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Item 2. Management’s Discussion and Analysis

2024-05-07 compared with 2023-11-03 · 232 added, 500 removed, 417 unchanged (64% of the section changed)

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Forward-Looking Statements

We make forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q, based on our management’s beliefs and assumptions and on information currently available to our management.

Forward-looking statements include the information concerning:

our possible or assumed future results of operations;

financial condition and leverage, including the expected impact of the Maui wildfires;

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:

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;

our expectations regarding development profit margins, defaults and expected losses, notes receivable balances, commitments to owners’ associations, payments for property acquisitions and development plans, lease payments, that interest income and notes receivable will increase in 2023, interest rates, indemnification receivables, financing profit margin, general and administrative expenses, inventory costs and inventory spending, taxes, and any effects of the COVID-19 pandemic;

and business strategies, such as our expectations that we will continue to offer financing incentives.

business strategies;

financing plans;

our competitive position;

our plans to pursue growth opportunities;

potential operating performance, including our expectations regarding contract sales, including contract sales from our Maui sales centers;

our expectation regarding consumer financing interest expense;

our expectation that inventory spending will exceed cost of sales for the remainder of 2024 and the impact of inventory repurchases;

indemnification;

capital requirements;

taxes, including the impact of Pillar 2;

our ability to securitize consumer loans and related default rates and reserve requirements;

and the pace of originations of vacation ownership notes receivable compared to payoffs.

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.

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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:

the effects of a future health crisis, including its short and longer-term impacts on consumer confidence and demand for travel, and the pace of recovery following a health crisis;

a future health crisis and responses to 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 and wage inflation;

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;

global supply chain disruptions;

volatility in the international and national economy and credit markets;

the impact of the current or a future banking crisis;

wars involving Russia, Ukraine, Israel and Gaza and related sanctions and other measures;

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;

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the availability of capital to finance growth;

the impact of rising interest rates;

the impact of changes in interest rates;

the effects of steps we have taken and may continue to take to reduce operating costs;

political or social strife;

difficulties associated with implementing new or maintaining existing technology;

changes in privacy laws;

the effects of steps that we or our affiliates have taken and may continue to take to reduce operating costs;

impacts from natural or man-made disasters and wildfires, including the Maui wildfires;

and other matters referred to under the heading “Risk Factors” contained herein and also in our most recent Annual Report on Form 10-K, and which may be updated in our future periodic filings with the U.S.

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 on Form 10-Q apply only as of the date of this Quarterly Report on Form 10-Q 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, except as required by law.

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.

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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 on Form 10-Q 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 on Form 10-Q.

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.

Business Overview

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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, as well as under Marriott Vacation Club Pulse, an extension to the Marriott Vacation Club brand.

We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Club brand, we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand and we have a license to use the St.

Regis brand for specified fractional ownership resorts.

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:

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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.

Since May 2022, we provide these services through our Interval International and Aqua-Aston businesses.

In April 2022, we disposed of VRI Americas after determining that the business was not a core component of our future growth strategy and operating model.

This business was a component of our Exchange & Third-Party Management segment through the date of the sale.

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”).

Integration of Marriott-, Sheraton- and Westin-Branded Vacation Ownership Products

In 2016, Marriott International purchased Starwood Hotels and Resorts Worldwide, Inc., which at the time exclusively licensed the Sheraton and Westin vacation ownership brands to Legacy-ILG.

Part of the rationale for our acquisition of ILG in 2018 was to achieve operating efficiencies and business growth by leveraging the brands then licensed by Marriott International and its subsidiaries to us and to ILG.

In August 2022, we launched Abound by Marriott Vacations, a new owner benefit and exchange program which affiliates the Marriott, Sheraton and Westin vacation ownership brands to offer similar benefits to owners of our products under these brands.

Under this program, owners of Marriott-, Sheraton- and Westin-branded VOIs can access over 90 resorts under the Marriott Vacation Club, Sheraton Vacation Club and Westin Vacation Club brands using a common currency.

The program also harmonizes fee structures and owner benefit levels and has allowed us to transition most of our Legacy-ILG sales galleries to sell our Marriott Vacation Club Destinations product.

Further, in late 2022, we added certain Sheraton- and Westin-branded VOIs to the Marriott Vacation Club Destinations product.

We recognize revenues from the sale of vacation ownership products (also referred to as VOIs) when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible.

Based upon the different terms of our contracts with the customer and business practices, control of the vacation ownership product has historically transferred to the customer at different points in time for each brand of VOIs.

In the third quarter of 2022, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignment”), resulting in the prospective change in the timing of the transfer of control to the customer for Marriott-branded VOIs.

Prior to these changes, control transfer occurred at closing for Marriott-branded vacation ownership products.

Subsequent to the Contract Alignment, transfer of control of Marriott-branded vacation ownership products occurs at expiration of the statutory rescission period, consistent with the historical timing of Sheraton-, Westin- and Hyatt- branded transactions.

Marriott-branded VOI sales contracts executed prior to these modifications have been accounted for with transfer of control of the VOI occurring at closing.

Control transfer for Legacy-Welk VOIs continues to occur at closing.

As a result of the unification of our Marriott-, Sheraton- and Westin-branded vacation ownership products under the Abound by Marriott Vacations program in the third quarter of 2022, we combined the reserves, and aligned our reserve methodology, for vacation ownership notes receivable for our Marriott, Sheraton and Westin brands (the “Reserve Alignment”).

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

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• 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 contract sales.” 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 described above 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.

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 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 contracts sales from the sale of vacation ownership products for non-consolidated joint ventures.

• Volume per guest (“VPG”) is calculated by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a tour at a sales location, by the number of tours at sales locations in a given period.

• Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures.

We believe that this operating metric 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.

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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 International 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 International network.

• Average revenue per member is calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue for the Interval International network by the monthly weighted average number of Interval International network active members during the applicable period.

We believe this metric is valuable in measuring the overall engagement of our Interval International network active members.

• Segment financial results attributable to common shareholders represents revenues less expenses directly attributable to each applicable reportable business segment (Vacation Ownership and Exchange & Third-Party Management).

• 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.

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Consolidated Results

Three Months Ended Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Sale of vacation ownership products $ 352 $ 375

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Litigation charges 3 3

Restructuring 2 —

Royalty fee 28 29

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TOTAL EXPENSES 1,058 1,015

Gains (losses) and other income (expense), net 3 (2) 34 39

Gains and other income, net — 21

Interest expense, net (40) (34)

Transaction and integration costs (15) (13)

Other (1) (1) — —

INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 81 128

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NET INCOME 46 87

Net income attributable to noncontrolling interests — (1) — —

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 42 $ 109 $ 219 $ 303

Net loss attributable to noncontrolling interests 1 —

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 47 $ 87

Operating Statistics

2023 Third Quarter

2024 First Quarter

Three Months Ended

(Contract sales $ in millions) September 30, 2023 September 30, 2022 Change % Change

Vacation Ownership

Total contract sales $ 443 $ 492 $ (49) (10%)

Consolidated contract sales $ 438 $ 483 $ (45) (9%)

Joint venture contract sales $ 5 $ 9 $ (4) (51%)

VPG $ 4,055 $ 4,353 $ (298) (7%)

Exchange & Third-Party Management

Total active members at end of period (000's) 1,571 1,591 (20) (1%)

Average revenue per member $ 39.15 $ 38.91 $ 0.24 1%

2023 First Three Quarters

Nine Months Ended

(Contract sales $ in millions) September 30, 2023 September 30, 2022 Change % Change

(Contract sales $ in millions) March 31, 2024 March 31, 2023 Change % Change

Vacation Ownership

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Average revenue per member $ 41.74 $ 42.07 $ (0.33) (1%)

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Vacation Ownership $ 1,126 $ 1,182 $ (56) (5%)

Exchange & Third-Party Management 64 71 (7) (8%)

Total Segment Revenues 1,190 1,253 (63) (5%)

Consolidated Property Owners’ Associations (4) (1) (3) NM

Total Revenues $ 1,186 $ 1,252 $ (66) (5%)

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Vacation Ownership $ 1,130 $ 1,097 $ 33 3%

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

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization.

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 and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business.

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 shareholders.

We also use Adjusted EBITDA, as do analysts, lenders, investors, and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry.

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In addition, other companies in our industry may calculate EBITDA and Adjusted EBITDA 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 shareholders, which is the most directly comparable GAAP financial measure.

2023 Third Quarter

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.

2024 First Quarter

Three Months Ended Change

($ in millions) September 30, 2023 September 30, 2022 % Change

Net income attributable to common shareholders $ 42 $ 109 $ (67) (61%)

($ in millions) March 31, 2024 March 31, 2023 % Change

Net income attributable to common stockholders

$ 47 $ 87 $ (40) (46%)

Interest expense, net 40 34 6 17%

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Adjusted EBITDA Margin 23% 25% (2 pts)

The table below details the components of Certain items for the three months ended September 30, 2023 and September 30, 2022.

The table below details the components of Certain items for the three months ended March 31, 2024 and March 31, 2023.

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022

($ in millions) March 31, 2024 March 31, 2023

ILG integration $ — $ 9

Welk acquisition and integration 15 4

Other transformation initiatives — 6

Other transaction costs — 1

Transaction and integration costs 15 13

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Litigation charges 3 3

Impairment — 1

Gain on disposition of hotel, land and other (1) —

Gain on disposition of VRI Americas — (1)

Foreign currency translation 5 3

Insurance proceeds (1) —

Change in indemnification asset (6) (1)

(Gains) losses and other (income) expense, net (3) 2

Expiration/forfeiture of deposits on pre-acquisition preview packages — (6)

Change in estimate relating to pre-acquisition contingencies — (2)

Total Certain items $ 9 $ 39

2023 First Three Quarters

Nine Months Ended Change

($ in millions) September 30, 2023 September 30, 2022 % Change

Net income attributable to common shareholders $ 219 $ 303 $ (84) (28%)

Interest expense, net 106 91 15 15%

Provision for income taxes 115 134 (19) (14%)

Depreciation and amortization 99 98 1 1%

EBITDA 539 626 (87) (14%)

Share-based compensation expense 25 30 (5) (15%)

Certain items 11 71 (60) NM

Adjusted EBITDA $ 575 $ 727 $ (152) (21%)

Adjusted EBITDA Margin 24% 30% (6%)

The table below details the components of Certain items for the nine months ended September 30, 2023 and September 30, 2022.

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022

ILG integration $ 15 $ 80

Welk acquisition and integration 13 10

Other transformation initiatives — 6

Other transaction costs — 3

Transaction and integration costs 28 99

Restructuring charges 2 —

Impairment charges — 4

Early redemption of senior secured notes — 10

Gain on disposition of hotel, land and other (8) (33)

Gain on disposition of VRI Americas — (17)

Foreign currency translation 2 (2)

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Gains and other income, net — (21)

Purchase accounting adjustments 6 13

Litigation charges 7 7

Impairment 4 1

Expiration/forfeiture of deposits on pre-acquisition preview packages — (6)

Early termination of VRI management contract — (2)

Change in estimate relating to pre-acquisition contingencies — (5)

Total Certain items $ 20 $ 2

Segment Adjusted EBITDA

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Vacation Ownership $ 173 $ 299 $ (126) (42%)

Exchange & Third-Party Management 30 39 (9) (20%)

Segment adjusted EBITDA 203 338 (135) (40%)

General and administrative (53) (54) 1 NM

Adjusted EBITDA $ 150 $ 284 $ (134) (47%)

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Vacation Ownership $ 213 $ 229 $ (16) (7%)

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Adjusted EBITDA $ 187 $ 203 $ (16) (8%)

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

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

Vacation Ownership

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Segment financial results $ 182 $ 205 $ (23) (11%)

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Segment adjusted EBITDA $ 213 $ 229 $ (16) (7%)

The table below details the components of Certain items for the three months ended September 30, 2023 and September 30, 2022.

The table below details the components of Certain items for Vacation Ownership segment financial results for the three months ended March 31, 2024 and March 31, 2023.

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022

Transaction and integration costs $ — $ 2

Purchase accounting adjustments 3 5

Litigation charges 2 2

Impairment — 1

Foreign currency translation — (1)

Insurance proceeds (1) —

Change in indemnification asset (6) —

Gains and other income, net (7) (1)

Expiration/forfeiture of deposits on pre-acquisition preview packages — (6)

Change in estimate relating to pre-acquisition contingencies — (2)

Total Certain items $ (1) $ 4

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Segment financial results $ 578 $ 720 $ (142) (20%)

Depreciation and amortization 69 67 2 2%

Share-based compensation expense 6 5 1 24%

Certain items (6) (20) 14 NM

Segment adjusted EBITDA $ 647 $ 772 $ (125) (16%)

The table below details the components of Certain items for the nine months ended September 30, 2023 and September 30, 2022.

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022

Transaction and integration costs $ — 3

($ in millions) March 31, 2024 March 31, 2023

Purchase accounting adjustments $ 1 $ 2

Litigation charges 3 3

Impairment 4 1

Gain on disposition of hotel, land and other (7) (33)

Impairment charges — 4

Insurance proceeds — (2)

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Gains and other income, net — (9)

Expiration/forfeiture of deposits on pre-acquisition preview packages — (6)

Change in estimate relating to pre-acquisition contingencies — (5)

Total Certain items $ 4 $ —

Exchange & Third-Party Management

2023 Third Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Segment financial results $ 23 $ 29 $ (6) (22%)

Depreciation and amortization 7 8 (1) (3%)

Share-based compensation expense — 1 (1) (30%)

Certain items — 1 (1) NM

Segment adjusted EBITDA $ 30 $ 39 $ (9) (20%)

The table below details the components of Certain items for the three months ended September 30, 2023 and September 30, 2022.

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022

Gain on disposition of hotel, land and other $ (1) $ —

Gain on disposition of VRI Americas — (1)

Foreign currency translation — 2

(Gains) losses and other (income) expense, net (1) 1

Total Certain items $ — $ 1

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Segment financial results $ 25 $ 28 $ (3) (13%)

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Share-based compensation expense — 1 (1) (11%)

Certain items — (17) 17 NM

Segment adjusted EBITDA $ 32 $ 37 $ (5) (14%)

The table below details the components of Certain items for the nine months ended September 30, 2023 and September 30, 2022.

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022

Gain on disposition of hotel, land and other $ (1) $ —

Gain on disposition of VRI Americas — (17)

Foreign currency translation — 2

Gains and other income, net (1) (15)

Early termination of VRI management contract — (2)

Total Certain items $ — $ (17)

Business Segments

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Vacation Ownership

Three Months Ended Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Sale of vacation ownership products $ 352 $ 375

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Gains and other income, net — 9

Transaction and integration costs — (2) — (3)

Other (1) (1) — —

SEGMENT FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 182 205

Net income attributable to noncontrolling interests — — — —

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 149 $ 270 $ 578 $ 720

Net loss attributable to noncontrolling interests — —

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 182 $ 205

Sale of Vacation Ownership Products

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 % of Consolidated Contract Sales, Net of Resales September 30, 2022 % of Consolidated Contract Sales, Net of Resales Change % Change

Total consolidated contract sales $ 438 $ 483 $ (45) (9%)

Joint venture contract sales 5 9 (4) (51%)

Total contract sales 443 492 (49) (10%)

resales contract sales (11) (10) (1)

joint venture contract sales (5) (9) 4

Consolidated contract sales, net of resales 427 473 (46) (10%)

Settlement revenue 12 3% 10 2% 2

Resales revenue 6 1% 5 1% 1

Revenue recognition adjustments:

Reportability — —% 54 12% (54)

Sales reserve (102) (24%) (64) (14%) (38)

($ in millions) March 31, 2024 % of Consolidated Contract Sales, Net of Resales March 31, 2023 % of Consolidated Contract Sales, Net of Resales Change % Change

Consolidated contract sales

$ 428 $ 434 $ (6) (1%)

Sale of vacation ownership products $ 319 74% $ 444 94% $ (125) (28%)

(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.

Contract sales in the 2023 third quarter declined due to a 7% decrease in VPG and a 3% decrease in tours.

The decline in VPG was attributed to the temporary suspension of activity at our sales centers in Maui, due to the wildfires, lower closing efficiencies due to the continued transition associated with the launch of Abound by Marriott Vacations (which commenced in the third quarter of 2022) and the continued integration of the Hyatt and Legacy-Welk business models and sales processes.

Though improving, we expect these factors to continue to impact VPG and contract sales for the remainder of 2023.

The favorable revenue reportability in the 2022 third quarter was primarily due to the Contract Alignment which resulted in the prospective acceleration of revenue for Marriott-branded vacation ownership interests of $46 million.

Financing propensity was 64% in the third quarter of 2023, a 530 basis point increase over the third quarter of 2022.

We expect to continue offering financing incentive programs throughout the remainder of 2023.

The average FICO score of customers for whom a credit score was available, generally U.S.

and Canadian residents, who financed a vacation ownership purchase was 729 and 730 for the three months ended September 30, 2023 and September 30, 2022, respectively.

In the third quarter of 2023, we evaluated our vacation ownership notes receivable reserve in light of trends in delinquencies and default rates.

As a result, we increased our originated vacation ownership notes receivable reserve by $59 million.

We primarily used a historical period of increased defaults as a basis for estimating the increase in our reserve.

This additional reserve adjusts our future default rate estimate to reflect current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.

The 2022 third quarter sales reserve included a $19 million increase attributed to the Reserve Alignment, which was offset by a decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 % of Consolidated Contract Sales, Net of Resales September 30, 2022 % of Consolidated Contract Sales, Net of Resales Change % Change

Total consolidated contract sales $ 1,325 $ 1,383 $ (58) (4%)

Joint venture contract sales 5 10 (5) (49%)

1 unchanged sentence

Resales contract sales

(12) (11) (1)

Joint venture contract sales

7 unchanged sentences

Sale of vacation ownership products $ 352 84% $ 375 88% $ (23) (6%)

Financing propensity

53.4% 54.2% (0.8 pts)

Average FICO Score (2)

(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.

Contract sales in the first three quarters of 2023 declined, despite tour growth of 5%, due to a 9% decrease in VPG.

The decline in VPG was attributed to the temporary suspension of activity at our sales centers in Maui, due to the wildfires, lower closing efficiencies due to the continued transition associated with the launch of Abound by Marriott Vacations and the continued integration of the Hyatt and Legacy-Welk business models and sales processes.

Financing propensity was 58% in the first three quarters of 2023, a 390 basis point increase over the first three quarters of 2022.

The average FICO score of customers for whom a credit score was available, generally U.S.

and Canadian residents, who financed a vacation ownership purchase was 734 and 733 for the nine months ended September 30, 2023 and September 30, 2022, respectively.

The sales reserve in the first three quarters of 2023 increased $78 million in light of trends in delinquencies and default rates in 2023.

The sales reserve in the first three quarters of 2022 included a $19 million increase attributed to the Reserve Alignment, which was offset by a decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses.

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

and Canadian residents.

Contract sales in the first quarter of 2024 declined due to a 5% decrease in VPG, partially offset by a 4% increase in tours primarily attributed to our Asia Pacific locations.

The 5% decrease in VPG was due to lower performance in both North America and international sales operations, a larger mix of international tours, which carry a lower VPG than our North America business, and the on-going impact from our Maui sales centers.

Excluding the $16 million decline in contract sales at our Maui sales centers, contract sales increased 3%.

We expect that full year 2024 contract sales from our Maui sales centers will be generally in-line with 2023 results and that full year 2024 consolidated contract sales, net of resales will exceed 2023 results.

The revenue reportability adjustment for the first quarter of 2024 resulted from contracts that remained in the contractual rescission period at the end of the quarter.

In the latter half of 2023, we increased our vacation ownership notes receivable reserve to reflect 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 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.

The sales reserve for the first quarter of 2024 continues to reflect these ongoing macroeconomic conditions and remains in-line with the reserve recorded in the fourth quarter of 2023.

Development Profit

2023 Third Quarter

2024 First Quarter

Three Months Ended Change % Change

($ in millions) September 30, 2023 % of Revenue September 30, 2022 % of Revenue

Sale of vacation ownership products $ 319 $ 444 $ (125) (28%)

Cost of vacation ownership products (50) (16%) (76) (17%) 26 35%

Marketing and sales (202) (64%) (207) (47%) 5 2%

Development profit $ 67 $ 161 $ (94) (59%)

Development profit margin 20.7% 36.1% (15.4 pts)

The decrease in Development profit reflects $43 million from unfavorable revenue reportability primarily attributed to the Contract Alignment, which resulted in the prospective acceleration of $39 million of revenue recognition for Marriott-branded VOI sales in the 2022 third quarter, $24 million from lower contract sales volumes and $35 million related to higher sales reserves, partially offset by $8 million of favorable product cost due mainly to the sale of lower cost inventory.

The $35 million of higher sales reserves included $49 million in the third quarter of 2023 ($59 million gross increase in reserve offset by a decrease of $10 million to product cost), partially offset by $14 million from the Reserve alignment in the third quarter of 2022.

Development profit margin, excluding the impact of the sales reserve increase of $49 million, was 30.5% in the third quarter of 2023.

We expect Development profit margin for the full year to be in line with year-to-date 2023 results.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 % of Revenue September 30, 2022 % of Revenue Change % Change

($ in millions) March 31, 2024 % of Revenue March 31, 2023 % of Revenue

Sale of vacation ownership products $ 352 $ 375 $ (23) (6%)

3 unchanged sentences

Development profit margin 21.5% 28.5% (7.0 pts)

The decrease in Development profit reflects $47 million of lower contract sales volumes, $49 million related to higher sales reserves, and $5 million from unfavorable revenue reportability, partially offset by $28 million of favorable product cost due mainly to the sale of lower cost inventory, and $6 million of favorable product cost true-up activity.

Development profit margin, excluding the impact of the $49 million sales reserve increase in the third quarter of 2023, was 29.9% in the first three quarters of 2023.

The decrease in Development profit reflects higher marketing and sales costs, including $6 million of higher preview costs, and lower sales of vacation ownership products, including $8 million from the higher sales reserve and $7 million from unfavorable revenue reportability, partially offset by $2 million due primarily to the sale of lower cost inventory.

We expect Development profit margin for the full year to decline slightly compared to 2023 results.

Resort Management and Other Services Revenues, Expenses and Profit

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Management fee revenues $ 44 $ 41 $ 3 9%

Ancillary revenues 62 63 (1) (1%)

Other management and exchange revenues 37 32 5 16%

Resort management and other services revenues 143 136 7 6%

Resort management and other services expenses (69) (64) (5) (8%)

Resort management and other services profit $ 74 $ 72 $ 2 3%

Resort management and other services profit margin 52.0% 53.2% (1.2 pts)

Resort occupancy (1)

86.1% 88.9% (2.8 pts)

(1) Resort occupancy represents all transient, previews, and owner keys divided by total keys available, net of keys out of service.

The increase in Resort management and other services revenues reflects higher club dues of $4 million, higher management fees and $1 million of higher refurbishment project revenues, partially offset by lower ancillary revenues.

The $5 million increase in Resort management and other services expenses reflects an increase in ancillary expenses of $2 million due to inflation and foreign currency exchange rate changes in Mexico, and an increase in customer services and exchange company expenses of $3 million due to incremental headcount, wages, benefits, and other operating cost increases.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Management fee revenues $ 52 $ 45 $ 7 15%

8 unchanged sentences

(1) Resort occupancy represents all transient, previews, and owner keys divided by total keys available, net of keys out of service.

The increase in Resort management and other services revenues reflects higher ancillary revenues, including revenues from food and beverage and golf offerings (as a result of an 8% increase in revenue per occupied key, partially offset by a 2% decrease in occupied keys at resorts with ancillary businesses) and higher management fees and commissions from third-party vacation and other offerings.

The decline in occupied keys at resorts with ancillary businesses was primarily in Maui due to the wildfires.

The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $15 million due to increased volumes sold, inflation and foreign currency exchange rate changes in Mexico, and an increase in customer services and exchange company expenses of $9 million due to incremental headcount, wages, benefits, and other operating cost increases.

The increase in Other management and exchange revenues is attributed to higher club dues.

The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $4 million, and an increase in customer service and exchange company expenses of $3 million due to incremental headcount, wages, benefits, and other operating cost increases.

Rental Revenues, Expenses and Profit

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Rental revenues $ 147 $ 141 $ 6 4%

3 unchanged sentences

Three Months Ended

September 30, 2023 September 30, 2022 Change % Change

March 31, 2024 March 31, 2023 Change % Change

Transient keys rented (1)

3 unchanged sentences

72.7% 70.4% 2.3 pts

(1) Transient keys rented exclude those occupied through the use of 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.

Rental profit for transient keys, including plus points and excluding keys from owned hotels, declined due to an $11 million increase in unsold maintenance fees associated with developer owned inventory, $9 million of decreased profit due largely to the Maui wildfires and declining average daily rates, offset by the continued rebound of the Asia Pacific region and $5 million of higher operating costs.

These decreases were partially offset by $8 million of higher plus points revenue.

In addition to these variances, there was a $25 million higher net down of rental revenues and expense in the 2023 third quarter associated with unsold VOIs that are registered and held for sale.

Rental profit for our owned hotels in the third quarter of 2023 decreased $1 million compared to the third quarter of 2022.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Rental revenues $ 404 $ 405 $ (1) —%

Rental expenses (354) (311) (43) (14%)

Rental profit

$ 50 $ 94 $ (44) (47%)

Rental profit margin 12.3% 23.2% (10.9 pts)

Nine Months Ended

September 30, 2023 September 30, 2022 Change % Change

Transient keys rented (1)

1,605,926 1,626,294 (20,368) (1%)

Average transient key rate $ 269 $ 268 $ 1 —%

Rental occupancy (2)

68.5% 70.3% (1.8 pts)

(1) Transient keys rented exclude those occupied through the use of plus points and preview stays.

(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.

Rental profit for transient keys, including plus points and excluding keys from owned hotels, declined by $40 million due to a $34 million increase in unsold maintenance fees associated with developer owned inventory, $10 million of increased costs associated with higher owner utilization of third-party vacation and other offerings, $12 million of decreased profit due to lower demand, the Maui wildfires and an unfavorable change in the mix of keys available to rent, and $3 million of higher other costs.

These decreases were partially offset by $16 million of higher plus points revenue and a $3 million reduction of rental costs associated with occupancy used for marketing and sales activities.

to these variances, there was a $2 million lower net down of rental revenues and expense in the first three quarters of 2023 associated with unsold VOIs that are registered and held for sale.

Rental profit for our owned hotels decreased by $4 million, or 30%, attributed to the disposition of our Puerto Vallarta hotel in 2022 and Branson hotel in 2023.

Rental profit for transient keys, including plus points and excluding keys from owned hotels, increased due to higher plus points revenue of $11 million, a $6 million increase in costs allocated to marketing and sales expense for occupancy used for previews and $2 million of lower unsold maintenance fees associated with developer owned inventory.

These changes were partially offset by $4 million of decreased profit due to fewer transient keys rented and higher tidy and variable costs and $3 million of increased costs associated with higher owner utilization of third-party vacation and other offerings.

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

Financing Revenues, Expenses and Profit

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Financing revenues $ 83 $ 78 $ 5 6%

Financing expenses (11) 9 (20) NM

Financing expenses (9) (10) 1 11%

Consumer financing interest expense (25) (16) (9) (50%)

1 unchanged sentence

Financing profit margin 59.5% 65.7% (6.2 pts)

Financing propensity 64.0% 58.7%

Financing revenues reflect $8 million of higher interest income as a result of a higher average notes receivable balance partially offset by $1 million of higher plus point financing incentive costs.

The higher average notes receivable balance was the result of new loan originations in excess of the repayment of existing vacation ownership notes receivable, which we expect to continue.

As part of our Reserve Alignment for Marriott-, Westin- and Sheraton-branded vacation ownership notes receivable, in the third quarter of 2022, we recorded a $19 million reduction in our estimated reserve for acquired vacation ownership notes receivable as a decrease in Financing expenses.

Excluding this difference, Financing expenses increased $1 million due to higher operating costs.

The increase in consumer financing interest expense is attributable to the higher average securitized debt at a higher average interest rate for the more recent term securitization transactions.

We expect consumer financing interest expense to continue to remain elevated over our average outstanding interest rates on existing securitization transactions as a result of rising interest rates for the remainder of 2023.

Financing propensity 53.4% 54.2% (0.8 pts)

Financing revenues reflect $5 million of higher interest income as a result of a higher average notes receivable balance and a slightly higher average interest rate.

The higher average notes receivable balance was the result of new loan originations in excess of the repayment of existing vacation ownership notes receivable, which we expect to continue in 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 consumer financing interest expense to continue to remain higher than our average outstanding interest rates on existing securitization transactions as a result of higher interest rates until meaningful market interest rate declines occur.

We do not adjust interest rates on consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates;

thus we expect our financing profit margin to continue to decrease in 2023, as we repay existing securitization transactions with lower interest rates and enter into new securitization transactions with higher interest rates.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Financing revenues 239 217 22 10%

Financing expenses (26) (10) (16) NM

Consumer financing interest expense (55) (39) (16) (41%)

Financing profit $ 158 $ 168 $ (10) (6%)

Financing profit margin 66.2% 77.7% (11.5 pts)

Financing propensity 58.2% 54.3%

Financing revenues reflect $24 million of higher interest income as a result of a higher average notes receivable balance partially offset by $2 million of higher plus point financing incentive costs.

The higher average notes receivable balance was the result of new loan originations in excess of the repayment of existing vacation ownership notes receivable, which we expect will continue.

Excluding the change in our estimated reserve for acquired vacation ownership notes receivable, Financing expenses were in line with prior year.

In 2023, we recorded a $3 million reduction to our reserve for acquired vacation ownership notes receivable compared to a $19 million reduction in the comparable reserve in 2022.

2023 Third Quarter

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 and enter into new securitization transactions with higher interest rates.

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Royalty fee $ 30 $ 28 $ 2 5%

Royalty fee expense increased in the third quarter of 2023 due to an increase of $2 million in the volume of closings on Marriott-branded products.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Royalty fee $ 28 $ 29 $ (1) (4%)

Royalty fee expense increased in the first three quarters of 2023 due to an increase in the volume of closings on Marriott-branded products ($2 million) and increased variable royalty fees paid to Hyatt, which commenced in the fourth quarter of 2022 ($2 million).

Royalty fee expense decreased in the first quarter of 2024 due to higher sales of pre-owned inventory, which carry a lower royalty fee as compared to initial sales (one percent versus two percent).

Gains and Other Income

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Gains and other income, net $ — $ 9 $ (9) NM

During the third quarter of 2023, we recorded a $6 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition and $1 million related to the receipt of insurance proceeds related to property damage from the 2017 hurricanes.

During the third quarter of 2022, we recorded a $1 million gain from foreign currency translation.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Gains and other income, net $ 23 $ 36 $ (13) (36%)

During the first three quarters of 2023, we recorded $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, a $9 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, $2 million related to the receipt of business interruption insurance proceeds, and $1 million related to the receipt of insurance proceeds related to property damage from the 2017 hurricanes.

During the first three quarters of 2022, we recorded gains and other income of $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico and $3 million related to the receipt of business interruption insurance proceeds.

During the first quarter of 2023, we recorded a $4 million gain associated with the earn out of additional proceeds from the 2019 disposition of a land parcel in Cancun, Mexico, a $3 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition and $2 million related to the receipt of business interruption insurance proceeds.

Litigation Charges

2024 First Quarter

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Litigation charges $ 3 $ 3 $ — 2%

Litigation charges during the first quarter of 2024, as well as the first quarter of 2023, relate primarily to business in Europe.

Exchange & Third-Party Management

Three Months Ended Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Management and exchange $ 52 $ 56

Rental 10 11 31 33

Cost reimbursements 2 5

4 unchanged sentences

TOTAL EXPENSES 40 43

Gains (losses) and other income (expense), net 1 (1) 1 15

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 23 $ 29 $ 75 $ 108

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 25 $ 28

Management and Exchange Profit

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Management and exchange revenue $ 50 $ 55 $ (5) (7%)

Management and exchange expense (31) (28) (3) (9%)

Management and exchange profit $ 19 $ 27 $ (8) (25%)

Management and exchange profit margin 38.9% 48.1% (9.2 pts)

The decrease in management and exchange revenue reflects a $3 million decline in Aqua-Aston management revenues resulting from lower revenue per available room in the Hawaii market and the wildfires in Maui.

Interval International management and exchange revenues declined $2 million primarily attributed to 5% lower transaction volume, partially offset by a 1% increase in average revenue per member.

The decrease in management and exchange profit was primarily attributed to higher marketing and sales expense, higher information technology costs and higher wages and benefits and lower revenues.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Management and exchange revenue $ 52 $ 56 $ (4) (9%)

2 unchanged sentences

Management and exchange profit margin 40.6% 47.1% (6.5 pts)

Excluding the $12 million decrease attributed to the disposition of our VRI Americas business during the second quarter of 2022, management and exchange revenue decreased $8 million or 4%.

Aqua-Aston management revenue declined $3 million as a result of the wildfires in Maui and higher property level expenses adversely impacting management fees.

Interval International management and exchange revenues declined $5 million, primarily attributed to lower membership fees and transaction revenues.

Interval International transaction volume declined 6% and average revenue per member decreased 1% compared to the prior year comparable period.

Excluding the impact of the disposition of VRI Americas, management and exchange profit decreased by $14 million or 15% in the first three quarters of 2023, primarily attributed to higher information technology costs and higher wages and benefits and lower revenues.

The decrease in management and exchange revenue reflects a $2 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent and a lower average daily rate in the Hawaii market due to changes in demand.

Interval International management and exchange revenues declined $2 million or 5% primarily attributed to lower exchange transaction volume.

The decrease in management and exchange profit was primarily attributed to lower revenues and higher information technology costs.

Rental Revenues

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Rental revenues $ 10 $ 11 $ (1) (7%)

Results reflect higher rental inventory procurement costs, which are recorded net within Rental revenues.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Rental revenues $ 11 $ 10 $ 1 7%

Results reflect higher rental inventory procurement costs, which are recorded net within Rental revenues.

Gains (Losses) and Other Income (Expense)

2023 Third Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Gains (losses) and other income (expense), net $ 1 $ (1) $ 2 NM

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Gains and other income, net $ 1 $ 15 $ (14) NM

During the first three quarters of 2022, we recorded a $17 million gain related to the sale of our VRI Americas business, partially offset by $2 million of foreign currency translation losses.

See Footnote 3 “Acquisitions and Dispositions” for more information on the disposition of VRI Americas.

Results reflect a 2% increase in volume of transactions and a 4% increase in average fee per transaction.

Corporate and Other

1 unchanged sentence

In addition, Corporate and Other includes the revenues and expenses from Consolidated Property Owners’ Associations.

Three Months Ended Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Resort management and other services $ 11 $ 9

5 unchanged sentences

Depreciation and amortization 6 1

Litigation charges — — (1) —

Restructuring 2 —

Cost reimbursements (11) (8)

TOTAL EXPENSES 71 71

(Losses) gains and other (expense) income, net (5) (2) 10 (12)

Gains and other income, net — 12

Interest expense, net (40) (34)

2 unchanged sentences

Provision for income taxes (35) (41)

Net income attributable to noncontrolling interests — (1) — —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (130) $ (190) $ (434) $ (525)

Net loss attributable to noncontrolling interests 1 —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (160) $ (146)

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.

Three Months Ended Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Resort management and other services $ 11 $ 9

5 unchanged sentences

TOTAL EXPENSES — 2

Losses and other expense, net — — — (3)

Interest expense, net — — 1 —

FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS — (1)

Provision for income taxes (1) — (1) —

Net income attributable to noncontrolling interests — (1) — —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (1) $ — $ — $ (3)

Net loss attributable to noncontrolling interests 1 —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

General and Administrative

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

General and administrative $ 57 $ 62 $ (5) (7%)

The change in General and administrative expenses is due to $17 million of lower variable compensation expense and $4 million of higher allocations of expenses to operations, offset by $9 million of incremental costs primarily related to compliance activities and new product development initiatives, $5 million of higher costs related to the implementation of technology, and a $2 million increase in wages and benefits.

We expect General and administrative expenses for the remainder of 2023 to increase due the continued impact of increased wages and additional investment in upgrading, maintaining, and implementing technology, including the continued transition to software as a service, which are recorded as a component of General and administrative expense as opposed to Depreciation expense.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

General and administrative $ 63 $ 68 $ (5) (8%)

General and administrative expenses increased due to $20 million of costs related to the implementation of technology associated with the integration of Legacy-ILG, $15 million of incremental costs primarily related to compliance activities and new product development initiatives, $8 million of increased wages and benefits, a $3 million increase in insurance expense, and $2 million of other miscellaneous expenses, partially offset by a $40 million decrease in variable compensation expense and $6 million of higher allocations of general and administrative expenses to operations.

The change in General and administrative expenses is due to $4 million of lower wages and benefits and $2 million of lower insurance expense, partially offset by $1 million of higher other expenses.

Gains (Losses) and Other Income (Expense)

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Losses and other expense, net $ (5) $ (2) $ (3) NM

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

In the third quarter of 2022, we recorded $2 million of foreign currency translation losses and $1 million of miscellaneous losses and other expense, partially offset by $1 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International for indemnified tax matters.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Gains (losses) and other income (expense), net $ 10 $ (12) $ 22 NM

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 offsetting accrual is included in the Provision for income taxes line), partially offset by a $10 million expense attributed to the redemption premium and write-off of unamortized debt issuance costs in connection with the early redemption of our senior secured notes, and $1 million of foreign currency translation losses.

In the first three quarters of 2022, we recorded $8 million of foreign currency translation losses, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations, $2 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International for indemnified tax matters, and $1 million of miscellaneous losses and other expense, partially offset by $2 million of proceeds from corporate owned life insurance.

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Gains and other income, net $ — $ 12 $ (12) (101%)

In the first quarter of 2024, we recorded $2 million of foreign currency translation losses, offset by $2 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International for indemnified tax matters.

In the first quarter of 2023, we recorded a $20 million increase in our receivable from Marriott International for indemnified tax matters (the true-up to the offsetting accrual is included in the Provision for income taxes line) and $2 million of foreign currency translation gains, 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

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Interest expense, net $ (40) $ (34) $ (6) (17%)

The increase in Interest expense, net is attributed to $2 million associated with higher borrowings and higher variable interest rates on both the Warehouse Credit Facility and the Revolving Corporate Credit Facility, $2 million of higher variable interest expense on the Term Loan, and $2 million of interest expense related to leased assets.

This was partially offset by $4 million of lower interest expense associated with the early redemption of our senior secured notes, $1 million of lower interest expense associated with our convertible notes, $1 million of lower other interest expense and $1 million of interest income.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Interest expense, net $ (106) $ (91) $ (15) (15%)

The increase in Interest expense, net is attributed to $14 million associated with higher borrowings and higher variable interest rates on both the Warehouse Credit Facility and the Revolving Corporate Credit Facility, $7 million of higher interest expense associated with our 2027 Convertible Notes issued in December 2022, $8 million of higher variable interest expense on the Term Loan, and $5 million of interest expense related to leased assets.

This was partially offset by $12 million of lower interest expense associated with the early redemption of our senior secured notes, $3 million of lower interest on non-income tax related items, $3 million of higher interest income, and $1 million of lower other interest expense.

2023 Third Quarter

2024 First Quarter

Three Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

Provision for income taxes $ (24) $ (59) $ 35 59%

Our effective tax rate was 36.1% and 34.7% for the three months ended September 30, 2023 and September 30, 2022, respectively.

The increase in the effective tax rate is predominately attributable to a decrease in Income before income taxes and noncontrolling interests from 2022 to 2023 without a proportional decrease to non-deductible tax expenses, in addition to a net decrease in the tax expense for foreign uncertain tax benefits in 2023.

2023 First Three Quarters

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022 Change % Change

($ in millions) March 31, 2024 March 31, 2023 Change % Change

Provision for income taxes $ (35) $ (41) $ 6 15%

Our interim effective tax rate was 34.3% and 30.6% for the nine months ended September 30, 2023 and September 30, 2022, respectively.

The increase in the effective tax rate is predominately attributable to a decrease in Income before income taxes and noncontrolling interests from 2022 to 2023 without a proportional decrease to non-deductible tax expenses, partially offset by a net increase in the tax expense for foreign uncertain tax benefits in 2023.

Our effective tax rate was 43.0% and 32.3% for the three months ended March 31, 2024 and March 31, 2023, respectively.

The effective tax rate for the three months ended March 31, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including $11 million primarily related to a $20 million increase to remove the permanent reinvestment assertion for certain non-U.S.

entities offset by a $9 million decrease for the expiration of statutes of limitation on certain unrecognized tax benefits.

The effective tax rate for the three months ended March 31, 2023 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items including $9 million primarily related to an increase in uncertain tax benefits of $20 million for new unrecognized tax benefits in a foreign jurisdiction, offset by decreases in stock compensation of $7 million and $4 million related to prior year true-up adjustments.

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.

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 shareholders.

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.

Our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.5 at September 30, 2023.

We have no material maturities of corporate debt until 2025.

At the end of the third quarter of 2023, the interest rate applicable to approximately 80% of our total corporate debt, excluding finance leases and including the impact of interest rate hedges, was effectively fixed.

The weighted average interest rate of our total corporate debt, excluding finance leases and including the impact of interest rate hedges, was 3.9% as of September 30, 2023.

At March 31, 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 committed to reducing this ratio to 3.0 by the end of 2025.

In April 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 proceeds were used to refinance in full the Term Loan, which was scheduled to mature on August 31, 2025.

As of May 1, 2024, as a result of refinancing the Term Loan, we have no maturities of corporate debt until 2026.

As of March 31, 2024, after considering the impact of interest rate hedges and excluding finance leases, the interest rate applicable to approximately 78% of our corporate debt was effectively fixed.

The weighted average interest rate of our total corporate debt as of March 31, 2024, excluding finance leases and including the impact of interest rate hedges, was 4.0%.

Excluding the impact of the interest rate hedges, 68% of our corporate debt was fixed as of March 31, 2024.

Sources of Liquidity

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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 generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable.

In a vacation ownership notes receivable term securitization, several classes of debt securities issued

by a special purpose entity are generally collateralized by a single pool of transferred assets, which consist of vacation ownership notes receivable.

In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued.

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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 2023, and as of September 30, 2023, we had 14 term securitization transactions outstanding, all of which were in compliance with their respective required parameters.

Since 2000, we have issued almost $8.5 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.

During the first quarter of 2024, and as of March 31, 2024, we had 14 term securitization transactions outstanding, all of which were in compliance with their respective required parameters.

Since 2000, we have issued approximately $9.4 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 2023, we amended certain agreements associated with our Warehouse Credit Facility, which increased the borrowing capacity of the existing facility from $425 million to $500 million and extended the revolving period from July 28, 2024 to May 31, 2025.

At September 30, 2023, we had $345 million of borrowings outstanding on our Warehouse Credit Facility.

As of September 30, 2023, $70 million of gross vacation ownership notes receivable were eligible for securitization.

At March 31, 2024, we had no borrowings outstanding on our Warehouse Credit Facility.

As of March 31, 2024, $61 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, 2023, $90 million of borrowings were outstanding on our Revolving Corporate Credit Facility, and $1 million of le tters of credit were outstanding.

Redemption of Senior Secured Notes

During the first quarter of 2023, we redeemed, prior to maturity, the remaining $250 million of the 2025 Notes outstanding pursuant to a redemption notice issued in the fourth quarter of 2022 and the terms of the indenture governing the 2025 Notes.

In connection with this redemption, we incurred charges of $10 million, including a redemption premium and the write-off of unamortized debt issuance costs, which were recorded in Gains (losses) and other income (expense), net on our Income Statement for the nine months ended September 30, 2023.

At March 31, 2024, $160 million of borrowings and $33 million of le tters of credit were outstanding on our Revolving Corporate Credit Facility.

We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts.

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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 occur in either the fourth quarter or the first quarter of each year.

Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year.

Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products.

In addition, during the first quarter of each year, we generally have significant variable compensation-related cash outflows associated with payment of annual bonuses.

In addition to net income or loss and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:

In addition, during the first quarter of each year, we typically have significant variable compensation-related cash outflows associated with payment of annual bonuses.

In addition to net income and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:

Inventory Spending Less Than Cost of Sales

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Inventory spending $ (25) $ (22)

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Inventory spending less than cost of sales $ 17 $ 16

Although we have significant excess 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 that limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale.

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 in key markets where opportunities generate acceptable risk adjusted returns.

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, by repurchasing inventory, we expect to be able to help stabilize the future cost of our vacation ownership products.

Our spending for real estate inventory in the first three quarters of 2023 was lower than cost of sales and was primarily related to purchases under our VOI repurchase programs.

Purchase of property for future transfer to inventory included the acquisition of property in Savannah, Georgia and Charleston, South Carolina in 2023 (see Footnote 3 “Acquisitions and Dispositions”).

We expect inventory spending to be less than cost of sales for 2023.

Among other reasons for repurchasing inventory, we expect these repurchases will stabilize the future cost of our vacation ownership products.

Our spending for real estate inventory in the first quarter of 2024 was lower than cost of sales and was primarily related to purchases under our VOI repurchase programs.

Purchase of property for future transfer to inventory in 2023 included the acquisition of property in Charleston, South Carolina.

We expect inventory spending to exceed cost of sales for the remainder of 2024, due to our remaining commitment to acquire property in Waikiki.

Vacation Ownership Notes Receivable Collections Less Than Originations

Nine Months Ended

($ in millions) September 30, 2023 September 30, 2022

Three Months Ended

($ in millions) March 31, 2024 March 31, 2023

Vacation ownership notes receivable collections — non-securitized $ 9 $ 48

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Vacation ownership notes receivable collections less than originations $ (40) $ (64)

Vacation ownership notes receivable collections were less than originations in each of the first three quarters of 2023 and 2022 due to the growth of the average vacation ownership notes receivable pool attributed to sales of VOIs.

We expect vacation ownership notes receivable originations to continue to outpace vacation ownership notes receivable collections in 2024 due to sales growth.

Repurchase of Common Stock

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As of December 31, 2023 25,141,073 $ 2,405 $ 95.65

For the first three quarters of 2023 1,936,855 248 128.03

As of September 30, 2023 24,710,073 $ 2,367 $ 95.80

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

Payment of Dividends to Common Shareholders

We distributed cash dividends to holders of common stock during the first three quarters of 2023 as follows:

Declaration Date Shareholder Record Date Distribution Date Dividend per Share

For the first quarter of 2024 279,577 24 87.37

As of March 31, 2024 25,420,650 $ 2,429 $ 95.56

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 quarter 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 16, 2023 March 2, 2023 March 16, 2023 $0.72

May 11, 2023 May 25, 2023 June 8, 2023 $0.72

We declared cash dividends to holders of our common stock during the third quarter of 2023, and distributed such cash dividends subsequent to the end of the third quarter of 2023 as follows:

Declaration Date Shareholder Record Date Distribution Date Dividend per Share

September 7, 2023 September 21, 2023 October 5, 2023 $0.72

We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to Board of Directors approval, which will depend on our financial condition, results of operations and capital requirements, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board 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.

February 15, 2024 February 29, 2024 March 14, 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, 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.

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Material Cash Requirements

The following table summarizes our future material cash requirements from known contractual or other obligations as of September 30, 2023:

The following table summarizes our future material cash requirements from known contractual or other obligations as of March 31, 2024:

Payments Due by Period

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of 2024 2025 2026 2027 2028 Thereafter

Contractual Obligations

$ 3,281 $ 87 $ 883 $ 635 $ 793 $ 373 $ 510

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

(2) In April 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 proceeds were used to refinance in full the Term Loan, which was scheduled to mature on August 31, 2025.

(3) Payments based on estimated timing of cash flow associated with securitized 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 under such contracts.

Amounts reflected herein represent expected funding under such contracts and primarily relate to future purchases of 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.

(5) The lease term of the finance lease arrangement for our new global headquarters office building located in Orlando, Florida commenced for accounting purposes during the first quarter of 2023, upon substantial completion of construction.

See Footnote 12 “Debt” to our Financial Statements for additional information on this lease.

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.

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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, 2023 and December 31, 2022, and for the nine months ended September 30, 2023 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.

The following tables present consolidating financial information as of March 31, 2024 and December 31, 2023, and for the three months ended March 31, 2024 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVWC, and MVW on a consolidated basis.

Condensed Consolidating Statement of Income

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated

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Net income (loss) 47 97 48 33 (179) 46

Net income attributable to noncontrolling interests — — — — — —

Net income (loss) attributable to common shareholders $ 219 $ 247 $ 167 $ 166 $ (580) $ 219

Net loss attributable to noncontrolling interests — — — 1 — 1

Net income (loss) attributable to common stockholders $ 47 $ 97 $ 48 $ 34 $ (179) $ 47

Condensed Consolidating Balance Sheet

As of September 30, 2023

As of March 31, 2024

Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated

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Deferred taxes — 128 244 36 (80) 328

MVW shareholders' equity 2,408 2,599 4,466 383 (7,448) 2,408

MVW stockholders' equity 2,379 2,477 4,430 336 (7,243) 2,379

Noncontrolling interests — — — (1) — (1)

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Deferred taxes — 124 242 19 (105) 280

MVW shareholders' equity 2,496 2,600 4,569 324 (7,493) 2,496

Noncontrolling interests — — — 2 — 2

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

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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 most recent Annual Report on Form 10-K.

Since the date of our most recent Annual Report on Form 10-K, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis