Marriott Vacations Worldwide Corporation

11/06/2025 | Press release | Distributed by Public on 11/06/2025 13:57

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
We make forward-looking statements throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"), based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: our possible or assumed future results of operations and growth opportunities, revenues, financial condition, leverage, liquidity, returns on investments, margins and related financing, development and rental profits; dividend payments; business strategies; financing plans and the adequacy of capital to meet short-term and long-term liquidity requirements; use of proceeds from senior notes due 2033;our competitive position; our plans to pursue growth opportunities; our expectations regarding average consumer financing interest rates and our financing profit margin; our expectations regarding the objectives, costs and benefits of our Strategic Business Operations office including revenue growth, operational efficiencies and savings, and benefits for our owners; our ability to reduce our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio; our expectations regarding inventory spending, the impact of inventory repurchases and timing of payments for inventory; taxes; our ability to securitize consumer loans; and expectations related to sales reserves, delinquencies and default rates relating to vacation ownership notes receivable. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could" or the negative of these terms or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: uncertainty in the current global macroeconomic environment created by rapid governmental policy and regulatory changes, including those affecting international trade; a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; failure of vendors and other third parties to timely comply with their contractual obligations; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technologies; the ability to use artificial intelligence ("AI") technologies successfully and potential business, compliance, or reputational risks associated with the use of AI technologies; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui and Los Angeles area wildfires; delinquency and default rates; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Hamas, and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs and accelerate growth and profitability; political or social strife; and other matters referred to under the heading "Risk Factors" contained herein and also in our 2024 Annual Report and Quarterly Report for the quarter ended June 30, 2025, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission (the "SEC").
All forward-looking statements in this Quarterly Report apply only as of the date of this Quarterly Report or as of the date they were made or as otherwise specified herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. You should not put undue reliance on any forward-looking statements in this Quarterly Report.
The risk factors discussed in "Risk Factors" in our 2024 Annual Report, our Quarterly Report for the quarter ended June 30, 2025, and under Item 1A of Part II of this Quarterly Report could cause actual results to differ materially from those expressed or implied in forward-looking statements in this Quarterly Report. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements.
Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows. The financial information discussed below and included in this Quarterly Report may not, however, necessarily reflect what our financial condition, results of operations or cash flows may be in the future.
In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our "Financial Statements," (ii) our Interim Consolidated Statements of Income as our "Income Statements," (iii) our Interim Consolidated Balance Sheets as our "Balance Sheets" and (iv) our Interim Consolidated Statements of Cash Flows as our "Cash Flows." References throughout to numbered "Footnotes" refer to the numbered Notes in the Interim Condensed Notes to Consolidated Financial Statements included in this Quarterly Report.
We routinely post important information, including news releases, announcements and other statements about our business and results of operations, that may be deemed material to investors on the Investor Relations section of our website, www.marriottvacationsworldwide.com. We use our website as a means of disclosing material, nonpublic information and for complying with our disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of our website in addition to following our press releases, filings with the SEC, public conference calls and webcasts. The information on our website is not part of, and is not incorporated by reference into, this Quarterly Report.
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 most of its 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 that portion of our results that are not allocable to our segments, including those relating to consolidated property owners' associations ("Consolidated Property Owners' Associations").
Strategic Business Operations
In the fourth quarter of 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. We are working 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. We believe that we can drive $150 million to $200 million of annualized benefits from these initiatives by the end of 2026, with approximately half of these benefits coming from cost savings and efficiencies and the balance from accelerating revenue growth. We also expect to realize additional savings that will benefit our owners' maintenance fees. We expect to incur non-recurring cash costs related to these modernization initiatives of approximately $100 million in each of 2025 and 2026.
In the third quarter of 2025, we reorganized a portion of our corporate overhead in our human resources and finance and accounting functions and transitioned work to third-party providers, which we expect will result in annual cost savings of approximately $20 million which will be reflected in multiple expense lines on our income statements.
2026 Outlook
We expect our cost of vacation ownership products in 2026 will increase due to a change in the mix of inventory sold in North America and Asia Pacific. In addition, we expect higher costs associated with increased developer-owned inventory partially offset by higher rental revenues.
Performance Measures
We measure operating performance using the key metrics described below:
•Contract sales from the sale of vacation ownership productsis considered to be an important operating measure because it 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 by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (referred to as Tours, see below), by the number of tours in a given period. We believe that VPG is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase.
•Toursis the number of sales tours performed during the applicable period, and generally includes virtual and offsite sales tours, and excludes telesales. We believe that Tours is a valuable metric because it represents the volume of touring guests.
•Development profit margin is calculated by dividing Development profit by revenues from the sale of vacation ownership products. We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as Development profit. We believe that Development profit margin is an important measure of the profitability of our development and subsequent marketing and sales of VOIs.
•Total active membersis the number of Interval Network active members at the end of the applicable period. We consider active members to be an important metric because it represents the population of owners eligible to book transactions using the Interval Network.
•Average revenue per memberis calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue for the Interval Network by the monthly weighted average number of Interval Network active members during the applicable period. We believe this metric is valuable in measuring the overall engagement of our Interval Network active members.
•Segment financial results attributable to common stockholdersrepresents revenues less expenses directly attributable to each applicable reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We consider this measure to be important in evaluating the performance of our reportable business segments. See Footnote 16 "Business Segments" to our Financial Statements for further information about our reportable business segments.
•Adjusted EBITDA marginrepresents Adjusted EBITDA divided by the Company's total revenues less cost reimbursements revenues.
•Segment Adjusted EBITDA marginrepresents Segment Adjusted EBITDA divided by the applicable segment's total revenues less cost reimbursements revenues.
NM = Not meaningful.
Consolidated Results
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
REVENUES
Sale of vacation ownership products $ 358 $ 387 $ 1,083 $ 1,048
Management and exchange 214 207 648 633
Rental 150 151 479 462
Financing 90 87 268 255
Cost reimbursements 451 473 1,231 1,242
TOTAL REVENUES 1,263 1,305 3,709 3,640
EXPENSES
Cost of vacation ownership products 52 54 135 145
Marketing and sales 234 228 705 677
Management and exchange 118 123 356 358
Rental 129 113 377 331
Financing 38 37 111 106
General and administrative 53 61 175 178
Depreciation and amortization 38 36 114 109
Litigation charges 4 3 16 16
Modernization 53 - 97 -
Restructuring - 1 2 4
Royalty fee 29 28 85 85
Impairment 31 - 31 2
Cost reimbursements 451 473 1,231 1,242
TOTAL EXPENSES 1,230 1,157 3,435 3,253
Gains and other income, net 11 9 48 2
Interest expense, net (43) (40) (125) (123)
Transaction and integration costs - - - (18)
Other - 1 - (1)
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 118 197 247
Provision for income taxes (3) (34) (73) (79)
NET (LOSS) INCOME (2) 84 124 168
Net income attributable to noncontrolling interests - - (1) -
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (2) $ 84 $ 123 $ 168
Operating Statistics
Three Months Ended Nine Months Ended
(Contract sales $ in millions) September 30, 2025 September 30, 2024
Change
September 30, 2025 September 30, 2024 Change
Vacation Ownership
Total contract sales $ 442 $ 463 $ (21) (4%) $ 1,316 $ 1,348 $ (32) (2%)
Consolidated contract sales $ 439 $ 459 $ (20) (4%) $ 1,304 $ 1,336 $ (32) (2%)
Joint venture contract sales $ 3 $ 4 $ (1) 5% $ 12 $ 12 $ - 6%
VPG $ 3,700 $ 3,888 $ (188) (5%) $ 3,760 $ 3,910 $ (150) (4%)
Tours 109,609 110,557 (948) (1%) 322,009 318,888 3,121 1%
Exchange & Third-Party Management
Total active members at end of period (000's) 1,499 1,545 (46) (3%) 1,499 1,545 (46) (3%)
Average revenue per member $ 37.91 $ 38.93 $ (1.02) (3%) $ 115.27 $ 118.98 $ (3.71) (3%)
Revenues
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Vacation Ownership $ 1,210 $ 1,250 $ (40) (3%) $ 3,533 3,458 $ 75 2%
Exchange & Third-Party Management 53 56 (3) (6%) 164 179 (15) (8%)
Total Segment Revenues 1,263 1,306 (43) (3%) 3,697 3,637 60 2%
Consolidated Property Owners' Associations - (1) 1 NM 12 3 9 NM
Total Revenues $ 1,263 $ 1,305 $ (42) (3%) 3,709 3,640 $ 69 2%
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 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 the third quarter of 2025, we reclassified $1 million of certain prior year amounts related to ongoing litigation from General and administrative expense to Litigation charges in order to conform with our current year presentation.
The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income or loss attributable to common stockholders, which is the most directly comparable GAAP financial measure.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Net (loss) income attributable to common stockholders
$ (2) $ 84 $ (86) (103%) $ 123 $ 168 $ (45) (27%)
Interest expense, net 43 40 3 6% 125 123 2 1%
Provision for income taxes
3 34 (31) NM 73 79 (6) (8%)
Depreciation and amortization 38 36 2 5% 114 109 5 4%
EBITDA 82 194 (112) (58%) 435 479 (44) (9%)
Share-based compensation expense 9 8 1 8% 28 24 4 19%
Amortization of cloud computing software implementation costs(1)(2)
2 1 1 NM 4 2 2 NM
Certain items(1)
77 (3) 80 NM 98 40 58 NM
Adjusted EBITDA(1)
$ 170 $ 200 $ (30) (15%) $ 565 $ 545 $ 20 4%
Adjusted EBITDA Margin(1)
20.9% 24.1% (3.2 pts) 22.8% 22.7% 0.1 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 the periods presented.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Gain on disposition of hotel, land, and other $ - $ (1) $ - $ (2)
Foreign currency translation (2) (6) (23) -
Insurance proceeds (8) - (16) -
Change in indemnification asset (1) 2 (4) 4
Change in estimates relating to pre-acquisition contingencies - (4) (2) (4)
Other - - (3) -
Gains and other income, net (11) (9) (48) (2)
Transaction and integration costs - - - 18
Purchase accounting adjustments - - - 1
Litigation charges(1)
4 3 16 16
Modernization 53 - 97 -
Restructuring - 1 2 4
Impairment 31 - 31 2
Other - 2 - 1
Total Certain items(1)
$ 77 $ (3) $ 98 $ 40
(1) Prior year amounts have been reclassified to conform with our current year presentation.
During the second quarter of 2024, we discontinued classifying costs associated with the continued integration of Welk in Transaction and integration costs. Welk integration costs incurred after this period are reflected in the operating results of each of our segments and/or General and administrative expenses.
Segment Adjusted EBITDA
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Vacation Ownership(1)
$ 195 $ 232 $ (37) (16%) $ 647 $ 626 $ 21 4%
Exchange & Third-Party Management 21 23 (2) (8%) 72 80 (8) (10%)
Segment adjusted EBITDA(1)
216 255 (39) (15%) 719 706 13 2%
General and administrative(1)
(53) (61) 8 12% (175) (178) 3 1%
Other
7 6 1 NM 21 17 4 NM
Adjusted EBITDA(1)
$ 170 $ 200 $ (30) (15%) $ 565 $ 545 $ 20 4%
(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
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Segment financial results $ 138 $ 205 $ (67) (33%) $ 532 $ 531 $ 1 -%
Depreciation and amortization 26 25 1 4% 80 75 5 7%
Share-based compensation expense 3 2 1 9% 7 6 1 10%
Amortization of cloud computing software implementation costs(1)
1 1 - NM 3 2 1 NM
Certain items 27 (1) 28 NM 25 12 13 NM
Segment adjusted EBITDA(1)
$ 195 $ 232 $ (37) (16%) $ 647 $ 626 $ 21 4%
Segment Adjusted EBITDA Margin(1)
26.1% 30.2% (4.1 pts) 28.4% 28.6% (0.2 pts)
(1) Prior year amounts have been reclassified to conform with our current year presentation.
The table below details the components of Certain items for Vacation Ownership segment financial results.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Gain on disposition of hotel, land, and other $ - $ - $ - $ (1)
Insurance proceeds (8) - (15) -
Change in estimates relating to pre-acquisition contingencies - (4) (2) (4)
Other - - (1) -
Gains and other income, net (8) (4) (18) (5)
Purchase accounting adjustments - - - 1
Litigation charges 3 2 10 15
Modernization 1 - 2 -
Restructuring - 1 - 1
Impairment 31 - 31 -
Total Certain items $ 27 $ (1) $ 25 $ 12
Exchange & Third-Party Management
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Segment financial results $ 15 $ 15 $ - (3%) $ 49 $ 55 $ (6) (12%)
Depreciation and amortization 6 7 (1) (13%) 20 21 (1) (7%)
Share-based compensation expense - 1 (1) 18% 1 2 (1) 11%
Certain items - - - NM 2 2 - NM
Segment adjusted EBITDA $ 21 $ 23 $ (2) (8%) $ 72 $ 80 $ (8) (10%)
Segment Adjusted EBITDA Margin(1)
42.3% 43.3% (1.0 pts) 45.8% 46.6% (0.8 pts)
(1) Prior year amounts have been reclassified to conform with our current year presentation.
The table below details the components of Certain items for Exchange and Third-Party Management segment financial results.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Gains and other income, net (1) (1) (1) (1)
Modernization 1 - 1 -
Restructuring - 1 2 1
Impairment - - - 2
Total Certain items $ - $ - $ 2 $ 2
Business Segments
Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 16 "Business Segments" to our Financial Statements for further information.
Vacation Ownership
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
REVENUES
Sale of vacation ownership products $ 358 $ 387 $ 1,083 $ 1,048
Resort management and other services 158 152 478 457
Rental 142 140 451 430
Financing 90 87 268 255
Cost reimbursements 462 484 1,253 1,268
TOTAL REVENUES 1,210 1,250 3,533 3,458
EXPENSES
Cost of vacation ownership products 52 54 135 145
Marketing and sales 234 228 705 677
Resort management and other services 72 72 220 216
Rental 132 120 387 343
Financing 38 37 111 106
Depreciation and amortization 26 25 80 75
Litigation charges 3 2 10 15
Modernization 1 - 2 -
Restructuring - 1 - 1
Royalty fee 29 28 85 85
Impairment 31 - 31 -
Cost reimbursements 462 484 1,253 1,268
TOTAL EXPENSES 1,080 1,051 3,019 2,931
Gains and other income, net 8 4 18 5
Other - 2 - (1)
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 138 $ 205 $ 532 $ 531
Sale of Vacation Ownership Products
Third Quarter and First Three Quarters
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 % of Consolidated Contract Sales, Net of Resales September 30, 2024 % of Consolidated Contract Sales, Net of Resales
Change
September 30, 2025 % of Consolidated Contract Sales, Net of Resales September 30, 2024 % of Consolidated Contract Sales, Net of Resales
Change
Consolidated contract sales $ 439 $ 459 $ (20) (4%) $ 1,304 $ 1,336 $ (32) (2%)
Joint venture contract sales 3 4 (1) 12 12 -
Total contract sales 442 463 (21) (4%) 1,316 1,348 (32) (2%)
Less: Resales contract sales (7) (8) 1 (23) (29) 6
Less: Joint venture contract sales (3) (4) 1 (12) (12) -
Consolidated contract sales, net of resales 432 451 (19) (4%) 1,281 1,307 (26) (2%)
Plus:
Settlement revenue 10 2% 9 2% 1 30 2% 27 2% 3
Resales revenue 4 1% 5 1% (1) 13 1% 16 1% (3)
Revenue recognition adjustments:
Reportability (5) (1%) 4 1% (9) 2 -% (4) -% 6
Sales reserve (57) (13%) (54) (12%) (3) (165) (13%) (222) (17%) 57
Other(1)
(26) (6%) (28) (6%) 2 (78) (6%) (76) (6%) (2)
Sale of vacation ownership products $ 358 83% $ 387 86% $ (29) (8%) $ 1,083 85% $ 1,048 80% $ 35 3%
VPG $ 3,700 $ 3,888 $(188) (5%) $ 3,760 $ 3,910 $(150) (4%)
Tours 109,609 110,557 (948) (1%) 322,009 318,888 3,121 1%
Financing propensity 60.4% 59.5% 0.9 pts 57.0% 56.0% 1.0 pts
Average FICO Score (2)
733 733 738 736
(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.
Third Quarter
The decrease in Sale of vacation ownership products for the third quarter of 2025 is attributed to lower contract sales, lower revenue reportability and an increase in the sales reserve due to higher financing propensity compared to the prior year comparable period.
Contract sales decreased during the third quarter of 2025 due to a 5% decrease in VPG and a 1% decrease in tours.
•First time buyer contract sales decreased 2% on lower VPG and tours.
•Owner contract sales declined 5% on lower VPG and flat tours.
First Three Quarters
The increase in Sale of vacation ownership products for the first three quarters of 2025 was primarily due to a decrease in our sales reserve reflecting last year's $70 million sales reserve adjustment (the "additional sales reserve") recorded in the second quarter of 2024, partially offset by higher financing propensity and defaults in Asia Pacific in the first three quarters of 2025. In addition, contract sales decreased during the first three quarters of 2025 due to a 4% decrease in VPG and a 1% increase in tours, partially offset by higher revenue reportability in the first three quarters of 2024.
•First time buyer contract sales increased 3% on higher tours.
•Owner contract sales declined 5% on lower VPG and tours.
Excluding the impact of the additional sales reserve recorded in the second quarter of 2024, our sales reserve as a percent of contract sales in the first three quarters of 2025 is 120 basis points higher than the prior year comparable period. While our delinquency rates at September 30, 2025 have declined from those experienced in 2024, we do not expect to lower the sales reserve for new originations until we have sufficient, sustained evidence of continued improvement in delinquency and default rates.
Development Profit
Third Quarter
Three Months Ended
($ in millions) September 30, 2025 % of Revenue September 30, 2024 % of Revenue
Change
Sale of vacation ownership products $ 358 $ 387 $ (29) (8%)
Cost of vacation ownership products (52) 14% (54) 14% 2 5%
Marketing and sales (234) 65% (228) 59% (6) (3%)
Development profit $ 72 $ 105 $ (33) (32%)
Development profit margin 20.2% 27.2% (7.0 pts)
The change in Development profit was due to the following:
•lower Sale of vacation ownership products (discussed above);
•lower Cost of vacation ownership products; and
•higher Marketing and sales costs due to higher preview and marketing costs, including costs to generate future package tours.
First Three Quarters
Nine Months Ended
($ in millions) September 30, 2025 % of Revenue September 30, 2024 % of Revenue
Change
Sale of vacation ownership products $ 1,083 $ 1,048 $ 35 3%
Cost of vacation ownership products (135) 12% (145) 14% 10 7%
Marketing and sales (705) 65% (677) 65% (28) (4%)
Development profit $ 243 $ 226 $ 17 7%
Development profit margin 22.4% 21.6% 0.8 pts
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 sale of lower average cost inventory, including $7 million of favorable product cost true-up activity, partially offset by the $13 million favorable impact of the additional sales reserve in the first three quarters of 2024.
These were partially offset by:
•higher marketing and sales costs due to:
•$9 million of higher wages and benefits, including variable compensation;
•$11 million of higher cost package tours and higher marketing and other costs; and
•$8 million of higher costs for occupancy used for previews.
Excluding the favorable impact of the additional sales reserve in the first three quarters of 2024, Cost of vacation ownership products decreased $23 million and Cost of vacation ownership products as a percentage of sales decreased approximately 160 basis points in the first three quarters of 2025.
Excluding the impact of the additional sales reserve in the first three quarters of 2024, Development profit decreased $40 million and Development profit margin decreased approximately 290 basis points in the first three quarters of 2025.
Resort Management and Other Services Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Management fee revenues $ 56 $ 52 $ 4 7% $ 166 $ 155 $ 11 7%
Ancillary revenues 69 66 3 4% 209 203 6 3%
Other management and exchange revenues 33 34 (1) (1%) 103 99 4 4%
Resort management and other services revenues 158 152 6 4% 478 457 21 4%
Resort management and other services expenses (72) (72) - -% (220) (216) (4) (2%)
Resort management and other services profit $ 86 $ 80 $ 6 8% $ 258 $ 241 $ 17 7%
Resort management and other services profit margin 53.9% 52.1% 1.8 pts 53.9% 52.6% 1.3 pts
Resort occupancy(1)
87.9% 89.1% (1.2 pts) 89.2% 89.8% (0.6 pts)
(1)Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service.
Third Quarter
The increase in Resort management and other services profit reflects $4 million of higher management profit, $1 million of higher ancillary profit and $1 million of higher exchange profit.
First Three Quarters
The increase in Resort management and other services profit reflects $12 million of higher management profit, $4 million of higher ancillary profit and $3 million of higher exchange profit.
Rental Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Rental revenues $ 142 $ 140 $ 2 1% $ 451 $ 430 $ 21 5%
Rental expenses (132) (120) (12) (10%) (387) (343) (44) (13%)
Rental profit $ 10 $ 20 $ (10) (54%) $ 64 $ 87 $ (23) (26%)
Rental profit margin 6.6% 14.7% (8.1 pts) 14.3% 20.3% (6.0 pts)
Transient keys rented(1)
554,983 554,201 782 -% 1,712,123 1,672,875 39,248 2%
Average transient rate $ 240 $ 239 $ 1 1% $ 260 $ 256 $ 4 1%
Rental occupancy(2)
69.0% 71.4% (2.4 pts) 72.4% 72.8% (0.4 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.
Third Quarter
Rental profit declined due to:
•$4 million of higher unsold maintenance fees associated with developer-owned inventory;
•$3 million of increased costs due to higher owner utilization of third-party vacation offerings, increased marketing, variable and other costs.
These amounts were partially offset by a $2 million increase in costs allocated to marketing and sales expense for occupancy used for previews.
Rental revenues and Rental expenses are both $9 million higher in the third quarter of 2025 compared to the third quarter of 2024 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.
First Three Quarters
Rental profit declined due to:
•$17 million of lower plus point revenue attributed to the non-recurring impact of sales incentive programs put in place during COVID, which increased the amount of plus points issued and lengthened the use period in the prior year comparable periods;
•$11 million of higher unsold maintenance fees associated with developer-owned inventory;
•$10 million of higher marketing, variable and other costs; and
•$7 million of increased costs due to higher owner utilization of third-party vacation offerings.
These amounts are partially offset by:
•$15 million increase in transient rental revenues; and
•an $8 million increase in costs allocated to marketing and sales expense for occupancy used for previews.
Rental revenues and Rental expenses are both $26 million higher in the first three quarters of 2025 compared to the first three quarters of 2024 due to the year over year change in the amount reclassified for costs in excess of rental revenues for developer-owned inventory which is registered and held for sale.
Financing Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Financing revenues $ 90 $ 87 $ 3 5% 268 255 13 5%
Financing expenses (12) (12) - (6%) (33) (29) (4) (13%)
Consumer financing interest expense (26) (25) (1) NM (78) (77) (1) NM
Financing profit $ 52 $ 50 $ 2 5% $ 157 $ 149 $ 8 6%
Financing profit margin 57.8% 57.9% (0.1 pts) 58.6% 58.4% 0.2 pts
Financing propensity 60.4% 59.5% 0.9 pts 57.0% 56.0% 1.0 pts
Third Quarter and First Three Quarters
•Financing revenues reflect higher interest income as a result of a higher average notes receivable balance, partially offset by a slightly lower average interest rate.
•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.
We expect our average interest rate to continue to increase as the current interest rate environment for new securitization transactions exceeds the average interest rate on our existing securitized debt. We do not adjust interest rates on consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates; as a result, we expect our financing profit margin to continue to decrease in 2025, as we repay existing securitization transactions with proceeds from newer securitization transactions with lower interest rates.
Litigation Charges
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Litigation charges $ 3 $ 2 $ 1 64% $ 10 $ 15 $ (5) (33%)
Third Quarter and First Three Quarters
Litigation charges during the third quarters of 2025 and 2024, as well as the first three quarters of 2025 and 2024, relate primarily to certain resorts in Europe.
Impairment
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Impairment
$ 31 $ - $ 31 NM $ 31 $ - $ 31 NM
Third Quarter and First Three Quarters
During the third quarter of 2025, we recorded a non-cash impairment charge of $31 million related to completed vacation ownership units and land, which were classified as a component of Property and equipment, net.
Gains and Other Income
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Gains and other income, net $ 8 $ 4 $ 4 NM $ 18 $ 5 $ 13 NM
Third Quarter
During the third quarter of 2025, we received $8 million of proceeds from service interruption insurance relating to the Maui wildfires.
During the third quarter of 2024, we recorded a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.
First Three Quarters
During the first three quarters of 2025, we received $15 million of proceeds from service interruption insurance relating to the Maui wildfires and recorded a $2 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition and $1 million of other gains.
During the first three quarters of 2024, we recorded a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition and $1 million of other gains.
Exchange & Third-Party Management
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
REVENUES
Management and exchange $ 43 $ 44 $ 130 $ 141
Rental 8 11 28 32
Cost reimbursements 2 1 6 6
TOTAL REVENUES 53 56 164 179
EXPENSES
Management and exchange 30 33 88 95
Depreciation and amortization 6 7 20 21
Modernization 1 - 1 -
Restructuring - 1 2 1
Impairment - - - 2
Cost reimbursements 2 1 6 6
TOTAL EXPENSES 39 42 117 125
Gains and other income, net 1 1 1 1
Other - - 1 -
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 15 $ 15 $ 49 $ 55
Management and Exchange Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Management and exchange revenue $ 43 $ 44 $ (1) (2%) $ 130 $ 141 $ (11) (8%)
Management and exchange expense (30) (33) 3 4% (88) (95) 7 6%
Management and exchange profit $ 13 $ 11 $ 2 3% $ 42 $ 46 $ (4) (11%)
Management and exchange profit margin 29.4% 28.0% 1.4 pts 32.1% 33.4% (1.3 pts)
Third Quarter
•Interval International management and exchange revenues declined due to 8% lower exchange transaction volume, partially offset by a 9% increase in average exchange fees.
•The decrease in management and exchange expense was primarily attributable to lower wages and benefits and other costs.
First Three Quarters
•Interval International management and exchange revenues declined $5 million, or 4%, 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, lower occupancy, and a lower average daily rate in the Hawaii market.
•Management and exchange revenue declined $2 million, attributed to the sale of an immaterial subsidiary in the second quarter of 2024.
•The decrease in management and exchange expenses was primarily attributable to lower wages and benefits and other costs.
Rental Revenues
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Rental revenues $ 8 $ 11 $ (3) (21%) $ 28 $ 32 $ (4) (12%)
Third Quarter and First Three Quarters
The decrease in rental revenues reflects an 18% decrease in transaction volume, partially offset by a 12% increase in average fees per transaction, in each case in each of the third quarter and first three quarters of 2025 compared to prior year comparable periods.
Restructuring
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Restructuring $ - $ 1 $ (1) (100%) $ 2 $ 1 $ 1 120%
Third Quarter and First Three Quarters
During the first three quarters of 2025, we recorded a $2 million impairment related to an operating lease and related assets.
Corporate and Other
Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and Other includes the revenues and expenses from Consolidated Property Owners' Associations.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
REVENUES
Resort management and other services $ 13 $ 11 $ 40 $ 35
Cost reimbursements (13) (12) (28) (32)
TOTAL REVENUES - (1) 12 3
EXPENSES
Resort management and other services 16 18 48 47
Rental (3) (7) (10) (12)
General and administrative 53 61 175 178
Depreciation and amortization 6 4 14 13
Litigation charges 1 1 6 1
Modernization 51 - 94 -
Restructuring - (1) - 2
Cost reimbursements (13) (12) (28) (32)
TOTAL EXPENSES 111 64 299 197
Gains (losses) and other income (expense), net 2 4 29 (4)
Interest expense, net (43) (40) (125) (123)
Transaction and integration costs - - - (18)
Other - (1) (1) -
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (152) (102) (384) (339)
Provision for income taxes (3) (34) (73) (79)
Net income attributable to noncontrolling interests - - (1) -
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (155) $ (136) $ (458) $ (418)
Litigation Charges
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Litigation charges $ 1 $ 1 $ - NM $ 6 $ 1 $ 5 NM
Third Quarter and First Three Quarters
Litigation charges during the third quarter of 2025 and 2024, as well as the first three quarters of 2025 and 2024, relate to a dispute with a service provider.
Modernization
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Modernization $ 51 $ - $ 51 NM $ 94 $ - $ 94 NM
Third Quarter and First Three Quarters
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. We are working 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. See "Strategic Business Operations" section above for further information.
During the third quarter and first three quarters of 2025, the majority of our Modernization charges were related to advisory services. See Footnote 17 "Modernization" to our Financial Statements for further information related to our modernization charges.
Gains (Losses) and Other Income (Expense)
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Gains (losses) and other income (expense), net $ 2 $ 4 $ (2) (39%) $ 29 $ (4) $ 33 NM
Third Quarter
In the third quarter of 2025, we recorded $2 million of foreign currency translation gains and $1 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, partially offset by $1 million of other losses.
In the third quarter of 2024, we recorded $6 million of foreign currency translation gains, partially offset by $2 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters.
First Three Quarters
In the first three quarters of 2025, we recorded $23 million of foreign currency translation gains, $4 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $1 million of other gains, and $1 million of insurance proceeds.
In the first three quarters of 2024, we recorded $4 million net of tax related adjustments to the receivable from Marriott International for indemnified tax matters.
Income Tax
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 Change September 30, 2025 September 30, 2024 Change
Provision for income taxes $ (3) $ (34) $ 31 NM $ (73) $ (79) $ 6 8%
Third Quarter
The effective tax rate for the three months ended September 30, 2025 differed from the blended U.S. federal and state statutory tax rate primarily due to discrete income tax adjustments in non-U.S. jurisdictions. These adjustments included a $25 million increase related to changes in valuation allowances, partially offset by tax benefits from $13 million of permanent differences arising from restructuring activities and $6 million for other deferred tax adjustments.
The effective tax rate for the three months ended September 30, 2024 differed from the blended U.S. federal and state statutory tax rate primarily due to discrete income tax adjustments. These adjustments included an $11 million decrease related to changes in valuation allowances on certain deferred tax assets in non-U.S. jurisdictions and a $6 million decrease as a result of the expiration of statutes of limitation on certain unrecognized tax benefits, partially offset by an $8 million increase related to the removal of the permanent reinvestment assertion for certain non-U.S. entities and a $3 million increase for deferred non-U.S. withholding taxes.
First Three Quarters
Our effective tax rate was 37.0% and 32.1% for the nine months ended September 30, 2025 and September 30, 2024, respectively.
The effective tax rate for the nine months ended September 30, 2025 differed from the blended U.S. federal and state statutory tax rate primarily due to discrete income tax adjustments in non-U.S. jurisdictions. These adjustments included a $25 million increase related to changes in valuation allowances, partially offset by tax benefits from $13 million of permanent differences arising from restructuring activities and $6 million related to prior year true-up adjustments.
The effective tax rate for the nine months ended September 30, 2024 differed from the blended U.S. federal and state statutory tax rate primarily due to discrete income tax adjustments. These adjustments included a $27 million decrease as a result of the expiration of statutes of limitation on uncertain unrecognized tax benefits and an $8 million net decrease related to changes in valuation allowances in non-U.S. jurisdictions. These decreases were partially offset by a $28 million increase related to the removal of the permanent reinvestment assertion for certain non-U.S. entities and a $3 million increase for deferred non-U.S. withholding taxes.
Consolidated Property Owners' Associations
The following table illustrates the impact of certain Consolidated Property Owners' Associations under the relevant accounting guidance.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
REVENUES
Resort management and other services $ 13 $ 11 $ 40 $ 35
Cost reimbursements (13) (12) (28) (32)
TOTAL REVENUES - (1) 12 3
EXPENSES
Resort management and other services 16 18 48 47
Rental (3) (7) (10) (12)
Cost reimbursements (13) (12) (28) (32)
TOTAL EXPENSES - (1) 10 3
Interest expense, net - - - 1
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS - - 2 1
Provision for income taxes - - (1) (1)
Net income attributable to noncontrolling interests - - (1) -
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ - $ - $ - $ -
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 September 30, 2025, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.1, above our targeted range of 2.5 to 3.0, and we remain focused on reducing this ratio over time.
We have no material principal payment obligations for the remainder of 2025. See Footnote 12 "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.
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 the third quarter of 2025, and as of September 30, 2025, we had 11 term securitization transactions outstanding, none of which were out of compliance with their respective required parameters. Since 2000, we have issued approximately $10.3 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 the second quarter of 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 September 30, 2025, we had $256 million of borrowings outstanding on our Warehouse Credit Facility. See Footnote 11 "Securitized Debt' to our Financial Statement for further information on our Warehouse Amendment.
As of September 30, 2025, $168 million of gross vacation ownership notes receivable were eligible for securitization.
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 intend to use the net proceeds to repay our 2026 Convertible Notes due in January 2026.
Corporate Credit Facility
During the first quarter of 2025, we entered into an amendment to the Corporate Credit Facility, 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 September 30, 2025, no borrowings and $14 million of letters of credit were outstanding under our Revolving Corporate Credit Facility.
Additionally, the Amendment provided for a new $450 million senior secured Delayed-Draw Term Loan scheduled to mature on December 31, 2027, which was subsequently terminated in the third quarter of 2025, in connection with the issuance of the 2033 Notes. We did not draw on the Delayed-Draw Term Loan at any time.
See Footnote 12 "Debt" to our Financial Statements for further information.
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 Cost of Sales
Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024
Inventory spending $ (77) $ (159)
Purchase and development of property for future transfer to inventory (134) -
Inventory cost of sales 98 107
Inventory spending in excess of cost of sales $ (113) $ (52)
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.
Vacation Ownership Notes Receivable Collections Less Than Originations
Nine Months Ended
($ in millions) September 30, 2025 September 30, 2024
Vacation ownership notes receivable collections - non-securitized $ 119 $ 67
Vacation ownership notes receivable collections - securitized 400 403
Vacation ownership notes receivable originations (766) (738)
Vacation ownership notes receivable collections less than originations $ (247) $ (268)
Vacation ownership notes receivable collections were less than originations in the first three quarters of 2025 and 2024 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 first three quarters of 2025 496,484 36 $ 73.09
As of September 30, 2025 26,287,034 $ 2,497 $ 94.98
See Footnote 13 "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 first three quarters of 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
Payment of dividends within Financing activities on our Cash Flows for the nine months ended September 30, 2025, includes $27 million related to the dividend distributed to holders of our common stock (as of the record date) on October 1, 2025, as the payment was funded on September 30, 2025.
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.
Material Cash Requirements
The following table summarizes our future material cash requirements from known contractual or other obligations as of September 30, 2025:
Payments Due by Period
($ in millions) Total Remainder
of 2025 		2026 2027 2028 2029 Thereafter
Debt(1)
$ 4,085 $ 35 $ 727 $ 722 $ 463 $ 602 $ 1,536
Securitized debt(1)(2)
2,719 72 282 278 473 232 1,382
Purchase obligations(3)
600 64 215 196 51 34 40
Operating lease obligations(4)
99 6 24 17 13 11 28
Finance lease obligations(4)
525 5 17 16 13 13 461
Other long-term obligations 10 6 2 1 1 - -
$ 8,038 $ 188 $ 1,267 $ 1,230 $ 1,014 $ 892 $ 3,447
(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 September 30, 2025 and December 31, 2024, and for the nine months ended September 30, 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 Statement of Income
Nine Months Ended September 30, 2025
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI
Revenues $ - $ 800 $ 2,078 $ 864 $ (33) $ 3,709
Expenses (34) (992) (1,868) (651) 33 (3,512)
Benefit from (provision for) income taxes 9 58 (64) (76) - (73)
Equity in net income of subsidiaries 148 342 - - (490) -
Net income 123 208 146 137 (490) 124
Net income attributable to noncontrolling interests - - - (1) - (1)
Net income attributable to common stockholders $ 123 $ 208 $ 146 $ 136 $ (490) $ 123
Condensed Consolidating Balance Sheet
As of September 30, 2025 As of December 31, 2024
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI MVWC MORI
Cash and cash equivalents $ 201 $ 54 $ 73 $ 146 $ - $ 474 $ 1 $ 14 $ 59 $ 123 $ - $ 197
Restricted cash - 23 86 150 - 259 - 25 134 172 - 331
Accounts and contracts receivable, net 12 179 107 168 (64) 402 18 166 118 88 (3) 387
Vacation ownership notes receivable, net - 231 180 2,111 - 2,522 - 177 161 2,102 - 2,440
Inventory - 333 287 107 - 727 - 282 345 108 - 735
Property and equipment, net - 319 721 285 - 1,325 - 280 652 238 - 1,170
Goodwill - - 3,117 - - 3,117 - - 3,117 - - 3,117
Intangibles, net - - 719 28 - 747 - - 763 27 - 790
Investments in subsidiaries 3,258 3,908 - - (7,166) - 3,466 3,743 - - (7,209) -
Other 174 145 244 131 (118) 576 148 199 261 105 (72) 641
Total assets $ 3,645 $ 5,192 $ 5,534 $ 3,126 $ (7,348) $ 10,149 $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808
Accounts payable $ 24 $ 63 $ 91 $ 72 $ - $ 250 $ 51 $ 52 $ 164 $ 76 $ - $ 343
Advance deposits - 71 78 17 - 166 - 68 79 15 - 162
Accrued liabilities 13 167 140 117 (63) 374 2 103 149 127 3 384
Deferred revenue - 10 160 184 (10) 344 - 15 157 190 (8) 354
Payroll and benefits liability - 107 62 34 - 203 - 103 86 31 - 220
Deferred compensation liability - 159 53 5 - 217 - 143 48 4 - 195
Securitized debt, net - - - 2,132 (25) 2,107 - - - 2,163 (27) 2,136
Debt, net 1,143 2,211 179 - - 3,533 1,138 1,771 179 1 - 3,089
Other - 3 112 18 - 133 - 2 118 19 - 139
Deferred taxes - 159 242 40 (84) 357 - 121 236 31 (43) 345
MVW stockholders' equity 2,465 2,242 4,417 507 (7,166) 2,465 2,442 2,508 4,394 307 (7,209) 2,442
Noncontrolling interests - - - - - - - - - (1) - (1)
Total liabilities and equity $ 3,645 $ 5,192 $ 5,534 $ 3,126 $ (7,348) $ 10,149 $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808
Recent Accounting Pronouncements
See Footnote 2 "Significant Accounting Policies and Recent Accounting Standards" 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 Policies and Estimates
Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our 2024 Annual Report. Since the date of our 2024 Annual Report, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.
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