Annual report pursuant to Section 13 and 15(d)

Inventory

v3.20.1
Inventory
12 Months Ended
Dec. 31, 2019
Inventory [Abstract]  
Inventory 6. Inventory

Our VOI inventory consists of the following (in thousands):

As of December 31,

2019

2018

Completed VOI units

$

269,847

$

237,010

Construction-in-progress

3,946

26,587

Real estate held for future development

73,144

70,552

$

346,937

$

334,149

In December 2018, we increased the average selling price of our VOIs by 3%. In June 2017, we increased the average selling price of our VOIs by 4%. As a result of these pricing changes, we also increased our estimate of total gross margin generated on the sale of our VOI inventory. Under the relative sales value method prescribed for timeshare developers to relieve the cost of VOI inventory, changes to the estimate of gross margin expected to be generated on the sale of VOI inventory are recognized on a retrospective basis in earnings. Accordingly, during 2018 and 2017, we recognized a benefit to cost of VOIs sold of $3.6 million ($2.7 million net of tax, $0.04 EPS) and $5.1 million ($3.1 million net of tax, $0.04 EPS), respectively. No such pricing change occurred in 2019.

The interest expense reflected in our consolidated statements of operations and comprehensive income is net of capitalized interest. Interest capitalized to VOI inventory was $0.5 million, $1.3 million and $1.1 million at December 31, 2019, 2018, and 2017, respectively.