Business Segments

12 Months Ended

Dec. 31, 2022

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 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 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 transactions; (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 and discounts 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:

	Year Ended December 31,
($ in millions)	2022		2021		2020
Revenues:
Real estate sales and financing	$	2,378	$	1,451	$	494
Resort operations and club management(1)	1,197		700		276
Total segment revenues	3,575		2,151		770
Cost reimbursements	297		202		137
Intersegment eliminations(1)	(37)		(18)		(13)
Total revenues	$	3,835	$	2,335	$	894

(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 and for the rental of model units to show prospective buyers. These charges totaled $37 million, $18 million and $13 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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

	Year Ended December 31,
($ in millions)	2022		2021		2020
Adjusted EBITDA:
Real estate sales and financing(1)	$	865	$	537	$	33
Resort operations and club management(1)	463		353		136
Segment Adjusted EBITDA	1,328		890		169
Acquisition and integration-related expense	(67)		(106)		—
General and administrative	(212)		(151)		(92)
Depreciation and amortization	(244)		(126)		(45)
License fee expense	(124)		(80)		(51)
Other (loss) gain, net	(1)		(26)		3
Interest expense	(142)		(105)		(43)
Income tax (expense) benefit	(129)		(93)		79
Equity in earnings from unconsolidated affiliates	13		10		5
Impairment expense	(17)		(2)		(209)
Other adjustment items(2)	(53)		(35)		(17)
Net income (loss)	$	352	$	176	$	(201)

(1)Includes intersegment transactions. 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 included within our reportable segments.

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

	December 31,
($ in millions)	2022		2021
Real estate sales and financing	$	5,755	$	5,544
Resort operations and club management	1,986		2,145
Total segment assets	7,741		7,689
Corporate	263		278
Land and infrastructure held for sale	—		41
Total assets	$	8,004	$	8,008

The following table presents capital expenditures for property and equipment (including inventory and leases) for our reportable segments, reconciled to consolidated amounts:

	December 31,
($ in millions)	2022		2021		2020
Real estate sales and financing	$	26	$	60	$	18
Resort operations and club management	2		—		—
Total segment capital expenditures	28		60		18
Corporate	65		12		8
Total capital expenditures	$	93	$	72	$	26