What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-02 · 189 added, 157 removed, 840 unchanged (29% of the section changed)

3 unchanged sentences

(In millions, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Sale of vacation ownership products $ 387 $ 319 $ 1,048 $ 1,085

17 unchanged sentences

TOTAL EXPENSES 1,157 1,081 3,253 3,099

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

Gains and other income, net 9 3 2 34

Interest expense, net ( 40 ) ( 36 ) ( 123 ) ( 106 )

14 unchanged sentences

(In millions)

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

NET INCOME $ 84 $ 42 $ 168 $ 219

9 unchanged sentences

(In millions, except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and cash equivalents $ 197 $ 248

31 unchanged sentences

Additional paid-in capital 3,969 3,955

Accumulated other comprehensive income 1 16

Accumulated other comprehensive (loss) income ( 11 ) 16

Retained earnings 830 742

8 unchanged sentences

(In millions)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

OPERATING ACTIVITIES

3 unchanged sentences

Amortization of debt discount and issuance costs 20 17

Vacation ownership notes receivable reserve 168 79

Vacation ownership notes and contracts receivable reserve 223 182

Share-based compensation 24 25

26 unchanged sentences

(In millions)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

FINANCING ACTIVITIES

5 unchanged sentences

Finance lease payment ( 4 ) ( 2 )

Payment of debt issuance costs ( 19 ) ( 6 )

Payment of debt and securitized debt issuance costs ( 25 ) ( 6 )

Repurchase of common stock ( 45 ) ( 248 )

10 unchanged sentences

Non-cash transfer from property and equipment to inventory 92 60

Non-cash transfer from property and equipment to other assets 52 —

Right-of-use asset obtained in exchange for finance lease obligation 14 80

Non-cash issuance of debt in connection with finance lease 13 97

Dividends payable $ 27 $ 26

Interest paid, net of amounts capitalized 179 141

23 unchanged sentences

75.8 BALANCE AT JUNE 30, 2024 1 ( 2,362 ) 3,959 1 773 2,372 — 2,372

— Net income — — — — 84 84 — 84

— Foreign currency translation adjustments — — — ( 12 ) — ( 12 ) — ( 12 )

— Share-based compensation plans — 1 10 — — 11 — 11

— Repurchase of common stock — ( 9 ) — — — ( 9 ) — ( 9 )

— Dividends — — — — ( 27 ) ( 27 ) — ( 27 )

75.8 BALANCE AT SEPTEMBER 30, 2024 $ 1 $ ( 2,370 ) $ 3,969 $ ( 11 ) $ 830 $ 2,419 $ — $ 2,419

MARRIOTT VACATIONS WORLDWIDE CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(In millions)

Issued Common

17 unchanged sentences

75.8 BALANCE AT JUNE 30, 2023 1 ( 2,213 ) 3,947 23 718 2,476 2 2,478

— Net income — — — — 42 42 — 42

— Foreign currency translation adjustments — — — ( 2 ) — ( 2 ) — ( 2 )

— Derivative instrument adjustment — — — ( 3 ) — ( 3 ) — ( 3 )

— Share-based compensation plans — 1 6 — — 7 — 7

— Repurchase of common stock — ( 86 ) — — — ( 86 ) — ( 86 )

— Dividends — — — — ( 26 ) ( 26 ) — ( 26 )

75.8 BALANCE AT SEPTEMBER 30, 2023 $ 1 $ ( 2,298 ) $ 3,953 $ 18 $ 734 $ 2,408 $ 2 $ 2,410

See Interim Condensed Notes to Consolidated Financial Statements

12 unchanged sentences

Such estimates include, but are not limited to, revenue recognition, cost of vacation ownership products, inventory valuation, goodwill and intangibles valuation, accounting for acquired vacation ownership notes receivable, vacation ownership notes receivable reserves, income taxes, and loss contingencies.

The uncertainties in the broader macroeconomic environment, including inflation, continuing high interest rates, mixed economic indicators, increased consumer debt and continuing global insecurity, have made it more challenging to make these estimates.

The uncertainties in the broader macroeconomic environment, including inflation, continuing high interest rates, mixed economic indicators, increased consumer debt, continuing global insecurity and political uncertainty, have made it more challenging to make these estimates.

Actual results could differ from our estimates, and such differences may be material.

23 unchanged sentences

We will begin providing the enhanced disclosures required by this standard with our Annual Report on Form 10-K for the year ending December 31, 2025.

Waikiki, Hawaii

During the third quarter of 2024, we acquired 38 completed vacation ownership units located at our Marriott Vacation Club, Waikiki property for $ 65 million.

The transaction was accounted for as an asset acquisition with all of the purchase price allocated to Inventory.

See Footnote 15 “Variable Interest Entities” for additional information about this transaction, including our remaining commitment related to this property, and our activities relating to the VIE involved in this transaction.

Additionally, during the first quarter of 2024, we acquired retail space located at our Marriott Vacation Club, Waikiki property for $ 48 million.

The transaction was accounted for as an asset acquisition, and was classified as held-for-sale and included in Other assets as of September 30, 2024.

We have an agreement to sell this retail space to a third party, and we expect to complete the sale during the fourth quarter of 2024.

Savannah, Georgia

During the third quarter of 2023, we acquired a property in Savannah, Georgia for $ 19 million.

We plan to convert the property into a 73 -unit vacation ownership property.

The transaction was accounted for as an asset acquisition and was recorded in Property and equipment, net.

Charleston, South Carolina

4 unchanged sentences

Sources of Revenue by Segment

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

9 unchanged sentences

Total Revenues $ 1,250 $ 56 $ ( 1 ) $ 1,305

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

9 unchanged sentences

Total Revenues $ 1,126 $ 64 $ ( 4 ) $ 1,186

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

9 unchanged sentences

Total Revenues $ 3,458 $ 179 $ 3 $ 3,640

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

11 unchanged sentences

The following tables detail the timing of revenue from contracts with customers by segment for the time periods presented.

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

2 unchanged sentences

Revenue from contracts with customers $ 1,163 $ 56 $ ( 1 ) $ 1,218

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

2 unchanged sentences

Revenue from contracts with customers $ 1,045 $ 64 $ ( 4 ) $ 1,105

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

2 unchanged sentences

Revenue from contracts with customers $ 3,203 $ 179 $ 3 $ 3,385

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

($ in millions) Vacation Ownership Exchange & Third-Party Management Corporate and Other Total

3 unchanged sentences

Sale of Vacation Ownership Products

Revenues were reduced during the second quarter and first half of 2024 by $ 60 million and $ 64 million, respectively, due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods.

Revenues were reduced during the third quarter and first three quarters of 2024 by $ 3 million and $ 67 million, respectively, due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods.

Receivables from Contracts with Customers, Contract Assets, & Contract Liabilities

The following table shows the composition of our receivables from contracts with customers and contract liabilities.

We had no contract assets at either June 30, 2024 or December 31, 2023.

($ in millions) At June 30, 2024 At December 31, 2023

We had no contract assets at either September 30, 2024 or December 31, 2023.

($ in millions) At September 30, 2024 At December 31, 2023

Receivables from Contracts with Customers

5 unchanged sentences

Deferred revenue 350 382

Revenue recognized during the second quarter and first half of 2024 that was included in our contract liabilities balance at December 31, 2023 was $ 95 million and $ 216 million, respectively.

Revenue recognized during the third quarter and first three quarters of 2024 that was included in our contract liabilities balance at December 31, 2023 was $ 76 million and $ 292 million, respectively.

Remaining Performance Obligations

Our remaining performance obligations represent the expected transaction price allocated to our contracts that we expect to recognize as revenue in future periods when we perform under the contracts.

At June 30, 2024, approximately 92 % of this amount is expected to be recognized as revenue over the next two years .

At September 30, 2024, approximately 92 % of this amount is expected to be recognized as revenue over the next two years .

Accounts and Contracts Receivable

1 unchanged sentence

The following table shows the composition of our accounts and contracts receivable balances:

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Receivables from contracts with customers, net $ 212 $ 259

5 unchanged sentences

Certain items that do not relate directly to ordinary income are excluded from the AETR and included in the period in which they occur.

Our effective tax rate was 22.0 % and 35.4 % for the three months ended June 30, 2024 and June 30, 2023, respectively, and 35.2 % and 33.9 % for the six 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.

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.

Our effective tax rate was 28.7 % and 36.1 % for the three months ended September 30, 2024 and September 30, 2023, respectively, and 32.1 % and 34.3 % for the nine months ended September 30, 2024 and September 30, 2023, respectively.

The effective tax rate for the three months ended September 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including an $ 11 million decrease related to changes in valuation allowances on certain deferred tax assets in non-U.S.

jurisdictions and a $ 6 million decrease primarily attributable to the expiration of statutes of limitation on certain unrecognized tax benefits, partially offset by an $ 8 million increase to remove the permanent reinvestment assertion for our earnings in certain non-U.S.

entities and an increase of $ 3 million for deferred non-U.S.

withholding taxes.

The effective tax rate for the three months ended September 30, 2023 differed from the blended statutory tax rate for the same period due to losses in non-U.S.

jurisdictions for which we do not realize tax benefits.

The effective tax rate for the nine months ended September 30, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including a $ 27 million decrease attributable to the expiration of statutes of limitation on certain unrecognized tax benefits (inclusive of interest and penalties) and an $ 8 million net decrease related to changes in valuation allowances in non-U.S.

jurisdictions, partially offset by a $ 28 million increase to remove the permanent reinvestment assertion for our earnings in certain non-U.S.

entities and a $ 3 million increase for deferred non-U.S.

withholding taxes.

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

Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (excluding interest and penalties) during the six months ended June 30, 2024.

The following table summarizes the activity related to our unrecognized tax benefits (excluding interest and penalties) during the nine months ended September 30, 2024.

($ in millions) Unrecognized Tax Benefits

2 unchanged sentences

Decreases as a result of a lapse of the applicable statute of limitation ( 9 )

Balance at June 30, 2024

Balance at September 30, 2024

(1) Decrease due to filing of an automatic tax method change with the IRS during the second quarter of 2024.

The total amount of gross interest and penalties accrued related to unrecognized tax benefits was $ 33 million at June 30, 2024 and $ 48 million at December 31, 2023, a decrease of $ 15 million, which is predominantly attributable to the expiration of statutes of limitation, partially offset by additional interest and penalties related to non-U.S.

The total amount of gross interest and penalties accrued related to unrecognized tax benefits was $ 29 million at September 30, 2024 and $ 48 million at December 31, 2023, a decrease of $ 19 million, which is predominantly attributable to the expiration of statutes of limitation, partially offset by additional interest and penalties related to non-U.S.

uncertain tax positions.

At June 30, 2024, unrecognized tax benefits (including interest and penalties) of $ 16 million, net of indemnification, would impact the effective tax rate if recognized.

At September 30, 2024, unrecognized tax benefits (including interest and penalties) of $ 13 million, net of indemnification, would impact the effective tax rate if recognized.

We anticipate $ 32 million of unrecognized tax benefits, including interest and penalties, to be indemnified pursuant to a Tax Matters Agreement dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc., and consequently have recorded a corresponding indemnification asset.

5 unchanged sentences

The following table shows the composition of our vacation ownership notes receivable balances, net of reserves.

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

($ in millions) Originated Acquired Total Originated Acquired Total

9 unchanged sentences

The following table summarizes interest income associated with vacation ownership notes receivable.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Interest income associated with securitized vacation ownership notes receivable

9 unchanged sentences

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.

We believe the cumulative impact of inflation on consumers and the related impact of 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.

The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 724 and 723 , at June 30, 2024 and December 31, 2023, respectively, based upon the FICO score of the borrower at the time of origination.

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

The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 725 and 723 , at September 30, 2024 and December 31, 2023, respectively, based upon the FICO score of the borrower at the time of origination.

Acquired Vacation Ownership Notes Receivable

Acquired vacation ownership notes receivable represent vacation ownership notes receivable acquired as part of the ILG Acquisition and the Welk Acquisition.

The following table shows future contractual principal payments, net of a $ 12 million reserve, and interest rates for our acquired vacation ownership notes receivable at June 30, 2024.

The following table shows future contractual principal payments, net of a $ 10 million reserve, and interest rates for our acquired vacation ownership notes receivable at September 30, 2024.

Acquired Vacation Ownership Notes Receivable

2 unchanged sentences

Thereafter 2 23 25

Balance at June 30, 2024 $ 19 $ 116 $ 135

Balance at September 30, 2024 $ 15 $ 105 $ 120

Weighted average stated interest rate 13.8 % 14.0 % 14.0 %

3 unchanged sentences

The following tables show the acquired vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination.

Acquired Vacation Ownership Notes Receivable as of June 30, 2024

Acquired Vacation Ownership Notes Receivable as of September 30, 2024

($ in millions) 700+ 600 - 699 < 600 No Score Total

9 unchanged sentences

Originated vacation ownership notes receivable represent vacation ownership notes receivable originated by Legacy-ILG and Legacy-Welk subsequent to each respective acquisition date, and all Legacy-MVW vacation ownership notes receivable.

The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at June 30, 2024.

The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at September 30, 2024.

Originated Vacation Ownership Notes Receivable

6 unchanged sentences

Thereafter 240 1,150 1,390

Balance at June 30, 2024 $ 383 $ 1,790 $ 2,173

Balance at September 30, 2024 $ 467 $ 1,800 $ 2,267

Weighted average stated interest rate 11.9 % 13.4 % 13.0 %

11 unchanged sentences

Defaulted vacation ownership notes receivable repurchase activity (1)

Balance at June 30, 2024 $ 271 $ 257 $ 528

115 ( 115 ) —

Balance at September 30, 2024 $ 244 $ 272 $ 516

(1) Reflects the change attributable to the transfer of the reserve from the securitized vacation ownership notes receivable reserve to the non-securitized vacation ownership notes receivable reserve when we voluntarily repurchased securitized vacation ownership notes receivable.

The following tables show originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination.

Originated Vacation Ownership Notes Receivable as of June 30, 2024

Originated Vacation Ownership Notes Receivable as of September 30, 2024

($ in millions) 700 + 600 - 699 < 600 No Score Total

7 unchanged sentences

$ 1,569 $ 679 $ 59 $ 326 $ 2,633

The following tables detail the origination year of our originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination as of June 30, 2024, and gross write-offs by brand for the first half of 2024.

The following tables detail the origination year of our originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination as of September 30, 2024, and gross write-offs by brand for the first three quarters of 2024.

Originated Vacation Ownership Notes Receivable - Marriott Vacation Ownership

15 unchanged sentences

Vacation Ownership Notes Receivable on Non-Accrual Status

For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rates of 14.77 % as of June 30, 2024 and 13.00 % as of December 31, 2023.

A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $ 13 million as of both June 30, 2024 and December 31, 2023.

For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rates of 14.22 % as of September 30, 2024 and 13.00 % as of December 31, 2023.

A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $ 14 million as of September 30, 2024 and $ 13 million as of December 31, 2023.

The following table shows our recorded investment in non-accrual vacation ownership notes receivable, which are vacation ownership notes receivable that are 90 days or more past due.

1 unchanged sentence

($ in millions) Non-Securitized Securitized Total

Investment in vacation ownership notes receivable on non-accrual status at June 30, 2024

Investment in vacation ownership notes receivable on non-accrual status at September 30, 2024

$ 158 $ 20 $ 178

1 unchanged sentence

$ 141 $ 27 $ 168

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of June 30, 2024 and December 31, 2023.

As of June 30, 2024 As of December 31, 2023

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of September 30, 2024 and December 31, 2023.

As of September 30, 2024 As of December 31, 2023

($ in millions) Non-Securitized Securitized Total Non-Securitized Securitized Total

10 unchanged sentences

The table excludes Cash and cash equivalents, Restricted cash, Accounts and contracts receivable (excluding contracts receivable for financed VOI sales, net), deposits included in Other assets, Accounts payable, Advance deposits, and Accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

At June 30, 2024 At December 31, 2023

At September 30, 2024 At December 31, 2023

($ in millions) Carrying

14 unchanged sentences

Vacation Ownership Notes Receivable

At June 30, 2024 At December 31, 2023

At September 30, 2024 At December 31, 2023

($ in millions) Carrying

24 unchanged sentences

We concluded that this fair value measurement should be categorized within Level 3.

Other assets include $ 118 million and $ 99 million of company owned insurance policies (the “COLI policies”) acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan (the “Deferred Compensation Plan”) at June 30, 2024 and December 31, 2023, respectively, that are held in a rabbi trust.

Other assets include $ 128 million and $ 99 million of company owned insurance policies (the “COLI policies”) acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan (the “Deferred Compensation Plan”) at September 30, 2024 and December 31, 2023, respectively, that are held in a rabbi trust.

The carrying value of the COLI policies is equal to their cash surrender value (Level 2 inputs).

21 unchanged sentences

Diluted earnings per common share attributable to common stockholders reflects the assumed conversion of all dilutive securities, calculated using the treasury stock method.

The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic earnings per share attributable to common stockholders.

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic and diluted earnings per share attributable to common stockholders.

Three Months Ended Nine Months Ended

(in millions, except per share amounts) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Net income attributable to common stockholders

2 unchanged sentences

Basic earnings per share $ 2.38 $ 1.16 $ 4.74 $ 5.96

The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of diluted earnings per share attributable to common stockholders.

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(in millions, except per share amounts) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Net income attributable to common stockholders

13 unchanged sentences

Diluted earnings per share $ 2.12 $ 1.09 $ 4.31 $ 5.33

The computations of diluted earnings per share attributable to common stockholders in the table above exclude approximately 393,000 and 213,000 shares of common stock, the maximum number of shares issuable as of June 30, 2024 and June 30, 2023, respectively, upon the vesting of certain performance-based awards, because the performance conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.

In accordance with the applicable accounting guidance for calculating earnings per share, for the second quarter of 2024, we excluded from our calculation of diluted earnings per share 559,444 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 96.82 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the first half of 2024, we excluded from our calculation of diluted earnings per share 646,203 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 93.73 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For each of the second quarter and first half of 2023, we excluded from our calculation of diluted earnings per share 289,750 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 143.38 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

The computations of diluted earnings per share attributable to common stockholders in the table above exclude approximately 393,000 and 200,000 shares of common stock, the maximum number of shares issuable as of September 30, 2024 and September 30, 2023, respectively, upon the vesting of certain performance-based awards, because the performance conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.

In accordance with the applicable accounting guidance for calculating earnings per share, for the third quarter of 2024, we excluded from our calculation of diluted earnings per share 695,868 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 77.42 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the first three quarters of 2024, we excluded from our calculation of diluted earnings per share 646,203 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 93.73 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For each of the third quarter and first three quarters of 2023, we excluded from our calculation of diluted earnings per share 287,125 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 143.38 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

The following table shows the composition of our inventory balances:

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Finished goods (1)

2 unchanged sentences

(1) Represents completed inventory that is registered for sale as VOIs and vacation ownership inventory expected to be reacquired pursuant to estimated future defaults on originated vacation ownership notes receivable.

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 20 million during the first half of 2024 and $ 15 million during the first half of 2023.

In addition to the above, at June 30, 2024 and December 31, 2023, we had $ 345 million and $ 370 million, respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until the time at which they are available and legally registered for sale as vacation ownership products.

We also had deposits on future purchases of inventory of $ 25 million at June 30, 2024, of which $ 21 million was included in Other assets and $ 4 million was included in Accounts and contracts receivable, net on our Balance Sheet, and $ 3 million at December 31, 2023, which was included in Other assets on our Balance Sheet.

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 28 million during the first three quarters of 2024 and $ 24 million during the first three quarters of 2023.

In addition to the above, at September 30, 2024 and December 31, 2023, we had $ 274 million and $ 370 million, respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until the time at which they are available and legally registered for sale as vacation ownership products.

We also had deposits on future purchases of inventory of $ 26 million at September 30, 2024, of which $ 22 million was included in Other assets and $ 4 million was included in Accounts and contracts receivable, net on our Balance Sheet, and $ 3 million at December 31, 2023, which was included in Other assets on our Balance Sheet.

CONTINGENCIES AND COMMITMENTS

Commitments and Letters of Credit

As of June 30, 2024, we had the following commitments outstanding:

As of September 30, 2024, we had the following commitments outstanding:

• We have various contracts for the use of information technology hardware and software that we use in the normal course of business.

14 unchanged sentences

• We have a commitment to acquire real estate in Waikiki, Hawaii for use in our Vacation Ownership segment via our involvement with a VIE.

Refer to Footnote 15 “Variable Interest Entities” for additional information and our activities relating to the VIE involved in this transaction.

As of June 30, 2024, we had $ 32 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 12 “Debt”), of which $ 31 million were related to and in lieu of reserves required for our most recent outstanding securitization transactions completed during the first quarter of 2024 and the fourth quarter of 2023.

In addition, as of June 30, 2024, we had $ 1 million in letters of credit outstanding that were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

Surety bonds issued as of June 30, 2024 totaled $ 129 million, the majority of which were requested by federal, state or local governments in connection with our operations.

Refer to Footnote 3 “ Acquisitions” for information about purchases that occurred during the first three quarters of 2024 pursuant to this commitment and Footnote 15 “Variable Interest Entities” for additional information about this commitment and our activities relating to the VIE involved in this commitment.

As of September 30, 2024, we had $ 20 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 12 “Debt”), of which $ 19 million were related to and in lieu of reserves required for our outstanding securitization transactions completed during the first quarter of 2024 and the fourth quarter of 2023.

In addition, as of September 30, 2024, we had $ 24 million in letters of credit outstanding that were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility, of which $ 23 million were related to and in lieu of reserves required for our most recent outstanding securitization transaction completed in the third quarter of 2024.

Surety bonds issued as of September 30, 2024 totaled $ 130 million, the majority of which were requested by federal, state or local governments in connection with our operations.

Certain of our rental management agreements in our Exchange & Third-Party Management segment provide for owners of properties we manage to receive specified percentages of rental revenue or guaranteed amounts generated under our management.

In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and we either retain the balance of the rental revenue (if any) as our fee or we make up the deficit if the owners have not received their guaranteed amounts.

At June 30, 2024, our maximum exposure under fixed dollar guarantees was $ 4 million, of which $ 1 million, $ 1 million, $ 1 million, $ 1 million, and less than $ 1 million relate to the remainder of 2024, 2025, 2026, 2027, and 2028, respectively.

At September 30, 2024, our maximum exposure under fixed dollar guarantees was $ 3 million, of which $ 1 million, $ 1 million, $ 1 million, and less than $ 1 million relate to 2025, 2026, 2027, and 2028, respectively.

We have a commitment to an owners’ association that we manage to pay for any shortfall between the actual expenses incurred by the owners’ association and the income received by the owners’ association, in lieu of our payment of maintenance fees for unsold inventory.

2 unchanged sentences

or (2) written notification of termination by either party.

At June 30, 2024, our expected commitment for the remainder of 2024 is $ 10 million, which will ultimately be recorded as a component of rental expense on our income statement.

At September 30, 2024, our expected commitment for the remainder of 2024 is $ 5 million, which will ultimately be recorded as a component of rental expense on our income statement.

Loss Contingencies

1 unchanged sentence

Regis Residence Club, New York filed a lawsuit in the Supreme Court for the State of New York, New York County, Commercial Division against ILG and several of its subsidiaries and certain third parties.

The operative complaint alleges that the defendants breached their fiduciary duties related to sale and rental practices, aided and abetted certain breaches of fiduciary duty, engaged in self-dealing as the sponsor and manager of the club, tortiously interfered with the management agreement, were unjustly enriched, and engaged in anticompetitive conduct.

The plaintiff is seeking unspecified damages, punitive damages and disgorgement of payments under the management and purchase agreements.

The operative complaint alleged that the defendants breached their fiduciary duties related to sale and rental practices, aided and abetted certain breaches of fiduciary duty, engaged in self-dealing as the sponsor and manager of the club, tortiously interfered with the management agreement, were unjustly enriched, and engaged in anticompetitive conduct.

The plaintiff sought unspecified damages, punitive damages and disgorgement of payments under the management and purchase agreements.

In February 2022, the Court granted our motion to dismiss the complaint and dismissed with prejudice all claims except one (such claim, the “Remaining Claim”), with respect to which the plaintiff was granted leave to amend its complaint.

16 unchanged sentences

For matters not requiring accrual, we do not believe that the ultimate outcome of such matters, individually or in the aggregate, will materially harm our financial position, cash flows, or overall trends in results of operations based on information currently available.

However, legal proceedings are inherently uncertain, and while we believe that our accruals, where required, are adequate and/or we have valid defenses to the claims

asserted, unfavorable rulings could occur that could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.

However, legal proceedings are inherently uncertain, and while we believe that our accruals, where required, are adequate and/or we have valid defenses to the claims asserted, unfavorable rulings could occur that could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.

SECURITIZED DEBT

The following table provides detail on our securitized debt, net of unamortized debt discount and issuance costs.

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Vacation ownership notes receivable securitizations, gross (1)

4 unchanged sentences

$ 2,248 $ 2,096

(1) Interest rates as of June 30, 2024 range from 1.5 % to 6.6 %, with a weighted average interest rate of 4.7 %.

(2) The effective interest rate as of June 30, 2024 was 6.6 %.

(1) Interest rates as of September 30, 2024 range from 1.5 % to 6.6 %, with a weighted average interest rate of 4.7 %.

(2) Excludes $ 2 million of unamortized debt issuance costs as of September 30, 2024, as no cash borrowings were outstanding on the Warehouse Credit Facility at that time.

All of our securitized debt is non-recourse.

See Footnote 15 “Variable Interest Entities” for a discussion of the collateral for the non-recourse debt associated with our securitized debt.

The following table shows anticipated future principal payments for our securitized debt as of June 30, 2024.

The following table shows anticipated future principal payments for our securitized debt as of September 30, 2024.

Vacation Ownership

Notes Receivable Securitizations Warehouse Credit

Notes Receivable Securitizations

($ in millions)

2024, remaining $ 50

2025 182 6 188

2026 187 7 194

2027 191 87 278

2028 189 — 189

Thereafter 1,435

$ 2,016 $ 108 $ 2,124

(1) Excludes future Warehouse Credit Facility renewals.

Vacation Ownership Notes Receivable Securitizations

1 unchanged sentence

If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s established parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread 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 second quarter of 2024, and as of June 30, 2024, we had 14 securitized vacation ownership notes receivable pools outstanding, none of which were out of compliance with their respective established parameters.

During the third quarter of 2024, and as of September 30, 2024, we had 15 securitized vacation ownership notes receivable pools outstanding, none of which were out of compliance with their respective established parameters.

As the contractual terms of the underlying securitized vacation ownership notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may occur earlier than shown above due to prepayments by the vacation ownership notes receivable obligors.

3 unchanged sentences

$ 284 million of Class A Notes, $ 89 million of Class B Notes, and $ 57 million of Class C Notes.

Class A Notes have an interest rate of 5.32 %, the Class B Notes have an interest rate of 5.51 %, and the Class C Notes have an interest rate of 6.20 %, for an overall weighted average interest rate of 5.48 %.

The Class A Notes have an interest rate of 5.32 %, the Class B Notes have an interest rate of 5.51 %, and the Class C Notes have an interest rate of 6.20 %, for an overall weighted average interest rate of 5.48 %.

Proceeds from the transaction, net of fees and a reserve, were used to repay the outstanding obligations on our warehouse credit facility (the “Warehouse Credit Facility”) and for other general corporate purposes.

During the third quarter of 2024, we securitized a pool of $ 454 million of vacation ownership notes receivable.

In connection with the securitization, $ 445 million in vacation ownership loan backed notes were issued by MVW 2024-2 LLC (the “2024-2 LLC”) in a private placement.

Three classes of vacation ownership loan backed notes were issued by the 2024-2 LLC:

$ 307 million of Class A Notes, $ 86 million of Class B Notes, and $ 52 million of Class C Notes.

The Class A Notes have an interest rate of 4.43 %, the Class B Notes have an interest rate of 4.58 %, and the Class C Notes have an interest rate of 4.92 %, for an overall weighted average interest rate of 4.52 %.

Proceeds from the transaction, net of fees, were used to repay the outstanding obligations on our Warehouse Credit Facility and for other general corporate purposes.

Warehouse Credit Facility

5 unchanged sentences

The following table provides detail on our debt balances, net of unamortized debt discount and issuance costs.

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Corporate Credit Facility

16 unchanged sentences

$ 3,038 $ 3,049

(1) The effective interest rate as of June 30, 2024 was 7.6 %.

(2) The effective interest rate as of June 30, 2024 was 7.4 %.

The following table shows scheduled principal payments for our debt, excluding finance leases, as of June 30, 2024.

(1) The effective interest rate as of September 30, 2024 was 7.1 %.

The following table shows scheduled principal payments for our debt, excluding finance leases, as of September 30, 2024.

Payments Year

8 unchanged sentences

Corporate Credit Facility

Our corporate credit facility (“Corporate Credit Facility”), which provides support for our business, including ongoing liquidity and letters of credit, includes a term loan facility (the “Term Loan”), and a revolving credit facility with a borrowing capacity of $ 750 million (the “Revolving Corporate Credit Facility”), which includes a letter of credit sub-facility of $ 75 million, that terminates on March 31, 2027.

Our corporate credit facility (the “Corporate Credit Facility”), which consists of a term loan facility (the “Term Loan”), and a revolving credit facility (the “Revolving Corporate Credit Facility”), provides support for our business, including ongoing liquidity and letters of credit.

Our Revolving Corporate Credit Facility has a borrowing capacity of $ 750 million, which includes a letter of credit sub-facility of $ 75 million, and terminates on March 31, 2027.

During the second quarter of 2024, we entered into an amendment to the Corporate Credit Facility (the “Amendment”), which, among other things, provided for a new $ 800 million term loan facility scheduled to mature on April 1, 2031 (the “New Term Loan”).

3 unchanged sentences

There were no changes to the borrowing capacity or the termination date of the Revolving Corporate Credit Facility or its letter of credit sub-facility.

During the second quarter of 2024, $ 200 million of interest rate swaps and a $ 100 million interest rate collar that were entered into prior to 2023 to hedge a portion of our interest rate risk on the Term Loan expired and are no longer recorded on our Balance Sheet as of June 30, 2024.

Both the interest rate swap and the interest rate collar were designated and qualified as cash flow hedges of interest rate risk and were recorded in Other assets on our Balance Sheets as of December 31, 2023.

We characterized payments we made or received in connection with these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income or loss for presentation purposes.

The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during the first half of 2024 and 2023.

The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during the first three quarters of 2024 and 2023.

There were no reclassifications to the Income Statement for any of the periods presented below.

5 unchanged sentences

Derivative instrument adjustment balance, June 30 — 9

Other comprehensive loss before reclassifications — ( 3 )

Derivative instrument adjustment balance, September 30 $ — $ 6

Our senior notes include:

5 unchanged sentences

The 2026 Convertible Notes mature on January 15, 2026, unless earlier repurchased or converted in accordance with their terms prior to that date.

The conversion rate of the 2026 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of June 30, 2024 to 6.2577 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 159.80 per share of our common stock), as a result of the dividends we declared since issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued.

The conversion rate of the 2026 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of September 30, 2024 to 6.3242 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 158.12 per share of our common stock), as a result of the dividends we declared since issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election.

As of June 30, 2024, the effective interest rate was 0.55 %.

The following table shows interest expense information related to the 2026 Convertible Notes.

Three Months Ended Six Months Ended

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

Amortization of debt issuance costs $ 1 $ 1 $ 2 $ 2

As of September 30, 2024, the effective interest rate was 0.55 %.

Amortization of debt issuance costs related to the 2026 Convertible Notes was less than $ 1 million during the third quarter of 2024 and 2023, and $ 2 million during the first three quarters of 2024 and 2023.

2026 Convertible Note Hedges and Warrants

In connection with the offering of the 2026 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions:

convertible note hedge transactions with respect to our common stock (the “2026 Convertible Note Hedges”), covering a total of 3.6 million shares of our common stock, and warrant transactions (the “2026 Warrants”), whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire 3.6 million shares of our common stock, in each case, as of June 30, 2024.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 159.80 and $ 199.75 , respectively, as of June 30, 2024, and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 158.12 and $ 197.65 , respectively, as of September 30, 2024, and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.

2027 Convertible Notes

1 unchanged sentence

The 2027 Convertible Notes mature on December 15, 2027, unless earlier repurchased or converted in accordance with their terms prior to that date.

The conversion rate of the 2027 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of June 30, 2024 to 5.2798 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 189.40 per share of our common stock), as a result of the dividends we declared since issuance of the 2027 Convertible Notes that were greater than the quarterly dividend we paid when the 2027 Convertible notes were issued.

The conversion rate of the 2027 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of September 30, 2024 to 5.2828 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 189.29 per share of our common stock), as a result of the dividends we declared since issuance of the 2027 Convertible Notes that were greater than the quarterly dividend we paid when the 2027 Convertible notes were issued.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election.

As of June 30, 2024, the effective interest rate was 3.88 %.

As of September 30, 2024, the effective interest rate was 3.88 %.

The following table shows interest expense information related to the 2027 Convertible Notes .

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Contractual interest expense $ 5 $ 5 $ 14 $ 14

3 unchanged sentences

In connection with the offering of the 2027 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions:

convertible note hedge transactions with respect to our common stock (the “2027 Convertible Note Hedges”), covering a total of 3.0 million shares of our common stock, and warrant transactions (the “2027 Warrants”), whereby we sold to the counterparties to the 2027 Convertible Note Hedges warrants to acquire 3.0 million shares of our common stock, in each case, as of June 30, 2024.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 189.40 and $ 285.89 , respectively, as of June 30, 2024, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 189.29 and $ 285.72 , respectively, as of September 30, 2024, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

Security and Guarantees

3 unchanged sentences

Marriott Vacations Worldwide has 100,000,000 authorized shares of common stock, par value of $ 0.01 per share.

At June 30, 2024, there were 75,847,792 shares of Marriott Vacations Worldwide common stock issued, of which 35,056,045 shares were outstanding and 40,791,747 shares were held as treasury stock.

At September 30, 2024, there were 75,847,792 shares of Marriott Vacations Worldwide common stock issued, of which 34,947,061 shares were outstanding and 40,900,731 shares were held as treasury stock.

At December 31, 2023, there were 75,807,882 shares of Marriott Vacations Worldwide common stock issued, of which 35,319,306 shares were outstanding and 40,488,576 shares were held as treasury stock.

Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $ 0.01 per share, none of which were issued or outstanding as of June 30, 2024 or December 31, 2023.

Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $ 0.01 per share, none of which were issued or outstanding as of September 30, 2024 or December 31, 2023.

Share Repurchase Program

From time to time, with the approval of our Board of Directors, we may undertake programs to purchase shares of our common stock (each, a “Share Repurchase Program”).

As of June 30, 2024, approximately $ 402 million remained available for share repurchases under the current Share Repurchase Program, which authorizes share repurchases through December 31, 2024.

As of September 30, 2024, approximately $ 394 million remained available for share repurchases under the current Share Repurchase Program, which authorizes share repurchases through December 31, 2024.

Share repurchases may be made through open market purchases, privately negotiated transactions, block transactions, tender offers, or otherwise.

7 unchanged sentences

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

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

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

We declared cash dividends to holders of common stock during the first half of 2024 as follows.

For the first three quarters of 2024 530,377 45 $ 85.45

As of September 30, 2024 25,671,450 $ 2,450 $ 95.44

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

Any future dividend payments will be subject to the restrictions imposed under the agreements covering our debt and approval of our Board of Directors.

4 unchanged sentences

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

September 4, 2024 September 19, 2024 October 3, 2024 $ 0.76

SHARE-BASED COMPENSATION

4 unchanged sentences

A total of approximately 3 million shares are authorized for issuance pursuant to grants under the MVW Equity Plan.

As of June 30, 2024, approximately 2 million shares were available for grants under the MVW Equity Plan.

As of September 30, 2024, approximately 2 million shares were available for grants under the MVW Equity Plan.

The following table details our share-based compensation expense related to award grants to our officers, directors, and employees:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Service-based RSUs $ 7 $ 7 $ 23 $ 22

2 unchanged sentences

The following table details our deferred compensation costs related to unvested awards:

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Service-based RSUs $ 32 $ 22

1 unchanged sentence

Restricted Stock Units

We granted 399,680 service-based RSUs, which are subject to time-based vesting conditions, with a weighted average grant-date fair value of $ 87.62 , to our employees and non-employee directors during the first half of 2024.

During the first half of 2024, we also granted performance-based RSUs, which are subject to performance-based vesting conditions, to members of management.

A maximum of 204,020 RSUs may be earned under the performance-based RSU awards granted during the first half of 2024.

We granted 401,181 service-based RSUs, which are subject to time-based vesting conditions, with a weighted average grant-date fair value of $ 87.55 , to our employees and non-employee directors during the first three quarters of 2024.

During the first three quarters of 2024, we also granted performance-based RSUs, which are subject to performance-based vesting conditions, to members of management.

A maximum of 204,020 RSUs may be earned under the performance-based RSU awards granted during the first three quarters of 2024.

Stock Appreciation Rights

We granted 86,759 SARs, with a weighted average grant-date fair value of $ 34.58 and a weighted average exercise price of $ 93.73 , to members of management during the first half of 2024.

We granted 86,759 SARs, with a weighted average grant-date fair value of $ 34.58 and a weighted average exercise price of $ 93.73 , to members of management during the first three quarters of 2024.

We use the Black-Scholes model to estimate the fair value of the SARs granted.

4 unchanged sentences

The dividend yield assumption listed below is based on the expectation of future payouts.

The following table outlines the assumptions used to estimate the fair value of grants during the first half of 2024:

The following table outlines the assumptions used to estimate the fair value of grants during the first three quarters of 2024:

Expected volatility 45.78 %

4 unchanged sentences

Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations

The following table shows consolidated assets, which are collateral for the obligations of the VIEs related to our vacation ownership notes receivable securitizations, and consolidated liabilities included on our Balance Sheet at June 30, 2024:

($ in millions) Vacation Ownership

11 unchanged sentences

Total $ 2,279 $ 1 $ 2,280

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the second quarter of 2024:

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the third quarter of 2024:

($ in millions) Vacation Ownership

5 unchanged sentences

Debt issuance cost amortization $ 2 $ 1 $ 3

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first half of 2024:

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first three quarters of 2024:

($ in millions) Vacation Ownership

7 unchanged sentences

The following table shows cash flows between us and the vacation ownership notes receivable securitization VIEs:

Six Months Ended

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

Nine Months Ended

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

Net proceeds from vacation ownership notes receivable securitizations $ 883 $ 396

12 unchanged sentences

The following table shows cash flows between us and the Warehouse Credit Facility VIE:

Six Months Ended

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

Nine Months Ended

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

Proceeds from vacation ownership notes receivable securitizations $ 325 $ 515

18 unchanged sentences

Accordingly, we have not consolidated the VIE.

We expect to acquire the property over time and as of June 30, 2024, we expect to make remaining payments for the property as follows:

$ 65 million during the third quarter of 2024, $ 82 million in 2025, and $ 41 million in 2026.

As of June 30, 2024, our Balance Sheet reflected $ 1 million in Accounts and contracts receivable, net, including a note receivable of less than $ 1 million, $ 14 million in Property and equipment, net, and $ 1 million in the Other line within liabilities on our Balance Sheets.

We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $ 16 million as of June 30, 2024.

During the first half of 2024, we fulfilled our outstanding commitment to purchase retail space for $ 48 million and incurred $ 1 million of cost related to the fit-out of this space.

We have an agreement to sell the retail space to a third party, at cost, upon completion of construction, which we expect to occur in the second half of 2024.

We expect to acquire the property over time and as of September 30, 2024, we expect to make remaining payments for the property as follows:

$ 82 million in 2025 and $ 41 million in 2026.

As of September 30, 2024, our Balance Sheet reflected $ 1 million in Accounts and contracts receivable, net, including a note receivable of less than $ 1 million, $ 10 million in Property and equipment, net, and $ 1 million in the Other line within liabilities on our Balance Sheets.

We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $ 14 million as of September 30, 2024.

Refer to Footnote 3 “ Acquisitions” for information about purchases pursuant to this commitment that occurred during the first three quarters of 2024.

Deferred Compensation Plan

2 unchanged sentences

We are the primary beneficiary of the rabbi trust because we direct the activities of the trust and are the beneficiary of the trust.

At June 30, 2024 and December 31, 2023, the value of the assets held in the rabbi trust was $ 118 million and $ 99 million, respectively, and was included in the Other line within assets on our Balance Sheets.

At September 30, 2024 and December 31, 2023, the value of the assets held in the rabbi trust was $ 128 million and $ 99 million, respectively, and was included in the Other line within assets on our Balance Sheets.

BUSINESS SEGMENTS

23 unchanged sentences

Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated net income attributable to common stockholders is presented below.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Vacation Ownership $ 1,250 $ 1,126 $ 3,458 $ 3,335

3 unchanged sentences

( 1 ) ( 4 ) 3 ( 2 )

$ 1,305 $ 1,186 $ 3,640 $ 3,533

Adjusted EBITDA and Reconciliation to Net Income Attributable to Common Stockholders

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Adjusted EBITDA Vacation Ownership $ 231 $ 173 $ 624 $ 647

9 unchanged sentences

$ 84 $ 42 $ 168 $ 219

($ in millions) At June 30, 2024 At December 31, 2023

($ in millions) At September 30, 2024 At December 31, 2023

Vacation Ownership $ 8,261 $ 8,167

4 unchanged sentences

Revenues Excluding Cost Reimbursements

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

United States $ 704 $ 622 $ 2,046 $ 2,038

2 unchanged sentences

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 1. Financial Statements