In order to make this Annual Report easier to read, we refer throughout to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Consolidated Statements of Cash Flows as our “Cash Flows.” References throughout to numbered “Footnotes” refer to the numbered Notes to our Financial Statements that we include in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report. When discussing our properties or markets, we refer to the United States, Mexico and the Caribbean as “North America.”

In March 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic (“COVID-19,” “the COVID-19 pandemic,” “the pandemic,” or “the virus”). The changes arising from the effects of the COVID-19 pandemic on the global economic landscape, outlook and, trade namesin particular, the travel and hospitality industries, have been swift and unexpected. The COVID-19 pandemic has caused significant disruptions in international and U.S. economies and markets. We discuss the impacts of other companiesthe COVID-19 pandemic and organizations,its potential future implications throughout this report; however, the COVID-19 pandemic is evolving and these brand names, trademarks, service marksits potential impact on our business in the future remains uncertain.

On September 1, 2018 (the “Acquisition Date”), we completed the acquisition of ILG, LLC, formerly known as ILG, Inc. (“ILG”), through a series of transactions (the “ILG Acquisition”), after which ILG became our indirect wholly-owned subsidiary. The Financial Statements in this report for fiscal year 2018 include ILG’s results of operations from the Acquisition Date through December 31, 2018 and trade names arereflect the propertyfinancial position of their respective owners.our combined company at December 31, 2018. We refer to our business associated with brands that existed prior to the ILG Acquisition as “Legacy-MVW” and to ILG’s business and brands that we acquired as “Legacy-ILG.”

By referring to our corporate website, www.marriottvacationsworldwide.com, or any other website, we do not incorporate any such website or its contents in this Annual Report.

Unless otherwise specified, each reference to a particular year means the fiscal year ended on the date shown in the table below, rather than the corresponding calendar year. Beginning with our 2017, fiscal year, we changed our financial reporting cycle to a calendar year-end and end-of-month quarterly reporting cycle. Accordingly, our 2017 fiscal year began on December 31, 2016 (the day after the end of the 2016 fiscal year) and ended on December 31, 2017. Our future fiscal years will begin on January 1 and end on December 31. Prior to our 2017, fiscal year, our fiscal year was a 52 or 53 week fiscal year that ended on the Friday nearest to December 31. As a result of the change in our financial reporting cycle, our 2017 fiscal year had two more days of activity than each of our 2016, 2015 and 2014 fiscal years, and five fewer days of activity than our 2013 fiscal year. We have not restated, and do not plan to restate, historical results.

We make forward-looking statements throughout this Annual Report, including in, among others, the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, and the effects of competition.competition, and the ongoing effect of the COVID-19 pandemic and actions we or others may take in response to the COVID-19 pandemic. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees and are subject to numerous risks and uncertainties, such as: the effects of the COVID-19 pandemic, including reduced demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including to the extent it is or may be impacted by vaccines; the pace of recovery following the COVID-19 pandemic; competitive conditions; the availability of capital to finance growth, and other matters referred to under the heading “Risk Factors” contained herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. You should not put undue reliance on any forward-looking statements in this Annual Report. We do not have any intention or obligation to update forward-looking statements after the date of this Annual Report, except as required by law.

The risk factors discussed in “Risk Factors” in this Annual Report could cause our results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements.

We are one of the world’s largest companies whose business is focused almost entirely ona leading global vacation company that offers vacation ownership, based on number of owners, number of resortsexchange, rental and revenues.resort and property management, along with related businesses, products and services. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, and Grand Residences by Marriott, brands.Sheraton, Westin, and Hyatt Residence Club brands, as well as under Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. We have a license to use the St. Regis brand for specified fractional ownership products.

Our business is grouped into threeoperates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management. We were incorporated in Delaware in June 2011 and have been an independent public company since our November 2011 spin-off from Marriott International (the “Marriott Spin-Off”).

We experienced an adverse impact on occupancy in our Vacation Ownership business beginning in mid-March 2020, which quickly accelerated later that month and continued throughout the remainder of 2020. In response to quickly evolving travel restrictions and restrictions on business operations, we closed all of our sales centers in March 2020, and beginning on March 25, 2020, we closed our resorts for rental guests with stays at our branded North America Asia Pacificvacation ownership resorts. Due to low occupancy rates and Europe.based on various governmental mandates and advisories, we completely closed several of our resorts and reduced operations and amenities at our resorts that remained open. The closure of our sales centers and low occupancy levels led to a material decrease in contract sales and rental revenues from our vacation ownership business beginning in the second quarter.

In late-May, as many government restrictions were beginning to be relaxed, owner occupancy at our resorts began to grow and we began reopening resorts to rental guests; over 95 percent of our vacation ownership resorts had reopened to owners and rental guests by December 31, 2020. We reopened certain sales centers in June and opened additional sales centers in July and throughout the rest of the year. As of December 31, 2017,2020, over 80 percent of our portfolio consistedsales centers had re-opened. Extended or further closures of our sales centers may be required if demand declines again or if we are again impacted by government regulations requiring resort closures or restricting travel.

In our Exchange & Third-Party Management business, the closures of certain affiliated resorts and managed properties had a significant adverse impact on our business beginning at the end of the first quarter of 2020. A large number of resorts closed or ceased taking reservations, leading to a decrease in management and exchange revenues. As of December 31, 2020, over 6590 percent of those affiliated resorts and managed properties had reopened or resumed taking reservations. Our Aqua-Aston business was materially adversely affected by travel restrictions, as most of its managed properties are located in Hawaii. Further resort and property closures may be required if demand declines again or if we are again impacted by government regulations requiring resort closures or restricting travel. Starting at the United Statesend of the first quarter of 2020, the COVID-19 pandemic depressed, and ninecontinues to depress, the demand for vacation rentals due to “stay-at-home” recommendations or requirements, quarantines, and the reluctance of consumers to travel.

In addition to accessing the capital markets, we also bolstered our liquidity through cost reduction. These efforts included reducing capital expenditures; suspending hiring and salary increases; reducing executive and other countriesassociate salaries; implementing furloughs and territories. We generatereduced work weeks for most of our revenues from four primary sources: sellingassociates; and modifying vendor and supplier payment terms where possible. Certain of these cost reduction efforts are still in place and we continue to implement these and other cost saving measures as the situation evolves.

In response to the pandemic, we implemented a comprehensive, enhanced cleaning protocol entitled “Next Level of Clean” beginning in 2020 across our seven vacation ownership products; managingbrands throughout the U.S., Caribbean, Europe, and Asia. The protocol utilizes enhanced cleaning materials and technologies, including electrostatic sprayers, micro-misting sanitation machines, and hospitality grade supplies. Our enhanced cleaning protocols reflect elevated cleanliness standards, cleaning frequency, and hospitality norms across our resorts; financing consumer purchases of vacation ownership products;brands. Our new enhanced cleaning program was a result of collaboration with leaders in cleaning, hygiene, air purification and rentinginfection prevention services. These protocols also extend to our sales galleries for our vacation ownership inventory.brands, where, in addition to implementation of the new cleanliness standards and protocols, new practices have been implemented to provide presentations in a manner to allow for social distancing.

Our strategic goal is to further strengthen our leadership position inAdditionally, we established safe work environment protocols for all associates across all brands and businesses. For associates, the vacation ownership industry through initiatives to drive profitable contract sales growth, focus onguidelines establish protocols that implement a work environment that takes into account the satisfaction of our ownershealth and guests and the engagementwell-being of our associates maximize cash flow and optimize our capital structure,regulations, laws, and recommendations from government authorities and health officials. Associates across all brands and businesses go through daily temperature screens and are given personal protective equipment, including facemasks, which are required to be worn in common areas and when social distancing is not possible.

On September 1, 2018, we completed the acquisition of ILG. The businesses acquired that are currently operated by selectively pursuing capital efficient deal structures,the Company as part of its Vacation Ownership business include Hyatt Vacation Ownership (“HVO”) and selectively pursue compelling newVistana Signature Experiences (“Vistana”), which includes vacation ownership products branded as Sheraton or Westin. The businesses acquired that are currently operated by the Company as part of its Exchange & Third-Party Management business opportunities. We believe that we have significant competitive advantages, including our scaleinclude Aqua-Aston Hospitality, Interval International, Trading Places International, and global reach, the quality and strength of the Marriott and Ritz-Carlton brands, our system of high-quality resorts, our loyal and highly satisfied customer base, our long-standing track record and our experienced management team and associates.Vacation Resorts International.

The vacation ownership industry (also known as the timeshare industry) enables customers to share ownership and use of fully-furnished vacation accommodations. Typically, a purchaser acquires an interest (known as a “vacation ownership interest” or a “VOI”) that is either a real estate ownership interest (known as a “timeshare estate”) or a contractual right-to-use interest (known as a “timeshare license”) in a single resort or a collection of resort properties. In the United States, most vacation ownership products are sold as timeshare estates, which can be structured in a variety of ways, including but not limited to, a deeded real estate interest in a specified accommodation unit, an undivided interest in a building or an entire resort, or a beneficial interest in a trust that owns one or more resort properties. By purchasing a vacation ownership interest, owners make a commitment to vacation. For many purchasers, vacation ownership provides an attractive alternative to traditional lodging accommodations (such as hotels, resorts and condominium rentals). In addition to avoiding the volatility in room rates to which traditional lodging customers are subject, vacation ownership purchasers also enjoy accommodations that are, on average, more than twice the size of traditional hotel rooms and typically have more features, such as kitchens and separate living areas. Purchasers who might otherwise buy a second home find vacation ownership a preferable alternative because it is more affordable and reduces maintenance and upkeep concerns.

Typically, developers sell vacation ownership interests for a fixed purchase price that is paid in full at closing or financed with a loan. Many vacation ownership companies provide financing or facilitate access to third-party bank financing for customers. Vacation ownership resorts are often operated by a nonprofit property owners’ association of which owners of vacation ownership interests are members. Most property owners’ associations are governed by a board of directors that includes owners and which may include representatives of the developer. Some vacation ownership resorts are held through a trust structure in which a trustee holds title and manages the property. The board of the property owners’ association, or trustee, as applicable, typically delegates much of the responsibility for managing the resort to a management company, which is often affiliated with the developer.

After the initial purchase, most vacation ownership programs require the owner of the vacation ownership interest to pay an annual maintenance fee. This fee represents the owner’s allocable share of the costs and expenses of operating and maintaining the vacation ownership property and providing program services. This fee typically covers expenses such as housekeeping, landscaping, taxes, insurance and resort labor, a property management fee payable to the management company for providing management services, and an assessment to fund a capital asset reserve account used to renovate, refurbish and replace furnishings, common areas and other assets (such as parking lots or roofs) as needed over time. Owners typically reserve their usage of vacation accommodations in advance through a reservation system (often provided by the management company or an affiliated entity), unless a vacation ownership interest specifies fixed usage dates and a particular unit every year.

To enhance the flexibility and appeal of their products, many vacation ownership developers affiliate their projects with vacation ownership exchange service providers so that owners may exchange their rights to use the developer’s resorts in which they have purchased an interest for accommodation at other resorts in the exchange service provider’s broader network of properties. The two leading exchange service providers are Interval International, with which we are associated,our subsidiary, and RCI. According to their websites,RCI, LLC, a subsidiary of Travel + Leisure Co. (formerly known as Wyndham Destinations, Inc.) (“RCI”). Interval International’s network includes nearly 3,200 resorts, and RCI’s networks include approximately 3,000 and 4,300network includes over 6,000 affiliated resorts, respectively, as identified on each company’sRCI’s website.

According to the American Resort Development Association (“ARDA”), a trade association representing the vacation ownership and resort development industries, as of December 31, 2016,2019, the U.S. vacation ownership community was comprised of over 1,500 resorts, representing overmore than 200,000 units and an estimated 9.5 million vacation ownership week equivalents.units. According to ARDA, sales in the U.S. market were $9.2approximately $10.5 billion in 2016.2019. We believe there is considerable potential for further growth in the industry both in the U.S. and globally.

UnderIn connection with our acquisition of ILG, we became the Marriott Rewards Affiliation Agreementexclusive licensee for the Sheraton and Westin brands in vacation ownership. Our license agreements for these brands grant us the exclusive right, for the terms of the license agreements, to use certain Sheraton and Westin marks and intellectual property in our vacation ownership business, and the right to use the St. Regis brand for specified fractional ownership products. In addition, we assumed a license agreement with Hyatt that we entered into with Marriott International (the “Marriott Rewards Agreement”), we participate ingrants us the Marriott Rewards customer loyalty program; this participation includesexclusive global use of the ability to purchase and use Marriott Rewards pointsHyatt brand in connection with the Hyatt Vacation Ownership business. Our license agreement with Hyatt was amended and restated effective January 2020.

We operate in a highly competitive industry and our Marriott-branded vacation ownership business. The Marriott Rewards Agreement is coterminous withbrand names, trademarks, service marks, trade names and logos are very important to the Marriott License Agreement.

Under our exclusive rights with respect to access to the Marriott Rewards program and member lists and Marriott International’s reservation system and marriott.com website in exchange for the following:

Through our relationship with Hyatt, our owners who are members of the World of Hyatt customer loyalty program members upon consolidation ofgenerally have the Marriottability to redeem their vacation ownership usage rights to access participating Hyatt-branded properties or other products and Starwood loyalty programs.services offered through the program.

Our strategic goal is to further strengthen our leadership position in the vacation ownership industry. To achieve this goal, we are pursuing the following initiatives:

We intend to continue to generate growth in vacation ownership sales by leveraging our globally recognized brand names and targeting high-quality inventory that allows us to add desirable new destinations to our systemsystems with new on-site sales locations. We expect to focus our effortscontinue to generate growth through our integrated platform that provides exclusive access to the world-class loyalty programs of Marriott Vacation Club points-based ownership programs focused in North AmericaInternational and Asia Pacific.Hyatt. We will also continue to focus on our approximately 400,000 ownersover 650,000 owner families around the world. In 2017, approximately 66 percent of our sales of vacation ownership products were to our existing owners. In addition, weWe are concentrating on growing our tour flow cost effectively as we seek to generate moregrow first-time buyer tours and achievethrough our longer term goal of selling to an equal mix of new buyers and existing buyers. Our strategy includes an emphasis onthat emphasizes new sales locations and new marketing channels, geared toward driving first-time buyer tour growth. including digital and social media marketing. As the vacation ownership business continues to grow sales and we add new resorts, our vacation ownership revenue streams from consumer financing, management fees, rentals and ancillary services are expected to grow.

We also plan to grow our recurring revenues which tend to be less capital intensive than sales of vacation ownership. Our recurring revenues include management of resorts and owners’ associations, financing revenues, and membership, club and other revenues in both our Vacation Ownership and Exchange & Third-Party Management segments. These revenues generally are also committedmore predictable due to maximizing development marginthe relatively fixed nature of resort operating expenses and, in the case of management and exchange revenues, contractual agreements that typically span many years and are often automatically renewable. Financing revenues are relatively stable as the majority of these revenues generated in any given year come from prior year note originations.

We expect to maintain an attractive leverage profile. We intend to meet our ongoing liquidity needs through cash on hand, operating cash flow, our $600 million revolving credit facility (the “Revolving Corporate Credit Facility”), our $350 million non-recourse warehouse credit facility (the “Warehouse Credit Facility”), and continued access to the asset-backed securities (“ABS”) term financing market. We believe this will enable us to maintain a level of liquidity that provides financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic downturns, optimize our cost of capital, and pursue strategies for returning excess capital to shareholders.

A key area of focus for us is the expansion of digital tools to drive more efficient digital marketing and sales spendingenhance user experience for our owners and managing inventory costsmembers of our exchange and development activities.other membership programs. We intend to build efficiencies in our cost of delivery of marketing and to enhance the experience of our owners by seeking new data driven approaches and enhancing digital tools.

We are in the business of providingprovide high-quality vacation experiences to our owners, members, and guests around the world. We intend to maintainworld and improve their satisfaction with our products and services, particularly because our owners and guests are our most cost-effective sales channels. We intend to continue to sell our products through these very effective channels andwe believe that maintaining a high level of engagement across all of our customer groups is key to our success. We intend to maintain and improve their satisfaction with our products and services, which drives incremental sales as customers choose to spend more time at our resorts. Because our owners, members, and guests are our most cost-effective vacation ownership sales channels, we intend to continue to leverage our strong customer satisfaction to drive higher margin sales volumes. We intend to provide innovative offerings in new destinations to meet the needs of current and future customers. We alsocustomers and intend to develop new offerings to attract the next generation of travelers looking for a greater variety of experiences with the high quality standards expected from a brandbrands they trust.

Engaging our associates in the success of our business continues to be one of our long-term core strategies. We understand the connection between the engagement of our associates and the satisfaction and engagement of our owners, members, and guests. At the heart of our culture is the belief that if we take care of our associates, they will take care of our owners, members, and guests and the owners, members, and guests will return again and again.

ThroughAs we continue to further integrate the use of our points-based products,ILG businesses, we are able to more closely match inventory investment with sales pace and reduce inventory levels, thereby generating strong cash flows over time. Additionally, by limiting the amount of completed inventory on hand, we are able to reduce the maintenance fees that we pay on unsold inventory. Over the last few years, we have significantly reduced our costs, and we intend to continue to control costs as sales volumes grow. We also seek to optimize our inventory investments by targeting high-quality inventory that allows us to add desirable new destinations to our system as well as new on-site sales locations. We seek to use capital efficient deal structures that may includesimultaneously working with third parties to develop new inventory or convert previously built units to be sold togrowth channels and streamline our business processes through technology. We are focused on integrating functions, leveraging strengths across our businesses, and pursuing transformational opportunities that can further differentiate us close to when we need such inventory. We also proactively buy back previously sold vacation ownership interests at lower costs than would be required to develop new inventory.

We are positioned to explore new business opportunities, such as the continued enhancement of our exchange programs, new management affiliations, and acquisitions of existing vacation ownership and related businesses. We intend to selectively pursue these types of opportunities, focusing on those opportunities that drive recurring revenue and profit streams. Prior to entering into any new business opportunity, we will evaluate its strategic fit and assess whether it is complementary to our current business, has strong expected financial returns and complements our existing competencies.

We design, build, manageare one of the world’s largest vacation ownership companies, based on number of owners, members, number of resorts and maintainrevenues. We believe our properties at upscalescale and luxury levels under fourglobal reach, coupled with our renowned brands in accordanceand development, marketing, sales, exchange and management expertise, help us achieve operational efficiencies and support future growth opportunities. Our size allows us to provide owners, members, and guests with the flexibility of a wide variety of experiences within our high-quality resort portfolio, coupled with the ease and certainty of working with a single trusted provider. We also believe our size helps us obtain better financing terms from lenders, achieve operational cost savings from our increased scale, and attract talented management and associates. Our Interval International network includes members and resorts from our Marriott, Westin, Sheraton and Ritz-Carlton brand standardsHyatt clubs that can attract developers and homeowners associations to affiliate with which we must comply under the License Agreements.network and provide an opportunity for their owners to exchange into our branded resorts, as well as other member resorts that are a part of the quality international network.

We believe that our signature offeringexclusive licenses with Marriott International and Hyatt for premier global brands in the upscale tier of the vacation ownership industry.business provide us with a meaningful competitive advantage. Through seven brands that we license from Marriott International for use in vacation ownership, we benefit from exclusive long-term access to the 147 million members in the Marriott Bonvoy loyalty program as of December 31, 2020. Through our relationship with Hyatt, we benefit from access to members of the World of Hyatt loyalty program, which includes over 25 million members as of December 31, 2020. We believe our access to guests with an affinity for our brands aids our marketing efforts and significantly enhances our ability to drive future sales, as we predominantly generate vacation ownership interest sales through brand loyalty-affiliated sales channels. We expect to continue to leverage our exclusive call transfer arrangements, on-site marketing at Marriott branded hotels, and use of certain exclusive marketing rights to increase sales across all of our Marriott-affiliated vacation ownership properties.

We have a large, highly satisfied customer base. Owner and member satisfaction is evidenced both by positive historical survey responses and higher than industry average historical resort occupancy for our Vacation ClubOwnership segment. We believe that strong customer satisfaction and brand loyalty result in more frequent use of our products, increase in member retention, and encourage owners to purchase additional products and to recommend our products to friends and family, which in turn generates higher revenues.

Our Vacation Ownership segment develops, markets, sells, rents, and manages vacation ownership and related products under our licensed brands. Our vacation ownership resorts typically combine many of the comforts of home, such as spacious accommodations with one, two and three bedroom options, living and dining areas, in-unit kitchens and laundry facilities, with resort amenities such as large feature swimming pools, restaurants and bars, convenience stores, fitness facilities and spas, as well as sports and recreation facilities appropriate for each resort’s unique location.

We sell the majority of our products through ourpoints-based ownership programs, including Marriott Vacation Club points-based ownership programs focused in North AmericaDestinations, Sheraton Flex, Westin Flex, Westin Aventuras, and Asia Pacific.the Hyatt Residence Club Portfolio Program. While the structural characteristics of each of our points-based programs differ, in each program, owners receive an annual allotment of points representing owners’ usage rights, and owners can use these points to access vacation ownership units across multiple destinations within their program’s portfolio of resort locations. Each program permits shorter or longer stays than a traditional weeks-based vacation ownership product and provides for flexibility with respect to check-in days and size of accommodations. In addition to traditional resort stays, the programs enable our owners to utilizeexchange their points for thea wide variety of innovative

Our points programs allow owners to bank and borrow their annual point allotments, access other Marriott Vacation Club locations through the applicable internal exchange programs that we and Interval International operate, and access Interval International’s approximately 3,000network of nearly 3,200 affiliated resorts. Owners can also trade their vacation ownership usage rights for Marriott RewardsBonvoy points or World of Hyatt points, as applicable, which can be used to access the vast majority of Marriott International’s system of over 4,600 participating hotels or redeem their Marriott Rewards pointsredeemed for airline miles or other merchandise offered through the Marriott Rewardssuch customer loyalty program. Our points-based products offer usage in perpetuity or for a term of years, and may consist of real estate interests or a contractual right-to-use.

We continue to sell Marriott Vacation Club, Westin, Sheraton and Hyatt branded weeks-based vacation ownership products in select markets, including in countries where legal and tax constraints currently limit our ability to include those locations in one of our existing points-based programs. We offerOur products include multi-week vacation ownership interests in specific Grand Residences by Marriott, St. Regis Residence Club, The Luxury Collection Residence Club, and The Ritz-Carlton Destination Club resorts, but we also intend to continue placing luxury branded inventory into our points-based ownership program focused in North America, Marriott Vacation Club Destinations (“MVCD”).resorts. Our Marriott Vacation Club, Grand Residences by Marriott and The Ritz-Carlton Destination Club weeks-based vacation ownership products in the United States and select Caribbean locations are typically sold as fee simple deeded real estate interests at a specific resort representing an ownership interest in perpetuity, except where restricted by leasehold or other structural limitations. We sell vacation ownership interests as a right-to-use product subject to a finite term under the Marriott Vacation Club brand in Asia Pacific and Europe and under the Grand Residences by Marriott brand in Europe.

As partAll of our vacation ownership products are affiliated with the launch of the MVCD program in 2010, we began offeringInterval International network.

We offer our existing Marriott Vacation Club owners who hold weeks-based products in the United States and Caribbean the opportunity to participate, on a voluntary basis, in MVCD’sMarriott Vacation Club Destinations (“MVCD”), an exchange program through which many of MVCD’s vacation experiences are offered. We began offering the opportunity to participate in the exchange program to owners who hold weeks-based products in Europe in 2012 and to owners who hold weeks-based products in Asia Pacific in 2016. All existing owners, whether or not they electedelect to participate in the MVCD exchange program, retainedretain their existing rights and privileges of vacation ownership. Owners who electedelect to participate in the exchange program receivedreceive the ability to trade their weeks-based interval usage for vacation club points usage each year, typically subject to payment of an initial enrollment fee and annual fees.club dues. As of the end of 2017,2020, approximately 176,000182,000 weeks-based owners have enrolled nearly 280,000approximately 287,000 weeks in MVCD’s exchange program since its launch.launch in 2010, with more than 236,000 total owners able to use points.

We generate most of our revenues from four primary sources: selling vacation ownership products; managing our resorts;vacation ownership resorts, clubs, and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.

Our principal source of revenue is the sale of vacation ownership interests. See “—Marketing and Sales Activities” below for information regarding our marketing and sales activities.

We generate revenue from fees we earn for managing each of our resorts. See “—Management Activities” below for additional information on the terms of our management agreements. In addition, we earn revenue for providing ancillary offerings, including food and beverage, retail, and golf and spa offerings at our resorts. We also receive annual fees, club dues, settlement fees from the sale of vacation ownership products, and certain transaction-based fees from owners and other third parties, including external exchange service providers with which we are associated.

We earn interest income on loans that we provide to purchasers of our vacation ownership interests, as well as loan servicing and other fees. See “—Consumer Financing” below for further information regarding our consumer financing activities.

We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs or as residences, or inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs. By using Marriott.com and other direct booking channels to rent available inventory, we are able to reach potential new members who may already have an affinity for and loyalty to the Marriott, Ritz-Carlton, Sheraton and Westin brands and introduce them to our products.

We sell our upper upscale tier vacation ownership products under the Marriott Vacation Club brandour brands primarily through our worldwide network of resort-based sales centers and certain off-site sales locations. Marriott Vacation Club productsOur vacation ownership interests are currently marketed for sale throughout the United States and in over 3025 countries around the world, targeting customers who vacation regularly with a focus on family, relaxation and recreational activities. In 2017, approximately2020, over 90 percent of our vacation ownership contract sales originated at sales centers that are co-located with one of our resorts. We maintain a range of different off-site sales centers, including our central telesales organization based in Orlando and our network of third-party brokers in Latin America and Europe, and our city-based sales centers, such as our sales centers in Dubai and Singapore.Europe. We have nearly 60more than 80 global sales locations focused on the sale of Marriott Vacation Club products.vacation ownership interests. We utilize a number of marketing channels to attract qualified customers to our sales locations, for our Marriott Vacation Club products.including digital and social media marketing.

We solicit our existing owners primarily while they are staying in our resorts, but also offer our owners the opportunity to make additional purchases through direct phone sales, owner events and inquiries from our central customer service centercenters located in Salt Lake City, Utah.Utah, Orlando, Florida, and Palm Springs, California. In 2017,2020, approximately 6673 percent of our sales of vacation ownership productscontract sales were to our existing owners. In addition, we are concentrating on growing our tour flow cost effectively as we seek to generate more first-time buyer tours and achievethrough our longer term goal of selling to an equal mix ofstrategy that emphasizes adding new buyerssales locations and existing owners. Our strategy includes an emphasis on new marketing channels geared toward driving first-time buyer tour growth.

We also market to existing Marriott Rewardsand Hyatt customer loyalty program members and travelers who are staying in locations where we have like-branded resorts. We market extensively to guests in Marriott International or Hyatt hotels that are located near one of our sales locations and havelocations. We also market through call transfer arrangements with Marriott International pursuant to which callers to certain of its reservation centers are asked if they would like to be transferred to one of our representatives that can tell them about our products. In addition, we operate other local marketing venues in various high-traffic areas. A significant part of our direct marketing activities are focused on prospects in the Marriott Rewardsand Hyatt customer loyalty program databasedatabases and our in-house databasedatabases of qualified prospects. We offer guests who do not buy a vacation ownership interest during their initial tour the opportunity to purchase an “Encore”a return package for a future stay at our resorts. These return guests are nearly twice as likely to purchase as a first-time visitor. We are also focused on

One of our key areas of focus is expanding our use of social media and digital marketing channels. We are focused on building stronger brand reputation associations via social media audience growth, community engagement, and data driven content marketing.

Our Marriott Vacation Club sales tours are designed to provide our guests with an overview of our company and our products, as well as a customized presentation to explain how our products and services can meet their vacationing needs. Our sales force is highly trained in a consultative sales approach designed to ensure that we meet customers’ needs on an individual basis. We hire our Marriott Vacation Club sales executives based on stringent selection criteria. After they are hired, they spend a minimum of four weeks in product and sales training before interacting with any customers. We manage our sales executives’ consistency of presentation and professionalism using a variety of sales tools and technology and through a post-presentation survey of our guests that measures many aspects of each guest’s interaction with us.

We believe consumers place a great deal of trust in the Marriott, Westin, Sheraton, Ritz-Carlton and Ritz-CarltonHyatt brands and the strength of these brands is important to our ability to attract qualified prospects in the marketplace. We maintain a prominent presence on the www.marriott.com, www.ritzcarlton.com and www.ritzcarlton.comwww.hyatt.com websites. Our proprietary sites which include www.marriottvacationsworldwide.com, www.marriottvacationclub.com, www.ritzcarltonclub.com, www.vistana.com, www.theresidenceclub.com, and www.ritzcarltonclub.com, had over 5.2 million visits in 2017.www.hyattresidenceclub.com.

We secure inventory by building additional phases at our existing resorts, repurchasing previously sold inventory in the secondary market, repurchasing inventory as a result of owner loan or maintenance fee defaults, or developing or acquiring inventory at resorts in strategic markets. We proactively buy back previously sold vacation ownership interests under our repurchase programprograms at lower costs than would be required to develop new inventory. Efficient use of our capital is also achieved through our points-based business model, which allows us to supply many sales locations with new inventory sourced from a small number of resort locations.

We intend to continue to selectively pursue growth opportunities primarily in North America and Asia Pacific by targeting high-quality inventory that allows us to add desirable new destinations to our system with new on-site sales locations in ways that optimize the timing of our capital investments. These capital efficient vacation ownership deal structures may include working with third parties to develop new inventory or to convert previously built units to be sold to us close to when we need such inventory.

Co-located resorts require cooperation and coordination among all parties and are subject to cost sharing and integration agreements among us, the applicable property owners’ association and managers and owners of the co-located hotel. Our License Agreementslicense agreements with Marriott International and Ritz-CarltonHyatt allow for the development of co-located properties in the future, and we intend to opportunistically pursue co-located projects with them.

Owners generally can offer their vacation ownership interests for resale on the secondary market, which can create pricing pressure on the sale of developer inventory. However, owners who purchase vacation ownership interests on the secondary market typically do not receive all of the benefits that owners who purchase products directly from us receive. When an owner purchases a vacation ownership interest directly from us or a resale on the secondary market, the owner receives certain entitlements that are tied to the underlying vacation ownership interest, such as the right to reserve a resort unit that underlies their vacation ownership interest in order to occupy that unit or exchange its use for use of a unit at another resort through an outsideexternal exchange service provider, as well as benefits that are incidental to the purchase of the vacation ownership interest. While aHowever, the purchaser on the secondary market will receive all of the entitlements that are tied to the underlying vacation ownership interest, the purchaser ismay not be entitled to receive certain incidental benefits. For example, owners who purchase our products on the secondary market have restrictedbenefits such as full access to our internal exchange programs and are not entitledor the right to trade their usage rights for Marriott RewardsBonvoy points. Therefore, those owners may only be entitled to use the inventory that underlies the vacation ownership interests they purchased. Additionally, mostmany of our vacation ownership interests provide us with a right of first refusal on secondary market sales. We monitor sales that occur in the secondary market and exercise our right of first refusal when it is advantageous for us to do so, whether due to pricing, desire for the particular inventory, or other factors. All owners, whether they purchase directly from us or on the secondary market, are responsible for the annual maintenance fees, property taxes and any assessments that are levied by the relevant property owners’ association, as well as any exchange service membership dues or service fees.

We enter into a management agreement with the property owners’ association or other governing body at each of our resorts and, when a trust holds interests in resorts, with the trust’s governing body. In exchange for a management fee, we typically provide owner account management (reservations and usage selection), housekeeping, check-in, maintenance and billing and collections services. The management fee is typically based on either a percentage of the budgeted costs to operate such resorts or a fixed fee arrangement. We earn these fees regardless of usage or occupancy. We also receive revenues that represent reimbursement for certain costs we incur under our management agreements, which are principally payroll-related costs at the locations where we employ the associates providing on-site services.

The terms of our management agreements generally range from three to ten years and are generally subject to periodic renewal for one to five year terms. Many of these agreements renew automatically unless either party provides advance notice

The Ritz-Carlton Hotel Company manages the on-site operations for The Ritz-Carlton Destination Club and The Ritz-Carlton Residences properties in our portfolio under separate management agreements with us. We provide property owners’ association governance and vacation ownership program management services for The Ritz-Carlton Destination Club and co-located The Ritz-Carlton Residences properties, including preparing association budgets, facilitating association meetings, billing and collecting maintenance fees, and supporting reservations, vacation experience planning and other off-site member services. We and The Ritz-Carlton Hotel Company typically split the management fees equally for these resorts. If a management agreement for a resort expires or is terminated, the resort loses the ability to use the Ritz-Carlton name and trademarks. The owners at such resorts also lose their ability to access other usage benefits, such as access to accommodations at other The Ritz-Carlton Destination Club resorts, preferential access to Ritz-Carlton hotels worldwide and access to our internal exchange and vacation travel options.

Each management agreement requires the property owners’ association, trust association or other governing body to provide sufficient funds to pay for the vacation ownership program and operating costs. To satisfy this requirement, owners of vacation ownership interests pay an annual maintenance fee. This fee represents the owner’s allocable share of the costs of operating and maintaining the resorts or interests in the timeshare plan in which they hold a vacation ownership interest, including management fees and expenses, taxes (in some locations), insurance, and other related costs, and the costs of providing program services (such as reservation services). This fee includes a management fee payable to us for providing management services as well as an assessment for funds to be deposited into a capital asset reserve fund and used to renovate, refurbish and replace furnishings, common areas and other resort assets (such as parking lots or roofs) as needed over time. As the owner of completed but unsold vacation ownership inventory, we also pay maintenance fees in accordance with the legal requirements of the jurisdictions applicable to such resorts and programs. In addition, in early phases of development at a resort, we sometimes enter into subsidy agreements with the property owners’ associations under which we agree to pay costs that otherwise would be covered by annual maintenance fees associated with vacation ownership interests or units that have not yet been built. These subsidy arrangements help keep maintenance fees at a reasonable level for owners who purchase in the early stages of development.

In the event of a default byIf an owner defaults in payment of maintenance fees or other assessments, the property owners’ association typically has the right to foreclose on or revoke the defaulting owner’s vacation ownership interest. We have entered into arrangements with several property owners’ associations to assist in reselling foreclosed or revoked vacation ownership interests in exchange for a fee, or to reacquire such foreclosed or revoked vacation ownership interests from the property owners’ associations.

We offer purchase money financing for purchasers of our vacation ownership products who meet our underwriting guidelines. By offering or eliminating financing incentives and modifying underwriting standards, we have been able to increase or decrease the volume of our financing activities depending on market conditions. We are not providing financing to buyers of our residential products. We generally do not face competition in our consumer financing business to finance sales of vacation ownership products.

In 2020, our North America segment in 2017, approximately 64financing propensity was 51 percent of Marriott Vacation Club customers financed their purchase with us. Theand the average loan originated by us for our Marriott Vacation Clubvacation ownership products totaled approximately $26,200,$26,100, which represented 8575 percent of the average purchase price. Our policy is toWe require a minimum down payment of 10 percent of the purchase price, although down payments and interest rates are typically higher for applicants with credit scores below certain levels and for purchasers who do not have credit scores, such as non-U.S. purchasers. The average interest rate for originated loans for our Marriott Vacation Club products originated in 20172020 was 12.1313.1 percent and the average term was 10.212 years. Interest rates are fixed and a loan fully amortizes over the life of the loan. The average monthly mortgage payment for a Marriott Vacation Cluban owner who received a loan in 20172020 was $406.$338. We do not impose any prepayment penalties. Generally, loans for The Ritz-Carlton Destination Club products have a significantly higher balance, a longer term and a lower interest rate than loans for our Marriott Vacation Club products.

In 2017,2020, approximately 9194 percent of our loans were used to finance U.S.-based products. In our North AmericanAmerica business, we perform a credit investigation or other review or inquiry to determine the purchaser’s credit history before originating a loan. The interest rates on the loans we provide are based primarily upon the purchaser’s credit score, the size of the purchase, and the term of the loan. We base our financing terms largely on a purchaser’s FICO score, which is a branded version of a consumer credit score widely used in the United States by banks and lending institutions. FICO scores range from 300 to 850 and are calculated based on information obtained from one or more of the three major U.S. credit reporting agencies that compile and report on a consumer’s credit history. In 2017,2020, the average FICO score of our customers who were U.S. citizens or residents who financed a vacation ownership purchase was 743; 75731; 69 percent had a credit score of over 700, 9187 percent had a credit score of over 650 and 9896 percent had a credit score of over 600.

We use other information to determine minimum down payments and interest rates applicable to loans made to purchasers who do not have a credit score or who do not reside within the United States, such as regional historical default rates and currency fluctuation risk.

In the event of a default, we generally have the right to foreclose on or revoke the defaulting owner’s vacation ownership interest. We typically resell interests that we reacquire through foreclosure or revocation or place such interests into one of our points-based programs.

We securitize the majority of the consumer loans we originate in support of our North Americanvacation ownership business. Historically, we have sold these loans to institutional investors in the ABS market on a non-recourse basis, completing securitization transactions once or twice each year.basis. These vacation ownership notes receivable securitizations provide funding for us at interest rates similar to those available to companies with investment grade credit ratings, and transfer the economic risks and substantially all the benefits of the consumer loans we originate to third parties. In a vacation ownership notes receivable securitization, various classes of debt securities issued by a special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable. During 2017,2020, we completed one securitization transaction, which is discussed in detail in Footnote No. 10, “Debt,”16 “Securitized Debt” to our Financial Statements. On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize eligible consumer loans.loans derived from certain branded vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which we intend to continue to complete at least once per year. Since 2000, we have issued approximately $5.0almost $7 billion of debt securities in securitization transactions in the ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions. We retain the servicing and collection responsibilities for the loans we securitize, for which we receive a servicing fee.

We believealso offer additional vacation rental opportunities to members of the Interval International network and certain other membership or affinity programs at attractive rates through Getaways. Getaways allow members to rent resort accommodations for a fee, plus applicable taxes. Resort accommodations available as Getaways consist of seasonal oversupply of vacation ownership accommodations within the applicable exchange network, as well as resort accommodations we source specifically for use in Getaways.

Interval International network members may take advantage of one of our two enhanced membership tiers, Interval Gold or Interval Platinum, each of which provides value-added benefits and services for an additional fee. These benefits and services vary by country of residence, but generally consist of discounts on Getaways, a concierge service, a hotel discount program and Interval Options, a service that competitionallows members to relinquish annual occupancy rights in their vacation ownership interests towards the purchase of various travel products, including hotel, cruise, golf and spa vacations. Members are enrolled in these programs either by resort developers in connection with the initial purchase of their vacation ownership interests or by upgrading their membership directly.

Interval International also markets products and services to resort developers and other parties in the vacation ownership industry isthrough a series of business development initiatives. Our sales and services personnel proactively seek to establish strong relationships with developers and owners’ associations, providing input on consumer preferences and industry trends based primarily on the quality, number and locationupon years of vacation ownership resorts, trust in the brand, pricing of product offerings and the availability of program benefits, such as exchange programs and access to affiliated hotel networks. Vacation ownership isexperience. We believe that we have established a vacation option that is positioned and sold as an attractive alternative to vacation rentals (such as hotels, resorts and condominium rentals) and second home ownership. The various segmentsstrong reputation within the vacation ownership industry as being highly responsive to the needs of resort developers, owners’ associations, management companies and owners of vacation ownership interests. In addition, we sponsor, participate in and attend numerous industry conferences around the world to provide potential and existing industry participants opportunities to network and learn more about vacation ownership.

Vacation Resorts International and Trading Places International provide management services to vacation ownership resorts pursuant to agreements with terms generally ranging from one to ten years, many of which are differentiatedautomatically renewable. Generally, our management fees are paid by the quality levelowners’ association and funded from the annual maintenance fees paid by the individual owners to the association. These maintenance fees represent each owner’s allocable share of the accommodations, rangecosts of servicesoperating and ancillary offerings,maintaining the resorts, which generally includes personnel, property taxes, insurance, a capital asset reserve to fund refurbishment and price. We believe thatother related costs. The management fees we have significant competitive advantages that support our leadership position inearn are highly predictable due to the vacation ownership industry.

Aqua-Aston provides management and rental services for condominium owners, hotel owners, and owners’ associations. The condominium rental properties are generally investment properties, and, to a lesser extent, second homes, owned by individuals who contract with Aqua‑Aston directly to manage, market and rent their properties, generally pursuant to short‑term agreements. We also offer such owners a comprehensive package of marketing, management and rental services designed to enhance rental income and profitability. Generally, owners’ association management services, including administrative, fiscal and quality assurance services, are provided pursuant to exclusive agreements with terms typically ranging from one to ten years or more, many of which are automatically renewable. Revenue is derived principally from fees for management of the world’s largest “pure-play” vacation ownership companies (thathotel, condominium resort, or owners’ association as well as related rental services. Management fees consist of a base management fee and, in some instances for hotels or condominium resorts, an incentive management fee which is generally a company whose businesspercentage of operating profits or improvement in operating profits. Service fee revenue is focused almost entirely on vacation ownership), based on numberthe services provided internally or through third-party providers to owners including reservations, sales and marketing, property accounting and information technology services.

The success and continued growth of owners, numberthe Aqua-Aston business depends largely on our ability to source vacationers interested in booking vacation properties made available through our rental services. Our sales and marketing team in Honolulu, Hawaii, utilizes a variety of resortssales, marketing, revenue management and revenues. As a “pure-play” vacation ownership company, we are abledigital marketing initiatives to enhance our focus on the vacation ownership industryattract consumers and tailor our business strategyadditional properties to address our company’s industry-specific goalsAqua‑Aston. The team in Hawaii utilizes many channels of distribution including traditional wholesale through tour operators and needs.

Corporate and Other consists of results not specifically attributableallocable to an individual segment,our segments, including expenses in support of our financing operations, non-capitalizable development expenses incurred to support overall company development, company-wide general and administrative costs, corporate interest expense, consumer financing interest expenseILG acquisition-related costs, and provision for income taxes. In addition, Corporate and Other includes the fixed royalty fee payablerevenues and expenses relating to property owners’ associations consolidated under the License Agreements.

In general,Our revenue is influenced by the vacation ownershipseasonal nature of travel. Within our Vacation Ownership segment, our sales and financing business is modestly seasonal,experiences a modest impact from seasonality, with stronger revenue generationhigher sales volumes during the traditional vacation periods, including summer months and major holidays. These seasonal patterns may cause fluctuations in quarterly revenues and margins.periods. Our vacation ownership management business doesbusinesses generally do not experience significant seasonality.seasonality, with the exception of our resort operations revenue, which tends to be higher in the first quarter.

Competition in the vacation ownership industry is driven primarily by the quality, number and location of vacation ownership resorts, the quality and capability of the related property management program, trust in the brand, pricing of product offerings and the availability of program benefits, such as exchange programs and access to affiliated hotel networks. We believe that our focus on offering distinctive vacation experiences, combined with our financial strength, well-established and diverse market presence, strong brands, expertise and well-managed and maintained properties, will enable us to remain competitive. Vacation ownership is a vacation option that is positioned and sold as an attractive alternative to vacation rentals (such as hotels, resorts and condominium rentals) and second home ownership. The various segments within the vacation ownership industry can be differentiated by the quality level of the accommodations, range of services and ancillary offerings, and price. Our brands operate in the upper upscale and luxury tiers of the vacation ownership segment of the industry and the upper upscale and luxury tiers of the whole ownership segment (also referred to as the residential segment) of the industry.

Our competitors in the vacation ownership industry range from small vacation ownership companies to large branded hotelhospitality companies that operate or license vacation ownership businesses. In North America, and the Caribbean, we typically compete with companies that sell upper upscale tier vacation ownership products under a lodging or entertainment brand umbrella, such as Westin Vacation Club, Sheraton Vacation Club, Hilton Grand Vacations Club, Hyatt Residence Club and Disney Vacation Club, as well as numerous regional vacation ownership operators. Our luxury vacation ownership products compete with vacation ownership products offered by Four Seasons, Exclusive Resorts, Timbers Resorts and several other smaller independent

Outside North America, and the Caribbean, we operate vacation ownership resorts in two primary regions, Asia Pacific and Europe. In both regions, we are one of the largest lodging-branded vacation ownership companies operating in the upper upscale tier, with regional operators dominating the competitive landscape. Where possible, our vacation ownership properties in these regions are co-located with Marriott International branded hotels. In Asia Pacific, our owner base is derived primarily from the Asia Pacific region and secondarily from the Europe and North America regions. In Europe, our owner base is derived primarily from the North America, Europe and Middle East regions.

Recent and potential future consolidation in the highly fragmented vacation ownership industry may increase competition. For example, ILG, Inc., which operates the Interval International exchange program, acquired Hyatt Residence Club in October 2014 and Vistana Signature Experiences, Inc. (which includes the Westin and Sheraton brands) in May 2016. Diamond Resorts International, Inc. completed the acquisition of the vacation ownership business of Gold Key Resorts in October 2015 and the acquisition of the vacation ownership business of Intrawest Resort Club Group in January 2016. Consolidation may create competitors that enjoy significant advantages resulting from, among other things, a lower cost of, and greater access to, capital and enhanced operating efficiencies.

We believe that developers and owners’ associations generally choose to affiliate with an exchange network based on the spin-offquality of resorts participating in the network; the level of service provided to members; the range and level of support services; the flexibility of the exchange program; the demographics of the membership base; the costs for annual membership and exchanges; and the continuity of management and its vacation ownership operations in January 2017 and Hilton Grand Vacations Inc. is now a separate publicly traded company. In August 2017, Wyndham Worldwide announced plans to spin off its hotel business duringstrategic relationships within the first half of 2018 resulting in two separate, publicly traded companies, including a publicly traded vacation ownership company. In November 2017, Bluegreen Vacations Corporation completed an initial public offering that resulted in approximately 10 percent of its stock being held by the public. Competitors that are publicly traded companies may benefit from a lower cost of, and greater access to, capital, as well as more focused management attention.industry.

Our business is heavily regulated.regulated and compliance with regulations has a significant impact on our results of operations. We are subject to a wide variety of complex international, national, federal, state and local laws, regulations and policies in jurisdictions around the world. We have proactively worked with ARDA to encourage the enactment of responsible consumer-protection legislation and state regulation that enhances the reputation and respectability of the overall vacation ownership industry. We believe that, over time, our vacation ownership products and services helped improve the public perception of the vacation ownership industry.

Some laws, regulations and policies may impact multiple areas of our business, such as securities, anti-discrimination, anti-fraud, data protection and security and anti-corruption and bribery laws and regulations or government economic sanctions, including applicable regulations of the Consumer Financial Protection Bureau, the U.S. Department of the Treasury’s Office of Foreign Asset Control and the U.S. Foreign Corrupt Practices Act (“FCPA”). The FCPA and similar anti-corruption and bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or generating business. The collection, use and protection of personal data of our customers, as well as the sharing of our customer data with affiliates and third parties, are governed by privacy laws and regulations enacted in the United States and in other jurisdictions around the world, such as Europe’s new General Data Protection Regulation (the “GDPR”), which will become effective in May 2018.world. Other laws, regulations and policies primarily affect one of four areas of our business: real estate development activities; marketing and sales activities; lending activities; and resort management activities.

Our real estate development activities are regulated under a number of different timeshare, condominium and land sales disclosure statutes in many jurisdictions. We are generally subject to laws and regulations typically applicable to real estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions, environmental regulation, accessibility, title transfers, title insurance, and taxation. In the United States, these include, with respect to some of our products, the Fair Housing Act and the Americans with Disabilities Act. In addition, we are subject to laws in some jurisdictions that impose liability on property developers for construction defects discovered or repairs made by future owners of property developed by the developer.

Our marketing and sales activities are closely regulated. In additionregulated pursuant to laws and regulations implementing laws enacted specifically for the vacation ownership and land sales industries, as well as a wide variety of laws and regulations that govern our marketing and sales activities in the jurisdictions in which we carry out such activities, includingactivities. These laws and regulations implementinginclude the USA PATRIOT Act, Foreign Investment In Real Property Tax Act, the Federal Interstate Land Sales Full Disclosure Act and fair housing statutes, U.S. Federal Trade Commission (the “FTC”) and state “Little FTC Act”Acts” and other laws and regulations governing unfair, deceptive or abusive acts or practices including unfair or deceptive trade practices and unfair competition, state attorney general regulations, anti-fraud laws, prize, gift and sweepstakes laws, real estate, title agency or insurance, travel insurance and other licensing or registration laws and regulations, anti-money laundering, consumer information privacy and security, breach

Many jurisdictions, including many jurisdictions in the United States, Asia Pacific and Europe, require that we file detailed registration or offering statements with regulatory authorities disclosing certain information regarding the vacation ownership interests and other real estate interests we market and sell, such as information concerning the interests being offered, any projects, resorts or programs to which the interests relate, applicable condominium or vacation ownership plans, evidence of title, details regarding our business, the purchaser’s rights and obligations with respect to such interests, and a description of the manner in which we intend to offer and advertise such interests. Regulation outside the United States includes for example, European regulations tojurisdictions in which our vacation ownership activities withinclubs and resorts operate, such as the European Union, are subjectSingapore and Singaporean regulations to which certain of our Asia Pacific operations are subject.Mexico, among others. Among other things, the European and Singaporean regulations: (1) require delivery of specified disclosure (some of which must be provided in a specific format or language) to purchasers; (2) require a specified “cooling off” rescission period after a purchase contract is made;signed; and (3) prohibit any advance payments during the “cooling off” rescission period.

We must obtain the approval of numerous governmental authorities for our marketing and sales activities. Changes in circumstances or applicable law may necessitate the application for or modification of existing approvals. Currently, we are permitted to market and sell vacation ownership products in all 50 states and the District of Columbia in the United States and numerous countries in North and South America, the Caribbean, Europe, Asia and the Middle East. In Australia, ourOur Marriott Vacation Club Destinations, Australia points-based program is subject to regulation as a “managed investment scheme” by the Australian Securities & Investments Commission. In some countries our vacation ownership products are marketed by third partythird-party brokers.

Laws in many jurisdictions in which we sell vacation ownership interests grant the purchaser of a vacation ownership interest the right to cancel a purchase contract during a specified rescission period following the later of the date the contract was signed or the date the purchaser received the last of the documents required to be provided by us.

In recent years, regulators in many jurisdictions have increased regulations and enforcement actions related to telemarketing operations, including requiring adherence to the federal Telephone Consumer Protection Act (the “TCPA”) and similar “do not call” legislation. These measures have significantly increased the costs and reduced the efficiencies associated with telemarketing. While we continue to be subject to telemarketing risks and potential liability, we believe that our exposure to adverse effects from telemarketing legislation and enforcement is mitigated in some instances by the use of permission-based marketing, under which we obtain the permission of prospective purchasers to contact them in the future. We participate in various programs and follow certain procedures that we believe help reduce the possibility that we contact individuals who have requested to be placed on federal or state “do not call” lists, including subscribing to the federal and certain state “do not call” lists, and maintaining an internal “do not call” list.

Our lending activities are subject to a number of laws and regulations including those of applicable supervisory, regulatory and enforcement agencies such as, in the United States, the Consumer Financial Protection Bureau, the FTC, and the Financial Crimes Enforcement Network. These laws and regulations, some of which contain exceptions applicable to the timeshare industry or may not apply to some of our products, may include, among others, the Real Estate Settlement Procedures Act and Regulation X, the Truth In Lending Act and Regulation Z, the Federal Trade Commission Act, the Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Fair Housing Act and implementing regulations, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act and Regulation E, unfair, deceptive or abusive acts or practices regulations and the Consumer Protection Act, the USA PATRIOT Act, the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act, the Servicemembers Civil Relief Act and the Bank Secrecy Act. Our lending activities are also subject to the laws and regulations of other jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage lending, usury, fair debt collection practices, consumer debt collection practices, mortgage disclosure, lender or mortgage loan originator licensing and registration and anti-money laundering.

Our resort management activities are subject to laws and regulations regarding community association management, public lodging, food and beverage services, labor, employment, health care, health and safety, accessibility, discrimination, immigration, gaming, and the environment (including climate change). In addition, many jurisdictions in which we manage our resorts have statutory provisions that limit the duration of the initial and renewal terms of our management agreements for property owners’ associations and/or permit the property owners’ association for a resort to terminate our management agreement under certain circumstances (for example, upon a super-majority vote of the owners), even if we are not in default under the agreement.

The properties we manage or develop are subject to national, state and local laws and regulations that govern the discharge of materials into the environment or otherwise relate to protecting the environment. These laws and regulations include requirements that address health and safety; the use, management and disposal of hazardous substances and wastes; and emission or discharge of wastes or other materials. We believe that our management and development of properties comply, in all material respects, with environmental laws and regulations. Our compliance with such provisions also has not had a material impact on our capital expenditures, earnings or competitive position, nor do we anticipate that such compliance will have a material impact in the future.

We take our commitment to protecting the environment seriously. We have collaborated with Audubon International to further the “greening” of our Marriott Vacation Club resorts in our North America segmentthe U.S. through the Audubon Green Leaf Eco-Rating Program for Hotels. The Audubon partnership is just one of several programs incorporated into our green initiatives. We have more than 20 years of energy conservation experience that we have put to use in implementing our environmental strategy across all of our segments. This strategy includes further reducing energy and water consumption, expanding our portfolio of green resorts, including LEED (Leadership in Energy & Environmental Design) certification, educating and inspiring associates and guests to support the environment, and embracing innovation.

As of December 31, 20172020, we had a global workforce consisting of approximately 11,000 employees18,000 associates, of which almost 15,500 were based in the United States and approximately 2,500 were based in international locations.

As a leisure-focused company, we are in the business of bringing people together. Like our customers, our associates come from diverse backgrounds, offering invaluably distinct perspectives. Women comprise 53.7 percent of our worldwide workforce and men comprise 46.3 percent. Within the United States, people of color comprise 43.1 percent of our management level positions and women comprise 45.2 percent of our management level positions. We are striving to make progress with an average lengthrecruiting efforts related to the placement of servicewomen and people of nearly seven years. We believe our relations with our employees are very good.color in management roles.

Our investor relations website address is www.marriottvacationsworldwide.com.www.marriottvacationsworldwide.com/investor-relations. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and any and all amendments thereto are available free of charge through our investor relations website as soon as reasonably practicable after they are filed or furnished to the Securities and Exchange Commission (the “SEC”). These materials are also accessible on the SEC’s website at www.sec.gov.

This section describes circumstances or events that could have a negative effect on our financial results or operations or that could change, for the worse, existing trends in our businesses. The occurrence of one or more of the circumstances or events described below could have a material adverse effect on our financial condition, results of operations and cash flows and/or on the trading prices of our common stock. The risks and uncertainties described in this Annual Report are not the only ones facing us. Additional risks and uncertainties that currently are not known to us or that we currently believe are immaterial also may adversely affect our businesses and operations.

In March 2020, the World Health Organization declared the coronavirus (“COVID-19 pandemic”) outbreak a pandemic. In the wake of this declaration, our operations have been impacted by recommendations and mandates from national, federal, state, and local authorities to stay home, avoid non-essential contact and gatherings, and self-quarantine. Since March 16, 2020, we have seen marked declines in occupancy, rentals, and contract sales because of the global economytemporary closure of substantially all of our sales centers internationally, the temporary closure of many of our resorts, the temporary closure of our branded North America vacation ownership resorts for rental stays, and the reduction in operations and amenities at all of our resorts based on government mandates and advisories. In response to the pandemic, we have: implemented furloughs, reduced work hours and reduced salaries for our associates; instituted “work from home” measures for many of our associates; and implemented social distancing and enhanced hygiene protocols at our resorts, sales centers, and corporate offices. These measures to protect human life resulted in additional costs, operational inefficiencies, and fewer revenue opportunities. Protocols adopted to combat the COVID-19 pandemic, such as canceling, or low levelsimplementing alternatives to, in-person sales tours and customized presentations, have resulted, and could continue to result in, lesser effectiveness of economic growthcustomer-associate interaction and diminished customer satisfaction, which could adversely impact our financial resultscondition. As of December 31,

The COVID-19 pandemic had, and is expected to continue to have, a material adverse impact on global economies and financial markets, which resulted in our industry may lag behind overallan economic improvement. Demand for vacation ownership industry products and services is linked to a number of factors relating to general global, national and regional economic conditions, including perceived and actual economic conditions, exchange rates, availability of credit and business and personal discretionary spending levels. Weakened consumer confidence and limited availability of consumer credit can causedownturn that reduced demand for our vacation ownership products to decline, which may reduce our revenue and profitability. Because a significant portionservices. The success of our expenses, including personnel costs, interest, property taxes and insurance, are relatively fixed, we may not be able to adjust spending quickly enough to offset revenue decreases. Adverse economic conditions may also cause purchaser defaults on our vacation ownership notes receivable to increase. In addition, adverse global and national economic and political events, as well as significant terrorist attacks, are likely to have a dampening effect on the economy in general, which could negatively affect our financial performancebusiness and our stock price.

The terms of any future preferred equity or debt financing may give holders of any preferred equity or debt securities rights that are seniorCOVID-19 pandemic has led to rights of our common shareholders or dilute the ownership percentage of existing shareholders or impose more stringent operating restrictions on our company.

Our success and profitability depend, in substantial part, upon the health of the worldwide vacation ownership, vacation rental and travel industries, and may be adversely affected by a number of factors that can disrupt or deter travel. A substantial amount of our sales activity occurs at our resorts, and sales volume is affected by the number of visitors at our resorts. Fear of exposure to COVID-19 or other diseases, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including tours at our resorts. Other factors such as weakened consumer confidence, limited availability of consumer credit and damage to infrastructure caused by natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts. For example, hurricanes have caused a number of Interval International exchange network resorts and our managed vacation ownership resorts to close for prolonged periods. Actual or threatened war, civil unrest and terrorist activity, as well as heightened travel security measures instituted in response to the same, could also interrupt or deter travel plans. In addition, demand for our products and services may decrease if the cost of travel, including the cost of transportation and fuel, increases, airlift to vacation destinations decreases, or if general economic conditions decline.

Our ability to process exchanges for members and to find purchasers and renters for accommodations we market or manage, as well as the need for the vacation rental and property management services we provide, largely depends on the continued desirability of the key vacation destinations in which our branded, managed or exchange properties are concentrated. Changes in the desirability of the destinations where these resorts are located and changes in vacation and travel patterns may adversely affect our cash flows, revenue and profits.

Complying with the intricate and multifaceted regulatory structures applicable to our businesses across the globe is complicated, constantly evolving, time-consuming and costly. We may not be able to resell foreclosed interests in a timely manner or for an attractive price.

We rely on a variety of direct marketing techniques, including foreign ownership restrictions, importtelemarketing, email marketing and export controls, and trade restrictions;

We collect and retain large volumes of internal and customer data, including social security numbers, credit card numbers and other personally identifiable information of our customers and employees, and retain it in various internalour information systems and information systemsthose of our service providers. We also maintain personally identifiable information about our employees. The integrity and protection of that customer, employee and company dataIt is critical that we maintain the integrity of and protect this data, which we rely on to us. We could make faultybusiness decisions if that data is inaccurate or incomplete. Ourand which our customers and employees also have a high expectationexpect that we and our service providers will adequately protect their personal information.protect. The regulatory environment as well asin the jurisdictions where we operate and the requirements imposed on us by the payment card industry surroundingregarding information, security and privacy is also increasingly demanding,demanding. Many of the laws applicable to us in bothdifferent jurisdictions vary from each other in significant ways and may not have the United States and other jurisdictions in which we operate.same effect,

We may be required to do so.

Our international operations expose us to a number of additional risks, any of which could reduce our profits or disrupt our business, such instances.as: compliance with laws of non-U.S. jurisdictions, including foreign ownership restrictions, import and export controls, and trade restrictions, and U.S. laws affecting our activities outside of the U.S.; anti-American sentiment; political or civil unrest and terrorism; difficulties of managing operations in many different countries; local economic risks; foreign currency exchange risks; and uncertainty as to the enforceability of contract and intellectual property rights under local laws.

Our operations and competitive position depend on our ability to maintain existing systems and implement new technologies, which includes allocating sufficient resources to periodically upgrade ourtechnologies. Our information technology systems and to protect our equipment and the information stored in our databases against bothare potentially susceptible to manmade and natural disasters, as well as power losses, computer and telecommunications failures, technological breakdowns, unauthorized intrusions, cyber-attacks, acts of war or terrorism and other events. Conversions to newSystem interruption, delays, obsolescence, loss of critical data and lack of integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. Our backup systems only relate to certain aspects of our operations; these systems are not fully redundant and disaster recovery planning is not sufficient for all eventualities. Projects to upgrade or replace our technologies may be extremely complex and require effective change management processessignificant resources and time. We may result in cost overruns, delays or business interruptions.not have adequate insurance coverage to compensate for losses from a major interruption. If our information technology systems are disrupted, become obsolete or do notfail to adequately support our strategic, operational or compliance needs, our business, financial position, results of operations or cash flows may be adversely affected.affected, as well as our disclosure controls and procedures and internal control over financial reporting.

A series of Spanish court rulings that, since 2015, have voided certain timeshare contracts has increased our exposure to litigation that may materially adversely affect our business and financial condition. These rulings voided certain timeshare contracts entered into after January 1999 related to certain resorts in Spain if a resort’s timeshare structure did not meet requirements prescribed by Spanish timeshare laws enacted in 1998, even if the structure was lawful prior to 1998 and adapted pursuant to mechanisms specified in the 1998 laws. These rulings have led to an increase in lawsuits by owners seeking to void timeshare contracts in Spain, including certain contracts at certain of our resorts in Spain. We have prevailed in many such lawsuits, and legislation is being considered by the Spanish government to address the impact of these lawsuits on the industry. If additional owners at our resorts in Spain file similar lawsuits, this may: void certain of those owners’ timeshare contracts;

Our businesses will be adversely impacted if they cannot compete effectively in their respective industries, each of which is highly competitive. A number of highly competitive companies participate in the vacation ownership industry, including several that are affiliated with branded hotel companies. We believe that competition in the vacation ownership industry is driven primarily by the quality, number and location of vacation ownership resorts, trust in the brand, pricing of product offerings and the availability of program benefits, such as exchange programs and access to affiliated hotel networks.industry. Our brands compete with the vacation ownership brands of major hotel chains in national and international venues, as well as with the vacation rental options (such as hotels, resorts and condominium rentals) offered by the lodging industry. Innovations that impact the industryOur competitors may also lead to new products and services that could disrupt our business model and create new and stronger competitors.

JurisdictionsChanges in which we do business may at any time review tax and other revenue raising laws, regulations and policies and any resulting changesin the jurisdictions where we do business could impose new restrictions, costs or prohibitions on our current practices and reduce our profits. In particular, governments may revise tax laws, regulations or official interpretations in ways that could have a significant impact on us, including modifications that could reduce the profits that we can effectively realize from our non-U.S. operations, or that could require costly changes to those operations, or the way that we structure them. For example, the effective tax rates of most U.S. corporations reflect the fact that income earned and reinvested outside the United States is generally taxed at local rates, which are often much lower than U.S. tax rates. In addition, interpretation of tax regulations requires us to exercise our judgment and taxing authorities or our independent registered public accounting firm may reach conclusions about the application of such regulations that differ from our conclusions. If changesOur effective tax rate reflects the fact that income earned and reinvested outside the U.S. is generally taxed at local rates that are often much lower than U.S. tax rates as well as our ability to carryforward losses in certain jurisdictions from prior years to offset future profits. Changes to U.S. or international tax laws, regulations or interpretations were tocould impact the tax treatment of our earnings and adversely affect our profitability. For example, if such changes significantly increase the tax rates on non-U.S. income, our effective tax rate could increase, our profits could be reduced, and if such increases were a result of our status as a U.S. corporation, we could be placed at a disadvantage to our non-U.S. competitors if those competitors remainthat are subject to lower local tax rates.

On December 22, 2017, President Trump signed into law H.R. 1, originally known as the “Tax CutsWe are subject to audit in various jurisdictions, and Jobs Act,” which significantly reforms the Internal Revenue Code of 1986, as amended. The new legislation, among other things, includes changes to U.S. federal tax rates, imposes significantthese jurisdictions may assess additional limitations on the deductibility of interest, allows for the expensing of capital expenditures,taxes against us. Developments in an audit, litigation, or laws, regulations, administrative practices, principles, and shifts from a “worldwide” system of taxation in which U.S. companies are taxed on their global income to a territorial system in which U.S. companies are only taxed on income earned in the United States. Many aspects of the new legislation are unclear and may not be clarified for some time. We continue to examine the impact this tax reform legislation may have on our business, but have not yet been able to determine the full impact of the new laws on our business, operations or financial condition. The impact of certain provisions of this tax reform on our financial condition and results of operations could be adverse and such impact could be material.

Approximately 43 percent of our resorts and 20 percent of our sales centers are concentrated in Florida, South Carolina and Hawaii and, therefore, ourOur business is particularly susceptible to the effects of natural or manmade disasters, in these areas, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents.incidents, in the areas where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, South Carolina and Hawaii. For example, properties in these markets have had to close in the past in order to repair damage caused by disasters. Depending on the severity of thesefuture disasters, the resulting damage could require closure of all or substantially all of our properties in one or more of these markets for a period of time necessary towhile we complete repairs and renovations. We cannot guarantee that the amount ofOur insurance maintained for these properties wouldmay not cover all damages caused by any such an event, including the loss of sales of VOIs at sales centers that are not fully operational. In addition, insurance costs may increase and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

Our business is also particularly susceptible to the effects of adverse economic developments in these areas, such as regional economic downturns, significant increases in the number of our competitors’ products in these markets and potentially higher labor, real estate, tax or other costs in thethese geographic markets in which we are concentrated. As a resultmarkets. Because of this geographic concentration of properties, we face a greater risk of a negative effect on our revenues in the eventand profits if these areas are affected by extreme weather, manmade disasters or adverse economic and competitive conditions.

We have expanded in part through acquisitions of other businesses and may not be covered by insurance.

Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies, including policies relating to the recognition of revenue and determination of cost of sales, are highly complex and involve many assumptions, estimates and judgments. We are required to review these assumptions, estimates and judgments regularly and revise them when necessary. Our actual results of operations vary from period to period based on revisions to these estimates. For example, in response to the COVID pandemic, we increased our sales reserve due to higher default expectations and revised our estimates of the fair value of our reporting units, resulting in the impairment of goodwill. In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial Accounting Standards Board, periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements. Changes to these standards or their interpretation could significantly impact our reported results in future periods. See Footnote No. 1,2 “Summary of Significant Accounting Policies,”Policies” to our Financial Statements for more information regarding changes in accounting standards that we recently adopted or expect to adopt in the future.

The termination of our license agreements with Marriott International or its affiliates would materially harm our business and results of operations and materially impair our ability to market and sell our products and maintain our competitive position, and could have a material adverse effect on our financial position, results of operations or cash flows. Our inability to rely on the strength of the Convertible Notes, if triggered,Marriott, Sheraton and/or Westin brands to attract qualified prospects in the marketplace would likely cause our revenue and profits to decline and our marketing and sales expenses to increase. Our inability to market to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing partnerships with North American Marriott International reservation centers would cause our sales to decline, which could adversely affect our financial conditions and result of operations. In addition, we would not be able to use the brand websites as channels through which to rent available inventory, which would cause our rental revenue to decline materially.

We offer vacation ownership products and services under the Marriott, Sheraton, Westin, The Ritz-Carlton, and Hyatt brands. Our success depends in part on the continued success of Marriott International and Hyatt and their respective brands. If market recognition or the positive perception of Marriott International and/or Hyatt is reduced or compromised, the goodwill associated with these brands may be adversely affected, which may adversely affect our market share, reputation, business, financial condition or results of operations. The positioning and offerings of any of these brands and/or their related customer loyalty programs, could change in a manner that adversely affects our business.

In addition, we depend on third parties to make certain benefits available to members of the Convertible NotesInterval International exchange network. The loss of such benefits could result in a decrease in the number of Interval International members, which could have a materially adversely effect on our business, financial condition and results of operations.

Our exchange networks’ transaction levels depend on the supply of inventory in the system and demand for the available inventory. Exchange inventory is deposited in the system by members, or by developers on behalf of members, to support current or anticipated exchanges. Inventory supply and demand for specific regions and on a broader scope is influenced by a variety of factors, such as: economic conditions; health and safety concerns, including concerns and travel restrictions relating to the COVID-19 pandemic; the occurrence or threat of natural disasters and severe weather; and owner decisions to travel to their home resort/vacation club system or otherwise not deposit exchange inventory. The factors that affect demand for specific destinations could significantly reduce the number of accommodations available in such areas for exchanges. The level of inventory in our system also depends on the number of developers whose resorts are in our exchange networks, and the numbers of members of such resorts. The number of developers affiliated with our exchange networks may decrease for a variety of reasons, such as consolidation and contraction in the industry and competition. If inventory supply and demand do not keep pace, transactions may decrease or we may purchase additional inventory to fulfill the demand, both of which could negatively affect our profits.

Our vacation ownership notes receivable portfolio performance and securitization program could be adversely affected if any vacation ownership notes receivable pool fails to meet certain ratios, which could occur if the default rates or other credit metrics of the underlying vacation ownership notes receivable deteriorate. Default rates may deteriorate due to many different reasons, including those beyond our control, such as financial hardship of purchasers. In addition, if we offer loans to our customers with terms longer than those generally not permittedoffered in the industry, our ability to securitize those loans may be adversely impacted. Instability in the credit markets may impact the timing and volume of the vacation ownership notes receivable that we are able to securitize, as well as the financial terms of such securitizations. If ABS issued in our securitization programs are downgraded by credit agencies in the future, our ability to complete securitization transactions on acceptable terms or at all

Holders of our convertible notes may convert the Convertible Notes until June 15, 2022, inconvertible notes after the event the conditional conversion featureoccurrence of the Convertible Notes is triggered due to the trading price of the Convertible Notescertain dates or our common stock, holders of the Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.events. See Footnote No. 10,17 “Debt,” to our Financial Statements for additional information. If one or moreany holders elect to convert their Convertible Notes,convertible notes, we may elect to settle all or a portion of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

WeThe way we account for our convertible notes may not haveimpact our reported or future financial results and the ability to raise the funds necessary to settle conversions of the Convertible Notes or to repurchase the Convertible Notes upon a fundamental change.

In connection with the Convertible Notes,convertible notes, we entered into privately negotiated convertible note hedges (the “Convertible Note Hedges”) with affiliates of two of the initial purchasers of the Convertible Notes. The Convertible Note Hedges cover, subject to customary anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the same number of shares of common stock that initially underlay the Convertible Notes. The Convertible Note Hedges are expected generally to reduce potential dilution to our common stock and/or offset cash payments we are required tomust make in excess of the principal amount, in each case, upon any conversion of Convertible Notes. Concurrently with our entry into the Convertible Note Hedges, we entered into warrant transactions (the “Warrants”) withconvertible notes. We also issued warrants to the hedge counterparties relating to the same number of shares of common stock.counterparties. The Warrantswarrants could separately have a dilutive effect on our shares of common stock to the extent that the market price per share exceeds the applicable strike price of the Warrantswarrants on one or more of the applicable expiration dates.

In connection with establishing their initial hedges of the Convertible Note Hedgesconvertible note hedges and the Warrants,warrants, the hedge counterparties and/or their respective affiliates advised us that they expected to purchase shares of our common stock in secondary market transactions and/or enter into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the Convertible Notes. The hedge counterparties and/or their respective affiliatesstock. These parties may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasingbuying or selling our common stock in the secondary market. The effect, if any, of these activities on the market price of our common stock or the Convertible Notes will depend in part on market conditions and cannot be ascertained at this time, but anyAny of these activities could cause or prevent an increase or a decline in the market price of our common stock or the Convertible Notes.stock.

We are subject to counterparty risk with respect to the Convertible Note Hedges.

As of December 31, 2020, approximately $884 million of our gross aggregate consolidated indebtedness was indexed to the London Interbank Offered Rate (“LIBOR”) and we were party to $550 million of derivative instruments indexed to LIBOR. In addition, funding costs related to our $600 million Revolving Corporate Credit Facility and $350 million Warehouse Credit Facility, which were both undrawn at December 31, 2020 except for $3 million in letters of credit outstanding, are generally indexed to LIBOR. The U.K. authority that regulates LIBOR announced that it will not compel banks to submit rates for the calculation of LIBOR after June 2023. There is considerable uncertainty regarding the publication of such rates beyond June 2023. A committee convened by the U.S. Federal Reserve to oversee the transition process for LIBOR rates quoted in U.S. dollars recommended the Secured Overnight Financing Rate as the alternative to LIBOR rates quoted in U.S. dollars. Other authorities have recommended alternatives to LIBOR rates quoted in other currencies. The full impact of any transition away from LIBOR remains unclear and these changes may have a material adverse impact on the availability of financing, including LIBOR-based loans, and on our financing costs. To the extent our interest rates increase, our interest expense will increase, which could adversely affect our financial stability or viabilitycondition, operating results and cash flows.

Provisions of our Charter and Bylaws, as well as provisions in the agreements with our licensors, may delay or prevent a merger or acquisition that a shareholder may consider favorable. For example, our Charter and Bylaws provide for a classified board, require advance notice for shareholder proposals and nominations, place limitationslimits on convening shareholder meetings and authorize our Board of Directors to issue one or more series of preferred stock. TheseDelaware law also restricts some business combinations between any holder of 15 percent or more of our outstanding common stock and us. The fact that these provisions and statutory restrictions may also discourage acquisition proposals or delay or prevent a change in control which could harm our stock price. In addition, Delaware law also imposesrestricts some restrictions on mergers and other business combinations between any holder of 15 percent or more of our outstanding common stock and us.

In addition, provisions in our agreements with Marriott International may delay or prevent a merger or acquisition that a shareholder may consider favorable. Under the Tax Sharing and Indemnification Agreement, we agreed not to enter into any transaction involving an acquisition or issuance of our common stock or any other transaction (or, to the extent we have the right to prohibit it, to permit any such transaction) that could reasonably be expected to cause the distribution of our common stock to be taxable to Marriott International. We are required to indemnify Marriott International for any tax resulting from any such prohibited transaction, and we are required to meet various requirements, including obtaining the approval of Marriott International or obtaining an Internal Revenue Service (“IRS”) ruling or unqualified opinion of tax counsel acceptable to Marriott International, before engaging in such transactions. Further, our License Agreements with Marriott International and The Ritz-Carlton Hotel Company provide that a change in control may not occur withoutcould result in an acceleration of our obligations under the consentCorporate Credit Facility or the indentures that govern our senior notes. The threat of Marriott International or The Ritz-Carlton Hotel Company, respectively. Aour debt being accelerated in connection with a change in control for purposes of these agreements would occur if, among other things, a person or group acquires beneficial ownership of, or the power to exercise effective control over, shares of our common stock representingcould make it more than 15 percent of the combined voting power of the then-outstanding securities entitled to vote generally in elections of directors.

As of December 31, 2017,2020, our vacation ownership portfolio consisted of over 65100 properties in the United States and ninetwelve other countries and territories. These properties are described in Part I, Item 1, “Business,” of this Annual Report. Except as indicated in Part I, Item 1, “Business,” we own all unsold inventory at these properties. We also own, manage or lease golf courses, fitness, spa and sports facilities, undeveloped and partially developed land and other common area assets at some of our resorts in our Vacation Ownership segment, including resort lobbies and food and beverage outlets.

In addition, we own or lease our regional offices and sales centers, both in the United States and internationally. OurWe lease our corporate headquarters in Orlando, Florida consists of approximately 160,000 square feet of leased spaceunder leases that begin to expire in two buildings, under2021. In January 2020, we entered into a lease expiringagreement for our new global headquarters in August 2021. We also own anOrlando. The new office facilitybuilding will be developed by a third-party and is expected to be completed in Lakeland, Florida consisting of approximately 125,000 square feet.2024. See Footnote 15 “Leases” for information.

Currently, and from time to time, we are subject to claims in legal proceedings arising in the normal course of business, including, among others, the legal actions discussed under “Loss Contingencies” in Footnote No. 9,14 “Contingencies and Commitments,”Commitments” to our Financial Statements. While management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, cash flows, or overall trends in results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.

Not applicable.

Our common stock currently is traded on the New York Stock Exchange, or the “NYSE,” under the symbol “VAC.” The following table sets forthIn response to the highimpact of COVID-19, we temporarily suspended cash dividends. In May 2020, we entered into a waiver (the “Waiver”) to the agreement that governs our Corporate Credit Facility that, among other things, suspends our requirement to comply with the leverage covenant in the Revolving Corporate Credit Facility for up to four quarters, and low sales prices for our common stockprohibits us from making certain restricted payments, including dividends. In February 2021, we extended the suspension period included in the Waiver through the end of 2021. Subject to compliance with the Waiver, and the per share cash dividends we declared for each fiscal quarter during the last two fiscal years.

On February 23, 2018,19, 2021, there were 22,79125,731 holders of record of our common stock. Because many

On July 30, 2019, our Board of Directors authorized the extension of the duration of our then-existing share repurchase program to December 30, 2020, as well as the repurchase of up to 4.5 million additional shares of our common stock. Due to the impact of the impact of the COVID-19 pandemic, we temporarily suspended repurchasing shares of our common stock are held by brokers and other institutionsin April 2020. Our share repurchase program expired on behalf of shareholders, we are unable to determine the total number of shareholders represented by these record holders; however, we believe that there were approximately 39,500 beneficial owners of our common stock as of February 23, 2018.December 31, 2020.