# MARRIOTT VACATIONS WORLDWIDE Corp: Form 10-Q for the period ended Sep 30, 2024

- Company: [MARRIOTT VACATIONS WORLDWIDE Corp](/companies/vac.md) (CIK 1524358)
- Form: 10-Q
- Filed: 2024-11-07
- Accepted by EDGAR: Nov 7, 2024, 19:42 ET
- Period: 2024-09-30
- Accession: 0001524358-24-000109
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1524358/000152435824000109/vac-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1524358/000152435824000109/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $1.22bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $3.38bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $34.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $79.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $84.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $168.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $2.12 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $4.31 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $2.38 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $4.74 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 42,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 42,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $105.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $43.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $81.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $45.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-09-30 | $197.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2024-09-30 | $9.74bn | us-gaap:Assets |
| Total liabilities | at 2024-09-30 | $7.32bn | us-gaap:Liabilities |
| Shareholders' equity | at 2024-09-30 | $2.42bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 76,672 characters.

### Forward-Looking Statements

We make forward-looking statements throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: timing of payments related to purchase commitments; our possible or assumed future results of operations, financial condition, leverage, liquidity, returns on investments, margins including financing profit and development profit margins; dividend payments; business strategies; financing plans; our competitive position; our plans to pursue growth opportunities; potential operating performance, including our expectations regarding full year contract sales, including contract sales from our Maui sales centers; VPG and tour growth; our expectation that consumer financing interest expense will remain higher than our average outstanding interest rates on existing securitization transactions and the resulting impact on our profit margin; our expectation that inventory spending will exceed cost of sales for the remainder of 2024 and the quantity and impact of inventory repurchases on the future cost of our vacation ownership products; indemnification; capital requirements; taxes, including the impact of Pillar 2; our ability to securitize consumer loans and our assumptions regarding related delinquency and default rates and reserve requirements; the pace of originations of vacation ownership notes receivable compared to payoffs of existing notes receivable; and the rate of maintenance fee increases. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: a future health crisis and responses to such a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; delinquency and default rates; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs and accelerate growth and profitability; political or social strife; and other matters referred to under the heading “Risk Factors” contained herein and also in our 2023 Annual Report, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission (the “SEC”).

All forward-looking statements in this Quarterly Report apply only as of the date of this Quarterly Report or as of the date they were made or as otherwise specified herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. You should not put undue reliance on any forward-looking statements in this Quarterly Report. We do not have any intention or obligation to update forward-looking statements after the date of this Quarterly Report, except as required by law.

The risk factors discussed in “Risk Factors” in our 2023 Annual Report could cause actual results to differ materially from those expressed or implied in forward-looking statements in this Quarterly Report. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements.

Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows. However, the financial information discussed below and included in this Quarterly Report may not necessarily reflect what our financial condition, results of operations or cash flows may be in the future.

In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes in the Interim Condensed Notes to Consolidated Financial Statements that we include in the Financial Statements of this Quarterly Report.

### Business Overview

We are a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management.

Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term relationships. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Vacation Club brands. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. We also have a license to use the St. Regis brand for specified fractional ownership products.

Our Vacation Ownership segment generates most of its revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.

Our Exchange & Third-Party Management segment includes an exchange network and membership programs, as well as the provision of management services to other resorts and lodging properties. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. We provide these services through our Interval International and Aqua-Aston businesses.

Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to consolidated property owners’ associations (“Consolidated Property Owners’ Associations”).

We recently launched a strategic business operations function to lead modernization, process improvement and long-term value generating initiatives across our business. We believe we can drive $50 million to $100 million of annual efficiencies over the next two years and plan to reinvest some of these savings to accelerate revenue growth and enhance our customer platforms, products, and services.

We routinely post important information, including news releases, announcements and other statements about our business and results of operations, that may be deemed material to investors on the Investor Relations section of our website, www.marriottvacationsworldwide.com. We use our website as a means of disclosing material, nonpublic information and for complying with our disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of our website in addition to following our press releases, filings with the SEC, public conference calls and webcasts. The information on our website is not part of, and is not incorporated by reference into this Quarterly Report.

### Performance Measures

We measure operating performance using the key metrics described below:

- *Contract sales* from the sale of vacation ownership products, which consists of the total amount of vacation ownership product sales under contracts 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.” In circumstances where customers apply 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 differ from revenues from the sale of vacation ownership products that we report on our income statements due to the requirements for revenue recognition, the reserve for vacation ownership notes receivable and adjustments 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 sales tour (referred to as *Tours*), by the number of tours in a given period. *Tours* refers to the number of sales tours performed during the applicable period, and generally include virtual and offsite sales tours, and exclude telesales. We believe that VPG is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase. We believe that tours is a valuable metric because it represents the volume of touring guests.
- *Development profit margin* is calculated by dividing Development profit by revenues from the sale of vacation ownership products. We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as *Development profit*. We believe that Development profit margin is an important measure of the profitability of our development and subsequent marketing and sales of VOIs.
- *Total active members* is the number of Interval Network active members at the end of the applicable period. We consider active members to be an important metric because it represents the population of owners eligible to book transactions using the Interval Network.
- *Average revenue per member* is calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue for the Interval Network by the monthly weighted average number of Interval Network active members during the applicable period. We believe this metric is valuable in measuring the overall engagement of our Interval Network active members.
- *Segment financial results attributable to common stockholders* represents revenues less expenses directly attributable to each applicable reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We consider this measure to be important in evaluating the performance of our reportable business segments. See Footnote 16 “Business Segments” to our Financial Statements for further information about our reportable business segments.
- *Adjusted EBITDA margin* is calculated by dividing Adjusted EBITDA by total revenues less cost reimbursement revenues.
- *Segment Adjusted EBITDA margin* is calculated by dividing Segment Adjusted EBITDA by the applicable segment’s total revenues less cost reimbursement revenues.

NM = Not meaningful.

### Consolidated Results

*($ in millions)*

| REVENUES | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Sale of vacation ownership products | $387 | $319 | $1,048 | $1,085 |
| Management and exchange | 207 | 205 | 633 | 611 |
| Rental | 151 | 138 | 462 | 435 |
| Financing | 87 | 81 | 255 | 239 |
| Cost reimbursements | 473 | 443 | 1,242 | 1,163 |
| **TOTAL REVENUES** | 1,305 | 1,186 | 3,640 | 3,533 |
| **EXPENSES** |  |  |  |  |
| Cost of vacation ownership products | 54 | 50 | 145 | 174 |
| Marketing and sales | 228 | 202 | 677 | 618 |
| Management and exchange | 123 | 115 | 358 | 332 |
| Rental | 113 | 119 | 331 | 344 |
| Financing | 37 | 30 | 106 | 81 |
| General and administrative | 62 | 57 | 179 | 189 |
| Depreciation and amortization | 36 | 33 | 109 | 99 |
| Litigation charges | 2 | 2 | 15 | 7 |
| Restructuring | 1 | — | 4 | — |
| Royalty fee | 28 | 30 | 85 | 88 |
| Impairment | — | — | 2 | 4 |
| Cost reimbursements | 473 | 443 | 1,242 | 1,163 |
| **TOTAL EXPENSES** | 1,157 | 1,081 | 3,253 | 3,099 |
| Gains and other income, net | 9 | 3 | 2 | 34 |
| Interest expense, net | (40) | (36) | (123) | (106) |
| Transaction and integration costs | — | (5) | (18) | (28) |
| Other | 1 | (1) | (1) | — |
| **INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS** | 118 | 66 | 247 | 334 |
| Provision for income taxes | (34) | (24) | (79) | (115) |
| **NET INCOME** | 84 | 42 | 168 | 219 |
| Net income attributable to noncontrolling interests | — | — | — | — |
| **NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $84 | $42 | $168 | $219 |

38

### Operating Statistics

*(Contract sales $ in millions)*

| Vacation Ownership | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Total contract sales | $463 | $443 | $20 | 4% | $1,348 | $1,349 | $(1) | —% |
| Consolidated contract sales | $459 | $438 | $21 | 5% | $1,336 | $1,325 | $11 | 1% |
| Joint venture contract sales | $4 | $5 | $(1) | (22%) | $12 | $24 | $(12) | (50%) |
| VPG | $3,888 | $4,055 | $(167) | (4%) | $3,910 | $4,118 | $(208) | (5%) |
| Tours | 110,557 | 100,609 | 9,948 | 10% | 318,888 | 300,245 | 18,643 | 6% |
| **Exchange & Third-Party Management** |  |  |  |  |  |  |  |  |
| Total active members at end of period (000's) | 1,545 | 1,571 | (26) | (2%) | 1,545 | 1,571 | (26) | (2%) |
| Average revenue per member | $38.93 | $39.15 | $(0.22) | (1%) | $118.98 | $120.48 | $(1.50) | (1%) |

### Revenues

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Vacation Ownership | $1,250 | $1,126 | $124 | 11% | $3,458 | 3,335 | $123 | 4% |
| Exchange & Third-Party Management | 56 | 64 | (8) | (12%) | 179 | 200 | (21) | (10%) |
| Total Segment Revenues | 1,306 | 1,190 | 116 | 10% | 3,637 | 3,535 | 102 | 3% |
| Consolidated Property Owners’ Associations | (1) | (4) | 3 | NM | 3 | (2) | 5 | NM |
| Total Revenues | $1,305 | $1,186 | $119 | 10% | 3,640 | 3,533 | $107 | 3% |

### Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We consider Adjusted EBITDA margin to be an indicator of our operating performance. We also use Adjusted EBITDA and Adjusted EBITDA margin, as do analysts, lenders, investors, and others, because these measures exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. We believe Adjusted EBITDA margin is useful as an indicator of operating profitability because it allows for period-over-period comparisons of the profitability of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing core operations before the impact of these items with results from other companies.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, other companies in our industry may calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. 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.

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income attributable to common stockholders | $84 | $42 | $42 | 99% | $168 | $219 | $(51) | (24%) |
| Interest expense, net | 40 | 36 | 4 | 13% | 123 | 106 | 17 | 17% |
| Provision for income taxes | 34 | 24 | 10 | 43% | 79 | 115 | (36) | (31%) |
| Depreciation and amortization | 36 | 33 | 3 | 6% | 109 | 99 | 10 | 10% |
| EBITDA | 194 | 135 | 59 | 43% | 479 | 539 | (60) | (11%) |
| Share-based compensation expense | 8 | 6 | 2 | 26% | 24 | 25 | (1) | (6%) |
| Certain items | (4) | 9 | (13) | NM | 39 | 11 | 28 | NM |
| Adjusted EBITDA | $198 | $150 | $48 | 32% | $542 | $575 | $(33) | (6%) |
| Adjusted EBITDA Margin | 23.8% | 20.3% | 3.5 pts |  | 22.6% | 24.3% | (1.7 pts) |  |

The table below details the components of Certain items for the periods presented.

*($ in millions)*

|  | Three Months Ended September 30, 2024 |  | September 30, 2023 |  | Nine Months Ended September 30, 2024 |  | September 30, 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| ILG integration | $— |  | $— |  | $— |  | $15 |  |
| Welk acquisition and integration | — |  | 5 |  | 18 |  | 13 |  |
| Transaction and integration costs |  | — |  | 5 |  | 18 |  | 28 |
| Purchase accounting adjustments |  | — |  | 3 |  | 1 |  | 6 |
| Litigation charges |  | 2 |  | 2 |  | 15 |  | 7 |
| Restructuring charges |  | 1 |  | — |  | 4 |  | — |
| Impairment charges |  | — |  | — |  | 2 |  | 4 |
| Early redemption of senior secured notes | — |  | — |  | — |  | 10 |  |
| Gain on disposition of hotel, land and other | (1) |  | (1) |  | (2) |  | (8) |  |
| Foreign currency translation | (6) |  | 5 |  | — |  | 1 |  |
| Insurance proceeds | — |  | (1) |  | — |  | (3) |  |
| Change in indemnification asset | 2 |  | (6) |  | 4 |  | (30) |  |
| Change in estimates relating to pre-acquisition contingencies | (4) |  | — |  | (4) |  | — |  |
| Other | — |  | — |  | — |  | (4) |  |
| Gains and other income, net |  | (9) |  | (3) |  | (2) |  | (34) |
| Other |  | 2 |  | 2 |  | 1 |  | — |
| Total Certain items |  | $(4) |  | $9 |  | $39 |  | $11 |

During the second quarter of 2024, we discontinued classifying adjustments related to Welk purchase accounting as Purchase accounting adjustments. Commencing in the third quarter of 2024, ongoing costs associated with the continued integration of Welk are reflected in our operating results.

### Segment Adjusted EBITDA

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Vacation Ownership | $231 | $173 | $58 | 33% | $624 | $647 | $(23) | (4%) |
| Exchange & Third-Party Management | 23 | 30 | (7) | (22%) | 80 | 99 | (19) | (19%) |
| Segment adjusted EBITDA | 254 | 203 | 51 | 25% | 704 | 746 | (42) | (6%) |
| General and administrative | (62) | (57) | (5) | (8%) | (179) | (189) | 10 | 6% |
| Other | 6 | 4 | 2 | 40% | $17 | $18 | $(1) | (8%) |
| Adjusted EBITDA | $198 | $150 | $48 | 32% | $542 | $575 | $(33) | (6%) |

The following tables present segment financial results attributable to common stockholders reconciled to segment Adjusted EBITDA.

### Vacation Ownership

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Segment financial results | $205 | $149 | $56 | 37% | $531 | $578 | $(47) | (8%) |
| Depreciation and amortization | 25 | 23 | 2 | 7% | 75 | 69 | 6 | 8% |
| Share-based compensation expense | 2 | 2 | — | 5% | 6 | 6 | — | (2%) |
| Certain items | (1) | (1) | — | NM | 12 | (6) | 18 | NM |
| Segment adjusted EBITDA | $231 | $173 | $58 | 33% | $624 | $647 | $(23) | (4%) |
| Segment Adjusted EBITDA Margin | 30.1% | 25.8% | 4.3 pts |  | 28.5% | 30.1% | (1.6 pts) |  |

The table below details the components of Certain items for Vacation Ownership segment financial results.

*($ in millions)*

|  | Three Months Ended September 30, 2024 |  | September 30, 2023 |  | Nine Months Ended September 30, 2024 |  | September 30, 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Purchase accounting adjustments |  | $— |  | $3 |  | 1 |  | 6 |
| Litigation charges |  | 2 |  | 2 |  | 15 |  | 8 |
| Restructuring charges |  | 1 |  | — |  | 1 |  | — |
| Impairment charges |  | — |  | — |  | — |  | 4 |
| Gain on disposition of hotel, land and other | — |  | — |  | (1) |  | (7) |  |
| Insurance proceeds | — |  | (1) |  | — |  | (3) |  |
| Change in indemnification asset | — |  | (6) |  | — |  | (9) |  |
| Change in estimates relating to pre-acquisition contingencies | (4) |  | — |  | (4) |  | — |  |
| Other | — |  | — |  | — |  | (4) |  |
| Gains and other income, net |  | (4) |  | (7) |  | (5) |  | (23) |
| Other |  | — |  | 1 |  | — |  | (1) |
| Total Certain items |  | $(1) |  | $(1) |  | $12 |  | $(6) |

41

### Exchange & Third-Party Management

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Segment financial results | $15 | $23 | $(8) | (33%) | $55 | $75 | $(20) | (26%) |
| Depreciation and amortization | 7 | 7 | — | (8%) | 21 | 23 | (2) | (9%) |
| Share-based compensation expense | 1 | — | 1 | 6% | 2 | 1 | 1 | (7%) |
| Certain items | — | — | — | NM | 2 | — | 2 | NM |
| Segment adjusted EBITDA | $23 | $30 | $(7) | (22%) | $80 | $99 | $(19) | (19%) |
| Segment Adjusted EBITDA Margin | 43.1% | 49.8% | (6.7 pts) |  | 46.5% | 52.5% | (6.0 pts) |  |

The table below details the components of Certain items for Exchange and Third-Party Management segment financial results.

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Restructuring charges | $1 | $— | $1 | $— |
| Impairment charges | — | — | 2 | — |
| Gain on disposition of hotel, land and other | (1) | (1) | (1) | (1) |
| Other | — | 1 | — | 1 |
| Total Certain items | $— | $— | $2 | $— |

### Business Segments

Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 16 “Business Segments” to our Financial Statements for further information about our segments.

### Vacation Ownership

*($ in millions)*

| REVENUES | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Sale of vacation ownership products | $387 | $319 | $1,048 | $1,085 |
| Resort management and other services | 152 | 143 | 457 | 425 |
| Rental | 140 | 128 | 430 | 404 |
| Financing | 87 | 81 | 255 | 239 |
| Cost reimbursements | 484 | 455 | 1,268 | 1,182 |
| **TOTAL REVENUES** | 1,250 | 1,126 | 3,458 | 3,335 |
| **EXPENSES** |  |  |  |  |
| Cost of vacation ownership products | 54 | 50 | 145 | 174 |
| Marketing and sales | 228 | 202 | 677 | 618 |
| Resort management and other services | 72 | 69 | 216 | 202 |
| Rental | 120 | 122 | 343 | 354 |
| Financing | 37 | 30 | 106 | 81 |
| Depreciation and amortization | 25 | 23 | 75 | 69 |
| Litigation charges | 2 | 2 | 15 | 8 |
| Restructuring | 1 | — | 1 | — |
| Royalty fee | 28 | 30 | 85 | 88 |
| Impairment | — | — | — | 4 |
| Cost reimbursements | 484 | 455 | 1,268 | 1,182 |
| **TOTAL EXPENSES** | 1,051 | 983 | 2,931 | 2,780 |
| Gains and other income, net | 4 | 7 | 5 | 23 |
| Other | 2 | (1) | (1) | — |
| **SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $205 | $149 | $531 | $578 |

43

### Sale of Vacation Ownership Products

#### Third Quarter and First Three Quarters

*($ in millions)*

|  | Three Months Ended September 30, 2024 | % of Consolidated Contract Sales, Net of Resales | September 30, 2023 | % of Consolidated Contract Sales, Net of Resales | Change 2024 vs. 2023 | Nine Months Ended September 30, 2024 | % of Consolidated Contract Sales, Net of Resales | September 30, 2023 | % of Consolidated Contract Sales, Net of Resales | Change 2024 vs. 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Consolidated contract sales | $459 |  | $438 |  | $21 5% | $1,336 |  | $1,325 |  | $11 1% |
| Joint venture contract sales | 4 |  | 5 |  | (1) (22%) | 12 |  | 24 |  | (12) (50%) |
| Total contract sales | 463 |  | 443 |  | 20 4% | 1,348 |  | 1,349 |  | (1) —% |
| Less: Resales contract sales | (8) |  | (11) |  | 3 | (29) |  | (32) |  | 3 |
| Less: Joint venture contract sales | (4) |  | (5) |  | 1 | (12) |  | (24) |  | 12 |
| Consolidated contract sales, net of resales | 451 |  | 427 |  | 24 5% | 1,307 |  | 1,293 |  | 14 1% |
| Plus: |  |  |  |  |  |  |  |  |  |  |
| Settlement revenue | 9 | 2% | 12 | 3% | (3) | 27 | 2% | 29 | 2% | (2) |
| Resales revenue | 5 | 1% | 6 | 1% | (1) | 16 | 1% | 18 | 1% | (2) |
| Revenue recognition adjustments: |  |  |  |  |  |  |  |  |  |  |
| Reportability | 4 | 1% | — | —% | 4 | (4) | —% | 5 | —% | (9) |
| Sales reserve | (54) | (12%) | (102) | (24%) | 48 | (222) | (17%) | (185) | (14%) | (37) |
| Other(1) | (28) | (6%) | (24) | (6%) | (4) | (76) | (6%) | (75) | (6%) | (1) |
| Sale of vacation ownership products | $387 | 86% | $319 | 74% | $68 22% | $1,048 | 80% | $1,085 | 84% | $(37) (3%) |
| VPG | $3,888 |  | $4,055 |  | $(167) (4%) | $3,910 |  | $4,118 |  | $(208) (5%) |
| Tours | 110,557 |  | 100,609 |  | 9,948 10% | 318,888 |  | 300,245 |  | 18,643 6% |
| Financing propensity | 59.5% |  | 64.0% |  | (4.5 pts) | 56.0% |  | 58.2% |  | (2.2 pts) |
| Average FICO Score (2) | 733 |  | 729 |  |  | 736 |  | 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.

(2) For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents.

#### Third Quarter and First Three Quarters

Contract sales increased during the third quarter and first three quarters of 2024 due to higher tours in each period compared to prior year periods of 10% and 6%, respectively, partially offset by lower VPGs of 4% and 5%, respectively. The decrease in VPG in both periods was due to a decline in first time buyer VPG and a larger percentage mix of international tours, which carry a lower VPG than domestic tours, partially offset by a slight increase in VPG from existing owners, and the ongoing impact from the lack of comparability of activity at our Maui sales centers given the wildfires. Excluding the $15 million increase at our Maui sales centers in the third quarter of 2024, contract sales and tours increased 2% and 6%, respectively. Excluding the $17 million decline at our Maui sales centers in the first three quarters of 2024, contract sales and tours increased 2% and 7%, respectively. We expect our full year 2024 contract sales will reflect lower VPG for the last quarter of 2024, partially offset by growth in first time buyer tours, which carry a lower VPG.

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 amount of the increase in our sales reserve primarily using a historical period of increased defaults. The $59 million additional reserves recorded in 2023 adjusted 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. Subsequent to the third quarter of 2023, we increased our sales reserve rate to provide for higher expected cumulative losses on new originations.

We believe the cumulative impact of inflation on consumers and the related impact of higher than historical year-over-year increases in maintenance fees for 2023 and 2024 have continued to drive elevated delinquencies and defaults. As a result of the elevated delinquencies and defaults, during the second quarter of 2024, we increased our sales reserve by $70 million to reflect increases in expected cumulative loss rates for our vacation ownership notes receivable originated during 2021-2024. In estimating the increase in the sales reserve, we considered then-current macroeconomic conditions, including higher consumer debt levels, moderating inflation, continued high interest rates, uncertainty around timing and frequency of interest rate adjustments and continued mixed economic indicators. As expected, maintenance fee increases for our points based products for 2025, which were approved by the relevant property owners’ association, returned to normal, however, consistent with the 2024 third quarter, we plan to continue to assume an increased sales reserve for new originations until we have sufficient evidence of improvement in delinquency and default rates.

### Development Profit

#### Third Quarter

*($ in millions)*

|  | Three Months Ended September 30, 2024 | % of Revenue | September 30, 2023 | % of Revenue | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Sale of vacation ownership products | $387 |  | $319 |  | $68 | 22% |
| Cost of vacation ownership products | (54) | (14%) | (50) | (16%) | (4) | (8%) |
| Marketing and sales | (228) | (59%) | (202) | (64%) | (26) | (13%) |
| Development profit | $105 |  | $67 |  | $38 | 60% |
| Development profit margin | 27.2% |  | 20.7% |  | 6.5 pts |  |

The increase in Development profit reflects higher sales of vacation ownership products ($59 million from the higher sales reserve recorded in the prior year), partially offset by higher marketing and sales costs, including $8 million of higher preview costs associated with higher tour volumes and higher cost of vacation ownership products ($10 million associated with the prior year sales reserve).

We expect our full year 2024 Development profit margin to decline due to increased marketing and sales expense, the $57 million net impact of the additional sales reserve recorded in the second quarter, and our higher sales reserve rate applied to new originations as discussed above.

#### First Three Quarters

*($ in millions)*

|  | Nine Months Ended September 30, 2024 | % of Revenue | September 30, 2023 | % of Revenue | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Sale of vacation ownership products | $1,048 |  | $1,085 |  | $(37) | (3%) |
| Cost of vacation ownership products | (145) | (14%) | (174) | (16%) | 29 | 17% |
| Marketing and sales | (677) | (65%) | (618) | (57%) | (59) | (10%) |
| Development profit | $226 |  | $293 |  | $(67) | (23%) |
| Development profit margin | 21.6% |  | 27.0% |  | (5.4 pts) |  |

The decrease in Development profit reflects lower sales of vacation ownership products and higher marketing and sales costs, including $22 million of higher preview costs associated with higher tour volumes, partially offset by $24 million from the sale of lower average cost inventory and $7 million of more favorable product cost true-up activity.

### Resort Management and Other Services Revenues, Expenses and Profit

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Management fee revenues | $52 | $44 | $8 | 15% | $155 | $134 | $21 | 15% |
| Ancillary revenues | 66 | 62 | 4 | 6% | 203 | 193 | 10 | 5% |
| Other management and exchange revenues | 34 | 37 | (3) | (4%) | 99 | 98 | 1 | 2% |
| Resort management and other services revenues | 152 | 143 | 9 | 6% | 457 | 425 | 32 | 7% |
| Resort management and other services expenses | (72) | (69) | (3) | (6%) | (216) | (202) | (14) | (7%) |
| Resort management and other services profit | $80 | $74 | $6 | 7% | $241 | $223 | $18 | 8% |
| Resort management and other services profit margin | 52.1% | 52.0% | 0.1 pts |  | 52.6% | 52.5% | 0.1 pts |  |
| Resort occupancy (1) | 89.1% | 86.1% | 3.0 pts |  | 89.8% | 87.9% | 1.9 pts |  |
| (1)Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service. |  |  |  |  |  |  |  |  |

46

### Rental Revenues, Expenses and Profit

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Rental revenues | $140 | $128 | $12 | 9% | $430 | $404 | $26 | 6% |
| Rental expenses | (120) | (122) | 2 | 2% | (343) | (354) | 11 | 3% |
| Rental profit | $20 | $6 | $14 | NM | $87 | $50 | $37 | NM |
| Rental profit margin | 14.7% | 5.1% | 9.6 pts |  | 20.3% | 12.3% | 8.0 pts |  |
| Transient keys rented(1) | 554,201 | 509,057 | 45,144 | 9% | 1,672,875 | 1,605,926 | 66,949 | 4% |
| Average transient rate | $239 | $256 | $(17) | (7%) | $256 | $269 | $(13) | (5%) |
| Rental occupancy(2) | 71.4% | 64.3% | 7.1 pts |  | 72.8% | 68.5% | 4.3 pts |  |

(1) Transient keys rented exclude plus points and preview stays.

(2) Rental occupancy represents transient and preview keys divided by keys available to rent, which is total available keys excluding owner usage.

#### Third Quarter

Rental profit, excluding profit from owned hotels, increased due to:

- $8 million of higher plus points revenue; and
- an $8 million increase in costs allocated to marketing and sales expense for occupancy used for previews.

These changes were partially offset by:

- $3 million of increased costs associated with higher owner utilization of third-party vacation and other offerings; and
- $2 million of higher unsold maintenance fees associated with developer-owned inventory.

Rental profit for our owned hotels remained in-line with the third quarter of 2023.

#### First Three Quarters

Rental profit, excluding profit from owned hotels, increased due to:

- $31 million of higher plus points revenue; and
- a $22 million increase in costs allocated to marketing and sales expense for occupancy used for previews.

These changes were partially offset by:

- $9 million of increased costs associated with higher owner utilization of third-party vacation and other offerings; and
- $7 million of decreased profit due to a lower average transient rate on higher keys rented and higher tidy and variable costs.

Rental profit for our owned hotels remained in-line with the first three quarters of 2023.

### Financing Revenues, Expenses and Profit

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Financing revenues | $87 | $81 | $6 6% | 255 | 239 | 16 7% |
| Financing expenses | (12) | (11) | (1) (8%) | (29) | (26) | (3) (13%) |
| Consumer financing interest expense | (25) | (19) | (6) (32%) | (77) | (55) | (22) (39%) |
| Financing profit | $50 | $51 | $(1) (4%) | $149 | $158 | $(9) (6%) |
| Financing profit margin | 57.9% | 63.7% | (5.8 pts) | 58.4% | 66.2% | (7.8 pts) |
| Financing propensity | 59.5% | 64.0% | (4.5 pts) | 56.0% | 58.2% | (2.2 pts) |

#### Third Quarter and First Three Quarters

Financing revenues reflect higher interest income as a result of a higher average notes receivable balances and a slightly higher average interest rate for the three and nine months ended September 30, 2024. The higher average notes receivable balances resulted from new loan originations in excess of the repayment of existing vacation ownership notes receivable, which we expect to continue for the remainder of 2024.

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.

We expect our average interest rate to continue to increase as the current interest rate environment for new securitization transactions is above the average interest rate on our existing securitized debt. We do not adjust interest rates on consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates; as a result, we expect our financing profit margin to continue to decrease in 2024, as we repay existing securitization transactions with lower interest rates.

### Litigation Charges

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | --- | ---: | ---: | ---: | --- |
| Litigation charges | $2 | $2 | $— | NM | $15 | $8 | $7 | NM |

#### Third Quarter and First Three Quarters

Litigation charges during the third quarter of 2024 and 2023, as well as the first three quarters of 2024 and 2023, relate primarily to a land disposition in the U.S. and certain resorts in Europe.

### Gains and Other Income

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | --- | ---: | ---: | ---: | --- |
| Gains and other income, net | $4 | $7 | $(3) | NM | $5 | $23 | $(18) | NM |

#### Third Quarter

During the third quarter of 2024, we recorded a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.

During the third quarter of 2023, we recorded a $6 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.

#### First Three Quarters

During the first three quarters of 2024, we recorded a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.

During the first three quarters of 2023, we recorded a $9 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, $7 million of gains on the disposition of excess real estate, a $4 million gain associated with the earn out of additional proceeds from the 2019 disposition of a land parcel in Cancun, Mexico, and $3 million related to the receipt of insurance proceeds.

### Exchange & Third-Party Management

*($ in millions)*

| REVENUES | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Management and exchange | $44 | $50 | $141 | $157 |
| Rental | 11 | 10 | 32 | 31 |
| Cost reimbursements | 1 | 4 | 6 | 12 |
| **TOTAL REVENUES** | 56 | 64 | 179 | 200 |
| **EXPENSES** |  |  |  |  |
| Management and exchange | 33 | 31 | 95 | 91 |
| Depreciation and amortization | 7 | 7 | 21 | 23 |
| Restructuring | 1 | — | 1 | — |
| Impairment | — | — | 2 | — |
| Cost reimbursements | 1 | 4 | 6 | 12 |
| **TOTAL EXPENSES** | 42 | 42 | 125 | 126 |
| Gains and other income, net | 1 | 1 | 1 | 1 |
| **SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $15 | $23 | $55 | $75 |

### Management and Exchange Profit

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Management and exchange revenue | $44 | $50 | $(6) (14%) | $141 | $157 | $(16) (10%) |
| Management and exchange expense | (33) | (31) | (2) (2%) | (95) | (91) | (4) (3%) |
| Management and exchange profit | $11 | $19 | $(8) (38%) | $46 | $66 | $(20) (29%) |
| Management and exchange profit margin | 28.0% | 38.9% | (10.9 pts) | 33.4% | 42.3% | (8.9 pts) |

#### Third Quarter

Interval International management and exchange revenues declined $3 million or 8% primarily attributed to 7% lower exchange transaction volume, partially offset by a 4% increase in average exchange fees. The decrease in management and exchange revenue reflects a $3 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent, lower occupancy, and a lower average daily rate in the Hawaii market due to changes in demand. The decrease in management and exchange profit was primarily attributed to lower revenues and higher information technology expenses.

#### First Three Quarters

Interval International management and exchange revenues declined $7 million or 6% primarily attributed to 7% lower exchange transaction volume, partially offset by a 4% increase in average exchange fees. The decrease in management and exchange revenue reflects a $9 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent, lower occupancy, and a lower average daily rate in the Hawaii market due to changes in demand. The decrease in management and exchange profit was primarily attributed to lower revenues and higher information technology expenses.

### Rental Revenues

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Rental revenues | $11 | $10 | $1 | 7% | $32 | $31 | $1 | 3% |

#### Third Quarter and First Three Quarters

Results reflect a 3% and 6% increase in average fees per transaction, partially offset by an 8% and 7% decrease in transaction volume, for the third quarter and first three quarters of 2024, respectively.

### Corporate and Other

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and Other includes the revenues and expenses from Consolidated Property Owners’ Associations.

*($ in millions)*

| REVENUES | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Resort management and other services | $11 | $12 | $35 | $29 |
| Cost reimbursements | (12) | (16) | (32) | (31) |
| **TOTAL REVENUES** | (1) | (4) | 3 | (2) |
| **EXPENSES** |  |  |  |  |
| Resort management and other services | 18 | 15 | 47 | 39 |
| Rental | (7) | (3) | (12) | (10) |
| General and administrative | 62 | 57 | 179 | 189 |
| Depreciation and amortization | 4 | 3 | 13 | 7 |
| Litigation charges | — | — | — | (1) |
| Restructuring | (1) | — | 2 | — |
| Cost reimbursements | (12) | (16) | (32) | (31) |
| **TOTAL EXPENSES** | 64 | 56 | 197 | 193 |
| Gains (losses) and other income (expense), net | 4 | (5) | (4) | 10 |
| Interest expense, net | (40) | (36) | (123) | (106) |
| Transaction and integration costs | — | (5) | (18) | (28) |
| Other | (1) | — | — | — |
| **FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS** | (102) | (106) | (339) | (319) |
| Provision for income taxes | (34) | (24) | (79) | (115) |
| **FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $(136) | $(130) | $(418) | $(434) |

### 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.

*($ in millions)*

| REVENUES | Three Months Ended September 30, 2024 | September 30, 2023 | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: | ---: |
| Resort management and other services | $11 | $12 | $35 | $29 |
| Cost reimbursements | (12) | (16) | (32) | (31) |
| **TOTAL REVENUES** | (1) | (4) | 3 | (2) |
| **EXPENSES** |  |  |  |  |
| Resort management and other services | 18 | 15 | 47 | 39 |
| Rental | (7) | (3) | (12) | (10) |
| Cost reimbursements | (12) | (16) | (32) | (31) |
| **TOTAL EXPENSES** | (1) | (4) | 3 | (2) |
| Interest expense, net | — | — | 1 | 1 |
| **FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS** | — | — | 1 | 1 |
| Provision for income taxes | — | (1) | (1) | (1) |
| **FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $— | $(1) | $— | $— |

50

### General and Administrative

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| General and administrative | $62 | $57 | $5 | 8% | $179 | $189 | $(10) | (6%) |

#### Third Quarter

General and administrative expenses for the third quarter of 2024 increased primarily due to $14 million of higher variable compensation expense and $3 million of higher insurance, partially offset by $11 million of lower information technology costs.

#### First Three Quarters

The decrease in General and administrative expenses for the first three quarters of 2024 is primarily due to $18 million lower information technology costs and $5 million of lower consulting and compliance related expenses, partially offset by $15 million of higher variable compensation expense.

### Gain (Losses) and Other Income (Expense)

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | --- | ---: | ---: | ---: | --- |
| Gains (losses) and other income (expense), net | $4 | $(5) | $9 | NM | $(4) | $10 | $(14) | NM |

#### Third Quarter

In the third quarter of 2024, we recorded $6 million of foreign currency translation gains.

In the third quarter of 2023, we recorded $5 million of foreign currency translation losses.

#### First Three Quarters

In the first three quarters of 2024, we recorded $4 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters.

In the first three quarters of 2023, we recorded a $21 million increase in our receivable from Marriott International for indemnified income tax matters (the true-up to the offsetting accrual is included in the Provision for income taxes line), partially offset by $10 million attributed to the redemption premium and write-off of unamortized debt issuance costs resulting from the early redemption of our senior secured notes.

### Interest Expense

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense, net | $(40) | $(36) | $(4) | (13%) | $(123) | $(106) | $(17) | (17%) |

#### Third Quarter and First Three Quarters

The increase in Interest expense, net is attributed to higher variable interest expense and changes in outstanding borrowings during the comparative periods.

### Income Tax

#### 2024 Third Quarter

*($ in millions)*

|  | Three Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  | Nine Months Ended September 30, 2024 | September 30, 2023 | Change 2024 vs. 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Provision for income taxes | $(34) | $(24) | $(10) | (43%) | $(79) | $(115) | $36 | 31% |

#### Third Quarter

Our effective tax rate was 28.7% and 36.1% for the three months ended September 30, 2024 and September 30, 2023, respectively.

The effective tax rate for the three months ended September 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including an $11 million decrease related to changes in valuation allowances on certain deferred tax assets in non-U.S. jurisdictions and a $6 million decrease primarily attributable to the expiration of statutes of limitation on certain unrecognized tax benefits, partially offset by an $8 million increase to remove the permanent reinvestment assertion for our earnings in certain non-U.S. entities and an increase of $3 million for deferred non-U.S. withholding taxes.

The effective tax rate for the three months ended September 30, 2023 differed from the blended statutory tax rate for the same period due to losses in non-U.S. jurisdictions for which we do not realize tax benefits.

#### First Three Quarters

Our effective tax rate was 32.1% and 34.3% for the nine months ended September 30, 2024 and September 30, 2023, respectively.

The effective tax rate for the nine months ended September 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including a $27 million decrease attributable to the expiration of statutes of limitation on certain unrecognized tax benefits (inclusive of interest and penalties) and an $8 million net decrease related to changes in valuation allowances in non-U.S. jurisdictions, partially offset by a $28 million increase to remove the permanent reinvestment assertion for our earnings in certain non-U.S. entities and a $3 million increase for deferred non-U.S. withholding taxes.

The effective tax rate for the nine months ended September 30, 2023 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including an $18 million increase to pre-acquisition reserves for unrecognized tax benefits.

The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 non-U.S. countries. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 differently than the model rules and/or on different timelines. While we continue to monitor legislative developments, we do not anticipate Pillar 2 will have a material impact on our 2024 or long-term financial results.

### Liquidity and Capital Resources

Typically, our capital needs are supported by cash on hand, cash generated from operations, our ability to access funds under the Warehouse Credit Facility and the Revolving Corporate Credit Facility, our ability to raise capital through securitizations in the ABS market, and, to the extent necessary, our ability to issue new debt and refinance existing debt. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to stockholders. We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs.

At September 30, 2024, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.9, above our targeted range of 2.5 to 3.0, and we remain focused on reducing this ratio by the end of 2025.

In the second quarter of 2024, we amended the Corporate Credit Facility to provide for a new $800 million term loan facility that is scheduled to mature on April 1, 2031, the New Term Loan. The proceeds of the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024 and was scheduled to mature on August 31, 2025. We have no material principal payment obligations on our debt prior to 2026. See Footnote 12 “Debt” to our Financial Statements for further information related to maturities of our debt.

### Sources of Liquidity

#### Cash from Operations

Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) net cash generated from our rental and resort management and other services operations.

#### Vacation Ownership Notes Receivable Securitizations

We periodically securitize, without recourse through bankruptcy remote special purpose entities, the majority of the notes receivable originated in connection with the sale of vacation ownership products to institutional investors in the ABS term securitization market. These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes. In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are collateralized by a single pool of transferred vacation ownership notes receivable. In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued.

Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default. Given the recent increase in delinquencies and defaults above historical averages, the cash excess spread we received from our securitization transactions has been lower than previously anticipated. At the recent level of defaults, there is no impact to cash whether we repurchase defaulted vacation ownership notes receivable from a securitization VIE and pursue foreclosure or foreclose on behalf of a securitization VIE.

Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. During the third quarter of 2024, and as of September 30, 2024, we had 15 term securitization transactions outstanding, all of which were in compliance with their respective required parameters. Since 2000, we have issued approximately $9.8 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.

On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize, on a revolving non-recourse basis, eligible consumer loans derived from certain vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur twice a year. During the second quarter of 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 September 30, 2024, we had no borrowings outstanding under our Warehouse Credit Facility.

As of September 30, 2024, $70 million of gross vacation ownership notes receivable were eligible for securitization.

#### 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. At September 30, 2024, $75 million of borrowings and $20 million of letters of credit were outstanding under our Revolving Corporate Credit Facility.

### Uses of Cash

We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners’ associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisitions and development.

#### Seasonality

Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments. Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year. Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we typically have significant variable compensation-related cash outflows associated with payment of annual bonuses.

#### Timing of Estimated Tax Payments

The Internal Revenue Service provided for the deferral of federal income tax payments as tax relief for businesses in parts of Florida affected by the hurricanes that occurred during the third and fourth quarters of 2024. This relief allows us to delay making certain estimated tax payments, without interest or penalty. As a result, we expect to defer $28 million of payments from 2024 to the second quarter of 2025. Similarly, in the prior year, $32 million of estimated tax payments from the third and fourth quarters of 2023 were deferred to the first quarter 2024 related to hurricanes that occurred in 2023.

#### 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

*($ in millions)*

|  | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: |
| Inventory spending | $(159) | $(56) |
| Purchase of property for future transfer to inventory | — | (27) |
| Inventory costs | 107 | 137 |
| Inventory spending (in excess of) less than cost of sales | $(52) | $54 |

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. Where possible, we will structure transactions to limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale. These capital efficient vacation ownership transaction structures may consist of the development of new inventory, or the conversion of previously built units, by third parties. 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. 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 the first three quarters of 2024 was higher than cost of sales due to our acquisition of vacation ownership units in Waikiki and purchases under our VOI repurchase programs. Refer to Footnote 3 “Acquisitions” for information about acquisitions that occurred during the first three quarters of 2024. Purchases of property for future transfer to inventory in 2023 included the acquisition of property in Charleston, South Carolina and Savannah, Georgia. We expect inventory spending to continue to exceed cost of sales for the remainder of 2024.

#### Vacation Ownership Notes Receivable Collections Less Than Originations

*($ in millions)*

|  | Nine Months Ended September 30, 2024 | September 30, 2023 |
| --- | ---: | ---: |
| Vacation ownership notes receivable collections — non-securitized | $67 | $119 |
| Vacation ownership notes receivable collections — securitized | 403 | 342 |
| Vacation ownership notes receivable originations | (738) | (749) |
| Vacation ownership notes receivable collections less than originations | $(268) | $(288) |

We expect vacation ownership notes receivable originations to continue to outpace vacation ownership notes receivable collections in the remainder of 2024.

#### Repurchase of Common Stock

The following table summarizes share repurchase activity under our Share Repurchase Program:

*($ in millions, except per share amounts)*

|  | Number of Shares Repurchased | Cost Basis of Shares Repurchased | Average Price Paid per Share |
| --- | ---: | ---: | ---: |
| As of December 31, 2023 | 25,141,073 | $2,405 | $95.65 |
| For the first three quarters of 2024 | 530,377 | 45 | $85.45 |
| As of September 30, 2024 | 25,671,450 | $2,450 | $95.44 |

See Footnote 13 “Stockholders' Equity” to our Financial Statements for further information related to our current share repurchase program.

#### Payment of Dividends to Common Stockholders

We distributed cash dividends to holders of common stock during the first three quarters of 2024 as follows:

| Declaration Date | Stockholder Record Date | Distribution Date | Dividend per Share |
| --- | --- | --- | ---: |
| December 7, 2023 | December 21, 2023 | January 4, 2024 | $0.76 |
| February 15, 2024 | February 29, 2024 | March 14, 2024 | $0.76 |
| May 9, 2024 | May 23, 2024 | June 6, 2024 | $0.76 |

We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.

#### Material Cash Requirements

The following table summarizes our future material cash requirements from known contractual or other obligations as of September 30, 2024:

*($ in millions)*

|  | Total | Payments Due by Period Remainder of 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Debt(1)(2) | $3,393 | $31 | $118 | $687 | $760 | $425 | $1,372 |
| Securitized debt(1)(3) | 2,927 | 77 | 288 | 280 | 277 | 270 | 1,735 |
| Purchase obligations(4) | 497 | 50 | 154 | 139 | 134 | 15 | 5 |
| Operating lease obligations(5) | 121 | 6 | 24 | 22 | 16 | 12 | 41 |
| Finance lease obligations(5) | 538 | 5 | 18 | 15 | 13 | 13 | 474 |
| Other long-term obligations | 10 | 6 | 2 | 1 | 1 | — | — |
|  | $7,486 | $175 | $604 | $1,144 | $1,201 | $735 | $3,627 |

(1) Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.

(2) During the second quarter of 2024, we amended the Corporate Credit Facility to provide for the New Term Loan, which is scheduled to mature on April 1, 2031. The proceeds from the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024, and was scheduled to mature on August 31, 2025.

(3) Payments based on estimated timing of cash flow associated with securitized vacation ownership notes receivable.

(4) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts reflected herein represent expected funding requirements under such contracts and primarily relate to future purchases of property and vacation ownership units and information technology assets (hardware and software). Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.

(5) Includes interest.

In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the owners’ associations, these obligations have minimal impact on our net income and cash flow. These purchase commitments are excluded from the table above.

#### Supplemental Guarantor Information

The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. (“MORI”), and certain other subsidiaries whose voting securities are wholly owned directly or indirectly by MORI (such subsidiaries collectively, the “Senior Notes Guarantors”). These guarantees are full and unconditional and joint and several. The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.

The following tables present consolidating financial information as of September 30, 2024 and December 31, 2023, and for the nine months ended September 30, 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.

#### Condensed Consolidating Statement of Income

*($ in millions)*

|  | Nine Months Ended September 30, 2024 Issuers MVWC | MORI | Senior Notes Guarantors | Non-Guarantor Subsidiaries | Total Eliminations | MVW Consolidated |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenues | $— | $834 | $1,990 | $848 | $(32) | $3,640 |
| Expenses | (32) | (962) | (1,829) | (603) | 33 | (3,393) |
| Benefit from (provision for) income taxes | 10 | 39 | (13) | (115) | — | (79) |
| Equity in net income (loss) of subsidiaries | 190 | 346 | — | — | (536) | — |
| Net income (loss) | 168 | 257 | 148 | 130 | (535) | 168 |
| Net loss attributable to noncontrolling interests | — | — | — | — | — | — |
| Net income (loss) attributable to common stockholders | $168 | $257 | $148 | $130 | $(535) | $168 |

#### Condensed Consolidating Balance Sheet

*($ in millions)*

|  | As of September 30, 2024 Issuers MVWC | MORI | Senior Notes Guarantors | Non-Guarantor Subsidiaries | Total Eliminations | MVW Consolidated |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $1 | $20 | $53 | $123 | $— | $197 |
| Restricted cash | — | 25 | 72 | 253 | — | 350 |
| Accounts and contracts receivable, net | 14 | 169 | 57 | 93 | 7 | 340 |
| Vacation ownership notes receivable, net | — | 124 | 187 | 2,076 | — | 2,387 |
| Inventory | — | 297 | 361 | 111 | — | 769 |
| Property and equipment, net | — | 277 | 648 | 240 | — | 1,165 |
| Goodwill | — | — | 3,117 | — | — | 3,117 |
| Intangibles, net | — | — | 778 | 29 | — | 807 |
| Investments in subsidiaries | 3,450 | 3,737 | — | — | (7,187) | — |
| Other | 146 | 196 | 220 | 124 | (78) | 608 |
| Total assets | $3,611 | $4,845 | $5,493 | $3,049 | $(7,258) | $9,740 |
| Accounts payable | $47 | $48 | $74 | $74 | $— | $243 |
| Advance deposits | — | 68 | 83 | 16 | — | 167 |
| Accrued liabilities | 9 | 100 | 152 | 117 | 6 | 384 |
| Deferred revenue | — | 14 | 167 | 176 | (7) | 350 |
| Payroll and benefits liability | — | 108 | 67 | 28 | — | 203 |
| Deferred compensation liability | — | 140 | 47 | 4 | — | 191 |
| Securitized debt, net | — | — | — | 2,276 | (28) | 2,248 |
| Debt, net | 1,136 | 1,722 | 179 | 1 | — | 3,038 |
| Other | — | 2 | 107 | 16 | — | 125 |
| Deferred taxes | — | 129 | 238 | 47 | (42) | 372 |
| MVW stockholders' equity | 2,419 | 2,514 | 4,379 | 294 | (7,187) | 2,419 |
| Noncontrolling interests | — | — | — | — | — | — |
| Total liabilities and equity | $3,611 | $4,845 | $5,493 | $3,049 | $(7,258) | $9,740 |

57

*($ in millions)*

|  | As of December 31, 2023 Issuers MVWC | MORI | Senior Notes Guarantors | Non-Guarantor Subsidiaries | Total Eliminations | MVW Consolidated |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| 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 |

### Recent Accounting Pronouncements

See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards.

### Critical Accounting Policies and Estimates

Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our 2023 Annual Report. Since the date of our 2023 Annual Report, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

## Market risk

As filed, 2,823 characters.

Our exposure to market risk has not changed materially from that disclosed in Part I, Item 7A of the 2023 Annual Report, other than as set forth below.

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. At September 30, 2024, the interest rate applicable to 70% (approximately $2.0 billion) of our corporate debt, excluding finance leases, was fixed and the interest rate applicable to the remaining 30% (approximately $873 million) was variable. Assuming we had no outstanding balance under our Revolving Corporate Credit Facility, a 100 basis point increase in the underlying benchmark rate on our variable-rate debt at September 30, 2024 would result in an annual increase in cash interest of approximately $8 million.

The following table presents the scheduled maturities and the total fair value as of September 30, 2024 for our financial instruments that are impacted by market risks:

*($ in millions)*

| Assets – Maturities represent expected principal receipts; fair values represent assets | Average Interest Rate Remainder of 2024 | Maturities by Period 2025 | 2026 | 2027 | 2028 | Thereafter | Total Carrying Value | Total Fair Value |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Vacation ownership notes receivable — non-securitized | 11.9% | $24 | $71 | $53 | $49 | $43 | $242 | $482 | $485 |
| Vacation ownership notes receivable — securitized | 13.4% | $40 | $166 | $173 | $177 | $176 | $1,173 | $1,905 | $1,968 |
| Contracts receivable for financed VOI sales, net | 12.5% | $1 | $4 | $4 | $4 | $4 | $34 | $51 | $51 |
| **Liabilities – Maturities represent expected principal payments; fair values represent liabilities** |  |  |  |  |  |  |  |  |  |
| Securitized debt | 4.7% | $(50) | $(189) | $(197) | $(202) | $(203) | $(1,435) | $(2,276) | $(2,280) |
| Term Loan(1) | 7.1% | $(2) | $(8) | $(8) | $(8) | $(8) | $(764) | $(798) | $(797) |
| Revolving Corporate Credit Facility | 7.1% | $— | $— | $— | $(75) | $— | $— | $(75) | $(75) |
| Senior notes |  |  |  |  |  |  |  |  |  |
| 2028 Notes | 4.8% | $— | $— | $— | $— | $(350) | $— | $(350) | $(336) |
| 2029 Notes | 4.5% | $— | $— | $— | $— | $— | $(500) | $(500) | $(471) |
| 2026 Convertible Notes | 0.0% | $— | $— | $(575) | $— | $— | $— | $(575) | $(521) |
| 2027 Convertible Notes | 3.3% | $— | $— | $— | $(575) | $— | $— | $(575) | $(535) |

(1) During the second quarter of 2024, we amended the Corporate Credit Facility to provide for the New Term Loan, which is scheduled to mature on April 1, 2031. The proceeds from the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024, and was scheduled to mature on August 31, 2025.

## Controls and procedures

As filed, 2,095 characters.

#### Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature, can provide only reasonable assurance about management’s control objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving the desired control objectives. However, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based upon the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2024, our disclosure controls and procedures were effective and operating to provide reasonable assurance that we record, process, summarize and report the information we are required to disclose in the reports that we file or submit under the Exchange Act within the time periods specified in the rules and forms of the SEC, and to provide reasonable assurance that we accumulate and communicate such information to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions about required disclosure.

#### Changes in Internal Control Over Financial Reporting

We made no changes in our internal control over financial reporting during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 272 characters.

There have been no material changes to the risk factors set forth in Item 1A to Part 1 of our 2023 Annual Report, except to the extent factual information disclosed elsewhere in this Quarterly Report relates to such risk factors, which is incorporated herein by reference.

Filed Nov 7, 2024.
Source: SEC EDGAR, the filing index for accession 0001524358-24-000109. Last ingested by Listed: Oct 24, 2026, 15:13 ET. No prices; not investment advice.