v3.26.1
ACQUISITION
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITION ACQUISITION
On April 29, 2026 (“Elara Acquisition Date”), we completed the acquisition of the remaining 75% ownership interest in BRE Ace LLC (“Elara”), which owns the Elara timeshare resort, from BRE Ace Holdings LLC (the “Elara Acquisition”) for a total cash consideration of $131 million of which $3 million was accrued for within Accounts payable, accrued expenses and other as of June 30, 2026. The transaction resulted in a controlling 100% ownership interest in Elara. Costs related to the Elara Acquisition for the three and six months ended June 30, 2026 were $2 million, which were expensed as incurred, and reflected as Acquisition and integration-related expense in our unaudited condensed consolidated statements of income.
The Elara Acquisition expands our resort portfolio and increases our timeshare financing receivable base.
Prior to obtaining a controlling financial interest, we accounted for our 25% investment in Elara as an equity method investment. In accordance with the accounting for step-acquisitions, we recognized a loss of $1 million which was included in Other gain (loss), net in our unaudited condensed consolidated statements of income for the three and six months ended June 30, 2026. The acquisition-date fair value of the previously held interest was based upon the grossed-up value of the cash consideration for the incremental 75% interest.
The following table presents the preliminary fair value of each class of consideration transferred in relation to the Elara Acquisition as of the Elara Acquisition Date:
($ in millions)
Cash consideration for incremental 75% interest
$131 
Effective settlement of preexisting relationships(2)
$(7)
Total purchase consideration$124 
Fair value of previously held 25% ownership interest(3)
$44 
Total allocatable value$168 
(1) The $131 million of cash consideration for the incremental 75% interest consists of $128 million paid on April 29, 2026 upon completion of the Elara Acquisition and $3 million accrued for within Accounts payable, accrued expenses and other as of June 30, 2026 for certain post-closing adjustments based on the terms and conditions of the purchase agreement.
(2) The amount primarily represents our effective settlement of outstanding payables to Elara. No gain or loss was recognized upon settlement as amounts were determined to be reflective of fair market value.
(3) The amount was determined based upon the grossed up value of the cash consideration for the incremental 75% interest.
Preliminary Fair Values of Assets Acquired and Liabilities Assumed
We accounted for the Elara Acquisition as a business combination, which requires us to record the assets acquired and liabilities assumed at fair value as of the Elara Acquisition Date. The preliminary fair values of the assets acquired and liabilities assumed, which are presented in the table below, and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as information compiled by management, including the books and records of Elara. Our estimates and assumptions are subject to change during the measurement period, not to exceed one-year from the Elara Acquisition Date. The Elara Acquisition could necessitate the need to use the full one-year measurement period to adequately analyze and assess a number of the factors used in establishing the asset and liability fair values as of the Elara Acquisition Date. Any potential adjustments made could be material in relation to the values presented in the table below.
As discussed more fully below, the primary areas of the purchase price allocation that are not yet finalized include the following: (1) finalizing the review and valuation of acquired inventory (including key assumptions, inputs and estimates), (2) finalizing the review and valuation of acquired property and equipment (including key assumptions, inputs and estimates) and assigning the remaining useful lives to the depreciable assets; (3) finalizing the review and valuation of
acquired timeshare financing receivables (including key assumptions, inputs and estimates); and (4) finalizing the review and valuation of other acquired assets and assumed liabilities, including debt assumed.
($ in millions)Preliminary Amounts Recognized as of the Elara Acquisition Date
Assets acquired
Cash and cash equivalents$9 
Restricted cash20 
Accounts receivable
4 
Timeshare financing receivables, net(1)
411 
Inventory37 
Property and equipment11 
Other assets4 
Total assets acquired$496 
Liabilities assumed
Accounts payable, accrued expenses and other11 
Advanced deposits
1 
Debt
7 
Non-recourse debt
310 
Total liabilities assumed329 
Net assets acquired$167 
Total purchase consideration$124 
Plus: Fair value of previously held 25% ownership interest
$44 
Less: Net assets acquired
$167 
Goodwill(2)
$1 
(1)The $411 million of Timeshare financing receivables, net includes $293 million of securitized timeshare financing receivables,net and $118 million unsecuritized timeshare financing receivables, net.
(2)Goodwill is calculated as total purchase consideration transferred plus the fair value of previously held 25% ownership interest less net assets acquired. It represents the benefit we expect to achieve from the expanded resort portfolio.
Timeshare Financing Receivables
We acquired timeshare financing receivables, net which consist of loans to customers who purchased vacation ownership products and chose to finance their purchases. These timeshare financing receivables, net are collateralized by the underlying VOIs and generally have 10-year amortizing repayment terms. We preliminarily estimated the fair value of the timeshare financing receivables using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivables. Our preliminarily estimated fair value of securitized timeshare financing receivables, net, is $293 million and unsecuritized timeshare financing receivables, net is $118 million. We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default, severity and prepayment assumptions, which could result in changes to our preliminary estimate. See Note 6: Timeshare Financing Receivables, net for additional information.
Inventory
We acquired inventory which primarily consists of completed unsold VOIs. We preliminarily estimated the fair value of acquired inventory using a discounted cash flows method, which included an estimate of cash flows expected to be generated from the sale of VOIs. Significant estimates and assumptions impacting the fair value of the acquired inventory that are subjective and/or require complex judgments include our estimates of operating costs and margins, and the discount rate. Certain other estimates and assumptions impacting the fair value of the acquired inventory involving less subjective and/or less complex judgments include: short-term and long-term revenue growth rates, capital expenditures, tax rates and other factors impacting the discounted cash flows. We are continuing to assess the market assumptions and property conditions, which could result in changes to these preliminary values.
Property and Equipment
We acquired property and equipment, which includes buildings and improvements, furniture, fixtures and equipment. For our preliminary analysis, we estimated the fair value of the property and equipment using the cost approach. In determining the fair value using the cost approach, we estimated the reproduction cost by applying BLS trending indices to the historical capitalized costs within the fixed asset details. In addition, furniture, fixtures, and equipment assets were held at their carrying value, which is our best estimate of fair value at this time given the information available. We are continuing to assess the cost assumptions and property conditions, which could result in changes to these preliminary values.
Debt
As part of the acquisition and consideration transferred, we assumed $7 million of Elara's existing corporate debt and accrued interest. As this debt was settled shortly after the Elara Acquisition Date, fair value was assumed to approximate carrying value.
Non-Recourse Debt
We preliminarily estimated the fair value of the securitized debt using a discounted cash flow model under the income approach. The significant assumptions in our analysis include default rates, prepayment rates, bond interest rates and other structural factors. We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default and prepayment assumptions, which could result in changes to our preliminary estimate.
Goodwill
We have recorded a preliminary estimate of $1 million of goodwill in connection with the Elara Acquisition. We have allocated the acquired goodwill to our Real Estate Sales and Financing segment. Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Elara Acquisition. The majority of goodwill is expected to be deductible for tax purposes.