MARRIOTT VACATIONS WORLDWIDE Corp 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk Our exposure to market risk has not changed materially from that disclosed in Part I, Item 7A of the 2023 Annual Report, other than as set forth below. We manage the interest rate risk on our corporate debt through the use of fixed-rate debt and may also use interest rate hedges to fix a portion of our variable-rate debt. At June 30, 2024, the interest rate applicable to 67% (approximately $2.0 billion) of our corporate debt, excluding finance leases, was fixed and the interest rate applicable to the remaining 33% (approximately $975 million) was variable. Assuming we had no outstanding balance under our Revolving Corporate Credit Facility, a 100 basis point increase in the underlying benchmark rate on our variable-rate debt at June 30, 2024 would result in an annual increase in cash interest of approximately $8 million. The following table presents the scheduled maturities and the total fair value as of June 30, 2024 for our financial instruments that are impacted by market risks: ($ in millions) Average Interest Rate Maturities by Period Remainder of 2024 2025 2026 2027 2028 Thereafter Total Carrying Value Total Fair Value Assets – Maturities represent expected principal receipts; fair values represent assets Vacation ownership notes receivable — non-securitized 12.0% $ 38 $ 55 $ 44 $ 40 $ 35 $ 190 $ 402 $ 406 Vacation ownership notes receivable — securitized 13.4% $ 85 $ 170 $ 177 $ 180 $ 179 $ 1,115 $ 1,906 $ 1,954 Contracts receivable for financed VOI sales, net 13.0% $ 3 $ 4 $ 4 $ 4 $ 4 $ 32 $ 51 $ 51 Liabilities – Maturities represent expected principal payments; fair values represent liabilities Securitized debt 4.8% $ (100) $ (188) $ (194) $ (278) $ (189) $ (1,175) $ (2,124) $ (2,085) Term Loan (1) 7.6% $ (4) $ (8) $ (8) $ (8) $ (8) $ (764) $ (800) $ (802) Revolving Corporate Credit Facility 7.4% $ — $ — $ — $ (175) $ — $ — $ (175) $ (175) Senior notes 2028 Notes 4.8% $ — $ — $ — $ — $ (350) $ — $ (350) $ (331) 2029 Notes 4.5% $ — $ — $ — $ — $ — $ (500) $ (500) $ (460) 2026 Convertible Notes 0.0% $ — $ — $ (575) $ — $ — $ — $ (575) $ (503) 2027 Convertible Notes 3.3% $ — $ — $ — $ (575) $ — $ — $ (575) $ (536) (1) During the second quarter of 2024, we amended the Corporate Credit Facility to provide for the New Term Loan, which is scheduled to mature on April 1, 2031. The proceeds from the New Term Loan were used to refinance in full the Term Loan, which had a balance of $784 million as of March 31, 2024, and was scheduled to mature on August 31, 2025.