Revenues from contracts with customers (excluding lease-related revenues) are recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenue and cost of sales for condominium units sold are not recognized until the construction is complete, the sale closes, and the title to the property has transferred to the buyer (point in time). Additionally, certain real estate selling costs, such as the costs related to the Company’s condominium model units, are either expensed immediately or capitalized as property and equipment and depreciated over their estimated useful life.
The following presents the Company’s revenues disaggregated by revenue source for the years ended December 31:
| | | | | | | | | | | | | | | | | |
| thousands | 2025 | | 2024 | | 2023 |
| Revenues from contracts with customers | | | | | |
| Recognized at a point in time: | | | | | |
| Condominium rights and unit sales | $ | 370,156 | | | $ | 778,616 | | | $ | 47,707 | |
| Master Planned Communities land sales | 562,586 | | | 453,195 | | | 370,185 | |
| Builder price participation | 52,341 | | | 52,023 | | | 60,989 | |
| Total | 985,083 | | | 1,283,834 | | | 478,881 | |
| | | | | |
| Recognized at a point in time or over time: | | | | | |
| Other land, rental, and property revenues | 48,363 | | | 44,755 | | | 46,255 | |
| | | | | |
| Rental and lease-related revenues | | | | | |
| Rental revenue | 441,446 | | | 422,100 | | | 383,617 | |
| Total revenues | $ | 1,474,892 | | | $ | 1,750,689 | | | $ | 908,753 | |
Contract Assets and Liabilities Contract assets are the Company’s right to consideration in exchange for goods or services that have been transferred to a customer, excluding any amounts presented as a receivable. Contract liabilities are the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration.
There were no contract assets for the periods presented. The contract liabilities primarily relate to escrowed condominium deposits, MPC land sales deposits, and deferred MPC land sales related to unsatisfied land improvements. The beginning and ending balances of contract liabilities and significant activity during the periods presented are as follows:
| | | | | |
| thousands | Contract Liabilities |
Balance at December 31, 2023 | $ | 575,621 | |
| Consideration earned during the period | (865,949) | |
| Consideration received during the period | 874,864 | |
Balance at December 31, 2024 | $ | 584,536 | |
| Consideration earned during the period | (479,157) | |
| Consideration received during the period | 791,517 | |
Balance at December 31, 2025 | $ | 896,896 | |
Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts executed and in progress. These performance obligations primarily relate to the completion of condominium construction and transfer of control to a buyer, as well as the completion of contracted MPC land sales and related land improvements. These obligations are associated with contracts that generally are non-cancelable by the customer after 30 days for all Ward Village condominiums and after 6 days for The Ritz-Carlton Residences; however, purchasers of condominium units have the right to cancel the contract should the Company elect not to construct the condominium unit within a certain period of time or materially change the design of the condominium unit. The aggregate amount of the transaction price allocated to the Company’s remaining unsatisfied performance obligations as of December 31, 2025, was $4.4 billion. The Company expects to recognize this amount as revenue over the following periods:
| | | | | | | | | | | | | | | | | | | | |
| thousands | Less than 1 year | | 1-2 years | 3 years and thereafter |
| Total remaining unsatisfied performance obligations | | $ | 1,072,317 | | | $ | 447,395 | | | $ | 2,884,803 | |
The Company’s remaining performance obligations are adjusted to reflect any known project cancellations, revisions to project scope and cost, and deferrals, as appropriate. These amounts exclude estimated amounts of variable consideration which are constrained, such as builder price participation.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.