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ACQUISITIONS AND DISPOSITIONS
 9 Months Ended
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS AND DISPOSITIONS
3. ACQUISITIONS AND DISPOSITIONS
Welk Acquisition
On April 1, 2021 (the “Welk Acquisition Date”), we completed the Welk Acquisition. The following table presents the fair value of each type of consideration transferred at the Welk Acquisition Date, as finalized at March 31, 2022.
(in millions, except per share amounts)
Equivalent shares of Marriott Vacations Worldwide common stock issued1.4 
Marriott Vacations Worldwide common stock price per share as of Welk Acquisition Date$174.18 
Fair value of Marriott Vacations Worldwide common stock issued248 
Cash consideration to Welk, net of cash and restricted cash acquired of $48 million
157 
Total consideration transferred, net of cash and restricted cash acquired$405 
Fair Values of Assets Acquired and Liabilities Assumed
We accounted for the Welk Acquisition as a business combination, which required us to record the assets acquired and liabilities assumed at fair value as of the Welk Acquisition Date. The values attributed to Vacation ownership notes receivable, Inventory, Property and equipment, Intangible assets, and Securitized debt from VIEs were based on valuations prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820, “Fair Value Measurements” (“ASC 820”). The value attributed to Debt was based on Level 2 inputs in accordance with ASC 820. During the first quarter of 2022, we finalized our allocation of the purchase price to the acquired assets and liabilities. The following table presents the fair values of the assets that we acquired and the liabilities that we assumed in connection with the business combination as previously reported at December 31, 2021, and as finalized at March 31, 2022. During the first quarter of 2022, we refined our valuation models related to certain acquired assets and liabilities as follows:
($ in millions)April 1, 2021
(as reported at
December 31, 2021)		AdjustmentsApril 1, 2021
(as finalized at
March 31, 2022)
Vacation ownership notes receivable, net$255 $— $255 
Inventory111 — 111 
Property and equipment83 — 83 
Intangible assets102 — 102 
Other assets19 — 19 
Deferred taxes(32)8 (24)
Debt(189)— (189)
Securitized debt(184)— (184)
Other liabilities(93)— (93)
Net assets acquired72 8 80 
Goodwill(1)
333 (8)325 
$405 $— $405 
_________________________
(1)Goodwill is calculated as total consideration transferred, net of cash acquired, less identified net assets acquired. It represents the value that we expect to obtain from growth opportunities from our combined operations and is not deductible for tax purposes.
Pro Forma Results of Operations
The following unaudited pro forma information presents the combined results of operations of Marriott Vacations Worldwide and Legacy-Welk as if we had completed the Welk Acquisition on December 31, 2019, the last day of our 2019 fiscal year, but using the fair values of assets and liabilities as of the Welk Acquisition Date set forth above. As required by GAAP, these unaudited pro forma results do not reflect any synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Welk Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.
There were no Welk Acquisition-related costs included in the unaudited pro forma results below for the nine months ended September 30, 2021.
Nine Months Ended
($ in millions, except per share data)September 30, 2021
Revenues$2,837 
Net income$7 
Net loss attributable to common shareholders$(1)
LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic$(0.01)
Diluted$(0.01)
Legacy-Welk Results of Operations
The following table presents the results of Legacy-Welk operations included in our Income Statement for the three months and nine months ended September 30, 2022 and September 30, 2021.
Three Months EndedNine Months Ended
($ in millions)September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Revenue$67 $53 $174 $101 
Net income$15 $10 $27 $16 
Other Acquisitions
Bali
During the first quarter of 2022, we acquired 88 completed vacation ownership units, as well as a sales center, located in Bali, Indonesia for $36 million. The transaction was accounted for as an asset acquisition with the purchase price allocated to Property and equipment. As consideration for the acquisition, we paid $12 million in cash and issued a non-interest bearing note payable for $11 million. Further, we reclassified $13 million of previous deposits associated with the project from Other assets to Property and equipment.
Dispositions
On April 29, 2022, we disposed of VRI Americas for proceeds of $56 million, net of cash and restricted cash transferred to the buyer of $12 million, after determining that this business was not a core component of our future growth strategy and operating model. The results of VRI Americas are included in our Exchange and Third-Party Management segment through the date of the sale. The net carrying value of VRI Americas as of the date of the disposition was $51 million, including $25 million of goodwill and $20 million of intangible assets. As a result of the disposition, we recorded a gain of $1 million and $17 million in (Losses) gains and other (expense) income, net on our Income Statements for the three and nine months ended September 30, 2022, respectively.
Additionally, on June 28, 2022, we disposed of entities that owned and operated a Vacation Ownership segment hotel in Puerto Vallarta, Mexico, for proceeds of $38 million, net of cash and restricted cash transferred to the buyer of $3 million, consistent with our development strategy to dispose of non-strategic assets. The net carrying value of the business disposed of as of the date of the disposition, excluding the cumulative translation adjustment, was $18 million, substantially all of which was property and equipment. As a result of this disposition, we recorded a gain of $33 million in (Losses) gains and other (expense) income, net on our Income Statements for the nine months ended September 30, 2022, which included the realization of cumulative foreign currency translation gains of $10 million associated with the disposition of these entities