What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-07 · 248 added, 180 removed, 469 unchanged (48% of the section changed)

3 unchanged sentences

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;

timing of payments related to purchase commitments;

our possible or assumed future results of operations, financial condition, leverage, the ratio of our corporate debt, net of cash and equivalents, to Adjusted EBITDA, liquidity, returns on investments, margins including financing profit and development profit margins;

dividend payments;

4 unchanged sentences

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;

our expectation that consumer financing interest expense will remain higher than our average outstanding interest rates on existing securitization transactions;

our expectation that inventory spending will exceed cost of sales for the remainder of 2024 due to our commitment to acquire property in Waikiki and the quantity and impact of inventory repurchases on the future cost of our vacation ownership products;

indemnification;

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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.

the pace of originations of vacation ownership notes receivable compared to payoffs of existing notes receivable;

and the rate of maintenance fee increases.

Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

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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:

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;

a future health crisis and responses to such a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis;

variations in demand for vacation ownership and exchange products and services;

66 unchanged sentences

See Footnote 16 “Business Segments” to our Financial Statements for further information on our reportable business segments.

• Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total revenues less cost reimbursement revenues.

• Segment Adjusted EBITDA margin is calculated by dividing Segment Adjusted EBITDA by the applicable segment’s total revenues less cost reimbursement revenues.

NM = Not meaningful.

Consolidated Results

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Sale of vacation ownership products $ 309 $ 391 $ 661 $ 766

17 unchanged sentences

TOTAL EXPENSES 1,038 1,003 2,096 2,018

Gains and other income, net — 21

(Losses) gains and other (expense) income, net (7) 10 (7) 31

Interest expense, net (43) (36) (83) (70)

Transaction and integration costs (3) (10) (18) (23)

Other (1) 1 (2) 1

INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 48 140 129 268

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NET INCOME 38 90 84 177

Net loss attributable to noncontrolling interests 1 —

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

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 37 $ 90 $ 84 $ 177

Operating Statistics

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

(Contract sales $ in millions) June 30, 2024 June 30, 2023 Change

June 30, 2024 June 30, 2023 Change

Vacation Ownership

6 unchanged sentences

Average revenue per member $ 38.30 $ 39.30 $ (1.00) (3%) $ 80.14 $ 81.35 $ (1.21) (1%)

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Vacation Ownership $ 1,078 $ 1,112 $ (34) (3%) $ 2,208 2,209 $ (1) —%

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Total Segment Revenues 1,136 1,177 (41) (4%) 2,331 2,345 (14) (1%)

Consolidated Property Owners’ Associations — 1 (1) NM

Consolidated Property Owners’ Associations 4 1 3 NM 4 2 2 NM

Total Revenues $ 1,140 $ 1,178 $ (38) (3%) 2,335 2,347 $ (12) (1%)

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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.

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

We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders.

We 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.

We consider Adjusted EBITDA margin to be an indicator of our operating performance.

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

For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings.

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As a result, effective tax rates and provisions for income taxes can vary considerably among companies.

EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.

These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items.

Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others of results from our on-going core operations before the impact of these items with results from other companies.

EBITDA and Adjusted EBITDA have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

In addition, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.

We believe Adjusted EBITDA margin is useful as an indicator of operating profitability because it allows for period-over-period comparisons of the profitability of our on-going core operations before the impact of the excluded items.

EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our on-going core operations before the impact of these items with results from other companies.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

In addition, other companies in our industry may calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.

The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with Net income attributable to common stockholders, which is the most directly comparable GAAP financial measure.

2024 First Quarter

Three Months Ended Change

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Net income attributable to common stockholders

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Share-based compensation expense 9 12 (3) (21%) 16 19 (3) (18%)

Certain items 20 2 18 NM

Certain items 23 — 23 NM 43 2 41 NM

Adjusted EBITDA $ 157 $ 222 $ (65) (29%) $ 344 $ 425 $ (81) (19%)

Adjusted EBITDA Margin 23% 25% (2 pts)

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) March 31, 2024 March 31, 2023

Adjusted EBITDA Margin 20.7% 26.9% (6.2 pts) 22.0% 26.1% (4.1 pts)

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

ILG integration $ — $ 6 $ — $ 15

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Early redemption of senior secured notes — — — 10

Gain on disposition of hotel, land and other (1) (7) (1) (7)

Foreign currency translation 4 (2) 6 (4)

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Change in indemnification asset 4 (1) 2 (24)

Gains and other income, net — (21)

Other — — — (4)

Losses (gains) and other expense (income), net 7 (10) 7 (31)

Other — (3) (1) (2)

Total Certain items $ 23 $ — $ 43 $ 2

Commencing in the second quarter of 2024, we discontinued classifying adjustments related to Welk purchase accounting as Purchase accounting adjustments.

Ongoing costs associated with the continued integration of Welk will be reflected in our operating results commencing in the third quarter of 2024.

Segment Adjusted EBITDA

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Vacation Ownership $ 180 $ 245 $ (65) (26%) $ 393 $ 474 $ (81) (17%)

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General and administrative (54) (64) 10 15% (117) (132) 15 11%

6 9 (3) (28%) $ 11 $ 14 $ (3) (22%)

Adjusted EBITDA $ 157 $ 222 $ (65) (29%) $ 344 $ 425 $ (81) (19%)

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Vacation Ownership

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Segment financial results $ 144 $ 224 $ (80) (36%) $ 326 $ 429 $ (103) (24%)

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Share-based compensation expense 2 3 (1) (4%) 4 4 — (6%)

Certain items 4 — 4 NM

Certain items 9 (5) 14 NM 13 (5) 18 NM

Segment adjusted EBITDA $ 180 $ 245 $ (65) (26%) $ 393 $ 474 $ (81) (17%)

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) March 31, 2024 March 31, 2023

Segment Adjusted EBITDA Margin

26.0% 32.5% (6.5 pts) 27.6% 32.0% (4.4 pts)

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Purchase accounting adjustments $ — $ 1 1 3

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Impairment charges — — — 4

Gain on disposition of hotel, land and other (1) (7) (1) (7)

Insurance proceeds — — — (2)

Change in indemnification asset — — — (3)

Other — — — (4)

Gains and other income, net (1) (7) (1) (16)

Other — (2) — (2)

Total Certain items $ 9 $ (5) $ 13 $ (5)

Exchange & Third-Party Management

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Segment financial results $ 15 $ 24 $ (9) (35%) $ 40 $ 52 $ (12) (23%)

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Share-based compensation expense 1 — 1 (15%) 1 1 — (13%)

Certain items 2 — 2 NM 2 — 2 NM

Segment adjusted EBITDA $ 25 $ 32 $ (7) (22%) $ 57 $ 69 $ (12) (17%)

Segment Adjusted EBITDA Margin

44.3% 51.9% (7.6 pts) 48.0% 53.8% (5.8 pts)

Certain items for the Exchange & Third-Party Management segment for the three and six months ended June 30, 2024 consisted of $2 million of impairment charges.

Business Segments

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Vacation Ownership

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Sale of vacation ownership products $ 309 $ 391 $ 661 $ 766

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Gains and other income, net 1 7 1 16

SEGMENT FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 182 205

Net loss attributable to noncontrolling interests — —

Other (2) 1 (3) 1

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 144 $ 224 $ 326 $ 429

Sale of Vacation Ownership Products

2024 First Quarter

Three Months Ended

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

Second Quarter and First Half

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 % of Consolidated Contract Sales, Net of Resales June 30, 2023 % of Consolidated Contract Sales, Net of Resales Change

June 30, 2024 % of Consolidated Contract Sales, Net of Resales June 30, 2023 % of Consolidated Contract Sales, Net of Resales Change

Consolidated contract sales

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Joint venture contract sales

(3) (9) 6 (8) (19) 11

Consolidated contract sales, net of resales 440 443 (3) (1%) 856 866 (10) (1%)

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Financing propensity

53.4% 54.2% (0.8 pts)

54.5% 56.2% (1.7 pts) 54.0% 55.3% (1.3pts)

Average FICO Score (2)

737 736 738 737

(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.

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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.

Second Quarter and First Half

Contract sales in the second quarter and first half of 2024 declined due to a 6% decrease in VPG in each period, partially offset by an increase in tours (5% and 4%, respectively).

The decrease in VPG in both periods was due to a decline in first time buyer VPG, a larger percentage mix of international tours which carry a lower VPG, and the on-going impact from the reduced activity at our Maui sales centers.

Excluding the $16 million and $32 million decline in contract sales at our Maui sales centers in the second quarter and first half of 2024, respectively, contract sales increased 3% in each period.

In the third quarter of 2023, we increased our vacation ownership notes receivable reserve to reflect then-current trends in delinquencies and default rates.

We estimated the amount of the increase in our sales reserve primarily using a historical period of increased defaults.

The 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.

Subsequent to the third quarter of 2023, we increased our sales reserve rate to provide for higher expected cumulative losses on new originations.

We believe the cumulative impact of inflation on consumers and the related impact on year-over-year increases in maintenance fees for 2023 and 2024 are driving continued elevated delinquencies and defaults.

As a result, during the second quarter of 2024, we increased our sales reserve by $70 million to reflect increases in expected cumulative loss rates for our vacation ownership notes receivable originated during 2021-2024.

In estimating the increase in the sales reserve, we considered current macroeconomic conditions, including higher consumer debt levels, moderating inflation, continued high interest rates, uncertainty around timing and frequency of interest rate adjustments and continued mixed economic indicators.

While we expect a return to normalized maintenance fee increases commencing in 2025, we plan to increase our sales reserve prospectively for new originations at a weighted average rate of 17% to 19% until we have sufficient evidence of improvement in delinquency and default rates.

We expect our full year 2024 contracts sales will reflect lower VPG for the second half of 2024, partially offset by tour growth in first time buyer tours, which carry a lower VPG.

Development Profit

2024 First Quarter

Three Months Ended Change % Change

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

Second Quarter

Three Months Ended

($ in millions) June 30, 2024 % of Revenue June 30, 2023 % of Revenue Change

Sale of vacation ownership products $ 309 $ 391 $ (82) (21%)

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Development profit margin 14.7% 30.8% (16.1 pts)

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.

The decrease in Development profit reflects lower sales of vacation ownership products and higher marketing and sales costs, including $8 million of higher preview costs, partially offset by $13 million of lower product cost associated with the additional sales reserve, $11 million of favorable product cost true-up activity compared to the prior comparable period and $4 million from the sale of lower average cost inventory.

Development profit margin, excluding the impact of the sales reserve increase of $70 million, was 27.0% in the second quarter of 2024.

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

Six Months Ended

($ in millions) June 30, 2024 % of Revenue June 30, 2023 % of Revenue Change

Sale of vacation ownership products $ 661 $ 766 $ (105) (14%)

Cost of vacation ownership products (91) (14%) (124) (16%) 33 27%

Marketing and sales (449) (68%) (416) (54%) (33) (8%)

Development profit $ 121 $ 226 $ (105) (47%)

Development profit margin 18.3% 29.6% (11.3 pts)

The decrease in Development profit reflects lower sales of vacation ownership products and higher marketing and sales costs, including $14 million of higher preview costs, partially offset by $13 million of lower product cost associated with the additional sales reserve, $11 million due to the sale of lower cost inventory, $5 million of favorable product cost true-up activity compared to the prior comparable period, $2 million associated with lower sales volume and $2 million of other development related costs.

Development profit margin, excluding the impact of the $70 million sales reserve increase in the second quarter of 2024, was 24.3% in the first half of 2024.

Resort Management and Other Services Revenues, Expenses and Profit

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Management fee revenues $ 51 $ 45 $ 6 16% $ 103 $ 90 $ 13 15%

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Resort management and other services profit $ 84 $ 78 $ 6 9% $ 161 $ 149 $ 12 8%

Resort management and other services profit margin 51.8% 52.7% (0.9 pts)

Resort management and other services profit margin 53.9% 52.9% 1.0 pts 52.9% 52.8% 0.1 pts

Resort occupancy (1)

90.2% 88.9% 1.3 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 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.

90.1% 88.7% 1.4 pts 90.1% 88.8% 1.3 pts

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

Second Quarter and First Half

The increase in Other management and exchange revenues is attributed to higher club dues in both the second quarter and first half of 2024.

The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $3 million and $7 million, and an increase in customer service and exchange company expenses of $1 million and $4 million due to higher wages, benefits, and other operating cost increases in the second quarter and first half of 2024, respectively.

Rental Revenues, Expenses and Profit

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Rental revenues $ 143 $ 135 $ 8 6% $ 290 $ 276 $ 14 5%

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Rental profit $ 30 $ 19 $ 11 64% $ 67 $ 44 $ 23 54%

Rental profit margin 25.3% 17.9% 7.4 pts

Three Months Ended

March 31, 2024 March 31, 2023 Change % Change

Rental profit margin 20.7% 13.4% 7.3 pts 23.0% 15.7% 7.3 pts

Transient keys rented (1)

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Rental occupancy (2)

72.7% 70.4% 2.3 pts

74.4% 70.8% 3.6 pts 73.6% 70.6% 3.0 pts

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

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

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.

Second Quarter

Rental profit, excluding profit from owned hotels, increased due to higher plus points revenue of $11 million, an $8 million increase in costs allocated to marketing and sales expense for occupancy used for previews, and $2 million of lower hotel loyalty and other costs.

These changes were partially offset by $5 million of decreased profit due to lower average transient rate on higher keys rented and higher tidy and variable costs, $3 million of increased costs associated with higher owner utilization of third-party vacation and other offerings, and $2 million of higher unsold maintenance fees associated with developer owned inventory.

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

Rental profit, excluding profit from owned hotels, increased due to higher plus points revenue of $22 million, a $14 million increase in costs allocated to marketing and sales expense for occupancy used for previews, and $2 million of lower hotel loyalty and other costs.

These changes were partially offset by $9 million of decreased profit due to lower

average transient rate on higher keys rented and higher tidy and variable costs and $6 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 half of 2023.

Financing Revenues, Expenses and Profit

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Financing revenues $ 85 $ 80 $ 5 7% 168 158 10 7%

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Financing profit $ 50 $ 55 $ (5) (10%) $ 99 $ 107 $ (8) (7%)

Financing profit margin 59.5% 65.7% (6.2 pts)

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.

Financing profit margin 58.0% 69.1% (11.1 pts) 58.7% 67.4% (8.7 pts)

Financing propensity 54.5% 56.2% (1.7 pts) 54.0% 55.3% (1.3 pts)

Second Quarter and First Half

Financing revenues reflect higher interest income as a result of a higher average notes receivable balances and a slightly higher average interest rate for the three and six months ended June 30, 2024.

The higher average notes receivable balances resulted from new loan originations in excess of the repayment of existing vacation ownership notes receivable, which we expect to continue for the remainder of 2024.

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

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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) March 31, 2024 March 31, 2023 Change % Change

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

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

2024 First Quarter

Three Months Ended

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

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

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Gains and other income, net $ 1 $ 7 $ (6) (82%) $ 1 $ 16 $ (15) (92%)

Second Quarter

During the second quarter of 2023, we recorded $7 million of gains on the disposition of excess real estate.

During the first half 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 $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

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Litigation charges $ 10 $ 3 $ 7 NM $ 13 $ 6 $ 7 NM

Second Quarter and First Half

Litigation charges during the second quarter of 2024 and 2023, as well as the first half of 2024 and 2023, relate primarily to a land disposition in the U.S.

and certain resorts in Europe.

Exchange & Third-Party Management

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Management and exchange $ 45 $ 51 $ 97 $ 107

Rental 10 11 21 21

Cost reimbursements 3 3 5 8

2 unchanged sentences

Depreciation and amortization 7 8 14 16

Impairment 2 — 2 —

Cost reimbursements 3 3 5 8

2 unchanged sentences

Management and Exchange Profit

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Management and exchange revenue $ 45 $ 51 $ (6) (9%) $ 97 $ 107 $ (10) (9%)

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Management and exchange profit $ 14 $ 21 $ (7) (31%) $ 35 $ 47 $ (12) (26%)

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

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.

Management and exchange profit margin 30.6% 40.4% (9.8 pts) 35.9% 44.0% (8.1 pts)

Second Quarter

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

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

Interval International management and exchange revenues declined $4 million or 4% primarily attributed to 6% lower exchange transaction volume, partially offset by a 3% increase in average exchange fees.The decrease in management and exchange revenue reflects a $6 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent, lower occupancy and a lower average daily rate in the Hawaii market due to changes in demand.

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

Rental Revenues

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Rental revenues

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

$ 10 $ 11 $ (1) (5%) $ 21 $ 21 $ — 1%

Second Quarter

Results reflect a 16% decrease in transaction volume, partially offset by a 10% increase in average fees per transaction.

Results reflect a 7% decrease in transaction volume offset by a 7% increase in average fees per transaction.

Corporate and Other

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

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Resort management and other services $ 13 $ 8 $ 24 $ 17

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Depreciation and amortization 3 3 9 4

Litigation charges — (1) — (1)

Restructuring 1 — 3 —

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TOTAL EXPENSES 62 66 133 137

Gains and other income, net — 12

(Losses) gains and other (expense) income, net (8) 3 (8) 15

Interest expense, net (43) (36) (83) (70)

Transaction and integration costs (3) (10) (18) (23)

Other 1 — 1 —

FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (111) (108) (237) (213)

Provision for income taxes (10) (50) (45) (91)

Net loss attributable to noncontrolling interests 1 —

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

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (122) $ (158) $ (282) $ (304)

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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

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Resort management and other services $ 13 $ 8 $ 24 $ 17

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TOTAL EXPENSES 4 — 4 2

Interest expense, net 1 1 1 1

FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 2 1 1

Net loss attributable to noncontrolling interests 1 —

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

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

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ (1) $ 2 $ — $ 1

General and Administrative

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

General and administrative $ 54 $ 64 $ (10) (15%) $ 117 $ 132 $ (15) (11%)

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)

2024 First Quarter

Three Months Ended

($ 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.

Second Quarter

The decrease in General and administrative expenses for the second quarter of 2024 is due to lower information technology costs, insurance expense and compensation expense of $5 million, $2 million and $3 million, respectively.

The decrease in General and administrative expenses for the first half of 2024 is due to lower information technology costs, insurance expense and compliance related expenses of $9 million, $3 million and $3 million, respectively.

(Losses) Gains and Other (Expense) Income

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

(Losses) gains and other (expense) income, net $ (8) $ 3 $ (11) NM $ (8) $ 15 $ (23) NM

Second Quarter

In the second quarter of 2024, we recorded $4 million of foreign currency translation losses and $4 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters.

In the second quarter of 2023, we recorded $2 million of foreign currency translation gains and a $1 million increase in our receivable from Marriott International for indemnified income tax matters (the true-up to the offsetting accrual is included in the Provision for income taxes line).

In the first half of 2024, we recorded $6 million of foreign currency translation losses and $2 million net of tax related adjustments to the receivable from Marriott International for indemnified tax matters.

In the first half of 2023, we recorded a $21 million increase in our receivable from Marriott International for indemnified income tax matters (the true-up to the offsetting accrual is included in the Provision for income taxes line) and $4 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

2024 First Quarter

Three Months Ended

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Interest expense, net $ (43) $ (36) $ (7) (21%) $ (83) $ (70) $ (13) (19%)

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.

2024 First Quarter

Three Months Ended

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

Second Quarter and First Half

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

2024 Second Quarter

Three Months Ended Six Months Ended

($ in millions) June 30, 2024 June 30, 2023 Change

2023 June 30, 2024 June 30, 2023 Change

Provision for income taxes $ (10) $ (50) $ 40 79% $ (45) $ (91) $ 46 50%

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.

Second Quarter

Our effective tax rate was 22.0% and 35.4% for the three months ended June 30, 2024 and June 30, 2023, respectively.

The effective tax rate for the three months ended June 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including a $13 million decrease for the expiration of statutes of limitation on certain unrecognized tax benefits, partially offset by a $4 million increase related to prior year true-up adjustments in non-U.S.

jurisdictions.

The effective tax rate for the three months ended June 30, 2023 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including a $5 million adjustment in stock compensation.

Our effective tax rate was 35.2% and 33.9% for the six months ended June 30, 2024 and June 30, 2023, respectively.

The effective tax rate for the six months ended June 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including a $20 million increase to remove the permanent reinvestment assertion for certain non-U.S.

entities and a $5 million increase related to prior year true-up adjustments in non-U.S.

jurisdictions, partially offset by a $22 million decrease for the expiration of statutes of limitation on certain unrecognized tax benefits.

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

The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 non-U.S.

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We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs.

At 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.

At June 30, 2024, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.4, above our targeted range of 2.5 to 3.0, and our goal is to reduce this ratio to 3.0 by the end of 2025.

In the second quarter of 2024, we amended the Corporate Credit Facility to provide for a new $800 million term loan facility that is scheduled to mature on April 1, 2031, the New Term Loan.

The proceeds of the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024 and was scheduled to mature on August 31, 2025.

We have no material principal payment obligations on our debt prior to 2026.

See Footnote 12 “Debt” to our Financial Statements for further information related to maturities of our debt.

Sources of Liquidity

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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 pool 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 collateralized by a single pool of transferred vacation ownership notes receivable.

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

Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default.

Given the recent increase in delinquencies and defaults above historical averages, the cash excess spread we received from our securitization transactions has been lower than previously anticipated.

At the recent level of defaults, there is no impact to cash whether we repurchase defaulted vacation ownership notes receivable from a securitization VIE and pursue foreclosure or foreclose on behalf of a securitization VIE.

Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable.

If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured.

During the 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.

During the second quarter of 2024, and as of June 30, 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.

1 unchanged sentence

Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur twice a year.

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.

During the second quarter of 2024, we amended certain agreements associated with our Warehouse Credit Facility, which extended the revolving

period from May 31, 2025 to June 11, 2026.

At June 30, 2024, we had $108 million of borrowings outstanding under our Warehouse Credit Facility.

As of June 30, 2024, $71 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 March 31, 2024, $160 million of borrowings and $33 million of le tters of credit were outstanding on our Revolving Corporate Credit Facility.

At June 30, 2024, $175 million of borrowings and $32 million of le tters of credit were outstanding under 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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Inventory Spending Less Than Cost of Sales

Three Months Ended

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

Six Months Ended

($ in millions) June 30, 2024 June 30, 2023

Inventory spending $ (63) $ (41)

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Through our existing VOI repurchase program, we proactively acquire previously sold VOIs from owners’ associations and individual owners at lower costs than would be required to develop new inventory.

Among other reasons for repurchasing inventory, we expect these repurchases will 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.

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

Our spending for real estate inventory in the first half 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.

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Vacation Ownership Notes Receivable Collections Less Than Originations

Three Months Ended

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

Six Months Ended

($ in millions) June 30, 2024 June 30, 2023

Vacation ownership notes receivable collections — non-securitized $ 67 $ 90

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Repurchase of Common Stock

The following table summarizes share repurchase activity under our current share repurchase program:

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

($ in millions, except per share amounts) Number of Shares Repurchased Cost Basis of Shares Repurchased Average Price

1 unchanged sentence

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

For the first quarter of 2024 279,577 24 87.37

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

For the first half of 2024 410,377 36 $ 88.99

As of June 30, 2024 25,551,450 $ 2,441 $ 95.55

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:

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

Declaration Date Stockholder Record Date

2 unchanged sentences

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.

May 9, 2024 May 23, 2024 June 6, 2024 $0.76

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

In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends.

The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us.

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Material Cash Requirements

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

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

Payments Due by Period

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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.

(2) During the second quarter of 2024, we amended the Corporate Credit Facility to provide for the New Term Loan, which is scheduled to mature on April 1, 2031.

The proceeds from the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024, and was scheduled to mature on August 31, 2025.

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

(4) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction.

Amounts reflected herein represent expected funding under such contracts and primarily relate to future purchases of vacation ownership units and information technology assets (hardware and software).

Amounts reflected herein represent expected funding requirements under such contracts and primarily relate to future purchases of property and vacation ownership units and information technology assets (hardware and software).

Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.

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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 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.

The following tables present consolidating financial information as of June 30, 2024 and December 31, 2023, and for the six months ended June 30, 2024 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVWC, and MVW on a consolidated basis.

Condensed Consolidating Statement of Income

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

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

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Condensed Consolidating Balance Sheet

As of March 31, 2024

As of June 30, 2024

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

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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