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Document and Entity Information - shares	8 Months Ended
Document and Entity Information - shares	Sep. 09, 2011	Dec. 02, 2011
Document Information [Line Items]
Document Type	10-Q
Trading Symbol	VAC
Amendment Flag	false
Document Period End Date	Sep. 09, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Entity Registrant Name	MARRIOTT VACATIONS WORLDWIDE CORP
Entity Central Index Key	0001524358
Current Fiscal Year End Date	--12-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		33,708,051

INTERIM COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended		8 Months Ended
	Sep. 09, 2011	Sep. 10, 2010	Sep. 09, 2011	Sep. 10, 2010
REVENUES
Sales of vacation ownership products, net	$ 147	$ 138	$ 442	$ 436
Resort management and other services	57	52	165	154
Financing	39	43	119	133
Rental	53	49	148	138
Other	5	6	20	21
Cost reimbursements	77	72	235	223
TOTAL REVENUES	378	360	1,129	1,105
EXPENSES
Costs of vacation ownership products	61	51	177	172
Marketing and sales	81	78	235	238
Resort management and other services	47	47	138	135
Financing and other	11	11	28	30
Rental	55	38	149	130
General and administrative	18	19	56	55
Interest	10	12	32	40
Impairment (reversal)	324		324	(5)
Cost reimbursements	77	72	235	223
TOTAL EXPENSES	684	328	1,374	1,018
Equity in losses		(2)		(9)
Impairment reversals on equity investment	4		4
(LOSS) INCOME BEFORE INCOME TAXES	(302)	30	(241)	78
Benefit (provision) for income taxes	81	(11)	55	(29)
NET (LOSS) INCOME	$ (221)	$ 19	$ (186)	$ 49

INTERIM COMBINED BALANCE SHEETS - USD ($) $ in Millions	Sep. 09, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 25	$ 26
Restricted cash (including $50 and $45 from VIEs, respectively)	65	66
Accounts and contracts receivable (net of allowance of $1 and $1, respectively)	95	100
Notes receivable (including $864 and $1,029 from VIEs, respectively)	1,178	1,254
Inventory	1,014	1,412
Property and equipment	291	310
Deferred taxes	403	333
Other (including $5 and $7 from VIEs, respectively)	94	141
Total Assets	3,165	3,642
LIABILITIES AND DIVISIONAL EQUITY
Accounts payable	67	87
Advance deposits	56	48
Accrued liabilities	118	92
Deferred revenue	48	56
Payroll and benefits liability	71	72
Liability for Marriott Rewards loyalty program	179	220
Deferred compensation liability	63	64
Debt (including $830 and $1,017 from VIEs, respectively)	833	1,022
Other (including $4 and $4 from VIEs, respectively)	82	77
Total Liabilities	1,517	1,738
Contingencies and Commitments (Note 7)
Divisional Equity
Net Parent Investment	1,619	1,876
Accumulated other comprehensive income	29	28
Divisional Equity Attributable to Parent, Total	1,648	1,904
Total Liabilities and Divisional Equity	$ 3,165	$ 3,642

INTERIM COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Sep. 09, 2011	Dec. 31, 2010
Restricted cash, VIEs	$ 65	$ 66
Notes receivable, VIEs	1,178	1,254
Other, VIEs	94	141
Other, VIEs	82	77
Accounts and contracts receivable, allowance	1	1
Variable Interest Entity
Restricted cash, VIEs	50	45
Notes receivable, VIEs	864	1,029
Other, VIEs	5	7
Debt, VIEs	830	1,017
Other, VIEs	$ 4	$ 4

INTERIM COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	8 Months Ended
	Sep. 09, 2011	Sep. 10, 2010
OPERATING ACTIVITIES
Net (loss) income	$ (186)	$ 49
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation	23	24
Income taxes	(70)	48
Equity method loss		9
Impairment charge (reversal)	324	(5)
Real estate inventory spending less than cost of sales	92	86
Notes receivable collections in excess of new mortgages	53	69
Financially reportable sales less than closed sales	4	30
Decrease in accounts payable	(20)	(14)
All other, including other working capital charges	29	44
Net cash provided by operating activities	249	340
INVESTING ACTIVITIES
Capital expenditures for property and equipment (excluding inventory)	(11)	(18)
Dispositions	1
Net cash used in investing activities	(10)	(18)
FINANCING ACTIVITIES
Repayment of debt related to securitizations	(187)	(208)
Repayment of third party debt	(2)	(52)
Note collections	20
Net transfers to parent	(71)	(55)
Net cash used in financing activities	(240)	(315)
(DECREASE) INCREASE IN CASH AND EQUIVALENTS	(1)	7
CASH AND CASH EQUIVALENTS, beginning	26	32
CASH AND CASH EQUIVALENTS, end	$ 25	$ 39

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8 Months Ended

Sep. 09, 2011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our Business

Marriott Vacations Worldwide Corporation (“Marriott Vacations Worldwide,” “we” or “us,” which includes our combined subsidiaries except where the context of the reference is to a single corporate entity) is 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. We are also the exclusive global 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. The Ritz-Carlton Hotel Company, L.L.C. (“Ritz-Carlton”), a subsidiary of Marriott International, Inc. (“Marriott International”) generally provides on-site management for Ritz-Carlton branded properties.

Our business is grouped into four segments: North America, Luxury, Europe and Asia Pacific. We operate 64 properties (under 71 separate resort management contracts) in the United States and eight other countries and territories.

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

Our Spin-Off from Marriott International, Inc.

On October 25, 2011, the Marriott International board of directors approved the spin-off of its vacation ownership division into an independent public company, Marriott Vacations Worldwide, through the distribution of 100 percent of the outstanding shares of Marriott Vacations Worldwide common stock to the stockholders of Marriott International (the “Spin-Off”). Prior to the Spin-Off, Marriott International completed an internal reorganization to contribute its non-U.S. and U.S. subsidiaries that conducted its vacation ownership business, including Marriott Ownership Resorts, Inc., a wholly owned subsidiary of Marriott International that does business under the name Marriott Vacation Club International, to Marriott Vacations Worldwide, a newly formed wholly owned subsidiary of Marriott International. In accordance with a separation and distribution agreement between Marriott International and Marriott Vacations Worldwide, the distribution of Marriott Vacations Worldwide common stock was made on November 21, 2011, with Marriott International stockholders receiving one share of Marriott Vacations Worldwide common stock for every ten shares of Marriott International common stock held as of the close of business Eastern time on the record date of November 10, 2011. In connection with the Spin-Off, we filed a Registration Statement on Form 10 with the Securities and Exchange Commission (the “SEC”) that was declared effective on October 27, 2011 (the “Form 10”). The Form 10 included an Information Statement describing the details of the Spin-Off and providing information as to the business and management of Marriott Vacations Worldwide. We filed the final version of the Information Statement, dated October 25, 2011, with our Current Report on Form 8-K filed on November 22, 2011 (the “Information Statement”). The Spin-Off did not require stockholder approval and had no impact on Marriott International’s contractual obligations to the existing notes receivable securitizations discussed in Footnote No. 3, “Asset Securitizations,” of our audited annual Combined Financial Statements, contained in our Information Statement. Refer to Footnote No. 15, “Subsequent Events,” for further discussion related to the Spin-Off.

Principles of Combination and Basis of Presentation

The interim combined financial statements presented herein, and discussed below, have been prepared on a stand-alone basis and are derived from the interim condensed consolidated financial statements and accounting records of Marriott International. These interim combined financial statements have been prepared as if the reorganization described in “Our Spin-Off from Marriott International, Inc.” above had taken place prior to the periods presented. The combined financial statements reflect our historical financial position, results of operations and cash flows as we were historically managed, in conformity with United States generally accepted accounting principles (“GAAP”). All significant intracompany transactions and accounts within these Combined Financial Statements have been eliminated.

We refer throughout to (i) our Interim Combined Financial Statements as our “Financial Statements,” (ii) our Interim Combined Statements of Operations as our “Statements of Operations,” (iii) our Interim Combined Balance Sheets as our “Balance Sheets,” (iv) our Interim Combined Statements of Cash Flows as our “Cash Flows” and (v) Accounting Standards Update No. 2009-17, “Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU No. 2009-17”), which we adopted on the first day of the 2010 fiscal year, as the new “Consolidation Standard.”

Unless otherwise specified, each reference to a particular quarter in these Financial Statements means the quarter ended on the date shown in the following table, rather than the corresponding calendar quarter:


Quarter	Quarter-End Date

2011 Third Quarter		September 9, 2011
2011 Second Quarter		June 17, 2011
2011 First Quarter		March 25, 2011
2010 Fourth Quarter		December 31, 2010
2010 Third Quarter		September 10, 2010
2010 Second Quarter		June 18, 2010
2010 First Quarter		March 26, 2010

In our opinion, our Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of September 9, 2011, and December 31, 2010, the results of our operations for the twelve and thirty-six weeks ended September 9, 2011, and September 10, 2010, and cash flows for the thirty-six weeks ended September 9, 2011, and September 10, 2010. Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations.

These Financial Statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe our disclosures are adequate to make the information presented not misleading, you should read these interim Financial Statements in conjunction with the audited annual Combined Financial Statements and notes to those Financial Statements included in our Information Statement.

All significant transactions between us and Marriott International have been included in these Financial Statements. The total net effect of the settlement of these intercompany transactions is reflected in the Cash Flows as a financing activity and in the Balance Sheets as Net Parent Investment.

In connection with the Spin-Off, Marriott Vacations Worldwide entered into agreements with Marriott International and other third parties that have either not existed historically, or that may be on different terms than the terms of the arrangement or agreements that existed prior to the Spin-Off. These Financial Statements do not reflect the impact of these new and/or revised agreements, including licensing fees payable to Marriott International, Marriott Rewards customer loyalty program arrangements, financing, operations and personnel needs of our business. Our Financial Statements include costs for services provided by Marriott International including, for the purposes of these Financial Statements, but not limited to, information technology support, systems maintenance, telecommunications, accounts payable, payroll and benefits, human resources, self-insurance and other shared services. Historically, these costs were charged to us based on specific identification or on a basis determined by Marriott International to reflect a reasonable allocation to us of the actual costs incurred to perform these services. Marriott International allocated indirect general and administrative costs to us for certain functions provided by Marriott International. These services provided to us include, but are not limited to, executive office, legal, tax, finance, government and public relations, internal audit, treasury, investor relations, human resources and other administrative support, which were allocated to us primarily on the basis of our proportion of Marriott International’s overall revenue. We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. The allocations may not, however, reflect the expense we would have incurred as an independent public company for the periods presented. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions we might have performed ourselves or outsourced and strategic decisions we might have made in areas such as information technology and infrastructure. Following the Spin-Off, we perform these functions using our own resources or purchased services from either Marriott International or third parties. For an interim period some of these functions will continue to be provided by Marriott International under Transition Services Agreements (“TSAs”). In addition to the TSAs, we entered into a number of commercial agreements with Marriott International in connection with the Spin-Off, many of which have terms longer than one year. Refer to Footnote No. 11, “Related Party Transactions,” for further discussion related to agreements entered into effective as of the Spin-Off.

Marriott International uses a centralized approach to U.S. domestic cash management and financing of its operations. Prior to the Spin-Off, the majority of our domestic cash was transferred to Marriott International daily and Marriott International funded our operating and investing activities as needed. Accordingly, the cash and cash equivalents held by Marriott International at the corporate level were not allocated to us for any of the periods presented. Cash and cash equivalents in our Balance Sheets primarily represent cash held locally by international entities included in our Financial Statements. We reflect transfers of cash to and from Marriott International’s domestic cash management system as a component of Net Parent Investment on the Balance Sheets. We have included debt incurred from our limited direct financing and, subsequent to the adoption of the new Consolidation Standard, historical notes receivable securitizations, on our Balance Sheets, as this debt is specific to our business. Marriott International has not allocated a portion of its external senior debt interest cost to us since none of the external senior debt recorded by Marriott International is directly related to our business. We also have not included any interest expense for cash advances from Marriott International since historically Marriott International has not allocated any interest expense related to intercompany advances to any of the historical Marriott International divisions.

Marriott International maintains self-insurance programs at a corporate level. Marriott International allocated a portion of expenses associated with these programs to us as part of the historical costs for services Marriott International provided. Marriott International did not allocate any portion of the related reserves as these reserves represent obligations of Marriott International which are not transferable. See Footnote No. 11, “Related Party Transactions,” for further description of our transactions with Marriott International.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, inventory valuation, property and equipment valuation, loan loss reserves, valuation of investments in ventures, residual interests valuation, Marriott Rewards customer loyalty program liabilities, equity-based compensation, income taxes, loss contingencies and liabilities for restructuring activities. Actual amounts may differ from these estimated amounts. For each of the periods presented, Marriott Vacations Worldwide was a subsidiary of Marriott International. The Financial Statements may not be indicative of our future performance and do not necessarily reflect what the results of operations, financial position and cash flows would have been had we operated as an independent public company during the periods presented.

New Accounting Standards

Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”) – Provisions Effective in the 2011 First Quarter

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

Future Adoption of Accounting Standards

Accounting Standards Update No. 2011-04 – “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU No. 2011-04”)

ASU No. 2011-04 generally provides a uniform framework for fair value measurements and related disclosures between GAAP and International Financial Reporting Standards (“IFRS”). Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU No. 2011-04 will be effective for interim and annual periods beginning on or after December 15, 2011, which for us will be our 2012 first quarter. We do not believe the adoption of this update will have a material impact on our financial statements.

Accounting Standards Update No. 2011-05 – “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”)

ASU 2011-05 amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, statement of comprehensive income, or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. Also, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. ASU No. 2011-05 requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (for us this will be our 2012 first quarter), with early adoption permitted. We believe the adoption of this update will change the order in which certain financial statements are presented and will provide additional detail on those financial statements when applicable, but will not have any other impact on our financial statements.

INCOME TAXES

8 Months Ended

Sep. 09, 2011

INCOME TAXES

2.	INCOME TAXES

Our operating results have been included in Marriott International’s consolidated U.S. federal and state income tax returns, as well as in many of Marriott International’s tax filings for non-U.S. jurisdictions. The provision for income taxes in these Financial Statements has been determined on a separate return basis. Our contribution to Marriott International’s tax losses and tax credits on a separate return basis has been included in these Financial Statements. Our separate return basis tax loss and tax credit carry backs may not reflect the tax positions taken or to be taken by Marriott International. Tax losses and tax credits generated by us have been available for use by Marriott International and will largely remain with Marriott International after the Spin-Off.

We have unrecognized tax benefits of $2 million and $1 million at September 9, 2011 and December 31, 2010, respectively, of which approximately $2 million and $1 million at September 9, 2011 and December 31, 2010, respectively, if recognized, would affect the effective tax rate, net of resulting changes in valuation allowances.

As a large taxpayer, Marriott International is continuously under audit by the Internal Revenue Service and other taxing authorities. Although we do not anticipate that these audits will have a significant impact on our unrecognized tax benefit balance during the next 52 weeks, it is possible that the amount of our liability for unrecognized tax benefits could change over that time period.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

NOTES RECEIVABLE

8 Months Ended

Sep. 09, 2011

NOTES RECEIVABLE

3.	NOTES RECEIVABLE

We show the composition of our notes receivable balances (net of reserves) in the following table:


*($ in millions)*	September 9, 2011		December 31, 2010

Vacation ownership notes receivable - securitized	$	864	$	1,029
Vacation ownership notes receivable - non-securitized		314		225

	$	1,178	$	1,254

The following tables show future principal payments (net of reserves) as well as interest rates for our securitized and non-securitized vacation ownership notes receivable.


*($ in millions)*	Non-Securitized		Securitized
Fiscal Year	Vacation Ownership Notes Receivable		Vacation Ownership Notes Receivable		Total

2011	$	29	$	37	$	66
2012		45		113		158
2013		37		118		155
2014		30		120		150
2015		28		115		143
Thereafter		145		361		506

Balance at September 9, 2011	$	314	$	864	$	1,178

Weighted average interest rate at September 9, 2011		11.9%		13.1%		12.7%

Range of stated interest rates at September 9, 2011		0.0% to 19.5%		5.2% to 19.5%		0.0% to 19.5%

Notes Receivable Reserves


*($ in millions)*	Non-Securitized Vacation Ownership Notes Receivable		Securitized Vacation Ownership Notes Receivable		Total

Balance at year-end 2010	$	129	$	89	$	218

Balance at September 9, 2011	$	122	$	63	$	185

The following table summarizes the activity related to our vacation ownership notes receivable reserve for the first three quarters of 2011:


*($ in millions)*	Non-Securitized Vacation Ownership Notes Receivable Reserve			Securitized Vacation Ownership Notes Receivable Reserve			Total

Balance at year-end 2010	$	129		$	89		$	218
Additions for current year vacation ownership product sales		21			—			21
Write-offs		(54	)		—			(54	)
Defaulted notes receivable repurchase activity⁽¹⁾		36			(36	)		—
Other ⁽²⁾		(10	)		10			—

Balance at September 9, 2011	$	122		$	63		$	185

⁽¹⁾	Decrease in securitized reserve and increase in non-securitized reserve was attributable to the transfer of the reserve when we repurchased the notes receivable.

⁽²⁾	Consists of static pool and default rate assumption changes.

For our combined notes receivable portfolio, we estimated average remaining default rates of 7.61 percent and 9.25 percent as of September 9, 2011 and December 31, 2010, respectively.

We show our recorded investment in non-accrual notes receivable in the following table:


*($ in millions)*	Non-Securitized Vacation Ownership Notes Receivable		Securitized Vacation Ownership Notes Receivable		Total

Investment in notes receivable on non-accrual status at September 9, 2011	$	101	$	14	$	115
Investment in notes receivable on non-accrual status at year-end 2010	$	113	$	15	$	128

Average investment in notes receivable on non-accrual status during the first three quarters of 2011	$	108	$	14	$	122

Average investment in notes receivable on non-accrual status during the first three quarters of 2010	$	116	$	8	$	124

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of September 9, 2011:


*($ in millions)*	Non-Securitized Vacation Ownership Notes Receivable		Securitized Vacation Ownership Notes Receivable		Total

31 to 90 days past due	$	12	$	22	$	34
91 to 150 days past due		7		12		19
Greater than 150 days past due		94		2		96

Total past due		113		36		149

Current		323		891		1,214

Total vacation ownership notes receivable	$	436	$	927	$	1,363

See Footnote No. 15, “Subsequent Events,” for more information.

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
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+ Details

FINANCIAL INSTRUMENTS

8 Months Ended

Sep. 09, 2011

FINANCIAL INSTRUMENTS

4.	FINANCIAL INSTRUMENTS

The following table shows the carrying values and the fair values of financial assets and liabilities that qualify as financial instruments, determined in accordance with current guidance for disclosures on the fair value of financial instruments.


*($ in millions)*	At September 9, 2011						At December 31, 2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value

Vacation ownership notes receivable - securitized	$	864		$	1,017		$	1,029		$	1,219
Vacation ownership notes receivable - non-securitized		314			335			225			231
Related party notes receivable		—			—			20			20
Restricted cash		65			65			66			66

Total financial assets	$	1,243		$	1,417		$	1,340		$	1,536

Non-recourse debt associated with securitized notes receivable	$	(830	)	$	(868	)	$	(1,017	)	$	(1,047	)
Other debt		(3	)		(3	)		(5	)		(5	)
Other liabilities		(30	)		(31	)		(30	)		(26	)

Total financial liabilities	$	(863	)	$	(902	)	$	(1,052	)	$	(1,078	)

Vacation Ownership Notes Receivable

We estimate the fair value of our securitized notes receivable using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model uses default rates, prepayment rates, coupon rates and loan terms for our securitized notes receivable portfolio as key drivers of risk and relative value, that when applied in combination with pricing parameters, determines the fair value of the underlying notes receivable.

We bifurcate our non-securitized notes receivable into two pools as follows:


*($ in millions)*	At September 9, 2011				At December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Vacation ownership notes receivable - eligible for securitization	$	119	$	140	$	47	$	53
Vacation ownership notes receivable - not eligible for securitization		195		195		178		178

Total financial assets	$	314	$	335	$	225	$	231

We estimate the fair value of a portion of our non-securitized notes receivable that we believe will ultimately be securitized in the same manner as securitized notes receivable. We value the remaining non-securitized notes receivable at their carrying value, rather than using our pricing model. We believe that the carrying value of such notes receivable approximates fair value because the stated interest rates of these loans are consistent with current market rates and the reserve for these notes receivable appropriately accounts for risks in default rates, prepayment rates and loan terms.

Other Notes Receivable

We estimate the fair value of our other notes receivable by discounting cash flows using risk-adjusted rates.

Non-Recourse Debt Associated with Securitized Notes Receivable

We internally generate cash flow estimates by modeling all bond tranches for our active notes receivable securitization transactions, with consideration for the collateral specific to each tranche. The key drivers in our analysis include default rates, prepayment rates, bond interest rates and other structural factors, which we use to estimate the projected cash flows. In order to estimate market credit spreads by rating, we reviewed market spreads from vacation ownership notes receivable securitizations and other asset-backed transactions that occurred in the market during the first three quarters of 2011 and fiscal year 2010. We then applied those estimated market spreads to swap rates in order to determine a discount rate to be used to estimate the fair value of the active bonds payable using the discounted cash flow method. We concluded that the fair value of the bonds exceeds the book value due to low current swap rates and credit spreads that are lower than our bond interest rates.

Other Liabilities

We estimate the fair value of our other liabilities using expected future payments discounted at risk-adjusted rates. Other liabilities represent guarantee costs and reserves and deposit liabilities and other miscellaneous liabilities. The carrying values of our guarantee costs and reserves approximate their fair values. We estimate the fair value of our deposit liabilities primarily by discounting future payments at a risk-adjusted rate.

See Footnote No. 15, “Subsequent Events,” for more information.

INVENTORY

8 Months Ended

Sep. 09, 2011

INVENTORY

5.	INVENTORY

The following table shows the composition of our inventory balances:


*($ in millions)*	At September 9, 2011		At December 31, 2010

Finished goods	$	489	$	652
Work-in-process		231		203
Land and infrastructure		288		551

Real estate inventory		1,008		1,406
Operating supplies and retail inventory		6		6

	$	1,014	$	1,412

In preparing to operate as an independent public company following the Spin-Off (see Footnote No. 1, “Summary of Significant Accounting Policies,” for additional information), management assessed our intended use of excess undeveloped land and built Luxury inventory and the current market conditions for those assets. On September 8, 2011, management approved a plan to accelerate cash flow through the monetization of certain excess undeveloped land and to offer incentives to accelerate sales of excess built Luxury fractional and residential inventory. As the fair values of the undeveloped land and the excess built Luxury fractional and residential inventory are less than their respective carrying values, we recorded an inventory impairment charge in the 2011 third quarter of $256 million to adjust the carrying value of the inventory to its fair value. Additionally, upon the approval of the plan in the 2011 third quarter, we reclassified $57 million of this undeveloped land previously in our development plans from inventory to property and equipment. See Footnote No. 13, “Impairment Charges,” for additional information.

PROPERTY AND EQUIPMENT

8 Months Ended

Sep. 09, 2011

PROPERTY AND EQUIPMENT

6.	PROPERTY AND EQUIPMENT

We show the composition of our property and equipment balances in the following table:


*($ in millions)*	At September 9, 2011			At December 31, 2010

Land	$	152		$	148
Buildings and leasehold improvements		218			219
Furniture and equipment		272			261
Construction in progress		8			18

		650			646
Accumulated depreciation		(359	)		(336	)

	$	291		$	310

As noted in Footnote No. 5, “Inventory,” management approved a plan, on September 8, 2011, to accelerate cash flow through the monetization of certain excess undeveloped land and to offer incentives to accelerate sales of excess built Luxury fractional and residential inventory. As the nominal cash flows from the planned land sales and their estimated fair values are less than their carrying values, we recorded an impairment charge in the 2011 third quarter of $68 million to adjust the carrying value of the property and equipment to its fair value. Additionally, upon the approval of this plan, we reclassified $57 million of this undeveloped land previously in our development plans from inventory to property and equipment in the 2011 third quarter. See Footnote No. 13, “Impairment Charges,” for additional information.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

CONTINGENCIES AND COMMITMENTS

8 Months Ended

Sep. 09, 2011

CONTINGENCIES AND COMMITMENTS

7.	CONTINGENCIES AND COMMITMENTS

Guarantees

We issue guarantees to certain lenders in connection with the provision of third-party financing for our sales of vacation ownership products for the Luxury and Asia Pacific segments. The terms of guarantees to lenders generally require us to fund if the purchaser fails to pay under the terms of its note payable, and Marriott International has guaranteed our performance under these arrangements. We are entitled to recover any funding to third-party lenders related to these guarantees through reacquisition and resale of the vacation ownership product. Our commitments under these guarantees expire as guaranteed notes mature or are repaid. The latest maturity date of the notes that are guaranteed is in 2020.

The following table shows the maximum potential amount of future fundings for financing guarantees where we are the primary obligor and the carrying amount of the liability for expected future fundings.


*($ in millions)*	Maximum Potential		Liability for
Segment	Amount of Future Fundings at September 9, 2011		Expected Future Fundings at September 9, 2011

Asia Pacific	$	24	$	—
Luxury		3		1

Total guarantees where we are the primary obligor	$	27	$	1

We included our liability for expected future fundings of the financing guarantees at September 9, 2011 in our Balance Sheets in the Other caption within Liabilities.

In addition to the guarantees we describe in the preceding paragraphs, in conjunction with financing obtained for specific projects or properties owned by joint ventures in which we are a party, we may provide industry standard indemnifications to the lender for loss, liability or damage occurring as a result of the actions of the other joint venture owner or our own actions.

Refer to Footnote No. 10, “Variable Interest Entities,” for further discussion of our funding liability established in connection with an equity method investment.

Commitments and Letters of Credit

In addition to the guarantees we note in the preceding paragraphs, as of September 9, 2011, we had the following commitments outstanding:

•

A commitment for $18 million (HK$141 million) to purchase vacation ownership units upon completion of construction for sale in our Marriott Vacation Club, Asia Pacific program. We have already made deposits of $11 million in conjunction with this commitment. We expect to pay the remaining $7 million upon acquisition of the units in the first quarter of 2012.

•

$3 million (€2 million) of other purchase commitments that we expect to fund over the next three years, as follows: $1 million in each of 2012, 2013 and 2014.

•

We have various contracts for the use of information technology hardware and software that we use in the normal course of business. Our commitments are $1 million in 2011 and $5 million in 2012.

•

Commitments to subsidize vacation ownership associations for costs that otherwise would be covered by annual maintenance fees associated with vacation ownership interests or units that have not yet been built were $4 million and $10 million, which we expect will be paid in 2011 and 2012, respectively.

Surety bonds guaranteed by Marriott International issued as of September 9, 2011 totaled $90 million, the majority of which were requested by federal, state or local governments related to our operations.

At September 9, 2011, we had $32 million of letters of credit outstanding under Marriott International credit facilities, the majority of which related to our Asia Pacific consumer financing guarantee.

Other

We estimate the cash outflow associated with completing all phases of our existing portfolio of vacation ownership projects currently under active construction will be approximately $187 million, of which $19 million is included within liabilities on our Balance Sheet. This estimate is based on our current development plans, which remain subject to change, and we expect the phases currently under development will be completed by 2016.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

DEBT

8 Months Ended

Sep. 09, 2011

DEBT

DEBT

We provide detail on our debt balances in the following table:


*($ in millions)*	At September 9, 2011		At December 31, 2010

Non-recourse debt associated with securitized notes receivable, interest rates ranging from 0.20% to 7.20% (weighted average interest rate of 4.98%)	$	830	$	1,017
Other		3		5

	$	833	$	1,022

The non-recourse debt associated with securitized notes receivable was, and to the extent currently outstanding is, secured by the related notes receivable. All of our other debt was, and to the extent currently outstanding is, recourse to us but unsecured.

Each of our securitized notes receivable pools contains various triggers relating to the performance of the underlying notes receivable. If a pool of securitized notes receivable fails to perform within the pool’s established parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread we typically receive from that pool (related to the interests we retained), to accelerate the principal payments to investors based on the subordination of the different tranches until the performance trigger is cured. During the first quarter of 2011, one pool that reached a performance trigger at year-end 2010 returned to meeting performance thresholds, while one other pool reached a performance trigger. At the end of the first quarter of 2011, this was the only pool that was not meeting performance thresholds. This pool returned to compliance during the 2011 second quarter. At the end of the 2011 second and third quarters, there were no pools out of compliance. As a result of performance triggers, a total of $2 million in cash of excess spread was used to pay down debt during the first three quarters of 2011. At September 9, 2011, we had 13 securitized notes receivable pools outstanding.

We show future principal payments and unamortized discounts for our non-recourse debt associated with securitizations and other debt in the following table:


*($ in millions)*	Non-Recourse Debt		Other Debt		Total

2011	$	39	$	—	$	39
2012		119		—		119
2013		125		—		125
2014		127		—		127
2015		120		—		120
Thereafter		300		3		303

Balance at September 9, 2011	$	830	$	3	$	833

As the contractual terms of the underlying securitized notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may occur earlier due to prepayments by the notes receivable obligors.

We paid cash for interest, net of amounts capitalized, of $32 million in the first three quarters of 2011 and $37 million in the first three quarters of 2010.

See Footnote No. 15, “Subsequent Events,” for more information.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

SHARE-BASED COMPENSATION COSTS

8 Months Ended

Sep. 09, 2011

SHARE-BASED COMPENSATION COSTS

9.	SHARE-BASED COMPENSATION COSTS

Marriott International maintains the Marriott International, Inc. Stock and Cash Incentive Plan (the “Marriott International Stock Plan”) for the benefit of its officers, directors and employees. Prior to the Spin-Off, certain of our employees received awards under the Marriott International Stock Plan. The following disclosures represent the portion of the Marriott International Stock Plan maintained by Marriott International in which our employees participated. All share-based awards granted under the Marriott International Stock Plan related to Marriott International Class A Common Stock (“Marriott International common stock”). As such, all related equity account balances are reflected in Marriott International’s consolidated statements of stockholders’ equity and have not been reflected in our Financial Statements. Accordingly, the amounts presented are not necessarily indicative of future performance and do not necessarily reflect the results that we would have experienced as an independent public company for the periods presented.

Under the Marriott International Stock Plan, Marriott International awarded to certain of our employees: (1) stock options to purchase Marriott International common stock; (2) stock appreciation rights (“SARs”) for Marriott International common stock (“SAR Program”); and (3) restricted stock units (“RSUs”) of Marriott International common stock. Marriott International granted these awards at exercise prices or strike prices that were equal to the market price of Marriott International common stock on the date of grant.

We recorded share-based compensation expense related to award grants to our employees of $2 million for the twelve weeks ended September 9, 2011 and for the twelve weeks ended September 10, 2010, and $7 million for the thirty-six weeks ended September 9, 2011 and for the thirty-six weeks ended September 10, 2010. Deferred compensation costs related to unvested awards held by our employees totaled $14 million and $12 million at September 9, 2011 and December 31, 2010, respectively.

RSUs

Marriott International granted 252,972 RSUs during the first three quarters of 2011 to our employees, and those units vest generally over four years in equal annual installments commencing one year after the date of grant. RSUs granted in the first three quarters of 2011 had a weighted average grant-date fair value of $40.

SARs

Marriott International granted 17,600 SARs during the first three quarters of 2011 to our employees. These SARs expire 10 years after the date of grant and both vest and are exercisable in cumulative installments of one quarter at the end of each of the first four years following the date of grant. These SARs had a weighted average grant-date fair value of $16.

We use a binomial method to estimate the fair value of each SAR granted, under which we calculated the weighted average expected SARs terms as the product of a lattice-based binomial valuation model that uses suboptimal exercise factors. We use historical data to estimate exercise behaviors and terms to retirement for separate groups of retirement eligible and non-retirement eligible employees.

We used the following assumptions to determine the fair value of the SARs granted to our employees during the first three quarters of 2011.


Expected volatility	32	%
Dividend yield	0.73	%
Risk-free rate	3.4	%
Expected term (in years)	8

In making these assumptions, we based risk-free rates on the corresponding U.S. Treasury spot rates for the expected duration at the date of grant, which we converted to a continuously compounded rate. We based expected volatility on the weighted-average historical volatility of Marriott International common stock, with periods with atypical stock movement given a lower weight to reflect stabilized long-term mean volatility.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Staff Accounting Bulletin (SAB)
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+ Details

VARIABLE INTEREST ENTITIES

8 Months Ended

Sep. 09, 2011

VARIABLE INTEREST ENTITIES

10.

VARIABLE INTEREST ENTITIES

In accordance with the applicable accounting guidance for the consolidation of variable interest entities, we analyze our variable interests, including loans, guarantees, and equity investments, to determine if an entity in which we have a variable interest is a variable interest entity. Our analysis includes both quantitative and qualitative reviews. We base our quantitative analysis on the forecasted cash flows of the entity, and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. We also use our qualitative analyses to determine if we must consolidate a variable interest entity as its primary beneficiary.

Variable Interest Entities Related to Our Notes Receivable Securitizations

We periodically securitize, without recourse, through special purpose entities, notes receivable originated in connection with the sale of vacation ownership products. These securitizations provide funding for us and transfer the economic risks and substantially all the benefits of the loans to third parties. In a notes receivable securitization, various classes of debt securities that the special purpose entities issue are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable. We service the notes receivable. With each securitization, we may retain a portion of the securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized receivables or, in some cases, overcollateralization and cash reserve accounts.

At September 9, 2011, consolidated assets on our Balance Sheet included collateral for the obligations of the variable interest entities that we consolidate with a carrying amount of $919 million, comprised of $864 million of notes receivable (net of reserves), $5 million of interest receivable and $50 million of restricted cash. Further, at September 9, 2011, consolidated liabilities on our Balance Sheet included liabilities for those variable interest entities with a carrying amount of $834 million, comprised of $4 million of interest payable and $830 million of debt. The non-controlling interest balance for those entities was zero. The creditors of those entities do not have general recourse to us. As a result of our involvement with these entities, we recognized $91 million of interest income, offset by $34 million of interest expense during the first three quarters of 2011.

We show our cash flows to and from the notes securitization variable interest entities in the following table:


*($ in millions)*	Thirty-six Weeks Ended
	September 9, 2011		September 10, 2010

Cash inflows:
Principal receipts	$	155	$	164
Interest receipts		92		99

Total		247		263


Cash outflows:
Principal to investors		150		160
Repurchases		36		49
Interest to investors		32		37

Total		218		246

Net cash flow	$	29	$	17

Under the terms of our notes receivable securitizations, we have the right at our option to repurchase defaulted mortgage notes at the outstanding principal balance. The transaction documents typically limit such repurchases to 10 to 20 percent of the transaction’s initial mortgage balance. We made voluntary repurchases of defaulted notes receivable of $36 million during the first three quarters of 2011 and $49 million during the first three quarters of 2010. Our maximum exposure to loss relating to the entities that own these notes receivable is the overcollateralization amount (the difference between the loan collateral balance and the balance on the outstanding notes receivable), plus cash reserves and any residual interest in future cash flows from collateral. See Footnote No. 15, “Subsequent Events,” for more information.

Other Variable Interest Entity

We have an equity investment in and a loan receivable due from a variable interest entity that develops and markets vacation ownership products in Hawaii. We concluded that the entity is a variable interest entity because the equity investment at risk is not sufficient to permit the entity to finance its activities without additional support from other parties. We have determined that we are not the primary beneficiary as power to direct the activities that most significantly impact economic performance of the entity is shared among the variable interest holders, and therefore we do not consolidate the entity. In 2009, we fully impaired our equity investment and certain loans receivable due from the entity. In 2010, the continued application of equity losses to our outstanding loan receivable balance reduced its carrying value to zero. Our equity in losses was $0 million and $2 million for the twelve weeks ended September 9, 2011 and September 10, 2010, respectively, and $0 million and $9 million for the thirty-six weeks ended September 9, 2011 and September 10, 2010, respectively. We may fund up to an additional $13 million and do not expect to recover this amount, which we have accrued and included in other liabilities. We do not have any remaining exposure to loss related to this entity.

RELATED PARTY TRANSACTIONS

8 Months Ended

Sep. 09, 2011

RELATED PARTY TRANSACTIONS

11.

RELATED PARTY TRANSACTIONS

Transactions with an Equity Method Investee

We provide marketing and sales, construction management, property management and accounting services to an equity method investee. Fees for such services are $1 million and $2 million in the thirty-six weeks ended September 9, 2011 and September 10, 2010, respectively. Refer to Footnote No. 10, “Variable Interest Entities,” under the heading “Other Variable Interest Entity” for further information pertaining to our investment.

Services Provided by Marriott International and General Corporate Overhead

Our Financial Statements include costs for services provided by Marriott International including, for the purposes of these Financial Statements but not limited to, information technology support, systems maintenance, telecommunications, accounts payable, payroll and benefits, human resources, self-insurance and other shared services. Historically, these costs were charged to us based on specific identification or on a basis determined by Marriott International to reflect reasonable allocation to us of the actual costs incurred to perform these services. Marriott International charged us approximately $7 million for the twelve weeks ended September 9, 2011 and for the twelve weeks ended September 10, 2010, and $22 million and $23 million for the thirty-six weeks ended September 9, 2011 and September 10, 2010, respectively, for such services.

Marriott International allocated indirect general and administrative costs to us for certain functions and services provided to us by Marriott International, including, but not limited to, executive office, legal, tax, finance, government and public relations, internal audit, treasury, investor relations, human resources and other administrative support primarily on the basis of our proportion of Marriott International’s overall revenue. Accordingly, we were allocated $3 million for the twelve weeks ended September 9, 2011 and for the twelve weeks ended September 10, 2010, and $10 million for the thirty-six weeks ended September 9, 2011 and for the thirty-six weeks ended September 10, 2010 of Marriott International’s indirect general and corporate overhead expenses, and have included these expenses in general and administrative expenses on our Statements of Operations.

We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented in accordance with Staff Accounting Bulletin Topic 1: Financial Statements. We determined that our relative revenue was a reasonable reflection of Marriott International time dedicated to the oversight of our historical business. The allocations may not, however, reflect the expense we would have incurred as an independent public company for the periods presented. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions we might have performed ourselves or outsourced and strategic decisions we might have made in areas such as information technology and infrastructure. Following the Spin-Off, we perform these functions using our own resources or purchased services from either Marriott International or third parties.

Cash Management

Marriott International did not allocate to us the cash and cash equivalents that Marriott International held at the corporate level for any of the periods presented. Cash and cash equivalents in our Balance Sheets primarily represent cash held by international entities at the local level. We reflect transfers of cash to and from Marriott International’s domestic cash management system as a component of Net Parent Investment.

Historically, Marriott International has not charged us interest expense (and we have not earned interest revenue) on our net cash balance due to/from Marriott International, except for amounts capitalized in inventory and property and equipment.

Our weighted-average outstanding cash balance due to Marriott International was approximately $773 million and $1,014 million for the thirty-six weeks ended September 9, 2011 and September 10, 2010, respectively. We reflect the total net effect of the settlement of these intercompany transactions in our Cash Flows as a financing activity and in our Balance Sheets as Net Parent Investment.

The transactions to reconcile the Net Parent Investment, including our use of cash from Marriott International, and cash provided to Marriott International by us, are reflected in our Statements of Cash Flows. The change in the Net Parent Investment is the sum of our cash flows from operations, investing activities and financing activities, excluding the change in Net Parent Investment.

Refer to Cash Flows for more information.

Marriott Rewards Customer Loyalty Program

We historically participated in the Marriott Rewards customer loyalty program and offered points as incentives to vacation ownership purchasers and/or in connection with exchange or other activities. This program, which Marriott International maintained and administered, is a frequent customer loyalty program in which program members earn or receive points based on the monetary spending at Marriott International's lodging operations or as an incentive to purchase vacation ownership and residential products. Points cannot be redeemed for cash. We included approximately $20 million and $6 million for the twelve weeks ended September 9, 2011 and September 10, 2010, respectively and $62 million and $48 million for the thirty-six weeks ended September 9, 2011 and September 10, 2010, respectively, for the estimated cost of future redemptions of points that Marriott International issued on our behalf in our historical segment results.

Guarantees

Prior to the Spin-Off, Marriott International provided guarantees of our performance under various contractual arrangements including responsibilities related to surety bonds, servicing securitized notes receivable and guarantees that we provide to third parties.

Fee Sharing

We share management fees received from vacation ownership associations for our Luxury segment developments with Marriott International, generally on a 50/50 basis. Our portion of the fees shared was $1 million for the twelve weeks ended September 9, 2011 and for the twelve weeks ended September 10, 2010, and $2 million for the thirty-six weeks ended September 9, 2011 and for the thirty-six weeks ended September 10, 2010, which we have presented in the Resort management and other services revenues caption of our Statements of Operations.

Agreements with Marriott International

On November 17, 2011, we entered into a separation and distribution agreement and several other agreements with Marriott International to effect the Spin-Off and to provide a framework for our relationship with Marriott International. These agreements govern the relationship between us and Marriott International subsequent to the completion of the Spin-Off and provide for the allocation between us and Marriott International of assets, liabilities and obligations attributable to periods prior to the Spin-Off. Because the terms of these agreements were entered into in the context of a related party transaction, the terms may not be comparable to terms that would be obtained in a transaction between unaffiliated parties.

The separation and distribution agreement between us and Marriott International contains the key provisions relating to the separation of our business from Marriott International and the distribution of our common stock to Marriott International stockholders. The separation and distribution agreement identifies the assets to be transferred to Marriott International or to us and liabilities to be assumed by Marriott International or by us prior to the Spin-Off so that each company retains the assets of, and the liabilities associated with, its respective businesses. The separation and distribution agreement also provides for the settlement or extinguishment of certain liabilities and other obligations in existence between us and Marriott International as of the date of the distribution of our common stock. In accordance with the separation and distribution agreement, we agreed that we had sufficient working capital as of the date of the distribution of our common stock to meet our anticipated needs, and that we would pay Marriott International $22.5 million within 120 days after the date of the distribution of our common stock, primarily to reimburse Marriott International for certain costs incurred in connection with the Spin-Off related to our new credit facilities (see Footnote No. 15, “Subsequent Events”) and to implement and modify our information resource systems. We on one hand, and Marriott International on the other, agreed in the separation and distribution agreement to indemnify each other against certain liabilities in connection with the Spin-Off and our respective businesses.

In accordance with the separation and distribution agreement, we also entered into several other agreements with Marriott International and its affiliates, including, among others: a tax sharing and indemnification agreement; an employee benefits and other matters allocation agreement; a non-competition agreement; a Marriott Rewards affiliation agreement; and transition services agreements. We also entered into license agreements under which we have the right to use certain Marriott International and Ritz-Carlton marks and intellectual property in exchange for (i) a fixed annual fee of $50 million plus (ii) two percent of the gross sales price paid to us for initial developer sales of interests in vacation ownership units and residential real estate units and one percent of the gross sales price paid to us for resales of interests in vacation ownership units and residential real estate units, in each case that are identified with or use the Marriott or Ritz-Carlton marks.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

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-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

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-Paragraph b

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+ Details

COMPREHENSIVE INCOME AND DIVISIONAL EQUITY

8 Months Ended

Sep. 09, 2011

COMPREHENSIVE INCOME AND DIVISIONAL EQUITY

12.

COMPREHENSIVE INCOME AND DIVISIONAL EQUITY

We detail comprehensive income in the following table:


*($ in millions)*	Twelve Weeks Ended					Thirty-six Weeks Ended
	September 9,			September 10,		September 9,			September 10,
	2011			2010		2011			2010

Net (loss) income	$	(221	)	$	19	$	(186	)	$	49

Other comprehensive income, net of tax:
Foreign currency translation adjustments		1			2		1			8

Total other comprehensive income, net of tax		1			2		1			8

Total comprehensive (loss) income	$	(220	)	$	21	$	(185	)	$	57

The following table details changes in divisional equity:


*($ in millions)*	Parent Company Investment			Accumulated Other Comprehensive Income (Loss)		Total Parent Company Equity

Balance at year-end 2010	$	1,876		$	28	$	1,904
Net (loss) income		(186	)		—		(186	)
Currency translation adjustments		—			1		1
Other derivative instrument adjustments		—			—		—
Net transfers to Parent		(71	)		—		(71	)

Balance at September 9, 2011	$	1,619		$	29	$	1,648

IMPAIRMENT CHARGES

8 Months Ended

Sep. 09, 2011

IMPAIRMENT CHARGES

13.

IMPAIRMENT CHARGES

In preparation for the Spin-Off (see Footnote No. 1, “Summary of Significant Accounting Policies,” for additional information), management assessed the intended use of excess undeveloped land and built inventory and the current market conditions for those assets. On September 8, 2011, management approved a plan to accelerate cash flow through the monetization of certain excess undeveloped land in the United States, Mexico, and the Bahamas over the next 18 to 24 months and to accelerate sales of excess built Luxury fractional and residential inventory over the next three years. As a result, in accordance with the guidance for accounting for the impairment or disposal of long-lived assets, because the nominal cash flows from the planned land sales and the estimated fair values of the land and excess built Luxury inventory were less than their respective carrying values, we recorded a pre-tax non-cash impairment charge of $324 million ($234 million after-tax) in our 2011 third quarter Income Statements under the “Impairment” caption.

We estimated the fair value of the land by using recent comparable sales data for the land parcels, which we determined were Level 3 inputs. We estimated the fair value of the excess built Luxury fractional and residential inventory using cash flow projections discounted at risk premiums commensurate with the market conditions of the related projects. We used Level 3 inputs for these discounted cash flow analyses and our assumptions included: growth rate and sales pace projections, additional sales incentives such as pricing discounts, and marketing and sales cost estimates.

Grouped by product type and/or geographic location, these impairment charges consisted of $113 million associated with nine North American Luxury fractional and mixed use properties, $2 million related to one project in our European vacation ownership business, and $209 million associated with Corporate and Other, including $203 million related to undeveloped land parcels associated with five vacation ownership properties and $6 million of software previously under development that will not be completed and used under our new strategy.

The following table details the composition of these charges.


*($ in millions)*	Luxury Segment		Europe Segment		Corporate and Other		Total

Inventory impairment	$	107	$	2	$	147	$	256
Property and equipment impairment		6		—		62		68

Total	$	113	$	2	$	209	$	324

Additionally, upon the approval of the plan in the 2011 third quarter to dispose of certain undeveloped land parcels, we reclassified $57 million of these land parcels previously in our development plans from inventory to property and equipment.

We also reviewed the remainder of our inventory assets and determined that there were no other adjustments needed to our vacation ownership inventory, which is recorded at the lower of cost or fair value less cost to sell.

BUSINESS SEGMENTS

8 Months Ended

Sep. 09, 2011

BUSINESS SEGMENTS

14.

BUSINESS SEGMENTS

We operate our business in four segments:

•

In our North America segment, we develop, market, sell and manage vacation ownership products under the Marriott Vacation Club and Grand Residences by Marriott brands in the United States and the Caribbean. We also develop, market, sell and manage resort residential real estate located within our vacation ownership developments under the Grand Residences by Marriott brand.

•

In our Luxury segment, we develop, market, sell and manage luxury vacation ownership products under the Ritz-Carlton Destinations Club brand. We also sell whole ownership luxury residential real estate under the Ritz-Carlton Residences brand.

•

In our Europe segment, we develop, market, sell and manage vacation ownership products in several locations in Europe.

•

In our Asia Pacific segment, we operate Marriott Vacation Club, Asia Pacific, a points program we introduced in 2006 that we specifically designed to appeal to vacation preferences of the Asian market.

We evaluate the performance of our segments based primarily on the results of the segment without allocating corporate expenses, income taxes, or indirect general, administrative and other expenses. We do not allocate corporate interest expense to our segments. We include interest income specific to segment activities within the appropriate segment. We allocate other gains and losses, equity in earnings or losses from our joint ventures, general and administrative expenses, and income or losses attributable to noncontrolling interests to each of our segments. Corporate and other represents that portion of our revenues, general, administrative and other expenses, equity in earnings or losses, and other gains or losses that are not allocable to our segments.

Revenues


*($ in millions)*	Twelve Weeks Ended				Thirty-six Weeks Ended
	September 9,		September 10,		September 9,		September 10,
	2011		2010		2011		2010

North America	$	296	$	279	$	899	$	873
Luxury		21		19		71		73
Europe		39		39		95		93
Asia Pacific		22		23		64		66

Total segment revenues		378		360		1,129		1,105
Corporate and other		—		—		—		—

	$	378	$	360	$	1,129	$	1,105

Net (Loss) Income


*($ in millions)*	Twelve Weeks Ended						Thirty-six Weeks Ended
	September 9,			September 10,			September 9,			September 10,
	2011			2010			2011			2010

North America	$	55		$	69		$	193		$	199
Luxury		(120	)		(9	)		(132	)		(25	)
Europe		5			6			9			10
Asia Pacific		2			2			2			8

Total segment financial results		(58	)		68			72			192
Corporate and other		(244	)		(38	)		(313	)		(114	)
Benefit (provision) for income taxes		81			(11	)		55			(29	)

	$	(221	)	$	19		$	(186	)	$	49

Assets


*($ in millions)*	At Period-End
	September 9,		December 31,
	2011		2010

North America	$	1,052	$	1,355
Luxury		149		368
Europe		104		104
Asia Pacific		59		61

Total segment assets		1,364		1,888
Corporate and other		1,398		1,754

	$	2,762	$	3,642

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

SUBSEQUENT EVENTS

8 Months Ended

Sep. 09, 2011

SUBSEQUENT EVENTS

15.

SUBSEQUENT EVENTS

Spin-Off

On October 25, 2011, the Marriott International board of directors approved the spin-off of its vacation ownership division into an independent public company, Marriott Vacations Worldwide, through the distribution of 100 percent of the outstanding shares of Marriott Vacations Worldwide common stock to the stockholders of Marriott International. In accordance with a separation and distribution agreement between Marriott International and Marriott Vacations Worldwide, the distribution of Marriott Vacations Worldwide common stock was made on November 21, 2011, with Marriott International stockholders receiving one share of Marriott Vacations Worldwide common stock for every ten shares of Marriott International common stock held as of close of business Eastern time on the record date of November 10, 2011. Fractional shares of Marriott Vacations Worldwide common stock were not distributed; any fractional share of Marriott Vacations Worldwide common stock otherwise issuable to a Marriott International stockholder was sold in the open market on such stockholder’s behalf, with such stockholders receiving a cash payment in lieu of such fractional share. Marriott International received a private letter ruling from the Internal Revenue Service to the effect that, among other things, the distribution of shares of Marriott Vacations Worldwide common stock in the Spin-Off qualifies as tax-free to Marriott International, Marriott Vacations Worldwide and Marriott International stockholders for U.S. federal income tax purposes under Sections 355 and 368(a) and related provisions of the Internal Revenue Code of 1986, except for cash received in lieu of fractional shares. Following the Spin-Off, Marriott International retained no ownership interest in Marriott Vacations Worldwide, and each company has its own board of directors and management. Our Form 10 filed with the SEC, which described the Spin-Off, was declared effective on October 27, 2011. All subsidiaries and equity method investments not contributed by Marriott International to Marriott Vacations Worldwide remained with Marriott International. On November 22, 2011, our common stock began trading on the New York Stock Exchange under the ticker symbol “VAC”.

Borrowings

On September 28, 2011, we closed a $300 million warehouse credit facility (the “Warehouse Credit Facility”) that allows for the securitization of vacation ownership notes receivable on a non-recourse basis, pursuant to the terms of the facility. The revolving period of the facility is one year. The notes receivable that we securitize under the facility will be similar in nature to the notes receivable we have securitized in the past. Borrowings under the facility will bear interest at a rate of LIBOR plus 1.25 percent and are limited at any point to the advance rate on the aggregate amount of eligible notes receivable at such time. The advance rate of receivables securitized using the facility vary based on the characteristics of the obligor on each securitized note receivable.

On October 5, 2011, we made the first draw on the Warehouse Credit Facility. The carrying amount of notes receivable securitized was $154 million. The advance rate was 81 percent, which resulted in gross proceeds of $125 million. Net proceeds were $122 million due to the funding of a reserve account in the amount of $1 million, cash transaction costs of $2 million and costs of less than $1 million associated with entering into a derivative transaction to cap the interest rate. Estimated additional transaction costs are $1 million. The securitized notes receivable included $16 million of notes receivable that we repurchased in the fourth quarter of 2011 from two consolidated special purpose entities that we initially used to securitize the notes receivable in 2003. Proceeds from the draw on the Warehouse Credit Facility were transferred to Marriott International in settlement of certain intercompany account balances.

On October 20, 2011, we entered into a four-year revolving credit facility (the “Revolving Corporate Credit Facility”) with a borrowing capacity of $200 million that will provide support for our business, including ongoing liquidity and letters of credit, including a letter of credit sub-facility of $120 million, with a syndicate of banks led by JP Morgan Chase Bank. On November 21, 2011, we closed the Revolving Corporate Credit Facility by satisfying all conditions precedent to borrowing. Borrowings under the Revolving Corporate Credit Facility will generally bear interest at a floating rate at the Eurodollar rate plus an applicable margin that varies from 2.75 percent to 4 percent depending on our credit rating. The facility’s credit agreement contains affirmative and negative covenants and representations and warranties customary for financings of this type. In addition, the Revolving Corporate Credit Facility contains financial covenants, including covenants requiring us to maintain (a) minimum consolidated tangible net worth of not less than the sum of (i) 80 percent of our consolidated tangible net worth as set forth on an opening balance sheet plus (ii) 80 percent of any increase in consolidated tangible net worth attributable to the issuance of equity after the date of such opening balance sheet; (b) a maximum ratio of consolidated total debt to consolidated adjusted EBITDA (as defined in the Revolving Corporate Credit Facility) of 6 to 1 through the end of the 2013 first fiscal quarter, which maximum ratio decreases to 5.25 to 1 through the end of the 2014 fiscal year and to 4.75 to 1 thereafter; and (c) a minimum consolidated adjusted EBITDA, as defined in the Revolving Corporate Credit Facility, to interest expense of not less than 3 to 1. The facility is guaranteed by Marriott Vacations Worldwide and by each of our direct and indirect, existing and future, domestic subsidiaries (excluding certain special purpose subsidiaries), and is secured by a perfected first priority security interest in substantially all of our assets and the assets of the guarantors, subject to certain exceptions.

On October 26, 2011, our subsidiary, MVW US Holdings, Inc. (“MVW US Holdings”) issued $40 million of its mandatorily redeemable Series A (non-voting) preferred stock to Marriott International as part of Marriott International’s internal reorganization prior to the Spin-Off. On October 28, 2011, Marriott International sold all of this preferred stock to third-party investors. For the first five years after issuance, the Series A preferred stock will pay an annual cash dividend equal to the five-year U.S. Treasury Rate as of October 19, 2011, plus a spread of 10.958 percent, for a total annual cash dividend rate of 12 percent. On the fifth anniversary of issuance, the annual cash dividend rate will be reset to the five-year U.S. Treasury rate in effect on such date plus the same 10.958 percent spread. The Series A preferred stock is mandatorily redeemable by MVW US Holdings upon the tenth anniversary of the date of issuance but can be redeemed at our option after five years. The Series A preferred stock has an aggregate liquidation preference of $40 million plus any accrued and unpaid dividends and a premium if liquidation occurs during the first five years after the issuance of the preferred stock.

Dispositions

On October 25, 2011, we completed a bulk sale of land and developed inventory, classified as inventory within our Luxury segment. Net cash proceeds totaled $17 million and we recorded a net gain of $2 million. We accounted for the sale under the full accrual method in accordance with accounting for sales of real estate.