REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2024

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 reportable segments: (i) Real estate sales and financing and (ii) Resort operations and club management. See Note 17: Business Segments for more information related to our segments.

($ in millions)	Three Months Ended March 31,
Real Estate Sales and Financing Segment	2024		2023
Sales of VOIs, net	$	438	$	318
Sales, marketing, brand and other fees	145		158
Interest income	96		66
Other financing revenue	8		8
Real estate sales and financing segment revenues	$	687	$	550

($ in millions)	Three Months Ended March 31,
Resort Operations and Club Management Segment	2024		2023
Club management	$	63	$	51
Resort management	103		80
Rental(1)	169		147
Ancillary services	12		11
Resort operations and club management segment revenues	$	347	$	289

(1)Excludes intersegment transactions. See Note 17: Business Segments for additional information.

Receivables from Contracts with Customers, Contract Liabilities, and Contract Assets

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. Our timeshare financing receivables consist of loans related to our financing of VOI sales that are secured by the underlying timeshare properties. See Note 6: Timeshare financing receivables for additional information.

The following table provides information on our contracts with customers which are included in Accounts receivable, net and Timeshare financing receivables, net, respectively, on our condensed consolidated balance sheets:

($ in millions)	March 31, 2024		December 31, 2023
Receivables from contracts with customers:
Accounts receivable, net	$	360	$	343
Timeshare financing receivables, net	3,030		2,113
Total	$	3,390	$	2,456

Contract liabilities include payments received or due in advance of satisfying our performance obligations. Such contract liabilities include advanced deposits received on prepaid vacation packages for future stays at our resorts, deferred revenue 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)	March 31, 2024		December 31, 2023
Contract liabilities:
Advanced deposits	$	181	$	179
Deferred sales of VOIs of projects under construction	35		39
Club activation fees and annual dues	180		97
Bonus point incentive liability(1)	94		83
Deferred maintenance fees	39		12
Other deferred revenue	86		38

(1)The balance includes $52 million and $54 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, 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 months ended March 31, 2024, that was included in the contract liabilities balance at December 31, 2023, was approximately $82 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, 2024, and $13 million of contract assets as of December 31, 2023.

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.

Deferred VOI sales includes deferred revenue from sales associated with phases or buildings under-construction and not yet completed. The following table presents the deferred revenue, deferred cost of VOI sales and deferred direct selling costs from sales of VOIs related to projects under construction:

($ in millions)	March 31, 2024		December 31, 2023
Sales of VOIs, net	$	35	$	39
Cost of VOI sales	11		10
Sales and marketing expense	5		6

During the three months ended March 31, 2024, we recognized $41 million of sales of VOIs, net, offset by deferrals of $39 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 March 31, 2024, 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 March 31, 2024:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	181	18 months	Upon customer stays
Club activation fees	66		7 years	Straight-line basis over average inventory holding period
Bonus point incentive liability	94		18 - 30 months	Upon redemption