Marriott Vacations Worldwide Corporation

11/04/2026 | Press release | Distributed by Public on 11/04/2026 09:43

Quarterly Report for Quarter Ending September 30, 2026 (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, cash flows, financial condition, leverage and liquidity; future dividend payments; our business strategies and management priorities for 2026, including efforts to improve profitability and cash flow, strengthen leadership and talent, accelerate sustainable revenue growth, lower our cost base, protect and grow our recurring revenue streams, maintain disciplined capital allocation, monetize non-core assets and optimize our geographic mix, including through our Asia-Pacific strategy; expected trends in contract sales, VPG and Tours, including the anticipated benefits of our owner engagement initiatives, such as our enhanced Owner Benefit Levels and Inner Circle platform, and our efforts to enhance Tour quality; expected trends in Development profit margin, sales reserve, rental profit (including the impact of the closure of the Sheraton Kauai hotel), marketing and sales expenses and cost of vacation ownership products as a percentage of revenue; the amount and timing of expected proceeds from the disposition of non-core assets and our decision to retain certain assets for operational use; the adequacy of capital to meet short-term and long-term liquidity requirements; our leverage, including our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio; our expectations regarding the costs and benefits of our modernization efforts, including expected modernization expenses in the fourth quarter of 2026; and our expectations regarding inventory spending, including the impact of inventory repurchases and the timing of payments for inventory and other purchase commitments. 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 or travel; future health crises and related governmental responses and their potential adverse effects; 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; our ability to attract and retain our global workforce; price inflation; difficulties associated with implementing new or maintaining existing technologies; the ability to integrate artificial intelligence ("AI") technologies successfully while managing and mitigating related operational, legal, intellectual property, data security and reputational risks; changes in privacy and other laws and regulations affecting our business; instability, disruptions, or distress in the banking system or financial institutions; impacts of severe weather events, climate conditions or natural or man-made disasters; delinquency and default rates in our financing business; global supply chain disruptions; volatility in the international and national economies and credit markets; the impacts of ongoing global conflicts and related sanctions or geopolitical measures; 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 2025 Annual Report, 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 2025 Annual Report, 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 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 ("Consolidated Property Owners' Associations").
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 reflects the pace of sales in our business and excludes contract sales from the sale of vacation ownership products for non-consolidated joint ventures.
•Volume per guest ("VPG") is calculated as contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (collectively, "Tours" as defined below) 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.
•Tours is defined as the number of sales tours conducted during the applicable period, including virtual and offsite sales tours and excluding telesales.
•Development profit margin is 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 our associated marketing and sales efforts.
•Total active members represents the number of active members of the Interval Network 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 member is 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 stockholders reflects 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 16 "Business Segments" to our Financial Statements for further information about our reportable business segments.
•Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues less cost reimbursements revenues.
•Segment Adjusted EBITDA margin is calculated as Segment Adjusted EBITDA divided by the respective segment's total revenues less cost reimbursements revenues.
NM = Not meaningful.
Management Priorities
During the third quarter of 2026, we continued to execute our previously described management priorities and made meaningful progress across our strategic, operational, and financial objectives. The following discussion provides an update on our progress.
Our management priorities for 2026 are as follows:
•Improve profitability and cash flow by driving higher free cash flow conversion through disciplined execution, optimizing working capital, managing capital spending, and improving Adjusted EBITDA performance.
•We continued to improve profitability and Adjusted EBITDA, both sequentially and compared to the prior-year quarter and year to date periods. We also remained focused on improving operating cash flow, generating significantly higher cash from operating activities during the first three quarters of 2026 compared the first three quarters of 2025, while maintaining disciplined capital spending on inventory and property and equipment.
•Strengthen leadership and talent through onboarding new leadership with the external expertise to drive improvement in consistency and long-term growth execution. Retain key existing leadership and talent throughout the organization to facilitate continuity and retention of historical business knowledge.
•During the first three quarters of 2026, we enhanced key leadership talent and capabilities and made targeted investments in our workforce. We believe these actions have strengthened our leadership bench, enhanced critical commercial capabilities across the organization, and supported the execution of our strategic and operational objectives. We will regularly evaluate our talent needs and organizational structure to help maintain the capabilities we believe are necessary to support long-term growth and value creation.
•Accelerate near-term, sustainable revenue growth by increasing contract sales through strengthened marketing and sales leadership, hiring proven frontline sales talent and critically improving our daily management discipline throughout our business. Current initiatives focus on expanding and diversifying marketing opportunities by improving lead generation, increasing marketing efficiency and enhancing our products and services.
•We have continued to onboard top-performing sales and marketing professionals while investing in innovation and industry-leading tools that we believe help our teams to operate more effectively and support long-term value creation.
•In the second quarter of 2026, we enhanced our Owner Benefit Levels, including by introducing new ownership tiers, providing exclusive access to deeper discounts for certain reservation types and additional onsite benefits when visiting the Marriott Vacation Clubs. We plan to continue to focus on creating more personalized, engaging and experience-driven vacations for our owners to elevate the owner experience.
•In the second quarter of 2026, we launched "Inner Circle," a new owner-exclusive experiences platform offering access to private concerts, sporting events, culinary experiences and on-site events to owners of Marriott Vacation Club, Westin Vacation Club and Sheraton Vacation Club. Early owner participation and
engagement levels have been favorable among those who have attended these events, providing evidence that these initiatives are resonating with our owner base.
•As a result of these actions, Contract sales increased 29% and VPG increased 30% during the third quarter of 2026 over the comparable period in 2025 despite a 2% decline in Tours. Third quarter 2026 development margin benefited from a substantially higher mix of sales to existing owners as we were able to leverage marketing and sales costs on higher VPGs.
•We expect the enhanced owner experience, new owner benefits and Inner Circle platforms to continue to increase owner engagement and retention which we anticipate will generate increased referrals of potential new customers to support contract sales growth and higher VPG. We expect the financial benefits of these actions to grow in the fourth quarter of 2026 and continue into 2027 as we continue to build an owner Tour pipeline that reflects these changes. We expect marketing and sales expenses to continue to decline as a percentage of Development revenue during the fourth quarter of 2026.
•Lower cost base by emphasizing operating discipline to improve cash flow through execution and cost management.
•We intend to continue to advance this priority through focused expense control, operational efficiencies, and disciplined management of working capital and capital expenditures. We believe these efforts contributed to a significant improvement in operating cash flow.
•Protect and grow recurring, high margin revenue streams by maintaining stable performance in our financing and management and exchange businesses to promote earnings durability and cash flow generation.
•Our financing, management and exchange businesses continue to be high-margin, contractually based, recurring revenue streams which contribute to earnings and cash flow generation, reinforcing the resilience of our business model and supporting our objective of delivering consistent financial performance across varying market conditions.
•Disciplined capital allocation to fund high return growth initiatives while prioritizing liquidity and balance sheet flexibility.
•We seek to balance investment in growth with maintaining liquidity and balance sheet flexibility. We are prioritizing initiatives that we believe have the greatest potential to drive long-term returns while maintaining the financial flexibility necessary to support our strategic objectives and navigate macroeconomic uncertainty.
•In July 2026, we amended certain agreements associated with our Warehouse Credit Facility to extend the revolving period from the second quarter of 2027 to the second quarter of 2028. The extension strengthens our liquidity profile and financial flexibility, while providing continued access to a key source of funding to support our strategic and operational objectives.
•In September, we generated $66 million of net proceeds from the private placement of $91 million of vacation ownership notes receivable with collateral located in Asia Pacific that were not eligible for sale in the traditional ABS market at a blended interest rate of 6.70% .
•At September 30, 2026, our gross corporate debt, net of cash and cash equivalents, to Adjusted EBITDA ratio was 3.6, which has improved from 4.2 at December 31, 2025, providing flexibility for capital allocation decisions.
•Subsequent to the end of the third quarter of 2026, we securitized a pool of $469 million of vacation ownership notes receivable at a blended interest rate of 5.91% and a gross advance rate of 98%.
•Monetize non-core assets to generate proceeds and support our capital allocation priorities.
•While we continue to evaluate opportunities to monetize non-core assets as part of our capital allocation framework, recent increases in contract sales volume and improved sales trends have increased our inventory requirements to support anticipated future sales. As a result, we expect to retain certain assets for operational use that we previously identified for potential disposition, reducing our near term estimated proceeds from non-core asset monetization but supporting future revenue generation and long-term value creation.
•Following the decision to retain certain assets for operational use, we expect that we will generate approximately $200 million of gross cash proceeds from the disposition of non-core assets by the end of 2027.
•We realized proceeds of $50 million in the first quarter of 2026 from the disposition of an entity that owned and operated a hotel in Cancun, Mexico and we expect to realize an additional $11 million of gross proceeds from dispositions during the fourth quarter of 2026.
•Optimize geographic mix by scaling back our operations in lower return areas to improve capital efficiency overall and future margins.
•As part of our previously announced Asia-Pacific strategy, we reduced Tours to certain customers aligned regional staffing levels with anticipated demand, and deferred the purchase of a future phase of our Khao Lak, Thailand resort development.
Consolidated Results
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
REVENUES
Sale of vacation ownership products $ 459 $ 358 $ 1,232 $ 1,083
Management and exchange 212 214 653 648
Rental 155 150 504 479
Financing 95 90 279 268
Cost reimbursements 446 451 1,276 1,231
TOTAL REVENUES 1,367 1,263 3,944 3,709
EXPENSES
Cost of vacation ownership products 49 52 138 135
Marketing and sales 268 234 791 705
Management and exchange 116 118 357 356
Rental 143 129 423 377
Financing 45 38 128 111
Royalty fee 29 29 86 85
General and administrative 71 53 197 175
Depreciation and amortization 33 38 99 114
Litigation charges (2) 4 (1) 16
Modernization 6 53 32 97
Restructuring†
10 - 16 -
Impairment†
- 31 - 33
Cost reimbursements 446 451 1,276 1,231
TOTAL EXPENSES 1,214 1,230 3,542 3,435
Gains and other income, net 3 11 1 48
Interest expense, net (43) (43) (130) (125)
Other - - (1) -
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 113 1 272 197
Provision for income taxes (31) (3) (91) (73)
NET INCOME (LOSS) 82 (2) 181 124
Net income attributable to noncontrolling interests - - - (1)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 82 $ (2) $ 181 $ 123
† Prior year amounts have been reclassified to conform with our current year presentation.
Operating Statistics
Three Months Ended Nine Months Ended
(Contract sales $ in millions) September 30, 2026 September 30, 2025
Change
September 30, 2026 September 30, 2025 Change
Vacation Ownership
Contract sales
$ 565 $ 439 $ 126 29% $ 1,521 $ 1,304 $ 217 17%
VPG $ 4,822 $ 3,700 $ 1,122 30% $ 4,456 $ 3,760 $ 696 19%
Tours 107,687 109,609 (1,922) (2%) 315,658 322,009 (6,351) (2%)
Exchange & Third-Party Management
Total active members at end of period (000's) 1,480 1,499 (19) (1%) 1,480 1,499 (19) (1%)
Average revenue per member $ 37 $ 38 $ (1) (2%) $ 113 $ 115 $ (2) (2%)
Revenues
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Vacation Ownership $ 1,308 $ 1,210 $ 98 8% $ 3,761 $ 3,533 $ 228 6%
Exchange & Third-Party Management 52 53 (1) (1%) 163 164 (1) -%
Total Segment Revenues 1,360 1,263 97 8% 3,924 3,697 227 6%
Consolidated Property Owners' Associations 7 - 7 NM 20 12 8 NM
Total Revenues $ 1,367 $ 1,263 $ 104 8% $ 3,944 $ 3,709 $ 235 6%
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), 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. Amortization of cloud computing software implementation costs, which are not included in depreciation and amortization expense, are excluded from Adjusted EBITDA for comparability purposes to address the considerable variability among companies in the utilization of productive assets.
For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense 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. 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.
Certain amounts from the prior year have been reclassified to conform to the current year presentation. Beginning in the third quarter of 2025, we began separately presenting Modernization expense in our Income Statements and in the fourth quarter of 2025, all Modernization expenses were moved from our individual business segments to Corporate and other. As a result, prior year amounts for the three and nine months ended September 30, 2025 were reclassified from Modernization expense to conform with our current year presentation. Additionally, for the nine months ended September 30, 2025, we reclassified $2 million related to the impairment of an operating lease and related assets from Restructuring expense to Impairment expense to conform with our current year presentation.
Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the three and nine months ended September 30, 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $4 million and $9 million for the three and nine months ended September 30, 2026, respectively, and $3 million and $10 million for the three and nine months ended September 30, 2025, respectively.
The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income or loss attributable to common stockholders, which is the most directly comparable GAAP financial measure.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Net income (loss) attributable to common stockholders $ 82 $ (2) $ 84 NM $ 181 $ 123 $ 58 47%
Interest expense, net 43 43 - -% 130 125 5 4%
Provision for income taxes
31 3 28 NM 91 73 18 25%
Depreciation and amortization 33 38 (5) (13%) 99 114 (15) (13%)
EBITDA 189 82 107 132% 501 435 66 15%
Share-based compensation expense 12 9 3 32% 34 28 6 20%
Amortization of cloud computing software implementation costs
2 2 - (14%) 5 4 1 11%
Certain items
13 77 (64) NM 52 98 (46) NM
Adjusted EBITDA
$ 216 $ 170 $ 46 27% $ 592 $ 565 $ 27 5%
Adjusted EBITDA Margin
23.4% 20.9% 2.5 pts 22.2% 22.8% (0.6 pts)
The table below details the components of Certain items for the periods presented.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Gain on disposition of hotel, land, and other $ - $ - $ (2) $ -
Foreign currency (3) (2) 2 (23)
Insurance proceeds - (8) - (16)
Change in indemnification asset - (1) 5 (4)
Change in estimates relating to pre-acquisition contingencies - - (4) (2)
Other - - (2) (3)
Gains and other income, net (3) (11) (1) (48)
Litigation charges (2) 4 (1) 16
Modernization 6 53 32 97
Restructuring†
10 - 16 -
Impairment†
- 31 - 33
Other 2 - 6 -
Total Certain items
$ 13 $ 77 $ 52 $ 98
† Prior year amounts have been reclassified to conform with our current year presentation.
Segment Adjusted EBITDA
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Vacation Ownership
$ 255 $ 195 $ 60 30% $ 689 $ 647 $ 42 6%
Exchange & Third-Party Management 21 21 - 1% 67 72 (5) (7%)
Segment Adjusted EBITDA
276 216 60 27% 756 719 37 5%
General and administrative
(71) (53) (18) (33%) (197) (175) (22) (13%)
Share-based compensation expense
8 6 2 48% 25 20 5 29%
Other(1)
3 1 2 NM 8 1 7 NM
Adjusted EBITDA
$ 216 $ 170 $ 46 27% $ 592 $ 565 $ 27 5%
(1)Includes $5 million of severance expense relating to changes in executive leadership that was recorded as General and administrative expense in the nine months ended September 30, 2026.
The following tables present segment financial results attributable to common stockholders reconciled to segment Adjusted EBITDA.
Vacation Ownership
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Segment financial results†
$ 220 $ 139 $ 81 58% $ 606 $ 534 $ 72 14%
Depreciation and amortization 24 26 (2) (8%) 70 80 (10) (12%)
Share-based compensation expense 3 3 - (4%) 7 7 - (1%)
Amortization of cloud computing software implementation costs
1 1 - (10%) 4 3 1 21%
Certain items†
7 26 (19) NM 2 23 (21) NM
Segment Adjusted EBITDA
$ 255 $ 195 $ 60 30% $ 689 $ 647 $ 42 6%
Segment Adjusted EBITDA Margin
29.6% 26.1% 3.5 pts 27.9% 28.4% (0.5 pts)
† 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, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Gain on disposition of hotel, land, and other $ - $ - $ (2) $ -
Insurance proceeds - (8) - (15)
Change in estimates relating to pre-acquisition contingencies - - (4) (2)
Other (1) - (1) (1)
Gains and other income, net (1) (8) (7) (18)
Litigation charges (2) 3 (1) 10
Restructuring 9 - 9 -
Impairment - 31 - 31
Other 1 - 1 -
Total Certain items†
$ 7 $ 26 $ 2 $ 23
† Prior year amounts have been reclassified to conform with our current year presentation.
Exchange & Third-Party Management
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Segment financial results†
$ 16 $ 16 $ - 10% $ 52 $ 50 $ 2 5%
Depreciation and amortization 4 6 (2) (23%) 14 20 (6) (28%)
Share-based compensation expense 1 - 1 10% 2 1 1 5%
Certain items†
- (1) 1 NM (1) 1 (2) NM
Segment Adjusted EBITDA
$ 21 $ 21 $ - 1% $ 67 $ 72 $ (5) (7%)
Segment Adjusted EBITDA Margin
44.7% 42.3% 2.4 pts 44.3% 45.8% (1.5 pts)
† 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, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Gains and other income, net $ - $ (1) (1) (1)
Impairment†
- - - 2
Total Certain items†
$ - $ (1) $ (1) $ 1
† Prior year amounts have been reclassified to conform with our current year presentation.
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, 2026 September 30, 2025 September 30, 2026 September 30, 2025
REVENUES
Sale of vacation ownership products $ 459 $ 358 $ 1,232 $ 1,083
Resort management and other services 157 158 479 478
Rental 146 142 478 451
Financing 95 90 279 268
Cost reimbursements 451 462 1,293 1,253
TOTAL REVENUES 1,308 1,210 3,761 3,533
EXPENSES
Cost of vacation ownership products 49 52 138 135
Marketing and sales 268 234 791 705
Resort management and other services 70 72 215 220
Rental 146 132 432 387
Financing 45 38 128 111
Royalty fee 29 29 86 85
Depreciation and amortization 24 26 70 80
Litigation charges (2) 3 (1) 10
Restructuring 9 - 9 -
Impairment - 31 - 31
Cost reimbursements 451 462 1,293 1,253
TOTAL EXPENSES†
1,089 1,079 3,161 3,017
Gains and other income, net 1 8 7 18
Other - - (1) -
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS†
$ 220 $ 139 $ 606 $ 534
† Prior year amounts have been reclassified to conform with our current year presentation.
Sale of Vacation Ownership Products
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026
% of Contract Sales, Net of Resales
September 30, 2025
% of Contract Sales, Net of Resales
Change
September 30, 2026
% of Contract Sales, Net of Resales
September 30, 2025
% of Contract Sales, Net of Resales
Change
Contract sales $ 565 $ 439 $ 126 29% $ 1,521 $ 1,304 $ 217 17%
Less: Resales contract sales (11) (7) (4) (27) (23) (4)
Contract sales, net of resales 554 432 122 29% 1,494 1,281 213 17%
Plus:
Settlement revenue 12 2% 10 2% 2 34 2% 30 2% 4
Resales revenue 5 1% 4 1% 1 11 1% 13 1% (2)
Revenue recognition adjustments:
Reportability (3) (1%) (5) (1%) 2 (25) (2%) 2 -% (27)
Sales reserve (82) (15%) (57) (13%) (25) (204) (14%) (165) (13%) (39)
Other(1)
(27) (5%) (26) (6%) (1) (78) (5%) (78) (6%) -
Sale of vacation ownership products $ 459 83% $ 358 83% $ 101 28% $ 1,232 82% $ 1,083 85% $ 149 14%
VPG $ 4,822 $ 3,700 $ 1,122 30% $ 4,456 $ 3,760 $ 696 19%
Tours 107,687 109,609 (1,922) (2%) 315,658 322,009 (6,351) (2%)
Expected financing propensity as a % of contract sales 71% 67% 4 pts 66% 63% 3 pts
Average FICO Score (2)
753 733 754 738
(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 we expect to finance a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents.
Third Quarter
The increase in Sale of vacation ownership products for the third quarter of 2026 was driven by higher contract sales and a slightly lower rate for sales incentives, partially offset by a higher sales reserve attributable to a significant increase in dollars financed.
•Owner contract sales increased 54% reflecting a 43% increase in VPG and an 8% increase in owner Tours. These results reflect changes in our sales strategy to focus on existing owners in connection with the launch of our recent owner engagement initiatives and improved owner arrival connection rates which drove higher incremental purchase activity.
•First time buyer contract sales decreased 20% driven by lower VPG and Tours. We continue to believe there is a significant long-term opportunity to expand our first time buyer base through targeted marketing, enhanced lead generation efforts, and continued refinement of our sales and customer acquisition strategies.
The overall decline in Tours was largely attributable to the change in strategy for our Asia-Pacific business as well as our strategy to improve tour quality for first time buyers. Excluding Asia-Pacific, Tours increased 3% year-over-year. VPG increased 30% year-over-year on a consolidated basis and, excluding Asia-Pacific, VPG increased nearly 30% year over year.
We expect the higher contract sales and VPG to continue in the last quarter of 2026, as well as into 2027 but at a lower rate of growth. We also expect the sales reserve, measured as a percentage of contract sales, to reflect higher utilization of our Company-provided financing.
First Three Quarters
The increase in Sale of vacation ownership products for the first three quarters of 2026 was driven by higher contract sales, partially offset by lower revenue reportability, a higher sales reserve attributable to a significant increase in dollars financed and a slightly lower rate for sales incentives.
•Owner contract sales increased 33% reflecting a 27% increase in VPG and 5% higher Tours.
•First time buyer contract sales decreased 16% reflecting lower Tours and a lower VPG.
The overall decline in Tours was largely attributable to the change in strategy for our Asia-Pacific business as well as our strategy to improve tour quality for first time buyers. Excluding Asia-Pacific, Tours increased 2% year-over-year. VPG increased 19% year-over-year on a consolidated basis and, excluding Asia-Pacific, VPG increased nearly 18% year over year.
Development Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 % of Revenue September 30, 2025 % of Revenue Change September 30, 2026 % of Revenue September 30, 2025 % of Revenue
Change
Sale of vacation ownership products $ 459 $ 358 $ 101 28% $ 1,232 $ 1,083 $ 149 14%
Cost of vacation ownership products (49) 11% (52) 14% 3 4% (138) 11% (135) 12% (3) (2%)
Marketing and sales (268) 58% (234) 65% (34) (14%) (791) 64% (705) 65% (86) (12%)
Development profit $ 142 $ 72 $ 70 97% $ 303 $ 243 $ 60 25%
Development profit margin 31.0% 20.2% 10.8 pts 24.6% 22.4% 2.2 pts
Third Quarter and First Three Quarters
The change in Development profit was due to the following:
•higher Sale of vacation ownership products (discussed above);
•a decline in Cost of vacation ownership products as a percentage of revenue due to the sale of lower average cost inventory (including resulting from the impairments in inventory in the fourth quarter of 2025); and
•a lower marketing and sales rate primarily attributed to higher VPG and continued progress on our marketing and sales initiatives.
Cost of vacation ownership products as a percentage of revenue is expected to increase in the last quarter of 2026, although changes in this percentage will ultimately be the result of pricing increases, upgrade volume, repurchase activity and changes in the mix of inventory being sold. In addition, we expect to further leverage our fixed Marketing and sales expenses as we continue to invest in initiatives that support sales growth, reflecting our expectation that the growth in contract sales achieved during the second and third quarters of 2026 will continue through year-end resulting in an increase in Development profit margin.
Resort Management and Other Services Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Management fee revenues $ 56 $ 56 $ - -% $ 168 $ 166 $ 2 1%
Ancillary revenues 67 69 (2) (2%) 206 209 (3) (1%)
Other management and exchange revenues 34 33 1 3% 105 103 2 3%
Resort management and other services revenues 157 158 (1) -% 479 478 1 -%
Resort management and other services expenses (70) (72) 2 3% (215) (220) 5 2%
Resort management and other services profit $ 87 $ 86 $ 1 2% $ 264 $ 258 $ 6 2%
Resort management and other services profit margin 55.1% 53.9% 1.2 pts 55.0% 53.9% 1.1 pts
Resort occupancy (1)
88.4% 87.9% 0.5 pts 89.5% 89.2% 0.3 pts
(1)Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service.
Rental Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Rental revenues $ 146 $ 142 $ 4 4% $ 478 $ 451 $ 27 6%
Rental expenses (146) (132) (14) (10%) (432) (387) (45) (12%)
Rental profit $ - $ 10 $ (10) (90%) $ 46 $ 64 $ (18) (27%)
Rental profit margin 0.7% 6.6% (5.9 pts) 9.9% 14.3% (4.4 pts)
Transient keys rented(1)
545,678 554,983 (9,305) (2%) 1,727,870 1,712,123 15,747 1%
Average transient rate $ 249 $ 240 $ 9 4% $ 265 $ 260 $ 5 2%
Rental occupancy(2)
70.1% 69.0% 1.1 pts 73.3% 72.4% 0.9 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 $6 million of higher unsold maintenance fees associated with developer-owned inventory, $3 million of higher marketing, variable, and other costs, and $2 million due to the closure of the Sheraton Kauai hotel following damage sustained from Hurricane Lowell.
Rental revenues and Rental expenses are both $5 million higher due to a reduction of costs in excess of rental revenues for developer-owned inventory which is registered and held for sale, which is reclassified to Rental revenues (net presentation).
We expect the ongoing closure of the Sheraton Kauai hotel will negatively impact our fourth quarter Rental profit by approximately $6 million. We continue to expect a decline in rental profit for the fourth quarter of 2026 due to higher inventory and related unsold maintenance fees.
First Three Quarters
Rental profit declined due to $18 million of higher unsold maintenance fees associated with developer-owned inventory, $9 million of higher marketing, variable, and other costs, and $2 million due to the closure of the Sheraton Kauai hotel following damage sustained from Hurricane Lowell, partially offset by an $11 million increase in transient rental revenues, including plus points.
Rental revenues and Rental expenses are both $16 million higher due to a reduction of costs in excess of rental revenues for developer-owned inventory which is registered and held for sale, which is reclassified to Rental revenues (net presentation).
Financing Revenues, Expenses and Profit
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Financing revenues $ 95 $ 90 $ 5 4% 279 268 11 4%
Financing expenses (13) (12) (1) (14%) (33) (33) - (2%)
Consumer financing interest expense (32) (26) (6) (21%) (95) (78) (17) (21%)
Financing profit $ 50 $ 52 $ (2) (6%) $ 151 $ 157 $ (6) (4%)
Financing profit margin 52.0% 57.8% (5.8 pts) 54.0% 58.6% (4.6 pts)
Third Quarter and First Three Quarters
•Financing revenues reflect higher interest income as a result of a higher average notes receivable balance.
•Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the three and nine months ended September 30, 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $4 million and $9 million for the three and nine months ended September 30, 2026, respectively, and $3 million and $10 million for the three and nine months ended September 30, 2025, respectively.
•In addition, consumer financing interest expense increased by $3 million and $7 million in the third quarter and first three quarters of 2026, respectively, due to a higher average securitized debt balance and a higher blended interest rate.
Restructuring
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Restructuring $ 9 $ - $ 9 NM $ 9 $ - $ 9 NM
Third Quarter
During the third quarter of 2026, we recorded $6 million of restructuring costs in connection with the termination of a future inventory purchase commitment in Mexico and $3 million of severance.
First Three Quarters
During the first three quarters of 2026, we recorded $6 million of restructuring costs in connection with the termination of a future inventory purchase commitment in Mexico, $2 million relating to the change in strategy for Asia Pacific and $1 million of severance.
Gains and Other Income
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Gains and other income, net $ 1 $ 8 $ (7) NM $ 7 $ 18 $ (11) NM
Third Quarter
During the third quarter of 2025, we benefited from $8 million of proceeds from service interruption insurance relating to the Maui wildfires.
First Three Quarters
During the first three quarters of 2026, we benefited from a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, a $2 million gain on the disposition of an entity that owned and operated a hotel in Cancun, Mexico, and $1 million of other gains.
During the first three quarters of 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 $1 million of other gains.
Exchange & Third-Party Management
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
REVENUES
Management and exchange $ 39 $ 43 $ 125 $ 130
Rental 9 8 26 28
Cost reimbursements 4 2 12 6
TOTAL REVENUES 52 53 163 164
EXPENSES
Management and exchange 28 30 86 88
Depreciation and amortization 4 6 14 20
Impairment†
- - - 2
Cost reimbursements 4 2 12 6
TOTAL EXPENSES†
36 38 112 116
Gains and other income, net - 1 1 1
Other - - - 1
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS†
$ 16 $ 16 $ 52 $ 50
† Prior year amounts have been reclassified to conform with our current year presentation.
Corporate and Other
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
REVENUES
Resort management and other services $ 16 $ 13 $ 49 $ 40
Cost reimbursements (9) (13) (29) (28)
TOTAL REVENUES 7 - 20 12
EXPENSES
Resort management and other services 18 16 56 48
Rental (3) (3) (9) (10)
General and administrative 71 53 197 175
Depreciation and amortization 5 6 15 14
Litigation charges - 1 - 6
Modernization†
6 53 32 97
Restructuring 1 - 7 -
Cost reimbursements (9) (13) (29) (28)
TOTAL EXPENSES†
89 113 269 302
Gains (losses) and other income (expense), net 2 2 (7) 29
Interest expense, net (43) (43) (130) (125)
Other - - - (1)
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS†
(123) (154) (386) (387)
Provision for income taxes (31) (3) (91) (73)
Net income attributable to noncontrolling interests - - - (1)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS†
$ (154) $ (157) $ (477) $ (461)
† Prior year amounts have been reclassified to conform with our current year presentation.
General and Administrative
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
General and administrative $ 71 $ 53 $ 18 33% $ 197 $ 175 $ 22 13%
Third Quarter
The increase in general and administrative expenses for the third quarter of 2026 was primarily attributable to a $16 million increase in incentive compensation expense related to Company performance and a $3 million increase in stock-based compensation expense partially offset by a $2 million decrease in insurance expense.
First Three Quarters
The increase in general and administrative expenses for the third quarter of 2026 was primarily attributable to a $23 million increase in incentive compensation expense related to Company performance and a $6 million increase in stock-based compensation expense partially offset by a $4 million decrease in insurance expense.
Modernization
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Modernization $ 6 $ 53 $ (47) (88%) $ 32 $ 97 $ (65) (67%)
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. 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.
The following table shows the composition of our modernization expenses during the third quarter and first three quarters of 2026 and 2025:
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Advisory services
$ - $ 21 $ (1) $ 52
Consulting (implementation)
5 11 18 18
Transition costs
1 14 6 15
Technology
2 5 9 7
Other
(2) 2 - 5
$ 6 $ 53 $ 32 $ 97
We expect to incur less than $20 million of non-recurring modernization expenses in the fourth quarter of 2026 primarily related to technology, as we wind down consulting (implementation) spending and do not expect to incur further advisory services costs.
Gains (Losses) and Other Income (Expense)
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Gains (losses) and other income (expense), net $ 2 $ 2 $ - NM $ (7) $ 29 $ (36) NM
Third Quarter
In the third quarter of 2026, we recorded $3 million of foreign currency gains partially offset by $1 million of other losses.
In the third quarter of 2025, we recorded $2 million of foreign currency gains, $1 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, partially offset by $1 million of other losses.
First Three Quarters
In the first three quarters of 2026, we recorded $2 million of foreign currency losses and a $5 million reduction in the receivable from Marriott International for indemnified tax matters.
In the first three quarters of 2025, we recorded $23 million of foreign currency gains, $4 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $1 million of insurance proceeds, and $1 million of other gains.
Interest Expense
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Interest expense, net $ (43) $ (43) $ - -% $ (130) $ (125) $ (5) (4%)
Third Quarter and First Three Quarters
The change in Interest expense, net is primarily attributed to interest on our 6.500% Senior Unsecured Notes due 2033 issued in the third quarter of 2025 (the proceeds of which were used to repay our $575 million 0.000% 2026 Convertible Notes). This increase was partially offset by the change in presentation of interest on our Warehouse Credit Facility and by lower interest on our Corporate Credit Facility and on our 2026 Convertible Notes, which were repaid during the first three quarters of 2026.
Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the three and nine months ended September 30, 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $4 million and $9 million for the three and nine months ended September 30, 2026, respectively, and $3 million and $10 million for the three and nine months ended September 30, 2025, respectively.
Income Tax
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 Change September 30, 2026 September 30, 2025 Change
Provision for income taxes $ (31) $ (3) $ (28) NM $ (91) $ (73) $ (18) (25%)
Third Quarter
Our effective tax rate was 27.8% and 537.8% for the three months ended September 30, 2026 and September 30, 2025, respectively.
The effective tax rate for the three months ended September 30, 2026 differed from the blended U.S. federal and state statutory tax rate primarily due to discrete income tax adjustments, including an $8 million increase in income tax expense related to changes in uncertain tax positions, partially offset by $2 million of tax benefits from U.S. and non-U.S. return-to-provision adjustments. The effective tax rate for the three months ended September 30, 2026 also reflects the cumulative impact of a lower estimated annual effective tax rate, primarily due to a change in our position regarding the utilization of foreign tax credits.
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, including a $25 million increase in income tax expense related to changes in valuation allowances, partially offset by $13 million of tax benefits associated with permanent differences arising from restructuring activities and $6 million of tax benefit related to other deferred tax adjustments.
First Three Quarters
Our effective tax rate was 33.4% and 37.0% for the nine months ended September 30, 2026 and September 30, 2025, respectively.
The effective tax rate for the nine months ended September 30, 2026 differed from the blended U.S. federal and state statutory tax rate primarily due to projected losses in certain foreign jurisdictions for which no tax benefit was recognized due to valuation allowances, as well as discrete income tax adjustments. These adjustments included a $5 million increase in income tax expense related to foreign return-to-provision adjustments and a $6 million cumulative adjustment related to a foreign tax provision and associated penalties, partially offset by $3 million of tax benefits related to changes in uncertain tax positions.
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, including a $25 million increase in income tax expense related to changes in valuation allowances, partially offset by $13 million of tax benefits related to permanent differences arising from restructuring activities and $6 million of tax benefits from non-U.S. return-to-provision adjustments.
Consolidated Property Owners' Associations
The following table illustrates the impact of certain Consolidated Property Owners' Associations under the relevant accounting guidance.
Three Months Ended Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
REVENUES
Resort management and other services $ 16 $ 13 $ 49 $ 40
Cost reimbursements (9) (13) (29) (28)
TOTAL REVENUES 7 - 20 12
EXPENSES
Resort management and other services 18 16 56 48
Rental (3) (3) (9) (10)
Cost reimbursements (9) (13) (29) (28)
TOTAL EXPENSES 6 - 18 10
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 - 2 2
Provision for income taxes - - (1) (1)
Net income attributable to noncontrolling interests - - - (1)
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 September 30, 2026, our gross corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.6, which has improved from 4.2 at December 31, 2025, providing flexibility for capital allocation decisions.
During the first quarter of 2026, we used the proceeds from the 2033 Notes to repay our 2026 Convertible Notes upon maturity. We have no material principal payment obligations for the remainder of 2026. See Footnote 12 "Debt" to our Financial Statements for further information related to maturities of our debt.
In September, we generated $66 million of net proceeds from the private placement of $91 million of vacation ownership notes receivable with collateral located in Asia Pacific that was not eligible for sale in the traditional ABS market at a blended interest rate of 6.70%. Subsequent to the end of the third quarter of 2026, we securitized a pool of $469 million of vacation ownership notes receivable at a blended interest rate of 5.91% and a gross advance rate of 98%.
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 2026, and as of September 30, 2026, no securitized vacation ownership notes receivable pools were out of compliance with their respective established parameters. As of September 30, 2026, we had 13 term securitization transactions outstanding. Since 2000, we have issued approximately $11.2 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. At September 30, 2026, we had $382 million of borrowings outstanding on our Warehouse Credit Facility. See Footnote 11 "Securitized Debt" to our Financial Statements for further information.
As of September 30, 2026, $97 million of gross vacation ownership notes receivable were eligible for securitization.
Revolving Corporate Credit Facility
Our Revolving Corporate Credit Facility, which expires on March 24, 2030, provides for up to $800 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions. At September 30, 2026, $20 million of borrowings and $4 million of letters of credit were outstanding under our Revolving Corporate Credit Facility. See Footnote 12 "Debt" to our Financial Statements for further information.
Disposition of Non-core Assets
Following the decision to retain certain assets for operational use, we expect that we will generate approximately $200 million of gross cash proceeds from the disposition of non-core assets by the end of 2027. We realized proceeds of $50 million in the first quarter of 2026 from the disposition of an entity that owned and operated a hotel in Cancun, Mexico and we expect to realize an additional $11 million of gross proceeds from dispositions during the fourth quarter of 2026.
Uses of Cash
We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners' associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, timing and amount of voluntary repurchases of defaulted vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisitions and development.
Seasonality
Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments. Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year. Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we generally have incentive compensation-related cash outflows associated with payment of annual bonuses and, subject to the continued issuance of quarterly dividends, the payment of two quarterly cash dividends declared in December and February.
Operations
In addition to net income and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:
Inventory Spending Less than (In Excess of) Cost of Sales
Nine Months Ended
($ in millions) September 30, 2026 September 30, 2025
Inventory spending $ (81) $ (77)
Purchase and development of property for future transfer to inventory - (134)
Inventory costs 102 98
Inventory spending less than (in excess of) cost of sales $ 21 $ (113)
We plan to restrict our new inventory spending to capital efficient arrangements where our cash outlay coincides with the 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, 2026 September 30, 2025
Vacation ownership notes receivable collections - non-securitized $ 67 $ 119
Vacation ownership notes receivable collections - securitized 514 400
Vacation ownership notes receivable originations (887) (766)
Vacation ownership notes receivable collections less than originations $ (306) $ (247)
Vacation ownership notes receivable collections were less than originations in the first three quarters of 2026 and 2025 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, 2025 26,795,163 $ 2,522 $ 94.12
For the first three quarters of 2026 - - $ -
As of September 30, 2026 26,795,163 $ 2,522 $ 94.12
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 2026 as follows:
Declaration Date Stockholder Record Date Distribution Date Dividend per Share
December 12, 2025 December 24, 2025 January 7, 2026 $0.80
February 19, 2026 March 4, 2026 March 18, 2026 $0.80
May 14, 2026 May 27, 2026 June 10, 2026 $0.80
September 2, 2026 September 16, 2026 September 30, 2026 $0.80
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.
Material Cash Requirements
The following table summarizes our future material cash requirements from known contractual or other obligations as of September 30, 2026:
Payments Due by Period
($ in millions) Total Remainder
of 2026 		2027 2028 2029 2030 Thereafter
Debt(1)
$ 3,442 $ 53 $ 733 $ 475 $ 612 $ 120 $ 1,449
Securitized debt(1)(2)
3,081 84 325 316 613 254 1,489
Purchase obligations(3)
501 92 218 99 40 31 21
Operating lease obligations(4)
66 5 17 12 10 7 15
Finance lease obligations(4)
515 5 19 16 14 13 448
Other long-term obligations 11 7 2 2 - - -
$ 7,616 $ 246 $ 1,314 $ 920 $ 1,289 $ 425 $ 3,422
(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 generally have minimal impact on our net income (loss) attributed to common stockholders 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, 2026 and December 31, 2025, and for the nine months ended September 30, 2026 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, 2026
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI
Revenues $ - $ 985 $ 2,122 $ 871 $ (34) $ 3,944
Expenses (54) (958) (2,093) (601) 34 (3,672)
Benefit from (provision for) income taxes 15 (6) (4) (96) - (91)
Equity in net income of subsidiaries 220 364 - - (584) -
Net income attributable to common stockholders $ 181 $ 385 $ 25 $ 174 $ (584) $ 181
Condensed Consolidating Balance Sheet
As of September 30, 2026 As of December 31, 2025
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 $ - $ 46 $ 60 $ 123 $ - $ 229 $ 135 $ 70 $ 69 $ 132 $ - $ 406
Restricted cash - 32 112 160 - 304 - 21 145 161 - 327
Accounts and contracts receivable, net 19 183 151 65 1 419 21 135 166 117 (11) 428
Vacation ownership notes receivable, net - 215 130 2,331 - 2,676 - 251 192 2,122 - 2,565
Inventory - 307 223 149 - 679 - 324 231 137 - 692
Property and equipment, net - 253 580 103 - 936 - 252 593 105 - 950
Goodwill - - 2,958 - - 2,958 - - 2,958 - - 2,958
Intangibles, net - - 639 26 - 665 - - 683 28 - 711
Investments in subsidiaries 2,504 3,449 - - (5,953) - 2,894 3,592 - - (6,486) -
Other 196 146 303 137 (179) 603 180 155 323 191 (129) 720
Total assets $ 2,719 $ 4,631 $ 5,156 $ 3,094 $ (6,131) $ 9,469 $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
Accounts payable $ 22 $ 51 $ 70 $ 84 $ - $ 227 $ 91 $ 45 $ 144 $ 79 $ (1) $ 358
Advance deposits - 75 74 18 - 167 - 72 73 18 - 163
Accrued liabilities 6 126 135 118 3 388 1 130 123 124 (2) 376
Deferred revenue and other - 34 153 181 (10) 358 - 11 157 212 (9) 371
Payroll and benefits liability - 141 63 29 - 233 1 109 74 34 - 218
Deferred compensation liability - 148 91 3 - 242 - 165 55 5 - 225
Securitized debt, net - - - 2,450 (28) 2,422 - - - 2,173 (27) 2,146
Debt, net 571 2,226 180 - - 2,977 1,144 2,210 179 1 - 3,534
Other - 5 91 27 - 123 - 5 113 24 - 142
Deferred taxes 1 114 186 17 (105) 213 - 105 209 18 (101) 231
MVW stockholders' equity 2,119 1,711 4,113 167 (5,991) 2,119 1,993 1,948 4,233 305 (6,486) 1,993
Total liabilities and equity $ 2,719 $ 4,631 $ 5,156 $ 3,094 $ (6,131) $ 9,469 $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
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 2025 Annual Report. Since the date of our 2025 Annual Report, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.
Marriott Vacations Worldwide Corporation published this content on November 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 04, 2026 at 15:43 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]