ORLANDO, Fla.--(BUSINESS WIRE)--Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW,” the “Company,” “we” or “our”) reported financial results for the third quarter of 2026.
Third Quarter 2026 Highlights
- Contract sales increased 29% year over year to $565 million in the quarter.
- VPG was $4,822, 30% above last year.
- Development profit increased 97% to $142 million versus the prior year.
- Net income attributable to common stockholders was $82 million compared to net loss attributable to common stockholders of $2 million in the prior year and diluted earnings per share was $2.24 compared to diluted loss per share of $0.07 in the prior year.
- Adjusted net income attributable to common stockholders increased 47% to $98 million and adjusted diluted earnings per share increased 56% to $2.64.
- Adjusted EBITDA increased 27% to $216 million compared to $170 million in the prior year.
- The Company raised the midpoint of its full-year Contract Sales and Adjusted EBITDA guidance to $2,130 million and $820 million, respectively. The increase is despite an estimated $16 million adverse impact to Adjusted EBITDA from Hurricane Lowell in the second half of 2026.
“We are very pleased with our third quarter financial results, as they demonstrate the substantive momentum in our business, on the heels of our strong second quarter. Further, they reflect the continued success of the strategies we began implementing in the second quarter as part of the transformation now underway. By way of example, VPG increased to an industry leading $4,822, 30% above last year, and our operating discipline drove 27% Adjusted EBITDA growth,” said Matt Avril, Chief Executive Officer. “Our emphasis on differentiating Owner experiences such as our Inner Circle by Aflac events platform - which features curated regional and national entertainment - are fueling our sales success.”
In the tables that follow “*” denotes Non-GAAP Financial Measures. Please see page A-17 for additional information about our reasons for providing these alternative financial measures and limitations on their use. Additionally, in the tables below “†” denotes prior year amounts that have been reclassified to conform with our current year presentation and “NM” means not meaningful. Please see page A-17 for additional information about our prior year reclassifications.
Vacation Ownership |
|||||||||||
Three Months Ended |
|||||||||||
(In millions, except volume per guest (“VPG”) and tours) |
September
|
September
|
Change |
||||||||
Revenues excluding cost reimbursements |
$ |
857 |
$ |
748 |
15% |
||||||
Contract sales |
$ |
565 |
$ |
439 |
29% |
||||||
VPG |
$ |
4,822 |
$ |
3,700 |
30% |
||||||
Tours |
107,687 |
109,609 |
(2%) |
||||||||
Segment financial results attributable to common stockholders† |
$ |
220 |
$ |
139 |
58% |
||||||
Segment margin† |
25.7% |
18.6% |
710 bps |
||||||||
Segment Adjusted EBITDA* |
$ |
255 |
$ |
195 |
30% |
||||||
Segment Adjusted EBITDA margin* |
29.6% |
26.1% |
350 bps |
||||||||
Contract sales increased 29% compared to the prior year. VPG increased 30% year over year driven by higher average transaction size from better sales execution, and the product and operational enhancements implemented in the second quarter. Tours in North America increased 4% year over year driven by higher owner connection rates and the 2% decline in total tours was attributable to the Company’s purposeful actions to prioritize higher profitability and cash flow in the Asia‑Pacific region.
During the third quarter the Company recorded a 14.8% sales reserve as a percentage of contract sales compared to 13.4% in the second quarter driven by the origination of an additional $60 million of receivables. While the higher level of originations increased the current-period sales reserve, these additional receivables are expected to generate incremental financing profit over time.
Segment Adjusted EBITDA increased primarily due to higher contract sales and lower average cost of vacation ownership products, partially offset by lower rental profit as a result of higher inventory costs and the partial closure of five resorts in Kauai, Hawaii, attributable to damages from Hurricane Lowell. Segment Adjusted EBITDA margin increased primarily due to lower sales and marketing as a percentage of revenue and lower product cost rates.
Exchange & Third-Party Management |
||||||||||
(In millions, except total active Interval International members and average revenue
|
Three Months Ended |
Change |
||||||||
September
|
September
|
|||||||||
Revenues excluding cost reimbursements |
$ |
48 |
$ |
51 |
(5%) |
|||||
Total active Interval International members (000's)(1) |
1,480 |
1,499 |
(1%) |
|||||||
Average revenue per Interval International member |
$ |
37 |
$ |
38 |
(2%) |
|||||
Segment financial results attributable to common stockholders† |
$ |
16 |
$ |
16 |
10% |
|||||
Segment margin† |
34.4% |
29.7% |
470 bps |
|||||||
Segment Adjusted EBITDA* |
$ |
21 |
$ |
21 |
1% |
|||||
Segment Adjusted EBITDA margin* |
44.7% |
42.3% |
240 bps |
|||||||
(1) Includes members at the end of each period. |
||||||||||
Revenues excluding cost reimbursements declined 5% to $48 million driven by lower exchange and other transaction revenue at Interval International, and Segment Adjusted EBITDA remained flat.
Corporate and Other
General and administrative costs increased $18 million in the third quarter compared to the prior year primarily due to higher incentive compensation.
Capital Markets Activity
During the quarter, the Company generated $66 million of net proceeds through the sale of Asia Pacific vacation ownership notes receivable at an interest rate of 6.70%. Additionally, subsequent to the end of the third quarter, the Company completed a $460 million term securitization with a weighted average coupon of 5.91% and a 98% advance rate.
Balance Sheet and Liquidity
The Company ended the quarter with approximately $1.1 billion in liquidity, including $229 million of cash and cash equivalents and $776 million of available capacity under its revolving corporate credit facility. The Company had $3.0 billion of corporate debt and $2.4 billion of non-recourse debt related to its securitized vacation ownership notes receivable at the end of the third quarter.
The Company’s net corporate leverage ratio declined to 3.6 times in the third quarter compared to 4.0 times at the end of the second quarter.
The Company also had $906 million of inventory at the end of the quarter, including $227 million classified as a component of Property and equipment.
Share Repurchase Authorization
The Board of Directors authorized the extension of the remaining $322 million share repurchase authorization from December 31, 2026 to December 31, 2027.
Full Year 2026 Outlook
The Company updated its full year 2026 guidance as reflected in the chart below. The current guidance includes an estimated $16 million adverse impact to Adjusted EBITDA from Hurricane Lowell in Kauai.
(in millions, except per share amounts) |
Current 2026 Guidance |
Previous 2026 Guidance |
|||||
Contract sales |
$2,120 |
to |
$2,140 |
$2,080 |
to |
$2,115 |
|
Adjusted EBITDA* |
$810 |
to |
$830 |
$805 |
to |
$830 |
|
Adjusted net income attributable to common stockholders* |
$315 |
to |
$335 |
$300 |
to |
$330 |
|
Adjusted earnings per share - diluted* |
$8.65 |
to |
$9.15 |
$8.25 |
to |
$9.05 |
|
Adjusted free cash flow* |
$410 |
to |
$430 |
$410 |
to |
$460 |
|
The guidance provided above excludes impacts from certain asset sales, foreign currency changes, restructuring costs, litigation charges, modernization costs, and impairments, each of which the Company cannot forecast with sufficient accuracy to factor them into the guidance provided above and without unreasonable efforts, and which may be significant. As a result, the full year 2026 outlook is presented only on a non-GAAP basis and is not reconciled to the most comparable GAAP measures. Where one or more of the currently unavailable items is applicable, some items could be material, individually or in the aggregate, to GAAP reported results.
During the first quarter of 2026, the Company began including interest expense associated with its warehouse credit facility borrowings as a component of consumer financing interest expense. In the third quarter of 2026, interest expense on warehouse credit facility borrowings was $4 million.
The Company’s 2026 guidance is based on the following supplemental estimates:
($ in millions) |
Current 2026 Guidance |
Previous 2026 Guidance |
|||||
Interest expense, net |
$176 |
to |
$174 |
$178 |
to |
$174 |
|
Depreciation and amortization |
$135 |
to |
$133 |
$140 |
to |
$138 |
|
Tax rate used to calculate adjusted net income attributable
|
30% |
to |
29% |
31% |
to |
29% |
|
Non-GAAP Financial Information
Non-GAAP Financial Measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see page A-17 for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing Non-GAAP Financial Measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission.
Third Quarter 2026 Financial Results Conference Call
The Company will hold a conference call on November 4, 2026, at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing 877-407-8289 or 201-689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.
About Marriott Vacations Worldwide Corporation
Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has 120 vacation ownership resorts and approximately 650,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates an exchange network and membership programs comprised of more than 3,200 affiliated resorts in over 90 countries and territories, and provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.
The Company routinely posts important information, including news releases, announcements and other statements about its business and results of operations, that may be deemed material to investors on the Investor Relations section of the Company’s website, www.marriottvacationsworldwide.com. The Company uses its website as a means of disclosing material, nonpublic information and for complying with the Company’s disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of the Company’s website in addition to following the Company’s press releases, filings with the SEC, public conference calls and webcasts.
Note on forward-looking statements
This press release and accompanying schedules contain “forward-looking statements” within the meaning of federal securities laws, including statements about expectations, plans, objectives, outlook and prospects for future performance and growth; expected asset dispositions; and its full year 2026 outlook and guidance for contract sales, results of operations and cash flows.
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. The Company cautions 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” in our most recent Annual Report on Form 10-K, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission.
All forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no 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. 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.
Financial Schedules Follow
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||
FINANCIAL SCHEDULES |
|||
QUARTER 3, 2026 |
|||
TABLE OF CONTENTS |
|||
Summary Financial Information and Adjusted EBITDA by Segment |
A-1 |
||
Interim Consolidated Statements of Income |
A-2 |
||
Adjusted Net Income Attributable to Common Stockholders Adjusted Earnings Per Share - Diluted |
A-3 |
||
Adjusted EBITDA |
A-4 |
||
Segment Adjusted EBITDA Vacation Ownership Exchange & Third-Party Management |
A-5 |
||
Contract Sales to Development Profit |
A-6 |
||
Supplemental Information |
A-7 |
to |
A-10 |
Interim Consolidated Balance Sheets |
A-11 |
||
Interim Consolidated Statements of Cash Flows |
A-12 |
||
Free Cash Flow and Adjusted Free Cash Flow |
A-14 |
||
2026 Outlook - Adjusted Free Cash Flow |
A-15 |
||
Quarterly Operating Metrics |
A-16 |
||
Non-GAAP Financial Measures |
A-17 |
||
A-1 |
|||||||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||||||
SUMMARY FINANCIAL INFORMATION |
|||||||||||||||||||
(In millions, except per share amounts) |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
Three Months Ended |
Change
|
Nine Months Ended |
Change
|
||||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||||||
GAAP Measures |
|||||||||||||||||||
Revenues |
$ |
1,367 |
$ |
1,263 |
8% |
$ |
3,944 |
$ |
3,709 |
6% |
|||||||||
Revenues excluding cost
|
$ |
921 |
$ |
812 |
14% |
$ |
2,668 |
$ |
2,478 |
8% |
|||||||||
Income before income taxes
|
$ |
113 |
$ |
1 |
NM |
$ |
272 |
$ |
197 |
39% |
|||||||||
Net income (loss)
|
$ |
82 |
$ |
(2 |
) |
NM |
$ |
181 |
$ |
123 |
47% |
||||||||
Diluted shares |
38.6 |
34.9 |
10% |
38.2 |
41.9 |
(9%) |
|||||||||||||
Earnings (loss) per share -
|
$ |
2.24 |
$ |
(0.07 |
) |
NM |
$ |
5.07 |
$ |
3.27 |
55% |
||||||||
Non-GAAP Measures* |
|||||||||||||||||||
Adjusted EBITDA |
$ |
216 |
$ |
170 |
27% |
$ |
592 |
$ |
565 |
5% |
|||||||||
Adjusted pretax income |
$ |
126 |
$ |
78 |
63% |
$ |
324 |
$ |
294 |
10% |
|||||||||
Adjusted net income
|
$ |
98 |
$ |
66 |
47% |
$ |
225 |
$ |
208 |
8% |
|||||||||
Adjusted earnings per share
|
$ |
2.64 |
$ |
1.69 |
56% |
$ |
6.21 |
$ |
5.31 |
17% |
|||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||||||
A-2 |
|||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
INTERIM CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
(In millions, except per share amounts) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
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
|
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
|
$ |
82 |
$ |
(2 |
) |
$ |
181 |
$ |
123 |
||||||
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE
|
|||||||||||||||
Basic shares |
34.8 |
34.9 |
34.7 |
35.0 |
|||||||||||
Basic |
$ |
2.37 |
$ |
(0.07 |
) |
$ |
5.23 |
$ |
3.52 |
||||||
Diluted shares |
38.6 |
34.9 |
38.2 |
41.9 |
|||||||||||
Diluted |
$ |
2.24 |
$ |
(0.07 |
) |
$ |
5.07 |
$ |
3.27 |
||||||
† Prior year amounts have been reclassified to conform with our current year presentation. Please see “Non-GAAP Financial Measures” for additional information. |
|||||||||||||||
A-3 |
|||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND
|
|||||||||||||||
(In millions, except per share amounts) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
Net income (loss) attributable to common
|
$ |
82 |
$ |
(2 |
) |
$ |
181 |
$ |
123 |
||||||
Provision for income taxes |
31 |
3 |
91 |
73 |
|||||||||||
Income before income taxes attributable to
|
113 |
1 |
272 |
196 |
|||||||||||
Certain items: |
|||||||||||||||
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-
|
— |
— |
(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 |
— |
|||||||||||
Adjusted pretax income* |
126 |
78 |
324 |
294 |
|||||||||||
Provision for income taxes |
(28 |
) |
(12 |
) |
(99 |
) |
(86 |
) |
|||||||
Adjusted net income attributable to common
|
$ |
98 |
$ |
66 |
$ |
225 |
$ |
208 |
|||||||
Diluted shares |
38.6 |
42.0 |
38.2 |
41.9 |
|||||||||||
Adjusted earnings per share - Diluted* |
$ |
2.64 |
$ |
1.69 |
$ |
6.21 |
$ |
5.31 |
|||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
† Prior year amounts have been reclassified to conform with our current year presentation. Please see “Non-GAAP Financial Measures” for additional information. |
|||||||||||||||
A-4 |
|||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
ADJUSTED EBITDA |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
Net income (loss) attributable to common stockholders |
$ |
82 |
$ |
(2 |
) |
$ |
181 |
$ |
123 |
||||||
Interest expense, net |
43 |
43 |
130 |
125 |
|||||||||||
Provision for income taxes |
31 |
3 |
91 |
73 |
|||||||||||
Depreciation and amortization |
33 |
38 |
99 |
114 |
|||||||||||
Share-based compensation |
12 |
9 |
34 |
28 |
|||||||||||
Amortization of cloud computing software implementation costs |
2 |
2 |
5 |
4 |
|||||||||||
Certain items: |
|||||||||||||||
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
|
— |
— |
(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 |
— |
|||||||||||
Adjusted EBITDA* |
$ |
216 |
$ |
170 |
$ |
592 |
$ |
565 |
|||||||
Adjusted EBITDA Margin* |
23.4% |
20.9% |
22.2% |
22.8% |
|||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
† Prior year amounts have been reclassified to conform with our current year presentation. Please see “Non-GAAP Financial Measures” for additional information. |
|||||||||||||||
A-5 |
|||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
Segment financial results attributable to common
|
$ |
220 |
$ |
139 |
$ |
606 |
$ |
534 |
|||||||
Depreciation and amortization |
24 |
26 |
70 |
80 |
|||||||||||
Share-based compensation |
3 |
3 |
7 |
7 |
|||||||||||
Amortization of cloud computing software implementation costs |
1 |
1 |
4 |
3 |
|||||||||||
Certain items: |
|||||||||||||||
Gain on disposition of hotel, land, and other |
— |
— |
(2 |
) |
— |
||||||||||
Insurance proceeds |
— |
(8 |
) |
— |
(15 |
) |
|||||||||
Change in estimates relating to pre-
|
— |
— |
(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 |
— |
|||||||||||
Segment Adjusted EBITDA* |
$ |
255 |
$ |
195 |
$ |
689 |
$ |
647 |
|||||||
Segment Adjusted EBITDA Margin* |
29.6% |
26.1% |
27.9% |
28.4% |
|||||||||||
EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
Segment financial results attributable to
|
$ |
16 |
$ |
16 |
$ |
52 |
$ |
50 |
|||||||
Depreciation and amortization |
4 |
6 |
14 |
20 |
|||||||||||
Share-based compensation |
1 |
— |
2 |
1 |
|||||||||||
Certain items: |
|||||||||||||||
Impairment† |
— |
— |
— |
2 |
|||||||||||
Other |
— |
(1 |
) |
(1 |
) |
(1 |
) |
||||||||
Segment Adjusted EBITDA* |
$ |
21 |
$ |
21 |
$ |
67 |
$ |
72 |
|||||||
Segment Adjusted EBITDA Margin* |
44.7% |
42.3% |
44.3% |
45.8% |
|||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
† Prior year amounts have been reclassified to conform with our current year presentation. Please see “Non-GAAP Financial Measures” for additional information. |
|||||||||||||||
A-6 |
|||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
CONTRACT SALES TO DEVELOPMENT PROFIT |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September
|
September
|
September
|
September
|
||||||||||||
Contract sales |
$ |
565 |
$ |
439 |
$ |
1,521 |
$ |
1,304 |
|||||||
Less resales contract sales |
(11 |
) |
(7 |
) |
(27 |
) |
(23 |
) |
|||||||
Contract sales, net of resales |
554 |
432 |
1,494 |
1,281 |
|||||||||||
Plus: |
|||||||||||||||
Settlement revenue |
12 |
10 |
34 |
30 |
|||||||||||
Resales revenue |
5 |
4 |
11 |
13 |
|||||||||||
Revenue recognition adjustments: |
|||||||||||||||
Reportability |
(3 |
) |
(5 |
) |
(25 |
) |
2 |
||||||||
Sales reserve |
(82 |
) |
(57 |
) |
(204 |
) |
(165 |
) |
|||||||
Other(1) |
(27 |
) |
(26 |
) |
(78 |
) |
(78 |
) |
|||||||
Sale of vacation ownership products |
459 |
358 |
1,232 |
1,083 |
|||||||||||
Less: |
|||||||||||||||
Cost of vacation ownership products |
(49 |
) |
(52 |
) |
(138 |
) |
(135 |
) |
|||||||
Marketing and sales |
(268 |
) |
(234 |
) |
(791 |
) |
(705 |
) |
|||||||
Development Profit |
$ |
142 |
$ |
72 |
303 |
243 |
|||||||||
Development Profit Margin |
31.0% |
20.2% |
24.6% |
22.4% |
|||||||||||
(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. |
|||||||||||||||
A-7 |
|||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||
SUPPLEMENTAL INFORMATION |
|||||||||
(In millions and Unaudited) |
|||||||||
Three Months Ended |
|||||||||
September
|
September
|
Change |
|||||||
DEVELOPMENT PROFIT |
|||||||||
Sale of vacation ownership products revenue |
$ |
459 |
$ |
358 |
28% |
||||
Cost of vacation ownership products expense |
(49 |
) |
(52 |
) |
4% |
||||
Marketing and sales expense |
(268 |
) |
(234 |
) |
(14%) |
||||
Development Profit |
142 |
72 |
97% |
||||||
Development Profit Margin |
31.0% |
20.2% |
1,080 bps |
||||||
MANAGEMENT AND EXCHANGE PROFIT |
|||||||||
Vacation Ownership Segment |
157 |
158 |
—% |
||||||
Exchange & Third-Party Management Segment |
39 |
43 |
(7%) |
||||||
Corporate and Other(1) |
16 |
13 |
23% |
||||||
Management and Exchange Revenue |
212 |
214 |
—% |
||||||
Vacation Ownership Segment |
(70 |
) |
(72 |
) |
3% |
||||
Exchange & Third-Party Management Segment |
(28 |
) |
(30 |
) |
9% |
||||
Corporate and Other(1) |
(18 |
) |
(16 |
) |
(16%) |
||||
Management and Exchange Expense |
(116 |
) |
(118 |
) |
2% |
||||
Management and Exchange Profit |
96 |
96 |
2% |
||||||
Management and Exchange Profit Margin |
45.2% |
44.3% |
90 bps |
||||||
RENTAL PROFIT |
|||||||||
Vacation Ownership Segment |
146 |
142 |
4% |
||||||
Exchange & Third-Party Management Segment |
9 |
8 |
6% |
||||||
Corporate and Other(1) |
— |
— |
NM |
||||||
Rental Revenue |
155 |
150 |
4% |
||||||
Vacation Ownership Segment |
(146 |
) |
(132 |
) |
(10%) |
||||
Exchange & Third-Party Management Segment |
— |
— |
NM |
||||||
Corporate and Other(1) |
3 |
3 |
(18%) |
||||||
Rental Expense |
(143 |
) |
(129 |
) |
(11%) |
||||
Rental Profit |
12 |
21 |
(40%) |
||||||
Rental Profit Margin |
8.3% |
14.3% |
(600 bps) |
||||||
FINANCING PROFIT |
|||||||||
Financing Revenue |
95 |
90 |
4% |
||||||
Financing Expense |
(45 |
) |
(38 |
) |
(19%) |
||||
Financing Profit |
50 |
52 |
(6%) |
||||||
Financing Profit Margin |
52.0% |
57.8% |
(580 bps) |
||||||
OTHER |
|||||||||
General and administrative |
(71 |
) |
(53 |
) |
(33%) |
||||
Royalty fee |
(29 |
) |
(29 |
) |
(3%) |
||||
Other(2) |
16 |
11 |
47% |
||||||
ADJUSTED EBITDA* |
$ |
216 |
$ |
170 |
27% |
||||
Adjusted EBITDA Margin |
23.4% |
20.9% |
250 bps |
||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||
| (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the Financial Accounting Standards Board Accounting Standard Codification Topic 810, “Consolidation,” and represents the portion attributable to individual or third-party vacation ownership interest owners. | |||||||||
| (2) Includes share-based compensation, amortization of cloud computing software implementation costs, net income or loss attributable to noncontrolling interests, and other. | |||||||||
NM = Not meaningful |
|||||||||
A-8 |
|||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||
SUPPLEMENTAL INFORMATION |
|||||||||
(In millions and Unaudited) |
|||||||||
Nine Months Ended |
|||||||||
September
|
September
|
Change |
|||||||
DEVELOPMENT PROFIT |
|||||||||
Sale of vacation ownership products revenue |
$ |
1,232 |
$ |
1,083 |
14% |
||||
Cost of vacation ownership products expense |
(138 |
) |
(135 |
) |
(2%) |
||||
Marketing and sales expense |
(791 |
) |
(705 |
) |
(12%) |
||||
Development Profit |
303 |
243 |
25% |
||||||
Development Profit Margin |
24.6% |
22.4% |
220 bps |
||||||
MANAGEMENT AND EXCHANGE PROFIT |
|||||||||
Vacation Ownership Segment |
479 |
478 |
—% |
||||||
Exchange & Third-Party Management Segment |
125 |
130 |
(3%) |
||||||
Corporate and Other(1) |
49 |
40 |
21% |
||||||
Management and Exchange Revenue |
653 |
648 |
1% |
||||||
Vacation Ownership Segment |
(215 |
) |
(220 |
) |
2% |
||||
Exchange & Third-Party Management Segment |
(86 |
) |
(88 |
) |
3% |
||||
Corporate and Other(1) |
(56 |
) |
(48 |
) |
(17%) |
||||
Management and Exchange Expense |
(357 |
) |
(356 |
) |
—% |
||||
Management and Exchange Profit |
296 |
292 |
2% |
||||||
Management and Exchange Profit Margin |
45.3% |
45.0% |
30 bps |
||||||
RENTAL PROFIT |
|||||||||
Vacation Ownership Segment |
478 |
451 |
6% |
||||||
Exchange & Third-Party Management Segment |
26 |
28 |
(8%) |
||||||
Corporate and Other(1) |
— |
— |
NM |
||||||
Rental Revenue |
504 |
479 |
5% |
||||||
Vacation Ownership Segment |
(432 |
) |
(387 |
) |
(12%) |
||||
Exchange & Third-Party Management Segment |
— |
— |
NM |
||||||
Corporate and Other(1) |
9 |
10 |
(15%) |
||||||
Rental Expense |
(423 |
) |
(377 |
) |
(12%) |
||||
Rental Profit |
81 |
102 |
(20%) |
||||||
Rental Profit Margin |
16.2% |
21.4% |
(520 bps) |
||||||
FINANCING PROFIT |
|||||||||
Financing Revenue |
279 |
268 |
4% |
||||||
Financing Expense |
(128 |
) |
(111 |
) |
(16%) |
||||
Financing Profit |
151 |
157 |
(4%) |
||||||
Financing Profit Margin |
54.0% |
58.6% |
(460 bps) |
||||||
OTHER |
|||||||||
General and administrative |
(197 |
) |
(175 |
) |
(13%) |
||||
Royalty fee |
(86 |
) |
(85 |
) |
(2%) |
||||
Other(2) |
44 |
31 |
40% |
||||||
ADJUSTED EBITDA* |
$ |
592 |
$ |
565 |
5% |
||||
Adjusted EBITDA Margin |
22.2% |
22.8% |
(60 bps) |
||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||
| (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the Financial Accounting Standards Board Accounting Standard Codification Topic 810, “Consolidation,” and represents the portion attributable to individual or third-party vacation ownership interest owners. | |||||||||
| (2) Includes share-based compensation, amortization of cloud computing software implementation costs, net income or loss attributable to noncontrolling interests, and other. | |||||||||
| NM = Not meaningful | |||||||||
A-9 |
|||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||
SUPPLEMENTAL INFORMATION - MANAGEMENT AND EXCHANGE REVENUE |
|||||||||
(In millions and Unaudited) |
|||||||||
Three Months Ended |
|||||||||
September
|
September
|
Change |
|||||||
ANCILLARY REVENUE |
|||||||||
Vacation Ownership Segment |
$ |
67 |
$ |
69 |
(2%) |
||||
Exchange & Third-Party Management Segment |
1 |
1 |
—% |
||||||
Corporate and Other(1) |
— |
— |
NM |
||||||
Ancillary Revenue |
68 |
70 |
(2%) |
||||||
MANAGEMENT FEE REVENUE |
|||||||||
Vacation Ownership Segment |
56 |
56 |
—% |
||||||
Exchange & Third-Party Management Segment |
1 |
2 |
(20%) |
||||||
Corporate and Other(1) |
(1 |
) |
(1 |
) |
(1%) |
||||
Management Fee Revenue |
56 |
57 |
(1%) |
||||||
EXCHANGE AND OTHER SERVICES REVENUE |
|||||||||
Vacation Ownership Segment |
34 |
33 |
3% |
||||||
Exchange & Third-Party Management Segment |
37 |
40 |
(7%) |
||||||
Corporate and Other(1) |
17 |
14 |
22% |
||||||
Exchange and Other Services Revenue |
88 |
87 |
2% |
||||||
TOTAL MANAGEMENT AND EXCHANGE REVENUE |
$ |
212 |
$ |
214 |
—% |
||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the Financial Accounting Standards Board Accounting Standard Codification Topic 810, “Consolidation,” and represents the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||
A-10 |
|||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||
SUPPLEMENTAL INFORMATION - MANAGEMENT AND EXCHANGE REVENUE |
|||||||||
(In millions and Unaudited) |
|||||||||
Nine Months Ended |
|||||||||
September
|
September
|
Change |
|||||||
ANCILLARY REVENUE |
|||||||||
Vacation Ownership Segment |
$ |
206 |
$ |
209 |
(1%) |
||||
Exchange & Third-Party Management Segment |
3 |
3 |
5% |
||||||
Corporate and Other(1) |
— |
— |
NM |
||||||
Ancillary Revenue |
209 |
212 |
(1%) |
||||||
MANAGEMENT FEE REVENUE |
|||||||||
Vacation Ownership Segment |
168 |
166 |
1% |
||||||
Exchange & Third-Party Management Segment |
5 |
6 |
(12%) |
||||||
Corporate and Other(1) |
(2 |
) |
(2 |
) |
(1%) |
||||
Management Fee Revenue |
171 |
170 |
—% |
||||||
EXCHANGE AND OTHER SERVICES REVENUE |
|||||||||
Vacation Ownership Segment |
105 |
103 |
3% |
||||||
Exchange & Third-Party Management Segment |
117 |
121 |
(3%) |
||||||
Corporate and Other(1) |
51 |
42 |
20% |
||||||
Exchange and Other Services Revenue |
273 |
266 |
3% |
||||||
TOTAL MANAGEMENT AND EXCHANGE REVENUE |
$ |
653 |
$ |
648 |
1% |
||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the Financial Accounting Standards Board Accounting Standard Codification Topic 810, “Consolidation,” and represents the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||
A-11 |
|||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||
INTERIM CONSOLIDATED BALANCE SHEETS |
|||||||
(In millions, except share and per share data) |
|||||||
Unaudited |
|||||||
September
|
December
|
||||||
ASSETS |
|||||||
Cash and cash equivalents |
$ |
229 |
$ |
406 |
|||
Restricted cash (including $98 and $81 from VIEs, respectively) |
304 |
327 |
|||||
Accounts and contracts receivable, net (including $17 and $15 from VIEs,
|
419 |
428 |
|||||
Vacation ownership notes receivable, net (including $2,191 and $1,900 from
|
2,676 |
2,565 |
|||||
Inventory |
679 |
692 |
|||||
Property and equipment, net(1) |
936 |
950 |
|||||
Goodwill |
2,958 |
2,958 |
|||||
Intangibles, net |
665 |
711 |
|||||
Other (including $188 and $168 from VIEs, respectively) |
603 |
720 |
|||||
TOTAL ASSETS |
$ |
9,469 |
$ |
9,757 |
|||
LIABILITIES AND EQUITY |
|||||||
Accounts payable |
$ |
227 |
$ |
358 |
|||
Advance deposits |
167 |
163 |
|||||
Accrued liabilities (including $4 and $4 from VIEs, respectively) |
388 |
376 |
|||||
Deferred revenue and other |
358 |
371 |
|||||
Payroll and benefits liability |
233 |
218 |
|||||
Deferred compensation liability |
242 |
225 |
|||||
Securitized debt, net (including $2,450 and $2,173 from VIEs, respectively) |
2,422 |
2,146 |
|||||
Debt, net |
2,977 |
3,534 |
|||||
Other |
123 |
142 |
|||||
Deferred taxes |
213 |
231 |
|||||
TOTAL LIABILITIES |
7,350 |
7,764 |
|||||
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or
|
— |
— |
|||||
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,934,456
|
1 |
1 |
|||||
Treasury stock — at cost; 41,515,500 and 41,767,498 shares, respectively |
(2,412 |
) |
(2,427 |
) |
|||
Additional paid-in capital |
4,011 |
3,996 |
|||||
Accumulated other comprehensive loss |
(13 |
) |
(11 |
) |
|||
Retained earnings |
532 |
434 |
|||||
TOTAL MVW STOCKHOLDERS' EQUITY |
2,119 |
1,993 |
|||||
Noncontrolling interests |
— |
— |
|||||
TOTAL EQUITY |
2,119 |
1,993 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
9,469 |
$ |
9,757 |
|||
The abbreviation VIEs above means Variable Interest Entities. |
|||||||
(1) Includes $227 million and $224 million at September 30, 2026 and December 31, 2025, respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until the time at which they are available and legally registered for sale as vacation ownership products. |
|||||||
A-12 |
|||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In millions and unaudited) |
|||||||
Nine Months Ended |
|||||||
September
|
September
|
||||||
OPERATING ACTIVITIES |
|||||||
Net income |
$ |
181 |
$ |
124 |
|||
Adjustments to reconcile net income to net cash, cash equivalents, and
|
|||||||
Depreciation and amortization of intangibles |
99 |
114 |
|||||
Amortization of debt discount and issuance costs |
16 |
18 |
|||||
Vacation ownership notes and contracts receivable reserve |
205 |
165 |
|||||
Share-based compensation |
34 |
28 |
|||||
Impairment† |
— |
33 |
|||||
Foreign currency remeasurement loss (gain)† |
2 |
(23 |
) |
||||
Deferred income taxes |
(16 |
) |
15 |
||||
Net change in assets and liabilities: |
|||||||
Accounts and contracts receivable |
(1 |
) |
(13 |
) |
|||
Vacation ownership notes receivable originations |
(887 |
) |
(766 |
) |
|||
Vacation ownership notes receivable collections |
581 |
519 |
|||||
Inventory |
22 |
22 |
|||||
Other assets |
68 |
27 |
|||||
Accounts payable, advance deposits and accrued liabilities |
(85 |
) |
(72 |
) |
|||
Deferred revenue and other |
(13 |
) |
(12 |
) |
|||
Payroll and benefit liabilities |
15 |
(19 |
) |
||||
Deferred compensation liability |
(1 |
) |
3 |
||||
Other liabilities |
(14 |
) |
(6 |
) |
|||
Purchase and development of property for future transfer to inventory |
— |
(134 |
) |
||||
Other, net† |
(2 |
) |
(1 |
) |
|||
Net cash, cash equivalents, and restricted cash provided by operating
|
204 |
22 |
|||||
INVESTING ACTIVITIES |
|||||||
Proceeds from disposition of entity |
50 |
— |
|||||
Capital expenditures for property and equipment (excluding inventory) |
(34 |
) |
(45 |
) |
|||
Purchase of company owned life insurance† |
(3 |
) |
(13 |
) |
|||
Other, net† |
— |
1 |
|||||
Net cash, cash equivalents, and restricted cash provided by (used in)
|
13 |
(57 |
) |
||||
† Prior year amounts have been reclassified to conform with our current year presentation. Please see "Non-GAAP Financial Measures" for additional information. |
|||||||
A-13 |
|||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
|||||||
(In millions and unaudited) |
|||||||
Nine Months Ended |
|||||||
September
|
September
|
||||||
FINANCING ACTIVITIES |
|||||||
Borrowings from securitization transactions |
1,287 |
927 |
|||||
Repayment of debt related to securitization transactions |
(1,010 |
) |
(958 |
) |
|||
Proceeds from debt |
1,780 |
1,740 |
|||||
Repayments of debt |
(2,341 |
) |
(1,296 |
) |
|||
Finance lease payment |
(5 |
) |
(5 |
) |
|||
Payment of debt and securitized debt issuance costs |
(9 |
) |
(20 |
) |
|||
Repurchase of common stock |
— |
(36 |
) |
||||
Payment of dividends |
(110 |
) |
(110 |
) |
|||
Payment of withholding taxes on vesting of restricted stock units |
(8 |
) |
(6 |
) |
|||
Other, net |
— |
— |
|||||
Net cash, cash equivalents, and restricted cash (used in) provided by
|
(416 |
) |
236 |
||||
Effect of changes in exchange rates on cash, cash equivalents, and restricted
|
(1 |
) |
4 |
||||
Change in cash, cash equivalents, and restricted cash |
(200 |
) |
205 |
||||
Cash, cash equivalents, and restricted cash, beginning of period |
733 |
528 |
|||||
Cash, cash equivalents, and restricted cash, end of period |
$ |
533 |
$ |
733 |
|||
A-14 |
|||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||
FREE CASH FLOW AND ADJUSTED FREE CASH FLOW |
|||||||
(In millions and unaudited) |
|||||||
Nine Months Ended |
|||||||
CASH FLOW |
September
|
September
|
|||||
Cash, cash equivalents, and restricted cash provided by operating activities |
$ |
204 |
$ |
22 |
|||
Capital expenditures for property and equipment (excluding inventory) |
(34 |
) |
(45 |
) |
|||
Borrowings from securitizations, net of repayments |
277 |
(31 |
) |
||||
Securitized debt issuance costs |
(9 |
) |
(7 |
) |
|||
Purchase of company owned life insurance |
(3 |
) |
(13 |
) |
|||
Free cash flow* |
435 |
(74 |
) |
||||
Adjustments: |
|||||||
Proceeds from Cancun disposition |
50 |
— |
|||||
Net change in borrowings available from the securitization of eligible vacation
|
(109 |
) |
96 |
||||
Other(2) |
73 |
129 |
|||||
Adjusted free cash flow* |
$ |
449 |
$ |
151 |
|||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||
| (1) Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable compared to the prior year end. | |||||||
| (2) Represents the adjustments to exclude certain capital expenditures, as well as the after-tax impact of modernization costs, restructuring costs, transaction and integration costs, insurance proceeds, changes in restricted cash, and other. | |||||||
| A-15 | |||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
|||||||||||||||
2026 ADJUSTED FREE CASH FLOW OUTLOOK |
|||||||||||||||
(In millions) |
|||||||||||||||
Current
|
Previous
|
||||||||||||||
Low |
High |
Low |
High |
||||||||||||
Adjusted EBITDA* |
$ |
810 |
$ |
830 |
$ |
805 |
$ |
830 |
|||||||
Cash interest |
(170 |
) |
(165 |
) |
(170 |
) |
(165 |
) |
|||||||
Cash taxes |
(120 |
) |
(125 |
) |
(150 |
) |
(160 |
) |
|||||||
Corporate capital expenditures |
(60 |
) |
(60 |
) |
(60 |
) |
(70 |
) |
|||||||
Inventory |
15 |
20 |
20 |
30 |
|||||||||||
Financing activity and other |
(65 |
) |
(70 |
) |
(35 |
) |
(5 |
) |
|||||||
Adjusted free cash flow* |
$ |
410 |
$ |
430 |
$ |
410 |
$ |
460 |
|||||||
The guidance provided above excludes impacts from certain asset sales, foreign currency changes, restructuring costs, litigation charges, modernization costs, transaction and integration costs, and impairments, each of which the Company cannot forecast with sufficient accuracy to factor them into the guidance provided above and without unreasonable efforts, and which may be significant. As a result, the full year 2026 adjusted free cash flow outlook is presented only on a non-GAAP basis and is not reconciled to the most comparable GAAP measures. Where one or more of the currently unavailable items is applicable, some items could be material, individually or in the aggregate, to GAAP reported results. |
|||||||||||||||
| * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. | |||||||||||||||
A-16 |
||||||||||||||||
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
||||||||||||||||
QUARTERLY OPERATING METRICS |
||||||||||||||||
(Contract sales in millions) |
||||||||||||||||
Quarter Ended |
||||||||||||||||
Year |
March 31 |
June 30 |
September 30 |
December 31 |
Full Year |
|||||||||||
Vacation Ownership |
||||||||||||||||
Contract sales |
||||||||||||||||
2026 |
$ |
411 |
$ |
545 |
$ |
565 |
||||||||||
2025 |
$ |
420 |
$ |
445 |
$ |
439 |
$ |
458 |
$ |
1,762 |
||||||
2024 |
$ |
428 |
$ |
449 |
$ |
459 |
$ |
477 |
$ |
1,813 |
||||||
VPG |
||||||||||||||||
2026 |
$ |
4,016 |
$ |
4,477 |
$ |
4,822 |
||||||||||
2025 |
$ |
3,979 |
$ |
3,631 |
$ |
3,700 |
$ |
3,894 |
$ |
3,794 |
||||||
2024 |
$ |
4,129 |
$ |
3,741 |
$ |
3,888 |
$ |
3,916 |
$ |
3,911 |
||||||
Tours |
||||||||||||||||
2026 |
95,250 |
112,721 |
107,687 |
|||||||||||||
2025 |
97,998 |
114,402 |
109,609 |
109,965 |
431,974 |
|||||||||||
2024 |
96,579 |
111,752 |
110,557 |
113,828 |
432,716 |
|||||||||||
Exchange & Third-Party Management |
||||||||||||||||
Total active Interval International members(1) |
||||||||||||||||
2026 |
1,507,043 |
1,474,816 |
1,479,618 |
|||||||||||||
2025 |
1,537,561 |
1,507,051 |
1,499,208 |
1,507,345 |
1,507,345 |
|||||||||||
2024 |
1,565,558 |
1,530,490 |
1,544,835 |
1,545,638 |
1,545,638 |
|||||||||||
Average revenue per Interval International member |
||||||||||||||||
2026 |
$ |
39.13 |
$ |
36.83 |
$ |
36.99 |
||||||||||
2025 |
$ |
39.94 |
$ |
37.40 |
$ |
37.91 |
$ |
35.30 |
$ |
150.51 |
||||||
2024 |
$ | 41.74 |
$ | 38.30 |
$ | 38.93 |
$ | 35.36 |
$ | 154.34 |
||||||
| (1) Includes members at the end of each period. | ||||||||||||||||
A-17 |
MARRIOTT VACATIONS WORLDWIDE CORPORATION |
NON-GAAP FINANCIAL MEASURES |
In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by an asterisk (“*”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common stockholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.
Reclassifications
Certain amounts from the prior fiscal 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.
Certain Items Excluded from Non-GAAP Financial Measures
We evaluate non-GAAP financial measures, including those identified by an asterisk (“*”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our ongoing core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our ongoing core operations before these items with results from other companies.
Adjusted Development Profit and Adjusted Development Profit Margin
We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our ongoing core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin.
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.
A-18 |
For purposes of our EBITDA and Adjusted EBITDA 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 also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes 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 also excludes 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 is useful as an indicator of operating performance because it allows for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our ongoing core operations before the impact of these items with results from other companies.
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.
Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin
We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin as indicators of operating profitability. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our ongoing core operations before the impact of excluded items.
Adjusted Pretax Income, Adjusted Net Income Attributable to Common Stockholders, and Adjusted Earnings per Share - Diluted
We evaluate Adjusted pretax income, Adjusted net income attributable to common stockholders, and Adjusted earnings per share - diluted as indicators of operating performance. Adjusted pretax income is calculated as Adjusted EBITDA less depreciation and amortization, interest expense, net of interest income, share-based compensation expense and amortization of cloud computing software implementation costs. Adjusted net income attributable to common stockholders is calculated as Adjusted pretax income less provision for income tax adjusted for certain items and Adjusted earnings per share - diluted equals adjusted net income attributable to common stockholders divided by diluted shares. We evaluate these measures because we believe they provide useful information to investors because they allow for period-over-period comparisons of our ongoing core operations before the impact of certain non-recurring items such as impacts from asset sales, foreign currency changes, restructuring costs, litigation charges, modernization costs, transaction and integration costs, and impairments, and also facilitate the comparison of results from our ongoing core operations before these items with results from other companies.
A-19 |
Free Cash Flow and Adjusted Free Cash Flow
We evaluate Free Cash Flow and Adjusted Free Cash Flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted Free Cash Flow, which reflects additional adjustments to Free Cash Flow for the impact of transaction, integration, restructuring, and modernization costs, litigation charges, insurance proceeds, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash and other items, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free Cash Flow and Adjusted Free Cash Flow also facilitates management’s comparison of our results with our competitors’ results.
Net Corporate Leverage
Net corporate leverage ratio represents gross corporate debt, less cash and cash equivalents, divided by Adjusted EBITDA realized over the last twelve months. The Company’s corporate debt is composed of its corporate credit facility, senior unsecured notes, convertible notes, and finance leases. Management uses this measure to evaluate balance sheet strength, financial flexibility, and progress toward its leverage objectives. We believe net corporate leverage is an important measure of financial strength because it provides insight into our ability to invest in growth and return capital to shareholders.