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What changed in MARRIOTT VACATIONS WORLDWIDE Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MARRIOTT VACATIONS WORLDWIDE Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+412 added−464 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-27)

Top changes in MARRIOTT VACATIONS WORLDWIDE Corp's 2024 10-K

412 paragraphs added · 464 removed · 344 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

132 edited+14 added−40 removed170 unchanged
Biggest changeIn 2023, the average FICO score of our customers who were U.S. citizens or residents who financed a vacation ownership purchase was 735; 72% had a credit score of over 700, 89% had a credit score of over 650 and 97% had a credit score of over 600.
Biggest changeFiscal Years 2024 2023 2022 Financing propensity 56% 58% 54% Average loan amount $30,400 $28,600 $28,100 Average interest rate 13.0% 13.1% 13.2% Average term (years) 11 12 12 Average monthly mortgage payment $492 $454 $508 Average FICO score (1) 737 735 734 % of purchasers with FICO over 700 (1) 74% 72% 71% % of purchasers with FICO over 650 (1) 91% 89% 89% % of purchasers with FICO over 600 (1) 98% 97% 97% (1) FICO scores of our customers who were U.S. citizens or residents who financed a vacation ownership purchase and for whom FICO scores were available.
Item 1. 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. As the first hospitality-branded vacation ownership company, Marriott Vacations Worldwide helped establish the industry and was the first major pure-play independent, public company in the field.
Item 1. 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. As the first major hospitality-branded vacation ownership company, Marriott Vacations Worldwide helped establish the industry and was the first major pure-play independent, public company in the field.
Selectively pursue compelling new business opportunities We are positioned to explore new business opportunities, such as the continued enhancement of our exchange programs, new management affiliations, acquisitions of existing vacation ownership and related businesses, and the creation of new innovative travel-related products that are complementary to our core vacation ownership and exchange company offerings.
Selectively pursue compelling new business opportunities We are positioned to explore new business opportunities, such as acquisitions of existing vacation ownership and related businesses, the continued enhancement of our exchange programs, new management affiliations, and the creation of new innovative travel-related products that are complementary to our core vacation ownership and exchange company offerings.
Inventory and Development Activities We secure inventory by developing or acquiring inventory at resorts in strategic markets, reacquiring previously sold inventory in the secondary market, reacquiring inventory as a result of owner loan or maintenance fee defaults, or building additional phases at our existing resorts.
Inventory and Development Activities We secure inventory by developing or acquiring inventory in strategic markets, reacquiring previously sold inventory in the secondary market, reacquiring inventory as a result of owner loan or maintenance fee defaults, or building additional phases at our existing resorts.
Our total revenue excluding cost reimbursements derived from sources other than the sale of VOIs has increased and is expected to continue to increase. Our Exchange & Third-Party Management businesses also create ample opportunities to realize recurring higher-margin, fee-based revenue streams with modest required capital expenditures, which we believe will enhance our margins and cash flow generation over time.
Our total revenue excluding cost reimbursements derived from sources other than the sale of VOIs has increased and is expected to continue to increase. Our Exchange & Third-Party Management businesses also create opportunities to realize recurring higher-margin, fee-based revenue streams with modest required capital expenditures, which we believe will enhance our margins and cash flow generation over time.
Our management team’s experience in the highly regulated vacation ownership industry also provides us with a competitive advantage in expanding existing product forms and developing new ones. 7 Engaged associates delivering high levels of customer service driving repeat customers We believe that our associates provide superior customer service and this dedication to serving the customer enhances our competitive position.
Our management team’s experience in the highly regulated vacation ownership industry also provides us with a competitive advantage in expanding existing product forms and developing new ones. Engaged associates delivering high levels of customer service driving repeat customers We believe that our associates provide superior customer service and this dedication to serving the customer enhances our competitive position.
This fee typically covers expenses such as housekeeping, 3 landscaping, taxes, insurance, and resort labor, a property management fee payable to the management company for providing management services, and an assessment to fund a capital asset reserve account used to renovate, refurbish and replace furnishings, common areas and other assets (such as parking lots or roofs) as needed over time.
This fee typically covers expenses such as housekeeping, landscaping, taxes, insurance, and resort labor, a property management fee payable to the management company for providing management services, and an assessment to fund a capital asset reserve account used to renovate, refurbish and replace furnishings, common areas and other assets (such as parking lots or roofs) as needed over time.
We are generally subject to laws and regulations typically applicable to real estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions, environmental regulation, accessibility, title transfers, title insurance, and taxation. In the United States, these include, with respect to some of our products, the Fair Housing Act and the Americans with Disabilities Act.
We are generally subject to laws and regulations applicable to real estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions, environmental regulation, accessibility, title transfers, title insurance, and taxation. In the United States, these include, with respect to some of our products, the Fair Housing Act and the Americans with Disabilities Act.
This fee includes a management fee payable to us for providing management services as well as an assessment for funds to be deposited into a capital asset reserve fund and used to renovate, refurbish and replace furnishings, common areas and other resort assets (such as parking lots or roofs) as needed over time.
This fee includes a management fee payable to us for providing management services as well as 12 an assessment for funds to be deposited into a capital asset reserve fund and used to renovate, refurbish and replace furnishings, common areas and other resort assets (such as parking lots or roofs) as needed over time.
We expect to continue to leverage our exclusive call transfer arrangements, on-site marketing at Marriott and Hyatt branded hotels, and use of certain exclusive marketing rights to increase sales across all of our Marriott-affiliated and Hyatt-affiliated vacation ownership properties, respectively. Loyal, highly satisfied customers We have a large, highly satisfied customer base.
We expect to continue to leverage our exclusive call transfer arrangements, on-site marketing at Marriott and Hyatt branded hotels, and use of certain exclusive marketing rights to increase sales across all of our Marriott-affiliated and Hyatt-affiliated vacation ownership properties, respectively. 6 Loyal, highly satisfied customers We have a large, highly satisfied customer base.
In addition, Corporate and Other includes the revenues and expenses relating to owners’ associations consolidated under the relevant accounting guidance (“Consolidated Property Owners’ Associations”), which are not included in operating segment resource allocation decision-making. Seasonality Our revenue is influenced by the seasonal nature of travel.
In addition, Corporate and Other includes the revenues and expenses relating to owners’ associations consolidated under the relevant accounting guidance (“Consolidated Property Owners’ Associations”), which are not included in operating segment resource allocation decision-making. 16 Seasonality Our revenue is influenced by the seasonal nature of travel.
Vacation ownership is a vacation option that is positioned and sold as an attractive alternative to vacation rentals (such as hotels, resorts and 18 condominium rentals) and second home ownership. The various segments within the vacation ownership industry can be differentiated by the quality level of the accommodations, range of services and ancillary offerings, and price.
Vacation ownership is a vacation option that is positioned and sold as an attractive alternative to vacation rentals (such as hotels, resorts and condominium rentals) and second home ownership. The various segments within the vacation ownership industry can be differentiated by the quality level of the accommodations, range of services and ancillary offerings, and price.
Other laws, regulations and policies primarily affect one of five areas of our business: real estate development activities; marketing and sales activities; lending activities; resort management activities; and exchange and travel activities. 19 Real Estate Development Regulation Our real estate development activities are regulated under a number of different timeshare, condominium and land sales disclosure statutes in many jurisdictions.
Other laws, regulations and policies primarily affect one of five areas of our business: real estate development activities; marketing and sales activities; lending activities; resort management activities; and exchange and travel activities. Real Estate Development Regulation Our real estate development activities are regulated under a number of different timeshare, condominium and land sales disclosure statutes in many jurisdictions.
We maintain a range of different off-site sales centers, including our central telesales organization based in Orlando and our network of third-party brokers in Latin America and Europe. We have 90 global sales locations focused on the sale of VOIs.
We maintain a range of different off-site sales centers, including our central telesales organization based in Orlando and our network of third-party brokers in Latin America and Europe. We have over 90 global sales locations focused on the sale of VOIs.
As a result, our ability to achieve some or all of our corporate responsibility initiatives or goals may be limited without additional support or action by the owners of resorts and properties we manage. 21 We take our commitment to protecting the environment seriously.
As a result, our ability to achieve some or all of our corporate responsibility initiatives or goals may be limited without additional support or action by the owners of resorts and properties we manage. We take our commitment to protecting the environment seriously.
We monitor sales that occur in the secondary market and exercise our right of first refusal when it is advantageous for us to do so, 12 whether due to pricing, desire for the particular inventory, or other factors.
We monitor sales that occur in the secondary market and exercise our right of first refusal when it is advantageous for us to do so, whether due to pricing, desire for the particular inventory, or other factors.
Our Marriott Vacation Club Destinations, Australia points-based program is subject to regulation as a “managed investment scheme” by the Australian Securities & Investments Commission. In some countries, our vacation ownership products are marketed by third-party brokers.
Our 18 Marriott Vacation Club Destinations, Australia points-based program is subject to regulation as a “managed investment scheme” by the Australian Securities & Investments Commission. In some countries, our vacation ownership products are marketed by third-party brokers.
Sheraton Vacation Club upper upscale vacation ownership resorts are part of the Vistana Signature Network (“VSN”). 8 Westin Vacation Club is a collection of vacation ownership resorts located in some of the most sought-after destinations and designed with living well in mind.
Sheraton Vacation Club upper upscale vacation ownership resorts are part of the Vistana Signature Network (“VSN”). Westin Vacation Club is a collection of vacation ownership resorts located in some of the most sought-after destinations and designed with living well in mind.
We 6 believe our access to guests with an affinity for our brands aids with our marketing efforts and significantly enhances our ability to drive future sales, as we predominantly generate VOI sales through brand loyalty-affiliated sales channels.
We believe our access to guests with an affinity for our brands aids with our marketing efforts and significantly enhances our ability to drive future sales, as we predominantly generate VOI sales through brand loyalty-affiliated sales channels.
Each brand has a unique history and heritage that has enriched our Company immeasurably and that we are building upon to better serve our owners, members, guests, and associates.
Each brand has a unique history and heritage that has enriched our Company immeasurably and that we are building upon to better serve our owners, members, and guests.
From 2003 to 2013, Mr. Marino worked in the investment banking divisions of Cantor Fitzgerald, Credit Suisse Securities (USA) LLC and Bear, Stearns & Co. Inc., holding positions of increasing responsibility. Raman T. Bukkapatnam Executive Vice President and Chief Information Officer 57 Raman T. Bukkapatnam has served as our Executive Vice President and Chief Information Officer since July 10, 2023.
From 2003 to 2013, Mr. Marino worked in the investment banking divisions of Cantor Fitzgerald, Credit Suisse Securities (USA) LLC and Bear, Stearns & Co. Inc., holding positions of increasing responsibility. Raman T. Bukkapatnam Executive Vice President and Chief Information Officer 58 Raman T. Bukkapatnam has served as our Executive Vice President and Chief Information Officer since July 10, 2023.
On an ongoing basis, we have the ability to use our warehouse credit facility (“Warehouse Credit Facility”) to securitize eligible consumer loans derived from certain branded vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which we intend to continue to complete twice a year.
On an ongoing basis, we have the ability to use our warehouse credit facility (“Warehouse Credit Facility”) to securitize eligible consumer loans derived from certain branded vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which we intend to continue to complete at least twice a year.
Long-standing track record, experienced management and engaged associates We have been a pioneer in the vacation ownership industry since 1984, when Marriott International became the first company to introduce a lodging-branded vacation ownership product. The story of Marriott Vacations Worldwide is one of growth, driven by innovation and exceptional vitality.
Long-standing track record, experienced management and engaged associates We have been a pioneer in the vacation ownership industry since 1984, when Marriott International became the first major hospitality company to introduce a lodging-branded vacation ownership product. The story of Marriott Vacations Worldwide is one of growth, driven by innovation and exceptional vitality.
In the event of a default, we generally have the right to foreclose on or revoke the defaulting owner’s VOI. We typically resell interests that we reacquire through foreclosure or revocation or place such interests into one of our points-based programs. We securitize the majority of the consumer loans we originate in support of our vacation ownership business.
In the event of a default, we generally have the right to foreclose on or revoke the defaulting owner’s VOI. We typically resell interests that we reacquire through foreclosure or revocation or place such interests into one of our points-based programs. 13 We securitize the majority of the consumer loans we originate in our vacation ownership business.
In a vacation ownership notes receivable securitization, several classes of debt securities issued by a special purpose entity are generally collateralized by a single pool of transferred assets, which consist of vacation ownership notes receivable. During 2023, we completed two securitization transactions, which are discussed in detail in Footnote 15 “Securitized Debt” to our Financial Statements.
In a vacation ownership notes receivable securitization, several classes of debt securities issued by a special purpose entity are generally collateralized by a single pool of transferred assets, which consist of vacation ownership notes receivable. During 2024, we completed two securitization transactions, which are discussed in detail in Footnote 15 “Securitized Debt” to our Financial Statements.
Owner and member satisfaction is evidenced both by a high level of sales to existing owners (approximately 70% of VOI sales in 2023 were to existing owners), as well as positive historical survey responses, high levels of engagement that we see in the many customer and associate care stories shared on social media channels, and higher than industry average current and historical resort occupancy for our Vacation Ownership segment.
Owner and member satisfaction is evidenced both by a high level of sales to existing owners (approximately 70% of VOI sales in 2024 were to existing owners), as well as positive historical survey responses, high levels of engagement that we see in the many customer and associate care stories shared on social media channels, and consistently higher than industry average current and historical resort occupancy for our Vacation Ownership segment.
We seek to continuously evolve and expand our core product offerings, as demonstrated by the launch of the Marriott Vacation Club Destinations points product in 2010 and Abound by Marriott Vacations program in 2022, and through the integration of the Legacy-Welk and Hyatt businesses in 2023.
We seek to evolve and expand our core product offerings, as demonstrated by the launch of the Marriott Vacation Club Destinations points product in 2010 and Abound by Marriott Vacations program in 2022, and through the integration of the Legacy-Welk and Hyatt businesses in 2023 and 2024.
Owners who elect to participate in the exchange program receive the ability to trade their weeks-based interval usage for vacation club points usage each year, typically subject to payment of an initial enrollment fee and annual club dues.
Owners who elect to participate in the exchange program receive the ability to trade their weeks-based VOI usage for vacation club points usage each year, typically subject to payment of an initial enrollment fee and annual club dues.
We believe that our distinction as a Kincentric Best Employer and our strengths identified by current associates demonstrate the incredible care we have for each other and for the associate experience and will make us an employer of choice for potential future associates.
We believe that our distinction as a Mercer Best Employer and our strengths identified by current associates demonstrate the incredible care we have for each other and for the associate experience and will make us an employer of choice for potential future associates.
Since becoming a standalone public company in 2011, our vacation ownership business has grown substantially, from 64 vacation ownership resorts and approximately 420,000 owners to approximately 120 vacation ownership resorts and approximately 700,000 owner families as of December 31, 2023.
Since becoming a standalone public company in 2011, our vacation ownership business has grown substantially, from 64 vacation ownership resorts and approximately 420,000 owners to approximately 120 vacation ownership resorts and approximately 700,000 owner families as of December 31, 2024.
Marriott Vacation Club Pulse, a brand extension of Marriott Vacation Club, offers properties in the heart of vibrant cities, such as San Francisco and New York City. Because of their urban locations, Marriott Vacation Club Pulse properties typically offer limited on-site amenities and may include smaller guest rooms without separate living areas and kitchens.
The Marriott Vacation Clubs City Collection, a brand extension of Marriott Vacation Club, offers properties in the heart of vibrant cities, such as San Francisco and New York City. Because of their urban locations, The Marriott Vacation Clubs City Collection properties typically offer limited on-site amenities and may include smaller guest rooms without separate living areas and kitchens.
Sheraton Vacation Club provides enriching and unexpected vacation experiences in fun family destinations like Florida, South Carolina, and Colorado, with activities that emphasize building and strengthening relationships.
Sheraton Vacation Club provides enriching and unexpected vacation experiences in fun family destinations like Florida, South Carolina, Hawaii, Arizona, and Colorado, with activities that emphasize building and strengthening relationships.
Marino Executive Vice President and Chief Financial Officer 48 Jason P. Marino has served as our Executive Vice President and Chief Financial Officer since September 30, 2023. Mr. Marino served as Senior Vice President, Strategy, Financial Planning & Analysis (“FP&A”) and Operational Finance - Vacation Ownership for the Company from December 2021 to September 2023.
Marino has served as our Executive Vice President and Chief Financial Officer since September 30, 2023. Mr. Marino served as Senior Vice President, Strategy, Financial Planning & Analysis (“FP&A”) and Operational Finance - Vacation Ownership for the Company from December 2021 to September 2023.
According to the American Resort Development Association (“ARDA”), a trade association representing the vacation ownership and resort development industries, as of December 31, 2022, the U.S. vacation ownership community was comprised of over 1,500 resorts, representing more than 200,000 units. According to ARDA, sales in the U.S. market were approximately $10.5 billion in 2022.
According to the American Resort Development Association (“ARDA”), a trade association representing the vacation ownership and resort development industries, as of December 31, 2023, the U.S. vacation ownership community was comprised of over 1,500 resorts, representing more than 200,000 units. According to ARDA, sales in the U.S. market were approximately $10.6 billion in 2023.
We solicit our existing owners primarily while they are staying in our resorts, but also offer our owners the opportunity to make additional purchases through direct phone sales, owner events and inquiries from our central customer service centers located in Salt Lake City, Utah, Orlando, Florida, and Palm Springs, California.
We solicit our existing owners primarily while they are staying in our resorts, but also offer our owners the opportunity to make additional purchases through direct phone sales, owner events and inquiries from our central customer service centers located in Salt Lake City, Utah, Orlando, Florida, and Mexico City, Mexico.
Members also have the ability to exchange their VOI for a cruise vacation, which requires payment of an exchange transaction fee and a supplemental fee, which vary based on the cruise vacation selected and the VOI relinquished to the Interval Network.
Members also have the ability to exchange their VOI for a cruise vacation or hotel stay, which requires payment of an exchange transaction fee and a supplemental fee, which vary based on the cruise vacation or hotel stay selected and the VOI relinquished to the Interval Network.
Butera held a number of leadership positions with the Company, serving as Vice President, Asset Management for The Ritz-Carlton Destination Club from August 2014 to October 2018, before moving into the position of Senior Vice President, Vacation Ownership for the Americas, Florida, Mexico, and Caribbean from October 2018 to April 2021. Ms.
Butera held a number of leadership positions with the Company, serving as Vice President, Asset Management for The Ritz-Carlton Destination Club from August 2014 to October 2018, before moving into the position of Senior Vice President, Vacation Ownership for the Americas, Florida, Mexico, and Caribbean from October 2018 to April 2021. Ms. Butera joined the Company in 1999. Lori M.
License Agreements and Intellectual Property We have a long-term license agreement with Marriott International under which we are granted the exclusive right, for the term of the license agreement, to use certain Marriott, Sheraton, and Westin marks and intellectual property in our vacation ownership business and to use the Grand Residences by Marriott marks and intellectual property in our residential real estate business.
License Agreements and Intellectual Property We have a long-term license agreement with Marriott International that expires in 2095, subject to renewal, under which we are granted the exclusive right, for the term of the license agreement, to use certain Marriott, Sheraton, and Westin marks and intellectual property in our vacation ownership business and to use the Grand Residences by Marriott marks and intellectual property in our residential real estate business.
We believe our access to capital markets and credit facilities will enable us to maintain an attractive leverage profile and level of liquidity that provides financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic downturns, optimize our cost of capital, and pursue strategies for returning excess capital to stockholders.
We believe our access to capital markets and credit facilities will enable us to maintain a level of liquidity that provides financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic downturns, optimize our cost of capital, and pursue strategies for returning excess capital to stockholders.
The Interval International business offers a variety of membership programs and travel related products to approximately 1.6 million members globally and the Aqua-Aston business provides property management and rental services to property owners at 25 resorts and lodging properties.
The Interval International business offers a variety of membership programs and travel related products to approximately 1.5 million members globally and the Aqua-Aston business provides property management and rental services to property owners at 24 resorts and lodging properties.
With input from our associates gathered through engagement surveys, as well as championship by leaders across our global organization, we hosted a diverse set of “Educate and Celebrate” events, which provide associates the opportunity to share their personal experiences and learn from their colleagues. We also provided training programs for our leaders.
With input from our associates gathered through engagement surveys, as well as championship by leaders across our global organization, we hosted a diverse set of “Educate and Celebrate” events, which provide associates the opportunity to share their personal experiences and learn from their colleagues.
These capital efficient vacation ownership transaction structures may include working with third parties to develop new inventory or to convert previously built units to be sold to us close to when we need such inventory. Approximately 25% of our Vacation Ownership segment resorts are co-located with same-branded or affiliated hotel properties.
These capital efficient vacation ownership transaction structures may include working with third parties to develop new inventory or to convert previously built units to be sold to us close to when we need such inventory to support growth in VOI sales. 11 Approximately 25% of our Vacation Ownership segment resorts are co-located with same-branded or affiliated hotel properties.
The segment revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. The Exchange & Third-Party Management segment represented 6% of our consolidated revenue for 2023.
The segment revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. The Exchange & Third-Party Management segment represented 5% of our consolidated revenue for 2024.
Similarly, through our relationship with Hyatt, we benefit from access to members of Hyatt’s award-winning guest loyalty program, the World of Hyatt, which includes approximately 44 million members as of December 31, 2023.
Similarly, through our relationship with Hyatt, we benefit from access to members of Hyatt’s award-winning guest loyalty program, the World of Hyatt, which includes approximately 54 million members as of December 31, 2024.
In 2023, approximately 70% of our vacation ownership contract sales were to our existing owners. In addition, we are concentrating on growing our tour flow cost effectively as we seek to generate more first-time buyer tours through our strategy that emphasizes adding new sales locations and new marketing channels, including digital and social media marketing.
In 2024, approximately 70% of our vacation ownership contract sales were to our existing owners. In addition, we are concentrating on growing our tour flow cost effectively as we seek to generate more first-time buyer tours through our strategy that emphasizes adding new sales locations and new marketing channels.
Our eleven executive committee members as of January 1, 2024 have an average of approximately 21 years of total combined experience at Marriott Vacations Worldwide, our subsidiary companies, and Marriott International.
Our eleven executive committee members as of December 31, 2024 have an average of approximately 21 years of total combined experience at Marriott Vacations Worldwide, our subsidiary companies, and Marriott International.
We have a long-term license agreement with Hyatt under which we are granted the exclusive right, for the term of the license agreement, to use certain Hyatt marks and intellectual property in connection with our Hyatt Vacation Ownership business.
We have a long-term license agreement with Hyatt that expires in 2093, subject to renewal, under which we are granted the exclusive right, for the term of the license agreement, to use certain Hyatt marks and intellectual property in connection with our Hyatt Vacation Ownership business.
As part of the Kincentric Best Employers 2023 assessment, we conducted an associate survey that achieved a 93% response rate, which demonstrated a strong level of overall associate engagement.
As part of the Mercer Best Employers 2024 assessment, we conducted an associate survey that achieved a 93% response rate, which demonstrated a strong level of overall associate engagement.
As of December 31, 2023, we had a global workforce consisting of approximately 22,000 associates, of which approximately 17,500 (80%) were based in the United States. Inclusion and Diversity Grounded in our culture of caring and collaboration, we strive to empower both our customers and our associates to live their most fulfilling lives.
As of December 31, 2024, we had a global workforce consisting of approximately 22,300 associates, of which approximately 17,500 (79%) were based in the United States. 20 Inclusion and Diversity Grounded in our culture of caring and collaboration, we strive to empower both our customers and our associates to live their most fulfilling lives.
Generally, individuals are enrolled by resort developers in connection with their purchase of VOIs from such resort developers, with initial membership fees being paid on behalf of members by the resort developers. Members may also enroll directly, for instance, when they purchase a VOI through resale or an owners’ association at a resort that participates in the Interval Network.
Generally, individuals are enrolled in the Interval Network by resort developers in connection with their purchase of VOIs from such resort developers. Members may also enroll directly, for instance, when they purchase a VOI through resale or an owners’ association at a resort that participates in the Interval Network.
As of December 31, 2023, our Vacation Ownership segment had approximately 120 resorts and approximately 700,000 owner families. The Vacation Ownership segment represented 94% of our consolidated revenue for 2023.
As of December 31, 2024, our Vacation Ownership segment had approximately 120 resorts and approximately 700,000 owner families. The Vacation Ownership segment represented 95% of our consolidated revenue for 2024.
Available Information Our investor relations website address is www.ir.mvwc.com.
Available Information Our investor relations website address is www.ir.marriottvacationsworldwide.com.
James H Hunter, IV Executive Vice President and General Counsel 61 James H Hunter, IV has served as our Executive Vice President and General Counsel since November 2011. Prior to that time, he had served as Senior Vice President and General Counsel since 2006. Mr. Hunter joined Marriott International in 1994. Jeanette E.
James H Hunter, IV Executive Vice President and General Counsel 62 James H Hunter, IV has served as our Executive Vice President and General Counsel and as our Corporate Secretary since November 2011. Prior to that time, he had served as Senior Vice President and General Counsel since 2006. Mr. Hunter joined Marriott International in 1994. Brian E.
For example, the wide range of vacation experiences we offer includes not only traditional resort experiences but also urban experiences at our Marriott Vacation Club Pulse locations, which are unique properties that embrace the spirit and culture of their urban locations.
For example, the wide range of vacation experiences we offer includes not only traditional resort experiences but also urban experiences at The Marriott Vacation Clubs City Collection locations, which are unique properties that embrace the spirit and culture of their urban locations.
Through the brands we license from Marriott International for use in vacation ownership, we benefit from exclusive long-term access to members in the Marriott Bonvoy loyalty program, which includes approximately 196 million members as of December 31, 2023.
Through the brands we license from Marriott International for use in vacation ownership, we benefit from exclusive long-term access to members in the Marriott Bonvoy loyalty program, which includes nearly 228 million members as of December 31, 2024.
From January 2018 to January 2021, he served as our Executive Vice President and Chief Financial and Administrative Officer. From 2009 to December 2017, he served as our Executive Vice President and Chief Financial Officer. Mr. Geller joined Marriott International in 2005 as Senior Vice President and Chief Audit Executive and Information Security Officer. Jason P.
From 2009 to December 2017, he served as our Executive Vice President and Chief Financial Officer. Mr. Geller joined Marriott International in 2005 as Senior Vice President and Chief Audit Executive and Information Security Officer. Jason P. Marino Executive Vice President and Chief Financial Officer 49 Jason P.
Regis Residence Club and The Luxury Collection 3 82 Hyatt Vacation Club 22 2,693 Other 2 468 118 31,470 Hotels Location Sheraton Kauai Resort Kauai, HI The Westin Resort & Spa, Cancun Cancun, Mexico Hyatt Highlands Inn Carmel, CA 15 EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT Our Exchange & Third-Party Management segment is comprised of the Interval International and Aqua-Aston businesses.
Regis Residence Club and The Luxury Collection 3 83 Hyatt Vacation Club 22 2,693 Other 2 458 119 31,598 Hotels Location Sheraton Kauai Resort Kauai, HI The Westin Resort & Spa, Cancun Cancun, Mexico Hyatt Highlands Inn Carmel, CA EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT Our Exchange & Third-Party Management segment is comprised of the Interval International and Aqua-Aston businesses.
($ in millions) 2023 Exchange & Third-Party Management Segment Revenues Management and exchange $ 206 Rental 40 Cost reimbursements 16 TOTAL REVENUES $ 262 Membership Programs, Products and Services Exchange Products - Interval Network Interval International’s principal membership program is the Interval Network, which is comprised of more than 3,200 affiliated resorts in over 90 countries and territories.
($ in millions) 2024 Exchange & Third-Party Management Segment Revenues Management and exchange $ 182 Rental 40 Cost reimbursements 9 TOTAL REVENUES $ 231 Membership Programs, Products and Services Exchange Products - Interval Network Interval International’s principal membership program is the Interval Network, which is comprised of more than 3,200 affiliated resorts in over 90 countries and territories.
These materials are also accessible on the SEC’s website at www.sec.gov. 23 Information About Our Executive Officers Set forth below is certain information with respect to our executive officers. The information set forth below is as of February 27, 2024, except where indicated. Name and Title Age Business Experience John E. Geller, Jr.
These materials are also accessible on the SEC’s website at www.sec.gov. Information About Our Executive Officers Set forth below is certain information with respect to our executive officers. The information set forth below is as of February 28, 2025, except where indicated. Name and Title Age Business Experience John E. Geller, Jr. President and Chief Executive Officer 57 John E.
Vacation Ownership Mainland U.S. and Hawaii # of Resorts # of Keys # of Resorts # of Keys # of Resorts # of Keys Arizona 5 1,189 Missouri 2 320 Texas 1 195 California 17 6,268 Nevada 2 1,172 Utah 2 634 Colorado 13 971 New Jersey 1 180 Virginia 1 276 Florida 23 7,989 New Mexico 1 16 Washington, D.C. 1 71 Hawaii 12 4,768 New York 2 228 Massachusetts 1 84 South Carolina 10 1,864 Caribbean, Mexico, and Central America # of Resorts # of Keys # of Resorts # of Keys # of Resorts # of Keys Aruba 2 1,211 Puerto Rico 1 164 Mexico 4 1,283 Bahamas 1 392 U.S.
Vacation Ownership Mainland U.S. and Hawaii # of Resorts # of Keys # of Resorts # of Keys # of Resorts # of Keys Arizona 5 1,190 Missouri 2 320 Texas 1 195 California 17 6,268 Nevada 2 1,172 Utah 2 634 Colorado 13 971 New Jersey 1 180 Virginia 1 276 Florida 23 8,002 New Mexico 1 16 Washington, D.C. 1 71 Hawaii 13 4,891 New York 2 228 Massachusetts 1 84 South Carolina 10 1,864 Caribbean, Mexico, and Central America # of Resorts # of Keys # of Resorts # of Keys # of Resorts # of Keys Aruba 2 1,211 Puerto Rico 1 164 Mexico 4 1,295 Bahamas 1 382 U.S.
Our services may include day-to-day operations of the properties, maintenance of the properties, preparation of reports and budgets, owners’ association administration, quality assurance and employee training. As of December 31, 2023, we provided third-party management services to 25 properties. Our Aqua-Aston business provides management and rental services for condominium owners, hotel owners, and owners’ associations.
Our services may include day-to-day operations of the properties, maintenance of the properties, preparation of reports and budgets, owners’ association administration, quality assurance and employee training. As of December 31, 2024, we provided third-party management services to 24 properties. Our Aqua-Aston business, which is concentrated in Hawaii, provides management and rental services for condominium owners, hotel owners, and owners’ associations.
Regis and Hyatt brands and the strength of these brands is important to our ability to attract qualified prospects in the marketplace. We maintain a prominent presence on the www.marriott.com, www.ritzcarlton.com and www.hyatt.com websites. Our proprietary websites include www.marriottvacationsworldwide.com, www.marriottvacationclubs.com, www.ritzcarltonclub.com, www.theresidenceclub.com, www.grandresidenceclub.com and www.hyattvacationclub.com.
We believe consumers place a great deal of trust in our brands and the strength of these brands is important to our ability to attract qualified prospects in the marketplace. We maintain a presence on the www.marriott.com, www.ritzcarlton.com and www.hyatt.com websites. Our proprietary websites include www.marriottvacationsworldwide.com, www.marriottvacationclubs.com, www.ritzcarltonclub.com, www.theresidenceclub.com, www.grandresidenceclub.com and www.hyattvacationclub.com.
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, as well as under Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand.
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.
Virgin Islands 3 512 Costa Rica 1 48 West Indies 1 88 Europe and Asia Pacific # of Resorts # of Keys # of Resorts # of Keys France 1 202 Indonesia 2 161 Spain 3 715 Thailand 3 332 United Kingdom 1 49 Australia 1 88 Brands # of Resorts # of Keys Marriott Vacation Club 63 18,913 Sheraton Vacation Club 9 4,364 Westin Vacation Club 12 4,310 Grand Residences by Marriott 2 381 The Ritz-Carlton Club 5 259 St.
Virgin Islands 3 512 Costa Rica 1 48 West Indies 1 88 Europe and Asia Pacific # of Resorts # of Keys # of Resorts # of Keys France 1 202 Indonesia 2 161 Spain 3 715 Thailand 3 332 United Kingdom 1 49 Australia 1 77 14 Brands # of Resorts # of Keys Marriott Vacation Club 64 19,013 Sheraton Vacation Club 9 4,377 Westin Vacation Club 12 4,334 Grand Residences by Marriott 2 381 The Ritz-Carlton Club 5 259 St.
President and Chief Executive Officer 56 John E. Geller, Jr. was appointed as our President and Chief Executive Officer, effective January 1, 2023. Mr. Geller has served as our President since October 2021. From January 2021 to October 2021, he served as our President and Chief Financial Officer.
Geller, Jr. was appointed as our President and Chief Executive Officer, effective January 1, 2023. Mr. Geller has served as our President since October 2021. From January 2021 to October 2021, he served as our President and Chief Financial Officer. From January 2018 to January 2021, he served as our Executive Vice President and Chief Financial and Administrative Officer.
We do not recruit child labor, and we support programs and partnerships that help at-risk youth and their families prepare for and find meaningful employment. Our Human Rights Policy is available on our website at www.marriottvacationsworldwide.com under the “Investor Relations” tab. We also have a human trafficking awareness training course that promotes our Human Rights Policy and core values.
We support programs and partnerships that help at-risk youth and their families prepare for and find meaningful employment. Our Human Rights Policy is available on our website at www.marriottvacationsworldwide.com under the “Our Values” tab. 21 We also have a human trafficking awareness training course that promotes our Human Rights Policy and core values.
She served as our Senior Vice President and Chief Operating Officer, Hyatt Vacation Ownership from April 2021 to December 2022. Prior to leading Hyatt Vacation Ownership, Ms.
Butera has served as our Executive Vice President and Chief Operating Officer, Hyatt Vacation Ownership since January 2023. She served as our Senior Vice President and Chief Operating Officer, Hyatt Vacation Ownership from April 2021 to December 2022. Prior to leading Hyatt Vacation Ownership, Ms.
Our exchange network and membership programs are comprised of more than 3,200 affiliated resorts and approximately 1.6 million members, and we also provide management services to 25 other resorts and lodging properties, as of the end of 2023.
Our exchange network and membership programs are comprised of more than 3,200 affiliated resorts and over 1.5 million members, and we also provide management services to 24 other resorts and lodging properties, as of the end of 2024.
In 2023, we were recognized as a Kincentric Best Employer globally for the third consecutive year as part of Kincentric’s robust assessment that identifies organizations that have transformed their people practices to drive better business results.
In 2024, we were recognized as a Mercer Best Employer globally for the fourth consecutive year as part of Mercer’s robust assessment that identifies organizations that have transformed their people practices to drive better business results.
Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management. 2023 ($ in millions) Segment Revenue % of Segment Revenue Vacation Ownership $ 4,468 94% Exchange & Third-Party Management 262 6% Total Segment Revenue $ 4,730 100% The Vacation Ownership Industry The vacation ownership industry (also known as the timeshare industry) enables customers to share ownership and use of fully-furnished vacation accommodations.
Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management. 2024 ($ in millions) Segment Revenue % of Segment Revenue Vacation Ownership $ 4,730 95% Exchange & Third-Party Management 231 5% Total Segment Revenue $ 4,961 100% The Vacation Ownership Industry The vacation ownership industry (also known as the timeshare industry) enables customers to share ownership and use of fully-furnished vacation accommodations.
($ in millions) 2023 Vacation Ownership Segment Revenues Sale of vacation ownership products $ 1,460 Resort management and other services 568 Rental 531 Financing 322 Cost reimbursements 1,587 TOTAL REVENUES $ 4,468 Brands Built upon a single hospitality brand at the time of our founding, Marriott Vacations Worldwide has grown into a multi-branded organization with a broad, diverse portfolio of immersive vacation and leisure destinations.
($ in millions) 2024 Vacation Ownership Segment Revenues Sale of vacation ownership products $ 1,448 Resort management and other services 612 Rental 605 Financing 342 Cost reimbursements 1,723 TOTAL REVENUES $ 4,730 Brands Built upon a single hospitality brand at the time of our founding, Marriott Vacations Worldwide has grown into a multi-branded organization with a broad, diverse portfolio of immersive vacation and leisure destinations.
In addition, during 2023, we rebranded all Legacy-Welk resorts as Hyatt Vacation Club resorts. Interval International is our high-quality membership brand that serves as the gateway to vacation experiences around the world, including access to its affiliated resorts. Our Aqua-Aston business provides management services for resorts, hotels, and other third-party vacation property owners.
Interval International is our high-quality membership brand that serves as the gateway to vacation experiences around the world, including access to its affiliated resorts. Our Aqua-Aston business provides management services for resorts, hotels, and other third-party vacation property owners.
Members of the Interval Network are offered the ability to exchange points or usage rights in their VOI for accommodations generally of comparable trading value to those relinquished, based on factors including location, quality, seasonality, unit attributes and time of relinquishment prior to occupancy.
As of December 31, 2024, approximately 40% of total Interval Network members were traditional members and approximately 60% were corporate members. 15 Members of the Interval Network are offered the ability to exchange points or usage rights in their VOI for accommodations generally of comparable trading value to those relinquished, based on factors including location, quality, seasonality, unit attributes and time of relinquishment prior to occupancy.
We provide owners’ association governance and vacation ownership program management services for The Ritz-Carlton Club and co-located The Ritz-Carlton Residences properties, including preparing association budgets, facilitating association meetings, billing and collecting maintenance fees, and supporting reservations, vacation experience planning and other off-site member services. We and The Ritz-Carlton Hotel Company typically split the management fees equally for these resorts.
We provide owners’ association governance and vacation ownership program management services for these properties, including preparing association budgets, facilitating association meetings, billing and collecting maintenance fees, and supporting reservations, vacation experience planning and other off-site member services. We and the on-site manager typically split the management fees for these resorts.
We offer financing to qualified customers for the purchase of most types of our vacation ownership products. Rental We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs or as residences, or inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs.
Rental We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs or as residences, or inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs.
On-site management and services are provided by The Ritz-Carlton Hotel Company. St. Regis Residence Club and The Luxury Collection offer fractional interests in luxury real estate and distinctive privileges to members who embrace the art of living in unforgettable destinations. Hyatt Vacation Club is a diverse collection of distinctive family-friendly vacation ownership resorts with residential-style accommodations.
Regis Residence Club and The Luxury Collection offer fractional interests in luxury real estate and distinctive privileges to members who embrace the art of living in unforgettable destinations. Hyatt Vacation Club is a diverse collection of distinctive family-friendly vacation ownership resorts with residential-style accommodations.
We believe that developers and owners’ associations generally choose to affiliate with an exchange network based on the quality of resorts participating in the network; the level of service provided to members; the range and level of support services; the flexibility of the exchange program; the demographics of the membership base; the costs for annual membership and exchanges; and the continuity of management and its strategic relationships within the industry.
We believe that developers and owners’ associations generally choose to affiliate with an exchange network based on the quality of resorts participating in the network; the level of service provided to members; the range and level of support services; the flexibility of the exchange program; the demographics of the membership base; the costs for annual membership and exchanges; and the continuity of management and its strategic relationships within the industry. 17 Regulation Our business is heavily regulated and compliance with regulations has a significant impact on our results of operations.
Yonker Executive Vice President and Chief Human Resources and Global Communications Officer 65 Michael E. Yonker has served as our Executive Vice President and Chief Human Resources and Global Communications Officer since January 2024. Mr. Yonker has served as our Executive Vice President and Chief Human Resources Officer from December 2011 to December 2023.
Yonker has served as our Executive Vice President and Chief Human Resources and Global Communications Officer since January 2024. Mr. Yonker has served as our Executive Vice President and Chief Human Resources Officer from December 2011 to December 2023. Prior to that time, he served as our Chief Human Resources Officer since 2010. Mr.
From November 2011 to September 2018, he served as our Executive Vice President and Chief Sales and Marketing Officer. Prior to that time, he had served as our Senior Vice President, Sales and Marketing and Service Operations since 2007. Mr. Miller joined the Company in 1991. Michael E.
Prior to that time, he had served as our Senior Vice President, Sales and Marketing and Service Operations since 2007. Mr. Miller joined the Company in 1991. Michael E. Yonker Executive Vice President and Chief Human Resources and Global Communications Officer 66 Michael E.
John and Hawaii, that allow owners to access only that particular site using points in a similar fashion to the other points-based products. 9 Our points programs allow owners to bank and borrow their annual point allotments, access other locations through the applicable internal exchange programs that we operate, and access Interval International’s network of more than 3,200 affiliated resorts.
Our points programs allow owners to bank and borrow their annual point allotments, access other locations through the applicable internal exchange programs that we operate, and access Interval International’s network of more than 3,200 affiliated resorts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFailure to comply could have a material adverse effect on our business. For example, failure to comply with applicable law could result in the loss of licenses or registrations we must have in order to operate our business, render sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation.
Biggest changeFor example, we could lose licenses or registrations required to operate our business, sales contracts for our products could be void or voidable, we may incur fines or other sanctions, and our exposure to litigation may increase. Allegations of our failure to comply with applicable laws could adversely affect our business, financial condition, and reputation.
Our information systems and records, including those we maintain with our service providers or licensors, may be subject to security breaches, cyber-attack or cyber-intrusion, system failures, viruses, malicious software, operator error or inadvertent releases of data, or other cybersecurity incidents. Data breaches have increased in recent years as the number, intensity and sophistication of attacks have increased.
Our information systems and records, including those we maintain with our service providers or licensors, may be subject to security breaches, cyber-attack or cyber-intrusion, system failures, viruses, malicious software, operator error or inadvertent releases of data, or other cybersecurity incidents. Data breaches have increased in recent years as the number, intensity and sophistication of attacks increased.
Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy. Third parties have also developed proprietary ratings or analyses of companies based on certain ESG metrics.
Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy. Third parties have developed proprietary ratings or analyses of companies based on certain ESG metrics.
We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed units to us at pre-agreed prices in the future. These transactions expose us to additional risk as we will not control development activities or timing of development completion.
We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed units in the future to us at pre-agreed prices. These transactions expose us to additional risk as we will not control development activities or timing of development completion.
In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.
In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.
For example, our Charter and Bylaws require advance notice for stockholder proposals and nominations, place limits on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock. Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.
For example, our Charter and Bylaws require advance notice of stockholder proposals and nominations, place limits on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock. Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.
If we are unable to recover any of the principal amount of the loan from a defaulting borrower, or if the allowances for losses from such defaults are inadequate, the revenues and profits that we derive from the vacation ownership business could be reduced materially. 34 Our points-based product forms expose us to an increased risk of temporary inventory depletion.
If we are unable to recover any of the principal amount of the loan from a defaulting borrower, or if the allowances for losses from such defaults are inadequate, the revenues and profits that we derive from the vacation ownership business could be reduced materially. Our points-based product forms expose us to an increased risk of temporary inventory depletion.
A significant cybersecurity incident or theft, loss, disclosure, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines, penalties or litigation, any of which may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.
A significant cybersecurity incident or theft, 26 loss, disclosure, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines, penalties or litigation, any of which may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.
To the extent that we and our subsidiaries incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above will increase. 37 If the default rates or other credit metrics underlying our vacation ownership notes receivable deteriorate, our vacation ownership notes receivable securitization program and VOI financing program could be adversely affected.
To the extent that we and our subsidiaries incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above will increase. If the default rates or other credit metrics underlying our vacation ownership notes receivable deteriorate, our vacation ownership notes receivable securitization program and VOI financing program could be adversely affected.
The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock. Use of our funds to repurchase shares could diminish our cash reserves, which may 38 impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.
The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock. Use of our funds to repurchase shares could diminish our cash reserves, which may impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.
Borrower defaults have caused, and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility.
Borrower defaults have caused, 32 and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility.
If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which would result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.
If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which could result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.
System interruption, delays, obsolescence, loss of critical data and lack of integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
System interruption, delays, obsolescence, loss of critical data and lack of 27 integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
The increased ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a decrease in the number of resorts located in Spain in the Interval Network with active sales and the loss of members who own VOIs at those resorts.
The ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a decrease in the number of resorts located in Spain in the Interval Network with active sales and the loss of members who own VOIs at those resorts.
Our Interval International business depends on vacation ownership developers for new members and on members and participants to renew their existing memberships and otherwise engage in transactions. Developers and members also supply resort accommodations for use in exchanges and Getaways. Our third-party management business depends on relationships with vacation property and hotel owners.
Our Interval International business depends on vacation ownership developers for new members and on members and participants to renew their existing memberships and engage in transactions. Developers and members also supply resort accommodations for use in exchanges and Getaways. Our third-party management business depends on relationships with vacation property and hotel owners.
The factors that affect demand for specific destinations could significantly reduce the number of 36 accommodations available in such areas for exchanges. The level of inventory in our system also depends on the number of developers whose resorts are in our exchange network, and the numbers of members of such resorts.
The factors that affect demand for specific destinations could significantly reduce the number of accommodations available in such areas for exchanges. The level of inventory in our system also depends on the number of developers whose resorts are in our exchange network, and the numbers of members of such resorts.
These actions may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation. 30 Changes in tax regulations or their interpretation could negatively impact our cash flows and results of operations.
These actions may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation. Changes in tax regulations or their interpretation could negatively impact our cash flows and results of operations.
Any of these events could have a material adverse effect on our business, financial condition and results of operations. Risks related to our exchange and third-party management business. Our Exchange & Third-Party Management business depends on relationships with developers, members and others, and any adverse changes in these relationships could adversely affect our business, financial condition, and results of operations.
Any of these events could have a material adverse effect on our business, financial condition and results of operations. Risks related to our exchange and third-party management business. Any adverse changes in our relationships with developers, members and others could adversely affect our Exchange & Third-Party Management business, financial condition, and results of operations.
Our inability or failure to meet, or the perceived failure to meet, such stakeholders’ expectations, as well as adverse incidents, could negatively impact our stock price, results of operations, or reputation and increase our cost of capital. 32 Risks related to our vacation ownership business.
Our inability or failure to meet, or the perceived failure to meet, such stakeholders’ expectations, as well as adverse incidents, could negatively impact our stock price, results of operations, or reputation and increase our cost of capital. Risks related to our vacation ownership business.
Our business may be adversely affected by factors that disrupt or deter travel. Our success and results of operations depend, in substantial part, upon the health of the worldwide vacation ownership and leisure travel industries, and may be adversely affected by a number of factors that can disrupt or deter travel.
Our success and results of operations depend, in substantial part, upon the health of the worldwide vacation ownership and leisure travel industries, and may be adversely affected by a number of factors that can disrupt or deter travel.
The positioning and offerings of any of these brands or their related customer loyalty programs could change in a manner that adversely affects our business. Marriott International or Hyatt could compete with our vacation ownership business in the future.
The positioning and offerings of any of these brands or their related customer loyalty programs could change in a manner that adversely affects our business. 31 Marriott International or Hyatt could compete with our vacation ownership business in the future.
In 2023, our cost to insure our properties in these areas increased significantly. Our insurance costs may rise again in the future and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.
In 2023, our cost to insure our properties in these areas increased significantly. Our insurance costs may rise again and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.
Also, if a purchaser of a VOI defaults on the related loan during the early part of the amortization period, we may not have recovered the marketing, selling and general and administrative costs associated with the sale of that VOI.
Also, if a purchaser of a VOI defaults on the related loan during the early part of the amortization period, we may not have fully recovered the marketing, selling and general and administrative costs associated with the sale of that VOI.
Competitive pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our business, financial condition and results of operations. Our principal exchange network administered by Interval International included more than 3,200 resorts located in over 90 countries and territories as of December 31, 2023.
Competitive pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our business, financial condition and results of operations. Our principal exchange network administered by Interval International included more than 3,200 resorts located in over 90 countries and territories as of December 31, 2024.
If a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand as our resort, which has happened in the past, we could lose benefits such as sharing amenities, infrastructure and staff, integration of services, and other cost efficiencies.
If a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand as our resort, which has happened in the past, we could lose benefits such as shared amenities, infrastructure and staff, integration of services, and other cost efficiencies.
Spanish court rulings voiding certain timeshare contracts have increased our exposure to litigation that may materially adversely affect our business and financial condition. A series of Spanish court rulings starting in 2015 increased our exposure to litigation that may materially adversely affect our business and financial condition.
Spanish court rulings voiding certain timeshare contracts have increased our exposure to litigation that may materially adversely affect our business and financial condition. A series of Spanish court rulings starting in 2015 (“2015 Rulings”) increased our exposure to litigation that may materially adversely affect our business and financial condition.
The failure of any such service providers or products to comply with our privacy policies or privacy laws and regulations, or any unauthorized release of personally identifiable information or other user data, could damage our reputation, discourage potential users from trying our products and services, breach certain agreements under which we have obligations with respect to network security, and result in fines and proceedings against us by governmental agencies, service providers and consumers.
The failure of any such service providers or products to comply with our privacy policies or privacy laws and regulations, or any unauthorized release of personally identifiable information or other user data, could damage our reputation, discourage potential users from trying our products and services, breach certain agreements under which we have obligations with respect to network security, and result in fines and proceedings against us.
Properties in these markets have had to close in the past, including for extended periods, in order to repair or assess damage caused by disasters. For example, we temporarily closed our resorts and sales centers last year as a result of wildfires in Maui.
Properties in these markets have had to close in the past, including for extended periods, in order to repair or assess damage caused by disasters. For example, we temporarily closed our resorts and sales centers in 2023 as a result of wildfires in Maui.
Complying with the GDPR, other international laws and regulations, and state and federal laws and regulations could subject us to increased costs; and our failure to comply with these laws and regulations could result in significant fines, litigation, losses, third-party damages and other liabilities, any of which may have a material adverse effect on our brands, marketing, reputation, business, financial condition and results of operations.
Complying with the GDPR or other laws and regulations could subject us to increased costs; and our failure to comply with these laws and regulations could result in significant fines, litigation, losses, third-party damages and other liabilities, any of which may have a material adverse effect on our brands, marketing, reputation, business, financial condition and results of operations.
Risks related to our indebtedness. Our indebtedness may restrict our operations. As of December 31, 2023, we had approximately $3 billion of total corporate indebtedness outstanding and could borrow an additional $621 million under a revolving corporate credit facility with a borrowing capacity of $750 million (the “Revolving Corporate Credit Facility”).
Risks related to our indebtedness. Our indebtedness may restrict our operations. As of December 31, 2024, we had approximately $3 billion of total corporate indebtedness outstanding and could borrow an additional $607 million under a revolving corporate credit facility with a borrowing capacity of $750 million (the “Revolving Corporate Credit Facility”).
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may increase our costs or expose us to new or additional risks.
In addition, an increase in the cost of capital, labor and materials could have an adverse impact on our business or financial results. Inflation could also have an indirect adverse impact on our business by making travel more expensive for consumers and reducing consumer discretionary income.
In addition, an increase in the cost of capital, labor and materials could have an adverse impact on our business or financial results. Inflation could also have an indirect adverse impact on our business by making travel more expensive, increasing maintenance costs and fees for consumers and reducing consumer discretionary income.
A breach in the security of our information systems or those of our service providers or licensors could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a negative impact to our results of operations.
A breach in the security of our information systems or those of our service providers or licensors could lead to interruptions in the operation of our systems, resulting in operational inefficiencies and a negative impact to our results of operations.
It is critical that we maintain the integrity of and protect this data, which we rely on to make business decisions and which our customers and employees expect that we will protect. 28 We may be required to expend significant capital and other resources to enhance the security of our data.
It is critical that we maintain the integrity of and protect this data, which we rely on to make business decisions and which our customers and employees expect that we will protect. We may have to expend significant capital and other resources to enhance the security of our data.
Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies, including policies relating to the recognition of revenue and determination of cost of sales, are highly complex and involve many assumptions, estimates and judgments.
Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies, including policies relating to the recognition of revenue, determination of cost of sales and evaluation of our assets for impairment, are highly complex and involve many assumptions, estimates and judgments.
We must obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or develop in the future. If our licensors do not consent to such use as required by the applicable license agreement, our ability to expand our business and remain competitive may be materially adversely affected.
We must obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or develop in the future. If our licensors do not consent to such use, our ability to expand our business and remain competitive may be materially adversely affected.
Inflation can adversely affect us by increasing the costs of carrying unsold inventory, development and other corporate capital expenditures, materials and labor, service contracts, insurance, technology and related hardware or equipment, and interest rates. All of these factors can have a negative impact on the affordability of our products and services.
Inflation can adversely affect us by increasing the costs of carrying unsold inventory, development and other corporate capital expenditures, materials and labor, service contracts, insurance, technology and related hardware or equipment, and interest rates. All of these factors can decrease the affordability of our products and services.
When Health Crises make headlines from time to time, consumer fear about contracting an illness and recommendations or mandates from governmental authorities to avoid large gatherings of people or self-quarantine, may increase. These recommendations and mandates have affected, and may affect in the future, resort occupancies.
When Health Crises make headlines, consumer fear about contracting an illness and government recommendations or mandates to avoid large gatherings of people or self-quarantine may increase. These fears, recommendations and mandates have affected, and may affect in the future, resort occupancies.
Our project development activities entail risks that may cause project delays or increased project costs and therefore may adversely impact our results of operations, cash flows and financial condition, including: • construction delays or cost overruns; • shortages of skilled labor; • claims for construction defects, including claims by purchasers and owners’ associations; • the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues; • an inability to timely obtain required governmental permits and authorizations; • compliance with zoning, building codes and other local regulations; • performance by third parties involved in the financing and development of our projects; • the cost or availability of raw materials; and • interference of weather-related, geological or other events, such as hurricanes, earthquakes, floods, tsunamis, fires, and volcanic eruptions.
Our project development activities entail risks that may cause project delays or increased project costs and therefore may adversely impact our results of operations, cash flows and financial condition, including: • construction delays or cost overruns; • shortages of skilled labor; • claims for construction defects, including claims by purchasers and owners’ associations; • the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues; • an inability to timely obtain required governmental permits and authorizations; • compliance with zoning, building codes and other local regulations; • performance by third parties involved in the financing and development of our projects; • the cost or availability of raw materials; and • interference of weather-related, geological or other events, such as hurricanes, earthquakes, floods, tsunamis, fires, and volcanic eruptions. 33 Our resort management business may be adversely affected by the loss of management contracts, failure of resorts to comply with brand standards, increased maintenance fees and disagreements with owners.
If we are less successful in our recruiting efforts, or if we are unable to retain management and other key associates, our ability to develop and deliver successful products and services may be adversely affected. Effective succession planning is also important to our long-term success.
If we are unable to attract and retain management and other key associates, our ability to develop and deliver successful products and services may be adversely affected. Effective succession planning is also important to our long-term success.
The duration and extent of the impact of a future Health Crisis on our business and financial results will largely depend on future developments, including the duration and spread of the Health Crisis, the response by all levels of government in their efforts to contain the Health Crisis to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the Health Crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.
The duration and extent of the impact of a future Health Crisis on our business and financial results will largely depend on future developments, including the duration and spread of the Health Crisis, governmental efforts to contain the Health Crisis, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the Health Crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.
ESG disclosure rules have been adopted by California and the European Union, and are being considered by the SEC. Increased ESG-related compliance costs could result in increases to our overall operational costs.
ESG disclosure rules have been adopted by California and the European Union, and are being considered by the SEC. Increased ESG-related compliance costs could increase our overall 30 operational costs.
All of these covenants and restrictions limit how we conduct our business. The Corporate Credit Facility also requires us to maintain a specified leverage ratio. These restrictions could restrict our flexibility to react to changes in our businesses, industries and economic conditions and increase borrowing costs.
The Corporate Credit Facility also requires us to maintain a specified leverage ratio. These restrictions could restrict our flexibility to react to changes in our businesses, industries and economic conditions and increase borrowing costs.
The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time. Neither we nor our service providers may be able to prevent, detect and contain unauthorized activity and misuse or human errors compromising the efficacy of security measures.
Techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, may be difficult to detect and could be enhanced by artificial intelligence (“AI”). Neither we nor our service providers may be able to prevent, detect and contain unauthorized activity and misuse or human errors compromising the efficacy of security measures.
Our acquisition strategy depends on our ability to identify, and the availability of, suitable acquisition candidates. We may incur costs in connection with proposed acquisitions, but may ultimately be unable or unwilling to consummate any particular proposed transaction for various reasons.
We have expanded in part through acquisitions of other businesses and may continue to do so in the future. Our acquisition strategy depends on our ability to identify, and the availability of, suitable acquisition candidates. We may incur costs in connection with proposed acquisitions, but may ultimately be unable or unwilling to consummate any particular proposed transaction for various reasons.
The warrants could have a dilutive effect on our shares of common stock to the extent that the market price per share exceeds the applicable strike price of the warrants on one or more of the applicable expiration dates. Alternatively, if settled in cash, the warrants could have a negative impact on cash flow and liquidity.
The warrants could have a dilutive effect on our shares of common stock to the extent that the market price per share exceeds the applicable strike price of the warrants on one or more of the applicable expiration dates.
In connection with establishing their initial hedges of the convertible note hedges and the warrants, the hedge counterparties and their respective affiliates advised us that they expected to purchase shares of our common stock in secondary market transactions and enter into various derivative transactions with respect to our common stock.
Alternatively, if settled in cash, the warrants could have a negative impact on cash flow and liquidity. 36 In connection with establishing their initial hedges of the convertible note hedges and the warrants, the hedge counterparties and their respective affiliates advised us that they expected to purchase shares of our common stock in secondary market transactions and enter into various derivative transactions with respect to our common stock.
Projects to upgrade or replace our technologies may be extremely complex and require significant resources and time, and may adversely affect our ability to provide services, operate websites, process and fulfill transactions, and respond to customer inquiries during the upgrade or replacement process.
Projects to upgrade or replace our technologies may be extremely complex and require significant resources and time, and may adversely affect our ability to provide services, operate websites, process and fulfill transactions, and respond to customer inquiries during the upgrade or replacement process. Our insurance coverage may not compensate us for all our losses from a major interruption.
Our owners could lose access to the more varied and elaborate amenities that are generally available at the larger campus of an integrated vacation ownership and hotel resort. We expect our overhead and operating costs for such resorts would increase.
Our owners could lose access to the more varied and elaborate amenities that are generally available at the larger campus of an integrated vacation ownership and hotel resort.
The loss of such benefits could result in a decrease in the number of Interval International members, which could have a material adverse effect on our business, financial condition and results of operations.
In addition, we depend on third parties to make certain benefits available to members of the Interval International exchange network. The loss of such benefits could result in a decrease in the number of Interval International members, which could have a material adverse effect on our business, financial condition and results of operations.
Our businesses also compete for leisure travelers with other leisure lodging operators, including both independent and branded properties, as well as with alternative lodging marketplaces, which operate websites that market furnished, privately-owned residential properties throughout the world which can be rented on a nightly, weekly or monthly basis.
The effects of such competition on our exchange business are more pronounced as the proportion of vacation club corporate members in the Interval Network increases. 28 Our businesses also compete for leisure travelers with other leisure lodging operators, including both independent and branded properties, as well as with alternative lodging marketplaces, which operate websites that market furnished, privately-owned residential properties throughout the world which can be rented on a nightly, weekly or monthly basis.
We procure insurance for general liability, property, business interruption, directors and officers liability, and other insurable risks with respect to our business operations and as customarily carried by companies in the hospitality industry.
Damage to, or other potential losses involving, properties that we own or manage may not be covered by insurance. We procure insurance for general liability, property, business interruption, directors and officers liability, and other insurable risks with respect to our business operations and as customarily carried by companies in the hospitality industry.
If any such litigation results in a significant adverse judgment or settlement, we could suffer significant losses, our margins and results of operations could be reduced, our reputation could be harmed and our future ability to operate our business could be constrained. 35 Damage to, or other potential losses involving, properties that we own or manage may not be covered by insurance.
If any such litigation results in a significant adverse judgment or settlement, we could suffer significant losses, our margins and results of operations could be reduced, our reputation could be harmed and our future ability to operate our business could be constrained.
Other factors such as weakened consumer confidence, limited availability or increased costs of consumer credit and damage to infrastructure caused by natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.
Fear of exposure to contagious illnesses, natural or man-made disasters, the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes, wildfires, erosion and flooding, weakened consumer 24 confidence, limited availability or increased costs of consumer credit and damage to infrastructure caused by natural or man-made disasters and other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.
We may not be able to successfully comply with all laws, regulations and policies to which we are subject. Laws, regulations, policies, and case law precedent may change or be subject to different interpretation in the future, including in ways that could decrease demand for our products and services, increase costs, and subject us to additional liabilities.
Laws, regulations, policies, and case law precedent may change or be subject to different interpretation in the future, including in ways that could decrease demand for our products and services, increase costs, and subject us to additional liabilities. Failure to comply could have a material adverse effect on our business.
The cost of compliance with privacy laws in the jurisdictions in which we operate has increased and may continue to increase as laws change and we expand into new jurisdictions and become subject to the privacy laws of such jurisdictions. If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected.
The cost of our compliance with privacy laws has increased and may continue to increase as laws change and we expand into new jurisdictions. If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected. We also obtain access to potential customers from travel service providers and other companies.
If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would reduce our earnings. If default rates increase beyond current projections and result in higher than expected foreclosure activity, our results of operations would be adversely affected.
If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would adversely affect our results of operations and cash flows.
Fear of exposure to viruses or other illnesses, government restrictions on travel, including quarantine requirements, low vaccination rates in some parts of the world and viruses or other illnesses that may be resistant to available vaccines could cause travelers to cancel or delay plans to travel to our resorts.
Fear of exposure to illnesses, government restrictions on travel, low vaccination rates in some parts of the world and illnesses that may be resistant to available vaccines could cause travelers to cancel or delay plans to visit our resorts. These changes in vacation and travel patterns could adversely affect our cash flows, revenues, and results of operations.
Alternatively, deflation could cause an overall decrease in spending and borrowing capacity, which could lead to a deterioration of economic conditions and employment levels. Deflation could also cause the value of our products and services to decline.
Alternatively, deflation could cause an overall decrease in spending and borrowing capacity, which could lead to a deterioration of economic conditions and employment levels. Deflation could also cause the value of our products and services to decline. These, or other factors that increase the risk of significant deflation, could have a negative impact on our business or financial results.
Failure to maintain the integrity of internal or customer data or to protect our information systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.
If our access to these third-party customer lists is prohibited or restricted, our ability to attract new customers could be impaired. Failure to maintain the integrity of internal or customer data or to protect our information systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.
To the extent our liability insurance covers claims and losses arising from cybersecurity incidents or attacks, such insurance might not be sufficient in type or amount to cover us against such claims or losses. Any of the foregoing could materially adversely affect our business, financial condition and results of operations.
Our insurance might not be sufficient in type or amount to cover us against such claims or losses. Any of the foregoing could materially adversely affect our business, financial condition and results of operations. Our use of AI technologies may not be successful and may present business, compliance, and reputational risks.
The risk of borrower defaults may increase due to man-made or natural disasters or a recession or other economic downturn, which cause financial hardship for borrowers. The risk of borrower defaults may also increase if we do not evaluate accurately the creditworthiness of the customers to whom we extend financing or due to the influence of timeshare relief firms.
The risk of borrower defaults may also increase if we do not evaluate accurately the creditworthiness of the customers to whom we extend financing or due to the influence of timeshare relief firms.
In connection with our vacation ownership business, we provide loans to purchasers to finance their purchase of VOIs. Accordingly, we are subject to the risk that those borrowers may default on the financing that we provide.
In connection with our vacation ownership business, we provide loans to purchasers to finance their purchase of VOIs. Accordingly, we are subject to the risk that those borrowers may default on the financing that we provide. The risk of borrower defaults may increase due to man-made or natural disasters, recessions or other economic downturns that cause financial hardship for borrowers.
Our resort management business may be adversely affected by the loss of management contracts, failure of resorts to comply with brand standards, increased maintenance fees and disagreements with owners. Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards.
Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards.
Failure to make scheduled cash payments on our existing debt, or to comply with the restrictive covenants and other requirements in our debt agreements, could result in an event of default, which, if not cured or waived, could result in acceleration of our debt repayment obligations.
Downgrades in our ratings could adversely affect our businesses, cash flows, financial condition, operating results and share and debt prices, as well as our ability to meet our obligations under our capital efficient inventory acquisitions. 35 Failure to make scheduled cash payments on our existing debt, or to comply with the restrictive covenants and other requirements in our debt agreements, could result in an event of default, which, if not cured or waived, could result in acceleration of our debt repayment obligations.
The failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the developer renews Interval International membership fees for all of its active owners, has a greater adverse effect. The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially adversely impact our financial condition and results of operations.
The failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the developer renews Interval International membership fees for all of its active owners, has a greater adverse effect.
Further, a change in control could result in an acceleration of our obligations under the Corporate Credit Facility or the indentures that govern our senior notes.
The fact that these provisions and statutory restrictions may discourage acquisition proposals or delay or prevent a change in control could harm our stock price. Further, a change in control could result in an acceleration of our obligations under the Corporate Credit Facility or the indentures that govern our senior notes.
At times, beach access at our resorts and our managed resorts has been impeded by weather conditions or due to the effects of erosion. Actual or threatened war, civil unrest and terrorist activity, as well as heightened travel security measures instituted in response to the same, could also interrupt or deter travel plans.
Actual or threatened war, civil unrest and terrorist activity, as well as heightened travel security measures instituted in response to the same, could also interrupt or deter travel plans.
Our ability to remain competitive and to attract and retain owners depends on our success in distinguishing the quality and value of our products and services from those offered by others.
Our ability to remain competitive and to attract and retain owners depends on our success in distinguishing the quality and value of our products and services from those offered by others. If we cannot compete successfully in these areas, this could limit our operating margins, diminish our market share and reduce our earnings.
However, if we breach our obligations under a license agreement and remain in breach after the applicable notice and cure period, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands in connection with our businesses.
These relationships are governed by various agreements, including long-term license agreements that expire between 2090 and 2095, subject to renewal. However, if we breach our obligations under a license agreement and remain in breach after the applicable notice and cure period, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands.
Increasing our financing rates could negatively impact VOI sales and financing propensity. However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted, as happened in 2023.
However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted, as happened in 2023 and 2024. 25 Our business is extensively regulated, and any failure to comply with applicable laws could materially adversely affect our business.
Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, impairments of goodwill or substantial amortization expenses associated with other intangible assets. 31 Our use of different estimates and assumptions in the application of our accounting policies could result in material changes to our reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact our reported results of operations.
Our use of different estimates and assumptions in the application of our accounting policies could result in material changes to our reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact our reported results of operations.
Because of this geographic concentration of properties, we face a greater risk of a negative effect on our results of operations if these areas are affected by severe weather, man-made disasters or adverse economic and competitive conditions.
This geographic concentration of properties increases the risk of a negative effect on our results of operations if these areas are affected by severe weather, man-made disasters or adverse economic and competitive conditions. 29 If we are not able to successfully identify, finance, integrate and manage costs related to acquisitions, our business operations and financial position could be adversely affected.
While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates. As a result, our financing profit margin declined in 2023 due to general market interest rate increases, and may decline again in the future.
We finance more than half of our VOI sales. While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates.
The final outcome of tax audits, investigations, and any related litigation could be materially different from our historical tax provisions and accruals. Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of severe weather and other regional events in these areas.
An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, and could materially and adversely affect our financial condition or results of operations. Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of severe weather and other regional events in these areas.
The threat of our debt being accelerated in connection with a change in control could make it more difficult for us to attract potential buyers or to consummate a change in control transaction that would otherwise be beneficial to our stockholders. Risks related to the Vistana Spin-Off.
Such debt acceleration could make it more difficult for us to attract potential buyers or to consummate a change in control transaction that would otherwise be beneficial to our stockholders. Item 1B. Unresolved Staff Comments None. 37
Adverse action by governmental authorities or others alleging our failure to comply with applicable laws could adversely affect our business, financial condition, and reputation. Changes in privacy laws could adversely affect our ability to market our products effectively. We rely on a variety of direct marketing techniques, including telemarketing, digital marketing and postal mailings.
Changes in privacy laws could adversely affect our ability to market our products effectively. We rely on a variety of marketing techniques, including digital marketing (e-mail), telemarketing, postal mailings, websites and social media.
Such impacts could adversely affect our results of operations, cash flows, and capital resources for a significant period.
Such impacts could adversely affect our results of operations, cash flows, and capital resources for a significant period. Risks related to our business and industry. Our business may be adversely affected by factors that disrupt or deter travel.
We are required to review these assumptions, estimates and judgments regularly and revise them when necessary. Our actual results of operations vary from period to period based on revisions to these estimates.
We review these assumptions, estimates and judgments regularly and revise them when necessary. Our actual results of operations vary from period to period based on revisions to these estimates. For example, higher loan delinquencies or defaults could lead to an increase in our estimated reserve for vacation ownership notes receivable.
Approximately 25% of our Vacation Ownership segment resorts are co-located with same-branded or affiliated hotel properties.
If a branded hotel property co-located with one of our resorts ceases to be affiliated with the same brand as our resort or a related brand, our business could be harmed. Approximately 25% of our Vacation Ownership segment resorts are co-located with same-branded or affiliated hotel properties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe DBRT is responsible for oversight and handling of significant security threats, incidents, and issues that involve data loss or operational impact to our business through a documented process. Potentially material cyber events are escalated by our EVP-CIO to executive management and reviewed with members of the Company’s Disclosure Committee.
Biggest changePotentially material cybersecurity incidents are escalated by our EVP-CIO to executive management and reviewed with members of the Company’s Disclosure Committee. Material Cybersecurity Risk, Threats & Incidents Routinely, we partner with and use third-party service providers and products that host, manage, or control sensitive data.
We are also subject to the Payment Card Industry Data Security Standard and we perform an annual self-assessment according to the requirements set forth by the Payment Card Industry Security Standards Council.
We are also subject to the Payment Card Industry Data Security Standard and perform an annual self-assessment according to the requirements set forth by the Payment Card Industry Security Standards Council.
Our SVP-GIS works closely with our Law Department and regularly engages expert consultants and other third parties to assist with assessing, identifying, and managing cybersecurity risks and to oversee compliance with legal, regulatory and contractual security requirements. The EVP-CIO and SVP-GIS also periodically attend Audit Committee meetings to report on any material developments.
Our SVP-GIS works closely with our Law Department and regularly engages expert consultants and other third parties to assist with assessing, identifying, and managing cybersecurity risks and to oversee compliance with legal, regulatory and contractual cybersecurity requirements. The EVP-CIO and SVP-GIS also periodically attend Audit Committee meetings to report on any material developments.
Risk Management and Strategy We employ systems and processes designed to oversee, identify, and reduce the potential impact of a security incident at a third-party vendor, service provider or customer or otherwise implicating the third-party technology and systems we use. Our processes and systems include automated tools and technical safeguards managed and monitored by our cybersecurity team.
Risk Management and Strategy We employ systems and processes designed to oversee, identify, and reduce the potential impact of a cybersecurity incident at a third-party vendor, service provider or customer or otherwise implicating the third-party technology and systems we use. Our processes and systems include automated tools and technical safeguards managed and monitored by our cybersecurity team.
The functions that report to our SVP-GIS include: cybersecurity risk management, Payment Card Industry compliance, and security testing; operation of protective security tools and systems; security monitoring, incident response, and digital forensics; security research and development and support for information technology and security functions.
The functions that report to our SVP-GIS include: cybersecurity risk management, Payment Card Industry compliance, and cybersecurity testing; operation of protective cybersecurity tools and systems; cybersecurity monitoring, incident response, and digital forensics; cybersecurity research and development and support for information technology and cybersecurity functions.
We also maintain written information security policies and procedures that apply to the entire Company and third parties who handle our data or have access to our information technology systems.
We also maintain written cybersecurity policies and procedures that apply to the entire Company and third parties who handle our data or have access to our information technology systems.
These reports may address a wide range of topics, including recent developments, evolving standards, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to our peers and third parties. The Audit Committee reports to the Board on data protection and cybersecurity matters.
These reports may address a wide range of topics, including recent developments, evolving standards, third-party and independent reviews, the threat environment, technological trends and cybersecurity considerations arising with respect to our peers and third parties. The Audit Committee reports to the Board on cybersecurity matters.
Risks from cybersecurity threats, including as a result of such previous incident, have not materially affected us, including our business strategy, results of operations or financial condition for the periods covered by this Annual Report, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
Risks from cybersecurity incidents, including as a result of the June 2018 incident, have not materially affected us, including our business strategy, results of operations or financial condition for the periods covered by this Annual Report, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
These policies and procedures establish the framework for our information security program and cover topics such as acceptable use of information systems, security risk management, access management, audit and logging, patching, and security requirements for numerous technologies. These policies and procedures are reviewed at least annually, updated as necessary and integrated into employee training programs and our contracting process.
These policies and procedures establish the framework for our cybersecurity program and cover topics such as acceptable use of information systems, cybersecurity risk management, access management, audit and logging, patching, and cybersecurity requirements for numerous technologies. These policies and procedures are reviewed at least annually, updated as necessary, and integrated into employee training programs and our technology procurement process.
We currently carry cybersecurity insurance, however, we cannot assure you that we will be able to maintain such policies in the future or that they will be sufficient to cover all potential cybersecurity events or losses we incur in connection with such events. 40 We require our associates to receive annual training on our information security policies.
We currently carry cybersecurity insurance, however, we cannot assure you that we will be able to maintain such policies in the future or that they will be sufficient to cover all potential cybersecurity events or losses we incur in connection with such events. 38 We require our associates to receive annual training on our cybersecurity policies and practices.
The SVP-GIS is responsible for maintaining our IRP. Potentially significant threats are escalated to an interdisciplinary data breach response team (the “DBRT”), which is led our EVP-CIO and co-chaired by the SVP-GIS, our head of data privacy and a representative from our Law Department.
Potentially significant threats are escalated to an interdisciplinary data breach response team (the “DBRT”), which is led by our EVP-CIO and co-chaired by the SVP-GIS, our head of data privacy, and a representative from our Law Department. The DBRT is responsible for oversight and handling of significant cybersecurity threats, incidents, and issues through a documented process.
The IRP applies to all Company personnel (including third-party contractors, vendors and partners) that perform functions or services that require access to secure Company information, and to all devices and network services that are owned or managed by the Company. The IRP is practiced through walkthroughs and tabletop exercises on at least an annual basis.
The IRP applies to all Company personnel (including third-party contractors, vendors and partners) that perform functions or services that require access to secure Company information, and to all devices and network services that are owned or managed by the Company. The SVP-GIS is responsible for maintaining our IRP.
Material Cybersecurity Risk, Threats & Incidents Routinely, we partner with and use third-party service providers and products that host, manage, or control sensitive data. We and the companies we work with have experienced cybersecurity threats to our data and systems, including ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.
We and the companies we work with have experienced cybersecurity incidents involving our data and systems, including ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.
Our SVP-GIS leads the team responsible for implementing, monitoring and maintaining cybersecurity and data protection policies and practices across our business and reports directly to our EVP-CIO. Our SVP-GIS’s direct reports include a number of experienced information security leaders responsible for various aspects of our security program, each of whom is supported by a team of experienced cybersecurity professionals.
Our SVP-GIS’s direct reports include a number of experienced cybersecurity leaders responsible for various aspects of our cybersecurity program, each of whom is supported by a team of experienced cybersecurity professionals.
Our SVP-GIS has extensive cybersecurity knowledge and skills gained from over 20 years of work experience at the Company and elsewhere and maintains several certifications, including Certified Information Systems Security Professional (“CISSP”) from ISC Squared and Certified Information Security Manager (“CISM”) from the Informations Systems Audit and Control Association (“ISACA”).
Our SVP-GIS has extensive cybersecurity knowledge and skills gained from over 25 years of experience in government and industries including retail and manufacturing, and industry certifications including Certified Information Systems Security Professional (“CISSP”) from ISC Squared and Global Information Assurance Certification (“GIAC”) from SANS Institute.
Added
Our SVP-GIS also has experience in forensic investigations, strategic cyber risk management, and cybersecurity program development. Our SVP-GIS leads the team responsible for implementing, monitoring and maintaining cybersecurity policies and practices across our business and reports directly to our EVP-CIO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn 2020, we entered into a finance lease agreement for our new corporate headquarters office building in Orlando, Florida. The lease for the new building commenced for accounting purposes during the first quarter of 2023, upon the substantial completion of construction.
Biggest changeWe lease our corporate headquarters in Orlando, Florida under a finance lease arrangement that commenced in 2023, upon the substantial completion of construction. In the fourth quarter of 2023, we relocated from our former corporate headquarters to our new corporate headquarters office building. 39
Item 2. Properties As of December 31, 2023, our vacation ownership portfolio consisted of approximately 120 properties in the United States and thirteen other countries and territories. These properties are described in Part I, Item 1, “Business” of this Annual Report. Except as indicated in Part I, Item 1, “Business,” we own unsold inventory at these properties.
Item 2. Properties As of December 31, 2024, our vacation ownership portfolio consisted of approximately 120 properties in the United States and thirteen other countries and territories. These properties are described in Part I, Item 1, “Business” of this Annual Report. Except as indicated in Part I, Item 1, “Business,” we own unsold inventory at these properties.
Removed
In the fourth quarter of 2023, we relocated from our former corporate headquarters to our new corporate headquarters office building. See Footnote 14 “Leases” for additional information. 41

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ( 1) Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs (1)(2) October 1, 2023 – October 31, 2023 176,000 $ 93.40 176,000 $ 459,314,827 November 1, 2023 – November 30, 2023 134,000 $ 79.55 134,000 $ 448,655,123 December 1, 2023 – December 31, 2023 121,000 $ 83.15 121,000 $ 438,594,526 Total 431,000 $ 86.22 431,000 $ 438,594,526 (1) On September 13, 2021, our Board of Directors authorized a share repurchase program under which we were authorized to purchase shares of our common stock for an aggregate purchase price not to exceed $250 million, prior to December 31, 2022.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ( 1) Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs (1)(2) October 1, 2024 – October 31, 2024 34,400 $ 76.28 34,400 $ 390,959,238 November 1, 2024 – November 30, 2024 24,000 $ 89.80 24,000 $ 388,803,983 December 1, 2024 – December 31, 2024 60,700 $ 91.65 60,700 $ 383,241,012 Total 119,100 $ 86.84 119,100 $ 383,241,012 (1) On May 11, 2023, we announced that our Board of Directors increased the then-remaining authorization under our share repurchase program (which was first announced on September 13, 2021) to authorize purchases of up to $600 million of our common stock and extended the term of our share repurchase program to December 31, 2024.
The graph assumes that $100 was invested in our common stock and each index on December 31, 2018. The stock price performance reflected above is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested in our common stock and each index on December 31, 2019. The stock price performance reflected above is not necessarily indicative of future stock price performance.
Holders of Record On February 21, 2024, there were 22,402 holders of record of our common stock.
Holders of Record On February 24, 2025, there were 21,273 holders of record of our common stock.
All dollar amounts presented exclude such excise tax, as applicable. 42 Performance Graph The above graph compares the relative performance of our common stock, the S&P MidCap 400 Index (which has included our common stock since our acquisition of ILG), and the S&P Composite 1500 Hotels, Resorts & Cruise Lines Index.
(2) All dollar amounts presented exclude the nondeductible 1% excise tax on the net value of certain stock repurchases that was imposed by the Inflation Reduction Act of 2022. 40 Performance Graph The above graph compares the relative performance of our common stock, the S&P MidCap 400 Index (which has included our common stock since our acquisition of ILG), and the S&P Composite 1500 Hotels, Resorts & Cruise Lines Index.
On May 11, 2023, we announced that our Board of Directors increased the then-remaining authorization to authorize purchases of up to $600 million of our common stock and extended the term of our share repurchase program to December 31, 2024.
On December 19, 2024, we announced that our Board of Directors extended the term of our share repurchase program to December 31, 2025.
Removed
On February 22, 2022, we announced that our Board of Directors authorized the repurchase of up to an additional $300 million of our common stock and extended the term of our share repurchase program to March 31, 2023.
Removed
On August 1, 2022, we announced that our Board of Directors authorized the repurchase of up to an additional $500 million of our common stock and extended the term of our share repurchase program to June 30, 2023.
Removed
(2) The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. See Footnote 17 “Stockholders' Equity” to our Financial Statements for further information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

97 edited+37 added−54 removed51 unchanged
Biggest changeCondensed Consolidating Balance Sheet As of December 31, 2023 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI Cash and cash equivalents $ — $ 20 $ 96 $ 132 $ — $ 248 Restricted cash — 25 153 148 — 326 Accounts and contracts receivable, net 30 106 142 120 (13) 385 Vacation ownership notes receivable, net — 121 176 2,046 — 2,343 Inventory — 186 336 112 — 634 Property and equipment, net — 265 736 259 — 1,260 Goodwill — — 3,117 — — 3,117 Intangibles, net — — 822 32 — 854 Investments in subsidiaries 3,421 3,943 — — (7,364) — Other 122 126 279 118 (132) 513 Total assets $ 3,573 $ 4,792 $ 5,857 $ 2,967 $ (7,509) $ 9,680 Accounts payable $ 55 $ 30 $ 196 $ 81 $ — $ 362 Advance deposits — 65 83 16 — 164 Accrued liabilities 5 95 137 113 (7) 343 Deferred revenue — 7 169 213 (7) 382 Payroll and benefits liability — 91 86 28 — 205 Deferred compensation liability — 126 39 3 — 168 Securitized debt, net — — — 2,121 (25) 2,096 Debt, net 1,131 1,736 177 5 — 3,049 Other — 2 229 18 — 249 Deferred taxes — 124 242 19 (105) 280 MVW stockholders' equity 2,382 2,516 4,499 350 (7,365) 2,382 Total liabilities and equity $ 3,573 $ 4,792 $ 5,857 $ 2,967 $ (7,509) $ 9,680 Condensed Consolidating Statement of Income 2023 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI Revenues $ — $ 962 $ 2,731 $ 1,075 $ (41) $ 4,727 Expenses (25) (1,127) (2,458) (760) 41 (4,329) Benefit from (provision for) income taxes 12 25 (90) (93) — (146) Equity in net income (loss) of subsidiaries 267 439 — — (706) — Net income (loss) 254 299 183 222 (706) 252 Net loss attributable to noncontrolling interests — — — 2 — 2 Net income (loss) attributable to common stockholders $ 254 $ 299 $ 183 $ 224 $ (706) $ 254 68 Recent Accounting Pronouncements See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards.
Biggest changeThe following tables present consolidating financial information as of December 31, 2024, and for the fiscal year ended December 31, 2024, 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. 63 Condensed Consolidating Balance Sheet As of December 31, 2024 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI Cash and cash equivalents $ 1 $ 14 $ 59 $ 123 $ — $ 197 Restricted cash — 25 134 172 — 331 Accounts and contracts receivable, net 18 166 118 88 (3) 387 Vacation ownership notes receivable, net — 177 161 2,102 — 2,440 Inventory — 282 345 108 — 735 Property and equipment, net — 280 652 238 — 1,170 Goodwill — — 3,117 — — 3,117 Intangibles, net — — 763 27 — 790 Investments in subsidiaries 3,466 3,743 — — (7,209) — Other 148 199 261 105 (72) 641 Total assets $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808 Accounts payable $ 51 $ 52 $ 164 $ 76 $ — $ 343 Advance deposits — 68 79 15 — 162 Accrued liabilities 2 103 149 127 3 384 Deferred revenue — 15 157 190 (8) 354 Payroll and benefits liability — 103 86 31 — 220 Deferred compensation liability — 143 48 4 — 195 Securitized debt, net — — — 2,163 (27) 2,136 Debt, net 1,138 1,771 179 1 — 3,089 Other — 2 118 19 — 139 Deferred taxes — 121 236 31 (43) 345 MVW stockholders' equity 2,442 2,508 4,394 307 (7,209) 2,442 Noncontrolling interests — — — (1) — (1) Total liabilities and equity $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808 Condensed Consolidating Statement of Income 2024 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI Revenues $ — $ 1,146 $ 2,727 $ 1,137 $ (43) $ 4,967 Expenses (44) (1,291) (2,542) (827) 43 (4,661) Benefit from (provision for) income taxes 13 71 (43) (130) — (89) Equity in net income (loss) of subsidiaries 249 411 — — (660) — Net income (loss) 218 337 142 180 (660) 217 Net loss attributable to noncontrolling interests — — — 1 — 1 Net income (loss) attributable to common stockholders $ 218 $ 337 $ 142 $ 181 $ (660) $ 218 Recent Accounting Pronouncements See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards. 64 Critical Accounting Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures.
In addition, we may develop inventory on balance sheet in key markets where we believe the opportunities will generate acceptable risk adjusted returns. 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.
In addition, we may develop inventory on our balance sheet in key markets where we believe the opportunities will generate acceptable risk adjusted returns. 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.
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 64 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.
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.
Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, unsold inventory on hand and keys allocated for preview stays.
Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, rental inventory on hand and keys allocated for preview stays.
While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates. We may use incentives to encourage our customers to 45 choose our financing.
While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates. We may use incentives to encourage our customers to choose our financing.
As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.
As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.
In our Vacation Ownership segment and Consolidated Property Owners’ Associations, we refer to these activities as “Resort Management and Other Services.” Financing We offer financing to qualified customers for the purchase of most types of our vacation ownership products.
In our Vacation Ownership segment and Consolidated Property Owners’ Associations, we refer to these activities as “Resort Management and Other Services.” 43 Financing We offer financing to qualified customers for the purchase of most types of our vacation ownership products.
For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business.
For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business.
The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections.
The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections and defaults.
See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for further information related to our critical accounting policies and estimates, which are as follows: • Revenue recognition , including how we recognize revenue under ASC Topic 606 “ Revenue from Contracts with Customers ” for the sale of vacation ownership products, including our estimates of variable consideration.
See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for further information related to our critical accounting policies and estimates, which are as follows: • Revenue recognition , including how we recognize revenue under ASC Topic 606 “ Revenue from Contracts with Customers ” for the sale of vacation ownership products, including our estimates of the sales reserve (variable consideration).
The financial information discussed below and included in this Annual Report may not, however, necessarily reflect what our financial condition, results of operations and cash flows may be in the future. Our discussion and analysis of fiscal year 2023 to fiscal year 2022 is included herein.
The financial information discussed below and included in this Annual Report may not, however, necessarily reflect what our financial condition, results of operations and cash flows may be in the future. Our discussion and analysis of fiscal year 2024 to fiscal year 2023 is included herein.
We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties.
We obtain rental inventory and generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties.
During the fourth quarter of 2023, we conducted our annual goodwill impairment test and did not record any impairment charges. The estimated fair values of our reporting units exceeded their carrying amounts at the date of their most recent estimated fair value determination.
During the fourth quarter of 2024, we conducted our annual goodwill impairment test and did not record any impairment charges. The estimated fair values of our reporting units exceeded their carrying amounts at the date of their most recent estimated fair value determination.
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to Board approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board considers relevant.
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.
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 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.
Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third-parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales.
Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests (also referred to as an equity upgrade), we include only the incremental value purchased as contract sales.
Interest Expense Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense. Transaction and Integration Costs Transaction and integration costs primarily include fees paid to change-management consultants, technology-related costs associated with the integration of ILG and Welk and charges for employee retention, severance and other termination-related benefits.
Interest Expense Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense, net of interest income. Transaction and Integration Costs Transaction and integration costs primarily include fees paid to change-management consultants, technology-related costs associated with the integrations of ILG and Welk and charges for employee retention, severance and other termination-related benefits.
Our discussion and analysis of fiscal year 2022 to fiscal year 2021 has been omitted from this Form 10-K and can be found in Part II, “Item 7.
Our discussion and analysis of fiscal year 2023 to fiscal year 2022 has been omitted from this Form 10-K and can be found in Part II, “Item 7.
Factors considered in estimating net realizable value include historical results by tax jurisdiction, carryforward periods, income tax strategies and forecasted taxable income. 69
Factors considered in estimating net realizable value include historical results by tax jurisdiction, carryforward periods, income tax strategies and forecasted taxable income. 65
See Footnote 20 “Business Segments” to our Financial Statements for further information on our segments.
See Footnote 20 “Business Segments” to our Financial Statements for further information about our segments.
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.
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.
In April 2022, we disposed of VRI Americas after determining that the business was not a core component of our future growth strategy and operating model. This business was a component of our Exchange & Third-Party Management segment through the date of the sale.
We provide these services through our Interval International and Aqua-Aston businesses. In April 2022, we disposed of VRI Americas after determining that the business was not a core component of our future growth strategy and operating model. This business was a component of our Exchange & Third-Party Management segment through the date of the sale.
Fiscal Years ($ in millions) 2023 2022 2021 REVENUES Resort management and other services $ 39 $ 67 $ 152 Cost reimbursements (42) (44) (121) TOTAL REVENUES (3) 23 31 EXPENSES Resort management and other services 54 84 190 Rental (14) (18) (50) General and administrative 273 249 227 Depreciation and amortization 11 9 9 Litigation charges — 2 1 Restructuring 6 — (1) Impairment 16 — 3 Cost reimbursements (42) (44) (121) TOTAL EXPENSES 304 282 258 Gains (losses) and other income (expense), net 17 (12) (52) Interest expense, net (145) (118) (164) Transaction and integration costs (37) (122) (108) FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (472) (511) (551) Provision for income taxes (146) (191) (74) Net loss (income) attributable to noncontrolling interests 2 — (4) FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (616) $ (702) $ (629) 61 Consolidated Property Owners’ Associations The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance, and the changes attributed to the deconsolidation of individual Consolidated Property Owners’ Associations.
Fiscal Years ($ in millions) 2024 2023 2022 REVENUES Resort management and other services $ 49 $ 39 $ 67 Cost reimbursements (43) (42) (44) TOTAL REVENUES 6 (3) 23 EXPENSES Resort management and other services 67 54 84 Rental (17) (14) (18) General and administrative 243 273 249 Depreciation and amortization 18 11 9 Litigation charges (1) — 2 Restructuring 8 6 — Impairment — 16 — Cost reimbursements (43) (42) (44) TOTAL EXPENSES 275 304 282 (Losses) gains and other (expense) income, net (17) 17 (12) Interest expense, net (162) (145) (118) Transaction and integration costs (18) (37) (122) FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (466) (472) (511) Provision for income taxes (89) (146) (191) Net loss attributable to noncontrolling interests 1 2 — FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (554) $ (616) $ (702) Consolidated Property Owners’ Associations The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance and the changes attributed to the deconsolidation of certain individual Consolidated Property Owners’ Associations.
Gains (Losses) and Other Income (Expense) Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Gains (losses) and other income (expense), net $ 17 $ (12) $ (52) $ 29 NM In 2023, we recorded a $22 million increase to our receivable from Marriott International for indemnified income tax matters (the offsetting accrual is included in the Provision for income taxes line) and $6 million of foreign currency translation gains, partially offset by a $10 million expense attributed to the redemption premium and write-off of unamortized debt issuance costs in connection with the early redemption of our 6.125% Senior Secured Notes due 2025 (“2025 Notes”).
In 2023, we recorded a $22 million increase to our receivable from Marriott International for indemnified income tax matters (the offsetting accrual is included in the Provision for income taxes line) and $6 million of foreign currency translation gains, partially offset by a $10 million expense attributed to the redemption premium and write-off of unamortized debt issuance costs in connection with the early redemption of our 6.125% Senior Secured Notes due 2025 (“2025 Notes”). 58 Interest Expense Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Interest expense, net $ (162) $ (145) $ (118) $ (17) (12%) 2024 Compared to 2023 The increase in Interest expense, net is attributed to higher variable interest expense and changes in outstanding borrowings during the comparative periods.
Among other reasons for repurchasing inventory, we expect these repurchases will stabilize the future cost of our vacation ownership products. Our spending for real estate inventory in 2023 was lower than our cost of sales and was primarily related to our purchases under our VOI repurchase programs.
Among other reasons for repurchasing inventory, we expect these repurchases will help stabilize the future cost of our vacation ownership products. Our spending for real estate inventory in 2024 was higher than our cost of sales due to our acquisition of vacation ownership units in Waikiki and purchases under our VOI repurchase programs.
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.
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.
(2) For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents. 2023 Compared to 2022 Contract sales declined due to an 8% decline in VPG, partially offset by tour growth of 4%.
(2) For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents. 2024 Compared to 2023 Contract sales increased in 2024 due to a 7% increase in tours, partially offset by a 4% decline in VPG.
In addition, our cash from operations varies due to the timing of repayment by owners of 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.
In addition, our cash from operations varies due to the timing of repayment by owners of 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. 60 Seasonality Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments.
Impairment Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Impairment $ 12 $ 2 $ — $ 10 NM During 2023, we recorded non-cash impairment charges of $8 million related to our investment in a joint venture, $2 million related to an ancillary operation in Europe, and $2 million related to an owned hotel.
During 2023, we recorded non-cash impairment charges of $8 million related to our investment in a joint venture, $2 million related to an ancillary operation in Europe, and $2 million related to an owned hotel.
These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items.
These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items.
Financing Revenues, Expenses and Margin Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Financing revenues $ 322 $ 293 $ 268 $ 29 10% Financing expenses (36) (20) (38) (16) (82%) Consumer financing interest expense (77) (55) (50) (22) (40%) Financing profit $ 209 $ 218 $ 180 $ (9) (4%) Financing profit margin 64.9% 74.5% 67.1% (9.6 pts) Financing propensity 58.1% 53.9% 52.7% 4.2 pts 2023 Compared to 2022 The increase in Financing revenues reflects $31 million of higher interest income as a result of a higher average vacation ownership notes receivable balance and a slightly higher average interest rate and $1 million of higher late and service fees, offset by $3 million of higher plus point financing incentive costs (recorded as a reduction of interest income).
Financing Revenues, Expenses and Margin Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Financing revenues $ 342 $ 322 $ 293 $ 20 6% Financing expenses (41) (36) (20) (5) (13%) Consumer financing interest expense (105) (77) (55) (28) (36%) Financing profit $ 196 $ 209 $ 218 $ (13) (6%) Financing profit margin 57.4% 64.9% 74.5% (7.5 pts) Financing propensity 55.9% 58.1% 53.9% (2.2 pts) 2024 Compared to 2023 The increase in Financing revenues reflects $20 million of higher interest income as a result of a higher average vacation ownership notes receivable balance and $1 million of higher late and service fees, partially offset by $1 million of higher plus point financing incentive costs (recorded as a reduction of interest income).
In addition, during the first quarter of each year, we generally have significant variable compensation-related cash outflows associated with payment of annual bonuses. 65 Operations In addition to net income and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities: Inventory Spending Less Than (In Excess of) Cost of Sales Fiscal Years ($ in millions) 2023 2022 2021 Inventory spending $ (89) $ (138) $ (153) Purchase of property for future transfer to inventory (27) (12) (98) Inventory costs 176 242 212 Inventory spending less than (in excess of) cost of sales $ 60 $ 92 $ (39) Although we have significant inventory on hand, we intend to continue selectively pursuing growth opportunities by targeting high-quality inventory that allows us to add desirable new destinations to our systems with new on-site sales locations.
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 (In Excess of) Less Than Cost of Sales Fiscal Years ($ in millions) 2024 2023 2022 Inventory spending $ (183) $ (89) $ (138) Purchase of property for future transfer to inventory (10) (27) (12) Inventory costs 150 176 242 Inventory spending (in excess of) less than cost of sales $ (43) $ 60 $ 92 Although we have adequate inventory on hand, we intend to continue selectively pursuing growth opportunities by targeting high-quality inventory that allows us to add desirable new destinations to our systems with new on-site sales locations to support anticipated future contract sales growth.
We also recognize rental revenue from the utilization of plus points under our points-based products when the points are redeemed for rental stays at one of our resorts or other third-party offerings, or upon expiration of the points.
We also recognize rental revenue from the utilization of plus points at redemption for rental stays at one of our resorts or other third-party offerings.
Subsequent to the end of 2023, on February 15, 2024, our Board of Directors declared a quarterly dividend of $0.76 per share to be paid on March 14, 2024 to stockholders of record as of February 29, 2024.
Subsequent to the end of 2024, on February 20, 2025, our Board of Directors declared a quarterly dividend of $0.79 per share to be paid on March 19, 2025 to stockholders of record as of March 5, 2025.
Revisions to estimates of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes receivable and can increase or decrease revenues. In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve as an adjustment to Financing expenses on our Income Statements.
Revisions to estimates that result in decreases or increases to the reserve for originated vacation ownership notes receivable can increase or decrease revenues, respectively. In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve as an adjustment to Financing expenses on our Income Statements.
Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products.
Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we generally have significant variable compensation-related cash outflows associated with payment of annual bonuses.
Fiscal Years ($ in millions) 2023 2022 Gain on disposition of hotel, land, and other $ (1) $ — Gain on disposition of VRI Americas — (17) Foreign currency translation — 2 Gains and other income, net (1) (15) Litigation charges 1 — Impairment charges 4 — Early termination of VRI management contract — (2) Total Certain items $ 4 $ (17) 53 BUSINESS SEGMENTS Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management.
Fiscal Years ($ in millions) 2024 2023 Litigation charges $ — $ 1 Restructuring charges 1 — Impairment charges 2 4 Gain on disposition of hotel, land, and other (1) (1) Foreign currency translation loss 1 — Total Certain items $ 3 $ 4 50 BUSINESS SEGMENTS Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management.
Restructuring Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Restructuring $ 6 $ — $ (1) $ 6 NM During 2023, we realigned our management structure, resulting in severance costs associated with the elimination of certain positions. 62 Impairment Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Impairment $ 16 $ — $ 3 $ 16 NM During 2023, upon our relocation to our new corporate headquarters, we recorded a non-cash impairment of a right-of-use asset related to operating leases for our legacy corporate headquarters located in Orlando, Florida, as we do not expect proceeds from subleasing the spaces to exceed our future obligations under the operating leases.
Impairment Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Impairment $ — $ 16 $ — $ (16) NM During 2023, upon our relocation to our new corporate headquarters, we recorded a non-cash impairment of a right-of-use asset related to operating leases for our legacy corporate headquarters located in Orlando, Florida, as we did not expect proceeds from subleasing these spaces to exceed our future obligations under the operating leases.
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.
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.
The increase in consumer financing interest expense is attributable to the higher average securitized debt and a higher average interest rate on our more recent term securitization transactions. We expect consumer financing interest expense to continue to increase as the rates on new securitizations exceed the current weighted average of our portfolio.
The increase in consumer financing interest expense is attributable to the higher average securitized debt at a higher average interest rate for our more recent term securitization transactions. 54 We expect our average interest rate to continue to increase as the current interest rate environment for new securitization transactions is higher than the average interest rate on our existing securitized debt.
Revolving Corporate Credit Facility Our Revolving Corporate Credit Facility, which expires on March 31, 2027, provides for up to $750 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions.
See Footnote 15 “Securitized Debt’ and Footnote 19 “Variable Interest Entities” for further information on these facilities. Revolving Corporate Credit Facility Our Revolving Corporate Credit Facility, which expires on March 31, 2027, provides for up to $750 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions.
NM = Not meaningful. 48 CONSOLIDATED RESULTS Fiscal Years ($ in millions) 2023 2022 2021 REVENUES Sale of vacation ownership products $ 1,460 $ 1,618 $ 1,153 Management and exchange 813 827 855 Rental 571 551 486 Financing 322 293 268 Cost reimbursements 1,561 1,367 1,128 TOTAL REVENUES 4,727 4,656 3,890 EXPENSES Cost of vacation ownership products 224 289 250 Marketing and sales 823 807 617 Management and exchange 442 444 521 Rental 452 382 344 Financing 113 75 88 General and administrative 273 249 227 Depreciation and amortization 135 132 146 Litigation charges 13 11 10 Restructuring 6 — — Royalty fee 117 114 106 Impairment 32 2 3 Cost reimbursements 1,561 1,367 1,128 TOTAL EXPENSES 4,191 3,872 3,440 Gains (losses) and other income (expense), net 47 40 (51) Interest expense, net (145) (118) (164) Transaction and integration costs (37) (125) (110) Other (3) 1 2 INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 398 582 127 Provision for income taxes (146) (191) (74) NET INCOME 252 391 53 Net loss (income) attributable to noncontrolling interests 2 — (4) NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 254 $ 391 $ 49 Operating Statistics Fiscal Years 2023 vs. 2022 (Contract sales $ in millions) 2023 2022 2021 Change Vacation Ownership Total contract sales $ 1,800 $ 1,874 $ 1,411 $ (74) (4%) Consolidated contract sales $ 1,772 $ 1,837 $ 1,374 $ (65) (4%) Joint venture contract sales $ 28 $ 37 $ 37 $ (9) (24%) VPG $ 4,088 $ 4,421 $ 4,356 $ (333) (8%) Exchange & Third-Party Management Total active members at end of year (000's) 1,564 1,566 1,296 (2) —% Average revenue per member $ 156.65 $ 157.97 $ 179.48 $ (1.32) (1%) 49 Revenues Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Vacation Ownership $ 4,468 $ 4,342 $ 3,539 $ 126 3% Exchange & Third-Party Management 262 291 320 (29) (10%) Total Segment Revenues 4,730 4,633 3,859 97 2% Consolidated Property Owners’ Associations (3) 23 31 (26) (112%) Total Revenues $ 4,727 $ 4,656 $ 3,890 $ 71 2% Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization.
NM = Not meaningful. 46 CONSOLIDATED RESULTS Fiscal Years ($ in millions) 2024 2023 2022 REVENUES Sale of vacation ownership products $ 1,448 $ 1,460 $ 1,618 Management and exchange 843 813 827 Rental 645 571 551 Financing 342 322 293 Cost reimbursements 1,689 1,561 1,367 TOTAL REVENUES 4,967 4,727 4,656 EXPENSES Cost of vacation ownership products 200 224 289 Marketing and sales 919 823 807 Management and exchange 482 442 444 Rental 481 452 382 Financing 146 113 75 General and administrative 243 273 249 Depreciation and amortization 146 135 132 Litigation charges 17 13 11 Restructuring 10 6 — Royalty fee 114 117 114 Impairment 30 32 2 Cost reimbursements 1,689 1,561 1,367 TOTAL EXPENSES 4,477 4,191 3,872 (Losses) gains and other (expense) income, net (1) 47 40 Interest expense, net (162) (145) (118) Transaction and integration costs (18) (37) (125) Other (3) (3) 1 INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 306 398 582 Provision for income taxes (89) (146) (191) NET INCOME 217 252 391 Net loss attributable to noncontrolling interests 1 2 — NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 218 $ 254 $ 391 47 Operating Statistics Fiscal Years 2024 vs. 2023 (Contract sales $ in millions) 2024 2023 2022 Change Vacation Ownership Total contract sales $ 1,829 $ 1,800 $ 1,874 $ 29 2% Consolidated contract sales $ 1,813 $ 1,772 $ 1,837 $ 41 2% Joint venture contract sales $ 16 $ 28 $ 37 $ (12) (43%) VPG $ 3,911 $ 4,088 $ 4,421 $ (177) (4%) Tours 432,716 405,825 390,593 26,891 7% Exchange & Third-Party Management Total active members at end of year (000's) 1,546 1,564 1,566 (18) (1%) Average revenue per member $ 154.34 $ 156.65 $ 179.48 $ (2.31) (1%) Revenues Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Vacation Ownership $ 4,730 $ 4,468 $ 4,342 $ 262 6% Exchange & Third-Party Management 231 262 291 (31) (12%) Total Segment Revenues 4,961 4,730 4,633 231 5% Consolidated Property Owners’ Associations 6 (3) 23 9 NM Total Revenues $ 4,967 $ 4,727 $ 4,656 $ 240 5% Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization.
Transaction and integration costs also include costs related to the ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax-related accruals. Commencing in the third quarter of 2023, we discontinued classifying costs associated with the continued integration of ILG in Transaction and integration costs.
Transaction and integration costs also include costs related to the ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax-related accruals.
Fiscal Years ($ in millions) 2023 2022 Transaction and integration costs $ — $ 3 Gain on disposition of hotel, land, and other (7) (33) Insurance proceeds (9) (4) Change in indemnification asset (9) — Other (4) — Gains and other income, net (29) (37) Purchase accounting adjustments 8 11 Litigation charges 12 9 Impairment charges 12 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — (6) Change in estimate relating to pre-acquisition contingencies — (12) Other 2 3 Total Certain items $ 5 $ (27) 52 Exchange & Third-Party Management Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Segment financial results $ 93 $ 132 $ 93 $ (39) (30%) Depreciation and amortization 31 31 48 — (2%) Share-based compensation expense 2 2 2 — (23%) Certain items 4 (17) 1 21 122% Segment Adjusted EBITDA $ 130 $ 148 $ 144 $ (18) (13%) The table below details the components of Certain items for the Exchange & Third-Party Management segment financial results for 2023 and 2022.
Fiscal Years ($ in millions) 2024 2023 Purchase accounting adjustments $ 1 $ 8 Litigation charges 18 12 Restructuring charges 1 — Impairment charges 28 12 Gain on disposition of hotel, land, and other (7) (7) Insurance proceeds (5) (9) Change in indemnification asset — (9) Change in estimates relating to pre-acquisition contingencies (4) — Other — (4) Gains and other income, net (16) (29) Other 2 2 Total Certain items $ 34 $ 5 Exchange & Third-Party Management Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Segment financial results $ 69 $ 93 $ 132 $ (24) (26%) Depreciation and amortization 28 31 31 (3) (7%) Share-based compensation expense 2 2 2 — NM Certain items 3 4 (17) (1) NM Segment Adjusted EBITDA $ 102 $ 130 $ 148 $ (28) (21%) Segment Adjusted EBITDA Margin 45.9% 52.5% 55.2% (6.6) pts The table below details the components of Certain items for the Exchange & Third-Party Management segment financial results for fiscal years 2024 and 2023.
Fiscal Years ($ in millions) 2023 2022 ILG integration $ 15 $ 98 Welk acquisition and integration 22 14 Other transformation initiatives — 10 Other transaction costs — 3 Transaction and integration costs 37 125 Early redemption of senior secured notes 10 — Gain on disposition of hotel, land, and other (8) (33) Gain on disposition of VRI Americas — (17) Foreign currency translation (6) 10 Insurance proceeds (9) (6) Change in indemnification asset (31) 3 Other (3) 3 Gains and other income, net (47) (40) Purchase accounting adjustments 8 11 Litigation charges 13 11 Restructuring charges 6 — Impairment charges 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — (6) Early termination of VRI management contract — (2) Change in estimate relating to pre-acquisition contingencies — (12) Other 1 6 Total Certain items $ 50 $ 95 Commencing in the third quarter of 2023, we discontinued classifying costs associated with the continued integration of ILG in Transaction and integration costs.
Fiscal Years ($ in millions) 2024 2023 ILG integration $ — $ 15 Welk acquisition and integration 18 22 Transaction and integration costs 18 37 Purchase accounting adjustments 1 8 Litigation charges 17 13 Restructuring charges 10 6 Impairment charges 30 32 Early redemption of senior secured notes — 10 Gain on disposition of hotel, land, and other (8) (8) Foreign currency translation loss (gain) 13 (6) Insurance proceeds (5) (9) Change in indemnification asset 5 (31) Change in estimates relating to pre-acquisition contingencies (4) — Other — (3) Losses (gains) and other expense (income), net 1 (47) Other 2 1 Total Certain items $ 79 $ 50 During the third quarter of 2023 and the second quarter of 2024, we discontinued classifying costs associated with the continued integration of ILG and Welk, respectively, in Transaction and integration costs.
Subsequent to the Contract Alignment, transfer of control of Marriott-branded vacation ownership products occurs at expiration of the statutory rescission period, consistent with the historical timing of Sheraton- and Westin- branded transactions. Marriott-branded VOI sales contracts executed prior to these modifications have been accounted for with transfer of control of the VOI occurring at closing.
Prior to these changes, control transfer occurred at closing for these vacation ownership products. Subsequent to the Contract Alignments, transfer of control of these vacation ownership products occurs at expiration of the statutory rescission period, consistent with the historical timing of Sheraton-, Westin- and Hyatt- branded transactions.
Gains and Other Income Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Gains and other income, net $ 29 $ 37 $ 1 $ (8) (23%) During 2023, we recorded a $9 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, $9 million related to the receipt of business interruption and property damage insurance proceeds, $7 million of gains on the disposition of excess real estate, and $4 million of gains associated with the earn out of additional proceeds from the 2019 disposition of a land parcel in Cancun, Mexico.
Gains and Other Income Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Gains and other income, net $ 16 $ 29 $ 37 $ (13) NM During 2024, we recorded $6 million of gains on the disposition of excess real estate, $5 million related to the receipt of business interruption insurance proceeds, and a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.
VACATION OWNERSHIP Fiscal Years ($ in millions) 2023 2022 2021 REVENUES Sale of vacation ownership products $ 1,460 $ 1,618 $ 1,153 Resort management and other services 568 534 470 Rental 531 509 446 Financing 322 293 268 Cost reimbursements 1,587 1,388 1,202 TOTAL REVENUES 4,468 4,342 3,539 EXPENSES Cost of vacation ownership products 224 289 250 Marketing and sales 823 807 617 Resort management and other services 270 240 200 Rental 466 400 394 Financing 113 75 88 Depreciation and amortization 93 92 89 Litigation charges 12 9 9 Royalty fee 117 114 106 Impairment 12 2 — Cost reimbursements 1,587 1,388 1,202 TOTAL EXPENSES 3,717 3,416 2,955 Gains and other income, net 29 37 1 Transaction and integration costs — (3) (2) Other (3) 1 2 SEGMENT FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 777 961 585 Net income attributable to noncontrolling interests — — — SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 777 $ 961 $ 585 54 Sale of Vacation Ownership Products Fiscal Years 2023 vs. 2022 ($ in millions) 2023 % of Consolidated Contract Sales, Net of Resales 2022 % of Consolidated Contract Sales, Net of Resales 2021 % of Consolidated Contract Sales, Net of Resales Change Consolidated contract sales $ 1,772 $ 1,837 $ 1,374 $ (65) (4%) Joint venture contract sales 28 37 37 (9) (24%) Total contract sales 1,800 1,874 1,411 (74) (4%) Less resales contract sales (42) (40) (26) (2) Less joint venture contract sales (28) (37) (37) 9 Consolidated contract sales, net of resales 1,730 1,797 1,348 (67) (4%) Plus: Settlement revenue 39 2% 36 2% 28 2% 3 Resales revenue 22 1% 20 1% 12 1% 2 Revenue recognition adjustments: Reportability 3 —% 43 2% (44) (3%) (40) Sales reserve (232) (13%) (170) (9%) (101) (8%) (62) Other (1) (102) (6%) (108) (6%) (90) (7%) 6 Sale of vacation ownership products $ 1,460 84% $ 1,618 90% $ 1,153 86% $ (158) (10%) Financing propensity 58.1% 53.9% 52.7% 4.2 pts Average FICO Score (2) 735 734 732 (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.
VACATION OWNERSHIP Fiscal Years ($ in millions) 2024 2023 2022 REVENUES Sale of vacation ownership products $ 1,448 $ 1,460 $ 1,618 Resort management and other services 612 568 534 Rental 605 531 509 Financing 342 322 293 Cost reimbursements 1,723 1,587 1,388 TOTAL REVENUES 4,730 4,468 4,342 EXPENSES Cost of vacation ownership products 200 224 289 Marketing and sales 919 823 807 Resort management and other services 293 270 240 Rental 498 466 400 Financing 146 113 75 Depreciation and amortization 100 93 92 Litigation charges 18 12 9 Restructuring 1 — — Royalty fee 114 117 114 Impairment 28 12 2 Cost reimbursements 1,723 1,587 1,388 TOTAL EXPENSES 4,040 3,717 3,416 Gains and other income, net 16 29 37 Transaction and integration costs — — (3) Other (3) (3) 1 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 703 $ 777 $ 961 51 Sale of Vacation Ownership Products Fiscal Years 2024 vs. 2023 ($ in millions) 2024 % of Consolidated Contract Sales, Net of Resales 2023 % of Consolidated Contract Sales, Net of Resales 2022 % of Consolidated Contract Sales, Net of Resales Change Consolidated contract sales $ 1,813 $ 1,772 $ 1,837 $ 41 2% Joint venture contract sales 16 28 37 (12) (43%) Total contract sales 1,829 1,800 1,874 29 2% Less resales contract sales (38) (42) (40) 4 Less joint venture contract sales (16) (28) (37) 12 Consolidated contract sales, net of resales 1,775 1,730 1,797 45 3% Plus: Settlement revenue 38 2% 39 2% 36 2% (1) Resales revenue 19 1% 22 1% 20 1% (3) Revenue recognition adjustments: Reportability (2) —% 3 —% 43 2% (5) Sales reserve (278) (16%) (232) (13%) (170) (9%) (46) Other (1) (104) (6%) (102) (6%) (108) (6%) (2) Sale of vacation ownership products $ 1,448 82% $ 1,460 84% $ 1,618 90% $ (12) (1%) VPG 3,911 4,088 4,421 (177) (4%) Tours 432,716 405,825 390,593 26,891 7% Financing propensity 55.9% 58.1% 53.9% (2.2 pts) Average FICO Score (2) 737 735 734 (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.
We consider contract sales to be an important operating measure because it reflects the pace of sales in our business. • Total contract sales include contract sales from the sale of vacation ownership products including non-consolidated joint ventures. • Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures. • Volume per guest (“VPG”) is calculated by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a tour at a sales location, by the number of tours at sales locations in a given period.
Further integration costs incurred after these periods are reflected in the operating results of each of our segments and/or General and administrative expenses. 45 Performance Measures We measure operating performance using the key metrics described below: • Contract sales from the sale of vacation ownership products is considered to be an important operating measure because it reflects the pace of sales in our business. • Total contract sales include contract sales from the sale of vacation ownership products, including non-consolidated joint ventures. • Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures. • Volume per guest (“VPG”) is calculated by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (referred to as Tours , see below), by the number of tours in a given period.
During 2023, and as of December 31, 2023, we had 14 term securitization transactions outstanding, all of which were in compliance with their respective required parameters. Since 2000, we have issued approximately $8.9 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.
As of December 31, 2024, we had 12 term securitization transactions outstanding. Since 2000, we have issued approximately $10 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.
In the third quarter of 2022, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignment”), resulting in the prospective change in the timing of the transfer of control to the customer for Marriott-branded VOIs. Prior to these changes, control transfer occurred at closing for Marriott-branded vacation ownership products.
In the third quarter of 2022 and the fourth quarter of 2024, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignments”), resulting in the prospective change in the timing of the transfer of control to the 42 customer for Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts, respectively.
The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense. 46 In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed properties through our Aqua-Aston business, and for the period prior to its disposition in the second quarter of 2022, VRI Americas.
The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense. 44 In our Exchange & Third-Party Management segment, we offer vacation rental offers known as Getaways to members of the Interval Network and certain other membership programs.
These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements. We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as Development profit.
These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements.
We expect originations of vacation ownership notes receivable to outpace payoffs. We do not adjust interest rates on 57 consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates; thus, we expect our financing profit margin to decrease in the near term.
We do not adjust interest rates on consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates. We expect our financing profit to remain flat in 2025.
We completed two term securitization transactions in 2023 resulting in net proceeds of $806 million. Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable.
Loan defaults under securitizations offset a portion of the excess spread we receive, on a monthly basis. We completed two term securitization transactions in 2024 resulting in net proceeds of $863 million. Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable.
Fiscal Years ($ in millions) 2023 2022 2021 REVENUES Resort management and other services $ 39 $ 64 $ 152 Cost reimbursements (42) (44) (121) TOTAL REVENUES (3) 20 31 EXPENSES Resort management and other services 54 84 190 Rental (14) (18) (50) Cost reimbursements (42) (44) (121) TOTAL EXPENSES (2) 22 19 Losses and other expense, net — (3) (4) Interest expense, net 1 — — FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS — (5) 8 Provision for income taxes (1) (1) (1) Net loss (income) attributable to noncontrolling interests 2 — (4) FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 1 $ (6) $ 3 General and Administrative Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change General and administrative $ 273 $ 249 $ 227 $ 24 10% 2023 Compared to 2022 General and administrative expenses increased due to $31 million of costs related to the implementation of technology, $14 million of increased wages and benefits, $8 million related to new product development initiatives, $6 million of increased insurance expense, $6 million of incremental costs related to compliance activities and $7 million of other miscellaneous expenses, partially offset by a $39 million decrease in variable compensation expense and $9 million of higher allocations of general and administrative expenses to operations.
Fiscal Years ($ in millions) 2024 2023 2022 REVENUES Resort management and other services $ 49 $ 39 $ 64 Cost reimbursements (43) (42) (44) TOTAL REVENUES 6 (3) 20 EXPENSES Resort management and other services 67 54 84 Rental (17) (14) (18) Cost reimbursements (43) (42) (44) TOTAL EXPENSES 7 (2) 22 Losses and other expense, net — — (3) Interest expense, net 1 1 — FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS — — (5) Provision for income taxes (1) (1) (1) Net loss attributable to noncontrolling interests 1 2 — FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ — $ 1 $ (6) 57 General and Administrative Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change General and administrative $ 243 $ 273 $ 249 $ (30) (11%) 2024 Compared to 2023 The decrease in General and administrative expense is primarily due to one-time information technology expenses incurred in 2023 and lower consulting and compliance related expenses, partially offset by higher variable compensation expense and higher operating costs.
The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $19 million due to increased volumes sold, inflation and foreign currency exchange rate changes in Mexico, and an increase in customer services and exchange company expenses of $11 million due to incremental headcount, wages, benefits, and other operating cost increases. 56 Rental Revenues, Expenses and Margin Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Rental revenues $ 531 $ 509 $ 446 $ 22 4% Rental expenses (466) (400) (394) (66) (16%) Rental profit $ 65 $ 109 $ 52 $ (44) (40%) Rental profit margin 12.4% 21.4% 11.7% (9.0 pts) Fiscal Years 2023 vs. 2022 (transient keys in millions) 2023 2022 2021 Change Transient keys rented (1) 2,072,590 2,073,945 1,933,746 (1,355) —% Average transient key rate $ 268.79 $ 268.39 $ 245.79 $ 0.40 —% Rental occupancy (2) 68.2% 70.3% 55.1% (2.1 pts) (1) Transient keys rented exclude plus points and preview stays.
The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $15 million due to increased volumes sold and operating costs, and an increase in customer services and exchange company expenses of $8 million due to wages, benefits, and other operating cost increases. 53 Rental Revenues, Expenses and Margin Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Rental revenues $ 605 $ 531 $ 509 $ 74 14% Rental expenses (498) (466) (400) (32) (7%) Rental profit $ 107 $ 65 $ 109 $ 42 62% Rental profit margin 17.6% 12.4% 21.4% 5.2 pts Transient keys rented (1) 2,172,529 2,072,590 2,073,945 99,939 5% Average transient key rate $ 256.61 $ 268.79 $ 268.39 $ (12.18) (5%) Rental occupancy (2) 72.3% 68.2% 70.3% 4.1 pts (1) Transient keys rented exclude plus points and preview stays.
Accruals for contingent liabilities are recorded when it is probable that a liability has been incurred, or an asset impaired, and the amount of the loss can be reasonably estimated.
During 2024, we evaluated our other intangible assets for impairment and did not record any impairment charges. • Loss contingencies , including information on how we account for loss contingencies. Accruals for contingent liabilities are recorded when it is probable that a liability has been incurred, or an asset impaired, and the amount of the loss can be reasonably estimated.
See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information regarding the accounting for acquired vacation ownership notes receivable. In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI. We return VOIs that we reacquire through foreclosure or revocation back to inventory.
In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI. We return VOIs that we reacquire through foreclosure or revocation back to inventory.
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) net cash generated from our rental and resort management and other services operations.
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. 59 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.
Income Tax Fiscal Years ($ in millions) 2023 2022 2021 Provision for income taxes $ (146) $ (191) $ (74) Effective tax rate 36.5% 32.9% 58.4% 2023 Compared to 2022 The change in our income tax expense is attributable to lower income before income taxes and noncontrolling interests ($49 million) and benefits from state tax rate changes and certain other foreign and permanent differences which were favorable to prior periods ($62 million).
Income Tax Fiscal Years ($ in millions) 2024 2023 2022 Provision for income taxes $ (89) $ (146) $ (191) Effective tax rate 29.0% 36.5% 32.9% 2024 Compared to 2023 The change in our income tax expense is attributable to lower income before income taxes and noncontrolling interests $23 million and benefits from changes in uncertain tax benefits and our valuation allowance ($78 million).
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 , which was filed with the Securities and Exchange Commission on February 27, 2023. 43 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 , which was filed with the Securities and Exchange Commission on February 27, 2024.
In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are generally collateralized by a single pool of transferred assets, which consist of 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.
In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued.
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.
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.
The additional reserve adjusted our future default rate estimates to reflect then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity. 55 The $19 million Reserve Alignment in 2022 was offset by a $19 million decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses in 2022.
The $59 million additional reserve recorded in 2023 was the result of an adjustment to our future default rate estimate to reflect then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.
Fiscal Years ($ in millions) 2023 2022 2021 REVENUES Management and exchange $ 206 $ 226 $ 233 Rental 40 42 40 Cost reimbursements 16 23 47 TOTAL REVENUES 262 291 320 EXPENSES Management and exchange 118 120 131 Depreciation and amortization 31 31 48 Litigation charges 1 — — Restructuring — — 1 Impairment 4 — — Cost reimbursements 16 23 47 TOTAL EXPENSES 170 174 227 Gains and other income, net 1 15 — SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 93 $ 132 $ 93 Management and Exchange Profit Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Management and exchange revenue $ 206 $ 226 $ 233 $ (20) (9%) Management and exchange expense (118) (120) (131) 2 1% Management and exchange profit $ 88 $ 106 $ 102 $ (18) (18%) Management and exchange profit margin 42.5% 47.0% 43.8% (4.5 pts) 2023 Compared to 2022 Excluding the $12 million decrease attributed to the disposition of our VRI Americas business during the second quarter of 2022, management and exchange revenue decreased $8 million or 4%.
Fiscal Years ($ in millions) 2024 2023 2022 REVENUES Management and exchange $ 182 $ 206 $ 226 Rental 40 40 42 Cost reimbursements 9 16 23 TOTAL REVENUES 231 262 291 EXPENSES Management and exchange 122 118 120 Depreciation and amortization 28 31 31 Litigation charges — 1 — Restructuring 1 — — Impairment 2 4 — Cost reimbursements 9 16 23 TOTAL EXPENSES 162 170 174 Gains and other income, net — 1 15 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 69 $ 93 $ 132 Management and Exchange Profit Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Management and exchange revenue $ 182 $ 206 $ 226 $ (24) (12%) Management and exchange expense (122) (118) (120) (4) (3%) Management and exchange profit $ 60 $ 88 $ 106 $ (28) (31%) Management and exchange profit margin 33.2% 42.5% 47.0% (9.3 pts) 2024 Compared to 2023 Interval International management and exchange revenues declined $11 million, or 6% , as a result of 7% lower exchange transaction volume, partially offset by a 4% increase in average exchange fees.
Rental In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory.
We distinguish consumer financing interest expense from all other interest expense because the debt associated with the consumer financing interest expense is considered to be an operating expense of our business. Rental In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory.
Resort Management and Other Services Revenues, Expenses and Profit Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Management fee revenues $ 180 $ 166 $ 158 $ 14 8% Ancillary revenues 252 241 188 11 5% Other management and exchange revenues 136 127 124 9 7% Resort management and other services revenues 568 534 470 34 6% Resort management and other services expenses (270) (240) (200) (30) (12%) Resort management and other services profit $ 298 $ 294 $ 270 $ 4 1% Resort management and other services profit margin 52.4% 55.1% 57.5% (2.7 pts) Resort occupancy (1) 88.1% 89.3% 81.6% (1.2 pts) (1) Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service. 2023 Compared to 2022 The increase in Resort management and other services revenues reflects higher ancillary revenues, including revenues from food and beverage and golf offerings (resulting in a 6% increase in revenue per occupied key, partially offset by a 2% decrease in occupied keys at resorts with ancillary businesses), and higher management fees and commissions from third-party vacation and other offerings.
Resort Management and Other Services Revenues, Expenses and Profit Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Management fee revenues $ 207 $ 180 $ 166 $ 27 15% Ancillary revenues 266 252 241 14 6% Other management and exchange revenues 139 136 127 3 3% Resort management and other services revenues 612 568 534 44 8% Resort management and other services expenses (293) (270) (240) (23) (9%) Resort management and other services profit $ 319 $ 298 $ 294 $ 21 7% Resort management and other services profit margin 52.1% 52.4% 55.1% (0.3 pts) Resort occupancy (1) 89.8% 88.1% 89.3% 1.7 pts (1) Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service. 2024 Compared to 2023 The increase in Resort management and other services revenues reflects higher management fees, higher ancillary revenues and higher club dues.
Litigation Charges Fiscal Years 2023 vs. 2022 ($ in millions) 2023 2022 2021 Change Litigation charges $ 12 $ 9 $ 9 $ 3 36% 2023 Compared to 2022 During 2023 and 2022, the litigation charges relate primarily to our business in Europe.
Litigation Charges Fiscal Years 2024 vs. 2023 ($ in millions) 2024 2023 2022 Change Litigation charges $ 18 $ 12 $ 9 $ 6 54% 2024 Compared to 2023 During 2024 and 2023, litigation charges relate primarily to a land disposition in the U.S. and certain resorts in Europe.
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.
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. 48 The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income attributable to common stockholders, which is the most directly comparable GAAP financial measure.
We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period. We do not include resales contract sales in the financing propensity calculation.
We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period. We do not include resales contract sales in the financing propensity calculation. First-time buyers are more likely to finance their purchases and remain an integral part of our overall marketing and sales strategy.
At December 31, 2023, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.7, above our targeted range of 2.5 to 3.0. We have no material maturities of corporate debt until the third quarter of 2025.
At December 31, 2024, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.0, above our targeted range of 2.5 to 3.0, and we remain focused on reducing this ratio over time.
During 2023, we amended certain agreements associated with our Warehouse Credit Facility, which increased the borrowing capacity from $425 million to $500 million and extended the revolving period from July 28, 2024 to May 31, 2025. At December 31, 2023, we had $150 million of borrowings outstanding on our Warehouse Credit Facility.
During 2024, we amended certain agreements associated with our Warehouse Credit Facility, which extended the revolving period from May 31, 2025 to June 11, 2026. At December 31, 2024, we had $124 million of borrowings outstanding on our Warehouse Credit Facility. As of December 31, 2024, $110 million of gross vacation ownership notes receivable were eligible for securitization.
At December 31, 2023, $105 million of borrowings were outstanding on our Revolving Corporate Credit Facility and $24 million of le tters of credit were outstanding. See Footnote 16 “Debt” to our Financial Statements for more information on interest rates pertaining to this facility.
At December 31, 2024, $125 million of borrowings and $18 million of letters of credit were outstanding under our Revolving Corporate Credit Facility. See Footnote 16 “Debt” to our Financial Statements for more information on interest rates pertaining to this facility. Uses of Cash We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts.
Development profit margin is calculated by dividing Development profit by revenues from the Sale of vacation ownership products.
We believe that Tours is a valuable metric because it represents the volume of touring guests. • Development profit margin is calculated by dividing Development profit by revenues from the sale of vacation ownership products.
We 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, as well as under Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand.
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.
In the third quarter of 2023, we evaluated our vacation ownership notes receivable reserve in light of trends in delinquencies and default rates. As a result, we increased our originated vacation ownership notes receivable reserve by $59 million. We primarily used a similar historical period of increased defaults as a basis for estimating the increase in our reserve.
In the third quarter of 2023, we increased our vacation ownership notes receivable reserve to reflect then-current trends in delinquencies and default rates. We estimated the increase in our sales reserve primarily using information from a historical period of increased defaults.
Resort accommodations typically become available as Getaways as a result of seasonal oversupply or underutilized space in the applicable exchange program. We also source resort accommodations specifically for the Getaways program. Rental revenues associated with Getaways are reported net of related expenses.
Getaways allows us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members. Resort accommodations typically become available as Getaways as a result of seasonal oversupply or underutilized space in the applicable exchange program. We also source resort accommodations specifically for the Getaways program.
Vacation Ownership Notes Receivable Collections Less Than of Originations Fiscal Years ($ in millions) 2023 2022 2021 Vacation ownership notes receivable collections — non-securitized $ 152 $ 196 $ 129 Vacation ownership notes receivable collections — securitized 444 446 557 Vacation ownership notes receivable originations (987) (980) (750) Vacation ownership notes receivable collections less than originations $ (391) $ (338) $ (64) Vacation ownership notes receivable collections were less than originations in 2023, 2022 and 2021 due to the growth of the average vacation ownership notes receivable portfolio.
We expect inventory spending to again be more than cost of sales for 2025 based upon our existing commitments to purchase inventory in 2025. 61 Vacation Ownership Notes Receivable Collections Less Than Originations Fiscal Years ($ in millions) 2024 2023 2022 Vacation ownership notes receivable collections — non-securitized $ 111 $ 152 $ 196 Vacation ownership notes receivable collections — securitized 521 444 446 Vacation ownership notes receivable originations (1,015) (987) (980) Vacation ownership notes receivable collections less than originations $ (383) $ (391) $ (338) Vacation ownership notes receivable collections were less than originations in 2024, 2023 and 2022 due to the growth of our vacation ownership notes receivable portfolio.
Control transfer for Hyatt Vacation Club VOIs occurs at expiration of the statutory rescission period, except that control transfer for VOIs derived from Legacy-Welk continues to occur at closing. 44 Sales of vacation ownership products may be made for cash or we may provide financing.
Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts executed prior to the applicable Contract Alignment have been accounted for with the transfer of control of the VOI occurring at closing. Sales of vacation ownership products may be made for cash or we may provide financing.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+3 added−2 removed3 unchanged
Biggest changeThe following table presents the scheduled maturities and the total fair value as of year-end 2023 for our financial instruments that are impacted by market risks: ($ in millions) Average Interest Rate Maturities by Period 2024 2025 2026 2027 2028 There-after Total Carrying Value Total Fair Value Assets – Maturities represent expected principal receipts; fair values represent assets Vacation ownership notes receivable — non-securitized 12.0% $ 63 $ 42 $ 40 $ 40 $ 38 $ 208 $ 431 $ 433 Vacation ownership notes receivable — securitized 13.3% $ 171 $ 176 $ 181 $ 183 $ 181 $ 1,020 $ 1,912 $ 1,994 Contracts receivable for financed VOI sales, net 12.6% $ 3 $ 3 $ 3 $ 3 $ 3 $ 22 $ 37 $ 37 Liabilities – Maturities represent expected principal payments; fair values represent liabilities Securitized debt 4.6% $ (193) $ (196) $ (319) $ (192) $ (189) $ (1,032) $ (2,121) $ (2,068) Term Loan 7.2% $ — $ (784) $ — $ — $ — $ — $ (784) $ (784) Revolving Corporate Credit Facility 7.5% $ — $ — $ — $ (105) $ — $ — $ (105) $ (105) Senior Notes 2028 Notes 4.8% $ — $ — $ — $ — $ (350) $ — $ (350) $ (322) 2029 Notes 4.5% $ — $ — $ — $ — $ — $ (500) $ (500) $ (445) 2026 Convertible Notes —% $ — $ — $ (575) $ — $ — $ — $ (575) $ (508) 2027 Convertible Notes 3.3% $ — $ — $ — $ (575) $ — $ — $ (575) $ (513) Non-interest bearing note payable —% $ (4) $ — $ — $ — $ — $ — $ (4) $ (4) We are exposed to currency exchange rate risk through investments in foreign subsidiaries that transact business in a currency other than the U.S. dollar and through the revaluation of assets and liabilities denominated in a currency other than the functional currency.
Biggest changeThe following table presents the scheduled maturities and the total fair value as of December 31, 2024 for our financial instruments that are impacted by market risks: ($ in millions) Average Interest Rate Maturities by Period 2025 2026 2027 2028 2029 There-after Total Carrying Value Total Fair Value Assets – Maturities represent expected principal receipts; fair values represent assets Vacation ownership notes receivable — non-securitized 11.8% $ 90 $ 63 $ 58 $ 50 $ 40 $ 222 $ 523 $ 527 Vacation ownership notes receivable — securitized 13.4% $ 164 $ 171 $ 175 $ 176 $ 172 $ 1,059 $ 1,917 $ 1,981 Contracts receivable for financed VOI sales, net 12.5% $ 4 $ 4 $ 4 $ 4 $ 4 $ 26 $ 46 $ 46 Liabilities – Maturities represent expected principal payments; fair values represent liabilities Securitized debt 4.8% $ (183) $ (189) $ (298) $ (187) $ (183) $ (1,123) $ (2,163) $ (2,147) Term Loan 6.6% $ (8) $ (8) $ (8) $ (8) $ (8) $ (756) $ (796) $ (796) Revolving Corporate Credit Facility 6.3% $ — $ — $ (125) $ — $ — $ — $ (125) $ (125) Senior Notes 2028 Notes 4.8% $ — $ — $ — $ (350) $ — $ — $ (350) $ (336) 2029 Notes 4.5% $ — $ — $ — $ — $ (500) $ — $ (500) $ (467) 2026 Convertible Notes 0.0% $ — $ (575) $ — $ — $ — $ — $ (575) $ (546) 2027 Convertible Notes 3.3% $ — $ — $ (575) $ — $ — $ — $ (575) $ (541) We are exposed to currency exchange rate risk through investments in foreign subsidiaries that transact business in a currency other than the U.S. dollar and through the revaluation of assets and liabilities denominated in a currency other than the functional currency.
Assuming we had no outstanding hedging arrangements and no outstanding balance on our Revolving Corporate Credit Facility, a 100 basis point increase in the underlying benchmark rate on our variable-rate debt at December 31, 2023 would result in an annual increase in cash interest of approximately $8 million.
Assuming we had no outstanding balance on our Revolving Corporate Credit Facility, a 100 basis point increase in the underlying benchmark rate on our variable-rate debt at December 31, 2024 would result in an annual increase in cash interest of approximately $8 million.
Changes in interest rates also impact the fair value of our fixed-rate vacation ownership notes receivable and our fixed-rate debt.
Changes in interest rates also impact the fair value of our fixed-rate vacation ownership notes receivable and our fixed-rate debt. We issue securitized debt backed by consumer loans at least twice annually.
At December 31, 2023, after considering the impact of interest rate swap agreements and excluding finance leases, the interest rate applicable to approximately 80% of our corporate debt was effectively fixed and the interest rate applicable to the remaining 20% (approximately $589 million) was variable.
At December 31, 2024, the interest rate applicable to 68% (approximately $2 billion) of our corporate debt, excluding finance leases, was fixed and the interest rate applicable to the remaining 32% (approximately $921 million) was variable.
We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates. As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk and we do not use derivatives for trading or speculative purposes.
As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk and we do not use derivatives for trading or speculative purposes. However, we cannot assure you that these transactions will be as effective as we anticipate. 66
We manage the interest rate risk on our corporate debt through the use of a combination of fixed-rate debt and interest rate swaps (certain of which expired in September 2023 and the remaining outstanding interest rate swaps will expire in April 2024) that fix a portion of our variable-rate debt.
We manage the interest rate risk on our corporate debt through the use of fixed-rate debt and may also use interest rate hedges to fix a portion of our variable-rate debt.
Removed
Assuming no outstanding balance on our Revolving Corporate Credit Facility, a 100 basis point increase in the underlying benchmark rate on our variable-rate debt at December 31, 2023 would result in an increase of approximately $5 million in annual cash interest due to the impact of our hedging arrangements discussed in Footnote 16 “Debt” to our Financial Statements.
Added
To the extent interest rates are higher relative to the interest rates in our financing programs on our loans being securitized at the time of a transaction, the excess spread we realize over the life of a securitization will be lower.
Removed
However, we cannot assure you that these transactions will be as effective as we anticipate. 70
Added
While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates.
Added
We may use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates.

Other VAC 10-K year-over-year comparisons