Variable Interest Entities

6 Months Ended

Jun. 30, 2025

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

The Company analyzes its variable interests, including loans, guarantees, interests in special purpose entities (“SPEs”), and equity investments, to determine if an entity in which the Company has a variable interest is a VIE. If the entity is deemed to be a VIE, the Company consolidates those VIEs for which the Company is the primary beneficiary.

Vacation Ownership Contract Receivables Securitizations

The Company pools qualifying VOCRs and sells them to bankruptcy-remote entities. VOCRs qualify for securitization based primarily on the credit strength of the VOI purchaser to whom financing has been extended. VOCRs are securitized

through bankruptcy-remote SPEs that are consolidated within the Company’s Condensed Consolidated Financial Statements. As a result, the Company does not recognize gains or losses resulting from these securitizations at the time of sale to the SPEs. Interest income is recognized when earned over the contractual life of the VOCRs. The Company services the securitized VOCRs pursuant to servicing agreements negotiated on an arm’s-length basis based on market conditions. The activities of these SPEs are limited to (i) purchasing VOCRs from the Company’s vacation ownership subsidiaries, (ii) issuing debt securities and/or borrowing under a conduit facility to fund such purchases, and (iii) entering into derivatives to hedge interest rate exposure. The bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to creditors of the Company and legally are not assets of the Company. Additionally, the non-recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors of these SPEs have no recourse to the Company for principal and interest.

The assets and liabilities of these vacation ownership SPEs are as follows (in millions):


	June 30, 2025		December 31, 2024
Securitized contract receivables, gross (a)	$	2,105	$	2,293
Securitized restricted cash (b)	84		92
Interest receivables on securitized contract receivables (c)	16		19
Other assets (d)	8		8
Total SPE assets	2,213		2,412
Non-recourse term notes (e) (f)	1,576		1,746
Non-recourse conduit facilities (e)	383		377
Other liabilities (g)	2		3
Total SPE liabilities	1,961		2,126
SPE assets in excess of SPE liabilities	$	252	$	286

(a)Included in Vacation ownership contract receivables, net on the Condensed Consolidated Balance Sheets.

(b)Included in Restricted cash on the Condensed Consolidated Balance Sheets.

(c)Included in Trade receivables, net on the Condensed Consolidated Balance Sheets.

(d)Primarily includes deferred financing costs for the bank conduit facilities and a security investment asset, which are included in Other assets on the Condensed Consolidated Balance Sheets.

(e)Included in Non-recourse vacation ownership debt on the Condensed Consolidated Balance Sheets.

(f)Includes deferred financing costs of $21 million and $23 million as of June 30, 2025 and December 31, 2024, related to non-recourse debt.

(g)Primarily includes accrued interest on non-recourse debt, which is included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets.

In addition, the Company has VOCRs that have not been securitized through bankruptcy-remote SPEs. Such gross receivables were $1.07 billion and $940 million as of June 30, 2025 and December 31, 2024.

A summary of total vacation ownership receivables and other securitized assets, net of securitized liabilities and the allowance for loan losses, is as follows (in millions):


	June 30, 2025		December 31, 2024
SPE assets in excess of SPE liabilities	$	252	$	286
Non-securitized contract receivables	1,067		940
Less: allowance for loan losses	604		614
Total, net	$	715	$	612

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

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