Marriott Vacations Worldwide Corporation

03/02/2026 | Press release | Distributed by Public on 03/02/2026 05:03

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
You should read the following discussion of our results of operations and financial condition together with our audited historical consolidated financial statements and accompanying notes in Part II, "Item 8. Financial Statements and Supplementary Data," and Part I, "Item 1. Business," of this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those we discuss in the sections of this Annual Report entitled "Risk Factors" and "Special Note About Forward-Looking Statements."
Our consolidated financial statements, which we discuss below, reflect our historical financial condition, results of operations and cash flows. The financial information discussed below and included in this Annual Report may not, however, necessarily reflect what our financial condition, results of operations and cash flows may be in the future.
Our discussion and analysis of fiscal year 2025 to fiscal year 2024 is included herein. Our discussion and analysis of fiscal year 2024 to fiscal year 2023 has been omitted from this Form 10-K and can be found in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the Securities and Exchange Commission on February 28, 2025.
Business Overview
We are a leading global vacation company that offers vacation ownership, exchange, rental, and resort and property management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management.
Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world's most iconic brands licensed under exclusive long-term relationships. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Vacation Club brands. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. We also have a license to use the St. Regis brand for specified fractional ownership products.
Our Vacation Ownership segment generates revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners' associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.
Our Exchange & Third-Party Management segment includes an exchange network and membership programs, as well as the provision of management services to other resorts and lodging properties. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners' association management, and other related products and services. We provide these services through our Interval International and Aqua-Aston businesses.
Corporate and other represents the portion of our results that are not allocable to our segments, including those relating to Consolidated Property Owners' Associations.
Accounting Policies Used in Describing Results of Operations
Sale of Vacation Ownership Products
We recognize revenues from the sale of vacation ownership products (also referred to as "VOIs") when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible, which typically correlates to expiration of the statutory rescission period.
Sales of vacation ownership products may be made for cash or we may provide financing. In addition, we recognize settlement fees associated with the transfer of VOIs and commission revenues from sales of VOIs on behalf of third parties, which we refer to as "resales revenue."
We also provide sales incentives to certain purchasers. These sales incentives typically include Marriott Bonvoy points, World of Hyatt points or an alternative sales incentive that we refer to as "plus points." Plus points are redeemable for stays at our resorts or for use in other third-party offerings, generally up to two years from the date of issuance.
Finally, as more fully described in "Financing" below, we record the difference between the contract receivable or vacation ownership note receivable and the amount we expect to collect from debtors (also known as a vacation ownership notes receivable reserve or a sales reserve) as a reduction of revenues from the sale of VOIs at the time we recognize revenues from a sale.
We report, on a supplemental basis, contract sales for our Vacation Ownership segment. Contract sales consist of the total amount of VOI sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of VOIs on behalf of third parties, which we refer to as "resales contract sales." In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests (also referred to as an equity upgrade), we include only the incremental value purchased as contract sales. Contract sales differ from revenues from the sale of VOIs that we report on our income statements due to the requirements for revenue recognition described above. We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.
Cost of vacation ownership products includes costs to acquire, develop and construct our projects (also known as real estate inventory costs), other non-capitalizable costs associated with the overall project development process and settlement expenses associated with the closing process. For each project, we expense inventory costs in the same proportion as the revenue recognized. Consistent with the applicable accounting guidance, to the extent there is a change in the estimated sales revenues or inventory costs for the project in a period, a non-cash adjustment is recorded on our income statements to true up costs in that period to those that would have been recorded historically if the revised estimates had been used. These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements.
Management and Exchange
Our management and exchange revenues include revenues generated from fees we earn for managing each of our vacation ownership resorts, providing property management, owners' association management and related services and fees we earn for providing rental services and related hotel, condominium resort, and owners' association management services to vacation property owners.
In addition, we earn revenue from ancillary offerings, including food and beverage outlets, golf courses and other retail and service outlets located at our Vacation Ownership resorts. We also receive annual membership fees, club dues and certain transaction-based fees from members, owners and other third parties.
Management and exchange expenses include costs to operate the food and beverage outlets, other ancillary operations and to provide overall customer support services, including reservations, and certain transaction-based expenses relating to third-party exchange service providers.
In our Vacation Ownership segment and Consolidated Property Owners' Associations, we refer to these activities as "Resort Management and Other Services."
Financing
We offer financing to qualified customers for the purchase of most types of our VOIs. The typical financing agreement provides for monthly payments of principal and interest with the principal balance of the loan fully amortizing over the term of the related vacation ownership note receivable, which is generally ten to fifteen years. While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates. We may use incentives to encourage our customers to choose our financing. Included within our vacation ownership notes receivable are originated vacation ownership notes receivable and vacation ownership notes receivable acquired in connection with the ILG Acquisition and the Welk Acquisition.
The interest income earned from our vacation ownership financing arrangements is earned on an accrual basis on the principal balance outstanding over the contractual life of the arrangement and is recorded as Financing revenues on our Income Statements. Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable portfolio. The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections and defaults. We calculate financing propensity as contract sales volume of
financed contracts originated in the period divided by contract sales volume of all contracts originated in the period. We do not include resales contract sales in the financing propensity calculation. First-time buyers are more likely to finance their purchases and remain an integral part of our overall marketing and sales strategy.
Acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model. The estimates of the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and the estimated value of collateral securing the acquired vacation ownership notes receivable.
In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI. We return VOIs that we reacquire through foreclosure or revocation back to inventory. As discussed above, for originated vacation ownership notes receivable, we record a reserve at the time of sale and classify the reserve as a reduction to revenues from the sale of vacation ownership products on our Income Statements. Revisions to estimates that result in decreases or increases to the reserve for originated vacation ownership notes receivable can increase or decrease revenues, respectively. In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve as an adjustment to Financing expenses on our Income Statements. See Footnote 5 "Vacation Ownership Notes Receivable" to our Financial Statements for further information.
Financing expenses include consumer financing interest expense, which represents interest expense associated with the securitization of our vacation ownership notes receivable, costs to support the financing, servicing and securitization processes and changes in expected credit losses related to acquired vacation ownership notes receivable. We distinguish consumer financing interest expense from all other interest expense because the debt associated with the consumer financing interest expense is considered to be an operating expense of our business.
Rental
In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory. We obtain rental inventory and generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties. We also recognize rental revenue from the utilization of plus points at redemption for rental stays at one of our resorts or other third-party offerings. For rental revenues associated with VOIs which we own and which are registered and held for sale, to the extent that the revenues from rental are less than costs, revenues are reported net of rental expenses in accordance with Accounting Standards Codification ("ASC") Topic 978, "Real Estate - Time-Sharing Activities" ("ASC 978"). The rental activity associated with discounted vacation packages requiring a tour ("preview stays") is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense.
In our Exchange & Third-Party Management segment, we offer vacation rental offers known as Getaways to members of the Interval Network and certain other membership programs. Getaways allows us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members. Resort accommodations typically become available as Getaways as a result of seasonal oversupply or underutilized space in the applicable exchange program. We also source resort accommodations specifically for the Getaways program. Rental revenues associated with Getaways are reported net of related expenses.
Rental expenses include:
•Maintenance and other fees on unsold inventory;
•Costs to provide alternative usage options, including Marriott Bonvoy points, World of Hyatt points, and offerings available as part of third-party offerings, for owners who elect to exchange their inventory; and
•Marketing costs and direct operating and related expenses in connection with the rental business (such as housekeeping, labor costs, credit card expenses, and reservation services).
Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, rental inventory on hand and keys allocated for preview stays. In addition, rental metrics may not correlate with rental revenues due to the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above). The "transient keys" metric represents the blended mix of inventory available for rent and includes all of the combined inventory configurations available in our resort system.
Cost Reimbursements
Cost reimbursements include direct and indirect costs that are reimbursed to us by owners' associations and customers under management contracts, which costs are principally payroll-related costs at the locations where we employ the associates providing on-site services, costs associated with property refurbishments (including those where we act as the project manager), and insurance costs. All costs reimbursed to us by owners' associations and customers, with the exception of taxes assessed by a governmental authority, are reported on a gross basis. We recognize cost reimbursements when we incur the related reimbursable costs. Cost reimbursements consist of actual expenses with no added margin.
Interest Expense
Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense, net of interest income.
Transaction and Integration Costs
Transaction and integration costs primarily include fees paid to change-management consultants, technology-related costs associated with the integrations of ILG and Welk and charges for employee retention, severance and other termination-related benefits. Transaction and integration costs also include costs related to the ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax-related accruals. During the third quarter of 2023 and the second quarter of 2024, we discontinued classifying costs associated with the continued integration of ILG and Welk, respectively, in Transaction and integration costs. Further integration costs incurred after these periods are reflected in the operating results of each of our segments and/or General and administrative expenses.
Performance Measures
Management uses the following key performance metrics to assess the Company's operational efficiency and market competitiveness, identify trends, develop financial projections, and support strategic decision-making. Management continuously monitors and analyzes these metrics to help ensure that the Company remains responsive to changing market conditions and aligned with our long-term growth objectives. The definitions and methodologies of certain of these metrics may differ from those used by other companies, and as a result, these metrics may not be directly comparable to similarly titled measures reported by other companies.
•Contract sales from the sale of VOIs reflects the pace of sales in our business.
•Total contract sales include contract sales from the sale of vacation ownership products, including non-consolidated joint ventures.
•Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures.
•Volume per guest("VPG") is calculated as consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (collectively, "Tours") divided by the number of Tours conducted during the applicable period. We believe that VPG is a key driver of profitability as it reflects both the average contract price and the effectiveness of converting touring guests into purchasers.
•Toursis defined as the number of sales tours conducted during the applicable period, including virtual and offsite sales tours and excludes telesales. We view Tours as an important indicator of touring guest volume.
•Development profit marginis calculated as Development profit divided by revenues from the sale of vacation ownership products. Development profit represents revenues from the sale of vacation ownership products, net of the cost of vacation ownership products and related marketing and sales costs. We believe that Development profit margin is a key indicator of the profitability of our development activities and the effectiveness of its associated marketing and sales efforts.
•Total active members represents the number of active members of the Interval Network active members as of the end of the applicable period. We consider this metric to be an important indicator of the size of the member base eligible to transact within the Interval Network.
•Average revenue per memberis calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue generated by the Interval Network by the monthly weighted average number of active
members of the Interval Network during the applicable period. We believe this metric is a meaningful indicator of member engagement.
•Segment financial results attributable to common stockholdersreflects revenues less expenses that are directly attributable to each respective reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We believe this measure provides meaningful insight into the operating performance of our reportable business segments. See Footnote 19 "Business Segments" to our Financial Statements for further information about our reportable business segments.
•Adjusted EBITDA marginis calculated as Adjusted EBITDA divided by the Company's total revenues less cost reimbursements revenues.
•Segment Adjusted EBITDA marginis calculated as Segment Adjusted EBITDA divided by the respective segment's total revenues less cost reimbursements revenues.
NM = Not meaningful.
Management Priorities
Our management priorities for 2026 are centered on driving stronger profitability and improving cash flow. We are focused on reshaping the quality and composition of our tours, tightening our cost structure, and refining our global development strategy. We expect that delivering higher-quality tours via various initiatives will increase VPGs while reducing default rates on newly originated vacation ownership notes receivable. For example, we are using FICO scores to pre-qualify prospective purchasers and focusing on increasing in-house capture rates, which has historically been one of our highest VPG channels. Additional priorities include reducing overhead, focusing on marketing and sales talent, delaying modernization projects to manage cash flow, monetizing certain non-core assets on our balance sheet, and managing maintenance fee increases for each of our vacation ownership products.
Asia Pacific Strategy Change
A key element of our revised strategy relates to our Asia Pacific business, where we have experienced lower returns than expected, partially due to higher defaults that are primarily driven by customers from newer source markets. To address these dynamics, we are scaling back growth expectations and right-sizing our business in the region. This includes reducing tours for first-time buyers in select countries, reducing headcount in the region, deferring the purchase of the next phase of our resort in Khao Lak, Thailand, and canceling a purchase commitment for inventory in Bali. Collectively, these actions are designed to concentrate our efforts on markets with the greatest potential to drive profitability and cash flow and resulted in Restructuring expense in our Vacation Ownership segment. We also recorded a non-cash impairment for vacation ownership units in Khao Lak, Thailand primarily attributed to the elongation of the pace of sales and changes in our marketing approach.
Development Strategy Change
As part of our broader financial strategic review, we conducted a comprehensive review to assess the strategic alignment of inventory and property and equipment within our North America vacation ownership business. This review focused on assessing inventory needs in light of our current inventory position and identifying opportunities to monetize non-core assets. The outcome of this review represented an indicator of impairment for certain assets. As a result of our impairment analysis, we recorded a non-cash impairment related to assets associated with future phases of our existing resorts that we no longer plan to further develop. The carrying values of the assets associated with these resorts exceeded their estimated fair values because the carrying values included historical allocations of common infrastructure costs incurred when we built the resorts. In addition, we recorded a non-cash impairment related to certain property and equipment identified for disposition in our Vacation Ownership segment.
We expect to generate between $250 million and $300 million of net cash proceeds over a two year period from the disposition of certain non-core property and equipment and other assets, including $50 million from the disposition of the Cancun hotel in January 2026.
CONSOLIDATED RESULTS
Fiscal Years
($ in millions) 2025 2024 2023
REVENUES
Sale of vacation ownership products $ 1,464 $ 1,448 $ 1,460
Management and exchange 860 843 813
Rental 650 645 571
Financing 360 342 322
Cost reimbursements 1,698 1,689 1,561
TOTAL REVENUES 5,032 4,967 4,727
EXPENSES
Cost of vacation ownership products 184 200 224
Marketing and sales 943 919 823
Management and exchange 476 482 442
Rental 523 481 452
Financing 150 146 113
Royalty fee 113 114 117
General and administrative(1)
242 237 273
Depreciation and amortization 149 146 135
Litigation charges(1)
17 23 13
Modernization(1)
122 4 -
Restructuring(1)
15 6 6
Impairment 577 30 32
Cost reimbursements 1,698 1,689 1,561
TOTAL EXPENSES 5,209 4,477 4,191
Gains (losses) and other income (expense), net 47 (1) 47
Interest expense, net (169) (162) (145)
Transaction and integration costs - (18) (37)
Other - (3) (3)
(LOSS) INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (299) 306 398
Provision for income taxes (8) (89) (146)
NET (LOSS) INCOME (307) 217 252
Net (income) loss attributable to noncontrolling interests (1) 1 2
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (308) $ 218 $ 254
(1) Prior year amounts have been reclassified to conform with our current year presentation.
Operating Statistics
Fiscal Years
2025 vs. 2024
(Contract sales $ in millions) 2025 2024 2023 Change
Vacation Ownership
Consolidated contract sales $ 1,762 $ 1,813 $ 1,772 $ (51) (3%)
VPG $ 3,794 $ 3,911 $ 4,088 $ (117) (3%)
Tours
431,974 432,716 405,825 (742) -%
Exchange & Third-Party Management
Total active members at end of period (000's) 1,507 1,546 1,564 (39) (2%)
Average revenue per member $ 150.51 $ 154.34 $ 156.65 $ (3.83) (2%)
Revenues
Fiscal Years
2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Vacation Ownership $ 4,805 $ 4,730 $ 4,468 $ 75 2%
Exchange & Third-Party Management 213 231 262 (18) (8%)
Total Segment Revenues 5,018 4,961 4,730 57 1%
Consolidated Property Owners' Associations 14 6 (3) 8 NM
Total Revenues $ 5,032 $ 4,967 $ 4,727 $ 65 1%
Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA
EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense and amortization of cloud computing software implementation costs. Share-based compensation expense is excluded to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. During the first quarter of 2025, we began excluding amortization of cloud computing software implementation costs, which are not included in depreciation and amortization, from Adjusted EBITDA for comparability purposes to address the considerable variability among companies in the utilization of productive assets, and have reclassified prior year amounts to conform with our current year presentation.
For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We consider Adjusted EBITDA margin to be an indicator of our operating profitability.
We also use Adjusted EBITDA and Adjusted EBITDA margin, as do analysts, lenders, investors, and others, because these measures exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization as well as amortization of cloud computing software implementation costs because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating or amortizing productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing core operations before the impact of these items with results from other companies.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, other companies in our industry may calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.
Additionally, during 2025, we reclassified $6 million of certain amounts related to ongoing litigation from General and administrative expense to Litigation charges in order to conform our 2024 results with our current year presentation.
Commencing in 2026, interest expense associated with our Warehouse Credit Facility will be included as a component of Consumer financing interest expense within Financing expense. Interest expense on our Warehouse Credit Facility was $13 million and $10 million for the years ended December 31, 2025 and December 31, 2024, respectively.
The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income or loss attributable to common stockholders, which is the most directly comparable GAAP financial measure.
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Net (loss) income attributable to common stockholders
$ (308) $ 218 $ 254 $ (526) NM
Interest expense, net 169 162 145 7 4%
Provision for income taxes 8 89 146 (81) NM
Depreciation and amortization 149 146 135 3 3%
EBITDA 18 615 680 (597) NM
Share-based compensation expense 38 33 31 5 15%
Amortization of cloud computing software implementation costs(1)(2)
6 3 - 3 NM
Certain items(1)
689 85 50 604 NM
Adjusted EBITDA(1)
$ 751 $ 736 $ 761 $ 15 2%
Adjusted EBITDA Margin(1)
22.5% 22.5% 24.0% 0.0 pts
(1) Prior year amounts have been reclassified to conform with our current year presentation.
(2) During the first quarter of 2025, we began excluding Amortization of cloud computing software implementation costs, which are not included in Depreciation and amortization, from Adjusted EBITDA, and have reclassified prior year amounts to conform with our current year presentation.
The table below details the components of Certain items for fiscal years 2025 and 2024.
Fiscal Years
($ in millions) 2025 2024
Gain on disposition of hotel, land, and other $ - $ (8)
Foreign currency translation (gain) loss (22) 13
Insurance proceeds (16) (5)
Change in indemnification asset (4) 5
Change in estimates relating to pre-acquisition contingencies (2) (4)
Other (3) -
(Gains) losses and other (income) expense, net (47) 1
Transaction and integration costs - 18
Purchase accounting adjustments - 1
Litigation charges(1)
17 23
Modernization(1)
122 4
Restructuring(1)
15 6
Impairment 577 30
Other 5 2
Total Certain items(1)
$ 689 $ 85
(1) Prior year amounts have been reclassified to conform with our current year presentation.
Segment Adjusted EBITDA
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Vacation Ownership(1)
$ 868 $ 848 $ 883 $ 20 2%
Exchange & Third-Party Management 91 102 130 (11) (11%)
Segment Adjusted EBITDA(1)
959 950 1,013 9 1%
General and administrative(1)
(242) (237) (273) (5) (2%)
Other 34 23 21 11 43%
Adjusted EBITDA(1)
$ 751 $ 736 $ 761 $ 15 2%
(1) Prior year amounts have been reclassified to conform with our current year presentation.
The following tables present segment financial results attributable to common stockholders reconciled to segment Adjusted EBITDA.
Vacation Ownership
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Segment financial results $ 345 $ 703 $ 777 $ (358) NM
Depreciation and amortization 106 100 93 6 7%
Share-based compensation expense 9 8 8 1 11%
Amortization of cloud computing amortization implementation costs(1)
5 3 - 2 NM
Certain items 403 34 5 369 NM
Segment Adjusted EBITDA(1)
$ 868 $ 848 $ 883 $ 20 2%
Segment Adjusted EBITDA Margin(1)
28.3% 28.2% 30.7% 0.1 pts
(1) Prior year amounts have been reclassified to conform with our current year presentation.
The table below details thecomponents of Certain items for the Vacation Ownership segment financial results for fiscal years 2025 and 2024.
Fiscal Years
($ in millions) 2025 2024
Gain on disposition of hotel, land, and other $ - $ (7)
Insurance proceeds (15) (5)
Change in estimates relating to pre-acquisition contingencies (2) (4)
Other (1) -
Gains and other income, net (18) (16)
Purchase accounting adjustments - 1
Litigation charges 11 18
Restructuring 15 1
Impairment 395 28
Other - 2
Total Certain items $ 403 $ 34
Exchange & Third-Party Management
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Segment financial results $ (116) $ 69 $ 93 $ (185) NM
Depreciation and amortization 24 28 31 (4) (14%)
Share-based compensation expense 2 2 2 - 11%
Certain items 181 3 4 178 NM
Segment Adjusted EBITDA $ 91 $ 102 $ 130 $ (11) (11%)
Segment Adjusted EBITDA Margin
44.6% 46.1% 52.5% (1.5 pts)
The table below details the components of Certain items for the Exchange & Third-Party Management segment financial results for fiscal years 2025 and 2024.
Fiscal Years
($ in millions) 2025 2024
Gains and other income, net $ (1) $ -
Restructuring - 1
Impairment 182 2
Total Certain items $ 181 $ 3
BUSINESS SEGMENTS
Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 19 "Business Segments" to our Financial Statements for further information about our segments.
VACATION OWNERSHIP
Fiscal Years
($ in millions) 2025 2024 2023
REVENUES
Sale of vacation ownership products $ 1,464 $ 1,448 $ 1,460
Resort management and other services 633 612 568
Rental 615 605 531
Financing 360 342 322
Cost reimbursements 1,733 1,723 1,587
TOTAL REVENUES 4,805 4,730 4,468
EXPENSES
Cost of vacation ownership products 184 200 224
Marketing and sales 943 919 823
Resort management and other services 291 293 270
Rental 537 498 466
Financing 150 146 113
Royalty fee 113 114 117
Depreciation and amortization 106 100 93
Litigation charges 11 18 12
Restructuring 15 1 -
Impairment 395 28 12
Cost reimbursements 1,733 1,723 1,587
TOTAL EXPENSES 4,478 4,040 3,717
Gains and other income, net 18 16 29
Other - (3) (3)
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 345 $ 703 $ 777
Sale of Vacation Ownership Products
Fiscal Years 2025 vs. 2024
($ in millions) 2025 % of Consolidated Contract Sales, Net of Resales 2024 % of Consolidated Contract Sales, Net of Resales 2023 % of Consolidated Contract Sales, Net of Resales Change
Consolidated contract sales $ 1,762 $ 1,813 $ 1,772 $ (51) (3%)
Joint venture contract sales 16 16 28 - (1%)
Total contract sales 1,778 1,829 1,800 (51) (3%)
Less:
Resales contract sales (29) (38) (42) 9
Joint venture contract sales (16) (16) (28) -
Consolidated contract sales, net of resales 1,733 1,775 1,730 (42) (2%)
Plus:
Settlement revenue 41 2% 38 2% 39 2% 3
Resales revenue 16 1% 19 1% 22 1% (3)
Revenue recognition adjustments:
Reportability 1 -% (2) -% 3 -% 3
Sales reserve (222) (13%) (278) (16%) (232) (13%) 56
Other(1)
(105) (6%) (104) (6%) (102) (6%) (1)
Sale of vacation ownership products $ 1,464 84% $ 1,448 82% $ 1,460 84% $ 16 1%
VPG
3,794 3,911 4,088 (117) (3%)
Tours
431,974 432,716 405,825 (742) -%
Financing propensity
56.7% 55.9% 58.1% 0.8 pts
Average FICO Score(2)
740 737 735
(1)Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.
(2)For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents.
2025 Compared to 2024
The increase in Sale of vacation ownership products was primarily due to a decrease in our sales reserve reflecting the $70 million sales reserve adjustment (the "additional sales reserve") recorded in the second quarter of 2024, which did not recur in 2025. Lower contract sales were partially offset by higher revenue reportability and financing propensity in 2025. First time buyer contract sales were flat on 1% higher tours. Owner contract sales declined 4% on lower VPG and tours.
Excluding the impact of the additional sales reserve recorded in the second quarter of 2024, our sales reserve as a percent of contract sales in 2025 is approximately 110 basis points higher than the prior year, reflecting our expectation that future defaults will be higher than those experienced prior to 2023. While our delinquency rates at December 31, 2025 have declined approximately 100 basis points compared to December 31, 2024, we do not expect to lower the sales reserve for new originations until we have sufficient, sustained evidence of continued improvement in delinquency and default rates.
Development Profit
Fiscal Years 2025 vs. 2024
($ in millions) 2025 % of Revenue 2024 % of Revenue 2023 % of Revenue Change
Sale of vacation ownership products $ 1,464 $ 1,448 $ 1,460 $ 16 1%
Cost of vacation ownership products (184) 13% (200) 14% (224) 15% 16 8%
Marketing and sales (943) 64% (919) 63% (823) 56% (24) (3%)
Development profit $ 337 $ 329 $ 413 $ 8 2%
Development profit margin 23.0% 22.7% 28.3% 0.3 pts
2025 Compared to 2024
The increase in Development profit was due to the following:
•higher Sale of vacation ownership products (discussed above); and
•lower Cost of vacation ownership products due to the $13 million favorable impact of the additional sales reserve in 2024 partially offset by the sale of higher average cost inventory.
These were partially offset by:
•higher marketing and sales costs due to:
•$10 million of higher costs for occupancy used for previews;
•$8 million of higher marketing and other costs; and
•$6 million of higher salaries, wages and benefits for sales executives, including variable compensation.
Excluding the favorable impact of the additional sales reserve in 2024, both Cost of vacation ownership products and Cost of vacation ownership products as a percentage of sales were flat.
Excluding the impact of the additional sales reserve in 2024, Development profit decreased $49 million and Development profit margin decreased approximately 240 basis points in 2025.
Resort Management and Other Services Revenues, Expenses and Profit
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Management fee revenues $ 221 $ 207 $ 180 $ 14 7%
Ancillary revenues 273 266 252 7 2%
Other management and exchange revenues 139 139 136 - -%
Resort management and other services revenues 633 612 568 21 3%
Resort management and other services expenses (291) (293) (270) 2 1%
Resort management and other services profit $ 342 $ 319 $ 298 $ 23 7%
Resort management and other services profit margin 54.1% 52.1% 52.4% 2.0 pts
Resort occupancy(1)
89.2% 89.8% 88.1% (0.6 pts)
(1)Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service.
2025 Compared to 2024
The increase in Resort management and other services profit reflects $16 million of higher management and exchange profit reflecting continued growth in revenues and operating efficiencies, and $7 million of higher ancillary profit.
Rental Revenues, Expenses and Margin
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Rental revenues $ 615 $ 605 $ 531 $ 10 2%
Rental expenses (537) (498) (466) (39) (8%)
Rental profit $ 78 $ 107 $ 65 $ (29) (27%)
Rental profit margin 12.7% 17.6% 12.4% (4.9 pts)
Transient keys rented(1)
2,236,229 2,172,529 2,072,590 63,700 3%
Average transient key rate $ 258 $ 257 $ 269 $ 1 -%
Rental occupancy(2)
72.0% 72.3% 68.2% (0.3 pts)
(1)Transient keys rented exclude plus points and preview stays.
(2)Rental occupancy represents transient and preview keys divided by keys available to rent, which is total available keys excluding owner usage.
2025 Compared to 2024
Rental profit declined due to:
•$23 million of lower plus point revenue resulting from the non-recurring impact of sales incentive programs put in place during the COVID pandemic, which increased the amount of plus points issued and lengthened the use period through the end of 2024, resulting in higher non-recurring revenues in 2024;
•$13 million of higher unsold maintenance fees associated with developer-owned inventory;
•$17 million of higher marketing, variable and other costs; and
•$2 million of increased costs due to higher owner utilization of third-party vacation offerings.
These amounts are partially offset by:
•$16 million increase in transient rental revenues; and
•$10 million increase in costs allocated to marketing and sales expense for occupancy used for previews.
Rental revenues and Rental expenses are both $17 million higher due to the year over year change in the amount reclassified for costs in excess of rental revenues for developer-owned inventory which is registered and held for sale.
Financing Revenues, Expenses and Margin
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Financing revenues $ 360 $ 342 $ 322 $ 18 5%
Financing expenses (44) (41) (36) (3) (9%)
Consumer financing interest expense (106) (105) (77) (1) -%
Financing profit $ 210 $ 196 $ 209 $ 14 7%
Financing profit margin 58.3% 57.4% 64.9% 0.9 pts
Financing propensity 56.7% 55.9% 58.1% 0.8 pts
2025 Compared to 2024
•Financing revenues reflect higher interest income as a result of a higher average notes receivable balance.
•The increase in financing expense is primarily attributed to higher credit card fees, partially offset by lower operating costs, including those resulting from our cost savings initiatives implemented in the third quarter of 2025.
Litigation Charges
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Litigation charges $ 11 $ 18 $ 12 $ (7) (38%)
2025 Compared to 2024
During 2025 and 2024, litigation charges relate primarily to certain resorts in Europe, as well as a land disposition in the U.S. during 2024.
Restructuring Charges
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Restructuring $ 15 $ 1 $ - $ 14 NM
2025 Compared to 2024
During 2025, we recorded $15 million of restructuring costs, all of which related to the strategy change in our Asia Pacific business, consisting of $10 million for the cancellation of a purchase commitment for 26 vacation ownership units in Bali ($8 million related to the write-off of progress payments and $2 million for the contract termination fee) and $5 million of severance.
Impairment
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Impairment $ 395 $ 28 $ 12 $ 367 NM
During 2025, we recorded non-cash impairment charges of $395 million related to our development strategy change including:
•$160 million to write down the basis of certain non-core Property and equipment and Other assets identified for disposition to their estimated fair values;
•$131 million related to decisions to forego build out of future phases of existing resorts primarily attributed to the fact that the book values of these assets include the historical allocations of common costs incurred when we built the infrastructure of these resorts;
•$75 million to write down the value of vacation ownership interests related to Legacy-Welk reflecting a further elongated pace of sales at a higher marketing and selling cost as the Hyatt-branded vacation ownership business continues to underperform expectations;
•$27 million for the impairment of vacation ownership units in Khao Lak, Thailand classified in Inventory due to the change in strategy for the in Asia Pacific region which elongated the pace of sales and changes in our marketing approach; and
•$2 million for the impairment of inventory in an equity method investment.
During 2024, we recorded non-cash impairment charges of $28 million related to Legacy-Welk inventory. The impairment charge reflects an elongated pace of sales at a higher marketing and selling cost than the estimates used in purchase accounting when we acquired the inventory.
Gains and Other Income
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Gains and other income, net $ 18 $ 16 $ 29 $ 2 NM
During 2025 we benefited from $15 million of proceeds from service interruption insurance relating to the Maui wildfires, a $2 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, and $1 million of other miscellaneous gains.
During 2024 we benefited from $6 million of gains on the disposition of excess real estate, $5 million related to the receipt of business interruption insurance proceeds, a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, and $1 million of other miscellaneous gains.
EXCHANGE & THIRD-PARTY MANAGEMENT
Our Exchange & Third-Party Management segment is comprised of the Interval International and Aqua-Aston businesses.
Fiscal Years
($ in millions) 2025 2024 2023
REVENUES
Management and exchange $ 170 $ 182 $ 206
Rental 35 40 40
Cost reimbursements 8 9 16
TOTAL REVENUES 213 231 262
EXPENSES
Management and exchange 117 122 118
Depreciation and amortization 24 28 31
Litigation charges - - 1
Restructuring - 1 -
Impairment 182 2 4
Cost reimbursements 8 9 16
TOTAL EXPENSES 331 162 170
Gains and other income, net 1 - 1
Other 1 - -
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (116) $ 69 $ 93
Management and Exchange Profit
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Management and exchange revenue $ 170 $ 182 $ 206 $ (12) (7%)
Management and exchange expense (117) (122) (118) 5 4%
Management and exchange profit $ 53 $ 60 $ 88 $ (7) (12%)
Management and exchange profit margin 31.3% 33.2% 42.5% (1.9 pts)
2025 Compared to 2024
•Interval International management and exchange revenues declined $6 million primarily due to 9% lower exchange transaction volume, partially offset by a 6% increase in average exchange fees.
•Management and exchange revenue reflects a $4 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent and a lower average daily rate in the Hawaii market.
•Management and exchange revenue declined $2 million as a result of the sale of an immaterial subsidiary in the second quarter of 2024.
•The decrease in management and exchange expenses was primarily attributable to lower wages and benefits and other costs.
Rental Revenues
Fiscal Years
2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Rental revenues $ 35 $ 40 $ 40 $ (5) (12%)
2025 Compared to 2024
The decrease in rental revenues reflects a 15% decrease in transaction volume, partially offset by a 9% increase in average fees per transaction.
Impairment
Fiscal Years
2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Impairment $ 182 $ 2 $ 4 $ 180 NM
2025 Compared to 2024
In 2025, we recorded a non-cash impairment of $182 million primarily to write down the value of our goodwill ($159 million) as a result of (i) the change in expected future operating results based on a sustained decline in operating performance in comparison to prior expectations; and (ii) the impact of market factors, including a decline in our stock price and market capitalization. In addition, we recorded a $21 million non-cash impairment to write down the value of trade names which was primarily attributed to the decline in estimated future revenues of each of the related businesses and a $2 million impairment related to an operating lease and related assets. See Footnote 10 "Goodwill" and Footnote 11 "Intangible Assets" to our Financial Statements for additional information.
CORPORATE AND OTHER
Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and Other includes the revenues and expenses from the Consolidated Property Owners' Associations.
Fiscal Years
($ in millions) 2025 2024 2023
REVENUES
Resort management and other services $ 57 $ 49 $ 39
Cost reimbursements (43) (43) (42)
TOTAL REVENUES 14 6 (3)
EXPENSES
Resort management and other services 68 67 54
Rental (14) (17) (14)
General and administrative 242 237 273
Depreciation and amortization 19 18 11
Litigation charges(1)
6 5 -
Modernization(1)
122 4 -
Restructuring(1)
- 4 6
Impairment - - 16
Cost reimbursements (43) (43) (42)
TOTAL EXPENSES 400 275 304
Gains (losses) and other income (expense), net 28 (17) 17
Interest expense, net (169) (162) (145)
Transaction and integration costs - (18) (37)
Other (1) - -
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (528) (466) (472)
Provision for income taxes (8) (89) (146)
Net (income) loss attributable to noncontrolling interests (1) 1 2
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (537) $ (554) $ (616)
(1) Prior year amounts have been reclassified to conform with our current year presentation.
General and Administrative
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
General and administrative $ 242 $ 237 $ 273 $ 5 2%
2025 Compared to 2024
The increase in General and administrative expenses is attributed to $27 million of higher wages, benefits and variable compensation and $6 million of severance for our former chief executive officer, partially offset by $8 million of net savings from outsourcing certain finance and accounting and human resources functions, $7 million of lower insurance, $4 million of lower consulting costs and $9 million of other individually insignificant cost reductions.
Litigation Charges
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Litigation charges(1)
$ 6 $ 5 $ - $ 1 3%
(1) Prior year amounts have been reclassified to conform with our current year presentation.
2025 Compared to 2024
Litigation charges during 2025 and 2024 relate to a dispute with a service provider.
Modernization Charges
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Modernization(1)
$ 122 $ 4 $ - $ 118 NM
(1) Prior year amounts have been reclassified to conform with our current year presentation.
2025 Compared to 2024
In November 2024, we announced the creation of a Strategic Business Operations office focused on accelerating our growth and driving operating efficiencies in all areas of our business while increasing organizational agility. The Strategic Business Operations office was created to modernize and optimize our processes and systems, including through advanced technology and automation; increase sales efficiency and inventory optimization; and capture significant savings from initiatives related to procurement and corporate overhead.
2025 Modernization charges related to:
•$87 million of advisory services;
•$18 million for the partial outsourcing of corporate overhead functions;
•$12 million for technology; and
•$5 million related to other initiatives.
In the third quarter of 2025, we outsourced a portion of our human resources and finance and accounting functions to third-party service providers, which we expect will result in annual cost savings of approximately $20 million that will be reflected in multiple expense lines on our income statements.
We expect to incur non-recurring expenses of approximately $100 million in 2026 related to these modernization initiatives.
Gains (Losses) and Other Income (Expense)
Fiscal Years 2025 vs. 2024
($ in millions) 2025 2024 2023 Change
Gains (losses) and other income (expense), net $ 28 $ (17) $ 17 $ 45 NM
In 2025, we recorded $22 million of foreign currency translation gains, a $4 million increase in the receivable from Marriott International for indemnified tax matters, $1 million of insurance proceeds, and $1 million of other gains.
In 2024, we recorded $12 million of foreign currency translation losses and a $5 million reduction in the receivable from Marriott International for indemnified tax matters.
Income Tax
Fiscal Years
($ in millions) 2025 2024 2023
Provision for income taxes $ (8) $ (89) $ (146)
Effective tax rate
(2.8%) 29.0% 36.5%
2025 Compared to 2024
The decrease in income tax expense for 2025 primarily reflects losses before income taxes and noncontrolling interests, as well as the establishment of valuation allowances on certain deferred tax assets. The decrease was further driven by
the absence of the tax expense recognized in 2024 related to the removal of our permanent reinvestment assertion for earnings in certain non-U.S. entities, partially offset by tax benefits associated with 2025 restructuring activity. These decreases were partially offset by the impact of certain state and federal permanent differences and the absence of a benefit recognized in 2024 related to changes in uncertain tax positions.
Timing of Estimated Tax Payments
As part of the federal tax relief provided by the Internal Revenue Service for businesses in areas of Florida affected by hurricanes during 2024, we were permitted to defer certain federal income tax payments without incurring interest or penalties. As a result, we deferred $38 million of estimated tax payments from 2024 to 2025. Similarly, in 2024, under comparable relief measures related to hurricanes in 2023, we deferred $32 million of estimated tax payments from 2023 to 2024. In addition, in 2023, under similar circumstances, we deferred $45 million of estimated tax payments from 2022 to 2023. None of our 2025 estimated tax payments were deferred into 2026.
Refer to Footnote 4 "Income Taxes" for additional information.
Consolidated Property Owners' Associations
The following table illustrates the impact of certain Consolidated Property Owners' Associations under the relevant accounting guidance.
Fiscal Years
($ in millions) 2025 2024 2023
REVENUES
Resort management and other services $ 57 $ 49 $ 39
Cost reimbursements (43) (43) (42)
TOTAL REVENUES 14 6 (3)
EXPENSES
Resort management and other services 68 67 54
Rental (14) (17) (14)
Cost reimbursements (43) (43) (42)
TOTAL EXPENSES 11 7 (2)
Interest expense, net - 1 1
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 3 - -
Provision for income taxes (1) (1) (1)
Net (income) loss attributable to noncontrolling interests (1) 1 2
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
$ 1 $ - $ 1
Liquidity and Capital Resources
Typically, our capital needs are supported by cash on hand, cash generated from operations, our ability to access funds under the Warehouse Credit Facility and the Revolving Corporate Credit Facility, our ability to raise capital through securitizations in the ABS market, and, to the extent necessary, our ability to issue new debt and refinance existing debt. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to stockholders. We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs.
At December 31, 2025, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.2, a manageable leverage level, and we remain focused on reducing this ratio over time.
Subsequent to the end of 2025, we used the proceeds from the 2033 Notes to repay our 2026 Convertible Notes upon maturity. See Footnote 15 "Debt" to our Financial Statements for further information related to maturities of our debt.
Sources of Liquidity
Cash from Operations
Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) cash generated from our rental and resort management and other services operations.
Vacation Ownership Notes Receivable Securitizations
We periodically securitize, without recourse, through bankruptcy remote special purpose entities, the majority of the notes receivable originated in connection with the sale of vacation ownership products to institutional investors in the ABS term securitization market. These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes. In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are collateralized by a single pool of transferred vacation ownership notes receivable. In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued.
Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default. Loan defaults under securitizations offset a portion of the excess spread we receive, on a monthly basis. We completed two term securitization transactions in 2025 resulting in net proceeds of $908 million.
Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool's parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. At the recent level of defaults, there is no impact to cash whether we repurchase defaulted vacation ownership notes receivable from a securitization VIE and pursue foreclosure or foreclose on behalf of a securitization VIE. During 2025, and as of December 31, 2025, no securitized vacation ownership notes receivable pools were out of compliance with their respective required parameters. As of December 31, 2025, we had 12 term securitization transactions outstanding. Since 2000, we have issued approximately $10.7 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.
On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize, on a revolving non-recourse basis, eligible consumer loans derived from certain vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur twice a year. During 2025, we amended certain agreements associated with our Warehouse Credit Facility, which among other things extended the revolving period from June 11, 2026 to June 11, 2027. At December 31, 2025, no borrowings were outstanding on our Warehouse Credit Facility.
As of December 31, 2025, $176 million of gross vacation ownership notes receivable were eligible for securitization. See Footnote 14 "Securitized Debt" and Footnote 18 "Variable Interest Entities" for further information on these facilities.
Issuance of Senior Unsecured Notes
During the third quarter of 2025, we issued the 2033 Notes with an aggregate principal amount of $575 million and we received net proceeds of $567 million from the offering, after deducting the underwriting fees and transaction expenses. We used the net proceeds to repay our 2026 Convertible Notes due in January 2026.
Corporate Credit Facility
During 2025, we entered into an amendment to the Corporate Credit Facility (the "Amendment"), which, among other things, increased the borrowing capacity on our Revolving Corporate Credit Facility from $750 million to $800 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions. The Amendment also extended the termination date from March 31, 2027 to March 24, 2030, reduced
certain fees and interest costs, and increased the letter of credit sub-facility of the Revolving Corporate Credit Facility from $75 million to $150 million. At December 31, 2025, no borrowings and $13 million of letters of credit were outstanding under our Revolving Corporate Credit Facility. See Footnote 15 "Debt" to our Financial Statements for more information pertaining to this facility.
Uses of Cash
We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners' associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, timing and amount of voluntary repurchases of defaulted vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisitions and development.
Seasonality
Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments. Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year. Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we generally have variable compensation-related cash outflows associated with payment of annual bonuses.
Operations
In addition to net income or loss and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:
Inventory Spending (In Excess of) Less Than Cost of Sales
Fiscal Years
($ in millions) 2025 2024 2023
Inventory spending $ (111) $ (183) $ (89)
Purchase and development of property for future transfer to inventory (140) (10) (27)
Inventory costs 136 150 176
Inventory spending (in excess of) less than cost of sales $ (115) $ (43) $ 60
We plan to restrict our new inventory spending to capital efficient arrangements where our cash outlay coincides with start of sales, as well as low-cost reacquired inventory. Through our existing VOI repurchase program, we proactively acquire previously sold VOIs from owners' associations and individual owners at lower costs than would be required to develop new inventory. Among other reasons for repurchasing inventory, we expect these repurchases will help stabilize the future cost of our vacation ownership products. In 2025, we fulfilled existing commitments to purchase property in Waikiki and Thailand.
Vacation Ownership Notes Receivable Collections Less Than Originations
Fiscal Years
($ in millions) 2025 2024 2023
Vacation ownership notes receivable collections - non-securitized $ 160 $ 111 $ 152
Vacation ownership notes receivable collections - securitized 519 521 444
Vacation ownership notes receivable originations (1,030) (1,015) (987)
Vacation ownership notes receivable collections less than originations $ (351) $ (383) $ (391)
Vacation ownership notes receivable collections were less than originations in 2025, 2024 and 2023 due to the growth of our vacation ownership notes receivable portfolio.
Repurchase of Common Stock
The following table summarizes share repurchase activity under our Share Repurchase Program:
($ in millions, except per share amounts) Number of Shares Repurchased Cost Basis of Shares Repurchased Average Price
Paid per Share
As of December 31, 2024 25,790,550 $ 2,461 $ 95.40
For the year ended December 31, 2025 1,004,613 61 61.26
As of December 31, 2025 26,795,163 $ 2,522 $ 94.12
See Footnote 16 "Stockholders' Equity" to our Financial Statements for further information related to our current share repurchase program.
Payment of Dividends to Common Stockholders
We distributed cash dividends to holders of our common stock during the year ended December 31, 2025 as follows:
Declaration Date
Stockholder Record Date
Distribution Date Dividend per Share
December 6, 2024 December 19, 2024 January 3, 2025 $0.79
February 20, 2025 March 5, 2025 March 19, 2025 $0.79
May 12, 2025 May 23, 2025 June 6, 2025 $0.79
September 3, 2025 September 17, 2025 October 1, 2025 $0.79
On December 12, 2025, our Board of Directors declared a quarterly dividend of $0.80 per share that was paid subsequent to the end of 2025, on January 7, 2026, to stockholders of record as of December 24, 2025.
Subsequent to the end of 2025, on February 19, 2026, our Board of Directors declared a quarterly dividend of $0.80 per share to be paid on March 18, 2026 to stockholders of record as of March 4, 2026.
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.
Material Cash Requirements
The following table summarizes our future material cash requirements from known contractual or other obligations as of December 31, 2025:
Payments Due by Period
($ in millions) Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years
Debt(1)
$ 4,091 $ 727 $ 1,186 $ 694 $ 1,484
Securitized debt(1)(2)
2,822 287 556 523 1,456
Purchase obligations(3)
626 204 333 70 19
Operating lease obligations(4)
84 23 28 17 16
Finance lease obligations(4)
522 18 30 26 448
Other long-term obligations
33 31 2 - -
$ 8,178 $ 1,290 $ 2,135 $ 1,330 $ 3,423
(1)Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.
(2)Payments based on estimated timing of cash flow associated with securitized notes receivable.
(3)Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts
reflected herein represent expected funding requirements under such contracts and primarily relate to future purchases of property and vacation ownership units, outsourced services, and arrangements related to information technology, including cloud computing. Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
(4)Includes interest.
In the normal course of our resort management business, we enter into purchase commitments on behalf of owners' associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the owners' associations, these obligations have minimal impact on our net income or loss and cash flow. These purchase commitments are excluded from the table above.
Supplemental Guarantor Information
The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. ("MORI"), and certain other subsidiaries whose voting securities are wholly owned directly or indirectly by MORI (such subsidiaries collectively, the "Senior Notes Guarantors"). These guarantees are full and unconditional and joint and several. The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.
The following tables present consolidating financial information as of December 31, 2025, and for the fiscal year ended December 31, 2025, for MVWC and MORI on a stand-alone basis (collectively, the "Issuers"), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVWC, and MVW on a consolidated basis.
Condensed Consolidating Balance Sheet
As of December 31, 2025
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI
Cash and cash equivalents $ 135 $ 70 $ 69 $ 132 $ - $ 406
Restricted cash - 21 145 161 - 327
Accounts and contracts receivable, net 21 135 166 117 (11) 428
Vacation ownership notes receivable, net - 251 192 2,122 - 2,565
Inventory - 324 231 137 - 692
Property and equipment, net - 252 593 105 - 950
Goodwill - - 2,958 - - 2,958
Intangibles, net - - 683 28 - 711
Investments in subsidiaries 2,894 3,592 - - (6,486) -
Other 180 155 323 191 (129) 720
Total assets $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
Accounts payable $ 91 $ 45 $ 144 $ 79 $ (1) $ 358
Advance deposits - 72 73 18 - 163
Accrued liabilities 1 130 123 124 (2) 376
Deferred revenue and other - 11 157 212 (9) 371
Payroll and benefits liability 1 109 74 34 - 218
Deferred compensation liability - 165 55 5 - 225
Securitized debt, net - - - 2,173 (27) 2,146
Debt, net 1,144 2,210 179 1 - 3,534
Other - 5 113 24 - 142
Deferred taxes - 105 209 18 (101) 231
MVW stockholders' equity 1,993 1,948 4,233 305 (6,486) 1,993
Noncontrolling interests - - - - - -
Total liabilities and equity $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
Condensed Consolidating Statement of Income
2025
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI
Revenues $ - $ 1,086 $ 2,798 $ 1,192 $ (44) $ 5,032
Expenses (44) (1,396) (2,906) (1,029) 44 (5,331)
Benefit from (provision for) income taxes 12 87 (49) (58) - (8)
Equity in net income (loss) of subsidiaries (276) 129 - - 147 -
Net loss (308) (94) (157) 105 147 (307)
Net income attributable to noncontrolling interests - - - (1) - (1)
Net loss attributable to common stockholders $ (308) $ (94) $ (157) $ 104 $ 147 $ (308)
Recent Accounting Pronouncements
See Footnote 2 "Summary of Significant Accounting Policies" to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards.
Critical Accounting Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if: (1) it requires assumptions to be made that are uncertain at the time the estimate is made; and (2) changes in the estimate, or different estimates that could have been selected, could have a material effect on our results of operations or financial condition.
While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information presently available. Actual results may differ significantly. Additionally, changes in our assumptions, estimates or assessments as a result of unforeseen events or otherwise could have a material impact on our consolidated financial position or results of operations.
See Footnote 2 "Summary of Significant Accounting Policies" to our Financial Statements for further information related to our critical accounting policies and estimates, which are as follows:
•Revenue recognition, including how we recognize revenue under ASC Topic 606 "Revenue from Contracts with Customers" for the sale of vacation ownership products, including our estimates of the sales reserve (variable consideration). Revisions to estimates of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes receivable and can increase or decrease revenue. See Footnote 5 "Vacation Ownership Notes Receivable" to our Financial Statements for further information on our assessments of our originated vacation ownership notes receivable reserve.
•Inventories and cost of vacation ownership products,which require estimation of future revenues (including pricing assumptions) and product costs to apply a relative sales value method specific to the vacation ownership industry and how we evaluate the fair value of our vacation ownership inventory. See Footnote 20 "Restructuring and Impairment" to our Financial Statements for further information.
•Valuation of property and equipment, including when we record impairment losses. See Footnote 20 "Restructuring and Impairment" to our Financial Statements for further information.
•Valuation of goodwill and other intangible assets, including how we determine the fair value of goodwill and our other intangible assets and reporting units, and how we determine when an impairment loss should be recorded. See Footnote 10 "Goodwill" and Footnote 11 "Intangible Assets" to our Financial Statements for further information.
•Loss contingencies, including information on how we account for loss contingencies. Accruals for contingent liabilities are recorded when it is probable that a liability has been incurred, or an asset impaired, and the amount of the loss can be reasonably estimated. Liabilities accrued for legal matters require judgments regarding projected outcomes and range of loss based on historical litigation and settlement experience, recommendations of legal counsel and, if applicable, other experts.
•Income taxes, including the accounting related to uncertain tax positions and the determination of valuation allowances on our deferred tax assets. The recognition and measurement of uncertain tax positions involves consideration of the amounts and probabilities of various outcomes that could be realized upon ultimate resolution. Tax valuation allowances are established to reduce deferred tax assets, such as tax loss carryforwards, to net realizable value. Factors considered in estimating net realizable value include historical results by tax jurisdiction, carryforward periods, income tax strategies and forecasted taxable income.
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