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our possible or assumed future results of operations;
−Removed: business strategies, such as our plans to continue to increase focus on sales to first-time buyers;
+Added: business strategies, such as our plans to continue to increase our focus on sales of vacation ownership products to first-time buyers and our expectations regarding resulting increases in financing propensity;
financing plans;
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potential growth opportunities;
−Removed: 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;
+Added: potential operating performance improvements, including the expectations that contract sales, resort management, and rental occupancies will continue to remain strong and/or improve throughout 2022 and that interest income will increase in 2022;
+Added: our expectations regarding availability of inventory for Getaways;
the effects of competition;
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Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.
+Added: Forward-looking statements involve risks, uncertainties and assumptions.
+Added: Actual results may differ materially from those expressed in these forward-looking statements.
We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as:
−Removed: the effects of the COVID-19 pandemic, including reduced demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other government-imposed travel or health-related restrictions;
+Added: the continuing effects of the COVID-19 pandemic, including variations in demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other government-imposed travel or health-related restrictions;
the length and severity of the COVID-19 pandemic, including its short and longer-term impact on the demand for travel and on consumer confidence;
the impact of the availability and distribution of effective vaccines on the demand for travel and consumer confidence;
−Removed: the effectiveness of available vaccines against variants of the virus, including the Delta variant;
+Added: the effectiveness of available vaccines against variants of the virus;
the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available;
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the effects of steps we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts due to the COVID-19 pandemic;
−Removed: political or social strife, and other matters referred to under the heading “Risk Factors” contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our periodic filings with the U.S.
−Removed: Securities and Exchange Commission (the “SEC”), any of which could cause actual results to differ materially from those expressed or implied herein.
−Removed: There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows.
+Added: political or social strife, and other matters referred to under the heading “Risk Factors” contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our future filings with the U.S.
+Added: Securities and Exchange Commission (the “SEC”).
+Added: You should not put undue reliance on any forward-looking statements in this Report.
We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
+Added: We do not have any intention or obligation to update forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law.
+Added: There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows.
+Added: Any such risks could cause our results to differ materially from those we express in forward-looking statements.
Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows.
−Removed: The financial information discussed below and included in this Quarterly Report on Form 10-Q may not necessarily reflect what our financial condition, results of operations or cash flows may be in the future.
+Added: However, the financial information discussed below and included in this Quarterly Report on Form 10-Q may not necessarily reflect what our financial condition, results of operations or cash flows may be in the future.
In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes to our Financial Statements that we include in the Financial Statements of this Quarterly Report on Form 10-Q.
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Vacation Ownership and Exchange & Third-Party Management.
−Removed: Our Vacation Ownership segment includes seven vacation ownership brands licensed under exclusive, long-term relationships with Marriott International and Hyatt Hotels Corporation.
+Added: Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term relationships.
We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Residence Club brands, as well as under Marriott Vacation Club Pulse, an extension to the Marriott Vacation Club brand.
−Removed: We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand and we have a license to use the St.
+Added: We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, we have the non-exclusive right
+Added: to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand and we have a license to use the St.
Regis brand for specified fractional ownership resorts.
−Removed: In addition, as part of our acquisition of Welk Hospitality Group, Inc.
−Removed: (“Welk”) through a series of transactions (the “Welk Acquisition”), we acquired a short-term license to use the Welk brand in connection with the continued operations of that business.
−Removed: We intend to rebrand all Welk resorts as Hyatt-branded resorts once we obtain all necessary approvals.
Our Vacation Ownership segment generates most of its revenues from four primary sources:
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and renting vacation ownership inventory.
−Removed: Our Exchange & Third-Party Management segment includes exchange networks and membership programs, as well as management of resorts and lodging properties.
−Removed: We provide these services through a variety of brands including Interval International, Trading Places International (“TPI”), Vacation Resorts International (“VRI”), and Aqua-Aston.
+Added: Our Exchange & Third-Party Management segment includes exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties.
+Added: As of the end of the first quarter of 2022, we provided these services through a variety of brands including Interval International, VRI, TPI, and Aqua-Aston.
Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and association management, and other related products and services.
−Removed: Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to property owners’ associations consolidated under the voting interest model (“Consolidated Property Owners’ Associations”).
+Added: Subsequent to the end of the first quarter of 2022, we disposed of the VRI and TPI businesses.
+Added: See Footnote 18 “Subsequent Event” to our Financial Statements for further information regarding this disposition.
+Added: Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to consolidated property owners’ associations (“Consolidated Property Owners’ Associations”).
Acquisition of Welk
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 second and third quarters of 2021 and reflect the financial position of our combined company at September 30, 2021.
−Removed: We refer to Welk’s business and brands that we acquired as “Legacy-Welk.”
−Removed: COVID-19 Pandemic Update
+Added: We refer to Welk’s business and brands that we acquired as “Legacy-Welk.” In April 2022, we introduced the Hyatt Vacation Club and rebranded Welk’s vacation ownership program as the Hyatt Vacation Club Platinum Program, enabling Legacy-Welk sales centers to sell a Hyatt-branded vacation ownership product.
+Added: Most Legacy-Welk resorts are now available for rental stays through Hyatt.com.
+Added: COVID-19 Pandemic
The COVID-19 pandemic has caused significant disruptions in international and U.S.
−Removed: economies and markets.
−Removed: 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 the first three quarters of 2021.
−Removed: We expect that sequential improvement to continue across our businesses during the fourth quarter of 2021.
−Removed: We discuss the COVID-19 pandemic and its current and potential future implications in this report;
−Removed: however, the COVID-19 pandemic, and any recovery therefrom, is evolving and its potential impact on our business in the future remains uncertain.
+Added: economies and markets, and has had an unprecedented impact on the travel and hospitality industries, as well as our Company.
+Added: We discuss the impacts of the COVID-19 pandemic and its potential future implications throughout this report;
+Added: however, the COVID-19 pandemic, and any recovery therefrom, continues to evolve and further potential impacts on our business in the future remain uncertain.
Significant Accounting Policies Used in Describing Results of Operations
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We recognize revenues from the sale of vacation ownership products (“VOIs”) when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible.
−Removed: Based upon the different terms of the contracts with the customer and business practices, control of the vacation ownership product is transferred to the customer at closing for Legacy-MVW and Legacy-Welk transactions and upon expiration of the statutory rescission period for Legacy-ILG transactions.
+Added: Based upon the different terms of the contracts with the customer and business practices, control of the vacation ownership product is transferred to the customer at closing for Marriott-branded and Legacy-Welk transactions and upon expiration of the statutory rescission period for Sheraton-,Westin-, and Hyatt-branded transactions.
Sales of vacation ownership products may be made for cash or we may provide financing.
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Typically, sales incentives are only awarded if the sale is closed.
−Removed: There may be timing differences between the date of the contract with the customer and when revenue is recognized.
−Removed: When comparing results year-over-year, this timing difference may generate significant variances, which we refer to as the impact of revenue reportability.
Finally, as more fully described in “ Financing ” below, we record the difference between the vacation ownership note receivable and the consideration to which we expect to be entitled (also known as a vacation ownership notes receivable reserve or a sales reserve) as a reduction of revenues from the sale of vacation ownership products at the time we recognize revenues from a sale.
We report, on a supplemental basis, contract sales for our Vacation Ownership segment.
−Removed: Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third-parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales.
−Removed: Contract sales differ from revenues from the sale of vacation ownership products that we report on our income statements due to the
−Removed: requirements for revenue recognition described above.
+Added: Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least 10% of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third-parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales.
+Added: Contract sales differ from revenues from the sale of vacation ownership products that we report on our income statements due to the requirements for revenue
+Added: recognition described above.
We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.
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Development profit margin is calculated by dividing Development profit by revenues from the Sale of vacation ownership products.
−Removed: We previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs.
−Removed: Beginning in the first quarter of 2021, we now refer to this financial measure as Development profit.
−Removed: While the calculation remains unchanged, we believe the revised term better depicts the financial results being presented.
Management and Exchange
−Removed: Our management and exchange revenues include revenues generated from fees we earn for managing each of our vacation ownership resorts, providing property management, property owners’ association management and related services to third-party vacation ownership resorts and fees we earn for providing rental services and related hotel, condominium resort, and property owners’ association management services to vacation property owners.
+Added: Our management and exchange revenues include revenues generated from fees we earn for managing each of our vacation ownership resorts, providing property management, owners’ association management and related services to third-party vacation ownership resorts and fees we earn for providing rental services and related hotel, condominium resort, and owners’ association management services to vacation property owners.
In addition, we earn revenue from ancillary offerings, including food and beverage outlets, golf courses and other retail and service outlets located at our Vacation Ownership resorts.
We also receive annual membership fees, club dues and certain transaction-based fees from members, owners and other third parties.
−Removed: Management and exchange expenses include costs to operate food and beverage outlets and other ancillary operations and to provide overall customer support services, including reservations, and certain transaction-based expenses relating to external exchange service providers.
+Added: Management and exchange expenses include costs to operate the food and beverage outlets and other ancillary operations and to provide overall customer support services, including reservations, and certain transaction-based expenses relating to external exchange service providers.
In our Vacation Ownership segment and Consolidated Property Owners’ Associations, we refer to these activities as “Resort Management and Other Services.”
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citizens or residents who financed a vacation ownership purchase was as follows:
−Removed: Nine Months Ended
−Removed: September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: March 31, 2022 March 31, 2021
Average FICO score 736 732
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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.
−Removed: The interest income earned from the originated vacation ownership financing arrangements is earned on an accrual basis on the principal balance outstanding over the contractual life of the arrangement and is recorded as Financing revenues on our Income Statements.
+Added: The interest income earned from our vacation ownership financing arrangements is earned on an accrual basis on the principal balance outstanding over the contractual life of the arrangement and is recorded as Financing revenues on our Income Statements.
Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable portfolio.
The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections.
−Removed: 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.
+Added: We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period.
We do not include resales contract sales in the financing propensity calculation.
−Removed: Financing propensity was 60 percent in the third quarter of 2021 and 43 percent in the third quarter of 2020;
−Removed: 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.
−Removed: 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
−Removed: 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 50% in the first quarter of 2022 and 46% in the first quarter of 2021;
+Added: the higher financing propensity in the first quarter of 2022 is due to a higher percentage of sales during this period to first-time buyers, who tend to have a higher financing propensity.
+Added: We expect to continue offering financing incentive programs in 2022.
+Added: We also plan to shift back to the increased focus we placed pre-pandemic on sales to first-time buyers, who are more likely to finance their purchases, which should further increase propensity and increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
+Added: Acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model.
+Added: The estimates of the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and estimated value of collateral securing the acquired vacation ownership notes receivable.
+Added: See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information regarding the accounting for acquired vacation ownership notes receivable.
In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI.
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As discussed above, for originated vacation ownership notes receivable, we record a reserve at the time of sale and classify the reserve as a reduction to revenues from the sale of vacation ownership products on our Income Statements.
+Added: Revisions to estimates of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes receivable and can increase or decrease revenues.
+Added: In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve, net of collateral value, as an adjustment to Financing expenses on our Income Statements.
Historical default rates, which represent defaults as a percentage of each year’s beginning gross vacation ownership notes receivable balance, were as follows:
−Removed: Nine Months Ended
−Removed: September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: March 31, 2022 March 31, 2021
Historical default rates 1.1% 1.3%
+Added: The decrease in default rates in 2022 reflects the return of the performance of our notes receivable portfolio to pre-pandemic levels.
Financing expenses include consumer financing interest expense, which represents interest expense associated with the securitization of our vacation ownership notes receivable, costs to support the financing, servicing and securitization processes and changes in expected credit losses related to acquired vacation ownership notes receivable.
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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 products 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, or upon expiration of the points.
We obtain rental inventory from unsold inventory and inventory we control because owners have elected alternative usage options offered through our vacation ownership programs.
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The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense.
−Removed: In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed properties through VRI, TPI, and Aqua-Aston.
−Removed: We also offer vacation rental offers knows as Getaways to members of the Interval International Network and certain other membership programs.
−Removed: The offering of Getaways allows us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members.
−Removed: Resort accommodations available as Getaways typically result from seasonal oversupply or underutilized space in the applicable exchange program, as well as resort accommodations specifically sourced for the Getaways program.
+Added: In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed properties.
+Added: We also offer vacation rental opportunities known as Getaways to members of the Interval International network and certain other membership programs.
+Added: Getaways allow us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members.
+Added: Resort accommodations typically become available as Getaways as a result of seasonal oversupply or underutilized space in the applicable exchange program.
+Added: We also source resort accommodations specifically for the Getaways program.
Rental expenses include:
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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
−Removed: villas represent one key.
−Removed: 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.
+Added: Lock-off villas represent two keys and non-lock-off villas represent one key.
+Added: 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.
Cost Reimbursements
Cost reimbursements include direct and indirect costs that are reimbursed to us by customers under management contracts.
−Removed: All costs, with the exception of taxes assessed by a governmental authority, reimbursed to us by customers are reported on a gross basis.
+Added: All costs reimbursed to us by customers, with the exception of taxes assessed by a governmental authority, are reported on a gross basis.
We recognize cost reimbursements when we incur the related reimbursable costs.
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Transaction and Integration Costs
−Removed: Transaction and integration costs represent costs related to the acquisitions of ILG and Welk, primarily for financial advisory, legal, and other professional service fees, as well as certain tax related accruals.
−Removed: Transaction and integration costs also include charges for employee retention, severance and other termination related benefits, fees paid to change management consultants and technology-related costs related to the integration and transformation of ILG and Welk.
+Added: Transaction and integration costs represent costs related to the ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax related accruals.
+Added: Transaction and integration costs also include charges for employee retention, severance and other termination related benefits, fees paid to change-management consultants and technology-related costs related to the integration of ILG and Welk.
We measure operating performance using the following key metrics:
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• Development profit margin;
−Removed: • Volume per guest (“VPG”), which we calculate by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, joint venture sales and other sales that are not attributed to a tour at a sales location, by the number of tours at sales locations in a given period (which we refer to as “tour flow”).
+Added: • Volume per guest (“VPG”), which we calculate by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, joint venture sales and other sales that are not attributed to a tour at a sales location, by the number of tours at sales locations in a given period.
We believe that this operating metric is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase;
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• Average revenue per member, which we calculate by dividing membership fee revenue, transaction revenue and other member revenue for the Interval International network by the monthly weighted average number of Interval International network active members during the applicable period.
+Added: NM = Not meaningful.
Consolidated Results
−Removed: Three Months Ended Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Sale of vacation ownership products $ 310 $ 163
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Management and exchange 127 117
−Removed: Rental 84 74 247 245
Financing 21 21
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Litigation charges 3 3
−Removed: Restructuring — 20 — 20
Royalty fee 27 25
−Removed: Impairment — 2 5 98
Cost reimbursements 316 255
TOTAL EXPENSES 911 739
−Removed: Losses and other expense, net (31) — (27) (42)
+Added: Gains and other income, net 4 6
Interest expense (27) (43)
Transaction and integration costs (28) (19)
−Removed: Other 1 — 2 —
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 90 (36)
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Operating Statistics
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: (Contract sales $ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Vacation Ownership
−Removed: Total contract sales $ 392 $ 141 $ 251 NM
−Removed: Consolidated contract sales $ 380 $ 140 $ 240 NM
−Removed: Joint venture contract sales $ 12 $ 1 $ 11 NM
−Removed: Exchange & Third-Party Management
−Removed: Total active members at end of period (000's) (1)
−Removed: 1,313 1,536 (223) (15%)
−Removed: Average revenue per member (1)
−Removed: $ 42.95 $ 36.76 $ 6.19 17%
−Removed: _______________
−Removed: (1) Only includes members of the Interval International exchange network.
−Removed: NM Not meaningful
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: (Contract sales $ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: (Contract sales $ in millions) March 31, 2022 March 31, 2021 Change % Change
Vacation Ownership
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Consolidated contract sales $ 394 $ 226 $ 168 75%
−Removed: Joint venture contract sales $ 28 $ 10 $ 18 NM
+Added: Joint venture contract sales $ 9 $ 6 $ 3 45%
+Added: VPG $ 4,706 $ 4,644 $ 62 1%
Exchange & Third-Party Management
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(1) Only includes members of the Interval International exchange network.
−Removed: 2021 Third Quarter
−Removed: The following table presents our revenues for the third quarter of 2021 compared to the third quarter of 2020.
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Vacation Ownership $ 974 $ 571 $ 403 71%
−Removed: Exchange & Third-Party Management 77 71 6 5%
−Removed: Total Segment Revenues 1,051 642 409 63%
−Removed: Consolidated Property Owners’ Associations 1 7 (6) (84%)
−Removed: Total Revenues $ 1,052 $ 649 $ 403 62%
−Removed: 2021 First Three Quarters
−Removed: The following table presents our revenues for the first three quarters of 2021 compared to the first three quarters of 2020.
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Vacation Ownership $ 956 $ 661 $ 295 45%
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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 Third Quarter
+Added: 2022 First Quarter
Three Months Ended Change
−Removed: ($ in millions) September 30, 2021 September 30, 2020 % Change
−Removed: Net income (loss) attributable to common shareholders $ 10 $ (62) $ 72 116%
−Removed: Interest expense 41 37 4 10%
−Removed: Provision for (benefit from) income taxes 47 (14) 61 NM
−Removed: Depreciation and amortization 35 30 5 15%
−Removed: EBITDA 133 (9) 142 NM
−Removed: Share-based compensation expense 11 11 — 2%
−Removed: Certain items 61 33 28 85%
−Removed: Adjusted EBITDA $ 205 $ 35 $ 170 NM
−Removed: 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.
−Removed: 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 $4 million related to the change in accrual for health and welfare costs for furloughed associates.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended Change
−Removed: ($ in millions) September 30, 2021 September 30, 2020 % Change
−Removed: Net loss attributable to common shareholders $ (12) $ (238) $ 226 95%
+Added: ($ in millions) March 31, 2022 March 31, 2021 % Change
+Added: Net income (loss) attributable to common shareholders $ 58 $ (28) $ 86 NM
Interest expense 27 43 (16) (37%)
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Adjusted EBITDA $ 188 $ 69 $ 119 NM
−Removed: 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.
−Removed: 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
−Removed: 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.
+Added: Certain items for the first quarter of 2022 consisted of $28 million of transaction and integration costs (including $25 million of ILG Acquisition and integration related costs and $3 million of Welk Acquisition and integration related costs), $3 million of purchase accounting adjustments, and $3 million of litigation charges, partially offset by $4 million of gains and other income, net (including $3 million of business interruption insurance proceeds received during the quarter and $1 million of foreign currency translation gains).
+Added: Certain items for the first quarter of 2021 consisted of $19 million of transaction costs (including $17 million of ILG Acquisition and integration related costs and $2 million of Welk Acquisition and integration related costs) and $3 million of litigation charges, partially offset by $4 million of foreign currency translation gains, and $2 million of miscellaneous gains and other income.
Segment Adjusted EBITDA
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Vacation Ownership $ 199 $ 68 $ 131 NM
1 unchanged sentence
Segment adjusted EBITDA 242 109 133 NM
−Removed: General and administrative (45) (27) (18) NM
−Removed: Consolidated property owners’ associations — 3 (3) NM
−Removed: Adjusted EBITDA $ 205 $ 35 $ 170 NM
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Vacation Ownership $ 465 $ 156 $ 309 NM
−Removed: Exchange & Third-Party Management 113 91 22 25%
−Removed: Segment adjusted EBITDA 578 247 331 134%
−Removed: General and administrative (140) (91) (49) NM
+Added: General and administrative (54) (40) (14) (35%)
Consolidated property owners’ associations — — — NM
Adjusted EBITDA $ 188 $ 69 $ 119 NM
−Removed: The following tables present Adjusted EBITDA for our reportable segments reconciled to segment financial results.
Vacation Ownership
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Segment adjusted EBITDA $ 215 $ 28 $ 187 NM
−Removed: Depreciation and amortization (24) (20) (4) (21%)
−Removed: Share-based compensation expense (1) (2) 1 NM
−Removed: Certain items (5) (9) 4 44%
−Removed: Segment financial results $ 185 $ (3) $ 188 NM
−Removed: Certain items in the Vacation Ownership segment for the third quarter of 2021 consisted primarily of $5 million of purchase accounting adjustments.
−Removed: 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 $6 million of gains and other income.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Segment adjusted EBITDA $ 199 $ 68 $ 131 NM
Depreciation and amortization (22) (19) (3) (14%)
−Removed: Share-based compensation expense (4) (4) — NM
+Added: Share-based compensation expense (1) (1) — (22%)
Certain items (3) (4) 1 17%
Segment financial results $ 173 $ 44 $ 129 NM
−Removed: 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.
−Removed: 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.
+Added: Certain items in the Vacation Ownership segment for the first quarter of 2022 consisted of $3 million of litigation charges and $3 million of purchase accounting adjustments, offset by $3 million of gains and other income, net related to business interruption insurance proceeds received during the quarter.
+Added: Certain items in the Vacation Ownership segment for the first quarter of 2021 consisted of $3 million of litigation charges and $1 million of restructuring costs.
Exchange & Third-Party Management
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Segment adjusted EBITDA $ 43 $ 41 $ 2 4%
1 unchanged sentence
Share-based compensation expense (1) — (1) (40%)
−Removed: Certain items (1) (10) 9 97%
+Added: Certain items — — — NM
Segment financial results $ 33 $ 21 $ 12 59%
−Removed: 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 $1 million asset impairment charge.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Segment adjusted EBITDA $ 113 $ 91 $ 22 25%
−Removed: Depreciation and amortization (40) (24) (16) (60%)
−Removed: Share-based compensation expense (1) (1) — 8%
−Removed: Certain items (1) (101) 100 99%
−Removed: Segment financial results $ 71 $ (35) $ 106 NM
−Removed: 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 $1 million of purchase accounting adjustments.
Business Segments
3 unchanged sentences
Vacation Ownership
−Removed: Three Months Ended Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Sale of vacation ownership products $ 310 $ 163
7 unchanged sentences
Resort management and other services 54 35
−Removed: Rental 97 86 288 280
Financing 21 21
3 unchanged sentences
Royalty fee 27 25
−Removed: Impairment — 1 — 6
Cost reimbursements 327 268
1 unchanged sentence
Gains and other income, net 3 —
−Removed: Transaction and integration costs (1) — (2) (3)
−Removed: Other 1 — 2 —
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 173 $ 44
Contract Sales
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Total consolidated contract sales $ 380 $ 140 $ 240 NM
−Removed: Joint venture contract sales 12 1 11 NM
−Removed: Total contract sales $ 392 $ 141 $ 251 NM
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Total consolidated contract sales $ 394 $ 226 $ 168 75%
−Removed: Joint venture contract sales 28 10 18 NM
+Added: Joint venture contract sales 9 6 3 45%
Total contract sales $ 403 $ 232 $ 171 74%
Sale of Vacation Ownership Products
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Total contract sales $ 392 $ 141 $ 251 NM
−Removed: resales contract sales (7) (1) (6)
−Removed: joint venture contract sales (12) (1) (11)
−Removed: Consolidated contract sales, net of resales 373 139 234
−Removed: Settlement revenue 8 4 4
−Removed: Resales revenue 5 1 4
−Removed: Revenue recognition adjustments:
−Removed: Reportability 2 (18) 20
−Removed: Sales reserve (31) (10) (21)
−Removed: (27) (18) (9)
−Removed: Sale of vacation ownership products $ 330 $ 98 $ 232 NM
−Removed: _______________
−Removed: (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 $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 $9 million of higher sales incentives issued (higher settlement revenue, sales incentives issued, and sales reserve activity were driven primarily by the higher contract sales volumes year-over-year).
−Removed: The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic late in the prior year first quarter, as well as the inclusion of Welk beginning in the second quarter of 2021.
−Removed: With the reopening of many of our sales centers throughout 2020 and during 2021, and the Welk Acquisition, our contract sales volumes have continued to improve on a sequential basis each quarter and we expect that sequential improvement to continue during the fourth quarter of 2021.
−Removed: Revenue reportability was slightly positive in the third quarter of 2021 as compared to a negative position historically.
−Removed: While we benefited from contract sales in the second quarter of 2021 being recognized as revenue in the third quarter of 2021, due to the impact of the Delta variant that negatively impacted contract sales late in the third quarter, we did not see a corresponding shift of revenues into the fourth quarter of 2021.
−Removed: Revenue reportability was negative in the third quarter of 2020 as a result of contract sales late in the third quarter of 2020 that were recognized as revenue in the fourth quarter.
−Removed: Given the low sales volumes in June 2020 due to the impact of the COVID-19 pandemic, we did not benefit from a shift of revenues from sales late in the second quarter into the third quarter.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Total contract sales $ 403 $ 232 $ 171 74%
11 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 $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).
−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.
−Removed: 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.
−Removed: 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.
−Removed: Revenue reportability was negative in the first three quarters of 2021.
−Removed: 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.
−Removed: In contrast, revenue reportability was significantly positive in the first three quarters of 2020.
−Removed: 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.
−Removed: 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.
+Added: The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic, as well as $24 million in contract sales relating to the Welk Acquisition, which we acquired in the second quarter of 2021.
+Added: Higher settlement revenue, sales incentives issued, and sales reserve activity were driven primarily by the higher contract sales volumes as well as the Welk Acquisition.
Development Profit
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Sale of vacation ownership products $ 330 $ 98 $ 232 NM
−Removed: Cost of vacation ownership products (71) (27) (44) NM
−Removed: Marketing and sales (166) (78) (88) (113%)
−Removed: Development profit $ 93 $ (7) $ 100 NM
−Removed: Development profit increased $100 million year-over-year.
−Removed: 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 $1 million related to lower sales reserve rate due to the mix of products being sold.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Sale of vacation ownership products $ 310 $ 163 $ 147 90%
2 unchanged sentences
Development profit $ 68 $ 14 $ 54 NM
−Removed: Development profit increased $170 million year-over-year.
−Removed: 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.
+Added: The increase in Development profit reflects $51 million as a result of higher contract sales volumes, in part from continued strong VPGs, and lower marketing and sales spending as a percentage of revenue and $9 million of favorable product cost, due to the sale of lower cost inventory as well as favorable product cost true-up activity, partially offset by $5 million of higher sales reserve activity due to higher contract sales volumes and $1 million of unfavorable revenue reportability.
Resort Management and Other Services Revenues, Expenses and Profit
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Management fee revenues $ 40 $ 37 $ 3 10%
−Removed: Ancillary revenues 55 17 38 NM
−Removed: Other management and exchange revenues 31 28 3 11%
−Removed: Resort management and other services revenues 126 82 44 54%
−Removed: Resort management and other services expenses (55) (27) (28) (107%)
−Removed: Resort management and other services profit $ 71 $ 55 $ 16 29%
−Removed: 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 higher management fees and $8 million of revenues from the Welk Acquisition.
−Removed: Resort occupancies have continued to increase throughout 2021 as our resorts that were closed at the start of the COVID-19 pandemic have reopened.
−Removed: We expect this trend in business improvement to continue throughout the remainder of 2021.
−Removed: The increase in resort management and other services profit reflected the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Management fee revenues $ 42 $ 38 $ 4 12%
5 unchanged sentences
Resort management and other services profit margin 57.5% 63.0% (5.5 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 higher management fees and $16 million from the Welk Acquisition.
−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 in business improvement to continue throughout the remainder of 2021.
−Removed: The increase in resort management and other services profit reflected the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.
+Added: Resort management and other services revenues reflects higher ancillary revenues, including revenues from food and beverage and golf offerings, as a result of the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic, higher management fees, and $6 million of revenues from the Welk Acquisition.
+Added: Resort occupancies continued to increase since the initial impact of the pandemic as travel and tourism trends continue to recover.
+Added: We expect this trend in business improvement to continue throughout 2022.
+Added: The increase in resort management and other services profit reflects the higher ancillary expenses as a result of the higher ancillary revenues mentioned above.
Rental Revenues, Expenses and Profit
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Rental revenues $ 121 $ 46 $ 75 NM
−Removed: Rental expenses (97) (86) (11) (12%)
−Removed: Rental profit $ 24 $ (40) $ 64 NM
−Removed: Rental profit margin 20.6% NM
+Added: 2022 First Quarter
Three Months Ended
−Removed: September 30, 2021 September 30, 2020 Change % Change
−Removed: Transient keys rented (1)
−Removed: 500,952 237,749 263,203 111%
−Removed: Average transient key rate $ 260.00 $ 198.84 $ 61.16 31%
−Removed: Resort occupancy 85.0% 24.5% 60.5 pts
−Removed: _________________________
−Removed: (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 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.
−Removed: 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, have been lifted, we expect rental occupancies to continue to increase throughout the remainder of 2021.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Rental revenues $ 122 $ 77 $ 45 58%
Rental expenses (90) (96) 6 6%
−Removed: Rental profit $ 20 $ (100) $ 120 120%
+Added: Rental profit (loss) $ 32 $ (19) $ 51 NM
Rental profit margin 25.8% NM
−Removed: Nine Months Ended
−Removed: September 30, 2021 September 30, 2020 Change % Change
+Added: Three Months Ended
+Added: March 31, 2022 March 31, 2021 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 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.
−Removed: 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, have been lifted, we expect rental occupancies to continue to increase throughout the remainder of 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 as COVID-19-related restrictions continued to ease, as well as from higher plus point revenue.
+Added: These increases were partially offset by higher inventory carrying costs (due to low sales volumes in 2021 as a result of the COVID-19 pandemic, the acquisition of new inventory in 2021, and higher utilization in 2022 of third-party vacation offerings for owners who elect to exchange the usage of 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 remain strong throughout the remainder of 2022.
+Added: However, we do not expect this part of our business to fully recover to pre-pandemic levels in 2022 as a result of reduced rental inventory availability due to higher owner usage as well as higher inventory carry costs.
Financing Revenues, Expenses and Profit
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Financing revenues 69 64 5 8%
−Removed: Financing expenses (10) (9) (1) (18%)
−Removed: Consumer financing interest expense (12) (15) 3 21%
−Removed: Financing profit $ 47 $ 40 $ 7 16%
−Removed: Financing propensity 59.6% 42.9%
−Removed: Financing revenues increased due to the Welk Acquisition, which contributed $11 million for the third quarter of 2021.
−Removed: 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.
−Removed: 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.
−Removed: Financing expenses increased due to higher salaries and wages and foreclosure costs as well as less than $1 million of higher costs from the Welk Acquisition.
−Removed: Lower consumer financing interest expense resulted from the continued pay-down of securitized debt balances.
−Removed: The higher financing propensity reflects a higher mix of sales to first time buyers, who tend to have a higher financing propensity.
−Removed: The low propensity in the prior year reflected the impact of sales programs that incented cash purchases during the initial periods of the COVID-19 pandemic.
−Removed: As we move into 2022, we expect to continue to shift back to an increased focus on sales to first-time buyers, which should increase propensity (60 percent or higher) and increase interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Financing revenues 71 59 12 21%
3 unchanged sentences
Financing propensity 50.3% 46.0%
−Removed: The Welk Acquisition provided $21 million of incremental revenues in the first three quarters of 2021.
−Removed: 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.
−Removed: 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.
−Removed: Financing expenses decreased due to $14 million of higher credit losses associated with acquired vacation ownership notes receivable in the prior year quarter.
−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 Welk Acquisition.
+Added: Financing revenues increased due primarily to the Welk Acquisition, which contributed $10 million in the first quarter of 2022.
+Added: Excluding the impact of the Welk Acquisition, financing revenues increased $2 million due mainly to lower plus point financing incentive costs year-over-year.
+Added: New loan originations are beginning to offset the continued pay-down of the existing vacation ownership notes receivable portfolio, such that interest income is relatively flat compared to the prior year quarter.
+Added: As contract sales volumes continue to grow, we expect that the growth from new loan originations will more than offset the normal decline in the existing vacation ownership notes receivable portfolio due to loan payment activity, and cause interest income to increase.
+Added: Financing expenses increased due to the Welk Acquisition and increased foreclosure costs, offset partially by the timing of when lien fee income is recognized.
The higher financing propensity reflects a higher mix of sales to first-time buyers, who tend to have a higher financing propensity.
−Removed: 2021 Third Quarter
+Added: As we move through 2022, we expect to continue to increase our focus on sales to first-time buyers, which should further increase financing propensity.
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Royalty fee $ 26 $ 23 $ 3 14%
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Royalty fee $ 27 $ 25 $ 2 8%
−Removed: 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 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Litigation charges $ 1 $ 2 $ (1) 3%
−Removed: During the third quarter of 2021 and the third quarter of 2020, we incurred $1 million and $2 million, respectively, of litigation charges related primarily to projects in Europe.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Litigation charges $ 3 $ 3 $ — (5%)
−Removed: During the first three quarters of 2021 and first three quarters of 2020, we incurred $7 million and $4 million, respectively, of litigation charges related primarily to projects in Europe.
−Removed: Restructuring
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Restructuring $ (1) $ 11 $ (12) (106%)
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Restructuring $ — $ 11 $ (11) (100%)
−Removed: During the third quarter and first three quarters of 2020, we incurred $11 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
−Removed: During the third quarter of 2021, we trued up this restructuring accrual based upon current plans.
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Impairment $ — $ 1 $ (1) (99%)
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Impairment $ — $ 6 $ (6) (100%)
−Removed: No asset impairment charges were recorded for the third quarter of 2021 or the first three quarters of 2021.
−Removed: During the third quarter and first three quarters of 2020, we recorded non-cash impairment charges of $1 million and $6 million, respectively, related to our Asia Pacific inventory as a result of the impact of the COVID-19 pandemic.
+Added: During the first quarter of 2022 and the first quarter of 2021, the litigation charges related primarily to projects in Europe.
Gains and Other Income
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Gains and other income, net $ — $ 6 $ (6) (101%)
−Removed: No gains and other income were recorded for the third quarter of 2021.
−Removed: During the third quarter of 2020, we recorded $6 million of gains and other income related to the disposition of excess land parcels in Orlando, Florida and Steamboat Springs, Colorado.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Gains and other income, net $ — $ 12 $ (12) (100%)
−Removed: No gains and other income were recorded for the first three quarters of 2021.
−Removed: 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 $4 million of net insurance proceeds related to the settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane.
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
+Added: Gains and other income, net $ 3 $ — $ 3 NM
+Added: During the first quarter of 2022, we recorded $3 million of gains and other income, net related to business interruption insurance proceeds received during the quarter.
Exchange & Third-Party Management
−Removed: Three Months Ended Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Management and exchange $ 64 $ 60
−Removed: Rental 9 10 32 29
−Removed: Financing — — — 2
Cost reimbursements 9 14
1 unchanged sentence
Management and exchange 33 31
−Removed: Rental — 2 — 8
−Removed: Financing — — — 1
Depreciation and amortization 9 20
−Removed: Restructuring 1 3 1 3
−Removed: Impairment — 1 — 92
Cost reimbursements 9 14
TOTAL EXPENSES 51 65
−Removed: Losses and other expense, net — (5) — (5)
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 33 $ 21
Rental Revenues, Expenses and Profit
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Rental revenues $ 11 $ 12 $ (1) (8%)
−Removed: Rental expenses — (2) 2 101%
+Added: Rental expenses — — — NM
Rental profit $ 11 $ 12 $ (1) (8%)
Rental profit margin 100.0% 100.0% — pts
−Removed: The increase in rental profit reflected a 4 percent increase in Getaway program transactions and a 13 percent increase in average fee, reflecting customers’ desire to travel and pent-up demand due to COVID-19-related restrictions.
−Removed: 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 Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Rental revenues $ 32 $ 29 $ 3 12%
−Removed: Rental expenses — (8) 8 100%
−Removed: Rental profit $ 32 $ 21 $ 11 54%
−Removed: Rental profit margin 100.1% 72.8% 27.3%
−Removed: The increase in rental profit reflected a 42 percent increase in Getaway program transactions and a 10 percent increase in average fee, reflecting customers’ desire to travel and pent up-demand due to COVID-19-related restrictions.
−Removed: 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: Results reflect a 12% decline in Getaways transactions, offset partially by a 15% increase in average fees.
+Added: The decline in transactions reflects increased owner usage which is putting pressure on the volume of member deposits available as inventory for Getaways as members choose to occupy their accommodations rather than exchange usage through Interval International, offset partially by pricing increases.
Management and Exchange Profit
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Management and exchange revenue $ 59 $ 49 $ 10 18%
−Removed: Management and exchange expense (33) (27) (6) (17%)
−Removed: Management and exchange profit $ 26 $ 22 $ 4 19%
−Removed: Management and exchange profit margin 44.7% 44.3% 0.4 pts
−Removed: 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.
−Removed: For Interval International, average revenue per member increased 17 percent over the prior year comparable period.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Management and exchange revenue $ 64 $ 60 $ 4 7%
2 unchanged sentences
Management and exchange profit margin 48.6% 48.0% 0.6 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 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.
−Removed: For Interval International, exchange transactions and average exchange fee increased 5 percent and 3 percent, respectively, over the prior year comparable periods.
+Added: The increase in management and exchange revenue and profit reflects higher management fees at Aqua-Aston managed properties due to the continued ramp-up of the business in Hawaii subsequent to the initial impact of the COVID-19 pandemic.
+Added: For Interval International, average revenue per member decreased 6% over the prior year comparable period.
+Added: This decline was due in part to new, recently added affiliations for which we expect any exchange activity to take time to ramp-up as many of the new members have already booked near term travel plans.
Depreciation and Amortization
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Depreciation and amortization $ 11 $ 8 $ 3 42%
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Depreciation and amortization $ 9 $ 20 $ (11) (56%)
−Removed: 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.
−Removed: Restructuring
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Restructuring $ 1 $ 3 $ (2) (94%)
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Restructuring $ 1 $ 3 $ (2) (87%)
−Removed: 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.
−Removed: During the third quarter and first three quarters of 2021, we incurred $1 million of additional restructuring costs related to this plan.
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Impairment $ — $ 1 $ (1) (100%)
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Impairment $ — $ 92 $ (92) (100%)
−Removed: No asset impairment charges were recorded for the third quarter or the first three quarters of 2021.
−Removed: During the first three quarters of 2020, we recorded a non-cash impairment of $92 million primarily related to a decrease in the fair value of goodwill and certain trademarks resulting from the impact of the COVID-19 pandemic.
−Removed: Losses and Other Expense
−Removed: 2021 Third Quarter
−Removed: Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Losses and other expense, net $ — $ (5) $ 5 (99%)
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Losses and other expense, net $ — $ (5) $ 5 (98%)
−Removed: No losses and other expenses were recorded for the third quarter or first three quarters of 2021.
−Removed: During the third quarter and first three quarters of 2020, we recorded a $5 million loss related to the disposition of a previously consolidated subsidiary.
+Added: The decrease in depreciation expense relates to a true-up made in the prior year to accelerate depreciation on a technology asset.
Corporate and Other
−Removed: Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and (provision for) benefit from income taxes.
+Added: Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes.
In addition, Corporate and Other includes the revenues and expenses from the Consolidated Property Owners’ Associations.
−Removed: Three Months Ended Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Resort management and other services $ 32 $ 39
5 unchanged sentences
Depreciation and amortization 2 2
−Removed: Litigation charges 1 — 1 —
Restructuring — (1)
−Removed: Impairment — — 5 —
Cost reimbursements (20) (27)
TOTAL EXPENSES 74 57
−Removed: Losses and other expense, net (31) (1) (27) (49)
+Added: Gains and other income, net 1 6
Interest expense (27) (43)
6 unchanged sentences
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.
−Removed: Three Months Ended Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Resort management and other services $ 32 $ 39
5 unchanged sentences
TOTAL EXPENSES 11 10
−Removed: Losses and other expense, net (1) — (1) —
−Removed: FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 2 7 10 20
−Removed: Provision for income taxes (1) — (2) —
+Added: Gains and other income, net — 2
+Added: FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 4
Net income attributable to noncontrolling interests — (3)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 1 $ 1
−Removed: Pursuant to a change in control of certain Consolidated Property Owners’ Associations, we recorded a non-cash loss of $1 million in Losses and other expense, net on our Income Statement for the nine months ended September 30, 2021.
−Removed: We continue to act as manager for these property owners’ associations pursuant to existing management contracts and retain membership interests via our ownership of vacation ownership interests.
General and Administrative
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: General and administrative $ 54 $ 32 $ 22 71%
−Removed: 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 $4 million of lower other spending across the business, including technology, travel, training, and other expenses.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
General and administrative $ 61 $ 46 $ 15 33%
−Removed: 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.
−Removed: These increases were partially offset by $9 million of lower costs as the prior year period included an accrual for health and welfare
−Removed: costs for furloughed associates and $9 million of lower net overall spending across the business, including technology, travel, training, and other expenses.
+Added: For the first quarter of 2022, General and administrative expenses increased due primarily to $11 million of higher salary costs due to reduced work week programs in the prior year, $3 million related to higher bonus expense, and a $2 million decrease in credits related to incentives under the CARES Act, partially offset by $1 million in lower overall spending.
Restructuring
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Restructuring $ — $ 6 $ (6) (100%)
−Removed: No restructuring costs were recorded for the third quarter of 2021.
−Removed: During the third quarter of 2020, we incurred $6 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Restructuring $ — $ (1) $ 1 (100%)
−Removed: During the first three quarters of 2020, we incurred $6 million in restructuring costs primarily related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.
−Removed: During the first three quarters of 2021, we trued up this restructuring accrual based upon current plans.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Impairment $ 5 $ — $ 5 NM
−Removed: During the first three quarters of 2021, we recorded a $5 million non-cash impairment charge related to an equity method investment.
−Removed: No asset impairment charges were recorded for the third quarter of 2021, the third quarter of 2020, or the first three quarters of 2020.
+Added: No restructuring costs were recorded for the first quarter of 2022.
+Added: During the first quarter of 2021, we reversed an accrual for $1 million associated with a restructuring plan that we adopted as a result of the COVID-19 pandemic.
Gains / Losses and Other Income / Expense
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Losses and other expense, net $ (31) $ (1) $ (30) NM
−Removed: 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).
−Removed: In the third quarter of 2020, we recorded a loss of $1 million driven mainly by foreign currency translation.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Losses and other expense, net
−Removed: $ (27) $ (49) $ 22 45%
−Removed: 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.
−Removed: 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 $6 million of other income related to an indemnification payment from Marriott International for VAT penalties and interest.
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
+Added: Gains and other income, net $ 1 $ 6 $ (5) (74%)
+Added: We recorded $1 million and $6 million of foreign currency translation gains in the first quarter of 2022 and the first quarter of 2021, respectively.
Interest Expense
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Interest expense $ (41) $ (37) $ (4) (10%)
−Removed: 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.
−Removed: These increases were partially offset by a $9 million decrease in expenses associated with the payoff of the 2026 Notes in the quarter.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Interest expense $ (27) $ (43) $ 16 37%
−Removed: 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.
−Removed: 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.
+Added: Interest expense decreased $16 million, including $13 million due to the early redemption of the 2026 Notes in 2021, $6 million due to the adoption of new accounting guidance related to our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards”), and $4 million due to the early redemption of a portion of the 2025 Notes, partially offset by $6 million due to the issuance of the 2029 Notes in 2021 and $1 million of higher interest related to a leased asset.
Transaction and Integration Costs
−Removed: 2021 Third Quarter
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: Transaction and integration costs $ (26) $ (11) $ (15) (126%)
−Removed: 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.
−Removed: In the third quarter of 2020, Transaction and integration costs included $11 million of ILG Acquisition related costs.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
Transaction and integration costs $ (28) $ (19) $ (9) (49%)
−Removed: 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.
−Removed: In the first three quarters of 2020, Transaction and integration costs included $44 million of ILG Acquisition related costs.
−Removed: 2021 Third Quarter
+Added: In the first quarter of 2022, Transaction and integration costs included $25 million of ILG Acquisition and integration related costs, and $3 million of Welk Acquisition and integration related costs.
+Added: In the first quarter of 2021, Transaction and integration costs included $17 million of ILG Acquisition and integration related costs, and $2 million of Welk Acquisition and integration related costs.
+Added: 2022 First Quarter
Three Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
−Removed: (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 and an increase in the reserve for unrecognized tax benefits for the three months ended September 30, 2021.
−Removed: 2021 First Three Quarters
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020 Change % Change
+Added: ($ in millions) March 31, 2022 March 31, 2021 Change % Change
(Provision for) benefit from income taxes $ (32) $ 11 $ (43) NM
−Removed: 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.
+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 March 31, 2022.
Liquidity and Capital Resources
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: In September 2021, we issued a redemption notice and redeemed, prior to maturity, the remaining $250 million aggregate principal amount of the 2026 Notes.
−Removed: 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.
−Removed: Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes.
−Removed: At September 30, 2021, we had $732 million of completed real estate inventory on hand.
−Removed: 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.
+Added: Typically, our capital needs are supported by cash on hand ($0.4 billion at the end of the first quarter of 2022), cash generated from operations, our ability to raise capital through securitizations in the asset-backed securities market, our ability to issue new, and refinance existing, debt and, to the extent necessary, our ability to access funds under the Warehouse Credit Facility and the Revolving Corporate Credit Facility.
+Added: We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to shareholders.
+Added: During the first quarter of 2022, we entered into an amendment to the Revolving Corporate Credit Facility (the “Amendment”), which increased the borrowing capacity of the existing revolving credit facility from $600 million to $750 million and extended the maturity date from August 31, 2023 to March 31, 2027.
+Added: At March 31, 2022, we had $4.6 billion of total gross debt outstanding, which included $1.8 billion of non-recourse debt associated with vacation ownership notes receivable securitizations, $1.1 billion of senior notes, $0.8 billion of convertible notes, $0.8 billion of debt under our Corporate Credit Facility, $84 million related to finance lease obligations, and $11 million related to a non-interest bearing note payable.
+Added: At March 31, 2022, we had $684 million of completed real estate inventory on hand.
+Added: In addition, we had $496 million of completed vacation ownership units that have been classified as a component of Property and equipment until the time at which they are legally registered and available for sale as vacation ownership products.
+Added: Our material cash requirements from known contractual or other obligations were $6 billion as of March 31, 2022, of which we expect $748 million to be payable during 2022.
+Added: These obligations primarily relate to our debt, securitized debt and purchase obligations.
+Added: Please see “Material Cash Requirements” below for additional information.
The following table summarizes the changes in cash, cash equivalents and restricted cash:
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Cash, cash equivalents and restricted cash provided by (used in):
8 unchanged sentences
We minimize our working capital needs through cash management, strict credit-granting policies and disciplined collection efforts.
−Removed: Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to property owners’ associations and certain annual compensation-related outflows.
−Removed: 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 three quarters of 2021, we had $303 million of cash inflows from operating activities, compared to $158 million of cash inflows in the first three quarters of 2020.
−Removed: Excluding the impact of changes in net loss and adjustments for non-cash items, cash flow increased as a result of higher operational expense accruals, higher sales and rental deposits due to the continued ramp-up of the business, and higher collections of vacation ownership notes receivable, partially offset by severance and benefit payments related to cost management activities and higher inventory spending.
−Removed: In addition to net loss and adjustments for non-cash items, the following operating activities are key drivers of our cash flow from operating activities:
−Removed: Inventory Spending In Excess of Cost of Sales
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020
+Added: Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners’ associations and certain annual compensation-related outflows.
+Added: In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisition and development.
+Added: Excluding the impact of changes in net income or loss and adjustments for non-cash items, the change in cash flows from operations increased as a result of lower inventory spending, higher operational expense accruals, higher sales and rental deposits due to the continued ramp-up of the business, and higher collections of vacation ownership notes receivable, partially offset by timing of certain employee benefit payments.
+Added: In addition to net income or loss and adjustments for non-cash items, the following operating activities are key drivers of our cash flow from operating activities:
+Added: Inventory Spending Less Than (In Excess of) Cost of Sales
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Inventory spending $ (22) $ (57)
1 unchanged sentence
Inventory costs 50 31
−Removed: Inventory spending in excess of cost of sales $ (41) $ (63)
−Removed: Our Vacation Ownership segment product offerings allow us to utilize our inventory efficiently.
−Removed: 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, if any, under construction at any given time and can leverage successful sales locations at completed resorts.
−Removed: 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 enables us to better align our inventory acquisitions with the pace of sales of vacation ownership products.
−Removed: 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.
−Removed: These capital efficient deal structures may consist of the development of new inventory, or the conversion of previously built units, by third parties just prior to sale.
−Removed: 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 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.
−Removed: 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.
−Removed: See Footnote 11 “Contingencies and Commitments” to our Financial Statements for additional information regarding our remaining commitments.
+Added: Inventory spending less than (in excess of) cost of sales $ 16 $ (125)
+Added: While we have significant inventory on hand, we will continue to selectively pursue growth opportunities in North America and Asia Pacific by targeting high-quality inventory that allows us to add desirable new destinations to our system with new on-site sales locations through transactions that limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale.
+Added: These capital efficient vacation ownership deal structures may consist of the development of new inventory, or the conversion of previously built units by third parties, just prior to sale.
+Added: Our spending for real estate inventory in the first quarter of 2022 was lower than real estate inventory costs due to our strategy to minimize spending because we have a significant amount of inventory on hand.
Through our existing vacation ownership interest repurchase program, we proactively buy back previously sold vacation ownership interests at lower costs than would be required to develop new inventory.
By repurchasing inventory, we expect to be able to help stabilize the future cost of vacation ownership products.
−Removed: Vacation Ownership Notes Receivable Collections In Excess of Originations
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020
+Added: Vacation Ownership Notes Receivable Collections (Less Than) In Excess of Originations
+Added: Three Months Ended
+Added: ($ in millions) March 31, 2022 March 31, 2021
Vacation ownership notes receivable collections — non-securitized $ 67 $ 42
1 unchanged sentence
Vacation ownership notes receivable originations (205) (108)
−Removed: Vacation ownership notes receivable collections in excess of originations $ (13) $ 222
−Removed: 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 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.
−Removed: 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.
−Removed: 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.
+Added: Vacation ownership notes receivable collections (less than) in excess of originations $ (17) $ 57
+Added: Vacation ownership notes receivable collections increased during the first quarter of 2022, as compared to the first quarter of 2021, due to an increase in the portfolio of outstanding vacation ownership notes receivable.
+Added: Vacation ownership notes receivable originations in the first quarter of 2022 increased, as compared to the first quarter of 2021, due to higher sales combined with a higher financing propensity.
+Added: Financing propensity increased to 50% for the first quarter of 2022, compared to 46% for the first quarter of 2021, reflecting a higher mix of sales to first-time buyers, who tend to have a higher financing propensity.
Cash from Investing Activities
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020
−Removed: Acquisition of a business, net of cash and restricted cash acquired $ (157) $ —
−Removed: Capital expenditures for property and equipment (excluding inventory) (19) (36)
−Removed: Purchase of company owned life insurance (11) (3)
−Removed: Dispositions, net — 15
−Removed: Net cash, cash equivalents and restricted cash used in investing activities $ (187) $ (24)
−Removed: Acquisition of a Business, Net of Cash and Restricted Cash Acquired
−Removed: Net cash outflows of $157 million in the first three quarters of 2021 were due to the Welk Acquisition.
−Removed: See Footnote 3 “Acquisitions and Dispositions” to our Financial Statements for more information.
Capital Expenditures for Property and Equipment
−Removed: 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 buildings and equipment used in common areas at some of our resorts.
−Removed: 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.
−Removed: 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, 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.
−Removed: We expect this trend to continue into the fourth quarter of 2021.
−Removed: 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.
−Removed: Purchase of Company Owned Life Insurance
−Removed: 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 $11 million and $3 million to acquire these policies during the first three quarters of 2021 and the first three quarters of 2020, respectively.
+Added: In the first quarter of 2022, capital expenditures for property and equipment included $9 million to support business operations (including $6 million for ancillary and other operations assets and $3 million for sales locations).
+Added: In the first quarter of 2021, capital expenditures for property and equipment of $7 million included $5 million to support business operations (including $3 million for ancillary and other operations assets and $2 million for sales locations) and $2 million for technology.
Cash from Financing Activities
−Removed: Nine Months Ended
−Removed: ($ in millions) September 30, 2021 September 30, 2020
−Removed: Borrowings from securitization transactions $ 425 $ 690
−Removed: Repayment of debt related to securitization transactions (602) (793)
−Removed: Proceeds from debt 1,061 1,166
−Removed: Repayments of debt (1,039) (703)
−Removed: Purchase of convertible note hedges (100) —
−Removed: Proceeds from issuance of warrants 70 —
−Removed: Finance lease payment (2) (10)
−Removed: Payment of debt issuance costs (17) (14)
−Removed: Repurchase of common stock (4) (82)
−Removed: Payment of dividends — (45)
−Removed: Payment of withholding taxes on vesting of restricted stock units (17) (14)
−Removed: 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 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.”
−Removed: 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 .
−Removed: See Footnote 12 "Securitized Debt" to our Financial Statements for additional information regarding this transaction.
−Removed: As of September 30, 2021, $278 million of gross vacation ownership notes receivable were eligible for securitization.
+Added: During the first quarter of 2022, we securitized vacation ownership notes receivable under our Warehouse Credit Facility.
+Added: The carrying amount of the vacation ownership notes receivable securitized was $125 million.
+Added: The average advance rate was 81%, which resulted in gross proceeds of $102 million.
+Added: Net proceeds were $101 million due to the funding of reserve accounts of $1 million.
+Added: As of March 31, 2022, $120 million of gross vacation ownership notes receivable were eligible for securitization.
Proceeds from / Repayments of Debt
Borrowings from / Repayment of Corporate Credit Facility
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We later repaid $696 million during the first three quarters of 2020 and had no amounts outstanding as of September 30, 2020.
−Removed: During the first three quarters of 2020, we also repaid $7 million of the amount outstanding under the Term Loan.
−Removed: 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 / Repayment of Senior Notes
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Subsequent to the end of the third quarter of 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: See Footnote 13 "Debt" to our Financial Statements for additional information related to these notes.
−Removed: Proceeds from Convertible Notes
−Removed: 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.
−Removed: 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 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.
−Removed: Repayment of Debt Assumed from Welk Acquisition
−Removed: 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.
−Removed: The total amount of repayments related to these debt obligations was $189 million.
−Removed: Purchase of Convertible Note Hedges / Proceeds from Issuance of Warrants
−Removed: In connection with the issuance of the 2026 Convertible Notes, we entered into the 2026 Convertible Note Hedges with respect to our common stock with certain counterparties, covering a total of 3.4 million shares of our common stock at a cost of $100 million.
−Removed: Concurrently with the entry into the 2026 Convertible Note Hedges, we separately entered into the 2026 Warrants, whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire, collectively, subject to anti-dilution adjustments, approximately 3.4 million shares of our common stock at an initial strike price of $213.76 per share.
−Removed: We received aggregate proceeds of $70 million from the sale of the 2026 Warrants to the counterparties.
−Removed: 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.
+Added: Our Corporate Credit Facility includes the Term Loan and our Revolving Corporate Credit Facility, which is further discussed in Footnote 13 “Debt” to our Financial Statements.
+Added: No principal payments were made on our Term Loan during the first quarter of 2022.
+Added: During the first quarter of 2022, we borrowed $30 million under our Revolving Corporate Credit Facility, all of which was repaid prior to the end of the quarter.
+Added: There were no borrowed amounts outstanding under our Revolving Corporate Credit Facility as of March 31, 2022.
+Added: As of March 31, 2022, we had $2 million of letters of credit outstanding under our Revolving Corporate Credit Facility.
+Added: During the first quarter of 2021, we repaid $100 million of the amount outstanding under the Term Loan.
+Added: We had no borrowings or repayments under our Revolving Corporate Credit Facility during the first quarter of 2021.
Finance Lease Payment
−Removed: During the first three quarters of 2021, we paid $2 million related to our finance lease obligations for technology and business operations equipment.
−Removed: 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.
−Removed: Additionally, we paid $3 million related to our finance lease obligations for technology and business operations equipment.
+Added: During the first quarter of 2022, we paid $2 million related to our finance lease obligations for technology and business operations equipment.
Debt Issuance Costs
−Removed: 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.
−Removed: 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.
−Removed: 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: During the first quarter of 2022, we paid $4 million of debt issuance costs associated with an amendment to the Revolving Corporate Credit Facility, which is further discussed in Footnote 13 “Debt” to our Financial Statements.
+Added: During the first quarter of 2021, we paid $2 million of debt issuance costs, which included $1 million associated with the 2026 Convertible Notes and $1 million associated with the extension of the Waiver which suspended certain requirements under the Revolving Corporate Credit Facility.
+Added: Repurchase of Common Stock
+Added: The following table summarizes share repurchase activity under our current share repurchase program:
+Added: ($ in millions, except per share amounts) Number of Shares Repurchased Cost of Shares Repurchased Average Price
+Added: Paid per Share
+Added: As of December 31, 2021 17,681,395 $ 1,418 $ 80.17
+Added: For the first quarter of 2022 764,824 119 156.50
+Added: As of March 31, 2022 18,446,219 $ 1,537 $ 83.34
+Added: See Footnote 14 “Shareholders' Equity” to our Financial Statements for further information related to our share repurchase program, including the additional share repurchase authorization approved by our Board of Directors during the first quarter of 2022.
+Added: We distributed cash dividends to holders of our common stock during the first quarter of 2022 as follows:
Declaration Date Shareholder Record Date Distribution Date Dividend per Share
−Removed: September 10, 2021 September 23, 2021 October 7, 2021 $0.54
−Removed: 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.
−Removed: 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.
+Added: December 9, 2021 December 23, 2021 January 6, 2022 $0.54
+Added: February 18, 2022 March 3, 2022 March 17, 2022 $0.62
+Added: We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to Board approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors
+Added: considers relevant.
+Added: In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends.
The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us.
−Removed: Accordingly, there can be no assurance that we will pay dividends in the future at the same rate or at all.
+Added: Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.
+Added: Material Cash Requirements
+Added: The following table summarizes our future material cash requirements from known contractual or other obligations as of March 31, 2022:
+Added: Payments Due by Period
+Added: ($ in millions) Total Remainder
+Added: of 2022 Years
+Added: 2023 - 2024 Years
+Added: 2025 - 2026 Thereafter
+Added: Contractual Obligations
+Added: Debt obligations (1)
+Added: $ 3,088 $ 294 $ 155 $ 1,710 $ 929
+Added: Securitized debt (1)(2)
+Added: 1,994 167 529 410 888
+Added: Purchase obligations (3)
+Added: 377 250 86 41 —
+Added: Operating lease obligations 122 18 44 35 25
+Added: Finance lease obligations (4)
+Added: 283 6 11 7 259
+Added: Other long-term obligations (5)
+Added: $ 5,888 $ 748 $ 832 $ 2,206 $ 2,102
+Added: _________________________
+Added: (1) Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.
+Added: (2) Payments based on estimated timing of cash flow associated with securitized notes receivable.
+Added: (3) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction.
+Added: Amounts reflected herein represent expected funding under such contracts.
+Added: Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
+Added: (4) Includes interest.
+Added: (5) Primarily relates to our commitment to an owners’ association that we manage, to pay for any shortfall between the actual expenses incurred by the owners’ association and the income received by the owners’ association, in lieu of maintenance fees, of $10 million.
+Added: In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts.
+Added: Since we are reimbursed for these commitments from the cash flows of the resorts, these obligations have minimal impact on our net income and cash flow.
+Added: These purchase commitments are excluded from the table above.
+Added: Leases That Have Not Yet Commenced
+Added: During 2020, we entered into a finance lease arrangement, that was amended in 2021, for our new global headquarters office building, which is being constructed in Orlando, Florida.
+Added: The new Orlando corporate office building is currently expected to be completed in 2023, at which time the lease term will commence and a right-of-use asset and corresponding liability will be recorded on our balance sheet.
+Added: The initial lease term is approximately 16 years with total lease payments of $137 million for the aforementioned period.
Supplemental Guarantor Information
3 unchanged sentences
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 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.
+Added: The following tables present consolidating financial information as of March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVW, and MVW on a consolidated basis.
Condensed Consolidating Balance Sheet
−Removed: As of September 30, 2021
+Added: As of March 31, 2022
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
52 unchanged sentences
Condensed Consolidating Statements of Income
−Removed: Nine Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2022
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
7 unchanged sentences
Net (loss) income attributable to common shareholders $ 58 $ 66 $ 87 $ 24 $ (177) $ 58
−Removed: Contractual Obligations and Off-Balance Sheet Arrangements
−Removed: The following table summarizes our contractual obligations as of September 30, 2021:
−Removed: Payments Due by Period
−Removed: ($ in millions) Total Remainder
−Removed: of 2021 Years
−Removed: 2022 - 2023 Years
−Removed: 2024 - 2025 Thereafter
−Removed: Contractual Obligations
−Removed: Debt obligations (1)
−Removed: $ 5,197 $ 337 $ 823 $ 1,580 $ 2,457
−Removed: Purchase obligations (2)
−Removed: 321 19 265 28 9
−Removed: Operating lease obligations 232 6 50 40 136
−Removed: Finance lease obligations (3)
−Removed: Other long-term obligations (4)
−Removed: Total contractual obligations $ 5,781 $ 369 $ 1,154 $ 1,653 $ 2,605
−Removed: _________________________
−Removed: (1) Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.
−Removed: (2) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction.
−Removed: Amounts reflected represent expected funding under such contracts.
−Removed: Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
−Removed: (3) Includes interest.
−Removed: (4) Primarily relates to future guaranteed purchases of rental inventory, operational support services, marketing related benefits, membership fulfillment benefits, and other commitments.
−Removed: In the normal course of our resort management business, we enter into purchase commitments on behalf of property owners’ associations to manage the daily operating needs of our resorts.
−Removed: Since we are reimbursed for these commitments from the cash flows of the resorts, these obligations have minimal impact on our net income and cash flow.
−Removed: Leases That Have Not Yet Commenced
−Removed: During the first quarter of 2020, we entered into a finance lease arrangement for our new global headquarters in Orlando, Florida.
−Removed: The new Orlando corporate office building is currently expected to be completed in 2023, at which time the lease term will commence and a right-of-use asset and corresponding liability will be recorded on our balance sheet.
−Removed: The initial lease term is approximately 16 years with total lease payments of $129 million for the aforementioned period.
−Removed: See Footnote 11 “Contingencies and Commitments” to our Financial Statements for additional information on this lease, including additional arrangements made as a result of the COVID-19 pandemic.
Recent Accounting Pronouncements
4 unchanged sentences
Since the date of our most recent Annual Report on Form 10-K, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.
+Added: Quantitative and Qualitative Disclosures About Market Risk
+Added: Our exposure to market risk has not changed materially from that disclosed in Part I, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.
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.