Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following tables show our disaggregated revenues by product and 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 16: Business Segments below for more details related to our segments.

($ in millions)	Three Months Ended March 31,
Real Estate Sales and Financing Segment	2023		2022
Sales of VOIs, net	$	318	$	269
Sales, marketing, brand and other fees	158		119
Interest income	66		55
Other financing revenue	8		9
Real estate sales and financing segment revenues	$	550	$	452

($ in millions)	Three Months Ended March 31,
Resort Operations and Club Management Segment	2023		2022
Club management	$	51	$	51
Resort management	80		74
Rental(1)	147		124
Ancillary services	11		12
Resort operations and club management segment revenues	$	289	$	261

(1)Excludes intersegment eliminations. See Note 16: Business Segments for additional information.

Contract Balances

Our accounts receivable that relate to our contracts with customers includes amounts associated with our contractual right to consideration for completed performance obligations 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.

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:

($ in millions)	March 31, 2023		December 31, 2022
Receivables	$	341	$	322

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 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, deferred maintenance fees and other deferred revenue.

The following table presents the composition of our contract liabilities:

($ in millions)	March 31, 2023		December 31, 2022
Contract liabilities:
Advanced deposits	$	174	$	150
Deferred sales of VOIs of projects under construction	—		3
Club dues and Club activation fees	172		76
Bonus Point incentive liability(1)	103		106
Deferred maintenance fees	40		14
Other deferred revenue	41		42

(1)As of March 31, 2023, the balance includes $52 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets. This liability is for incentives from VOI sales and sales and marketing expenses in conjunction with our fee-for-service arrangements.

Revenue earned for the three months ended March 31, 2023, that was included in the contract liabilities balance at December 31, 2022 was approximately $56 million.

Contract assets relate to incentive fees that can be earned for meeting certain targets 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. There were no contract assets as of March 31, 2023 and $9 million contract assets as of December 31, 2022.

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) Bonus Points that may be redeemed in the future.

The following table presents the deferred revenue, cost of VOI sales and direct selling costs from sales of VOIs related to projects under construction as of March 31, 2023 and December 31, 2022.

($ in millions)	March 31, 2023		December 31, 2022
Sales of VOIs, net	$	—	$	3
Cost of VOI sales	—		1
Sales and marketing expense	—		1

As of March 31, 2023, we have recognized all revenue, costs of VOI sales and direct selling costs previously in deferral as all projects under construction were completed in the first quarter of 2023.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus Points incentive liability as of March 31, 2023:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	174	18 months	Upon customer stays
Club activation fees	65		7 years	Straight-line basis over average inventory holding period
Bonus Points incentive liability	103		18 - 30 months	Upon redemption