Marriott Vacations Worldwide

2021
ANNUAL 
REPORT

TO OUR 
VALUED 
STOCK-
HOLDERS

When reflecting on the last 10 years at Marriott Vacations Worldwide and 
all that we’ve accomplished, growth and gratitude come to mind. We have 
evolved and grown exponentially, which can be attributed to the resilience 
of our business model, the dedication of our more than 20,000 associates 
around the globe who embody our warm and caring culture, and the 
continued loyalty and trust of our Owners, members, and guests. 

As we look back on 2021, we also pause to think about how far we’ve 
come over the last 10 years, from being the first major pure-play 
independent public company in the vacation ownership field to today being 
so much more than vacation ownership. With over 120 vacation ownership 
resorts, approximately 700,000 Owner families, nearly 3,200 affiliated 
resorts in our exchange network and membership programs in over 90 
nations, and servicing over 150 other resorts and lodging properties, we 
are 100 percent focused on providing leisure vacation experiences.

With this significant growth, our brand portfolio today encompasses some 
of the most widely recognized, respected, and trusted brands in travel 
and hospitality — all known for their high quality and for having their own 
special story. As a result, we are better positioned than ever to continue 
to curate and provide unparalleled vacation experiences to our Owners, 
members, and guests.

Our annual financial performance in 2021 has been nothing short of 
remarkable given the continued impact of the COVID-19 pandemic. We 
ended the year on a strong note, growing contract sales by 7% sequentially 
in the fourth quarter to $406 million, exceeding 2019 levels for the first 
time since the pandemic started. We generated nearly $1.4 billion in 
consolidated contract sales for full year 2021. Overall, we posted $3.9 
billion in total revenue and $657 million in Adjusted EBITDA for the full  
year 2021. 

On the people side, we were recognized as a 2021 Best Employer by 
Kincentric in seven countries, seeing strong levels of overall engagement 
and areas of strength defined by our associates as acting with integrity, 
modeling the company’s core values, taking care of the community, and 
demonstrating commitment to inclusion and diversity. The latter of which 
exceeds many external diversity benchmarks — with women comprising 
46% of management-level positions in the U.S. and people of color, 41%. 

Looking ahead, we will continue investing in our long-term growth. We are 
expanding our use of new technology to enhance the customer experience, 
evolving our core vacation ownership product, expanding and enhancing 
our Hyatt Vacation Ownership portfolio, and broadening our exchange 
business through new affiliations with leading travel partners. In addition, 
we are setting new standards of excellence and, with a dedicated focus 
on environmental, social, and governance issues, we will be reporting our 
progress in an ongoing, transparent way, building on our history and culture 
of taking care of people.

On behalf of the Board of Directors and our incredible associates around 
the globe, thank you for supporting Marriott Vacations Worldwide. If the 
past 10 years have proven anything, it’s that people appreciate their time 
with family and friends and want to go on vacations. As a company whose 
sole purpose is providing travelers great vacation experiences, we couldn’t 
be in a better position and look forward to a bright future.

Bill Shaw

Chairman of 
the Board

Steve Weisz

CEO 

SCAN QR 
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10-YEAR 
ANNIVERSARY 
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REVENUES

NEARLY

$3.9B

CONSOLIDATED CONTRACT SALES

NEARLY

$1.4B

ADJUSTED EBITDA

$657M

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, 2021

or

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

For the transition period from

to

Commission File No. 001-35219

Marriott Vacations Worldwide Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)
9002 San Marco Court Orlando FL
(Address of principal executive offices)

45-2598330

(I.R.S. Employer
Identification No.)
32819
(Zip Code)

Registrant’s Telephone Number, Including Area Code (407) 206-6000

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

Title of Each Class
Common Stock, $0.01 Par Value

Trading Symbol(s)
VAC

Name of Each Exchange on Which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

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

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

Accelerated filer
Smaller reporting company
Emerging growth company

☐
☐
☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒

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

The aggregate market value of shares of common stock held by non-affiliates at June 30, 2021, was $6,667,644,233. There were 42,104,128
shares of common stock outstanding as of February 22, 2022.

Portions of the Proxy Statement prepared for the 2022 Annual Meeting of Shareholders are incorporated by reference into Part III of this
report.

DOCUMENTS INCORPORATED BY REFERENCE

TABLE OF CONTENTS

Part I.

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A.

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B.

Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Item 3.

Item 4.

Part II.

Item 5.

Item 6.

Item 7.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 8.

Item 9.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . .

Item 9A.

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9B.

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . .

Part III.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Part IV.

Item 15.

Item 16.

Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . .

Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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140

Throughout this Annual Report on Form 10-K (this “Annual Report”), we refer to Marriott Vacations Worldwide
Corporation, together with its consolidated subsidiaries, as “Marriott Vacations Worldwide,” “MVW,” “we,” “us,” or “the
Company.”

In order to make this Annual Report easier to read, we refer throughout to (i) our Consolidated Financial Statements as

our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our Consolidated
Balance Sheets as our “Balance Sheets” and (iv) our Consolidated Statements of Cash Flows as our “Cash Flows.” References
throughout to numbered “Footnotes” refer to the numbered Notes to our Financial Statements that we include in Part II, Item 8.
“Financial Statements and Supplementary Data” of this Annual Report. When discussing our properties or markets, we refer to
the United States, Mexico, Central America, and the Caribbean as “North America.”

Additionally, throughout this Annual Report, we refer to brands that we own, as well as those brands that we license,

as our brands. All brand names, trademarks, service marks and trade names cited in this report are the property of their
respective owners, including those of other companies and organizations. Solely for convenience, trademarks, trade names and
service marks referred to in this Annual Report may appear without the ® or TM symbols, however such references are not
intended to indicate in any way that MVW or the owner, as applicable, will not assert, to the fullest extent under applicable law,
all rights to such trademarks, trade names and service marks.

Brand names, trademarks, service marks and trade names that we own or license from Marriott International, Inc. or its
affiliates (“Marriott International”) include Marriott Vacation Club®, Marriott Vacation Club DestinationsTM, Marriott Vacation
Club PulseSM, Marriott Grand Residence Club®, Grand Residences by Marriott®, The Ritz-Carlton Destination Club®, Westin®,
Sheraton®, and (to a limited extent) St. Regis® and The Luxury Collection®. Marriott International’s affiliates include Starwood
Hotels and Resorts Worldwide, Inc. (“Starwood”) and The Ritz-Carlton Hotel Company, L.L.C. (“The Ritz-Carlton Hotel
Company”). We also refer to Marriott International’s Marriott Bonvoy® customer loyalty program as “Marriott
Bonvoy.” “Hyatt Vacation Ownership” business refers to our group of businesses using the Hyatt® brand in the vacation
ownership business pursuant to an exclusive, global master license agreement with a subsidiary of Hyatt Hotels Corporation
(“Hyatt”). We also refer to Hyatt’s World of Hyatt® customer loyalty program as “World of Hyatt.”

In early 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic

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

On April 1, 2021, we completed the acquisition of Welk Hospitality Group, Inc. (“Welk”) through a series of
transactions (the “Welk Acquisition”), after which Welk became our indirect wholly-owned subsidiary. The Financial
Statements in this report for fiscal year 2021 include Welk’s results of operations for the last three quarters of 2021, and reflect
the financial position of our combined company at December 31, 2021. We refer to the business and brands that we acquired
from Welk as “Legacy-Welk.” In addition, as part of the Welk Acquisition, we acquired a short-term license to use the Welk
brand in connection with the continued operations of the Welk business. We intend to rebrand all Welk resorts as Hyatt-branded
resorts once all necessary approvals are obtained.

In 2018, we completed the acquisition of ILG, LLC, formerly known as ILG, Inc. (“ILG”), through a series of
transactions (the “ILG Acquisition”), after which ILG became our indirect wholly-owned subsidiary. We refer to our business
associated with brands that existed prior to the ILG Acquisition as “Legacy-MVW” and to ILG’s business and brands that we
acquired as “Legacy-ILG.” The businesses acquired from ILG that we currently operate as part of our Vacation Ownership
business include Vistana Signature Experiences (“Vistana”), which includes vacation ownership products branded as Sheraton
or Westin, and Hyatt Vacation Ownership. The businesses acquired from ILG that we currently operate as part of our Exchange
& Third-Party Management business include Aqua-Aston Hospitality (“Aqua-Aston”), Interval International, Trading Places
International (“TPI”), and Vacation Resorts International (“VRI”).

By referring to our corporate website, www.marriottvacationsworldwide.com, or any other website, we do not

incorporate any such website or its contents in this Annual Report.

1

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

We make forward-looking statements throughout this Annual Report, including in, among others, the sections entitled

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

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from

those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future
performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such
as: the continuing effects of the COVID-19 pandemic, including variations in demand for vacation ownership and exchange
products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines
or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including
its short and longer-term impact on the demand for travel and on consumer confidence; the impact of the availability and
distribution of effective vaccines on the demand for travel and consumer confidence; the effectiveness of available vaccines
against variants of the virus, including the Delta and Omicron variants; the pace of recovery following the COVID-19 pandemic
or as effective treatments or vaccines become widely available; the availability of capital to finance growth; the effects of steps
we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts
due to the COVID-19 pandemic; political or social strife, and other matters referred to under the heading “Risk Factors”
contained herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a
result of new information, future events, or otherwise. You should not put undue reliance on any forward-looking statements in
this Annual Report. We do not have any intention or obligation to update forward-looking statements after the date of this
Annual Report, except as required by law.

The risk factors discussed in “Risk Factors” in this Annual Report could cause actual results to differ materially from

those expressed or implied in forward-looking statements in this Annual Report. There may be other risks and uncertainties that
we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position,
results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-
looking statements.

PART I

Item 1.

Overview

Business

We are a leading global vacation company that offers vacation ownership, exchange, rental and resort and property

management, along with related businesses, products and services. As the first hospitality-branded vacation ownership
company, Marriott Vacations Worldwide helped establish the industry and was the first major pure-play independent, public
company in the field. Today we are more than a vacation ownership company; we are about vacation experiences. We are a
global leader in vacation ownership with some of the most iconic brands in the industry. We are the exclusive worldwide
developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand
Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Residence Club brands, as well as under
Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand. We are also the exclusive worldwide
developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, and
have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton
Residences brand. We have a license to use the St. Regis brand for specified fractional ownership products. In addition, as part
of our acquisition of Welk Resorts, we intend to rebrand all Welk resorts as Hyatt-branded resorts once all necessary approvals
are obtained. In the exchange arena, Interval International is our high-quality membership brand that serves as the gateway to
unparalleled vacation experiences around the world, including access to its affiliated resorts.

2

Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management.
We have been an independent public company since our November 2011 spin-off from Marriott International (the “Marriott
Spin-Off”).

($ in millions)

Segment Revenue

% of Segment Revenue

Vacation Ownership . . . . . . . . . . . . . . . . . . . . . . $

Exchange & Third-Party Management . . . . . . . .

Total Segment Revenue . . . . . . . . . . . . . . . . . $

3,539

320

3,859

92%

8%

100%

2021

COVID-19 Pandemic Update

The COVID-19 pandemic has caused significant disruptions in international and U.S. economies and markets. Our

results of operations from 2021 and 2020 reflect significantly adverse impacts related to the COVID-19 pandemic. At this time,
our businesses continue to recover, and nearly all of our sales centers, resorts, and other properties have reopened. While
financial results for certain areas of our business remain below pre-pandemic levels, we continued to experience significant
sequential improvement during each quarter of 2021, with certain fourth quarter 2021 results exceeding pre-pandemic levels.
We expect improvement to continue across our businesses during 2022 as urban markets continue to recover, international
travel restrictions subside, and we continue to strengthen our digital infrastructure, grow online tour packages, and enhance
customer experiences. Because demand for our products and services has increased and we expect it to continue to increase, in
mid-year 2021, we ceased our workforce reduction plans and instead implemented workforce recalls, attraction and retention
plans. We discuss the COVID-19 pandemic and its current and potential future implications in this report; however, the
COVID-19 pandemic, and any recovery therefrom, continues to evolve and its further potential impacts on our business in the
future remain uncertain. We continue to closely monitor and seek to manage the ongoing effects of the COVID-19 pandemic on
our business and operations, and to adapt our operations.

The Vacation Ownership Industry

The vacation ownership industry (also known as the timeshare industry) enables customers to share ownership and use

of fully-furnished vacation accommodations. Typically, a purchaser acquires an interest (known as a “vacation ownership
interest” or a “VOI”) that is either a real estate ownership interest (known as a “timeshare estate”) or a contractual right-to-use
interest (known as a “timeshare license”) in a single resort or a collection of resort properties. In the United States, most
vacation ownership products are sold as timeshare estates, which can be structured in a variety of ways, including a deeded real
estate interest in a specified accommodation unit, an undivided interest in a building or an entire resort, or a beneficial interest
in a trust that owns one or more resort properties. By purchasing a vacation ownership interest, owners make a commitment to
vacation. For many purchasers, vacation ownership provides an attractive alternative to traditional lodging accommodations
(such as hotels, resorts and condominium rentals). In addition to avoiding the volatility in room rates to which traditional
lodging customers are subject, vacation ownership purchasers enjoy accommodations that are, on average, more than twice the
size of traditional hotel rooms and typically have more features, such as kitchens and separate living areas. Purchasers who
might otherwise buy a second home find vacation ownership a preferable alternative because it is more affordable and reduces
maintenance and upkeep concerns, and because they are interested in buying a lifetime of vacations.

Typically, developers sell vacation ownership interests for a fixed purchase price that is paid in full at closing or

financed with a loan. Many vacation ownership companies provide financing or facilitate access to third-party bank financing
for customers. Vacation ownership resorts are often operated by a nonprofit owners’ association of which owners of vacation
ownership interests are members. Most owners’ associations are governed by a board of directors that includes owners and
which may include representatives of the developer. Some vacation ownership resorts are held through a trust structure in
which a trustee holds title and manages the property. The board of the owners’ association, or trustee, as applicable, typically
delegates much of the responsibility for managing the resort to a management company, which is often affiliated with the
developer.

After the initial purchase, most vacation ownership programs require the owner of the vacation ownership interest to

pay an annual maintenance fee. This fee represents the owner’s allocable share of the costs and expenses of operating and
maintaining the vacation ownership property and providing program services. This fee typically covers expenses such as
housekeeping, landscaping, taxes, insurance, and resort labor, a property management fee payable to the management company
for providing management services, and an assessment to fund a capital asset reserve account used to renovate, refurbish and
replace furnishings, common areas and other assets (such as parking lots or roofs) as needed over time. Owners typically
reserve their usage of vacation accommodations in advance through a reservation system (often provided by the management
company or an affiliated entity), unless a vacation ownership interest specifies fixed usage dates and a particular unit every
year.

3

The vacation ownership industry has grown through expansion of established vacation ownership developers as well

as entrance into the market of well-known lodging and entertainment brands, including Marriott, Sheraton, Hilton, Hyatt,
Westin and Disney. The industry’s growth can also be attributed to increased market acceptance of vacation ownership
products, stronger consumer protection laws and the evolution of vacation ownership interests from a fixed- or floating-week
product, which provides the right to use the same property every year, to membership in multi-resort vacation networks, which
offer a more flexible vacation experience. These vacation networks often issue their members an annual allotment of points that
can be redeemed for stays at affiliated vacation ownership resorts or for alternative vacation experiences available through the
program.

To enhance the flexibility and appeal of their products, many vacation ownership developers affiliate their projects

with vacation ownership exchange service providers so that owners may exchange their rights to use the developer’s resorts in
which they have purchased an interest for accommodation at other resorts in the exchange service provider’s broader network
of properties. The two leading exchange service providers are our subsidiary Interval International, and RCI, LLC, a subsidiary
of Travel + Leisure Co. (“RCI”). Interval International’s network includes nearly 3,200 affiliated resorts, and RCI’s network
includes over 7,000 affiliated resorts, as identified on RCI’s website.

According to the American Resort Development Association (“ARDA”), a trade association representing the vacation

ownership and resort development industries, as of December 31, 2020, the U.S. vacation ownership community was comprised
of over 1,500 resorts, representing more than 200,000 units. According to ARDA, sales in the U.S. market were approximately
$4.9 billion in 2020. We believe there is considerable potential for further growth in the industry both in the U.S. and globally.

License Agreements and Intellectual Property

Our long-term license agreements include a License, Services, and Development Agreement (the “Marriott License

Agreement”) with Marriott International and a License, Services, and Development Agreement (the “Ritz-Carlton License
Agreement”) with The Ritz-Carlton Hotel Company, a subsidiary of Marriott International. Under these long-term license
agreements, we are granted the exclusive right, for the terms of the license agreements, to use certain Marriott and Ritz-Carlton
marks and intellectual property in our vacation ownership business, the exclusive right to use the Grand Residences by Marriott
marks and intellectual property in our residential real estate business, and the non-exclusive right to use certain Ritz-Carlton
marks and intellectual property in our residential real estate business.

We are also the exclusive licensee for the Sheraton and Westin brands in vacation ownership. Our license agreements
for these brands grant us the exclusive right, for the terms of the license agreements, to use certain Sheraton and Westin marks
and intellectual property in our vacation ownership business, and the right to use the St. Regis brand for specified fractional
ownership products. In addition, we assumed a license agreement with Hyatt that grants us the exclusive global use of the Hyatt
brand in connection with the Hyatt Vacation Ownership business.

As part of the Welk Acquisition, we acquired a short-term license to use the Welk brand in connection with the

continued operations of the Welk business. We intend to rebrand all Welk resorts as Hyatt-branded resorts once all necessary
approvals are obtained.

We operate in a highly competitive industry and our brand names, trademarks, service marks, trade names and logos

are very important to the marketing and sales of our products and services. We believe that our licensed brand names and other
intellectual property represent high standards of quality, caring, service and value to our customers and the traveling public. We
register and protect our intellectual property where we deem appropriate and otherwise seek to protect against its unauthorized
use.

Licensor Customer Loyalty Programs

Under our affiliation agreements with Marriott International and its affiliates, our owners who are Marriott Bonvoy

members generally have the ability to redeem their vacation ownership usage rights to access participating Marriott-, Sheraton-,
and Westin-branded properties or other products and services offered through the program.

Through our relationship with Hyatt, our owners who are members of the World of Hyatt customer loyalty program
generally have the ability to redeem their vacation ownership usage rights to access participating Hyatt-branded properties or
other products and services offered through the program.

4

Business Strategy

Our strategic goal is to further strengthen our leadership position in the vacation ownership industry. To achieve this

goal, we are pursuing the following initiatives, as we continue to focus in the years ahead on further enhancing the vacation
experience to help our members and owners live their lives to the fullest:

Drive profitable revenue growth

We intend to continue to generate growth in vacation ownership sales by leveraging our powerful mix of trusted

hospitality brands and membership programs and targeting high-quality inventory that allows us to add desirable new
destinations to our systems with new on-site sales locations. We expect to continue to generate growth through our integrated
platform that provides exclusive access to the world-class loyalty programs of Marriott International and Hyatt. We will also
continue to focus on our approximately 700,000 owner families around the world. We are concentrating on growing our tour
flow cost effectively as we seek to grow first-time buyer tours through our strategy that emphasizes new sales locations and
new marketing channels, including digital and social media marketing. As the vacation ownership business continues to grow
sales and we add new resorts, our vacation ownership revenue streams from consumer financing, management fees, rentals and
ancillary services are expected to grow.

We also plan to grow our recurring revenues which tend to be less capital intensive than sales of vacation ownership.

Our recurring revenues include management of resorts and owners’ associations, financing revenues, and membership, club and
other revenues in both our Vacation Ownership and Exchange & Third-Party Management segments. These revenues generally
are more predictable due to the relatively fixed nature of resort operating expenses and, in the case of management and
exchange revenues, contractual agreements that typically span many years and are often automatically renewable. Financing
revenues are relatively stable as the majority of these revenues generated in any given year come from prior year note
originations.

Additionally, we plan to drive revenue growth by focusing on younger customers and by accessing a wider array of

vacationers through new membership programs in our exchange businesses.

Maximize cash flow and optimize our capital structure, including by selectively pursuing capital efficient vacation

ownership deal structures

Through the use of our points-based products, we are able to more closely match inventory investment with sales pace,

thereby generating strong cash flows over time. Limiting the amount of completed inventory on hand and pursuing capital
efficient vacation ownership inventory arrangements enable us to reduce the maintenance fees that we pay on unsold inventory
and improve returns on invested capital and liquidity. In addition, we reacquire previously sold vacation ownership interests at
lower costs than would be required to develop new inventory which increases margins on our sales of vacation ownership
interests.

Our business model is characterized by steady, consistent cash flow, which is driven in part by our “asset-light” capital

efficient framework. We expect to maintain an attractive leverage profile. We intend to meet our ongoing liquidity needs
through cash on hand, operating cash flow, our $600 million revolving credit facility (the “Revolving Corporate Credit
Facility”), our $350 million non-recourse warehouse credit facility (the “Warehouse Credit Facility”), and continued access to
the asset-backed securities (“ABS”) term financing market. We believe this will enable us to maintain a level of liquidity that
provides financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic
downturns, optimize our cost of capital, and pursue strategies for returning excess capital to shareholders.

Enhance digital capabilities

A key area of focus for us is the expansion of digital tools to drive more efficient digital marketing and enhance user

experience for our owners and members of our exchange and other membership programs. We believe there is much more
innovation and growth to come, and we intend to build efficiencies in our cost of delivery of marketing and to facilitate access
to our portfolio of brands with new digital tools.

Focus on the satisfaction of our owners, members, and guests as well as the engagement of our associates

We provide high-quality vacation experiences to our owners, members, and guests around the world and we believe

that maintaining a high level of engagement across all of our customer groups is key to our success. We intend to maintain and
improve their satisfaction with our products and services, which drives incremental sales as customers choose to spend more
time at our resorts. Because our owners, members, and guests are our most cost-effective vacation ownership sales channels, we
intend to continue to leverage our strong customer satisfaction to drive higher margin sales volumes.

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From our earliest days, we have sought to create a culture that emphasizes warm and welcoming customer service and

authentic care for our associates. At Marriott Vacations Worldwide, these characteristics are two sides of the same coin. They
give meaning to our vision of helping our customers and associates live their lives to the fullest. Our caring culture unites our
associates across a wide range of backgrounds, geographies and experiences. It is this very diversity that make us “Better
Together” and that has allowed us to grow and prosper over the years.

Transform our business in connection with the integration of the ILG and Welk Acquisitions

Perhaps no aspect of our business has changed more over the years than the range of diverse vacation experiences we
provide. The dramatic shift was made possible by the ILG Acquisition in 2018 and enhanced by the Welk Acquisition in 2021.
Interval International has been our valued exchange partner since 1988 and became part of the Marriott Vacations Worldwide
family as a result of the ILG Acquisition. As we continue to further integrate the ILG and Welk businesses, we are
simultaneously working to develop new growth channels and streamline our business processes through technology. We are
focused on integrating functions, leveraging strengths across our businesses, and pursuing transformational opportunities that
can further differentiate us from our competitors. We intend to continue advancing our company analytics to encourage greater
points utilization and usage of our exchange and travel products, provide enhanced resort experiences, and create more relevant
and high value targeted leads for tour offers and vacation options. This is a multi-year process that is designed to achieve cost
savings and increase revenue opportunities that we expect will continue into 2022.

Selectively pursue compelling new business opportunities

We are positioned to explore new business opportunities, such as the continued enhancement of our exchange
programs, new management affiliations, acquisitions of existing vacation ownership and related businesses, and the creation of
new innovative travel-related products that are outside of our core vacation ownership and exchange company offerings. We
intend to selectively pursue these types of opportunities, focusing on those opportunities that drive recurring revenue and profit
streams. Prior to entering into any new business opportunity, we will evaluate its strategic fit and assess whether it is
complementary to our current business, has strong expected financial returns and complements our existing culture and
competencies.

Competitive Strengths

A leading global vacation ownership and exchange company

We are one of the world’s largest vacation ownership companies, based on number of owners, members, number of
resorts and revenues. Since becoming a standalone public company 10 years ago, our vacation ownership business has nearly
doubled in size, from 64 vacation ownership resorts and approximately 420,000 owners to over 120 vacation ownership resorts
and approximately 700,000 owner families as of the end of 2021. Our exchange networks and membership programs are
comprised of nearly 3,200 affiliated resorts and almost 1.4 million members, and we also provide management services to over
150 other resorts and lodging properties, as of the end of 2021. We believe our scale and global reach, coupled with our
renowned brands and development, marketing, sales, exchange and management expertise, help us achieve operational
efficiencies and support future growth opportunities. Our size allows us to provide owners, members, and guests with the
flexibility of a wide variety of experiences within our high-quality resort portfolio, coupled with the ease and certainty of
working with a single trusted provider. We also believe our size helps us obtain better financing terms from lenders, achieve
operational cost savings from our increased scale, and attract talented management and associates. In the exchange arena,
Interval International is the high-quality membership brand that serves as the gateway to unparalleled vacation experiences. Our
Interval International network includes members and resorts from our Marriott, Westin, Sheraton and Hyatt clubs, as well as
other high quality branded and independent resorts, that can attract developers and owners’ associations to affiliate with the
network and provide exchange opportunities for their owners.

The breadth and depth of our operations enables us to offer a variety of products and to continue to adapt those
products to the ever changing needs and preferences of our existing and future customers. For example, the tapestry of vacation
experiences we offer includes not only traditional resort experiences but also urban experiences at our Marriott Vacation Club
Pulse locations, which are unique properties that embrace the spirit and culture of their urban locations.

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Premier global brands with access to expansive customer bases

Each of our owned or licensed brands - from Marriott Vacation Club to Hyatt Residence Club, from Interval
International to Aqua-Aston, from Sheraton Vacation Club to Westin Vacation Club - is a highly respected and widely trusted
leader in the travel and hospitality industry. We are creating distinct lanes for our brands to grow within. This careful
segmentation is designed to allow each of our brands to reach its full potential, while also giving us diverse paths to growth.
Each brand has a unique history and heritage that has enriched our company immeasurably and that we are building upon to
better serve our owners, members, guests, and associates. Through the brands we license from Marriott International for use in
vacation ownership, we benefit from exclusive long-term access to members in the Marriott Bonvoy loyalty program, which
includes over 160 million members as of December 31, 2021. Similarly, through our relationship with Hyatt Corporation, we
benefit from access to members of Hyatt’s award-winning guest loyalty program, the World of Hyatt, which includes
approximately 30 million members as of December 31, 2021. We believe our access to guests with an affinity for our brands
aids our marketing efforts and significantly enhances our ability to drive future sales, as we predominantly generate vacation
ownership interest sales through brand loyalty-affiliated sales channels. We expect to continue to leverage our exclusive call
transfer arrangements, on-site marketing at Marriott and Hyatt branded hotels, and use of certain exclusive marketing rights to
increase sales across all of our Marriott-affiliated and Hyatt-affiliated vacation ownership properties, respectively.

Loyal, highly satisfied customers

We have a large, highly satisfied customer base. Owner and member satisfaction is evidenced both by positive

historical survey responses, high levels of engagement that we see in the many customer and associate care stories shared on
social media sites, and higher than industry average historical resort occupancy for our Vacation Ownership segment. We
believe that strong customer satisfaction and brand loyalty result in more frequent use of our products, increase in member
retention, and encourage owners to purchase additional products and to recommend our products to friends and family, which in
turn generates higher revenues.

Capital efficient business model providing strong free cash flow and financial flexibility

We believe that our scale, recurring revenue fee streams and enhanced margin profile will enable us to maintain

flexibility for continued organic growth, strategic acquisitions, debt repayment, and return of capital to shareholders. Our total
revenue excluding cost reimbursements derived from sources other than the sale of vacation ownership interests has increased
and continues to increase. Our Exchange & Third-Party Management businesses also create ample opportunities to realize
recurring higher-margin, fee-based revenue streams with modest required capital expenditures, enhancing our margins and free
cash flow generation over time.

We were also among the first of the major hospitality brands to move from a fixed-week, fixed-unit operating model to

a points-based system. This critical transition responded directly to consumer demand for greater flexibility and allowed us to
tap into the broader membership opportunity afforded by the industry’s exchange businesses. Our points-based vacation
ownership products allow us to utilize capital efficient structures and maintain long-term sales locations without the need to
construct additional units at each location. We are able to better manage our inventory needs, while achieving top line growth
without a need to significantly increase inventory investments. Our disciplined inventory approach and use of capital efficient
vacation ownership deal structures, including working with third parties that develop new inventory or convert previously built
units that are sold to us close to when such inventory is needed to support sales, is expected to support strong free cash flow
generation.

Long-standing track record, experienced management and engaged associates

We have been a pioneer in the vacation ownership industry since 1984, when Marriott International became the first

company to introduce a lodging-branded vacation ownership product. The story of Marriott Vacations Worldwide is one of
growth driven by innovation and exceptional vitality. Since our early days, we have sought to create a culture that emphasizes
authentic care for associates. Our seasoned management team is led by Stephen P. Weisz, our Chief Executive Officer.
Mr. Weisz has served as our Chief Executive Officer since 2011, and as our President from 1996 through December 2020. Mr.
Weisz has almost 50 years of combined experience at Marriott International and Marriott Vacations Worldwide. William J.
Shaw, the Chairman of our Board of Directors, is the former Vice Chairman, President and Chief Operating Officer of Marriott
International and spent nearly 37 years with Marriott International. Our eleven executive officers have an average of nearly 29
years of total combined experience at Marriott Vacations Worldwide, our subsidiary companies, and Marriott International. We
believe our management team’s extensive public company and vacation ownership industry experience has enabled us to
achieve solid operating results and will enable us to continue to respond quickly and effectively to changing market conditions
and consumer trends. Our management’s experience in the highly regulated vacation ownership industry also provides us with a
competitive advantage in expanding existing product forms and developing new ones that include more non-perpetual products.

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Engaged associates delivering high levels of customer service driving repeat customers

We believe that our associates provide superior customer service and this dedication to serving the customer enhances

our competitive position. A significant portion of our vacation ownership contract sales are historically to existing owners,
which enables them to enjoy longer stays and have greater flexibility in their vacation choices. Sales to existing owners
typically have significantly lower sales and marketing costs than sales to new owners. We leverage outstanding associate
engagement and strong corporate culture to deliver positive customer experiences in sales, marketing, exchange, management
and resort operations.

We survey our associates regularly through an external survey provider to understand their satisfaction and

engagement, defined as how passionate employees are about the company’s mission and their willingness to “go the extra mile”
to see it succeed. We have historically ranked highly compared to other companies participating in such surveys. Our caring
culture contributes to the long tenure of associates at both leadership and operational levels. We use the results of our annual
engagement surveys to improve the experience of our associates and to help chart their career progression. To this end, we
provide a learning-rich environment with many training and career advancement opportunities.

VACATION OWNERSHIP SEGMENT

Our Vacation Ownership segment develops, markets, sells, finances, rents, and manages vacation ownership and

related products under our licensed brands. Our vacation ownership resorts typically combine many of the comforts of home,
such as spacious accommodations with one, two and three bedroom options, living and dining areas, in-unit kitchens and
laundry facilities, with resort amenities such as large feature swimming pools, restaurants and bars, convenience stores, fitness
facilities and spas, as well as sports and recreation facilities appropriate for each resort’s unique location.

As of December 31, 2021, our Vacation Ownership segment had over 120 resorts and approximately 700,000 owner

families. The Vacation Ownership segment represented 91% of our consolidated revenue for 2021.

($ in millions)

Sale of vacation ownership products . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Resort management and other services . . . . . . . . . . . . . . . . . . . . . . . . .

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021
Vacation Ownership
Segment Revenues

1,153

470

446

268

1,202

3,539

Brands

Built upon a single hospitality brand at the time of our founding, Marriott Vacations Worldwide has grown into a

multi-branded organization with a broad, diverse portfolio of immersive vacation and leisure destinations. Our portfolio
includes a rich tapestry of some of the world’s most iconic, widely recognized and respected hospitality and travel brands. We
design, build, manage and maintain properties at upper upscale and luxury levels primarily under the following brands:

Marriott Vacation Club is a collection of upper upscale vacation ownership resorts featuring timeshare villas and

other accommodations throughout the U.S., Caribbean, Europe, Asia, and Australia. It’s about vacations with a sense of place
and belonging, providing owners and their families with the flexibility to enjoy a wide variety of vacation experiences that are
characterized by the consistent high quality and warm hospitality for which the Marriott name is known. Marriott Vacation
Club Pulse, a brand extension of Marriott Vacation Club, offers properties in the heart of vibrant cities, including San Francisco
and New York City, among others. Because of their urban locations, Marriott Vacation Club Pulse properties typically offer
limited on-site amenities and may include smaller guest rooms without separate living areas and kitchens.

Sheraton Vacation Club provides enriching and unexpected vacation experiences in fun family destinations like

Florida, South Carolina and Colorado, with activities that emphasize building and strengthening relationships. This collection of
vacation ownership resorts builds on an iconic legacy of trusted hospitality, and brings to life a warm, energetic haven for
families to gather and nurture their most precious relationships by allowing owners and guests to relax, play and experience
what the world has to offer. Sheraton Vacation Club upper upscale vacation ownership resorts are part of the Vistana Signature
Network.

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Westin Vacation Club is a collection of vacation ownership resorts located in some of the most sought-after

destinations and designed with living well in mind. From the world-renowned Heavenly Bed to an energizing
WestinWORKOUT and revitalizing experiences, every element of a vacation stay is created to leave owners and guests feeling
better than when they arrived. Westin Vacation Club upper upscale vacation ownership resorts are part of the Vistana Signature
Network.

Grand Residences by Marriott provides vacation ownership through fractional real estate and whole ownership

offerings. Grand Residences by Marriott is dedicated to providing carefree property ownership. The accommodations for this
brand are similar to those we offer under the Marriott Vacation Club brand, but the duration of the vacation ownership interest
is longer, ranging between three and thirteen weeks.

The Ritz-Carlton Destination Club is a collection of vacation ownership resorts that provide luxurious vacation

experiences for members and their families commensurate with the legacy of The Ritz-Carlton brand. The Ritz-Carlton
Destination Club resorts include luxury villas and resort amenities that offer inspirational vacation lifestyles tailored to every
member’s needs and expectations. The Ritz-Carlton Destination Club resorts typically feature two, three and four bedroom
units that usually include marble foyers, walk-in closets, custom kitchen cabinetry and luxury resort amenities such as large
feature swimming pools and access to full service restaurants and bars. On-site management and services, which usually include
daily housekeeping service, valet, in-residence dining, and access to fitness facilities as well as spa and sports facilities as
appropriate for each destination, are provided by The Ritz-Carlton Hotel Company.

The Ritz-Carlton Residences is a luxury tier whole ownership residence brand. The Ritz-Carlton Residences includes

whole ownership luxury residential condominiums co-located with The Ritz-Carlton Destination Club resorts. Owners can
typically purchase condominiums that vary in size from one bedroom apartments to spacious penthouses. Owners of The Ritz-
Carlton Residences can avail themselves of the services and facilities that are associated with the co-located The Ritz-Carlton
Destination Club resort on an a la carte basis. On-site management and services are provided by The Ritz-Carlton Hotel
Company.

St. Regis Residence Club and The Luxury Collection offer fractional interests in luxury real estate and distinctive

privileges to members who embrace the art of living in unforgettable destinations. For connoisseurs who desire the finest in
luxury living, magnificent residences exude the timeless grandeur and glamour synonymous with the illustrious past of the St.
Regis brand.

Hyatt Residence Club is a collection of vacation ownership resorts with a diverse portfolio of boutique upper upscale
residential-style retreats. Set in unique destinations from Maui, Carmel and Aspen to Sedona, San Antonio and Key West, Hyatt
Residence Club resorts deliver genuine Hyatt care. In addition, as part of the Welk Acquisition, we intend to rebrand all Welk
resorts as Hyatt-branded resorts once all necessary approvals have been obtained.

Products

Points-Based Vacation Ownership Products

We sell the majority of our products through points-based ownership programs, including Marriott Vacation Club
Destinations, Sheraton Flex, Westin Flex, Westin Aventuras, and the Hyatt Residence Club Portfolio Program. Our points-
based systems and exchange networks enable owners and members to access virtually any kind of vacation experience they
want. While the structural characteristics of each of our points-based programs differ, in each program, owners receive an
annual allotment of points representing owners’ usage rights, and owners can use these points to access vacation ownership
units across multiple destinations within their program’s portfolio of resort locations. Each program permits shorter or longer
stays than a traditional weeks-based vacation ownership product and provides for flexibility with respect to check-in days and
size of accommodations. In addition to traditional resort stays, the programs enable our owners to exchange their points for a
wide variety of innovative vacation experiences, which may include cruises, airline travel, guided tours, safaris and other
unique vacation alternatives. Owners who are members of our points-based programs typically pay annual fees in exchange for
the ability to participate in the program. In addition to points-based ownership programs that allow owners to access multiple
destinations within a single program, we offer points programs at certain resorts, such as in St. John and Hawaii, that allow
owners to access that particular single site using points in a similar use fashion to the other points-based products.

Our points programs allow owners to bank and borrow their annual point allotments, access other locations through the

applicable internal exchange programs that we operate, and access Interval International’s network of nearly 3,200 affiliated
resorts. Owners can trade their vacation ownership usage rights for Marriott Bonvoy points or World of Hyatt points, as
applicable, which can be used to access participating hotels or redeemed for airline miles or other merchandise offered through
such customer loyalty program. Through our points systems and exchange networks, owners can also use points toward
vacation experiences such as a bicycle tour, a culinary journey, an adventure cruise or a once-in-a-lifetime trip to a major
sporting event. Our points-based products offer usage in perpetuity or for a term of years and may consist of real estate interests
or a contractual right-to-use.

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Weeks-Based Vacation Ownership Products

We continue to sell Marriott Vacation Club, Westin, Sheraton and Hyatt branded weeks-based vacation ownership
products in select markets, including in countries where legal and tax constraints currently limit our ability to include those
locations in one of our existing points-based programs. Our products include multi-week vacation ownership interests in
specific Grand Residences by Marriott, St. Regis Residence Club, The Luxury Collection Residence Club, and The Ritz-Carlton
Destination Club resorts. Our weeks-based vacation ownership products in the United States and select Caribbean locations are
typically sold as fee simple deeded real estate interests at a specific resort representing an ownership interest in perpetuity,
except where restricted by leasehold or other structural limitations. We sell vacation ownership interests as a contractual right-
to-use product subject to a finite term in Asia Pacific and Europe.

Global Exchange Opportunities

Most of our vacation ownership products, including our Marriott-, Sheraton-, Westin-, and Hyatt-branded products, are

affiliated with the Interval International network, the high-quality membership brand that serves as the gateway to unparalleled
vacation experiences.

We offer our existing Marriott Vacation Club owners who hold weeks-based products the opportunity to participate,

on a voluntary basis, in Marriott Vacation Club Destinations (“MVCD”), an exchange program through which many of
MVCD’s vacation experiences are offered. All existing owners, whether or not they elect to participate in the MVCD exchange
program, retain their existing rights and privileges of vacation ownership. Owners who elect to participate in the exchange
program receive the ability to trade their weeks-based interval usage for vacation club points usage each year, typically subject
to payment of an initial enrollment fee and annual club dues. As of the end of 2021, approximately 177,000 weeks-based
owners have enrolled approximately 279,000 weeks in MVCD’s exchange program, with more than 239,000 total owners able
to use points.

The Vistana Signature Network (“VSN”) provides Westin Vacation Club and Sheraton Vacation Club owners access

to its affiliated resorts as well as the opportunity to exchange their points through the Marriott Bonvoy program to Marriott
resorts, through the Interval International network, or for a cruise. Based on the point value of the home resort interest owned,
customers can choose other VSN affiliated resorts, the type of villa, the date of travel and the length of stay. VSN members
have a priority period in which they have exclusive reservation rights for the related resort or points program without
competition from other network members. During this home resort period, they can reserve occupancy based on the season and
unit type purchased. As of December 31, 2021, VSN included more than 182,000 members.

Hyatt Residence Club provides its owners internal exchange rights among Hyatt Residence Club resorts as well as the

opportunity to trade their club points for World of Hyatt points which may be redeemed at participating Hyatt branded
properties and exchanged through the Interval International network. Owners will receive Hyatt Residence Club points if they
have not reserved at their home resort or through its points program during their allotted preference period or if they elect to
convert to points earlier. As of December 31, 2021, this points-based membership exchange system served more than 30,000
owners.

Sources of Revenue

We generate most of our revenues from four primary sources: selling vacation ownership products; managing vacation
ownership resorts, clubs, and owners’ associations; financing consumer purchases of vacation ownership products; and renting
vacation ownership inventory.

Sale of Vacation Ownership Products

Our principal source of revenue is the sale of vacation ownership interests.

Resort Management and Other Services

We generate revenue from fees we earn for managing each of our resorts. In addition, we earn revenue for providing
ancillary offerings, including food and beverage, retail, and golf and spa offerings at our resorts. We also receive annual fees,
club dues, and certain transaction-based fees from owners and other third parties, including external exchange service providers
with which we are associated.

Financing

We earn interest income on loans that we provide to purchasers of our vacation ownership interests, as well as loan

servicing and other fees.

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Rental

We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs or

as residences, or inventory that we control because our owners have elected alternative usage options permitted under our
vacation ownership programs. By using Marriott.com and other direct booking channels to rent available inventory, we are able
to reach potential new members who may already have an affinity for and loyalty to the Marriott, Sheraton, Westin and Ritz-
Carlton brands and introduce them to our products. Similarly, by using Hyatt.com and other direct booking channels to rent
available inventory, we are able to reach potential new members who may already have an affinity for and loyalty to the Hyatt
brand and introduce them to our products.

Marketing and Sales Activities

We sell our upper upscale tier vacation ownership products under our brands primarily through our worldwide network
of resort-based sales centers and certain off-site sales locations. Our vacation ownership interests are currently marketed for sale
throughout the United States and in over 30 countries around the world, targeting customers who vacation regularly with a
focus on family, relaxation and recreational activities. In 2021, over 90% of our vacation ownership contract sales originated at
sales centers that are co-located with one of our resorts. We maintain a range of different off-site sales centers, including our
central telesales organization based in Orlando and our network of third-party brokers in Latin America and Europe. We have
more than 90 global sales locations focused on the sale of vacation ownership interests. We utilize a number of marketing
channels to attract qualified customers to our sales locations, including digital and social media marketing.

We solicit our existing owners primarily while they are staying in our resorts, but also offer our owners the opportunity

to make additional purchases through direct phone sales, owner events and inquiries from our central customer service centers
located in Salt Lake City, Utah, Orlando, Florida, and Palm Springs, California. In 2021, approximately 70% of our vacation
ownership contract sales were to our existing owners. In addition, we are concentrating on growing our tour flow cost
effectively as we seek to generate more first-time buyer tours through our strategy that emphasizes adding new sales locations
and new marketing channels.

We also market to existing Marriott and Hyatt customer loyalty program members and travelers who are staying in

locations where we have like-branded resorts. We market extensively to guests in Marriott International or Hyatt hotels that are
located near one of our sales locations. We also market through call transfer arrangements with Marriott International pursuant
to which callers to certain of its reservation centers are asked if they would like to be transferred to one of our representatives
who can tell them about our products. In addition, we operate other local marketing venues in various high-traffic areas. A
significant part of our direct marketing activities is focused on prospects in the Marriott and Hyatt customer loyalty program
databases and our in-house databases of qualified prospects. We offer guests who do not buy a vacation ownership interest
during their initial tour the opportunity to purchase a return package for a future stay at our resorts. These return guests are
nearly twice as likely to purchase as a first-time visitor.

One of our key areas of focus is expanding our use of social media and digital marketing channels. We are focused on

building stronger brand reputation associations via social media audience growth and data driven content marketing.

Our sales tours are designed to provide our guests with an overview of our company and our products, as well as a
customized presentation to explain how our products and services can meet their vacationing needs. From a single week at a
fixed location to today’s abundance of getaway options, our vacation experience has undergone a remarkable metamorphosis.
The vacation experience we provide today isn’t just about a visit to a resort. It can be a bicycle tour, a culinary journey, an
adventure cruise, or a once-in-a-lifetime trip to a major sporting event. That’s why our sales force is highly trained in a
consultative sales approach designed to ensure that we meet customers’ needs on an individual basis. We hire our sales
executives based on stringent selection criteria. After they are hired, they spend a minimum of four weeks in product and sales
training before interacting with any customers. We manage our sales executives’ consistency of presentation and
professionalism using a variety of sales tools and technology and through a post-presentation survey of our guests that measures
many aspects of each guest’s interaction with us.

We believe consumers place a great deal of trust in the Marriott, Westin, Sheraton, Ritz-Carlton and Hyatt brands and

the strength of these brands is important to our ability to attract qualified prospects in the marketplace. We maintain a
prominent presence on the www.marriott.com, www.ritzcarlton.com and www.hyatt.com websites. Our proprietary sites
include www.marriottvacationsworldwide.com, www.marriottvacationclub.com, www.ritzcarltonclub.com, www.vistana.com,
www.theresidenceclub.com, and www.hyattresidenceclub.com.

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Inventory and Development Activities

We secure inventory by building additional phases at our existing resorts, reacquiring previously sold inventory in the

secondary market, reacquiring inventory as a result of owner loan or maintenance fee defaults, or developing or acquiring
inventory at resorts in strategic markets. We proactively buy back previously sold vacation ownership interests under our
repurchase programs at lower costs than would be required to develop new inventory. Efficient use of our capital is also
achieved through our points-based business model, which allows us to supply many sales locations with new inventory sourced
from a small number of resort locations.

We intend to continue to selectively pursue growth opportunities primarily in North America by targeting high-quality
inventory that allows us to add desirable new destinations to our system with new on-site sales locations in ways that optimize
the timing of our capital investments. These capital efficient vacation ownership deal structures may include working with third
parties to develop new inventory or to convert previously built units to be sold to us close to when we need such inventory.

Approximately 20% of our Vacation Ownership segment resorts are co-located with same-branded hotel properties.
Co-location of our resorts with same-branded hotels can provide several advantages from development, operations, customer
experience and marketing perspectives, including sharing amenities, infrastructure and staff, integration of services, and other
cost efficiencies. The larger campus of an integrated vacation ownership and hotel resort often can afford our owners more
varied and elaborate amenities than those that would generally be available at a stand-alone resort. Shared infrastructure can
also reduce our overall development costs for our resorts on a per unit basis. Integration of services and sharing staff and other
expenses can lower overhead and operating costs for our resorts. Our on-site access to hotel customers, including customer
loyalty program members, who are visiting co-located hotels also provides us with a cost-effective marketing channel for our
vacation ownership products.

Co-located resorts require cooperation and coordination among all parties and are subject to cost sharing and

integration agreements among us, the applicable owners’ association and managers and owners of the co-located hotel. Our
license agreements with Marriott International and Hyatt allow for the development of co-located properties in the future, and
we intend to opportunistically pursue co-located projects with them.

Owners generally can offer their vacation ownership interests for resale on the secondary market, which can create

pricing pressure on the sale of developer inventory. However, owners who purchase vacation ownership interests on the
secondary market typically do not receive all of the benefits that owners who purchase products directly from us receive. When
an owner purchases a vacation ownership interest directly from us or a resale on the secondary market, the owner receives
certain entitlements that are tied to the underlying vacation ownership interest, such as the right to reserve a resort unit that
underlies their vacation ownership interest in order to occupy that unit or exchange its use for use of a unit at another resort
through an external exchange service provider, as well as benefits that are incidental to the purchase of the vacation ownership
interest. However, the purchaser on the secondary market may not be entitled to receive certain incidental benefits such as full
access to our internal exchange programs or the right to trade their usage rights for customer loyalty program points.
Additionally, many of our vacation ownership interests provide us with a right of first refusal on secondary market sales. We
monitor sales that occur in the secondary market and exercise our right of first refusal when it is advantageous for us to do so,
whether due to pricing, desire for the particular inventory, or other factors. All owners, whether they purchase directly from us
or on the secondary market, are responsible for the annual maintenance fees, property taxes and any assessments that are levied
by the relevant owners’ association, as well as any exchange service membership dues or service fees.

Management Activities

We enter into a management agreement with the owners’ association or other governing body at our resorts and, when
a trust holds interests in resorts, with the trust’s governing body. In exchange for a management fee, we typically provide owner
account management (reservations and usage selection), housekeeping, check-in, maintenance and billing and collections
services. The management fee is typically based on either a percentage of the budgeted costs to operate such resorts or a fixed
fee arrangement. We earn these fees regardless of usage or occupancy. We also receive revenues that represent reimbursement
for certain costs we incur under our management agreements, which are principally payroll-related costs at the locations where
we employ the associates providing on-site services.

The terms of our management agreements generally range from three to ten years and are generally subject to periodic

renewal for one to five year terms. Many of these agreements renew automatically unless either party provides advance notice
of termination before the expiration of the term. When our management agreement for a branded resort is not renewed or is
terminated, the resort loses the ability to use the brand and trademarks. The owners at such resorts also lose their ability to trade
their vacation ownership usage rights for customer loyalty points and to access other resorts through one of our internal
exchange systems.

12

The Ritz-Carlton Hotel Company manages the on-site operations for The Ritz-Carlton Destination Club and The Ritz-
Carlton Residences properties in our portfolio under separate management agreements with us. We provide owners’ association
governance and vacation ownership program management services for The Ritz-Carlton Destination Club and co-located The
Ritz-Carlton Residences properties, including preparing association budgets, facilitating association meetings, billing and
collecting maintenance fees, and supporting reservations, vacation experience planning and other off-site member services. We
and The Ritz-Carlton Hotel Company typically split the management fees equally for these resorts. If a management agreement
for a resort expires or is terminated, the resort loses the ability to use the Ritz-Carlton brand and trademarks. The owners at such
resorts also lose their ability to access other usage benefits, such as the ability to exchange occupancy for customer loyalty
points, access to accommodations at other The Ritz-Carlton Destination Club resorts, preferential access to Ritz-Carlton hotels
worldwide and access to our internal exchange and vacation travel options.

Each management agreement requires the owners’ association, trust association or other governing body to provide

sufficient funds to pay for the vacation ownership program and operating costs. To satisfy this requirement, owners of vacation
ownership interests pay an annual maintenance fee. This fee represents the owner’s allocable share of the costs of operating and
maintaining the resorts or interests in the timeshare plan in which they hold a vacation ownership interest, including
management fees and expenses, taxes (in some locations), insurance, and other related costs, and the costs of providing program
services (such as reservation services). This fee includes a management fee payable to us for providing management services as
well as an assessment for funds to be deposited into a capital asset reserve fund and used to renovate, refurbish and replace
furnishings, common areas and other resort assets (such as parking lots or roofs) as needed over time. As the owner of
completed but unsold vacation ownership inventory, we also pay maintenance fees in accordance with the legal requirements of
the jurisdictions applicable to such resorts and programs. In addition, in early phases of development of a resort, we sometimes
enter into subsidy agreements with the owners’ associations under which we agree to pay costs that otherwise would be covered
by annual maintenance fees associated with vacation ownership interests or units that have not yet been built or committed to a
timeshare plan. These subsidy arrangements help keep maintenance fees at a reasonable level for owners who purchase,
especially in the early stages of development.

If an owner defaults in payment of maintenance fees or other assessments, the owners’ association typically has the

right to foreclose on or revoke the defaulting owner’s vacation ownership interest. We have arrangements with several owners’
associations to assist in reselling foreclosed or revoked vacation ownership interests in exchange for a fee, or to reacquire such
foreclosed or revoked vacation ownership interests from the owners’ associations.

Consumer Financing

We offer purchase money financing for purchasers of our vacation ownership products who meet our underwriting

guidelines. By offering or eliminating financing incentives and modifying underwriting standards, we have been able to
increase or decrease the volume of our financing activities depending on market conditions. We are not providing financing to
buyers of our residential products. We generally do not face competition in our consumer financing business to finance sales of
vacation ownership products.

In 2021, our financing propensity was 53% and the average loan originated by us for vacation ownership products
totaled approximately $27,800, which represented 71% of the average purchase price. For financing on the majority of our
brands, we require a minimum down payment of 10% of the purchase price, although down payments and interest rates are
typically higher for applicants with credit scores below certain levels and for purchasers who do not have credit scores, such as
non-U.S. purchasers. The average interest rate for originated loans in 2021 was 12.9% and the average term was 12 years.
Interest rates are fixed and a loan fully amortizes over the life of the loan. The average monthly mortgage payment for an owner
who received a loan in 2021 was $408. We do not impose any prepayment penalties.

In our vacation ownership business, in many of our markets, we perform a credit investigation or other review or

inquiry to determine the purchaser’s credit history before originating a loan. The interest rates on the loans we provide are based
primarily upon the purchaser’s credit score, the size of the purchase, and the term of the loan. We base our financing terms
largely on a purchaser’s FICO score, which is a branded version of a consumer credit score widely used in the United States by
banks and lending institutions. FICO scores range from 300 to 850 and are calculated based on information obtained from one
or more of the three major U.S. credit reporting agencies that compile and report on a consumer’s credit history. In 2021, the
average FICO score of our customers who were U.S. citizens or residents who financed a vacation ownership purchase was
732; 69% had a credit score of over 700, 87% had a credit score of over 650 and 96% had a credit score of over 600.

We use other information to determine minimum down payments and interest rates applicable to loans made to
purchasers who do not have a credit score or who do not reside within the United States, such as regional historical default rates
and currency fluctuation risk.

13

In the event of a default, we generally have the right to foreclose on or revoke the defaulting owner’s vacation
ownership interest. We typically resell interests that we reacquire through foreclosure or revocation or place such interests into
one of our points-based programs.

We securitize the majority of the consumer loans we originate in support of our vacation ownership business.

Historically, we have sold these loans to institutional investors in the ABS market on a non-recourse basis. These vacation
ownership notes receivable securitizations provide funding for us at interest rates similar to those available to companies with
investment grade credit ratings, and transfer the economic risks and substantially all the benefits of the consumer loans we
originate to third parties. In a vacation ownership notes receivable securitization, various classes of debt securities issued by a
special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership
notes receivable. During 2021, we completed two securitization transactions, which are discussed in detail in Footnote 15
“Securitized Debt” to our Financial Statements. On an ongoing basis, we have the ability to use our Warehouse Credit Facility
to securitize eligible consumer loans derived from certain branded vacation ownership sales. Those loans may later be
transferred to term securitization transactions in the ABS market, which we intend to continue to complete at least once per
year. Since 2000, we have issued almost $7.5 billion of debt securities in securitization transactions in the ABS market,
excluding amounts securitized through warehouse credit facilities or private bank transactions. We retain the servicing and
collection responsibilities for the loans we securitize, for which we receive a servicing fee.

Our Resorts

As of December 31, 2021, our vacation ownership portfolio consisted of over 120 properties with over 22,000 vacation

ownership villas, also referred to as units, and over 31,000 keys in the following locations. A “key” is the lowest increment for
reporting occupancy statistics based upon the mix of non-lock-off and lock-off villas. Lock-off villas represent two keys and
non-lock-off villas represent one key.

Vacation Ownership

Mainland U.S. and Hawaii

# of
Resorts

Arizona . . . . . . . . . .

California . . . . . . . . .

Colorado . . . . . . . . .

Florida . . . . . . . . . . .

Hawaii . . . . . . . . . . .

Massachusetts . . . . .

5

20

14

23

12

1

Caribbean and Mexico

Aruba . . . . . . . . . . . .
Bahamas . . . . . . . . .
Costa Rica . . . . . . . .

# of
Resorts
2
1
1

Europe and Asia Pacific

# of
Resorts

France . . . . . . . . . . .

Spain . . . . . . . . . . . .

United Kingdom . . .

1

3

1

# of
Keys

1,189

6,264

1,036

7,989

4,768

84

# of
Keys
1,211
392
48

# of
Keys

202

715

49

# of
Resorts

Missouri

. . . . . . . . .

Nevada . . . . . . . . . .

New Jersey . . . . . . .

New Mexico . . . . . .

New York . . . . . . . .

2

2

1

1

2

# of
Keys

479

1,172

180

16

228

South Carolina . . . . .

10

1,864

Puerto Rico . . . . . . .
U.S. Virgin Islands .
West Indies . . . . . . .

# of
Resorts
1
3
1

# of
Resorts

Indonesia . . . . . . . . .

Thailand . . . . . . . . .

Australia . . . . . . . . .

1

3

1

# of
Keys
164
512
88

# of
Keys

73

332

88

# of
Resorts

# of
Keys

Texas . . . . . . . . . . . .

Utah . . . . . . . . . . . . .

Virginia . . . . . . . . . .

Washington, D.C.

. .

1

2

1

1

195

634

276

71

Mexico . . . . . . . . . .

# of
Resorts
4

# of
Keys
1,561

14

Brands

Marriott Vacation Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sheraton Vacation Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Westin Vacation Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grand Residences by Marriott

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Ritz-Carlton Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

St. Regis Residence Club and The Luxury Collection . . . . . . . . . . . . . . . . . . . . . . . . .

Hyatt Residence Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other, including Welk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hotels

Sheraton Kauai Resort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

# of Resorts

62

9

12

2

5

3

15

13

121

# of Keys

18,825

4,375

4,584

381

259

82

1,399

1,975

31,880

Location

Kauai, HI

The Westin Resort & Spa, Cancun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cancun, Mexico

The Westin Resort & Spa, Puerto Vallarta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hyatt Highlands Inn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Puerto Vallarta, Mexico
Carmel, CA

Welk Resorts Branson Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Branson, MO

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT

Our Exchange & Third-Party Management segment includes exchange networks and membership programs comprised

of nearly 3,200 affiliated resorts in over 90 nations and nearly 1.4 million members, as well as provision of management
services to over 150 other resorts and lodging properties. We provide these services through a variety of brands including
Interval International, Trading Places International, Vacation Resorts International and Aqua-Aston. The segment revenue
generally is fee-based and derived from membership, exchange and rental transactions, owners’ association management, and
other related products and services. The Exchange & Third-Party Management segment represented 8% of our consolidated
revenue for 2021.

($ in millions)

Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021
Exchange & Third-Party Management
Segment Revenues

233

40

—

47
320

Exchange Networks and Membership Programs

Interval International

Our primary exchange offering is Interval International’s network, a membership-based exchange program which also
provides a comprehensive package of value-added products and services to members and developers. Generally, individuals are
enrolled by resort developers in connection with their purchase of vacation ownership interests from such resort developers,
with initial membership fees being paid on behalf of members by the resort developers. Members may also enroll directly, for
instance, when they purchase a vacation ownership interest through resale or an owners’ association at a resort that participates
in the Interval International network. Interval International has established multi-year relationships with resort developers,
including leading independent developers and our branded vacation ownership programs, under exclusive affiliation
agreements, which typically provide for continued resort participation following the agreement’s term.

Our traditional Interval International network members have the option, after their initial membership period ends, to
renew their memberships for terms ranging from one to five years and by paying membership fees directly to us. Alternatively,
some resort developers incorporate the Interval International network membership fee into certain annual fees they charge to

15

owners of vacation ownership interests at their resorts or vacation ownership clubs. As a result, membership in the Interval
International network and, where applicable, the Interval Gold, Club Interval, or Interval Platinum program (as described
below), for these corporate members is automatically renewed through the period of their resort’s or club’s participation in the
Interval International network. As of December 31, 2021, approximately 60% of total Interval International network members
were traditional members and approximately 40% were corporate members.

Interval International recognizes certain of its eligible Interval International network resorts as either a “Select Resort,”

a “Select Boutique Resort,” a “Premier Resort,” a “Premier Boutique Resort,” an “Elite Resort” or an “Elite Boutique Resort”
based upon the satisfaction of qualifying criteria, inspection, member feedback, and other resort-specific factors. Over 40% of
Interval International network resorts were recognized as a Select, Select Boutique, Premier, Premier Boutique, Elite or Elite
Boutique Resort as of December 31, 2021.

Products and Services

Exchange

Members are offered the ability to exchange usage rights in their vacation ownership interest for accommodations

which are generally of comparable trading value to those relinquished, based on factors including location, quality, seasonality,
unit attributes and time of relinquishment prior to occupancy.

Getaways

We also offer additional vacation rental opportunities to members of the Interval International network and certain

other membership or affinity programs at attractive rates through Getaways. Getaways allow members to rent resort
accommodations for a fee, plus applicable taxes. Resort accommodations available as Getaways consist of seasonal oversupply
of vacation ownership accommodations within the applicable exchange network, as well as resort accommodations we source
specifically for use in Getaways.

Interval Gold and Interval Platinum

Interval International network members may take advantage of one of our two enhanced membership tiers, Interval
Gold or Interval Platinum, each of which provides value-added benefits and services for an additional fee. These benefits and
services vary by country of residence, but generally consist of discounts on Getaways, a concierge service, a hotel discount
program and Interval Options, a service that allows members to relinquish annual occupancy rights in their vacation ownership
interests towards the purchase of various travel products, including hotel, cruise, golf and spa vacations. Members are enrolled
in these programs either by resort developers in connection with the initial purchase of their vacation ownership interests or by
upgrading their membership directly.

Club Interval

This product gives owners of fixed or floating week vacation ownership interests the opportunity to use their resort

week as points within the Interval International network. Club Interval members also receive all of the benefits of Interval Gold
and can upgrade to Interval Platinum.

Non-Exchange Products

Interval International’s subsidiary, Worldwide Vacation & Travel, offers two programs, Leisure Time Passport and

Dream Vacation Week. Leisure Time Passport is a travel membership program which provides members with a variety of travel
and leisure benefits, including savings on resort accommodations, hotel stays, cruise vacations and more. The Leisure Time
Passport membership program is used by resort developers as a trial membership program for potential purchasers of vacation
ownership products as well as by non-developer clients, as an addition to their own product(s), which provides ongoing value
and customer engagement. Dream Vacation Week is a certificate program which provides the recipient with access to book
discounted resort accommodations and is used as a marketing premium, sales incentive, or enhancement to an existing program.

Sales and Marketing Support for Interval International network resorts

Resort developers promote membership in our exchange programs and related value-added services as an important

benefit of owning a vacation ownership interest. We offer developers a selection of sales and marketing materials. These
materials, many of which are available in multiple languages, include brochures, publications, sales-office displays, resort
directories and Interval HD, an online video channel featuring resort and destination overviews.

Operational Support for Interval International network resorts

Interval International also makes available a comprehensive array of back-office servicing solutions to resort

developers and resorts. For example, for an additional fee, we provide reservation services and billing and collection of
maintenance fees and other amounts due to developers or owners’ associations. In addition, through consulting arrangements,
we assist resort developers in the design of tailored vacation programs for owners of vacation ownership interests.

16

Trading Places International

Trading Places International provides exchange services to owners at certain of our managed timeshare properties as
well as other direct-to-consumer exchanges that do not require a membership fee. For an annual fee, vacation interest owners
may choose to join the upgraded Trading Places Prime program with additional benefits. Exchanges in these Trading Places
programs are based on like value and upgrades are available upon payment of additional fees.

Business Development

Our exchange businesses maintain corporate and consumer business development departments that are responsible for

signing up new resorts, resort developers, and other businesses and implementing marketing strategies. We also develop
materials to promote membership participation, exchange opportunities and other value-added services to existing members, as
well as for the Interval International business to secure new relationships with resort developers, owners’ associations and
resorts, to obtain and retain members, and with other affinity partners, to provide value added travel benefits to their customers.

Our consumer marketing efforts revolve around the deepening of new and existing customer relationships and

increasing engagement and loyalty of members through a number of channels including digital distribution utilizing social
media channels to inspire vacations, share stories and promote the vacation ownership lifestyle, as well as direct mail and
telemarketing.

Interval International also markets products and services to resort developers and other parties in the vacation

ownership industry through a series of business development initiatives. Our sales and services personnel proactively seek to
establish strong relationships with developers and owners’ associations, providing input on consumer preferences and industry
trends based upon years of experience. We believe that we have established a strong reputation within the vacation ownership
industry as being highly responsive to the needs of resort developers, owners’ associations, management companies and owners
of vacation ownership interests. In addition, we sponsor, participate in and attend numerous industry conferences around the
world to provide potential and existing industry participants opportunities to network and learn more about vacation ownership.

Third-Party Management

We provide resort management services for vacation ownership resorts and other third-party vacation property owners

through Vacation Resorts International, Trading Places International and Aqua-Aston. Our services may include day-to-day
operations of the resorts, maintenance of the resorts, preparation of reports, budgets, owners’ association administration, quality
assurance and employee training. As of December 31, 2021, we provided third-party management services to over 150 resorts
and lodging properties.

Vacation Resorts International and Trading Places International provide management services to vacation ownership

resorts pursuant to agreements with terms generally ranging from one to ten years, many of which are automatically renewable.
Generally, our management fees are paid by the owners’ association and funded from the annual maintenance fees paid by the
individual vacation ownership interest owners to the association. These maintenance fees represent each owner’s allocable
share of the costs of operating and maintaining the resorts, which generally includes personnel, property taxes, insurance, a
capital asset reserve to fund refurbishment and other related costs. The management fees we earn are highly predictable due to
the relatively fixed nature of resort operating expenses. We are reimbursed for the costs incurred to perform our services,
principally related to personnel providing on-site services. We also offer vacation rental services to these owners’ associations.
These rentals are made online directly to consumers through our websites and through third-party online travel agencies, and
through Interval International’s Getaways program.

Aqua-Aston provides management and rental services for condominium owners, hotel owners, and owners’
associations. The condominium rental properties are generally investment properties, and, to a lesser extent, second homes,
owned by individuals who contract with Aqua‑Aston directly to manage, market and rent their properties, generally pursuant to
short‑term agreements. We also offer such owners a comprehensive package of marketing, management and rental services
designed to enhance rental income and profitability. Generally, owners’ association management services, including
administrative, fiscal and quality assurance services, are provided pursuant to exclusive agreements with terms typically ranging
from one to ten years or more, many of which are automatically renewable. Revenue is derived principally from fees for
management of the hotel, condominium resort, or owners’ association as well as related rental services. Management fees
consist of a base management fee and, in some instances for hotels or condominium resorts, an incentive management fee
which is generally a percentage of operating profits or improvement in operating profits. Service fee revenue is based on the
services provided internally or through third-party providers to owners including reservation services, sales and marketing,
property accounting and information technology services.

The success and continued growth of the Aqua-Aston business, which is concentrated in Hawaii, depends largely on
our ability to source vacationers interested in booking vacation properties made available through our rental services. Our in
market sales and marketing team utilizes a variety of sales, marketing, revenue management and digital marketing initiatives to
attract consumers and additional properties to Aqua‑Aston. We utilize many channels of distribution including traditional

17

wholesale through tour operators and travel partners, online travel agencies and global distribution systems. In addition,
Aqua‑Aston focuses on driving direct business through brand websites and our central reservations office. The sales team
covers several market segments from corporate and government/military to travel agents and groups. We offer a variety of
leisure accommodations to visitors from around the world through various consumer websites including, www.aquaaston.com,
www.aquaresorts.com, www.mauicondo.com, and others.

CORPORATE AND OTHER

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and

administrative costs, corporate interest expense, transaction and integration costs, and (provision for) benefit from income taxes.
In addition, Corporate and Other includes the revenues and expenses relating to owners’ associations consolidated under the
relevant accounting guidance (“Consolidated Property Owners’ Associations”), which are not included in operating segment
resource allocation decision-making.

Seasonality

Our revenue is influenced by the seasonal nature of travel. Within our Vacation Ownership segment, our sale of

vacation ownership business experiences a modest impact from seasonality, with higher sales volumes during the traditional
vacation periods. COVID-19 has impacted, and may continue to impact, our typical seasonal patterns. In addition, business at
properties in some locations may experience a greater impact from seasonality than those in other locations.

Within our Exchange & Third-Party Management segment, we recognize exchange and Getaways revenue based on
confirmation of the vacation; revenue is generally higher in the first quarter and lower in the fourth quarter. Remaining rental
revenue is recognized based on occupancy.

Competition

Competition in the vacation ownership industry is driven primarily by the quality, number and location of vacation

ownership resorts, the quality and capability of the related property management program, trust in the brand, pricing of product
offerings, cost of ownership (i.e., ongoing maintenance and other fees) and the availability of program benefits, such as
exchange programs and access to affiliated hotel networks. We believe that our focus on offering distinctive vacation
experiences, combined with our financial strength, well-established and diverse market presence, strong brands, expertise and
well-managed and maintained properties, will enable us to remain competitive. Vacation ownership is a vacation option that is
positioned and sold as an attractive alternative to vacation rentals (such as hotels, resorts and condominium rentals) and second
home ownership. The various segments within the vacation ownership industry can be differentiated by the quality level of the
accommodations, range of services and ancillary offerings, and price. Our brands operate in the upper upscale and luxury tiers
of the vacation ownership segment of the industry and the upper upscale and luxury tiers of the whole ownership segment (also
referred to as the residential segment) of the industry.

Our competitors in the vacation ownership industry range from small vacation ownership companies to large branded

hospitality companies that operate or license vacation ownership businesses. In North America, we typically compete with
companies that sell upper upscale tier vacation ownership products under a lodging or entertainment brand umbrella, such as
Hilton Grand Vacations Club and Disney Vacation Club, as well as numerous regional vacation ownership operators. Our
luxury vacation ownership products compete with vacation ownership products offered by Four Seasons, Exclusive Resorts,
Timbers Resorts and several other smaller independent companies. In addition, the vacation ownership industry competes
generally with other vacation rental options (such as hotels, resorts and condominium rentals) offered by the lodging industry as
well as alternative lodging marketplaces such as Airbnb, VRBO, and HomeAway, which offer rentals of homes and
condominiums. Innovations that impact the industry may also lead to new products and services that could disrupt our business
model and create new and stronger competitors.

Outside North America, we operate vacation ownership resorts in two primary regions, Asia Pacific and Europe. In

both regions, we are one of the largest lodging-branded vacation ownership companies operating in the upper upscale tier, with
regional operators dominating the competitive landscape. Where possible, our vacation ownership properties in these regions
are co-located with Marriott International branded hotels. In Asia Pacific, our owner base is derived primarily from the Asia
Pacific region and secondarily from the Europe and North America regions. In Europe, our owner base is derived primarily
from the North America, Europe and Middle East regions.

Recent and potential future consolidation in the highly fragmented vacation ownership industry may increase

competition. Consolidation may create competitors that enjoy significant advantages resulting from, among other things, a
lower cost of, and greater access to, capital and enhanced operating efficiencies.

18

Our Interval International exchange business principally competes for developer and consumer market share with

Travel + Leisure Co.’s subsidiary, RCI. Our subsidiary, Trading Places International, and several third parties operate in this
industry with a significantly more limited scope of available accommodations. This business also faces increasing competition
from points‑based vacation clubs and large resort developers, which operate their own internal exchange systems to facilitate
exchanges for owners of vacation ownership interests at their resorts as they increase in size and scope. Increased consolidation
in the industry enhances this competition. In addition, vacation clubs and resort developers may have direct exchange
relationships with other developers.

We believe that developers and owners’ associations generally choose to affiliate with an exchange network based on

the quality of resorts participating in the network; the level of service provided to members; the range and level of support
services; the flexibility of the exchange program; the demographics of the membership base; the costs for annual membership
and exchanges; and the continuity of management and its strategic relationships within the industry.

Regulation

Our business is heavily regulated and compliance with regulations has a significant impact on our results of operations.

We are subject to a wide variety of complex international, national, federal, state and local laws, regulations and policies in
jurisdictions around the world. We have proactively worked with ARDA to encourage the enactment of responsible consumer-
protection legislation and state regulation that enhances the reputation and respectability of the overall vacation ownership
industry. We believe that, over time, our vacation ownership products and services helped improve the public perception of the
vacation ownership industry.

Some laws, regulations and policies may impact multiple areas of our business, such as securities, anti-discrimination,
anti-fraud, data protection and security and anti-corruption and bribery laws and regulations or government economic sanctions,
including applicable regulations of the Consumer Financial Protection Bureau (the “CFPB”), the U.S. Department of the
Treasury’s Office of Foreign Asset Control and the U.S. Foreign Corrupt Practices Act (the “FCPA”). The FCPA and similar
anti-corruption and bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making
improper payments to government officials for the purpose of obtaining or generating business. The collection, use and
protection of personal data of our customers, as well as the sharing of our customer data with affiliates and third parties, are
governed by privacy laws and regulations enacted in the United States and other jurisdictions around the world. Other laws,
regulations and policies primarily affect one of four areas of our business: real estate development activities; marketing and
sales activities; lending activities; resort management activities, and exchange and travel activities.

Real Estate Development Regulation

Our real estate development activities are regulated under a number of different timeshare, condominium and land
sales disclosure statutes in many jurisdictions. We are generally subject to laws and regulations typically applicable to real
estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions,
environmental regulation, accessibility, title transfers, title insurance, and taxation. In the United States, these include, with
respect to some of our products, the Fair Housing Act and the Americans with Disabilities Act. In addition, we are subject to
laws in some jurisdictions that impose liability on property developers for construction defects discovered or repairs made by
future owners of property developed by the developer.

Marketing and Sales Regulation

Our marketing and sales activities are closely regulated pursuant to laws and regulations enacted specifically for the
vacation ownership and land sales industries, as well as a wide variety of laws and regulations that govern our marketing and
sales activities in the jurisdictions in which we carry out such activities. These laws and regulations include the USA PATRIOT
Act, Foreign Investment In Real Property Tax Act, the Federal Interstate Land Sales Full Disclosure Act and fair housing
statutes, U.S. Federal Trade Commission (the “FTC”) and state “Little FTC Acts” and other laws and regulations governing
unfair, deceptive or abusive acts or practices including unfair or deceptive trade practices and unfair competition, state attorney
general regulations, anti-fraud laws, prize, gift and sweepstakes laws, real estate, title agency or insurance, travel insurance and
other licensing or registration laws and regulations, anti-money laundering, consumer information privacy and security, breach
notification, information sharing and telemarketing laws, home solicitation sales laws, tour operator laws, lodging certificate
and seller of travel laws, securities laws, and other consumer protection laws.

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Many jurisdictions, including many jurisdictions in the United States, Asia Pacific and Europe, require that we file
detailed registration or offering statements with regulatory authorities disclosing certain information regarding the vacation
ownership interests and other real estate interests we market and sell, such as information concerning the interests being
offered, any projects, resorts or programs to which the interests relate, applicable condominium or vacation ownership plans,
evidence of title, details regarding our business, the purchaser’s rights and obligations with respect to such interests, and a
description of the manner in which we intend to offer and advertise such interests. Regulation outside the United States includes
jurisdictions in which our clubs and resorts operate, such as the European Union, Singapore and Mexico, among others. Among
other things, the European and Singaporean regulations: (1) require delivery of specified disclosure (some of which must be
provided in a specific format or language) to purchasers; (2) require a specified “cooling off” rescission period after a purchase
contract is signed; and (3) prohibit any advance payments during the “cooling off” rescission period.

We must obtain the approval of numerous governmental authorities for our marketing and sales activities. Changes in

circumstances or applicable law may necessitate the application for or modification of existing approvals. Currently, we are
permitted to market and sell vacation ownership products in all 50 states and the District of Columbia in the United States and
numerous countries in North and South America, the Caribbean, Europe, Asia and the Middle East. Our Marriott Vacation Club
Destinations, Australia points-based program is subject to regulation as a “managed investment scheme” by the Australian
Securities & Investments Commission. In some countries our vacation ownership products are marketed by third-party brokers.

Laws in many jurisdictions in which we sell vacation ownership interests grant the purchaser of a vacation ownership

interest the right to cancel a purchase contract during a specified rescission period following the later of the date the contract
was signed or the date the purchaser received the last of the documents required to be provided by us.

Regulators in many jurisdictions have increased regulations and enforcement actions related to telemarketing
operations, including requiring adherence to the federal Telephone Consumer Protection Act (the “TCPA”) and similar “do not
call” legislation. These measures have significantly increased the costs and reduced the efficiencies associated with
telemarketing. While we continue to be subject to telemarketing risks and potential liability, we believe that our exposure to
adverse effects from telemarketing legislation and enforcement is mitigated in some instances by the use of permission-based
marketing, under which we obtain the permission of prospective purchasers to contact them in the future. We participate in
various programs and follow certain procedures that we believe help reduce the possibility that we contact individuals who have
requested to be placed on federal or state “do not call” lists, including subscribing to the federal and certain state “do not call”
lists, and maintaining an internal “do not call” list.

Lending Regulation

Our lending activities are subject to a number of laws and regulations including those of applicable supervisory,

regulatory and enforcement agencies such as, in the United States, the CFPB, the FTC, and the Financial Crimes Enforcement
Network. These laws and regulations, some of which contain exceptions applicable to the timeshare industry or may not apply
to some of our products, may include, among others, the Real Estate Settlement Procedures Act and Regulation X, the Truth In
Lending Act and Regulation Z, the Federal Trade Commission Act, the Equal Credit Opportunity Act and Regulation B, the
Fair Credit Reporting Act, the Fair Housing Act and implementing regulations, the Fair Debt Collection Practices Act, the
Electronic Funds Transfer Act and Regulation E, unfair, deceptive or abusive acts or practices regulations and the Consumer
Protection Act, the USA PATRIOT Act, the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act, the Servicemembers
Civil Relief Act and the Bank Secrecy Act. Our lending activities are also subject to the laws and regulations of other
jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage
lending, usury, fair debt collection practices, consumer debt collection practices, mortgage disclosure, lender or mortgage loan
originator licensing and registration and anti-money laundering.

Resort Management Regulation

Our resort management activities are subject to laws and regulations regarding community association management,

public lodging, food and beverage services, labor, employment, health care, health and safety, accessibility, discrimination,
immigration, gaming, and the environment (including climate change). In addition, many jurisdictions in which we manage our
resorts have statutory provisions that limit the duration of the initial and renewal terms of our management agreements for
owners’ associations and/or permit the owners’ association for a resort to terminate our management agreement under certain
circumstances (for example, upon a super-majority vote of the owners), even if we are not in default under the agreement.

Exchange and Travel Regulations

Many jurisdictions regulate businesses engaged in timeshare exchange activity, typically requiring annual filing of

prescribed disclosures with regulatory agencies. Such disclosure must be provided to persons enrolling in a timeshare exchange
program prior to completion of enrollment. The disclosure generally provides information on the terms and conditions of
membership as well as audited key operating statistics of the exchange program.

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In connection with our exchange businesses, we also offer other travel-related products and services that are subject to

regulation in certain jurisdictions, including requirements that we register as a “seller of travel” and comply with applicable
bonding and disclosure requirements. Additionally, operation of our travel membership programs can trigger requirements that
we register as a discount buying organization. Other products and services we offer (e.g., travel insurance) are subject to
regulations imposed on our suppliers, and as a result we are subject to travel reseller requirements and licensing in certain
jurisdictions.

Environmental Compliance and Awareness

The properties we manage or develop are subject to national, state and local laws and regulations that govern the
discharge of materials into the environment or otherwise relate to protecting the environment. These laws and regulations
include requirements that address health and safety; the use, management and disposal of hazardous substances and wastes; and
emission or discharge of wastes or other materials. We believe that our management and development of properties comply, in
all material respects, with environmental laws and regulations. Our compliance with such provisions also has not had a material
impact on our capital expenditures, earnings or competitive position, nor do we anticipate that such compliance will have a
material impact in the future.

We take our commitment to protecting the environment seriously. We have collaborated with Audubon International

to further the “greening” of our Marriott Vacation Club resorts in the U.S. through the Audubon Green Leaf Eco-Rating
Program for Hotels. The Audubon partnership is just one of several programs incorporated into our green initiatives. We have
more than 20 years of energy conservation experience that we have put to use in implementing our environmental strategy
across each of our segments. This strategy includes further reducing energy and water consumption, expanding our portfolio of
green resorts, including LEED (Leadership in Energy & Environmental Design) certification, educating and inspiring associates
and guests to support the environment, and embracing innovation.

Human Capital

We recognize that our industry leadership depends in critical part on our continued ability to recruit, motivate, and
retain the talented associates that make up our global workforce. We maintain a set of programs and initiatives, rooted in our
Core Values (Caring Culture, Integrity First, Excellence Always, Customer Obsessed, and Better Together), designed to attract,
develop, retain and engage our associates that is focused on:

•

•

•

•

competitive, fair, and transparent compensation and benefits offerings;

supporting the overall well-being of our associates from a physical, mental, and social perspective;

creating opportunities for associate growth, development, recognition, training, and education; and

promoting an inclusive and diverse workplace, where all individuals are respected regardless of their age, race,
notional origin, gender, religion, disability, or sexual orientation.

As of December 31, 2021, we had a global workforce consisting of approximately 20,300 associates, of which

approximately 16,800 were based in the United States and approximately 3,500 were based in international locations.

Inclusion and Diversity

As a leisure-focused company, we are in the business of bringing people together. Like our customers, our associates
come from diverse backgrounds, offering invaluably distinct perspectives. Women comprise 54% of our worldwide workforce
and men comprise 46%. Within the United States, people of color comprise 41% of our management level positions and women
comprise 46% of our management level positions. We are implementing recruiting efforts focused on placing women and
people of color in management roles.

In 2021, we launched an Executive Inclusion Council, which is comprised of approximately 20 senior leaders
dedicated to enabling and championing Inclusion and Diversity initiatives throughout the organization. Top priorities include
providing guidance regarding our Inclusion and Diversity strategy, increasing leaders’ ability to discuss and be held
accountable for driving Inclusion and Diversity outcomes, and increasing awareness and impact of initiatives. With the support
of the Executive Inclusion Council, we completed an internal review of our Inclusion and Diversity practices and programs as
well as external benchmarking to refine our Inclusion and Diversity strategic framework and ongoing areas of focus. This work
led us to establish a framework rooted in our core values and supported by a newly developed Inclusion and Diversity
Commitment Statement (included below).

MVW is committed to advancing and cultivating inclusion and diversity in all aspects of our business. We provide
treasured vacation experiences to our customers around the world, and foster an inclusive, diverse, and caring work
environment for our associates. We support a life fulfilled for all individuals and embrace that we are better together.

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Associate Development

We seek to cultivate a learning-rich environment where associates are prepared to succeed, are encouraged to grow

their careers, and are motivated to serve our owners, members, and guests. Our Global Talent Management team develops and
deploys programs and resources for all our associates. Our learning programs are designed to help ensure our company is a
desirable place to start and cultivate a fulfilling career, with increased opportunities for growth. In light of the COVID-19
pandemic, a key training focus in 2021 was to provide courses on returning to work safely and supporting our associates’
overall health and well-being.

Our Global Talent Management team is also committed to providing our leaders with the opportunity to develop their

leadership skills and equip leaders with the skills they need to create a positive work environment for all associates. With a
curriculum of approximately 15 distinct courses, the Leadership Development Program provides associates the tools, resources,
and practices we believe are important to becoming successful leaders and strengthening our diverse talent pipeline. In 2021,
we continued to deliver virtual learning courses to support leadership development training in a socially distant manner. We
also adapted in-classroom practices to accommodate live, instructor-lead training for select courses. Our efforts helped us
continue to support leaders in building leadership skills for the future.

Collective Bargaining Agreements

We are party to collective bargaining agreements in the United States, Spain, and Mexico primarily with regard to

employees working in food service, laundry, and hospitality and tourism.

Human Rights

We maintain a Human Rights Policy that aligns with government, business, and public concerns about issues such as

human trafficking and the exploitation of children. We do not recruit child labor, and we support programs and partnerships that
help at-risk young people and their families prepare for and find meaningful employment. Our Human Rights Policy is
available on our website at (www.marriottvacationsworldwide.com) under the “Investor Relations” tab.

Available Information

Our investor relations website address is www.ir.mvwc.com. Our Annual Reports on Form 10-K, Quarterly Reports on

Form 10-Q, Current Reports on Form 8-K, proxy statements, and any and all amendments thereto are available free of charge
through our investor relations website as soon as reasonably practicable after they are filed or furnished to the Securities and
Exchange Commission (the “SEC”). These materials are also accessible on the SEC’s website at www.sec.gov.

Information About Our Executive Officers

Set forth below is certain information with respect to our executive officers. The information set forth below is as of

February 21, 2022, except where indicated.

Name and Title

Age

Business Experience

Stephen P. Weisz
Chief Executive Officer

71

John E. Geller, Jr.
President

54

Stephen P. Weisz has served as our Chief Executive Officer since 2011, and as our
President from 1996 through December 2020. Mr. Weisz has also been a member of
our Board of Directors since 2011. Mr. Weisz joined Marriott International in 1972.
Over his 39-year career with Marriott International, he held a number of leadership
positions in the Lodging division, including Senior Vice President of Sales and
Marketing and Executive Vice President-Lodging Brands. Mr. Weisz is a past
Chairman of the Board of Directors of the American Resort Development Association
and also a past Chairman of the Board of Trustees of Children’s Miracle Network.

John E. Geller, Jr. has served as our President since October 2021. From January 2021
to October 2021, he served as our President and Chief Financial Officer. From January
2018 to January 2021, he served as our Executive Vice President and Chief Financial
and Administrative Officer. From 2009 to December 2017, he served as our Executive
Vice President and Chief Financial Officer. Mr. Geller joined Marriott International in
2005 as Senior Vice President and Chief Audit Executive and Information Security
Officer.

22

Name and Title

Age

Business Experience

R. Lee Cunningham
Executive Vice President
and Chief Operating Officer
- Vacation Ownership

62

Anthony E. Terry
Executive Vice President
and Chief Financial Officer

54

Lori Gustafson
Executive Vice President
and Chief Brand and Digital
Strategy Officer

James H Hunter, IV
Executive Vice President
and General Counsel

Lizabeth Kane-Hanan
Executive Vice President
and Chief Development and
Product Officer

Jeanette E. Marbert
President, Exchange and
Third-Party Management

Brian E. Miller
President, Vacation
Ownership

Dwight D. Smith
Executive Vice President
and Chief Information
Officer

38

59

55

65

58

61

R. Lee Cunningham has served as our Executive Vice President and Chief Operating
Officer - Vacation Ownership since September 2018. From December 2012 to August
2018, he served as our Executive Vice President and Chief Operating Officer. From
2007 to December 2012, he served as our Executive Vice President and Chief
Operating Officer – North America and Caribbean. Mr. Cunningham joined our
company in 1997 as Vice President of Revenue Management and Owner Service
Operations. Mr. Cunningham joined Marriott International in 1982. As reported in a
Current Report on Form 8-K filed on January 12, 2022, Mr. Cunningham announced
his decision to retire as our Executive Vice President and Chief Operating Officer -
Vacation Ownership in April 2022; Mr. Cunningham subsequently announced that he
would instead retire in May 2022.
Anthony E. Terry has served as our Executive Vice President and Chief Financial
Officer since October 2021. From July 2005 to September 2021, he served as our
Senior Vice President, Global Operational Finance. From October 2001 to June 2005,
he served as our Vice President of Product Supply Management. Mr. Terry began his
career with the Company in 1996.
Lori Gustafson joined our company in November 2020 and serves as our Executive
Vice President and Chief Brand and Digital Strategy Officer. From May 2019 to
November 2020, she served as Senior Vice President, Global Brands & Digital for
Wyndham Destinations, where she was responsible for brand management and digital
marketing. From January 2018 to May 2019, she served as Vice President, Brand
Marketing, where she was responsible for brand management, campaign development
and advertising. From July 2017 to January 2018, she served as Corporate Vice
President of Digital, eCommerce, and Media at SeaWorld Parks & Entertainment,
where she led the U.S. team that oversaw the development of eCommerce, digital
marketing, social media, business intelligence and digital content. From 2015 until July
2017, she served as Senior Director, Digital Marketing at SeaWorld Parks &
Entertainment, where she was the executive leader for digital transformation initiatives,
including websites, mobile and digital commerce improvements and the
implementation of a data and analytics program related to customer experience.
James H Hunter, IV has served as our Executive Vice President and General Counsel
since November 2011. Prior to that time, he had served as Senior Vice President and
General Counsel since 2006. Mr. Hunter joined Marriott International in 1994.
Lizabeth Kane-Hanan has served as our Executive Vice President and Chief
Development and Product Officer since September 2018. From November 2011 to
August 2018, she served as our Executive Vice President and Chief Growth and
Inventory Officer. Prior to that time, she had served as our Senior Vice President,
Resort Development and Planning, Inventory and Revenue Management and Product
Innovation since 2009. Ms. Kane-Hanan joined our company in 2000.
Jeanette Marbert has served as our President, Exchange and Third-Party Management
since October 2018. She served as President and Chief Executive Officer for the
Exchange and Rental Segment of ILG, Inc. from November 2017 until September
2018, and as Executive Vice President from June 2009 until November 2017. She was
Chief Operating Officer of ILG, Inc. from August 2008 to November 2017, and served
as a Director of ILG, Inc. from February 2015 to May 2016. Ms. Marbert joined
Interval in 1984.
Brian E. Miller has served as our President, Vacation Ownership since October 2020.
From October 2018 to September 2020, he served as our Executive Vice President and
Chief Marketing, Sales and Service Officer. From November 2011 to September 2018,
he served as our Executive Vice President and Chief Sales and Marketing Officer. Prior
to that time, he had served as our Senior Vice President, Sales and Marketing and
Service Operations since 2007. Mr. Miller joined our company in 1991.

Dwight D. Smith has served as our Executive Vice President and Chief Information
Officer since December 2011. Prior to that time, he served as our Senior Vice President
and Chief Information Officer since 2006. Mr. Smith joined Marriott International in
1988.

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Name and Title

Michael E. Yonker
Executive Vice President
and Chief Human Resources
Officer

Age

63

Business Experience

Michael E. Yonker has served as our Executive Vice President and Chief Human
Resources Officer since December 2011. Prior to that time, he served as our Chief
Human Resources Officer since 2010. Mr. Yonker joined Marriott International in
1983.

Item 1A.

Risk Factors

This section describes circumstances or events that could have a negative effect on our financial results or operations

or that could change, for the worse, existing trends in our businesses. The occurrence of one or more of the circumstances or
events described below could have a material adverse effect on our financial condition, results of operations and cash flows
and/or on the trading prices of our common stock. The risks and uncertainties described in this Annual Report are not the only
ones facing us. Additional risks and uncertainties that currently are not known to us or that we currently believe are immaterial
also may adversely affect our businesses and operations.

Risks related to the COVID-19 pandemic.

The COVID-19 pandemic has had, and may continue to have, serious adverse effects on our business, financial

condition, and results of operations for an unknown period of time.

As the outbreak of the coronavirus continues, both in the U.S. and globally, there has been significant volatility in

global economies and financial markets. The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly
changing and hard to predict. Uncertainties related to the pandemic include, but are not limited to, the continued disruptive
effect of the pandemic on the global economy, our supply chain partners, our workforce, traveler sentiment, resort occupancy
and periodic mandates from governmental authorities to stay home, avoid non-essential contact and gatherings, and self-
quarantine.

In 2020, we saw marked declines in occupancy, rentals, and contract sales because of the temporary closure of nearly

all of our sales centers, the temporary closure of many of our resorts, the temporary closure of our branded North America
vacation ownership resorts for rental stays, and the reduction in operations and amenities at all of our resorts based on
government mandates and advisories. Protocols adopted to combat the COVID-19 pandemic, such as canceling, or
implementing alternatives or modifications to, in-person sales tours and customized presentations, and reductions in amenities
at our resorts, have resulted, and could continue to result in, lesser effectiveness of customer-associate interaction and
diminished customer satisfaction, which could adversely impact our financial condition. As of December 31, 2021, nearly all of
our resorts and sales centers have reopened; however, extended or further closures may be required nationally, regionally, or in
specific locations in the event of a resurgence or variant of the virus.

The success of our business and our profitability depend, in substantial part, upon the health of the travel industry,

which has been materially adversely affected by the COVID-19 pandemic. As new variants of the virus make headlines every
few months, consumer fear about contracting COVID-19 and recommendations or mandates from governmental authorities to
avoid large gatherings of people or self-quarantine may increase. These recommendations and mandates have already affected
and may continue to affect resort occupancies. A substantial amount of our sales activity occurs at our resorts, and the number
of prospective and current owners who visit our resorts impacts sales volume. Our rental revenue is also substantially impacted
by the desire and ability of vacationers to travel. Fear of exposure to the COVID-19 virus, government restrictions on travel,
including quarantine requirements, low vaccination rates in some parts of the world and variants that may be resistant to
available vaccines have caused travelers to cancel or delay travel plans to our resorts. These changes in vacation and travel
patterns have adversely affected our cash flows, revenues, and profits, and are expected to continue to do so. Moreover, when
travel advisories and restrictions have been lifted, there has been a resurgence of the virus, and as a result, travel demand is
unpredictable and could remain so for a significant period. Adverse changes in the perceived or actual economic climate,
including higher unemployment rates, declines in income levels, inflation, and loss of personal wealth resulting from the impact
of the COVID-19 pandemic may negatively affect travel demand for a prolonged period.

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

receivable. The number of delinquencies may increase again as the duration of the pandemic or its effect on economic
conditions and the ability to travel continues and could lead to defaults on financing that we provide to purchasers of our
products in excess of our estimates. Purchaser defaults may cause us to foreclose on vacation ownership notes receivable and
reclaim ownership of the financed interests and could impact our ability to secure ABS or warehouse credit facility financing on
terms that are acceptable to us, or at all. In addition, the transactions in which we have securitized vacation ownership notes
receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would
result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.

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The duration and extent of the impact of the COVID-19 pandemic on our business and financial results will largely

depend on future developments, including the duration and spread of the pandemic, the extent and severity of any resurgences
of the pandemic in the future, the response by all levels of government in their efforts to contain the pandemic and to mitigate
the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand
for our products and services recover after the pandemic subsides, all of which are highly uncertain, rapidly changing and
cannot be predicted. Such impacts are expected to adversely affect our profitability, cash flows, financial results, and capital
resources for a significant period. Further, the COVID-19 pandemic may also adversely affect our operating and financial
results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our
operations.

The economic disruption caused by the COVID-19 pandemic has adversely affected our ability to generate cash to

support our continuing operations and debt service, implement our growth plans and make other payments.

We depend upon our operations to generate strong cash flows to support our operating activities, supply capital to

finance our operations and growth, make capital expenditures and acquisitions, service our debt and return value to our
shareholders through dividends and stock repurchases. In 2020, the economic disruption caused by the COVID-19 pandemic
adversely affected our ability to generate sufficient cash flows from operations to support these activities and the continuing
pandemic may do so in the future.

Steps taken to reduce operating costs and improve efficiency and further changes we may make in the future to reduce

costs have negatively impacted, and may in the future impact, owner and guest satisfaction. Reductions in or deferrals of
planned corporate capital expenditures may negatively impact owner satisfaction and make our products less attractive to
prospective purchasers.

If we cannot make scheduled payments on, or refinance, our debt, we would be in default, and the lenders under our
Corporate Credit Facility could terminate their commitments to loan money. Creditors could foreclose on the assets securing
our secured debt and apply the amounts realized from such foreclosures to repay amounts owed to them. Any of these actions
would likely trigger cross-default or cross-acceleration provisions in our other debt instruments, which would allow the
creditors under such instruments to exercise similar rights. If any of these actions were taken, we could be forced into
restructuring, bankruptcy or liquidation.

Risks related to our business and industry.

Our business may be adversely affected by factors that disrupt or deter travel.

Our success and profitability depend, in substantial part, upon the health of the worldwide vacation ownership,

vacation rental and travel industries, and may be adversely affected by a number of factors that can disrupt or deter travel. A
substantial amount of our sales activity occurs at our resorts, and sales volume is affected by the number of visitors at our
resorts. Fear of exposure to contagious illnesses, such as COVID-19 or other diseases, or natural or man-made disasters, and the
physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes and flooding, have caused and
may continue to cause travelers to delay or cancel travel plans, including tours at our resorts, with greater frequency. Other
factors such as weakened consumer confidence, limited availability of consumer credit and damage to infrastructure caused by
natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or
cancel plans to tour or visit our resorts. For example, hurricanes have caused a number of Interval International exchange
network resorts and our managed vacation ownership resorts to close for prolonged periods. Actual or threatened war, civil
unrest and terrorist activity, as well as heightened travel security measures instituted in response to the same, could also
interrupt or deter travel plans. In addition, demand for our products and services may decrease if the cost of travel, including the
cost of transportation and fuel, increases, airlift to vacation destinations decreases, or if general economic conditions decline.

Our ability to process exchanges for members and to find purchasers and renters for accommodations we market or

manage, as well as the need for the vacation rental and property management services we provide, largely depends on the
continued desirability of the key vacation destinations in which our branded, managed or exchange properties are concentrated.
Changes in the desirability of the destinations where these resorts are located and changes in vacation and travel patterns may
adversely affect our cash flows, revenue and profits.

25

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

A number of factors may adversely affect the labor force available or increase labor costs from time to time, such as

high employment levels, federal unemployment subsidies, including unemployment benefits offered in response to the
COVID-19 pandemic, and other government regulations. In 2021, we observed an overall tightening and increasingly
competitive labor market. A sustained labor shortage or increased turnover rates within our employee base, whether due to the
impact of the COVID-19 pandemic or as a result of general macroeconomic factors, could lead to increased costs, such as
increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our
ability to efficiently operate our business. If we are unable to hire and retain employees capable of performing at a high level,
our business could be adversely affected.

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

Inflation can adversely affect us by increasing the costs of development or other corporate capital expenditures,

materials and labor, and interest rates. All of these factors can have a negative impact on the affordability of our products and
services. In a high inflationary environment, we may be unable to raise the price of our products and services in a proportional
manner, which could reduce our profit margins. In addition, our cost of capital, labor and materials can increase, which could
have an adverse impact on our business or financial results.

Alternatively, deflation could cause an overall decrease in spending and borrowing capacity, which could lead to a

deterioration of economic conditions and employment levels. Deflation could also cause the value of our products and services
to decline. These, or other factors that increase the risk of significant deflation, could have a negative impact on our business or
financial results.

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

affect our business.

We are subject to a wide variety of highly complex international, national, federal, state, and local laws, regulations
and policies. The vacation ownership industry is subject to extensive regulation around the world. Each jurisdiction where we
operate generally requires resort developers to follow a set of specific procedures to develop, sell and market vacation interests.
Our real estate development activities, marketing and sales activities, lending activities and resort management activities are
also heavily regulated. In addition, myriad laws, regulations and policies impact multiple areas of our business, such as those
regulating the sale and offer of securities, anti-discrimination, anti-fraud, data protection, anti-corruption and bribery or
implementing government economic sanctions.

Complying with the intricate and multifaceted regulatory structures applicable to our businesses across the globe is

complicated, constantly evolving, time-consuming and costly. We may not be able to successfully comply with all laws,
regulations and policies to which we are subject. These laws, regulations and policies may change or be subject to different
interpretation in the future, including in ways that could decrease demand for our services, increase costs, and subject us to
additional liabilities. Failure to comply could have a material adverse effect on our business. For example, failure to comply
with applicable law could result in the loss of licenses or registrations we must have in order to operate our business, render
sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation.
Adverse action by governmental authorities or others alleging our failure to comply with applicable laws could adversely affect
our business, financial condition, and reputation.

Changes in privacy laws could adversely affect our ability to market our products effectively.

We rely on a variety of direct marketing techniques, including telemarketing, email marketing and postal mailings.
Adoption of new laws, or changes in existing laws, in any of the jurisdictions in which we operate regulating marketing and
solicitation or data protection could adversely affect the effectiveness of our marketing strategies. If we are not able to develop
adequate alternative marketing strategies, our sales may be adversely affected. We also obtain access to potential customers
from travel service providers and other companies with whom we have relationships. If our access to these third-party customer
lists was prohibited or restricted, our ability to develop new customers and introduce our products to them could be impaired.

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Failure to maintain the integrity of internal or customer data or to protect our systems from cyber-attacks could

disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.

We collect large volumes of data, including social security numbers and other personally identifiable information of
our customers and employees, and retain it in our information systems and those of our service providers. It is critical that we
maintain the integrity of and protect this data, which we rely on to make business decisions and which our customers and
employees expect that we will protect. The regulatory environment in the jurisdictions where we operate and the requirements
imposed on us by the payment card industry regarding information, security and privacy is increasingly demanding. Many of
the laws applicable to us in different jurisdictions vary from each other in significant ways and may not have the same effect,
thus complicating compliance efforts. Our efforts to comply with these requirements may require significant additional
resources and time and may not be successful.

We may be required to expend significant capital and other resources to enhance the security of our data. Our

information systems and records, including those we maintain with our service providers or licensors, may be subject to
security breaches, cyber-attack or cyber-intrusion, system failures, viruses, operator error or inadvertent releases of data. Data
breaches have increased in recent years as the number, intensity and sophistication of attacks have increased. The techniques
used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to
detect for long periods of time. Neither we nor our service providers may be able to prevent, detect and contain unauthorized
activity and misuse or human errors compromising the efficacy of security measures. A breach in the security of our
information systems or those of our service providers or licensors could lead to an interruption in the operation of our systems,
resulting in operational inefficiencies and a loss of profits. A significant cyber-attack or theft, loss, or fraudulent use of our
customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines or
litigation.

We and the companies we work with have experienced cyber security threats to our data and systems, including
ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary
disruptions. We have experienced cyber incidents in the past, and have previously disclosed those with material operational or
financial implications to the Company or our stakeholders. Routinely, we partner with and use third-party service providers and
products that host, manage, or control sensitive data. The failure of any such service providers or products to comply with our
privacy policies or privacy laws and regulations, or any unauthorized release of personally identifiable information or other user
data, could damage our reputation, discourage potential users from trying our products and services, breach certain agreements
under which we have obligations with respect to network security, and/or result in fines and/or proceedings against us by
governmental agencies, service providers and/or consumers. Any of the foregoing could materially adversely affect our
business, financial condition and results of operations.

Our international operations expose us to risks that could lower our profits or disrupt our business.

Our international operations expose us to a number of additional risks, any of which could reduce our profits or disrupt

our business, such as: compliance with laws of non-U.S. jurisdictions, including foreign ownership restrictions, import and
export controls, and trade restrictions, and U.S. laws affecting our activities outside of the U.S.; anti-American sentiment;
political or civil unrest and terrorism; difficulties of managing operations in many different countries; local economic risks;
foreign currency exchange risks; and uncertainty as to the enforceability of contract and intellectual property rights under local
laws.

Inadequate or failed technologies could lead to interruptions in our operations and materially adversely affect our

business, financial position, results of operations or cash flows.

Our operations and competitive position depend on our ability to maintain existing systems and implement new
technologies. Our information technology systems and our databases are potentially susceptible to manmade and natural
disasters, as well as power losses, computer and telecommunications failures, technological breakdowns, cyber-attacks, acts of
war or terrorism and other events. System interruption, delays, obsolescence, loss of critical data and lack of integration and
redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services,
operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
Our backup systems only relate to certain aspects of our operations; these systems are not fully redundant and disaster recovery
planning is not sufficient for all eventualities. Projects to upgrade or replace our technologies may be extremely complex and
require significant resources and time. We may not have adequate insurance coverage to compensate for losses from a major
interruption. If our information technology systems fail to adequately support our strategic, operational or compliance needs,
our business, financial position, results of operations or cash flows may be adversely affected, as well as our disclosure controls
and procedures and internal control over financial reporting.

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Spanish court rulings voiding certain timeshare contracts have increased our exposure to litigation that may

materially adversely affect our business and financial condition.

A series of Spanish court rulings that, since 2015, have voided certain timeshare contracts has increased our exposure

to litigation that may materially adversely affect our business and financial condition. These rulings voided certain timeshare
contracts entered into after January 1999 related to certain resorts in Spain if a resort’s timeshare structure did not meet
requirements prescribed by Spanish timeshare laws enacted in 1998, even if the structure was lawful prior to 1998 and adapted
pursuant to mechanisms specified in the 1998 laws. These rulings have led to an increase in lawsuits by owners seeking to void
timeshare contracts in Spain, including certain contracts at certain of our resorts in Spain. If additional owners at our resorts in
Spain file similar lawsuits, this may: void certain of those owners’ timeshare contracts; cause us to incur material litigation and
other costs, including judgment or settlement payments; and materially adversely affect the results of operation of our Vacation
Ownership segment, as well as our business and financial condition. The increased ability for owners of Spanish timeshares to
void their contracts is negatively impacting other developers with resorts in Spain, which may lead to a significant decrease in
the number of resorts located in Spain in the Interval International network and the loss of members who own VOIs at those
resorts.

The industries in which our businesses operate are competitive, which may impact our ability to compete

successfully.

Our businesses will be adversely impacted if they cannot compete effectively in their respective industries, each of
which is highly competitive. A number of highly competitive companies participate in the vacation ownership industry. Our
brands compete with the vacation ownership brands of major hotel chains in national and international venues, as well as with
the vacation rental options (such as hotels, resorts and condominium rentals) offered by the lodging industry. Our competitors
may have greater access to capital resources and broader marketing, sales and distribution capabilities than we do. Competitive
pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our
business, financial condition and results of operations.

Our principal exchange network administered by Interval International included nearly 3,200 resorts located in over 90

nations as of December 31, 2021. Interval International’s primary competitor, RCI, has a greater number of affiliated resorts
than we have. Through the resources of its corporate affiliates, particularly, Travel + Leisure Co., engaged in vacation
ownership sales, RCI may have greater access to a significant segment of new vacation ownership purchasers and a broader
platform for participating in industry consolidation. In addition, Interval International competes with developers that create,
operate and expand internal exchange and vacation club systems, which decreases their reliance on external vacation ownership
exchange programs, including those we offer, and adversely impacts the supply of resort accommodations available through our
external exchange networks. The effects of such competition on our exchange business are more pronounced as the proportion
of vacation club corporate members in the Interval International network increases.

Our businesses also compete for leisure travelers with other leisure lodging operators, including both independent and

branded properties, as well as with alternative lodging marketplaces, which operate websites that market furnished, privately-
owned residential properties throughout the world which can be rented on a nightly, weekly or monthly basis.

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

Negative public perception regarding our industry resulting from, among other things, consumer complaints regarding

sales and marketing practices, consumer financing arrangements, and restrictions on exit related to our products, as well as
negative comments on social media, could result in increased regulatory scrutiny, which could result in reputational damage,
more onerous laws, regulations, guidelines and enforcement interpretations in jurisdictions in which we operate. These actions
may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation.

Changes in tax regulations or their interpretation could reduce our profits or increase our costs.

Changes in tax and other revenue raising laws, regulations and policies in the jurisdictions where we do business could

impose new restrictions, costs or prohibitions on our practices and reduce our profits. In addition, interpretation of tax
regulations requires us to exercise our judgment and taxing authorities or our independent registered public accounting firm
may reach conclusions about the application of such regulations that differ from our conclusions. Our effective tax rate reflects
the fact that income earned and reinvested outside the U.S. is generally taxed at local rates that can be lower than U.S. tax rates
or based on a different tax base than U.S. jurisdictions, as well as our ability to carry forward losses in certain jurisdictions from
prior years to offset future profits. Changes to U.S. or international tax laws, regulations or interpretations could impact the tax
treatment of our earnings and adversely affect our profitability. For example, if such changes significantly increase the tax rates
on non-U.S. income, our effective tax rate could increase, our profits could be reduced, and if such increases were a result of
our status as a U.S. corporation, we could be placed at a disadvantage to our non-U.S. competitors that are subject to lower
local tax rates.

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We are subject to audit in various jurisdictions, and these jurisdictions may assess additional taxes against us.
Developments in an audit, litigation, or laws, regulations, administrative practices, principles, and interpretations could have a
material effect on our operating results or cash flows. The final outcome of tax audits, investigations, and any related litigation
could be materially different from our historical tax provisions and accruals.

Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas

exposes our business to the effects of severe weather and other regional events in these areas.

Our business is susceptible to the effects of natural or man-made disasters, including earthquakes, windstorms,
tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents, in the areas
where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, California, South Carolina
and Hawaii. For example, properties in these markets have had to close in the past in order to repair damage caused by
disasters. Depending on the severity of future disasters, the resulting damage could require closure of all or substantially all of
our properties in one or more of these markets while we complete renovations. Our insurance may not cover all damages caused
by any such event, including the loss of sales of VOIs at sales centers that are not fully operational. In addition, insurance costs
may increase and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent
natural disasters in these areas.

Our business is also susceptible to the effects of adverse economic developments in these areas, such as regional

economic downturns, significant increases in the number of our competitors’ products in these markets and potentially higher
labor, real estate, tax or other costs in these geographic markets. Because of this geographic concentration of properties, we face
a greater risk of a negative effect on our revenues and profits if these areas are affected by severe weather, man-made disasters
or adverse economic and competitive conditions.

If we are not able to successfully identify, finance, integrate and/or manage costs related to acquisitions, our

business operations and financial position could be adversely affected.

We have expanded in part through acquisitions of other businesses and may continue to do so in the future. Our

acquisition strategy depends on our ability to identify, and the availability of, suitable acquisition candidates. We may incur
costs in connection with proposed acquisitions, but may ultimately be unable or unwilling to consummate any particular
proposed transaction for various reasons. In addition, acquisitions involve numerous risks, including risks that we will not be
able to: successfully integrate acquired businesses in an efficient and cost-effective manner; achieve anticipated benefits of an
acquisition, including expected synergies; control potential increases in operating costs; manage geographically remote
operations; successfully expand our system of internal controls or our technological infrastructure to include an acquired
business; avoid potential disruptions in ongoing operations during an acquisition process or integration efforts; successfully
enter markets in which we have limited or no direct experience, including foreign markets whose practices or laws may pose
increased risk; and retain key employees, clients, vendors and business partners of the acquired companies. Failure to achieve
the anticipated benefits of any acquisition may adversely affect our financial condition, operating results and prospects.
Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, write-offs of
goodwill or substantial amortization expenses associated with other intangible assets.

Our use of different estimates and assumptions in the application of our accounting policies could result in
material changes to our reported financial condition and results of operations, and changes in accounting standards or their
interpretation could significantly impact our reported results of operations.

Our accounting policies are critical to the manner in which we present our results of operations and financial condition.

Many of these policies, including policies relating to the recognition of revenue and determination of cost of sales, are highly
complex and involve many assumptions, estimates and judgments. We are required to review these assumptions, estimates and
judgments regularly and revise them when necessary. Our actual results of operations vary from period to period based on
revisions to these estimates. For example, in response to the COVID-19 pandemic, we increased our sales reserve due to higher
default expectations and revised our estimates of the fair value of our reporting units, resulting in the impairment of goodwill.
In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial
Accounting Standards Board, periodically revise or issue new financial accounting and reporting standards that govern the
preparation of our consolidated financial statements. Changes to these standards or their interpretation could significantly
impact our reported results in future periods. See Footnote 2 “Summary of Significant Accounting Policies” to our Financial
Statements for more information regarding changes in accounting standards that we recently adopted or expect to adopt in the
future.

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The growth of our business and execution of our business strategies depend on the services of our senior

management and our associates.

Our business is based on successfully attracting and retaining talented associates. The market for highly skilled

associates and leaders in our industry is extremely competitive. If we are less successful in our recruiting efforts, or if we are
unable to retain management and other key associates, our ability to develop and deliver successful products and services may
be adversely affected. Effective succession planning is also important to our long-term success. The departure of a key
executive or associate and/or the failure to ensure an effective transfer of knowledge and a smooth transition upon such
departure may be disruptive to the business and could hinder our strategic planning and execution.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with

respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or
additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors and other stakeholders related to their

environmental, social and governance (“ESG”) practices and disclosure. Investor advocacy groups, investment funds and
influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and
safety, board and workforce diversity, labor conditions and human rights. Increased ESG-related compliance costs could result
in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or
stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and
stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding
mandatory and voluntary reporting, diligence, and disclosure.

Risks related to our vacation ownership business.

The termination of our license agreements with Marriott International or Hyatt, or our rights to use their

trademarks at our existing or future properties, could materially harm our business.

Our success depends, in part, on our relationships with Marriott International and Hyatt. These relationships are
governed by various agreements, including long-term license agreements that expire between 2090 and 2095, subject to
renewal. However, if we breach our obligations under a license agreement, the applicable licensor may be entitled to terminate
the license agreement and our rights to use its brands in connection with our businesses. In addition, if any of our properties
does not meet applicable brand standards, the applicable licensor can terminate our right to use its trademarks at the subject
properties.

The termination of our license agreements with Marriott International or its affiliates would materially harm our

business and results of operations and materially impair our ability to market and sell our products and maintain our
competitive position, and could have a material adverse effect on our financial position, results of operations or cash flows. Our
inability to rely on the strength of the Marriott, Sheraton and/or Westin brands to attract qualified prospects in the marketplace
would likely cause our revenue and profits to decline and our marketing and sales expenses to increase. Our inability to market
to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing
partnerships with North American Marriott International reservation centers would cause our sales to decline, which could
adversely affect our financial condition and result of operations. In addition, we would not be able to use the brand websites as
channels through which to rent available inventory, which would cause our rental revenue to decline materially.

Our license agreements also allow us to offer points to members of the loyalty programs associated with the Marriott,

Sheraton, Westin and Hyatt brands, which provides us with the opportunity to market directly to these members. The
termination of the license agreements with Marriott International or Hyatt would eliminate this valuable marketing channel.

We must also obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or
develop in the future. If our licensors do not consent to such use, our ability to expand our business and remain competitive may
be materially adversely affected.

Deterioration in the quality or reputation of the brands associated with our portfolio could adversely affect our

market share, reputation, business, financial condition and results of operations.

We offer vacation ownership products and services under the Marriott, Sheraton, Westin, The Ritz-Carlton, and Hyatt
brands. Our success depends in part on the continued success of Marriott International and Hyatt and their respective brands. If
market recognition or the positive perception of Marriott International and/or Hyatt is reduced or compromised, the goodwill
associated with these brands may be adversely affected, which may adversely affect our market share, reputation, business,
financial condition or results of operations. The positioning and offerings of any of these brands and/or their related customer
loyalty programs could change in a manner that adversely affects our business.

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Marriott International could compete with our vacation ownership business in the future.

Under the license agreement with Marriott International, if other international hotel operators offer new products and

services as part of their respective hotel businesses that may directly compete with our vacation ownership products and
services, then Marriott International may also offer such new products and services, and use its trademarks in connection with
such offers. If Marriott International offers new vacation ownership products and services under its trademarks, it may compete
directly with our vacation ownership products and services, and we may not be able to distinguish our vacation ownership
products and services from those offered by Marriott International. Our ability to remain competitive and to attract and retain
owners depends on our success in distinguishing the quality and value of our products and services from those offered by
others. If we cannot compete successfully in these areas, this could limit our operating margins, diminish our market share and
reduce our earnings.

If a branded hotel property co-located with one of our resorts ceases to be affiliated with the same brand as our

resort or a related brand, our business could be harmed.

Approximately 20% of our Vacation Ownership segment resorts are co-located with same-branded hotel properties. If
a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand
as our resort, which has happened in the past, we could lose benefits such as sharing amenities, infrastructure and staff,
integration of services, and other cost efficiencies. Our owners could lose access to the more varied and elaborate amenities that
are generally available at the larger campus of an integrated vacation ownership and hotel resort. We expect our overhead and
operating costs for such resorts would increase. We could also lose our on-site access to hotel customers, including brand
customer loyalty program members, at such resorts, which is a cost-effective marketing channel for our vacation ownership
products, and our sales may decline.

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

We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed

units to us at pre-agreed prices in the future. These transactions expose us to additional risk as we will not control development
activities or timing of development completion. If our counterparties default on their obligations, or exercise their right to sell
inventory to a different buyer, we may not acquire the inventory we expect on time or at all, or it may not be within agreed
upon specifications. If we cannot obtain inventory from alternative sources on a timely basis, we may not be able to achieve
sales forecasts. Conversely, if we procure or commit to procure inventory based on an expected sales plan and fail to achieve
that plan, we could have excess inventory, potentially negatively impacting our profit margins.

The sale of vacation ownership interests in the secondary market by existing owners could cause our sales revenues

and profits to decline.

Sales of VOIs by existing owners, which are typically at lower prices than the prices at which we would sell interests,

can create pricing pressure on our sale of vacation ownership products and cause our sales revenues and profits to decline. In
addition, unlawful or deceptive third-party VOI resale schemes involving interests in our resorts could damage our reputation
and brand value and adversely impact our sales revenues. Development of a more robust secondary market may also cause the
volume of lower-cost VOI inventory that we are able to repurchase to supplement our inventory needs to decline, which could
adversely impact our development margin.

Purchaser defaults on the vacation ownership notes receivable our business generates could reduce our revenues,

cash flows and profits.

In connection with our vacation ownership business, we provide loans to purchasers to finance their purchase of VOIs.

Accordingly, we are subject to the risk that purchasers of our VOIs may default on the financing that we provide. The risk of
purchaser defaults may increase due to man-made or natural disasters, which cause financial hardship for purchasers. The risk
of purchaser defaults may also increase if we do not evaluate accurately the creditworthiness of the customers to whom we
extend financing or due to the influence of timeshare relief firms. Purchaser defaults have caused, and may continue to cause, us
to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have
not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS
market or the Warehouse Credit Facility. If default rates for our borrowers increase, we have been required, and may in the
future be required, to increase our reserve on vacation ownership notes receivable.

If default rates increase beyond current projections and result in higher than expected foreclosure activity, our results

of operations could be adversely affected. Purchaser defaults could impact our ability to secure ABS or warehouse credit
facility financing on terms that are acceptable to us, or at all. In addition, the transactions in which we have securitized vacation
ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which,
if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the
requirements. Also, if a purchaser of a VOI defaults on the related loan during the early part of the amortization period, we may
not have recovered the marketing, selling and general and administrative costs associated with the sale of that VOI. If we are

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

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

Selling VOIs in a system of resorts under a points-based business model increases the risk of temporary inventory

depletion. Currently, our VOI sales are made primarily through a limited number of trust entities that issue VOIs. This structure
can lead to a temporary depletion of inventory available for sale caused by: (1) delayed delivery of inventory under construction
by us or third parties; (2) delayed receipt of required governmental registrations of inventory for sale; and (3) significant
unanticipated increases in sales pace. If the inventory available for sale for a particular trust were to be depleted before new
inventory is added and available for sale, we would be required to temporarily suspend sales until inventory is replenished or
shift to selling an alternative product which may increase marketing and sales costs and lower VPG. Our efforts to avoid the
risk of temporary inventory depletion by maintaining a surplus supply of completed inventory based on our forecasted sales
pace, and by employing other mitigation strategies such as accelerating completion of resorts under construction, acquiring
VOIs on the secondary market, or reducing sales pace by adjusting prices or sales incentives, may not be successful. A
depletion of VOI inventory could decrease our financing revenues generated from purchasers of VOIs and fee revenues
generated by providing club, management, exchange, sales, and marketing services. In addition, any temporary suspension of
sales due to lack of inventory could reduce our cash flow and have a negative impact on our results of operations.

Our development activities expose us to project cost and completion risks.

Our project development activities entail risks that may cause project delays or increased project costs and therefore

may adversely impact our results of operations, cash flows and financial condition, including:

•

•

•

•

•

•

•

•

•

construction delays or cost overruns;

shortages of skilled labor;

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

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

an inability to timely obtain required governmental permits and authorizations;

compliance with zoning, building codes and other local regulations;

performance by third parties involved in the financing and development of our projects;

the cost or availability of raw materials; and

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

Our resort management business may be adversely affected by the loss of management contracts, failure of resorts

to comply with brand standards, increased maintenance fees and disagreements with owners.

Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties

and keep them in compliance with brand standards. If a resort fails to comply with applicable brand standards, the applicable
licensor could terminate our rights to use its trademarks at the resort, which would result in the loss of management fees,
decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.
Increases in maintenance fees to keep pace with maintenance and other costs may make our products less desirable, which
could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio. If the
owners’ associations that we manage are unable to collect sufficient maintenance fees to cover operating and maintenance
costs, the related resorts may have to close or file for bankruptcy, which may result in termination of our management
agreements. We may also lose resort management contracts if they are not renewed when they expire, or the contract terms may
be renegotiated in a manner adverse to us. The loss or renegotiation of a significant number of our management contracts may
adversely affect our cash flows, revenues and profits.

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

owners of our VOIs have disagreed, and may in the future disagree, with changes we make to our products or programs.
Sometimes, disagreements with VOI owners and owners’ associations result in litigation and/or the loss of management
contracts. If any such litigation results in a significant adverse judgment or settlement, we could suffer significant losses, our
profits could be reduced, our reputation could be harmed and our future ability to operate our business could be constrained.

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Damage to, or other potential losses involving, properties that we own or manage may not be covered by insurance.

Market forces beyond our control may limit the scope of the insurance coverage we can obtain or our ability to obtain

coverage at reasonable rates. Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and
floods, or terrorist acts, may be uninsurable or the price of coverage for such losses may be too expensive to justify obtaining
insurance. The effects of climate change, such as increased storm intensity and rising sea levels over time, may also increase the
cost of property insurance and decrease our coverage levels. In addition, in the event of a substantial loss, the insurance
coverage we carry may not be sufficient to pay the full market value or replacement cost of our lost investment or that of
owners of VOIs or in some cases may not provide a recovery for any part of a loss due to deductible limits, policy limits,
coverage limits or other factors. As a result, we could lose some or all of the capital we have invested in a property, as well as
the anticipated future revenue from the property, and we could remain obligated under guarantees or other financial obligations
related to the property. In addition, we could lose the management contract for the property and, to the extent such property
operates under a licensed brand, the property may lose operating rights under the associated brand.

Risks related to our exchange and third-party management business.

Our Exchange & Third-Party Management business depends on relationships with developers, members and

others, and any adverse changes in these relationships could adversely affect our business, financial condition, and results
of operations.

Our Interval International business depends on vacation ownership developers for new members and on members and

participants to renew their existing memberships and otherwise engage in transactions. Developers and members also supply
resort accommodations for use in exchanges and Getaways. Our vacation rental business depends on vacation property and
hotel owners for vacation properties to rent to vacationers.

If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing

members or developers in our Interval International network, as has occurred in the past, the number of new and/or existing
members, the supply of resort accommodations available through our exchange networks and related revenue will decrease. The
failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the
developer renews Interval International membership fees for all of its active owners, has a greater adverse effect. The loss or
renegotiation on less favorable terms of several of our largest affiliation agreements could materially impact our financial
condition and results of operations. Our ability to maintain affiliation agreements with resort developers is also impacted by
consolidation in the vacation ownership industry.

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

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

Similarly, the failure of our third-party management businesses to maintain existing or negotiate new management

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

Insufficient availability of exchange inventory may adversely affect our profits.

Our exchange networks’ transaction levels depend on the supply of inventory in the system and demand for the

available inventory. Exchange inventory is deposited in the system by members, or by developers on behalf of members, to
support current or anticipated exchanges. Inventory supply and demand for specific regions and on a broader scope is
influenced by a variety of factors, such as: economic conditions; health and safety concerns, including concerns and travel
restrictions relating to the COVID-19 pandemic; the occurrence or threat of natural disasters and severe weather; and owner
decisions to travel to their home resort/vacation club system or otherwise not deposit exchange inventory. The factors that affect
demand for specific destinations could significantly reduce the number of accommodations available in such areas for
exchanges. The level of inventory in our system also depends on the number of developers whose resorts are in our exchange
networks, and the numbers of members of such resorts. The number of developers affiliated with our exchange networks may
decrease for a variety of reasons, such as consolidation and contraction in the industry and competition. If inventory supply and
demand do not keep pace, transactions may decrease or we may purchase additional inventory to fulfill the demand, both of
which could negatively affect our profits.

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Risks related to our indebtedness.

Our indebtedness may restrict our operations.

As of December 31, 2021, we had approximately $2.8 billion of total corporate indebtedness outstanding and could

borrow an additional $598 million under the Revolving Corporate Credit Facility. The credit agreement that governs the
Corporate Credit Facility and the indentures that govern the various senior notes impose significant operating and financial
restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay
dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate
transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or
substantially all of their assets. All of these covenants and restrictions limit how we conduct our business. The Corporate Credit
Facility also requires us to maintain a specified leverage ratio. These restrictions could restrict our flexibility to react to changes
in our businesses, industries and economic conditions and increase borrowing costs.

We must dedicate a portion of our cash flow from operations to debt servicing and repayment of debt, which reduces

funds available for strategic initiatives and opportunities, dividends, share repurchases, working capital, and other general
corporate needs. It also increases our vulnerability to the impact of adverse economic and industry conditions.

If we are unable to comply with our debt agreements, or to raise additional capital when needed, our business, cash

flow, liquidity, and results of operations could be harmed.

Our ability to make scheduled cash payments on and to refinance our indebtedness depends on our ability to generate

significant operating cash flow in the future, which, to a significant extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our control. We may not be able to maintain a sufficient
level of cash flow from operating activities to permit us to pay the principal, premium, if any, and interest on our indebtedness.

In addition, our credit ratings will impact the cost and availability of future borrowings and, accordingly, our cost of
capital. Downgrades in our ratings could adversely affect our businesses, cash flows, financial condition, operating results and
share and debt prices, as well as our obligations with respect to our capital efficient inventory acquisitions.

Failure to make scheduled cash payments on our existing debt, or to comply with the restrictive covenants and other

requirements in our debt agreements, could result in an event of default, which, if not cured or waived, could result in
acceleration of our debt obligations. We may not have sufficient cash to repay any accelerated debt obligations, which would
immediately and materially harm our business, results of operations and financial condition.

We may be required to raise additional capital to refinance our existing debt, or to expand or support our operations.
Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global
financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings, and the outlook for
our industry as a whole. The terms of future debt agreements could include more restrictive covenants or require incremental
collateral, which may further restrict our business operations or adversely affect our ability to obtain additional financing. There
is no guarantee that debt or equity financings will be available in the future on terms favorable to us or at all. If we are unable to
access additional funds on acceptable terms, we may have to adjust our business operations, and our ability to acquire
additional vacation ownership inventory, repurchase VOIs, or make other investments in our business could be impaired, any of
which may adversely affect our cash flows, revenues and profits.

We may incur substantially more debt, which could exacerbate further the risks associated with our leverage.

We and our subsidiaries may incur substantial additional indebtedness in the future, including secured indebtedness, as

well as obligations that do not constitute indebtedness as defined in our debt agreements. To the extent that we and our
subsidiaries incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness
described above will increase.

If the default rates or other credit metrics underlying our vacation ownership notes receivable deteriorate, our

vacation ownership notes receivable securitization program and VOI financing program could be adversely affected.

Our vacation ownership notes receivable portfolio performance and securitization program could be adversely affected
if any vacation ownership notes receivable pool fails to meet certain ratios, which could occur if the default rates or other credit
metrics of the underlying vacation ownership notes receivable deteriorate. Default rates may deteriorate due to many different
reasons, including those beyond our control, such as financial hardship of purchasers. In addition, if we offer loans to our
customers with terms longer than those generally offered in the industry, our ability to securitize those loans may be adversely
impacted. Instability in the credit markets may impact the timing and volume of the vacation ownership notes receivable that
we are able to securitize, as well as the financial terms of such securitizations. If ABS issued in our securitization programs are
downgraded by credit agencies in the future, our ability to complete securitization transactions on acceptable terms or at all
could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to
the extent available.

34

We are subject to risks relating to our convertible notes.

Holders of our convertible notes may convert the convertible notes after the occurrence of certain dates or events. See

Footnote 16 “Debt,” to our Financial Statements for additional information. If any holders elect to convert their convertible
notes, we may elect to settle all or a portion of our conversion obligation through the payment of cash, which could adversely
affect our liquidity.

The way we account for our convertible notes may impact our reported or future financial results and the market price
of our common stock. For example, the application of current accounting standards results in our reporting lower net income (or
greater net loss) in our financial results because interest must include both the current period’s amortization of the debt discount
and the instrument’s coupon interest. See Footnote 16 “Debt” and Footnote 2 “Summary of Significant Accounting Policies,” to
our Financial Statements for additional information regarding current and pending methods of accounting for our convertible
notes, respectively.

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

In connection with the convertible notes, we entered into privately negotiated convertible note hedges to reduce

potential dilution to our common stock and/or offset cash payments we must make in excess of the principal amount, in each
case, upon any conversion of convertible notes. We also issued warrants to the hedge counterparties. The warrants could have a
dilutive effect on our shares of common stock to the extent that the market price per share exceeds the applicable strike price of
the warrants on one or more of the applicable expiration dates.

In connection with establishing their initial hedges of the convertible note hedges and the warrants, the hedge

counterparties and/or their respective affiliates advised us that they expected to purchase shares of our common stock in
secondary market transactions and/or enter into various derivative transactions with respect to our common stock. These parties
may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or
buying or selling our common stock in the secondary market. Any of these activities could cause or prevent an increase or a
decline in the market price of our common stock.

We are subject to the risk that one or more of the hedge counterparties may default under the convertible note hedges.

If any of the hedge counterparties become subject to insolvency proceedings, we will become an unsecured creditor with a
claim equal to our exposure at that time under our transactions with such counterparties. Our exposure will depend on many
factors but, generally, the increase in our exposure will be correlated to the increase in the market price and in the volatility of
our common stock. In addition, upon a default by a hedge counterparty, we may suffer adverse tax consequences and more
dilution than we currently anticipate with respect to our common stock.

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

As of December 31, 2021, approximately $784 million of our gross aggregate consolidated indebtedness was indexed
to the USD London Interbank Offered Rate (“LIBOR”) and we were party to $550 million of derivative instruments indexed to
LIBOR. In addition, funding costs related to our $600 million Revolving Corporate Credit Facility and $350 million Warehouse
Credit Facility, which were both undrawn at December 31, 2021 except for $2 million in letters of credit outstanding, are
generally indexed to LIBOR. The U.K. authority that regulates LIBOR announced that it will no longer permit new LIBOR
contracts after December 31, 2021, and will not compel banks to submit rates for the calculation of LIBOR after June 2023.
There is considerable uncertainty regarding the publication of such rates beyond June 2023. A committee convened by the U.S.
Federal Reserve to oversee the transition process for LIBOR rates quoted in U.S. dollars recommended the Secured Overnight
Financing Rate as the alternative to LIBOR rates quoted in U.S. dollars. Other authorities have recommended alternatives to
LIBOR rates quoted in other currencies. The full impact of any transition away from LIBOR remains unclear and these changes
may have a material adverse impact on the availability of financing, including LIBOR-based loans, and on our financing costs.
To the extent our interest rates increase, our interest expense will increase, which could adversely affect our financial condition,
operating results and cash flows.

Risks related to ownership of our common stock.

Our share repurchase program may not enhance long-term shareholder value and could increase the volatility of

the market price of our common stock and diminish our cash.

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

amount of any repurchases depend upon several factors, including market conditions, business conditions, statutory and
contractual restrictions, the trading price of our common stock and the nature of other investment opportunities available to us.
In addition, repurchases of our common stock could affect our stock price and increase its volatility. The existence of a share
repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market
liquidity for our stock. Use of our funds to repurchase shares could diminish our cash reserves, which may impact our ability to
finance growth, pursue strategic opportunities, and discharge liabilities. Our share repurchases may not enhance shareholder

35

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

Our ability to pay dividends on our stock is limited.

We may not declare or pay dividends in the future at any particular rate or at all. Our Board of Directors makes all
decisions regarding our payment of dividends, subject to an evaluation of our financial condition, results of operations and
capital requirements, as well as applicable law, regulatory and contractual constraints, industry practice and other business
considerations that our Board of Directors considers relevant. Certain of the agreements governing our indebtedness restrict our
ability and/or the ability of our subsidiaries to pay dividends, and the terms of agreements governing debt that we may incur in
the future may also limit or prohibit dividend payments. The payment of certain cash dividends may also result in an adjustment
to the conversion rate of the Convertible Notes in a manner adverse to us. We may not have sufficient surplus under Delaware
law to be able to pay any dividends, which may result from extraordinary cash expenses, actual expenses exceeding
contemplated costs, funding of capital expenditures or increases in reserves.

Anti-takeover provisions in our organizational documents, Delaware law and in certain of our agreements could

delay or prevent a change in control.

Provisions of our Charter and Bylaws, as well as provisions in the agreements with our licensors, may delay or prevent
a merger or acquisition that a shareholder may consider favorable. For example, our Charter and Bylaws provide for a classified
board, require advance notice for shareholder proposals and nominations, place limits on convening shareholder meetings and
authorize our Board of Directors to issue one or more series of preferred stock. Delaware law also restricts some business
combinations between any holder of 15% or more of our outstanding common stock and us. The fact that these provisions and
statutory restrictions may discourage acquisition proposals or delay or prevent a change in control could harm our stock price.
Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock
and us.

Further, a change in control could result in an acceleration of our obligations under the Corporate Credit Facility or the

indentures that govern our senior notes. The threat of our debt being accelerated in connection with a change in control could
make it more difficult for us to attract potential buyers or to consummate a change in control transaction that would otherwise
be beneficial to our stockholders.

Risks related to the Vistana Spin-Off.

The ILG Acquisition could result in material liability if it causes the Vistana Spin-Off to be taxable.

In connection with Vistana’s spin-off from Starwood and acquisition by ILG (the “Vistana Spin-Off”), ILG and

Vistana entered into a Tax Matters Agreement that restricts them from actions or omissions that would cause the Vistana Spin-
Off to become taxable. Failure to adhere to these restrictions, including in certain circumstances that may be outside of our
control, could result in tax being imposed on Starwood or its shareholders for which we may be obligated to indemnify
Starwood. Even if we are not responsible for such tax liabilities under the Tax Matters Agreement, we may be liable under
applicable tax law for such liabilities if Starwood fails to pay such taxes. For two years after the Vistana Spin-Off, the Tax
Matters Agreement prohibited Vistana and ILG from taking certain actions involving their stock or Vistana’s assets because the
Vistana Spin-Off would be taxable to Starwood (but not to Starwood shareholders) pursuant to Section 355(e) of the Internal
Revenue Code if there was a direct or indirect 50% or greater change in Vistana’s ownership as part of a plan or series of
related transactions including the Vistana Spin-Off. The Vistana acquisition was not expected to violate this rule because
Starwood shareholders held over 50% by vote and value of ILG stock (and, thus, indirectly, of Vistana) immediately after the
Vistana acquisition. However, the ILG Acquisition diluted the indirect ownership of Vistana by its former shareholders below
50%. We received an opinion from KPMG LLP that entering into the ILG Acquisition would not affect the tax-free status of the
Vistana Spin-Off; however, this opinion does not bind the IRS or any court. If the IRS asserts that the ILG Acquisition is part of
a plan or series of related transactions including the Vistana Spin-Off and the Vistana acquisition, and this assertion is
sustained, the Vistana Spin-Off would be subject to the application of Section 355(e) of the Code, and we would be liable to
indemnify Starwood (or Marriott International) for any resulting tax liability pursuant to the Tax Matters Agreement.

Item 1B.

Unresolved Staff Comments

None.

36

Item 2.

Properties

As of December 31, 2021, our vacation ownership portfolio consisted of over 120 properties in the United States and

thirteen other countries and territories. These properties are described in Part I, Item 1, “Business,” of this Annual Report.
Except as indicated in Part I, Item 1, “Business,” we own all unsold inventory at these properties. We also own, manage or
lease golf courses, fitness, spa and sports facilities, undeveloped and partially developed land and other common area assets at
some of our resorts in our Vacation Ownership segment, including resort lobbies and food and beverage outlets.

In addition, we own or lease our regional offices and sales centers, both in the United States and internationally. The

leases for our current corporate headquarters in Orlando, Florida are set to expire in 2027. In the first quarter of 2020, we
entered into a lease agreement, that was amended during 2021, for our new global headquarters in Orlando, Florida, which is
currently expected to be completed in 2023. See Footnote 14 “Leases” for additional information.

Item 3.

Legal Proceedings

Currently, and from time to time, we are subject to claims in legal proceedings arising in the normal course of
business, including, among others, the legal actions discussed under “Loss Contingencies” in Footnote 13 “Contingencies and
Commitments” to our Financial Statements. While management presently believes that the ultimate outcome of these
proceedings, individually and in the aggregate, will not materially harm our financial position, cash flows, or overall trends in
results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in the aggregate,
have a material adverse effect on our business, financial condition, or operating results.

Item 4.

Mine Safety Disclosures

Not applicable.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Market Information and Dividends

Our common stock currently is traded on the New York Stock Exchange, or the “NYSE,” under the symbol “VAC.”
We currently expect to pay quarterly cash 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.
In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay
dividends, and the terms of agreements governing any debt that we may incur in the future may also limit or prohibit the
payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our
convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at
any particular rate or at all.

Holders of Record

On February 22, 2022, there were 24,618 holders of record of our common stock.

37

Issuer Purchases of Equity Securities

Period
October 1, 2021 – October 31, 2021 . . . . . . . . . . .
November 1, 2021 – November 30, 2021 . . . . . . .

December 1, 2021 – December 31, 2021 . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Number
of Shares
Purchased

Average
Price Paid
per Share

119,711
100,047

243,717

463,475

$
$

$

$

157.78
161.57

156.56

157.96

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs(1)

Maximum Dollar
Amount of Shares
That May Yet Be
Purchased Under
the Plans or
Programs(1)

119,711
100,047

243,717

463,475

$
$

$

$

226,615,634
210,451,495

172,295,787

172,295,787

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

Performance Graph

Comparison of Cumulative Total Return

$225

$200

$175

$150

$125

$100

$75

12/30/16

12/31/17

12/31/18

12/31/19

12/31/20

12/31/21

Marriott Vacations Worldwide Corporation
S&P MidCap 400 Index
S&P Composite 1500 Hotels, Resorts & Cruise Lines Index

The above graph compares the relative performance of our common stock, the S&P MidCap 400 Index (which has

included our common stock since the acquisition of ILG), and the S&P Composite 1500 Hotels, Resorts & Cruise Lines Index.
The graph assumes that $100 was invested in our common stock and each index on December 30, 2016. The stock price
performance reflected above is not necessarily indicative of future stock price performance. The foregoing performance graph is
being furnished as part of this Annual Report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our
shareholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any filings
by the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 6. Reserved

38

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

You should read the following discussion of our results of operations and financial condition together with our audited
historical consolidated financial statements and accompanying notes that we have included elsewhere in this Annual Report, as
well as the discussion in the section of this Annual Report entitled “Business.” This discussion contains forward-looking
statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on
our current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our
actual results could differ materially from the results contemplated by these forward-looking statements due to a number of
factors, including those we discuss in the sections of this Annual Report entitled “Risk Factors” and “Special Note About
Forward-Looking Statements.”

Our consolidated financial statements, which we discuss below, reflect our historical financial condition, results of
operations and cash flows. The financial information discussed below and included in this Annual Report may not, however,
necessarily reflect what our financial condition, results of operations and cash flows may be in the future.

Our discussion and analysis of fiscal year 2021 to fiscal year 2020 is included herein. Our discussion and analysis of
fiscal year 2020 to fiscal year 2019 has been omitted from this Form 10-K and can be found in Part II, “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal
year ended December 31, 2020, which was filed with the Securities and Exchange Commission on March 1, 2021.

Business Overview

We are a leading global vacation company that offers vacation ownership, exchange, rental, and resort and property

management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation
Ownership and Exchange & Third-Party Management.

Corporate and other represents that portion of our results that are not allocable to our segments, including those

relating to Consolidated Property Owners’ Associations.

COVID-19 Pandemic Update

The COVID-19 pandemic has caused significant disruptions in international and U.S. economies and markets, and has

also had an unprecedented impact on the travel industry and the Company. For further information about COVID-19’s impact
on our business, see Part I, Item 1, “Business.”

Significant Accounting Policies Used in Describing Results of Operations

Sale of Vacation Ownership Products

We recognize revenues from the sale of VOIs when control of the vacation ownership product is transferred to the

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

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

Finally, as more fully described in “Financing” below, we record the difference between the vacation ownership note

receivable and the consideration to which we expect to be entitled (also known as a vacation ownership notes receivable reserve
or a sales reserve) as a reduction of revenues from the sale of vacation ownership products at the time we recognize revenues
from a sale.

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

39

the sale of vacation ownership products that we report on our income statements due to the requirements for revenue
recognition described above. We consider contract sales to be an important operating measure because it reflects the pace of
sales in our business.

Cost of vacation ownership products includes costs to develop and construct our projects (also known as real estate

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

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

Management and Exchange

Our management and exchange revenues include revenues generated from fees we earn for managing each of our

vacation ownership resorts, providing property management, owners’ association management and related services to third-
party vacation ownership resorts and fees we earn for providing rental services and related hotel, condominium resort, and
owners’ association management services to vacation property owners.

In addition, we earn revenue from ancillary offerings, including food and beverage outlets, golf courses and other retail

and service outlets located at our Vacation Ownership resorts. We also receive annual membership fees, club dues and certain
transaction-based fees from members, owners and other third parties.

Management and exchange expenses include costs to operate the food and beverage outlets and other ancillary

operations and to provide overall customer support services, including reservations, and certain transaction-based expenses
relating to external exchange service providers.

In our Vacation Ownership segment and Consolidated Property Owners’ Associations, we refer to these activities as

“Resort Management and Other Services.”

Financing

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

Average FICO score . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
732

Fiscal Years
2020
730

2019
736

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

The interest income earned from our vacation ownership financing arrangements is earned on an accrual basis on the

principal balance outstanding over the contractual life of the arrangement and is recorded as Financing revenues on our Income
Statements. Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable
portfolio. The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes
receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by
principal collections. We calculate financing propensity as contract sales volume of financed contracts originated in the period
divided by contract sales volume of all contracts originated in the period. We do not include resales contract sales in the
financing propensity calculation. Financing propensity was 53% in 2021 and 51% in 2020. We expect to continue offering
financing incentive programs in 2022. We also plan to shift back to our pre-pandemic increased focus on sales to first-time
buyers, who are more likely to finance their purchases, which should further increase propensity and increase interest income as
new originations of vacation ownership notes receivable outpace the decline in principal of existing vacation ownership notes
receivable.

40

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. See Footnote 6 “Vacation
Ownership Notes Receivable” to our Financial Statements for further information regarding the accounting for acquired
vacation ownership notes receivable.

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

Historical default rates, which represent defaults as a percentage of each year’s beginning gross vacation ownership

notes receivable balance, were as follows:

Historical default rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
4.3%

Fiscal Years
2020
6.3%

2019
4.5%

The increased default rates in 2020 were predominantly due to the impact of the COVID-19 pandemic on the

performance of our notes receivable portfolio. The decrease in default rates in 2021 reflects the performance of our notes
receivable portfolio back to pre-pandemic levels.

Financing expenses include consumer financing interest expense, which represents interest expense associated with the

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

Rental

In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate

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

In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed properties

through VRI, TPI, and Aqua-Aston. We also offer vacation rental offers known as Getaways to members of the Interval
International network and certain other membership programs. The offering of Getaways allows us to monetize excess
availability of resort accommodations within the applicable exchange network, as well as provide additional vacation
opportunities to members. Resort accommodations available as Getaways typically result from seasonal oversupply or
underutilized space in the applicable exchange program, as well as resort accommodations specifically sourced for the
Getaways program.

41

Rental expenses include:

• Maintenance and other fees on unsold inventory;

•

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

• Marketing costs and direct operating and related expenses in connection with the rental business (such as

housekeeping, labor costs, credit card expenses and reservation services); and

•

Costs to secure resort accommodations for use in Getaways.

Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be

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

Cost Reimbursements

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

Interest Expense

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

within Financing expense.

Transaction and Integration Costs

Transaction and integration costs represent costs related to the ILG and Welk Acquisitions, primarily for financial

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

Other Items

We measure operating performance using the following key metrics:

•

Contract sales from the sale of vacation ownership products;

•

•

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

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

Development profit margin;

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

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

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

NM = Not meaningful.

•

•

•

•

•

42

CONSOLIDATED RESULTS

($ in millions)
REVENUES

Sale of vacation ownership products . . . . . . . . . . . . . . . . . . . . $
Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Cost of vacation ownership products . . . . . . . . . . . . . . . . . . . .
Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalty fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
(Losses) gains and other (expense) income, net
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and integration costs . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . .
(Provision for) benefit from income taxes . . . . . . . . . . . . . . . . . .
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . .
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

$

1,153
855
486
268
1,128
3,890

250
617
521
344
88
227
146
10
—
106
3
1,128
3,440
(51)
(164)
(110)
2

127
(74)
53
(4)

$

546
755
276
267
1,042
2,886

150
386
475
321
107
154
123
6
25
95
100
1,042
2,984
(26)
(150)
(66)
—

(340)
84
(256)
(19)

49

$

(275) $

1,354
949
573
275
1,108
4,259

349
748
547
357
91
248
141
7
—
106
99
1,108
3,801
16
(132)
(118)
1

225
(83)
142
(4)

138

43

Operating Statistics

(Contract sales $ in millions)
Vacation Ownership

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Total contract sales . . . . . . . . . . . . . $
Consolidated contract sales . . . . . . $
Exchange & Third-Party Management

1,411
1,374

$
$

669
654

$
$

1,569
1,524

Total active members at end of
period (000's)(1) . . . . . . . . . . . . . . . .
Average revenue per member(1)

1,296
. . . $ 179.48

1,518
$ 144.97

1,670
$ 168.73

$
$

$

_______________
(1)

Only includes members of the Interval International exchange network.

Revenues

The following table presents our revenues for 2021, 2020, and 2019.

742
720

111%
110%

$
$

(900)
(870)

(57%)
(57%)

(222)
34.51

(15%)
24%

(152)
$ (23.76)

(9%)
(14%)

($ in millions)

Vacation Ownership . . . . . . . . . . . . . . $
Exchange & Third-Party Management

Total Segment Revenues . . . . . . . .

Consolidated Property Owners'
Associations . . . . . . . . . . . . . . . . . . . .

Fiscal Years
2020

$

$

2,530
309

2,839

2019

3,761
454

4,215

2021

3,539
320

3,859

2021 vs. 2020
Change

2020 vs. 2019
Change

$

1,009
11

1,020

40%
4%

36%

$ (1,231)
(145)

(1,376)

(33%)
(32%)

(33%)

31

47

44

(16)

(35%)

3

10%

Total Revenues . . . . . . . . . . . . . . . . $

3,890

$

2,886

$

4,259

$

1,004

35%

$ (1,373)

(32%)

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

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable

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

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

44

($ in millions)
Net income (loss) attributable to
common shareholders . . . . . . . . . . . . . $
Interest expense . . . . . . . . . . . . . . . . .
Tax provision (benefit) . . . . . . . . . . . .
Depreciation and amortization . . . . . .
EBITDA . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . .
Certain items . . . . . . . . . . . . . . . . . . . .

Adjusted EBITDA . . . . . . . . . . . . . $
Adjusted EBITDA margin . . . . . . .

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

49
164
74
146
433
51
173
657

$

$

(275) $
150
(84)
123
(86)
37
284
235

$

138
132
83
141
494
37
227
758

$

$

324
14
158
23
519
14
(111)
422

NM
9%
NM
19%
NM
39%
NM
179%

$

$

(413)
18
(167)
(18)
(580)
—
57
(523)

NM
14%
NM
(13%)
NM
(1%)
25%
(69%)

24%

13%

24%

11 pts

(11 pts)

Certain items for 2021 consisted of $110 million of transaction and integration costs (including $93 million of ILG
Acquisition and integration related costs, $16 million of Welk Acquisition related costs, and $1 million of other transaction
costs), $51 million of losses and other expense (including $55 million related to the early redemption of our 2026 Notes (as
defined below) and a portion of our 2025 Notes (as defined below), and $3 million of miscellaneous other losses and other
expenses, partially offset by $7 million related to a true-up to a Marriott International indemnification receivable upon
settlement (the true-up to the offsetting accrual is included in the (Provision for) benefit from income taxes line)), $10 million
of litigation charges, $10 million of purchase accounting adjustments, and $3 million of impairment charges, partially offset by
$8 million to eliminate the impact of certain Consolidated Property Owners’ Associations, $2 million of activity related to the
accrual for health and welfare costs for furloughed associates, and $1 million of miscellaneous other adjustments.

Certain items for 2020 consisted of $100 million of impairment charges, $62 million of ILG Acquisition-related costs,
$57 million of other charges (including $50 million related to the net sales reserve adjustment, $2 million related to an accrual
for the health and welfare costs for furloughed associates, $4 million related to the charge for VAT penalties and interest (see
offset included in indemnification below) and $1 million of other miscellaneous charges), $26 million of losses and other
expense, $25 million of restructuring costs, $4 million of purchase accounting adjustments, $6 million of litigation charges, and
$4 million of transaction costs related to our capital efficient inventory arrangements.

The $26 million of losses and other expense included $32 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 Benefit (provision) for
income taxes line), $11 million related to foreign currency translation losses, and a $5 million loss related to the disposition of a
formerly consolidated subsidiary, partially offset by $6 million of gains and other income related to the disposition of excess
land parcels in Orlando, Florida and Steamboat Springs, Colorado, a $6 million receivable related to indemnification from
Marriott International for certain VAT charges, $4 million related to net insurance proceeds from the final settlement of
Legacy-MVW business interruption insurance claims arising from a prior year hurricane, $3 million related to other insurance
proceeds, and $3 million of miscellaneous gains and other income.

45

Segment Adjusted EBITDA

($ in millions)
Vacation Ownership . . . . . . . . . . . . . . $
Exchange & Third-Party Management
Segment Adjusted EBITDA . . . . . .
General and administrative . . . . . . . . .
Consolidated Property Owners'
Associations . . . . . . . . . . . . . . . . . . . .

Adjusted EBITDA . . . . . . . . . . . . . $

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

$

699
144
843
(186)

$

229
119
348
(118)

$

794
183
977
(222)

—
657

$

5
235

$

3
758

$

470
25
495
(68)

(5)
422

204%
23%
143%
(58%)

(100%)
179%

$

$

(565)
(64)
(629)
104

2
(523)

(71%)
(36%)
(64%)
47%

130%
(69%)

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

Vacation Ownership

($ in millions)
Segment Adjusted EBITDA . . . . . . . . $
Depreciation and amortization . . . . . .
Share-based compensation . . . . . . . . .
Certain items . . . . . . . . . . . . . . . . . . . .
Segment financial results . . . . . . . . . . $

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

699
(89)
(6)
(19)
585

$

$

229
(79)
(6)
(73)
71

$

$

794
(68)
(8)
(95)
623

$

$

470
(10)
—
54
514

204%
(13%)
3%
73%
NM

$

$

2020 vs. 2019
Change

(565)
(11)
2
22
(552)

(71%)
(15%)
29%
22%
(89%)

Certain items in the Vacation Ownership segment for the 2021 consisted primarily of $10 million of purchase

accounting adjustments and $9 million of litigation charges.

Certain items in the Vacation Ownership segment for 2020 consisted of $50 million related to the net sales reserve

adjustment, $15 million of restructuring costs, $8 million of asset impairment charges, $6 million of litigation charges, $3
million of unfavorable purchase accounting adjustments, and $3 million of transaction costs associated with capital efficient
inventory arrangements, partially offset by $12 million of gains and other income.

Exchange & Third-Party Management

($ in millions)
Segment Adjusted EBITDA . . . . . . . . . . . . $
Depreciation and amortization . . . . . . . . . .

Share-based compensation . . . . . . . . . . . . .

Certain items . . . . . . . . . . . . . . . . . . . . . . . .
Segment financial results . . . . . . . . . . . . . . $

Fiscal Years
2020

2019

2021

144

$

119

$

183

$

(48)

(2)

(1)

(32)

(2)

(99)

(47)

(3)

(4)

93

$

(14) $

129

$

2021 vs. 2020
Change
25

23%

(16)

(51%)

—

98

107

3%

99%

NM

2020 vs. 2019
Change
(64)

(36%)

15

1

(95)

(143)

32%

33%

NM

NM

$

$

Certain items in the Exchange & Third-Party Management segment for 2020 consisted of $92 million of asset
impairment charges, $4 million of restructuring costs, $2 million of miscellaneous losses and other expense, and $1 million of
unfavorable purchase accounting adjustments.

46

BUSINESS SEGMENTS

Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party

Management. See Footnote 20 “Business Segments” to our Financial Statements for further information on our segments.

VACATION OWNERSHIP

($ in millions)

REVENUES

2021

Fiscal Years
2020

2019

Sale of vacation ownership products . . . . . . . . . . . . . . . . . . . . $

1,153 $

546 $

Resort management and other services . . . . . . . . . . . . . . . . . . .

Rental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Cost of vacation ownership products . . . . . . . . . . . . . . . . . . . .

Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resort management and other services . . . . . . . . . . . . . . . . . . .

Rental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .

Litigation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Royalty fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains and other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and integration costs . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO
COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . $

470

446

268

1,202

3,539

250

617

200

394

88

89

9

—

106

—

1,202

2,955
1
(2)
2

356

239

265

1,124

2,530

150

386

136

363

106

79

6

15

95

8

1,124

2,468
12
(3)
—

585 $

71 $

1,354

488

512

271

1,136

3,761

349

695

229

390

89

68

6

—

106

99

1,136

3,167
28
—
1

623

Contract Sales

($ in millions)
Total consolidated contract sales . . . .
Joint venture contract sales . . . . . . . . .

Total contract sales . . . . . . . . . . . . . $

Fiscal Years
2020

654
15
669

$

$

2021

1,374
37
1,411

2019

1,524
45
1,569

$

2021 vs. 2020
Change

720
22
742

110%
155%
111%

2020 vs. 2019
Change

(870)
(30)
(900)

(57%)
(68%)
(57%)

$

47

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Sale of Vacation Ownership Products

($ in millions)
Total contract sales . . . . . . . . . . . . . . . $
Less resales contract sales . . . . . . . . .
Less joint venture contract sales . . . . .
Consolidated contract sales, net of
resales . . . . . . . . . . . . . . . . . . . . . . . . .
Plus:

$

1,411
(26)
(37)

1,348

Settlement revenue . . . . . . . . . . . . .
Resales revenue . . . . . . . . . . . . . . .

28
12

669
(12)
(15)

642

14
7

$

$

1,569
(30)
(45)

1,494

24
14

Revenue recognition adjustments:

Reportability . . . . . . . . . . . . . . . . . .
Sales reserve . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Other(1)

Sale of vacation ownership products . $

(44)
(101)
(90)
1,153

$

58
(129)
(46)
546

$

(8)
(112)
(58)
1,354

$

742
(14)
(22)

706

14
5

(102)
28
(44)
607

111%

$

111%

$

(900)
18
30

(852)

(10)
(7)

66
(17)
12
(808)

(57%)

(60%)

_______________
(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.

2021 Compared to 2020

Sale of vacation ownership products increased $607 million due primarily to $706 million of higher consolidated

contract sales volumes, net of resales, $28 million of lower sales reserve activity, $14 million of higher settlement revenue, and
$5 million of higher resales activity, partially offset by a $102 million unfavorable change in revenue reportability and $44
million of higher sales incentives issued (higher settlement revenue and higher sales incentives issued were driven by the higher
contract sales volumes year-over-year).

The higher contract sales performance reflects the continued ramp-up of the business following the initial impact of the
COVID-19 pandemic which commenced late in the prior year first quarter and resulted in the closure of all of our sales centers,
as well as the inclusion of the Welk business beginning in the second quarter of 2021. As a result of reopening our sales centers
throughout 2020 and 2021, as well as the Welk Acquisition, our contract sales volumes have improved on a sequential basis
each quarter and we expect that sequential improvement to continue in 2022.

The lower sales reserve reflects the prior year increase to the sales reserve to take into account higher expected default

activity as a result of the COVID-19 pandemic.

Revenue reportability was significantly negative in 2021. While we benefited from contract sales in the fourth quarter

of 2020 that we recognized as revenue in 2021, given the increasing contract sales volumes throughout 2021 due to the
reopening of our sales centers and continued ramp-up of our business, we saw a higher shift of contract sales in the fourth
quarter of 2021 into 2022 for revenue recognition. In contrast, revenue reportability was significantly positive in 2020 due to
contract sales from late in the fourth quarter of 2019 that were recognized as revenue in 2020. However, 2020 was not impacted
by a corresponding shift of revenues into 2021, given the low contract sales volumes in 2020 resulting from the impact of the
COVID-19 pandemic.

48

Development Profit

($ in millions)
Sale of vacation ownership products . $
Cost of vacation ownership products .
Marketing and sales . . . . . . . . . . . . . .
Development profit . . . . . . . . . . . . . . . $
Development profit margin . . . . . . . . .

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

$

1,153
(250)

(617)

$

546
(150)

(386)

$

1,354
(349)

(695)

607
(100)

(231)

286

$

10

$

310

24.8%

1.8%

22.9%

$

276
23.0 pts

111%
(66%)

(60%)

NM

$

(808)
199

309

(300)
$
(21.1 pts)

(60%)
57%

45%

NM

2021 Compared to 2020

Development profit increased $276 million year-over-year. The change reflected $268 million from the benefit of

higher contract sales volumes and lower marketing and sales spending as a percentage of revenue, $74 million related to lower
sales reserve activity, and $5 million of favorable product cost, due mainly to the sale of lower cost inventory and, to a lesser
extent, favorable product cost true-up activity, partially offset by $71 million of unfavorable revenue reportability year-over-
year.

Resort Management and Other Services Revenues, Expenses and Profit

($ in millions)
Management fee revenues . . . . . . . . . $
Ancillary revenues . . . . . . . . . . . . . . .
Other management and exchange
revenue . . . . . . . . . . . . . . . . . . . . . . . .
Resort management and other services
revenues . . . . . . . . . . . . . . . . . . . . . . .
Resort management and other services
expenses . . . . . . . . . . . . . . . . . . . . . . .
Resort management and other services
profit . . . . . . . . . . . . . . . . . . . . . . . . . . $
Resort management and other services
profit margin . . . . . . . . . . . . . . . . . . . .

2021 Compared to 2020

Fiscal Years
2020

2019

2021

$

158
188

124

470

$

149
89

118

356

$

144
224

120

488

2021 vs. 2020
Change
9
99

6%
111%

2020 vs. 2019
Change
5
(135)

4%
(60%)

$

6

5%

(2)

(3%)

114

32%

(132)

(27%)

(200)

(136)

(229)

(64)

(47%)

93

41%

270

$

220

$

259

$

50

23%

$

(39)

(15%)

57.5%

61.8%

53.0%

(4.3 pts)

8.8 pts

Resort management and other services revenues reflected higher ancillary revenues, including revenues from food and
beverage and golf offerings, as a result of the continued ramp-up of the business following the initial impact of the COVID-19
pandemic starting late in the prior year first quarter, as well as higher management fees and nearly $25 million of revenues
contributed by the Welk business. Resort occupancies continued to increase throughout 2021 as resorts that were closed at the
start of the COVID-19 pandemic reopened.

The increase in resort management and other services profit reflected the increase in resort management and other

services revenues, partially offset by higher ancillary expenses as a result of the higher ancillary revenues mentioned above and
the impact from the write-off of $7 million of outstanding management fee receivables deemed uncollectible related to a capital
efficient inventory arrangement.

While revenues from certain ancillary businesses continue to be adversely affected by government imposed capacity

limits, we have continued to remain agile by adjusting product and service offerings and operating hours such that Resort
management and other services profit remains strong. We expect that once we revert to our high-touch service model in the
latter half of 2022, commensurate with the quality expected of our iconic brands, we will have a slightly lower margin
associated with our ancillary businesses.

49

Rental Revenues, Expenses and Margin

($ in millions)
Rental revenues . . . . . . . . . . . . . . . . . . $
Rental expenses . . . . . . . . . . . . . . . . .
Rental profit

. . . . . . . . . . . . . . . . . . . . $

Fiscal Years
2020

2019

2021

446
(394)
52

$

$

$

239
(363)
(124) $

512
(390)
122

$

$

2021 vs. 2020
Change

207
(31)
176

86%
(9%)
NM

Rental profit margin . . . . . . . . . . . . . .

11.7%

NM

23.7%

NM

(transient keys in millions)
1.9
Transient keys rented(1)
Average transient key rate . . . . . . . . . $ 245.79
Resort occupancy . . . . . . . . . . . . . . . .

. . . . . . . . . . .

81.6%

2021

Fiscal Years
2020

1.1
$ 219.82
57.2%

2019

2.4
$ 228.38
88.1%

2021 vs. 2020
Change
0.8
25.97
24.4 pts

70%
12%

$

2020 vs. 2019
Change

$

$

(273)
27
(246)

NM

(53%)
7%
NM

2020 vs. 2019
Change

(1.3)
$
(8.56)
(30.9 pts)

(53%)
(4%)

_________________________
(1)

Transient keys rented exclude those obtained through the use of plus points and preview stays.

2021 Compared to 2020

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

As the majority of the governmental restrictions in response to the pandemic that caused rental activity to decline, such

as travel restrictions and quarantine requirements, have been lifted, we expect rental occupancies and revenues to continue to
increase in 2022.

Financing Revenues, Expenses and Margin

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

Financing revenues . . . . . . . . . . . . . . . $

268

$

265

$

271

$

Financing expenses . . . . . . . . . . . . . . .
Consumer financing interest expense .

(38)
(50)

(48)
(58)

(34)
(55)

3

10
8

21

1%

21%
14%

13%

$

$

2020 vs. 2019
Change

(6)

(14)
(3)

(23)

(2%)

(45%)
(5%)

(13%)

180

$

159

$

182

$

67.1%
53%

59.8%
51%

67.3%
63%

7.3 pts
2 pts

(7.5 pts)
(12 pts)

. . . . . . . . . . . . . . . . . $

Financing profit
Financing profit margin . . . . . . . . . . .
Financing propensity . . . . . . . . . . . . .

2021 Compared to 2020

The Welk business increased our revenues by nearly $31 million in 2021. Excluding the impact of the Welk business,

financing revenues decreased due to a $245 million decrease in the average net vacation ownership notes receivable balance.
This balance decreased as a result of the continued pay-down of the existing vacation ownership notes receivable portfolio
without a corresponding increase from new loan originations. As contract sales volumes and new loan originations continue to
grow in 2022, we expect that this growth should begin to more than offset the normal decline as a result of loan payment
activity, which would cause interest income to increase. Financing expenses decreased due to $14 million of higher credit losses
associated with acquired vacation ownership notes receivable in the prior year, offset partially by $2 million of costs associated
with the Welk business as well as $2 million of higher credit card fees. Lower consumer financing interest expense resulted
from the continued pay-down of securitized debt balances, offset partially by $2 million of costs from the Welk business.

50

Depreciation and Amortization

($ in millions)
Depreciation and amortization . . . . . . $

2021

Fiscal Years
2020

2019

89

$

79

$

68

$

2021 vs. 2020
Change
10

13%

2020 vs. 2019
Change
11

15%

$

2021 Compared to 2020

2021 included $8 million of depreciation and amortization expenses associated with assets acquired in the Welk

Acquisition.

Litigation Charges

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Litigation charges . . . . . . . . . . . . . . . . $

9

$

6

$

6

$

3

69%

$

—

(7%)

2021 Compared to 2020

In 2021, we incurred $9 million of litigation charges related primarily to projects in Europe. In 2020, we incurred $6

million of litigation charges, including approximately $4 million related to projects in Europe and approximately $1 million
related to projects in California.

Restructuring

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Restructuring . . . . . . . . . . . . . . . . . . . . $

— $

15

$

— $

(15)

NM

$

15

NM

2021 Compared to 2020

No restructuring costs were recorded in 2021. During 2020, we incurred $15 million in restructuring costs primarily

related to a workforce reduction plan that we adopted as a result of the COVID-19 pandemic.

Royalty Fee

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Royalty fee . . . . . . . . . . . . . . . . . . . . . $

106

$

95

$

106

$

11

11%

$

(11)

(10%)

2021 Compared to 2020

Royalty fee expense increased in 2021 as a result of higher contract closings compared to the prior year.

Impairment

($ in millions)
Impairment . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

— $

8

$

99

$

2021 vs. 2020
Change
(8)

(98%)

2020 vs. 2019
Change
(91)

(91%)

$

2021 Compared to 2020

No asset impairment charges were recorded in 2021. During 2020, we recorded $8 million of non-cash impairment
charges, including $6 million related to our Asia Pacific inventory as a result of the COVID-19 pandemic and $2 million of
impairment charges for property and equipment.

Cost Reimbursements

($ in millions)
Cost reimbursements . . . . . . . . . . . . . $

Fiscal Years
2020

2019

2021

1,202

$

1,124

$

1,136

$

2021 vs. 2020
Change
78

7%

2020 vs. 2019
Change
(12)

(1%)

$

51

Gains and Other Income

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Gains and other income, net . . . . . . . . $

1

$

12

$

28

$

(11)

(96%)

$

(16)

(56%)

2020

We recorded $12 million of gains and other income, including $6 million of net gains related to the disposition of

excess land parcels in Orlando, Florida and Steamboat Springs, Colorado, $4 million of net insurance proceeds related to the
settlement of Legacy-MVW business interruption insurance claims arising from a prior year hurricane, $1 million related to
foreign currency translation and $1 million related to a miscellaneous insurance refund.

Other

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Other . . . . . . . . . . . . . . . . . . . . . . . . . . $

2

$

— $

1

$

2

NM

$

(1)

NM

2021 Compared to 2020

In 2021, we incurred $2 million of transaction costs associated with our capital efficient inventory arrangements.

EXCHANGE & THIRD-PARTY MANAGEMENT

Our Exchange & Third-Party Management segment offers access to vacation accommodations and other travel-related

transactions and services to leisure travelers by providing vacation exchange and management services, including vacation
rentals and other services. We provide these services through a variety of brands including Interval International, Trading
Places International, Vacation Resorts International, and Aqua-Aston.

($ in millions)

REVENUES

2021

Fiscal Years
2020

2019

Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

233 $

211 $

Rental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .

Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses and other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . .
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO
COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . $

40

—

47

320

—

131

—

—

48

1

—
47
227
—

37

2

59

309

—

122

11

1

32

4

92
59
321
(2)

93 $

(14) $

298

61

4

91

454

53

101

28

2

47

—

—
91
322
(3)

129

52

Management and Exchange Profit

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Management and exchange revenue . . . . . . $

233

$

211

$

298

Management and exchange expense . . . . . .

(131)

(122)

(101)

Management and exchange profit . . . . . . . . $
Management and exchange profit margin .

102
43.8%

$

89
41.6%

$

197
65.9%

$

$

22

(9)

13

11%

(7%)

17%

2.2 pts

$

(87)

(21)

$
(108)
(24.3 pts)

(29%)

(21%)

(55%)

2021 Compared to 2020

The increase in management and exchange revenue and profit reflected higher management fees and exchange revenue
due to the continued ramp-up of the business following the initial impact of the COVID-19 pandemic which commenced late in
the prior year first quarter. These increases were partially offset by lower membership revenue as a result of lower renewal
activity, driven by a 15% decline in active members in 2021. The decline in active members was primarily due to the non-
renewal of one of Interval International’s corporate customers which the Company announced in February 2021. Average
exchange fee increased nearly 4% over 2020. On January 1, 2022, we added affiliations with Disney Vacation Club, Welk
Resorts, and El Cid to our Interval International exchange network, which resulted in over 300,000 new members.

Rental Revenues, Expenses and Margin

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Rental revenues . . . . . . . . . . . . . . . . . . . . . . $

Rental expenses . . . . . . . . . . . . . . . . . . . . . .

40

—

$

37

$

61

$

(11)

(28)

3

11

Rental profit
26
Rental profit margin . . . . . . . . . . . . . . . . . . 100.0% 71.3%

. . . . . . . . . . . . . . . . . . . . . . . . $

40

$

$

33
54.6%

$

14
28.7 pts

10%

100%

54%

$

$

(24)

(40%)

17

(7)

62%

(22%)

16.7 pts

2021 Compared to 2020

The increase in rental profit reflected a 39% increase in Getaway program transactions and a 9% increase in average

fee, reflecting customers’ desire to travel and pent up-demand due to COVID-19-related restrictions. Late in the first quarter of
2021, we introduced Getaway rentals of less than seven nights, providing members more opportunities to use their membership
in ways that better fit their lifestyles.

Depreciation and Amortization

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Depreciation and amortization . . . . . . . . . . $

48

$

32

$

47

$

16

50%

$

(15)

51%

2021 Compared to 2020

The increase in depreciation and amortization expense in 2021 relates to a true-up made to accelerate depreciation on a

technology asset.

Restructuring

($ in millions)
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . $

Fiscal Years
2020

2019

2021

1

$

4

$ — $

2021 vs. 2020
Change
(3)

NM

2020 vs. 2019
Change

$

4

—%

2021 Compared to 2020

During 2020, we incurred $4 million in restructuring costs primarily related to a workforce reduction plan that we

adopted as a result of the COVID-19 pandemic. During 2021, we incurred $1 million of additional restructuring costs related to
this plan. Given the continued ramp-up in the business, we do not currently expect any further workforce reductions.

53

Impairment

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . $ — $

92

$ — $

(92)

NM

$

92

—%

2021 Compared to 2020

No asset impairment charges were recorded in 2021. In 2020, we recorded a non-cash impairment charge of $92
million primarily related to a decrease in the fair value of goodwill and certain trademarks resulting from the impact of the
COVID-19 pandemic.

Losses and Other Expense

($ in millions)
Losses and other expense, net . . . . . . . . . . . . $ — $

2021

Fiscal Years
2020

2019

(2) $

(3) $

2021 vs. 2020
Change
2

93%

2020 vs. 2019
Change
1

11%

$

2021 Compared to 2020

No losses and other expense were recorded for 2021. We recorded $2 million of net losses and other expense in 2020,

including a $5 million loss related to the disposition of a previously consolidated subsidiary, partially offset by $3 million of
gains and other income from other insurance proceeds.

CORPORATE AND OTHER

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and

administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and
Other includes the revenues and expenses from the Consolidated Property Owners’ Associations.

($ in millions)

REVENUES

2021

Fiscal Years
2020

2019

Resort management and other services . . . . . . . . . . . . . . . . . . . $

152 $

188 $

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Resort management and other services . . . . . . . . . . . . . . . . . . .

Rental

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .

Litigation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses and other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and integration costs . . . . . . . . . . . . . . . . . . . . . . .

FINANCIAL RESULTS BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . .
(Provision for) benefit from income taxes . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . .
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

54

(121)

31

190

(50)

227

9

1

(1)

3
(121)
258
(52)
(164)
(108)

(551)
(74)
(4)

(141)

47

217

(53)

154

12

—

6

—
(141)
195
(36)
(150)
(63)

(397)
84
(19)

(629) $

(332) $

163

(119)

44

217

(61)

248

26

1

—

—
(119)
312
(9)
(132)
(118)

(527)
(83)
(4)

(614)

Consolidated Property Owners’ Associations

The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant

accounting guidance, which represents the portion related to third-party VOI owners.

($ in millions)
REVENUES

Resort management and other services . . . . . . . . . . . . . . . . . . $
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Resort management and other services . . . . . . . . . . . . . . . . . .
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains and other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . .

FINANCIAL RESULTS BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . .
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

$

152
(121)
31

190
(50)
(121)
19
(4)

8
(1)
(4)

$

188
(141)
47

217
(53)
(141)
23
—

24
—
(19)

3

$

5

$

163
(119)
44

217
(61)
(119)
37
—

7
—
(4)

3

Pursuant to a change in control of certain Consolidated Property Owners’ Associations, we recorded a non-cash loss of

$1 million in (Losses) gains and other (expense) income, net on our Income Statement for 2021, resulting from the
deconsolidation of 13 owners’ associations. We continue to act as manager for these owners’ associations pursuant to existing
management contracts and retain membership interests via our ownership of vacation ownership interests.

General and Administrative

($ in millions)
General and administrative . . . . . . . . . $

Fiscal Years
2020

2019

2021

227

$

154

$

248

$

2021 vs. 2020
Change
73

48%

2020 vs. 2019
Change
(94)

(38%)

$

2021 Compared to 2020

General and administrative expenses increased $73 million due to $27 million of higher salary and wages costs as the
prior year benefited from savings related to the furlough, reduced work week and workforce reduction programs implemented
in response to the impact of the COVID-19 pandemic, $41 million related to higher bonus expense, and $11 million decrease in
credits related to incentives under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) for companies
who continued paying associates' benefit costs while they were not working as a result of the COVID-19 pandemic. These
increases were partially offset by $4 million of lower costs as the prior year period included an accrual for health and welfare
costs for furloughed associates and $2 million of lower net overall spending across the business, including technology, travel,
rent, training, and other expenses.

Depreciation and Amortization

($ in millions)
Depreciation and amortization . . . . . . $

2021

Fiscal Years
2020

2019

9

$

12

$

26

$

2021 vs. 2020
Change
(3)

(29%)

Restructuring

($ in millions)
Restructuring . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

(1) $

6

$

— $

2021 vs. 2020
Change
(7)

NM

2020 vs. 2019
Change
(14)

(53%)

2020 vs. 2019
Change
6

NM

$

$

55

2021 Compared to 2020

During 2020, we incurred $6 million of restructuring costs related to a work-force reduction plan that we adopted as a

result of the COVID-19 pandemic. During 2021, we trued up this restructuring accrual based upon changes to the initial plan.
Given the continued ramp-up in the business, we do not currently expect any further workforce reductions.

Impairment

($ in millions)
Impairment . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

3

$

— $

— $

2021 vs. 2020
Change
3

NM

2020 vs. 2019
Change
—

NM

$

2021 Compared to 2020

During 2021, we recorded a net $3 million non-cash impairment charge related to an equity method investment. No

impairment charges were recorded for 2020.

Losses and Other Expense

($ in millions)
Losses and other expense, net . . . . . . . $

Fiscal Years
2020

2019

2021

(52) $

(36) $

(9) $

2021 vs. 2020
Change
(16)

(43%)

2020 vs. 2019
Change
(27)

NM

$

2021

We recorded $52 million of net losses and other expense, including $55 million related to the early redemption of our

2026 Notes (as defined below) and a portion of our 2025 Notes (as defined below), offset partially by $7 million related to a
true-up of a Marriott International indemnification receivable upon settlement (the true-up to the offsetting accrual is included
in the (Provision for) benefit from income taxes line).

2020

We recorded $36 million of net losses and other expense, including $32 million for the true-up to an indemnification
receivable from Marriott International as a result of a settlement of an indemnified liability with a taxing authority (the true-up
to the offsetting accrual is included in the (Provision for) benefit from income taxes line), and $12 million related to foreign
currency translation, partially offset by $6 million of other income related to an indemnification from Marriott International for
VAT penalties and interest and $2 million of miscellaneous net gains and other income.

Interest Expense

($ in millions)

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

Interest expense . . . . . . . . . . . . . . . . . $

(164) $

(150) $

(132) $

(14)

(9%)

$

(18)

(14%)

2021 Compared to 2020

Interest expense increased $14 million, including $24 million of higher interest expense associated with the convertible

notes issued in the first quarter of 2021, $12 million of higher interest expense associated with the senior notes issued in the
second quarter of 2021, and $8 million of higher expense associated with the senior notes issued in the second quarter of 2020.
These increases were partially offset by a $21 million decline associated with the payoff of senior notes in the third quarter of
2021, $5 million associated with less drawn on the Warehouse Credit Facility and Revolving Corporate Credit Facility, and a
$4 million decline associated with the Term Loan due to a partial pay-down in 2021.

Transaction and Integration Costs

($ in millions)
Transaction and integration costs . . . . $

Fiscal Years
2020

2019

2021

(108) $

(63) $

(118) $

2021 vs. 2020
Change
(45)

(72%)

2020 vs. 2019
Change
55

47%

$

2021 Compared to 2020

We incurred $108 million of Transaction and integration costs for 2021, including $93 million of ILG Acquisition and
integration related costs and $16 million of Welk Acquisition related costs. All of the $63 million of Transaction and integration
costs incurred during 2020 related to the ILG acquisition.

56

Income Tax

($ in millions)
(Provision for) benefit from income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021 Compared to 2020

Fiscal Years
2020

2019

2021

2021 vs. 2020
Change

2020 vs. 2019
Change

(74) $

84

$

(83) $

(158)

(188%)

$

167

201%

The change in the (Provision for) benefit from income taxes is predominately attributable to an increase in pre-tax

income and an increase in the reserve for unrecognized tax benefits for fiscal year 2021.

Liquidity and Capital Resources

Typically, our capital needs are supported by cash on hand ($342 million at the end of 2021), cash generated from

operations, our ability to raise capital through securitizations in the ABS market, our ability to issue new, and refinance
existing, debt, and, to the extent necessary, funds available under the Warehouse Credit Facility and the Revolving Corporate
Credit Facility. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity
requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements and return
capital to shareholders.

During 2021, we received proceeds from debt of $1,111 million, and redeemed or repaid $1,339 million of debt, which

is discussed further in the “Cash from Financing Activities” section below, and also in Footnote 16 “Debt” to our Financial
Statements. At December 31, 2021, 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, and $83 million related to finance lease obligations.

On April 1, 2021, we completed the Welk Acquisition for consideration of $405 million, including the issuance of

approximately 1.4 million shares of our common stock. See Footnote 3 “Acquisitions and Dispositions” to our Financial
Statements for additional information regarding the Welk Acquisition.

At the end of 2021, we had $710 million of completed real estate inventory on hand. In addition, we had $460 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.

Our vacation ownership product offerings allow us to utilize our real estate inventory efficiently. The majority of our

sales are of points-based products, which permits us to sell vacation ownership products at most of our sales locations,
including those where little or no site specific inventory remains available for sale. Because we no longer need specific resort-
based inventory at each sales location, we need to have only a few resorts under development at any given time and can
leverage successful sales locations at completed resorts. This allows us to maintain long-term sales locations and reduces the
need to develop and staff on-site sales locations at smaller projects in the future. We believe our points-based programs enable
us to closely align the timing of our real estate inventory acquisitions with the pace of sales of vacation ownership products.

We are selectively pursuing 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.
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.

Our Exchange & Third-Party Management segment includes exchange networks, membership programs and third-

party property management services that were acquired as part of the ILG Acquisition. These networks, programs and services
generate revenue that is generally fee-based and derived from membership, exchange and rental transactions, property and
association management, and other related products and services. This segment is expected to be less capital intensive than our
Vacation Ownership segment and is expected to be funded with cash generated from segment operations.

Our material cash requirements from known contractual or other obligations were $6 billion as of December 31, 2021,

of which we expect $850 million to be payable within the next twelve months. These obligations primarily relate to our debt.
Please see “Material Cash Requirements” below for additional information.

57

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

($ in millions)
Cash, cash equivalents, and restricted cash provided by (used in):

2021

Fiscal Years
2020

2019

Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of change in exchange rates on cash, cash equivalents, and restricted cash . .

Net change in cash, cash equivalents, and restricted cash . . . . . . . . . . . . . . . . . . . $

$

343
(213)
(317)
(2)
(189) $

299
(32)
23
1
291

$

$

382
37
(331)
(1)
87

Cash from Operating Activities

Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from

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

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

In 2021, we generated $343 million of cash flows from operating activities compared to $299 million in 2020.

Excluding the impact of changes in net income and adjustments for non-cash items, the change in cash flows from operations
increased as a result of higher operational expense accruals, higher sales and rentals deposits due to the continued ramp-up of
the business, and higher collections of vacation ownership notes receivable, partially offset by higher inventory spending and
severance and benefit payments.

In addition to net income (loss) and adjustments for non-cash items, the following operating activities are key drivers

of our cash flow from operating activities:

Inventory Spending (In Excess of) Less Than Cost of Sales

($ in millions)
Inventory spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Purchase of vacation ownership units for future transfer to inventory . . . . . . . .
Inventory costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inventory spending (in excess of) less than cost of sales . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

(153) $
(98)
212
(39) $

(98) $
(61)
117
(42) $

(228)
(20)
292
44

We measure our real estate inventory capital efficiency by comparing the cash outflow for real estate inventory
spending (a cash item) to the amount of real estate inventory costs charged to expense on our Income Statements related to sale
of vacation ownership products (a non-cash item). Given the significant level of completed real estate inventory on hand, as
well as the capital efficiency resulting from our points programs and capital efficient transactions, our spending for real estate
inventory was below the amount of real estate inventory costs in 2019. In 2020 and 2021, however, while our spending for real
estate inventory remained lower than pre-pandemic levels, given the slowdown in sales pace as a result of the COVID-19
pandemic, inventory spending exceeded inventory costs for both years due to commitments under capital efficient inventory
acquisition arrangements that were entered into prior to the onset of the COVID-19 pandemic. See Footnote 3 “Acquisitions
and Dispositions” to our Financial Statements for additional information regarding the acquisitions of inventory.

Through our existing vacation ownership interest repurchase program, we proactively buy back previously sold

vacation ownership interests at lower costs than would be required to develop new inventory. By repurchasing inventory, we
expect to be able to stabilize the future cost of vacation ownership products.

58

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

($ in millions)
Vacation ownership notes receivable collections — non-securitized . . . . . . . . . . $
Vacation ownership notes receivable collections — securitized . . . . . . . . . . . . .
Vacation ownership notes receivable originations . . . . . . . . . . . . . . . . . . . . . . . .
Vacation ownership notes receivable collections (less than) in excess of
originations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

$

129
557
(750)

$

217
403
(377)

(64) $

243

$

61
432
(817)

(324)

Vacation ownership notes receivable collections include principal from non-securitized and securitized vacation
ownership notes receivable. Vacation ownership notes receivable collections increased in 2021 compared to 2020 due to
payment deferral programs offered in 2020 to assist owners experiencing financial hardship as a result of the the COVID-19
pandemic. Vacation ownership notes receivable originations increased due to higher sales and a moderate increase in financing
propensity to 53% in 2021 from 51% in 2020.

Vacation ownership notes receivable collections increased in 2020 compared to 2019 due to a higher portfolio of

outstanding vacation ownership notes receivable at the beginning of 2020. Vacation ownership notes receivable originations in
2020 decreased due to lower sales due to the COVID-19 pandemic and a lower financing propensity. Financing propensity
declined to 51% in 2020 from 63% in 2019 as a result of the various sales programs that we offered to incentivize cash
purchases over financed purchases during 2020, in response to the COVID-19 pandemic.

Cash from Investing Activities

($ in millions)
Acquisition of a business, net of cash and restricted cash acquired . . . . . . . . . . . $
Proceeds from collection of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures for property and equipment (excluding inventory) . . . . . . .
Purchase of company owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dispositions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash, cash equivalents, and restricted cash (used in) provided by
investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

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

2021

Fiscal Years
2020

2019

(157) $
—
(47)
(14)
3
2

— $
—
(41)
(6)
15
—

(213) $

(32) $

—
38
(46)
(6)
51
—

37

Net cash outflows of $157 million in 2021 were due to the Welk Acquisition. See Footnote 3 “Acquisitions and

Dispositions” to our Financial Statements for additional information.

Proceeds from Collection of Notes Receivable

During 2019, we collected $23 million of notes receivable related to the disposition of our interest in VRI Europe

during the fourth quarter of 2018. In addition, we also collected a $15 million note receivable acquired in the ILG Acquisition.

Capital Expenditures for Property and Equipment

Capital expenditures for property and equipment relate to spending for technology development, buildings and
equipment used at sales locations and ancillary offerings, such as food and beverage offerings, at locations where such offerings
are provided. Additionally, it includes spending related to maintenance of buildings and equipment used in common areas at
some of our resorts.

Purchase of Company Owned Life Insurance

To support our ability to meet a portion of our obligations under the Marriott Vacations Worldwide Corporation

Deferred Compensation Plan (the “Deferred Compensation Plan”), we acquired company owned insurance policies on the lives
of certain participants in the Deferred Compensation Plan, the proceeds of which are intended to be aligned with the investment
alternatives elected by plan participants as discussed in Footnote 2 “Summary of Significant Accounting Policies” to our
Financial Statements.

Dispositions, net

Dispositions of $3 million during 2021 included dispositions of excess land parcels in the Bahamas and St. Thomas,

USVI. Dispositions of $15 million during 2020 related to the disposition of excess land parcels in Orlando, Florida and

59

Steamboat Springs, Colorado as part of our strategic decision to reduce holdings in markets where we have excess supply.
Dispositions of $51 million during 2019 related to our dispositions of excess land parcels in Cancun, Mexico and Avon,
Colorado as part of our strategic decision to reduce holdings in markets where we have excess supply. See additional
information on these dispositions in Footnote 3 “Acquisitions and Dispositions” to our Financial Statements for additional
information.

Cash from Financing Activities

($ in millions)

Borrowings from securitization transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Repayment of debt related to securitization transactions . . . . . . . . . . . . . . . . . .

Proceeds from debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance lease payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of convertible note hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of withholding taxes on vesting of restricted stock units . . . . . . . . . .
Other, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash, cash equivalents, and restricted cash (used in) provided by
financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

Fiscal Years
2020

2019

$

957
(868)
1,111
(1,339)
(5)
(100)
70
(22)
(78)
(23)
(20)
—

$

690
(960)
1,166
(705)
(11)
—
—
(14)
(82)
(45)
(16)
—

1,026
(880)
935
(820)
(12)
—
—
(20)
(465)
(81)
(15)
1

(317) $

23

$

(331)

Borrowings from / Repayment of Debt Related to Securitization Transactions

We reflect proceeds from securitizations of vacation ownership notes receivable, including draw downs on the

Warehouse Credit Facility, as “Borrowings from securitization transactions.” We reflect repayments of bonds associated with
vacation ownership notes receivable securitizations and repayments on the Warehouse Credit Facility (including vacation
ownership notes receivable repurchases) as “Repayment of debt related to securitization transactions.”

We account for our securitizations of vacation ownership notes receivable as secured borrowings and therefore do not

recognize a gain or loss as a result of the transaction. The results of operations for the securitization entities are consolidated
within our results of operations as these entities are variable interest entities for which we are the primary beneficiary.

During the second quarter of 2021, we completed the securitization of a pool of $434 million of vacation ownership

notes receivable. In connection with the securitization, investors purchased in a private placement $425 million in vacation
ownership loan backed notes from MVW 2021-1W LLC (the “2021-1W LLC”). Of the $425 million in proceeds from the
transaction, $8 million was used to pay transaction expenses and fund required reserves, and the remainder is being used for
general corporate purposes. In connection with the 2021-1W securitization, we redeemed certain remaining vacation ownership
notes receivable securitizations from 2014 and 2015, as well as certain vacation ownership notes receivable securitizations
acquired as part of the Welk Acquisition.

During the fourth quarter of 2021, we completed the securitization of a pool of $434 million of vacation ownership

notes receivable. Approximately $376 million of the vacation ownership notes receivable were purchased by the MVW 2021-2
LLC (the “2021-2 LLC”) during the fourth quarter of 2021, and as of December 31, 2021, the 2021-2 LLC held $57 million of
the proceeds, which was released as the remaining vacation ownership notes receivable were purchased subsequent to
December 31, 2021. In connection with the securitization during the fourth quarter of 2021, investors purchased in a private
placement $425 million in vacation ownership loan backed notes from the 2021-2 LLC. Of the $425 million in proceeds from
the transaction, approximately $107 million was used to repay all outstanding amounts previously drawn under our Warehouse
Credit Facility, approximately $8 million was used to pay transaction expenses and fund required reserves, and the remainder is
being used for general corporate purposes.

During the fourth quarter of 2021, we securitized vacation ownership notes receivable under our Warehouse Credit
Facility. The carrying amount of the vacation ownership notes receivable securitized was $126 million. The average advance
rate was 85%, which resulted in total gross proceeds of $107 million. Total net proceeds were $106 million due to the funding
of reserve accounts of $1 million.

As of December 31, 2021, $113 million of gross vacation ownership notes receivable were eligible for securitization.

60

Proceeds from / Repayments of Debt

Borrowings from / Repayment of Corporate Credit Facility

During 2021, we repaid $100 million of the amount outstanding under the Term Loan, which is part of our Corporate

Credit Facility. Additionally, during 2021, we borrowed $50 million and repaid $50 million under our Revolving Corporate
Credit Facility, which is also part of our Corporate Credit Facility, and had no amounts outstanding under the Revolving
Corporate Credit Facility as of December 31, 2021.

During 2020, we borrowed $666 million under our Revolving Corporate Credit Facility, which is part of our Corporate

Credit Facility, to facilitate the funding of our short-term working capital needs and to increase our cash position and preserve
financial flexibility in light of the impact on global markets resulting from the COVID-19 pandemic. During 2020, we repaid
$696 million under the Revolving Corporate Credit Facility and no amounts were outstanding as of December 31, 2020.
Additionally, during 2020, we repaid $9 million of the amount outstanding under the Term Loan.

During 2019, we borrowed $585 million under our Revolving Corporate Credit Facility to facilitate the funding of our
short-term working capital needs, of which $554 million was repaid during 2019. Also during 2019, we repaid $7 million of the
amount outstanding under the Term Loan.

See Footnote 16 “Debt” to our Financial Statements for additional information regarding our Corporate Credit Facility.

Proceeds from / Repayments of Senior Notes

The following activity related to our senior notes occurred during 2021, as further discussed in Footnote 16 “Debt” to

our Financial Statements.

• We issued $500 million in aggregate principal amount of 4.500% Senior Unsecured Notes due 2029 (the “2029

Notes”) and used the proceeds to redeem a portion of the 2026 Notes and pay transaction expenses and fees in
connection with the transaction.

• We redeemed, prior to maturity, all of the $750 million aggregate principal amount of 6.500% Senior Unsecured
Notes due 2026 issued in the third quarter of 2018 (the “2026 Notes”) pursuant to the terms of the indenture
governing the 2026 Notes. In connection with the redemption of the 2026 Notes, we incurred charges of $36
million, including a redemption premium and the write-off of unamortized debt issuance costs, which was
recorded in (Losses) gains and other (expense) income, net line on our Income Statement for the year ended
December 31, 2021.

• We redeemed, prior to maturity, $250 million of the $500 million aggregate principal amount of 6.125% Senior
Secured Notes due 2025 issued in the second quarter of 2020 (the “2025 Notes”) pursuant to the terms of the
indenture governing the 2025 Notes. In connection with this redemption, we incurred charges of $19 million,
including a redemption premium and the write-off of unamortized debt issuance costs, which was recorded in
(Losses) gains and other (expense) income, net line on our Income Statement for the year ended December 31,
2021.

During the second quarter of 2020, we issued $500 million in aggregate principal amount of

the 2025 Notes. After
deducting offering expenses and the underwriting discount, we received net proceeds of approximately $493 million from the
offering of the 2025 Notes, which we used to repay all amounts outstanding at that time on our Revolving Corporate Credit
Facility.

During 2019, we issued $350 million in aggregate principal amount of 4.750% Senior Unsecured Notes due 2028 (“the

2028 Notes”). The net proceeds from the 2028 Notes were used (i) to redeem all of the outstanding 5.625% Senior Unsecured
Notes due 2023 assumed in connection with the ILG Acquisition (the “IAC Notes”), (ii) to redeem all of the outstanding
5.625% Senior Unsecured Notes due 2023 offered in exchange for the IAC Notes during the third quarter of 2018 (the
“Exchange Notes”), (iii) to repay a portion of the then outstanding borrowings under our Revolving Corporate Credit Facility,
(iv) to pay transaction expenses and fees in connection with each of the foregoing and (v) for general corporate purposes.

Repayments of Non-interest Bearing Note Payable

During 2019, we paid the last installment of $31 million on a non-interest bearing note payable related to the

acquisition of 112 completed vacation ownership units located on the Big Island of Hawaii in 2017.

Debt Issuance Costs

In 2021, we incurred $22 million of debt issuance costs, which included $11 million associated with vacation
ownership notes receivable securitizations, $7 million associated with the issuance of senior notes, $2 million associated with
an amendment of the Warehouse Credit Facility, $1 million associated with the issuance of convertible senior notes, and $1

61

million associated with the amendment of a waiver (“the Waiver”) to the agreement that governs our Corporate Credit Facility,
which, among other things, suspended the requirement to comply with the leverage covenant in the Revolving Corporate Credit
Facility, commencing with the fiscal quarter ending June 30, 2020.

In 2020, we incurred $14 million of debt issuance costs, which included $7 million associated with the issuance of
senior notes, $5 million associated with a vacation ownership notes receivable securitization, $1 million associated with an
amendment and extension of the Warehouse Credit Facility, and $1 million related to the Waiver.

In 2019, we incurred $20 million of debt issuance costs, which included $12 million associated with vacation
ownership notes receivable securitizations, $5 million associated with the issuance of senior notes, $2 million associated with
an amendment and extension of the Warehouse Credit Facility, and $1 million related to the Waiver.

Repurchase of Common Stock

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

($ in millions, except per share amounts)
As of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended December 31, 2021 . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Shares
Repurchased

Cost of Shares
Repurchased

17,188,885
492,510
17,681,395

$

$

1,340
78
1,418

Average Price
Paid per Share
77.95
$
157.77
80.17

$

See Footnote 17 “Shareholders' Equity” to our Financial Statements for further information related to our share
repurchase program, including the additional share repurchase authorization approved by our Board of Directors subsequent to
the end of 2021.

Payment of Dividends to Common Shareholders

We distributed cash dividends to holders of common stock for the year ended December 31, 2021 as follows:

Declaration Date
September 10, 2021

Shareholder Record Date
September 23, 2021

Distribution Date
October 7, 2021

Dividend per Share
$0.54

On December 9, 2021, our Board of Directors declared a quarterly dividend of $0.54 per share that was paid
subsequent to the end of 2021, on January 6, 2022, to shareholders of record as of December 23, 2021. On February 18, 2022
subsequent to the end of 2021, our Board of Directors declared a quarterly dividend of $0.62 per share to be paid on March 17,
2022 to shareholders of record as of March 3, 2022.

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

62

Material Cash Requirements

The following table summarizes our future material cash requirements from known contractual or other obligations as

of December 31, 2021:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . $

($ in millions)
Debt(1)
Securitized debt(1) (2) . . . . . . . . . . . . . . . . . .
Purchase obligations(3)
. . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . .
Finance lease obligations(4)
. . . . . . . . . . .
Other long-term obligations(5) . . . . . . . . . .

Total

Less Than
1 Year

1 - 3 Years

3 - 5 Years

More Than
5 Years

Payments Due by Period

3,082

$

2,094

379

127

283

34

$

311

233

250

25

7

24

139

461

92

43

9

6

$

1,704

$

444

37

34

8

3

928

956

—

25

259

1

$

5,999

$

850

$

750

$

2,230

$

2,169

_________________________
(1)

(2)

(3)

(4)

(5)

Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.
Payments based on estimated timing of cash flow associated with securitized notes receivable.

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

Includes interest.

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

In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’

associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash
flows of the resorts, these obligations have minimal impact on our net income and cash flow.

Leases That Have Not Yet Commenced

During the first quarter of 2020, we entered into a finance lease arrangement, that was amended in 2021, for a new

corporate office building in Orlando, Florida. The new Orlando corporate office building is currently expected to be completed
in 2023, at which time the lease term will commence and a right-of-use asset and corresponding liability will be recorded on our
balance sheet. The initial lease term is approximately 16 years with total lease payments of $137 million for the aforementioned
period. See Footnote 14 “Leases” to our Financial Statements for additional information on this lease, including additional
arrangements made as a result of the COVID-19 pandemic.

Supplemental Guarantor Information

The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. (“MORI”), and certain other subsidiaries

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

The following tables present consolidating financial information as of December 31, 2021, and for the fiscal year

ended December 31, 2021, for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes
Guarantors, the combined non-guarantor subsidiaries of MVW, and MVW on a consolidated basis.

63

Condensed Consolidating Balance Sheet

Issuers

MVWC

($ in millions)
Cash and cash equivalents . . . . . . . . . . . . . . $ — $
Restricted cash . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
Accounts receivable, net
Vacation ownership notes receivable, net . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . .
Property and equipment, net
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles, net . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

—
14
—
—
—
—
—
3,645
76
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,735

Accounts payable . . . . . . . . . . . . . . . . . . . . . $
Advance deposits . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . .
Payroll and benefits liability . . . . . . . . . . . .
Deferred compensation liability . . . . . . . . . .
Securitized debt, net . . . . . . . . . . . . . . . . . . .
Debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . .

63
—
12
—
—
—
—
684
—
—
2,976
MVW shareholders' equity . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . .
—
Total liabilities and equity . . . . . . . . . . . . . . $ 3,735

Condensed Consolidating Statement of Income

MORI

126
18
49
127
244
200
—
—
4,371
108
5,243

22
69
151
11
102
114
—
1,870
19
91
2,794
—
5,243

$

$

$

Issuers

MVWC

($ in millions)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit from (provision for) income taxes . .
Equity in net income (loss) of subsidiaries .
Net income (loss) . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . $

(37)
12
74
49

—

49

$

MORI

673
(925)
70
251
69

—

As of December 31, 2021

Senior Notes
Guarantors
77
$
94
172
203
381
644
2,841
840
—
211
5,463

$

Non-
Guarantor
Subsidiaries
139
$
349
119
1,715
94
292
309
153
—
107
3,277

$

$

$

121
70
145
151
72
25
—
76
172
250
4,381
—
5,463

$

$

59
21
114
291
27
3
1,877
1
33
—
841
10
3,277

2021

Non-
Guarantor
Subsidiaries
881
$
(728)
(57)
—
96

Senior Notes
Guarantors
2,435
$
(2,172)
(99)
—
164

$

$

$

Total
Eliminations
$

MVW
Consolidated
342
461
279
2,045
719
1,136
3,150
993
—
488
9,613

— $
—
(75)
—
—
—
—
—
(8,016)
(14)
(8,105) $

— $
—
(77)
—
—
—
(21)
—
—
9
(8,016)
—
(8,105) $

265
160
345
453
201
142
1,856
2,631
224
350
2,976
10
9,613

Total
Eliminations
$

MVW
Consolidated
3,890
(3,763)
(74)
—
53

(99) $
99
—
(325)
(325)

—

(4)

—

69

$

164

$

92

$

(325) $

(4)

49

Recent Accounting Pronouncements

See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for information regarding

accounting standards adopted in 2021 and other new accounting standards that were issued but not effective as of December 31,
2021.

64

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and
assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if:
(1) it requires assumptions to be made that are uncertain at the time the estimate is made; and (2) changes in the estimate, or
different estimates that could have been selected, could have a material effect on our results of operations or financial condition.

While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information

presently available. Actual results may differ significantly. Additionally, changes in our assumptions, estimates or assessments
as a result of unforeseen events or otherwise could have a material impact on our consolidated financial position or results of
operations.

See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for further information

related to our critical accounting policies and estimates, which are as follows:

•

•

•

•

•

•

Revenue recognition, including how we recognize revenue under Accounting Standards Codification (“ASC”)
Topic 606, “Revenue from Contracts with Customers” (“ASC 606”) for the sale of vacation ownership products,
including our estimates of variable consideration. Our estimates of variable consideration and determination of
whether to include estimated amounts in the transaction price are based largely on the customer class and the
results of our static pool analyses, which rely on historical payment data by customer class. Revisions to estimates
of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation
ownership notes receivable and can increase or decrease revenue. Revenues were reduced during 2021 by $9
million due to changes in our estimates of variable consideration for performance obligations that were satisfied in
prior periods. See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further
information on our assessments of our vacation ownership notes receivable reserve, including factors attributable
to the COVID-19 pandemic.

Purchase price allocations of business combinations, which is also discussed in Footnote 3 “Acquisitions and
Dispositions” to our Financial Statements. Assets acquired and liabilities assumed as part of a business acquisition
are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value
of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets,
particularly intangibles, requires management to make estimates, which are based on all available information and
in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with
an asset. On April 1, 2021, we acquired Welk (see Footnote 3 “Acquisitions and Dispositions” to our Financial
Statements for further information).

Inventories and cost of vacation ownership products, which requires estimation of future revenues, including
incremental revenues from future price increases or from the sale of reacquired inventory resulting from defaulted
vacation ownership notes receivable, and development costs to apply a relative sales value method specific to the
vacation ownership industry and how we evaluate the fair value of our vacation ownership inventory. For each
vacation ownership product, we expense real estate inventory costs in the same proportion as we recognize the
revenue. Consistent with the applicable accounting guidance, to the extent there is a change in the estimated sales
revenues or inventory costs for the project in a period, a non-cash adjustment is recorded on our income
statements to true-up costs in that period to those that would have been recorded historically if the revised
estimates had been used. These true-ups, which we refer to as product cost true-up activity, can have a positive or
negative impact on our income statements. During 2021, we recorded a change in estimate of $5 million as an
increase to development profit.

Valuation of goodwill and intangible assets, including how we evaluate the fair value of intangible assets and
reporting units, and when we record an impairment loss on intangible assets or goodwill. During the 2021 fourth
quarter, we conducted our annual goodwill impairment test and no impairment charges were recorded. The
estimated fair values of all our reporting units significantly exceeded their carrying values at the date of their most
recent estimated fair value determination. During 2021, we evaluated our intangibles for impairment and did not
record any impairment charges.

Accounting for acquired vacation ownership notes receivable, where estimates of future cash flows are based
largely on the customer class and the results of our static pool analysis. In addition, the valuation of acquired
vacation ownership notes receivable includes a material estimate of the fair value of the underlying collateral
which would be retained in the event of customer default. See further discussion included in Footnote 6 “Vacation
Ownership Notes Receivable” to our Financial Statements.

Loss contingencies, including information on how we account for loss contingencies. Accruals for contingent
liabilities are recorded when it is probable that a liability has been incurred, or an asset impaired, and the amount

65

of the loss can be reasonably estimated. Liabilities accrued for legal matters require judgments regarding projected
outcomes and range of loss based on historical litigation and settlement experience, recommendations of legal
counsel and, if applicable, other experts. We utilize in-house legal experts to develop estimates of our legal
obligations. These estimates are supplemented, as needed, by third-party specialists to analyze our most complex
contingent liabilities.

•

Income taxes, including information on how we determine our current year amounts payable or refundable, as well
as our estimate of deferred tax assets and liabilities. We record our global tax provision based on the respective tax
rules and regulations for the jurisdictions in which we operate. Where we believe that a tax position is supportable
for income tax purposes, the item is included in our income tax returns. The accounting guidance related to
uncertain tax positions requires an evaluation process for all tax positions taken that involves a review of
probability for sustaining a tax position. Where treatment of a position is uncertain, liabilities are recorded based
upon our evaluation of the “more likely than not” outcome considering technical merits of the position based on
specific tax regulations and facts of each matter. Changes to recorded liabilities are only made when an
identifiable event occurs that changes the likely outcome, such as settlement with the relevant tax authority, the
expiration of statutes of limitation for the subject tax year, change in tax laws, or recent court cases that are
relevant to the matter.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit
will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate
valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future
taxable income, as well as successful implementation of various tax planning strategies.

We provide for income taxes on a quarterly basis based on an estimated annual tax rate. In determining this rate,
we make estimates about taxable income for each of our largest locations worldwide, as well as the tax rate that
will be in effect for each location. To the extent these estimates change during the year, or actual results differ
from these estimates, our estimated annual tax rate may change between quarterly periods and may differ from the
actual effective tax rate for the year. While we believe that these judgments and estimates are appropriate and
reasonable under the circumstances, actual resolution of these matters may differ from recorded estimated
amounts.

66

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk from changes in interest rates, currency exchange rates, and debt prices. We manage
our exposure to these risks by monitoring available financing alternatives, through pricing policies that may take into account
currency exchange rates, and by entering into derivative arrangements.

We are exposed to interest rate risk through borrowings on our Warehouse Credit Facility and our Corporate Credit

Facility, which includes our Revolving Corporate Credit Facility and our Term Loan, as these facilities bear interest at variable
rates. All other interest bearing debt, including securitized debt, incurs interest at fixed rates. Changes in interest rates also
impact the fair value of our fixed-rate notes receivable and our fixed-rate debt.

The following table sets forth the scheduled maturities and the total fair value as of year-end 2021 for our financial

instruments that are impacted by market risks:

($ in millions)

Average
Interest
Rate

Maturities by Period

2022

2023

2024

2025

2026

Thereafter

Total
Carrying
Value

Total
Fair
Value

Assets – Maturities represent expected principal receipts; fair values represent assets

Vacation ownership notes receivable
— non-securitized . . . . . . . . . . . . . . .

13.0% $

50

Vacation ownership notes receivable
— securitized . . . . . . . . . . . . . . . . . . .

13.1% $

177

$

$

30

181

$

$

30

182

$

$

30

181

$

$

31

181

$

$

212

$

383

$

390

760

$ 1,662

$ 1,712

Liabilities – Maturities represent expected principal payments; fair values represent liabilities

Securitized debt

. . . . . . . . . . . . . . . . .

2.3% $

(191) $

(196) $

(200) $

(199) $

(199) $

(892) $ (1,877) $ (1,900)

Senior notes

2025 Notes . . . . . . . . . . . . . . . . . . .

2028 Notes . . . . . . . . . . . . . . . . . . .

2029 Notes . . . . . . . . . . . . . . . . . . .

6.1% $ — $ — $ — $

(250) $ — $

— $

(250) $

(261)

4.8% $ — $ — $ — $ — $ — $

(350) $

(350) $

(362)

4.5% $ — $ — $ — $ — $ — $

(500) $

(500) $

(505)

Term Loan . . . . . . . . . . . . . . . . . . . . .

1.8% $ — $ — $ — $

(784) $ — $

— $

(784) $

(784)

2022 Convertible Notes . . . . . . . . . . .
2026 Convertible Notes . . . . . . . . . . . —% $ — $ — $ — $ — $

(230) $ — $ — $ — $ — $

4.7% $

— $

(230) $

(280)

(575) $

— $

(575) $

(682)

We are exposed to currency exchange rate risk through investments in foreign subsidiaries that transact business in a

currency other than the U.S. dollar and through the revaluation of assets and liabilities denominated in a currency other than the
functional currency.

We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with

fluctuations in interest rates and currency exchange rates. As a matter of policy, we only enter into transactions that we believe
will be highly effective at offsetting the underlying risk and we do not use derivatives for trading or speculative purposes.
However, we cannot assure you that these transactions will be as effective as we anticipate.

67

Item 8.

Financial Statements and Supplementary Data

The following financial information is included on the pages indicated.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page
68
69

70

71

74
74
75
76
77
79
80

68

MANAGEMENT’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Marriott Vacations Worldwide Corporation (the “Company”) is responsible for establishing and

maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control
over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance
on the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with U.S.
generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the Company’s transactions and dispositions of
the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the
consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of the Company’s management and
directors; and (3) provide reasonable assurance on prevention or timely detection of unauthorized acquisition, use, or
disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation of the Company’s annual consolidated financial statements, management has

undertaken an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31,
2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”).

Based on this assessment, management has concluded that, applying the COSO criteria, as of December 31, 2021, the
Company’s internal control over financial reporting was effective to provide reasonable assurance of the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles.

In the second quarter of 2021, the Company completed its acquisition of Welk Hospitality Group, Inc. (“Welk”). The
Company is in the process of evaluating Welk’s existing controls and procedures and integrating Welk into its internal control
over financial reporting. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from
management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is
completed, the Company has excluded the business acquired from its assessment of the effectiveness of internal control over
financial reporting as of December 31, 2021. The business that the Company acquired represented 9% of the Company’s total
assets as of December 31, 2021, and 4% of the Company’s revenues and 11% of the Company’s income before income taxes
and noncontrolling interests for the year ended December 31, 2021.

Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s consolidated
financial statements included in this report, has issued a report on the effectiveness of the Company’s internal control over
financial reporting, a copy of which appears on the next page of this Annual Report on Form 10-K.

69

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Marriott Vacations Worldwide Corporation

Opinion on Internal Control over Financial Reporting

We have audited Marriott Vacations Worldwide Corporation’s internal control over financial reporting as of

December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Marriott
Vacations Worldwide Corporation (the Company) maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2021, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s

assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal
controls of Welk Hospitality Group, Inc. (Welk), which is included in the 2021 consolidated financial statements of the
Company and constituted 9% of total assets, as of December 31, 2021 and 4% and 11% of revenues and income before income
taxes and noncontrolling interests, respectively, for the year then ended. Our audit of internal control over financial reporting of
the Company also did not include an evaluation of the internal control over financial reporting of Welk.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (PCAOB), the accompanying consolidated balance sheets of the Company as of December 31, 2021 and 2020, the
related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three
years in the period ended December 31, 2021, and the related notes and our report dated March 1, 2022 expressed an
unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for

its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a

material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ Ernst & Young LLP

Orlando, Florida
March 1, 2022

70

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Marriott Vacations Worldwide Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Marriott Vacations Worldwide Corporation (the

Company) as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income,
shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results
of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with
U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an

opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial

statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate.

Cost of Vacation Ownership Products
Description
of the Matter

The Company’s cost of vacation ownership products was $250 million for the year ended December 31,
2021. As discussed in Note 2 to the consolidated financial statements, the Company accounts for the cost of
vacation ownership products utilizing the relative sales value method in accordance with the authoritative
guidance for accounting for real estate time-sharing transactions. Changes in estimates used in applying the
relative sales value method are recognized in the period that the changes occur.

Auditing the Company’s application of the relative sales value method was challenging due to the nature and
extent of audit effort required as the calculations are complex and contain a significant volume of data.
Additionally, the determination of the cost of vacation ownership products was sensitive to certain estimates,
such as estimated future revenue from sale of vacation ownership products, which are affected by
expectations about future market and economic conditions.

71

Cost of Vacation Ownership Products

How We
Addressed
the Matter in
Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
the Company’s process to determine the cost of vacation ownership products. For example, we tested
controls over management’s review of the calculations, including the inputs and certain estimates, such as
estimated future revenue from sale of vacation ownership products.

To test the cost of vacation ownership products, we performed audit procedures that included, among others,
assessing the methodologies used, evaluating the estimates discussed above and testing the completeness and
accuracy of the data used by the Company in the calculations. For example, we agreed inputs to the
calculations to historical data and source documentation and evaluated the estimates used in the calculations,
such as estimated future revenue from sale of vacation ownership products, utilizing historical operating
results and relevant market information available. We involved real estate subject matter resources on our
team because the application of the relative sales value method is unique to companies in the real estate time-
sharing industry.

Valuation of Originated and Acquired Vacation Ownership Notes Receivable
Description
of the Matter

As of December 31, 2021, the Company’s vacation ownership notes receivable was $2,045 million, of which
$1,671 million related to originated vacation ownership notes receivable and $374 million related to acquired
vacation ownership notes receivable. As discussed in Note 2 to the consolidated financial statements, for
originated notes, the Company records the difference between the vacation ownership note receivable and
variable consideration included in the transaction price for the sale of the related vacation ownership
products as a reserve on the Company’s originated vacation ownership notes receivable. The Company’s
acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets
provision of the current expected credit loss model, whereby the Company estimates the reserve of its
acquired vacation ownership receivables on a quarterly basis and any changes in the reserve are recorded as
financing expense. The estimates of the variable consideration for originated vacation ownership notes
receivable and the reserve for credit losses on the acquired vacation ownership notes receivable are based on
default rates that are an output of the Company’s static pool analyses and the estimates regarding future
defaults.

Auditing the Company’s valuation of originated and acquired vacation ownership notes receivable was
challenging because significant audit effort is required as the static pool analyses are complex and contain a
significant volume of data. Furthermore, the valuation of originated and acquired vacation ownership notes
receivable was sensitive to management’s assumptions regarding future default rates.

How We
Addressed
the Matter in
Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
the Company’s vacation ownership notes receivable process. For example, we tested controls over
management’s review of the static pool analyses, including the significant inputs to the analyses, and review
of the assumption regarding future default rates.

To test the valuation of originated and acquired vacation ownership notes receivable, we performed audit
procedures that included, among others, assessing the methodologies used, evaluating the assumptions
regarding future defaults as discussed above, and testing the completeness and accuracy of the static pool
analyses, including the significant inputs to the analyses. For example, we agreed inputs to the static pool
analyses to historical data and source documentation. We also compared the assumptions regarding future
defaults to the Company’s historical and current default rates by customer class and performed a
retrospective review of prior analyses. We involved real estate subject matter resources on our team because
the static pool analyses are unique to companies in the real estate time-sharing industry.

72

Accounting for the Acquisition of Welk Hospitality Group, Inc.
Description
of the Matter

As more fully described in Note 3, the Company completed the acquisition of Welk Hospitality Group, Inc.
(“Welk”) in April 2021 for $405 million. The acquisition was accounted for as a business combination, and
as such, the Company measured the acquired assets and liabilities assumed at their acquisition-date fair
values. The Company has finalized the valuations of the acquired assets and liabilities assumed, except for
the valuation of certain property and equipment and evaluation of historical tax positions. Accordingly, these
estimates are subject to change during the measurement period.

Auditing the Company’s accounting for the Welk acquisition was challenging due to a high degree of
subjectivity and significant audit effort in evaluating the fair value of the intangible assets, inventory and
vacation ownership notes receivable. The fair value of the intangible assets, inventory and vacation
ownership notes receivable is sensitive to changes in significant assumptions, such as the discount rates for
intangible assets and inventory, and the default rates for vacations ownership notes receivable.

How We
Addressed
the Matter in
Our Audit

We obtained an understanding, evaluated the design and tested the effectiveness of controls over the
recognition and measurement of intangible assets, inventory and vacation ownership notes receivable,
including the controls over the valuation methodologies, models and significant inputs and assumptions used
in estimating the fair values.

To test the fair values of the intangible assets, inventory and vacation ownership notes receivable, we
performed audit procedures that included, among others, evaluating the Company’s methodologies and
related assumptions used as well as testing the completeness and accuracy of the underlying data supporting
the fair values. For example, we compared the discount rates utilized for intangible assets and inventory to
current industry, market and economic trends, and to assumptions used to value similar assets. For vacation
ownership notes receivable, we compared the default rates to Welk’s historical and current default rates by
customer class and tested the historical and current default rates by agreeing information to Welk’s historical
data and source documentation. In addition, we involved valuation specialists to assist in the evaluation of
the Company’s methodologies and significant assumptions used in estimating the fair values.

/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2011.

Orlando, Florida
March 1, 2022

73

MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Fiscal Years 2021, 2020 and 2019
(In millions, except per share amounts)

2021

2020

2019

REVENUES

Sale of vacation ownership products . . . . . . . . . . . . . . . . . . . . . $

1,153

$

Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPENSES

Cost of vacation ownership products . . . . . . . . . . . . . . . . . . . . .

Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management and exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . .

Litigation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Royalty fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Losses) gains and other (expense) income, net

. . . . . . . . . . . .

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transaction and integration costs . . . . . . . . . . . . . . . . . . . . . . . .

Other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . . .

(Provision for) benefit from income taxes . . . . . . . . . . . . . . . . . . .

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income attributable to noncontrolling interests . . . . . . . . . . . .
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

CASH DIVIDENDS DECLARED PER SHARE . . . . . . . . . . . $

855

486

268

1,128

3,890

250

617

521
344

88

227

146

10

—

106

3

1,128

3,440

(51)

(164)

(110)

2

127

(74)

53

(4)

$

546

755

276

267

1,042

2,886

150

386

475
321

107

154

123

6

25

95

100

1,042

2,984

(26)

(150)

(66)

—

(340)

84

(256)

(19)

49

$

(275) $

1.15

1.13

1.08

$

$

$

(6.65) $

(6.65) $

0.54

$

1,354

949

573

275

1,108

4,259

349

748

547
357

91

248

141

7

—

106

99

1,108

3,801

16

(132)

(118)

1

225

(83)

142

(4)

138

3.13

3.09

1.89

See Notes to Consolidated Financial Statements

74

MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Fiscal Years 2021, 2020 and 2019
(In millions)

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

53

$

(256) $

142

2021

2020

2019

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Derivative instrument adjustment, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . .

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX . . . . . . . . .

Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income attributable to noncontrolling interests . . . . . .

COMPREHENSIVE INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

21

32

(4)

—

(4)

6

(18)

(12)

(19)

—

(19)

(27)

(15)

(42)

(4)

—

(4)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

81

$

(287) $

96

See Notes to Consolidated Financial Statements

75

MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
Fiscal Year-End 2021 and 2020
(In millions, except share and per share data)

2021

2020

ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Restricted cash (including $139 and $68 from VIEs, respectively) . . . . . . . . . . . . . . . . .

Accounts receivable, net (including $12 and $11 from VIEs, respectively) . . . . . . . . . .
Vacation ownership notes receivable, net (including $1,662 and $1,493 from VIEs,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other (including $76 and $54 from VIEs, respectively) . . . . . . . . . . . . . . . . . . . . . . . . .

$

342

461

279

2,045

719

1,136

3,150

993

488

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

9,613

$

LIABILITIES AND EQUITY

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Advance deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued liabilities (including $2 and $1 from VIEs, respectively) . . . . . . . . . . . . . . . . .

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payroll and benefits liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred compensation liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securitized debt, net (including $1,877 and $1,604 from VIEs, respectively)

. . . . . . . .

Debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contingencies and Commitments (Note 13)
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,519,049 and
75,279,061 shares issued, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treasury stock — at cost; 33,235,671 and 34,184,813 shares, respectively . . . . . . . . . .

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL MVW SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES AND EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

The abbreviation VIEs above means Variable Interest Entities.

265

160

345

453

201

142

1,856

2,631

224

350

6,627

—

1

(1,356)

4,072

(16)

275

2,976

10

2,986

9,613

$

$

524

468

276

1,840

759

791

2,817

952

471

8,898

209

147

349

488

157

127

1,588

2,680

197

274

6,216

—

1

(1,334)

3,760

(48)

272

2,651

31

2,682

8,898

See Notes to Consolidated Financial Statements

76

MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Years 2021, 2020 and 2019
(In millions)

OPERATING ACTIVITIES

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments to reconcile net income (loss) to net cash, cash equivalents, and
restricted cash provided by operating activities:

Depreciation and amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . . .

Vacation ownership notes receivable reserve . . . . . . . . . . . . . . . . . . . . . . . . .

Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gain on disposal of property and equipment, net . . . . . . . . . . . . . . . . . . . . . . .

Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net change in assets and liabilities, net of the effects of acquisition:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Vacation ownership notes receivable originations . . . . . . . . . . . . . . . . . . .

Vacation ownership notes receivable collections . . . . . . . . . . . . . . . . . . . .

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts payable, advance deposits and accrued liabilities . . . . . . . . . . . .

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payroll and benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred compensation liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deconsolidation of certain Consolidated Property Owners' Associations . . . .

Purchase of vacation ownership units for future transfer to inventory . . . . . .

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash, cash equivalents, and restricted cash provided by operating
activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INVESTING ACTIVITIES

Acquisition of a business, net of cash and restricted cash acquired . . . . . . . . .

Proceeds from collection of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital expenditures for property and equipment (excluding inventory) . . . .

Purchase of company owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dispositions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash, cash equivalents, and restricted cash (used in) provided by
investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021

2020

2019

53

$

(256) $

142

146

56

101

51

3

—

34

—

(750)

686

61

(46)

42

88

35

22

27

(168)

(98)

—

343

(157)

—

(47)

(14)

3

2

(213)

123

22

150

36

100

(4)

(38)

21

(377)

620

18

44

(146)

59

(29)

17

—

—

(61)

—

299

—

—

(41)

(6)

15

—

(32)

141

19

112

33

99

(18)

5

69

(817)

493

65

37

17

10

(25)

18

23

—

(20)

(21)

382

—

38

(46)

(6)

51

—

37

Continued

See Notes to Consolidated Financial Statements

77

MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Fiscal Years 2021, 2020 and 2019
(In millions)

2021

2020

2019

FINANCING ACTIVITIES

Borrowings from securitization transactions . . . . . . . . . . . . . . . . . . . . . . . . . .

Repayment of debt related to securitization transactions . . . . . . . . . . . . . . . . .

Proceeds from debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repayments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchase of convertible note hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proceeds from issuance of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance lease payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of withholding taxes on vesting of restricted stock units . . . . . . . . .

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash, cash equivalents, and restricted cash (used in) provided by
financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates on cash, cash equivalents, and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in cash, cash equivalents, and restricted cash . . . . . . . . . . . . . . . . . . . . .

Cash, cash equivalents, and restricted cash, beginning of year . . . . . . . . . . . . . .

Cash, cash equivalents, and restricted cash, end of year . . . . . . . . . . . . . . . . . . . $

SUPPLEMENTAL DISCLOSURES

Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-cash issuance of treasury stock in connection with Welk Acquisition . .

Non-cash transfer from inventory to property and equipment . . . . . . . . . . . . .

Non-cash transfer from property and equipment to inventory . . . . . . . . . . . . .

Non-cash transfer from other assets to property and equipment . . . . . . . . . . .

Non-cash issuance of treasury stock for employee stock purchase plan . . . . .

Interest paid, net of amounts capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

957

(868)

1,111

(1,339)

(100)

70

(22)

(5)

(78)

(23)

(20)

—

(317)

(2)

(189)

992

803

23
248

105

2

22

3

184
(13)

$

$

690

(960)

1,166

(705)

—

—

(14)

(11)

(82)

(45)

(16)

—

23

1

291

701

992

$

— $
—

74

—

—

2

176
(32)

1,026

(880)

935

(820)

—

—

(20)

(12)

(465)

(81)

(15)

1

(331)

(1)

87

614

701

23
—

—

71

—

2

167
53

See Notes to Consolidated Financial Statements

78

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MARRIOTT VACATIONS WORLDWIDE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The consolidated financial statements present the results of operations, financial position and cash flows of Marriott
Vacations Worldwide Corporation (referred to in this report as (i) “we,” “us,” “Marriott Vacations Worldwide,” “MVW,” or
“the Company,” which includes our consolidated subsidiaries except where the context of the reference is to a single corporate
entity, or (ii) “MVWC,” which shall refer only to Marriott Vacations Worldwide Corporation, without its consolidated
subsidiaries). In order to make this report easier to read, we refer throughout to (i) our Consolidated Financial Statements as our
“Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our Consolidated Balance
Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Cash Flows.” References
throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Consolidated Financial Statements, unless
otherwise noted. We also refer to Marriott International, Inc. as “Marriott International” and Marriott International’s Marriott
Bonvoy customer loyalty program as “Marriott Bonvoy.” We use certain other terms that are defined within these Financial
Statements.

The Financial Statements presented herein and discussed below include 100% of the assets, liabilities, revenues,

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

Pursuant to a change in control of certain consolidated owners’ associations, we recorded a non-cash loss of $1 million

in (Losses) gains and other (expense) income, net on our Income Statement for the year ended December 31, 2021, and
deconsolidated $179 million of assets, inclusive of $168 million of restricted cash, and $155 million of liabilities, for a decrease
in Noncontrolling interests of $25 million during 2021. See our Consolidated Statements of Shareholders’ Equity for further
information. We continue to act as manager for these owners’ associations pursuant to existing management contracts and
retain membership interests via our ownership of vacation ownership interests.

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

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

COVID-19 Pandemic and Restructuring Update

In early 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic
(“COVID-19,” “the COVID-19 pandemic,” “the pandemic,” or “the virus”). The COVID-19 pandemic caused significant
disruptions in international and U.S. economies and markets, and has had an unprecedented impact on the travel and hospitality
industries, as well as the Company. Our results of operations for fiscal year 2021 and 2020 reflect significantly adverse impacts
related to the COVID-19 pandemic. At this time, our businesses continue to recover, and nearly all of our sales centers, resorts,
and other properties have reopened, however the COVID-19 pandemic, and any recovery therefrom, continues to evolve and its
further potential impacts on our business is the future remain uncertain. We continue to closely monitor and seek to actively
manage the ongoing effects of the COVID-19 pandemic on our business and operations, and to adapt our operations. We
recorded $25 million in Restructuring charges on our Income Statement for the year ended December 31, 2020, related to a
workforce reduction plan that was adopted as a result of the COVID-19 pandemic. The balance in our restructuring reserve as
of December 31, 2020 was $17 million and related solely to employee termination costs. During the year ended December 31,
2021, we recorded a true up of less than $1 million in Restructuring charges on our Income Statement, and our restructuring
reserve balance was less than $1 million as of December 31, 2021.

80

Acquisition of Welk

On April 1, 2021 (the “Welk Acquisition Date”), we completed the acquisition of Welk Hospitality Group, Inc.
(“Welk”) through a series of transactions (the “Welk Acquisition”), after which Welk became our indirect wholly-owned
subsidiary. The Financial Statements in this report for fiscal year 2021 include Welk’s results of operations for the last three
quarters of 2021, and reflect the financial position of our combined company at December 31, 2021. We refer to the business
and brands that we acquired in the Welk Acquisition as “Legacy-Welk.” See Footnote 3 “Acquisitions and Dispositions” for
more information on the Welk Acquisition.

Acquisition of ILG

On September 1, 2018 (the “ILG Acquisition Date”), we completed the acquisition of ILG, LLC, formerly known as

ILG, Inc. (“ILG”), through a series of transactions (the “ILG Acquisition”), after which ILG became our indirect wholly-owned
subsidiary. We refer to our business associated with brands that existed prior to the ILG Acquisition as “Legacy-MVW” and to
ILG’s business and brands that we acquired as “Legacy-ILG.”

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from

Contracts with Customers” (“ASC 606”).

Sale of Vacation Ownership Products

We market and sell vacation ownership products in our Vacation Ownership segment. Vacation ownership products

include deeded vacation ownership products, deeded beneficial interests, rights to use real estate and other interests in trusts that
solely hold real estate (collectively “vacation ownership products” or “VOIs”). Vacation ownership products may be sold for
cash or we may provide financing.

In connection with the sale of vacation ownership products, we provide sales incentives to certain purchasers and, in

certain cases, membership in a brand affiliated club. Non-cash incentives typically include Marriott Bonvoy points, Hyatt’s
customer loyalty program 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 an exclusive selection of travel packages provided by affiliate
tour operators (the “Explorer Collection”), generally up to two years from the date of issuance. Typically, sales incentives are
only awarded if the sale is closed.

Upon execution of a legal sales agreement, we typically receive an upfront deposit from our customer with the
remainder of the purchase price for the vacation ownership product to either be collected at closing (“cash contract”) or
financed by the customer through our financing programs (“financed contract”). Refer to “Financing Revenues” below for
further information regarding financing terms. Customer deposits received for contracts are recorded as Advance deposits on
our Balance Sheets until the point in time at which control of the vacation ownership product has transferred to the customer.

Our assessment of collectability of the transaction price for sales of vacation ownership products is aligned with our
credit granting policies for financed contracts. In determining the consideration to which we expect to be entitled for financed
contracts, we include estimated variable consideration in the transaction price to the extent it is probable that a significant
reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is
resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction
price are based largely on the customer class and the results of our static pool analyses, which rely on historical payment data
by customer class as described in “Loan Loss Reserves” below. Variable consideration which has not been included within the
transaction price is presented as a reserve on vacation ownership notes receivable. Revisions to estimates of variable
consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes
receivable and can increase or decrease revenue. Revenues were reduced during 2021 by $9 million due to changes in our
estimates of variable consideration for performance obligations that were satisfied in prior periods. See Footnote 6 “Vacation
Ownership Notes Receivable” for information on increases to our vacation ownership notes receivable reserve attributable to
the COVID-19 pandemic. In addition, we account for cash incentives provided to customers as a reduction of the transaction
price. Refer to “Arrangements with Multiple Performance Obligations” below for a description of our methods of allocating
transaction price to each performance obligation.

81

We evaluated our business practices, and the underlying risks and rewards associated with vacation ownership
products and the respective timing that such risks and rewards are transferred to the customer in determining the point in time at
which control of the vacation ownership product is transferred to the customer. Based upon the different terms of the contracts
with the customer and business practices, we transfer control of the vacation ownership product at different times for our
different businesses. We recognize revenue on the sale of Legacy-MVW and Legacy-Welk vacation ownership products at
closing. We recognize revenue on the sale of Legacy-ILG vacation ownership products upon expiration of the rescission period.

Revenue for non-cash incentives, such as plus points, is recorded as Deferred revenue on our Balance Sheets at closing

and is recognized as rental revenue upon transfer of control to the customer, which typically occurs upon delivery of the
incentive, or at the point in time when the incentive is redeemed. For non-cash incentives provided by third parties (i.e. Marriott
Bonvoy points, World of Hyatt points or third-party Explorer Collection offerings), we evaluated whether we control the
underlying good or service prior to delivery to the customer. We concluded that we are an agent for those non-cash incentives
which we do not control prior to delivery and as such record the related revenue net of the related cost upon recognition.

Management and Exchange Revenues and Cost Reimbursements Revenues

Ancillary Revenues

Ancillary revenues consist of goods and services that are sold or provided by us at food and beverage outlets, golf

courses and other retail and service outlets located at our resorts. Payments for such goods and services are generally received at
the point of sale in the form of cash or credit card charges. For goods and services sold, we evaluate whether we control the
underlying goods or services prior to delivery to the customer. For transactions where we do not control the goods or services
prior to delivery, the related revenue is recorded net of the related cost upon recognition. We recognize ancillary revenue at the
point in time when goods have been provided and/or services have been rendered.

Management Fee Revenues and Cost Reimbursements Revenues

We provide day-to-day-management services, including housekeeping services, operation of reservation systems,
maintenance and certain accounting and administrative services for owners’ associations, condominium owners and hotels.

We generate revenue from fees we earn for managing vacation ownership resorts, clubs, owners’ associations,
condominiums and hotels. In our Vacation Ownership segment, these fees are earned regardless of usage or occupancy and are
typically based on either a percentage of the budgeted costs to operate the resorts or a fixed fee arrangement (“VO management
fee revenues”). In our Exchange & Third-Party Management segment, we earn base management fees which are typically either
(i) fixed amounts, (ii) amounts based on a percentage of adjusted gross lodging revenue, or (iii) various revenue sharing
agreements based on stated formulas (“Base management fee revenues”) and incentive management fees, which are generally a
percentage of either operating profits or improvement in operating profits (“Incentive management fees”). In addition, we
receive reimbursement of costs incurred on behalf of our customers, which consist of actual expenses with no added margin
(“cost reimbursements”). Vacation Ownership segment cost reimbursements revenues exclude amounts that we have paid to the
owners’ associations related to maintenance fees for unsold vacation ownership products, as we have concluded that such
payments are consideration payable to a customer.

Management fees are collected over time or upfront depending upon the specific management contract. Cost
reimbursements are received over time and considered variable consideration. We have determined that a significant financing
component does not exist as a substantial amount of the consideration promised by the customer is paid when the associated
variable consideration is determined.

We evaluated the nature of the management services provided and concluded that the management services constitute

a series of distinct services to be accounted for as a single performance obligation transferred over time. We use an input
method, the number of days that management services are provided, to recognize VO management fee revenues and Base
management fee revenues, which is consistent with the pattern of transfer to the customers who receive and consume the
benefits as services are provided each day. We recognize Incentive management fees as earned throughout the incentive period
based on actual results, which is subject to estimation of the transaction price.

Any consideration we receive in advance of services being rendered is recorded as Deferred revenue on our Balance

Sheets and is recognized ratably across the service period to which it relates. We recognize variable consideration for Cost
reimbursements revenues when the reimbursable costs are incurred.

82

Other Services Revenues

Other services revenues includes revenues from membership fees, club dues and additional fees for services we
provide to customers. Membership fees and club dues are received in advance of providing access to the exchange services, are
recorded as Deferred revenue on our Balance Sheets and are earned regardless of whether exchange services are provided.
Generally, Interval International memberships are cancellable and refundable on a pro-rata basis, with the exception of the
Interval International network’s Platinum tier which is non-refundable. Transaction-based fees are typically collected at a point
in time.

We have determined that exchange services constitute a stand-ready obligation for us to provide unlimited access to

exchange services over a defined period of time, when and if a customer (or customer of a customer) requests. We have
determined that customers benefit from the stand-ready obligation evenly throughout the period in which the customer has
access to exchange services and as such, recognize membership fees and club dues on a straight-line basis over the related
period of time.

Transaction-based fees are recognized as revenue at the point in time at which the relevant goods or services are

transferred to the customer. For transaction-based fees, we evaluate whether we control the underlying goods or services prior
to delivery to the customer. Transaction-based fees from exchanges and other transactions in our Exchange & Third-Party
Management segment are generally recognized when confirmation of the transaction is provided and services have been
rendered. For transactions where we do not control the goods or services prior to delivery, the related revenue is recorded net of
the related cost upon recognition.

Financing Revenues

We offer consumer financing as an option to qualifying customers purchasing vacation ownership products, which is

collateralized by the underlying vacation ownership products. We recognize interest income on an accrual basis. The
contractual terms of the financing agreements require that the contractual level of annual principal payments be sufficient to
amortize the loan over a customary period for the vacation ownership product being financed, which is generally ten to fifteen
years. Generally, payments commence under the financing contracts 30 to 60 days after closing. We record the difference
between the vacation ownership note receivable and the variable consideration included in the transaction price for the sale of
the related vacation ownership product as a reserve on our vacation ownership notes receivable. We earn interest income from
the financing arrangements on the principal balance outstanding over the life of the arrangement and record that interest income
in Financing revenues on our Income Statements. See Footnote 6 “Vacation Ownership Notes Receivable” for additional
information related to the accounting for our acquired vacation ownership notes receivable.

Financing revenues include transaction-based fees we charge to owners and other third parties for services. We

recognize fee revenues when services have been rendered.

Rental Revenues

In our Vacation Ownership segment, 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. In our Exchange & Third-Party
Management segment, we offer vacation rental opportunities for managed properties and to members of the Interval
International network and certain other membership programs from seasonal oversupply or underutilized space, as well as
sourced resort accommodations.

We receive payments for rentals primarily through credit card charges. We generally recognize rental revenues when

occupancy has occurred, which is consistent with the period in which the customer benefits from such service. For certain rental
revenues associated with our Exchange & Third-Party Management segment, revenue is recognized when confirmation of the
transaction is provided as we concluded we are an agent for these transactions. We recognize rental revenue from the utilization
of plus points issued in connection with the sale of vacation ownership products, as described in “Sale of Vacation Ownership
Products” above, when occupancy has occurred.

We also generate revenues from vacation packages sold to our customers. The packages have an expiration period of
six to twenty-four months, and payments for such packages are non-refundable and generally paid by the customer in advance.
Payments received in advance are recorded as Advance deposits on our Balance Sheets, until the revenue is recognized, when
occupancy has occurred. For rental revenues associated with vacation ownership products which we own and which are
registered and held for sale, to the extent that the proceeds are less than costs, revenues are reported net in accordance with ASC
Topic 978, “Real Estate – Time-Sharing Activities.”

83

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate
revenue to each performance obligation based on its relative standalone selling price. In cases where the standalone selling price
is not readily available, we generally determine the standalone selling prices utilizing the adjusted market approach, using
prices from similar contracts, our historical pricing on similar contracts, our internal marketing and selling data and other
internal and external inputs we deem to be appropriate. Significant judgment is required in determining the standalone selling
price under the adjusted market approach.

Receivables, Contract Assets & Contract Liabilities

As discussed above, the payment terms and conditions in our customer contracts vary. In some cases, customers

prepay for their goods and services; in other cases, after appropriate credit evaluations, payment is due in arrears. When the
timing of our delivery of goods and services is different from the timing of the payments made by customers, we recognize
either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes
performance or when we have a right to consideration that is unconditional before the transfer of goods or services to a
customer). Receivables are recorded when the right to consideration becomes unconditional. Contract liabilities are recognized
as revenue as (or when) we perform under the contract. See Footnote 4 “Revenue and Receivables” for additional information
related to our receivables, contract assets and contract liabilities.

Costs Incurred to Sell Vacation Ownership Products

We charge marketing and sales costs we incur to sell vacation ownership products to expense when incurred.

Earnings or Loss Per Share Attributable to Common Shareholders

Basic earnings or loss per share attributable to common shareholders is calculated by dividing the earnings or loss
available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted
earnings or loss per share attributable to common shareholders is calculated to give effect to all potentially dilutive common
shares that were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation awards
is reflected in diluted earnings per share attributable to common shareholders by application of the treasury stock method. Any
potentially dilutive equity-based compensation awards are excluded from the calculation for periods when there is a net loss
attributable to common shareholders to avoid anti-dilutive effects.

Business Combinations

We allocate the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed

based on their estimated fair values at the acquisition date. We recognize as goodwill the amount by which the purchase price of
an acquired entity exceeds the net of the fair values assigned to the assets acquired and liabilities assumed. In determining the
fair values of assets acquired and liabilities assumed, we use various recognized valuation methods including the income, cost
and market approaches. Further, we make assumptions within certain valuation techniques, including discount rates, royalty
rates, and the amount and timing of future cash flows. We record the net assets and results of operations of an acquired entity in
our Financial Statements from the acquisition date. We initially perform these valuations based upon preliminary estimates and
assumptions by management or independent valuation specialists under our supervision, where appropriate, and make revisions
as estimates and assumptions are finalized. We expense acquisition-related costs as we incur them.

As part of our accounting for business combinations we are required to determine the useful lives of identifiable
intangible assets recognized separately from goodwill. The useful life of an intangible asset is the period over which the asset is
expected to contribute directly or indirectly to the future cash flows of the acquired business. An intangible asset with a finite
useful life shall be amortized; an intangible asset with an indefinite useful life shall not be amortized. We base the estimate of
the useful life of an intangible asset on an analysis of all pertinent factors, in particular, all of the following factors with no one
factor being more presumptive than the other:

•

•

•

•

•

•

The expected use of the asset.

The expected useful life of another asset or a group of assets to which the useful life of the intangible asset may
relate.

Any legal, regulatory, or contractual provisions that may limit the useful life.

Our own historical experience in renewing or extending similar arrangements, consistent with our intended use of
the asset, regardless of whether those arrangements have explicit renewal or extension provisions.

The effects of obsolescence, demand, competition, and other economic factors.

The level of maintenance expenditures required to obtain the expected future cash flows from the asset.

84

If no legal, regulatory, contractual, competitive, economic, or other factors limit the useful life of an intangible asset to
the reporting entity, the useful life of the asset shall be considered to be indefinite. The term indefinite does not mean the same
as infinite or indeterminate. The useful life of an intangible asset is indefinite if that life extends beyond the foreseeable
horizon; that is, there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of
the acquired business.

Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are

based in part on historical experience and information obtained from the management of the acquired entity and are inherently
uncertain. Examples of critical estimates in accounting for acquisitions include but are not limited to future expected cash flows
from sales of products and services and related contracts and agreements and discount and long-term growth rates.
Unanticipated events and circumstances may occur which could affect the accuracy or validity of our assumptions, estimates or
actual results.

Variable Interest Entities

We consolidate entities under our control, including VIEs where we are deemed to be the primary beneficiary. In

accordance with the applicable accounting guidance for the consolidation of VIEs, we analyze our variable interests, including
loans, guarantees and equity investments, to determine if an entity in which we have a variable interest is a VIE. Our analysis
includes both quantitative and qualitative reviews. We base our quantitative analysis on the forecasted cash flows of the entity,
and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making
ability, and relevant financial agreements. We also use our qualitative analyses to determine if we must consolidate a VIE
because we are its primary beneficiary.

Fair Value Measurements

We have several financial instruments that we must measure at fair value on a recurring basis. See Footnote 7

“Financial Instruments” for further information. We also apply the provisions of fair value measurement to various non-
recurring measurements for our financial and non-financial assets and liabilities.

The applicable accounting standards define fair value as the price that would be received upon selling an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure
fair value of our assets and liabilities using inputs from the following three levels of the fair value hierarchy:

•

•

•

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the
ability to access at the measurement date.

Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for
the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or
corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 includes unobservable inputs that reflect our assumptions about what factors market participants would
use in pricing the asset or liability. We develop these inputs based on the best information available, including our
own data.

Cash and Cash Equivalents

We consider all highly liquid investments with an initial purchase maturity of three months or less at the date of

purchase to be cash equivalents.

Restricted Cash

Restricted cash primarily consists of cash restricted for use by consolidated owners’ associations which is designated

for resort operations and other specific uses, such as reserves, cash held in a reserve account related to vacation ownership notes
receivable securitizations, cash collected for maintenance fees to be remitted to owners’ associations, and deposits received and
held in escrow, primarily associated with the sale of vacation ownership products.

85

Accounts Receivable

Accounts receivable are stated at amounts due from customers, principally resort developers, members and managed

properties, net of a reserve for credit losses. Accounts receivable outstanding longer than the contractual payment terms are
considered past due. We determine our credit loss reserve for accounts receivable by considering a number of factors, including
previous loss history, our judgment as to the specific customer’s current ability to pay its obligation and the condition of the
general economy. We write off accounts receivable when they become uncollectible once we have exhausted all means of
collection. Accounts receivable is presented net of a reserve for credit losses of $14 million and $15 million at December 31,
2021 and December 31, 2020, respectively. Accounts receivable also includes interest receivable on vacation ownership notes
receivable. Write-offs of interest receivable are recorded as a reversal of previously recorded interest income.

Acquired Vacation Ownership Notes Receivable Reserve for Credit Losses

As part of the ILG Acquisition, we acquired existing portfolios of vacation ownership notes receivable. At acquisition,

we recorded these vacation ownership notes receivable at fair value. Upon adoption of ASU 2016-13 (as defined below) on
January 1, 2020, we account for these acquired vacation ownership notes receivable using the purchased credit deteriorated
assets provision of the current expected credit loss model, whereby we established a reserve for credit losses and a
corresponding increase in the book value of the acquired vacation ownership notes receivable, resulting in no impact to the
recorded balance. 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. Any changes in the reserve for credit losses are recorded as
Financing expenses on our Income Statements. In addition, we established a noncredit discount of $2 million, which
represented the difference between the amortized cost basis and the par value of our acquired vacation ownership notes
receivable at January 1, 2020. The noncredit discount will be amortized to interest expense over the contractual life of the
acquired vacation ownership notes receivable and is recorded as Financing expenses on our Income Statements.

The vacation ownership notes receivable acquired as part of the Welk Acquisition were recorded at fair value using the

purchased credit deteriorated assets provision of the current expected credit loss model, consistent with the principles outlined
above.

Originated Vacation Ownership Notes Receivable Reserve

We record the difference between the vacation ownership note receivable and the variable consideration included in
the transaction price for the sale of the related vacation ownership product as a reserve on our originated vacation ownership
notes receivable. See “Financing Revenues” above for further information.

Past Due and Defaulted

Although we consider loans to owners to be past due if we do not receive payment within 30 days of the due date, we

suspend accrual of interest only on those loans that are over 90 days past due. For Legacy-MVW vacation ownership notes
receivable, we consider loans over 150 days past due to be in default and fully reserve such amounts. For Legacy-ILG and
Legacy-Welk vacation ownership notes receivable, we consider loans over 120 days past due to be in default and fully reserve
such amounts. We apply payments we receive for vacation ownership notes receivable on non-accrual status first to interest,
then to principal and any remainder to fees. We resume accruing interest when vacation ownership notes receivable are less
than 90 days past due. We do not accept payments for vacation ownership notes receivable during the foreclosure process
unless the amount is sufficient to pay all past due principal, interest, fees and penalties owed and fully reinstate the note. We
write off vacation ownership notes receivable against the reserve once we receive title to the vacation ownership products
through the foreclosure or deed-in-lieu process or, in certain circumstances, when revocation is complete.

Inventory

Our inventory consists primarily of completed vacation ownership products. We carry our inventory at the lower of

(1) cost, including costs of improvements and amenities incurred subsequent to acquisition, capitalized interest and real estate
taxes plus other costs incurred during construction, or (2) estimated fair value, less costs to sell, which can result in impairment
charges and/or recoveries of previous impairments.

We account for vacation ownership inventory and cost of vacation ownership products in accordance with the

authoritative guidance for accounting for real estate time-sharing transactions, which defines a specific application of the
relative sales value method for reducing vacation ownership inventory and recording cost of sales as described in our policy for
revenue recognition for vacation ownership products. Also, pursuant to the guidance for accounting for real estate time-sharing
transactions, we do not reduce inventory for cost of vacation ownership products related to variable consideration which has not
been included within the transaction price (accordingly, no adjustment is made when inventory is reacquired upon default of the
related receivable). These standards provide for changes in estimates within the relative sales value calculations to be accounted
for as real estate inventory true-ups, which we refer to as product cost true-up activity, and are recorded in Cost of vacation
ownership product expenses on the Income Statements to retrospectively adjust the margin previously recorded subject to those

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estimates. For 2021, 2020 and 2019, product cost true-up activity relating to vacation ownership products increased carrying
values of inventory by $10 million, $6 million and $8 million, respectively.

Property and Equipment

Property and equipment includes our sales centers, golf courses, information technology, including internally
developed capitalized software, and other assets used in the normal course of business, as well as land held for future vacation
ownership product development and undeveloped, and partially developed land parcels that are not part of an approved
development plan and do not meet the criteria to be classified as held for sale. In addition, fully developed vacation ownership
interests are classified as property and equipment until they are registered and available for sale. We record property and
equipment at cost, including interest and real estate taxes incurred during active development. We capitalize the cost of
improvements that extend the useful life of property and equipment when incurred. We expense all repair and maintenance
costs as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the assets (three to
forty years), and we amortize leasehold improvements over the shorter of the asset life or lease term.

We also capitalize certain qualified costs incurred in connection with the development of internal use software.

Capitalization of internal use software costs begins when the preliminary project stage is completed, management with the
relevant authority authorizes and commits to the funding of the software project, and it is probable that the project will be
completed and the software will be used to perform the function intended.

Leases

We account for leases in accordance with ASC Topic 842, “Leases” (“ASC 842”). We determine if an arrangement is
or contains a lease at contract inception. Operating leases include lease arrangements for various land, corporate facilities, real
estate and equipment. Corporate facilities leases are for office space, including our current corporate headquarters in Orlando,
Florida. Other operating leases are primarily for office, off-site sales centers and retail space, as well as various equipment
supporting our operations, with varying terms and renewal option periods.

Finance leases include lease arrangements for ancillary and operations space. We also have a long-term finance lease

for land underlying an operating hotel. In addition, we also lease various equipment supporting our operations and classify these
leases as finance leases in accordance with ASC 842. The depreciable life of these assets is limited to the expected lease term,
unless there is a transfer of title or purchase option reasonably certain of exercise.

Right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term

at commencement date. Short-term leases, which have an initial term of a year or less, are not recorded on the balance sheet.
For purposes of calculating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when
it is reasonably certain that we will exercise that option. Macro-economic conditions are the primary factor used to estimate
whether an option to extend a lease term will be exercised or not. Because the rate implicit in our leases is not readily
determinable, we use our incremental borrowing rate as the discount rate, which approximates the interest rate at which we
could borrow on a collateralized basis with similar terms and payments and in similar economic environments. Right-of-use
assets exclude the unamortized portion of lease incentives received. Certain of our lease agreements include variable rental
payments that are based on a percentage of retail sales over contractual levels and others include rental payments adjusted
periodically for inflation. Additionally, with respect to our real estate leases, we do not separate lease and non-lease
components.

Impairment of Long-Lived Assets and Other Intangible Assets

We assess long-lived assets, including property and equipment, leases, and definite-lived intangible assets, for
recoverability when changes in circumstances indicate the carrying value may not be recoverable, for example, when there are
material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected
operating results, or significant negative industry or economic trends. We evaluate recoverability of an asset group by
comparing its carrying value to the future net undiscounted cash flows that we expect will be generated by the asset group. If
the comparison indicates that the carrying value of an asset group is not recoverable, we recognize an impairment loss for the
excess of carrying value over the estimated fair value. When we recognize an impairment loss for assets to be held and used, we
depreciate the adjusted carrying amount of those assets over their remaining useful life.

We assess indefinite-lived intangible assets for potential impairment and continued indefinite use annually, or more
frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. We
may first assess qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived
intangible is less than its carrying amount. If the carrying value of the asset exceeds the fair value, we recognize an impairment
loss in the amount of that excess.

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Goodwill

We perform an annual review for the potential impairment of the carrying value of goodwill in the fourth quarter, or

more frequently if events or circumstances indicate a possible impairment. For purposes of evaluating goodwill for impairment,
we have two reporting units, which are also our reportable operating segments. In evaluating goodwill for impairment, we may
assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair
value of a reporting unit is less than its carrying amount. If we bypass the qualitative assessment, or if we conclude that it is
more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a quantitative
impairment test by comparing the fair value of a reporting unit with its carrying amount.

Qualitative factors that we consider include, for example, macroeconomic and industry conditions, overall financial

performance, and other relevant entity-specific events. If the qualitative assessment is not conclusive, then a quantitative
impairment analysis for goodwill is performed at the reporting unit level. We may also choose to perform this quantitative
impairment analysis instead of the qualitative analysis. The quantitative impairment analysis compares the fair value of the
reporting unit, determined using the income and/or market approach, to its recorded amount. If the recorded amount exceeds the
fair value, then a goodwill impairment charge is recorded for the difference up to the recorded amount of goodwill.

We calculate the estimated fair value of a reporting unit using a weighting of the income and market approaches. For
the income approach, we use internally developed discounted cash flow models that include the following assumptions, among
others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends;
expected future investments to grow new units; and estimated discount rates. For the market approach, we use internal analyses
based primarily on market comparables. We base these assumptions on our historical data and experience, third-party
appraisals, industry projections, micro and macro general economic condition projections, and our expectations.

See Footnote 11 “Goodwill” for additional information on our goodwill.

Convertible Senior Notes

In accounting for the 1.50% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) and the 0.00%

Convertible Senior Notes due 2026 (the “2026 Convertible Notes”), referred to collectively as our “convertible notes,” we
bifurcated the liability and equity components. The carrying amount of each liability component was calculated by measuring
the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of each equity
component representing the conversion option was determined by deducting the fair value of the liability component from the
par value of the convertible notes. The excess of the principal amount of the liability over its carrying amount is amortized to
interest expense over the term of the convertible notes using the effective interest method. The equity component is not
remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to
the convertible notes, we allocated the total amount incurred to the liability and equity components based on their relative
values. Issuance costs attributable to the liability component are amortized to interest expense over the term of the convertible
notes, and issuance costs attributable to the equity component are included along with the equity component in additional paid-
in capital within shareholders’ equity. See Footnote 16 “Debt” for more information on our convertible notes and also see
Future Adoption of Accounting Standards below for information on the adoption of future accounting standards that will impact
the accounting for our convertible notes.

Derivative Instruments

We record derivatives at fair value. The designation of a derivative instrument as a hedge and its ability to meet the

hedge accounting criteria determine how we reflect the change in fair value of the derivative instrument in our Financial
Statements. A derivative qualifies for hedge accounting if we expect it to be highly effective in offsetting the underlying hedged
exposure and we fulfill the hedge documentation requirements. We may designate a hedge as a cash flow hedge, fair value
hedge, or a net investment in non-U.S. operations hedge based on the exposure we are hedging. If a qualifying hedge is deemed
effective, we record changes in fair value in other comprehensive income.

We assess the effectiveness of our hedging instruments quarterly, recognize current period hedge ineffectiveness

immediately in earnings, and discontinue hedge accounting for any hedge that we no longer consider to be highly effective. We
recognize changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting in current
period earnings.

We are exposed to market risk from changes in interest rates, currency exchange rates and debt prices. We manage our

exposure to these risks by monitoring available financing alternatives, through pricing policies that may take into account
currency exchange rates, and by entering into derivative arrangements. As a matter of policy, we only enter into transactions
that we believe will be highly effective at offsetting the underlying risk, and we do not use derivatives for trading or speculative
purposes.

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Loss Contingencies

We are subject to various legal proceedings and claims in the normal course of business, the outcomes of which are

subject to significant uncertainty. We record an accrual for loss contingencies when we determine that it is probable that a
liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations we evaluate,
among other things, the degree of probability of an unfavorable outcome and, when it is probable that a liability has been
incurred, our ability to make a reasonable estimate of the loss. We review these accruals each reporting period and make
revisions based on changes in facts and circumstances.

Defined Contribution Plan

We administer and maintain a defined contribution plan for the benefit of all employees meeting certain eligibility

requirements who elect to participate in the plan. Contributions are determined based on a specified percentage of salary
deferrals by participating employees. We recognized compensation expense (net of cost reimbursements from owners’
associations) for our participating employees totaling $19 million in 2021, $12 million in 2020 and $19 million in 2019.

Deferred Compensation Plan

Certain members of our senior management have the opportunity to participate in the Marriott Vacations Worldwide

Deferred Compensation Plan (the “Deferred Compensation Plan”), which we maintain and administer. Under both the Deferred
Compensation Plan and the Marriott International EDC (as defined below) participating employees are able to defer payment
and income taxation of a portion of their salary and bonus. It also provides participants with the opportunity for long-term
capital appreciation by crediting their accounts with notional earnings.

Prior to the spin-off of MVW from Marriott International (the “Marriott Spin-Off”), certain members of our senior

management had the opportunity to participate in the Marriott International, Inc. Executive Deferred Compensation Plan (the
“Marriott International EDC”), which Marriott International maintains and administers. Subsequent to the Marriott Spin-Off,
we remain liable to reimburse Marriott International for distributions to participants that were employees of Marriott Vacations
Worldwide at the time of the Marriott Spin-Off including earnings thereon.

To support our ability to meet a portion of our obligations under the Deferred Compensation Plan, we acquired

company owned insurance policies (the “COLI policies”) on the lives of certain participants in the Deferred Compensation
Plan, the proceeds of which are intended to be aligned with the investment alternatives elected by plan participants and are
payable to a rabbi trust with the Company as grantor. For both 2021 and 2020, participants were able to select a rate of return
based on market-based investment alternatives for up to 100% of their contributions and existing balances, with one of those
options being a fixed rate of return of 3.5%.

We consolidate the liabilities of the Deferred Compensation Plan and the related assets, which consist of the COLI

policies held in the rabbi trust. The rabbi trust is considered a VIE. We are considered the primary beneficiary of the rabbi trust
because we direct the activities of the trust and are the beneficiary of the trust. At December 31, 2021, the value of the assets
held in the rabbi trust was $76 million, which is included in the Other line within assets on our Balance Sheets.

Share-Based Compensation Costs

During the second quarter of 2020, our shareholders approved the Marriott Vacations Worldwide Corporation 2020

Equity Incentive Plan (the “MVW Equity Plan”), which supersedes both the Marriott Vacations Worldwide Corporation Stock
and Cash Incentive Plan and the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan (collectively, the “Prior Plans”).
No new awards will be granted under the Prior Plans and all awards that were granted under the Prior Plans will remain
outstanding and continue to be governed by the Prior Plans.

The MVW Equity Plan was established in order to compensate our employees and directors by granting them equity

awards such as restricted stock units (“RSUs”), stock appreciation rights (“SARs”) and stock options.

We follow the provisions of ASC Topic 718, “Compensation—Stock Compensation,” which requires that a company

measure the expense of employee services received in exchange for an award of equity instruments based on the grant-date fair
value of the award. Generally, share-based awards granted to our employees, other than RSUs with performance vesting
conditions, vest ratably over a four-year period. For share-based awards with service-only vesting conditions, we record
compensation expense on a straight-line basis over the requisite service period. For RSUs with performance vesting conditions,
the number of RSUs earned, if any, is determined following the end of a performance period (typically three years) based upon
the cumulative achievement over that period of specific quantitative operating financial measures and we recognize
compensation expense once it is probable that the corresponding performance condition will be achieved.

SARs awarded under the MVW Equity Plan are granted at exercise prices or strike prices equal to the market price of
our common stock on the date of grant (this price is referred to as the “base value”). SARs generally expire ten years after the
date of grant and both vest and become exercisable in cumulative installments of one quarter of the grant at the end of each of

89

the first four years following the date of grant. Upon exercise of SARs, our employees and non-employee directors receive a
number of shares of our common stock equal to the number of SARs being exercised, multiplied by the quotient of (a) the
market price of the common stock on the date of exercise (this price is referred to as the “final value”) minus the base value,
divided by (b) the final value.

We recognize the expense associated with these awards on our Income Statements based on the fair value of the
awards as of the date that the share-based awards are granted and adjust that expense to the estimated number of awards that we
expect will vest or be earned. The fair value of RSUs represents the number of awards granted multiplied by the average of the
high and low market price of our common stock on the date the awards are granted reduced by the present value of the
dividends expected to be paid on the shares during the vesting period, discounted at a risk-free interest rate. We generally
determine the fair value of SARs using the Black-Scholes option valuation model which incorporates assumptions about
expected volatility, risk free interest rate, dividend yield and expected term. We will issue shares from authorized shares upon
the exercise of SARs or stock options held by our employees and directors.

For share-based awards granted to non-employee directors, we recognize compensation expense on the grant date

based on the fair value of the awards as of that date. See Footnote 18 “Share-Based Compensation” for more information on the
MVW Equity Plan.

Non-U.S. Operations

The U.S. dollar is the functional currency of our consolidated entities operating in the United States. The functional

currency for our consolidated entities operating outside of the United States is generally the currency of the economic
environment in which the entity primarily generates and expends cash. For consolidated entities whose functional currency is
not the U.S. dollar, we translate their financial statements into U.S. dollars. We translate assets and liabilities at the exchange
rate in effect as of the financial statement date and translate Income Statement accounts using the weighted average exchange
rate for the period. We include translation adjustments from currency exchange and the effect of exchange rate changes on
intercompany transactions of a long-term investment nature as a separate component of equity. We report gains and losses from
currency exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature,
as well as gains and losses from non-U.S. currency transactions, in the (Losses) gains and other (expense) income, net line on
our Income Statements.

Income Taxes

We file income tax returns, including with respect to our subsidiaries, in various jurisdictions around the world. We

account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this
method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax
basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date.

Changes in existing tax laws and rates, their related interpretations, and the uncertainty generated by the current

economic environment may affect the amounts of deferred tax liabilities or the valuations of deferred tax assets over time. Our
accounting for deferred tax consequences represents management’s best estimate of future events that can be appropriately
reflected in the accounting estimates.

We record a valuation allowance on deferred taxes if we determine it is more likely than not that we will not fully

realize the future benefit of deferred tax assets. In making such a determination, we consider all available positive and negative
evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning
strategies, and results of recent operations. In the event we determine that we would be able to realize our deferred income tax
assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation
allowance, which impacts the provision for income taxes.

We file tax returns after the close of our fiscal year end and adjust our estimated tax receivable or liability to the actual

tax receivable or due per the filed tax returns. Historically, we have not experienced significant differences between our
estimates of provision for income tax and actual amounts incurred, excluding one-time tax method changes approved by the
Internal Revenue Service (the “IRS”) after our financial statements were filed.

For purposes of Global Intangible Low-Taxed Income, we have elected to use the period cost method and therefore

have not recorded deferred taxes for basis differences expected to reverse in future periods.

For tax positions we have taken, or expect to take, in a tax return we apply a more likely than not threshold, under

which we must conclude a tax position is more likely than not to be sustained, assuming that the position will be examined by
the appropriate taxing authority that has full knowledge of all relevant information, in order to continue to recognize the benefit.

90

In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more
likely than not threshold. Based on our evaluations of tax positions, we believe that potential tax exposures have been recorded
appropriately. Additionally, we recognize accrued interest and penalties related to our unrecognized tax benefits as a component
of tax expense.

New Accounting Standards

Accounting Standards Update 2019-12 – “Income Taxes (Topic 740): Simplifying the Accounting for Income

Taxes” (“ASU 2019-12”)

In the first quarter of 2021, we adopted accounting standards update (“ASU”) 2019-12, which amended and simplified

existing guidance in an effort to reduce the complexity of accounting for income taxes while maintaining or enhancing the
helpfulness of information provided to financial statement users. Our adoption of ASU 2019-12 did not have a material impact
on our Financial Statements or disclosures.

Future Adoption of Accounting Standards

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

Rate Reform on Financial Reporting” (“ASU 2020-04”)

In March 2020, the FASB issued ASU 2020-04, as amended, which provides optional expedients and exceptions to

existing guidance on contract modifications and hedge accounting in an effort to ease the financial reporting burdens related to
the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates. This update can
be adopted no later than December 1, 2022, with early adoption permitted. As of December 31, 2021, borrowings under our
existing Corporate Credit Facility (as defined in Footnote 16 “Debt”) and Warehouse Credit Facility (as defined in Footnote 15
“Securitized Debt”) generally reference LIBOR, as do certain interest rate swaps and collars. The instruments have not yet
discontinued the use of LIBOR. To the extent these instruments are amended to reference a different benchmark interest rate,
we may elect to utilize the relief available in ASU 2020-04. When we renew or amend our existing debt instruments, we will
determine a replacement rate for LIBOR. We expect to adopt ASU 2020-04 in fiscal year 2022 and continue to evaluate the
impact that adoption of this update will have on our financial statements and disclosures.

Accounting Standards Update 2020-06 – “Debt — Debt With Conversion and Other Options (Subtopic 470-20) and

Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity’s Own Equity” (“ASU 2020-06”)

In August 2020, the FASB issued ASU 2020-06, which amends and simplifies existing guidance in an effort to reduce

the complexity of accounting for convertible instruments and to provide financial statement users with more meaningful
information. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods therein.
This update may be applied retrospectively or on a modified retrospective basis with the cumulative effect recognized as an
adjustment to the opening balance of retained earnings on the date of adoption. We will adopt ASU 2020-06 on January 1, 2022
using the modified retrospective method. The impacts of the adoption will be recorded as a cumulative effect in the opening
balance of retained earnings and the conversion feature related to our convertible notes will be reclassified from equity to
liabilities. In addition, we will eliminate the related equity adjustment associated with the deferred tax liability. Commencing in
the first quarter of 2022, we will be required to calculate the impact of the convertible notes on diluted earnings per share under
the “if-converted” method. Under the “if-converted” method, diluted earnings per share would generally be calculated assuming
that all of our convertible notes were converted solely into shares of common stock at the beginning of the reporting period,
unless the result would be anti-dilutive. The application of the “if-converted” method is expected to reduce our reported diluted
earnings per share. The adoption of ASU 2020-06 on January 1, 2022 will result in an increase in debt of $107 million, a
decrease in additional paid-in capital of $111 million, and a decrease in deferred taxes of $27 million, as well as a cumulative
effect adjustment to the opening balance of retained earnings of $31 million.

Accounting Standards Update 2021-08 – “Business Combinations (Topic 805): Accounting for Contract Assets and

Contract Liabilities from Contracts with Customers” (“ASU 2021-08”)

In October 2021, the FASB issued ASU 2021-08, which amends ASC 805 to require entities to apply ASC 606 to

recognize and measure contract assets and contract liabilities from contracts with customers in a business combination. ASU
2021-08 is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods therein,
with early adoption permitted. ASU 2021-08 shall be applied on a prospective basis to business combinations that occur on or
after the adoption date. We expect to early adopt ASU 2021-08 on January 1, 2022 and we anticipate that the adoption of this
ASU will not impact our financial statements and disclosure. In the event that we complete business combinations in the future,
the application of ASU 2021-08 could result in higher acquired deferred revenue.

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3. ACQUISITIONS AND DISPOSITIONS

Acquisitions

Welk Acquisition

We completed the Welk Acquisition on April 1, 2021, for consideration of $405 million, including approximately 1.4

million shares of our common stock. Welk was one of the largest independent vacation ownership companies in North America.
The following table presents the fair value of each type of consideration transferred in the Welk Acquisition at December 31,
2021.

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

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

1.4
174.18
248
157
405

Fair Values of Assets Acquired and Liabilities Assumed

We accounted for the Welk Acquisition as a business combination, which requires us to record the assets acquired and
liabilities assumed at fair value as of the Welk Acquisition Date. The values attributed to Vacation ownership notes receivable,
Inventory, Property and equipment, Intangible assets, Deferred taxes and Securitized debt from VIEs are based on valuations
prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820, “Fair Value Measurements” (“ASC 820”).
The value attributed to Debt is based on Level 2 inputs in accordance with ASC 820. We have finalized our valuations related
to the acquired assets and liabilities of Welk, except for the valuation of certain property and equipment and our evaluation of
Welk’s historical tax positions. Accordingly, these estimates are subject to change during the measurement period, which is up
to one year from the Welk Acquisition Date, as permitted under GAAP. Any potential adjustments could be material in relation
to the values presented in the table below.

The following table presents our current estimates of the fair value of the assets that we acquired and the liabilities that

we assumed in connection with the business combination as previously reported at the end of the third quarter of 2021 and as
adjusted at December 31, 2021. During the fourth quarter of 2021, we refined our valuation models related to certain acquired
assets and liabilities as follows:

($ in millions)
Vacation ownership notes receivable, net(1) . . . . . . $
Inventory(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Property and equipment
Intangible assets(3)
. . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securitized debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

April 1, 2021
(as previously reported)
254
136
111
100
19
(45)
(189)
(184)
(66)
136
269
405

$

Adjustments

April 1, 2021
(as adjusted)

$

1
(25)
(28)
2
—
13
—
—
(27)
(64)
64
— $

255
111
83
102
19
(32)
(189)
(184)
(93)
72
333
405

$

$

_________________________
(1)

Vacation ownership notes receivable, net has been determined to constitute purchased credit deteriorated assets under
the provisions of ASC Topic 326, “Financial Instruments - Credit Losses,” due to the impact of the COVID-19
pandemic on the Welk business and the vacation ownership industry as a whole, and has been accounted for as such.
We valued the vacation ownership notes receivable using an income approach, which includes the following
significant Level 3 assumptions: default rates, prepayment rates, discount rate and fair value of collateral retained upon
customer default.

92

($ in millions)
Vacation ownership notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vacation ownership notes receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

287
(32)
255

(2)

(3)

(4)

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

Intangible assets consist of management contracts with an estimated 20 year useful life. We valued management
contracts using the multi-period excess earnings method, which is a variation of the income approach. This method
estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to
the intangible asset. This valuation approach utilizes the following Level 3 inputs: future income growth, future cost
estimates and discount rate.

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

Pro Forma Results of Operations

The following unaudited pro forma information presents the combined results of operations of Marriott Vacations

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

There were no Welk acquisition-related costs included in the unaudited pro forma results below for 2021, and $19

million included for 2020.

($ in millions, except per share data)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income (loss) attributable to common shareholders . . . . . . . . . . . . . . $
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Welk Results of Operations

2021

2020

3,894
67
66

1.56
1.53

$
$
$

$
$

3,011
(272)
(291)

(7.04)
(7.04)

The following table presents the results of Welk operations included in our Income Statement for 2021.

($ in millions)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

146

17

Costa Rica

During the first quarter of 2021, we acquired 24 completed vacation ownership units and an operations building

located at our Marriott Vacation Club at Los Suenos resort in Costa Rica for $14 million. We accounted for the transaction as
an asset acquisition with the purchase price allocated to Inventory ($13 million) and Property and equipment ($1 million).

New York, New York

During 2021, we acquired the remaining 120 completed vacation ownership units located at our Marriott Vacation

Club Pulse, New York City property for $98 million. We accounted for the transaction as an asset acquisition with the purchase
price allocated to Property and equipment.

93

During 2020, we acquired 57 completed vacation ownership units, as well as office and ancillary space, located at our

Marriott Vacation Club Pulse, New York City property for $89 million, of which $22 million was a prepayment for future
tranches of completed vacation ownership units and $20 million was paid in 2019. We accounted for the transaction as an asset
acquisition with the purchase price allocated to Property and equipment ($67 million) and Other assets ($22 million).

San Francisco, California

During the first quarter of 2021, we acquired 44 completed vacation ownership units at our Marriott Vacation Club

Pulse, San Francisco property for $34 million. We accounted for the transaction as an asset acquisition with the purchase price
allocated to Inventory ($29 million) and Other assets ($5 million).

During the fourth quarter of 2021, we completed the purchase of the remaining inventory at our Marriott Vacation
Club Pulse, San Francisco property and wrote off the outstanding management fee receivables deemed uncollectible of $7
million, which was recorded in the Management and exchange expense line on our Income Statement for the year ended
December 31, 2021. As part of the purchase, we acquired the remaining 78 completed vacation ownership units, as well as an
onsite garage, for $59 million. We accounted for the purchase as an asset acquisition with the purchase price allocated to
Inventory ($41 million) and Property and equipment ($18 million). Further, we reclassified $10 million of previous deposits
associated with the project from Other assets to Inventory.

During 2020, we acquired 34 completed vacation ownership units located at our Marriott Vacation Club Pulse, San

Francisco property for $26 million, of which $5 million was a prepayment for future tranches of completed vacation ownership
units. We accounted for the transaction as an asset acquisition with the purchase price allocated to Inventory ($18 million),
Other assets ($5 million), and Property and equipment ($3 million).

During 2019, we acquired 78 completed vacation ownership units and a sales gallery located at our Marriott Vacation
Club Pulse, San Francisco property for $58 million. We accounted for the transaction as an asset acquisition with the purchase
price allocated to Inventory ($48 million) and Property and equipment ($10 million).

Dispositions

We made no significant dispositions in 2021.

During 2020, we recorded a loss of $5 million in the (Losses) gains and other (expense) income, net line on our

Income Statement for the year ended December 31, 2020 relating to the redemption of our interest in a joint venture in our
Exchange & Third-Party Management segment which was consolidated under the voting interest model. We received nominal
cash proceeds and a note receivable which we measured at a fair value of $1 million using Level 3 inputs.

Additionally, during 2020, we disposed of excess Vacation Ownership segment land parcels in Orlando, Florida and

Steamboat Springs, Colorado for combined proceeds of $15 million, as part of our strategic decision to reduce holdings in
markets where we have excess supply, as discussed further below. We recorded a combined net gain of $6 million in the
(Losses) gains and other (expense) income, net line on our Income Statement for the year ended December 31, 2020 relating to
these transactions.

During 2019, we disposed of excess land parcels in Cancun, Mexico and Avon, Colorado for proceeds of $62 million,

of which $8 million is deferred until certain conditions associated with the sale have been met. We recorded a combined net
gain of $19 million in the (Losses) gains and other (expense) income, net line on our Income Statement for the year ended
December 31, 2019.

2019 Strategy Change

As a result of the ILG Acquisition, we performed a comprehensive review to evaluate the strategic fit of the land

holdings and operating hotels in our Vacation Ownership segment. As a result of the change in our development strategy, in
2019, we recorded a non-cash impairment charge of $72 million, of which $61 million related to land and land improvements
associated with future phases of three existing resorts, $9 million related to a land parcel held for future development and $2
million related to an ancillary business.

We used a combination of the market and income approaches to estimate the fair value of these assets. Under the
market approach, a Level 2 input, fair value is measured through an analysis of sales and offerings of comparable property
which are adjusted to reflect differences between the asset being valued and the comparable assets, such as location, time and
terms of sales, utility and physical characteristics. Under the income approach, a Level 3 input, fair value is measured through a
discounted cash flow. Under the income approach, we contemplated alternative uses to comply with the highest and best use
provisions of ASC 820.

94

4. REVENUE AND RECEIVABLES

Sources of Revenue by Segment

The following tables detail the sources of revenue by segment for each of the last three fiscal years.

($ in millions)

2021

Vacation
Ownership

Exchange &
Third-Party
Management

Corporate and
Other

Total

Sale of vacation ownership products . . . . . . . $

1,153

$

— $

— $

1,153

Ancillary revenues . . . . . . . . . . . . . . . . . . .

Management fee revenues . . . . . . . . . . . . .

Exchange and other services revenues . . .

Management and exchange . . . . . . . . . . . . . .

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . .
Revenue from contracts with customers . .

188

158

124

470

446

1,202
3,271

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Revenues . . . . . . . . . . . . . . . . . . . . . $

268

3,539

$

—

(19)

171

152

—

(121)
31

—

31

$

3

32

198

233

40

47
320

—

320

$

2020

($ in millions)

Vacation
Ownership

Exchange &
Third-Party
Management

Corporate and
Other

Total

Sale of vacation ownership products . . . . . . . $

546

$

— $

— $

Ancillary revenues . . . . . . . . . . . . . . . . . . .

Management fee revenues . . . . . . . . . . . . .

Exchange and other services revenues . . .

Management and exchange . . . . . . . . . . . . . .

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . .

Revenue from contracts with customers . .

89

149

118

356

239

1,124

2,265

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Revenues . . . . . . . . . . . . . . . . . . . . . $

265

2,530

$

1

17

193

211

37

59

307

2

309

$

—

(22)

210

188

—

(141)

47

—

47

$

191

171

493

855

486

1,128
3,622

268

3,890

546

90

144

521

755

276

1,042

2,619

267

2,886

95

($ in millions)

2019

Vacation
Ownership

Exchange &
Third-Party
Management

Corporate and
Other

Total

Sale of vacation ownership products . . . . . . . $

1,354

$

— $

— $

1,354

Ancillary revenues . . . . . . . . . . . . . . . . . . .

Management fee revenues . . . . . . . . . . . . .

Exchange and other services revenues . . .

Management and exchange . . . . . . . . . . . . . .

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost reimbursements . . . . . . . . . . . . . . . . . . .

Revenue from contracts with customers . .

224

144

120

488

512

1,136

3,490

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Revenues . . . . . . . . . . . . . . . . . . . . . $

271
3,761

$

Timing of Revenue from Contracts with Customers by Segment

4

46

248

298

61

91

450

4
454

$

—

(13)

176

163

—

(119)

44

—
44

$

228

177

544

949

573

1,108

3,984

275
4,259

The following tables detail the timing of revenue from contracts with customers by segment for each of the last three

fiscal years.

($ in millions)

2021

Vacation
Ownership

Exchange &
Third-Party
Management

Corporate and
Other

Total

Services transferred over time . . . . . . . . . . . . . . . . $
Goods or services transferred at a point in time . .
Revenue from contracts with customers . . . . . . . $

1,915
1,356
3,271

($ in millions)

Vacation
Ownership

Services transferred over time . . . . . . . . . . . . . . . . $
Goods or services transferred at a point in time . .
Revenue from contracts with customers . . . . . . . $

1,616
649
2,265

($ in millions)

Vacation
Ownership

Services transferred over time . . . . . . . . . . . . . . . . $
Goods or services transferred at a point in time . .
Revenue from contracts with customers . . . . . . . $

1,896
1,594
3,490

$

$

$

$

$

$

31
—
31

154
166
320

$

$

2020

Exchange &
Third-Party
Management

Corporate and
Other

47
—
47

156
151
307

$

$

2019

Exchange &
Third-Party
Management

Corporate and
Other

194
256
450

$

$

44
—
44

$

$

$

$

$

$

2,100
1,522
3,622

Total

1,819
800
2,619

Total

2,134
1,850
3,984

96

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

The following table shows the composition of our receivables from contracts with customers and contract liabilities.

We had no contract assets at either December 31, 2021 or December 31, 2020.

($ in millions)
Receivables

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Vacation ownership notes receivable, net

. . . . . . . . . . . . . . . . . . . . . . . . .

$

Contract Liabilities

Advance deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

At December 31, 2021

At December 31, 2020

172
2,045
2,217

160
453
613

$

$

$

$

150
1,840
1,990

147
488
635

Revenue recognized during the year ended December 31, 2021 that was included in our contract liabilities balance at

December 31, 2020 was $395 million.

Remaining Performance Obligations

Our remaining performance obligations represent the expected transaction price allocated to our contracts that we

expect to recognize as revenue in future periods when we perform under the contracts. At December 31, 2021, approximately
87% of this amount is expected to be recognized as revenue over the next two years.

Accounts Receivable

Accounts receivable is comprised of amounts due from customers, primarily owners’ associations, resort developers

and members, credit card receivables, interest receivables, amounts due from taxing authorities, indemnification assets, and
other miscellaneous receivables. The following table shows the composition of our accounts receivable balances:

($ in millions)
Receivables from contracts with customers . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification asset
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee tax credit receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

At December 31, 2021
172
14
48
22
19
4
279

At December 31, 2020
150
13
60
15
19
19
276

$

$

97

5. INCOME TAXES

Income Tax Provision

The following table presents the components of our earnings or losses before income taxes for the last three fiscal

years:

($ in millions)
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

152
(25)
127

$

$

(255) $
(85)
(340) $

Our (provision for) or benefit from income taxes for the last three years consisted of:

($ in millions)
Current

– U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
– U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred – U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

$

8
(3)
(50)
(45)

(36)
3
4
(29)
(74) $

31
1
11
43

26
9
6
41
84

$

$

190
35
225

(12)
(29)
(36)
(77)

(28)
17
5
(6)
(83)

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate

The following table reconciles the U.S. statutory income tax rate to our effective income tax rate:

U.S. statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. state income taxes, net of U.S. federal tax benefit . . . . . . . . . . . . . . . .
Share-based compensation, net of Section 162(m) limitation . . . . . . . . . . .
Other permanent differences(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact related to the CARES Act of 2020 . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. income (loss)(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance(3)
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
21.0%
4.3
1.9
(5.5)
—
(3.8)
12.9
(0.9)
17.9
10.4
0.2
58.4%

2020
21.0%
4.5
0.2
(9.1)
6.0
0.4
4.2
0.2
5.2
(7.5)
(0.5)
24.6%

2019
21.0%
4.2
0.7
5.4
—
(0.3)
2.2
(6.6)
3.1
7.0
0.2
36.9%

_________________________
(1)

The 2021 impact is primarily due to the deduction of foreign taxes paid in the U.S. The 2020 impact is primarily
attributable to non-deductible goodwill impairment recorded due to the impact of COVID-19. The 2019 impact is
primarily due to non-deductible meal and entertainment expenses and new foreign tax provisions, under provisions of
the Tax Cuts and Jobs Act of 2017.

(2)

(3)

The 2021 impact is primarily due to increases in permanent differences in foreign jurisdictions. The 2020 and 2019
impact is attributable to the difference between U.S. and foreign income tax rates and other foreign adjustments.

The 2021 impact is primarily due to new valuation allowances. The 2020 impact is primarily attributable to the
increase of the valuation allowance on certain foreign entities. The 2019 impact is primarily attributable to foreign tax
credit carryforwards in the branch and treaty baskets and losses and future deductions in foreign tax credit
carryforwards in the branch and treaty baskets.

98

For the years ended December 31, 2021, 2020 and 2019, the provision for income taxes included $4 million, $4

million, and $2 million of excess tax benefits resulting from equity incentive plan activities, respectively.

We conduct business in countries that grant “holidays” from income taxes for ten to thirty-year periods. These

holidays expire through 2034.

Other

We are currently completing the purchase price accounting and have established certain non-income tax reserves for

the Welk Acquisition, and the reserve will be finalized in 2022. We finalized our purchase price accounting for the ILG
Acquisition during 2019 and established a reserve for non-income tax issues related to Legacy-ILG. As of December 31, 2021,
the balance of the reserve for non-income tax issues related to our acquisitions was $66 million. We expect that we will be
indemnified for liabilities of $5 million in connection with these non-income tax matters pursuant to a Tax Matters Agreement
dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and
Interval Leisure Group, Inc., and consequently have recorded a corresponding indemnification asset.

Deferred Income Taxes

The following table presents the significant components of our deferred tax assets and liabilities:

($ in millions)

Deferred Tax Assets

At Year-End 2021

At Year-End 2020

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net operating loss and capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . .

Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Right-of-use asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred Tax Liabilities

Long lived intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred sales of vacation ownership interests . . . . . . . . . . . . . . . . . . . . . . . .

Right-of-use liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

69

75

20

61

146

29

24

74

498

(122)

376

(231)

(414)

(24)

(9)
(678)

Total net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(302) $

83

98

12

72

98

31

2

113

509

(106)

403

(233)

(362)

(2)

(43)
(640)

(237)

Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be

realized. In 2021 we established an additional valuation allowance of $8 million.

We have $111 million of foreign net operating loss carryforwards, some of which begin expiring in 2022; however, a
significant portion of these have indefinite carryforward periods. We have $15 million of federal net operating losses and $18
million of state net operating loss carryforwards, of which less than $1 million will expire within the next five years. We have
U.S. federal foreign tax credit carryforwards of $20 million, federal capital loss carryforwards of $2 million, and $9 million of
state tax credit carryforwards.

99

As a result of the Tax Cuts and Jobs Act of 2017, distribution of profits from non-U.S. subsidiaries is not expected to

cause a significant incremental U.S. tax impact in the future. However, distributions may be subject to non-U.S. withholding
taxes if profits are distributed from certain jurisdictions. Our present intention is to indefinitely reinvest residual historic
undistributed accumulated earnings associated with certain foreign subsidiaries. We have not provided for deferred taxes on
outside basis differences in our investments in these foreign subsidiaries, and such estimates are not practicable to be
determined.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is

as follows:

($ in millions)

Unrecognized tax benefit at beginning of year . . . . . . . . . . . . . . . . . . . . . . . $

Increases related to tax positions taken during a prior period . . . . . . . . . .

Increases related to tax positions taken during the current period . . . . . . .

Decreases related to settlements with taxing authorities . . . . . . . . . . . . . .

Decreases as a result of a lapse of the applicable statute of limitations . .

Unrecognized tax benefit at end of year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

2020

2019

$

21 $

14

12

1

—

(1)

26

$

6

2

(14)

(1)

14 $

2

18

1

—

—

21

The total unrecognized tax benefits related to uncertain income tax positions, which would affect the effective tax rate
if recognized, were $26 million at December 31, 2021 and $14 million at December 31, 2020. The total amount of gross interest
and penalties accrued were $42 million at December 31, 2021 and $25 million at December 31, 2020. We anticipate $14
million of unrecognized tax benefits, including interest and penalties, to be indemnified pursuant to a Tax Matters Agreement
dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and
Interval Leisure Group, Inc., and consequently have recorded a corresponding indemnification asset. The unrecognized tax
benefit, including accrued interest and penalties are included in Other liabilities on our Balance Sheet.

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

U.S. Tax Law Update

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

100

6. VACATION OWNERSHIP NOTES RECEIVABLE

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

($ in millions)
Securitized . . . . . . . . . . . . . . . . . . . . . $
Non-securitized

Originated
1,308

December 31, 2021
Acquired

Total

December 31, 2020
Acquired

Total

$

354

$

1,662

$

273

$

1,493

Originated
1,220
$

Eligible for securitization(1)
Not eligible for securitization(1)

. . . . .
. .
Subtotal . . . . . . . . . . . . . . . . . .

96
267
363
1,671

$

$

1
19
20
374

$

97
286
383
2,045

$

126
185
311
1,531

$

2
34
36
309

$

128
219
347
1,840

_________________________
(1)

Refer to Footnote 7 “Financial Instruments” for discussion of eligibility of our vacation ownership notes receivable for
securitization.

We reflect interest income associated with vacation ownership notes receivable in our Income Statements in the

Financing revenues caption. The following table summarizes interest income associated with vacation ownership notes
receivable.

($ in millions)
Interest income associated with vacation ownership notes receivable
— securitized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest income associated with vacation ownership notes receivable
— non-securitized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest income associated with vacation ownership notes
receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

2020

2019

219

$

239

$

40

18

259

$

257

$

232

32

264

COVID-19 Impact on Vacation Ownership Notes Receivable Reserves

In 2020, as a result of higher actual and projected default activity related predominantly to the COVID-19 pandemic,

we evaluated our vacation ownership notes receivable reserve initially using the 2008/2009 financial crisis as a reference point.
As a result, we increased our vacation ownership notes receivable reserves by $52 million in the first quarter of 2020. We
monitored actual delinquency and default activity throughout the remainder of 2020. Taking into account higher than
previously expected default activity experienced, we increased our vacation ownership notes receivable reserve by an additional
$17 million in the fourth quarter of 2020. In total, the reserve adjustments made during 2020 were reflected as a $59 million
reduction to Sale of vacation ownership products, a $10 million increase in Financing expenses, and a $19 million reduction in
Cost of vacation ownership products on our Income Statement for the year ended December 31, 2020. There were no additional
adjustments to our vacation ownership notes receivables reserves due to the COVID-19 pandemic during 2021.

Acquired Vacation Ownership Notes Receivable

Acquired vacation ownership notes receivable represent vacation ownership notes receivable acquired as part of the
ILG Acquisition and the Welk Acquisition. The following table shows future contractual principal payments, net of reserves,
and interest rates for our acquired vacation ownership notes receivable at December 31, 2021.

($ in millions)
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . $

Acquired Vacation Ownership Notes Receivable
Securitized

Total

Non-Securitized

2
2
2
2
2
10
20

$

$

50
51
50
47
42
114
354

$

$

52
53
52
49
44
124
374

Weighted average stated interest rate . . . . . . . . . . . . . .

13.7%

14.1%

14.1%

Range of stated interest rates . . . . . . . . . . . . . . . . . . . .

0.0% to 21.9%

0.0% to 21.9%

0.0% to 21.9%

101

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

. . . . . . . . . . . . . . . . . . . . . . . .

($ in millions)
Balance at December 31, 2019, as reported . . . . . . . . . $
Impact of adoption of ASU 2016-13 . . . . . . . . . . . .
Opening Balance at January 1, 2020 . . . . . . . . . . . . . .
Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clean-up call
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defaulted vacation ownership notes receivable
repurchase activity(1)
Increase in vacation ownership notes receivable
reserve(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . .
Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clean-up call
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defaulted vacation ownership notes receivable
repurchase activity(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Initial allowance for credit losses for Legacy-Welk
vacation ownership notes receivable . . . . . . . . . . . .
(Decrease) increase in vacation ownership notes
receivable reserve . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . $

Acquired Vacation Ownership Notes Receivable Reserve
Total
Securitized

Non-Securitized

— $
29
29
(1)
1
(18)
9

17

2
39
(9)
3
(49)
27

32

11

(7)
47

$

— $
26
26
1
(1)
—
—

(17)

12
21
9
(3)
—
—

(32)

21

7
23

$

—
55
55
—
—
(18)
9

—

14
60
—
—
(49)
27

—

32

—
70

_________________________
(1)

Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation
ownership notes receivable reserve are attributable to the transfer of the reserve when we voluntarily repurchased
defaulted securitized vacation ownership notes receivable.

(2)

Increase in vacation ownership notes receivable reserve includes $10 million ($8 million non-securitized and $2
million securitized) attributable to the increased reserve as a result of the COVID-19 pandemic.

Originated Vacation Ownership Notes Receivable

Originated vacation ownership notes receivable represent vacation ownership notes receivable originated by Legacy-

ILG and Legacy-Welk subsequent to each respective acquisition date and all Legacy-MVW vacation ownership notes
receivable. The following table shows future principal payments, net of reserves, and interest rates for our originated vacation
ownership notes receivable at December 31, 2021.

($ in millions)
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . $

Originated Vacation Ownership Notes Receivable
Total
Securitized

Non-Securitized

48
28
28
28
29
202
363

$

$

127
130
132
134
139
646
1,308

$

$

175
158
160
162
168
848
1,671

Weighted average stated interest rate . . . . . . . . . . . . . . . . . . .

12.9%

12.9%

12.9%

Range of stated interest rates . . . . . . . . . . . . . . . . . . . . . . . . . .

0.0% to 20.9%

0.0% to 19.9%

0.0% to 20.9%

102

For originated vacation ownership notes receivable, we record the difference between the vacation ownership note

receivable and the variable consideration included in the transaction price for the sale of the related vacation ownership product
as a reserve on our vacation ownership notes receivable. The following table summarizes the activity related to our originated
vacation ownership notes receivable reserve.

($ in millions)
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . .
Increase in vacation ownership notes receivable reserve . . .
Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clean-up call
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defaulted vacation ownership notes receivable repurchase
activity(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . .

Increase in vacation ownership notes receivable reserve(2) . .
Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clean-up call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defaulted vacation ownership notes receivable repurchase
activity(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . .
Increase in vacation ownership notes receivable reserve . .
Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clean-up call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defaulted vacation ownership notes receivable repurchase
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
activity(1)

Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . $

Originated Vacation Ownership Notes Receivable Reserve
Securitized

Non-Securitized

Total

61
94
(81)
24
(48)

40
90
87
(70)
37
(31)

80
193
78
(76)
12
(79)

65
193

$

79
18
81
(24)
—

(40)
114
50
70
(37)
—

(80)
117
24
76
(12)
—

(65)
140

$

140
112
—
—
(48)

—
204
137
—
—
(31)

—
310
102
—
—
(79)

—
333

_________________________
(1)

Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation
ownership notes receivable reserve are attributable to the transfer of the reserve when we voluntarily repurchased
defaulted securitized vacation ownership notes receivable.

(2)

Increase in vacation ownership notes receivable reserve includes $59 million ($32 million non-securitized and $27
million securitized) attributable to the increased reserve as a result of the COVID-19 pandemic.

Credit Quality of Vacation Ownership Notes Receivable

Legacy-MVW Vacation Ownership Notes Receivable

For both Legacy-MVW non-securitized and securitized vacation ownership notes receivable, we estimated average

remaining default rate of 6.74% as of both December 31, 2021 and December 31, 2020. A 0.5 percentage point increase in the
estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $6
million as of both December 31, 2021 and December 31, 2020.

We use the aging of the vacation ownership notes receivable as the primary credit quality indicator for our Legacy-

MVW vacation ownership notes receivable, as historical performance indicates that there is a relationship between the default
behavior of borrowers and the age of the receivable associated with the vacation ownership interest.

The following table shows our recorded investment in non-accrual Legacy-MVW vacation ownership notes receivable,

which are vacation ownership notes receivable that are 90 days or more past due.

($ in millions)
Investment in vacation ownership notes receivable on non-
accrual status at December 31, 2021 . . . . . . . . . . . . . . . . . . . $
Investment in vacation ownership notes receivable on non-
accrual status at December 31, 2020 . . . . . . . . . . . . . . . . . . . $

Legacy-MVW Vacation Ownership Notes Receivable
Total
Securitized

Non-Securitized

88

100

$

$

8

14

$

$

96

114

103

The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-MVW

vacation ownership notes receivable as of December 31, 2021 and December 31, 2020.

($ in millions)
31 – 90 days past due . . . . . . . . . . $
91 – 150 days past due . . . . . . . . .
Greater than 150 days past due . . .
Total past due . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Total vacation ownership notes
receivable . . . . . . . . . . . . . . . . . $

Current

Legacy-MVW Vacation Ownership Notes Receivable

As of December 31, 2021

As of December 31, 2020

Non-
Securitized
6
4
84
94
180

$

$

Securitized
20
8
—
28
1,027

Total

Non-
Securitized

Securitized

Total

26 $
12
84
122
1,207

8 $
5
95
108
231

25 $
14
—
39
1,011

33
19
95
147
1,242

274

$

1,055

$

1,329 $

339 $

1,050 $

1,389

The following table details the origination year of our Legacy-MVW vacation ownership notes receivable as of

December 31, 2021.

($ in millions)
Year of Origination

Legacy-MVW Vacation Ownership Notes Receivable

Non-Securitized

Securitized

Total

2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 & Prior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

129
20
46
29
15
35
274

$

$

274
165
250
161
96
109
1,055

$

$

403
185
296
190
111
144
1,329

Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable

At December 31, 2021 and December 31, 2020, the weighted average FICO score within our consolidated Legacy-ILG

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

We use the origination of the vacation ownership notes receivable by brand (Westin, Sheraton, Hyatt, Welk) and the

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

The following table shows our recorded investment in non-accrual Legacy-ILG and Legacy-Welk vacation ownership

notes receivable, which are vacation ownership notes receivable that are 90 days or more past due.

($ in millions)
Investment in vacation ownership notes receivable on
non-accrual status at December 31, 2021 . . . . . . . . . . . $
Investment in vacation ownership notes receivable on
non-accrual status at December 31, 2020 . . . . . . . . . . . $

Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable
Securitized

Non-Securitized

Total

114

109

$

$

10

12

$

$

124

121

104

The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-ILG and

Legacy-Welk vacation ownership notes receivable as of December 31, 2021 and December 31, 2020.

Legacy-ILG and Legacy-Welk Vacation Ownership Notes Receivable

As of December 31, 2021

As of December 31, 2020

($ in millions)
31 – 90 days past due . . . . . . . . . . $
91 – 120 days past due . . . . . . . . .
Greater than 120 days past due . . .
Total past due . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Total vacation ownership notes
receivable . . . . . . . . . . . . . . . . . $

Current

Non-
Securitized
16
4
110
130
219

$

$

Securitized
24
6
4
34
735

Total

Non-
Securitized

Securitized

Total

40 $
10
114
164
954

8 $
2
107
117
123

19 $
7
5
31
550

349

$

769

$

1,118 $

240 $

581 $

27
9
112
148
673

821

The following tables show the Legacy-ILG and Legacy-Welk acquired vacation ownership notes receivable, before

reserves, by brand and FICO score.

($ in millions)
Westin . . . . . . . . . . . . . . . . . . . . . . . . $
Sheraton . . . . . . . . . . . . . . . . . . . . . . .
Hyatt
. . . . . . . . . . . . . . . . . . . . . . . . .
Welk . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . .

$

($ in millions)
Westin . . . . . . . . . . . . . . . . . . . . . . . . $
Sheraton . . . . . . . . . . . . . . . . . . . . . . .
Hyatt
. . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . .

$

Acquired Vacation Ownership Notes Receivable as of December 31, 2021

700 +

600 - 699

< 600

No Score

Total

52
54
8
115
2
231

$

$

32
48
6
79
—
165

$

$

3
8
1
1
—
13

$

$

8
23
—
2
2
35

$

$

Acquired Vacation Ownership Notes Receivable as of December 31, 2020

700 +

600 - 699

< 600

No Score

Total

81
81
12
2
176

$

$

48
73
9
1
131

$

$

4
13
1
—
18

$

$

11
31
—
2
44

$

$

95
133
15
197
4
444

144
198
22
5
369

The following tables detail the origination year of our Legacy-ILG and Legacy-Welk acquired vacation ownership

notes receivable by brand and FICO score as of December 31, 2021.

Acquired Vacation Ownership Notes Receivable - Westin

($ in millions)

2021

2020

2019

2018

2017 & Prior

Total

700 + . . . . . . . . . . . . . . $

— $

— $

— $

14

$

600 - 699 . . . . . . . . . . .

< 600 . . . . . . . . . . . . . .

No Score . . . . . . . . . . .

—

—

—

—

—

—

—

—

—

8

2

2

$

38

24

1

6

$

— $

— $

— $

26

$

69

$

Acquired Vacation Ownership Notes Receivable - Sheraton

($ in millions)

2021

2020

2019

2018

2017 & Prior

Total

700 + . . . . . . . . . . . . . $

— $

— $

— $

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

—

—

—

—

—

—

—

—

—

$

16

12

5

7

$

— $

— $

— $

40

$

38

36

3

16

93

$

$

52

32

3

8

95

54

48

8

23

133

105

($ in millions)

2021

2020

2019

2018

2017 & Prior

Total

Acquired Vacation Ownership Notes Receivable - Hyatt and Other

700 + . . . . . . . . . . . . . $

— $

— $

— $

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

—

—

—

—

—

—

—

—

—

$

— $

— $

— $

2

2

—

—

4

$

$

$

8

4

1

2

15

$

Acquired Vacation Ownership Notes Receivable - Welk

($ in millions)

2021

2020

2019

2018

2017 & Prior

Total

700 + . . . . . . . . . . . . . $

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

$

9

5

—

—

14

$

$

24

15

1

—

40

$

$

30

21

—

1

52

$

$

20

13

—

—

33

$

$

32

25

—

1

58

$

$

10

6

1

2

19

115

79

1

2

197

The following tables show the Legacy-ILG and Legacy-Welk originated vacation ownership notes receivable, before

reserves, by brand and FICO score.

($ in millions)
Westin . . . . . . . . . . . . . . . . . . . . . . . . $
Sheraton . . . . . . . . . . . . . . . . . . . . . . .

Hyatt

. . . . . . . . . . . . . . . . . . . . . . . . .

Welk . . . . . . . . . . . . . . . . . . . . . . . . .

Originated Vacation Ownership Notes Receivable as of December 31, 2021

700 +

600 - 699

< 600

No Score

Total

$

143

136

22

65

$

66

94

11

27

$

366

$

198

$

8

20

—

1

29

$

$

34

46

—

1

81

$

$

($ in millions)
Westin . . . . . . . . . . . . . . . . . . . . . . . . $
Sheraton . . . . . . . . . . . . . . . . . . . . . . .

Hyatt

. . . . . . . . . . . . . . . . . . . . . . . . .

Originated Vacation Ownership Notes Receivable as of December 31, 2020

700 +

600 - 699

< 600

No Score

Total

$

109

106

16

$

52

72

8

$

231

$

132

$

6

16

—

22

$

$

23

43

—

66

$

$

251

296

33

94

674

190

237

24

451

The following tables detail the origination year of our Legacy-ILG and Legacy-Welk originated vacation ownership

notes receivable by brand and FICO score as of December 31, 2021.

Originated Vacation Ownership Notes Receivable - Westin

($ in millions)

2021

2020

2019

2018

2017 & Prior

Total

700 + . . . . . . . . . . . . . $

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

$

72

30

3

20

$

22

10

2

5

$

41

22

3

8

$

125

$

39

$

74

$

8

4

—

1

13

$

$

— $

—

—

—

— $

143

66

8

34

251

106

($ in millions)
700 + . . . . . . . . . . . . . $

2021

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

$

($ in millions)
700 + . . . . . . . . . . . . . $

2021

600 - 699 . . . . . . . . . .

< 600 . . . . . . . . . . . . .

No Score . . . . . . . . . .

$

2021

($ in millions)
700 + . . . . . . . . . . . . . $
600 - 699 . . . . . . . . . . $
< 600 . . . . . . . . . . . . . $
No Score . . . . . . . . . . $
$

65
43
9
12
129

12
5
—
—
17

65
27
1
1
94

$

$

$

$

$

$

Originated Vacation Ownership Notes Receivable - Sheraton
2020

2018

2019

2017 & Prior

Total

23
16
4
9
52

$

$

38
27
6
21
92

$

$

10
8
1
4
23

$

$

— $
—
—
—
— $

Originated Vacation Ownership Notes Receivable - Hyatt

2020

2019

2018

2017 & Prior

Total

3
2
—
—
5

$

$

6
3
—
—
9

$

$

1
1
—
—
2

$

$

— $
—
—
—
— $

Originated Vacation Ownership Notes Receivable - Welk

2020

2019

2018

2017 & Prior

Total

— $
—
—
—
— $

— $
—
—
—
— $

— $
—
—
—
— $

— $
—
—
—
— $

136
94
20
46
296

22
11
—
—
33

65
27
1
1
94

107

7. FINANCIAL INSTRUMENTS

The following table shows the carrying values and the estimated fair values of financial assets and liabilities that

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

($ in millions)

At December 31, 2021
Fair
Value

Carrying
Amount

At December 31, 2020
Fair
Value

Carrying
Amount

Vacation ownership notes receivable . . . . . . . . . . . . . . . . $

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2,045

76

2,121

$

$

2,102

76

2,178

$

$

1,840

60

1,900

$

$

1,886

60

1,946

Securitized debt, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(1,856) $

(1,900) $

(1,588) $

(1,653)

2025 Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2026 Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2029 Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Term Loan, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2022 Convertible notes, net . . . . . . . . . . . . . . . . . . . . . . . .

2026 Convertible notes, net . . . . . . . . . . . . . . . . . . . . . . . .

(248)

—
(346)

(493)

(776)

(224)

(461)

(261)

—
(362)

(505)

(784)

(280)

(682)

(494)

(744)
(346)

—

(873)

(215)

—

(533)

(784)
(359)

—

(864)

(262)

—

Total financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . $

(4,404) $

(4,774) $

(4,260) $

(4,455)

Vacation Ownership Notes Receivable

($ in millions)

Vacation ownership notes receivable

At December 31, 2021
Fair
Value

Carrying
Amount

At December 31, 2020
Fair
Value

Carrying
Amount

Securitized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,662

$

1,712

$

1,493

$

1,530

Eligible for securitization . . . . . . . . . . . . . . . . . . . .
Not eligible for securitization . . . . . . . . . . . . . . . . .

Non-securitized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97

286

383
2,045

$

104

286

390
2,102

$

128

219

347
1,840

$

137

219

356
1,886

$

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

Due to factors that impact the general marketability of our vacation ownership notes receivable that have not been

securitized, as well as current market conditions, we bifurcate our non-securitized vacation ownership notes receivable at each
balance sheet date into those eligible and not eligible for securitization using criteria applicable to current securitization
transactions in the asset-backed securities (“ABS”) market. Generally, vacation ownership notes receivable are considered not
eligible for securitization if any of the following attributes are present: (1) payments are greater than 30 days past due; (2) the
first payment has not been received; or (3) the collateral is located in Asia or Europe. In some cases, eligibility may also be
determined based on the credit score of the borrower, the remaining term of the loans and other similar factors that may reflect
investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable.

108

The table above shows the bifurcation of our vacation ownership notes receivable that have not been securitized into

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

Other Assets

Other assets include $76 million of company owned insurance policies (the “COLI policies”), acquired on the lives of

certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan, that are held in a rabbi trust. The
carrying value of the COLI policies is equal to their cash surrender value (Level 2 inputs).

Securitized Debt

We generate cash flow estimates by modeling all bond tranches for our active vacation ownership notes receivable

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

Senior Notes

We estimate the fair value of our 2025 Notes, 2026 Notes, 2028 Notes, and 2029 Notes (each as defined in Footnote

16 “Debt”) using quoted market prices as of the last trading day for the quarter; however these notes have only a limited trading
history and volume, and as such this fair value estimate is not necessarily indicative of the value at which these notes could be
retired or transferred. We concluded that this fair value measurement should be categorized within Level 2.

Term Loan

We estimate the fair value of our Term Loan (as defined in Footnote 16 “Debt”) using quotes from securities dealers as

of the last trading day for the quarter; however this loan has only a limited trading history and volume, and as such this fair
value estimate is not necessarily indicative of the value at which the Term Loan could be retired or transferred. We concluded
that this fair value measurement should be categorized within Level 3.

Convertible Notes

We estimate the fair value of our 2022 Convertible Notes and 2026 Convertible Notes (referred to collectively as our

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

109

8. EARNINGS PER SHARE

Basic earnings or loss per common share attributable to common shareholders is calculated by dividing net income or

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

Our calculation of diluted earnings or loss per share attributable to common shareholders reflects our intent to settle

conversions of our convertible notes through a combination settlement, which contemplates repayment in cash of the principal
amount and repayment in shares of our common stock of any excess of the conversion value over the principal amount (the
“conversion premium”). Therefore, we include only the shares that may be issued with respect to any conversion premium in
total dilutive weighted average shares outstanding, which we calculate using the treasury stock method based upon an average
price per share for the period.

As of December 31, 2021, a conversion premium existed for our 2022 Convertible Notes, which had a dilutive impact
on our diluted earnings per share as of December 31, 2021. No conversion premium for our 2022 Convertible Notes existed as
of December 31, 2020 or December 31, 2019, and there was no dilutive impact on our diluted earnings per share as of
December 31, 2020 or 2019. No conversion premium existed for our 2026 Convertible Notes as of December 31, 2021, and
there was no dilutive impact on our diluted earnings per share as of December 31, 2021.

The shares issuable on exercise of the warrants sold in connection with the issuance of the our convertible notes will
not impact the total dilutive weighted average shares outstanding unless and until the price of our common stock exceeds the
respective strike price. If and when the price of our common stock exceeds the respective strike price of either of the warrants,
we will include the dilutive effect of the additional shares that may be issued upon exercise of the warrants in total dilutive
weighted average shares outstanding, which we calculate using the treasury stock method. The convertible note hedges
purchased in connection with each issuance of the convertible notes are considered to be anti-dilutive and do not impact our
calculation of diluted earnings per share attributable to common shareholders for any periods presented herein. See Footnote 16
“Debt” for further information on our convertible notes.

The table below illustrates the reconciliation of the earnings or loss and number of shares used in our calculation of

basic and diluted earnings or loss per share attributable to common shareholders.

(in millions, except per share amounts)

2021(1)

2020

2019(1)

Computation of Basic Earnings or Loss Per Share Attributable to Common Shareholders

Net income (loss) attributable to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Shares for basic earnings (loss) per share . . . . . . . . . .

Basic earnings (loss) per share . . . . . . . . . . . . . . . . . $

49

42.5

1.15

$

$

Computation of Diluted Earnings or Loss Per Share Attributable to Common Shareholders

Net income (loss) attributable to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Shares for basic earnings (loss) per share . . . . . . . . . .

Effect of dilutive shares outstanding(2)

Employee SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . .

2022 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . .

Shares for diluted earnings (loss) per share . . . . . . . . .

Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . $

49

$

42.5

0.2

0.5

0.1

43.3

1.13

$

(275) $

41.3

(6.65) $

(275) $

41.3

—

—

—

41.3

(6.65) $

138

43.9

3.13

138

43.9

0.3

0.3

—

44.5

3.09

_________________________
(1)

The computations of diluted earnings per share attributable to common shareholders exclude approximately 166,000
and 345,000 shares of common stock, the maximum number of shares issuable as of December 31, 2021 and
December 31, 2019, respectively, upon the vesting of certain performance-based awards, because the performance
conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the
reporting period.

110

(2)

For 2020, the following potentially dilutive securities were excluded from the above calculation of diluted net loss per
share attributable to common shareholders during the periods presented, as the effects of including these securities
would have been anti-dilutive.

(in millions)
Employee SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2020

0.1
0.3
0.4

In accordance with the applicable accounting guidance for calculating earnings per share, for the year ended
December 31, 2021, we excluded from our calculation of diluted earnings per share 126,804 shares underlying SARs that may
settle in shares of common stock because the exercise price of $173.88 of such SARs was greater than the average market price
for the period. For the year ended December 31, 2019, we excluded from our calculation of diluted earnings per share 56,649
shares underlying SARs that may settle in shares of common stock because the exercise price of $143.38 of such SARs was
greater than the average market price for the period.

9. INVENTORY

The following table shows the composition of our inventory balances:

($ in millions)
Real estate inventory(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

At Year-End 2021

At Year-End 2020

710
9
719

$

749
10
759

$

_________________________
(1)

Represents completed inventory that is available and registered for sale as vacation ownership interests and vacation
ownership inventory expected to be acquired pursuant to estimated future foreclosures.

We value vacation ownership interests at the lower of cost or fair market value less costs to sell, in accordance with

applicable accounting guidance, and we record operating supplies at the lower of cost (using the first-in, first-out method) or net
realizable value.

In addition to the above, at December 31, 2021 and December 31, 2020, we had $460 million and $162 million,

respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until
the time at which they are available and legally registered for sale as vacation ownership products. We also have $14 million
and $43 million of deposits on future purchases of inventory at December 31, 2021 and December 31, 2020, respectively,
which are included in the Other assets line on our Balance Sheets.

10. PROPERTY AND EQUIPMENT

The following table details the composition of our property and equipment balances:

($ in millions)
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and other equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

At Year-End 2021

At Year-End 2020

441
697
136
413
37
1,724
(588)
1,136

$

$

285
482
95
322
68
1,252
(461)
791

111

11. GOODWILL

The following table details the carrying amount of our goodwill at December 31, 2021 and December 31, 2020, and

reflects goodwill attributed to the ILG Acquisition and the Welk Acquisition.

($ in millions)

Vacation Ownership
Segment

Exchange & Third-
Party Management
Segment

Total Consolidated

Balance at December 31, 2019 . . . . . . . . . . . . . . . $

2,445

$

447

$

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign exchange adjustments . . . . . . . . . . . . .

Balance at December 31, 2020 . . . . . . . . . . . . . . .

Welk Acquisition . . . . . . . . . . . . . . . . . . . . . . .

Measurement period adjustments . . . . . . . . . .

—

—

2,445

299

34

(73)

(2)

372

—

—

Balance at December, 2021 . . . . . . . . . . . . . . . . . $

2,778

$

372

$

2,892

(73)

(2)

2,817

299

34

3,150

2021

During the 2021 fourth quarter, we conducted our annual goodwill impairment test, which was a qualitative evaluation,

and no impairment charges were recorded. The estimated fair values of all of our reporting units significantly exceeded their
carrying values at the date of their most recent estimated fair value determination.

2020

During 2020, we concluded that it was more likely than not that the fair value of both of our reporting units was below

their respective carrying amounts. The factors that led to this conclusion at that time were related to the COVID-19 pandemic
and included: (i) the substantial decline in our stock price and market capitalization; (ii) the temporary closure of substantially
all of our Vacation Ownership reporting unit sales centers; (iii) the government stay-at-home orders in place in many of the
jurisdictions in which we operate; (iv) our planned furloughs and reduced work schedule arrangements; (v) the impact of travel
restrictions on the hospitality industry; and (vi) the macroeconomic fallout from the COVID-19 pandemic.

We utilized a combination of the income and market approaches to estimate the fair value of our reporting units (Level

3). We concluded that there was no impairment of the Vacation Ownership reporting unit as declines in expected future
operating results were not substantial enough to cause the fair value of the reporting unit to be below its carrying amount. We
recognized a non-cash impairment charge of $73 million in the Impairment line on our Income Statement during 2020 related to
the Exchange & Third-Party Management reporting unit, which was primarily driven by the change in expected future
operating results as a result of the impact of the COVID-19 pandemic.

12. INTANGIBLE ASSETS

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

($ in millions)
Definite-lived intangible assets

Member relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Management contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indefinite-lived intangible assets

Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

Definite-Lived Intangible Assets

2021

2020

671 $
452
1,123
(194)
929

64
993 $

671
351
1,022
(134)
888

64
952

Definite-lived intangible assets, all of which were acquired as part of the ILG and Welk Acquisitions, are amortized on

a straight-line basis over their estimated useful lives, ranging from 15 to 25 years. We recorded amortization expense of $61
million in 2021, $57 million in 2020, and $59 million in 2019 in the Depreciation and amortization line of our Income
Statements. For these assets, we estimate that our aggregate amortization expense will be $62 million for each of the next five
fiscal years.

112

Indefinite-Lived Intangible Assets

The following table summarizes the activity related to our indefinite-lived intangible assets, all of which are related to

the Exchange & Third-Party Management segment.

($ in millions)

Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Trade Names

82

(18)

64

—

64

2020

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

13. CONTINGENCIES AND COMMITMENTS

Commitments and Letters of Credit

As of December 31, 2021, we had the following commitments outstanding:

• We have various contracts for the use of information technology hardware and software that we use in the normal
course of business. Our aggregate commitment under these contracts was $99 million, of which we expect $52
million, $28 million, $11 million, $6 million, and $2 million will be paid in 2022, 2023, 2024, 2025, and 2026 and
thereafter, respectively.

• We have a commitment to acquire real estate for use in our Vacation Ownership segment via our involvement

with a VIE. Refer to Footnote 19 “Variable Interest Entities” for additional information and our activities relating
to the VIE involved in this transaction.

• We have a remaining commitment to purchase 88 vacation ownership units located in Bali, Indonesia for use in
our Vacation Ownership segment, contingent upon completion of construction to agreed-upon standards. We
expect to complete the acquisition in 2022 and to make the remaining payments with respect to these units, when
specific construction milestones associated with the co-located hotel are completed, as follows: $11 million in
2022, $7 million in 2023, and $4 million in 2024.

• We have commitments to acquire inventory from our managed owners’ associations in 2022 for $66 million.

Surety bonds issued as of December 31, 2021 totaled $118 million, the majority of which were requested by federal,

state or local governments in connection with our operations.

As of December 31, 2021, we had $2 million of letters of credit outstanding under our Revolving Corporate Credit

Facility (as defined in Footnote 16 “Debt”). In addition, as of December 31, 2021, we had $2 million in letters of credit
outstanding related to and in lieu of reserves required for several vacation ownership notes receivable securitization transactions
outstanding. These letters of credit are not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving
Corporate Credit Facility.

Guarantees

Certain of our rental management agreements in our Exchange & Third-Party Management segment provide for

owners of properties we manage to receive specified percentages or guaranteed amounts of the rental revenue generated under
our management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the
rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either
retains the balance (if any) as its fee or makes up the deficit. At December 31, 2021, our maximum exposure under fixed dollar
guarantees was $10 million, of which $3 million, $2 million, $2 million, $1 million, $1 million, and $1 million relate to 2022,
2023, 2024, 2025, 2026, and thereafter, respectively.

113

We have a commitment to an owners’ association that we manage to pay for any shortfall between the actual expenses

incurred by the owners’ association and the income received by the owners’ association. The agreement will terminate on the
earlier of: 1) sale of 80% of the total ownership interests in the owners’ association; or 2) upon our written notification of
termination. At December 31, 2021, our expected commitment for 2022 is $17 million, which will ultimately be recorded as a
component of rental expense on our income statement.

Loss Contingencies

In March 2017, RCHFU, L.L.C. and other owners at The Ritz-Carlton Club, Aspen Highlands (“RCC Aspen
Highlands”) filed a complaint in an action pending in the U.S. District Court for the District of Colorado against us and certain
third parties, alleging that their fractional interests were devalued by the affiliation of the RCC Aspen Highlands and other Ritz-
Carlton Clubs with our points-based Marriott Vacation Club Destinations (“MVCD”) program. The plaintiffs sought
compensatory damages, disgorgement, punitive damages, fees and costs. In September 2021, the District Court granted our
motion for summary judgment and dismissed the case. The plaintiffs appealed the ruling and in February 2022 dismissed their
appeal with prejudice pursuant to a settlement for a non-material amount.

In May 2016, a purported class-action lawsuit was filed in the U.S. District Court for the Middle District of Florida by

Anthony and Beth Lennen against us and certain third parties. The complaint challenged the characterization of the beneficial
interests in the MVCD trust that are sold to customers as real estate interests under Florida law, the structure of the trust, and
associated operational aspects of the trust. The plaintiffs sought declaratory relief, an unwinding of the MVCD product, and
punitive damages. In August 2019, the District Court granted our motion for judgment on the pleadings and dismissed the case.
The plaintiffs appealed the ruling, and in December 2021, the U.S. Court of Appeals for the Eleventh Circuit affirmed the
District Court’s judgment in favor of the Company. In February 2022, the plaintiffs agreed to forego further appeal pursuant to
a settlement for a non-material amount.

In February 2019, the owners’ association for the St. Regis Residence Club, New York filed a lawsuit in the Supreme

Court for the State of New York, New York County, Commercial Division against ILG and several of its subsidiaries and
certain third parties. The operative complaint alleges that the defendants breached their fiduciary duties related to sale and rental
practices, aided and abetted certain breaches of fiduciary duty, engaged in self-dealing as the sponsor and manager of the club,
tortiously interfered with the management agreement, was unjustly enriched, and engaged in anticompetitive conduct. The
plaintiff is seeking unspecified damages, punitive damages and disgorgement of payments under the management and purchase
agreements. In February 2022, the Court granted defendants’ motion to dismiss and granted the plaintiff leave to file an
amended complaint within 30 days.

In April 2019, a purported class-action lawsuit was filed by Alan and Marjorie Helman and others against us in the

Superior Court of the Virgin Islands, Division of St. Thomas alleging that their fractional interests were devalued by the
affiliation of The Ritz-Carlton Club, St. Thomas and other Ritz-Carlton Clubs with our MVCD program. The lawsuit was
subsequently removed to the U.S. District Court for the District of the Virgin Islands. The plaintiffs are seeking unspecified
damages, disgorgement of profits, fees and costs.

In May 2019, the G.A. Resort Condominium Association Inc., the owners’ association for the fractional owners at the
Hyatt Residence Club Grand Aspen resort (“HRC Grand Aspen”) filed a lawsuit against us in the District Court for the County
of Pitkin, Colorado relating to the transfer of ownership of developer-owned fractional interests at HRC Grand Aspen to the
HPC Trust Club for sale and use as a part of the Hyatt Residence Club Portfolio Program. The lawsuit was subsequently
removed to the U.S. District Court for the District of Colorado. The plaintiff sought termination of the management agreement
with the owners’ association, the annulment of certain amendments to governing documents at HRC Grand Aspen, the removal
of fractional interests at HRC Grand Aspen from the HPC Trust Club, unspecified damages, disgorgement of profits, fees and
costs. In November 2020, the District Court granted our motion to dismiss and dismissed the case. The plaintiff appealed the
ruling and in November 2021 agreed to dismiss its appeal with prejudice pursuant to a settlement for a non-material amount.

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

defend each matter.

In the ordinary course of our business, various claims and lawsuits have been filed or are pending against us. A

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

We have not accrued for any of the pending matters described above and we cannot estimate a range of the potential

liability associated with these pending matters, if any, at this time. We have accrued for other claims and lawsuits, but the

114

amount accrued is not material individually or in the aggregate. For matters not requiring accrual, we do not believe that the
ultimate outcome of such matters, individually or in the aggregate, will materially harm our financial position, cash flows, or
overall trends in results of operations based on information currently available. However, legal proceedings are inherently
uncertain, and while we believe that our accruals are adequate and/or we have valid defenses to the claims asserted, unfavorable
rulings could occur that could, individually or in the aggregate, have a material adverse effect on our business, financial
condition, or operating results.

14. LEASES

The following table presents the carrying values of our leases and the classification on our Balance Sheet.

($ in millions)

Balance Sheet Classification

At December 31, 2021

At December 31, 2020

Operating lease assets . . . . . . . . . . . .

Other assets

Finance lease assets . . . . . . . . . . . . .

Property and equipment

Operating lease liabilities . . . . . . . . .

Accrued liabilities

Finance lease liabilities . . . . . . . . . .

Debt

$

$

$

$

96 $

89

185 $

108 $

83

191 $

The following table presents the lease costs and the classification on our Income Statements for the years ended

December 31, 2021 and December 31, 2020.

($ in millions)

Operating lease cost . . . . . . . . . . . . . . .

Finance lease cost

Income Statement Classification
Marketing and sales expense
General and administrative expense

Amortization of right-of-use assets .

Depreciation and amortization

Interest on lease liabilities . . . . . . . .

Financing expense

Variable lease cost . . . . . . . . . . . . . . . .

Marketing and sales expense

$

$

2021

2020

35 $

5

1

2

43 $

The following table presents the maturity of our operating and financing lease liabilities as of December 31, 2021.

($ in millions)

Operating Leases

Finance Leases

Total

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Imputed interest . . . . . . . . . . . . . . . . . . . . . . . .

$

$

25

23

20

18

16

25

127

(19)

108

$

$

7

5

4

4

4

259

283

(200)

83

$

115

131

8

139

138

8

146

36

5

1

2

44

32

28

24

22

20

284

410

(219)

191

Lease Term and Discount Rate

The following table presents additional information about our lease obligations.

Weighted-average remaining lease term

Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted-average discount rate

Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4 years

53.7 years

5.8%

5.3%

19.1 years

3.0 years

5.8%

3.9%

At December 31, 2021 At December 31, 2020

Other Information

The following table presents supplemental cash flow information for 2021 and 2020.

($ in millions)

2021

2020

Cash paid for amounts included in measurement of lease liabilities

Operating cash flows for finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Operating cash flows for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . $
Financing cash flows for finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Right-of-use assets obtained in exchange for lease obligations

Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Finance leases(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1 $

34 $
5 $

7 $

86 $

1

41
11

27

7

_________________________
(1)

Includes the reclassification of certain lease components from operating lease to finance lease classification,
attributable to the amendment of an existing lease.

Leases That Have Not Yet Commenced

During the first quarter of 2020, we entered into a finance lease arrangement for our new global headquarters being

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

15. SECURITIZED DEBT

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

($ in millions)
Vacation ownership notes receivable securitizations, gross(1)
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . $

$

At December 31, 2021
1,877
(21)
1,856

At December 31, 2020
1,604
(16)
1,588

$

$

_________________________
(1)

Interest rates as of December 31, 2021 range from 1.5% to 4.4%, with a weighted average interest rate of 2.3%

All of our securitized debt is non-recourse to us. See Footnote 19 “Variable Interest Entities” for a discussion of the

collateral for the non-recourse debt associated with our securitized debt.

116

The following table shows scheduled future principal payments for our securitized debt as of December 31, 2021.

($ in millions)

Payments Year

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

Vacation Ownership Notes Receivable Securitizations

Vacation Ownership Notes
Receivable Securitizations

191
196
200
199
199
892
1,877

Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the
performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable
fails to perform within the pool’s established parameters (default or delinquency thresholds vary by transaction), transaction
provisions effectively redirect the monthly excess spread we would otherwise receive from that pool (attributable to the
interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different
tranches to the extent there are multiple tranches) until the performance trigger is cured. During 2021, and as of December 31,
2021, no securitized vacation ownership notes receivable pools were out of compliance with their respective established
parameters. As of December 31, 2021, we had 14 securitized vacation ownership notes receivable pools outstanding.

As the contractual terms of the underlying securitized vacation ownership notes receivable determine the maturities of

the non-recourse debt associated with them, actual maturities may occur earlier than shown above due to prepayments by the
vacation ownership notes receivable obligors.

During the second quarter of 2021, we completed the securitization of a pool of $434 million of vacation ownership

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

During the fourth quarter of 2021, we completed the securitization of a pool of $434 million of vacation ownership

notes receivable. Approximately $376 million of the vacation ownership notes receivable were purchased by the MVW 2021-2
LLC (the “2021-2 LLC”) during the fourth quarter of 2021, and as of December 31, 2021, the 2021-2 LLC held $57 million of
the proceeds, which was released as the remaining vacation ownership notes receivable were purchased subsequent to
December 31, 2021.

In connection with the securitization during the fourth quarter of 2021, investors purchased in a private placement

$425 million in vacation ownership loan backed notes from the 2021-2 LLC. Three classes of vacation ownership loan backed
notes were issued by the 2021-2 LLC: $265 million of Class A Notes, $95 million of Class B Notes, and $65 million of Class C
Notes. The Class A Notes have an interest rate of 1.43%, the Class B Notes have an interest rate of 1.83%, and the Class C
Notes have an interest rate of 2.23%, for an overall weighted average interest rate of 1.64%. Of the $425 million in proceeds
from the transaction, approximately $107 million was used to repay all outstanding amounts previously drawn under our
Warehouse Credit Facility (as defined below), approximately $8 million was used to pay transaction expenses and fund
required reserves, and the remaining $204 million will be used for general corporate purposes.

Subsequent to end of 2021, the 2021-2 LLC purchased the remaining $58 million of vacation ownership notes

receivable and $57 million was released from restricted cash.

117

Warehouse Credit Facility

Our warehouse credit facility (the “Warehouse Credit Facility”), which has a borrowing capacity of $350 million,

allows for the securitization of vacation ownership notes receivable on a revolving non-recourse basis. The Warehouse Credit
Facility terminates on April 21, 2023, and if not renewed prior to termination, any amounts outstanding thereunder would
become due and payable 13 months after termination, at which time all principal and interest collected with respect to the
vacation ownership notes receivable held in the Warehouse Credit Facility would be redirected to the lenders to pay down the
outstanding debt under the facility. The advance rate for vacation ownership notes receivable securitized using the Warehouse
Credit Facility varies based on the characteristics of the securitized vacation ownership notes receivable. We also pay unused
facility and other fees under the Warehouse Credit Facility. We generally expect to securitize our vacation ownership notes
receivable, including any vacation ownership notes receivable held in the Warehouse Credit Facility, in the ABS market at least
once per year.

During the fourth quarter of 2021, we securitized vacation ownership notes receivable under our Warehouse Credit
Facility. The carrying amount of the vacation ownership notes receivable securitized was $126 million. The average advance
rate was 85%, which resulted in gross proceeds of $107 million. Net proceeds were $106 million due to the funding of reserve
accounts of $1 million.

As of December 31, 2021, there were no cash borrowings outstanding under our Warehouse Credit Facility, as all

outstanding amounts were repaid in connection with the fourth quarter of 2021 vacation ownership notes receivable
securitization transaction as discussed above.

118

16. DEBT

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

($ in millions)
Senior Secured Notes

At December 31, 2021

At December 31, 2020

2025 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

Senior Unsecured Notes

2026 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

2028 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

2029 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

Corporate Credit Facility

Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

Convertible Notes

2022 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

2026 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . .

$

250
(2)
248

—
—
—

350
(4)
346

500
(7)
493

784
(8)
776

230
(6)
224

575
(114)
461

500
(6)
494

750
(6)
744

350
(4)
346

—
—
—

884
(11)
873

230
(15)
215

—
—
—

Finance Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

83
2,631

$

8
2,680

The following table shows scheduled future principal payments for our debt, excluding finance leases, as of

December 31, 2021.

($ in millions)

Payments Year

2025 Notes

2028 Notes

2029 Notes

Term Loan

2022
Convertible
Notes

2026
Convertible
Notes

Total

2022 . . . . . . . . . . $

— $

— $

— $

— $

230

$

— $

2023 . . . . . . . . . .

2024 . . . . . . . . . .

2025 . . . . . . . . . .

2026 . . . . . . . . . .

Thereafter . . . . . .

—

—

250

—

—

$

250 $

—

—

—

—

350

350

$

—

—

—

—

500

500

119

—

—

784

—

—

—

—

—

—

—

—

—

—

575

—

230

—

—

1,034

575

850

$

784

$

230

$

575

$

2,689

Senior Notes

Our Senior Notes, as further discussed below, include the following:

•

•

•

$500 million aggregate principal amount of 6.125% Senior Secured Notes due 2025 issued in the second
quarter of 2020 with a maturity date of September 15, 2025 (the “2025 Notes”).

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

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

2025 Notes

The 2025 Notes are pari passu with, and secured by the same collateral as, our Corporate Credit Facility. We pay

interest on the 2025 Notes on May 15 and November 15 of each year. We received net proceeds of approximately $493 million
from the offering of the 2025 Notes, after deducting offering expenses and the underwriting discount, which were used to repay
all amounts outstanding at that time on the Revolving Corporate Credit Facility. We may redeem some or all of the remaining
2025 Notes prior to maturity under the terms provided in the indenture.

During 2021, we redeemed, prior to maturity, $250 million aggregate principal amount of the 2025 Notes pursuant to
the terms of the indenture governing the 2025 Notes. In connection with this redemption, we incurred charges of $19 million,
inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which was recorded in (Losses) gains
and other (expense) income, net line on our Income Statement for the year ended December 31, 2021.

2028 Notes

We issued the 2028 Notes under an indenture dated October 1, 2019 with The Bank of New York Mellon Trust, as
trustee. We received net proceeds of $346 million from the offering, after deducting the underwriting discount and estimated
expenses. The net proceeds from the 2028 Notes were used (i) to redeem all of the outstanding 5.625% Senior Unsecured Notes
due 2023 assumed in connection with the ILG Acquisition (the “IAC Notes”), (ii) to redeem all of the outstanding 5.625%
Senior Unsecured Notes due 2023 offered in exchange for the IAC Notes during the third quarter of 2018 (the “Exchange
Notes”), (iii) to repay a portion of the then outstanding borrowings under our Revolving Corporate Credit Facility, (iv) to pay
transaction expenses and fees in connection with each of the foregoing and (v) for general corporate purposes. We pay interest
on the 2028 Notes on March 15 and September 15 of each year. We may redeem some or all of the 2028 Notes prior to maturity
under the terms provided in the indenture.

2029 Notes

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

2026 Notes

As noted above, in July 2021, we redeemed, prior to maturity, $500 million aggregate principal amount of the 2026

Notes pursuant to the terms of the indenture governing the 2026 Notes. Additionally, in September 2021, we redeemed, prior to
maturity, the remaining $250 million aggregate principal amount of the 2026 Notes pursuant to the terms of the indenture
governing the 2026 Notes. In connection with these redemptions, we incurred charges of $36 million, inclusive of a redemption
premium and the write-off of unamortized debt issuance costs, which was recorded in (Losses) gains and other (expense)
income, net line on our Income Statement for the year ended December 31, 2021.

Corporate Credit Facility

Our corporate credit facility (“Corporate Credit Facility”), which provides support for our business, including ongoing
liquidity and letters of credit, includes a $900 million term loan facility (the “Term Loan”), which matures on August 31, 2025,
and a revolving credit facility with a borrowing capacity of $600 million (the “Revolving Corporate Credit Facility”), including
a letter of credit sub-facility of $75 million, that terminates on August 31, 2023.

120

The Term Loan bears interest at LIBOR plus 1.75%. Borrowings under the Revolving Corporate Credit Facility

generally bear interest at a floating rate plus an applicable margin that varies from 0.50% to 2.75% depending on the type of
loan and our credit rating. In addition, we pay a commitment fee on the unused availability under the Revolving Corporate
Credit Facility at a rate that varies from 20 to 40 basis points per annum, also depending on our credit rating.

Any amounts borrowed under that facility, as well as obligations with respect to letters of credit issued pursuant to that

facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrower under, and
guarantors of, that facility (which include Marriott Vacations Worldwide and each of our direct and indirect, existing and
future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries), in each case including
inventory, subject to certain exceptions.

In 2020, we entered into a waiver (the “Waiver”) to the agreement that governs our Corporate Credit Facility, which,

among other things, suspended the requirement to comply with the leverage covenant in the Revolving Corporate Credit
Facility, commencing with the fiscal quarter ending June 30, 2020. The initial suspension period included in the Waiver was up
to four quarters, however, in February 2021, we further amended the agreement governing our Corporate Credit Facility to
extend the suspension period included in the Waiver through the end of 2021. The Waiver prohibited us from making certain
restricted payments, including share repurchases and dividends. On September 9, 2021, we elected to terminate the Waiver.

Prior to 2020, we entered into $250 million of interest rate swaps under which we pay a fixed rate of 2.9625% and

receive a floating interest rate through September 2023 and $200 million of interest rate swaps under which we pay a fixed rate
of 2.2480% and receive a floating interest rate through April 2024, in each case to hedge a portion of our interest rate risk on
the Term Loan. We also entered into a $100 million interest rate collar with a cap strike rate of 2.5000% and a floor strike rate
of 1.8810% through April 2024 to further hedge our interest rate risk on the Term Loan. Both the interest rate swaps and the
interest rate collar have been designated and qualify as cash flow hedges of interest rate risk and recorded in Other liabilities on
our Balance Sheet as of December 31, 2021 and December 31, 2020. We characterize payments we make in connection with
these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income for
presentation purposes.

The following table reflects the activity in accumulated other comprehensive loss related to our derivative instruments

during 2021, 2020 and 2019. There were no reclassifications to the Income Statement for any of the periods below.

($ in millions)

2021

2020

2019

Derivative Instrument Adjustment, Beginning of Year . . . . . . . . . . . . . . $

Other comprehensive gain (loss) before reclassifications . . . . . . . . . .

Derivative Instrument Adjustment, End of Year . . . . . . . . . . . . . . . . . . . $

(39) $

21

(18) $

(21) $

(18)

(39) $

(6)

(15)

(21)

Convertible Notes

2022 Convertible Notes

During 2017, we issued $230 million of 2022 Convertible Notes that bear interest at a rate of 1.50%, payable in cash

semi-annually. The 2022 Convertible Notes mature on September 15, 2022, unless repurchased or converted in accordance with
their terms prior to that date. There are no financial or operating covenants related to the 2022 Convertible Notes.

The conversion rate is subject to adjustment for certain events as described in the indenture governing the notes, and

was subject to adjustment as of December 31, 2021 to 6.8282 shares of common stock per $1,000 principal amount of 2022
Convertible Notes (equivalent to a conversion price of approximately $146.45 per share of our common stock), as a result of the
dividends that have been declared since issuance that were greater than the quarterly dividend when the 2022 Convertible Notes
were issued. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination
of cash and shares of our common stock, at our election. It is our intent to settle conversions of the 2022 Convertible Notes
through combination settlement, which contemplates repayment in cash of the principal amount and repayment in shares of our
common stock of any excess of the conversion value over the principal amount. As of December 31, 2021, the effective interest
rate was 4.73% and the remaining discount amortization period was less than one year.

Holders may convert their 2022 Convertible Notes prior to June 15, 2022 only under certain circumstances. We may

not redeem the 2022 Convertible Notes prior to their maturity date. If we undergo a fundamental change, as described in the
indenture, subject to certain conditions, holders may require us to repurchase for cash all or any portion of their 2022
Convertible Notes, at a repurchase price equal to 100% of the principal amount of the 2022 Convertible Notes to be
repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. If certain fundamental changes referred to
in the indenture as make-whole fundamental changes occur, the conversion rate applicable to the 2022 Convertible Notes may
increase.

121

230
(13)
(2)
215

33

3
6
2
11

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

($ in millions)
Liability component
Principal amount
Unamortized debt discount
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net carrying amount of the liability component . . . . . . . . . . . . . . . . . . . . . . . . $

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Carrying amount of equity component, net of issuance costs . . . . . . . . . . . . . $

230
(5)
(1)
224

33

$

$

$

At December 31, 2021

At December 31, 2020

The following table shows interest expense information related to the 2022 Convertible Notes.

($ in millions)
Contractual interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amortization of debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

3
8
1
12

$

$

3
7
1
11

$

$

2022 Convertible Note Hedges and Warrants

In connection with the offering of the 2022 Convertible Notes, we concurrently entered into the following privately-

negotiated separate transactions: convertible note hedge transactions with respect to our common stock (“2022 Convertible
Note Hedges”), covering a total of approximately 1.5 million shares of our common stock, and warrant transactions (“2022
Warrants”), whereby we sold to the counterparties to the 2022 Convertible Note Hedges warrants to acquire approximately 1.5
million shares of our common stock. As of December 31, 2021, the strike prices of the 2022 Convertible Note Hedges and the
2022 Warrants were subject to adjustment to approximately $148.55 and $177.12, respectively, and no 2022 Convertible Note
Hedges or 2022 Warrants have been exercised.

2026 Convertible Notes

During 2021, we issued $575 million aggregate principal amount of 2026 Convertible Notes that bear interest at a rate

of 0.00%. The 2026 Convertible Notes are governed by an indenture dated February 2, 2021 (the “Indenture”) among the
Company, Marriott Ownership Resorts, Inc. and the other guarantors party thereto (the “Guarantors”) and The Bank of New
York Mellon Trust Company, N.A., as trustee (the “Trustee”). We received net proceeds from the offering of approximately
$530 million after adjusting for debt issuance costs, including the discount to the initial purchasers, the cost of the 2026
Convertible Note Hedges, and proceeds from the 2026 Warrants (both as defined below).

The 2026 Convertible Notes do not bear regular interest and mature on January 15, 2026, unless earlier repurchased or

converted in accordance with their terms prior to that date. On or after October 15, 2025, and prior to the close of business on
the second scheduled trading day immediately preceding the stated maturity date of the 2026 Convertible Notes, holders may
convert their 2026 Convertible Notes at their option. The conversion rate is subject to adjustment for certain events as described
in the Indenture, and was subject to adjustment as of December 31, 2021 to 5.8884 shares of common stock per $1,000
principal amount of 2026 Convertible Notes (equivalent to a conversion price of $169.83 per share of our common stock), as a
result of the dividends that have been declared since issuance. Upon conversion, we will pay or deliver, as the case may be,
cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. It is our intent to
settle conversions of the 2026 Convertible Notes through combination settlement, which contemplates repayment in cash of the
principal amount and repayment in shares of our common stock of any excess of the conversion value over the principal
amount.

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

•

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

122

•

•

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

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

We may not redeem the 2026 Convertible Notes prior to their maturity date, and no sinking fund is provided for them.

If we undergo a fundamental change, as described in the Indenture, subject to certain conditions, holders may require us to
repurchase for cash all or any portion of their 2026 Convertible Notes. The repurchase price as a result of a fundamental change
is equal to 100% of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid special
interest, if any, to, but excluding, the repurchase date. If certain fundamental changes referred to in the Indenture as make-
whole fundamental changes occur, the conversion rate applicable to the 2026 Convertible Notes may increase.

The 2026 Convertible Notes are unconditionally guaranteed, on a joint and several basis, by the Guarantors on a

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

There are no financial or operating covenants related to the 2026 Convertible Notes. The Indenture contains customary

events of default with respect to the 2026 Convertible Notes and provides that upon the occurrence and continuation of certain
events of default, the Trustee or the holders of at least 25% in aggregate principal amount of the 2026 Convertible Notes then
outstanding may declare all principal of and accrued and any unpaid interest on the 2026 Convertible Notes then outstanding to
be immediately due and payable. In case of certain events of bankruptcy or insolvency involving the Company, all of the
principal of and accrued and unpaid interest on the 2026 Convertible Notes will automatically become immediately due and
payable.

We separated the 2026 Convertible Notes into liability and equity components and allocated $449 million to the

liability component and $126 million to the equity component. The resulting debt discount is amortized as interest expense. As
of December 31, 2021, the effective interest rate was 0.00% and the remaining debt discount amortization period was 4 years.
We had debt issuance costs, including initial purchasers’ discount to underwriters, of $15 million related to the 2026
Convertible Notes, which were allocated to the liability and equity components based on their relative values. Issuance costs
attributable to the liability component are amortized to interest expense over the term of the 2026 Convertible Notes, and
issuance costs attributable to the equity component are included along with the equity component in shareholders’ equity.

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

At December 31, 2021

At December 31, 2020

($ in millions)
Liability component
Principal amount
Unamortized debt discount
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net carrying amount of the liability component . . . . . . . . . . . . . . . . . . . . . . . . $

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Carrying amount of equity component, net of issuance costs . . . . . . . . . . . . . $

123

575
(104)
(10)
461

117

$

$

$

—
—
—
—

—

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

($ in millions)
Amortization of debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amortization of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

22
2
24

$

$

— $
—
— $

—
—
—

2026 Convertible Note Hedges and Warrants

In connection with the offering of the 2026 Convertible Notes, we entered into privately-negotiated convertible note

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

Concurrently with the entry into the 2026 Convertible Note Hedges, we separately entered into privately-negotiated

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

Taken together, the 2026 Convertible Note Hedges and the 2026 Warrants are generally expected to reduce the

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

The 2026 Convertible Notes, the 2026 Convertible Note Hedges, and the 2026 Warrants are transactions that are

separate from each other. Holders of any such instrument have no rights with respect to the other instruments. As of
December 31, 2021, the strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to
approximately $169.83 and $212.28, respectively, and no 2026 Convertible Note Hedges or 2026 Warrants have been
exercised.

Finance Leases

See Footnote 14 “Leases” for information on our finance leases.

Security and Guarantees

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

124

17. SHAREHOLDERS’ EQUITY

Marriott Vacations Worldwide has 100,000,000 authorized shares of common stock, par value of $0.01 per share. At

December 31, 2021, there were 75,519,049 shares of Marriott Vacations Worldwide common stock issued, of which
42,283,378 shares were outstanding and 33,235,671 shares were held as treasury stock. At December 31, 2020, there were
75,279,061 shares of Marriott Vacations Worldwide common stock issued, of which 41,094,248 shares were outstanding and
34,184,813 shares were held as treasury stock. Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred
stock, par value of $0.01 per share, none of which were issued or outstanding as of December 31, 2021 or December 31, 2020.

Share Repurchase Program

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

($ in millions, except per share amounts)
As of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended December 31, 2021 . . . . . . . . . . . . . . . . .
As of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Shares
Repurchased

Cost of Shares
Repurchased

Average Price Paid
per Share

17,188,885
492,510
17,681,395

$

$

1,340
78
1,418

$
$
$

77.95
157.77
80.17

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

As of December 31, 2021, $172 million remained available for repurchase under the authorization approved by the

Board of Directors. The authorization for the share repurchase program may be suspended, terminated, increased or decreased
by our Board of Directors at any time without prior notice.

Subsequent to the end of 2021, our Board of Directors authorized the repurchase of up to an additional $300 million of

our common stock, as well as the extension of the duration of our existing share repurchase program to March 31, 2023.

Dividends

We declared cash dividends to holders of common stock during the year ended December 31, 2021 as follows. Any

future dividend payments will be subject to the restrictions imposed under the agreements covering our debt, and Board
approval. There can be no assurance that we will pay dividends in the future.

Declaration Date
September 10, 2021
December 9, 2021

Shareholder Record Date
September 23, 2021
December 23, 2021

Distribution Date
October 7, 2021
January 6, 2022

Dividend per Share
$0.54
$0.54

Subsequent to the end of 2021, on February 18, 2022, our Board of Directors declared a quarterly dividend of $0.62

per share to be paid on March 17, 2022 to shareholders of record as of March 3, 2022.

Noncontrolling Interests

Owners’ Associations

We consolidate certain owners’ associations. Noncontrolling interests represent the portion of the owners’ associations

related to third-party vacation ownership interest owners. Noncontrolling interests of $10 million and $31 million, as of
December 31, 2021 and December 31, 2020, respectively, are included on our Balance Sheets as a component of equity.

125

18. SHARE-BASED COMPENSATION

We maintain the MVW Equity Plan for the benefit of our officers, directors and employees. Under the MVW Equity

Plan, we are authorized to award: (1) RSUs of our common stock, (2) SARs relating to our common stock, and (3) stock
options to purchase our common stock. A total of 1.8 million shares are authorized for issuance pursuant to grants under the
MVW Equity Plan. As of December 31, 2021, approximately 1.4 million shares were available for grants under the MVW
Equity Plan.

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

and employees:

($ in millions)

Service-based RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Performance-based RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ILG Acquisition Converted RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

34
9
—
43
8
51

$

$

22
9
2
33
4
37

$

$

17
7
10
34
3
37

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

($ in millions)

Service-based RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Performance-based RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

At Year-End 2021(1)
33
—
33
2
35

$

At Year-End 2020

$

$

27
6
33
1
34

_________________________
(1)

As of December 31, 2021, the weighted average remaining term for RSU grants outstanding at year-end 2021 was one
to two years and we expect that deferred compensation expense will be recognized over a weighted average period of
one to three years.

Restricted Stock Units

We have issued RSUs that vest over time, which we refer to as service-based RSUs, and RSUs that vest based on

performance with respect to established criteria, which we refer to as performance-based RSUs.

The following table shows the changes in our outstanding RSUs and the associated weighted average grant-date fair

values:

Service-based

Performance-based

Total

2021

Weighted
Average Grant-
Date Fair Value
Per RSU

Weighted
Average Grant-
Date Fair Value
Per RSU

Weighted
Average Grant-
Date Fair Value
Per RSU

Number of
RSUs

Outstanding at year-end 2020 . .
Granted . . . . . . . . . . . . . . . . . .
Distributed . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . .
Outstanding at year-end 2021 . .

Number of
RSUs
783,489 $
260,077 $
(264,735) $
(13,751) $
765,080 $

Number of
RSUs
550,171 $
— $
(35,135) $
(39,915) $
475,121 $

88.98
161.42
97.57
115.94
110.14

99.56
—
138.68
133.95
93.77

1,333,660 $
260,077 $
(299,870) $
(53,666) $
1,240,201 $

93.34
161.42
102.39
129.33
103.87

The weighted average grant-date fair value per RSU granted in 2020 and 2019 was $95.92 and $95.66, respectively.
The fair value of the RSUs which vested in 2021, 2020, and 2019 was $46 million, $30 million, and $34 million, respectively,
and included $3 million, $6 million, and $15 million, respectively, related to RSUs converted from ILG equity-based RSUs to
MVW equity-based RSUs in the ILG Acquisition.

126

Stock Appreciation Rights

The following table shows the changes in our outstanding SARs and the associated weighted average exercise prices:

2021

Number of
SARs

Weighted Average
Exercise Price Per SAR

Outstanding at year-end 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding at year-end 2021(1)(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . .

622,102 $
$
127,857
(122,031) $
(1,053) $

626,875 $

84.58
173.88
57.78
173.88

107.86

_________________________
(1)

As of December 31, 2021, outstanding SARs had a total intrinsic value of $39 million and a weighted average
remaining term of 6 years.

(2)

As of December 31, 2021, 356,698 SARs with a weighted average exercise price of $86.61, an aggregate intrinsic
value of $29 million and a weighted average remaining contractual term of 5 years were exercisable.

The weighted average grant-date fair value per SAR granted in 2021, 2020, and 2019 was $70.66, $29.63, and $28.89,

respectively. The intrinsic value of SARs which vested in 2021, 2020, and 2019, was $5 million, $4 million, and $4 million,
respectively. The aggregate intrinsic value of SARs which were exercised in 2021, 2020, and 2019 was $14 million, $19
million, and $11 million, respectively.

We use the Black-Scholes model to estimate the fair value of the SARs granted. The expected stock price volatility
was calculated based on the average of the historical and implied volatility of our stock price. The average expected life was
calculated using the simplified method, as we have insufficient historical information to provide a basis for estimating average
expected life. The risk-free interest rate was calculated based on U.S. Treasury zero-coupon issues with a remaining term equal
to the expected life assumed at the date of grant. The dividend yield assumption listed below is based on the expectation of
future payouts.

The following table outlines the assumptions used to estimate the fair value of grants in 2021, 2020, and 2019:

Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
48.35%
1.48%
0.97%
6.25

2020
38.81%
2.13%
0.96%
6.25

2019
31.10%
1.76%
2.59%
6.25

Employee Stock Purchase Plan

During 2015, the Board of Directors adopted, and our shareholders subsequently approved, the Marriott Vacations

Worldwide Corporation Employee Stock Purchase Plan (the “ESPP”), which became effective during 2015. A total of 500,000
shares of common stock may be purchased under the ESPP. The ESPP allows eligible employees to purchase shares of our
common stock at a price per share not less than 95% of the fair market value per share of common stock on the purchase date,
up to a maximum threshold established by the plan administrator for the offering period.

127

19. VARIABLE INTEREST ENTITIES

Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations

We periodically securitize, without recourse, through bankruptcy remote special purpose entities, notes receivable

originated in connection with the sale of vacation ownership products. These vacation ownership notes receivable
securitizations provide funding for us and transfer the economic risks and substantially all the benefits of the consumer loans
we originate to third parties. In a vacation ownership notes receivable securitization, various classes of debt securities issued by
a special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation
ownership notes receivable. With each vacation ownership notes receivable securitization, we may retain a portion of the
securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized
vacation ownership notes receivable or, in some cases, overcollateralization and cash reserve accounts.

We created these bankruptcy remote special purpose entities to serve as a mechanism for holding assets and related

liabilities, and the entities have no equity investment at risk, making them VIEs. We continue to service the vacation ownership
notes receivable, transfer all proceeds collected to these special purpose entities, and retain rights to receive benefits that are
potentially significant to the entities. Accordingly, we concluded that we are the entities’ primary beneficiary and, therefore,
consolidate them. There is no noncontrolling interest balance related to these entities and the creditors of these entities do not
have general recourse to us.

The following table shows consolidated assets, which are collateral for the obligations of these VIEs, and consolidated

liabilities included on our Balance Sheet at December 31, 2021:

($ in millions)
Consolidated Assets

Vacation ownership notes receivable, net of reserves . . $
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Consolidated Liabilities

Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Securitized debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Vacation Ownership
Notes Receivable
Securitizations

Warehouse
Credit
Facility

Total

1,662
12
139
1,813

2
1,877
1,879

$

$

$

$

— $
—
—
— $

— $
—
— $

1,662
12
139
1,813

2
1,877
1,879

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs

during 2021:

($ in millions)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest expense to investors . . . . . . . . . . . . . . . . . . . . . . . . $
Debt issuance cost amortization . . . . . . . . . . . . . . . . . . . . . $
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Vacation Ownership
Notes Receivable
Securitizations

Warehouse
Credit
Facility

Total

217
43
7
3

$
$
$
$

$
2
$
2
1
$
— $

219
45
8
3

128

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

($ in millions)
Cash Inflows

2021

2020

Net proceeds from vacation ownership notes receivable securitizations . . . . . . . . . . . $
Principal receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash Outflows

Principal to investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voluntary repurchases of defaulted vacation ownership notes receivable . . . . . . . . .

Voluntary clean-up call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest to investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding of restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

$

841
585
228
159
1,813

(590)

(99)
(72)
(43)
(217)
(1,021)

792

$

371
487
218
16
1,092

(509)

(95)
(18)
(49)
(20)
(691)

401

Under the terms of our vacation ownership notes receivable securitizations, we have the right to substitute loans for, or

repurchase, defaulted loans at our option, subject to certain limitations. We made voluntary repurchases of defaulted vacation
ownership notes receivable, net of substitutions, of $99 million during 2021, $95 million during 2020 and $54 million during
2019. We also made voluntary repurchases of $200 million, $383 million and $356 million of other non-defaulted vacation
ownership notes receivable during 2021, 2020 and 2019, respectively, to retire previous vacation ownership notes receivable
securitizations. Our maximum exposure to potential loss relating to the special purpose entities that purchase, sell, and own
these vacation ownership notes receivable is the overcollateralization amount (the difference between the loan collateral balance
and the balance on the outstanding vacation ownership notes receivable), plus cash reserves and any residual interest in future
cash flows from collateral.

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

($ in millions)
Cash Inflows

Proceeds from vacation ownership notes receivable securitizations . . . . . . . . . . . . . . $
Principal receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Cash Outflows

Principal to investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voluntary repurchases of defaulted vacation ownership notes receivable . . . . . . . . .
Repayment of Warehouse Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest to investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding of restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Net Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Other Variable Interest Entities

2021

2020

107
2
2
1
112

—
—
(107)
(2)
(1)
(110)
2

$

$

315
34
17
2
368

(33)
(3)
(300)
(4)
(2)
(342)
26

We have a commitment to purchase a property located in Waikiki, Hawaii, which we assigned to a third party during
2020. If we are unable to negotiate a capital efficient inventory arrangement, we are committed to purchase the property, in its
then current form, for $104 million in 2022, unless it has been sold to another party. The property is held by a VIE for which we
are not the primary beneficiary as we do not control the operations of the VIE. Accordingly, we have not consolidated the VIE.
As of December 31, 2021, our Balance Sheet reflected $1 million in Accounts Receivable, including a note receivable of less
than $1 million, related to this VIE. We believe that our maximum exposure to loss as a result of our involvement with this VIE
is approximately $1 million as of December 31, 2021.

129

20. BUSINESS SEGMENTS

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

•

•

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

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

Exchange & Third-Party Management includes exchange networks and membership programs, as well as provision of
management services to other resorts and lodging properties. We provide these services through a variety of brands
including Interval International, Trading Places International, Vacation Resorts International, and Aqua-Aston.
Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and
rental transactions, owners’ association management, and other related products and services.

Our CODM evaluates the performance of our segments based primarily on the results of the segment without

allocating corporate expenses or income taxes. We do not allocate corporate interest expense or indirect general and
administrative expenses to our segments. We include interest income specific to segment activities within the appropriate
segment. We allocate depreciation, other gains and losses, equity in earnings or losses from our joint ventures, and
noncontrolling interest to each of our segments as appropriate. Corporate and other represents that portion of our results that are
not allocable to our segments, including those relating to consolidated owners’ associations, as our CODM does not use this
information to make operating segment resource allocations. Prior year segment information has been reclassified to conform to
the current reportable segment presentation.

Our CODM uses Adjusted EBITDA to evaluate the profitability of our operating segments, and the components of net

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

Revenues

($ in millions)
Vacation Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exchange & Third-Party Management . . . . . . . . . . . . .
Total segment revenues . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

2021

2020

2019

3,539
320
3,859
31
3,890

$

$

2,530
309
2,839
47
2,886

$

$

3,761
454
4,215
44
4,259

130

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

($ in millions)

Adjusted EBITDA Vacation Ownership . . . . . . . . . . . $
Adjusted EBITDA Exchange & Third-Party
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reconciling items:

Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax (provision) benefit . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . .

Share-based compensation expense . . . . . . . . . . . . .

Certain items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) attributable to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Depreciation and Amortization

($ in millions)
Vacation Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exchange & Third-Party Management . . . . . . . . . . . . .
Total segment depreciation . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporate and other

$

Assets

2021

2020

2019

699

$

229

$

144

(186)

(164)

(74)

(146)

(51)

(173)

119

(113)

(150)

84

(123)

(37)

(284)

49

$

(275) $

2021

2020

2019

89
48
137
9
146

$

$

79
32
111
12
123

$

$

794

183

(219)

(132)

(83)

(141)

(37)

(227)

138

68
47
115
26
141

($ in millions)
Vacation Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exchange & Third-Party Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

At December 31, 2021
7,897
911
8,808
805
9,613

$

At December 31, 2020
6,859
$
951
7,810
1,088
8,898

$

Capital Expenditures (including inventory)

($ in millions)
Vacation Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exchange & Third-Party Management . . . . . . . . . . . . .
Total segment capital expenditures . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

Geographic Information

2021

2020

2019

296
3
299
(2)
297

$

$

191
7
198
4
202

$

$

266
14
280
13
293

We conduct business globally, and our operations outside the United States represented approximately 10%, 10%, and

11% of our revenues, excluding cost reimbursements, for 2021, 2020, and 2019, respectively.

Revenues (excluding cost reimbursements)

($ in millions)

2021

2020

2019

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

All other countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

131

2,499

263

2,762

$

$

1,664

180

1,844

$

$

2,810

341

3,151

Fixed Assets

($ in millions)

At December 31, 2021 At December 31, 2020

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

All other countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

988

148

1,136

$

$

640

151

791

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

Disclosure Controls and Procedures

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

Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as

defined in Exchange Act Rule 13a-15(f). We have set forth management’s annual report on internal control over financial
reporting and the independent registered public accounting firm’s report on the effectiveness of our internal control over
financial reporting in Part II, Item 8 of this Annual Report, and we incorporate those reports by reference.

During the second quarter of 2021 we completed the Welk Acquisition, which was accounted for as a business

combination. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from
management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is
completed, we have excluded the businesses that we acquired in the Welk Acquisition from our assessment of the effectiveness
of internal control over financial reporting as of December 31, 2021. The businesses that we acquired in the Welk Acquisition
represented 9% of our total assets as of December 31, 2021, and 4% of our revenues and 11% of our income before income
taxes and noncontrolling interests for the year ended December 31, 2021.

Changes in Internal Control Over Financial Reporting

We made no changes in our internal control over financial reporting during the fourth quarter of 2021 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than changes
to integrate the Welk business into our internal control over financial reporting.

Item 9B.

Other Information

None.

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

132

PART III

As described below, we incorporate by reference in this Annual Report certain information appearing in the Proxy

Statement that we will furnish to our shareholders for our 2022 Annual Meeting of Shareholders (the “Proxy Statement”).

Item 10.

Directors, Executive Officers and Corporate Governance

Our Proxy Statement will be filed with the SEC in connection with our 2022 Annual Meeting of Shareholders.

Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3) to
Form 10-K. Information required by Item 10 of Form 10-K relating to directors is incorporated by reference to the material
captioned “Report on the Board of Directors and its Committees” in our Proxy Statement.

Code of Conduct

Our Board of Directors has adopted a code of conduct, our Business Conduct Guide, that applies to all of our directors,

officers, and associates, including our Chief Executive Officer, Principal Financial Officer, and Chief Accounting Officer. Our
Business Conduct Guide is available in the Investor Relations section of our website (marriottvacationsworldwide.com) and is
accessible by clicking on “Corporate Governance.” Any amendments to our Business Conduct Guide and any grant of a waiver
from a provision of our Business Conduct Guide requiring disclosure under applicable SEC rules may be disclosed at the same
location as the Business Conduct Guide in the Investor Relations section of our website located at
marriottvacationsworldwide.com within four business days following the date of the amendment or waiver or on a Current
Report on Form 8-K.

Item 11.

Executive Compensation

We incorporate this information by reference to the “Executive and Director Compensation” and “Compensation

Committee Interlocks and Insider Participation” sections of our Proxy Statement.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

We incorporate this information by reference to the “Securities Authorized for Issuance Under Equity Compensation

Plans” and “Stock Ownership” sections of our Proxy Statement.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

We incorporate this information by reference to the “Transactions with Related Persons” and “Director Independence”

sections of our Proxy Statement.

Item 14.

Principal Accountant Fees and Services

We incorporate this information by reference to the “Independent Registered Public Accounting Firm Fee Disclosure”

and “Pre-Approval of Independent Auditor Fees and Services Policy” sections of our Proxy Statement.

PART IV

Item 15.

Exhibits and Financial Statement Schedules

The following are filed as part of this Annual Report:

(1) Financial Statements

We include this portion of Item 15 under Part II, Item 8 of this Annual Report.

(2) Financial Statement Schedules

We include the financial statement schedules required by the applicable accounting regulations of the SEC in the notes

to our consolidated financial statements and incorporate that information in this Item 15 by reference.

(3) Exhibits

A shareholder who wants a copy of any of the following Exhibits may obtain one from us, without charge, upon

written request. Written requests to obtain any exhibit should be sent to Marriott Vacations Worldwide Corporation, 9002 San
Marco Court, Orlando, Florida 32819, Attention: Corporate Secretary. All documents referenced below are being filed as a part
of this Annual Report, unless otherwise noted.

133

Exhibit
Number

Description

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

Separation and Distribution Agreement, entered into on
November 17, 2011, among Marriott International, Inc., Marriott
Vacations Worldwide Corporation, Marriott Ownership Resorts,
Inc., Marriott Resorts Hospitality Corporation, MVCI Asia Pacific
Pte. Ltd. and MVCO Series LLC
Agreement and Plan of Merger, dated as of April 30, 2018, by and
among Marriott Vacations Worldwide Corporation, ILG, Inc.,
Ignite Holdco, Inc., Ignite Holdco Subsidiary, Inc., Volt Merger
Sub LLC(1)

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

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

Indenture between Marriott Vacations Worldwide Corporation and
The Bank of New York Mellon Trust Company, N.A., as trustee,
dated September 25, 2017
Form of 1.50% Convertible Senior Note due 2022 (included as
Exhibit A to Exhibit 4.2 above)
Joinder Agreement to Registration Rights Agreement, dated as of
September 1, 2018, by and among ILG, LLC, the guarantors party
thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as
the representative of the initial purchasers
Indenture, dated as of October 1, 2019, by and among Marriott
Ownership Resorts, Inc., Marriott Vacations Worldwide
Corporation, as guarantor, the other guarantors party thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee

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

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

Form of 4.750% Senior Notes due 2028 (included as Exhibit A to
Exhibit 4.5 above)
Registration Rights Agreement, dated as of October 1, 2019, by
and among Marriott Ownership Resorts, Inc., Marriott Vacations
Worldwide Corporation, as guarantor, the other guarantors party
thereto and J.P. Morgan Securities LLC

Indenture, dated as of May 13, 2020, by and among Marriott
Ownership Resorts, Inc., Marriott Vacations Worldwide
Corporation, as guarantor, the other guarantors party thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee
and collateral agent
Form of 6.125% Senior Secured Notes due 2025 (included as
Exhibit A to Exhibit 4.10 above)
Indenture, dated as of February 2, 2021, by and among Marriott
Vacations Worldwide Corporation, Marriott Ownership Resorts,
Inc. and the other guarantors party thereto and The Bank of New
York Mellon Trust Company, N.A., as trustee
Form of 0.00% Convertible Senior Note due 2026 (included as
Exhibit A to Exhibit 4.12 above)

2.1

2.2

2.3

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

134

8-K

2.1

11/22/2011

8-K

2.1

5/1/2018

8-K

2.1

1/26/2021

8-K

8-K

10

10-Q

10-Q

3.1

3.2

4.1

4.1

4.1

11/22/2011

11/22/2011

10/14/2011

11/2/2017

11/2/2017

8-K

4.8

9/5/2018

8-K

4.1

10/1/2019

10-K

4.12

3/2/2020

10-K

4.13

3/2/2020

8-K

4.2

10/1/2019

8-K

4.3

10/1/2019

8-K

4.1

5/15/2020

8-K

4.1

5/15/2020

8-K

4.1

2/3/2021

8-K

4.1

2/3/2021

Exhibit
Number

Description

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

4.14

4.15

4.16

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

Indenture, dated as of June 21, 2021, by and among Marriott
Ownership Resorts, Inc., Marriott Vacations Worldwide
Corporation, as guarantor, the other guarantors party thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee
Form of 4.500% Senior Notes due 2029 (included as Exhibit A to
Exhibit 4.14 above
Description of Registered Securities

License, Services, and Development Agreement, entered into on
November 17, 2011, among Marriott International, Inc., Marriott
Worldwide Corporation, Marriott Vacations Worldwide
Corporation and the other signatories thereto

Letter Agreement, dated as of February 21, 2013, between Marriott
International, Inc. and Marriott Vacations Worldwide Corporation,
supplementing the License, Services, and Development Agreement

Letter Agreement, dated May 9, 2016, among Marriott Vacations
Worldwide Corporation, Marriott Worldwide Corporation and
Marriott International, Inc. relating to the License, Services, and
Development Agreement
First Amendment to License, Services, and Development
Agreement, dated as of February 26, 2018, among Marriott
International, Inc., Marriott Worldwide Corporation, Marriott
Vacations Worldwide Corporation and the other signatories thereto

Amended and Restated Side Letter Agreement, dated as of
February 26, 2018 by among Marriott International, Inc., Marriott
Worldwide Corporation, Marriott Rewards, LLC, Marriott
Vacations Worldwide Corporation and Marriott Ownership
Resorts, Inc.†
Letter Agreement, effective as of January 1, 2022, between
Marriott International, Inc., Marriott Worldwide Corporation,
Marriott Vacations Worldwide Corporation, Starwood Hotels &
Resorts Worldwide, LLC, Marriott Ownership Resorts, Inc.,
Vistana Signature Experiences, Inc. and ILG, LLC
License, Services, and Development Agreement, entered into on
November 17, 2011, among The Ritz-Carlton Hotel Company,
L.L.C., Marriott Vacations Worldwide Corporation and the other
signatories thereto

First Amendment to License, Services, and Development
Agreement, dated as of February 26, 2018, among The Ritz-
Carlton Hotel Company, L.L.C., Marriott Vacations Worldwide
Corporation and the other signatures thereto

Employee Benefits and Other Employment Matters Allocation
Agreement, entered into on November 17, 2011, between Marriott
International, Inc. and Marriott Vacations Worldwide Corporation

Tax Sharing and Indemnification Agreement, entered into on
November 17, 2011, between Marriott International, Inc. and
Marriott Vacations Worldwide Corporation

Amendment, dated August 2, 2012, between Marriott
International, Inc. and Marriott Vacations Worldwide Corporation,
to the Tax Sharing and Indemnification Agreement

Marriott Rewards Affiliation Agreement, entered into on
November 17, 2011, among Marriott International, Inc., Marriott
Rewards, LLC, Marriott Vacations Worldwide Corporation,
Marriott Ownership Resorts, Inc. and the other signatories thereto

First Amendment to Marriott Rewards Affiliation Agreement,
dated as of February 26, 2018, among Marriott International, Inc.,
Marriott Rewards, LLC, Marriott Vacations Worldwide
Corporation and Marriott Ownership Resorts, Inc.

135

8-K

4.1

6/22/2021

8-K

10-K

4.2

4.16

6/22/2021

3/2/2020

8-K

10.1

11/22/2011

10-Q

10.1

4/25/2013

10-Q

10.3

7/21/2016

10-K

10.4

2/27/2018

10-K

10.5

2/27/2018

8-K

10.2

11/22/2011

10-K

10.7

2/27/2018

8-K

10.3

11/22/2011

8-K

10.4

11/22/2011

10-Q

10.1

10/18/2012

8-K

10.5

11/22/2011

10-K

10.12

2/27/2018

X

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

X

10-K

10.14

2/27/2018

10-K

10.14

2/23/2017

8-K

8-K

8-K

10-K

10-K

10-Q

8-K

10.1

12/9/2011

10.2

12/9/2011

10.1

3/16/2012

10.17

2/25/2016

10.16

3/21/2012

10.1

10.2

4/30/2015

3/16/2012

8-K

10.3

3/16/2012

8-K

10.3

6/13/2013

10-K

10.21

2/26/2015

8-K

10.1

6/11/2015

8-K

10.2

9/16/2014

10-Q

10.2

7/23/2015

8-K

10.1

9/16/2014

8-K

10.1

11/25/2015

10.17

10.18

10.19

10.20

10.21

Exhibit
Number

10.14

10.15

Description
Marriott Bonvoy Affiliation Agreement, dated as of November 10,
2021, by and among Marriott International, Inc., Marriott Rewards,
LLC, Marriott Vacations Worldwide Corporation and Marriott
Ownership Resorts, Inc.

Termination of Noncompetition Agreement, dated as of February
26, 2018, between Marriott International, Inc. and Marriott
Vacations Worldwide Corporation

10.16 Marriott Vacations Worldwide Corporation Amended and Restated

Stock and Cash Incentive Plan*
Form of Restricted Stock Unit Agreement – Marriott Vacations
Worldwide Corporation Stock and Cash Incentive Plan*
Form of Stock Appreciation Right Agreement – Marriott Vacations
Worldwide Corporation Stock and Cash Incentive Plan*
Form of Performance Unit Award Agreement – Marriott Vacations
Worldwide Corporation Stock and Cash Incentive Plan*
Form of Non-Employee Director Share Award Confirmation*

Form of Non-Employee Director Stock Appreciation Right Award
Agreement*
Form of Director Stock Unit Agreement*

10.22
10.23 Marriott Vacations Worldwide Corporation Change in Control

Severance Plan*

10.24

Form of Participation Agreement for Change in Control Severance
Plan – Marriott Vacations Worldwide Corporation Change in
Control Severance Plan*

10.25 Marriott Vacations Worldwide Corporation Deferred

Compensation Plan*

10.26 Marriott Vacations Worldwide Corporation Executive Long-Term

Disability Plan*

10.27 Marriott Vacations Worldwide Corporation Employee Stock

10.28

10.29

10.30

10.31

Purchase Plan*
Third Amended and Restated Indenture and Servicing Agreement,
entered into September 15, 2014 and dated as of September 1,
2014, among Marriott Vacations Worldwide Owner Trust 2011-1,
Marriott Ownership Resorts, Inc., and Wells Fargo Bank, National
Association

Indenture Supplement, dated June 24, 2015, among Marriott
Vacations Worldwide Owner Trust 2011-1, Marriott Ownership
Resorts, Inc., and Wells Fargo Bank, National Association,
Deutsche Bank AG, New York Branch, and the Conduits,
Alternate Purchasers, Funding Agents and Non-Conduit
Committed Purchasers signatory thereto

Second Amended and Restated Sale Agreement, entered into
September 15, 2014 and dated as of September 1, 2014, between
MORI SPC Series Corp. and Marriott Vacations Worldwide
Owner Trust 2011-1

Omnibus Amendment No. 3, dated November 23, 2015, relating
to, among other agreements, the Third Amended and Restated
Indenture and the Second Amended and Restated Sale Agreement,
by and among Marriott Vacations Worldwide Owner Trust 2011-1,
Marriott Ownership Resorts, Inc., Wells Fargo Bank, National
Association, MORI SPC Series Corp., Marriott Vacations
Worldwide Corporation, the Purchasers signatory thereto,
Deutsche Bank AG, New York Branch, Wilmington Trust,
National Association, and MVCO Series LLC

136

Exhibit
Number

10.32

10.33

10.34

10.35

10.36
10.37
10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

Description

Omnibus Amendment No. 4, dated May 20, 2016, relating to,
among other agreements, the Third Amended and Restated
Indenture and the Second Amended and Restated Sale Agreement,
by and among Marriott Vacations Worldwide Owner Trust 2011-1,
Marriott Ownership Resorts, Inc., Wells Fargo Bank, National
Association, MORI SPC Series Corp., Marriott Vacations
Worldwide Corporation, the Purchasers signatory thereto,
Deutsche Bank AG, New York Branch, Wilmington Trust,
National Association, and MVCO Series LLC

Indenture Supplement, dated June 16, 2016, by and among
Marriott Vacations Worldwide Owner Trust 2011-1, as issuer,
Marriott Ownership Resorts, Inc., Wells Fargo Bank, National
Association, Deutsche Bank AG, New York Branch, and the
Conduits, Alternate Purchasers, Funding Agents and Non-Conduit
Committed Purchasers signatory thereto

Omnibus Amendment No. 5, dated March 8, 2017, relating to,
among other agreements, the Third Amended and Restated
Indenture, by and among Marriott Vacations Worldwide Owner
Trust 2011-1, Marriott Ownership Resorts, Inc., Wells Fargo Bank,
National Association, MORI SPC Series Corp., Marriott Vacations
Worldwide Corporation, the Purchasers signatory thereto,
Deutsche Bank AG, New York Branch, Wilmington Trust,
National Association, and MVCO Series LLC
Omnibus Amendment No. 6, dated August 17, 2017, relating to,
among other agreements, the Third Amended and Restated
Indenture and the Second Amended and Restated Sale Agreement,
by and among Marriott Vacations Worldwide Owner Trust 2011-1,
Marriott Ownership Resorts, Inc., Wells Fargo Bank, National
Association, MORI SPC Series Corp., Marriott Vacations
Worldwide Corporation, the Purchasers signatory thereto,
Deutsche Bank AG, New York Branch, Wilmington Trust,
National Association, and MVCO Series LLC
Form of Call Option Transaction Confirmation
Form of Warrant Confirmation
Form of Amendment Agreement to Warrant Confirmation
Credit Agreement, dated as of August 31, 2018, among Marriott
Vacations Worldwide Corporation, Marriott Ownership Resorts,
Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent
Amendment No. 1 to Credit Agreement, dated as of December 3,
2019, among Marriott Vacations Worldwide Corporation, Marriott
Ownership Resorts, Inc., Interval Acquisition Corp., the lenders
party thereto and JPMorgan Chase Bank, N.A., as administrative
agent
Joinder Agreement, dated as of September 1, 2018, among Interval
Acquisition Corp. and JPMorgan Chase Bank, N.A.
Omnibus Amendment No. 8, dated August 31, 2018, relating to,
among other agreements, the Third Amended and Restated
Indenture, by and among Marriott Vacations Worldwide Owner
Trust 2011-1, Marriott Ownership Resorts, Inc., Wells Fargo Bank,
National Association, MORI SPC Series Corp., Marriott Vacations
Worldwide Corporation, the Purchasers signatory thereto,
Deutsche Bank AG, New York Branch, Wilmington Trust,
National Association, and MVCO Series LLC.
Deferred Compensation Plan for Non-Employee Directors*
Interval Leisure Group, Inc. 2013 Stock and Incentive
Compensation Plan, as amended*
Form of Terms and Conditions for Annual RSU Awards under the
Interval Leisure Group, Inc. 2013 Stock and Incentive
Compensation Plan*

137

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

10-Q

10.2

7/21/2016

10-Q

10.1

7/21/2016

8-K

10.1

3/14/2017

8-K

10.3

8/21/2017

10-Q
10-Q
10-K

10.1
10.2
10.54

11/2/2017
11/2/2017
3/1/2019

8-K

4.9

9/5/2018

10-K

10.38

3/2/2020

8-K

4.10

9/5/2018

10-Q

10.3

11/7/2018

S-1(2)

S-8(2)

10.12

8/1/2018

10.1

8/5/2016

10-Q(2)

10.1

5/8/2014

Exhibit
Number

10.46

10.47

10.48

10.49

10.50

10.51

10.52

10.53

10.54

10.55

10.56

Description
Form of Terms and Conditions for Adjusted EBITDA Performance
RSU Awards under the Interval Leisure Group, Inc. 2013 Stock
and Incentive Compensation Plan*

Form of Terms and Conditions for TSR-Based Performance RSU
Awards under the Interval Leisure Group, Inc. 2013 Stock and
Incentive Compensation Plan*

Employee Matters Agreement, dated as of October 27, 2015
among Interval Leisure Group, Inc., Starwood Hotels & Resorts
Worldwide, Inc. and Vistana Signature Experiences, Inc., as
amended

License, Services and Development Agreement, dated as of May
11, 2016, among Interval Leisure Group, Inc., Starwood Hotels &
Resorts Worldwide, Inc. and Vistana Signature Experiences, Inc.

Tax Matters Agreement, dated as of May 11, 2016, among Interval
Leisure Group, Inc., Starwood Hotels & Resorts Worldwide, Inc.
and Vistana Signature Experiences, Inc.

Starwood Preferred Guest Affiliation Agreement, dated as of May
11, 2016, among Starwood Hotels & Resorts Worldwide, Inc.,
Preferred Guest, Inc. and Vistana Signature Experiences, Inc.

Termination of Noncompetition Agreement, effective September 1,
2018, between Starwood Hotels & Resorts Worldwide, LLC
(formerly Starwood Hotels & Resorts Worldwide, Inc.) and
Vistana Signatures Experiences, Inc.
Letter of Agreement, effective September 1, 2018, among Marriott
Vacations Worldwide Corporation, Marriott Ownership Resorts,
Inc., Vistana Signatures Experiences, Inc., ILG, LLC, Marriott
International, Inc., Marriott Worldwide Corporation, Marriott
Rewards, LLC and Starwood Hotels & Resorts Worldwide, LLC
Amendment No. 2 to the Interval Leisure Group, Inc. 2013 Stock
and Incentive Compensation Plan, dated February 25, 2018*
Amended and Restated Employment Agreement between ILG, Inc.
and Jeanette E. Marbert, dated as of March 24, 2017*

Amendment dated March 28, 2018 to Amended and Restated
Employment Agreement between ILG, Inc. and Jeanette E.
Marbert*

10.57 Marriott Vacations Worldwide Corporation 2020 Equity Incentive

Plan*
Form of Call Option Transaction Confirmation
Form of Warrant Confirmation
Significant Subsidiaries of Marriott Vacations Worldwide
Corporation

List of the Issuer and its Guarantor Subsidiaries

Consent of Ernst & Young LLP

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

10-Q(2)

10.2

5/8/2014

10-Q(2)

10.3

5/8/2014

8-K(2)

10.6

5/12/2016

8-K(2)

10.1

5/12/2016

8-K(2)

10.3

5/12/2016

8-K(2)

10.5

5/12/2016

8-K

10.2

9/20/2018

8-K

10.1

9/20/2018

10-Q(2)

10.2

5/4/2018

10-Q(2)

10.2

5/5/2017

10-Q(2)

10.1

5/4/2018

DEF
14A
8-K
8-K

Appendix
A
10.1
10.2

3/30/2020

2/3/2021
2/3/2021

X

X

X

X

X

Powers of Attorney (included on the signature pages hereto)
Certification of Chief Executive Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934
Certification of Chief Financial Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934
Certification of Chief Executive Officer pursuant to Rule
13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Rule 13a-14(b)
and Section 906 of the Sarbanes-Oxley Act of 2002
The following financial statements from the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021, formatted in Inline XBRL: (i) Consolidated Statements of Income, (ii) Consolidated
Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash
Flows, (v) Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Consolidated Financial Statements

Furnished

Furnished

X

138

10.58
10.59

21.1

22.1

23.1

24.1

31.1

31.2

32.1

32.2

101

Exhibit
Number
104

Description

Filed
Herewith

Incorporation By Reference From
Date Filed
Form

Exhibit

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Management contract or compensatory plan or arrangement.
† Portions of this exhibit were redacted pursuant to a confidential treatment request filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The redacted portions of
this exhibit have been filed with the Securities and Exchange Commission.

(1) Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish

supplemental copies to the SEC of any omitted schedule upon request by the SEC.

(2) Filing made by ILG, LLC under SEC File No. 001-34062.

Item 16.

Form 10-K Summary

None.

139

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

MARRIOTT VACATIONS WORLDWIDE CORPORATION

Date: March 1, 2022

By:

/s/ Stephen P. Weisz
Stephen P. Weisz
Chief Executive Officer

POWER OF ATTORNEY

KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and

appoints jointly and severally, Stephen P. Weisz, Anthony E. Terry, and James H Hunter, IV, and each one of them, his or her
attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any and all amendments to
this Annual Report and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities
and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact, or his substitute or substitutes,
may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed by the

following persons on our behalf in the capacities and on the date indicated above.

Principal Executive Officer:

/s/ Stephen P. Weisz

Stephen P. Weisz

Principal Financial Officer:

/s/ Anthony E. Terry

Anthony E. Terry

Principal Accounting Officer:

Chief Executive Officer and Director

Executive Vice President and Chief Financial Officer

/s/ Laurie A. Sullivan

Laurie A. Sullivan

Senior Vice President, Corporate Controller and Chief
Accounting Officer

Directors:

/s/ William J. Shaw

William J. Shaw, Director, Chairman

/s/ C.E. Andrews

C.E. Andrews, Director

/s/ Lizanne Galbreath

Lizanne Galbreath, Director

/s/ Raymond L. Gellein, Jr.

Raymond L. Gellein, Jr., Director

/s/ Thomas J. Hutchison III

Thomas J. Hutchison III, Director

140

/s/ Melquiades R. Martinez

Melquiades R. Martinez, Director

/s/ William W. McCarten

William W. McCarten, Director

/s/ Dianna F. Morgan

Dianna F. Morgan, Director

/s/ Stephen R. Quazzo

Stephen R. Quazzo, Director

/s/ Jonice G. Tucker

Jonice G. Tucker, Director

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

William J. Shaw 
Chairman of the Board

Stephen P. Weisz 
Chief Executive Officer

C.E. Andrews 
Former Chief Executive Officer, 
MorganFranklin Consulting

Lizanne Galbreath 
Managing Director, Galbreath & Company

Raymond L. “Rip” Gellein, Jr. 
Former Chairman of the Board, Chief 
Executive Officer and President, Strategic 
Hotels & Resorts, Inc.

BOARD OF DIRECTORS

Thomas J. Hutchison III* 
Chairman and Chief Executive Officer,  
Legacy Companies, LLC

Stephen R. Quazzo 
Co-Founder and Chief Executive Officer, 
Pearlmark Real Estate, LLC

Melquiades R. “Mel” Martinez 
Chairman of the Southeast and Latin 
America, JPMorgan Chase & Co.

William W. McCarten 
Chairman of the Board, DiamondRock 
Hospitality Company

Dianna F. Morgan 
Former Senior Vice President, Walt Disney 
World Company

Jonice Gray Tucker 
Founding Partner and Governing Board 
Member, Buckley LLP

*  Mr. Hutchison’s term ends at the 2022 Annual Meeting 

of Stockholders.

Stephen P. Weisz 
Chief Executive Officer

John E. Geller, Jr. 
President

Anthony E. Terry 
Executive Vice President and Chief  
Financial Officer

R. Lee Cunningham** 
Executive Vice President and Chief Operating 
Officer – Vacation Ownership

EXECUTIVE LEADERSHIP

Lori Gustafson 
Executive Vice President and Chief Brand 
and Digital Strategy Officer

James H Hunter, IV 
Executive Vice President and  
General Counsel

Lizabeth “Lani” Kane-Hanan 
Executive Vice President and Chief 
Development and Product Officer

Jeanette E. Marbert 
President, Exchange and Third-Party 
Management

Brian E. Miller 
President, Vacation Ownership

Dwight D. Smith 
Executive Vice President and Chief 
Information Officer

Michael E. Yonker 
Executive Vice President and Chief Human 
Resources Officer

**  Mr. Cunningham has announced his plans to retire in 

May 2022.

INVESTOR RELATIONS

TRANSFER AGENT

Computershare 
P.O. Box 505000 
Louisville, Kentucky  
40233-5000 
866-429-5244 (toll-free) 
201-680-6578

Neal Goldner 
Vice President 
Investor Relations

GLOBAL CORPORATE  
COMMUNICATIONS

Erica Ettori 
Vice President 
Global Communications

CORPORATE 
INFORMATION

Marriott Vacations 
Worldwide 
9002 San Marco Court 
Orlando, Florida 32819 
407-206-6000 
marriottvacationsworldwide.com

22-05-1395677