8 unchanged sentences
potential growth opportunities;
−Removed: potential operating performance improvements, including expectations that contract sales and rental occupancies will continue to improve throughout 2021 and that interest income will begin to increase in the remainder of 2021;
+Added: potential operating performance improvements, including expectations that contract sales and rental occupancies will continue to improve throughout the remainder of 2021 and that interest income will begin to increase in the remainder of 2021 and into 2022;
the effects of competition;
39 unchanged sentences
On April 1, 2021, we completed the Welk Acquisition, after which Welk became our indirect wholly-owned subsidiary.
−Removed: The Financial Statements in this report include Welk’s results of operations for the three months ended June 30, 2021 and reflect the financial position of our combined company at June 30, 2021.
+Added: 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.”
3 unchanged sentences
At this time, our businesses continue to ramp up, with the majority of our sales centers, resorts, and other properties having reopened.
−Removed: 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 into 2021.
−Removed: We expect that sequential improvement to continue across our businesses as we move throughout 2021.
+Added: 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.
+Added: 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 in this report;
35 unchanged sentences
citizens or residents who financed a vacation ownership purchase was as follows:
−Removed: Six Months Ended
−Removed: June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: September 30, 2021 September 30, 2020
Average FICO score 731 731
−Removed: 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 years.
+Added: 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.
1 unchanged sentence
Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable portfolio.
−Removed: Financing expenses include costs to support the financing, servicing and securitization processes and changes in expected credit losses related to acquired vacation ownership notes receivable.
−Removed: The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which, for originated vacation ownership notes receivable, is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections.
+Added: 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 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.
−Removed: Financing propensity was 52 percent in the second quarter of 2021 and 37 percent in the second quarter of 2020;
−Removed: the higher financing propensity in the second quarter of 2021 is due to a higher percentage of sales during this period to first-time-buyers, who tend to have a higher financing propensity.
−Removed: Going forward, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should further increase propensity and increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
+Added: Financing propensity was 60 percent in the third quarter of 2021 and 43 percent in the third quarter of 2020;
+Added: the higher financing propensity in the third quarter of 2021 is due to a higher percentage of sales during this period to first-time-buyers, who tend to have a higher financing propensity.
+Added: As we proceed into 2022, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should further increase propensity and
+Added: increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI.
2 unchanged sentences
Historical default rates, which represent defaults as a percentage of each year’s beginning gross vacation ownership notes receivable balance, were as follows:
−Removed: Six Months Ended
−Removed: June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: September 30, 2021 September 30, 2020
Historical default rates 3.3% 4.9%
−Removed: Financing expenses include consumer financing interest expense, which represents interest expense associated with the securitization of our vacation ownership notes receivable.
+Added: 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.
1 unchanged sentence
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.
−Removed: We also recognize rental revenue from the utilization of plus points under our points-based Marriott Vacation Club Destinations program when the points are redeemed for rental stays at one of our resorts or in other third-party offerings.
+Added: 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.
We obtain rental inventory from unsold inventory and inventory we control because owners have elected alternative usage options offered through our vacation ownership programs.
8 unchanged sentences
• 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;
−Removed: • Marketing costs and direct operating and related expenses in connection with the rental business (such as housekeeping, credit card expenses and reservation services);
+Added: • 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);
• Costs to secure resort accommodations for use in Getaways.
6 unchanged sentences
A “key” is the lowest increment for reporting occupancy statistics based upon the mix of non-lock-off and lock-off villas.
−Removed: Lock-off villas typically represent two keys and non-lock-off villas represent one key.
−Removed: The “transient keys” metric represents the blended mix of inventory available for rent and includes all of the combined inventory configurations available in our resort system.
+Added: Lock-off villas typically represent two keys and non-lock-off
+Added: villas represent one key.
+Added: The “transient keys” metric represents the blended mix of occupancy available for rent and includes all of the combined inventory configurations available in our resort system.
Cost Reimbursements
18 unchanged sentences
Consolidated Results
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Sale of vacation ownership products $ 330 $ 98 $ 789 $ 409
12 unchanged sentences
Litigation charges 2 2 8 4
+Added: Restructuring — 20 — 20
Royalty fee 26 23 78 72
2 unchanged sentences
TOTAL EXPENSES 896 673 2,505 2,254
−Removed: (Losses) gains and other (expense) income, net (2) 14 4 (42)
+Added: Losses and other expense, net (31) — (27) (42)
Interest expense (41) (37) (128) (112)
7 unchanged sentences
Operating Statistics
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: (Contract sales $ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: (Contract sales $ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership
10 unchanged sentences
NM Not meaningful
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: (Contract sales $ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: (Contract sales $ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership
1 unchanged sentence
Consolidated contract sales $ 968 $ 476 $ 492 103%
−Removed: Joint venture contract sales $ 16 $ 9 $ 7 71%
+Added: Joint venture contract sales $ 28 $ 10 $ 18 NM
Exchange & Third-Party Management
5 unchanged sentences
(1) Only includes members of the Interval International exchange network.
−Removed: 2021 Second Quarter
−Removed: The following table presents our revenues for the second quarter of 2021 compared to the second quarter of 2020.
+Added: 2021 Third Quarter
+Added: The following table presents our revenues for the third quarter of 2021 compared to the third quarter of 2020.
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 974 $ 571 $ 403 71%
3 unchanged sentences
Total Revenues $ 1,052 $ 649 $ 403 62%
−Removed: 2021 First Half
−Removed: The following table presents our revenues for the first half of 2021 compared to the first half of 2020.
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: The following table presents our revenues for the first three quarters of 2021 compared to the first three quarters of 2020.
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 2,518 $ 1,884 $ 634 34%
20 unchanged sentences
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.
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended Change
−Removed: ($ in millions) June 30, 2021 June 30, 2020 % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 % Change
Net income (loss) attributable to common shareholders $ 10 $ (62) $ 72 116%
4 unchanged sentences
Share-based compensation expense 11 11 — 2%
−Removed: Certain items 37 (3) 40 NM
+Added: Certain items 61 33 28 85%
Adjusted EBITDA $ 205 $ 35 $ 170 NM
−Removed: Certain items for the second quarter of 2021 consisted of $29 million of transaction and integration costs (including $25 million of ILG acquisition and integration related costs and $3 million of Welk acquisition related costs), $5 million of impairment charges, $3 million of litigation charges, $2 million of purchase accounting adjustments, and $2 million of losses and other expense, partially offset by $2 million to eliminate the impact of consolidating certain property owners’ associations, and $2 million of activity related to the accrual for health and welfare costs for furloughed associates.
−Removed: Certain items for the second quarter of 2020 consisted of $14 million of gains and other income and $2 million related to VAT charges, partially offset by $12 million of transaction and integration costs and $1 million of asset impairment charges.
−Removed: 2021 First Half
−Removed: Six Months Ended Change
−Removed: ($ in millions) June 30, 2021 June 30, 2020 % Change
+Added: Certain items for the third quarter of 2021 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 million of transaction and integration costs (including $22 million of ILG Acquisition and integration related costs, $3 million of Welk Acquisition related costs, and $2 million of other transaction costs), $2 million of litigation charges, and $5 million of purchase accounting adjustments, partially offset by $3 million to eliminate the impact of consolidating certain property owners’ associations and $1 million of miscellaneous other adjustments.
+Added: 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, $2 million of asset impairment charges, 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 $4 million related to the change in accrual for health and welfare costs for furloughed associates.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 % Change
Net loss attributable to common shareholders $ (12) $ (238) $ 226 95%
5 unchanged sentences
Certain items 114 263 (149) (56%)
−Removed: Adjusted EBITDA $ 233 $ 128 $ 105 82%
−Removed: Certain items for the first half of 2021 consisted of $48 million of transaction and integration costs (including $42 million of ILG acquisition and integration related costs and $5 million of Welk acquisition related costs), $6 million of litigation charges, $5 million of impairment charges, and $2 million of purchase accounting adjustments, partially offset by $4 million of gains and other income (including $6 million of foreign currency translation gains, partially offset by $2 million of tax related charges), $2 million to eliminate the impact of consolidating certain property owners’ associations, and $2 million of activity related to the accrual for health and welfare costs for furloughed associates.
−Removed: Certain items for the first half of 2020 consisted of $96 million of asset impairment charges, $48 million of other charges (including $37 million related to the net sales reserve adjustment and $11 million related to an accrual for the health and welfare costs for furloughed associates), $42 million of losses and other expense, $36 million of transaction and integration costs (including $33 million of ILG acquisition and integration related costs and $3 million of transaction costs related to our asset light inventory arrangements), $4 million related to VAT charges, $2 million of purchase accounting adjustments, and $2 million of litigation charges.
+Added: Adjusted EBITDA $ 438 $ 163 $ 275 NM
+Added: Certain items for the first three quarters of 2021 consisted of $75 million of transaction and integration costs (including $64 million of ILG Acquisition and integration related costs, $8 million of Welk Acquisition related 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, 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, 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.
+Added: 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
+Added: 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 losses and other expense, $20 million of restructuring costs, $4 million related to VAT charges, $4 million of purchase accounting adjustments, and $4 million of litigation charges.
Segment Adjusted EBITDA
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Vacation Ownership $ 215 $ 28 $ 187 NM
4 unchanged sentences
Adjusted EBITDA $ 205 $ 35 $ 170 NM
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Vacation Ownership $ 250 $ 128 $ 122 94%
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Vacation Ownership $ 465 $ 156 $ 309 NM
Exchange & Third-Party Management 113 91 22 25%
Segment adjusted EBITDA 578 247 331 134%
−Removed: General and administrative (95) (64) (31) (49%)
+Added: General and administrative (140) (91) (49) NM
Consolidated property owners’ associations — 7 (7) NM
−Removed: Adjusted EBITDA $ 233 $ 128 $ 105 82%
+Added: Adjusted EBITDA $ 438 $ 163 $ 275 NM
The following tables present Adjusted EBITDA for our reportable segments reconciled to segment financial results.
Vacation Ownership
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 215 $ 28 $ 187 NM
Depreciation and amortization (24) (20) (4) (21%)
−Removed: Share-based compensation expense (2) (1) (1) (5%)
−Removed: Certain items (6) 4 (10) NM
+Added: Share-based compensation expense (1) (2) 1 NM
+Added: Certain items (5) (9) 4 44%
Segment financial results $ 185 $ (3) $ 188 NM
−Removed: Certain items in the Vacation Ownership segment for the second quarter of 2021 consisted of $3 million of litigation charges, $2 million of purchase accounting adjustments and $1 million of transaction and integration costs.
−Removed: Certain items in the Vacation Ownership segment for the second quarter of 2020 consisted of $5 million of gains and other income, partially offset by a $1 million asset impairment charge.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Segment adjusted EBITDA $ 250 $ 128 $ 122 94%
+Added: Certain items in the Vacation Ownership segment for the third quarter of 2021 consisted primarily of $5 million of purchase accounting adjustments.
+Added: 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 $6 million of gains and other income.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Segment adjusted EBITDA $ 465 $ 156 $ 309 NM
Depreciation and amortization (66) (61) (5) (10%)
−Removed: Share-based compensation expense (3) (2) (1) (21%)
+Added: Share-based compensation expense (4) (4) — NM
Certain items (15) (52) 37 70%
Segment financial results $ 380 $ 39 $ 341 NM
−Removed: Certain items in the Vacation Ownership segment for the first half of 2021 consisted primarily of $6 million of litigation charges, $2 million of purchase accounting adjustments, $1 million of transaction and integration costs, and $1 million of restructuring costs.
−Removed: Certain items in the Vacation Ownership segment for the first half of 2020 consisted of $37 million related to a net sales reserve adjustment due primarily to the impact of the COVID-19 pandemic, $5 million of asset impairment charges, $3 million related to transaction costs associated with our asset light inventory arrangements, $2 million of purchase accounting adjustments, and $2 million of litigation charges, partially offset by $6 million of gains and other income.
+Added: Certain items in the Vacation Ownership segment for the first three quarters of 2021 consisted primarily of $7 million of litigation charges and $7 million of purchase accounting adjustments.
+Added: Certain items in the Vacation Ownership segment for the first three quarters of 2020 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 million of litigation charges, $3 million related to transaction costs associated with our asset light inventory arrangements, and $3 million of purchase accounting adjustments, partially offset by $12 million of gains and other income.
Exchange & Third-Party Management
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 35 $ 31 $ 4 13%
3 unchanged sentences
Segment financial results $ 23 $ 13 $ 10 75%
−Removed: Certain items in the Exchange & Third-Party Management segment for the second quarter of 2020 consisted of $1 million of losses and other expense.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 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 $1 million asset impairment charge.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Segment adjusted EBITDA $ 113 $ 91 $ 22 25%
2 unchanged sentences
Certain items (1) (101) 100 99%
−Removed: Segment financial results $ 48 $ (48) $ 96 199%
−Removed: Certain items in the Exchange & Third-Party Management segment for the first half of 2020 consisted of $91 million of impairment charges related to Goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic.
+Added: Segment financial results $ 71 $ (35) $ 106 NM
+Added: 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 $1 million of purchase accounting adjustments.
Business Segments
3 unchanged sentences
Vacation Ownership
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Sale of vacation ownership products $ 330 $ 98 $ 789 $ 409
19 unchanged sentences
Other 1 — 2 —
−Removed: SEGMENT FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 151 (36) 195 42
−Removed: Net income attributable to noncontrolling interests — — — —
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 185 $ (3) $ 380 $ 39
Contract Sales
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total consolidated contract sales $ 380 $ 140 $ 240 NM
1 unchanged sentence
Total contract sales $ 392 $ 141 $ 251 NM
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total consolidated contract sales $ 968 $ 476 $ 492 103%
−Removed: Joint venture contract sales 16 9 7 71%
+Added: Joint venture contract sales 28 10 18 NM
Total contract sales $ 996 $ 486 $ 510 105%
Sale of Vacation Ownership Products
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total contract sales $ 392 $ 141 $ 251 NM
−Removed: Less resales contract sales (7) (1) (6)
−Removed: Less joint venture contract sales (10) — (10)
+Added: resales contract sales (7) (1) (6)
+Added: joint venture contract sales (12) (1) (11)
Consolidated contract sales, net of resales 373 139 234
5 unchanged sentences
(27) (18) (9)
−Removed: Sale of vacation ownership products $ 296 $ 53 $ 243 459%
+Added: Sale of vacation ownership products $ 330 $ 98 $ 232 NM
_______________
(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.
−Removed: Sale of vacation ownership products increased $243 million due primarily to $326 million of higher consolidated contract sales volume, net of resales (including $31 million from the acquisition of Welk), partially offset by a $49 million unfavorable change in revenue reportability, $21 million of higher sales incentives issued and $19 million of higher sales reserve activity (higher sales incentives and higher sales reserve activity were both driven by the higher contract sales volumes year-over-year).
−Removed: The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter, as well as the inclusion of Welk in the second quarter of 2021.
−Removed: With the reopening of many of our sales centers throughout 2020 and during the first half of 2021, our contract sales volumes have continued to improve on a sequential basis each quarter and we expect that improvement to continue through the remainder of 2021.
−Removed: Revenue reportability was negative in the second quarter of 2021.
−Removed: While we benefited from contract sales in the first quarter of 2021 being recognized as revenue in the second quarter of 2021 given the increasing contract sales volumes due to reopening of our sales centers and our continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic, we saw a higher shift of contract sales late in the second quarter of 2021 into the third quarter for revenue recognition.
−Removed: In contrast, revenue reportability was significantly positive in the second quarter of 2020.
−Removed: The second quarter of 2020 benefited from the contract sales from late in the first quarter of 2020 that were recognized as revenue in 2020.
−Removed: However, it was not impacted by an offsetting shift of revenues into the third quarter, given the low contract sales volumes in the second quarter of 2020 resulting from the impact of the COVID-19 pandemic.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 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 $9 million of higher sales incentives issued (higher settlement revenue, sales incentives issued, and sales reserve activity were driven primarily by the higher contract sales volumes year-over-year).
+Added: The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter, as well as the inclusion of Welk beginning in the second quarter of 2021.
+Added: With the reopening of many of our sales centers throughout 2020 and during 2021, and the Welk Acquisition, our contract sales volumes have continued to improve on a sequential basis each quarter and we expect that sequential improvement to continue during the fourth quarter of 2021.
+Added: Revenue reportability was slightly positive in the third quarter of 2021 as compared to a negative position historically.
+Added: While we benefited from contract sales in the second quarter of 2021 being recognized as revenue in the third quarter of 2021, due to the impact of the Delta variant that negatively impacted contract sales late in the third quarter, we did not see a corresponding shift of revenues into the fourth quarter of 2021.
+Added: Revenue reportability was negative in the third quarter of 2020 as a result of contract sales late in the third quarter of 2020 that were recognized as revenue in the fourth quarter.
+Added: Given the low sales volumes in June 2020 due to the impact of the COVID-19 pandemic, we did not benefit from a shift of revenues from sales late in the second quarter into the third quarter.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Total contract sales $ 996 $ 486 $ 510 105%
−Removed: Less resales contract sales (12) (8) (4)
−Removed: Less joint venture contract sales (16) (9) (7)
+Added: resales contract sales (19) (9) (10)
+Added: joint venture contract sales (28) (10) (18)
Consolidated contract sales, net of resales 949 467 482
8 unchanged sentences
(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.
−Removed: Sale of vacation ownership products increased $148 million due primarily to $248 million of higher consolidated contract sales volume, net of resales (including $31 million from the acquisition of Welk) and $38 million of lower sales reserve activity, offset partially by a $119 million unfavorable change in revenue reportability, and $22 million of higher sales incentives issued (higher sales incentives issued were driven by the higher contract sales volumes year-over-year).
−Removed: The higher contract sales performance reflect the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter.
−Removed: With the reopening of many of our sales centers throughout 2020 and during the first half of 2021, 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.
−Removed: The lower sales reserve recorded in the first half of 2021 reflects the prior year increase made in the sales reserve to take into account higher expected default and delinquency activity as a result of the COVID-19 pandemic.
−Removed: Revenue reportability was negative in the first half of 2021.
−Removed: While we benefited from contract sales in the fourth quarter of 2020 being recognized as revenue in the first half 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 half of 2021, we saw a higher shift of contract sales late in the second quarter of 2021 into the third quarter for revenue recognition.
−Removed: In contrast, revenue reportability was significantly positive in the first half of 2020.
−Removed: The first half of 2020 benefited from the contract sales from late in the fourth quarter of 2019 that were recognized as revenue in 2020.
−Removed: However, it was not impacted by an offsetting shift of revenues into the third quarter, given the low contract sales volumes in the second quarter of 2020 resulting from the impact of the COVID-19 pandemic.
+Added: 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 by the higher contract sales volumes year-over-year).
+Added: 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.
+Added: With the reopening of the majority of our sales centers throughout 2020 and during the first three quarters of 2021, and 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.
+Added: 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.
+Added: Revenue reportability was negative in the first three quarters of 2021.
+Added: 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.
+Added: In contrast, revenue reportability was significantly positive in the first three quarters of 2020.
+Added: 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.
+Added: 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.
Development Profit
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Sale of vacation ownership products $ 296 $ 53 $ 243 459%
−Removed: Cost of vacation ownership products (67) (23) (44) (192%)
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Sale of vacation ownership products $ 330 $ 98 $ 232 NM
+Added: Cost of vacation ownership products (71) (27) (44) NM
Marketing and sales (166) (78) (88) (113%)
−Removed: Development profit $ 65 $ (19) $ 84 459%
+Added: Development profit $ 93 $ (7) $ 100 NM
Development profit increased $100 million year-over-year.
−Removed: The change reflected $38 million from the benefit of higher contract sales volumes and lower marketing and sales spending, $55 million related to lower sales reserve activity, and $5 million of favorable product cost due mainly to the sale of lower cost inventory, partially offset by $14 million of unfavorable revenue reportability year-over-year.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: The change reflected $78 million from the benefit of higher contract sales volumes and lower marketing and sales spending as a percentage of revenue, $17 million of favorable revenue reportability, and $4 million of favorable product cost, due to the sale of lower cost inventory as well as favorable product cost true-up activity, and $1 million related to lower sales reserve rate due to the mix of products being sold.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Sale of vacation ownership products $ 789 $ 409 $ 380 93%
1 unchanged sentence
Marketing and sales (439) (297) (142) (48%)
−Removed: Development profit $ 79 $ 9 $ 70 761%
+Added: Development profit $ 172 $ 2 $ 170 NM
Development profit increased $170 million year-over-year.
−Removed: The change reflected $61 million from the benefit of higher contract sales volumes and lower marketing and sales spending and $75 million related to lower sales reserve activity, partially offset by $63 million of unfavorable revenue reportability year-over-year, and $3 million of unfavorable product cost due mainly to the sale of lower cost inventory.
+Added: 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 $81 million of unfavorable revenue reportability year-over-year.
Resort Management and Other Services Revenues, Expenses and Profit
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Management fee revenues $ 40 $ 37 $ 3 10%
5 unchanged sentences
Resort management and other services profit margin 55.9% 67.2% (11.3 pts)
−Removed: 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 $8 million of revenues from the acquisition of Welk.
−Removed: 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.
−Removed: We expect this trend to continue throughout the remainder of 2021.
+Added: 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 $8 million of revenues from the Welk Acquisition.
+Added: Resort occupancies have continued to increase throughout 2021 as our resorts that were closed at the start of the COVID-19 pandemic have reopened.
+Added: We expect this trend in business improvement to continue throughout the remainder of 2021.
The increase in resort management and other services profit reflected the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Management fee revenues $ 117 $ 113 $ 4 4%
5 unchanged sentences
Resort management and other services profit margin 60.2% 60.8% (0.6 pts)
−Removed: 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 $8 million from the acquisition of Welk.
+Added: 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 $16 million from the Welk Acquisition.
Resort occupancies have continued to increase throughout 2021 as an increasing number of resorts that were closed at the start of the COVID-19 pandemic have reopened.
−Removed: We expect this trend to continue throughout the remainder of 2021.
+Added: We expect this trend in business improvement to continue throughout the remainder of 2021.
The increase in resort management and other services profit reflected the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.
Rental Revenues, Expenses and Profit
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 121 $ 46 $ 75 NM
Rental expenses (97) (86) (11) (12%)
−Removed: Rental profit $ 15 $ (75) $ 90 119%
+Added: Rental profit $ 24 $ (40) $ 64 NM
Rental profit margin 20.6% NM
Three Months Ended
−Removed: June 30, 2021 June 30, 2020 Change % Change
+Added: September 30, 2021 September 30, 2020 Change % Change
Transient keys rented (1)
−Removed: 547,041 44,985 502,056 NM
+Added: 500,952 237,749 263,203 111%
Average transient key rate $ 260.00 $ 198.84 $ 61.16 31%
2 unchanged sentences
(1) Transient keys rented exclude those occupied through the use of plus points and preview stays.
−Removed: The improvement in rental profit resulted from an increase in keys rented and 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 and higher plus point revenue as COVID-19-related restrictions continued to ease.
+Added: 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).
−Removed: 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, either were lifted by the end of the first quarter of 2021 or shortly thereafter, we expect rental occupancies to continue to increase throughout 2021.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 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 throughout the remainder of 2021.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 308 $ 180 $ 128 71%
1 unchanged sentence
Rental profit $ 20 $ (100) $ 120 120%
−Removed: Rental profit margin NM NM
−Removed: Six Months Ended
−Removed: June 30, 2021 June 30, 2020 Change % Change
+Added: Rental profit margin 6.6% NM
+Added: Nine Months Ended
+Added: September 30, 2021 September 30, 2020 Change % Change
Transient keys rented (1)
4 unchanged sentences
(1) Transient keys rented exclude those occupied through the use of plus points and preview stays.
−Removed: The improvement in rental profit resulted from an increase in keys rented 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 and higher plus point revenue as COVID-19-related restrictions continued to ease.
−Removed: These increases were partially offset by a slightly lower transient rate as well as 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).
−Removed: 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, either were lifted by the end of the first quarter of 2021 or shortly thereafter, we expect rental occupancies to continue to increase throughout 2021.
+Added: 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.
+Added: 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).
+Added: 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 throughout the remainder of 2021.
Financing Revenues, Expenses and Profit
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Financing revenues 69 64 5 8%
3 unchanged sentences
Financing propensity 59.6% 42.9%
−Removed: Financing revenues decreased due to a $206 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 ($11 million), offset partially by higher interest income from the acquisition of Welk ($10 million).
−Removed: As contract sales volumes continue to grow throughout 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 begin to increase again.
−Removed: Financing expenses decreased due to lower bad debt expense associated with acquired vacation ownership notes receivable and favorable lien fee income in the current year quarter, offset partially by $1 million of higher costs from the acquisition of Welk.
−Removed: Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances, offset partially by $1 million of costs from the acquisition of Welk.
+Added: Financing revenues increased due to the Welk Acquisition, which contributed $11 million for the third quarter of 2021.
+Added: Excluding the impact of the Welk Acquisition, financing revenues declined $6 million due to a $200 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 in the portfolio from new loan originations.
+Added: As contract sales volumes continue to grow throughout the fourth quarter of 2021, we expect that this growth from new loan originations should more than offset the normal decline from loan payment activity, which would cause interest income to increase.
+Added: Financing expenses increased due to higher salaries and wages and foreclosure costs as well as less than $1 million of higher costs from the Welk Acquisition.
+Added: Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances.
The higher financing propensity reflects a higher mix of sales to first time buyers, who tend to have a higher financing propensity.
The low propensity in the prior year reflected the impact of sales programs that incented cash purchases during the initial periods of the COVID-19 pandemic.
−Removed: Going forward, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should increase propensity (60 percent or higher) and increase interest income as and when new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: As we move into 2022, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should 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.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Financing revenues 196 204 (8) (4%)
3 unchanged sentences
Financing propensity 53.4% 51.0%
−Removed: Financing revenues decreased due to a $269 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.
−Removed: As contract sales volumes continue to grow throughout 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 begin to increase again.
−Removed: Financing expenses decreased due to $14 million of lower bad debt expense associated with acquired vacation ownership notes receivable in the prior year quarter and lower credit card fees and other expenses, offset partially by $1 million of higher costs from the acquisition of Welk.
−Removed: Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances, partially offset by $1 million of costs from the acquisition of Welk.
−Removed: The lower financing propensity in the first half of 2021 is due to a higher percentage of sales during this period to existing owners, who tend to have a lower financing propensity.
−Removed: 2021 Second Quarter
+Added: The Welk Acquisition provided $21 million of incremental revenues in the first three quarters of 2021.
+Added: 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.
+Added: 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.
+Added: Financing expenses decreased due to $14 million of higher credit losses associated with acquired vacation ownership notes receivable in the prior year quarter.
+Added: Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances, offset partially by $1 million of costs from the Welk Acquisition.
+Added: The higher financing propensity reflects a higher mix of sales to first time buyers, who tend to have a higher financing propensity.
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Royalty fee $ 26 $ 23 $ 3 14%
−Removed: Royalty fee expense increased in the second quarter of 2021 as a result of higher contract closings compared to the prior year quarter.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Royalty fee $ 78 $ 72 $ 6 9%
−Removed: Royalty fee expense increased in the first half of 2021 as a result of higher contract closings compared to the prior year period.
+Added: 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.
Litigation Charges
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Litigation charges $ 3 $ — $ 3 NM
−Removed: During the second quarter of 2021, we incurred $3 million of litigation charges related primarily to projects in Europe.
−Removed: No litigation charges were recorded for the second quarter of 2020.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Litigation charges $ 6 $ 2 $ 4 NM
−Removed: During the first half of 2021 and first half of 2020, we incurred $6 million and $2 million, respectively, of litigation charges related primarily to projects in Europe.
−Removed: 2021 Second Quarter
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Litigation charges $ 1 $ 2 $ (1) 3%
+Added: During the third quarter of 2021 and the third quarter of 2020, we incurred $1 million and $2 million, respectively, of litigation charges related primarily to projects in Europe.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Litigation charges $ 7 $ 4 $ 3 106%
+Added: During the first three quarters of 2021 and first three quarters of 2020, we incurred $7 million and $4 million, respectively, of litigation charges related primarily to projects in Europe.
+Added: Restructuring
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Impairment $ — $ 1 $ (1) NM
−Removed: No asset impairment charges were recorded for the second quarter of 2021.
−Removed: During the second quarter of 2020, we recorded a non-cash impairment of $1 million related to our Asia Pacific inventory as a result of the impact of the COVID-19 pandemic.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Impairment $ — $ 5 $ (5) NM
−Removed: No asset impairment charges were recorded for the first half of 2021.
−Removed: During the first half of 2020, we recorded a non-cash impairment of $5 million related to our Asia Pacific inventory as a result of the impact of the COVID-19 pandemic.
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ (1) $ 11 $ (12) (106%)
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ — $ 11 $ (11) (100%)
+Added: During the third quarter and first three quarters of 2020, we incurred $11 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
+Added: During the third quarter of 2021, we trued up this restructuring accrual based upon current plans.
+Added: 2021 Third Quarter
+Added: Three Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Impairment $ — $ 1 $ (1) (99%)
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Impairment $ — $ 6 $ (6) (100%)
+Added: No asset impairment charges were recorded for the third quarter of 2021 or the first three quarters of 2021.
+Added: During the third quarter and first three quarters of 2020, we recorded non-cash impairment charges of $1 million and $6 million, respectively, related to our Asia Pacific inventory as a result of the impact of the COVID-19 pandemic.
Gains and Other Income
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Gains and other income, net $ — $ 5 $ (5) NM
−Removed: No gains and other income were recorded for the second quarter of 2021.
−Removed: During the second quarter of 2020, we recorded $5 million of gains and other income, including $4 million of net insurance proceeds related to the settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Gains and other income, net $ — $ 6 $ (6) NM
−Removed: No gains and other income were recorded for the first half of 2021.During the first half of 2020, we recorded $6 million of gains and other income, including $4 million of net insurance proceeds related to the settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane.
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Gains and other income, net $ — $ 6 $ (6) (101%)
+Added: No gains and other income were recorded for the third quarter of 2021.
+Added: During the third quarter of 2020, we recorded $6 million of gains and other income related to the disposition of excess land parcels in Orlando, Florida and Steamboat Springs, Colorado.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Gains and other income, net $ — $ 12 $ (12) (100%)
+Added: No gains and other income were recorded for the first three quarters of 2021.
+Added: 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 $4 million of net insurance proceeds related to the settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane.
Exchange & Third-Party Management
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Management and exchange $ 59 $ 49 $ 179 $ 160
7 unchanged sentences
Depreciation and amortization 11 8 40 24
+Added: Restructuring 1 3 1 3
Impairment — 1 — 92
3 unchanged sentences
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 23 $ 13 $ 71 $ (35)
−Removed: Management and Exchange Profit
−Removed: 2021 Second Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Management and exchange revenue $ 60 $ 39 $ 21 55%
−Removed: Management and exchange expense (35) (26) (9) (35%)
−Removed: Management and exchange profit $ 25 $ 13 $ 12 93%
−Removed: Management and exchange profit margin 42.2% 33.8% 8.4 pts
−Removed: The increase in management and exchange revenue and profit reflected higher management fees and exchange revenue 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.
−Removed: These increases were partially offset by lower membership revenue as a result of lower renewal activity, driven by a decline in active members, and higher costs to support the increased volumes.
−Removed: For Interval International, exchange transactions and average exchange fee increased 13 percent and 22 percent, respectively, over the prior year period.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Management and exchange revenue $ 120 $ 111 $ 9 9%
−Removed: Management and exchange expense (66) (66) — —%
−Removed: Management and exchange profit $ 54 $ 45 $ 9 22%
−Removed: Management and exchange profit margin 45.1% 40.3% 4.8%
−Removed: The increase in management and exchange revenue and profit reflected higher management fees and exchange revenue 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.
−Removed: These increases were partially offset by lower membership revenue as a result of lower renewal activity, driven by a decline in active members.
−Removed: For Interval International, exchange transactions and average exchange fee increased 15 percent and 3 percent, respectively, over the prior year period.
Rental Revenues, Expenses and Profit
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 9 $ 10 $ (1) (12%)
4 unchanged sentences
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.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Rental revenues $ 32 $ 29 $ 3 12%
4 unchanged sentences
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.
+Added: Management and Exchange Profit
+Added: 2021 Third Quarter
+Added: Three Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Management and exchange revenue $ 59 $ 49 $ 10 18%
+Added: Management and exchange expense (33) (27) (6) (17%)
+Added: Management and exchange profit $ 26 $ 22 $ 4 19%
+Added: Management and exchange profit margin 44.7% 44.3% 0.4 pts
+Added: The increase in management and exchange revenue and profit reflected higher management fees and membership revenue 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.
+Added: For Interval International, average revenue per member increased 17 percent over the prior year comparable period.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Management and exchange revenue $ 179 $ 160 $ 19 12%
+Added: Management and exchange expense (99) (93) (6) (5%)
+Added: Management and exchange profit $ 80 $ 67 $ 13 21%
+Added: Management and exchange profit margin 44.9% 41.5% 3.4 pts
+Added: The increase in management and exchange revenue and profit reflected higher management fees and exchange revenue 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.
+Added: These increases were partially offset by lower membership revenue as a result of lower renewal activity, driven by a 15% decline in active 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.
+Added: For Interval International, exchange transactions and average exchange fee increased 5 percent and 3 percent, respectively, over the prior year comparable periods.
Depreciation and Amortization
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Depreciation and amortization $ 11 $ 8 $ 3 42%
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Depreciation and amortization $ 40 $ 24 $ 16 60%
−Removed: Increase in depreciation expense relates to a true-up made to accelerate depreciation on a technology asset.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Impairment $ — $ 91 $ (91) NM
−Removed: No asset impairment charges were recorded for the first half of 2021.
−Removed: During the first half of 2020, we recorded a non-cash impairment of $91 million related to a decrease in the fair value of goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic.
+Added: Increase in depreciation expense in the third quarter and the first three quarters of 2021 relates to a true-up made to accelerate depreciation on a technology asset.
+Added: Restructuring
+Added: 2021 Third Quarter
+Added: Three Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ 1 $ 3 $ (2) (94%)
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ 1 $ 3 $ (2) (87%)
+Added: 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.
+Added: During the third quarter and first three quarters of 2021, we incurred $1 million of additional restructuring costs related to this plan.
+Added: 2021 Third Quarter
+Added: Three Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Impairment $ — $ 1 $ (1) (100%)
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Impairment $ — $ 92 $ (92) (100%)
+Added: No asset impairment charges were recorded for the third quarter or the first three quarters of 2021.
+Added: During the first three quarters of 2020, we recorded a non-cash impairment of $92 million primarily related to a decrease in the fair value of goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic.
+Added: Losses and Other Expense
+Added: 2021 Third Quarter
+Added: Three Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Losses and other expense, net $ — $ (5) $ 5 (99%)
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Losses and other expense, net $ — $ (5) $ 5 (98%)
+Added: No losses and other expenses were recorded for the third quarter or first three quarters of 2021.
+Added: During the third quarter and first three quarters of 2020, we recorded a $5 million loss related to the disposition of a previously consolidated subsidiary.
Corporate and Other
−Removed: Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and benefit from income taxes.
+Added: Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and (provision for) benefit from income taxes.
In addition, Corporate and Other includes the revenues and expenses from the Consolidated Property Owners’ Associations.
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Resort management and other services $ 40 $ 45 $ 116 $ 121
5 unchanged sentences
Depreciation and amortization — 2 6 8
+Added: Litigation charges 1 — 1 —
Restructuring — 6 (1) 6
2 unchanged sentences
TOTAL EXPENSES 53 40 189 134
−Removed: (Losses) gains and other (expense) income, net (2) 10 4 (48)
+Added: Losses and other expense, net (31) (1) (27) (49)
Interest expense (41) (37) (128) (112)
5 unchanged sentences
Consolidated Property Owners’ Associations
−Removed: The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance, which represents the portion related to individual or third-party VOI owners.
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
+Added: 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.
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Resort management and other services $ 40 $ 45 $ 116 $ 121
7 unchanged sentences
FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 2 7 10 20
−Removed: Benefit for income taxes (1) — (1) —
+Added: Provision for income taxes (1) — (2) —
Net income attributable to noncontrolling interests (1) (4) (6) (13)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ — $ 3 $ 2 $ 7
−Removed: Pursuant to a change in control of certain Consolidated Property Owners’ Associations, we recorded a non-cash loss of $1 million in (Losses) gains and other (expense) income, net on our Income Statement for each of the three and six months ended June 30, 2021, respectively.
+Added: Pursuant to a change in control of certain Consolidated Property Owners’ Associations, we recorded a non-cash loss of $1 million in Losses and other expense, net on our Income Statement for the nine months ended September 30, 2021.
We continue to act as manager for these property owners’ associations pursuant to existing management contracts and retain membership interests via our ownership of vacation ownership interests.
General and Administrative
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
General and administrative $ 54 $ 32 $ 22 71%
−Removed: General and administrative expenses increased $47 million due to $19 million of higher salary and wages costs as 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, $14 million related to higher bonus expense, $9 million of higher spending as operations continued to ramp-up subsequent to the initial impact of the COVID-19 pandemic (including $2 million related to the acquisition of Welk), and a $5 million decrease in credits related to incentives under the CARES Act for companies who continued paying associates' benefit costs while they were not working as a result of the COVID-19 pandemic.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: For the third quarter of 2021, General and administrative expenses increased $22 million due to $13 million of higher salary and wages costs as 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 million related to higher bonus expense, and a $4 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 $4 million of lower other spending across the business, including technology, travel, training, and other expenses.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
General and administrative $ 166 $ 121 $ 45 38%
−Removed: General and administrative expenses increased $23 million due to $10 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, $23 million related to higher bonus expense, and a $3 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.
−Removed: These increases were partially offset by $12 million of lower costs as the prior year period included an accrual for health and welfare costs for furloughed associates and $1 million of lower net overall spending (lower technology-related spending year-over-year, partially offset by the impact of operations ramping up subsequent to the initial impact of the COVID-19 pandemic, as well as $2 million related to the acquisition of Welk).
−Removed: 2021 Second Quarter
+Added: 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.
+Added: These increases were partially offset by $9 million of lower costs as the prior year period included an accrual for health and welfare
+Added: costs for furloughed associates and $9 million of lower net overall spending across the business, including technology, travel, training, and other expenses.
+Added: Restructuring
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Impairment $ 5 $ — $ 5 NM
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ — $ 6 $ (6) (100%)
+Added: No restructuring costs were recorded for the third quarter of 2021.
+Added: During the third quarter of 2020, we incurred $6 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Restructuring $ (1) $ 6 $ (7) (113%)
+Added: During the first three quarters of 2020, we incurred $6 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
+Added: During the first three quarters of 2021, we trued up this restructuring accrual based upon current plans.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Impairment $ 5 $ — $ 5 NM
−Removed: During the second quarter of 2021, we recorded a non-cash impairment of $5 million related to an equity method investment.
−Removed: No asset impairment charges were recorded for the first half of 2020.
+Added: During the first three quarters of 2021, we recorded a $5 million non-cash impairment charge related to an equity method investment.
+Added: No asset impairment charges were recorded for the third quarter of 2021, the third quarter of 2020, or the first three quarters of 2020.
Gains / Losses and Other Income / Expense
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: (Losses) gains and other (expense) income, net $ (2) $ 10 $ (12) (116%)
−Removed: In the second quarter of 2021, we recorded a tax related charge of $2 million.
−Removed: In the second quarter of 2020, we recorded gains and other income of $10 million, including a gain of $9 million related to foreign currency translation and other income of $1 million for the true-up of an indemnification receivable from Marriott International as a result of the settlement of an indemnified liability with a taxing authority.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
−Removed: Gains (losses) and other income (expense), net $ 4 $ (48) $ 52 108%
−Removed: In the first half of 2021, we recorded a gain of $4 million driven mainly by foreign currency translation ($6 million) partially offset by a tax related charge ($2 million).
−Removed: In the first half of 2020, we recorded losses and other expenses of $48 million, including $32 million for the true-up of an indemnification receivable from Marriott International as a result of the settlement of an indemnified liability with a taxing authority (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line) and $22 million related to foreign currency translation, partially offset by $6 million of other income related to an indemnification payment from Marriott International for VAT penalties and interest.
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Losses and other expense, net $ (31) $ (1) $ (30) NM
+Added: In the third quarter of 2021, we recorded losses and other expenses of $31 million, including $36 million of expense related to the early redemption of our 2026 Notes, $2 million of foreign currency translation losses, and $1 million of miscellaneous losses and other expense, partially offset by $8 million 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).
+Added: In the third quarter of 2020, we recorded a loss of $1 million driven mainly by foreign currency translation.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: Losses and other expense, net
+Added: $ (27) $ (49) $ 22 45%
+Added: In the first three quarters of 2021, we recorded losses and other expenses of $27 million, including $36 million of expense related to the early redemption of our 2026 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 to the offsetting accrual is included in the (Provision for) benefit from income taxes line), and $4 million of foreign currency translation gains.
+Added: 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 result of the settlement of an indemnified liability with a taxing authority (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line) and $24 million related to foreign currency translation, partially offset by $6 million of other income related to an indemnification payment from Marriott International for VAT penalties and interest.
Interest Expense
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Interest expense $ (41) $ (37) $ (4) (10%)
−Removed: Interest expense increased $2 million, including $6 million of higher interest expense associated with the 2026 Convertible Notes issued in the second quarter of 2021 and $4 million of higher expense associated with the 2025 Notes issued in the second quarter of 2020.
−Removed: These increases were partially offset by a $4 million decrease in expenses associated with draw downs on the Warehouse Credit Facility and Revolving Corporate Credit Facility, a $1 million decrease in expense associated with the Term Loan due to partial pay-down of the Term Loan in 2021, and other decreases in expenses associated with various other debt facilities.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: Interest expense increased $4 million, including $6 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.
+Added: These increases were partially offset by a $9 million decrease in expenses associated with the payoff of the 2026 Notes in the quarter.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Interest expense $ (128) $ (112) $ (16) (14%)
−Removed: Interest expense increased $12 million, including $11 million of higher interest expense associated with the 2026 Convertible Notes issued in the second quarter of 2021 and $12 million of higher expense associated with the 2025 Notes issued in the second quarter of 2020.
−Removed: These increases were partially offset by a $5 million decrease in expenses associated with draw downs 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.
+Added: 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.
+Added: 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 $3 million decrease in expense associated with the Term Loan due to partial pay-down of the Term Loan in 2021, and other decreases in expenses associated with various other debt facilities.
Transaction and Integration Costs
−Removed: 2021 Second Quarter
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Transaction and integration costs $ (26) $ (11) $ (15) (126%)
−Removed: In the second quarter of 2021, Transaction and integration costs included $25 million of ILG acquisition and integration related costs and $3 million of costs associated with the acquisition of Welk.
−Removed: In the second quarter of 2020, Transaction and integration costs included $12 million of ILG acquisition-related costs.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: In the third 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.
+Added: In the third quarter of 2020, Transaction and integration costs included $11 million of ILG Acquisition related costs.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
Transaction and integration costs $ (73) $ (44) $ (29) (65%)
−Removed: In the first half of 2021, Transaction and integration costs included $42 million of ILG acquisition and integration related costs and $5 million of costs associated with the acquisition of Welk.
−Removed: In the first half of 2020, Transaction and integration costs included $33 million of ILG acquisition-related costs.
−Removed: 2021 Second Quarter
+Added: 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.
+Added: In the first three quarters of 2020, Transaction and integration costs included $44 million of ILG Acquisition related costs.
+Added: 2021 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
(Provision for) benefit from income taxes $ (47) $ 14 $ (61) NM
−Removed: The change in the (Provision for) benefit from income taxes is predominately attributable to an increase in pre-tax income.
−Removed: 2021 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020 Change % Change
+Added: 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.
+Added: 2021 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
(Provision for) benefit from income taxes $ (63) $ 91 $ (154) NM
−Removed: The change in the (Provision for) benefit from income taxes is predominately attributable to a decrease in pre-tax loss and a release in reserve for uncertain tax benefits for the six months ended June 30, 2020.
+Added: 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 nine months ended September 30, 2021.
Liquidity and Capital Resources
−Removed: Typically, our capital needs are supported by cash on hand ($1.3 billion at the end of the second quarter of 2021), cash generated from operations, our ability to raise capital through securitizations in the ABS market, our ability to issue debt and, to the extent necessary, funds available under the Warehouse Credit Facility and the Revolving Corporate Credit Facility with a borrowing capacity of $600 million.
−Removed: At June 30, 2021, we had $5.5 billion of total gross debt outstanding, which included $1.8 billion of non-recourse debt associated with vacation ownership notes receivable securitizations, $1.6 billion of senior unsecured 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 million related to finance lease obligations.
−Removed: During the second quarter of 2021, we delivered a redemption notice of $500 million aggregate principal amount of the 2026 Notes pursuant to the terms of the indenture governing the 2026 Notes.
−Removed: On July 7, 2021, subsequent to the end of the second quarter of 2021, we redeemed, prior to maturity, $500 million aggregate principal amount of the 2026 Notes.
−Removed: In connection with this redemption, we expect to incur total charges of approximately $26 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which will be recorded in the third quarter of 2021.
−Removed: At June 30, 2021, we had $824 million of completed real estate inventory on hand.
+Added: Typically, our capital needs are supported by cash on hand ($0.4 billion at the end of the third quarter of 2021), cash generated from operations, our ability to raise capital through securitizations in the asset-backed security market, our ability to issue debt and, to the extent necessary, funds available under the Warehouse Credit Facility and the Revolving Corporate Credit Facility with a borrowing capacity of $600 million.
+Added: At September 30, 2021, we had $4.6 billion of total gross debt outstanding, which included $1.6 billion of non-recourse debt associated with vacation ownership notes receivable securitizations, $0.9 billion of senior unsecured 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 million related to finance lease obligations.
+Added: 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.
+Added: In September 2021, we issued a redemption notice and redeemed, prior to maturity, the remaining $250 million aggregate principal amount of the 2026 Notes.
+Added: 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.
+Added: Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes.
+Added: At September 30, 2021, we had $732 million of completed real estate inventory on hand.
In addition, we had $465 million of completed vacation ownership units that have been classified as a component of Property and equipment until the time at which they are legally registered and held for sale as vacation ownership products.
The following table summarizes the changes in cash, cash equivalents and restricted cash:
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020
Cash, cash equivalents and restricted cash provided by (used in):
10 unchanged sentences
In addition, our cash from operations varies due to the timing of our owners’ repayment 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.
−Removed: In the first half of 2021, we had $148 million of cash inflows from operating activities, compared to $73 million of cash outflows in the first half of 2020.
+Added: In the first three quarters of 2021, we had $303 million of cash inflows from operating activities, compared to $158 million of cash inflows in the first three quarters of 2020.
Excluding the impact of changes in net loss and adjustments for non-cash items, cash flow increased as a result of higher operational expense accruals, higher sales and rental deposits due to the continued ramp-up of the business, and higher collections of vacation ownership notes receivable, partially offset by severance and benefit payments related to cost management activities and higher inventory spending.
1 unchanged sentence
Inventory Spending In Excess of Cost of Sales
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020
Inventory spending $ (101) $ (88)
4 unchanged sentences
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.
−Removed: Because we do not need specific resort-based inventory at each sales location, we need to have only a few resorts under construction at any given time and can leverage successful sales locations at completed resorts.
+Added: 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.
−Removed: We believe our points-based programs enable us to align our inventory acquisitions with the pace of sales of vacation ownership products.
+Added: 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 by targeting high-quality inventory that allows us to add desirable new destinations to our systems 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.
1 unchanged sentence
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).
−Removed: Our spending for real estate inventory in the first half of 2021 was higher than the amount of real estate inventory costs given the timing of payments to satisfy our remaining commitments to purchase vacation ownership units and the slowdown in sales pace as a result of the COVID-19 pandemic.
+Added: Our spending for real estate inventory in the first three quarters of 2021 was higher than the amount of real estate inventory costs given the timing of payments 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 inventory closer to the time it is needed for sale.
1 unchanged sentence
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.
−Removed: By repurchasing inventory, we expect to be able to stabilize the future cost of vacation ownership products.
+Added: By repurchasing inventory, we expect to be able to help stabilize the future cost of vacation ownership products.
Vacation Ownership Notes Receivable Collections In Excess of Originations
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020
Vacation ownership notes receivable collections — non-securitized $ 137 $ 180
3 unchanged sentences
Vacation ownership notes receivable collections include principal from non-securitized and securitized vacation ownership notes receivable.
−Removed: Vacation ownership notes receivable collections increased during the first half of 2021, as compared to the first half of 2020, due to an increase in the portfolio of securitized outstanding vacation ownership notes receivable.
−Removed: Vacation ownership notes receivable originations in the first half of 2021 increased due to higher sales in the first half of 2021 due to the continued ramp-up in the business, partially offset by a lower financing propensity.
−Removed: Financing propensity declined to 49 percent for the first half of 2021 compared to 54 percent for the first half of 2020 due to a higher percentage of sales during the current period to existing owners, who tend to have a lower financing propensity.
−Removed: Going forward, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should increase propensity and increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
+Added: Vacation ownership notes receivable collections increased during the first three quarters of 2021, as compared to the first three quarters of 2020, due to an increase in the portfolio of securitized outstanding vacation ownership notes receivable.
+Added: Vacation ownership notes receivable originations in the first three quarters 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.
+Added: Financing propensity increased to 53 percent for the first three quarters of 2021, compared to 51 percent for the first three quarters of 2020, reflecting a higher mix of sales to first-time buyers, who tend to have a higher financing propensity.
Cash from Investing Activities
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020
Acquisition of a business, net of cash and restricted cash acquired $ (157) $ —
1 unchanged sentence
Purchase of company owned life insurance (11) (3)
+Added: 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
−Removed: Net cash outflows of $157 million in the first half of 2021 were due to the Welk Acquisition.
+Added: 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.
1 unchanged sentence
Capital expenditures for property and equipment relate to spending for technology development, buildings and equipment used at sales locations and ancillary offerings, such as food and beverage offerings, at locations where such offerings are provided.
−Removed: Additionally, it includes spending related to maintenance of buildings and equipment used in common areas at some of our resorts.
−Removed: In the first half of 2021, capital expenditures for property and equipment of $11 million included $8 million to support business operations (including $5 million for ancillary and other operations assets and $3 million for sales locations) and $3 million for technology spending.
+Added: Additionally, it includes spending related to buildings and equipment used in common areas at some of our resorts.
+Added: In the first three quarters of 2021, capital expenditures for property and equipment of $19 million included $16 million to support business operations (including $11 million for ancillary and other operations assets and $5 million for sales locations) and $3 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.
−Removed: However, during the first quarter of 2021, we began to add back business critical spending with expected long term strategic benefits for our operations.
−Removed: In the first half of 2020, capital expenditures for property and equipment of $34 million included $30 million to support business operations (including $20 million for ancillary and other operations assets and $10 million for sales locations) and $4 million for technology spending.
+Added: 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.
+Added: We expect this trend to continue into the fourth quarter of 2021.
+Added: 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.
−Removed: We paid $8 million and $4 million to acquire these policies during the first half of 2021 and the first half of 2020, respectively.
+Added: We paid $11 million and $3 million to acquire these policies during the first three quarters of 2021 and the first three quarters of 2020, respectively.
Cash from Financing Activities
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2021 June 30, 2020
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2021 September 30, 2020
Borrowings from securitization transactions $ 425 $ 690
5 unchanged sentences
Finance lease payment (2) (10)
−Removed: Debt issuance costs (15) (9)
+Added: Payment of debt issuance costs (17) (14)
Repurchase of common stock (4) (82)
1 unchanged sentence
Payment of withholding taxes on vesting of restricted stock units (17) (14)
−Removed: Net cash, cash equivalents and restricted cash provided by financing activities $ 716 $ 320
+Added: Net cash, cash equivalents and restricted cash (used in) provided by financing activities $ (225) $ 195
Borrowings from / Repayment of Debt Related to Securitization Transactions
−Removed: We reflect proceeds from securitizations of vacation ownership notes receivable, including draw downs on the Warehouse Credit Facility, as “Borrowings from securitization transactions.” We reflect repayments of bonds associated with 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.”
−Removed: During the first half of 2021, we completed a securitization of vacation ownership notes receivables, issuing $434 million of notes at an overall average weighted interest rate of 1.5% and a 98% gross advance rate, the lowest interest rate ever achieved by a MVW 144A securitization, generating net proceeds of $425 million.
+Added: We reflect proceeds from securitizations of vacation ownership notes receivable, including draw downs on the Warehouse Credit Facility, as “Borrowings from securitization transactions.” We reflect repayments of debt associated with 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.”
+Added: During the first three quarters of 2021, we completed a securitization of vacation ownership notes receivables, issuing $434 million of notes at an overall 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 proceeds of $425 million .
See Footnote 12 "Securitized Debt" to our Financial Statements for additional information regarding this transaction.
−Removed: As of June 30, 2021, $97 million of gross vacation ownership notes receivable were eligible for securitization.
−Removed: During the first half of 2020, we securitized vacation ownership notes receivable under our Warehouse Credit Facility.
−Removed: The total carrying amount of the vacation ownership notes receivable securitized was $372 million.
−Removed: The average advance rate was 85 percent, which resulted in total gross proceeds of $315 million.
+Added: As of September 30, 2021, $278 million of gross vacation ownership notes receivable were eligible for securitization.
Proceeds from / Repayments of Debt
Borrowings from / Repayment of Corporate Credit Facility
−Removed: During the first half of 2021, we repaid $100 million of the amount outstanding under the Term Loan, which is part of our Corporate Credit Facility.
−Removed: We had no borrowings or repayments under our Revolving Corporate Credit Facility during the first half of 2021 and also had no amounts outstanding as of June 30, 2021.
−Removed: During the first half 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.
−Removed: We later repaid $696 million during the first half of 2020 and had no amounts outstanding as of June 30, 2020.
−Removed: During the first half of 2020, we also repaid $5 million of the amount outstanding under the Term Loan.
+Added: During the first three quarters of 2021, we repaid $100 million of the amount outstanding under the Term Loan, which is part of our Corporate Credit Facility.
+Added: 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.
+Added: 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.
+Added: We later repaid $696 million during the first three quarters of 2020 and had no amounts outstanding as of September 30, 2020.
+Added: 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.
−Removed: Proceeds from Senior Notes
−Removed: During the first half of 2021, we issued $500 million of 2029 Notes and used the proceeds in early July to repay $500 million of $750 million of outstanding principal of the 2026 Notes.
−Removed: During the first half 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.
+Added: Proceeds from / Repayment of Senior Notes
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes.
+Added: 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.
+Added: 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.
1 unchanged sentence
Proceeds from Convertible Notes
−Removed: During the first half of 2021, we issued $575 million of 2026 Convertible Notes, as discussed further in Footnote 13 “Debt” to our Financial Statements.
+Added: 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.
−Removed: We used, or expect to use, the net proceeds from the 2026 Convertible Notes to (i) complete the acquisition of Welk, (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.
+Added: 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
−Removed: During the first half 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.
+Added: 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.
4 unchanged sentences
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.
−Removed: As of June 30, 2021, no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.
Finance Lease Payment
−Removed: During the first half of 2021, we paid $1 million related to our finance lease obligations for technology and business operations equipment.
−Removed: During the first half 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.
+Added: During the first three quarters of 2021, we paid $2 million related to our finance lease obligations for technology and business operations equipment.
+Added: 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.
Debt Issuance Costs
−Removed: During the first half of 2021, we paid $15 million of debt issuance costs, which included $6 million associated with the 2021 vacation ownership notes receivable securitization, $7 million associated with the 2029 Notes, $1 million associated with the 2026 Convertible Notes, and $1 million associated with the extension of the Waiver associated with the Revolving Corporate Credit Facility.
−Removed: During the first half of 2020, we paid $9 million of debt issuance costs, which included $7 million associated with the 2025 Notes, $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.
−Removed: Given the impact of the COVID-19 pandemic, we have temporarily suspended cash dividends.
−Removed: In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends.
−Removed: Future dividend payments will also be subject to both the restrictions imposed under the Waiver and Board approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory and contractual constraints, industry practice and other business considerations that our Board of Directors considers relevant.
+Added: During the first three quarters of 2021, we paid $17 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 the Revolving Corporate Credit Facility.
+Added: During the first three quarters 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.
+Added: We declared cash dividends to holders of our common stock during the third quarter of 2021, and distributed cash dividends subsequent to the end of the third quarter of 2021 as follows:
+Added: Declaration Date Shareholder Record Date Distribution Date Dividend per Share
+Added: September 10, 2021 September 23, 2021 October 7, 2021 $0.54
+Added: 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 considers relevant.
+Added: 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.
1 unchanged sentence
Supplemental Guarantor Information
−Removed: The 2026 Notes and 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc.
+Added: 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”).
1 unchanged sentence
The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.
−Removed: The following tables present consolidating financial information as of June 30, 2021 and for the six months ended June 30, 2021 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.
+Added: The following tables present consolidating financial information as of September 30, 2021 and for the nine months ended September 30, 2021 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
−Removed: As of June 30, 2021
+Added: As of September 30, 2021
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
52 unchanged sentences
Condensed Consolidating Statements of Income
−Removed: Six Months Ended June 30, 2021
+Added: Nine Months Ended September 30, 2021
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
3 unchanged sentences
Benefit (provision) for income taxes 10 91 (92) (72) — (63)
−Removed: Equity in net (loss) income of subsidiaries (10) 93 — — (83) —
+Added: Equity in net income (loss) of subsidiaries 6 129 — — (135) —
Net (loss) income (12) 20 89 32 (135) (6)
−Removed: Net loss attributable to noncontrolling interests — — — (5) — (5)
+Added: Net income attributable to noncontrolling interests — — — (6) — (6)
Net (loss) income attributable to common shareholders $ (12) $ 20 $ 89 $ 26 $ (135) $ (12)
Contractual Obligations and Off-Balance Sheet Arrangements
−Removed: The following table summarizes our contractual obligations as of June 30, 2021:
+Added: The following table summarizes our contractual obligations as of September 30, 2021:
Payments Due by Period
33 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.