Business Segments

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Business Segments

Note 20: 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 acquired Diamond operations within both segments since the Acquisition Date. The following table presents revenues for our reportable segments reconciled to consolidated amounts:

	Three Months Ended March 31,
($ in millions)	2022			2021
Revenues:
Real estate sales and financing	$	452		$	123
Resort operations and club management(1)		268			80
Total segment revenues		720			203
Cost reimbursements		66			35
Intersegment eliminations(1)(2)		(7	)		(3	)
Total revenues	$	779		$	235

(1) Includes charges to the real estate sales and financing segment from the resort operations and club management segment for fulfillment of discounted

marking package stays at resorts. These charges totaled $7 million and $3 million for the three months ended March 31, 2022 and 2021, 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 less than $1 million for the three months ended March 31, 2022 and 2021.

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

	Three Months Ended March 31,
($ in millions)	2022			2021
Adjusted EBITDA:
Real estate sales and financing(1)	$	153		$	27
Resort operations and club management(1)		101			42
Segment Adjusted EBITDA		254			69
Acquisition and integration-related expense		(13	)		(15	)
General and administrative		(42	)		(21	)
Depreciation and amortization		(60	)		(11	)
License fee expense		(25	)		(14	)
Other gain (loss), net		1			(1	)
Interest expense		(33	)		(15	)
Income tax (expense) benefit		(20	)		6
Equity in earnings from unconsolidated affiliates		3			2
Impairment expense		(3	)		(1	)
Other adjustment items(2)		(11	)		(6	)
Net income (loss)	$	51		$	(7	)

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

(2) For the three months ended March 31, 2022 and 2021, this amount includes costs associated with restructuring, one-time charges and other

non-cash items included within our reportable segments.