INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Earnings or losses before income taxes by geographic region

The following table presents the components of our earnings or losses before income taxes for the last three fiscal years:

($ in millions)	2021		2020		2019
United States	$	152	$	(255)	$	190
Non-U.S. jurisdictions	(25)		(85)		35
	$	127	$	(340)	$	225

Provision for or benefit from income taxes

Our (provision for) or benefit from income taxes for the last three years consisted of:

($ in millions)		2021		2020		2019
Current	– U.S. Federal	$	8	$	31	$	(12)
	– U.S. State	(3)		1		(29)
	– Non-U.S.	(50)		11		(36)
		(45)		43		(77)
Deferred	– U.S. Federal	(36)		26		(28)
	– U.S. State	3		9		17
	– Non-U.S.	4		6		5
		(29)		41		(6)
		$	(74)	$	84	$	(83)

Reconciliation of US statutory income tax rate to our effective income tax rate

The following table reconciles the U.S. statutory income tax rate to our effective income tax rate:

	2021	2020	2019
U.S. statutory income tax rate	21.0%	21.0%	21.0%
U.S. state income taxes, net of U.S. federal tax benefit	4.3	4.5	4.2
Share-based compensation, net of Section 162(m) limitation	1.9	0.2	0.7
Other permanent differences(1)	(5.5)	(9.1)	5.4
Impact related to the CARES Act of 2020	—	6.0	—
Tax rate changes	(3.8)	0.4	(0.3)
Non-U.S. income (loss)(2)	12.9	4.2	2.2
Tax credits	(0.9)	0.2	(6.6)
Unrecognized tax benefits	17.9	5.2	3.1
Change in valuation allowance(3)	10.4	(7.5)	7.0
Other items	0.2	(0.5)	0.2
Effective rate	58.4%	24.6%	36.9%

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(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)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.

(3)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.

Components of deferred tax assets and liabilities

The following table presents the significant components of our deferred tax assets and liabilities:

($ in millions)	At Year-End 2021		At Year-End 2020
Deferred Tax Assets
Inventory	$	69	$	83
Reserves	75		98
Deferred revenue	20		12
Property and equipment	61		72
Net operating loss and capital loss carryforwards	146		98
Tax credits	29		31
Right-of-use asset	24		2
Other, net	74		113
Deferred tax assets	498		509
Less valuation allowance	(122)		(106)
Net deferred tax assets	376		403
Deferred Tax Liabilities
Long lived intangible assets	(231)		(233)
Deferred sales of vacation ownership interests	(414)		(362)
Right-of-use liability	(24)		(2)
Other, net	(9)		(43)
Deferred tax liabilities	(678)		(640)
Total net deferred tax liabilities	$	(302)	$	(237)

Schedule of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows:

($ in millions)	2021		2020		2019
Unrecognized tax benefit at beginning of year	$	14	$	21	$	2
Increases related to tax positions taken during a prior period	12		6		18
Increases related to tax positions taken during the current period	1		2		1
Decreases related to settlements with taxing authorities	—		(14)		—
Decreases as a result of a lapse of the applicable statute of limitations	(1)		(1)		—
Unrecognized tax benefit at end of year	$	26	$	14	$	21