Business Segments

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Business Segments

Note 22: Business Segments

We operate our business through the following two segments:

•Real estate sales and financing – We market and sell VOIs that we own. We also source VOIs through fee-for-service agreements with third-party developers. Related to the sales of the VOIs that we own, we provide consumer financing, which includes interest income generated from the origination of consumer loans to customers to finance their purchase of VOIs and revenue from servicing the loans. We also generate fee revenue from servicing the loans provided by third-party developers to purchasers of their VOIs.

•Resort operations and club management – We manage the Club and Diamond Clubs and earn activation fees, annual dues and transaction fees from member exchanges for other vacation products. We also earn fees for managing the timeshare properties. We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges under our Club and Diamond Clubs programs. We also earn revenue from food and beverage, retail and spa outlets at our timeshare properties.

The performance of our operating segments is evaluated primarily based on adjusted earnings before interest expense (excluding non-recourse debt), taxes, depreciation and amortization (“EBITDA”). We define Adjusted EBITDA as EBITDA, further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) other gains, including asset dispositions and foreign currency translations; (ii) debt restructurings/retirements; (iii) non-cash impairment losses; (iv) share-based and other compensation expenses; and (v) other items, including but not limited to costs associated with acquisitions, restructuring, amortization of premiums resulting from purchase accounting, and other non-cash and one-time charges.

We do not include equity in earnings (losses) from unconsolidated affiliates in our measures of segment operating performance.

Below is the presentation of our reportable segment results which include the newly acquired Diamond operations within both segments since the Acquisition Date. The following table presents revenues for our reportable segments reconciled to consolidated amounts:

	Year Ended December 31,
($ in millions)	2021			2020			2019
Revenues:
Real estate sales and financing	$	1,451		$	494		$	1,252
Resort operations and club management(1)		700			276			454
Segment revenues		2,151			770			1,706
Cost reimbursements		202			137			168
Intersegment eliminations(1)(2)		(18	)		(13	)		(36	)
Total revenues	$	2,335		$	894		$	1,838

(1)Includes charges to the real estate sales and financing segment from the resort operations and club management segment for fulfillment of discounted marketing package stays at resorts. These charges totaled $18 million, $13 million and $35 million for the years ended December 31, 2021, 2020, and 2019, respectively.

(2)Includes charges to the real estate sales and financing segment from the resort operations and club management segment for the rental of model units to show prospective buyers. These charges totaled $1 million for the year ended December 31, 2021, less than $1 million for the year ended December 31, 2020 and $1 million for the year ended December 31, 2019.

The following table presents Adjusted EBITDA for our reportable segments reconciled to net income (loss):

	Year Ended December 31,
($ in millions)	2021			2020			2019
Adjusted EBITDA:
Real estate sales and financing(1)	$	537		$	33		$	325
Resort operations and club management(1)		353			136			265
Segment Adjusted EBITDA		890			169			590
Acquisition and integration-related expense		(106	)		—			—
General and administrative		(151	)		(92	)		(118	)
Depreciation and amortization		(126	)		(45	)		(44	)
License fee expense		(80	)		(51	)		(101	)
Other (loss) gain, net		(26	)		3			(3	)
Interest expense		(105	)		(43	)		(43	)
Income tax (expense) benefit		(93	)		79			(57	)
Equity in earnings from unconsolidated affiliates		10			5			4
Impairment expense		(2	)		(209	)		—
Other adjustment items(2)		(35	)		(17	)		(12	)
Net income (loss)	$	176		$	(201	)	$	216

(1)Includes intersegment eliminations. Refer to our table presenting revenues by reportable segment above for additional discussion.

(2)This amount includes costs associated with restructuring, one-time charges and other non-cash items.

The following table presents total assets for our reportable segments, reconciled to consolidated amounts:

	December 31,
($ in millions)	2021		2020
Real estate sales and financing	$	5,544	$	2,839
Resort operations and club management		2,145		79
Total segment assets		7,689		2,918
Corporate		278		175
Land and infrastructure held for sale		41		41
Total assets	$	8,008	$	3,134

The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts:

	December 31,
($ in millions)	2021		2020		2019
Real estate sales and financing	$	60	$	18	$	19
Resort operations and club management		—		—		5
Total segment capital expenditures		60		18		24
Corporate		12		8		13
Total capital expenditures	$	72	$	26	$	37