Business Segments

12 Months Ended

Dec. 31, 2020

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, earn activation fees, annual dues and transaction fees from member exchanges for other vacation products. We 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 program. 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 which has been further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) asset dispositions; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) reorganization costs, including severance and relocation costs; (vi) share-based and other compensation expenses; (vii) costs related to the spin-off; and (viii) other items.

We do not include equity in earnings (losses) from unconsolidated affiliates in our measures of segment operating performance. The following table presents revenues for our reportable segments reconciled to consolidated amounts:

	Year Ended December 31,
($ in millions)	2020			2019			2018
Revenues:
Real estate sales and financing	$	494		$	1,252		$	1,462
Resort operations and club management(1)		276			454			422
Total segment revenues		770			1,706			1,884
Cost reimbursements		137			168			147
Intersegment eliminations(1)(2)		(13	)		(36	)		(32	)
Total revenues	$	894		$	1,838		$	1,999

⁽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 $13 million, $35 million and $31 million for the years ended December 31, 2020, 2019 and 2018, 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 year ended December 31, 2020 and $1 million for the years ended December 31, 2019 and 2018.

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

	Year Ended December 31,
($ in millions)	2020			2019			2018
Adjusted EBITDA:
Real estate sales and financing(1)	$	33		$	325		$	447
Resort operations and club management(1)		136			265			245
Segment Adjusted EBITDA		169			590			692
General and administrative		(92	)		(118	)		(120	)
Depreciation and amortization		(45	)		(44	)		(33	)
License fee expense		(51	)		(101	)		(98	)
Other gain (loss), net		3			(3	)		(1	)
Interest expense		(43	)		(43	)		(30	)
Income tax benefit (expense)		79			(57	)		(105	)
Equity in earnings from unconsolidated affiliates		5			4			—
Impairment expense		(209	)		—			—
Other adjustment items(2)		(17	)		(12	)		(7	)
Net income	$	(201	)	$	216		$	298

_{(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)	2020		2019
Real estate sales and financing	$	2,839	$	2,753
Resort operations and club management		79		196
Total segment assets		2,918		2,949
Corporate		175		130
Land and infrastructure held for sale		41		—
Total assets	$	3,134	$	3,079

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

	December 31,
($ in millions)	2020		2019		2018
Real estate sales and financing	$	18	$	19	$	36
Resort operations and club management		—		5		—
Total segment capital expenditures for property and equipment		18		24		36
Corporate		8		13		8
Total capital expenditures for property and equipment	$	26	$	37	$	44