MARRIOTT VACATIONS WORLDWIDE Corp 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk Our exposure to market risk has not changed materially from that disclosed in Part I, Item 7A of the 2022 Annual Report, other than as set forth below. 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 begin to expire in the 2023 third quarter) that fix a portion of our variable-rate debt. At March 31, 2023, after considering the impact of interest rate swap agreements and excluding finance leases, the interest rate applicable to approximately 85% of our total corporate debt was effectively fixed and the interest rate applicable to the remaining 15% (approximately $434 million) is variable. 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 would result in an increase of approximately $2 million in annual cash interest due to the impact of our hedging arrangements discussed in Footnote 12 “Debt” to our Financial Statements. Assuming we had no outstanding hedging arrangements, a 100 basis point increase in the underlying benchmark rate would result in an annual increase in cash interest of approximately $8 million. The following table presents the scheduled maturities and the total fair value as of March 31, 2023 for our financial instruments that are impacted by market risks: ($ in millions) Average Interest Rate Maturities by Period Remainder of 2023 2024 2025 2026 2027 Thereafter Total Carrying Value Total Fair Value Assets – Maturities represent expected principal receipts; fair values represent assets Vacation ownership notes receivable — non-securitized 12.4% $ 41 $ 43 $ 38 $ 38 $ 36 $ 231 $ 427 $ 429 Vacation ownership notes receivable — securitized 13.3% $ 126 $ 173 $ 175 $ 179 $ 179 $ 961 $ 1,793 $ 1,854 Liabilities – Maturities represent expected principal payments; fair values represent liabilities Securitized debt 3.7% $ (137) $ (187) $ (445) $ (176) $ (173) $ (839) $ (1,957) $ (1,838) Senior notes 2028 Notes 4.8% $ — $ — $ — $ — $ — $ (350) $ (350) $ (310) 2029 Notes 4.5% $ — $ — $ — $ — $ — $ (500) $ (500) $ (424) Term Loan 6.6% $ — $ — $ (784) $ — $ — $ — $ (784) $ (780) Revolving Corporate Credit Facility 6.7% $ — $ — $ — $ — $ (200) $ — $ (200) $ (200) 2026 Convertible Notes —% $ — $ — $ — $ (575) $ — $ — $ (575) $ (553) 2027 Convertible Notes 3.3% $ — $ — $ — $ — $ (575) $ — $ (575) $ (566) Non-interest bearing note payable —% $ — $ (4) $ — $ — $ — $ — $ (4) $ (4)