Policies

9 Months Ended

Sep. 09, 2011

Restricted Cash

Restricted Cash

Restricted cash in our Balance Sheets at the end of the 2011third quarter and year-end 2010 is recorded as $50 million and $55 million, respectively, in the “Other current assets” line and $33 million and $30 million, respectively, in the “Other long-term assets” line. Restricted cash primarily consists of cash proceeds of a note receivable that are restricted as collateral for other debt; cash held in a reserve account related to Timeshare segment notes receivable securitizations; cash held internationally that we have not repatriated due to statutory, tax and currency risks; and deposits received, primarily associated with timeshare interval, fractional ownership, and residential sales that are held in escrow until the contract has closed.

Accounting Standards Update No. 2010-06 - Provisions Effective in the 2011 First Quarter ("ASU No. 2010-06")

Accounting Standards Update No. 2010-06 – Provisions Effective in the 2011 First Quarter (“ASU No. 2010-06”)

Certain provisions of ASU No. 2010-06 became effective during our 2011 first quarter. Those provisions, which amended Subtopic 820-10, require us to present as separate line items all purchases, sales, issuances, and settlements of financial instruments valued using significant unobservable inputs (Level 3) in the reconciliation of fair value measurements, in contrast to the previous aggregate presentation as a single line item. The adoption did not have a material impact on our financial statements or disclosures.

Cost Method Investments, Valuation Policy

We estimate the fair value of our cost method investments by applying a cap rate to stabilized earnings (a market approach).

Earnings Per Share, Dilutive Securities Policy

We compute the effect of dilutive securities using the treasury stock method and average market prices during the period. We determine dilution based on earnings.

Inventory Valuation Policy

We primarily record Timeshare segment interval, fractional ownership, and residential products at the lower of cost or fair market value, in accordance with applicable accounting guidance, and we generally value operating supplies at the lower of cost (using the first-in, first-out method) or market. Consistent with recognized industry practice, we classify Timeshare segment interval, fractional ownership, and residential products inventory, which has an operating cycle that exceeds 12 months, as a current asset.