4 unchanged sentences
our possible or assumed future results of operations;
+Added: dividend payments;
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;
4 unchanged sentences
our expectations regarding availability of inventory for Getaways and exchange transactions;
+Added: inventory spending;
the effects of competition;
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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 continuing effects of the COVID-19 pandemic, including quarantines or other government-imposed travel or health-related restrictions;
−Removed: the length and severity of the COVID-19 pandemic, including its short and longer-term impact on consumer confidence and demand for travel, and the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines against variants of the COVID-19 virus become widely available;
+Added: the continuing effects of the COVID-19 pandemic or future health crises, including quarantines or other government-imposed travel or health-related restrictions;
+Added: the length and severity of the COVID-19 pandemic or future health crises, including short and longer-term impact on consumer confidence and demand for travel, and the pace of recovery following the COVID-19 pandemic or future health crises, or as effective treatments or vaccines against variants of the COVID-19 pandemic or future health crises become widely available;
variations in demand for vacation ownership and exchange products and services;
2 unchanged sentences
global supply chain disruptions;
−Removed: volatility in the international and national economy and credit markets, including as a result of the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine and related sanctions and other measures;
+Added: volatility in the international and national economy and credit markets, including as a result of the COVID-19 pandemic or future health crises, and the ongoing conflict between Russia and Ukraine and related sanctions and other measures;
our ability to attract and retain our global workforce;
1 unchanged sentence
the availability of capital to finance growth;
−Removed: 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;
+Added: the impact of rising interest rates;
+Added: 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 or future health crises;
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 as may be updated in our future periodic filings with the U.S.
5 unchanged sentences
Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows.
−Removed: 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
+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.
13 unchanged sentences
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.
−Removed: As of the end of the second quarter of 2022, we provided these services through Interval International and Aqua-Aston.
+Added: As of May 2022, we provided these services through Interval International 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.
8 unchanged sentences
Under this program, owners of Marriott-, Sheraton- and Westin-branded vacation ownership interests can access over 90 Marriott Vacation Club, Sheraton Vacation Club and Westin Vacation Club resorts using a common currency.
−Removed: The program also harmonizes fee structures and owner benefit levels and allows us to transition certain of our Legacy-ILG sales galleries to sell our Marriott Vacation Club Destinations product.
+Added: The program also harmonizes fee structures and owner benefit levels and allows us to transition most of our Legacy-ILG sales galleries to sell our Marriott Vacation Club Destinations product.
Later in 2022, we plan to add certain Sheraton- and Westin- branded vacation ownership interests to the Marriott Vacation Club Destinations product.
1 unchanged sentence
On April 1, 2021, we completed the Welk Acquisition, after which Welk became our indirect wholly-owned subsidiary.
−Removed: 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: We refer to the Welk business that we acquired as “Legacy-Welk.” In April 2022, we introduced the Hyatt Vacation Club and rebranded Welk’s vacation ownership program as the Hyatt Vacation Club Platinum Program, enabling Legacy-Welk sales centers to sell a Hyatt-branded vacation ownership product.
Most Legacy-Welk resorts are now available for rental stays through Hyatt.com.
7 unchanged sentences
We recognize revenues from the sale of vacation ownership products (also referred to as vacation ownership interests or “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 Marriott-branded and Legacy-Welk transactions and upon expiration of the statutory rescission period for Sheraton-,Westin-, and Hyatt-branded transactions.
+Added: Based upon the different terms of the contracts with the customer and business practices, control of the vacation ownership product has historically transferred to the customer at different points in time for each brand of VOIs.
+Added: In the third quarter of 2022, we aligned our business practices and contract terms, resulting in the prospective change in the timing of the transfer of control to the customer for Marriott-branded vacation ownership interests.
+Added: Prior to these changes, control transfer occurred at closing for Marriott-branded and Legacy-Welk vacation ownership products.
+Added: Subsequent to this alignment, transfer of control of Marriott-branded vacation ownership products occurs at expiration of the statutory rescission period, consistent with the historical timing of Sheraton-, Westin- and Hyatt- branded transactions.
+Added: Marriott-branded VOI sales contracts executed prior to these modifications will continue to be accounted for with transfer of control of the VOI occurring at closing.
+Added: Control transfer for Legacy-Welk VOIs remains at closing.
Sales of vacation ownership products may be made for cash or we may provide financing.
1 unchanged sentence
We also provide sales incentives to certain purchasers.
−Removed: These sales incentives typically include Marriott Bonvoy points, World of Hyatt points or an alternative sales incentive that we refer to as “plus points.” These plus points are redeemable for stays at our resorts or for use in other third-party offerings, generally up to two years from the date of issuance.
+Added: These sales incentives typically include Marriott Bonvoy points, World of Hyatt points or an alternative sales incentive that we refer to as “plus points.” Plus points are redeemable for stays at our resorts or for use in other third-party offerings, generally up to two years from the date of issuance.
Typically, sales incentives are only awarded if the sale is closed.
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Development profit margin is calculated by dividing Development profit by revenues from the Sale of vacation ownership products.
−Removed: Revenue Recognition Change Commencing in August 2022
−Removed: In connection with the affiliation of the Marriott-, Sheraton-, and Westin-branded vacation ownership products discussed above, in mid-August, we intend to modify our business practices and the terms of our Marriott-branded VOI sales contracts to be consistent with the existing terms of our Sheraton- and Westin-branded VOI sales contracts.
−Removed: As a result of these modifications, control of Marriott-branded vacation ownership products will be transferred to the customer upon expiration of the statutory rescission period, consistent with the current method for Sheraton- and Westin-branded vacation ownership products.
−Removed: This will result in the acceleration of revenue and a one-time benefit to development profit, net income attributable to common shareholders and Adjusted EBITDA (defined below), however at this time we are
−Removed: unable to quantify the magnitude of this impact.
−Removed: Marriott-branded VOI sales contracts executed prior to these modifications will continue to be accounted for as outlined above, with transfer of control of the VOI occurring at closing.
Management and Exchange
7 unchanged sentences
citizens or residents who financed a vacation ownership purchase was as follows:
−Removed: Six Months Ended
−Removed: June 30, 2022 June 30, 2021
+Added: Nine Months Ended
+Added: September 30, 2022 September 30, 2021
Average FICO score 733 731
1 unchanged sentence
While we adjust interest rates from time to time, such changes are typically not made in step with the timing and magnitude of changes in broader market rates.
−Removed: We do use incentives to encourage our customers to take our financing.
+Added: We may use incentives to encourage our customers to choose our financing.
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.
4 unchanged sentences
We do not include resales contract sales in the financing propensity calculation.
−Removed: Financing propensity was 53% in the second quarter of 2022 and 52% in the second quarter of 2021.
−Removed: We expect to continue offering financing incentive programs throughout the remainder of 2022.
+Added: Financing propensity was 59% in the third quarter of 2022 and 60% in the third quarter of 2021.
+Added: We expect to continue offering financing incentive programs throughout the fourth quarter of 2022 and into 2023.
Growing sales to first-time buyers, who are more likely to finance their purchases, remains an integral part of our overall marketing and sales strategy
−Removed: We expect the current financing incentives and other initiatives to increase sales to first-time buyers to further increase propensity and interest income as new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes receivable.
Acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model.
The estimates of the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and estimated value of collateral securing the acquired vacation ownership notes receivable.
−Removed: 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.
4 unchanged sentences
Historical default rates, which represent defaults as a percentage of each year’s beginning gross vacation ownership notes receivable balance, were as follows:
−Removed: Six Months Ended
−Removed: June 30, 2022 June 30, 2021
+Added: Nine Months Ended
+Added: September 30, 2022 September 30, 2021
Historical default rates 3.3% 3.3%
−Removed: The decrease in default rates in 2022 reflects the continued improvement in the performance of our vacation ownership notes receivable portfolio subsequent to the increased default rates experienced in 2020 as a result of the COVID-19 pandemic.
+Added: Historical default rates reflect the stabilization in the performance of our vacation ownership notes receivable portfolio subsequent to the increased default rates experienced in 2020 as a result of the COVID-19 pandemic.
+Added: As a result of the unification of the Company’s Marriott-, Sheraton- and Westin- branded vacation ownership products under the Abound by Marriott Vacations program and stabilization of defaults, in the third quarter of 2022, we combined and aligned our reserve methodology on vacation ownership notes receivable for our Marriott-, Sheraton- and Westin- brands.
+Added: See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information.
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.
1 unchanged sentence
In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory.
−Removed: 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.
+Added: 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 unregistered inventory and owned-hotel properties.
We also recognize rental revenue from the utilization of plus points under our points-based products when the points are redeemed for rental stays at one of our resorts or in other third-party offerings, or upon expiration of the points.
14 unchanged sentences
Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior.
−Removed: In addition, rental metrics may not correlate with rental revenues due to
−Removed: the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above).
+Added: In addition, rental metrics may not correlate with rental revenues due to the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above).
Further, as our ability to rent certain luxury and other inventory is often limited on a site-by-site basis, rental operations may not generate adequate rental revenues to cover associated costs.
19 unchanged sentences
• Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures.
−Removed: We consider contract sales to be an important operating measure because it reflects the pace of our business.
+Added: We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.
• Volume per guest (“VPG”) is calculated by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, 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.
9 unchanged sentences
Consolidated Results
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Sale of vacation ownership products $ 444 $ 330 $ 1,179 $ 789
16 unchanged sentences
TOTAL EXPENSES 1,012 896 2,880 2,505
−Removed: Gains (losses) and other income (expense), net 37 (2) 41 4
+Added: (Losses) gains and other (expense) income, net (2) (31) 39 (27)
Interest expense (34) (41) (91) (128)
1 unchanged sentence
Other (1) 1 — 2
−Removed: INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 178 35 268 (1)
+Added: INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 169 58 437 57
Provision for income taxes (59) (47) (134) (63)
NET INCOME (LOSS) 110 11 303 (6)
−Removed: Net loss (income) attributable to noncontrolling interests 1 (2) 1 (5)
+Added: Net income attributable to noncontrolling interests (1) (1) — (6)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 109 $ 10 $ 303 $ (12)
Operating Statistics
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: (Contract sales $ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: (Contract sales $ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership
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Average revenue per member $ 38.91 $ 42.95 $ (4.04) (9%)
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: (Contract sales $ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: (Contract sales $ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership
6 unchanged sentences
Average revenue per member $ 122.30 $ 136.57 $ (14.27) (10%)
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership $ 1,182 $ 974 $ 208 21%
1 unchanged sentence
Total Segment Revenues 1,253 1,051 202 19%
−Removed: Consolidated Property Owners’ Associations (1) 10 (11) (108%)
+Added: Consolidated Property Owners’ Associations (1) 1 (2) NM
Total Revenues $ 1,252 $ 1,052 $ 200 19%
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership $ 3,229 $ 2,518 $ 711 28%
4 unchanged sentences
Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA
−Removed: EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term loan securitization transactions), income taxes, depreciation and amortization.
+Added: EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization.
Adjusted EBITDA reflects additional adjustments for certain items described below, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted.
−Removed: For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term loan securitization transactions because we consider it to be an operating expense of our business.
+Added: For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business.
We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to shareholders.
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The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate.
−Removed: As a result, effective tax rates and provision for income taxes can vary considerably among companies.
−Removed: EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.
+Added: As a result, effective tax rates and provisions for income taxes can vary considerably among companies.
+Added: EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and
+Added: depreciating productive assets.
These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items.
−Removed: Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other vacation companies.
+Added: Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other companies.
EBITDA and Adjusted EBITDA have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
1 unchanged sentence
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: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended Change
−Removed: ($ in millions) June 30, 2022 June 30, 2021 % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 % Change
Net income attributable to common shareholders $ 109 $ 10 $ 99 NM
2 unchanged sentences
Depreciation and amortization 33 35 (2) (2%)
−Removed: EBITDA 241 113 128 NM
+Added: EBITDA 235 133 102 77%
Share-based compensation expense 10 11 (1) (14%)
1 unchanged sentence
Adjusted EBITDA $ 284 $ 205 $ 79 38%
−Removed: Certain items for the second quarter of 2022 consisted of $37 million of gains and other income, $2 million of revenue associated with an early termination of a VRI management contract, and $3 million of miscellaneous other adjustments, partially offset by $37 million of transaction and integration costs (including $23 million of ILG integration related costs, $10 million of other integration costs, $2 million of Welk Acquisition and integration related costs, and $2 million of other transaction costs), $5 million of purchase accounting adjustments, and $2 million of litigation charges.
−Removed: The $37 million of gains and other income included $33 million of gains and other income related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, $16 million of gains and other income related to the strategic decision to dispose of our VRI Americas business, and $2 million of proceeds from corporate owned life insurance, partially offset by $8 million of foreign currency translation losses, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, and $3 million of non-income tax related adjustments to the receivable for the indemnification payment we expect to receive from Marriott International.
−Removed: See Footnote 5 “Income Taxes” to our Financial Statements for further information regarding our indemnification assets.
−Removed: Certain items for the second quarter of 2021 consisted of $29 million of transaction costs (including $25 million of ILG integration related costs and $3 million of Welk Acquisition and integration related costs), $5 million of impairment charges, $3 million of litigation charges, $2 million of purchase accounting adjustments, and $2 million of losses and other expense, partially offset by $2 million to eliminate the impact of consolidating certain property owners’ associations, and $2 million of activity related to the accrual for health and welfare costs for furloughed associates.
−Removed: 2022 First Half
−Removed: Six Months Ended Change
−Removed: ($ in millions) June 30, 2022 June 30, 2021 % Change
+Added: In the third quarter of 2022, in connection with the unification of the our Marriott-, Westin-, and Sheraton- branded vacation ownership products under the Abound by Marriott Vacations program, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract alignment”), resulting in the prospective acceleration of revenue for the sale of Marriott-branded vacation ownership interests.
+Added: The Contract alignment increased Net income attributable to common shareholders and Adjusted EBITDA by $29 million and $39 million, respectively.
+Added: In addition, we combined and aligned our reserve methodology for vacation ownership notes receivable for these brands (the “Reserve alignment”), resulting in a $4 million increase in Net income attributable to common shareholders and a $5 million increase in Adjusted EBITDA.
+Added: Together, these changes are hereinafter referred to as the “Alignment.” See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information.
+Added: Certain items for the third quarter of 2022 consisted of $34 million of transaction and integration costs (including $19 million of ILG Acquisition and integration related costs, $7 million of other transaction costs, $5 million of Welk Acquisition and integration related costs, and $3 million of other integration costs), $5 million of purchase accounting adjustments, $2 million of losses and other expense (including $3 million related to foreign currency translation losses, $1 million of miscellaneous losses and other expense, partially offset by $1 million of working capital adjustments related to the disposition of our VRI Americas business and $1 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International), $2 million of litigation charges, $1 million of impairment charges, and $1 million of miscellaneous other adjustments, partially offset by $6 million of revenue associated with expired or forfeited deposits on pre-acquisition preview packages.
+Added: Certain items for the third quarter of 2021 consisted of $31 million of losses and other expense (including $36 million related to the early redemption of senior unsecured 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 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), $5 million of purchase accounting adjustments, and $2 million of litigation charges, partially offset by $3 million to eliminate the impact of consolidating certain property owners’ associations and $1 million of miscellaneous other adjustments.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 % Change
Net income (loss) attributable to common shareholders $ 303 $ (12) $ 315 NM
Interest expense 91 128 (37) (29%)
−Removed: Provision for income taxes 75 16 59 NM
+Added: Provision for income taxes 134 63 71 113%
Depreciation and amortization 98 112 (14) (12%)
3 unchanged sentences
Adjusted EBITDA $ 727 $ 438 $ 289 66%
−Removed: Certain items for the first half of 2022 consisted of $65 million of transaction and integration costs (including $48 million of ILG integration related costs, $10 million of other integration costs, $5 million of Welk Acquisition and integration related costs, and $2 million of other transaction costs), $8 million of purchase accounting adjustments, and $5 million of litigation charges, partially offset by $41 million of gains and other income, $2 million of revenue associated with an early termination of a VRI management contract, and $3 million of miscellaneous other adjustments.
−Removed: The $41 million of gains and other income included $33 million of gains and other income related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, $16 million of gains and other income related to the strategic decision to dispose of our VRI Americas business, $3 million of business interruption insurance proceeds received and $2 million of proceeds from corporate owned life insurance, partially offset by $7 million of foreign currency translation charges, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, and $3 million of non-income tax related adjustments to the receivable for the indemnification payment we expect to receive from Marriott International.
−Removed: See Footnote 5 “Income Taxes” to our Financial Statements for further information regarding our indemnification assets.
−Removed: Certain items for the first half of 2021 consisted of $48 million of transaction costs (including $42 million of ILG integration related costs and $5 million of Welk Acquisition and integration related costs), $6 million of litigation charges, $5 million of impairment charges and $2 million of purchase accounting adjustments, partially offset by $4 million of gains and other income net (including $6 million of foreign currency translation gains, partially offset by $2 million of non-income tax related charges), $2 million to eliminate the impact of consolidating certain property owners’ associations, and $2 million of activity related to the accrual for health and welfare costs for furloughed associates.
+Added: We recognized an additional $33 million of Net income attributable to common shareholders and an additional $44 million of Adjusted EBITDA during the nine months ended September 30, 2022, as a result of the Alignment.
+Added: Certain items for the first three quarters of 2022 consisted of $99 million of transaction and integration costs (including $67 million of ILG integration related costs, $13 million of other integration costs, $10 million of Welk Acquisition and integration related costs, and $9 million of other transaction costs), $13 million of purchase accounting adjustments, $7 million of litigation charges, and $1 million of impairment charges, partially offset by $39 million of gains and other income, $6 million of revenue associated with expired or forfeited deposits on pre-acquisition preview packages, $2 million of revenue associated with an early termination of a VRI management contract, and $2 million of miscellaneous other adjustments.
+Added: The $39 million of gains and other income included $33 million of gains and other income related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, $17 million of gains and other income related to the strategic disposition of our VRI Americas business, $3 million of business interruption insurance proceeds received, and $2 million of proceeds from corporate owned life insurance, partially offset by $10 million of foreign currency translation, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, and $2 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International.
+Added: See Footnote 5 “Income Taxes” to our Financial Statements for further information regarding our indemnification assets, and $1 million of miscellaneous losses and other expense.
+Added: Certain items for the first three quarters of 2021 consisted of $75 million of transaction and integration costs (including $64 million of ILG Acquisition and integration related costs, $8 million of Welk Acquisition related costs, and $3 million of other transaction costs), $27 million of losses and other expense (including $36 million related to the early redemption of senior unsecured 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 income taxes line and $4 million of foreign currency translation gains), $8 million of litigation charges, $7 million of purchase accounting adjustments, and $5 million of impairment charges, 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 $1 million of miscellaneous other adjustments.
Segment Adjusted EBITDA
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership $ 299 $ 215 $ 84 39%
3 unchanged sentences
Adjusted EBITDA $ 284 $ 205 $ 79 38%
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: We recognized an additional $44 million of Adjusted EBITDA in the Vacation Ownership segment during the three months ended September 30, 2022, as a result of the Alignment.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Vacation Ownership $ 772 $ 465 $ 307 66%
3 unchanged sentences
Adjusted EBITDA $ 727 $ 438 $ 289 66%
+Added: We recognized an additional $44 million of Adjusted EBITDA in the Vacation Ownership segment during the nine months ended September 30, 2022, as a result of the Alignment.
The following tables present Adjusted EBITDA for our reportable segments reconciled to segment financial results attributable to common shareholders.
Vacation Ownership
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Segment adjusted EBITDA $ 299 $ 215 $ 84 39%
1 unchanged sentence
Share-based compensation expense (2) (1) (1) (23%)
−Removed: Certain items 27 (6) 33 NM
+Added: Certain items (4) (5) 1 41%
Segment financial results attributable to common shareholders $ 270 $ 185 $ 85 46%
−Removed: Certain items in the Vacation Ownership segment for the second quarter of 2022 consisted of $32 million of gains and other income, net (including $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, partially offset by $1 million of foreign currency translation charges) and $3 million of miscellaneous other adjustments, partially offset by $5 million of purchase accounting adjustments, $2 million of litigation charges and $1 million of miscellaneous other transaction costs.
−Removed: Certain items in the Vacation Ownership segment for the second quarter of 2021 consisted of $3 million of litigation charges, $2 million of purchase accounting adjustments and $1 million of transaction and integration costs.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: We recognized an additional $44 million of Adjusted EBITDA in the Vacation Ownership segment during the three months ended September 30, 2022, as a result of the Alignment.
+Added: Certain items in the Vacation Ownership segment for the third quarter of 2022 consisted of $6 million of revenue associated with expired or forfeited deposits on pre-acquisition preview packages, $2 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International, and $1 million of foreign currency translation, partially offset by $5 million of purchase accounting adjustments, $3 million of miscellaneous other adjustments, $2 million of litigation charges, $2 million of miscellaneous other transaction costs, and $1 million of impairment charge.
+Added: Certain items in the Vacation Ownership segment for the third quarter of 2021 consisted primarily of $5 million of purchase accounting adjustments.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Segment adjusted EBITDA $ 772 $ 465 $ 307 66%
2 unchanged sentences
Certain items 20 (15) 35 NM
−Removed: Segment financial results attributable to common shareholders $ 450 $ 195 $ 255 NM
−Removed: Certain items in the Vacation Ownership segment for the first half of 2022 consisted primarily of $35 million of gains and other income, net (including $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, and $3 million related to business interruption insurance proceeds, partially offset by $1 million of foreign currency translation charges) and $3 million of miscellaneous other adjustments, partially offset by $8 million of purchase accounting adjustments, $5 million of litigation charges, and $1 million of miscellaneous other transaction costs.
−Removed: Certain items in the Vacation Ownership segment for the first half of 2021 consisted of $6 million of litigation charges, $2 million of purchase accounting adjustments, $1 million of transaction and integration costs, and $1 million of restructuring costs.
+Added: Segment financial results attributable to common shareholders $ 720 $ 380 $ 340 90%
+Added: We recognized an additional $44 million of Adjusted EBITDA in the Vacation Ownership segment during the nine months ended September 30, 2022, as a result of the Alignment.
+Added: Certain items in the Vacation Ownership segment for the first three quarters of 2022 consisted primarily of $36 million of gains and other income, net (including $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, and $3 million related to business interruption insurance proceeds), $6 million of revenue associated with expired or forfeited deposits on pre-acquisition preview packages, and $5 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International, partially offset by $13 million of purchase accounting adjustments, $7 million of litigation charges, and $3 million of miscellaneous other transaction costs, $3 million of miscellaneous other adjustments, and $1 million of impairment charge.
+Added: Certain items in the Vacation Ownership segment for the first three quarters of 2021 consisted primarily of $7 million of litigation charges, $7 million of purchase accounting adjustments, and $2 million of miscellaneous other transaction costs, partially offset by $1 million of miscellaneous other adjustments.
Exchange & Third-Party Management
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Segment adjusted EBITDA $ 39 $ 35 $ 4 7%
3 unchanged sentences
Segment financial results attributable to common shareholders $ 29 $ 23 $ 6 23%
−Removed: Certain items for the Exchange & Third-Party Management segment for the second quarter of 2022 consisted of $16 million of gains and other income related to the strategic decision to dispose of our VRI Americas business and $2 million of revenue associated with an early termination of a VRI management contract.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: Certain items for the Exchange & Third-Party Management segment for the third quarter of 2022 consisted of $2 million of foreign currency translation losses, partially offset by $1 million of gains and other income related to the strategic disposition of our VRI Americas business.
+Added: Certain items for the Exchange & Third-Party Management segment for the third quarter of 2021 consisted of $1 million of COVID-19 related restructuring.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Segment adjusted EBITDA $ 117 $ 113 $ 4 2%
3 unchanged sentences
Segment financial results attributable to common shareholders $ 108 $ 71 $ 37 50%
−Removed: Certain items for the Exchange & Third-Party Management segment for the first half of 2022 consisted of $16 million of gains and other income related to the strategic decision to dispose of our VRI Americas business and $2 million of revenue associated with an early termination of a VRI management contract.
+Added: Certain items for the Exchange & Third-Party Management segment for the first three quarters of 2022 consisted of $17 million of gains and other income related to the strategic disposition of our VRI Americas business and $2 million of revenue associated with an early termination of a VRI management contract, partially offset by $2 million of foreign currency translation losses.
+Added: Certain items for the Exchange & Third-Party Management segment for the first three quarters of 2021 consisted of $1 million of COVID-19 related restructuring.
Business Segments
3 unchanged sentences
Vacation Ownership
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Sale of vacation ownership products $ 444 $ 330 $ 1,179 $ 789
13 unchanged sentences
Royalty fee 28 26 84 78
+Added: Impairment 1 — 1 —
Cost reimbursements 374 328 1,026 882
5 unchanged sentences
Contract Sales
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Total consolidated contract sales $ 483 $ 380 $ 103 27%
1 unchanged sentence
Total contract sales $ 492 $ 392 $ 100 26%
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Total consolidated contract sales $ 1,383 $ 968 $ 415 43%
2 unchanged sentences
Sale of Vacation Ownership Products
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Total contract sales $ 492 $ 392 $ 100 26%
12 unchanged sentences
The higher contract sales performance reflects the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic.
−Removed: Higher settlement and resales revenues, sales incentives issued, and sales reserve activity were driven by the higher contract sales volumes.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: Higher settlement revenues and sales incentives issued were driven by the higher contract sales volumes.
+Added: The favorable reportability was primarily due to the Contract alignment that resulted in the prospective acceleration of revenue for Marriott-branded vacation ownership interests in connection with the unification of the Company’s Marriott-, Westin-, and Sheraton-branded vacation ownership products through the Abound by Marriott Vacations program of $46 million.
+Added: The increase in the sales reserve included $19 million from the Reserve alignment, which was offset by a decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses, and $14 million from the higher contract sales volumes and normal course adjustments to the sales reserve estimate.
+Added: Excluding the impact of the Alignment, Sale of vacation ownership products increased $87 million and 26%.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Total contract sales $ 1,411 $ 996 $ 415 42%
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: 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 $29 million in contract sales relating to the Welk Acquisition, which we acquired in the second quarter of 2021.
−Removed: Higher settlement and resales revenues, sales incentives issued and sales reserve activity were driven by the higher contract sales volumes as well as the Welk Acquisition.
+Added: The higher contract sales performance reflects $380 million from the continued ramp-up of the business subsequent to the initial impact of the COVID-19 pandemic and $24 million of Welk contract sales in the first quarter of 2022, which we acquired in the second quarter of 2021.
+Added: Higher settlement and resales revenues and sales incentives issued were driven by the higher contract sales volumes as well as the Welk Acquisition.
+Added: The favorable reportability was due to $46 million from the Contract alignment that resulted in the prospective acceleration of revenue for Marriott-branded vacation ownership interests in connection with the unification of the Company’s Marriott-, Westin-, and Sheraton-branded vacation ownership products through the Abound by Marriott Vacations program and $12 million from a favorable change in reportability compared to the prior year.
+Added: The increase in the sales reserve included $38 million from the higher contract sales volumes and normal course adjustments to the sales reserve estimate and $19 million from the Reserve alignment, which was offset by a decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses.
+Added: Excluding the impact of the Alignment, Sale of vacation ownership products increased $363 million and 46%.
Development Profit
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Sale of vacation ownership products $ 444 $ 330 $ 114 34%
3 unchanged sentences
Development profit margin 36.1% 28.0% 8.1 pts
−Removed: The increase in Development profit reflects $50 million as a result of higher contract sales volumes net of the sales reserve and direct variable expenses (i.e.
−Removed: cost of vacation ownership products and marketing and sales), in part from continued strong VPG and lower marketing and sales spending as a percentage of revenue, $11 million from a favorable mix of lower cost inventory being sold, $3 million of favorable product cost true-up activity, and $2 million of favorable revenue reportability.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: The increase in Development profit reflects $41 million of favorable revenue reportability (including $39 million of profit acceleration from the Contract alignment), $20 million as a result of higher contract sales volumes net of the sales reserve and direct variable expenses (i.e., cost of vacation ownership products and marketing and sales), $15 million from a favorable mix of lower cost inventory being sold, and $6 million of lower marketing and sales associated with expired or forfeited deposits on pre-acquisition preview packages, partially offset by a $14 million negative impact to development profit from the Reserve alignment.
+Added: Excluding the impact of the Alignment, Development profit increased $43 million and Development profit margin increased to 32.6%.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Sale of vacation ownership products $ 1,179 $ 789 $ 390 49%
3 unchanged sentences
Development profit margin 30.5% 21.8% 8.7 pts
−Removed: The increase in Development profit reflects $93 million as a result of higher contract sales volumes net of the sales reserve and direct variable expenses (i.e.
−Removed: cost of vacation ownership products and marketing and sales), in part from continued strong VPGs and lower marketing and sales spending as a percentage of revenue, $14 million from a favorable mix of lower cost inventory being sold, $9 million of favorable product cost true-up activity, and $4 million of favorable revenue reportability.
+Added: The increase in Development profit reflects $113 million as a result of higher contract sales volumes net of the sales reserve and direct variable expenses (i.e., cost of vacation ownership products and marketing and sales), in part from continued strong VPGs and lower marketing and sales spending as a percentage of revenue, $45 million of favorable revenue reportability (including $39 million of profit acceleration from the Revenue alignment), $29 million from a favorable mix of lower cost inventory being sold, $9 million of favorable product cost true-up activity, and $6 million of lower marketing and sales associated with expired or forfeited deposits on pre-acquisition preview packages, partially offset by a $14 million negative impact to Development profit from the Reserve alignment.
+Added: Excluding the impact of the Alignment, Development profit increased $163 million and Development profit margin increased to 29.1%.
Resort Management and Other Services Revenues, Expenses and Profit
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Management fee revenues $ 41 $ 40 $ 1 2%
5 unchanged sentences
Resort management and other services profit margin 53.2% 55.9% (2.7 pts) (5%)
−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, and higher management fees.
−Removed: attributed to budgeted expense increases at owners’ associations, as our management fees are largely calculated as a percentage of budgeted costs to operate resorts.
−Removed: Resort occupancies continued to increase subsequent to the initial impact of the pandemic as travel and tourism trends continue to recover.
−Removed: We expect resort occupancies to remain strong for the remainder of 2022 and this trend in business improvement to continue for the remainder of 2022.
−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: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+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 pricing, and higher management fees, attributed to budgeted expense increases at owners’ associations, as our management fees are largely calculated as a percentage of budgeted costs to operate resorts.
+Added: Resort occupancies continued to increase subsequent to the initial impact of the pandemic as travel and tourism continues to recover.
+Added: We expect travel, tourism, and resort occupancies to remain strong for the remainder of 2022.
+Added: The increase in resort management and other services profit reflects $2 million of higher ancillary profit and higher management fee revenues, partially offset by higher customer services expenses due to wage increases and improvements in service levels.
+Added: Ancillary profit margin remained in line with the prior year as we raised pricing and optimized our food and beverage offerings to offset wage pressures.
+Added: We expect future ancillary profit margins to remain in line with recent results.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Management fee revenues $ 124 $ 117 $ 7 6%
5 unchanged sentences
Resort management and other services profit margin 55.8% 60.2% (4.4 pts) (7%)
−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, $5 million of revenues relating to the Welk Acquisition, which we acquired in the second quarter of 2021, and higher management fees.
−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 and higher pricing, $6 million of revenues relating to the Welk Acquisition, which we acquired in the second quarter of 2021, and higher management fees.
+Added: The increase in resort management and other services profit reflects $11 million of higher ancillary profit and higher management fee revenues, partially offset by higher customer services expenses due to wage increases and improvements in service levels.
+Added: Ancillary profit margin remained in line with the prior year as we raised pricing and optimized our food and beverage offerings to offset wage pressures.
+Added: We expect future ancillary profit margins to remain in line with recent results.
Rental Revenues, Expenses and Profit
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Rental revenues $ 154 $ 121 $ 33 27%
Rental expenses (130) (97) (33) (34%)
−Removed: Rental profit $ 38 $ 15 $ 23 NM
+Added: Rental profit $ 24 $ 24 $ — (2%)
Rental profit margin 15.9% 20.6% (4.7 pts)
Three Months Ended
−Removed: June 30, 2022 June 30, 2021 Change % Change
+Added: September 30, 2022 September 30, 2021 Change % Change
Transient keys rented (1)
509,621 500,952 8,669 2%
−Removed: Average transient key rate $ 262.38 $ 230.67 $ 31.71 14%
+Added: Average transient rate $ 267.37 $ 260.00 $ 7.37 3%
Resort occupancy 88.9% 85.0% 3.9 pts
1 unchanged sentence
(1) Transient keys rented exclude those occupied through the use of plus points and preview stays.
−Removed: Rental revenues increased by $37 million due to additional transient keys rented at a higher average transient rate, partially offset by $18 million of increased rental expenses recorded as a reduction to rental revenues.
−Removed: Rental expenses decreased by $4 million attributed to $18 million of costs recorded as a reduction to rental revenues and $1 million of lower administrative expenses, partially offset by a $6 million increase in operating hotel expenses attributable to higher revenues, $5 million of higher carry costs of excess inventory on hand resulting from our fulfillment of purchase commitments in 2021 and $4 million of additional costs attributed to higher utilization in 2022 of third-party vacation offerings by owners.
+Added: Rental revenues increased $7 million due to additional transient keys rented at a higher average transient rate.
+Added: The remaining $26 million increase is attributed to the lower net down of rental revenues by rental expenses for unsold VOIs that are registered and held for sale (which is recorded net within rental revenues when proceeds are less than costs).
+Added: Rental expenses increased by $33 million attributed to a $26 million decrease in costs recorded net within rental revenues for unsold VOIs that are registered and held for sale, $5 million of additional costs attributed to higher owner utilization in 2022 of third-party vacation and other offerings, $3 million of higher carry costs of excess inventory on hand resulting from our fulfillment of purchase commitments in 2021, $3 million of higher subsidy expenses, and $1 million of higher administrative expenses, partially offset by $4 million of higher allocations of rental costs to marketing and sales expense for marketing purposes and a $1 million decrease in operating hotel expenses.
As the majority of the governmental restrictions in response to the COVID-19 pandemic that caused rental activity to decline (such as travel restrictions and quarantine requirements) have been lifted, we expect high resort occupancies throughout the remainder of 2022.
−Removed: However, we do not expect this part of our business to fully recover to pre-pandemic levels in 2022 as a result of reduced rental inventory availability due to higher owner usage as well as higher inventory carrying costs, as described above.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+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 and preview usage as well as higher inventory carrying costs, as described above.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Rental revenues $ 405 $ 308 $ 97 31%
1 unchanged sentence
Rental profit (loss) $ 94 $ 20 $ 74 NM
−Removed: Rental profit margin 27.7% NM
−Removed: Six Months Ended
−Removed: June 30, 2022 June 30, 2021 Change % Change
+Added: Rental profit margin 23.2% 6.6% 16.6 pts
+Added: Nine Months Ended
+Added: September 30, 2022 September 30, 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: Rental revenues increased by $115 million due to the increase in transient keys rented and a higher average transient rate, partially offset by $51 million of increased rental expenses recorded as a reduction to rental revenues.
−Removed: Rental expenses decreased by $10 million attributed to $51 million of costs recorded as a reduction to rental revenues and $11 million of higher allocations of rental costs to marketing and sales expense for marketing purposes partially offset by $15 million in operating hotel expenses attributable to higher revenues, $13 million of additional tidy and variable costs associated with increased transient keys rented, $8 million of higher carry costs of excess inventory on hand resulting from our fulfillment of purchase commitments in 2021, $8 million of additional costs attributed to higher utilization in 2022 of third-party vacation offerings by owners, $5 million of higher subsidy expenses, and $3 million of higher owner list for rent costs.
+Added: Rental revenues increased by $122 million due to the increase in transient keys rented and a higher average transient rate, partially offset by a $25 million lesser net down of rental revenues associated with unsold VOIs that are registered and held for sale.
+Added: Rental expenses increased by $23 million attributed to $15 million of additional costs attributed to higher owner utilization in 2022 of third-party vacation and other offerings, $14 million in operating hotel expenses attributable to higher revenues, $13 million of additional tidy and variable costs associated with increased transient keys rented, $11 million of higher carry costs of excess inventory on hand resulting from our fulfillment of purchase commitments in 2021, $8 million of higher subsidy expenses, and $1 million of higher administrative expenses, partially offset by a $25 million increase in costs recorded as a reduction to rental revenues and $14 million of higher allocations of rental costs to marketing and sales expense for marketing purposes.
Financing Revenues, Expenses and Profit
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Financing revenues 74 69 5 6%
−Removed: Financing expenses (10) (8) (2) (22%)
+Added: Financing expenses 9 (10) 19 NM
Consumer financing interest expense (14) (12) (2) (20%)
1 unchanged sentence
Financing propensity 58.7% 59.6%
−Removed: Financing revenues reflected $3 million of higher interest income as a result of a higher average notes receivable balance, a slightly higher average interest rate driven by mix of customers and brands, and $1 million of lower plus point financing incentive costs year-over-year.
+Added: Financing revenues reflect $4 million of higher interest income as a result of a higher average notes receivable balance, a slightly higher average interest rate driven by mix of customers and brands, and $1 million of lower plus point financing incentive costs year-over-year.
The higher average notes receivable balance was the result of new loan originations in excess of the amount of the continued pay-down of the existing vacation ownership notes receivable portfolio.
We expect the average notes receivable balance, and resulting interest income, to continue to increase with the expected growth in contract sales and loan originations.
−Removed: Financing expenses increased primarily due to the timing of when lien fee income is recognized.
−Removed: As we move through 2022, we expect to continue to increase our focus on sales to first-time buyers, which should further increase financing propensity.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: Financing expenses decreased $19 million due to the Reserve alignment which reduced the reserve related to our acquired vacation ownership notes receivable (recorded as a reduction of Financing expenses), offset by an increase to our reserve for originated vacation ownership notes receivable (which is recorded as a reduction of Sales of vacation ownership products).
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Financing revenues 217 196 21 10%
3 unchanged sentences
Financing propensity 54.3% 53.4%
−Removed: Financing revenues reflected $13 million of higher interest income (including $10 million due to the Welk Acquisition and $3 million as a result of a higher average vacation ownership notes receivable balance and a slightly higher average interest rate driven by mix of customers and brands) and $3 million of lower plus point financing incentive costs year-over-year.
−Removed: Financing expenses increased primarily due to the timing of when lien fee income is recognized.
−Removed: The higher financing propensity is primarily a result of the Welk Acquisition in the second quarter of 2021.
−Removed: Legacy-Welk customers have a higher financing propensity than Legacy-MVW customers.
−Removed: 2022 Second Quarter
+Added: Financing revenues reflect $18 million of higher interest income (including $10 million due to the Welk Acquisition and $8 million as a result of a higher average vacation ownership notes receivable balance and a slightly higher average interest rate driven by mix of customers and brands) and $3 million of lower plus point financing incentive costs year-over-year.
+Added: Financing expenses decreased $19 million due to the Reserve alignment which reduced the reserve related to our acquired vacation ownership notes receivable (recorded as a reduction of Financing expenses), offset by an increase to our reserve for originated vacation ownership notes receivable (which is recorded as a reduction of Sales of vacation ownership products), partially offset by lower lien fee income and higher other expenses.
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Royalty fee $ 28 $ 26 $ 2 8%
−Removed: The increase in royalty fee expense in the second quarter of 2022 included $2 million from an increase in the dollar volume of closings and $1 million from a contractual increase in the fixed portion of the royalty fee owed to Marriott International, partially offset by $1 million from an increase in sales of pre-owned inventory, which carry a lower royalty fee as compared to initial sales of our inventory (one percent versus two percent).
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: The increase in royalty fee expense in the third quarter of 2022 included $1 million from an increase in the dollar volume of closings and $1 million from a contractual increase in the fixed portion of the royalty fee owed to Marriott International.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Royalty fee $ 84 $ 78 $ 6 8%
−Removed: The increase in royalty fee expense in the first half of 2022 included $4 million from an increase in the dollar volume of closings and $2 million from a contractual increase in the fixed portion of the royalty fee owed to Marriott International, partially offset by $2 million from an increase in sales of pre-owned inventory, which carry a lower royalty fee as compared to initial sales of our inventory (one percent versus two percent).
+Added: The increase in royalty fee expense in the first three quarters of 2022 included $5 million from an increase in the dollar volume of closings and $2 million from a contractual increase in the fixed portion of the royalty fee owed to Marriott International, partially offset by $1 million from an increase in sales of pre-owned inventory, which carry a lower royalty fee as compared to initial sales of our inventory (one percent versus two percent).
Litigation Charges
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Litigation charges $ 2 $ 1 $ 1 32%
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Litigation charges $ 7 $ 7 $ — (14%)
−Removed: During the second quarter and first half of 2022, as well as the second quarter and first half of 2021, the litigation charges related primarily to projects in Europe.
+Added: During the third quarter and first three quarters of 2022, as well as the third quarter and first three quarters of 2021, the litigation charges relate primarily to business in Europe.
Gains and Other Income
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Gains and other income, net $ 1 $ — $ 1 NM
−Removed: During the second quarter of 2022, we recorded $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, partially offset by $1 million of foreign currency translation charges.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: During the third quarter of 2022, we recorded a $1 million gain from foreign currency translation.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Gains and other income, net $ 36 $ — $ 36 NM
−Removed: During the first half of 2022, we recorded $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, and $3 million related to receipt of business interruption insurance proceeds, partially offset by $1 million of foreign currency translation charges.
+Added: During the first three quarters of 2022, we recorded gains and other income of $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico and $3 million related to receipt of business interruption insurance proceeds.
Exchange & Third-Party Management
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Management and exchange $ 55 $ 59 $ 177 $ 179
4 unchanged sentences
Depreciation and amortization 8 11 24 40
+Added: Restructuring — 1 — 1
Cost reimbursements 5 9 19 38
TOTAL EXPENSES 41 54 136 178
−Removed: Gains and other income, net 16 — 16 —
+Added: (Losses) gains and other (expense) income, net (1) — 15 —
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 29 $ 23 $ 108 $ 71
Management and Exchange Profit
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Management and exchange revenue $ 55 $ 59 $ (4) (7%)
2 unchanged sentences
Management and exchange profit margin 48.1% 44.7% 3.4 pts
−Removed: The decrease in management and exchange revenue reflected $4 million of lower revenue due to the disposition of our VRI Americas business during the second quarter of 2022 and $1 million of lower Interval International transaction fee revenue due to fewer exchanges as more members chose to occupy their home resorts rather than exchange for usage through Interval International, partially offset by $2 million of 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: The decrease in management and exchange revenue reflects $8 million of lower revenue due to the disposition of our VRI Americas business during the second quarter of 2022, partially offset by $3 million of higher Interval International transaction fee revenue due to increased average exchange fees offset by lower exchanges as fewer members exchanged their home inventory for usage at another resort through Interval International and $1 million of higher management fees at Aqua-Aston managed properties due to the continued ramp-up of the business in Hawaii subsequent to the initial impact of the COVID-19 pandemic.
For Interval International, average revenue per member decreased 9% over the prior year comparable period.
−Removed: This decline was due, in part, to recently added affiliations, for which we expect exchange activity to ramp-up over time, as well as the decline in exchange revenue.
−Removed: The increase in management and exchange profit primarily reflected the higher management fees at Aqua Aston.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: This decline was due, in part, to recently added affiliations, for which we expect exchange activity to ramp-up over time, partially offset by the increase in exchange revenue.
+Added: Management and exchange profit and profit margin excluding the impact of the disposition of VRI Americas would have increased by $4 million and 15%, respectively, in the third quarter of 2022.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Management and exchange revenue $ 177 $ 179 $ (2) (1%)
2 unchanged sentences
Management and exchange profit margin 47.3% 44.9% 2.4 pts
−Removed: The increase in management and exchange revenue and profit reflects higher management fees at Aqua-Aston managed properties due to continued ramp-up of business in Hawaii subsequent to the initial impact of the COVID-19 pandemic, partially offset by lower Interval International transaction fee revenue and profit due to fewer exchanges as more members chose to occupy their home resorts rather than exchange for usage through Interval International.
−Removed: The management and exchange revenue was also negatively impacted by the disposition of our VRI Americas business during the second quarter of 2022 as discussed above.
−Removed: For Interval International, average revenue per member decreased 11% over the prior year comparable period.
−Removed: This decline was due, in part, to recently added affiliations, for which we expect exchange activity to ramp-up over time, as well as the decline in exchange revenue.
+Added: The decrease in management and exchange revenue reflects $11 million of lower revenue due to the disposition of our VRI Americas business during the second quarter of 2022, partially offset by higher management fees at Aqua-Aston managed properties due to the continued ramp-up of business in Hawaii subsequent to the initial impact of the COVID-19 pandemic.
+Added: For Interval International, revenue was in line with the prior year period while average revenue per member decreased 10% over the prior year comparable period.
+Added: This decline was due, in part, to recently added affiliations, for which we expect exchange activity to ramp-up over time.
+Added: Management and exchange profit primarily reflected the higher management fees at Aqua-Aston, partially offset by $4 million of lower profit due to the disposition of our VRI Americas business during the second quarter of 2022.
+Added: Management and exchange profit and profit margin excluding the impact of the disposition of VRI Americas would have increased by $8 million and 11%, respectively, in the nine months ended September 30, 2022.
Rental Revenues
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Rental revenues $ 11 $ 9 $ 2 25%
−Removed: Results reflect a $2 million decrease in gross Getaway revenues, which resulted from an 18% decline in transactions, partially offset by a 7% increase in the average Getaway fee.
−Removed: Rental revenues remain flat to the prior year, as rental inventory procurement costs, which are recorded net within Rental revenues, declined by $2 million.
−Removed: The decline in Getaway transactions reflected fewer owner deposits as more members chose to occupy their home resorts rather than exchange for usage through Interval International, which put pressure on the inventory available for Getaways.
−Removed: We expect the reduced exchange volume and Getaway specific inventory sourcing to continue through the remainder of the year.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: Results reflect a $2 million increase in gross Getaway revenues, which resulted from a 12% increase in transactions and an 8% increase in the average Getaway fee.
+Added: Rental inventory procurement costs, which are recorded net within Rental revenues, were in line with the prior year.
+Added: The increase in Getaway transactions reflects an increase in inventory available for Getaways.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Rental revenues $ 33 $ 32 $ 1 3%
−Removed: Results reflect a $2 million decrease in gross Getaway revenues, which resulted from a 15% decline in transactions, partially offset by an 11% increase in the average Getaway fee.
−Removed: This was partially offset by lower rental inventory procurement costs, which are recorded net within Rental revenues, of $1 million.
−Removed: The decline in Getaway transactions reflected fewer owner deposits as more members chose to occupy their home resorts rather than exchange for usage through Interval International, which put pressure on the inventory available for Getaways.
+Added: Results reflect a $1 million increase in gross Getaway revenues, driven by a 10% increase in the average Getaway fee, partially offset by an 8% decline in transactions.
+Added: Rental inventory procurement costs, which are recorded net within Rental revenues, were in line with the prior year.
+Added: The decline in Getaway transactions reflects fewer owner deposits in the first three quarters of 2022 as more members chose to occupy their home resorts rather than exchange for usage through Interval International, which put pressure on the inventory available for Getaways.
Depreciation and Amortization
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Depreciation and amortization $ 8 $ 11 $ (3) (32%)
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Depreciation and amortization $ 24 $ 40 $ (16) (40%)
−Removed: The decrease in depreciation expense in the first half of 2022 relates to a true-up made in the prior year to accelerate depreciation on a technology asset.
−Removed: Gains and Other Income
−Removed: 2022 Second Quarter
+Added: The decrease in depreciation and amortization expense in the first three quarters of 2022 relates to a true-up made in the prior year to accelerate depreciation on a technology asset.
+Added: Gains (Losses) and Other Income (Expense)
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
−Removed: Gains and other income, net $ 16 $ — $ 16 NM
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
+Added: Losses and other expense, net $ (1) $ — $ (1) NM
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Gains and other income, net $ 15 $ — $ 15 NM
−Removed: During the second quarter and first half of 2022, we recorded a $16 million gain related to the strategic decision to dispose of our VRI Americas business .
+Added: During the first three quarters of 2022, we recorded a $17 million gain related to the sale of our VRI Americas business, partially offset by $2 million of foreign currency translation.
See Footnote 3 “Acquisitions and Dispositions” for more information on the disposition of VRI Americas.
2 unchanged sentences
In addition, Corporate and Other includes the revenues and expenses from the Consolidated Property Owners’ Associations.
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Resort management and other services $ 7 $ 40 $ 44 $ 116
5 unchanged sentences
Depreciation and amortization 2 — 7 6
+Added: Litigation charges — 1 — 1
Restructuring — — — (1)
2 unchanged sentences
TOTAL EXPENSES 61 53 202 189
−Removed: (Losses) gains and other (expense) income, net (11) (2) (10) 4
+Added: Losses and other expense, net (2) (31) (12) (27)
Interest expense (34) (41) (91) (128)
2 unchanged sentences
Provision for income taxes (59) (47) (134) (63)
−Removed: Net loss (income) attributable to noncontrolling interests 1 (2) 1 (5)
+Added: Net income attributable to noncontrolling interests (1) (1) — (6)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (190) $ (198) $ (525) $ (463)
Consolidated Property Owners’ Associations
−Removed: The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance.
−Removed: Three Months Ended Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
+Added: The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance and the changes attributed to the deconsolidation of individual Consolidated Property Owners’ Associations subsequent to the third quarter of 2021.
+Added: Three Months Ended Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Resort management and other services $ 6 $ 40 $ 42 $ 116
8 unchanged sentences
Provision for income taxes — (1) — (2)
−Removed: Net loss (income) attributable to noncontrolling interests 1 (2) 1 (5)
+Added: Net income attributable to noncontrolling interests (1) (1) — (6)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ — $ — $ (3) $ 2
General and Administrative
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
General and administrative $ 62 $ 54 $ 8 13%
−Removed: For the second quarter of 2022, General and administrative expenses decreased due primarily to lower bonus expenses.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
General and administrative $ 187 $ 166 $ 21 12%
−Removed: For the first half of 2022, General and administrative expenses increased primarily due to $12 million of higher salary costs due to reduced work week programs in the prior year and a $2 million decrease in credits related to incentives under the CARES Act, partially offset by $1 million in lower overall spending.
+Added: For the third quarter of 2022 and the first three quarters of 2022, General and administrative expenses increased $8 million and $21 million, respectively, attributed to higher compensation and transformation initiative spending, including procurement and artificial intelligence capabilities.
Gains / Losses and Other Income / Expense
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
−Removed: Losses and other expense, net $ (11) $ (2) $ (9) NM
−Removed: In the second quarter of 2022, we recorded $7 million of foreign currency translation losses, a tax related charge of $3 million, and $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, partially offset by $2 million of proceeds from corporate owned life insurance.
−Removed: In the second quarter of 2021, we recorded a tax related charge of $2 million.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
−Removed: (Losses) gains and other (expense) income, net $ (10) $ 4 $ (14) NM
−Removed: In the first half of 2022, we recorded $6 million of foreign currency translation losses, a tax related charge of $3 million, and $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, partially offset by $2 million of proceeds from corporate owned life insurance.
−Removed: In the first half of 2021, we recorded $6 million of foreign currency translation gains, partially offset by a tax related charge of $2 million.
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
+Added: Losses and other expense, net $ (2) $ (31) $ 29 92%
+Added: In the third quarter of 2022, we recorded $2 million of foreign currency translation losses, and $1 million of miscellaneous losses and other expense, offset by $1 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International.
+Added: In the third quarter of 2021, we recorded losses and other expenses of $31 million, including $36 million of expense related to the early redemption of senior unsecured notes, $2 million of foreign currency translation losses, and $1 million of miscellaneous losses and other expense, partially offset by $8 million related to a true-up of a Marriott International indemnification receivable upon settlement (the true-up to the offsetting accrual is included in the Provision for income taxes line).
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
+Added: Losses and other expense, net $ (12) $ (27) $ 15 55%
+Added: In the first three quarters of 2022, we recorded $8 million of foreign currency translation losses, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, $2 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International, and $1 million of miscellaneous losses and other expense, partially offset by $2 million of proceeds from corporate owned life insurance.
+Added: In the first three quarters of 2021, we recorded losses and other expenses of $27 million, including $36 million of expense related to the early redemption of senior unsecured 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 income taxes line), and $4 million of foreign currency translation gains.
Interest Expense
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Interest expense $ (34) $ (41) $ 7 17%
−Removed: Interest expense decreased $14 million, including $12 million due to the early redemption of the 2026 Notes in 2021, $7 million due to the adoption of new accounting guidance related to our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements), and $4 million due to the early redemption of a portion of the 2025 Notes in 2021, partially offset by $5 million due to the issuance of the 2029 Notes in June 2021, $3 million of non-income tax related interest expense and $1 million of higher interest related to finance leases.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: Interest expense decreased $7 million, including $4 million of lower interest expense associated with the early redemption of a portion of senior secured notes in the third quarter of 2021, $3 million of lower interest expense associated with the early redemption of senior unsecured notes in the third quarter of 2021, $2 million of lower interest expense due to the adoption of new accounting guidance related to our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements), and $1 million of lower non-income tax related interest expense.
+Added: These decreases were partially offset by $3 million of higher interest expense due to amounts drawn on the Warehouse Credit Facility and Revolving Corporate Credit Facility, and a higher variable interest rate on the Revolving Corporate Credit Facility.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Interest expense $ (91) $ (128) $ 37 29%
−Removed: Interest expense decreased $30 million, including $25 million due to the early redemption of the 2026 Notes in 2021, $13 million due to the adoption of new accounting guidance related to our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements), and $8 million due to the early redemption of a portion of the 2025 Notes in 2021, partially offset by $11 million due to the issuance of the 2029 Notes in June 2021, $3 million of non-income tax related interest expense and $2 million of higher interest related to finance leases.
+Added: Interest expense decreased $37 million, including $28 million of lower interest expense associated with the early redemption of senior unsecured notes in the third quarter of 2021, $15 million of lower interest expense due to the adoption of new accounting guidance related to our convertible debt (see Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements), and $12 million of lower interest expense associated with the early redemption of a portion of senior secured notes in the third quarter of 2021.
+Added: These decreases were partially offset by $11 million of higher interest expense associated with senior unsecured notes issued in the second quarter of 2021, $3 million of higher interest expense related to finance leases, $2 million of higher non-income tax related interest expense, and $2 million of higher interest expense due to amounts drawn on the Warehouse Credit Facility and Revolving Corporate Credit Facility, and a higher variable interest rate on the Revolving Corporate Credit Facility.
Transaction and Integration Costs
−Removed: 2022 Second Quarter
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Transaction and integration costs $ (32) $ (26) $ (6) (25%)
−Removed: In the second quarter of 2022, Transaction and integration costs included $23 million of ILG integration related costs, $10 million of other integration costs, $2 million of Welk Acquisition and integration related costs, and $1 million of other transactions costs.
−Removed: In the second quarter of 2021, Transaction and integration costs included $25 million of ILG integration related costs, and $3 million of Welk Acquisition and integration related costs.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: In the third quarter of 2022, Transaction and integration costs included $19 million of ILG integration related costs, $3 million of other integration costs, $5 million of Welk Acquisition and integration related costs, and $5 million of other transaction and integration related costs.
+Added: In the third quarter of 2021, Transaction and integration costs included $22 million of ILG integration related costs, $3 million of Welk Acquisition and integration related costs and $1 million of other transaction and integration related costs.
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Transaction and integration costs $ (96) $ (73) $ (23) (32%)
−Removed: In the first half of 2022, Transaction and integration costs included $48 million of ILG integration related costs, $10 million of other integration costs, $5 million of Welk Acquisition and integration related costs and $1 million of other transaction costs.
−Removed: In the first half of 2021, Transaction and integration costs included $42 million of ILG integration related costs and $5 million of Welk Acquisition and integration related costs.
−Removed: 2022 Second Quarter
+Added: In the first three quarters of 2022, Transaction and integration costs included $67 million of ILG integration related costs, $13 million of other integration costs, $10 million of Welk Acquisition and integration related costs, and $6 million of other transaction and integration related costs.
+Added: In the first three quarters of 2021, Transaction and integration costs included $64 million of ILG integration related costs, $8 million of Welk Acquisition and integration related costs, and $1 million of other transaction and integration related costs.
+Added: 2022 Third Quarter
Three Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Provision for income taxes $ (59) $ (47) $ (12) (24%)
−Removed: The change in the Provision for income taxes is predominately attributable to an increase in pre-tax income for the three months ended June 30, 2022.
−Removed: 2022 First Half
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021 Change % Change
+Added: 2022 First Three Quarters
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021 Change % Change
Provision for income taxes $ (134) $ (63) $ (71) NM
−Removed: The change in the Provision for income taxes is predominately attributable to an increase in pre-tax income for the six months ended June 30, 2022.
+Added: The change in the Provision for income taxes is predominately attributable to an increase in pre-tax income for the three and nine months ended September 30, 2022.
Liquidity and Capital Resources
−Removed: Typically, our capital needs are supported by cash on hand ($0.3 billion at the end of the second 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: Typically, our capital needs are supported by cash on hand, 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.
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.
−Removed: During the first quarter of 2022, we entered into an amendment to the Revolving Corporate Credit Facility, 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.
−Removed: Subsequent to the end of the second quarter of 2022, we amended certain agreements associated with our Warehouse Credit Facility, which increased the borrowing capacity of the existing facility from $350 million to $425 million and extended the revolving period from April 21, 2023 to July 28, 2024.
−Removed: At June 30, 2022, we had $4.7 billion of total gross debt outstanding, which included $1.9 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 $10 million related to a non-interest bearing note payable.
−Removed: During the second quarter of 2022, we issued irrevocable notice of our intent to settle the 2022 Convertible Notes in cash.
−Removed: Excluding repayment of non-recourse debt, which is funded by the performance of vacation ownership notes receivable, principal repayments for the remainder of 2022 and 2023 consist of $230 million related to the 2022 Convertible Notes and $6 million related to a non-interest bearing note payable, respectively.
−Removed: At June 30, 2022, we had $686 million of completed real estate inventory on hand and $506 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.
−Removed: Our material cash requirements from known contractual or other obligations were $6 billion as of June 30, 2022, of which we expect $569 million to be payable during the second half of 2022.
−Removed: These obligations primarily relate to our debt, securitized debt, and purchase obligations.
−Removed: See “Material Cash Requirements” below for additional information.
−Removed: The following table summarizes the changes in cash, cash equivalents, and restricted cash:
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021
−Removed: Cash, cash equivalents, and restricted cash provided by (used in):
−Removed: Operating activities $ 218 $ 148
−Removed: Investing activities 15 (176)
−Removed: Financing activities (428) 716
−Removed: Effect of change in exchange rates on cash, cash equivalents, and restricted cash (2) —
−Removed: Net change in cash, cash equivalents, and restricted cash $ (197) $ 688
−Removed: Cash from Operating Activities
+Added: We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs.
+Added: At September 30, 2022, we had $4.6 billion of total gross debt outstanding, which included $2.8 billion of corporate debt (consisting of $1.1 billion of senior notes, $1.0 billion of debt under our Corporate Credit Facility, and $575 million of convertible notes), $1.8 billion of non-recourse debt associated with vacation ownership notes receivable securitizations, $83 million related to finance lease obligations, and $10 million related to a non-interest bearing note payable.
+Added: the impact of the Alignment, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio at September 30, 2022 was 2.8x, which is within our targeted 2.5x to 3.0x leverage range.
+Added: We have no material maturities of corporate debt until 2025.
+Added: At the end of the third quarter of 2022, our corporate debt, including the impact of interest rate hedges, had a weighted average interest rate of 3.9% and 83% accrued interest at a fixed rate.
+Added: Sources of Liquidity
+Added: Cash from Operations
Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) net cash generated from our rental and resort management and other services operations.
−Removed: Outflows include spending for the development of new phases of existing resorts, the acquisition of additional inventory, enhancement of our inventory exchange network of resorts and related technology infrastructure and funding our working capital needs.
+Added: Vacation Ownership Notes Receivable Securitizations
+Added: We periodically securitize, without recourse, through bankruptcy remote special purpose entities, the majority of the notes receivable originated in connection with the sale of vacation ownership products to institutional investors in the asset-backed securities (“ABS”) term securitization market.
+Added: These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes.
+Added: In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable.
+Added: With each vacation ownership notes receivable securitization, we may retain a portion of the securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized vacation ownership notes receivable or, in some cases, over-collateralization and cash reserve accounts.
+Added: Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default.
+Added: As of November 3, 2022, we have completed two term securitization transactions in 2022 resulting in net proceeds of $621 million.
+Added: Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable.
+Added: If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured.
+Added: During the third quarter of 2022, and as of September 30, 2022, we had 14 term securitization transactions outstanding, all of which were in compliance with their respective required parameters.
+Added: Since 2000, we have issued approximately $8 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.
+Added: On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize, on a revolving non-recourse basis, eligible consumer loans derived from certain vacation ownership sales.
+Added: Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur at least once per year.
+Added: Our Warehouse Credit Facility, as amended during the third quarter of 2022, provides for up to $425 million of aggregate borrowings through July 28, 2024.
+Added: As of September 30, 2022, $142 million of gross vacation ownership notes receivable were eligible for securitization.
+Added: Revolving Corporate Credit Facility
+Added: Our Revolving Corporate Credit Facility provides for up to $750 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit and acquisitions and expires on March 31, 2027.
+Added: At September 30, 2022, $230 million of debt principal was outstanding on our Revolving Corporate Credit Facility, the proceeds of which were used to repay the 2022 Convertible Notes which matured on September 15, 2022, and $1 million of le tters of credit were outstanding.
+Added: See Footnote 13 “Debt” to our Financial Statements for more information on interest rates pertaining to this facility.
+Added: Issuance of Senior Notes and Convertible Debt
+Added: Our ability to access the public debt markets through the issuance of senior notes and convertible debt remained strong during the COVID-19 pandemic.
+Added: We accessed the public debt markets every year between 2017 and 2021, including a $500 million senior note issuance during the height of the COVID-19 pandemic in May 2020.
We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts.
Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners’ associations and certain annual compensation-related outflows.
−Removed: 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.
−Removed: 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 collections of vacation ownership notes receivable, higher sales and rental deposits due to the continued ramp-up of the business, and higher operational expense accruals, partially offset by timing of certain employee benefit payments and recognition of previously deferred revenues.
−Removed: 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: 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 acquisitions and development.
+Added: Cash and cash equivalents on hand at September 30, 2022 totaled $294 million, a decrease of $48 million from December 31, 2021, primarily reflecting the repurchase of common stock of $528 million, payment of dividends of $75 million and repayments of securitized debt in excess of new borrowings of $46 million, capital expenditures for property and equipment (excluding inventory) of $36 million, $13 million related to debt issuance costs and payments on finance leases, and $23 million for payment of withholding taxes on vesting of restricted stock units offset by $380 million associated with net cash and cash equivalents provided by operating activities, and investing cash inflow related to the disposition of subsidiaries of $94 million.
+Added: In addition to net income or loss and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:
Inventory Spending Less Than (In Excess of) Cost of Sales
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021
Inventory spending $ (108) $ (101)
Purchase of vacation ownership units for future transfer to inventory (12) (99)
−Removed: Inventory costs 118 90
+Added: Cost of sales 183 159
Inventory spending less than (in excess of) cost of sales $ 63 $ (41)
−Removed: While we have significant excess 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: While we have significant excess inventory on hand, we will continue to selectively pursue growth opportunities 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.
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.
−Removed: Through our existing vacation ownership interest repurchase program, we proactively acquire previously sold vacation ownership interests at lower costs than would be required to develop new inventory.
−Removed: By repurchasing inventory, we expect to be able to help stabilize the future cost of vacation ownership products.
−Removed: Our spending for real estate inventory in the first half of 2022 was lower than real estate inventory costs and was primarily related to our vacation ownership interest repurchase program.
−Removed: We acquired a higher amount of previously sold
−Removed: vacation ownership interests in the first half of 2022 due to the reinstatement of our vacation ownership interest repurchase program that was suspended as part of the cash preservation measures implemented in response to the COVID-19 pandemic.
−Removed: We expect inventory spending to be less than cost of sales for the remainder of 2022 as we intend to repurchase less inventory and provided we are able to negotiate a capital efficient inventory arrangement under which a third party will develop the Waikiki property we are committed to purchase and agree to resell it to us at a later date.
+Added: In addition, we may develop inventory in key markets where opportunities generate acceptable risk adjusted returns.
+Added: Through our existing vacation ownership interest repurchase program, we proactively acquire previously sold vacation ownership interests from owners’ associations and individual owners at lower costs than would be required to develop new inventory.
+Added: Among other reasons, by repurchasing inventory, we expect to be able to help stabilize the future cost of vacation ownership products.
+Added: Our spending for real estate inventory in the first three quarters of 2022 was lower than cost of sales and was primarily related to our vacation ownership interest repurchase program.
+Added: We acquired a higher amount of previously sold vacation ownership interests in the first three quarters of 2022 due to the reinstatement of our vacation ownership interest repurchase programs that were suspended as part of the cash preservation measures implemented in response to the COVID-19 pandemic.
+Added: We expect inventory spending to be less than cost of sales for the last quarter of 2022.
+Added: During the third quarter of 2022, we also amended the terms of a capital efficient inventory arrangement, under which a third party will develop the Waikiki property that we are committed to purchase and agree to resell it to us over time commencing in 2024.
See Footnote 16 “Variable Interest Entities” to our Financial Statements for more information.
−Removed: Vacation Ownership Notes Receivable Collections (Less Than) In Excess of Originations
−Removed: Six Months Ended
−Removed: ($ in millions) June 30, 2022 June 30, 2021
+Added: Vacation Ownership Notes Receivable Collections Less Than Originations
+Added: Nine Months Ended
+Added: ($ in millions) September 30, 2022 September 30, 2021
Vacation ownership notes receivable collections — non-securitized $ 91 $ 137
1 unchanged sentence
Vacation ownership notes receivable originations (728) (545)
−Removed: Vacation ownership notes receivable collections (less than) in excess of originations $ (118) $ 42
−Removed: Vacation ownership notes receivable collections increased during the first half of 2022, as compared to the first half of 2021, due to an increase in the portfolio of outstanding vacation ownership notes receivable, reflecting the continued ramp up of sales and higher financing propensity (52% for the first half of 2022, compared to 49% for the first half of 2021).
−Removed: Cash from Investing Activities
−Removed: Acquisition of a Business, Net of Cash and Restricted Cash Acquired
−Removed: Net cash outflows of $157 million in the first half of 2021 were due to the Welk Acquisition.
−Removed: See Footnote 3 “Acquisitions and Dispositions” to our Financial Statements for more information.
−Removed: Proceeds from Disposition of Subsidiaries, Net of Cash and Restricted Cash Transferred
−Removed: Proceeds from disposition of subsidiaries, net of cash and restricted cash transferred of $93 million in the first half of 2022 were due to the disposition of various subsidiaries, including $55 million for the VRI Americas business entities and $38 million for the entities that owned and operated the hotel in Puerto Vallarta, Mexico.
−Removed: See Footnote 3 “Acquisitions and Dispositions” to our Financial Statements for more information.
−Removed: Capital Expenditures for Property and Equipment
−Removed: In the first half of 2022, capital expenditures for property and equipment included $23 million to support business operations (including $15 million for ancillary and other operations assets and $7 million for sales locations) and $1 million for technology.
−Removed: In the first half of 2021, capital expenditures for property and equipment of $11 million included $8 million to support business operations (including $5 million for ancillary and other operations assets and $3 million for sales locations) and $3 million for technology.
−Removed: Issuance of Note Receivable to VIE
−Removed: During the second quarter of 2022, in connection with the amendment of an inventory purchase commitment, we extended a loan to a VIE, which we do not consolidate, for $47 million.
−Removed: The loan is due in full upon the earlier of either a sale of the property, including a sale to us, or an amendment and restatement of our purchase commitment, one of which is expected to occur in 2022.
−Removed: See Footnote 16 “Variable Interest Entities” to our Financial Statements for more information.
−Removed: Cash from Financing Activities
−Removed: Borrowings from / Repayment of Debt Related to Securitization Transactions
−Removed: During the first quarter of 2022, we securitized vacation ownership notes receivable under our Warehouse Credit Facility.
−Removed: The carrying amount of the vacation ownership notes receivable securitized was $125 million.
−Removed: The average advance rate was 81%, which resulted in gross proceeds of $102 million.
−Removed: Net proceeds were $101 million due to the funding of reserve accounts of $1 million.
−Removed: During the second quarter of 2022, we completed the securitization of a pool of $383 million of vacation ownership notes receivable.
−Removed: Approximately $342 million of the vacation ownership notes receivable were purchased by the 2022-1 LLC during the second quarter of 2022.
−Removed: Of the $375 million in proceeds from the transaction, $40 million was held by the 2022-1 LLC as of June 30, 2022 and released subsequently as it purchased all of the remaining loans.
−Removed: In addition, approximately $98 million was used to repay all outstanding amounts previously drawn under our Warehouse Credit Facility, approximately $7 million was used to pay transaction expenses and fund required reserves, and the remaining $176 million will be used for general corporate purposes.
−Removed: In connection with this securitization, we redeemed the remaining vacation ownership loan backed notes, issued in a prior securitization, for approximately $38 million;
−Removed: the majority of the loans acquired through the redemption were purchased by the 2022-1 LLC.
−Removed: As of June 30, 2022, $106 million of gross vacation ownership notes receivable were eligible for securitization.
−Removed: Proceeds from / Repayments of Debt
−Removed: All proceeds from and repayments of debt during the first half of 2022 were related to borrowings from and repayments of our Corporate Credit Facility.
−Removed: 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.
−Removed: No principal payments were made on our Term Loan during the first half of 2022.
−Removed: During the first half of 2022, we borrowed and repaid $125 million under our Revolving Corporate Credit Facility.
−Removed: There were no borrowed amounts outstanding under our Revolving Corporate Credit Facility as of June 30, 2022.
−Removed: As of June 30, 2022, w e had $1 million of le tters of credit outstanding under our Revolving Corporate Credit Facility.
−Removed: During the first half of 2021, we repaid $100 million of the amount outstanding under the Term Loan.
−Removed: We had no borrowings or repayments under our Revolving Corporate Credit Facility during the first half of 2021.
−Removed: Finance Lease Payment
−Removed: During the first half of 2022, we paid $2 million related to our finance lease obligations for technology and business operations equipment.
−Removed: Debt Issuance Costs
−Removed: During the first half of 2022, we paid $9 million of debt issuance costs, which included $5 million associated with the vacation ownership notes receivable securitization completed in 2022 and $4 million associated with an amendment to the Revolving Corporate Credit Facility, which is further discussed in Footnote 13 “Debt” to our Financial Statements.
−Removed: During the first half of 2021, we paid $15 million of debt issuance costs, which included $6 million associated with the vacation ownership notes receivable securitization we completed in 2021, $7 million associated with the issuance of the 2029 Notes, $1 million associated with the issuance of the 2026 Convertible Notes, and $1 million associated with the amendment of a waiver to the agreement that governs our Corporate Credit Facility.
+Added: Vacation ownership notes receivable collections less than originations $ (259) $ (13)
+Added: The increase in sales of vacation ownership products subsequent to the COVID-19 pandemic combined with an increase in financing propensity (54% in the first three quarters of 2022 compared to 53% in the three quarters of 2021) outpaced collections of vacation ownership notes receivable.
Repurchase of Common Stock
3 unchanged sentences
As of December 31, 2021 17,681,395 $ 1,418 $ 80.17
−Removed: For the first half of 2022 2,187,336 312 143.02
−Removed: As of June 30, 2022 19,868,731 $ 1,730 $ 87.09
−Removed: See Footnote 14 “Shareholders' Equity” to our Financial Statements for further information related to our share repurchase program, including the additional share repurchase authorization and extension approved by our Board of Directors during the first half of 2022.
−Removed: We distributed cash dividends to holders of our common stock during the first half of 2022 as follows:
+Added: For the first three quarters of 2022 3,852,726 528 137.16
+Added: As of September 30, 2022 21,534,121 $ 1,946 $ 90.37
+Added: See Footnote 14 “Shareholders' Equity” to our Financial Statements for further information related to our current share repurchase program, including the additional share repurchase authorization and extension approved by our Board of Directors during the first three quarters of 2022.
+Added: We distributed cash dividends to holders of our common stock during the first three quarters of 2022 as follows:
Declaration Date Shareholder Record Date Distribution Date Dividend per Share
2 unchanged sentences
May 12, 2022 May 26, 2022 June 9, 2022 $0.62
+Added: We declared cash dividends to holders of our common stock during the third quarter of 2022, and distributed such cash dividends subsequent to the end of the third quarter of 2022 as follows:
+Added: Declaration Date Shareholder Record Date Distribution Date Dividend per Share
+Added: September 8, 2022 September 22, 2022 October 6, 2022 $0.62
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to Board approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant.
3 unchanged sentences
Material Cash Requirements
−Removed: The following table summarizes our future material cash requirements from known contractual or other obligations as of June 30, 2022:
+Added: The following table summarizes our future material cash requirements from known contractual or other obligations as of September 30, 2022:
Payments Due by Period
35 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 June 30, 2022 and December 31, 2021, and for the six months ended June 30, 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.
+Added: The following tables present consolidating financial information as of September 30, 2022 and December 31, 2021, and for the nine months ended September 30, 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 June 30, 2022
+Added: As of September 30, 2022
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
52 unchanged sentences
Condensed Consolidating Statements of Income
−Removed: Six Months Ended June 30, 2022
+Added: Nine Months Ended September 30, 2022
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
16 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.