UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-35219

_________________________

Marriott Vacations Worldwide Corporation

(Exact name of registrant as specified in its charter)

_________________________

Delaware

45-2598330

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

9002 San Marco Court

Orlando

32819

(Address of principal executive offices)

(Zip Code)

(407) 206-6000 (Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	VAC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock, par value $0.01 per share, as of ~~November 4, 2021~~May 2, 2022 was ~~42,595,068.~~41,432,080.

MARRIOTT VACATIONS WORLDWIDE CORPORATION

FORM 10-Q TABLE OF CONTENTS


		Page
Part I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Interim Consolidated Statements of Income	1
	Interim Consolidated Statements of Comprehensive Income	2
	Interim Consolidated Balance Sheets	3
	Interim Consolidated Statements of Cash Flows	4
	Interim Consolidated Statements of Shareholders’ Equity	6
	Interim Condensed Notes to ~~Interim~~ Consolidated Financial Statements	87
	~~1. Basis of Presentation~~	8
	~~2. Significant Accounting Policies and Recent Accounting Standards~~	9
	~~3. Acquisitions and Dispositions~~	10
	~~4. Revenue and Receivables~~	12
	~~5. Income Taxes~~	16
	~~6. Vacation Ownership Notes Receivable~~	17
	~~7. Financial Instruments~~	24
	~~8. Earnings Per Share~~	26
	~~9. Inventory~~	27
	~~10. Goodwill and Intangibles~~	27
	~~11. Contingencies and Commitments~~	28
	~~12. Securitized Debt~~	30
	~~13. Debt~~	32
	~~14. Shareholders’ Equity~~	37
	~~15. Share-Based Compensation~~	38
	~~16. Variable Interest Entities~~	39
	~~17. Business Segments~~	41

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4337
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7858
Item 4.	Controls and Procedures	7858
Part II.	OTHER INFORMATION	7958
Item 1.	Legal Proceedings	7958
Item 1A.	Risk Factors	7958
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7959
Item 6.	Exhibits	8059
	SIGNATURES	8261

Throughout this report, we refer to Marriott Vacations Worldwide Corporation, together with its consolidated subsidiaries, as “Marriott Vacations Worldwide,” “MVW,” “we,” “us,” or “the Company.” We also refer to brands that we own, as well as those brands that we license, as our brands. All brand names, trademarks, service marks, and trade names cited in this report are the property of their respective owners, including those of other companies and organizations. Solely for convenience, trademarks, trade names, and service marks referred to in this report may appear without the ® or TM symbols, however such references are not intended to indicate in any way that MVW or the owner, as applicable, will not assert, to the fullest extent under applicable law, all rights to such trademarks, trade names, and service marks.

Capitalized terms used and not specifically defined herein have the same meanings given those terms in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”). When discussing our properties or markets, we refer to the United States, Mexico, Central America, and the Caribbean as “North America.”

The COVID-19 pandemic has caused significant disruptions in international and U.S. economies and markets, and has also had an unprecedented impact on the travel and hospitality industries, as well as the Company. We discuss the impacts of the COVID-19 pandemic and its potential future implications throughout this report; however, the COVID-19 pandemic, ~~is evolving~~ and ~~its~~any recovery therefrom, continues to evolve and further potential ~~impact~~impacts on our business in the future ~~remains~~remain uncertain.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	98	$	789	$	409	Sale of vacation ownership products	$	310	$	163
Management and exchange	Management and exchange	225		176		638		548		Management and exchange	222		193
Rental	Rental	130		56		340		209		Rental	133		89
Financing	Financing	69		64		196		206		Financing	71		59
Cost reimbursements	Cost reimbursements	298		255		827		767		Cost reimbursements	316		255
TOTAL REVENUES	TOTAL REVENUES	1,052		649		2,790		2,139		TOTAL REVENUES	1,052		759
EXPENSES	EXPENSES									EXPENSES
Cost of vacation ownership products	Cost of vacation ownership products	71		27		178		110		Cost of vacation ownership products	60		40
Marketing and sales	Marketing and sales	166		78		439		297		Marketing and sales	182		109
Management and exchange	Management and exchange	138		106		381		342		Management and exchange	127		117
Rental	Rental	84		74		247		245		Rental	81		82
Financing	Financing	22		24		64		85		Financing	21		21
General and administrative	General and administrative	54		32		166		121		General and administrative	61		46
Depreciation and amortization	Depreciation and amortization	35		30		112		93		Depreciation and amortization	33		41
Litigation charges	Litigation charges	2		2		8		4		Litigation charges	3		3
Restructuring		—		20		—		20

Royalty fee	Royalty fee	26		23		78		72		Royalty fee	27		25
Impairment		—		2		5		98

Cost reimbursements	Cost reimbursements	298		255		827		767		Cost reimbursements	316		255
TOTAL EXPENSES	TOTAL EXPENSES	896		673		2,505		2,254		TOTAL EXPENSES	911		739
Losses and other expense, net		(31)		—		(27)		(42)
Gains and other income, net										Gains and other income, net	4		6
Interest expense	Interest expense	(41)		(37)		(128)		(112)		Interest expense	(27)		(43)
Transaction and integration costs	Transaction and integration costs	(27)		(11)		(75)		(47)		Transaction and integration costs	(28)		(19)
Other		1		—		2		—

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	58		(72)		57		(316)		INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	90		(36)
(Provision for) benefit from income taxes	(Provision for) benefit from income taxes	(47)		14		(63)		91		(Provision for) benefit from income taxes	(32)		11
NET INCOME (LOSS)	NET INCOME (LOSS)	11		(58)		(6)		(225)		NET INCOME (LOSS)	58		(25)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		(4)		(6)		(13)		Net income attributable to noncontrolling interests	—		(3)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	10	$	(62)	$	(12)	$	(238)	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	58	$	(28)

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS	EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS									EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic	Basic	$	0.24	$	(1.51)	$	(0.28)	$	(5.76)	Basic	$	1.36	$	(0.68)
Diluted	Diluted	$	0.23	$	(1.51)	$	(0.28)	$	(5.76)	Diluted	$	1.23	$	(0.68)

CASH DIVIDENDS DECLARED PER SHARE	CASH DIVIDENDS DECLARED PER SHARE	$	0.54	$	—	$	0.54	$	0.54	CASH DIVIDENDS DECLARED PER SHARE	$	0.62	$	—

See Notes to Interim Consolidated Financial Statements

Table of Contents

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			March 31, 2022		March 31, 2021
NET INCOME (LOSS)	NET INCOME (LOSS)	$	11	$	(58)	$	(6)	$	(225)	NET INCOME (LOSS)	$	58	$	(25)

Foreign currency translation adjustments	Foreign currency translation adjustments	(4)		5		(3)		(9)		Foreign currency translation adjustments	4		(3)
Derivative instrument adjustment, net of tax	Derivative instrument adjustment, net of tax	3		3		12		(22)		Derivative instrument adjustment, net of tax	16		6
OTHER COMPREHENSIVE (LOSS) GAIN, NET OF TAX		(1)		8		9		(31)
OTHER COMPREHENSIVE GAIN, NET OF TAX										OTHER COMPREHENSIVE GAIN, NET OF TAX	20		3

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		(4)		(6)		(13)		Net income attributable to noncontrolling interests	—		(3)
Other comprehensive income attributable to noncontrolling interests	Other comprehensive income attributable to noncontrolling interests	—		—		—		—		Other comprehensive income attributable to noncontrolling interests	—		—
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(1)		(4)		(6)		(13)		COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—		(3)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	9	$	(54)	$	(3)	$	(269)	COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	78	$	(25)

See Notes to the Interim Consolidated Financial Statements

Table of Contents

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)


		Unaudited					Unaudited
		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	448	$	524	Cash and cash equivalents	$	354	$	342
Restricted cash (including $69 and $68 from VIEs, respectively)		434		468
Accounts receivable, net (including $10 and $11 from VIEs, respectively)		223		276
Vacation ownership notes receivable, net (including $1,486 and $1,493 from VIEs, respectively)		2,026		1,840
Restricted cash (including $78 and $139 from VIEs, respectively)						Restricted cash (including $78 and $139 from VIEs, respectively)	296		461
Accounts receivable, net (including $12 and $12 from VIEs, respectively)						Accounts receivable, net (including $12 and $12 from VIEs, respectively)	234		279
Vacation ownership notes receivable, net (including $1,661 and $1,662 from VIEs, respectively)						Vacation ownership notes receivable, net (including $1,661 and $1,662 from VIEs, respectively)	2,030		2,045
Inventory	Inventory	741		759		Inventory	693		719
Property and equipment, net	Property and equipment, net	1,077		791		Property and equipment, net	1,162		1,136
Goodwill	Goodwill	3,086		2,817		Goodwill	3,142		3,150
Intangibles, net	Intangibles, net	1,007		952		Intangibles, net	978		993
Other (including $70 and $54 from VIEs, respectively)		501		471
Other (including $74 and $76 from VIEs, respectively)						Other (including $74 and $76 from VIEs, respectively)	614		488
TOTAL ASSETS	TOTAL ASSETS	$	9,543	$	8,898	TOTAL ASSETS	$	9,503	$	9,613

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Accounts payable	Accounts payable	$	190	$	209	Accounts payable	$	212	$	265
Advance deposits	Advance deposits	166		147		Advance deposits	194		160
Accrued liabilities (including $2 and $1 from VIEs, respectively)		375		349
Accrued liabilities (including $2 and $2 from VIEs, respectively)						Accrued liabilities (including $2 and $2 from VIEs, respectively)	347		345
Deferred revenue	Deferred revenue	540		488		Deferred revenue	507		453
Payroll and benefits liability	Payroll and benefits liability	201		157		Payroll and benefits liability	214		201
Deferred compensation liability	Deferred compensation liability	135		127		Deferred compensation liability	136		142
Securitized debt, net (including $1,611 and $1,604 from VIEs, respectively)		1,594		1,588
Securitized debt, net (including $1,799 and $1,877 from VIEs, respectively)						Securitized debt, net (including $1,799 and $1,877 from VIEs, respectively)	1,779		1,856
Debt, net	Debt, net	2,795		2,680		Debt, net	2,751		2,631
Other	Other	218		197		Other	206		224
Deferred taxes	Deferred taxes	325		274		Deferred taxes	333		350
TOTAL LIABILITIES	TOTAL LIABILITIES	6,539		6,216		TOTAL LIABILITIES	6,679		6,627
Contingencies and Commitments (Note 11)	Contingencies and Commitments (Note 11)	0		0		Contingencies and Commitments (Note 11)	0		0
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding	Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding	—		—		Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding	—		—
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,491,621 and 75,279,061 shares issued, respectively		1		1
Treasury stock — at cost; 32,776,162 and 34,184,813 shares, respectively		(1,282)		(1,334)
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,721,548 and 75,519,049 shares issued, respectively						Common stock — $0.01 par value; 100,000,000 shares authorized; 75,721,548 and 75,519,049 shares issued, respectively	1		1
Treasury stock — at cost; 33,971,376 and 33,235,671 shares, respectively						Treasury stock — at cost; 33,971,376 and 33,235,671 shares, respectively	(1,474)		(1,356)
Additional paid-in capital	Additional paid-in capital	4,056		3,760		Additional paid-in capital	3,945		4,072
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(39)		(48)		Accumulated other comprehensive loss	4		(16)
Retained earnings	Retained earnings	237		272		Retained earnings	338		275
TOTAL MVW SHAREHOLDERS' EQUITY	TOTAL MVW SHAREHOLDERS' EQUITY	2,973		2,651		TOTAL MVW SHAREHOLDERS' EQUITY	2,814		2,976
Noncontrolling interests	Noncontrolling interests	31		31		Noncontrolling interests	10		10
TOTAL EQUITY	TOTAL EQUITY	3,004		2,682		TOTAL EQUITY	2,824		2,986
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	9,543	$	8,898	TOTAL LIABILITIES AND EQUITY	$	9,503	$	9,613

The abbreviation VIEs above means Variable Interest Entities.

See Notes to Interim Consolidated Financial Statements

Table of Contents

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


		Nine Months Ended					Three Months Ended
		September 30, 2021		September 30, 2020			March 31, 2022		March 31, 2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net loss		$	(6)	$	(225)
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash used by operating activities:
Net income (loss)						Net income (loss)	$	58	$	(25)
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash provided by (used in) operating activities:						Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash provided by (used in) operating activities:
Depreciation and amortization of intangibles	Depreciation and amortization of intangibles	112		93		Depreciation and amortization of intangibles	33		41
Amortization of debt discount and issuance costs	Amortization of debt discount and issuance costs	41		16		Amortization of debt discount and issuance costs	5		11

Vacation ownership notes receivable reserve	Vacation ownership notes receivable reserve	73		97		Vacation ownership notes receivable reserve	29		14
Share-based compensation	Share-based compensation	33		23		Share-based compensation	8		8
Impairment charges		5		98

Deferred income taxes	Deferred income taxes	10		1		Deferred income taxes	18		15
Net change in assets and liabilities:	Net change in assets and liabilities:					Net change in assets and liabilities:
Accounts receivable	Accounts receivable	54		24		Accounts receivable	45		51
Vacation ownership notes receivable originations	Vacation ownership notes receivable originations	(545)		(265)		Vacation ownership notes receivable originations	(205)		(108)
Vacation ownership notes receivable collections	Vacation ownership notes receivable collections	532		487		Vacation ownership notes receivable collections	188		165
Inventory	Inventory	59		(4)		Inventory	28		(26)

Other assets	Other assets	(29)		57		Other assets	(134)		(138)
Accounts payable, advance deposits and accrued liabilities	Accounts payable, advance deposits and accrued liabilities	(44)		(231)		Accounts payable, advance deposits and accrued liabilities	12		(30)
Deferred revenue	Deferred revenue	119		57		Deferred revenue	54		102
Payroll and benefit liabilities	Payroll and benefit liabilities	35		—		Payroll and benefit liabilities	13		31
Deferred compensation liability	Deferred compensation liability	14		8		Deferred compensation liability	(7)		(2)
Other liabilities	Other liabilities	23		(11)		Other liabilities	(3)		5
Deconsolidation of certain Consolidated Property Owners' Associations	Deconsolidation of certain Consolidated Property Owners' Associations	(87)		—		Deconsolidation of certain Consolidated Property Owners' Associations	—		(71)
Purchase of vacation ownership units for future transfer to inventory	Purchase of vacation ownership units for future transfer to inventory	(99)		(61)		Purchase of vacation ownership units for future transfer to inventory	(12)		(99)
Other, net	Other, net	3		(6)		Other, net	(1)		(4)
Net cash, cash equivalents and restricted cash provided by operating activities		303		158
Net cash, cash equivalents and restricted cash provided by (used in) operating activities						Net cash, cash equivalents and restricted cash provided by (used in) operating activities	129		(60)
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Acquisition of a business, net of cash and restricted cash acquired		(157)		—

Capital expenditures for property and equipment (excluding inventory)	Capital expenditures for property and equipment (excluding inventory)	(19)		(36)		Capital expenditures for property and equipment (excluding inventory)	(9)		(7)

Purchase of company owned life insurance	Purchase of company owned life insurance	(11)		(3)		Purchase of company owned life insurance	(4)		(1)
Dispositions, net	Dispositions, net	—		15		Dispositions, net	3		—
Net cash, cash equivalents and restricted cash used in investing activities	Net cash, cash equivalents and restricted cash used in investing activities	(187)		(24)		Net cash, cash equivalents and restricted cash used in investing activities	(10)		(8)

Continued

See Notes to Interim Consolidated Financial Statements

Table of Contents

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In millions)

(Unaudited)


		Nine Months Ended					Three Months Ended
		September 30, 2021		September 30, 2020			March 31, 2022		March 31, 2021
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Borrowings from securitization transactions	Borrowings from securitization transactions	425		690		Borrowings from securitization transactions	102		—
Repayment of debt related to securitization transactions	Repayment of debt related to securitization transactions	(602)		(793)		Repayment of debt related to securitization transactions	(178)		(159)
Proceeds from debt	Proceeds from debt	1,061		1,166		Proceeds from debt	30		561
Repayments of debt	Repayments of debt	(1,039)		(703)		Repayments of debt	(30)		(100)
Purchase of convertible note hedges	Purchase of convertible note hedges	(100)		—		Purchase of convertible note hedges	—		(100)
Proceeds from issuance of warrants	Proceeds from issuance of warrants	70		—		Proceeds from issuance of warrants	—		70
Finance lease payment	Finance lease payment	(2)		(10)		Finance lease payment	(2)		—
Payment of debt issuance costs	Payment of debt issuance costs	(17)		(14)		Payment of debt issuance costs	(4)		(2)
Repurchase of common stock	Repurchase of common stock	(4)		(82)		Repurchase of common stock	(119)		—
Payment of dividends	Payment of dividends	—		(45)		Payment of dividends	(49)		—
Payment of withholding taxes on vesting of restricted stock units	Payment of withholding taxes on vesting of restricted stock units	(17)		(14)		Payment of withholding taxes on vesting of restricted stock units	(22)		(15)

Net cash, cash equivalents and restricted cash (used in) provided by financing activities	Net cash, cash equivalents and restricted cash (used in) provided by financing activities	(225)		195		Net cash, cash equivalents and restricted cash (used in) provided by financing activities	(272)		255
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(1)		(2)		Effect of changes in exchange rates on cash, cash equivalents and restricted cash	—		(1)
Change in cash, cash equivalents and restricted cash	Change in cash, cash equivalents and restricted cash	(110)		327		Change in cash, cash equivalents and restricted cash	(153)		186
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	992		701		Cash, cash equivalents and restricted cash, beginning of period	803		992
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	882	$	1,028	Cash, cash equivalents and restricted cash, end of period	$	650	$	1,178

SUPPLEMENTAL DISCLOSURES	SUPPLEMENTAL DISCLOSURES					SUPPLEMENTAL DISCLOSURES
Non-cash issuance of treasury stock in connection with Welk Acquisition		$	248	$	—

Non-cash transfer from property and equipment to inventory	Non-cash transfer from property and equipment to inventory	3		—		Non-cash transfer from property and equipment to inventory	$	2	$	3
Non-cash transfer from inventory to property and equipment	Non-cash transfer from inventory to property and equipment	105		90		Non-cash transfer from inventory to property and equipment	31		2
Non-cash transfer of other assets to property and equipment						Non-cash transfer of other assets to property and equipment	13		22
Non-cash issuance of debt in connection with asset acquisition						Non-cash issuance of debt in connection with asset acquisition	11		—
Non-cash issuance of treasury stock for employee stock purchase plan	Non-cash issuance of treasury stock for employee stock purchase plan	3		1		Non-cash issuance of treasury stock for employee stock purchase plan	1		—
Dividends payable		23		—

Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized	136		140		Interest paid, net of amounts capitalized	30		53
Income tax refunds, net of income taxes paid	Income tax refunds, net of income taxes paid	(19)		(48)		Income tax refunds, net of income taxes paid	(7)		(30)

See Notes to Interim Consolidated Financial Statements

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions)

(Unaudited)


Common Stock Issued	Common Stock Issued				Common Stock			Treasury Stock				Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Gain				Retained Earnings			Total MVW Shareholders' Equity				Noncontrolling Interests			Total Equity		Common Stock Issued						Common Stock		Treasury Stock				Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income				Retained Earnings		Total MVW Shareholders' Equity				Noncontrolling Interests		Total Equity

		75.3		BALANCE AT DECEMBER 31, 2020						$	1						$	(1,334)						$	3,760							$	(48)		$	272					$	2,651					$	31					$	2,682
—			Net (loss) income				—							—							—							—						(28)			(28)		3				(25)
—			Foreign currency translation adjustments		—			—				—			(3)				—			(3)				—			(3)
—			Derivative instrument adjustment		—			—				—			6				—			6				—			6
0.2			Share-based compensation plans		—			—				(4)			—				—			(4)				—			(4)

—			Equity component of convertible notes, net of issuance costs		—			—				117			—				—			117				—			117
—			Purchase of convertible note hedges		—			—				(100)			—				—			(100)				—			(100)
—			Issuance of warrants		—			—				70			—				—			70				—			70

75.5																															75.5			BALANCE AT DECEMBER 31, 2021			$	1	$	(1,356)			$	4,072	$	(16)			$	275	$	2,976			$	10	$	2,986
—	—		Deconsolidation of certain Consolidated Property Owners' Associations		—			—				—			—				—			—				(5)			(5)		—			Impact of adoption of ASU 2020-06			—		—				(111)		—				31		(80)				—		(80)
75.5	75.5		BALANCE AT MARCH 31, 2021		1			(1,334)				3,843			(45)				244			2,709				29			2,738		75.5			OPENING BALANCE 2022			1		(1,356)				3,961		(16)				306		2,896				10		2,906
—	—		Net income		—			—				—			—				6			6				2			8		—			Net income			—		—				—		—				58		58				—		58
—	—		Welk Acquisition		—			55				193			—				—			248				—			248		—			Foreign currency translation adjustments			—		—				—		4				—		4				—		4
—	—		Foreign currency translation adjustments		—			—				—			4				—			4				—			4		—			Derivative instrument adjustment			—		—				—		16				—		16				—		16
0.2																															0.2			Share-based compensation plans			—		1				(16)		—				—		(15)				—		(15)
—	—		Derivative instrument adjustment		—			—				—			3				—			3				—			3		—			Repurchase of common stock			—		(119)				—		—				—		(119)				—		(119)
—	—		Share-based compensation plans		—			1				9			—				—			10				—			10		—			Dividends			—		—				—		—				(26)		(26)				—		(26)

—			Deconsolidation of certain Consolidated Property Owners' Associations		—			—				—			—				—			—				(1)			(1)

—			Employee stock plan issuance		—			—				2			—				—			2				—			2
75.5			BALANCE AT JUNE 30, 2021		1			(1,278)				4,047			(38)				250			2,982				30			3,012
—			Net income		—			—				—			—				10			10				1			11
75.7																															75.7			BALANCE AT MARCH 31, 2022			$	1	$	(1,474)			$	3,945	$	4			$	338	$	2,814			$	10	$	2,824

—			Foreign currency translation adjustments		—			—				—			(4)				—			(4)				—			(4)
—			Derivative instrument adjustment		—			—				—			3				—			3				—			3
—			Share-based compensation plans		—			—				8			—				—			8				—			8
—			Repurchase of common stock		—			(4)				—			—				—			(4)				—			(4)

—			Dividends		—			—				—			—				(23)			(23)				—			(23)
—			Employee stock plan issuance		—			—				1			—				—			1				—			1
75.5			BALANCE AT SEPTEMBER 30, 2021		$	1		$	(1,282)			$	4,056		$	(39)			$	237		$	2,973			$	31		$	3,004

~~Continued~~


Common Stock Issued		Common Stock		Treasury Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total MVW Shareholders' Equity		Noncontrolling Interests		Total Equity


75.3	BALANCE AT DECEMBER 31, 2020	$	1	$	(1,334)	$	3,760	$	(48)	$	272	$	2,651	$	31	$	2,682
—	Net (loss) income	—		—		—		—		(28)		(28)		3		(25)
—	Foreign currency translation adjustments	—		—		—		(3)		—		(3)		—		(3)
—	Derivative instrument adjustment	—		—		—		6		—		6		—		6
0.2	Share-based compensation plans	—		—		(4)		—		—		(4)		—		(4)
—	Equity component of convertible notes, net of issuance costs	—		—		117		—		—		117		—		117
—	Purchase of convertible note hedges	—		—		(100)		—		—		(100)		—		(100)
—	Issuance of warrants	—		—		70		—		—		70		—		70
—	Deconsolidation of certain Consolidated Property Owners' Associations	—		—		—		—		—		—		(5)		(5)
75.5	BALANCE AT MARCH 31, 2021	$	1	$	(1,334)	$	3,843	$	(45)	$	244	$	2,709	$	29	$	2,738

See Notes to Interim Consolidated Financial Statements

~~MARRIOTT VACATIONS WORLDWIDE CORPORATION~~

~~INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY~~

~~(In millions)~~

~~(Unaudited)~~

Common
Stock
Issued Common
Stock Treasury
Stock Additional
Paid-In
Capital Accumulated Other Comprehensive (Loss) Gain Retained Earnings Total MVW Shareholders' Equity Noncontrolling Interests Total Equity
75.0 BALANCE AT DECEMBER 31, 2019 $ 1 $ (1,253) $ 3,738 $ (36) $ 569 $ 3,019 $ 12 $ 3,031
— Net (loss) income — — — — (106) (106) 1 (105)
— Foreign currency translation adjustments — — — (17) — (17) — (17)
— Derivative instrument adjustment — — — (24) — (24) — (24)
0.2 Share-based compensation plans — — (9) — — (9) — (9)
— Repurchase of common stock — (82) — — — (82) — (82)
— Dividends — — — — (22) (22) — (22)
75.2 BALANCE AT MARCH 31, 2020 1 (1,335) 3,729 (77) 441 2,759 13 2,772
— Net (loss) income — — — — (70) (70) 8 (62)
— Foreign currency translation adjustments — — — 3 — 3 — 3
— Derivative instrument adjustment — — — (1) — (1) — (1)
— Share-based compensation plans — — 7 — — 7 — 7
— Employee stock plan issuance — 1 — — — 1 — 1
75.2 BALANCE AT JUNE 30, 2020 1 (1,334) 3,736 (75) 371 2,699 21 2,720
— Net (loss) income — — — — (62) (62) 4 (58)
— Foreign currency translation adjustments — — — 5 — 5 — 5
— Derivative instrument adjustment — — — 3 — 3 — 3
0.1 Share-based compensation plans — — 13 — — 13 — 13
75.3 BALANCE AT SEPTEMBER 30, 2020 $ 1 $ (1,334) $ 3,749 $ (67) $ 309 $ 2,658 $ 25 $ 2,683

~~See Notes to Interim Consolidated Financial Statements~~

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MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONDENSED NOTES TO ~~INTERIM~~ CONSOLIDATED FINANCIAL STATEMENTS


1.			BASIS OF PRESENTATION

The Interim Consolidated Financial Statements present the results of operations, financial position and cash flows of Marriott Vacations Worldwide Corporation (referred to in this report as (i) “we,” “us,” “Marriott Vacations Worldwide,” “MVW” or “the Company,” which includes our consolidated subsidiaries except where the context of the reference is to a single corporate entity, or (ii) “MVWC,” which shall refer only to Marriott Vacations Worldwide Corporation, without its consolidated subsidiaries). In order to make this report easier to read, we refer throughout to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Interim Consolidated Financial Statements, unless otherwise noted. Capitalized terms used and not specifically defined herein have the same meanings given those terms in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”). We use certain other terms that are defined within these Financial Statements.

The Financial Statements presented herein and discussed below include ~~100 percent~~100% of the assets, liabilities, revenues, expenses, and cash flows of Marriott Vacations Worldwide, all entities in which Marriott Vacations Worldwide has a controlling voting interest (“subsidiaries”), and those variable interest entities (“VIEs”) for which Marriott Vacations Worldwide is the primary beneficiary in accordance with consolidation accounting guidance. References in these Financial Statements to net income ~~(loss)~~or loss attributable to common shareholders and MVW shareholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entities and are reported separately. Intercompany accounts and transactions between consolidated ~~companies~~entities have been eliminated in consolidation.

Pursuant to a change in control of certain consolidated property owners’ associations, we recorded a non-cash loss of $1 million in Losses and other expense, net on our Income Statement for the nine months ended September 30, 2021, and deconsolidated $88 million of assets, inclusive of $87 million of restricted cash, and $83 million of liabilities, for a decrease in Noncontrolling interests of $6 million during the first three quarters of 2021. See our Interim Consolidated Statements of Shareholders’ Equity for further information. We continue to act as manager for these property owners’ associations pursuant to existing management contracts and retain membership interests via our ownership of vacation ownership interests.

These Financial Statements reflect our financial position, results of operations, and cash flows as prepared in conformity with United States Generally Accepted Accounting Principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, allocations of the purchase price paid in business combinations, cost of vacation ownership products, inventory valuation, goodwill and intangibles valuation, accounting for acquired vacation ownership notes receivable, vacation ownership notes receivable reserves, income taxes, and loss contingencies. The uncertainty created by the COVID-19 pandemic, and the ongoing efforts to mitigate it, has made it more challenging to make these estimates. Accordingly, ultimate results could differ from our estimates, and such differences may be material.

In our opinion, our Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position, the results of our operations, and cash flows for the periods presented. Interim results may not be indicative of fiscal year performance because of, among other reasons, the impact of the COVID-19 pandemic and seasonal and short-term variations. These Financial Statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe our footnote disclosures are adequate to make the information presented not misleading, the Financial Statements in this report should be read in conjunction with the consolidated financial statements and notes thereto in our ~~2020~~2021 Annual Report.

Acquisition of Welk

On April 1, 2021, we completed the acquisition of Welk Hospitality Group, Inc. (“Welk”) through a series of transactions (the “Welk Acquisition”), after which Welk became our indirect wholly-owned subsidiary. The Financial Statements in this report include Welk’s results of operations for the second and third quarters of 2021 and reflect the financial position of our combined company at September 30, 2021. We refer to ~~Welk’s~~the business and brands that we acquired as “Legacy-Welk.” See Footnote 3 ~~“Acquisitions and Dispositions”~~“Acquisitions” for more information on the Welk Acquisition.

~~Table of Contents~~

~~Reclassifications~~

~~We have reclassified certain prior year amounts to conform to our current year presentation.~~


2.			SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS

New Accounting Standards

Accounting Standards Update ~~2019-12~~2020-06 – “~~“Income Taxes (Topic 740)~~Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): ~~Simplifying the~~ Accounting for ~~Income Taxes”~~Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU ~~2019-12”~~2020-06”)

In the first quarter of ~~2021,~~2022, we adopted accounting standards update (“ASU”) 2020-06, using the modified retrospective method. Under ASU 2020-06, we no longer separate our convertible notes into liability and equity components,

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and we are required to calculate the impact of our convertible notes on diluted earnings per share using the “if-converted” method, regardless of intent to settle or partially settle the debt in cash. Under the “if-converted” method, diluted earnings per share would generally be calculated assuming that all of our convertible notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the “if- converted” method reduces our reported diluted earnings per share. The impacts of the adoption were recorded as a cumulative effect in the opening balance of retained earnings and the conversion feature related to our convertible notes was reclassified from equity to liabilities. In addition, we eliminated the related equity adjustment associated with the deferred tax liability. The adoption of ASU 2020-06 on January 1, 2022 resulted in an increase in debt of $107 million, a decrease in additional paid-in capital of $111 million, and a decrease in deferred taxes of $27 million, as well as a cumulative effect adjustment to the opening balance of retained earnings of $31 million. The remaining debt issuance costs will continue to be amortized over the term of our convertible notes. The prior period consolidated financial statements have not been retrospectively restated and continue to be reported under the accounting standards in effect for those periods.

Accounting Standards Update 2021-08 - “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”)

In the first quarter of 2022, we adopted ASU ~~2019-12,~~2021-08, which ~~amends~~amended ASC 805 to require entities to apply ASC 606 to recognize and ~~simplifies existing guidance~~measure contract assets and contract liabilities from contracts with customers in ~~an effort to reduce the complexity of accounting for income taxes while maintaining or enhancing the helpfulness of information provided to financial statement users. Our~~a business combination. The adoption of ASU ~~2019-12~~2021-08 on January 1, 2022 did not have a material impact on our ~~Financial Statements or disclosures.~~financial statements and disclosure. In the event that we complete business combinations in the future, the application of ASU 2021-08 could result in higher acquired deferred revenue.

Future Adoption of Accounting Standards

Accounting Standards Update 2020-04 – “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”)

In March 2020, the FASB issued ASU 2020-04, as amended, which provides optional expedients and exceptions to existing guidance on contract modifications and hedge accounting in an effort to ease the financial reporting burdens related to the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates. This update ~~can be adopted no later than December 1, 2022, with early adoption permitted. We expect~~was effective upon issuance and issuers may generally elect to adopt the optional expedients and exceptions over time through December 31, 2022. As of March 31, 2022, the interest rate applicable to borrowings under our existing Term Loan (as defined in Footnote 13 “Debt”) and Warehouse Credit Facility (as defined in Footnote 12 “Securitized Debt”) generally continue to reference LIBOR, as do certain interest rate swaps and collars. These instruments have not yet discontinued the use of LIBOR. To the extent these instruments are amended to reference a different benchmark interest rate, we may elect to utilize the relief available in ASU ~~2020-04 in fiscal year~~2020-04. When we renew or amend our remaining existing debt instruments, we will determine a replacement rate for LIBOR. We have not adopted any of the optional expedients or exceptions as of March 31, 2022, ~~and~~but will continue to evaluate their adoption during the ~~impact that adoption of this update will have on our Financial Statements and disclosures.~~effective period as circumstances evolve.

Accounting Standards Update ~~2020-06~~2022-02 – “Financial Instruments–Credit Losses (Topic 326) - Troubled Debt ~~— Debt With Conversion~~Restructurings and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”Vintage Disclosures” (“ASU ~~2020-06”~~2022-02”)

In ~~August 2020,~~March 2022, the FASB issued ASU ~~2020-06,~~2022-02, which ~~amends and simplifies existing guidance in an effort to reduce~~eliminates the complexity of accounting for convertible instruments and to provide financial statement users with more meaningful information. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods therein, with early adoption permitted for fiscal years beginning after December 15, 2020. This update may be applied retrospectively or on a modified retrospective basis with the cumulative effect recognized as an adjustment to the opening balance of retained earnings on the date of adoption. We expect to adopt ASU 2020-06 on January 1, 2022 using the modified retrospective method. Any transactions that may be settled prior to adoption will not be impacted by the update. The impacts of the adoption for any remaining instruments will be recorded in its cumulative effect in the opening balance of retained earnings and the conversion feature related to our convertible notes will be reclassified from equity to liabilities. In addition, we will eliminate the related equity adjustment associated with the deferred tax liability. Upon adoption, we will also be required to calculate the impact of the convertible notes on diluted earnings per share under the “if-converted” method. Under the “if-converted” method, diluted earnings per share would generally be calculated assuming that all of our convertible notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the “if-converted” method is expected to reduce our reported diluted earnings per share.

~~Accounting Standards Update 2021-08 - “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”~~ ~~(“ASU 2021-08”)~~

~~In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606,~~ ~~Revenue from Contracts with Customers,~~ ~~to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination. ASU 2021-08 creates an exception to the general~~ recognition and measurement ~~principle~~guidance applicable to troubled debt restructurings for creditors and enhances disclosure requirements with respect to loan modifications for borrowers experiencing financial difficulty. ASU 2022-02 also requires disclosure of current-period gross write-offs by year of origination to be presented in ~~ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by~~ the ~~acquiree immediately before the acquisition date. The guidance eliminates the complexity of determining the fair value of contract liabilities and may result in higher balances~~vintage disclosures for ~~contract liabilities acquired in a business combination, resulting in more post-combination revenue and a higher amount of goodwill being recognized by the acquirer.~~financing receivables. This update is effective for fiscal years beginning after December 15, 2022, ~~and~~including interim periods ~~therein,~~within those fiscal years, with early adoption permitted. We ~~expect to adopt~~are evaluating the impact that adoption of ASU ~~2021-08~~2022-02, including the timing of implementation, will have on ~~a prospective basis in fiscal year 2022,~~our financial statements and disclosures; however, we do not expect ~~the~~ adoption to have a material ~~impact~~effect on our ~~Financial Statements~~financial statements or ~~disclosures.~~disclosures other than disclosure changes related to vintage disclosures for financing receivables.

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3.			ACQUISITIONS ~~AND DISPOSITIONS~~

Welk Acquisition

On April 1, 2021 (the “Welk Acquisition Date”), we completed the Welk ~~Acquisition for consideration of $405 million, including approximately 1.4 million shares of our common stock. Welk was one of the largest independent vacation ownership companies in North America.~~Acquisition. The following table presents the fair value of each type of consideration transferred at the Welk Acquisition Date, as finalized at ~~September 30, 2021.~~March 31, 2022.


(in millions, except per share amounts)
Equivalent shares of Marriott Vacations Worldwide common stock issued	1.4
Marriott Vacations Worldwide common stock price per share as of Welk Acquisition Date	$	174.18
Fair value of Marriott Vacations Worldwide common stock issued	248
Cash consideration to Welk, net of cash and restricted cash acquired of $48 million	157



Total consideration transferred, net of cash and restricted cash acquired	$	405

~~Preliminary~~ Fair Values of Assets Acquired and Liabilities Assumed

We accounted for the Welk Acquisition as a business combination, which ~~requires~~required us to record the assets acquired and liabilities assumed at fair value as of the Welk Acquisition Date. The amounts recorded are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the Welk Acquisition Date. We continue to evaluate the underlying inputs and assumptions used in our valuation for all assets acquired and liabilities assumed. The values attributed to Vacation ownership notes receivable, Inventory, Property and equipment, Intangible assets, ~~Deferred taxes~~ and Securitized debt from VIEs are based on ~~preliminary~~ valuations prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820, “Fair Value Measurements” (“ASC 820”). The value attributed to Debt is based on Level 2 inputs in accordance with ASC 820. ~~We are in~~During the ~~process~~first quarter of ~~finalizing~~2022, we finalized our ~~valuations in accordance with the authoritative guidance by continuing our evaluation~~allocation of the underlying inputs and assumptions that are being utilized in the valuations. Our evaluation of Welk’s historical tax positions remains ongoing. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the Welk Acquisition Date, as permitted under GAAP. Any potential adjustments could be material in relationpurchase price to the ~~values presented in the table below.~~

acquired assets and liabilities. The following table presents ~~our preliminary estimates of~~ the fair ~~value~~values of the assets that we acquired and the liabilities that we assumed in connection with the business combination as previously reported at ~~June 30,~~December 31, 2021, and as ~~adjusted~~finalized at ~~September 30, 2021.~~March 31, 2022. During the ~~third~~first quarter of ~~2021,~~2022, we refined our valuation models related to certain acquired assets and liabilities as follows:


($ in millions)	($ in millions)	April 1, 2021 (as reported at June 30, 2021)		Adjustments		April 1, 2021 (as adjusted at September 30, 2021)		($ in millions)	April 1, 2021 (as reported at December 31, 2021)		Adjustments		April 1, 2021 (as finalized at March 31, 2022)
Vacation ownership notes receivable, net~~(1)~~	Vacation ownership notes receivable, net~~(1)~~	$	240	$	14	$	254	Vacation ownership notes receivable, net~~(1)~~	$	255	$	—	$	255
Inventory~~(2)~~	Inventory~~(2)~~	83		53		136		Inventory~~(2)~~	111		—		111
Property and equipment	Property and equipment	151		(40)		111		Property and equipment	83		—		83
Intangible assets~~(3)~~	Intangible assets~~(3)~~	94		6		100		Intangible assets~~(3)~~	102		—		102
Other assets	Other assets	19		—		19		Other assets	19		—		19

Deferred taxes	Deferred taxes	(41)		(4)		(45)		Deferred taxes	(32)		8		(24)
Debt	Debt	(189)		—		(189)		Debt	(189)		—		(189)
Securitized debt	Securitized debt	(184)		—		(184)		Securitized debt	(184)		—		(184)
Other liabilities	Other liabilities	(67)		1		(66)		Other liabilities	(93)		—		(93)
Net assets acquired	Net assets acquired	106		30		136		Net assets acquired	72		8		80
Goodwill~~(4)~~(1)	Goodwill~~(4)~~(1)	299		(30)		269		Goodwill~~(4)~~(1)	333		(8)		325
		$	405	$	—	$	405		$	405	$	—	$	405

_________________________

(1)~~Vacation ownership notes receivable, net have been determined to constitute purchased credit deteriorated assets under the provisions of ASC Topic 326, “Financial Instruments - Credit Losses,” due to the impact of the COVID-19 pandemic on Welk and the greater vacation ownership industry as a whole, and have been accounted for as such.~~

~~Table of Contents~~


~~($ in millions)~~
~~Vacation ownership notes receivable~~	$	~~287~~
~~Allowance for credit losses~~	~~(33)~~
~~Vacation ownership notes receivable, net~~	$	~~254~~

~~(2)~~Inventory consists of completed unsold VOIs. We valued inventory using an income approach, which includes significant Level 3 assumptions, such as estimates of future income growth, marketing and sales costs and discount rates.

~~(3)Intangible assets consist of management contracts with an estimated 20 year useful life.~~

~~(4)~~Goodwill is calculated as total consideration transferred, net of cash acquired, less identified net assets ~~acquired and it~~acquired. It represents the value that we expect to obtain from growth opportunities from our combined operations and is not deductible for tax purposes.

Pro Forma Results of Operations

The following unaudited pro forma information presents the combined results of operations of Marriott Vacations Worldwide and Welk as if we had completed the Welk Acquisition on December 31, 2019, the last day of our 2019 fiscal year, but using ~~our preliminary estimates of~~ the fair values of assets and liabilities as of the Welk Acquisition ~~Date.~~Date set forth above. As required by GAAP, these unaudited pro forma results do not reflect any synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Welk Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.

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There were no Welk ~~acquisition-related~~Acquisition-related costs included in the unaudited pro forma results below for the ~~nine~~three months ended ~~September 30, 2021, and $18 million included for the nine months ended September 30, 2020.~~March 31, 2021.

Nine Months Ended
($ in millions, except per share data) September 30, 2021 September 30, 2020
Revenues $ 2,837 $ 2,246
Net income (loss) $ 6 $ (251)
Net income (loss) attributable to common shareholders $ — $ (264)
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic $ 0.01 $ (6.40)
Diluted $ 0.01 $ (6.40)


	Three Months Ended
($ in millions, except per share data)	March 31, 2021
Revenues	$	806
Net loss	$	(12)
Net loss attributable to common shareholders	$	(15)
LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic	$	(0.36)
Diluted	$	(0.36)

Welk Results of Operations

The following table presents the results of Welk operations included in our Income Statement for the three ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 2022.

($ in millions) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021
Revenue $ 53 $ 101
Net income $ 10 $ 16


($ in millions)	Three Months Ended March 31, 2022
Revenue	$	51
Net income	$	8

Other Acquisitions

~~Costa Rica~~Bali

During the first quarter of ~~2021,~~2022, we acquired 2488 completed vacation ownership units, ~~and an operations building~~as well as a sales center, located ~~at our Marriott Vacation Club at Los Suenos resort~~ in ~~Costa Rica~~Bali, Indonesia for ~~$14~~$36 million. WeThe transaction was accounted for ~~the transaction as an asset acquisition with the purchase price allocated to Inventory ($13 million) and Property and equipment ($1 million).~~

~~New York, New York~~

During the first quarter of 2021, we acquired the remaining 120 completed vacation ownership units located at our Marriott Vacation Club Pulse, New York City property for $98 million. We accounted for the transaction as an asset acquisition with the purchase price allocated to Property and equipment.

~~Table of Contents~~

~~During~~ As consideration for the ~~first quarter of 2020,~~acquisition, we ~~acquired 57 completed vacation ownership units, as well as office~~paid $12 million in cash and ~~ancillary space, located at our Marriott Vacation Club Pulse, New York City property~~issued a non-interest bearing note payable for ~~$89~~$11 million. Further, we reclassified $13 million of ~~which $22 million was a prepayment for future tranches of completed vacation ownership units and $20 million was paid in December 2019. We accounted for the transaction as an asset acquisition~~previous deposits associated with the ~~purchase price allocated~~project from Other assets to Property and ~~equipment ($67 million) and Other assets ($22 million).~~

~~San Francisco, California~~

During the first quarter of 2021, we acquired 44 completed vacation ownership units located at our Marriott Vacation Club Pulse, San Francisco property for $34 million. We accounted for the transaction as an asset acquisition with the purchase price allocated to Inventory ($29 million) and Other assets ($5 million).

During the first quarter of 2020, we acquired 34 completed vacation ownership units located at our Marriott Vacation Club Pulse, San Francisco property for $26 million, of which $5 million was a prepayment for future tranches of completed vacation ownership units. We accounted for the transaction as an asset acquisition with the purchase price allocated to Inventory ($18 million), Property and equipment ($3 million), and Other assets ($5 million).

See Footnote 16 “Variable Interest Entities” for information on our remaining commitment to purchase future inventory and additional information on our activities relating to the VIE involved in this transaction.

~~Dispositions~~

During the third quarter of 2020, we recorded a loss of $5 million in the Losses and other expense, net line on our Income Statement for the three and nine months ended September 30, 2020 relating to the redemption of our interest in a joint venture in our Exchange & Third-Party Management segment which was consolidated under the voting interest model. We received nominal cash proceeds and a note receivable which we measured at a fair value of $1 million using Level 3 inputs.

Additionally, during the third quarter of 2020, we disposed of excess Vacation Ownership segment land parcels in Orlando, Florida and Steamboat Springs, Colorado for combined proceeds of $15 million, as part of our strategic decision to reduce holdings in markets where we have excess supply. We recorded a combined net gain of $6 million in the Losses and other expense, net line on our Income Statement for the three and nine months ended September 30, 2020 relating to these transactions.equipment.


4.			REVENUE AND RECEIVABLES

Sources of Revenue by Segment

The following tables detail the sources of revenue by segment for the time periods presented.


		Three Months Ended September 30, 2021									Three Months Ended March 31, 2022
($ in millions)	($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total		($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	—	$	—	$	330	Sale of vacation ownership products	$	310	$	—	$	—	$	310

Ancillary revenues	Ancillary revenues	55		1		—		56		Ancillary revenues	54		1		—		55
Management fee revenues	Management fee revenues	40		10		(4)		46		Management fee revenues	42		10		(3)		49
Exchange and other services revenues	Exchange and other services revenues	31		48		44		123		Exchange and other services revenues	30		53		35		118
Management and exchange	Management and exchange	126		59		40		225		Management and exchange	126		64		32		222

Rental	Rental	121		9		—		130		Rental	122		11		—		133

Cost reimbursements	Cost reimbursements	328		9		(39)		298		Cost reimbursements	327		9		(20)		316
Revenue from contracts with customers	Revenue from contracts with customers	905		77		1		983		Revenue from contracts with customers	885		84		12		981

Financing	Financing	69		—		—		69		Financing	71		—		—		71
Total Revenues	Total Revenues	$	974	$	77	$	1	$	1,052	Total Revenues	$	956	$	84	$	12	$	1,052

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Three Months Ended September 30, 2020
($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total
Sale of vacation ownership products $ 98 $ — $ — $ 98
Ancillary revenues 17 — — 17
Management fee revenues 37 4 (5) 36
Exchange and other services revenues 28 45 50 123
Management and exchange 82 49 45 176
Rental 46 10 — 56
Cost reimbursements 281 12 (38) 255
Revenue from contracts with customers 507 71 7 585
Financing 64 — — 64
Total Revenues $ 571 $ 71 $ 7 $ 649

Nine Months Ended September 30, 2021
($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total
Sale of vacation ownership products $ 789 $ — $ — $ 789
Ancillary revenues 135 2 — 137
Management fee revenues 117 24 (15) 126
Exchange and other services revenues 91 153 131 375
Management and exchange 343 179 116 638
Rental 308 32 — 340
Cost reimbursements 882 38 (93) 827
Revenue from contracts with customers 2,322 249 23 2,594
Financing 196 — — 196
Total Revenues $ 2,518 $ 249 $ 23 $ 2,790

~~Table of Contents~~


		Nine Months Ended September 30, 2020									Three Months Ended March 31, 2021
($ in millions)	($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total		($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total
Sale of vacation ownership products	Sale of vacation ownership products	$	409	$	—	$	—	$	409	Sale of vacation ownership products	$	163	$	—	$	—	$	163

Ancillary revenues	Ancillary revenues	69		1		—		70		Ancillary revenues	28		—		—		28
Management fee revenues	Management fee revenues	113		14		(14)		113		Management fee revenues	38		5		(6)		37
Exchange and other services revenues	Exchange and other services revenues	85		145		135		365		Exchange and other services revenues	28		55		45		128
Management and exchange	Management and exchange	267		160		121		548		Management and exchange	94		60		39		193

Rental	Rental	180		29		—		209		Rental	77		12		—		89

Cost reimbursements	Cost reimbursements	824		45		(102)		767		Cost reimbursements	268		14		(27)		255
Revenue from contracts with customers	Revenue from contracts with customers	1,680		234		19		1,933		Revenue from contracts with customers	602		86		12		700

Financing	Financing	204		2		—		206		Financing	59		—		—		59
Total Revenues	Total Revenues	$	1,884	$	236	$	19	$	2,139	Total Revenues	$	661	$	86	$	12	$	759

Timing of Revenue from Contracts with Customers by Segment

The following tables detail the timing of revenue from contracts with customers by segment for the time periods presented.


		Three Months Ended September 30, 2021									Three Months Ended March 31, 2022
($ in millions)	($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total		($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total
Services transferred over time	Services transferred over time	$	517	$	38	$	1	$	556	Services transferred over time	$	517	$	38	$	12	$	567
Goods or services transferred at a point in time	Goods or services transferred at a point in time	388		39		—		427		Goods or services transferred at a point in time	368		46		—		414
Revenue from contracts with customers	Revenue from contracts with customers	$	905	$	77	$	1	$	983	Revenue from contracts with customers	$	885	$	84	$	12	$	981

Three Months Ended September 30, 2020
($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total
Services transferred over time $ 394 $ 35 $ 7 $ 436
Goods or services transferred at a point in time 113 36 — 149
Revenue from contracts with customers $ 507 $ 71 $ 7 $ 585

Nine Months Ended September 30, 2021
($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total
Services transferred over time $ 1,388 $ 118 $ 23 $ 1,529
Goods or services transferred at a point in time 934 131 — 1,065
Revenue from contracts with customers $ 2,322 $ 249 $ 23 $ 2,594

Nine Months Ended September 30, 2020
($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total
Services transferred over time $ 1,197 $ 119 $ 19 $ 1,335
Goods or services transferred at a point in time 483 115 — 598
Revenue from contracts with customers $ 1,680 $ 234 $ 19 $ 1,933

~~Table of Contents~~


	Three Months Ended March 31, 2021
($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total
Services transferred over time	$	408	$	37	$	12	$	457
Goods or services transferred at a point in time	194		49		—		243
Revenue from contracts with customers	$	602	$	86	$	12	$	700

Sale of Vacation Ownership Products

~~Revenues were reduced~~Revenue recognized during the ~~third~~first quarter ~~and first three quarters~~ of ~~2021 by $1 million and $9 million, respectively,~~2022 due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior ~~periods.~~periods was $1 million.

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Receivables from Contracts with Customers, Contract Assets, & Contract Liabilities

The following table shows the composition of our receivables from contracts with customers and contract liabilities. We had no contract assets at either ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Receivables from Contracts with Customers	Receivables from Contracts with Customers					Receivables from Contracts with Customers
Accounts receivable	Accounts receivable	$	140	$	150	Accounts receivable	$	140	$	172
Vacation ownership notes receivable, net	Vacation ownership notes receivable, net	2,026		1,840		Vacation ownership notes receivable, net	2,030		2,045
		$	2,166	$	1,990		$	2,170	$	2,217
Contract Liabilities	Contract Liabilities					Contract Liabilities
Advance deposits	Advance deposits	$	166	$	147	Advance deposits	$	194	$	160
Deferred revenue	Deferred revenue	540		488		Deferred revenue	507		453
		$	706	$	635		$	701	$	613

Revenue recognized during the ~~third~~first quarter ~~and first three quarters~~ of ~~2021~~2022 that was included in our contract liabilities balance at December 31, ~~2020~~2021 was ~~$133 million and $336 million, respectively.~~$126 million.

Remaining Performance Obligations

Our remaining performance obligations represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts. At ~~September 30, 2021,~~March 31, 2022, approximately ~~84 percent~~86% of this amount is expected to be recognized as revenue over the next two years.

Accounts Receivable

Accounts receivable is comprised of amounts due from customers, primarily ~~property~~ owners’ associations, resort developers and members, credit card receivables, interest receivables, amounts due from taxing authorities, indemnification assets, and other miscellaneous receivables. The following table shows the composition of our accounts receivable balances:


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Receivables from contracts with customers	Receivables from contracts with customers	$	140	$	150	Receivables from contracts with customers	$	140	$	172
Interest receivable	Interest receivable	14		13		Interest receivable	14		14
Tax receivable	Tax receivable	19		60		Tax receivable	34		48
Indemnification assets	Indemnification assets	21		15		Indemnification assets	21		22
Employee tax credit receivable	Employee tax credit receivable	19		19		Employee tax credit receivable	17		19
Other	Other	10		19		Other	8		4
		$	223	$	276		$	234	$	279

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5.			INCOME TAXES

Our provision for income taxes is calculated using an estimated annual effective tax rate, based upon expected annual income, less losses in certain jurisdictions, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, discrete items related to prior year tax items are treated separately.

Our interim effective tax rate was ~~81.5 percent~~35.6% and ~~19.8 percent~~29.8% for the three months ended ~~September 30,~~March 31, 2022 and March 31, 2021, ~~and September 30, 2020,~~ respectively. The change in the effective tax rate is predominately attributable to an increase in pre-tax income and an increase in the reserve for uncertain tax benefits.

Our interim effective tax rate was 110.6 percent and 28.7 percent for the nine months ended September 30, 2021 and September 30, 2020, respectively. The change in the effective tax rate is predominately attributable to an increase in pre-tax income and an increase in the reserve for uncertain tax benefits.

~~U.S. Tax Law Update~~

~~We have considered the income tax accounting and disclosure implications~~

Table of the relief provided by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted in March 2020, and the Consolidated Appropriations Act, 2021, enacted in December 2020. As of September 30, 2021, we evaluated the income tax provisions of the above mentioned acts and have determined there to be minimal effect on either the September 30, 2021 tax rate or the computation of the estimated effective tax rate for the year ended December 31, 2021. We will continue to evaluate the income tax provisions of the above mentioned acts and monitor the developments in the jurisdictions where we have significant operations for tax law changes that could have additional income tax accounting and disclosure implications.Contents

Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (excluding interest and penalties) during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. These unrecognized tax benefits relate to uncertain income tax positions, which would affect the effective tax rate if recognized.



($ in millions)	Unrecognized Tax Benefits
Balance at December 31, ~~2020~~2021	$	1426
Increases related to tax positions taken during a prior period	12
~~Increases related to tax positions taken during the current period~~	12


~~Decreases as a result of a lapse of the applicable statute of limitations~~	~~(1)~~

Balance at ~~September 30, 2021~~March 31, 2022	$	2628

The total amount of gross interest and penalties accrued was ~~$38~~$45 million at ~~September 30, 2021~~March 31, 2022 and ~~$25~~$42 million at December 31, ~~2020.~~2021. We anticipate $14 million of unrecognized tax benefits, including interest and penalties, to be indemnified pursuant to a Tax Matters Agreement dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc., and consequently have recorded a corresponding indemnification asset. The unrecognized tax benefits, including accrued interest and penalties, are included in Other liabilities on our Balance Sheet.

Our income tax returns are subject to examination by relevant tax authorities. Certain of our returns are being audited in various jurisdictions for tax years 2007 through 2019. The amount of the unrecognized tax benefit may increase or decrease as a result of audits or audit settlements.

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6.			VACATION OWNERSHIP NOTES RECEIVABLE

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


		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
($ in millions)	($ in millions)	Originated		Acquired		Total		Originated		Acquired		Total		($ in millions)	Originated		Acquired		Total		Originated		Acquired		Total
Securitized	Securitized	$	1,097	$	389	$	1,486	$	1,220	$	273	$	1,493	Securitized	$	1,345	$	316	$	1,661	$	1,308	$	354	$	1,662
Non-securitized	Non-securitized													Non-securitized
Eligible for securitization(1)	Eligible for securitization(1)	242		2		244		126		2		128		Eligible for securitization(1)	102		1		103		96		1		97
Not eligible for securitization(1)	Not eligible for securitization(1)	269		27		296		185		34		219		Not eligible for securitization(1)	249		17		266		267		19		286
Subtotal	Subtotal	511		29		540		311		36		347		Subtotal	351		18		369		363		20		383
		$	1,608	$	418	$	2,026	$	1,531	$	309	$	1,840		$	1,696	$	334	$	2,030	$	1,671	$	374	$	2,045

_________________________

(1)Refer to Footnote 7 “Financial Instruments” for a 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, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Interest income associated with vacation ownership notes receivable — securitized $ 55 $ 59 $ 160 $ 186
Interest income associated with vacation ownership notes receivable — non-securitized 13 4 30 13
Total interest income associated with vacation ownership notes receivable $ 68 $ 63 $ 190 $ 199

~~COVID-19 Impact on Vacation Ownership Notes Receivable Reserves~~

We increased our vacation ownership notes receivable reserves by $52 million in the first quarter of 2020 as a result of higher actual and projected default activity related predominantly to the COVID-19 pandemic. In the fourth quarter of 2020, we increased our vacation ownership notes receivable reserve by an additional $17 million due to higher than previously expected default activity. During the first three quarters of 2021, there were no additional increases to our vacation ownership notes receivable reserves attributed to the COVID-19 pandemic.


	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021
Interest income associated with vacation ownership notes receivable — securitized	$	59	$	48
Interest income associated with vacation ownership notes receivable — non-securitized	10		9
Total interest income associated with vacation ownership notes receivable	$	69	$	57

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Acquired Vacation Ownership Notes Receivable

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, 2021.~~March 31, 2022.


		Acquired Vacation Ownership Notes Receivable							Acquired Vacation Ownership Notes Receivable
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total
2021, remaining		$	1	$	13	$	14
2022		3		53		56
2022, remaining								2022, remaining	$	2	$	52	$	54
2023	2023	3		54		57		2023	2		47		49
2024	2024	3		53		56		2024	2		47		49
2025	2025	3		50		53		2025	2		44		46
2026								2026	2		39		41
Thereafter	Thereafter	16		166		182		Thereafter	8		87		95
Balance at September 30, 2021		$	29	$	389	$	418
Balance at March 31, 2022								Balance at March 31, 2022	$	18	$	316	$	334
Weighted average stated interest rate	Weighted average stated interest rate	13.7%		14.1%		14.1%		Weighted average stated interest rate	13.8%		14.2%		14.1%
Range of stated interest rates	Range of stated interest rates	0.0% to 21.9%		0.0% to 21.9%		0.0% to 21.9%		Range of stated interest rates	0.0% to 21.9%		0.0% to 21.9%		0.0% to 21.9%

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


		Acquired Vacation Ownership Notes Receivable Reserve							Acquired Vacation Ownership Notes Receivable Reserve
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total
Balance at December 31, 2020		$	39	$	21	$	60
Securitizations		(6)		6		—
Clean-up call		3		(3)		—
Balance at December 31, 2021								Balance at December 31, 2021	$	47	$	23	$	70

Write-offs	Write-offs	(36)		—		(36)		Write-offs	(11)		—		(11)
Recoveries	Recoveries	19		—		19		Recoveries	7		—		7
Defaulted vacation ownership notes receivable repurchase activity(1)	Defaulted vacation ownership notes receivable repurchase activity(1)	25		(25)		—		Defaulted vacation ownership notes receivable repurchase activity(1)	8		(8)		—
Initial allowance for credit losses for Legacy-Welk vacation ownership notes receivable		12		21		33

(Decrease) increase in vacation ownership notes receivable reserve	(Decrease) increase in vacation ownership notes receivable reserve	(6)		6		—		(Decrease) increase in vacation ownership notes receivable reserve	(5)		5		—
Balance at September 30, 2021		$	50	$	26	$	76
Balance at March 31, 2022								Balance at March 31, 2022	$	46	$	20	$	66

_________________________

~~Table of Contents~~

Originated Vacation Ownership Notes Receivable

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, 2021.~~March 31, 2022.


		Originated Vacation Ownership Notes Receivable							Originated Vacation Ownership Notes Receivable
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total
2021, remaining		$	14	$	28	$	42
2022		46		115		161
2022, remaining								2022, remaining	$	45	$	97	$	142
2023	2023	40		116		156		2023	29		130		159
2024	2024	39		117		156		2024	27		132		159
2025	2025	37		121		158		2025	27		135		162
2026								2026	27		140		167
Thereafter	Thereafter	335		600		935		Thereafter	196		711		907
Balance at September 30, 2021		$	511	$	1,097	$	1,608
Balance at March 31, 2022								Balance at March 31, 2022	$	351	$	1,345	$	1,696
Weighted average stated interest rate	Weighted average stated interest rate	12.8%		12.8%		12.8%		Weighted average stated interest rate	12.8%		12.9%		12.9%
Range of stated interest rates	Range of stated interest rates	0.0% to 20.9%		0.0% to 19.9%		0.0% to 20.9%		Range of stated interest rates	0.0% to 20.9%		0.0% to 19.9%		0.0% to 20.9%

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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							Originated Vacation Ownership Notes Receivable Reserve
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total
Balance at December 31, 2020		$	193	$	117	$	310
Balance at December 31, 2021								Balance at December 31, 2021	$	193	$	140	$	333
Increase in vacation ownership notes receivable reserve	Increase in vacation ownership notes receivable reserve	48		23		71		Increase in vacation ownership notes receivable reserve	25		4		29
Securitizations(1)	Securitizations(1)	(29)		29		—		Securitizations(1)	(21)		21		—
Clean-up call		3		(3)		—

Write-offs	Write-offs	(49)		—		(49)		Write-offs	(19)		—		(19)
Defaulted vacation ownership notes receivable repurchase activity~~(1)~~(2)	Defaulted vacation ownership notes receivable repurchase activity~~(1)~~(2)	53		(53)		—		Defaulted vacation ownership notes receivable repurchase activity~~(1)~~(2)	15		(15)		—
Balance at September 30, 2021		$	219	$	113	$	332
Balance at March 31, 2022								Balance at March 31, 2022	$	193	$	150	$	343

_________________________

(1)~~Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation ownership notes receivable reserve are~~Reflects the change attributable to the transfer of the reserve from the non-securitized vacation ownership notes receivable reserve to the securitized vacation ownership notes receivable reserve, when MVW 2021-2 LLC purchased the remaining vacation ownership notes receivable that were securitized during the fourth quarter of 2021, and when we securitized vacation ownership notes receivable under our Warehouse Credit Facility (as defined in Footnote 12 “Securitized Debt”) during the first quarter of 2022.

(2)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 defaulted~~repurchase securitized vacation ownership notes receivable.

~~Table of Contents~~

Credit Quality of Vacation Ownership Notes Receivable

Legacy-MVW Vacation Ownership Notes Receivable

For both Legacy-MVW non-securitized and securitized vacation ownership notes receivable, we estimated average remaining default rates of ~~6.67 percent~~6.71% as of ~~September 30, 2021,~~March 31, 2022, and ~~6.74 percent~~6.74% as of December 31, ~~2020.~~2021. 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 $6 million as of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

We use the aging of the vacation ownership notes receivable as the primary credit quality indicator for our Legacy-MVW vacation ownership notes receivable, as historical performance indicates that there is a relationship between the default behavior of borrowers and the age of the receivable associated with the vacation ownership interest.

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 September 30, 2021 $ 98 $ 7 $ 105
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2020 $ 100 $ 14 $ 114


	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, 2022	$	84	$	9	$	93
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2021	$	88	$	8	$	96

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The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-MVW vacation ownership notes receivable as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


		Legacy-MVW Vacation Ownership Notes Receivable													Legacy-MVW Vacation Ownership Notes Receivable
		As of September 30, 2021						As of December 31, 2020							As of March 31, 2022						As of December 31, 2021
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total		Non-Securitized		Securitized		Total
31 – 90 days past due	31 – 90 days past due	$	9	$	18	$	27	$	8	$	25	$	33	31 – 90 days past due	$	6	$	18	$	24	$	6	$	20	$	26
91 – 150 days past due	91 – 150 days past due	3		7		10		5		14		19		91 – 150 days past due	3		9		12		4		8		12
Greater than 150 days past due	Greater than 150 days past due	95		—		95		95		—		95		Greater than 150 days past due	81		—		81		84		—		84
Total past due	Total past due	107		25		132		108		39		147		Total past due	90		27		117		94		28		122
Current	Current	286		900		1,186		231		1,011		1,242		Current	163		1,042		1,205		180		1,027		1,207
Total vacation ownership notes receivable	Total vacation ownership notes receivable	$	393	$	925	$	1,318	$	339	$	1,050	$	1,389	Total vacation ownership notes receivable	$	253	$	1,069	$	1,322	$	274	$	1,055	$	1,329

The following table details the origination year of our Legacy-MVW vacation ownership notes receivable as of ~~September 30, 2021.~~March 31, 2022.

Legacy-MVW Vacation Ownership Notes Receivable
($ in millions) Non-Securitized Securitized Total
Year of Origination
2021 $ 207 $ 79 $ 286
2020 33 169 202
2019 60 269 329
2018 35 178 213
2017 18 107 125
2016 and Prior 40 123 163
$ 393 $ 925 $ 1,318

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	Legacy-MVW Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
Year of Origination
2022	$	83	$	16	$	99
2021	37		349		386
2020	19		151		170
2019	42		226		268
2018	26		145		171
2017 & Prior	46		182		228
	$	253	$	1,069	$	1,322

Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the weighted average FICO score within our consolidated Legacy-ILG and Legacy-Welk vacation ownership notes receivable pools was ~~707~~708 and ~~708,~~707, respectively, based upon the ~~outstanding vacation ownership notes receivable balance~~FICO score of the borrower at the time of origination. The average estimated rate for all future defaults for our Legacy-ILG and Legacy-Welk consolidated outstanding pool of vacation ownership notes receivable was ~~17.13 percent~~17.14% as of ~~September 30, 2021~~March 31, 2022 and ~~14.63 percent~~17.33% as of December 31, ~~2020.~~2021. A 0.5 percentage point increase in the estimated default rate on the Legacy-ILG and Legacy-Welk vacation ownership notes receivable would have resulted in an increase in the related vacation ownership notes receivable reserve of $4 million as of ~~September 30, 2021,~~both March 31, 2022 and ~~$3 million as of~~ December 31, ~~2020.~~2021.

We use the origination of the vacation ownership notes receivable by brand (Westin, Sheraton, Hyatt, Welk) and the FICO scores of the customer as the primary credit quality indicators for our Legacy-ILG and Legacy-Welk vacation ownership notes receivable, as historical performance indicates that there is a relationship between the default behavior of borrowers and the brand associated with the vacation ownership interest they have acquired, supplemented by the FICO scores of the customers. Vacation ownership notes receivable with no FICO score in the tables below primarily relate to non-U.S. resident borrowers.

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

Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable
($ in millions) Non-Securitized Securitized Total
Investment in vacation ownership notes receivable on non-accrual status at September 30, 2021 $ 116 $ 8 $ 124
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2020 $ 109 $ 12 $ 121


	Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
Investment in vacation ownership notes receivable on non-accrual status at March 31, 2022	$	115	$	9	$	124
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2021	$	114	$	10	$	124

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The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-ILG and Legacy-Welk vacation ownership notes receivable as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


		Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable													Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable
		As of September 30, 2021						As of December 31, 2020							As of March 31, 2022						As of December 31, 2021
($ in millions)	($ in millions)	Non-Securitized		Securitized		Total		Non-Securitized		Securitized		Total		($ in millions)	Non-Securitized		Securitized		Total		Non-Securitized		Securitized		Total
31 – 90 days past due	31 – 90 days past due	$	11	$	16	$	27	$	8	$	19	$	27	31 – 90 days past due	$	11	$	21	$	32	$	16	$	24	$	40
91 – 120 days past due	91 – 120 days past due	2		5		7		2		7		9		91 – 120 days past due	4		5		9		4		6		10
Greater than 120 days past due	Greater than 120 days past due	114		3		117		107		5		112		Greater than 120 days past due	111		4		115		110		4		114
Total past due	Total past due	127		24		151		117		31		148		Total past due	126		30		156		130		34		164
Current	Current	289		676		965		123		550		673		Current	229		732		961		219		735		954
Total vacation ownership notes receivable	Total vacation ownership notes receivable	$	416	$	700	$	1,116	$	240	$	581	$	821	Total vacation ownership notes receivable	$	355	$	762	$	1,117	$	349	$	769	$	1,118

The following tables show the Legacy-ILG and Legacy-Welk acquired vacation ownership notes receivable, before reserves, by brand and FICO score.


		Acquired Vacation Ownership Notes Receivable as of September 30, 2021											Acquired Vacation Ownership Notes Receivable as of March 31, 2022
($ in millions)	($ in millions)	700 +		600 - 699		< 600		No Score		Total		($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	Westin	$	59	$	36	$	3	$	9	$	107	Westin	$	48	$	30	$	3	$	7	$	88
Sheraton	Sheraton	59		54		10		24		147		Sheraton	49		43		7		19		118
Hyatt	Hyatt	9		6		1		1		17		Hyatt	7		5		1		—		13
Welk	Welk	128		87		1		3		219		Welk	102		71		1		2		176
Other	Other	2		1		—		1		4		Other	1		1		—		2		4
		$	257	$	184	$	15	$	38	$	494		$	207	$	150	$	12	$	30	$	399


	Acquired Vacation Ownership Notes Receivable as of December 31, 2021
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	$	52	$	32	$	3	$	8	$	95
Sheraton	54		48		8		23		133
Hyatt	8		6		1		—		15
Welk	115		79		1		2		197
Other	2		—		—		2		4
	$	231	$	165	$	13	$	35	$	444

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Acquired Vacation Ownership Notes Receivable as of December 31, 2020
($ in millions) 700 + 600 - 699 < 600 No Score Total
Westin $ 81 $ 48 $ 4 $ 11 $ 144
Sheraton 81 73 13 31 198
Hyatt 12 9 1 — 22
Other 2 1 — 2 5
$ 176 $ 131 $ 18 $ 44 $ 369

The following tables detail the origination year of our Legacy-ILG and Legacy-Welk acquired vacation ownership notes receivable by brand and FICO score as of ~~September 30, 2021.~~March 31, 2022.


		Acquired Vacation Ownership Notes Receivable - Westin															Acquired Vacation Ownership Notes Receivable 2018 & Prior
($ in millions)	($ in millions)	2021		2020		2019		2018		2017		2016 & Prior		Total		($ in millions)	Westin		Sheraton		Hyatt & Other		Total
700 +	700 +	$	—	$	—	$	—	$	16	$	17	$	26	$	59	700 +	$	48	$	49	$	8	$	105
600 - 699	600 - 699	—		—		—		9		10		17		36		600 - 699	30		43		6		79
< 600	< 600	—		—		—		2		—		1		3		< 600	3		7		1		11
No Score	No Score	—		—		—		2		3		4		9		No Score	7		19		2		28
		$	—	$	—	$	—	$	29	$	30	$	48	$	107		$	88	$	118	$	17	$	223

Acquired Vacation Ownership Notes Receivable - Sheraton
($ in millions) 2021 2020 2019 2018 2017 2016 & Prior Total
700 + $ — $ — $ — $ 17 $ 17 $ 25 $ 59
600 - 699 — — — 14 15 25 54
< 600 — — — 6 2 2 10
No Score — — — 7 7 10 24
$ — $ — $ — $ 44 $ 41 $ 62 $ 147

Acquired Vacation Ownership Notes Receivable - Hyatt and Other
($ in millions) 2021 2020 2019 2018 2017 2016 & Prior Total
700 + $ — $ — $ — $ 3 $ 2 $ 6 $ 11
600 - 699 — — — 1 2 4 7
< 600 — — — — — 1 1
No Score — — — — — 2 2
$ — $ — $ — $ 4 $ 4 $ 13 $ 21

Acquired Vacation Ownership Notes Receivable - Welk
($ in millions) 2021 2020 2019 2018 2017 2016 & Prior Total
700 + $ 22 $ 14 $ 21 $ 33 $ 27 $ 11 $ 128
600 - 699 17 11 15 23 16 5 87
< 600 — — — — 1 — 1
No Score 1 — 1 1 — — 3
$ 40 $ 25 $ 37 $ 57 $ 44 $ 16 $ 219

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	Acquired Vacation Ownership Notes Receivable - Welk
($ in millions)	2021		2020		2019		2018 & Prior		Total
700 +	$	8	$	22	$	26	$	46	$	102
600 - 699	4		13		19		35		71
< 600	—		1		—		—		1
No Score	—		—		1		1		2
	$	12	$	36	$	46	$	82	$	176

The following tables show the Legacy-ILG and Legacy-Welk originated vacation ownership notes receivable, before reserves, by brand and FICO score.


		Originated Vacation Ownership Notes Receivable as of September 30, 2021											Originated Vacation Ownership Notes Receivable as of March 31, 2022
($ in millions)	($ in millions)	700 +		600 - 699		< 600		No Score		Total		($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	Westin	$	136	$	63	$	7	$	28	$	234	Westin	$	148	$	68	$	9	$	40	$	265
Sheraton	Sheraton	127		91		19		45		282		Sheraton	138		98		20		46		302
Hyatt	Hyatt	21		10		1		—		32		Hyatt	23		11		1		—		35
Welk	Welk	52		21		1		—		74		Welk	79		34		1		1		115
		$	336	$	185	$	28	$	73	$	622		$	388	$	211	$	31	$	87	$	717


		Originated Vacation Ownership Notes Receivable as of December 31, 2020											Originated Vacation Ownership Notes Receivable as of December 31, 2021
($ in millions)	($ in millions)	700 +		600 - 699		< 600		No Score		Total		($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	Westin	$	109	$	52	$	6	$	23	$	190	Westin	$	143	$	66	$	8	$	34	$	251
Sheraton	Sheraton	106		72		16		43		237		Sheraton	136		94		20		46		296
Hyatt	Hyatt	16		8		—		—		24		Hyatt	22		11		—		—		33
Welk												Welk	65		27		1		1		94
													$	366	$	198	$	29	$	81	$	674
		$	231	$	132	$	22	$	66	$	451

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The following tables detail the origination year of our Legacy-ILG and Legacy-Welk originated vacation ownership notes receivable by brand and FICO score as of ~~September 30, 2021.~~March 31, 2022.


		Originated Vacation Ownership Notes Receivable - Westin															Originated Vacation Ownership Notes Receivable - Westin
($ in millions)	($ in millions)	2021		2020		2019		2018		2017		2016 & Prior		Total		($ in millions)	2022		2021		2020		2019		2018		Total
700 +	700 +	$	58	$	24	$	45	$	9	$	—	$	—	$	136	700 +	$	21	$	61	$	20	$	38	$	8	$	148
600 - 699	600 - 699	23		11		24		5		—		—		63		600 - 699	6		29		9		20		4		68
< 600	< 600	3		2		2		—		—		—		7		< 600	1		3		2		2		1		9
No Score	No Score	13		5		9		1		—		—		28		No Score	18		9		4		8		1		40
		$	97	$	42	$	80	$	15	$	—	$	—	$	234		$	46	$	102	$	35	$	68	$	14	$	265


		Originated Vacation Ownership Notes Receivable - Sheraton															Originated Vacation Ownership Notes Receivable - Sheraton
($ in millions)	($ in millions)	2021		2020		2019		2018		2017		2016 & Prior		Total		($ in millions)	2022		2021		2020		2019		2018		Total
700 +	700 +	$	47	$	26	$	43	$	11	$	—	$	—	$	127	700 +	$	17	$	56	$	21	$	35	$	9	$	138
600 - 699	600 - 699	34		17		31		9		—		—		91		600 - 699	8		43		14		25		8		98
< 600	< 600	6		4		7		2		—		—		19		< 600	1		9		4		5		1		20
No Score	No Score	8		10		22		5		—		—		45		No Score	5		11		8		18		4		46
		$	95	$	57	$	103	$	27	$	—	$	—	$	282		$	31	$	119	$	47	$	83	$	22	$	302


		Originated Vacation Ownership Notes Receivable - Hyatt															Originated Vacation Ownership Notes Receivable - Hyatt
($ in millions)	($ in millions)	2021		2020		2019		2018		2017		2016 & Prior		Total		($ in millions)	2022		2021		2020		2019		2018		Total
700 +	700 +	$	9	$	3	$	7	$	2	$	—	$	—	$	21	700 +	$	5	$	9	$	3	$	5	$	1	$	23
600 - 699	600 - 699	4		2		3		1		—		—		10		600 - 699	3		4		1		2		1		11
< 600	< 600	1		—		—		—		—		—		1		< 600	—		1		—		—		—		1
No Score	No Score	—		—		—		—		—		—		—		No Score	—		—		—		—		—		—
		$	14	$	5	$	10	$	3	$	—	$	—	$	32		$	8	$	14	$	4	$	7	$	2	$	35


		Originated Vacation Ownership Notes Receivable - Welk															Originated Vacation Ownership Notes Receivable - Welk
($ in millions)	($ in millions)	2021		2020		2019		2018		2017		2016 & Prior		Total		($ in millions)	2022		2021		2020		2019		2018		Total
700 +	700 +	$	52	$	—	$	—	$	—	$	—	$	—	$	52	700 +	$	24	$	55	$	—	$	—	$	—	$	79
600 - 699	600 - 699	21		—		—		—		—		—		21		600 - 699	11		23		—		—		—		34
< 600	< 600	1		—		—		—		—		—		1		< 600	—		1		—		—		—		1
No Score	No Score	—		—		—		—		—		—		—		No Score	1		—		—		—		—		1
		$	74	$	—	$	—	$	—	$	—	$	—	$	74		$	36	$	79	$	—	$	—	$	—	$	115

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7.			FINANCIAL INSTRUMENTS

The following table shows the carrying values and the estimated fair values of financial assets and liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures regarding the fair value of financial instruments. Considerable judgment is required in interpreting market data to develop estimates of fair value. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts. The table excludes Cash and cash equivalents, Restricted cash, Accounts receivable, deposits included in Other assets, Accounts payable, Advance deposits, and Accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.


		At September 30, 2021				At December 31, 2020					At March 31, 2022				At December 31, 2021
($ in millions)	($ in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		($ in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Vacation ownership notes receivable	Vacation ownership notes receivable	$	2,026	$	2,084	$	1,840	$	1,886	Vacation ownership notes receivable	$	2,030	$	2,091	$	2,045	$	2,102
Other assets	Other assets	70		70		60		60		Other assets	74		74		76		76
Total financial assets	Total financial assets	$	2,096	$	2,154	$	1,900	$	1,946	Total financial assets	$	2,104	$	2,165	$	2,121	$	2,178

Securitized debt, net	Securitized debt, net	$	(1,594)	$	(1,646)	$	(1,588)	$	(1,653)	Securitized debt, net	$	(1,779)	$	(1,745)	$	(1,856)	$	(1,900)
2025 Notes, net	2025 Notes, net	(495)		(529)		(494)		(533)		2025 Notes, net	(248)		(257)		(248)		(261)
2026 Notes, net		—		—		(744)		(784)
2028 Notes, net	2028 Notes, net	(346)		(356)		(346)		(359)		2028 Notes, net	(346)		(338)		(346)		(362)
2029 Notes, net	2029 Notes, net	(493)		(507)		—		—		2029 Notes, net	(493)		(474)		(493)		(505)
Term Loan, net	Term Loan, net	(776)		(769)		(873)		(864)		Term Loan, net	(777)		(763)		(776)		(784)

2022 Convertible Notes, net		(221)		(280)		(215)		(262)
2026 Convertible Notes, net		(455)		(648)		—		—
2022 Convertible Notes, net(1)										2022 Convertible Notes, net(1)	(229)		(265)		(224)		(280)
2026 Convertible Notes, net(1)										2026 Convertible Notes, net(1)	(563)		(632)		(461)		(682)
Non-interest bearing note payable, net										Non-interest bearing note payable, net	(11)		(11)		—		—
Total financial liabilities	Total financial liabilities	$	(4,380)	$	(4,735)	$	(4,260)	$	(4,455)	Total financial liabilities	$	(4,446)	$	(4,485)	$	(4,404)	$	(4,774)

_________________________

(1)Prior period amounts have not been adjusted due to 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.

Vacation Ownership Notes Receivable


		At September 30, 2021				At December 31, 2020					At March 31, 2022				At December 31, 2021
($ in millions)	($ in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		($ in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Vacation ownership notes receivable	Vacation ownership notes receivable									Vacation ownership notes receivable
Securitized	Securitized	$	1,486	$	1,532	$	1,493	$	1,530	Securitized	$	1,661	$	1,715	$	1,662	$	1,712

Eligible for securitization	Eligible for securitization	244		256		128		137		Eligible for securitization	103		110		97		104
Not eligible for securitization	Not eligible for securitization	296		296		219		219		Not eligible for securitization	266		266		286		286
Non-securitized	Non-securitized	540		552		347		356		Non-securitized	369		376		383		390
		$	2,026	$	2,084	$	1,840	$	1,886		$	2,030	$	2,091	$	2,045	$	2,102

We estimate the fair value of our vacation ownership notes receivable that have been securitized using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model uses default rates, prepayment rates, coupon rates, and loan terms for our securitized vacation ownership notes receivable portfolio as key drivers of risk and relative value to determine the fair value of the underlying vacation ownership notes receivable. We concluded that this fair value measurement should be categorized within Level 3.

Due to factors that impact the general marketability of our vacation ownership notes receivable that have not been securitized, as well as current market conditions, we bifurcate our non-securitized vacation ownership notes receivable at each balance sheet date into those eligible and not eligible for securitization using criteria applicable to current securitization transactions in the ABS market. Generally, vacation ownership notes receivable are considered not eligible for securitization if any of the following attributes are present: (1) payments are greater than 30 days past due; (2) the first payment has not been received; or (3) the collateral is located in Asia or Europe. In some cases, eligibility may also be determined based on

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the credit score of the borrower, the remaining term of the loans and other similar factors that may reflect investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable.

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The table above shows the bifurcation of our vacation ownership notes receivable that have not been securitized into those eligible and not eligible for securitization based upon the aforementioned eligibility criteria. We estimate the fair value of the portion of our vacation ownership notes receivable that have not been securitized that we believe will ultimately be securitized in the same manner as vacation ownership notes receivable that have been securitized. We value the remaining vacation ownership notes receivable that have not been securitized at their carrying value, rather than using our pricing model. We believe that the carrying value of these particular vacation ownership notes receivable approximates fair value because the stated, or otherwise imputed, interest rates of these loans are consistent with current market rates and the reserve for these vacation ownership notes receivable appropriately accounts for risks in default rates, prepayment rates, discount rates, and loan terms. We concluded that this fair value measurement should be categorized within Level 3.

Other Assets

Other assets include ~~$70~~$74 million of company owned insurance policies (the “COLI policies”), acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan, that are held in a rabbi trust. The carrying value of the COLI policies is equal to their cash surrender value (Level 2 inputs).

Securitized Debt

We generate cash flow estimates by modeling all bond tranches for our active vacation ownership notes receivable securitization transactions, with consideration for the collateral specific to each tranche. The key drivers in our analysis include default rates, prepayment rates, bond interest rates, and other structural factors, which we use to estimate the projected cash flows. In order to estimate market credit spreads by rating, we obtain indicative credit spreads from investment banks that actively issue and facilitate the market for vacation ownership securities and determine an average credit spread by rating level of the different tranches. We then apply those estimated market spreads to swap rates in order to estimate an underlying discount rate for calculating the fair value of the active bonds payable. We concluded that this fair value measurement should be categorized within Level 3.

Senior Notes

We estimate the fair value of our 2025 ~~Notes, 2026~~ Notes, 2028 Notes, and 2029 Notes (each as defined in Footnote 13 “Debt”) using quoted market prices as of the last trading day for the quarter; however these notes have only a limited trading history and volume, and as such this fair value estimate is not necessarily indicative of the value at which these notes could be retired or transferred. We concluded that this fair value measurement should be categorized within Level 2.

Term Loan

We estimate the fair value of our Term Loan (as defined in Footnote 13 “Debt”) using quotes from securities dealers as of the last trading day for the quarter; however this loan has only a limited trading history and volume, and as such this fair value estimate is not necessarily indicative of the value at which the Term Loan could be retired or transferred. We concluded that this fair value measurement should be categorized within Level 3.

Convertible Notes

We estimate the fair value of our 2022 Convertible Notes and 2026 Convertible Notes (each as defined in Footnote 13 “Debt” and referred to collectively as our “convertible notes”) using quoted market prices as of the last trading day for the quarter; however these notes have only a limited trading history and volume, and as such this fair value estimate is not necessarily indicative of the value at which the convertible notes could be retired or transferred. We concluded that this fair value measurement should be categorized within Level 2. The difference between the carrying value and the fair value is primarily attributed to the underlying conversion feature and the spread between the conversion price and the market value of the shares underlying the convertible notes.

Non-Interest Bearing Note Payable

The carrying value of our non-interest bearing note payable issued in connection with the acquisition of vacation ownership units located in Bali, Indonesia approximates fair value, because the imputed interest rate used to discount this note payable is consistent with current market rates. We concluded that this fair value measurement should be categorized within Level 3.

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8.			EARNINGS PER SHARE

Basic earnings or loss per common share attributable to common shareholders is calculated by dividing net income or loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the reporting period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings or loss per common share attributable to common shareholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period, except in periods when there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings or loss per common share applicable to common shareholders by application of the treasury stock method using average market prices during the period.

~~Our calculation~~We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. ASU 2020-06 was applicable to our convertible notes outstanding as of adoption and requires us to calculate the impact of our convertible notes on diluted earnings ~~or loss~~ per share ~~attributable to common shareholders reflects~~using the “if-converted” method, regardless of our intent to settle ~~conversions~~or partially settle the debt in cash. Under the “if-converted” method, shares issuable upon conversion of our convertible notes ~~through a combination settlement, which contemplates repayment in cash~~are assumed to be converted into common stock at the beginning of the ~~principal amount and repayment in shares of our common stock of any excess of~~period, to the conversion value over the principal amount (the “conversion premium”). Therefore, we include only the shares that may be issued with respect to any conversion premium in total dilutive weighted average shares outstanding, which we calculate using the treasury stock method based upon an average priceextent dilutive. Earnings per share for the ~~quarter.~~

~~As of September 30,~~three months ended March 31, 2021 ~~a conversion premium existed~~have not been retrospectively restated and continue to be reported under the accounting standards in effect for our 2022 Convertible Notes (as defined in Footnote 13 “Debt”). As no conversion premium existed as of September 30, 2020, there was no potential dilutive impact from our 2022 Convertible Notes for the third quarter or first three quarters of 2020. Additionally, as no conversion premium existed for our 2026 Convertible Notes (as defined in Footnote 13 “Debt”) as of September 30, 2021, there was no potential dilutive impact from our 2026 Convertible Notes for the third quarter or first three quarters of 2021.that period.

The shares issuable on exercise of the warrants sold in connection with the issuance of our convertible notes will not impact the total dilutive weighted average shares outstanding unless and until the price of our common stock exceeds the respective strike price. If and when the price of our common stock exceeds the respective strike price of either of the warrants, we will include the dilutive effect of the additional shares that may be issued upon exercise of the warrants in total dilutive weighted average shares outstanding, which we calculate using the treasury stock method. The convertible note hedges purchased in connection with each issuance of convertible notes are considered to be anti-dilutive and do not impact our calculation of diluted earnings per share attributable to common shareholders for any periods presented herein. See Footnote 13 “Debt” for further information on our convertible notes.

The table below illustrates the reconciliation of the earnings or loss and number of shares used in our calculation of basic and diluted earnings or loss per share attributable to common shareholders.


		Three Months Ended				Nine Months Ended					Three Months Ended
(in millions, except per share amounts)	(in millions, except per share amounts)	September 30, 2021(1)		September 30, 2020		September 30, 2021		September 30, 2020		(in millions, except per share amounts)	March 31, 2022(1)		March 31, 2021
Computation of Basic Earnings (Loss) Per Share Attributable to Common Shareholders	Computation of Basic Earnings (Loss) Per Share Attributable to Common Shareholders									Computation of Basic Earnings (Loss) Per Share Attributable to Common Shareholders
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	10	$	(62)	$	(12)	$	(238)	Net income (loss) attributable to common shareholders	$	58	$	(28)
Shares for basic earnings (loss) per share	Shares for basic earnings (loss) per share	42.9		41.2		42.4		41.3		Shares for basic earnings (loss) per share	42.4		41.4
Basic earnings (loss) per share	Basic earnings (loss) per share	$	0.24	$	(1.51)	$	(0.28)	$	(5.76)	Basic earnings (loss) per share	$	1.36	$	(0.68)
Computation of Diluted Earnings (Loss) Per Share Attributable to Common Shareholders	Computation of Diluted Earnings (Loss) Per Share Attributable to Common Shareholders									Computation of Diluted Earnings (Loss) Per Share Attributable to Common Shareholders
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	10	$	(62)	$	(12)	$	(238)	Net income (loss) attributable to common shareholders	$	58	$	(28)
Add back of interest expense related to convertible notes subsequent to the adoption of ASU 2020-06, net of tax										Add back of interest expense related to convertible notes subsequent to the adoption of ASU 2020-06, net of tax	1		—
Numerator used to calculate diluted EPS										Numerator used to calculate diluted EPS	$	59	$	(28)

Shares for basic earnings (loss) per share	Shares for basic earnings (loss) per share	42.9		41.2		42.4		41.3		Shares for basic earnings (loss) per share	42.4		41.4

Effect of dilutive shares outstanding (2)	Effect of dilutive shares outstanding (2)									Effect of dilutive shares outstanding (2)
Employee stock options and SARs		0.2		—		—		—
Employee SARs										Employee SARs	0.2		—
Restricted stock units	Restricted stock units	0.5		—		—		—		Restricted stock units	0.3		—
2022 Convertible Notes		0.1		—		—		—

2022 Convertible Notes ($230 million of principal)										2022 Convertible Notes ($230 million of principal)	1.6		—
2026 Convertible Notes ($575 million of principal)										2026 Convertible Notes ($575 million of principal)	3.4		—
Shares for diluted earnings (loss) per share	Shares for diluted earnings (loss) per share	43.7		41.2		42.4		41.3		Shares for diluted earnings (loss) per share	47.9		41.4
Diluted earnings (loss) per share	Diluted earnings (loss) per share	$	0.23	$	(1.51)	$	(0.28)	$	(5.76)	Diluted earnings (loss) per share	$	1.23	$	(0.68)

(1)The computation of diluted earnings per share attributable to common shareholders excludes approximately ~~298,000~~300,000 shares of common stock, the maximum number of shares issuable as of ~~September 30, 2021,~~March 31, 2022, upon the vesting of certain performance-based awards, because the performance ~~condition~~conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.

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(2)For the first ~~three quarters~~quarter of 2021, ~~and the third quarter and the first three quarters of 2020,~~ the following potentially dilutive securities were excluded from the above calculation of diluted net loss per share attributable to common shareholders during the periods presented, as the effects of including these securities would have been anti-dilutive.

Three Months Ended Nine Months Ended
(in millions) September 30, 2020 September 30, 2021 September 30, 2020
Employee stock options and SARs 0.1 0.2 0.2
Restricted stock units 0.3 0.5 0.2
2022 Convertible Notes — 0.1 —
0.4 0.8 0.4


									Three Months Ended
(in millions)									March 31, 2021
Employee SARs									0.2
Restricted stock units									0.5
2022 Convertible Notes ($230 million of principal)									0.1

									0.8

In accordance with the applicable accounting guidance for calculating earnings per share, for the ~~third~~first quarter of ~~2021,~~2022, we excluded from our calculation of diluted earnings per share ~~127,008~~126,169 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise price of $173.88 of such SARs was greater than the average market price for the applicable period.


9.			INVENTORY

The following table shows the composition of our inventory balances:


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021

Real estate inventory(1)	Real estate inventory(1)	$	732	$	749	Real estate inventory(1)	$	684	$	710
Other	Other	9		10		Other	9		9
		$	741	$	759		$	693	$	719

_________________________

(1)Represents completed inventory that is registered for sale as vacation ownership interests and vacation ownership inventory expected to be reacquired pursuant to estimated future foreclosures.

We value vacation ownership products at the lower of cost or fair market value less costs to sell, in accordance with applicable accounting guidance, and we record operating supplies at the lower of cost (using the first-in, first-out method) or net realizable value. Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $6$7 million during the first ~~three quarters~~quarter of ~~2021~~2022 and by $4$1 million during the first ~~three quarters~~quarter of ~~2020.~~2021.

In addition to the above, at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had ~~$465~~$496 million and ~~$162~~$460 million, respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until the time at which they are available and legally registered for sale as vacation ownership products. We also have $24 million and $43 million of deposits on future purchases of inventory at September 30, 2021 and December 31, 2020, respectively, which are included in the Other assets line on our Balance Sheets.


10.			GOODWILL AND INTANGIBLES

Goodwill

The following table details the carrying amount of our goodwill at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and reflects goodwill attributed to the ILG Acquisition and the Welk Acquisition.

($ in millions) Vacation Ownership Reporting Unit Exchange & Third-Party Management Reporting Unit Total Consolidated
Balance at December 31, 2020 $ 2,445 $ 372 $ 2,817
Welk Acquisition 299 — 299
Balance at June 30, 2021 2,744 372 3,116
Measurement period adjustments (30) — (30)
Balance at September 30, 2021 $ 2,714 $ 372 $ 3,086


($ in millions)	Vacation Ownership Reporting Unit		Exchange & Third-Party Management Reporting Unit		Total Consolidated
Balance at December 31, 2021	$	2,778	$	372	$	3,150

Measurement period adjustments	(8)		—		(8)

Balance at March 31, 2022	$	2,770	$	372	$	3,142

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~~Q1 2021, Q2 2021, and Q3 2021~~

We periodically monitor for indicators of impairment of our goodwill and none were identified during the third quarter or first three quarters of 2021. While the goodwill of our reporting units was not impaired during the first three quarters of 2021, we cannot assure you that our goodwill will not be impaired in future periods.

~~Q1 2020~~

We recognized a non-cash impairment charge of $73 million in the Impairment line on our Income Statement during the first quarter of 2020 related to the Exchange & Third-Party Management reporting unit, which was primarily driven by the change in expected future operating results as a result of the impact of the COVID-19 pandemic.

Intangible Assets

The following table details the composition of our intangible asset balances:

($ in millions) At September 30, 2021 At December 31, 2020
Definite-lived intangible assets
Member relationships $ 671 $ 671
Management contracts 451 351
1,122 1,022
Accumulated amortization (179) (134)
943 888
Indefinite-lived intangible assets
Trade names 64 64
$ 1,007 $ 952

~~Q1 2020~~

We recognized a non-cash impairment charge of $18 million in the Impairment line on our Income Statement during the first quarter of 2020 related to the indefinite-lived intangible assets in our Exchange & Third-Party Management segment, which was primarily attributed to the decline in estimated near-term revenues and related recovery of long-term revenues as a result of the impact of the COVID-19 pandemic.


($ in millions)	At March 31, 2022		At December 31, 2021
Definite-lived intangible assets
Member relationships	$	671	$	671
Management contracts	452		452
	1,123		1,123
Accumulated amortization	(209)		(194)
	914		929
Indefinite-lived intangible assets
Trade names	64		64
	$	978	$	993


11.			CONTINGENCIES AND COMMITMENTS

Commitments and Letters of Credit

As of ~~September 30, 2021,~~March 31, 2022, we had the following commitments outstanding:

•We have various contracts for the use of information technology hardware and software that we use in the normal course of business. Our aggregate commitment under these contracts was ~~$87~~$97 million, of which we expect ~~$14~~$43 million, ~~$40~~$30 million, ~~$21~~$13 million, ~~$6 million, $5~~$8 million, and $1$3 million will be paid in the remainder of ~~2021,~~ 2022, 2023, 2024, 2025, and 2026 and thereafter, respectively.

•We have ~~various commitments~~a commitment to acquire real estate for use in our Vacation Ownership segment via our involvement with ~~VIEs.~~a VIE. Refer to Footnote 16 “Variable Interest Entities” for additional information and our activities relating to the ~~VIEs~~VIE involved in ~~these transactions.~~this transaction.

•We have ~~a remaining commitment~~commitments to ~~purchase 88 vacation ownership units located~~acquire inventory from our managed owners’ associations in ~~Bali, Indonesia~~the remainder of 2022 for use in our Vacation Ownership segment, contingent upon completion of construction to agreed-upon standards. We expect to complete the acquisition in 2022 and to make the remaining payments of $23 million in 2022 with respect to these units, when specific construction milestones are completed.$79 million.

Surety bonds issued as of ~~September 30, 2021~~March 31, 2022 totaled ~~$123~~$120 million, the majority of which were requested by federal, state, or local governments in connection with our operations.

As of ~~September 30, 2021,~~March 31, 2022, we had $2 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 13 “Debt”). In addition, as of ~~September 30, 2021,~~March 31, 2022, we had $2 million in letters of credit outstanding related to and in lieu of reserves required for several vacation ownership notes receivable securitization transactions outstanding. These letters of credit are not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

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We estimate the cash outflow associated with completing the phases of our existing portfolio of vacation ownership projects currently under development will be approximately $2 million, of which $1 million is included within liabilities on our Balance Sheet at September 30, 2021. This estimate is based on our current development plans, which remain subject to change, and we expect the phases currently under development will be completed in 2022.

Guarantees

Certain of our rental management agreements in our Exchange & Third-Party Management segment provide for owners of properties we manage to receive specified percentages of rental revenue or guaranteed amounts generated under our management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either retains the balance (if any) as its fee or makes up the deficit. At ~~September 30, 2021,~~March 31, 2022, our maximum exposure under fixed dollar guarantees was ~~$12~~$8 million, of which $1 ~~million, $4~~ million, $2 million, $2 million, $1 million, $1 million, and $2$1 million relate to the remainder of ~~2021,~~ 2022, 2023, 2024, 2025, 2026, and thereafter, respectively.

We have a commitment to ~~a property~~an owners’ association that we manage to pay for any shortfall between the actual expenses incurred by the ~~property~~ owners’ association and the income received by the ~~property~~ owners’ ~~association.~~association, in lieu of maintenance fees for unsold inventory. The agreement will terminate on the earlier of: 1) sale of ~~80%~~95% of the total ownership ~~interests;~~interests in the owners’ association; or 2) ~~upon our~~ written notification of ~~termination.~~termination by either party. At ~~September 30, 2021,~~March 31, 2022, our expected commitment for the remainder of ~~2021~~2022 is ~~$3 million.~~$10 million, which will ultimately be recorded as a component of rental expense on our income statement.

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Loss Contingencies

In March 2017, RCHFU, L.L.C. and other owners at The Ritz-Carlton Club, Aspen Highlands (“RCC Aspen Highlands”) filed a complaint in an action pending in the U.S. District Court for the District of Colorado against us and certain third parties, alleging that their fractional interests were devalued by the affiliation of the RCC Aspen Highlands and other Ritz-Carlton Clubs with our points-based Marriott Vacation Club Destinations (“MVCD”) program. The plaintiffs sought compensatory damages, disgorgement, punitive damages, fees and costs. In September 2021, the District Court granted our motion for summary judgment and dismissed the case. In October 2021, the plaintiffs appealed the ruling. Subsequently, the parties have agreed in principle to the dismissal of plaintiffs’ appeal in exchange for a dismissal of our claim for attorneys’ fees and expenses.

In May 2016, a purported class-action lawsuit was filed in the U.S. District Court for the Middle District of Florida by Anthony and Beth Lennen against us and certain third parties. The complaint challenged the characterization of the beneficial interests in the MVCD trust that are sold to customers as real estate interests under Florida law, the structure of the trust, and associated operational aspects of the trust. The plaintiffs sought declaratory relief, an unwinding of the MVCD product, and punitive damages. In August 2019, the District Court granted our motion for judgment on the pleadings and dismissed the case. The plaintiffs have appealed the ruling.

In February 2019, the owners’ association for the St. Regis Residence Club, New York filed a lawsuit in the Supreme Court for the State of New York, New York County, Commercial Division against ILG and several of its subsidiaries and certain third parties. The operative complaint alleges that the defendants breached their fiduciary duties related to sale and rental practices, aided and abetted certain breaches of fiduciary duty, engaged in self-dealing as the sponsor and manager of the club, tortiously interfered with the management agreement, ~~was~~were unjustly enriched, and engaged in anticompetitive conduct. The plaintiff is seeking unspecified damages, punitive damages and disgorgement of payments under the management and purchase agreements. In February 2022, the Court granted our motion to dismiss the complaint and dismissed with prejudice all claims except one, with respect to which the plaintiff was granted leave to amend its complaint. The plaintiff has filed an amended complaint and has appealed the dismissal of the other claims.

In April 2019, a purported class-action lawsuit was filed by Alan and Marjorie Helman and others against us in the Superior Court of the Virgin Islands, Division of St. Thomas alleging that their fractional interests were devalued by the affiliation of The Ritz-Carlton Club, St. Thomas and other Ritz-Carlton Clubs with our MVCD program. The lawsuit was subsequently removed to the U.S. District Court for the District of the Virgin Islands. The plaintiffs are seeking unspecified damages, disgorgement of profits, fees and costs.

In May 2019, the G.A. Resort Condominium Association Inc., the owners’ association for the fractional owners at the Hyatt Residence Club Grand Aspen resort (“HRC Grand Aspen”) filed a lawsuit against us in the District Court for the County of Pitkin, Colorado relating to the transfer of ownership of developer-owned fractional interests at HRC Grand Aspen to the HPC Trust Club for sale and use as a part of the Hyatt Residence Club Portfolio Program. The lawsuit was subsequently removed to the U.S. District Court for the District of Colorado. The plaintiff sought termination of the management agreement with the owners’ association, the annulment of certain amendments to governing documents at HRC Grand Aspen, the removal of fractional interests at HRC Grand Aspen from the HPC Trust Club, unspecified damages, disgorgement of profits, fees and costs. In November 2020, the District Court granted our motion to dismiss and dismissed the case. The plaintiffs have appealed the ruling.

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We believe we have meritorious defenses to the claims in each of the above matters and intend to vigorously defend each matter.

In the ordinary course of our business, various claims and lawsuits have been filed or are pending against us. A number of these lawsuits and claims may exist at any given time. Additionally, the COVID-19 pandemic may give rise to various claims and lawsuits from owners, members and other parties. We record and accrue for legal contingencies when we determine that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations, we evaluate, among other things, the degree of probability of an unfavorable outcome and, when it is probable that a liability has been incurred, our ability to make a reasonable estimate of loss. We review these accruals each reporting period and make revisions based on changes in facts and circumstances.

We have not accrued for any of the pending matters described above and we cannot estimate a range of the potential liability associated with these pending matters, if any, at this time. We have accrued for other claims and lawsuits, but the amount accrued is not material individually or in the aggregate. For matters not requiring accrual, we do not believe that the ultimate outcome of such matters, individually or in the aggregate, will materially harm our financial position, cash flows, or overall trends in results of operations based on information currently available. However, legal proceedings are inherently uncertain, and while we believe that our accruals are adequate and/or we have valid defenses to the claims asserted, unfavorable rulings could occur that could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.

Leases That Have Not Yet Commenced

During ~~the first quarter of~~ 2020, we entered into a finance lease arrangement, which was then amended in 2021, for our new global headquarters office building, which is being constructed in Orlando, Florida. The initial lease term is approximately 16 years with total lease payments of ~~$129~~$137 million for the aforementioned period. During 2020, in response to the COVID-19 pandemic and our ongoing evaluation of future space needs, we entered into a standstill arrangement with the developer/lessor, which expired in June 2021. During the second quarter of 2021, we amended our lease agreement with the developer/lessor andWe expect the new office building to be completed in 2023. Upon commencement of the lease term, a right-of-use asset and corresponding liability will be recorded on our balance sheet.

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12.			SECURITIZED DEBT

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


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Vacation ownership notes receivable securitizations, gross(1)	Vacation ownership notes receivable securitizations, gross(1)	$	1,611	$	1,604	Vacation ownership notes receivable securitizations, gross(1)	$	1,698	$	1,877
Unamortized debt discount and issuance costs	Unamortized debt discount and issuance costs	(17)		(16)		Unamortized debt discount and issuance costs	(19)		(21)
							1,679		1,856

Warehouse Credit Facility, gross						Warehouse Credit Facility, gross	101		—
Unamortized debt issuance costs(2)						Unamortized debt issuance costs(2)	(1)		—
							100		—

							$	1,779	$	1,856

		$	1,594	$	1,588

_________________________

(1)Interest rates as of ~~September 30, 2021~~March 31, 2022 range from 1.5% to 4.4%, with a weighted average interest rate of ~~2.5%~~2.3%.

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

All of our securitized debt is non-recourse to ~~us.~~MVWC. See Footnote 16 “Variable Interest Entities” for a discussion of the collateral for the non-recourse debt associated with our securitized debt.

The following table shows scheduled future principal payments for our securitized debt as of ~~September 30, 2021.~~March 31, 2022.

Vacation Ownership
Notes Receivable Securitizations
($ in millions)
Payments Year
2021, remaining $ 44
2022 175
2023 179
2024 182
2025 183
Thereafter 848
$ 1,611

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	Vacation Ownership Notes Receivable Securitizations		Warehouse Credit Facility		Total
($ in millions)
Payments Year
2022, remaining	$	135	$	3	$	138
2023	182		5		187
2024	185		93		278
2025	185		—		185
2026	183		—		183
Thereafter	828		—		828
	$	1,698	$	101	$	1,799

Vacation Ownership Notes Receivable Securitizations

Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s established parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. During the ~~third~~first quarter of ~~2021,~~2022, and as of ~~September 30, 2021, no~~March 31, 2022, we had 14 securitized vacation ownership notes receivable pools outstanding, none of which were out of compliance with their respective established parameters. ~~As of September 30, 2021, we had 13 securitized vacation ownership notes receivable pools outstanding.~~

As the contractual terms of the underlying securitized vacation ownership notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may occur earlier than shown above due to prepayments by the vacation ownership notes receivable obligors.

During the second quarter of 2021, we completed the securitization of a pool of $434 million of vacation ownership notes receivable. In connection with the securitization, investors purchased in a private placement $425 million in vacation ownership loan backed notes from MVW 2021-1W LLC (the “2021-1W LLC”). NaN classes of vacation ownership loan backed notes were issued by the 2021-1W LLC: $207 million of Class A Notes, $107 million of Class B Notes, $80 million of Class C Notes, and $31 million of Class D Notes. The Class A Notes have an interest rate of 1.14 percent, the Class B Notes have an interest rate of 1.44 percent, the Class C Notes have an interest rate of 1.94 percent, and the Class D Notes have an interest rate of 3.17 percent, for an overall weighted average interest rate of 1.52 percent. Of the $425 million in proceeds from the transaction, $8 million was used to pay transaction expenses and fund required reserves, and the remainder will be used for general corporate purposes. In connection with the 2021-1W securitization, we redeemed certain remaining vacation ownership notes receivable securitizations from 2014 and 2015, as well as certain vacation ownership notes receivable securitizations acquired as part of the Welk Acquisition.

Warehouse Credit Facility

Our warehouse credit facility (the “Warehouse Credit Facility”), which has a borrowing capacity of $350 million, allows for the securitization of vacation ownership notes receivable on a revolving non-recourse basis. During the ~~second~~first quarter of ~~2021,~~2022, we amended certain agreements associated with this facility, and as a result, the revolving period was extended from December 20, 2021 to April 21, 2023 and the interest rate increased from primarily LIBOR plus 1.1% to primarily LIBOR plus 1.35%. Our borrowing capacity was not modified by these amendments. The amended facility expanded our ability to monetizesecuritized vacation ownership notes receivable ~~loans originated by Welk. The other terms were substantially similar to those in effect prior to the execution of the amendments. As of September 30, 2021, there were no cash borrowings outstanding~~ under our Warehouse Credit Facility. The carrying amount of the vacation ownership notes receivable securitized was $125 million. The average advance rate was 81%, which resulted in gross proceeds of $102 million. Net proceeds were $101 million due to the funding of reserve accounts of $1 million.

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13.			DEBT

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


($ in millions)	($ in millions)		At September 30, 2021		At December 31, 2020		($ in millions)		At March 31, 2022		At December 31, 2021
Senior Secured Notes	Senior Secured Notes						Senior Secured Notes
		2025 Notes	$	500	$	500		2025 Notes	$	250	$	250
		Unamortized debt discount and issuance costs	(5)		(6)			Unamortized debt discount and issuance costs	(2)		(2)
			495		494				248		248
Senior Unsecured Notes	Senior Unsecured Notes						Senior Unsecured Notes
		2026 Notes	—		750
		Unamortized debt discount and issuance costs	—		(6)
			—		744

		2028 Notes	350		350			2028 Notes	350		350
		Unamortized debt discount and issuance costs	(4)		(4)			Unamortized debt discount and issuance costs	(4)		(4)
			346		346				346		346

		2029 Notes	500		—			2029 Notes	500		500
		Unamortized debt discount and issuance costs	(7)		—			Unamortized debt discount and issuance costs	(7)		(7)
			493		—				493		493
Corporate Credit Facility	Corporate Credit Facility						Corporate Credit Facility
		Term Loan	784		884			Term Loan	784		784
		Unamortized debt discount and issuance costs	(8)		(11)			Unamortized debt discount and issuance costs	(7)		(8)
			776		873				777		776

Convertible Notes	Convertible Notes						Convertible Notes
		2022 Convertible Notes	230		230			2022 Convertible Notes	230		230
		Unamortized debt discount and issuance costs	(9)		(15)			Unamortized debt discount and issuance costs	(1)		(6)
			221		215				229		224

		2026 Convertible Notes	575		—			2026 Convertible Notes	575		575
		Unamortized debt discount and issuance costs	(120)		—			Unamortized debt discount and issuance costs	(12)		(114)
			455		—				563		461

Non-interest bearing note payable							Non-interest bearing note payable		11		—

Finance Leases	Finance Leases		9		8		Finance Leases		84		83
			$	2,795	$	2,680			$	2,751	$	2,631

The following table shows scheduled future principal payments for our debt, excluding finance leases, as of ~~September 30, 2021.~~March 31, 2022.


($ in millions)	($ in millions)	2025 Notes		2028 Notes		2029 Notes		Term Loan		2022 Convertible Notes		2026 Convertible Notes		Total		($ in millions)	2025 Notes		2028 Notes		2029 Notes		Term Loan		2022 Convertible Notes		2026 Convertible Notes		Non-Interest Bearing Note Payable		Total
Payments Year	Payments Year															Payments Year
2021, remaining		$	250	$	—	$	—	$	—	$	—	$	—	$	250
2022		—		—		—		—		230		—		230
2022, remaining																2022, remaining	$	—	$	—	$	—	$	—	$	230	$	—	$	—	$	230
2023	2023	—		—		—		—		—		—		—		2023	—		—		—		—		—		—		7		7
2024	2024	—		—		—		—		—		—		—		2024	—		—		—		—		—		—		4		4
2025	2025	250		—		—		784		—		—		1,034		2025	250		—		—		784		—		—		—		1,034
2026																2026	—		—		—		—		—		575		—		575
Thereafter	Thereafter	—		350		500		—		—		575		1,425		Thereafter	—		350		500		—		—		—		—		850
		$	500	$	350	$	500	$	784	$	230	$	575	$	2,939		$	250	$	350	$	500	$	784	$	230	$	575	$	11	$	2,700

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Senior Notes

Our senior notes include:

•$500 million aggregate principal amount of 6.125% Senior Secured Notes due 2025 issued in the second quarter of 2020 with a maturity date of September 15, 2025 (the “2025 Notes”)., of which $250 million of principal was outstanding as of March 31, 2022.

•$350 million aggregate principal amount of 4.750% Senior Unsecured Notes due 2028 issued in the fourth quarter of 2019 with a maturity date of January 15, 2028 (the “2028 Notes”).

•$500 million aggregate principal amount of 4.500% Senior Unsecured Notes due 2029 issued in the second quarter of 2021 with a maturity date of June 15, 2029 (the “2029 Notes”).

~~Issuance and Redemption of Senior Notes~~

The 2029 Notes were issued under an indenture dated June 21, 2021 with The Bank of New York Mellon Trust Company, N.A., as trustee. We received net proceeds of $493 million from the offering, after deducting the underwriting fees and transaction expenses. We used these proceeds in July 2021 to redeem, prior to maturity, $500 million of the $750 million aggregate principal amount of 6.500% Senior Unsecured Notes due 2026 issued in the third quarter of 2018 with a maturity date of September 15, 2026 (the “2026 Notes”) and pay transaction expenses and fees in connection with the transaction. We will pay interest on the 2029 Notes on June 15 and December 15 of each year, commencing on December 15, 2021. We may redeem some or all of the 2029 Notes prior to maturity under the terms provided in the indenture.

As noted above, in July 2021, we redeemed, prior to maturity, $500 million aggregate principal amount of the 2026 Notes pursuant to a redemption notice issued in June 2021 and the terms of the indenture governing the 2026 Notes. Additionally, in September 2021, we issued a redemption notice and redeemed, prior to maturity, the remaining $250 million aggregate principal amount of the 2026 Notes pursuant to the terms of the indenture governing the 2026 Notes. In connection with the redemptions that occurred during the third quarter of 2021, we incurred charges of $36 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which was recorded in the Losses and other expense, net line on our Income Statement for the three and nine months ended September 30, 2021.

During the third quarter of 2021, we delivered a redemption notice of $250 million aggregate principal amount of the 2025 Notes pursuant to the terms of the indenture governing the 2025 Notes. Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes. In connection with this redemption, we expect to incur charges of approximately $19 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which will be recorded in the fourth quarter of 2021.

Corporate Credit Facility

Our corporate credit facility (“Corporate Credit Facility”), which provides support for our business, including ongoing liquidity and letters of credit, includes a $900 million term loan facility (the “Term Loan”), which matures on August 31, 2025, and bears interest at LIBOR plus 1.75%, and a revolving credit facility ~~with a borrowing capacity of $600 million~~ (the “Revolving Corporate Credit Facility”)~~, including~~ that includes a letter of credit sub-facility of $75 million.

During the first quarter of 2022, we entered into an amendment to the Revolving Corporate Credit Facility (the “Amendment”), which increased the borrowing capacity of the existing revolving credit facility from $600 million ~~that terminates on~~to $750 million and extended the maturity date from August 31, ~~2023.~~

2023 to March 31, 2027. The ~~Term Loan bears~~Amendment modified the interest ~~at LIBOR plus 1.75 percent. Borrowings~~rate applicable to borrowings under the Revolving Corporate Credit Facility ~~generally bear interest at~~to reference the Secured Overnight Financing Rate (“SOFR”) and to be based on “Adjusted Term SOFR,” which is calculated as Term SOFR (as defined in the Amendment), plus a ~~floating~~0.10% adjustment, subject to a 0.00% floor. Interest rates for other select non-U.S. dollar borrowings were also amended to be based on updated variable rate ~~plus an~~indices. The applicable ~~margin that varies from 0.50 percent~~margins with respect to ~~2.75 percent depending on the type of loan and our credit rating. In addition, we pay a commitment fee on the unused availability under~~ the Revolving Corporate Credit Facility ~~at a rate that varies from 20~~were amended to ~~40 basis points per annum, also depending~~be based on ~~our~~leverage-based measures instead of credit ~~rating.~~

~~In 2020, we entered into a waiver (the “Waiver”)~~ratings-based measures. The Amendment made no other material changes to the ~~agreement that governs our~~ Corporate Credit Facility, which, among other things, suspended the requirement to comply with the leverage covenant in the Revolving Corporate Credit Facility, commencing with the fiscal quarter ending June 30, 2020. The initial suspension period included in the Waiver was up to four quarters, however in February 2021, we further amended the agreement governing our Corporate Credit Facility to extend the suspension period included in the Waiver through the end of 2021. The Waiver prohibited us from making certain restricted payments, including share repurchases and dividends. On September 9, 2021, we elected to terminate the Waiver.Facility.

Prior to 2020, we entered into $250 million of interest rate swaps under which we pay a fixed rate of ~~2.9625 percent~~2.9625% and receive a floating interest rate through September 2023 and $200 million of interest rate swaps under which we pay a fixed rate of ~~2.2480 percent~~2.2480% and receive a floating interest rate through April 2024, in each case to hedge a portion of our interest rate risk on the Term Loan. We also entered into a $100 million interest rate collar with a cap strike rate of ~~2.5000 percent~~2.5000% and a floor strike rate of ~~1.8810 percent~~1.8810% through April 2024 to further hedge our interest rate risk on the Term Loan. Both the interest rate swaps and the interest rate collar have been designated and qualify as cash flow hedges of interest rate risk and recorded in Other liabilities on our Balance Sheet as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. We

~~Table of~~ ~~Contents~~

characterize payments we make in connection with these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income for presentation purposes.

The following table reflects the activity in accumulated other comprehensive loss related to our derivative instruments during the first ~~three~~ quarters of ~~2021~~2022 and ~~2020.~~2021. There were no reclassifications to the Income Statement for ~~any~~either of the periods presented below.


($ in millions)	($ in millions)	2021		2020		($ in millions)	2022		2021
Derivative instrument adjustment balance, January 1	Derivative instrument adjustment balance, January 1	$	(39)	$	(21)	Derivative instrument adjustment balance, January 1	$	(18)	$	(39)
Other comprehensive gain (loss) before reclassifications		6		(24)
Other comprehensive gain before reclassifications						Other comprehensive gain before reclassifications	16		6

Derivative instrument adjustment balance, March 31	Derivative instrument adjustment balance, March 31	(33)		(45)		Derivative instrument adjustment balance, March 31	$	(2)	$	(33)
Other comprehensive gain (loss) before reclassifications		3		(1)

Derivative instrument adjustment balance, June 30		(30)		(46)
Other comprehensive gain before reclassifications		3		3

Derivative instrument adjustment balance, September 30		$	(27)	$	(43)

Convertible Notes

2022 Convertible Notes

During 2017, we issued $230 million of aggregate principal amount of convertible senior notes (the “2022 Convertible Notes”) that bear interest at a rate of ~~1.50 percent,~~1.50%, payable in cash semi-annually. The 2022 Convertible Notes mature on September 15, 2022, unless repurchased or converted in accordance with their terms prior to that date.

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common stock, or a combination of cash and shares of our common stock, at our election. It is our intent to settle conversions of the 2022 Convertible Notes through combination settlement, which contemplates repayment in cash of the principal amount and repayment in shares of our common stock of any excess of the conversion value over the principal amount. As of ~~September 30, 2021,~~March 31, 2022, the effective interest rate was ~~4.73% and the remaining discount amortization period was one year.~~2.19%.

The following table shows the net carrying value of the 2022 Convertible Notes.


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Liability component	Liability component					Liability component
Principal amount	Principal amount	$	230	$	230	Principal amount	$	230	$	230
Unamortized debt discount(1)	Unamortized debt discount(1)	(8)		(13)		Unamortized debt discount(1)	—		(5)
Unamortized debt issuance costs	Unamortized debt issuance costs	(1)		(2)		Unamortized debt issuance costs	(1)		(1)
Net carrying amount of the liability component	Net carrying amount of the liability component	$	221	$	215	Net carrying amount of the liability component	$	229	$	224

Carrying amount of equity component, net of issuance costs(1)	Carrying amount of equity component, net of issuance costs(1)	$	33	$	33	Carrying amount of equity component, net of issuance costs(1)	$	—	$	33

________________________

(1)As a result of the 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 2022 Convertible Notes from equity to liabilities. Prior period amounts have not been adjusted due to 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 2022 Convertible Notes.

Three Months Ended Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Contractual interest expense $ 1 $ 1 $ 3 $ 3
Amortization of debt discount 1 1 5 5
Amortization of debt issuance costs — — 1 1
$ 2 $ 2 $ 9 $ 9

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	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021
Contractual interest expense	$	1	$	1
Amortization of debt discount	—		2

	$	1	$	3

2022 Convertible Note Hedges and Warrants

In connection with the offering of the 2022 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions: convertible note hedge transactions with respect to our common stock (“2022 Convertible Note Hedges”), covering a total of approximately ~~1.5~~1.6 million shares of our common stock, and warrant transactions (“2022 Warrants”), whereby we sold to the counterparties to the 2022 Convertible Note Hedges warrants to acquire approximately ~~1.5~~1.6 million shares of our common stock. As of ~~September 30, 2021,~~March 31, 2022, the strike prices of the 2022 Convertible Note Hedges and the 2022 Warrants were subject to adjustment to approximately ~~$148.73~~$148.29 and ~~$177.33,~~$176.80, respectively, and no 2022 Convertible Note Hedges or 2022 Warrants have been exercised.

2026 Convertible Notes

During ~~the first quarter of~~ 2021, we issued $575 million aggregate principal amount of ~~0.00% Convertible Senior Notes due 2026~~convertible senior notes (the “2026 Convertible Notes”) that bear interest at a rate of 0.00%. The 2026 Convertible Notes are governed by an indenture dated February 2, 2021 (the Indenture) among the Company, Marriott Ownership Resorts, Inc. and the other guarantors party thereto (the “Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). We received net proceeds from the offering of approximately $530 million after adjusting for debt issuance costs, including the discount to the initial purchasers, the cost of the 2026 Convertible Note Hedges, and proceeds from the 2026 Warrants (both as defined below).

~~The 2026 Convertible Notes will not bear regular interest and will~~ mature on January 15, 2026, unless ~~earlier~~ repurchased or converted in accordance with their terms prior to that date. On or after October 15, 2025, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the 2026 Convertible Notes, holders may convert their 2026 Convertible Notes at their option.

The conversion rate is subject to adjustment for certain events as described in the indenture governing the notes, and was subject to adjustment as of ~~September 30, 2021~~March 31, 2022 to ~~5.8685~~5.9122 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of ~~$170.40~~$169.14 per share of our common stock), as a result of the dividends ~~that have been~~we declared since ~~issuance.~~issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. ~~It is our intent to settle conversions~~As of the 2026 Convertible Notes through combination settlement, which contemplates repayment in cash of the principal amount and repayment in shares of our common stock of any excess of the conversion value over the principal amount.

~~Holders may convert their 2026 Convertible Notes prior to October 15, 2025 only under the following circumstances:~~

•~~during any calendar quarter commencing after the calendar quarter ending on~~ March 31, ~~2021 (and only during such calendar quarter), if~~2022, the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 percent of the conversion price on each applicable trading day;

•during the 5 business day period after any 5 consecutive trading day period in which the trading price per $1,000 principal amount of 2026 Convertible Notes for each trading day of the measurement periodeffective interest rate was ~~less than 98 percent of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or~~

•~~upon the occurrence of specified corporate events as described in the Indenture.~~

We may not redeem the 2026 Convertible Notes prior to their maturity date, and no sinking fund is provided for them. If we undergo a fundamental change, as described in the Indenture, subject to certain conditions, holders may require us to repurchase for cash all or any portion of their 2026 Convertible Notes. The repurchase price as a result of a fundamental change is equal to 100 percent of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the repurchase date. If certain fundamental changes referred to in the Indenture as make-whole fundamental changes occur, the conversion rate applicable to the 2026 Convertible Notes may increase.

The 2026 Convertible Notes are unconditionally guaranteed, on a joint and several basis, by the Guarantors on a senior, unsecured basis. The 2026 Convertible Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future senior indebtedness, and senior in right of payment to all of our future subordinated debt. The 2026 Convertible Notes will be effectively subordinated to any of our existing and future secured debt to the extent of the value of the assets securing such debt, including the guarantees of borrowings outstanding under the Corporate Credit Facility and our 2025 Notes. The 2026 Convertible Notes will be structurally subordinated to any existing and future indebtedness and any other liabilities and obligations of any of our subsidiaries that are not guarantors of the 20260.55%.

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Convertible Notes. The guarantees will be the Guarantors’ general senior unsecured obligations and will rank equally in right of payment with all of the Guarantors’ existing and future senior indebtedness, and senior in right of payment to all of the Guarantors’ future subordinated debt. The guarantees will be effectively subordinated to any of the Guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt, including any borrowings outstanding under the Corporate Credit Facility and the 2025 Notes. The guarantees will be structurally subordinated to any existing and future indebtedness and any other liabilities and obligations of any of our subsidiaries that are not guarantors of the 2026 Convertible Notes.

There are no financial or operating covenants related to the 2026 Convertible Notes. The indenture governing these notes contains customary events of default with respect to the 2026 Convertible Notes and provides that upon the occurrence and continuation of certain events of default, the Trustee or the holders of at least 25 percent in aggregate principal amount of the 2026 Convertible Notes then outstanding may declare all principal of and accrued and any unpaid interest on the 2026 Convertible Notes then outstanding to be immediately due and payable. In case of certain events of bankruptcy or insolvency involving the Company, all of the principal of and accrued and unpaid interest on the 2026 Convertible Notes will automatically become immediately due and payable.

In accounting for the issuance of the 2026 Convertible Notes, we separated the 2026 Convertible Notes into liability and equity components and allocated $449 million to the liability component and $126 million to the equity component. The resulting debt discount is amortized as interest expense. As of September 30, 2021, the effective interest rate was 4.96% and the remaining debt discount amortization period was 4.3 years. We had debt issuance costs, including initial purchasers’ discount to underwriters, of $15 million related to the 2026 Convertible Notes, which were allocated to the liability and equity components based on their relative values. Issuance costs attributable to the liability component are amortized to interest expense over the term of the 2026 Convertible Notes, and issuance costs attributable to the equity component are included along with the equity component in shareholders’ equity.

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

~~($ in millions)~~


($ in millions)	At March 31, 2022		At December 31, 2021
Liability component
Principal amount	$	575	$	575
Unamortized debt discount(1)	—		(104)
Unamortized debt issuance costs	(12)		(10)
Net carrying amount of the liability component	$	563	$	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 due to 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.

~~At September 30, 2021~~

~~At December 31, 2020~~

~~Liability component~~

~~Principal amount~~

~~575~~

—

~~Unamortized debt discount~~

~~(110)~~

—

~~Unamortized debt issuance costs~~

~~(10)~~

—

~~Net carrying amount of the liability component~~

~~455~~

—

~~Carrying amount of equity component, net of issuance costs~~

~~117~~

—

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


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Amortization of debt discount	Amortization of debt discount	$	6	$	—	$	16	$	—	Amortization of debt discount	$	—	$	5
Amortization of debt issuance costs	Amortization of debt issuance costs	1		—		2		—		Amortization of debt issuance costs	1		—
		$	7	$	—	$	18	$	—		$	1	$	5

2026 Convertible Note Hedges and Warrants

In connection with the offering of the 2026 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions: convertible note hedge transactions with respect to our common stock ~~with certain counterparties (the “2026~~(“2026 Convertible Note Hedges”), covering a total of approximately 3.4 million shares of our common stock, at a cost of $100 million. The 2026 Convertible Note Hedges are subject to anti-dilution provisions substantially similar to those of the 2026 Convertible Notes, have a strike price that initially corresponded to the initial conversion price of the 2026 Convertible Notes, are exercisable by us upon any conversion under the 2026 Convertible Notes, and expire when the 2026 Convertible Notes mature. The cost of the 2026 Convertible Note Hedges is expected to be tax deductible as an original issue discount over the life of the 2026 Convertible Notes, as the 2026 Convertible Notes and the 2026 Convertible Note Hedges represent an integrated debt instrument for tax purposes. The cost of the 2026 Convertible Note Hedges was recorded as a reduction of Additional paid-in capital on our Balance Sheet.

~~Table of~~ ~~Contents~~

~~Concurrently with the entry into the 2026 Convertible Note Hedges, we separately entered into privately-negotiated~~ warrant transactions ~~(the “2026~~(“2026 Warrants”), whereby we sold to the counterparties to the 2026 Convertible Note Hedges, warrants to acquire ~~collectively, subject to anti-dilution adjustments,~~ approximately 3.4 million shares of our common stock at an initial strike price of $213.76 per share. We received aggregate proceeds of $70 million from the sale of the 2026 Warrants to the counterparties. The proceeds from the issuance of the 2026 Warrants were recorded as an increase to Additional paid-in capital on our Balance Sheet.

Taken together, the 2026 Convertible Note Hedges and the 2026 Warrants are generally expected to reduce the potential dilution to our common stock (or, in the event the conversion of the 2026 Convertible Notes is settled in cash, to reduce our cash payment obligation) in the event that at the time of conversion our stock price exceeds the conversion price under the 2026 Convertible Notes and to effectively increase the overall conversion price to the Company from $171.01 per share to $213.76 per share. The 2026 Warrants will expire in ratable portions on a series of expiration dates commencing on April 15, 2026.

The 2026 Convertible Notes, the 2026 Convertible Note Hedges, and the 2026 Warrants are transactions that are separate from each other. Holders of any such instrument have no rights with respect to the other instruments.stock. As of ~~September 30, 2021,~~March 31, 2022, the strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to approximately ~~$170.40~~$169.14 and ~~$213.00,~~$211.43, respectively, and no 2026 Convertible ~~Notes~~Note Hedges or 2026 Warrants have been exercised.

Security and Guarantees

Amounts borrowed under the Corporate Credit Facility and the 2025 Notes, as well as obligations with respect to letters of credit issued pursuant to the Corporate Credit Facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrowers under, and guarantors of, that facility (which include MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries), in each case including inventory, subject to certain exceptions. In addition, the Corporate Credit Facility, the 2026 Convertible Notes, the 2025 Notes, the 2028 Notes, and the 2029 Notes are guaranteed by MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding bankruptcy remote special purpose ~~subsidiaries.~~subsidiaries.

Non-Interest Bearing Note Payable

During the first quarter of 2022, we issued a non-interest bearing note payable in connection with the acquisition of vacation ownership units located in Bali, Indonesia. See Footnote 3 “Acquisitions” for additional information on this transaction.


14.			SHAREHOLDERS’ EQUITY

Marriott Vacations Worldwide has 100,000,000 authorized shares of common stock, par value of $0.01 per share. At ~~September 30, 2021,~~March 31, 2022, there were ~~75,491,621~~75,721,548 shares of Marriott Vacations Worldwide common stock issued, of which ~~42,715,459~~41,750,172 shares were outstanding and ~~32,776,162~~33,971,376 shares were held as treasury stock. At December 31, ~~2020,~~2021, there were ~~75,279,061~~75,519,049 shares of Marriott Vacations Worldwide common stock issued, of which ~~41,094,248~~42,283,378 shares were outstanding and ~~34,184,813~~33,235,671 shares were held as treasury stock. Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $0.01 per share, none of which were issued or outstanding as of ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

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Share Repurchase Program

During the third quarter of 2021, our Board of Directors authorized a share repurchase program under which we may purchase shares of our common stock for an aggregate purchase price not to exceed $250 million, prior to December 31, 2022. Share repurchases may be made through open market purchases, privately negotiated transactions, block transactions, tender offers, or otherwise. The specific timing, amount and other terms of the repurchases will depend on market conditions, corporate and regulatory requirements, contractual restrictions, and other factors. Acquired shares of our common stock are held as treasury shares carried at cost in our Financial Statements. In connection with the repurchase program, we are authorized to adopt one or more plans pursuant to the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

~~The following table summarizes~~During the first quarter of 2022, our Board of Directors authorized the repurchase of up to an additional $300 million of our common stock, as well as the extension of the term of our existing share repurchase ~~activity under our share repurchase programs:~~

($ in millions, except per share amounts) Number of Shares Repurchased Cost of Shares Repurchased Average Price
Paid per Share
As of December 31, 2020 17,188,885 $ 1,340 $ 77.95
For the first three quarters of 2021 29,035 4 $ 154.84
As of September 30, 2021 17,217,920 $ 1,344 $ 78.08
program to March 31, 2023.

As of ~~September 30, 2021, $246~~March 31, 2022, $353 million remained available for repurchase under the ~~authorization~~share repurchase program approved by the Board of ~~Directors in the third quarter of 2021.~~Directors. The authorization for the current share repurchase program may be suspended, terminated, increased or decreased by our Board of Directors at any time without prior notice.

37The following table summarizes share repurchase activity under our share repurchase programs:

~~Table of~~ ~~Contents~~


($ in millions, except per share amounts)	Number of Shares Repurchased	Cost of Shares Repurchased		Average Price Paid per Share
As of December 31, 2021	17,681,395	$	1,418	$	80.17
For the first quarter of 2022	764,824	119		$	156.50
As of March 31, 2022	18,446,219	$	1,537	$	83.34

Dividends

We declared cash dividends to holders of common stock during the quarter ended ~~September 30, 2021~~March 31, 2022 as follows. Any future dividend payments will be subject to the restrictions imposed under the agreements covering our debt, and Board approval. There can be no assurance that we will pay dividends in the future.

Declaration Date

Shareholder Record Date

Distribution Date

Dividend per Share

~~September 10, 2021~~February 18, 2022

~~September 23, 2021~~March 3, 2022

~~October 7, 2021~~March 17, 2022

$~~0.54~~0.62

Noncontrolling Interests - ~~Property~~ Owners’ Associations

We consolidate certain ~~property~~ owners’ associations. Noncontrolling interests represent the portion of the ~~property~~ owners’ associations related to third-party vacation ownership interest owners. Noncontrolling interests of ~~$31~~$10 million as of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are included on our Balance Sheets as a component of equity.


15.			SHARE-BASED COMPENSATION

We maintain the Marriott Vacations Worldwide Corporation 2020 Equity Incentive Plan (the “MVW Equity Plan”) for the benefit of our officers, directors, and employees. Under the MVW Equity Plan, we are authorized to award: (1) restricted stock units (“RSUs”) of our common stock, (2) stock appreciation rights (“SARs”) relating to our common stock, and (3) stock options to purchase our common stock. A total of 1.8 million shares are authorized for issuance pursuant to grants under the MVW Equity Plan. As of ~~September 30, 2021,~~March 31, 2022, approximately ~~1.5~~1.0 million shares were available for grants under the MVW Equity Plan.

The following table details our share-based compensation expense related to award grants to our officers, directors, and employees:


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Service-based RSUs	Service-based RSUs	$	8	$	5	$	23	$	16	Service-based RSUs	$	7	$	6
Performance-based RSUs	Performance-based RSUs	1		4		4		3		Performance-based RSUs	—		1
ILG Acquisition Converted RSUs		—		1		—		2

		9		10		27		21			7		7
SARs	SARs	2		1		6		3		SARs	1		1

		$	11	$	11	$	33	$	24		$	8	$	8

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The following table details our deferred compensation costs related to unvested awards:


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Service-based RSUs	Service-based RSUs	$	32	$	27	Service-based RSUs	$	51	$	33
Performance-based RSUs	Performance-based RSUs	2		6		Performance-based RSUs	10		—

		34		33			61		33
SARs	SARs	4		1		SARs	5		2

		$	38	$	34		$	66	$	35

Restricted Stock Units

We granted ~~171,625~~165,392 service-based RSUs, which are subject to time-based vesting conditions, with a weighted average grant-date fair value of ~~$169.19,~~$153.25, to our employees and non-employee directors during the first ~~three quarters~~quarter of ~~2021.~~2022. During the first quarter of 2022, we also granted performance-based RSUs, which are subject to performance-based vesting conditions, to members of management. A maximum of 135,012 RSUs may be earned under the performance-based RSU awards granted during the first quarter of 2022.

Stock Appreciation Rights

We granted ~~127,857~~77,037 SARs, with a weighted average grant-date fair value of ~~$70.66~~$59.68 and a weighted average exercise price of ~~$173.88,~~$159.27, to members of management during the first ~~three quarters~~quarter of ~~2021.~~2022. We use the Black-Scholes model to estimate the fair value of the SARs granted. The expected stock price volatility was calculated based on the average of the historical and implied volatility of our stock price. The average expected life was calculated using the simplified method, as we have insufficient historical information to provide a basis for estimating average expected life. The risk-free interest rate was calculated based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The dividend yield assumption listed below is based on the expectation of future payouts.

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The following table outlines the assumptions used to estimate the fair value of grants during the first ~~three quarters~~quarter of ~~2021:~~2022:


Expected volatility			~~48.35%~~42.86%
Dividend yield			~~1.48%~~1.53%
Risk-free rate			~~0.97%~~1.77%
Expected term (in years)			6.25


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 funding for us and transfer the economic risks and substantially all the benefits of the consumer loans we originate to third parties. 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.

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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, 2021:~~March 31, 2022:

($ in millions) Vacation Ownership
Notes Receivable
Securitizations Warehouse
Credit Facility Total
Consolidated Assets
Vacation ownership notes receivable, net $ 1,486 $ — $ 1,486
Interest receivable 10 — 10
Restricted cash 69 — 69
Total $ 1,565 $ — $ 1,565
Consolidated Liabilities
Interest payable $ 2 $ — $ 2
Securitized Debt 1,611 — 1,611
Total $ 1,613 $ — $ 1,613

~~The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the third quarter of 2021:~~

($ in millions) Vacation Ownership
Notes Receivable
Securitizations Warehouse
Credit Facility Total
Interest income $ 55 $ — $ 55
Interest expense to investors $ 11 $ — $ 11
Debt issuance cost amortization $ 2 $ — $ 2
Administrative expenses $ 1 $ — $ 1

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($ in millions)	Vacation Ownership Notes Receivable Securitizations		Warehouse Credit Facility		Total
Consolidated Assets
Vacation ownership notes receivable, net of reserves	$	1,552	$	109	$	1,661
Interest receivable	11		1		12
Restricted cash	73		5		78
Total	$	1,636	$	115	$	1,751
Consolidated Liabilities
Interest payable	$	1	$	1	$	2
Securitized Debt	1,698		101		1,799
Total	$	1,699	$	102	$	1,801

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first ~~three quarters~~quarter of ~~2021:~~2022:


($ in millions)	($ in millions)	Vacation Ownership Notes Receivable Securitizations		Warehouse Credit Facility		Total		($ in millions)	Vacation Ownership Notes Receivable Securitizations		Warehouse Credit Facility		Total
Interest income	Interest income	$	160	$	—	$	160	Interest income	$	57	$	2	$	59
Interest expense to investors	Interest expense to investors	$	33	$	1	$	34	Interest expense to investors	$	10	$	—	$	10
Debt issuance cost amortization	Debt issuance cost amortization	$	5	$	1	$	6	Debt issuance cost amortization	$	2	$	—	$	2
Administrative expenses		$	2	$	—	$	2

The following table shows cash flows between us and the vacation ownership notes receivable securitization VIEs:


		Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Cash Inflows	Cash Inflows					Cash Inflows
Net proceeds from vacation ownership notes receivable securitizations		$	421	$	371

Principal receipts	Principal receipts	432		360		Principal receipts	$	139	$	130
Interest receipts	Interest receipts	167		166		Interest receipts	58		50
Reserve release(1)	Reserve release(1)	109		16		Reserve release(1)	57		—
Total	Total	1,129		913		Total	254		180
Cash Outflows	Cash Outflows					Cash Outflows
Principal to investors	Principal to investors	(452)		(370)		Principal to investors	(155)		(129)
Voluntary repurchases of defaulted vacation ownership notes receivable	Voluntary repurchases of defaulted vacation ownership notes receivable	(78)		(69)		Voluntary repurchases of defaulted vacation ownership notes receivable	(23)		(30)
Voluntary clean-up call		(72)		(18)

Interest to investors	Interest to investors	(33)		(37)		Interest to investors	(11)		(11)
Funding of restricted cash		(110)		(20)

Total	Total	(745)		(514)		Total	(189)		(170)
Net Cash Flows	Net Cash Flows	$	384	$	399	Net Cash Flows	$	65	$	10

_________________________

(1)Relates to the release of funds when MVW 2021-2 LLC purchased the remaining vacation ownership notes receivable that were securitized during the fourth quarter of 2021.

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.

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The following table shows cash flows between us and the Warehouse Credit Facility VIE:

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020
Cash Inflows
Proceeds from vacation ownership notes receivable securitizations $ — $ 315
Principal receipts — 34
Interest receipts — 17
Reserve release — 2
Total — 368
Cash Outflows
Principal to investors — (33)
Voluntary repurchases of defaulted vacation ownership notes receivable — (3)
Repayment of Warehouse Credit Facility — (300)
Interest to investors (1) (4)
Funding of restricted cash — (2)
Total (1) (342)
Net Cash Flows $ (1) $ 26

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	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021
Cash Inflows
Proceeds from vacation ownership notes receivable securitizations	$	102	$	—
Principal receipts	4		—
Interest receipts	1		—

Total	107		—
Cash Outflows




Funding of restricted cash	(1)		—
Total	(1)		—
Net Cash Flows	$	106	$	—

Other Variable Interest Entities

We have a commitment to purchase ~~an operating~~a property located in ~~San Francisco, California, that~~Waikiki, Hawaii, which we ~~currently manage as Marriott Vacation Club Pulse, San Francisco. We expect~~assigned to acquire the operating property over time and as of September 30, 2021 are committed to make payments for the operating property as follows: $25 million in 2022 and $32 million in 2023. See Footnote 3 “Acquisitions and Dispositions” for information on the purchases that occurreda third party during ~~the first quarters of 2021 and~~ 2020. ~~We are required to purchase the property from the third-party developer unless the developer has sold the property to another party.~~ The property is held by a VIE for which we are not the primary ~~beneficiary as we cannot prevent the VIE from selling the property to another party at a higher price.~~beneficiary. Accordingly, we have not consolidated the VIE. As of September 30, 2021, our Balance Sheet reflected $2 million in Accounts Receivable, including a note receivable of less than $1 million, and $10 million in Other assets for a deposit related to the future acquisition of a portion of this property. We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $12 million as of September 30, 2021.

We have a commitment to purchase a property located in Waikiki, Hawaii, which was assigned to a third party during 2020. If we are unable to negotiate a capital efficient inventory arrangement, we are committed to purchase the property, in its then current form, for $104 million inMarch 31, 2022, unless it has been sold to another party. The property is held by a VIE for which we are not the primary beneficiary as we do not control the operations of the VIE. Accordingly, we have not consolidated the VIE. As of September 30, 2021, our Balance Sheet reflected $1 million in Accounts Receivable, including a note receivable of less than $1 million. 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, 2021.~~March 31, 2022. Subsequent to the end of the first quarter of 2022, we extended a loan to the VIE for $47 million and amended the terms of this commitment. As a result of the amended commitment, if we are unable to negotiate a capital efficient inventory arrangement under which a third party will purchase the property and agree to resell it to us at a later date, we are committed to purchase the property, in its then current form, for $80 million in the fourth quarter of 2022, unless it has been sold to another party. The loan extended to the VIE is due in full upon the earlier of sale of the property, including a sale to us, or an amendment and restatement of our purchase commitment. In the latter case, the existing loan of $47 million would be repaid to us as part of that revised purchase commitment on the part of MVW.

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, 2021,~~March 31, 2022, the value of the assets held in the rabbi trust was ~~$70~~$74 million, which is included in the Other line within assets on our Balance Sheets.


17.			BUSINESS SEGMENTS

We define our reportable segments based on the way in which the chief operating decision maker (“CODM”), currently our chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance. We operate in 2 operating and reportable business segments:

•Vacation Ownership includes a diverse portfolio of resorts that includes ~~7 vacation ownership~~some of the world’s most iconic brands licensed under exclusive, long-term ~~relationships with Marriott International and Hyatt Hotels Corporation.~~relationships. We are the exclusive worldwide developer, marketer, seller, and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Residence Club brands, as well as under Marriott Vacation Club Pulse, an extension to the Marriott Vacation Club brand. We are also the exclusive worldwide developer, marketer, and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, we have the non-exclusive right to develop, market, and sell whole ownership residential products under The Ritz-Carlton Residences brand and we have a license to use the St. Regis brand for specified fractional ownership resorts. In addition, as part of the Welk Acquisition, we acquired a short-term license to use the Welk brand in connection with the continued operations of that business. MVW intends to rebrand all Welk resorts as Hyatt-branded resorts once it has obtained all necessary approvals.

•Our Vacation Ownership segment generates most of its revenues from ~~four~~4 primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs, and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.

•Exchange & Third-Party Management includes exchange networks and membership programs, as well as provision of management ofservices to other resorts and lodging properties. We provide these services through a variety of brands including Interval International, Trading Places International (“TPI”), Vacation Resorts International (“VRI”), and Aqua-Aston. Exchange & Third-Party Management revenue generally is fee-based

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and derived from membership, exchange and rental transactions, ~~property and~~owners’ association management, and other related products and services.

Our CODM evaluates the performance of our segments based primarily on the results of the segment without allocating corporate expenses or income taxes. We do not allocate corporate interest expense or indirect general and administrative expenses to our segments. We include interest income specific to segment activities within the appropriate

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segment. We allocate depreciation, other gains and losses, equity in earnings or losses from our joint ventures, and noncontrolling interest to each of our segments as appropriate. Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to ~~property~~consolidated owners’ associations, ~~consolidated under the voting interest model,~~ as our CODM does not use this information to make operating segment resource allocations. ~~Prior year segment information has been reclassified to conform to the current reportable segment presentation.~~

Our CODM uses Adjusted EBITDA to evaluate the profitability of our operating segments, and the components of net income or loss attributable to common shareholders excluded from Adjusted EBITDA are not separately evaluated. Adjusted EBITDA is defined as net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with ~~term loan~~ securitization transactions), income taxes, depreciation and amortization, excluding share-based compensation expense and adjusted for certain items that affect the comparability of our operating performance. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated net income ~~(loss)~~or loss attributable to common shareholders is presented below.

Revenues


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Vacation Ownership	Vacation Ownership	$	974	$	571	$	2,518	$	1,884	Vacation Ownership	$	956	$	661
Exchange & Third-Party Management	Exchange & Third-Party Management	77		71		249		236		Exchange & Third-Party Management	84		86
Total segment revenues	Total segment revenues	1,051		642		2,767		2,120		Total segment revenues	1,040		747
Corporate and other	Corporate and other	1		7		23		19		Corporate and other	12		12
		$	1,052	$	649	$	2,790	$	2,139		$	1,052	$	759

Adjusted EBITDA and Reconciliation to Net Income ~~(Loss)~~or Loss Attributable to Common Shareholders


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Adjusted EBITDA Vacation Ownership	Adjusted EBITDA Vacation Ownership	$	215	$	28	$	465	$	156	Adjusted EBITDA Vacation Ownership	$	199	$	68
Adjusted EBITDA Exchange & Third-Party Management	Adjusted EBITDA Exchange & Third-Party Management	35		31		113		91		Adjusted EBITDA Exchange & Third-Party Management	43		41
Reconciling items:	Reconciling items:									Reconciling items:
Corporate and other	Corporate and other	(45)		(24)		(140)		(84)		Corporate and other	(54)		(40)
Interest expense	Interest expense	(41)		(37)		(128)		(112)		Interest expense	(27)		(43)
Tax (provision) benefit	Tax (provision) benefit	(47)		14		(63)		91		Tax (provision) benefit	(32)		11
Depreciation and amortization	Depreciation and amortization	(35)		(30)		(112)		(93)		Depreciation and amortization	(33)		(41)
Share-based compensation expense	Share-based compensation expense	(11)		(11)		(33)		(24)		Share-based compensation expense	(8)		(8)
Certain items	Certain items	(61)		(33)		(114)		(263)		Certain items	(30)		(16)
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	10	$	(62)	$	(12)	$	(238)	Net income (loss) attributable to common shareholders	$	58	$	(28)

Assets


($ in millions)	($ in millions)	At September 30, 2021		At December 31, 2020		($ in millions)	At March 31, 2022		At December 31, 2021
Vacation Ownership	Vacation Ownership	$	7,750	$	6,859	Vacation Ownership	$	7,946	$	7,897
Exchange & Third-Party Management	Exchange & Third-Party Management	927		951		Exchange & Third-Party Management	903		911
Total segment assets	Total segment assets	8,677		7,810		Total segment assets	8,849		8,808
Corporate and other	Corporate and other	866		1,088		Corporate and other	654		805
		$	9,543	$	8,898		$	9,503	$	9,613

We conduct business globally, and our operations outside the United States represented approximately ~~10 percent~~11% and ~~8 percent~~9% of our revenues, excluding cost reimbursements, for the three months ended ~~September 30,~~March 31, 2022 and March 31, 2021, ~~and September 30, 2020, respectively, and 10 percent of our revenues, excluding cost reimbursements, for each of the nine months ended September 30, 2021 and September 30, 2020.~~respectively.

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18.			SUBSEQUENT EVENT

In April 2022, we disposed of the VRI and TPI after determining that these businesses did not meet our future growth strategy and operating model, for net proceeds of approximately $60 million. Both of these businesses are components of our Exchange and Third-Party Management segment.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

We make forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q, based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: our possible or assumed future results of operations; business strategies, such as our plans to continue to increase our focus on sales of vacation ownership products to first-time ~~buyers;~~buyers and our expectations regarding resulting increases in financing propensity; financing plans; competitive position; potential growth opportunities; potential operating performance improvements, including the expectations that contract sales, resort management, and rental occupancies will continue to remain strong and/or improve throughout ~~the remainder of 2021~~2022 and that interest income will ~~begin to~~ increase in ~~the remainder~~2022; our expectations regarding availability of ~~2021 and into 2022;~~inventory for Getaways; the effects of competition; and the ongoing effect of the COVID-19 pandemic and actions we or others may take in response to the COVID-19 pandemic. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the continuing effects of the COVID-19 pandemic, including ~~reduced~~variations in demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including its short and longer-term impact on the demand for travel and on consumer confidence; the impact of the availability and distribution of effective vaccines on the demand for travel and consumer confidence; the effectiveness of available vaccines against variants of the ~~virus, including the Delta variant;~~virus; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; competitive conditions; the availability of capital to finance growth; the effects of steps we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts due to the COVID-19 pandemic; political or social strife, and other matters referred to under the heading “Risk Factors” contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our ~~periodic~~future filings with the U.S. Securities and Exchange Commission (the “SEC”),. You should not put undue reliance on any forward-looking statements in this Report. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of ~~which could cause actual results~~new information, future events, or otherwise. We do not have any intention or obligation to ~~differ materially from those expressed or implied herein.~~update forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. ~~We do not undertake any obligation~~Any such risks could cause our results to ~~publicly update or revise any~~differ materially from those we express in forward-looking ~~statement, whether as a result of new information, future events, or otherwise.~~statements.

Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows. ~~The~~However, the financial information discussed below and included in this Quarterly Report on Form 10-Q may not necessarily reflect what our financial condition, results of operations or cash flows may be in the future. In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes to our Financial Statements that we include in the Financial Statements of this Quarterly Report on Form 10-Q.

Business Overview

We are a leading global vacation company that offers vacation ownership, exchange, rental, and resort and property management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management.

Our Vacation Ownership segment includes ~~seven vacation ownership~~a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term ~~relationships with Marriott International and Hyatt Hotels Corporation.~~relationships. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Residence Club brands, as well as under Marriott Vacation Club Pulse, an extension to the Marriott Vacation Club brand. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, we have the non-exclusive right

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to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand and we have a license to use the St. Regis brand for specified fractional ownership resorts. In addition, as part of our acquisition of Welk Hospitality Group, Inc. (“Welk”) through a series of transactions (the “Welk Acquisition”), we acquired a short-term license to use the Welk brand in connection with the continued operations of that business. We intend to rebrand all Welk resorts as Hyatt-branded resorts once we obtain all necessary approvals.

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Our Vacation Ownership segment generates most of its revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.

Our Exchange & Third-Party Management segment includes exchange networks and membership programs, as well as provision of management ofservices to other resorts and lodging properties. ~~We provide~~As of the end of the first quarter of 2022, we provided these services through a variety of brands including Interval International, ~~Trading Places International (“TPI”), Vacation Resorts International (“VRI”),~~VRI, TPI, and Aqua-Aston. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and association management, and other related products and services. Subsequent to the end of the first quarter of 2022, we disposed of the VRI and TPI businesses. See Footnote 18 “Subsequent Event” to our Financial Statements for further information regarding this disposition.

Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to consolidated property owners’ associations ~~consolidated under the voting interest model~~ (“Consolidated Property Owners’ Associations”).

Acquisition of Welk

On April 1, 2021, we completed the Welk Acquisition, after which Welk became our indirect wholly-owned subsidiary. The Financial Statements in this report include Welk’s results of operations for the second and third quarters of 2021 and reflect the financial position of our combined company at September 30, 2021. We refer to Welk’s business and brands that we acquired as “Legacy-Welk.” In April 2022, we introduced the Hyatt Vacation Club and rebranded Welk’s vacation ownership program as the Hyatt Vacation Club Platinum Program, enabling Legacy-Welk sales centers to sell a Hyatt-branded vacation ownership product. Most Legacy-Welk resorts are now available for rental stays through Hyatt.com.

COVID-19 Pandemic ~~Update~~

The COVID-19 pandemic has caused significant disruptions in international and U.S. economies and ~~markets. At this time,~~markets, and has had an unprecedented impact on the travel and hospitality industries, as well as our ~~businesses continue to ramp up, with~~Company. We discuss the ~~majority~~impacts of our sales centers, resorts, and other properties having reopened. While our contract sales and financial results remain below pre-pandemic levels, we have continued to experience significant sequential improvement each quarter as we progressed through 2020 and the first three quarters of 2021. We expect that sequential improvement to continue across our businesses during the fourth quarter of 2021. We discuss the COVID-19 pandemic and its ~~current and~~ potential future implications inthroughout this report; however, the COVID-19 pandemic, and any recovery therefrom, ~~is evolving~~continues to evolve and ~~its~~further potential ~~impact~~impacts on our business in the future ~~remains~~remain uncertain.

Significant Accounting Policies Used in Describing Results of Operations

Sale of Vacation Ownership Products

We recognize revenues from the sale of vacation ownership products (“VOIs”) when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible. Based upon the different terms of the contracts with the customer and business practices, control of the vacation ownership product is transferred to the customer at closing for ~~Legacy-MVW~~Marriott-branded and Legacy-Welk transactions and upon expiration of the statutory rescission period for ~~Legacy-ILG~~Sheraton-,Westin-, and Hyatt-branded transactions. Sales of vacation ownership products may be made for cash or we may provide financing. In addition, we recognize settlement fees associated with the transfer of vacation ownership products and commission revenues from sales of vacation ownership products on behalf of third parties, which we refer to as “resales revenue.”

We also provide sales incentives to certain purchasers. These sales incentives typically include Marriott Bonvoy points, World of Hyatt points or an alternative sales incentive that we refer to as “plus points.” These plus points are redeemable for stays at our resorts or for use in other third-party offerings, generally up to two years from the date of issuance. Typically, sales incentives are only awarded if the sale is closed.

There may be timing differences between the date of the contract with the customer and when revenue is recognized. When comparing results year-over-year, this timing difference may generate significant variances, which we refer to as the impact of revenue reportability.

Finally, as more fully described in “Financing” below, we record the difference between the vacation ownership note receivable and the consideration to which we expect to be entitled (also known as a vacation ownership notes receivable reserve or a sales reserve) as a reduction of revenues from the sale of vacation ownership products at the time we recognize revenues from a sale.

We report, on a supplemental basis, contract sales for our Vacation Ownership segment. Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ~~ten percent~~10% of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third-parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales. Contract sales differ from revenues from the sale of vacation ownership products that we report on our income statements due to the requirements for revenue

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~~requirements for revenue~~ recognition described above. We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.

Cost of vacation ownership products includes costs to develop and construct our projects (also known as real estate inventory costs), other non-capitalizable costs associated with the overall project development process and settlement expenses associated with the closing process. For each project, we expense real estate inventory costs in the same proportion as the revenue recognized. Consistent with the applicable accounting guidance, to the extent there is a change in the estimated sales revenues or inventory costs for the project in a period, a non-cash adjustment is recorded on our income statements to true-up costs in that period to those that would have been recorded historically if the revised estimates had been used. These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements.

We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as Development profit. Development profit margin is calculated by dividing Development profit by revenues from the Sale of vacation ownership products. We previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, we now refer to this financial measure as Development profit. While the calculation remains unchanged, we believe the revised term better depicts the financial results being presented.

Management and Exchange

Our management and exchange revenues include revenues generated from fees we earn for managing each of our vacation ownership resorts, providing property management, ~~property~~ owners’ association management and related services to third-party vacation ownership resorts and fees we earn for providing rental services and related hotel, condominium resort, and ~~property~~ owners’ association management services to vacation property owners.

In addition, we earn revenue from ancillary offerings, including food and beverage outlets, golf courses and other retail and service outlets located at our Vacation Ownership resorts. We also receive annual membership fees, club dues and certain transaction-based fees from members, owners and other third parties.

Management and exchange expenses include costs to operate the food and beverage outlets and other ancillary operations and to provide overall customer support services, including reservations, and certain transaction-based expenses relating to external exchange service providers.

In our Vacation Ownership segment and Consolidated Property Owners’ Associations, we refer to these activities as “Resort Management and Other Services.”

Financing

We offer financing to qualified customers for the purchase of most types of our vacation ownership products. The average FICO score of customers who were U.S. citizens or residents who financed a vacation ownership purchase was as follows:

Nine Months Ended
September 30, 2021 September 30, 2020
Average FICO score 731 731


	Three Months Ended
	March 31, 2022	March 31, 2021
Average FICO score	736	732

The typical financing agreement provides for monthly payments of principal and interest with the principal balance of the loan fully amortizing over the term of the related vacation ownership note receivable, which is generally ten to fifteen years. Included within our vacation ownership notes receivable are originated vacation ownership notes receivable and vacation ownership notes receivable acquired in connection with the ILG Acquisition and the Welk Acquisition.

The interest income earned from ~~the originated~~our vacation ownership financing arrangements is earned on an accrual basis on the principal balance outstanding over the contractual life of the arrangement and is recorded as Financing revenues on our Income Statements. Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable portfolio. The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections. We calculate financing propensity as contract sales volume of ~~finance~~financed contracts originated in the period divided by contract sales volume of all contracts originated in the period. We do not include resales contract sales in the financing propensity calculation. Financing propensity was ~~60 percent~~50% in the ~~third~~first quarter of ~~2021~~2022 and ~~43 percent~~46% in the ~~third~~first quarter of ~~2020;~~2021; the higher financing propensity in the ~~third~~first quarter of ~~2021~~2022 is due to a higher percentage of sales during this period to ~~first-time-buyers,~~first-time buyers, who tend to have a higher financing propensity. ~~As we proceed into 2022, we~~We expect to continue offering financing incentive programs in 2022. We also plan to shift back to anthe increased focus we placed pre-pandemic on sales to first-time buyers, who are more likely to finance their purchases, which should further increase propensity and

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increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.

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Acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model. The estimates of 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 estimated value of collateral securing the acquired vacation ownership notes receivable. See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information regarding the accounting for acquired vacation ownership notes receivable.

In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI. We return VOIs that we reacquire through foreclosure or revocation back to inventory. As discussed above, for originated vacation ownership notes receivable, we record a reserve at the time of sale and classify the reserve as a reduction to revenues from the sale of vacation ownership products on our Income Statements. Revisions to estimates of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes receivable and can increase or decrease revenues. In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve, net of collateral value, as an adjustment to Financing expenses on our Income Statements.

Historical default rates, which represent defaults as a percentage of each year’s beginning gross vacation ownership notes receivable balance, were as follows:

Nine Months Ended
September 30, 2021 September 30, 2020
Historical default rates 3.3% 4.9%


	Three Months Ended
	March 31, 2022	March 31, 2021
Historical default rates	1.1%	1.3%

The decrease in default rates in 2022 reflects the return of the performance of our notes receivable portfolio to pre-pandemic levels.

Financing expenses include consumer financing interest expense, which represents interest expense associated with the securitization of our vacation ownership notes receivable, costs to support the financing, servicing and securitization processes and changes in expected credit losses related to acquired vacation ownership notes receivable. We distinguish consumer financing interest expense from all other interest expense because the debt associated with the consumer financing interest expense is secured by vacation ownership notes receivable that have been sold to bankruptcy remote special purpose entities and is generally non-recourse to us.

Rental

In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory. We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of owned-hotel properties. We also recognize rental revenue from the utilization of plus points under our points-based products when the points are redeemed for rental stays at one of our resorts or in other third-party ~~offerings.~~offerings, or upon expiration of the points. We obtain rental inventory from unsold inventory and inventory we control because owners have elected alternative usage options offered through our vacation ownership programs. For rental revenues associated with vacation ownership products which we own and which are registered and held for sale, to the extent that the revenues from rental are less than costs, revenues are reported net in accordance with ASC Topic 978, “Real Estate - Time-Sharing Activities” (“ASC 978”). The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense.

In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed ~~properties through VRI, TPI, and Aqua-Aston.~~properties. We also offer vacation rental ~~offers knows~~opportunities known as Getaways to members of the Interval International ~~Network~~network and certain other membership programs. ~~The offering of~~ Getaways ~~allows~~allow us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members. Resort accommodations typically become available as Getaways ~~typically~~as a result ~~from~~of seasonal oversupply or underutilized space in the applicable exchange ~~program, as well as~~program. We also source resort accommodations specifically ~~sourced~~ for the Getaways program.

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Rental expenses include:

•Maintenance and other fees on unsold inventory;

•Costs to provide alternative usage options, including Marriott Bonvoy points, World of Hyatt points and offerings available as part of third-party offerings, for owners who elect to exchange their inventory;

•Marketing costs and direct operating and related expenses in connection with the rental business (such as housekeeping, labor costs, credit card expenses and reservation services); and

•Costs to secure resort accommodations for use in Getaways.

Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior. In addition, rental metrics may not correlate with rental revenues due to the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above). Further, as our ability to rent certain luxury and other inventory is often limited on a site-by-site basis, rental operations may not generate adequate rental revenues to cover associated costs. Our Vacation Ownership segment units are either “full villas” or “lock-off” villas. Lock-off villas are units that can be separated into a master unit and a guest room. Full villas are “non-lock-off” villas because they cannot be separated. A “key” is the lowest increment for reporting occupancy statistics based upon the mix of non-lock-off and lock-off villas. Lock-off villas ~~typically~~ represent two keys and non-lock-off

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villas represent one key. The “transient keys” metric represents the blended mix of ~~occupancy~~inventory available for rent and includes all of the combined inventory configurations available in our resort system.

Cost Reimbursements

Cost reimbursements include direct and indirect costs that are reimbursed to us by customers under management contracts. All costs reimbursed to us by customers, with the exception of taxes assessed by a governmental authority, ~~reimbursed to us by customers~~ are reported on a gross basis. We recognize cost reimbursements when we incur the related reimbursable costs. Cost reimbursements consist of actual expenses with no added margin.

Interest Expense

Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense.

Transaction and Integration Costs

Transaction and integration costs represent costs related to the ~~acquisitions of~~ ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax related accruals. Transaction and integration costs also include charges for employee retention, severance and other termination related benefits, fees paid to ~~change management~~change-management consultants and technology-related costs related to the integration ~~and transformation~~ of ILG and Welk.

Other Items

We measure operating performance using the following key metrics:

•Contract sales from the sale of vacation ownership products;

•Total contract sales include contract sales from the sale of vacation ownership products including joint ventures, and

•Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ~~ventures~~ventures;

•Development profit margin;

•Volume per guest (“VPG”), which we calculate by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, joint venture sales and other sales that are not attributed to a tour at a sales location, by the number of tours at sales locations in a given ~~period (which we refer to as “tour flow”).~~period. We believe that this operating metric is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase;

•Total active members, which is the number of Interval International network active members at the end of the applicable period; and

•Average revenue per member, which we calculate by dividing membership fee revenue, transaction revenue and other member revenue for the Interval International network by the monthly weighted average number of Interval International network active members during the applicable period.

NM = Not meaningful.

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Consolidated Results


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	98	$	789	$	409	Sale of vacation ownership products	$	310	$	163
Management and exchange	Management and exchange	225		176		638		548		Management and exchange	222		193
Rental	Rental	130		56		340		209		Rental	133		89
Financing	Financing	69		64		196		206		Financing	71		59
Cost reimbursements	Cost reimbursements	298		255		827		767		Cost reimbursements	316		255
TOTAL REVENUES	TOTAL REVENUES	1,052		649		2,790		2,139		TOTAL REVENUES	1,052		759
EXPENSES	EXPENSES									EXPENSES
Cost of vacation ownership products	Cost of vacation ownership products	71		27		178		110		Cost of vacation ownership products	60		40
Marketing and sales	Marketing and sales	166		78		439		297		Marketing and sales	182		109
Management and exchange	Management and exchange	138		106		381		342		Management and exchange	127		117
Rental	Rental	84		74		247		245		Rental	81		82
Financing	Financing	22		24		64		85		Financing	21		21
General and administrative	General and administrative	54		32		166		121		General and administrative	61		46
Depreciation and amortization	Depreciation and amortization	35		30		112		93		Depreciation and amortization	33		41
Litigation charges	Litigation charges	2		2		8		4		Litigation charges	3		3
Restructuring		—		20		—		20

Royalty fee	Royalty fee	26		23		78		72		Royalty fee	27		25
Impairment		—		2		5		98

Cost reimbursements	Cost reimbursements	298		255		827		767		Cost reimbursements	316		255
TOTAL EXPENSES	TOTAL EXPENSES	896		673		2,505		2,254		TOTAL EXPENSES	911		739
Losses and other expense, net		(31)		—		(27)		(42)
Gains and other income, net										Gains and other income, net	4		6
Interest expense	Interest expense	(41)		(37)		(128)		(112)		Interest expense	(27)		(43)
Transaction and integration costs	Transaction and integration costs	(27)		(11)		(75)		(47)		Transaction and integration costs	(28)		(19)
Other		1		—		2		—

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	58		(72)		57		(316)		INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	90		(36)
(Provision for) benefit from income taxes	(Provision for) benefit from income taxes	(47)		14		(63)		91		(Provision for) benefit from income taxes	(32)		11
NET INCOME (LOSS)	NET INCOME (LOSS)	11		(58)		(6)		(225)		NET INCOME (LOSS)	58		(25)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		(4)		(6)		(13)		Net income attributable to noncontrolling interests	—		(3)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	10	$	(62)	$	(12)	$	(238)	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	58	$	(28)

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Operating Statistics

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
(Contract sales $ in millions)	(Contract sales $ in millions)	September 30, 2021		September 30, 2020		Change		% Change	(Contract sales $ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Vacation Ownership	Vacation Ownership								Vacation Ownership
Total contract sales	Total contract sales	$	392	$	141	$	251	NM	Total contract sales	$	403	$	232	$	171	74%
Consolidated contract sales	Consolidated contract sales	$	380	$	140	$	240	NM	Consolidated contract sales	$	394	$	226	$	168	75%
Joint venture contract sales	Joint venture contract sales	$	12	$	1	$	11	NM	Joint venture contract sales	$	9	$	6	$	3	45%
VPG									VPG	$	4,706	$	4,644	$	62	1%
Exchange & Third-Party Management	Exchange & Third-Party Management								Exchange & Third-Party Management
Total active members at end of period (000's)(1)	Total active members at end of period (000's)(1)	1,313		1,536		(223)		(15%)	Total active members at end of period (000's)(1)	1,606		1,479		127		9%
Average revenue per member(1)	Average revenue per member(1)	$	42.95	$	36.76	$	6.19	17%	Average revenue per member(1)	$	44.33	$	47.13	$	(2.80)	(6%)

_______________

(1)Only includes members of the Interval International exchange network.

~~NM Not meaningful~~

~~2021 First Three Quarters~~

Nine Months Ended
(Contract sales $ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership
Total contract sales $ 996 $ 486 $ 510 105%
Consolidated contract sales $ 968 $ 476 $ 492 103%
Joint venture contract sales $ 28 $ 10 $ 18 NM
Exchange & Third-Party Management
Total active members at end of period (000's)(1)
1,313 1,536 (223) (15%)
Average revenue per member(1)
$ 136.57 $ 108.44 $ 28.13 26%

~~_______________~~

~~(1)Only includes members of the Interval International exchange network.~~

~~Revenues~~

~~2021 Third Quarter~~

~~The following table presents our revenues for the third quarter of 2021 compared to the third quarter of 2020.~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 974 $ 571 $ 403 71%
Exchange & Third-Party Management 77 71 6 5%
Total Segment Revenues 1,051 642 409 63%
Consolidated Property Owners’ Associations 1 7 (6) (84%)
Total Revenues $ 1,052 $ 649 $ 403 62%

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~~2021~~Revenues

2022 First ~~Three Quarters~~Quarter

~~The following table presents our revenues for the first three quarters of 2021 compared to the first three quarters of 2020.~~


		Nine Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Vacation Ownership	Vacation Ownership	$	2,518	$	1,884	$	634	34%	Vacation Ownership	$	956	$	661	$	295	45%
Exchange & Third-Party Management	Exchange & Third-Party Management	249		236		13		5%	Exchange & Third-Party Management	84		86		(2)		(1%)
Total Segment Revenues	Total Segment Revenues	2,767		2,120		647		31%	Total Segment Revenues	1,040		747		293		39%
Consolidated Property Owners’ Associations	Consolidated Property Owners’ Associations	23		19		4		22%	Consolidated Property Owners’ Associations	12		12		—		(6%)
Total Revenues	Total Revenues	$	2,790	$	2,139	$	651	30%	Total Revenues	$	1,052	$	759	$	293	39%

Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term loan securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items described below, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term loan securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures and expand our business. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other vacation companies.

EBITDA and Adjusted EBITDA have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with Net income (loss) attributable to common shareholders, which is the most directly comparable GAAP financial measure.

2022 First Quarter


	Three Months Ended				Change
($ in millions)	March 31, 2022		March 31, 2021				% Change
Net income (loss) attributable to common shareholders	$	58	$	(28)	$	86	NM
Interest expense	27		43		(16)		(37%)
Provision for (benefit from) income taxes	32		(11)		43		NM
Depreciation and amortization	33		41		(8)		(21%)
EBITDA	150		45		105		NM
Share-based compensation expense	8		8		—		—%
Certain items	30		16		14		97%
Adjusted EBITDA	$	188	$	69	$	119	NM

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~~2021 Third Quarter~~

Three Months Ended Change
($ in millions) September 30, 2021 September 30, 2020 % Change
Net income (loss) attributable to common shareholders $ 10 $ (62) $ 72 116%
Interest expense 41 37 4 10%
Provision for (benefit from) income taxes 47 (14) 61 NM
Depreciation and amortization 35 30 5 15%
EBITDA 133 (9) 142 NM
Share-based compensation expense 11 11 — 2%
Certain items 61 33 28 85%
Adjusted EBITDA $ 205 $ 35 $ 170 NM

Certain items for the ~~third~~first quarter of ~~2021~~2022 consisted of $31 million of losses and other expense (including $36 million related to the early redemption of our 2026 Notes, $2 million of foreign currency translation losses, and $1 million of miscellaneous losses and other expenses, partially offset by $8 million related to a true-up to a Marriott International indemnification receivable upon settlement (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line), $27$28 million of transaction and integration costs (including ~~$22~~$25 million of ILG Acquisition and integration related costs and $3 million of Welk Acquisition ~~related costs,~~ and ~~$2 million of other transaction~~integration related costs), ~~$2 million of litigation charges, and $5~~$3 million of purchase accounting adjustments, ~~partially offset by~~and $3 ~~million to eliminate the impact of consolidating certain property owners’ associations and $1 million of miscellaneous other adjustments.~~

Certain items for the third quarter of 2020 consisted of $20 million of restructuring costs, $11 million of ILG Acquisition related costs, a $5 million loss and other expense related to the disposition of a formerly consolidated subsidiary, $2 million of purchase price adjustments, $2 million of litigation charges, $2partially offset by $4 million of ~~asset impairment charges,~~gains and other income, net (including $3 million of business interruption insurance proceeds received during the quarter and $1 million of foreign currency translation losses, partially offset by $6 million of gains and other income related to the disposition of excess land parcels in Orlando, Florida and Steamboat Springs, Colorado and $4 million related to the change in accrual for health and welfare costs for furloughed associates.

~~2021 First Three Quarters~~

Nine Months Ended Change
($ in millions) September 30, 2021 September 30, 2020 % Change
Net loss attributable to common shareholders $ (12) $ (238) $ 226 95%
Interest expense 128 112 16 14%
Provision for (benefit from) income taxes 63 (91) 154 NM
Depreciation and amortization 112 93 19 20%
EBITDA 291 (124) 415 NM
Share-based compensation expense 33 24 9 37%
Certain items 114 263 (149) (56%)
Adjusted EBITDA $ 438 $ 163 $ 275 NM
gains).

Certain items for the first ~~three quarters~~quarter of 2021 consisted of ~~$75~~$19 million of transaction ~~and integration~~ costs (including ~~$64~~$17 million of ILG Acquisition and integration related costs $8and $2 million of Welk Acquisition and integration related ~~costs,~~costs) and $3 million of ~~other transaction costs), $27 million of losses and other expense (including $36 million related to the early redemption of our 2026 Notes, and $1 million of miscellaneous losses and other expense,~~litigation charges, partially offset by $6 million related to a true-up to a Marriott International indemnification receivable upon settlement (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line, and $4 million of foreign currency translation ~~gains), $8 million of litigation charges, $5 million of impairment charges,~~gains, and ~~$7 million of purchase accounting adjustments, partially offset by $5 million to eliminate the impact of consolidating certain property owners’ associations,~~ $2 million of ~~activity related to the accrual for health and welfare costs for furloughed associates, and $1 million of~~ miscellaneous ~~other adjustments.~~

Certain items for the first three quarters of 2020 consisted of $98 million of asset impairment charges, $47 million of transaction and integration costs (including $44 million of ILG Acquisition related costs and $3 million of transaction costs

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related to our asset light inventory arrangements), $44 million of other charges (including $37 million related to the net sales reserve adjustment and $7 million related to an accrual for the health and welfare costs for furloughed associates), $42 million of lossesgains and other ~~expense, $20 million of restructuring costs, $4 million related to VAT charges, $4 million of purchase accounting adjustments, and $4 million of litigation charges.~~income.

Segment Adjusted EBITDA

~~2021 Third~~2022 First Quarter

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 215 $ 28 $ 187 NM
Exchange & Third-Party Management 35 31 4 13%
Segment adjusted EBITDA 250 59 191 NM
General and administrative (45) (27) (18) NM
Consolidated property owners’ associations — 3 (3) NM
Adjusted EBITDA $ 205 $ 35 $ 170 NM

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 465 $ 156 $ 309 NM
Exchange & Third-Party Management 113 91 22 25%
Segment adjusted EBITDA 578 247 331 134%
General and administrative (140) (91) (49) NM
Consolidated property owners’ associations — 7 (7) NM
Adjusted EBITDA $ 438 $ 163 $ 275 NM

~~The following tables present Adjusted EBITDA for our reportable segments reconciled to segment financial results.~~


	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Vacation Ownership	$	199	$	68	$	131	NM
Exchange & Third-Party Management	43		41		2		4%
Segment adjusted EBITDA	242		109		133		NM
General and administrative	(54)		(40)		(14)		(35%)
Consolidated property owners’ associations	—		—		—		NM
Adjusted EBITDA	$	188	$	69	$	119	NM

Vacation Ownership

~~2021 Third~~2022 First Quarter

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 215 $ 28 $ 187 NM
Depreciation and amortization (24) (20) (4) (21%)
Share-based compensation expense (1) (2) 1 NM
Certain items (5) (9) 4 44%
Segment financial results $ 185 $ (3) $ 188 NM

~~Certain items in the Vacation Ownership segment for the third quarter of 2021 consisted primarily of $5 million of purchase accounting adjustments.~~

Certain items in the Vacation Ownership segment for the third quarter of 2020 consisted of $11 million of restructuring costs, $2 million of litigation charges, a $1 million asset impairment charge, and $1 million of purchase accounting adjustments, partially offset by $6 million of gains and other income.

~~Table of~~ ~~Contents~~

~~2021 First Three Quarters~~


		Nine Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Segment adjusted EBITDA	Segment adjusted EBITDA	$	465	$	156	$	309	NM	Segment adjusted EBITDA	$	199	$	68	$	131	NM
Depreciation and amortization	Depreciation and amortization	(66)		(61)		(5)		(10%)	Depreciation and amortization	(22)		(19)		(3)		(14%)
Share-based compensation expense	Share-based compensation expense	(4)		(4)		—		NM	Share-based compensation expense	(1)		(1)		—		(22%)
Certain items	Certain items	(15)		(52)		37		70%	Certain items	(3)		(4)		1		17%
Segment financial results	Segment financial results	$	380	$	39	$	341	NM	Segment financial results	$	173	$	44	$	129	NM

Certain items in the Vacation Ownership segment for the first ~~three quarters~~quarter of ~~2021~~2022 consisted ~~primarily~~ of $7$3 million of litigation charges and $7$3 million of purchase accounting ~~adjustments.~~adjustments, offset by $3 million of gains and other income, net related to business interruption insurance proceeds received during the quarter.

Certain items in the Vacation Ownership segment for the first ~~three quarters~~quarter of ~~2020~~2021 consisted of ~~$37 million related to a net sales reserve adjustment due primarily to the impact of the COVID-19 pandemic, $11 million of restructuring costs, $6 million of asset impairment charges, $4~~$3 million of litigation charges ~~$3 million related to transaction costs associated with our asset light inventory arrangements,~~ and $3$1 million of ~~purchase accounting adjustments, partially offset by $12 million of gains and other income.~~restructuring costs.

Exchange & Third-Party Management

~~2021 Third~~2022 First Quarter

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 35 $ 31 $ 4 13%
Depreciation and amortization (11) (8) (3) (42%)
Share-based compensation expense — — — —%
Certain items (1) (10) 9 97%
Segment financial results $ 23 $ 13 $ 10 75%

Certain items in the Exchange & Third-Party Management segment for the third quarter of 2020 consisted of $5 million of losses and other expenses, $3 million of restructuring costs, $1 million of purchase accounting adjustments, and a $1 million asset impairment charge.

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 113 $ 91 $ 22 25%
Depreciation and amortization (40) (24) (16) (60%)
Share-based compensation expense (1) (1) — 8%
Certain items (1) (101) 100 99%
Segment financial results $ 71 $ (35) $ 106 NM

Certain items in the Exchange & Third-Party Management segment for the first three quarters of 2020 consisted of $92 million of impairment charges related to Goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic, $5 million of losses and other expenses, $3 million of restructuring costs, and $1 million of purchase accounting adjustments.


	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Segment adjusted EBITDA	$	43	$	41	$	2	4%
Depreciation and amortization	(9)		(20)		11		56%
Share-based compensation expense	(1)		—		(1)		(40%)
Certain items	—		—		—		NM
Segment financial results	$	33	$	21	$	12	59%

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Business Segments

Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 17 “Business Segments” to our Financial Statements for further information on our segments.

Vacation Ownership


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	98	$	789	$	409	Sale of vacation ownership products	$	310	$	163
Resort management and other services	Resort management and other services	126		82		343		267		Resort management and other services	126		94
Rental	Rental	121		46		308		180		Rental	122		77
Financing	Financing	69		64		196		204		Financing	71		59
Cost reimbursements	Cost reimbursements	328		281		882		824		Cost reimbursements	327		268
TOTAL REVENUES	TOTAL REVENUES	974		571		2,518		1,884		TOTAL REVENUES	956		661
EXPENSES	EXPENSES									EXPENSES
Cost of vacation ownership products	Cost of vacation ownership products	71		27		178		110		Cost of vacation ownership products	60		40
Marketing and sales	Marketing and sales	166		78		439		297		Marketing and sales	182		109
Resort management and other services	Resort management and other services	55		27		136		105		Resort management and other services	54		35
Rental	Rental	97		86		288		280		Rental	90		96
Financing	Financing	22		24		64		84		Financing	21		21
Depreciation and amortization	Depreciation and amortization	24		20		66		61		Depreciation and amortization	22		19
Litigation charges	Litigation charges	1		2		7		4		Litigation charges	3		3
Restructuring	Restructuring	(1)		11		—		11		Restructuring	—		1
Royalty fee	Royalty fee	26		23		78		72		Royalty fee	27		25
Impairment		—		1		—		6

Cost reimbursements	Cost reimbursements	328		281		882		824		Cost reimbursements	327		268
TOTAL EXPENSES	TOTAL EXPENSES	789		580		2,138		1,854		TOTAL EXPENSES	786		617
Gains and other income, net	Gains and other income, net	—		6		—		12		Gains and other income, net	3		—
Transaction and integration costs		(1)		—		(2)		(3)
Other		1		—		2		—

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	185	$	(3)	$	380	$	39	SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	173	$	44

Contract Sales

~~2021 Third~~2022 First Quarter

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total consolidated contract sales $ 380 $ 140 $ 240 NM
Joint venture contract sales 12 1 11 NM
Total contract sales $ 392 $ 141 $ 251 NM

~~2021 First Three Quarters~~


		Nine Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Total consolidated contract sales	Total consolidated contract sales	$	968	$	476	$	492	103%	Total consolidated contract sales	$	394	$	226	$	168	75%
Joint venture contract sales	Joint venture contract sales	28		10		18		NM	Joint venture contract sales	9		6		3		45%
Total contract sales	Total contract sales	$	996	$	486	$	510	105%	Total contract sales	$	403	$	232	$	171	74%

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Sale of Vacation Ownership Products

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Total contract sales	Total contract sales	$	392	$	141	$	251	NM	Total contract sales	$	403	$	232	$	171	74%
Less: resales contract sales	Less: resales contract sales	(7)		(1)		(6)			Less: resales contract sales	(9)		(5)		(4)
Less: joint venture contract sales	Less: joint venture contract sales	(12)		(1)		(11)			Less: joint venture contract sales	(9)		(6)		(3)
Consolidated contract sales, net of resales	Consolidated contract sales, net of resales	373		139		234			Consolidated contract sales, net of resales	385		221		164		74%
Plus:	Plus:								Plus:
Settlement revenue	Settlement revenue	8		4		4			Settlement revenue	7		5		2
Resales revenue	Resales revenue	5		1		4			Resales revenue	4		2		2
Revenue recognition adjustments:	Revenue recognition adjustments:								Revenue recognition adjustments:
Reportability	Reportability	2		(18)		20			Reportability	(33)		(36)		3
Sales reserve	Sales reserve	(31)		(10)		(21)			Sales reserve	(29)		(14)		(15)
Other(1)	Other(1)	(27)		(18)		(9)			Other(1)	(24)		(15)		(9)
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	98	$	232	NM	Sale of vacation ownership products	$	310	$	163	$	147	90%

_______________

(1)Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.

Sale of vacation ownership products increased $232 million due primarily to $234 million of higher consolidated contract sales volume, net of resales (including $30 million from the acquisition of Welk), a $20 million favorable change in revenue reportability, $4 million of higher settlement revenue, and $4 million of higher resales activity, offset partially by $21 million of higher sales reserve activity and $9 million of higher sales incentives issued (higher settlement revenue, sales incentives issued, and sales reserve activity were driven primarily by the higher contract sales volumes year-over-year).

The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic, ~~late in the prior year first quarter,~~ as well as $24 million in contract sales relating to the ~~inclusion of~~ Welk ~~beginning~~Acquisition, which we acquired in the second quarter of 2021. With the reopening of many of our sales centers throughout 2020 and during 2021, and the Welk Acquisition, our contract sales volumes have continued to improve on a sequential basis each quarter and we expect that sequential improvement to continue during the fourth quarter of 2021.

Revenue reportability was slightly positive in the third quarter of 2021 as compared to a negative position historically. While we benefited from contract sales in the second quarter of 2021 being recognized asHigher settlement revenue, in the third quarter of 2021, due to the impact of the Delta variant that negatively impacted contract sales late in the third quarter, we did not see a corresponding shift of revenues into the fourth quarter of 2021.

Revenue reportability was negative in the third quarter of 2020 as a result of contract sales late in the third quarter of 2020 that were recognized as revenue in the fourth quarter. Given the low sales volumes in June 2020 due to the impact of the COVID-19 pandemic, we did not benefit from a shift of revenues from sales late in the second quarter into the third quarter.

~~Table of~~ ~~Contents~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total contract sales $ 996 $ 486 $ 510 105%
Less: resales contract sales (19) (9) (10)
Less: joint venture contract sales (28) (10) (18)
Consolidated contract sales, net of resales 949 467 482
Plus:
Settlement revenue 21 12 9
Resales revenue 8 6 2
Revenue recognition adjustments:
Reportability (51) 48 (99)
Sales reserve (73) (90) 17
Other(1)
(65) (34) (31)
Sale of vacation ownership products $ 789 $ 409 $ 380 93%

~~_______________~~

~~(1)Adjustment for~~ sales incentives ~~that will not be recognized as Sale of vacation ownership products revenue~~issued, and ~~other adjustments to Sale of vacation ownership products revenue.~~

Sale of vacation ownership products increased $380 million due primarily to $482 million of higher consolidated contract sales volume, net of resales (including $61 million from the acquisition of Welk), $17 million of lower sales reserve activity and $9 million of higher settlement revenue, and $2 million of higher resales activity, offset partially by a $99 million unfavorable change in revenue reportability, and $31 million of higher sales incentives issued (higher settlement revenue and sales incentives issued were driven primarily by the higher contract sales volumes ~~year-over-year).~~

The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter. With the reopening of the majority of our sales centers throughout 2020 and during the first three quarters of 2021, andas well as the Welk ~~Acquisition, our contract sales volumes have continued to improve on a sequential basis each quarter and we expect that improvement to continue through the remainder of 2021.~~

The lower sales reserve recorded in the first three quarters of 2021 reflects the prior year increase to the sales reserve to take into account higher expected default and delinquency activity as a result of the COVID-19 pandemic.

Revenue reportability was negative in the first three quarters of 2021. While we benefited from contract sales in the fourth quarter of 2020 being recognized as revenue in the first three quarters of 2021, given the increasing contract sales volumes due to the reopening of our sales centers as our business continued to ramp-up throughout the first three quarters of 2021, we saw a higher shift of contract sales in the third quarter of 2021 into the fourth quarter for revenue recognition. In contrast, revenue reportability was significantly positive in the first three quarters of 2020. The first three quarters of 2020 benefited from the contract sales from late in the fourth quarter of 2019 that were recognized as revenue in 2020. However, the first three quarters of 2020 were not impacted by a corresponding shift of revenues into the fourth quarter, given the low contract sales volumes in the third quarter of 2020 resulting from the impact of the COVID-19 pandemic.

Acquisition.

~~Table of~~ ~~Contents~~

Development Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Sale of vacation ownership products	Sale of vacation ownership products	$	330	$	98	$	232	NM	Sale of vacation ownership products	$	310	$	163	$	147	90%
Cost of vacation ownership products	Cost of vacation ownership products	(71)		(27)		(44)		NM	Cost of vacation ownership products	(60)		(40)		(20)		(52%)
Marketing and sales	Marketing and sales	(166)		(78)		(88)		(113%)	Marketing and sales	(182)		(109)		(73)		(66%)
Development profit	Development profit	$	93	$	(7)	$	100	NM	Development profit	$	68	$	14	$	54	NM

The increase in Development profit ~~increased $100~~reflects $51 million ~~year-over-year. The change reflected $78 million from the benefit~~as a result of higher contract sales volumes, in part from continued strong VPGs, and lower marketing and sales spending as a percentage of revenue ~~$17 million of favorable revenue reportability,~~ and $4$9 million of favorable product cost, due to the sale of lower cost inventory as well as favorable product cost true-up activity, ~~and $1~~partially offset by $5 million ~~related to lower~~of higher sales reserve ~~rate~~activity due to ~~the mix of products being sold.~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Sale of vacation ownership products $ 789 $ 409 $ 380 93%
Cost of vacation ownership products (178) (110) (68) (61%)
Marketing and sales (439) (297) (142) (48%)
Development profit $ 172 $ 2 $ 170 NM

~~Development profit increased $170 million year-over-year. The change reflected $167 million from the benefit of~~ higher contract sales volumes and ~~lower marketing and sales spending as a percentage of revenue, $82 million related to lower sales reserve activity, and~~ $1 ~~million of favorable product cost, due mainly to the sale of lower cost inventory and, to a lesser extent, favorable product cost true-up activity, partially offset by $81~~ million of unfavorable revenue ~~reportability year-over-year.~~reportability.

Table of Contents

Resort Management and Other Services Revenues, Expenses and Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Management fee revenues	Management fee revenues	$	40	$	37	$	3	10%	Management fee revenues	$	42	$	38	$	4	12%
Ancillary revenues	Ancillary revenues	55		17		38		NM	Ancillary revenues	54		28		26		93%
Other management and exchange revenues	Other management and exchange revenues	31		28		3		11%	Other management and exchange revenues	30		28		2		7%
Resort management and other services revenues	Resort management and other services revenues	126		82		44		54%	Resort management and other services revenues	126		94		32		34%
Resort management and other services expenses	Resort management and other services expenses	(55)		(27)		(28)		(107%)	Resort management and other services expenses	(54)		(35)		(19)		(54%)
Resort management and other services profit	Resort management and other services profit	$	71	$	55	$	16	29%	Resort management and other services profit	$	72	$	59	$	13	22%
Resort management and other services profit margin	Resort management and other services profit margin	55.9%		67.2%		(11.3 pts)			Resort management and other services profit margin	57.5%		63.0%		(5.5 pts)

Resort management and other services revenues ~~reflected~~reflects higher ancillary revenues, including revenues from food and beverage and golf offerings, as a result of the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic, ~~late in the prior year first quarter, as well as~~ higher management fees, and $8$6 million of revenues from the Welk Acquisition. Resort occupancies ~~have~~ continued to increase ~~throughout 2021 as our resorts that were closed at~~since the ~~start~~initial impact of the ~~COVID-19~~ pandemic ~~have reopened.~~ as travel and tourism trends continue to recover.We expect this trend in business improvement to continue throughout ~~the remainder of 2021.~~2022.

The increase in resort management and other services profit ~~reflected the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.~~

~~Table of~~ ~~Contents~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Management fee revenues $ 117 $ 113 $ 4 4%
Ancillary revenues 135 69 66 96%
Other management and exchange revenues 91 85 6 7%
Resort management and other services revenues 343 267 76 29%
Resort management and other services expenses (136) (105) (31) (31%)
Resort management and other services profit $ 207 $ 162 $ 45 27%
Resort management and other services profit margin 60.2% 60.8% (0.6 pts)

Resort management and other services revenues reflected higher ancillary revenues, including revenues from food and beverage and golf offerings, as a result of the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter, as well as higher management fees and $16 million from the Welk Acquisition. Resort occupancies have continued to increase throughout 2021 as an increasing number of resorts that were closed at the start of the COVID-19 pandemic have reopened. We expect this trend in business improvement to continue throughout the remainder of 2021.

~~The increase in resort management and other services profit reflected~~reflects the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.

Rental Revenues, Expenses and Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Rental revenues	Rental revenues	$	121	$	46	$	75	NM	Rental revenues	$	122	$	77	$	45	58%
Rental expenses	Rental expenses	(97)		(86)		(11)		(12%)	Rental expenses	(90)		(96)		6		6%
Rental profit		$	24	$	(40)	$	64	NM
Rental profit (loss)									Rental profit (loss)	$	32	$	(19)	$	51	NM
Rental profit margin	Rental profit margin	20.6%		NM					Rental profit margin	25.8%		NM


		Three Months Ended								Three Months Ended
		September 30, 2021		September 30, 2020		Change		% Change		March 31, 2022		March 31, 2021		Change		% Change
Transient keys rented(1)	Transient keys rented(1)	500,952		237,749		263,203		111%	Transient keys rented(1)	539,559		385,745		153,814		40%
Average transient key rate	Average transient key rate	$	260.00	$	198.84	$	61.16	31%	Average transient key rate	$	275.49	$	230.32	$	45.17	20%
Resort occupancy	Resort occupancy	85.0%		24.5%		60.5 pts			Resort occupancy	87.6%		66.7%		20.9 pts

_________________________

(1)Transient keys rented exclude those occupied through the use of plus points and preview stays.

The improvement in rental profit resulted from an increase in transient keys rented and a higher average transient rate due to the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic ~~late in the prior year first quarter~~as COVID-19-related restrictions continued to ease, as well as from higher plus point ~~revenue as COVID-19-related restrictions continued to ease.~~revenue. These increases were partially offset by higher inventory carrying costs (due to low sales volumes in 2021 as a result of the COVID-19 pandemic, the acquisition of new inventory in ~~the first quarter of~~ 2021, and higher utilization in 2022 of third-party vacation offerings for owners who elect to exchange the usage of their inventory).

As the majority of the governmental restrictions in response to the pandemic that caused rental activity to decline, such as travel restrictions and quarantine requirements, have been lifted, we expect rental occupancies to continue to ~~increase~~remain strong throughout the remainder of ~~2021.~~2022. However, we do not expect this part of our business to fully recover to pre-pandemic levels in 2022 as a result of reduced rental inventory availability due to higher owner usage as well as higher inventory carry costs.

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~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 308 $ 180 $ 128 71%
Rental expenses (288) (280) (8) (3%)
Rental profit $ 20 $ (100) $ 120 120%
Rental profit margin 6.6% NM

Nine Months Ended
September 30, 2021 September 30, 2020 Change % Change
Transient keys rented(1)
1,433,738 816,404 617,334 76%
Average transient key rate $ 240.48 $ 227.07 $ 13.41 6%
Resort occupancy 79.1% 53.8% 25.3 pts

~~_________________________~~

~~(1)Transient keys rented exclude those occupied through the use of plus points and preview stays.~~

The improvement in rental profit resulted from an increase in transient keys rented and a higher average transient rate due to the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter as well as from higher plus point revenue as COVID-19-related restrictions continued to ease. These increases were partially offset by higher inventory carrying costs (due to low sales volumes as a result of the COVID-19 pandemic, the acquisition of new inventory in the first quarter of 2021, and higher utilization of third-party vacation offerings for owners who elect to exchange their inventory).

Financing Revenues, Expenses and Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Financing revenues	Financing revenues	69		64		5		8%	Financing revenues	71		59		12		21%
Financing expenses	Financing expenses	(10)		(9)		(1)		(18%)	Financing expenses	(9)		(8)		(1)		(12%)
Consumer financing interest expense	Consumer financing interest expense	(12)		(15)		3		21%	Consumer financing interest expense	(12)		(13)		1		5%
Financing profit	Financing profit	$	47	$	40	$	7	16%	Financing profit	$	50	$	38	$	12	31%
Financing propensity	Financing propensity	59.6%		42.9%					Financing propensity	50.3%		46.0%

Financing revenues increased due primarily to the Welk Acquisition, which contributed ~~$11~~$10 million ~~for~~in the ~~third~~first quarter of ~~2021.~~2022. Excluding the impact of the Welk Acquisition, financing revenues ~~declined $6~~increased $2 million due mainly to ~~a $200 million decrease in the average net vacation ownership notes receivable balance resulting from~~lower plus point financing incentive costs year-over-year. New loan originations are beginning to offset the continued pay-down of the existing vacation ownership notes receivable portfolio, ~~without a corresponding increase in~~such that interest income is relatively flat compared to the ~~portfolio from new loan originations.~~prior year quarter. As contract sales volumes continue to grow, ~~throughout the fourth quarter of 2021,~~ we expect that ~~this~~the growth from new loan originations ~~should~~will more than offset the normal decline ~~from~~in the existing vacation ownership notes receivable portfolio due to loan payment activity, ~~which would~~and cause interest income to increase. Financing expenses increased due to ~~higher salaries~~the Welk Acquisition and ~~wages and~~increased foreclosure costs, ~~as well as less than $1 million~~offset partially by the timing of ~~higher costs from the Welk Acquisition. Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances.~~when lien fee income is recognized. The higher financing propensity reflects a higher mix of sales to ~~first time~~first-time buyers, who tend to have a higher financing propensity. ~~The low propensity in the prior year reflected the impact of sales programs that incented cash purchases during the initial periods of the COVID-19 pandemic.~~ As we move ~~into~~through 2022, we expect to continue to ~~shift back to an increased~~increase our focus on sales to first-time buyers, which should further increase propensity (60 percent or higher) and increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.

~~Table of~~ ~~Contents~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Financing revenues 196 204 (8) (4%)
Financing expenses (26) (40) 14 33%
Consumer financing interest expense (38) (44) 6 13%
Financing profit $ 132 $ 120 $ 12 9%
Financing propensity 53.4% 51.0%

The Welk Acquisition provided $21 million of incremental revenues in the first three quarters of 2021. Excluding the impact of Welk activity, financing revenues decreased due to a $296 million decrease in the average net vacation ownership notes receivable balance resulting from the continued pay-down of the existing vacation ownership notes receivable portfolio without a corresponding increase from new loan originations. As contract sales volumes continue to grow through the remainder of 2021, we expect that this growth should begin to more than offset the normal decline from loan payment activity, which would cause interest income to increase. Financing expenses decreased due to $14 million of higher credit losses associated with acquired vacation ownership notes receivable in the prior year quarter. Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances, offset partially by $1 million of costs from the Welk Acquisition. The higher financing propensity reflects a higher mix of sales to first time buyers, who tend to have a higher financing propensity.

Royalty Fee

~~2021 Third~~2022 First Quarter

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Royalty fee $ 26 $ 23 $ 3 14%

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Royalty fee $ 78 $ 72 $ 6 9%

~~Royalty fee expense increased in the third quarter and first three quarters of 2021 as a result of higher contract closings compared to prior year periods.~~


	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Royalty fee	$	27	$	25	$	2	8%

Litigation Charges

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Litigation charges	Litigation charges	$	1	$	2	$	(1)	3%	Litigation charges	$	3	$	3	$	—	(5%)

During the ~~third~~first quarter of 2022 and the first quarter of 2021, ~~and~~ the ~~third quarter of 2020, we incurred $1 million and $2 million, respectively, of~~ litigation charges related primarily to projects in Europe.

~~2021~~

Gains and Other Income

2022 First ~~Three Quarters~~Quarter


		Nine Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Litigation charges		$	7	$	4	$	3	106%
Gains and other income, net									Gains and other income, net	$	3	$	—	$	3	NM

During the first ~~three quarters~~quarter of ~~2021~~2022, we recorded $3 million of gains and ~~first three quarters of 2020, we incurred $7 million and $4 million, respectively, of litigation charges~~other income, net related ~~primarily~~ to ~~projects in Europe.~~business interruption insurance proceeds received during the quarter.

6048

Table of ~~Contents~~

~~Restructuring~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Restructuring $ (1) $ 11 $ (12) (106%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Restructuring $ — $ 11 $ (11) (100%)

~~During the third quarter and first three quarters~~ of 2020, we incurred $11 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic. During the third quarter of 2021, we trued up this restructuring accrual based upon current plans.

~~Impairment~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ — $ 1 $ (1) (99%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ — $ 6 $ (6) (100%)

No asset impairment charges were recorded for the third quarter of 2021 or the first three quarters of 2021. During the third quarter and first three quarters of 2020, we recorded non-cash impairment charges of $1 million and $6 million, respectively, related to our Asia Pacific inventory as a result of the impact of the COVID-19 pandemic.

~~Gains and Other Income~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Gains and other income, net $ — $ 6 $ (6) (101%)

No gains and other income were recorded for the third quarter of 2021. During the third quarter of 2020, we recorded $6 million of gains and other income related to the disposition of excess land parcels in Orlando, Florida and Steamboat Springs, Colorado.

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Gains and other income, net $ — $ 12 $ (12) (100%)

No gains and other income were recorded for the first three quarters of 2021. During the first three quarters of 2020, we recorded $12 million of gains and other income, including $6 million of gains and other income related to the disposition of excess land parcels in Orlando, Florida and Steamboat Springs, Colorado and $4 million of net insurance proceeds related to the settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane.

~~Table of~~ Contents

Exchange & Third-Party Management


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Management and exchange	Management and exchange	$	59	$	49	$	179	$	160	Management and exchange	$	64	$	60
Rental	Rental	9		10		32		29		Rental	11		12
Financing		—		—		—		2

Cost reimbursements	Cost reimbursements	9		12		38		45		Cost reimbursements	9		14
TOTAL REVENUES	TOTAL REVENUES	77		71		249		236		TOTAL REVENUES	84		86
EXPENSES	EXPENSES									EXPENSES

Management and exchange	Management and exchange	33		27		99		93		Management and exchange	33		31
Rental		—		2		—		8
Financing		—		—		—		1

Depreciation and amortization	Depreciation and amortization	11		8		40		24		Depreciation and amortization	9		20
Restructuring		1		3		1		3
Impairment		—		1		—		92

Cost reimbursements	Cost reimbursements	9		12		38		45		Cost reimbursements	9		14
TOTAL EXPENSES	TOTAL EXPENSES	54		53		178		266		TOTAL EXPENSES	51		65
Losses and other expense, net		—		(5)		—		(5)

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	23	$	13	$	71	$	(35)	SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	33	$	21

Rental Revenues, Expenses and Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Rental revenues	Rental revenues	$	9	$	10	$	(1)	(12%)	Rental revenues	$	11	$	12	$	(1)	(8%)
Rental expenses	Rental expenses	—		(2)		2		101%	Rental expenses	—		—		—		NM
Rental profit	Rental profit	$	9	$	8	$	1	13%	Rental profit	$	11	$	12	$	(1)	(8%)
Rental profit margin	Rental profit margin	100.2%		78.1%		22.1 pts			Rental profit margin	100.0%		100.0%		— pts

~~The increase~~Results reflect a 12% decline in ~~rental profit reflected~~Getaways transactions, offset partially by a ~~4 percent increase in Getaway program transactions and a 13 percent~~15% increase in average ~~fee, reflecting customers’ desire~~fees. The decline in transactions reflects increased owner usage which is putting pressure on the volume of member deposits available as inventory for Getaways as members choose to ~~travel and pent-up demand due to COVID-19-related restrictions. Late in the first quarter of 2021, we also introduced Getaway rentals of less~~occupy their accommodations rather than ~~seven nights, providing members more opportunities to use their membership in ways that better fit their lifestyles.~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 32 $ 29 $ 3 12%
Rental expenses — (8) 8 100%
Rental profit $ 32 $ 21 $ 11 54%
Rental profit margin 100.1% 72.8% 27.3%

The increase in rental profit reflected a 42 percent increase in Getaway program transactions and a 10 percent increase in average fee, reflecting customers’ desire to travel and pent up-demand due to COVID-19-related restrictions. Late in the first quarter of 2021, we also introduced Getaway rentals of less than seven nights, providing members more opportunities to use their membership in ways that better fit their lifestyles.

exchange usage through Interval International, offset partially by pricing increases.

~~Table of~~ ~~Contents~~

Management and Exchange Profit

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Management and exchange revenue	Management and exchange revenue	$	59	$	49	$	10	18%	Management and exchange revenue	$	64	$	60	$	4	7%
Management and exchange expense	Management and exchange expense	(33)		(27)		(6)		(17%)	Management and exchange expense	(33)		(31)		(2)		(6%)
Management and exchange profit	Management and exchange profit	$	26	$	22	$	4	19%	Management and exchange profit	$	31	$	29	$	2	8%
Management and exchange profit margin	Management and exchange profit margin	44.7%		44.3%		0.4 pts			Management and exchange profit margin	48.6%		48.0%		0.6 pts

The increase in management and exchange revenue and profit ~~reflected~~reflects higher management fees ~~and membership revenue~~at Aqua-Aston managed properties due to the continued ramp-up of the business in Hawaii subsequent to the initial impact of the COVID-19 ~~pandemic late in the prior year first quarter.~~pandemic. For Interval International, average revenue per member ~~increased 17 percent~~decreased 6% over the prior year comparable period.

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Management and exchange revenue $ 179 $ 160 $ 19 12%
Management and exchange expense (99) (93) (6) (5%)
Management and exchange profit $ 80 $ 67 $ 13 21%
Management and exchange profit margin 44.9% 41.5% 3.4 pts

~~The increase~~ This decline was due in ~~management and~~part to new, recently added affiliations for which we expect any exchange ~~revenue and profit reflected higher management fees and exchange revenue due~~activity to ~~the continued~~take time to ramp-up as many of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter. These increases were partially offset by lower membership revenue as a result of lower renewal activity, driven by a 15% decline in activenew members in the third quarter and first three quarters of 2021, primarily due to the non-renewal of one of Interval International’s corporate customers which the Company announced in February of 2021. For Interval International, exchange transactions and average exchange fee increased 5 percent and 3 percent, respectively, over the prior year comparable periods.have already booked near term travel plans.

Depreciation and Amortization

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Depreciation and amortization	Depreciation and amortization	$	11	$	8	$	3	42%	Depreciation and amortization	$	9	$	20	$	(11)	(56%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Depreciation and amortization $ 40 $ 24 $ 16 60%

~~Increase~~The decrease in depreciation expense ~~in the third quarter and the first three quarters of 2021~~ relates to a true-up made in the prior year to accelerate depreciation on a technology asset.

6349

Table of of Contents

~~Restructuring~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Restructuring $ 1 $ 3 $ (2) (94%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Restructuring $ 1 $ 3 $ (2) (87%)

During the third quarter and first three quarters of 2020, we incurred $3 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic. During the third quarter and first three quarters of 2021, we incurred $1 million of additional restructuring costs related to this plan.

~~Impairment~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ — $ 1 $ (1) (100%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ — $ 92 $ (92) (100%)

No asset impairment charges were recorded for the third quarter or the first three quarters of 2021. During the first three quarters of 2020, we recorded a non-cash impairment of $92 million primarily related to a decrease in the fair value of goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic.

~~Losses and Other Expense~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Losses and other expense, net $ — $ (5) $ 5 (99%)

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Losses and other expense, net $ — $ (5) $ 5 (98%)

Nolosses and other expenses were recorded for the third quarter or first three quarters of 2021. During the third quarter and first three quarters of 2020, we recorded a $5 million loss related to the disposition of a previously consolidated subsidiary.

~~Table of~~ ~~Contents~~

Corporate and Other

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and ~~(provision for) benefit from~~ income taxes. In addition, Corporate and Other includes the revenues and expenses from the Consolidated Property Owners’ Associations.


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Resort management and other services	Resort management and other services	$	40	$	45	$	116	$	121	Resort management and other services	$	32	$	39

Cost reimbursements	Cost reimbursements	(39)		(38)		(93)		(102)		Cost reimbursements	(20)		(27)
TOTAL REVENUES	TOTAL REVENUES	1		7		23		19		TOTAL REVENUES	12		12
EXPENSES	EXPENSES									EXPENSES
Resort management and other services	Resort management and other services	50		52		146		144		Resort management and other services	40		51
Rental	Rental	(13)		(14)		(41)		(43)		Rental	(9)		(14)
General and administrative	General and administrative	54		32		166		121		General and administrative	61		46
Depreciation and amortization	Depreciation and amortization	—		2		6		8		Depreciation and amortization	2		2
Litigation charges		1		—		1		—

Restructuring	Restructuring	—		6		(1)		6		Restructuring	—		(1)
Impairment		—		—		5		—

Cost reimbursements	Cost reimbursements	(39)		(38)		(93)		(102)		Cost reimbursements	(20)		(27)
TOTAL EXPENSES	TOTAL EXPENSES	53		40		189		134		TOTAL EXPENSES	74		57
Losses and other expense, net		(31)		(1)		(27)		(49)
Gains and other income, net										Gains and other income, net	1		6
Interest expense	Interest expense	(41)		(37)		(128)		(112)		Interest expense	(27)		(43)
Transaction and integration costs	Transaction and integration costs	(26)		(11)		(73)		(44)		Transaction and integration costs	(28)		(19)
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	(150)		(82)		(394)		(320)		FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	(116)		(101)
(Provision for) benefit from income taxes	(Provision for) benefit from income taxes	(47)		14		(63)		91		(Provision for) benefit from income taxes	(32)		11

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		(4)		(6)		(13)		Net income attributable to noncontrolling interests	—		(3)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(198)	$	(72)	$	(463)	$	(242)	FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(148)	$	(93)

~~Table of~~ ~~Contents~~

Consolidated Property Owners’ Associations

The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance, which represents the portion related to third-party VOI owners.


		Three Months Ended				Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
REVENUES	REVENUES									REVENUES
Resort management and other services	Resort management and other services	$	40	$	45	$	116	$	121	Resort management and other services	$	32	$	39

Cost reimbursements	Cost reimbursements	(39)		(38)		(93)		(102)		Cost reimbursements	(20)		(27)
TOTAL REVENUES	TOTAL REVENUES	1		7		23		19		TOTAL REVENUES	12		12
EXPENSES	EXPENSES									EXPENSES
Resort management and other services	Resort management and other services	50		52		146		144		Resort management and other services	40		51
Rental	Rental	(13)		(14)		(41)		(43)		Rental	(9)		(14)
Cost reimbursements	Cost reimbursements	(39)		(38)		(93)		(102)		Cost reimbursements	(20)		(27)
TOTAL EXPENSES	TOTAL EXPENSES	(2)		—		12		(1)		TOTAL EXPENSES	11		10
Losses and other expense, net		(1)		—		(1)		—
FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS		2		7		10		20
Provision for income taxes		(1)		—		(2)		—
Gains and other income, net										Gains and other income, net	—		2
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS										FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	1		4

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		(4)		(6)		(13)		Net income attributable to noncontrolling interests	—		(3)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	—	$	3	$	2	$	7	FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	1	$	1

Pursuant to a change in control of certain Consolidated Property Owners’ Associations, we recorded a non-cash loss of $1 million in Losses and other expense, net on our Income Statement for the nine months ended September 30, 2021. We continue to act as manager for these property owners’ associations pursuant to existing management contracts and retain membership interests via our ownership of vacation ownership interests.

Table of Contents

General and Administrative

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
General and administrative	General and administrative	$	54	$	32	$	22	71%	General and administrative	$	61	$	46	$	15	33%

For the ~~third~~first quarter of ~~2021,~~2022, General and administrative expenses increased ~~$22 million~~ due primarily to ~~$13~~$11 million of higher salary ~~and wages~~ costs asdue to reduced work week programs in the prior year, ~~quarter benefited from savings related to the furlough, reduced work week and workforce reduction programs implemented in response to the impact of the COVID-19 pandemic, $9~~$3 million related to higher bonus expense, and a $4$2 million decrease in credits related to incentives under the CARES Act, for companies who continued paying associates' benefit costs while they were not working as a result of the COVID-19 pandemic, offset partially by $4 million of lower other spending across the business, including technology, travel, training, and other expenses.

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
General and administrative $ 166 $ 121 $ 45 38%

For the first three quarters, General and administrative expenses increased $45 million due to $24 million of higher salary and wages costs as the prior year period benefited from savings related to the furlough, reduced work week and workforce reduction programs implemented in response to the impact of the COVID-19 pandemic, $31 million related to higher bonus expense, and an $8 million decrease in credits related to incentives under the CARES Act for companies who continued paying associates' benefit costs while they were not working as a result of the COVID-19 pandemic. These increases were partially offset by $9$1 million ofin lower ~~costs as the prior year period included an accrual for health and welfare~~

~~Table of~~ ~~Contents~~

~~costs for furloughed associates and $9 million of lower net~~ overall ~~spending across the business, including technology, travel, training, and other expenses.~~spending.

Restructuring

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Restructuring	Restructuring	$	—	$	6	$	(6)	(100%)	Restructuring	$	—	$	(1)	$	1	(100%)

No restructuring costs were recorded for the ~~third~~first quarter of ~~2021.~~2022. During the ~~third~~first quarter of ~~2020,~~2021, we ~~incurred $6~~reversed an accrual for $1 million inassociated with a restructuring ~~costs primarily related to a workforce reduction~~ plan that we adopted as a result of the COVID-19 pandemic.

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Restructuring $ (1) $ 6 $ (7) (113%)

During the first three quarters of 2020, we incurred $6 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic. During the first three quarters of 2021, we trued up this restructuring accrual based upon current plans.

~~Impairment~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ 5 $ — $ 5 NM

During the first three quarters of 2021, we recorded a $5 million non-cash impairment charge related to an equity method investment. No asset impairment charges were recorded for the third quarter of 2021, the third quarter of 2020, or the first three quarters of 2020.

Gains / Losses and Other Income / Expense

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Losses and other expense, net		$	(31)	$	(1)	$	(30)	NM
Gains and other income, net									Gains and other income, net	$	1	$	6	$	(5)	(74%)

InWe recorded $1 million and $6 million of foreign currency translation gains in the ~~third~~first quarter of 2022 and the first quarter of 2021, ~~we recorded losses and other expenses of $31~~respectively.

Interest Expense

2022 First Quarter


	Three Months Ended
($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Interest expense	$	(27)	$	(43)	$	16	37%

Interest expense decreased $16 million, including ~~$36~~$13 million ~~of expense related~~due to the early redemption of ~~our~~the 2026 Notes $2in 2021, $6 million due to the adoption of ~~foreign currency translation losses, and $1 million of miscellaneous losses and other expense, partially offset by $8 million~~new accounting guidance related to ~~a true-up of a Marriott International indemnification receivable upon settlement (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line).~~

~~In the third quarter of 2020, we recorded a loss of $1~~our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards”), and $4 million ~~driven mainly by foreign currency translation.~~

~~Table of~~ ~~Contents~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Losses and other expense, net $ (27) $ (49) $ 22 45%

~~In the first three quarters of 2021, we recorded losses and other expenses of $27 million, including $36 million of expense related~~due to the early redemption of ~~our 2026~~a portion of the 2025 Notes, ~~and $1 million of miscellaneous losses and other expense,~~ partially offset by $6 million ~~related to a true-up of a Marriott International indemnification receivable upon settlement (the true-up~~due to the ~~offsetting accrual is included in the (Provision for) benefit from income taxes line), and $4 million of foreign currency translation gains.~~

In the first three quarters of 2020, we recorded losses and other expenses of $49 million, including $32 million for the true-up of an indemnification receivable from Marriott International as a resultissuance of the ~~settlement of an indemnified liability with a taxing authority (the true-up to the offsetting accrual is included~~2029 Notes in ~~the (Provision for) benefit from income taxes line)~~2021 and ~~$24 million related to foreign currency translation, partially offset by $6 million of other income related to an indemnification payment from Marriott International for VAT penalties and interest.~~

~~Interest Expense~~

~~2021 Third Quarter~~

Three Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Interest expense $ (41) $ (37) $ (4) (10%)

~~Interest expense increased $4 million, including $6~~$1 million of higher interest expense associated with the 2029 Notes issued in the second quarter of 2021 and $6 million of higher expense associated with the 2026 Convertible Notes issued in the first quarter of 2021. These increases were partially offset byrelated to a ~~$9 million decrease in expenses associated with the payoff of the 2026 Notes in the quarter.~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Interest expense $ (128) $ (112) $ (16) (14%)

Interest expense increased $16 million, including $17 million of higher interest expense associated with the 2026 Convertible Notes issued in the first quarter of 2021, $12 million of higher expense associated with the 2025 Notes issued in the second quarter of 2020, and $6 million of higher interest expense associated with the 2029 Notes issued in the second quarter of 2021. These increases were partially offset by a $9 million decrease in expenses associated with the payoff of the 2026 Notes in the third quarter, $6 million associated with less drawn on the Warehouse Credit Facility and Revolving Corporate Credit Facility, a $3 million decrease in expense associated with the Term Loan due to partial pay-down of the Term Loan in 2021, and other decreases in expenses associated with various other debt facilities.leased asset.

Transaction and Integration Costs

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
Transaction and integration costs	Transaction and integration costs	$	(26)	$	(11)	$	(15)	(126%)	Transaction and integration costs	$	(28)	$	(19)	$	(9)	(49%)

In the ~~third~~first quarter of 2022, Transaction and integration costs included $25 million of ILG Acquisition and integration related costs, and $3 million of Welk Acquisition and integration related costs.

In the first quarter of 2021, Transaction and integration costs included ~~$22 million of costs related to the ILG Acquisition and $3 million of costs related to the Welk Acquisition.~~

~~In the third quarter of 2020, Transaction and integration costs included $11~~$17 million of ILG Acquisition and integration related costs, and $2 million of Welk Acquisition and integration related costs.

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~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
Transaction and integration costs $ (73) $ (44) $ (29) (65%)

~~In the first three quarters of 2021, Transaction and integration costs included $64 million of costs related to the ILG Acquisition and $8 million of costs related to the Welk Acquisition.~~

~~In the first three quarters of 2020, Transaction and integration costs included $44 million of ILG Acquisition related costs.~~

Income Tax

~~2021 Third~~2022 First Quarter


		Three Months Ended								Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		Change		% Change	($ in millions)	March 31, 2022		March 31, 2021		Change		% Change
(Provision for) benefit from income taxes	(Provision for) benefit from income taxes	$	(47)	$	14	$	(61)	NM	(Provision for) benefit from income taxes	$	(32)	$	11	$	(43)	NM

The change in the (Provision for) benefit from income taxes is predominately attributable to an increase in pre-tax income and an increase in the reserve for unrecognized tax benefits for the three months ended ~~September 30, 2021.~~

~~2021 First Three Quarters~~

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020 Change % Change
(Provision for) benefit from income taxes $ (63) $ 91 $ (154) NM

Liquidity and Capital Resources

Typically, our capital needs are supported by cash on hand ($0.4 billion at the end of the ~~third~~first quarter of ~~2021)~~2022), cash generated from operations, our ability to raise capital through securitizations in the asset-backed ~~security~~securities market, our ability to issue new, and refinance existing, debt and, to the extent necessary, our ability to access funds ~~available~~ under the Warehouse Credit Facility and the Revolving Corporate Credit Facility. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to shareholders.

During the first quarter of 2022, we entered into an amendment to the Revolving Corporate Credit Facility ~~with a~~(the “Amendment”), which increased the borrowing capacity of the existing revolving credit facility from $600 ~~million.~~million to $750 million and extended the maturity date from August 31, 2023 to March 31, 2027.

At ~~September 30, 2021,~~March 31, 2022, we had $4.6 billion of total gross debt outstanding, which included ~~$1.6~~$1.8 billion of non-recourse debt associated with vacation ownership notes receivable securitizations, ~~$0.9~~$1.1 billion of senior ~~unsecured~~notes, $0.8 billion of convertible notes, $0.8 billion of debt under our Corporate Credit Facility, ~~$0.8 billion of convertible notes, $0.5 billion of senior secured notes, and $9~~$84 million related to finance lease ~~obligations.~~

~~In July 2021, we redeemed, prior to maturity, $500~~obligations, and $11 million ~~aggregate principal amount of the 2026 Notes pursuant~~related to a redemption notice issued in June 2021 and the terms of the indenture governing the 2026 Notes. In September 2021, we issued a redemption notice and redeemed, prior to maturity, the remaining $250 million aggregate principal amount of the 2026 Notes.

At ~~September 30, 2021,~~March 31, 2022, we had ~~$732~~$684 million of completed real estate inventory on hand. In addition, we had ~~$465~~$496 million of completed vacation ownership units that have been classified as a component of Property and equipment until the time at which they are legally registered and ~~held~~available for sale as vacation ownership products.

~~Table~~Our material cash requirements from known contractual or other obligations were $6 billion as of ~~Contents~~

March 31, 2022, of which we expect $748 million to be payable during 2022. These obligations primarily relate to our debt, securitized debt and purchase obligations. Please see “Material Cash Requirements” below for additional information.

The following table summarizes the changes in cash, cash equivalents and restricted cash:


		Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Cash, cash equivalents and restricted cash provided by (used in):	Cash, cash equivalents and restricted cash provided by (used in):					Cash, cash equivalents and restricted cash provided by (used in):
Operating activities	Operating activities	$	303	$	158	Operating activities	$	129	$	(60)
Investing activities	Investing activities	(187)		(24)		Investing activities	(10)		(8)
Financing activities	Financing activities	(225)		195		Financing activities	(272)		255
Effect of change in exchange rates on cash, cash equivalents and restricted cash	Effect of change in exchange rates on cash, cash equivalents and restricted cash	(1)		(2)		Effect of change in exchange rates on cash, cash equivalents and restricted cash	—		(1)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	$	(110)	$	327	Net change in cash, cash equivalents and restricted cash	$	(153)	$	186

Cash from Operating Activities

Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions and (4) net cash generated from our rental and resort management and other services operations. Outflows include spending for the development of new phases of existing resorts, the acquisition of additional inventory, enhancement of our inventory exchange network of resorts and related technology infrastructure and funding our working capital needs.

We minimize our working capital needs through cash management, strict credit-granting policies and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to ~~property~~ owners’ associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of ~~our owners’~~ repayment by owners of vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisition and development.

~~In the first three quarters~~

Table of ~~2021, we had $303 million of cash inflows from operating activities, compared to $158 million of cash inflows in the first three quarters of 2020.~~ Contents

Excluding the impact of changes in net income or loss and adjustments for non-cash items, the change in cash ~~flow~~flows from operations increased as a result of lower inventory spending, higher operational expense accruals, higher sales and rental deposits due to the continued ramp-up of the business, and higher collections of vacation ownership notes receivable, partially offset by ~~severance and~~timing of certain employee benefit ~~payments related to cost management activities and higher inventory spending.~~payments.

In addition to net income or loss and adjustments for non-cash items, the following operating activities are key drivers of our cash flow from operating activities:

Inventory Spending InLess Than (In Excess ofof) Cost of Sales


		Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Inventory spending	Inventory spending	$	(101)	$	(88)	Inventory spending	$	(22)	$	(57)
Purchase of vacation ownership units for future transfer to inventory	Purchase of vacation ownership units for future transfer to inventory	(99)		(61)		Purchase of vacation ownership units for future transfer to inventory	(12)		(99)
Inventory costs	Inventory costs	159		86		Inventory costs	50		31
Inventory spending in excess of cost of sales		$	(41)	$	(63)
Inventory spending less than (in excess of) cost of sales						Inventory spending less than (in excess of) cost of sales	$	16	$	(125)

~~Our Vacation Ownership segment product offerings allow us~~While we have significant inventory on hand, we will continue to utilize our inventory efficiently. The majority of our sales are of points-based products, which permits us to sell vacation ownership products at most of our sales locations, including those where little or no weeks-based inventory remains available for sale. Because we do not need specific resort-based inventory at each sales location, we need to have only a few resorts, if any, under construction at any given time and can leverage successful sales locations at completed resorts. This allows us to maintain long-term sales locations and reduces the need to develop and staff on-site sales locations at smaller projects in the future. We believe our points-based programs enables us to better align our inventory acquisitions with the pace of sales of vacation ownership products.

~~As part of our long-term strategy, we~~ selectively pursue growth opportunities in ~~our Vacation Ownership segment~~North America and Asia Pacific by targeting high-quality inventory that allows us to add desirable new destinations to our ~~systems~~system with new on-site sales locations through transactions that limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale. These capital efficient vacation ownership deal structures may consist of the development of new inventory, or the conversion of previously built units by third parties, just prior to sale.

~~Table of~~ ~~Contents~~

We measure our real estate inventory capital efficiency by comparing the cash outflow for real estate inventory spending (a cash item) to the amount of real estate inventory costs charged to expense on our income statements related to sale of vacation ownership products (a non-cash item).

Our spending for real estate inventory in the first ~~three quarters~~quarter of ~~2021~~2022 was ~~higher~~lower than ~~the amount of~~ real estate inventory costs ~~given the timing of payments~~due to ~~satisfy~~ our remaining commitments to purchase vacation ownership units and the slowdown in sales pace as a result of the COVID-19 pandemic. We entered into these commitments in prior periods as part of our capital efficient strategy to ~~limit our up-front capital investment and purchase finished~~minimize spending because we have a significant amount of inventory ~~closer to the time it is needed for sale. See Footnote 11 “Contingencies and Commitments” to our Financial Statements for additional information regarding our remaining commitments.~~on hand.

Through our existing vacation ownership interest repurchase program, we proactively buy back previously sold vacation ownership interests at lower costs than would be required to develop new inventory. By repurchasing inventory, we expect to be able to help stabilize the future cost of vacation ownership products.

Vacation Ownership Notes Receivable Collections (Less Than) In Excess of Originations


		Nine Months Ended					Three Months Ended
($ in millions)	($ in millions)	September 30, 2021		September 30, 2020		($ in millions)	March 31, 2022		March 31, 2021
Vacation ownership notes receivable collections — non-securitized	Vacation ownership notes receivable collections — non-securitized	$	137	$	180	Vacation ownership notes receivable collections — non-securitized	$	67	$	42
Vacation ownership notes receivable collections — securitized	Vacation ownership notes receivable collections — securitized	395		307		Vacation ownership notes receivable collections — securitized	121		123
Vacation ownership notes receivable originations	Vacation ownership notes receivable originations	(545)		(265)		Vacation ownership notes receivable originations	(205)		(108)
Vacation ownership notes receivable collections in excess of originations		$	(13)	$	222
Vacation ownership notes receivable collections (less than) in excess of originations						Vacation ownership notes receivable collections (less than) in excess of originations	$	(17)	$	57

~~Vacation ownership notes receivable collections include principal from non-securitized and securitized vacation ownership notes receivable.~~ Vacation ownership notes receivable collections increased during the first ~~three quarters~~quarter of ~~2021,~~2022, as compared to the first ~~three quarters~~quarter of ~~2020,~~2021, due to an increase in the portfolio of ~~securitized~~ outstanding vacation ownership notes receivable. Vacation ownership notes receivable originations in the first ~~three quarters~~quarter of 2022 increased, as compared to the first quarter of 2021, ~~increased~~ due to higher sales ~~in the first three quarters of 2021 due to the continued ramp-up in the business~~ combined with a higher financing propensity. Financing propensity increased to ~~53 percent~~50% for the first ~~three quarters~~quarter of ~~2021,~~2022, compared to ~~51 percent~~46% for the first ~~three quarters~~quarter of ~~2020,~~2021, reflecting a higher mix of sales to first-time buyers, who tend to have a higher financing propensity.

Cash from Investing Activities

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020
Acquisition of a business, net of cash and restricted cash acquired $ (157) $ —
Capital expenditures for property and equipment (excluding inventory) (19) (36)
Purchase of company owned life insurance (11) (3)
Dispositions, net — 15
Net cash, cash equivalents and restricted cash used in investing activities $ (187) $ (24)

~~Acquisition of a Business, Net of Cash and Restricted Cash Acquired~~

Net cash outflows of $157 million in the first three quarters of 2021 were due to the Welk Acquisition. See Footnote 3 “Acquisitions and Dispositions” to our Financial Statements for more information.

Capital Expenditures for Property and Equipment

~~Capital~~In the first quarter of 2022, capital expenditures for property and equipment ~~relate~~included $9 million to ~~spending~~support business operations (including $6 million for ~~technology development, buildings~~ancillary and ~~equipment used at~~other operations assets and $3 million for sales locations and ancillary offerings, such as food and beverage offerings, at locations where such offerings are provided. Additionally, it includes spending related to buildings and equipment used in common areas at some of our resorts.locations).

In the first ~~three quarters~~quarter of 2021, capital expenditures for property and equipment of ~~$19~~$7 million included~~$16~~ $5 million to support business operations (including ~~$11~~$3 million for ancillary and other operations assets and $5$2 million for sales locations) and $3$2 million for technology. Given the impact of the COVID-19 pandemic, we significantly reduced our spending for property and equipment beginning in the second quarter of 2020. However, during the first quarter of 2021, and continuing into the second and third quarters, we began to add back business critical spending with expected long term strategic benefits for our operations. We expect this trend to continue into the fourth quarter of 2021.

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In the first three quarters of 2020, capital expenditures for property and equipment of $36 million included $33 million to support business operations (including $21 million for ancillary and other operations assets and $12 million for sales locations) and $3 million for technology.

~~Purchase of Company Owned Life Insurance~~

To support our ability to meet a portion of our obligations under the Marriott Vacations Worldwide Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”), we acquired company owned insurance policies on the lives of certain participants in the Deferred Compensation Plan, the proceeds of which are intended to be aligned with the investment alternatives elected by plan participants. We paid $11 million and $3 million to acquire these policies during the first three quarters of 2021 and the first three quarters of 2020, respectively.

Cash from Financing Activities

Nine Months Ended
($ in millions) September 30, 2021 September 30, 2020
Borrowings from securitization transactions $ 425 $ 690
Repayment of debt related to securitization transactions (602) (793)
Proceeds from debt 1,061 1,166
Repayments of debt (1,039) (703)
Purchase of convertible note hedges (100) —
Proceeds from issuance of warrants 70 —
Finance lease payment (2) (10)
Payment of debt issuance costs (17) (14)
Repurchase of common stock (4) (82)
Payment of dividends — (45)
Payment of withholding taxes on vesting of restricted stock units (17) (14)
Net cash, cash equivalents and restricted cash (used in) provided by financing activities $ (225) $ 195

Borrowings from / Repayment of Debt Related to Securitization Transactions

~~We reflect proceeds from securitizations~~During the first quarter of 2022, we securitized vacation ownership notes receivable ~~including draw downs on the~~under our Warehouse Credit ~~Facility, as “Borrowings from securitization transactions.” We reflect repayments~~Facility. The carrying amount of ~~debt associated with~~the vacation ownership notes receivable ~~securitizations and repayments on the Warehouse Credit Facility (including vacation ownership notes receivable repurchases) as “Repayment of debt related to securitization transactions.”~~

~~During the first three quarters of 2021, we completed a securitization of vacation ownership notes receivables, issuing $434 million of notes at an overall~~securitized was $125 million. The average ~~weighted interest rate of 1.5% and a 98% gross~~ advance rate ~~the lowest interest rate ever achieved by one of our securitizations, generating net~~was 81%, which resulted in gross proceeds of ~~$425~~$102 million. Net proceeds were $101 million. ~~See Footnote 12 "Securitized Debt"~~ due to ~~our Financial Statements for additional information regarding this transaction.~~the funding of reserve accounts of $1 million.

As of ~~September 30, 2021, $278~~March 31, 2022, $120 million of gross vacation ownership notes receivable were eligible for securitization.

Proceeds from / Repayments of Debt

Borrowings from / Repayment of Corporate Credit Facility

Our Corporate Credit Facility includes the Term Loan and our Revolving Corporate Credit Facility, which is further discussed in Footnote 13 “Debt” to our Financial Statements. No principal payments were made on our Term Loan during the first quarter of 2022. During the first ~~three quarters~~quarter of 2022, we borrowed $30 million under our Revolving Corporate Credit Facility, all of which was repaid prior to the end of the quarter. There were no borrowed amounts outstanding under our Revolving Corporate Credit Facility as of March 31, 2022. As of March 31, 2022, we had $2 million of letters of credit outstanding under our Revolving Corporate Credit Facility.

During the first quarter of 2021, we repaid $100 million of the amount outstanding under the Term ~~Loan, which is part of our Corporate Credit Facility.~~Loan. We had no borrowings or repayments under our Revolving Corporate Credit Facility during the first ~~three quarters of 2021 and also had no amounts outstanding as of September 30, 2021.~~

During the first three quarters of 2020, we borrowed $666 million under our Revolving Corporate Credit Facility to facilitate the funding of our short-term working capital needs and to increase our cash position and preserve financial flexibility in light of the impact on global markets resulting from the COVID-19 pandemic. We later repaid $696 million during the first three quarters of 2020 and had no amounts outstanding as of September 30, 2020. During the first three quarters of 2020, we also repaid $7 million of the amount outstanding under the Term Loan.

~~See Footnote 13 “Debt” to our Financial Statements for additional information regarding our Corporate Credit Facility that includes our Revolving Corporate Credit Facility and the Term Loan.~~

~~Table of~~ ~~Contents~~

~~Proceeds from / Repayment of Senior Notes~~

During the second quarter of 2021, we issued $500 million of 2029 Notes and used the proceeds, during the third quarter of 2021, to redeem a portion of the 2026 Notes and pay transaction expenses and fees in connection with the transaction.

In July 2021, we redeemed, prior to maturity, $500 million aggregate principal amount of the 2026 Notes pursuant to a redemption notice issued in June 2021 and the terms of the indenture governing the 2026 Notes. In September 2021 we issued a redemption notice and redeemed, prior to maturity, the remaining $250 million aggregate principal amount of the 2026 Notes pursuant to the terms of the indenture governing the 2026 Notes. In connection with the redemptions that occurred during the third quarter of 2021, we incurred charges of $36 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which was recorded in the Losses and other expense, net line on our Income Statement for the three and nine months ended September 30, 2021.

Additionally, during the third quarter of 2021, we delivered a redemption notice of $250 million aggregate principal amount of the 2025 Notes pursuant to the terms of the indenture governing the 2025 Notes. Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes. In connection with this redemption, we expect to incur charges of approximately $19 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which will be recorded in the fourth quarter of 2021.

During the first three quarters of 2020, we issued $500 million of the 2025 Notes that are pari passu with and secured by the same collateral as our Corporate Credit Facility. After deducting offering expenses and the underwriting discount, we received net proceeds of approximately $493 million from the offering of the 2025 Notes, which were used to repay all then outstanding amounts on the Revolving Corporate Credit Facility.

~~See Footnote 13 "Debt" to our Financial Statements for additional information related to these notes.~~

~~Proceeds from Convertible Notes~~

During the first three quarters of 2021, we issued $575 million of 2026 Convertible Notes, as discussed further in Footnote 13 “Debt” to our Financial Statements. We received net proceeds from the offering of approximately $530 million after adjusting for debt issuance costs, including the discount to the initial purchasers, the cost of the 2026 Convertible Note Hedges, and proceeds from the 2026 Warrants. We used, or expect to use, the net proceeds from the 2026 Convertible Notes to (i) complete the Welk Acquisition, (ii) repay a portion of our term loan and (iii) in each case, pay transaction expenses and other fees in connection therewith, and to the extent of any remaining proceeds, for other general corporate purposes.

~~Repayment of Debt Assumed from Welk Acquisition~~

During the first three quarters of 2021, subsequent to the Welk Acquisition, we repaid all outstanding debt obligations, excluding securitized debt, of Welk and its subsidiaries that were assumed as part of the Welk Acquisition. The total amount of repayments related to these debt obligations was $189 million.

~~Purchase of Convertible Note Hedges / Proceeds from Issuance of Warrants~~

In connection with the issuance of the 2026 Convertible Notes, we entered into the 2026 Convertible Note Hedges with respect to our common stock with certain counterparties, covering a total of 3.4 million shares of our common stock at a cost of $100 million. Concurrently with the entry into the 2026 Convertible Note Hedges, we separately entered into the 2026 Warrants, whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire, collectively, subject to anti-dilution adjustments, approximately 3.4 million shares of our common stock at an initial strike price of $213.76 per share. We received aggregate proceeds of $70 million from the sale of the 2026 Warrants to the counterparties.

See Footnote 13 “Debt” to our Financial Statements for additional information regarding the issuance of the 2026 Convertible Notes, including the 2026 Convertible Note Hedges and the 2026 Warrants.

Finance Lease Payment

During the first ~~three quarters~~quarter of ~~2021,~~2022, we paid $2 million related to our finance lease obligations for technology and business operations equipment.

During the first three quarters of 2020, in conjunction with the acquisition of the 57 completed vacation ownership units at our Marriott Vacation Club Pulse, New York City property, we made finance lease payments of $7 million related to the purchase of the accompanying ancillary and office space. Additionally, we paid $3 million related to our finance lease obligations for technology and business operations equipment.

~~Table of~~ ~~Contents~~

Debt Issuance Costs

During the first ~~three quarters~~quarter of 2022, we paid $4 million of debt issuance costs associated with an amendment to the Revolving Corporate Credit Facility, which is further discussed in Footnote 13 “Debt” to our Financial Statements.

During the first quarter of 2021, we paid ~~$17~~$2 million of debt issuance costs, which included $7 million associated with the 2029 Notes, $6 million associated with the 2021 vacation ownership notes receivable securitization, $2 million associated with the amendment of our Warehouse Credit Facility, $1 million associated with the 2026 Convertible Notes and $1 million associated with the extension of the Waiver ~~associated with~~which suspended certain requirements under the Revolving Corporate Credit Facility.

~~During~~Repurchase of Common Stock

The following table summarizes share repurchase activity under our current share repurchase program:


($ in millions, except per share amounts)	Number of Shares Repurchased	Cost of Shares Repurchased		Average Price Paid per Share
As of December 31, 2021	17,681,395	$	1,418	$	80.17
For the first quarter of 2022	764,824	119		156.50
As of March 31, 2022	18,446,219	$	1,537	$	83.34

See Footnote 14 “Shareholders' Equity” to our Financial Statements for further information related to our share repurchase program, including the additional share repurchase authorization approved by our Board of Directors during the first ~~three quarters~~quarter of 2020, we paid $14 million of debt issuance costs, which included $7 million associated with the 2025 Notes, $5 million associated with the 2020 vacation ownership notes receivable securitization, $1 million related to the Waiver associated with the Revolving Corporate Credit Facility, and $1 million associated with the amendment of our Warehouse Credit Facility.2022.

Dividends

We ~~declared~~distributed cash dividends to holders of our common stock during the ~~third~~first quarter of ~~2021, and distributed cash dividends subsequent to the end of the third quarter of 2021~~2022 as follows:

Declaration Date

Shareholder Record Date

Distribution Date

Dividend per Share

~~September 10,~~December 9, 2021

~~September~~December 23, 2021

~~October 7, 2021~~January 6, 2022

$0.54

February 18, 2022

March 3, 2022

March 17, 2022

$0.62

We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to Board approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors

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considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing ~~the~~ debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at ~~the same~~any particular rate or at all.

Material Cash Requirements

The following table summarizes our future material cash requirements from known contractual or other obligations as of March 31, 2022:


			Payments Due by Period
($ in millions)	Total		Remainder of 2022		Years 2023 - 2024		Years 2025 - 2026		Thereafter
Contractual Obligations
Debt obligations(1)	$	3,088	$	294	$	155	$	1,710	$	929
Securitized debt(1)(2)	1,994		167		529		410		888
Purchase obligations(3)	377		250		86		41		—
Operating lease obligations	122		18		44		35		25
Finance lease obligations(4)	283		6		11		7		259
Other long-term obligations(5)	24		13		7		3		1
	$	5,888	$	748	$	832	$	2,206	$	2,102

_________________________

(1)Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.

(2)Payments based on estimated timing of cash flow associated with securitized notes receivable.

(3)Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts reflected herein represent expected funding under such contracts. Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.

(4)Includes interest.

(5)Primarily relates to our commitment to an owners’ association that we manage, to pay for any shortfall between the actual expenses incurred by the owners’ association and the income received by the owners’ association, in lieu of maintenance fees, of $10 million.

In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the resorts, these obligations have minimal impact on our net income and cash flow. These purchase commitments are excluded from the table above.

Leases That Have Not Yet Commenced

During 2020, we entered into a finance lease arrangement, that was amended in 2021, for our new global headquarters office building, which is being constructed in Orlando, Florida. The new Orlando corporate office building is currently expected to be completed in 2023, at which time the lease term will commence and a right-of-use asset and corresponding liability will be recorded on our balance sheet. The initial lease term is approximately 16 years with total lease payments of $137 million for the aforementioned period.

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Supplemental Guarantor Information

The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. (“MORI”), and certain other subsidiaries whose voting securities are wholly owned directly or indirectly by MORI (such subsidiaries collectively, the “Senior Notes Guarantors”). These guarantees are full and unconditional and joint and several. The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.

The following tables present consolidating financial information as of ~~September 30,~~March 31, 2022 and December 31, 2021, and for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVW, and MVW on a consolidated basis.

Condensed Consolidating Balance Sheet


		As of September 30, 2021																As of March 31, 2022
		Issuers				Senior Notes Guarantors				Non-Guarantor Subsidiaries				Total Eliminations					MVW Consolidated				Issuers										Senior Notes Guarantors		Non-Guarantor Subsidiaries				Total Eliminations				MVW Consolidated
($ in millions)	($ in millions)	MVWC		MORI								($ in millions)	MVWC									MORI
Cash and cash equivalents	Cash and cash equivalents	$	—	$	238			$	85							$	125				$	—			$	448	Cash and cash equivalents		$	—	$	129					$	77			$	148			$	—	$	354
Restricted cash	Restricted cash	—		20		65				349				—					434			Restricted cash	—				22							76		198				—				296
Accounts receivable, net	Accounts receivable, net	2		72		82				94				(27)					223			Accounts receivable, net	4				55						117		67				(9)				234
Vacation ownership notes receivable, net	Vacation ownership notes receivable, net	—		211		261				1,554				—					2,026			Vacation ownership notes receivable, net	—				109						204		1,717				—				2,030
Inventory	Inventory	—		228		417				96				—					741			Inventory	—				227						374		92				—				693
Property and equipment	Property and equipment	—		203		650				224				—					1,077			Property and equipment	—				196						641		325				—				1,162
Goodwill	Goodwill	—		—		2,817				269				—					3,086			Goodwill	—				—						3,142		—				—				3,142
Intangibles, net	Intangibles, net	—		—		854				153				—					1,007			Intangibles, net	—				—						827		151				—				978

Investments in subsidiaries	Investments in subsidiaries	3,630		4,292		—				—				(7,922)					—			Investments in subsidiaries	3,582				4,211						—		—				(7,793)				—
Other	Other	70		97		240				119				(25)					501			Other	74				116						275		189				(40)				614
Total assets	Total assets	$	3,702	$	5,361	$	5,471			$	2,983			$	(7,974)				$	9,543		Total assets	$	3,660			$	5,065					$	5,733	$	2,887			$	(7,842)			$	9,503

Accounts payable	Accounts payable	$	44	$	31	$	63			$	52			$	—				$	190		Accounts payable	$	48			$	15					$	91	$	58			$	—			$	212
Advance deposits	Advance deposits	—		72		72				22				—					166			Advance deposits	—				83						85		26				—				194
Accrued liabilities	Accrued liabilities	3		94		186				120				(28)					375			Accrued liabilities	5				102						147		102				(9)				347
Deferred revenue	Deferred revenue	—		11		176				358				(5)					540			Deferred revenue	—				10						241		276				(20)				507
Payroll and benefits liability	Payroll and benefits liability	—		99		80				22				—					201			Payroll and benefits liability	1				100						88		25				—				214
Deferred compensation liability	Deferred compensation liability	—		105		28				2				—					135			Deferred compensation liability	—				109						25		2				—				136
Securitized debt, net	Securitized debt, net	—		—		—				1,611				(17)					1,594			Securitized debt, net	—				—						—		1,799				(20)				1,779
Debt, net	Debt, net	676		2,116		1				2				—					2,795			Debt, net	792				1,871						76		12				—				2,751

Other	Other	—		27		151				40				—					218			Other	—				3						171		32				—				206
Deferred taxes	Deferred taxes	6		86		210				24				(1)					325			Deferred taxes	—				60						272		—				1				333
MVW shareholders' equity	MVW shareholders' equity	2,973		2,720		4,504				699				(7,923)					2,973			MVW shareholders' equity	2,814				2,712						4,537		545				(7,794)				2,814
Noncontrolling interests	Noncontrolling interests	—		—		—				31				—					31			Noncontrolling interests	—				—						—		10				—				10
Total liabilities and equity	Total liabilities and equity	$	3,702	$	5,361	$	5,471			$	2,983			$	(7,974)				$	9,543		Total liabilities and equity	$	3,660			$	5,065					$	5,733	$	2,887			$	(7,842)			$	9,503

7556

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		As of December 31, 2020																As of December 31, 2021
		Issuers				Senior Notes Guarantors			Non-Guarantor Subsidiaries			Total Eliminations					MVW Consolidated				Issuers									Senior Notes Guarantors				Non-Guarantor Subsidiaries				Total Eliminations		MVW Consolidated
($ in millions)	($ in millions)	MVWC		MORI										($ in millions)		MVWC						MORI				Senior Notes Guarantors		Non-Guarantor Subsidiaries	Total Eliminations				MVW Consolidated
Cash and cash equivalents	Cash and cash equivalents	$	25	$	347		$	50				$	102					$	—				$	524	Cash and cash equivalents						$	—				$	126				$	77	$	139		$	—	$	342
Restricted cash	Restricted cash	—		19			72			377				—					468			Restricted cash	—				18							94				349		—					461
Accounts receivable, net	Accounts receivable, net	44		59			121			57				(5)					276			Accounts receivable, net	14				49							172				119		(75)					279
Vacation ownership notes receivable, net	Vacation ownership notes receivable, net	—		164			116			1,560				—					1,840			Vacation ownership notes receivable, net	—				127							203				1,715		—					2,045
Inventory	Inventory	—		276			383			100				—					759			Inventory	—				244							381				94		—					719
Property and equipment	Property and equipment	—		213			341			237				—					791			Property and equipment	—				200							644				292		—					1,136
Goodwill	Goodwill	—		—			2,817			—				—					2,817			Goodwill	—				—							2,841				309		—					3,150
Intangibles, net	Intangibles, net	—		—			894			58				—					952			Intangibles, net	—				—							840				153		—					993

Investments in subsidiaries	Investments in subsidiaries	2,775		4,384			—			—				(7,159)					—			Investments in subsidiaries	3,645				4,371							—				—		(8,016)					—
Other	Other	54		115			214			133				(45)					471			Other	76				108							211				107		(14)					488
Total assets	Total assets	$	2,898	$	5,577		$	5,008		$	2,624			$	(7,209)				$	8,898		Total assets	$	3,735			$	5,243						$	5,463			$	3,277	$	(8,105)				$	9,613

Accounts payable	Accounts payable	$	29	$	29		$	145		$	6			$	—				$	209		Accounts payable	$	63			$	22						$	121			$	59	$	—				$	265
Advance deposits	Advance deposits	—		70			57			20				—					147			Advance deposits	—				69							70				21		—					160
Accrued liabilities	Accrued liabilities	1		99			157			99				(7)					349			Accrued liabilities	12				151							145				114		(77)					345
Deferred revenue	Deferred revenue	—		8			126			355				(1)					488			Deferred revenue	—				11							151				291		—					453
Payroll and benefits liability	Payroll and benefits liability	1		81			55			20				—					157			Payroll and benefits liability	—				102							72				27		—					201
Deferred compensation liability	Deferred compensation liability	—		104			22			1				—					127			Deferred compensation liability	—				114							25				3		—					142
Securitized debt, net	Securitized debt, net	—		—			—			1,604				(16)					1,588			Securitized debt, net	—				—							—				1,877		(21)					1,856
Debt, net	Debt, net	215		2,464			—			1				—					2,680			Debt, net	684				1,870							76				1		—					2,631

Other	Other	1		39			130			27				—					197			Other	—				19							172				33		—					224
Deferred taxes	Deferred taxes	—		103			143			28				—					274			Deferred taxes	—				91							250				—		9					350

MVW shareholders' equity	MVW shareholders' equity	2,651		2,580			4,173			432				(7,185)					2,651			MVW shareholders' equity	2,976				2,794							4,381				841		(8,016)					2,976
Noncontrolling interests	Noncontrolling interests	—		—			—			31				—					31			Noncontrolling interests	—				—							—				10		—					10
Total liabilities and equity	Total liabilities and equity	$	2,898	$	5,577		$	5,008		$	2,624			$	(7,209)				$	8,898		Total liabilities and equity	$	3,735			$	5,243						$	5,463			$	3,277	$	(8,105)				$	9,613

Condensed Consolidating Statements of Income


		Nine Months Ended September 30, 2021														Three Months Ended March 31, 2022
		Issuers				Senior Notes Guarantors		Non-Guarantor Subsidiaries				Total Eliminations					MVW Consolidated			Issuers								Senior Notes Guarantors				Non-Guarantor Subsidiaries				Total Eliminations				MVW Consolidated
($ in millions)	($ in millions)	MVWC		MORI										($ in millions)		MVWC					MORI
Revenues	Revenues	$	—	$	468	$	1,769			$	645			$	(92)					$	2,790	Revenues	$	—		$	161				$	658			$	241			$	(8)			$	1,052
Expenses	Expenses	(28)		(668)		(1,588)		(541)				92					(2,733)		Expenses	(2)				(236)						(533)				(199)				8				(962)
Benefit (provision) for income taxes	Benefit (provision) for income taxes	10		91		(92)		(72)				—					(63)		Benefit (provision) for income taxes	—				24				(38)				(18)				—				(32)
Equity in net income (loss) of subsidiaries	Equity in net income (loss) of subsidiaries	6		129		—		—				(135)					—		Equity in net income (loss) of subsidiaries	60				117				—				—				(177)				—
Net (loss) income	Net (loss) income	(12)		20		89		32				(135)					(6)		Net (loss) income	58				66				87				24				(177)				58
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		—		—		(6)				—					(6)		Net income attributable to noncontrolling interests	—				—				—				—				—				—
Net (loss) income attributable to common shareholders	Net (loss) income attributable to common shareholders	$	(12)	$	20	$	89	$	26			$	(135)				$	(12)	Net (loss) income attributable to common shareholders	$	58			$	66			$	87			$	24			$	(177)			$	58

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~~Contractual Obligations and Off-Balance Sheet Arrangements~~

~~The following table summarizes our contractual obligations as of September 30, 2021:~~

Payments Due by Period
($ in millions) Total Remainder
of 2021 Years
2022 - 2023 Years
2024 - 2025 Thereafter
Contractual Obligations
Debt obligations(1)
$ 5,197 $ 337 $ 823 $ 1,580 $ 2,457
Purchase obligations(2)
321 19 265 28 9
Operating lease obligations 232 6 50 40 136
Finance lease obligations(3)
10 1 7 1 1
Other long-term obligations(4)
21 6 9 4 2
Total contractual obligations $ 5,781 $ 369 $ 1,154 $ 1,653 $ 2,605

~~_________________________~~

~~(1)Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.~~

~~(2)~~Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts reflected represent expected funding under such contracts. Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.

~~(3)Includes interest.~~

~~(4)Primarily relates to future guaranteed purchases of rental inventory, operational support services, marketing related benefits, membership fulfillment benefits, and other commitments.~~

In the normal course of our resort management business, we enter into purchase commitments on behalf of property owners’ associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the resorts, these obligations have minimal impact on our net income and cash flow.

~~Leases That Have Not Yet Commenced~~

During the first quarter of 2020, we entered into a finance lease arrangement for our new global headquarters in Orlando, Florida. The new Orlando corporate office building is currently expected to be completed in 2023, at which time the lease term will commence and a right-of-use asset and corresponding liability will be recorded on our balance sheet. The initial lease term is approximately 16 years with total lease payments of $129 million for the aforementioned period. See Footnote 11 “Contingencies and Commitments” to our Financial Statements for additional information on this lease, including additional arrangements made as a result of the COVID-19 pandemic.

Recent Accounting Pronouncements

See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information on new accounting standards and the future adoption of such standards.

Critical Accounting Policies and Estimates

Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our most recent Annual Report on Form 10-K. Since the date of our most recent Annual Report on Form 10-K, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

~~Table of~~ ~~Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk has not changed materially from that disclosed in Part I, Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2020, other than as set forth below.~~

During the first quarter of 2021, we issued $575 million of 2026 Convertible Notes. Holders may convert the 2026 Convertible Notes prior to maturity upon the occurrence of certain circumstances. Upon conversion, holders of the 2026 Convertible Notes will receive cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election.

Concurrently with the issuance of the 2026 Convertible Notes, we entered into convertible note hedges and warrants as discussed further in Footnote 13 “Debt” to these Financial Statements. Taken together, these separate transactions were intended to reduce the potential economic dilution to our common stock from the conversion of the 2026 Convertible Notes.

The 2026 Convertible Notes have a fixed annual interest rate of 0.00 percent and, therefore, we do not have economic interest rate exposure on our 2026 Convertible Notes. However, the fair market value of the 2026 Convertible Notes is exposed to interest rate risk. Generally, the fair market value of the 2026 Convertible Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair market value of the 2026 Convertible Notes is affected by our stock price and will increase as our stock price increases and decrease as our stock price decreases. The net carrying value of the 2026 Convertible Notes was $455 million as of September 30, 2021. This represents the liability component of the principal balance of the 2026 Convertible Notes, net of unamortized debt discount and issuance costs, as of September 30, 2021. The total estimated fair market value of the 2026 Convertible Notes was $648 million as of September 30, 2021, and the fair market value was determined based on the quoted market price of the 2026 Convertible Notes in an over-the-counter market as of the last day of trading for the quarter ended September 30, 2021. For further information see Footnote 7 “Financial Instruments” and Footnote 13 “Debt” to these Financial Statements.

During the second quarter of 2021, we issued $500 million of 2029 Notes. During the third quarter of 2021, we redeemed, prior to maturity, a total of $750 million of our 2026 Notes ($500 million in July and the remaining $250 million in September). Refer to Footnote 13 “Debt” to these Financial Statements for additional information, including our redemption, prior to maturity, of $250 million of our 2025 Notes subsequent to the end of the third quarter.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature, can provide only reasonable assurance about management’s control objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving the desired control objectives. However, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based upon the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of ~~September 30, 2021,~~March 31, 2022, our disclosure controls and procedures were effective and operating to provide reasonable assurance that we record, process, summarize and report the information we are required to disclose in the reports that we file or submit under the Exchange Act within the time periods specified in the rules and forms of the SEC, and to provide reasonable assurance that we accumulate and communicate such information to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions about required disclosure.

Changes in Internal Control Over Financial Reporting

~~During the second quarter of 2021, we completed the Welk Acquisition.~~ We are currently in the process of assessing Welk’s internal control over financial reporting and integrating Welk’s internal control over financial reporting with our existing internal control over financial reporting. There weremade no ~~other~~ changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting.~~reporting other than changes in control over financial reporting to integrate the business we acquired in the Welk Acquisition.

~~Table of~~ ~~Contents~~

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Currently, and from time to time, we are subject to claims in legal proceedings arising in the normal course of business, including, among others, the legal actions discussed under “Loss Contingencies” in Footnote 11 “Contingencies and Commitments” to our Financial Statements. While management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, cash flows, or overall trends in results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in aggregate, have a material adverse effect on our business, financial condition, or operating results.

Item 1A. Risk Factors

The COVID-19 pandemic has heightened, and in some cases, manifested, certain of the risks we normally face in our business, including those disclosed in the 2021 Annual Report. There have been no material changes from the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”). ~~The COVID-19 pandemic has heightened, and in some cases, manifested, certain of the risks we normally face in our business, including those disclosed in the 2020 Annual Report.~~

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period Total Number of Shares Purchased Average
Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs(1)
July 1, 2021 – July 31, 2021 — $ — — $ —
August 1, 2021 – August 31, 2021 — $ — — $ —
September 1, 2021 – September 30, 2021 29,035 $ 154.84 29,035 $ 246
Total 29,035 $ 154.84 29,035 $ 246


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs(1)
January 1, 2022 – January 31, 2022	112,662	$	162.72	112,662	$	153,963,268
February 1, 2022 – February 28, 2022	198,735	$	161.69	198,735	$	421,829,349
March 1, 2022 – March 31, 2022	453,427	$	152.68	453,427	$	352,598,477
Total	764,824	$	156.50	764,824	$	352,598,477

_________________________

(1)~~During the third quarter of~~On September 10, 2021, our Board of Directors authorized a share repurchase program under which we may purchase shares of our common stock for an aggregate purchase price not to exceed $250 million, prior to December 31, 2022. On February 18, 2022, our Board of Directors authorized the repurchase of up to an additional $300 million of our common stock, as well as the extension of the duration of our existing share repurchase program to March 31, 2023.

~~Table of~~ ~~Contents~~

Item 6. Exhibits

All documents referenced below are being filed as a part of this Quarterly Report on Form 10-Q, unless otherwise noted.

Exhibit Number Description Filed
Herewith Incorporation By Reference From
Form Exhibit Date Filed
2.1
Agreement and Plan of Merger by and among Marriott Vacations Worldwide Corporation, Sommelier Acquisition Corp., Champagne Resorts, Inc., Welk Hospitality Group, Inc. and the Shareholder Representative, dated as of January 26, 2021 8-K 2.1 1/26/2021
3.1
Restated Certificate of Incorporation of Marriott Vacations Worldwide Corporation 8-K 3.1 11/22/2011
3.2
Restated Bylaws of Marriott Vacations Worldwide Corporation 8-K 3.2 11/22/2011
4.1
Form of certificate representing shares of common stock, par value $0.01 per share, of Marriott Vacations Worldwide Corporation 10 4.1 10/14/2011
4.2
Indenture between Marriott Vacations Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, dated September 25, 2017 10-Q 4.1 11/2/2017
4.3
Form of 1.50% Convertible Senior Note due 2022 (included as Exhibit A to Exhibit 4.2 above) 10-Q 4.1 11/2/2017
4.4
Joinder Agreement to Registration Rights Agreement, dated as of September 1, 2018, by and among ILG, LLC, the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as the representative of the initial purchasers 8-K 4.8 9/5/2018
4.5
Indenture, dated as of October 1, 2019, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee 8-K 4.1 10/1/2019
4.6
Supplemental Indenture, dated December 31, 2019, by and among Marriott Ownership Resorts, Inc., MVW Vacations, LLC and the Bank of New York Mellon Trust Company, N.A., as trustee 10-K 4.12 3/2/2020
4.7
Second Supplemental Indenture, dated February 26, 2020, by and among Marriott Ownership Resorts, Inc., MVW Services Corporation, and the Bank of New York Mellow Trust Company, N.A., as trustee 10-K 4.13 3/2/2020
4.8
Form of 4.750% Senior Notes due 2028 (included as Exhibit A to Exhibit 4.5 above) 8-K 4.2 10/1/2019
4.9
Registration Rights Agreement, dated as of October 1, 2019, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and J.P. Morgan Securities LLC 8-K 4.3 10/1/2019
4.10
Indenture, dated as of May 13, 2020, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent 8-K 4.1 5/15/2020
4.11
Form of 6.125% Senior Secured Notes due 2025 (included as Exhibit A to Exhibit 4.10) 8-K 4.1 5/15/2020
4.12
Indenture, dated as of February 2, 2021, by and among Marriott Vacations Worldwide Corporation, Marriott Ownership Resorts, Inc. and the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee 8-K 4.1 2/3/2021
4.13
Form of 0.00% Convertible Senior Note due 2026 (included as Exhibit A to Exhibit 4.12 above) 8-K 4.1 2/3/2021
4.14
Indenture, dated as of June 21, 2021, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee 8-K 4.1 6/22/2021

Exhibit Number

Description

Filed
Herewith

Incorporation By Reference From

Form

Exhibit

Date Filed

2.1

Agreement and Plan of Merger, dated as of April 30, 2018, by and among Marriott Vacations Worldwide Corporation, ILG, Inc., Ignite Holdco, Inc., Ignite Holdco Subsidiary, Inc., Volt Merger Sub, Inc., and Volt Merger Sub LLC*

8-K

2.1

5/1/2018

2.2

Agreement and Plan of Merger by and among Marriott Vacations Worldwide Corporation, Sommelier Acquisition Corp., Champagne Resorts, Inc., Welk Hospitality Group, Inc. and the Shareholder Representative, dated as of January 26, 2021

8-K

2.1

1/26/2021

3.1

Restated Certificate of Incorporation of Marriott Vacations Worldwide Corporation

8-K

3.1

11/22/2011

3.2

Restated Bylaws of Marriott Vacations Worldwide Corporation

8-K

3.2

11/22/2011

4.1

Form of certificate representing shares of common stock, par value $0.01 per share, of Marriott Vacations Worldwide Corporation

4.1

10/14/2011

4.2

Indenture between Marriott Vacations Worldwide Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee, dated September 25, 2017

10-Q

4.1

11/2/2017

4.3

Form of 1.50% Convertible Senior Note due 2022 (included as Exhibit A to Exhibit 4.2 above)

10-Q

4.1

11/2/2017

4.4

Joinder Agreement to Registration Rights Agreement, dated as of September 1, 2018, by and among ILG, LLC, the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as the representative of the initial purchasers

8-K

4.8

9/5/2018

4.5

Indenture, dated as of October 1, 2019, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee

8-K

4.1

10/1/2019

4.6

Supplemental Indenture, dated December 31, 2019, by and among Marriott Ownership Resorts, Inc., MVW Vacations, LLC and the Bank of New York Mellon Trust Company, N.A., as trustee

10-K

4.12

3/2/2020

4.7

Second Supplemental Indenture, dated February 26, 2020, by and among Marriott Ownership Resorts, Inc., MVW Services Corporation, and the Bank of New York Mellon Trust Company, N.A., as trustee

10-K

4.13

3/2/2020

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Table of of Contents

Exhibit Number Description Filed
Herewith Incorporation By Reference From
Form Exhibit Date Filed
4.15
Form of 4.500% Senior Notes due 2029 (included as Exhibit A to Exhibit 4.14 above) 8-K 4.2 6/22/2021
4.16
Description of Registered Securities 10-K 4.16 3/2/2020
10.1
Waiver to Credit Agreement, dated as of May 14, 2020, by and among Marriott Vacations Worldwide Corporation, Marriott Ownership Resorts, Inc., the Revolving Credit Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent 8-K 4.3 5/15/2020
22.1
List of the Issuer and its Guarantor Subsidiaries 10-Q 22.1 11/5/2020
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 X
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 X
32.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002 Furnished
32.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002 Furnished
101 The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL: (i) Interim Consolidated Statements of Income, (ii) Interim Consolidated Statements of Comprehensive Income, (iii) Interim Consolidated Balance Sheets, (iv) Interim Consolidated Statements of Cash Flows, (v) Interim Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Interim Consolidated Financial Statements
104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL and contained in Exhibit 101

Exhibit Number

Description

Filed
Herewith

Incorporation By Reference From

Form

Exhibit

Date Filed

4.8

Form of 4.750% Senior Notes due 2028 (included as Exhibit A to Exhibit 4.5 above)

8-K

4.2

10/1/2019

4.9

Registration Rights Agreement, dated as of October 1, 2019, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and J.P. Morgan Securities LLC

8-K

4.3

10/1/2019

4.10

Indenture, dated as of May 13, 2020, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent

8-K

4.1

5/15/2020

4.11

Form of 6.125% Senior Secured Notes due 2025 (included as Exhibit A to Exhibit 4.10)

8-K

4.1

5/15/2020

4.12

Indenture, dated as of February 2, 2021, by and among Marriott Vacations Worldwide Corporation, Marriott Ownership Resorts, Inc. and the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee

8-K

4.1

2/3/2021

4.13

Form of 0.00% Convertible Senior Note due 2026 (included as Exhibit A to Exhibit 4.12 above)

8-K

4.1

2/3/2021

4.14

Indenture, dated as of June 21, 2021, by and among Marriott Ownership Resorts, Inc., Marriott Vacations Worldwide Corporation, as guarantor, the other guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee

8-K

4.1

6/22/2021

4.15

Form of 4.500% Senior Notes due 2029 (included as Exhibit A to Exhibit 4.14 above)

8-K

4.2

6/22/2021

4.16

Description of Registered Securities

10-K

4.16

3/2/2020

10.1

Incremental Facility Amendment, dated as of March 31, 2022, by and among Marriott Vacations Worldwide Corporation, Marriott Ownership Resorts, Inc., as borrower, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the incremental lenders party thereto

8-K

10.1

04/4/2022

10.2

Umbrella IP Amendment, dated as of March 4, 2022, to the Marriott License, Services and Development Agreement for Marriott Projects dated November 19, 2011, by and among Marriott International, Inc., Marriott Worldwide Corporation, and Marriott Vacations Worldwide Corporation.

2 2 .1

List of the Issuer and its Guarantor Subsidiaries

10-K

22.1

03/1/2022

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

32.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002

Furnished

32.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002

Furnished

101

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Interim Consolidated Statements of Income, (ii) Interim Consolidated Statements of Comprehensive Income, (iii) Interim Consolidated Balance Sheets, (iv) Interim Consolidated Statements of Cash Flows, (v) Interim Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Interim Consolidated Financial Statements

104

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL and contained in Exhibit 101

Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplemental copies to the SEC of any omitted schedule upon request by the SEC.

8160

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MARRIOTT VACATIONS WORLDWIDE CORPORATION

Date:	~~November 8, 2021~~May 9, 2022	/s/ Stephen P. Weisz
		Stephen P. Weisz
		Chief Executive Officer

		/s/ Anthony E. Terry
		Anthony E. Terry
		Executive Vice President and Chief Financial Officer

8261


	Three Months Ended September 30, 2020
($ in millions)	Vacation Ownership		Exchange & Third-Party Management		Corporate and Other		Total
Sale of vacation ownership products	$	98	$	—	$	—	$	98

Ancillary revenues	17		—		—		17
Management fee revenues	37		4		(5)		36
Exchange and other services revenues	28		45		50		123
Management and exchange	82		49		45		176

Rental	46		10		—		56

Cost reimbursements	281		12		(38)		255
Revenue from contracts with customers	507		71		7		585

Financing	64		—		—		64
Total Revenues	$	571	$	71	$	7	$	649