What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-03-01 · 79 added, 75 removed, 334 unchanged (32% of the section changed)

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Risks related to the COVID-19 pandemic.

The COVID-19 pandemic has had, and will continue to have, serious adverse effects on our business, financial condition, and results of operations for an unknown period of time.

In March 2020, the World Health Organization declared the coronavirus (“COVID-19 pandemic”) outbreak a pandemic.

In the wake of this declaration, our operations have been impacted by recommendations and mandates from national, federal, state, and local authorities to stay home, avoid non-essential contact and gatherings, and self-quarantine.

Since March 16, 2020, we have seen marked declines in occupancy, rentals, and contract sales because of the temporary closure of substantially all of our sales centers internationally, the temporary closure of many of our resorts, the temporary closure of our branded North America vacation ownership resorts for rental stays, and the reduction in operations and amenities at all of our resorts based on government mandates and advisories.

In response to the pandemic, we have:

implemented furloughs, reduced work hours and reduced salaries for our associates;

instituted “work from home” measures for many of our associates;

and implemented social distancing and enhanced hygiene protocols at our resorts, sales centers, and corporate offices.

These measures to protect human life resulted in additional costs, operational inefficiencies, and fewer revenue opportunities.

Protocols adopted to combat the COVID-19 pandemic, such as canceling, or implementing alternatives to, in-person sales tours and customized presentations, have resulted, and could continue to result in, lesser effectiveness of customer-associate interaction and diminished customer satisfaction, which could adversely impact our financial condition.

As of December 31,

2020, the majority of our resorts and sales centers were open;

however, extended or further closures may be required nationally, regionally, or in specific locations in the event of a resurgence of the virus.

This situation is unprecedented and rapidly changing and has unknown duration and severity.

The COVID-19 pandemic had, and is expected to continue to have, a material adverse impact on global economies and financial markets, which resulted in an economic downturn that reduced demand for our products and services.

The COVID-19 pandemic has had, and may continue to have, serious adverse effects on our business, financial condition, and results of operations for an unknown period of time.

As the outbreak of the coronavirus continues, both in the U.S.

and globally, there has been significant volatility in global economies and financial markets.

The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly changing and hard to predict.

Uncertainties related to the pandemic include, but are not limited to, the continued disruptive effect of the pandemic on the global economy, our supply chain partners, our workforce, traveler sentiment, resort occupancy and periodic mandates from governmental authorities to stay home, avoid non-essential contact and gatherings, and self-quarantine.

In 2020, we saw marked declines in occupancy, rentals, and contract sales because of the temporary closure of nearly all of our sales centers, the temporary closure of many of our resorts, the temporary closure of our branded North America vacation ownership resorts for rental stays, and the reduction in operations and amenities at all of our resorts based on government mandates and advisories.

Protocols adopted to combat the COVID-19 pandemic, such as canceling, or implementing alternatives or modifications to, in-person sales tours and customized presentations, and reductions in amenities at our resorts, have resulted, and could continue to result in, lesser effectiveness of customer-associate interaction and diminished customer satisfaction, which could adversely impact our financial condition.

As of December 31, 2021, nearly all of our resorts and sales centers have reopened;

however, extended or further closures may be required nationally, regionally, or in specific locations in the event of a resurgence or variant of the virus.

The success of our business and our profitability depend, in substantial part, upon the health of the travel industry, which has been materially adversely affected by the COVID-19 pandemic.

As new variants of the virus make headlines every few months, consumer fear about contracting COVID-19 and recommendations or mandates from governmental authorities to avoid large gatherings of people or self-quarantine may increase.

These recommendations and mandates have already affected and may continue to affect resort occupancies.

A substantial amount of our sales activity occurs at our resorts, and the number of prospective and current owners who visit our resorts impacts sales volume.

Our rental revenue is also substantially impacted by the desire and ability of vacationers to travel.

Fear of exposure to the COVID-19 pandemic, government restrictions on travel, including quarantine requirements, and the lack of a widely available vaccine have caused travelers to cancel or delay travel plans to our resorts.

Fear of exposure to the COVID-19 virus, government restrictions on travel, including quarantine requirements, low vaccination rates in some parts of the world and variants that may be resistant to available vaccines have caused travelers to cancel or delay travel plans to our resorts.

These changes in vacation and travel patterns have adversely affected our cash flows, revenues, and profits, and are expected to continue to do so.

Moreover, when travel advisories and restrictions have been lifted, there has been a resurgence of the virus, and as a result, travel demand has remained weak and could remain so for a significant period.

We cannot predict if or when demand for our resorts will return to pre-COVID-19 pandemic levels.

Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, and loss of personal wealth resulting from the impact of the COVID-19 pandemic are expected to negatively affect travel demand for a prolonged period.

The COVID-19 pandemic has led to an increase in payment delinquencies for our vacation ownership notes receivable.

The number of delinquencies may increase as the duration of the pandemic or its effect on economic conditions continues and could lead to defaults on financing that we provide to purchasers of our products in excess of our estimates.

Moreover, when travel advisories and restrictions have been lifted, there has been a resurgence of the virus, and as a result, travel demand is unpredictable and could remain so for a significant period.

Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, inflation, and loss of personal wealth resulting from the impact of the COVID-19 pandemic may negatively affect travel demand for a prolonged period.

The onset of the COVID-19 pandemic led to an increase in payment delinquencies for our vacation ownership notes receivable.

The number of delinquencies may increase again as the duration of the pandemic or its effect on economic conditions and the ability to travel continues and could lead to defaults on financing that we provide to purchasers of our products in excess of our estimates.

Purchaser defaults may cause us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests and could impact our ability to secure ABS or warehouse credit facility financing on terms that are acceptable to us, or at all.

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Further, the COVID-19 pandemic may also adversely affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

The economic disruption caused by the COVID-19 pandemic is adversely affecting our ability to generate cash to support our continuing operations and debt service, implement our growth plans and make other payments.

The economic disruption caused by the COVID-19 pandemic has adversely affected our ability to generate cash to support our continuing operations and debt service, implement our growth plans and make other payments.

We depend upon our operations to generate strong cash flows to support our operating activities, supply capital to finance our operations and growth, make capital expenditures and acquisitions, service our debt and return value to our shareholders through dividends and stock repurchases.

The economic disruption caused by the COVID-19 pandemic is adversely affecting our ability to generate sufficient cash flows from operations to support these activities.

Steps taken to reduce operating costs and improve efficiency and further changes we may make in the future to reduce costs may negatively impact owner and guest satisfaction and our ability to attract and retain associates.

For example, if furloughed personnel do not return to work with us when the COVID-19 pandemic subsides, we may experience operational challenges that impact owner satisfaction and demand for our products, which could limit our ability to grow and expand our business and could reduce our profits.

In 2020, the economic disruption caused by the COVID-19 pandemic adversely affected our ability to generate sufficient cash flows from operations to support these activities and the continuing pandemic may do so in the future.

Steps taken to reduce operating costs and improve efficiency and further changes we may make in the future to reduce costs have negatively impacted, and may in the future impact, owner and guest satisfaction.

Reductions in or deferrals of planned corporate capital expenditures may negatively impact owner satisfaction and make our products less attractive to prospective purchasers.

The temporary suspension of our stock repurchase program and declaration and payment of cash dividends may negatively impact our reputation and investor confidence in us, which may negatively affect our stock price.

If we cannot make scheduled payments on, or refinance, our debt, we would be in default, and the lenders under our Corporate Credit Facility could terminate their commitments to loan money.

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A substantial amount of our sales activity occurs at our resorts, and sales volume is affected by the number of visitors at our resorts.

Fear of exposure to COVID-19 or other diseases, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including tours at our resorts.

Fear of exposure to contagious illnesses, such as COVID-19 or other diseases, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including tours at our resorts, with greater frequency.

Other factors such as weakened consumer confidence, limited availability of consumer credit and damage to infrastructure caused by natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.

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Changes in the desirability of the destinations where these resorts are located and changes in vacation and travel patterns may adversely affect our cash flows, revenue and profits.

Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases.

A number of factors may adversely affect the labor force available or increase labor costs from time to time, such as high employment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations.

In 2021, we observed an overall tightening and increasingly competitive labor market.

A sustained labor shortage or increased turnover rates within our employee base, whether due to the impact of the COVID-19 pandemic or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our business.

If we are unable to hire and retain employees capable of performing at a high level, our business could be adversely affected.

Significant inflation, higher interest rates or deflation could adversely affect our business and financial results.

Inflation can adversely affect us by increasing the costs of development or other corporate capital expenditures, materials and labor, and interest rates.

All of these factors can have a negative impact on the affordability of our products and services.

In a high inflationary environment, we may be unable to raise the price of our products and services in a proportional manner, which could reduce our profit margins.

In addition, our cost of capital, labor and materials can increase, which could have an adverse impact on our business or financial results.

Alternatively, deflation could cause an overall decrease in spending and borrowing capacity, which could lead to a deterioration of economic conditions and employment levels.

Deflation could also cause the value of our products and services to decline.

These, or other factors that increase the risk of significant deflation, could have a negative impact on our business or financial results.

Our business is extensively regulated, and any failure to comply with applicable laws could materially adversely affect our business.

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We rely on a variety of direct marketing techniques, including telemarketing, email marketing and postal mailings.

Adoption of new laws, or changes in existing laws, in any of the jurisdictions in which we operate regulating marketing and solicitation or data protection could adversely affect the effectiveness of our marketing strategy.

If we are not able to develop adequate alternative marketing strategies, our sales may be adversely effected.

If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected.

We also obtain access to potential customers from travel service providers and other companies with whom we have relationships.

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The regulatory environment in the jurisdictions where we operate and the requirements imposed on us by the payment card industry regarding information, security and privacy is increasingly demanding.

Many of the laws applicable to us in different jurisdictions vary from each other in significant ways and may not have the same effect,

thus complicating compliance efforts.

Many of the laws applicable to us in different jurisdictions vary from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Our efforts to comply with these requirements may require significant additional resources and time and may not be successful.

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A significant cyber-attack or theft, loss, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines or litigation.

We and the companies we work with have experienced cyber security threats to our data and systems, including malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.

For example, in June 2018, we identified forged and fraudulently induced electronic payment disbursements we made to third parties in an aggregate amount of $10 million resulting from unauthorized third-party access to our email system.

Our licensor, Marriott International, announced in November 2018 that it had experienced a data breach that included our customers’ data.

We and the companies we work with have experienced cyber security threats to our data and systems, including ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.

We have experienced cyber incidents in the past, and have previously disclosed those with material operational or financial implications to the Company or our stakeholders.

Routinely, we partner with and use third-party service providers and products that host, manage, or control sensitive data.

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These rulings have led to an increase in lawsuits by owners seeking to void timeshare contracts in Spain, including certain contracts at certain of our resorts in Spain.

We have prevailed in many such lawsuits, and legislation is being considered by the Spanish government to address the impact of these lawsuits on the industry.

If additional owners at our resorts in Spain file similar lawsuits, this may:

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Negative public perception regarding our industry could have an adverse effect on our operations.

Negative public perception regarding our industry resulting from, among other things, consumer complaints regarding sales and marketing practices, consumer financing arrangements, and restrictions on exit, as well as negative comments on social media, could result in increased regulatory scrutiny, which could result in more onerous laws, regulations, guidelines and enforcement interpretations in jurisdictions in which we operate.

Negative public perception regarding our industry resulting from, among other things, consumer complaints regarding sales and marketing practices, consumer financing arrangements, and restrictions on exit related to our products, as well as negative comments on social media, could result in increased regulatory scrutiny, which could result in reputational damage, more onerous laws, regulations, guidelines and enforcement interpretations in jurisdictions in which we operate.

These actions may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation.

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Our effective tax rate reflects the fact that income earned and reinvested outside the U.S.

is generally taxed at local rates that are often much lower than U.S.

tax rates as well as our ability to carryforward losses in certain jurisdictions from prior years to offset future profits.

is generally taxed at local rates that can be lower than U.S.

tax rates or based on a different tax base than U.S.

jurisdictions, as well as our ability to carry forward losses in certain jurisdictions from prior years to offset future profits.

Changes to U.S.

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The final outcome of tax audits, investigations, and any related litigation could be materially different from our historical tax provisions and accruals.

Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of regional events in these areas.

Our business is susceptible to the effects of natural or manmade disasters, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents, in the areas where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, South Carolina and Hawaii.

Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of severe weather and other regional events in these areas.

Our business is susceptible to the effects of natural or man-made disasters, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents, in the areas where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, California, South Carolina and Hawaii.

For example, properties in these markets have had to close in the past in order to repair damage caused by disasters.

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Our business is also susceptible to the effects of adverse economic developments in these areas, such as regional economic downturns, significant increases in the number of our competitors’ products in these markets and potentially higher labor, real estate, tax or other costs in these geographic markets.

Because of this geographic concentration of properties, we face a greater risk of a negative effect on our revenues and profits if these areas are affected by extreme weather, manmade disasters or adverse economic and competitive conditions.

Because of this geographic concentration of properties, we face a greater risk of a negative effect on our revenues and profits if these areas are affected by severe weather, man-made disasters or adverse economic and competitive conditions.

If we are not able to successfully identify, finance, integrate and/or manage costs related to acquisitions, our business operations and financial position could be adversely affected.

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and retain key employees, clients, vendors and business partners of the acquired companies.

For example, we may be unable to close the Welk Resorts acquisition, ensure it complies with our public company financial reporting, disclosure and corporate governance requirements and realize expected synergies when or as expected.

Failure to achieve the anticipated benefits of any acquisition may adversely affect our financial condition, operating results and prospects.

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The departure of a key executive or associate and/or the failure to ensure an effective transfer of knowledge and a smooth transition upon such departure may be disruptive to the business and could hinder our strategic planning and execution.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions and human rights.

Increased ESG-related compliance costs could result in increases to our overall operational costs.

Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and stock price.

New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.

Risks related to our vacation ownership business.

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Our inability to rely on the strength of the Marriott, Sheraton and/or Westin brands to attract qualified prospects in the marketplace would likely cause our revenue and profits to decline and our marketing and sales expenses to increase.

Our inability to market to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing partnerships with North American Marriott International reservation centers would cause our sales to decline, which could adversely affect our financial conditions and result of operations.

In addition, we would not be able to use the brand websites as channels through which to rent available inventory, which would cause our rental revenue to decline materially.

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If a branded hotel property co-located with one of our resorts ceases to be affiliated with the same brand as our resort or a related brand, our business could be harmed.

Approximately a quarter of our Vacation Ownership segment resorts are co-located with same-branded hotel properties.

Approximately 20% of our Vacation Ownership segment resorts are co-located with same-branded hotel properties.

If a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand as our resort, which has happened in the past, we could lose benefits such as sharing amenities, infrastructure and staff, integration of services, and other cost efficiencies.

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We could also lose our on-site access to hotel customers, including brand customer loyalty program members, at such resorts, which is a cost-effective marketing channel for our vacation ownership products, and our sales may decline.

We may not have inventory available for sale when needed.

We may not have inventory available for sale when needed or we may have excess inventory.

We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed units to us at pre-agreed prices in the future.

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If we cannot obtain inventory from alternative sources on a timely basis, we may not be able to achieve sales forecasts.

Conversely, if we procure or commit to procure inventory based on an expected sales plan and fail to achieve that plan, we could have excess inventory, potentially negatively impacting our profit margins.

The sale of vacation ownership interests in the secondary market by existing owners could cause our sales revenues and profits to decline.

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In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.

In addition, we may not be able to resell foreclosed or revoked interests in a timely manner or for an attractive price which could result in an adverse impact on our results from operations.

If the reclaimed interests have declined in value, we may incur impairment losses that reduce our profits.

Also, if a purchaser of a VOI defaults on the related loan during the early part of the amortization period, we may not have recovered the marketing, selling and general and administrative costs associated with the sale of that VOI.

If we are unable to recover any of the principal amount of the loan from a defaulting purchaser, or if the allowances for losses from such defaults are inadequate, the revenues and profits that we derive from the vacation ownership business could be reduced.

unable to recover any of the principal amount of the loan from a defaulting purchaser, or if the allowances for losses from such defaults are inadequate, the revenues and profits that we derive from the vacation ownership business could be reduced.

Our points-based product forms expose us to an increased risk of temporary inventory depletion.

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and (3) significant unanticipated increases in sales pace.

If the inventory available for sale for a particular trust were to be depleted before new inventory is added and available for sale, we would be required to temporarily suspend sales until inventory is replenished or shift to selling an alternative product which may increase marketing and sales costs and lower VPG.

Our efforts to avoid the risk of temporary inventory depletion by maintaining a surplus supply of completed inventory based on our forecasted sales pace, and by employing other mitigation strategies such as accelerating completion of resorts under construction, acquiring VOIs on the secondary market, or reducing sales pace by adjusting prices or sales incentives, may not be successful.

A decline in VOI inventory could decrease our financing revenues generated from purchasers of VOIs and fee revenues generated by providing club, management, exchange, sales, and marketing services.

A depletion of VOI inventory could decrease our financing revenues generated from purchasers of VOIs and fee revenues generated by providing club, management, exchange, sales, and marketing services.

In addition, any temporary suspension of sales due to lack of inventory could reduce our cash flow and have a negative impact on our results of operations.

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• shortages of skilled labor;

• claims for construction defects, including claims by purchasers and property owners’ associations;

• claims for construction defects, including claims by purchasers and owners’ associations;

• the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;

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• interference of weather-related, geological or other events, such as hurricanes, earthquakes, floods, tsunamis, fires, and volcanic eruptions.

Our resort management business may be adversely effected by the loss of management contracts, failure of resorts to comply with brand standards, increased maintenance fees and disagreements with owners.

Owners of our VOIs are required to pay maintenance costs to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards.

Our resort management business may be adversely affected by the loss of management contracts, failure of resorts to comply with brand standards, increased maintenance fees and disagreements with owners.

Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards.

If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which would result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.

Increases in maintenance fees to keep pace with maintenance and other costs may make our products less desirable, which could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio.

If the property owners’ associations that we manage are unable to collect sufficient maintenance fees to cover operating and maintenance costs, the related resorts may have to close or file for bankruptcy, which may result in termination of our management agreements.

If the owners’ associations that we manage are unable to collect sufficient maintenance fees to cover operating and maintenance costs, the related resorts may have to close or file for bankruptcy, which may result in termination of our management agreements.

We may also lose resort management contracts if they are not renewed when they expire, or the contract terms may be renegotiated in a manner adverse to us.

The loss or renegotiation of a significant number of our management contracts may adversely affect our cash flows, revenues and profits.

From time to time, disagreements arise between us and the owners of VOIs and property owners’ associations.

From time to time, disagreements arise between us and the owners of VOIs and owners’ associations.

For example, owners of our VOIs have disagreed, and may in the future disagree, with changes we make to our products or programs.

Sometimes, disagreements with owners and owners’ associations result in litigation and/or the loss of management contracts.

Sometimes, disagreements with VOI owners and owners’ associations result in litigation and/or the loss of management contracts.

If any such litigation results in a significant adverse judgment or settlement, we could suffer significant losses, our profits could be reduced, our reputation could be harmed and our future ability to operate our business could be constrained.

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Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, or terrorist acts, may be uninsurable or the price of coverage for such losses may be too expensive to justify obtaining insurance.

The effects of climate change, such as increased storm intensity and rising sea levels, may also increase the cost of property insurance and decrease our coverage levels.

The effects of climate change, such as increased storm intensity and rising sea levels over time, may also increase the cost of property insurance and decrease our coverage levels.

In addition, in the event of a substantial loss, the insurance coverage we carry may not be sufficient to pay the full market value or replacement cost of our lost investment or that of owners of VOIs or in some cases may not provide a recovery for any part of a loss due to deductible limits, policy limits, coverage limits or other factors.

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Our vacation rental business depends on vacation property and hotel owners for vacation properties to rent to vacationers.

If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members or developers in our Interval International network, the number of new and/or existing members, the supply of resort accommodations available through our exchange networks and related revenue will decrease.

If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members or developers in our Interval International network, as has occurred in the past, the number of new and/or existing members, the supply of resort accommodations available through our exchange networks and related revenue will decrease.

The failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the developer renews Interval International membership fees for all of its active owners, has a greater adverse effect.

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Our ability to maintain affiliation agreements with resort developers is also impacted by consolidation in the vacation ownership industry.

Consolidation can also lead to larger competitors with greater resources that compete with our vacation ownership business for customers, projects and talent.

In addition, we depend on third parties to make certain benefits available to members of the Interval International exchange network.

The loss of such benefits could result in a decrease in the number of Interval International members, which could have a materially adversely effect on our business, financial condition and results of operations.

Similarly, the failure of our third-party management businesses to maintain existing or negotiate new management agreements with hotel and vacation property owners or owners associations, as a result of the sale of property to third parties, contract disputes or otherwise, or the failure of vacationers to book vacation rentals through these businesses would result in a decrease in related revenue, which would have an adverse effect on our business, financial condition and results of operations.

Similarly, the failure of our third-party management businesses to maintain existing or negotiate new management agreements with hotel and owners’ associations, as a result of the sale of property to third parties, contract disputes or otherwise, or the failure of vacationers to book vacation rentals through these businesses would result in a decrease in related revenue, which would have an adverse effect on our business, financial condition and results of operations.

Insufficient availability of exchange inventory may adversely affect our profits.

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Our indebtedness may restrict our operations.

As of December 31, 2020, we had approximately $2,722 million of total corporate indebtedness outstanding and could borrow an additional $597 million under the Revolving Corporate Credit Facility.

Since that date, we issued an additional $575 million in convertible senior notes.

As of December 31, 2021, we had approximately $2.8 billion of total corporate indebtedness outstanding and could borrow an additional $598 million under the Revolving Corporate Credit Facility.

The credit agreement that governs the Corporate Credit Facility and the indentures that govern the various senior notes impose significant operating and financial restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets.

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The Corporate Credit Facility also requires us to maintain a specified leverage ratio.

this requirement has been waived until December 31, 2021, provided that we maintain a monthly minimum liquidity of $300 million.

These restrictions could restrict our flexibility to react to changes in our businesses, industries and economic conditions and increase borrowing costs.

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Instability in the credit markets may impact the timing and volume of the vacation ownership notes receivable that we are able to securitize, as well as the financial terms of such securitizations.

If ABS issued in our securitization programs are downgraded by credit agencies in the future, our ability to complete securitization transactions on acceptable terms or at all

could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.

If ABS issued in our securitization programs are downgraded by credit agencies in the future, our ability to complete securitization transactions on acceptable terms or at all could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.

We are subject to risks relating to our convertible notes.

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The way we account for our convertible notes may impact our reported or future financial results and the market price of our common stock.

For example, the application of current accounting standards result in our reporting lower net income (or greater net loss) in our financial results because interest must include both the current period’s amortization of the debt discount and the instrument’s coupon interest.

See Footnote 17 “Debt,” to our Financial Statements for additional information regarding current and pending methods of accounting for our convertible notes.

For example, the application of current accounting standards results in our reporting lower net income (or greater net loss) in our financial results because interest must include both the current period’s amortization of the debt discount and the instrument’s coupon interest.

See Footnote 16 “Debt” and Footnote 2 “Summary of Significant Accounting Policies,” to our Financial Statements for additional information regarding current and pending methods of accounting for our convertible notes, respectively.

We are subject to risks relating to the convertible note hedges and warrants.

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We may be adversely affected by changes in LIBOR reporting practices.

As of December 31, 2020, approximately $884 million of our gross aggregate consolidated indebtedness was indexed to the London Interbank Offered Rate (“LIBOR”) and we were party to $550 million of derivative instruments indexed to LIBOR.

As of December 31, 2021, approximately $784 million of our gross aggregate consolidated indebtedness was indexed to the USD London Interbank Offered Rate (“LIBOR”) and we were party to $550 million of derivative instruments indexed to LIBOR.

In addition, funding costs related to our $600 million Revolving Corporate Credit Facility and $350 million Warehouse Credit Facility, which were both undrawn at December 31, 2021 except for $2 million in letters of credit outstanding, are generally indexed to LIBOR.

authority that regulates LIBOR announced that it will not compel banks to submit rates for the calculation of LIBOR after June 2023.

authority that regulates LIBOR announced that it will no longer permit new LIBOR contracts after December 31, 2021, and will not compel banks to submit rates for the calculation of LIBOR after June 2023.

There is considerable uncertainty regarding the publication of such rates beyond June 2023.

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Our share repurchase program does not obligate us to repurchase any shares of our common stock.

We have temporarily suspended our share repurchase program in response to the COVID-19 pandemic and to comply with contractual constraints on our ability to repurchase our shares.

When and if we resume the program, the timing and amount of any repurchases will depend upon several factors, including market conditions, business conditions, statutory and contractual restrictions, the trading price of our common stock and the nature of other investment opportunities available to us.

The timing and amount of any repurchases depend upon several factors, including market conditions, business conditions, statutory and contractual restrictions, the trading price of our common stock and the nature of other investment opportunities available to us.

In addition, repurchases of our common stock could affect our stock price and increase its volatility.

The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our

The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock.

Use of our funds to repurchase shares could diminish our cash reserves, which may impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.

Our share repurchases may not enhance shareholder value because the market price of our common stock may decline below the prices at which we repurchased shares and short-term stock price fluctuations could reduce the program’s effectiveness.

Our share repurchases may not enhance shareholder

value because the market price of our common stock may decline below the prices at which we repurchased shares and short-term stock price fluctuations could reduce the program’s effectiveness.

Our ability to pay dividends on our stock is limited.

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For example, our Charter and Bylaws provide for a classified board, require advance notice for shareholder proposals and nominations, place limits on convening shareholder meetings and authorize our Board of Directors to issue one or more series of preferred stock.

Delaware law also restricts some business combinations between any holder of 15 percent or more of our outstanding common stock and us.

Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.

The fact that these provisions and statutory restrictions may discourage acquisition proposals or delay or prevent a change in control could harm our stock price.

Delaware law also restricts some business combinations between any holder of 15 percent or more of our outstanding common stock and us.

Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.

Further, a change in control could result in an acceleration of our obligations under the Corporate Credit Facility or the indentures that govern our senior notes.

13 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.

What changed 10-K

Item 1A. Risk Factors