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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-27 · 187 added, 205 removed, 568 unchanged (41% of the section changed)

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Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term relationships.

We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Vacation Club brands, as well as under Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand.

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

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Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services.

We provide these services through our Interval International and Aqua-Aston businesses.

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

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Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to Consolidated Property Owners’ Associations.

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

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

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

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

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

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

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

Significant Accounting Policies Used in Describing Results of Operations

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

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

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

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

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

Control transfer for Hyatt Vacation Club VOIs occurs at expiration of the statutory rescission period, except that control transfer for VOIs derived from Legacy-Welk continues to occur at closing.

In the third quarter of 2022 and the fourth quarter of 2024, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignments”), resulting in the prospective change in the timing of the transfer of control to the

customer for Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts, respectively.

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

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

Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts executed prior to the applicable Contract Alignment have been accounted for with the transfer of control of the VOI occurring at closing.

Sales of vacation ownership products may be made for cash or we may provide financing.

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We report, on a supplemental basis, contract sales for our Vacation Ownership segment.

Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third-parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales.

Contract sales consist of the total amount of vacation ownership product sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests (also referred to as an equity upgrade), we include only the incremental value purchased as contract sales.

Contract sales differ from revenues from the sale of vacation ownership products that we report on our income statements due to the requirements for revenue recognition described above.

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These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements.

We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as Development profit.

Development profit margin is calculated by dividing Development profit by revenues from the Sale of vacation ownership products.

Management and Exchange

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While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates.

We may use incentives to encourage our customers to

choose our financing.

We may use incentives to encourage our customers to choose our financing.

Included within our vacation ownership notes receivable are originated vacation ownership notes receivable and vacation ownership notes receivable acquired in connection with the ILG Acquisition and the Welk Acquisition.

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Financing revenues also include fees earned from servicing the existing vacation ownership notes receivable portfolio.

The amount of interest income earned in a period depends on the amount of outstanding vacation ownership notes receivable, which is impacted positively by the origination of new vacation ownership notes receivable and negatively by principal collections.

We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period.

We do not include resales contract sales in the financing propensity calculation.

Growing sales to first-time buyers, who are more likely to finance their purchases, remains an integral part of our overall marketing and sales strategy.

First-time buyers are more likely to finance their purchases and remain an integral part of our overall marketing and sales strategy.

Acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model.

The estimates of the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and the estimated value of collateral securing the acquired vacation ownership notes receivable.

See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information regarding the accounting for acquired vacation ownership notes receivable.

In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI.

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As discussed above, for originated vacation ownership notes receivable, we record a reserve at the time of sale and classify the reserve as a reduction to revenues from the sale of vacation ownership products on our Income Statements.

Revisions to estimates of variable consideration from the sale of vacation ownership products impact the reserve on originated vacation ownership notes receivable and can increase or decrease revenues.

Revisions to estimates that result in decreases or increases to the reserve for originated vacation ownership notes receivable can increase or decrease revenues, respectively.

In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve as an adjustment to Financing expenses on our Income Statements.

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Financing expenses include consumer financing interest expense, which represents interest expense associated with the securitization of our vacation ownership notes receivable, costs to support the financing, servicing and securitization processes and changes in expected credit losses related to acquired vacation ownership notes receivable.

We distinguish consumer financing interest expense from all other interest expense because the debt associated with the consumer financing interest expense is secured by vacation ownership notes receivable that have been sold to bankruptcy remote special purpose entities and is generally non-recourse to us.

We distinguish consumer financing interest expense from all other interest expense because the debt associated with the consumer financing interest expense is considered to be an operating expense of our business.

In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory.

We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties.

We also recognize rental revenue from the utilization of plus points under our points-based products when the points are redeemed for rental stays at one of our resorts or other third-party offerings, or upon expiration of the points.

We obtain rental inventory from unsold inventory and inventory we control because owners have elected alternative usage options offered through our vacation ownership programs.

We obtain rental inventory and generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties.

We also recognize rental revenue from the utilization of plus points at redemption for rental stays at one of our resorts or other third-party offerings.

For rental revenues associated with vacation ownership products which we own and which are registered and held for sale, to the extent that the revenues from rental are less than costs, revenues are reported net in accordance with Accounting Standards Codification (“ASC”) Topic 978, “ Real Estate - Time-Sharing Activities ” (“ASC 978”).

The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense.

In our Exchange & Third-Party Management segment, we offer vacation rental opportunities at managed properties through our Aqua-Aston business, and for the period prior to its disposition in the second quarter of 2022, VRI Americas.

We also offer vacation rental offers known as Getaways to members of the Interval Network and certain other membership programs.

In our Exchange & Third-Party Management segment, we offer vacation rental offers known as Getaways to members of the Interval Network and certain other membership programs.

Getaways allows us to monetize excess availability of resort accommodations within the applicable exchange network, as well as provide additional vacation opportunities to members.

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• Marketing costs and direct operating and related expenses in connection with the rental business (such as housekeeping, labor costs, credit card expenses, and reservation services).

Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, unsold inventory on hand and keys allocated for preview stays.

Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, rental inventory on hand and keys allocated for preview stays.

In addition, rental metrics may not correlate with rental revenues due to the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above).

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Interest Expense

Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense.

Interest expense consists of all interest expense other than consumer financing interest expense, which is included within Financing expense, net of interest income.

Transaction and Integration Costs

Transaction and integration costs primarily include fees paid to change-management consultants, technology-related costs associated with the integration of ILG and Welk and charges for employee retention, severance and other termination-related benefits.

Transaction and integration costs primarily include fees paid to change-management consultants, technology-related costs associated with the integrations of ILG and Welk and charges for employee retention, severance and other termination-related benefits.

Transaction and integration costs also include costs related to the ILG and Welk Acquisitions, primarily for financial advisory, legal, and other professional service fees, as well as certain tax-related accruals.

Commencing in the third quarter of 2023, we discontinued classifying costs associated with the continued integration of ILG in Transaction and integration costs.

Further costs incurred are reflected in the operating results of each of our segments and/or General and administrative expenses.

During the third quarter of 2023 and the second quarter of 2024, we discontinued classifying costs associated with the continued integration of ILG and Welk, respectively, in Transaction and integration costs.

Further integration costs incurred after these periods are reflected in the operating results of each of our segments and/or General and administrative expenses.

Performance Measures

We measure operating performance using the key metrics described below:

• Contract sales from the sale of vacation ownership products , which consists of the total amount of vacation ownership product sales under contracts signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership products on behalf of third parties, which we refer to as “resales contract sales.” In circumstances where customers apply any or all of their existing ownership interests as part of the purchase price for additional interests, we include only the incremental value purchased as contract sales.

Contract sales differ from revenues from the sale of vacation ownership products that we report on our income statements due to the requirements for revenue recognition described above and adjustments for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.

We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.

• Contract sales from the sale of vacation ownership products is considered to be an important operating measure because it reflects the pace of sales in our business.

• Total contract sales include contract sales from the sale of vacation ownership products, including non-consolidated joint ventures.

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

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

We believe that this operating metric is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase.

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

We believe that VPG is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase.

• Tours is the number of sales tours performed during the applicable period, and generally includes virtual and offsite sales tours, and excludes telesales.

We believe that Tours is a valuable metric because it represents the volume of touring guests.

• Development profit margin is calculated by dividing Development profit by revenues from the sale of vacation ownership products.

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We consider this measure to be important in evaluating the performance of our reportable business segments.

See Footnote 20 “Business Segments” to our Financial Statements for further information on our reportable business segments.

See Footnote 20 “Business Segments” to our Financial Statements for further information about our reportable business segments.

• Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursements revenues.

• Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursements revenues.

NM = Not meaningful.

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TOTAL EXPENSES 4,477 4,191 3,872

Gains (losses) and other income (expense), net 47 40 (51)

(Losses) gains and other (expense) income, net (1) 47 40

Interest expense, net (162) (145) (118)

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NET INCOME 217 252 391

Net loss (income) attributable to noncontrolling interests 2 — (4)

Net loss attributable to noncontrolling interests 1 2 —

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 218 $ 254 $ 391

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VPG $ 3,911 $ 4,088 $ 4,421 $ (177) (4%)

432,716 405,825 390,593 26,891 7%

Exchange & Third-Party Management

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Total Segment Revenues 4,961 4,730 4,633 231 5%

Consolidated Property Owners’ Associations (3) 23 31 (26) (112%)

Consolidated Property Owners’ Associations 6 (3) 23 9 NM

Total Revenues $ 4,967 $ 4,727 $ 4,656 $ 240 5%

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

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

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

Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted.

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

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 profitability.

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.

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

We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items.

Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing 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.

Fiscal Years 2024 vs.

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Share-based compensation expense 33 31 39 2 5%

Certain items 50 95 173 (45) (47%)

Certain items 79 50 95 29 NM

Adjusted EBITDA $ 727 $ 761 $ 966 $ (34) (4%)

Adjusted EBITDA Margin 22.2% 24.0% 29.4% (1.8 pts)

In the third quarter of 2022, in connection with the unification of our Marriott-, Westin-, and Sheraton- branded vacation ownership products under the Abound by Marriott Vacations program, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignment”), resulting in the prospective acceleration of revenue for the sale of Marriott-branded VOIs.

The Contract Alignment increased Net income attributable to common stockholders and Adjusted EBITDA by $34 million and $46 million in 2022, respectively.

In addition, we combined and aligned our reserve methodology for vacation ownership notes receivable for these brands (the “Reserve Alignment”), resulting in a $4 million increase in Net income attributable to common stockholders and a $5 million increase in Adjusted EBITDA.

Together, these changes are hereinafter referred to as the “Alignment.” See Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements for further information on the Reserve Alignment.

The table below details the components of Certain items for 2023 and 2022.

The table below details the components of Certain items for fiscal years 2024 and 2023.

($ in millions) 2024 2023

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Welk acquisition and integration 18 22

Other transformation initiatives — 10

Other transaction costs — 3

Transaction and integration costs 18 37

Early redemption of senior secured notes 10 —

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

Gain on disposition of VRI Americas — (17)

Foreign currency translation (6) 10

Insurance proceeds (9) (6)

Change in indemnification asset (31) 3

Gains and other income, net (47) (40)

Purchase accounting adjustments 1 8

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Impairment charges 30 32

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

Early termination of VRI management contract — (2)

Change in estimate relating to pre-acquisition contingencies — (12)

Early redemption of senior secured notes — 10

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

Foreign currency translation loss (gain) 13 (6)

Insurance proceeds (5) (9)

Change in indemnification asset 5 (31)

Change in estimates relating to pre-acquisition contingencies (4) —

Losses (gains) and other expense (income), net 1 (47)

Total Certain items $ 79 $ 50

Commencing in the third quarter of 2023, we discontinued classifying costs associated with the continued integration of ILG in Transaction and integration costs.

Further costs incurred are reflected in the operating results of each of our segments and/or General and administrative expenses.

Further integration costs incurred after these periods are reflected in the operating results of each of our segments and/or General and administrative expenses.

Segment Adjusted EBITDA

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Share-based compensation expense 8 8 7 — —%

Certain items 5 (27) 19 32 117%

Certain items 34 5 (27) 29 NM

Segment Adjusted EBITDA $ 845 $ 883 $ 1,033 $ (38) (4%)

We recognized an additional $51 million of Adjusted EBITDA in the Vacation Ownership segment during 2022 as a result of the Alignment.

The table below details the components of Certain items for the Vacation Ownership segment financial results for 2023 and 2022.

Segment Adjusted EBITDA Margin

28.1% 30.7% 35.0% (2.6 pts)

The table below details the components of Certain items for the Vacation Ownership segment financial results for fiscal years 2024 and 2023.

($ in millions) 2024 2023

Transaction and integration costs $ — $ 3

Purchase accounting adjustments $ 1 $ 8

Litigation charges 18 12

Restructuring charges 1 —

Impairment charges 28 12

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

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Change in indemnification asset — (9)

Change in estimates relating to pre-acquisition contingencies (4) —

Gains and other income, net (16) (29)

Purchase accounting adjustments 8 11

Litigation charges 12 9

Impairment charges 12 2

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

Change in estimate relating to pre-acquisition contingencies — (12)

Total Certain items $ 34 $ 5

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Depreciation and amortization 28 31 31 (3) (7%)

Share-based compensation expense 2 2 2 — (23%)

Certain items 4 (17) 1 21 122%

Share-based compensation expense 2 2 2 — NM

Certain items 3 4 (17) (1) NM

Segment Adjusted EBITDA $ 102 $ 130 $ 148 $ (28) (21%)

The table below details the components of Certain items for the Exchange & Third-Party Management segment financial results for 2023 and 2022.

Segment Adjusted EBITDA Margin

45.9% 52.5% 55.2% (6.6) pts

The table below details the components of Certain items for the Exchange & Third-Party Management segment financial results for fiscal years 2024 and 2023.

($ in millions) 2024 2023

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

Gain on disposition of VRI Americas — (17)

Foreign currency translation — 2

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

Litigation charges $ — $ 1

Restructuring charges 1 —

Impairment charges 2 4

Early termination of VRI management contract — (2)

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

Foreign currency translation loss 1 —

Total Certain items $ 3 $ 4

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Vacation Ownership and Exchange & Third-Party Management.

See Footnote 20 “Business Segments” to our Financial Statements for further information on our segments.

See Footnote 20 “Business Segments” to our Financial Statements for further information about our segments.

VACATION OWNERSHIP

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Litigation charges 18 12 9

Restructuring 1 — —

Royalty fee 114 117 114

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Other (3) (3) 1

SEGMENT FINANCIAL RESULTS BEFORE NONCONTROLLING INTERESTS 777 961 585

Net income attributable to noncontrolling interests — — —

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 703 $ 777 $ 961

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Sale of vacation ownership products $ 1,448 82% $ 1,460 84% $ 1,618 90% $ (12) (1%)

3,911 4,088 4,421 (177) (4%)

432,716 405,825 390,593 26,891 7%

Financing propensity

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2024 Compared to 2023

Contract sales declined due to an 8% decline in VPG, partially offset by tour growth of 4%.

The decline in VPG is attributed to the normalization of sales following the COVID-19 pandemic, the transition of certain Legacy-ILG sales galleries to selling our Marriott Vacation Club Destinations product and the impact of the reduced activity at our sales centers in Maui due to the wildfires.

These results reflect a 46% and 14% increase in tours and VPG, respectively, in Asia Pacific resulting from the rebound of our sales operations in response to the increase in travel in this region following the COVID-19 pandemic.

Revenue reportability declined due to the non-recurring impact of the Alignment recorded in 2022, which resulted in an increase in reportability of $58 million in 2022.

The increase in the sales reserve is due to an adjustment to our sales reserve recorded in the third quarter of 2023 (referred to as the “2023 Reserve Adjustment” and discussed further below), an increase in the sales reserve rate in the fourth quarter of 2023 to provide for increased defaults consistent with the 2023 Reserve Adjustment, and an increase in financing propensity, partially offset by the non-recurring $19 million Reserve Alignment recorded in 2022.

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

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

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

The additional reserve adjusted our future default rate estimates to reflect then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.

The $19 million Reserve Alignment in 2022 was offset by a $19 million decrease in the acquired reserve for vacation ownership notes receivable recorded as a reduction of Financing expenses in 2022.

Contract sales increased in 2024 due to a 7% increase in tours, partially offset by a 4% decline in VPG.

The decrease in VPG was due to a larger percentage mix of international and North America first time buyer tours, both of which carry a lower VPG than existing owner tours.

While existing owner VPG was in line with the prior year, first time buyer VPG declined 9%.

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 increase in our sales reserve primarily using information from a historical period of increased defaults.

The $59 million additional reserve recorded in 2023 was the result of an adjustment to 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.

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.

Consistent with our analysis in the third quarter of 2023, we considered the cumulative impact of inflation and mixed economic environment on delinquencies and default rates.

We believed the related impact of higher than historical year-over-year increases in maintenance fees for 2023 and 2024 would continue to drive elevated delinquencies and defaults.

As expected, maintenance fee increases for our points-based products for 2025, which were approved by the relevant property owners’ association, returned to levels consistent with historical experience.

We have increased our sales reserve rate to reflect higher expected cumulative losses on new originations and do not expect to lower the sales reserve rate until we have sufficient evidence of improvement in delinquency and default rates.

Development Profit

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2024 Compared to 2023

The decrease in Development profit reflects lower contract sales volumes and higher sales reserves, higher marketing and sales costs attributed to the 4% increase in tours, lower VPGs and higher than normal inflation, partially offset by $13 million of favorable product cost true-up activity and a lower average cost of inventory in 2023.

Excluding the impact of the $49 million 2023 Reserve Adjustment ($59 million gross, offset by a $10 million reduction in Cost of vacation ownership products) and the $32 million Alignment in 2022, Development profit decreased $28 million and Development profit margin decreased by approximately 60 basis points.

We expect future development profit margins to decline slightly resulting from increasing our sales reserve to reflect more recent default activity and an increase in Cost of vacation ownership products.

The decrease in Development profit was due to the following:

• lower sales of vacation ownership products due to the increase in sales reserve discussed above;

• higher marketing and sales costs due to:

• higher preview costs attributed to a $26 million increase in cost of occupancy and $4 million for higher tours volume;

• $28 million increase in tour generation costs;

• $19 million of higher compensation due to inflation and higher contract sales;

• $19 million of higher information technology and other operating costs.

These changes were partially offset by:

• lower cost of vacation ownership products attributed to the sale of lower average cost inventory, including product cost true-up activity, partially offset by higher contract sales.

Resort Management and Other Services Revenues, Expenses and Profit

12 unchanged sentences

2024 Compared to 2023

The increase in Resort management and other services revenues reflects higher ancillary revenues, including revenues from food and beverage and golf offerings (resulting in a 6% increase in revenue per occupied key, partially offset by a 2% decrease in occupied keys at resorts with ancillary businesses), and higher management fees and commissions from third-party vacation and other offerings.

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

The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $19 million due to increased volumes sold, inflation and foreign currency exchange rate changes in Mexico, and an increase in customer services and exchange company expenses of $11 million due to incremental headcount, wages, benefits, and other operating cost increases.

The increase in Resort management and other services revenues reflects higher management fees, higher ancillary revenues and higher club dues.

The increase in Resort management and other services expenses reflects an increase in ancillary expenses of $15 million due to increased volumes sold and operating costs, and an increase in customer services and exchange company expenses of $8 million due to wages, benefits, and other operating cost increases.

Rental Revenues, Expenses and Margin

5 unchanged sentences

Rental profit margin 17.6% 12.4% 21.4% 5.2 pts

Fiscal Years 2023 vs.

(transient keys in millions) 2023 2022 2021 Change

Transient keys rented (1)

6 unchanged sentences

2024 Compared to 2023

Rental profit excluding profit from our owned hotels declined $38 million due to a $49 million increase in unsold maintenance fees associated with developer owned inventory, $11 million of decreased profit (due to lower demand, the impact of the Maui wildfires, and an unfavorable change in the mix of keys available to rent), and $5 million of increased costs associated with higher owner utilization of third-party vacation and other offerings.

These decreases were partially offset by $21 million of higher plus points revenue and a $6 million reduction in costs associated with occupancy used for marketing and sales activities.

Rental profit for our owned hotels declined by $6 million, or 34%, primarily attributed to the disposition of our Puerto Vallarta and Branson hotels in 2022 and 2023, respectively.

Rental profit, excluding profit from owned hotels, increased due to:

• $43 million of higher plus points revenue attributed to enhanced sales incentive programs put in place during COVID, which increased the amount of plus points issued and lengthened the use period;

• $26 million increase in costs allocated to marketing and sales expense for occupancy used for previews.

These changes were partially offset by:

• $17 million of increased costs associated with higher owner utilization of third-party vacation and other offerings;

• $12 million of decreased profit due to a lower average transient rate on higher keys rented and higher tidy and variable costs.

Rental profit for our owned hotels increased $2 million.

We expect rental profit to decline in 2025 due to a higher mix of keys in lower ADR markets, lower plus point revenue due the expiration of enhanced sales incentives programs put in place during COVID, additional preview usage and higher costs associated with unsold maintenance fees.

Financing Revenues, Expenses and Margin

8 unchanged sentences

2024 Compared to 2023

The increase in Financing revenues reflects $31 million of higher interest income as a result of a higher average vacation ownership notes receivable balance and a slightly higher average interest rate and $1 million of higher late and service fees, offset by $3 million of higher plus point financing incentive costs (recorded as a reduction of interest income).

We plan to continue offering financing incentives to certain customers in the future.

Excluding the $19 million Reserve Alignment recorded in 2022, which reduced the reserve related to our acquired vacation ownership notes receivable (recorded as a reduction of Financing expenses), the decline in Financing expenses is attributed to a reduction in the acquired vacation ownership notes receivable reserve of $3 million during 2023.

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

We expect consumer financing interest expense to continue to increase as the rates on new securitizations exceed the current weighted average of our portfolio.

We expect originations of vacation ownership notes receivable to outpace payoffs.

We do not adjust interest rates on

consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates;

thus, we expect our financing profit margin to decrease in the near term.

The increase in Financing revenues reflects $20 million of higher interest income as a result of a higher average vacation ownership notes receivable balance and $1 million of higher late and service fees, partially offset by $1 million of higher plus point financing incentive costs (recorded as a reduction of interest income).

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

We expect our average interest rate to continue to increase as the current interest rate environment for new securitization transactions is higher than the average interest rate on our existing securitized debt.

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

We expect our financing profit to remain flat in 2025.

Litigation Charges

3 unchanged sentences

2024 Compared to 2023

During 2023 and 2022, the litigation charges relate primarily to our business in Europe.

Fiscal Years 2023 vs.

($ in millions) 2023 2022 2021 Change

Royalty fee $ 117 $ 114 $ 106 $ 3 3%

2023 Compared to 2022

Royalty fee expense increased $2 million due to increased variable royalty fees paid to Hyatt, which became effective in the fourth quarter of 2022, and a $1 million increase in initial sales of our inventory, which carry a higher royalty fee as compared to sales of pre-owned inventory (two percent versus one percent).

During 2024 and 2023, litigation charges relate primarily to a land disposition in the U.S.

and certain resorts in Europe.

Fiscal Years 2024 vs.

1 unchanged sentence

Impairment $ 28 $ 12 $ 2 $ 16 NM

During 2024, we recorded a non-cash impairment charge of $28 million related to Legacy-Welk inventory.

The impairment charge reflects an elongated pace of sales at a higher marketing and selling cost than that estimated in purchase accounting.

During 2023, we recorded non-cash impairment charges of $8 million related to our investment in a joint venture, $2 million related to an ancillary operation in Europe, and $2 million related to an owned hotel.

During 2022, we recorded a non-cash impairment charge of $2 million related to an ancillary operation in Europe.

Gains and Other Income

1 unchanged sentence

($ in millions) 2024 2023 2022 Change

Gains and other income, net $ 29 $ 37 $ 1 $ (8) (23%)

Gains and other income, net $ 16 $ 29 $ 37 $ (13) NM

During 2024, we recorded $6 million of gains on the disposition of excess real estate, $5 million related to the receipt of business interruption insurance proceeds, and a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.

During 2023, we recorded a $9 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, $9 million related to the receipt of business interruption and property damage insurance proceeds, $7 million of gains on the disposition of excess real estate, and $4 million of gains associated with the earn out of additional proceeds from the 2019 disposition of a land parcel in Cancun, Mexico.

During 2022, we recorded gains and other income of $33 million related to the strategic decision to dispose of our hotel in Puerto Vallarta, Mexico, $3 million related to the receipt of business interruption insurance proceeds, and $1 million related to property insurance proceeds.

EXCHANGE & THIRD-PARTY MANAGEMENT

Our Exchange & Third-Party Management segment is comprised of the Interval International and Aqua-Aston businesses.

The Interval International business offers a variety of membership programs and travel related products to approximately 1.6 million members and the Aqua-Aston business provides property management and rental services to property owners at 25 resorts and lodging properties.

Our results include those of VRI Americas for the period prior to its disposition in the second quarter of 2022.

Results below include VRI Americas for the period prior to its disposition in the second quarter of 2022.

($ in millions) 2024 2023 2022

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2024 Compared to 2023

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

Interval International management and exchange revenues declined $5 million or 3% , primarily attributed to lower transaction volume and lower membership revenues due to the continued shift in mix to corporate members, which have a lower propensity to transact than our traditional members.

Exchange transaction volume declined 5% and average revenue per member decreased 1% compared to the prior year.

Aqua-Aston management revenue declined $3 million due to higher property level expenses, which adversely impacted management fees, and a reduction in the number of units managed at a property in Maui.

Excluding the impact of the disposition of VRI Americas, management and exchange profit decreased by $14 million or 14% from the prior year, primarily attributed to higher information technology costs, marketing and sales costs and higher wages and benefits and lower revenues.

Interval International management and exchange revenues declined $11 million, or 6% , as a result of 7% lower exchange transaction volume, partially offset by a 4% increase in average exchange fees.

The decrease in management and exchange revenue also reflects a $13 million decline in Aqua-Aston management revenues resulting from changes in demand in Maui, along with a decline in available nights across the portfolio.

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

Rental Revenues

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2024 Compared to 2023

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

Fiscal Years 2023 vs.

($ in millions) 2023 2022 2021 Change

Impairment $ 4 $ — $ — $ 4 NM

During 2023, we impaired an investment in a management contract.

Gains and Other Income

Fiscal Years 2023 vs.

($ in millions) 2023 2022 2021 Change

Gains and other income, net $ 1 $ 15 $ — $ (14) (95%)

During 2023, we recorded a gain on the disposition of excess real estate of $1 million.

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

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

Results reflect a 6% increase in average fees per transaction and lower inventory acquisition costs, partially offset by an 8% decrease in transaction volume.

CORPORATE AND OTHER

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes.

Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, net, transaction and integration costs, and income taxes.

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

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TOTAL EXPENSES 275 304 282

Gains (losses) and other income (expense), net 17 (12) (52)

(Losses) gains and other (expense) income, net (17) 17 (12)

Interest expense, net (162) (145) (118)

2 unchanged sentences

Provision for income taxes (89) (146) (191)

Net loss (income) attributable to noncontrolling interests 2 — (4)

Net loss attributable to noncontrolling interests 1 2 —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (554) $ (616) $ (702)

Consolidated Property Owners’ Associations

The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance, and the changes attributed to the deconsolidation of individual Consolidated Property Owners’ Associations.

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 certain individual Consolidated Property Owners’ Associations.

($ in millions) 2024 2023 2022

10 unchanged sentences

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

Net loss (income) attributable to noncontrolling interests 2 — (4)

Net loss attributable to noncontrolling interests 1 2 —

FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

5 unchanged sentences

2024 Compared to 2023

General and administrative expenses increased due to $31 million of costs related to the implementation of technology, $14 million of increased wages and benefits, $8 million related to new product development initiatives, $6 million of increased insurance expense, $6 million of incremental costs related to compliance activities and $7 million of other miscellaneous expenses, partially offset by a $39 million decrease in variable compensation expense and $9 million of higher allocations of general and administrative expenses to operations.

The decrease in General and administrative expense is primarily due to one-time information technology expenses incurred in 2023 and lower consulting and compliance related expenses, partially offset by higher variable compensation expense and higher operating costs.

We expect General and administrative expenses to increase in the near term due to the continued impact of increased wages and variable compensation expense and additional investment in upgrading, maintaining, and implementing new technology, including costs associated with our continued transition to software as a service, which are recorded as a component of General and administrative expense as opposed to Depreciation expense.

3 unchanged sentences

Restructuring $ 8 $ 6 $ — $ 2 NM

In November 2024, we announced the creation of a Strategic Business Operations office focused on accelerating our growth and driving operating efficiencies in all areas of our business while increasing organizational agility.

We intend to modernize and optimize our processes and systems, including through advanced technology and automation, while focusing on efforts to increase sales efficiency and inventory optimization while capturing significant savings from initiatives related to procurement and corporate overhead.

We believe that we can drive $150 million to $200 million of run rate benefits from these initiatives by the end of 2026, with half coming from cost savings and efficiencies with the balance from accelerating revenue growth.

We expect to incur one-time costs related to these initiatives of approximately $100 million in each of 2025 and 2026 to enhance our customer platforms, products and services to achieve these benefits.

We also expect additional savings that will benefit our owners’ maintenance fees.

During 2024, we incurred $4 million of severance costs and $4 million of other costs associated with these efforts.

During 2023, we realigned our management structure, resulting in severance costs associated with the elimination of certain positions.

2 unchanged sentences

Impairment $ — $ 16 $ — $ (16) NM

During 2023, upon our relocation to our new corporate headquarters, we recorded a non-cash impairment of a right-of-use asset related to operating leases for our legacy corporate headquarters located in Orlando, Florida, as we do not expect proceeds from subleasing the spaces to exceed our future obligations under the operating leases.

Gains (Losses) and Other Income (Expense)

During 2023, upon our relocation to our new corporate headquarters, we recorded a non-cash impairment of a right-of-use asset related to operating leases for our legacy corporate headquarters located in Orlando, Florida, as we did not expect proceeds from subleasing these spaces to exceed our future obligations under the operating leases.

(Losses) Gains and Other (Expense) Income

Fiscal Years 2024 vs.

($ in millions) 2024 2023 2022 Change

Gains (losses) and other income (expense), net $ 17 $ (12) $ (52) $ 29 NM

(Losses) gains and other (expense) income, net $ (17) $ 17 $ (12) $ (34) NM

In 2024, we recorded $12 million of foreign currency translation losses and $5 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters.

In 2023, we recorded a $22 million increase to our receivable from Marriott International for indemnified income tax matters (the offsetting accrual is included in the Provision for income taxes line) and $6 million of foreign currency translation gains, partially offset by a $10 million expense attributed to the redemption premium and write-off of unamortized debt issuance costs in connection with the early redemption of our 6.125% Senior Secured Notes due 2025 (“2025 Notes”).

In 2022, we recorded $8 million of foreign currency translation losses, $3 million of non-cash losses pursuant to a change in control of certain Consolidated Property Owners’ Associations as a result of which we ceased consolidating these owners’ associations, $3 million of non-income tax related adjustments to the receivable for the indemnification we expect to receive from Marriott International for indemnified tax matters, partially offset by $2 million of proceeds from corporate owned life insurance.

Interest Expense

3 unchanged sentences

2024 Compared to 2023

The increase in Interest expense, net is attributed to $20 million of higher interest expense associated with our 2027 Convertible Notes issued in December 2022, $17 million associated with higher borrowings and higher variable interest rates on both the Warehouse Credit Facility and the Revolving Corporate Credit Facility, $10 million of higher interest expense associated with higher variable interest rates and the expiration of a portion of our interest rate hedges on the $900 million term loan facility included in our corporate credit facility Term Loan, $7 million of interest expense related to leased assets and $2 million of higher interest on non-income tax related items.

This was partially offset by $16 million of lower interest expense associated with the early redemption of our 2025 Notes, $9 million of lower interest expense associated with our 2022 Convertible Notes which were repaid at maturity and $4 million of higher interest income.

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

($ in millions) 2024 2023 2022

3 unchanged sentences

2024 Compared to 2023

The change in our income tax expense is attributable to lower income before income taxes and noncontrolling interests ($49 million) and benefits from state tax rate changes and certain other foreign and permanent differences which were favorable to prior periods ($62 million).

These decreases were partially offset by increases in uncertain tax benefits and changes in our valuation allowance ($66 million) of which $22 million is 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 we have recorded a corresponding indemnification asset as a component of Gains (losses) and other income (expense), net on our Income Statements.

The change in our income tax expense is attributable to lower income before income taxes and noncontrolling interests $23 million and benefits from changes in uncertain tax benefits and our valuation allowance ($78 million).

These decreases were partially offset by certain state, foreign and permanent differences which were unfavorable to prior periods ($44 million), of which $20 million related to the removal of our permanent reinvestment assertion for earnings in certain non-U.S.

Refer to Footnote 5 “Income Taxes” for additional information.

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.

During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws.

Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and/or on different timelines.

While we continue to monitor legislative developments, we do not anticipate Pillar 2 will have a material impact on our long-term financial position.

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released model rules introducing a 15% global minimum tax rate for large multinational corporations (“Pillar 2”).

Certain countries in which we operate have enacted legislation consistent with the OECD model rules effective beginning in 2024.

We considered the applicable tax laws enacted in relevant jurisdictions and concluded there is not a material effect on our tax provision for the year ended December 31, 2024.

We will continue to evaluate the impact of additional Pillar Two legislative changes on future reporting periods.

Liquidity and Capital Resources

2 unchanged sentences

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 December 31, 2023, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.7, above our targeted range of 2.5 to 3.0.

We have no material maturities of corporate debt until the third quarter of 2025.

As of December 31, 2023, the interest rate applicable to approximately 80% of our total corporate debt, excluding finance leases and including the impact of interest rate hedges, was effectively fixed.

The weighted average interest rate of our total corporate debt, excluding finance leases and including the impact of interest rate hedges, was 3.9% as of December 31, 2023.

Approximately 70% of our corporate debt will be fixed once our interest rate hedges mature in April 2024.

At December 31, 2024, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.0, above our targeted range of 2.5 to 3.0, and we remain focused on reducing this ratio over time.

During 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 16 “Debt” to our Financial Statements for further information related to maturities of our debt.

Sources of Liquidity

Cash from Operations

Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) net cash generated from our rental and resort management and other services operations.

Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) cash generated from our rental and resort management and other services operations.

Vacation Ownership Notes Receivable Securitizations

1 unchanged sentence

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.

Loan defaults under securitizations offset a portion of the excess spread we receive, on a monthly basis.

We completed two term securitization transactions in 2024 resulting in net proceeds of $863 million.

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

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 2023, and as of December 31, 2023, we had 14 term securitization transactions outstanding, all of which were in compliance with their respective required parameters.

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.

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.

During 2024, and as of December 31, 2024, no securitized vacation ownership notes receivable pools were out of compliance with their respective required parameters.

As of December 31, 2024, we had 12 term securitization transactions outstanding.

Since 2000, we have issued approximately $10 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.

During 2023, we amended certain agreements associated with our Warehouse Credit Facility, which increased the borrowing capacity from $425 million to $500 million and extended the revolving period from July 28, 2024 to May 31, 2025.

During 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 December 31, 2024, we had $124 million of borrowings outstanding on our Warehouse Credit Facility.

3 unchanged sentences

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 December 31, 2023, $105 million of borrowings were outstanding on our Revolving Corporate Credit Facility and $24 million of le tters of credit were outstanding.

At December 31, 2024, $125 million of borrowings and $18 million of letters of credit were outstanding under our Revolving Corporate Credit Facility.

See Footnote 16 “Debt” to our Financial Statements for more information on interest rates pertaining to this facility.

Redemption of Senior Secured Notes

During 2023, we redeemed, prior to maturity, the remaining $250 million of the 2025 Notes outstanding pursuant to a redemption notice issued in 2022.

In connection with this redemption, we incurred charges of $10 million, including a redemption premium and the write-off of unamortized debt issuance costs, which were recorded in Gains (losses) and other income (expense), net on our Income Statement for the year ended December 31, 2023.

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

5 unchanged sentences

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

Timing of Estimated Tax Payments

The Internal Revenue Service provided for the deferral of federal income tax payments as tax relief for businesses in parts of Florida affected by the hurricanes that occurred during the third and fourth quarters of 2024.

This relief allows us to delay making certain estimated tax payments, without interest or penalty.

As a result, we deferred $38 million of estimated tax payments from the third and fourth quarters of 2024 to the second quarter of 2025.

Similarly, in the prior year, as tax relief for businesses in parts of Florida affected by the hurricanes that occurred in 2023, we were able to defer $32 million of estimated tax payments from the third and fourth quarters of 2023 to the first quarter of 2024.

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

Inventory Spending Less Than (In Excess of) Cost of Sales

Inventory Spending (In Excess of) Less Than Cost of Sales

($ in millions) 2024 2023 2022

2 unchanged sentences

Inventory costs 150 176 242

Inventory spending less than (in excess of) cost of sales $ 60 $ 92 $ (39)

Although we have significant inventory on hand, we intend to continue selectively pursuing growth opportunities by targeting high-quality inventory that allows us to add desirable new destinations to our systems with new on-site sales locations.

Inventory spending (in excess of) less than cost of sales $ (43) $ 60 $ 92

Although we have adequate inventory on hand, we intend to continue selectively pursuing growth opportunities by targeting high-quality inventory that allows us to add desirable new destinations to our systems with new on-site sales locations to support anticipated future contract sales growth.

Where possible, we will structure transactions to limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale.

These capital efficient vacation ownership transaction structures may consist of the development of new inventory, or the conversion of previously built units, by third parties.

In addition, we may develop inventory on balance sheet in key markets where we believe the opportunities will generate acceptable risk adjusted returns.

In addition, we may develop inventory on our balance sheet in key markets where we believe the opportunities will generate acceptable risk adjusted returns.

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

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

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

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

We expect inventory spending to again be less than cost of sales for 2024.

Vacation Ownership Notes Receivable Collections Less Than of Originations

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 2024 was higher than our cost of sales due to our acquisition of vacation ownership units in Waikiki and purchases under our VOI repurchase programs.

Refer to Footnote 3 “Acquisitions and Dispositions” for information about acquisitions that occurred in 2024.

Purchases of property for future transfer to inventory in 2023 included the acquisition of property in Charleston, South Carolina and Savannah, Georgia.

To manage our inventory spending and more closely align it with future sales, we have delayed the construction of certain projects.

We expect inventory spending to again be more than cost of sales for 2025 based upon our existing commitments to purchase inventory in 2025.

Vacation Ownership Notes Receivable Collections Less Than Originations

($ in millions) 2024 2023 2022

3 unchanged sentences

Vacation ownership notes receivable collections less than originations $ (383) $ (391) $ (338)

Vacation ownership notes receivable collections were less than originations in 2023, 2022 and 2021 due to the growth of the average vacation ownership notes receivable portfolio.

Vacation ownership notes receivable collections were less than originations in 2024, 2023 and 2022 due to the growth of our vacation ownership notes receivable portfolio.

We expect vacation ownership notes receivable originations to continue to outpace vacation ownership notes receivable collections in 2025.

Repurchase of Common Stock

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

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

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

Paid per Share

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

7 unchanged sentences

December 7, 2023 December 21, 2023 January 4, 2024 $0.76

February 16, 2023 March 2, 2023 March 16, 2023 $0.72

February 15, 2024 February 29, 2024 March 14, 2024 $0.76

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

1 unchanged sentence

On December 6, 2024, our Board of Directors declared a quarterly dividend of $0.79 per share that was paid subsequent to the end of 2024, on January 3, 2025, to stockholders of record as of December 19, 2024.

Subsequent to the end of 2023, on February 15, 2024, our Board of Directors declared a quarterly dividend of $0.76 per share to be paid on March 14, 2024 to stockholders of record as of February 29, 2024.

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

Subsequent to the end of 2024, on February 20, 2025, our Board of Directors declared a quarterly dividend of $0.79 per share to be paid on March 19, 2025 to stockholders of record as of March 5, 2025.

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.

11 unchanged sentences

Operating lease obligations (5)

117 25 39 22 31

Finance lease obligations (5)

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

(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 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 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.

(5) Includes interest.

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

See Footnote 14 “Leases” to our Financial Statements for additional information on this lease.

In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts.

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MVW stockholders' equity 2,442 2,508 4,394 307 (7,209) 2,442

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

Total liabilities and equity $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808

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See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for further information related to our critical accounting policies and estimates, which are as follows:

• Revenue recognition , including how we recognize revenue under ASC Topic 606 “ Revenue from Contracts with Customers ” for the sale of vacation ownership products, including our estimates of variable consideration.

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During 2024, we evaluated our other intangible assets for impairment and did not record any impairment charges.

• Accounting for acquired vacation ownership notes receivable , where estimates of future cash flows are based largely on the customer class and the results of our static pool analysis.

In addition, the valuation of acquired vacation ownership notes receivable includes a material estimate of the fair value of the underlying collateral which would be retained in the event of customer default.

See further discussion included in Footnote 6 “Vacation Ownership Notes Receivable” to our Financial Statements.

• Loss contingencies , including information on how we account for loss contingencies.

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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-K

Item 7. Management’s Discussion and Analysis