Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue from Contracts with Customers

Note 3: Revenue from Contracts with Customers

Disaggregation of Revenue

The following tables show our disaggregated revenues by segment from contracts with customers. We operate our business in the following two segments: (i) Real estate sales and financing and (ii) Resort operations and club management. Please refer to Note 18: Business Segments below for more details related to our segments.

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2020		2019		2020		2019
Real Estate and Financing Segment
Sales of VOIs, net	$	24	$	138	$	80	$	383
Sales, marketing, brand and other fees		52		143		171		429
Interest income		34		37		108		109
Other financing revenue		6		6		19		18
Real estate and financing segment revenues	$	116	$	324	$	378	$	939

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2020		2019		2020		2019
Resort Operations and Club Management Segment
Club management	$	23	$	28	$	70	$	80
Resort management		16		17		52		50
Rental(1)		19		48		71		153
Ancillary services		1		6		6		20
Resort operations and club management segment revenues	$	59	$	99	$	199	$	303

⁽¹⁾ Excludes intersegment eliminations. See Note 18: Business Segments for additional information.

Contract Balances

The following table provides information on our accounts receivable from contracts with customers which are included in Accounts receivable, net on our condensed consolidated balance sheets:

	September 30,		December 31,
($ in millions)	2020		2019
Receivables	$	67	$	129

The following table presents the composition of our contract liabilities.

	September 30,		December 31,
($ in millions)	2020		2019
Contract liabilities:
Advanced deposits	$	119	$	115
Deferred Sales of VOIs of projects under construction		148		84
Club activation fees, annual dues and other		96		86
Club Bonus Point incentive liability(1)		60		59

⁽¹⁾ Amounts related to the Club Bonus Point incentive liability are included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets. This liability is comprised of unrecognized revenue for incentives from VOI sales and sales and marketing expenses in conjunction with our fee-for-service arrangements.

Revenue earned for the three and nine months ended September 30, 2020 that was included in the contract liabilities balance at December 31, 2019 was approximately $10 million and $63 million, respectively. 

Our accounts receivables that relate to our contracts with customers includes amounts associated with our contractual right to consideration for completed performance obligations related primarily to our fee-for-service arrangements and homeowners’ associations (“HOA”) management agreements and are settled when the related cash is received. Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the passage of time. Refer to Note 6: Timeshare Financing Receivables for information on balances and changes in balances during the period related to our timeshare financing receivables.

Contract assets relate to incentive fees that can be earned for meeting certain target on sales of VOIs at properties under our fee-for-service arrangements; however, our right to consideration is conditional upon completing the requirements of the annual incentive fee period.  

Contract liabilities include payments received or due in advance of satisfying our performance obligations. Such contract liabilities include advance deposits received on prepaid vacation packages for future stays at our resorts, deferred revenues related to sales of VOIs of projects under construction, club activation fees and annual dues and the liability for Club Bonus Points awarded to our customers for purchase of VOIs at our properties or properties under our fee-for-service arrangements that may be redeemed in the future.

Transaction Price Allocated to Remaining Performance Obligations

Transaction price allocated to remaining performance obligations represents contract revenue that has not yet been recognized. Our contracts with remaining performance obligations primarily include (i) sales of VOIs under construction, (ii) Club activation fees paid at closing of a VOI purchase, (iii) customers’ advanced deposits on prepaid vacation packages and (iv) Club Bonus Points that may be redeemed in the future. The following table represents the deferred revenue, cost of VOI sales and direct selling costs from sales of VOIs related to projects under construction as of September 30, 2020:

	September 30,		December 31,
($ in millions)	2020		2019
Sales of VOIs, net	$	148	$	84
Cost of VOI sales(1)		44		27
Sales and marketing expense		21		12

⁽¹⁾ Includes anticipated Cost of VOI sales related to inventory associated with Sales of VOIs under construction that will be acquired under a just-in-time arrangement once construction is complete.

We expect to recognize the revenue, costs of VOI sales and direct selling costs upon completion of the projects in 2021.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Club Bonus Points as of September 30, 2020:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	119	18 months	Upon customer stays
Club activation fees		66	7 years	Straight-line basis over average inventory holding    period
Club Bonus Points		60	24 months	Upon redemption