REVENUE FROM CONTRACTS WITH CUSTOMERS

6 Months Ended

Jun. 30, 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. See Note 16: Business Segments for more information related to our segments.

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Real Estate Sales and Financing Segment	2023		2022		2023		2022
Sales of VOIs, net	$	355	$	361	$	673	$	630
Sales, marketing, brand and other fees	173		161		331		280
Interest income	65		54		131		109
Other financing revenue	11		10		19		19
Real estate sales and financing segment revenues	$	604	$	586	$	1,154	$	1,038

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Resort Operations and Club Management Segment	2023		2022		2023		2022
Club management	$	53	$	51	$	104	$	102
Resort management	80		73		160		147
Rental(1)	162		155		309		279
Ancillary services	11		16		22		28
Resort operations and club management segment revenues	$	306	$	295	$	595	$	556

(1)Excludes intersegment transactions. 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)	June 30, 2023		December 31, 2022
Receivables	$	324	$	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, 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)	June 30, 2023		December 31, 2022
Contract liabilities:
Advanced deposits	$	185	$	150
Deferred sales of VOIs of projects under construction	6		3
Club dues and Club activation fees	142		76
Bonus point incentive liability(1)	101		106
Deferred maintenance fees	29		14
Other deferred revenue	31		42

(1)The balance includes $56 million and $51 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, respectively. 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 and six months ended June 30, 2023, that was included in the contract liabilities balance at December 31, 2022, was approximately $43 million and $99 million, respectively.

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. Contract assets were $7 million as of June 30, 2023 and $9 million 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 June 30, 2023 and December 31, 2022:

($ in millions)	June 30, 2023		December 31, 2022
Sales of VOIs, net	$	6	$	3
Cost of VOI sales	1		1
Sales and marketing expense	1		1

During the six months ended June 30, 2023, we recognized $4 million of sales of VOIs, net, offset by deferrals of $6 million, related to sales of projects under construction, some of which were completed during the year. We expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of June 30, 2023 upon their completion in 2024.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus points incentive liability as of June 30, 2023:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	185	18 months	Upon customer stays
Club activation fees	65		7 years	Straight-line basis over average inventory holding period
Bonus point incentive liability	101		18 - 30 months	Upon redemption