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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-27 · 356 added, 499 removed, 1348 unchanged (39% of the section changed)

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Auditing the Company’s application of the relative sales value method was challenging due to the nature and extent of audit effort required as the calculations are complex and contain a significant volume of data.

Additionally, the determination of the cost of vacation ownership products was sensitive to the selection and application of assumptions used in estimating future revenues from sale of vacation ownership products which are affected by expectations about future market and economic conditions.

Additionally, the determination of the cost of vacation ownership products was sensitive to the selection and application of assumptions, specifically future pricing assumptions, used in estimating future revenues from sale of vacation ownership products which are affected by expectations about future market and economic conditions.

Cost of Vacation Ownership Products

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the cost of vacation ownership products.

For example, we tested controls over management’s review of the calculations, including the inputs and certain estimates, such as estimated future revenue from sale of vacation ownership products.

For example, we tested controls over management’s review of the calculations, including the inputs and certain estimates, such as estimated future revenues from sale of vacation ownership products.

To test the cost of vacation ownership products, we performed audit procedures that included, among others, assessing the methodologies used, evaluating the estimates discussed above and testing the completeness and accuracy of the data used by the Company in the calculations.

For example, we agreed inputs to the calculations to historical data and source documentation and evaluated the estimates used in the calculations, such as estimated future revenue from sale of vacation ownership products, utilizing historical operating results.

For example, we agreed inputs to the calculations to historical data and source documentation and evaluated the estimates used in the calculations, such as estimated future revenues from sale of vacation ownership products, utilizing historical operating results.

We involved real estate subject matter resources on our team because the application of the relative sales value method is unique to companies in the real estate time-sharing industry.

Valuation of Originated and Acquired Vacation Ownership Notes Receivable

Description of the Matter As of December 31, 2023, the Company’s vacation ownership notes receivable was $2,343 million, of which $2,178 million related to originated vacation ownership notes receivable and $165 million related to acquired vacation ownership notes receivable.

Originated Vacation Ownership Notes Receivable Reserve

Description of the Matter As of December 31, 2024, the Company’s originated vacation ownership notes receivable reserve was $527 million.

As discussed in Note 2 to the consolidated financial statements, for originated notes, the Company records the difference between the vacation ownership note receivable and variable consideration included in the transaction price for the sale of the related vacation ownership products as a reserve on the Company’s originated vacation ownership notes receivable.

The Company’s acquired vacation ownership notes receivable are accounted for using the purchased credit deteriorated assets provision of the current expected credit loss model, whereby the Company estimates the reserve of its acquired vacation ownership receivables on a quarterly basis and any changes in the reserve are recorded as financing expense.

The estimates of the variable consideration for originated vacation ownership notes receivable and the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of the Company’s static pool analyses and the estimates regarding future defaults.

Auditing the Company’s valuation of originated and acquired vacation ownership notes receivable was challenging due to the nature and extent of audit effort required to test the static pool analyses, which are complex and contain a significant volume of data.

Furthermore, the valuation of originated and acquired vacation ownership notes receivable was sensitive to management’s assumptions regarding future default rates.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s vacation ownership notes receivable process.

For example, we tested controls over management’s review of the static pool analyses, including the significant inputs to the analyses, and review of the assumption regarding future default rates.

To test the valuation of originated and acquired vacation ownership notes receivable, we performed audit procedures that included, among others, assessing the methodology used, evaluating the assumptions regarding future default rates as discussed above, and testing the completeness and accuracy of the static pool analyses, including the significant inputs to the analyses.

The estimate of the variable consideration for originated vacation ownership notes receivable is based on default rates that are an output of the Company’s static pool analyses and the estimates regarding future defaults.

Auditing the Company’s originated vacation ownership notes receivable reserve was challenging due to the nature and extent of audit effort required to test the static pool analyses, which are complex and contain a significant volume of data.

Furthermore, the originated vacation ownership notes receivable reserve was sensitive to management’s assumptions regarding future default rates.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s originated vacation ownership notes receivable reserve process.

For example, we tested controls over management’s review of the static pool analyses, including the significant inputs to the analyses, and review of the assumptions regarding future default rates.

To test the originated vacation ownership notes receivable reserve, we performed audit procedures that included, among others, assessing the methodology used, evaluating the assumptions regarding future default rates as discussed above, and testing the completeness and accuracy of the static pool analyses, including the significant inputs to the analyses.

For example, we agreed inputs to the static pool analyses to historical data and source documentation.

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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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Derivative instrument adjustment, net of tax ( 3 ) ( 10 ) 31

OTHER COMPREHENSIVE INCOME, NET OF TAX 1 31 32

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

COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 2 — ( 4 )

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX ( 24 ) 1 31

Net loss attributable to noncontrolling interests 1 2 —

COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1 2 —

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 194 $ 255 $ 422

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Additional paid-in capital 3,975 3,955

Accumulated other comprehensive income 16 15

Accumulated other comprehensive (loss) income ( 8 ) 16

Retained earnings 852 742

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Deferred income taxes 38 ( 64 ) 87

Net change in assets and liabilities, net of the effects of acquisition:

Net change in assets and liabilities:

Accounts and contracts receivable ( 16 ) ( 105 ) ( 45 )

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INVESTING ACTIVITIES

Acquisition of a business, net of cash and restricted cash acquired — — ( 157 )

Proceeds from disposition of subsidiaries, net of cash and restricted cash transferred — — 94

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Purchase of company owned life insurance ( 16 ) ( 10 ) ( 18 )

Purchase and development of property for future sale ( 50 ) — —

Dispositions, net 8 16 3

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Finance lease payment ( 6 ) ( 5 ) ( 4 )

Payment of debt issuance costs ( 12 ) ( 15 ) ( 22 )

Payment of debt and securitized debt issuance costs ( 25 ) ( 12 ) ( 15 )

Repurchase of common stock ( 56 ) ( 286 ) ( 701 )

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Non-cash issuance of debt in connection with asset acquisition $ — $ — $ 11

Non-cash issuance of treasury stock in connection with Welk Acquisition — — 248

Non-cash transfer from inventory to property and equipment 21 12 47

Non-cash transfer from property and equipment to inventory 93 57 13

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

Non-cash transfer from other assets to property and equipment — — 14

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Interest paid, net of amounts capitalized 247 204 149

Income taxes paid, net of refunds (income tax refunds, net of income taxes paid) 141 57 ( 13 )

Income taxes paid, net of refunds 133 141 57

See Notes to Consolidated Financial Statements

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75.5 BALANCE AT YEAR-END 2021 $ 1 $ ( 1,356 ) $ 4,072 $ ( 16 ) $ 275 $ 2,976 $ 10 $ 2,986

— Net income — — — — 49 49 4 53

— Welk Acquisition — 55 193 — — 248 — 248

— Foreign currency translation adjustments — — — 11 — 11 — 11

— Derivative instrument adjustment — — — 21 — 21 — 21

0.2 Share-based compensation plans — 1 29 — — 30 — 30

— Equity component of convertible notes, net of issuance costs — — 117 — — 117 — 117

— Purchase of convertible note hedges — — ( 100 ) — — ( 100 ) — ( 100 )

— Issuance of warrants — — 70 — — 70 — 70

— Repurchase of common stock — ( 78 ) — — — ( 78 ) — ( 78 )

— Dividends — — — — ( 46 ) ( 46 ) — ( 46 )

— Employee stock plan issuance — — 3 — — 3 — 3

— Deconsolidation of certain Consolidated Property Owners' Associations — — — — — — ( 25 ) ( 25 )

75.5 BALANCE AT YEAR-END 2021 1 ( 1,356 ) 4,072 ( 16 ) 275 2,976 10 2,986

— Impact of adoption of ASU 2020-06

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75.7 BALANCE AT YEAR-END 2022 1 ( 2,054 ) 3,941 15 593 2,496 2 2,498

Continued - See Notes to Consolidated Financial Statements

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

Fiscal Years 2023, 2022 and 2021

(In millions)

Common Stock Issued Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings Total MVW Stockholders' Equity Non-controlling Interests Total Equity

— Net income (loss) — — — — 254 254 ( 2 ) 252

— Foreign currency translation adjustments — — — 11 — 11 — 11

— Derivative instrument adjustment — — — ( 10 ) — ( 10 ) — ( 10 )

0.1 Share-based compensation plans — 8 14 — — 22 — 22

— Repurchase of common stock — ( 286 ) — — — ( 286 ) — ( 286 )

— Dividends — — — — ( 105 ) ( 105 ) — ( 105 )

75.8 BALANCE AT YEAR-END 2023 1 ( 2,332 ) 3,955 16 742 2,382 — 2,382

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The Consolidated Financial Statements present the results of operations, financial position and cash flows of Marriott Vacations Worldwide Corporation (referred to in this report as (i) “we,” “us,” “Marriott Vacations Worldwide,” “MVW,” or the “Company,” which includes our consolidated subsidiaries except where the context of the reference is to a single corporate entity, or (ii) “MVWC,” which shall refer only to Marriott Vacations Worldwide Corporation, without its consolidated subsidiaries).

In order to make this report easier to read, we refer throughout to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Consolidated Financial Statements, unless otherwise noted.

We also refer to Marriott International, Inc.

as “Marriott International” and Marriott International’s Marriott Bonvoy customer loyalty program as “Marriott Bonvoy.” We use certain other terms that are defined within these Financial Statements.

In order to make this report easier to read, we refer throughout to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered notes in the Financial Statements, unless otherwise noted.

We refer to Marriott International, Inc.

as “Marriott International” and Marriott International’s Marriott Bonvoy customer loyalty program as “Marriott Bonvoy.” Additionally, we use the term “Marriott Vacation Ownership” to refer to our Marriott, Sheraton, and Westin branded businesses and the term “Hyatt Vacation Ownership” to refer to our Hyatt branded business.

We also use certain other terms that are defined within these Financial Statements.

The Financial Statements presented herein and discussed below include 100 % of the assets, liabilities, revenues, expenses, and cash flows of Marriott Vacations Worldwide, all entities in which Marriott Vacations Worldwide has a controlling voting interest (“subsidiaries”), and those variable interest entities (“VIEs”) for which Marriott Vacations Worldwide is the primary beneficiary in accordance with consolidation accounting guidance.

References in these Financial Statements to net income or loss attributable to common stockholders and MVW stockholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entities and are reported separately.

References in these Financial Statements to net income attributable to common stockholders and MVW stockholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entities and are reported separately.

Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation.

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.

Such estimates include, but are not limited to, revenue recognition, allocations of the purchase price paid in business combinations, 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.

Such estimates include, but are not limited to, revenue recognition, cost of vacation ownership products, inventory valuation, goodwill and intangibles valuation, 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, 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.

We have reclassified certain prior year amounts to conform with our current year presentation.

Acquisition of Welk

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(“Welk”) through a series of transactions (the “Welk Acquisition”), after which Welk became our indirect wholly-owned subsidiary.

We refer to the business and brand that we acquired in the Welk Acquisition as “Legacy-Welk.” The Financial Statements in this report for fiscal year 2021 include Welk’s results of operations for the last three quarters of 2021.

During 2023, we rebranded all Legacy-Welk resorts as Hyatt Vacation Club resorts.

See Footnote 3 “Acquisitions and Dispositions” for more information on the Welk Acquisition.

Acquisition of ILG and Disposition of VRI America

We refer to the business and brand that we acquired in the Welk Acquisition as “Legacy-Welk.” During 2023, we rebranded all Legacy-Welk resorts as Hyatt Vacation Club resorts.

Acquisition of ILG and Disposition of VRI Americas

On September 1, 2018, we completed the acquisition of ILG, LLC, formerly known as ILG, Inc.

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The businesses acquired from ILG that we currently operate as part of our Exchange & Third-Party Management business include Interval International and Aqua-Aston Hospitality.

As part of the ILG Acquisition, we also acquired the Vacation Resorts International (“VRI”) and Trading Places International (“TPI”) businesses (together, the “VRI Americas” business).

As part of the ILG Acquisition, we also acquired the Vacation Resorts International and Trading Places International businesses (together, the “VRI Americas” business).

Our Financial Statements reflect the disposition of the VRI Americas business on April 29, 2022.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Vacation ownership products may be sold for cash or we may provide financing.

In connection with the sale of vacation ownership products, we provide sales incentives to certain purchasers and, in certain cases, membership in a brand affiliated club.

Non-cash incentives typically include Marriott Bonvoy points, Hyatt’s customer loyalty program points (“World of Hyatt” points), or an alternative sales incentive that we refer to as “plus points.” Plus points are redeemable for stays at our resorts or for use in an exclusive selection of travel packages provided by affiliate tour operators (the “Explorer Collection” or “BEYOND”), generally up to two years from the date of issuance.

In connection with the sale of vacation ownership products, we provide sales incentives to certain purchasers.

Incentives typically include Marriott Bonvoy points, Hyatt’s customer loyalty program points (“World of Hyatt” points), or an alternative sales incentive that we refer to as “plus points.” Plus points are redeemable for stays at our resorts or for use in an exclusive selection of travel packages provided by third-party tour operators (the “Explorer Collection” or “BEYOND”), generally up to two years from the date of issuance.

Upon execution of a legal sales agreement, we typically receive an upfront deposit from our customer with the remainder of the purchase price for the vacation ownership product to either be collected at closing (“cash contract”) or financed by the customer through our financing programs (“financed contract”).

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In determining the consideration to which we expect to be entitled for financed contracts, we include estimated variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the customer class and the results of our static pool analyses, which, primarily rely on historical payment data by customer class as described in “ Loan Loss Reserves ” below.

Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the customer class and the results of our static pool analyses, which primarily rely on historical payment data by customer class.

We use the origination of vacation ownership notes receivable and the FICO scores of the customer by brand as the primary credit quality indicators, as historical performance indicates that there is a relationship between the default behavior of borrowers by FICO score and the brand associated with the VOI they have acquired.

Variable consideration which has not been included within the transaction price is presented as a reserve on contracts receivable or vacation ownership notes receivable.

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

Revenues were reduced during 2023 by $ 69 million due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods, primarily due to the increase in our reserve for vacation ownership notes receivable.

In the third quarter of 2022, we combined and aligned our accounting methodology to calculate our estimates for the reserve on vacation ownership notes receivable for the Marriott-, Sheraton-, and Westin-brands (“Combined Marriott”), as we expect our future customers to represent a blend of the historical customers for each brand.

See Footnote 6 “Vacation Ownership Notes Receivable” for additional information on our reserve for vacation ownership notes receivable reserve and adjustments recorded for the years presented.

Revenues were reduced during 2024 by $ 68 million due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods due to the increase in our reserve for originated vacation ownership notes receivable.

See Footnote 6 “Vacation Ownership Notes Receivable” for additional information on our reserve for vacation ownership notes receivable and adjustments recorded for the years presented.

In addition, we account for cash incentives provided to customers as a reduction of the transaction price.

Refer to “ Arrangements with Multiple Performance Obligations ” below for a description of our methods of allocating transaction price to each performance obligation.

We evaluated our business practices, and the underlying risks and rewards associated with vacation ownership products and the respective timing that such risks and rewards are transferred to the customer in determining the point in time at which control of the vacation ownership product is transferred to the customer.

Based upon the different terms of the contracts with the customer and business practices, for the contracts executed in the period prior to the third quarter of 2022, we determined that we transfer control of vacation ownership products at different times for each brand.

Prior to the third quarter of 2022, we recognized revenue on the sale of Marriott-branded vacation ownership products at closing.

We have historically recognized revenue on the sale of Sheraton-,Westin- and Hyatt-branded vacation ownership products upon expiration of the rescission period.

In the third quarter of 2022, in connection with the affiliation of the Marriott-, Sheraton-, and Westin-branded vacation ownership products through Abound by Marriott Vacations, we modified our business practices and the terms of our Marriott-branded VOI sales contracts to be consistent with the existing terms of our Sheraton- and Westin-branded VOI sales contracts.

As a result of these modifications, control of Marriott-branded vacation ownership products is transferred to the customer upon expiration of the statutory rescission period, consistent with the historical method of revenue recognition for sales of Sheraton- and Westin-branded vacation ownership products, resulting in earlier revenue recognition than the historical timing for Marriott-branded VOIs.

At the time at which we recognize revenue for Marriott-branded VOI contracts, we temporarily record a contract receivable for both cash contracts and financed contracts, until the time at which we collect the cash or originate a vacation ownership note receivable, which occurs at closing.

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

We have not changed contract terms or business practices regarding how control of Hyatt Vacation Club VOIs is transferred to the customer.

As such, we recognize revenue on the sale of Hyatt Vacation Club VOIs at expiration of rescission, except that revenue on the sale of VOIs derived from Legacy-Welk is recognized at closing.

Revenue for non-cash incentives, such as plus points, is recorded as Deferred revenue on our Balance Sheets at closing and is recognized as rental revenue upon transfer of control to the customer, which typically occurs upon delivery of the incentive, or at the point in time when the incentive is redeemed.

For non-cash incentives provided by third parties (i.e.

We recognize revenues from the sale of vacation ownership products when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible.

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

In the third quarter of 2022 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.

At the time at which we recognize revenue for VOIs, we temporarily record a contract receivable for both cash contracts and financed contracts, until the time at which we collect the cash or originate a vacation ownership note receivable, which occurs at closing.

Revenue for plus points is recorded as Deferred revenue on our Balance Sheets at closing and is recognized as rental revenue upon transfer of control to the customer, which typically occurs upon delivery of the incentive, or at the point in time when the incentive is redeemed.

For incentives provided by third parties (i.e.

Marriott Bonvoy points, World of Hyatt points, third-party Explorer Collection offerings, or BEYOND), we evaluated whether we control the underlying good or service prior to delivery to the customer.

We concluded that we are an agent for those non-cash incentives which we do not control prior to delivery and as such record the related revenue net of the related cost upon recognition.

We concluded that we are an agent for those incentives which we do not control prior to delivery and as such record the related revenue net of the related cost upon recognition.

Management and Exchange Revenues and Cost Reimbursements Revenues

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Generally, Interval Network memberships are cancellable and refundable on a pro-rata basis, with the exception of the Interval Network’s Platinum tier which is non-refundable.

Transaction-based fees are typically collected at a point in time.

We have determined that exchange services constitute a stand-ready obligation for us to provide unlimited access to exchange services over a defined period of time, when and if a customer (or customer of a customer) requests.

We have determined that customers benefit from the stand-ready obligation evenly throughout the period in which the customer has access to exchange services and as such, recognize membership fees and club dues on a straight-line basis over the related period of time.

Transaction-based fees are recognized as revenue at the point in time at which the relevant goods or services are transferred to the customer.

Transaction-based fees are typically collected at a point in time and are recognized as revenue at the point in time at which the relevant goods or services are transferred to the customer.

For transaction-based fees, we evaluate whether we control the underlying goods or services prior to delivery to the customer.

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Generally, payments commence under the financing contracts 30 to 60 days after closing.

We record the difference between the contract receivable or vacation ownership note receivable and the variable consideration included in the transaction price for the sale of the related vacation ownership product as a reserve on our contracts receivable or vacation ownership notes receivable, as applicable.

We earn interest income from the financing arrangements on the principal balance outstanding over the life of the arrangement and record that interest income in Financing revenues on our Income Statements.

See Footnote 6 “Vacation Ownership Notes Receivable” for additional information related to the accounting for our acquired vacation ownership notes receivable.

Financing revenues include transaction-based fees we charge to owners and other third parties for services.

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We generally recognize rental revenues when occupancy has occurred, which is consistent with the period in which the customer benefits from such service.

For certain rental revenues associated with our Exchange & Third-Party Management segment, revenue is recognized when confirmation of the transaction is provided as we concluded we are an agent for these transactions.

We recognize rental revenue from the utilization of plus points issued in connection with the sale of vacation ownership products, as described in “ Sale of Vacation Ownership Products ” above, when occupancy has occurred.

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

For certain rental revenues associated with our Exchange & Third-Party Management segment, revenue is recognized when confirmation of the transaction is provided because we concluded we are an agent for these transactions.

Arrangements with Multiple Performance Obligations

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We charge marketing and sales costs we incur to sell vacation ownership products to expense when incurred.

Earnings or Loss Per Share Attributable to Common Stockholders

Basic earnings or loss per share attributable to common stockholders is calculated by dividing the earnings or loss available to common stockholders by the weighted average number of common shares outstanding for the period.

Diluted earnings or loss per share attributable to common stockholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period.

Earnings Per Share Attributable to Common Stockholders

Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the reporting period.

Treasury stock is excluded from the weighted average number of shares of common stock outstanding.

Diluted earnings per share attributable to common stockholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period.

The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings per share attributable to common stockholders by application of the treasury stock method.

Any potentially dilutive shares are excluded from the calculation for periods when there is a net loss attributable to common stockholders to avoid anti-dilutive effects.

Business Combinations

We allocate the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

We recognize the amount by which the purchase price of an acquired entity exceeds the net of the fair values assigned to the assets acquired and liabilities assumed as goodwill.

In determining the fair values of assets acquired and liabilities assumed, we use various recognized valuation methods including the income, cost and market approaches.

Further, we make assumptions within certain valuation techniques, including discount rates, royalty rates, and the amount and timing of future cash flows.

We record the net assets and results of operations of an acquired entity in our Financial Statements from the acquisition date.

We initially perform these valuations based upon preliminary estimates and assumptions by management or independent valuation specialists under our supervision, where appropriate, and make revisions as estimates and assumptions are finalized.

We expense acquisition-related costs as we incur them.

As part of our accounting for business combinations we are required to determine the useful lives of identifiable intangible assets recognized separately from goodwill.

The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the acquired business.

An intangible asset with a finite useful life is amortized;

an intangible asset with an indefinite useful life is not amortized.

We base the estimate of the useful life of an intangible asset on an analysis of all pertinent factors, in particular, all of the following factors with no one factor being more presumptive than the other:

• The expected use of the asset.

• The expected useful life of another asset or a group of assets to which the useful life of the intangible asset may relate.

• Any legal, regulatory, or contractual provisions that may limit the useful life.

• Our own historical experience in renewing or extending similar arrangements, consistent with our intended use of the asset, regardless of whether those arrangements have explicit renewal or extension provisions.

• The effects of obsolescence, demand, competition, and other economic factors.

• The level of maintenance expenditures required to obtain the expected future cash flows from the asset.

If no legal, regulatory, contractual, competitive, economic, or other factors limit the useful life of an intangible asset to the reporting entity, the useful life of the asset is considered to be indefinite.

The term indefinite does not mean the same as infinite or indeterminate.

The useful life of an intangible asset is indefinite if that life extends beyond the foreseeable horizon;

that is, there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the acquired business.

Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired entity and are inherently uncertain.

Examples of critical estimates in accounting for acquisitions include but are not limited to future expected cash flows from sales of products and services and related contracts and agreements and discount and long-term growth rates.

Unanticipated events and circumstances may occur which could affect the accuracy or validity of our assumptions, estimates or actual results.

Variable Interest Entities

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Acquired Vacation Ownership Notes Receivable Reserve for Credit Losses

As part of the ILG Acquisition, we acquired existing portfolios of vacation ownership notes receivable.

As part of both the ILG Acquisition and Welk Acquisition, we acquired existing portfolios of vacation ownership notes receivable.

We account for these acquired vacation ownership notes receivable using the purchased credit deteriorated assets provision of the current expected credit loss model, whereby we established a reserve for credit losses and a corresponding increase in the book value of the acquired vacation ownership notes receivable, resulting in no impact to the recorded balance.

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For acquired vacation ownership notes receivable, the estimated collateral value is transferred from vacation ownership notes receivable to inventory upon foreclosure or revocation of the related vacation ownership note receivable.

The vacation ownership notes receivable acquired as part of the Welk Acquisition were recorded at fair value using the purchased credit deteriorated assets provision of the current expected credit loss model, consistent with the principles outlined above.

Contracts Receivable and Originated Vacation Ownership Notes Receivable Reserve

We record the difference between the contract receivable or vacation ownership note receivable and the variable consideration included in the transaction price for the sale of the related vacation ownership product as a reserve on our contracts receivable or originated vacation ownership notes receivable, as applicable.

See “Financing Revenues” above for further information.

See Footnote 6 “Vacation Ownership Notes Receivable” for further information.

Past Due and Defaulted

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We do not accept payments for vacation ownership notes receivable during the foreclosure process unless the amount is sufficient to pay all past due principal, interest, fees and penalties owed and fully reinstate the note.

off vacation ownership notes receivable against the reserve once we receive title to the vacation ownership products through the foreclosure or deed-in-lieu process or, in certain circumstances, when revocation is complete.

We write off vacation ownership notes receivable against the reserve once we receive title to the vacation ownership products through the foreclosure or deed-in-lieu process or, in certain circumstances, when revocation is complete.

Our inventory consists primarily of completed vacation ownership products.

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Also, pursuant to the guidance for accounting for real estate time-sharing transactions, we do not reduce inventory for the cost of vacation ownership products related to variable consideration which has not been included within the transaction price (accordingly, no adjustment is made when inventory is reacquired upon default of the related originated vacation ownership note receivable).

These standards provide for changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as product cost true-up activity, and are recorded in Cost of vacation ownership product expenses on the Income Statements to retrospectively adjust the margin previously recorded subject to those estimates.

These standards provide for changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as product cost true-up activity, and to be recorded in Cost of vacation ownership product expenses on the Income Statements to retrospectively adjust the margin previously recorded subject to those estimates to the amounts that would have been recorded historically had the revised estimates been used.

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 39 million, $ 36 million and $ 24 million during 2024, 2023 and 2022, respectively.

Property and Equipment

Property and equipment includes our sales centers, golf courses, information technology, including internally developed capitalized software, finance lease assets, and other assets used in the normal course of business, as well as land held for future vacation ownership product development, and undeveloped and partially developed land parcels that are not part of an approved development plan and do not meet the criteria to be classified as held for sale.

Property and equipment includes our sales centers, golf courses, information technology, including internal use software, finance lease assets, and other assets used in the normal course of business, as well as land held for future vacation ownership product development, and undeveloped and partially developed land parcels that are not part of an approved development plan and do not meet the criteria to be classified as held for sale.

In addition, fully developed VOIs are classified as property and equipment until they are registered and available for sale.

We record property and equipment at cost, including interest and real estate taxes incurred during active development.

We record property and equipment at cost, including capitalized interest and real estate taxes incurred during active development.

We capitalize the cost of improvements that extend the useful life of property and equipment when incurred.

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We compute depreciation using the straight-line method over the estimated useful lives of the assets ( three to forty years ), and we amortize leasehold improvements over the shorter of the asset life or lease term.

We also capitalize certain qualified costs incurred in connection with the development of internal use software.

Capitalization of internal use software costs begins when the preliminary project stage is completed, management with the relevant authority authorizes and commits to the funding of the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

Cloud Computing Arrangements

We have entered into various cloud computing arrangements that are considered service contracts.

We capitalize certain qualified implementation costs incurred in connection with these arrangements, including both internal and external costs.

Capitalization of costs begins when the preliminary project stage is completed, management with the relevant authority authorizes and commits to the funding of the project, and it is probable that the project will be completed and will be used to perform the function intended.

We cease capitalization of such costs when the implementation activities are complete.

Capitalized implementation costs of $ 35 million and $ 28 million are recorded in Other assets on our Balance Sheets as of December 31, 2024 and December 31, 2023, respectively.

We amortize capitalized implementation costs to an operating expense using the straight-line method over the term of the cloud computing arrangement ( 3 to 5 years).

To the extent that we conclude we will not complete a project, we expect to cease using the services such capitalized costs are related to or expect to terminate the cloud computing arrangement early, we write off the remaining capitalized cost.

We account for leases in accordance with ASC Topic 842, “ Leases ” (“ASC 842”).

We determine if an arrangement is or contains a lease at contract inception.

Operating leases include lease arrangements for various land, corporate facilities office space, real estate and equipment.

Other operating leases are primarily for office, off-site sales centers and retail space, as well as various equipment supporting our operations, with varying terms and renewal option periods.

Finance leases include lease arrangements for our new corporate headquarters (commencing in 2023), ancillary and operations space.

Operating leases include lease arrangements for land, office space, real estate, sales centers, as well as various facilities and equipment supporting our operations, with varying terms and renewal option periods.

Finance leases include lease arrangements for our corporate headquarters in Orlando, Florida, as well as other operations space.

We also have a long-term finance lease for land underlying an operating hotel.

In addition, we also lease various equipment supporting our operations and classify these leases as finance leases in accordance with ASC 842.

In addition, we lease various equipment supporting our operations and classify these leases as finance leases in accordance with ASC 842.

The depreciable life of these assets is limited to the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

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Macroeconomic conditions are the primary factor used to estimate whether an option to extend a lease term will be exercised or not.

Because the rate implicit in our leases is not readily determinable, we use our incremental borrowing rate as the discount rate, which approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments and in similar economic

environments.

Right-of-use assets exclude the unamortized portion of lease incentives received.

Certain of our lease agreements include variable rental payments that are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation.

Certain of our lease agreements include variable rental payments that are based on a percentage of sales over contractual levels and others include rental payments adjusted periodically for inflation.

Additionally, with respect to our real estate leases, we do not separate lease and non-lease components.

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Convertible Notes

In the first quarter of 2022, we adopted Accounting Standards Update 2020-06 – “ Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

In the first quarter of 2022, we adopted Accounting Standards Update (“ASU”) 2020-06 – “ Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), using the modified retrospective method.

Prior to the adoption of ASU 2020-06, we had bifurcated our convertible notes into liability and equity components.

The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that did not have an associated convertible feature.

The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the convertible notes.

The excess of the principal amount of the liability over its carrying amount was amortized to interest expense over the term of the convertible notes using the effective interest method.

Upon adoption of ASU 2020-06, we were no longer required to separate our convertible notes into liability and equity components, and were required to calculate the impact of our convertible notes on diluted earnings per share using the “if-converted” method, regardless of intent to settle or partially settle the debt in cash.

Subsequent to the adoption of ASU 2020-06, our convertible senior notes are accounted for entirely as a liability and measured at their amortized cost as we are no longer required to separate our convertible notes into liability and equity components, and are required to calculate the impact of our convertible notes on diluted earnings per share using the “if-converted” method, regardless of intent to settle or partially settle the debt in cash.

Under the “if-converted” method, diluted earnings per share is generally calculated assuming that all of our convertible notes are converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive.

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The adoption of ASU 2020-06 on January 1, 2022 resulted in an increase in debt of $ 107 million, a decrease in additional paid-in capital of $ 111 million, and a decrease in deferred taxes of $ 27 million, as well as a cumulative effect adjustment to the opening balance of retained earnings of $ 31 million.

We will continue to amortize the remaining debt issuance costs associated with our convertible notes over the respective terms of our convertible notes.

The prior period consolidated financial statements have not been retrospectively restated and continue to be reported under the accounting standards in effect for those periods.

Subsequent to the adoption of ASU 2020-06, our convertible senior notes are accounted for entirely as a liability and measured at their amortized cost.

See Footnote 8 “Earnings Per Share” and Footnote 16 “Debt” for more information .

We continue to amortize the remaining debt issuance costs associated with our convertible notes over the respective terms of our convertible notes.

Derivative Instruments

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We manage our exposure to these risks by monitoring available financing alternatives, through pricing policies that may take into account currency exchange rates, and by entering into derivative arrangements.

We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates.

We may use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates.

As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk and we do not use derivatives for trading or speculative purposes.

We have no outstanding derivative instruments as of December 31, 2024.

Loss Contingencies

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Share-Based Compensation Costs

In 2020, our stockholders approved the Marriott Vacations Worldwide Corporation 2020 Equity Incentive Plan (the “MVW Equity Plan”), which supersedes both the Marriott Vacations Worldwide Corporation Stock and Cash Incentive Plan and the Interval Leisure Group, Inc.

During the second quarter of 2024, our stockholders approved the Amended and Restated Marriott Vacations Worldwide Corporation 2020 Equity Incentive Plan (the “MVW Equity Plan”), which supersedes the Marriott Vacations Worldwide Corporation Stock and Cash Incentive Plan and the Interval Leisure Group, Inc.

2013 Stock and Incentive Plan (collectively, the “Prior Plans”).

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Under the MVW Equity Plan, we are authorized to award:

(1) restricted shares of our common stock and restricted stock units (“RSUs”) of our common stock, (2) stock appreciation rights (“SARs”) relating to our common stock, and (3) options to purchase our common stock.

(1) restricted stock and restricted stock units (“RSUs”) of our common stock, (2) stock appreciation rights (“SARs”) relating to our common stock, and (3) stock options to purchase our common stock.

We follow the provisions of ASC Topic 718 “ Compensation—Stock Compensation ,” which requires that a company measure the expense of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

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SARs awarded under the MVW Equity Plan are granted at exercise prices or strike prices equal to the market price of our common stock on the date of grant (this price is referred to as the “base value”).

SARs generally expire ten years after the date of grant and both vest and become exercisable in cumulative installments of one quarter of the grant at the end of each of the first four years following the date of grant.

SARs generally expire ten years after the date of grant and both vest and become exercisable in cumulative installments of one quarter of the grant per year in each of the first four years following the date of grant.

Upon exercise of SARs, our employees and non-employee directors receive a number of shares of our common stock equal to the number of SARs being exercised, multiplied by the quotient of (a) the market price of the common stock on the date of exercise (this price is referred to as the “final value”) minus the base value, divided by (b) the final value.

We recognize the expense associated with these awards on our Income Statements based on the fair value of the awards as of the date that the share-based awards are granted and adjust that expense to the estimated number of awards that we

expect will vest or be earned.

The fair value of RSUs represents the number of awards granted multiplied by the average of the high and low market price of our common stock on the date the awards are granted, reduced by the present value of the dividends expected to be paid on the shares during the vesting period, discounted at a risk-free interest rate.

The fair value of RSUs represents the number of awards granted multiplied by the average

of the high and low market price of our common stock on the date the awards are granted, reduced by the present value of the dividends expected to be paid on the shares during the vesting period, discounted at a risk-free interest rate.

We generally determine the fair value of SARs using the Black-Scholes option valuation model, which incorporates assumptions about expected volatility, risk free interest rate, dividend yield and expected term.

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We report gains and losses from currency exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature, as well as gains and losses from non-U.S.

currency transactions, in the Gains (losses) and other income (expense), net line on our Income Statements.

currency transactions, in the (Losses) gains and other (expense) income, net line on our Income Statements.

We file income tax returns, including with respect to our subsidiaries, in various jurisdictions around the world.

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New Accounting Standards

Accounting Standards Update 2022-02 – “ Financial Instruments — Credit Losses (Topic 326) – Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”)

In the first quarter of 2023, we adopted accounting standards update (“ASU”) 2022-02, which eliminated the recognition and measurement guidance applicable to troubled debt restructurings for creditors and enhanced disclosure requirements with respect to loan modifications for borrowers experiencing financial difficulty.

ASU 2022-02 also requires disclosure of current-period gross write-offs by year of origination to be presented in the vintage disclosures for financing receivables.

The adoption of ASU 2022-02 on January 1, 2023, on a prospective basis, did not have a material impact on our financial statements or disclosures other than the addition of incremental disclosures relating to gross write-offs for vacation ownership notes receivable.

See Footnote 6 “Vacation Ownership Notes Receivable” for the incremental disclosures required by the adoption of ASU 2022-02.

Accounting Standards Update 2020-04 – “ Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”) and Accounting Standards Update 2022-06 – “ Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848 ” (“ASU 2022-06”)

In 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, as amended, which provides optional expedients and exceptions to existing guidance on contract modifications and hedge accounting in an effort to ease the financial reporting burdens related to the expected market transition from the USD London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

This update was effective upon issuance and issuers generally were able to elect to adopt the optional expedients and exceptions over time through a period ending on December 31, 2022.

In December 2022, the FASB issued ASU 2022-06 to extend the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024.

During the second quarter of 2023, we amended our Term Loan (as defined in Footnote 16 “Debt”) and our interest rate swaps and collar to reference SOFR (as defined in Footnote 15 “Securitized Debt”) rather than LIBOR.

See Footnote 16 “Debt” for more information.

Both our Term Loan and the related interest rate swaps and collar transitioned to SOFR at the same time, effective July 31, 2023.

As of December 31, 2023, we have no other financial instruments to transition from LIBOR.

Future Adoption of Accounting Standards

Accounting Standards Update 2023-07 – “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”)

In November 2023, the FASB issued ASU 2023-07, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

This update should be applied retrospectively for all prior periods presented in the financial statements.

We continue to evaluate the impact that the adoption of this update, including the timing of implementation, will have on our disclosures.

In the fourth quarter of 2024, we adopted ASU 2023-07, which updated reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information to help users of financial statements understand how the chief operating decision maker evaluates segment expenses and operating results.

The ASU did not change how we identify operating segments.

The adoption of ASU 2023-07 on a retrospective basis, did not have a material impact on our financial statements, but rather enhanced our disclosure of segment information.

See Footnote 20 “Business Segments” for the additional disclosures required by the adoption of ASU 2023-07.

Future Adoption of Accounting Standards

Accounting Standards Update 2023-09 – “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”)

In December 2023, the FASB issued ASU 2023-09, which is intended to enhance the transparency and decision usefulness of income tax disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, which is intended to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 primarily enhances and expands both the annual income tax rate reconciliation disclosure and the annual income taxes paid disclosure.

This update is effective for fiscal years beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis, with early adoption permitted.

We continue to evaluate the impact that the adoption of this update, including the timing of implementation, will have on our disclosures.

We expect to begin providing the enhanced disclosures required by this ASU in our Annual Report on Form 10-K for the year ending December 31, 2025.

Accounting Standards Update 2024-03 - “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU 2024-03”)

In November 2024, the FASB issued ASU 2024-03, which requires additional information about specific expense categories in the notes to financial statements for both interim and annual reporting periods.

This update is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, with early adoption permitted.

We are evaluating the impact that the adoption of this update, including the timing of implementation, will have on our disclosures.

Accounting Standards Update 2024-04 - “Debt - Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”)

In November 2024, the FASB issued ASU 2024-04, which requires an entity to account for certain early settlements of convertible debt instruments as an induced conversion if the inducement offer includes the issuance of all consideration (in form and amount) issuable under the conversion privileges provided in the terms of the existing convertible debt instrument.

This update is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted for all entities that have adopted the amendments in ASU 2020-06.

We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method.

We are evaluating the impact that the adoption of this update, including the timing of implementation, will have on our disclosures.

ACQUISITIONS AND DISPOSITIONS

Welk Acquisition

We completed the Welk Acquisition on April 1, 2021.

The following table presents the fair value of each type of consideration transferred in the Welk Acquisition, as finalized at March 31, 2022.

(in millions, except per share amounts)

Equivalent shares of Marriott Vacations Worldwide common stock issued 1.4

Marriott Vacations Worldwide common stock price per share as of Welk Acquisition Date $ 174.18

Fair value of Marriott Vacations Worldwide common stock issued 248

Cash consideration to Welk, net of cash and restricted cash acquired of $ 48 million

Total consideration transferred, net of cash and restricted cash acquired $ 405

Fair Values of Assets Acquired and Liabilities Assumed

We accounted for the Welk Acquisition as a business combination, which requires us to record the assets acquired and liabilities assumed at fair value as of the Welk Acquisition Date.

The values attributed to Vacation ownership notes receivable, Inventory, Property and equipment, Intangible assets, and Securitized debt from VIEs were based on valuations prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820 “ Fair Value Measurements ” (“ASC 820”).

The value attributed to Debt was based on Level 2 inputs in accordance with ASC 820.

During the first quarter of 2022, we finalized our allocation of the purchase price to the acquired assets and liabilities.

The following table presents the fair value of the assets that we acquired and the liabilities that we assumed in connection with the business combination as finalized.

($ in millions) April 1, 2021

(as finalized)

Vacation ownership notes receivable, net $ 255

Inventory 111

Property and equipment, net 83

Intangible assets 102

Other assets 19

Deferred taxes ( 24 )

Securitized debt ( 184 )

Other liabilities ( 93 )

Net assets acquired 80

(1) Goodwill is calculated as total consideration transferred, net of cash acquired, less identified net assets acquired.

It represents the value that we expect to obtain from growth opportunities from our combined operations and is not deductible for tax purposes.

Pro Forma Results of Operations

The following unaudited pro forma information presents the combined results of operations of Marriott Vacations Worldwide and Legacy-Welk as if we had completed the Welk Acquisition on December 31, 2019, the last day of our 2019 fiscal year, but using the estimates of the fair values of assets and liabilities as of the Welk Acquisition Date set forth above.

As required by GAAP, these unaudited pro forma results do not reflect any synergies from operating efficiencies.

Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Welk Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.

There were no Welk Acquisition-related costs included in the unaudited pro forma results below for 2021.

($ in millions, except per share data) 2021

Revenues $ 3,937

Net income $ 70

Net income attributable to common stockholders $ 62

EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

Diluted $ 1.43

Other Acquisitions

Orlando, Florida

During the fourth quarter of 2024, we acquired a parcel of land in Orlando, Florida for $ 11 million, which we plan to develop into a 289 -unit Hyatt-branded vacation ownership property.

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

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 19 “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 December 31, 2024.

Savannah, Georgia

During 2023, we acquired a property in Savannah, Georgia for $ 19 million.

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

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

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

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During 2023, we acquired a parcel of land and an adjacent retail space in Charleston, South Carolina for $ 17 million.

We plan to develop the parcel of land into a 50 -unit vacation ownership property and use a portion of the retail space to operate a sales center.

We plan to develop the parcel of land into a 50 -unit Westin-branded vacation ownership property and use a portion of the retail space to operate a sales center.

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

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The transaction was accounted for as an asset acquisition and the purchase price was allocated to Property and equipment, net.

As consideration for the acquisition, we paid $ 12 million in cash and issued a non-interest bearing note payable for $ 11 million, of which $ 6 million was repaid in the first quarter of 2023.

As consideration for the acquisition, we paid $ 12 million in cash and issued a non-interest bearing note payable for $ 11 million, of which $ 6 million was repaid in the first quarter of 2023 and the remainder was repaid in the first quarter of 2024.

Further, we reclassified $ 13 million of previous deposits associated with the project from Other assets to Property and equipment, net.

During 2021, we acquired 24 completed vacation ownership units and an operations building located in Costa Rica for $ 14 million.

We accounted for the transaction as an asset acquisition with the purchase price allocated to Inventory ($ 13 million) and Property and equipment, net ($ 1 million).

New York, New York

During 2021, we acquired the remaining 120 completed vacation ownership units located at our Marriott Vacation Club Pulse, New York City property for $ 98 million.

We accounted for the transaction as an asset acquisition with the purchase price allocated to Property and equipment, net.

San Francisco, California

During 2021, we acquired 44 completed vacation ownership units at our Marriott Vacation Club Pulse, San Francisco property for $ 34 million.

We accounted for the transaction as an asset acquisition with the purchase price allocated to Inventory ($ 29 million) and Other assets ($ 5 million).

Additionally, during 2021, we completed the purchase of the remaining inventory at our Marriott Vacation Club Pulse, San Francisco property and wrote off the outstanding management fee receivables deemed uncollectible of $ 7 million, which was recorded in the Management and exchange expense line on our Income Statement for the year ended December 31, 2021.

As part of the purchase, we acquired the remaining 78 completed vacation ownership units, as well as an onsite garage, for $ 59 million.

We accounted for the purchase as an asset acquisition with the purchase price allocated to Inventory ($ 41 million) and Property and equipment, net ($ 18 million).

Further, we reclassified $ 10 million of previous deposits associated with the project from Other assets to Inventory.

During 2022, we disposed of VRI Americas for proceeds of $ 56 million, net of cash and restricted cash transferred to the buyer of $ 12 million, after determining that this business was not a core component of our future growth strategy and operating model.

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The net carrying value of VRI Americas as of the date of the disposition was $ 51 million, including $ 25 million of goodwill and $ 20 million of intangible assets.

As a result of the disposition, we recorded a gain of $ 17 million in Gains (losses) and other income (expense), net on our Income Statement for the year ended December 31, 2022.

As a result of the disposition, we recorded a gain of $ 17 million in (Losses) gains and other (expense) income, net on our Income Statement for the year ended December 31, 2022.

Additionally, during 2022, we disposed of entities that owned and operated a Vacation Ownership segment hotel in Puerto Vallarta, Mexico, for proceeds of $ 38 million, net of cash and restricted cash transferred to the buyer of $ 3 million, consistent with our strategy to dispose of non-strategic assets.

The net carrying value of the business disposed of as of the date of the disposition, excluding the cumulative translation adjustment, was $ 18 million, substantially all of which was for property and equipment.

As a result of this disposition, we recorded a gain of $ 33 million in Gains (losses) and other income (expense), net on our Income Statement for the year ended December 31, 2022, which included the realization of cumulative foreign currency translation gains of $ 10 million associated with the disposition of these entities.

As a result of this disposition, we recorded a gain of $ 33 million in (Losses) gains and other (expense) income, net on our Income Statement for the year ended December 31, 2022, which included the realization of cumulative foreign currency translation gains of $ 10 million associated with the disposition of these entities.

REVENUE AND RECEIVABLES

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Income Tax Provision

The following table presents the components of our Income (loss) before income taxes and noncontrolling interests for the last three fiscal years:

The following table presents the components of our Income before income taxes and noncontrolling interests for the last three fiscal years:

($ in millions) 2024 2023 2022

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Change in valuation allowance

( 2.6 ) 7.1 1.0

Other items 1.6 ( 0.2 ) ( 0.8 )

Effective rate 29.0 % 36.5 % 32.9 %

(1) The 2024 permanent differences are primarily related to non-deductible interest, other expenses and foreign taxes partially offset by non-taxable income.

The 2023 permanent differences are primarily related to non-taxable income and foreign taxes deducted in the U.S.

The 2022 permanent differences primarily relate to non-deductible interest.

The 2021 permanent differences primarily relate to the deduction of foreign taxes paid in the U.S.

For the years ended December 31, 2023, 2022 and 2021, our provision for income taxes included $ 1 million, $ 3 million, and $ 4 million of excess tax benefits resulting from equity incentive plan activities, respectively.

We conduct business in countries that grant “holidays” from income taxes for ten to thirty-year periods.

These holidays expire through 2034.

As of December 31, 2023, the $ 28 million tax reserve for non-income tax issues is predominantly related to the ILG Acquisition.

We expect that we will be indemnified for liabilities of $ 4 million in connection with the Legacy-ILG non-income tax matters 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.

These holidays expire through 2034 and may be impacted by the global minimum tax rules (Pillar 2) set forth for large multinational corporations.

Deferred Income Taxes

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Deferred compensation 42 35

Deferred revenue 10 22

Property and equipment 73 56

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Net operating loss and capital loss carryforwards 143 153

Accrued expenses 30 21

Tax credits 30 27

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Total net deferred tax liabilities $ ( 307 ) $ ( 266 )

In 2023, the change in our valuation allowance is primarily related to certain existing non-U.S.

loss carryforwards where future sources of income are no longer available for realization of the losses.

In 2024, the change in our valuation allowance is primarily related to realization of non-U.S.

loss carryforwards.

We have $ 6 million in foreign capital loss carryforwards and $ 126 million of foreign net operating loss carryforwards, some of which begin expiring in 2025;

however, a significant portion of the net operating loss carryforwards have indefinite carryforward periods.

We have $ 13 million of state net operating loss carryforwards, the majority of which will not expire within the next five years.

federal foreign tax credit carryforwards of $ 20 million and $ 6 million of state tax credit carryforwards.

We continue to treat the undistributed earnings of certain foreign subsidiaries as permanently reinvested.

No taxes have been accrued with respect to these undistributed earnings or any outside basis differences.

Distribution of profits from foreign subsidiaries is not expected to cause a significant incremental U.S.

tax impact in the future;

an estimate of the U.S.

tax impact is not practicable to determine.

We have $ 8 million of state net operating loss carryforwards, the majority of which will not expire within the next five years, $ 3 million of business interest deduction carryforwards and $ 7 million of state tax credit carryforwards, both of which have an indefinite carryforward period.

In 2024, we elected to remove our permanent reinvestment assertion related to the undistributed earnings of certain foreign subsidiaries and accrued the applicable taxes of $ 20 million related to this decision.

Subsequent to this change, we no longer have any subsidiaries for which undistributed earnings are treated as permanently reinvested.

Unrecognized Tax Benefits

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Increases related to tax positions taken during a prior period 8 87 3

Increases related to tax positions taken during the current period — — 1

Decreases related to tax positions taken during a prior period ( 82 ) ( 6 ) ( 4 )

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Unrecognized tax benefits at end of year $ 23 $ 106 $ 25

The increase in the unrecognized tax benefits during 2023 is primarily related to $ 80 million for a proposed tax method change for pre-acquisition Welk.

Unrecognized tax benefits (excluding interest and penalties) of $ 26 million would impact the effective tax rate if recognized.

The increase in the unrecognized tax benefits during 2023 and subsequent decrease during 2024 is primarily related to an $ 80 million proposed tax method change in 2023, which was filed with the IRS in 2024.

The total amount of gross interest and penalties accrued relating to unrecognized tax benefits was $ 37 million at December 31, 2024 and $ 48 million at December 31, 2023, which is predominantly attributable to non-U.S.

jurisdictions.

We anticipate $ 36 million of unrecognized tax benefits, including interest and penalties, will 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.

The unrecognized tax benefits, including accrued interest and penalties, are included in Other liabilities on our Balance Sheet.

We recognized an income tax benefit of $ 11 million in 2024, an income tax expense of $ 20 million in 2023, and an income tax benefit of $ 14 million in 2022, related to accrued interest and penalties.

Unrecognized tax benefits (including interest and penalties) of $ 29 million and $ 38 million, net of indemnification, would have impacted the effective tax rate for the years ended December 31, 2024 and December 31, 2023, respectively, if recognized.

We anticipate $ 31 million of unrecognized tax benefits, including interest and penalties, will 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., (the “Tax Matters Agreement”) and consequently have recorded a corresponding indemnification asset.

The unrecognized tax benefits, including accrued interest and penalties, are included in Other liabilities on our Balance Sheets.

Our income tax returns are subject to examination by relevant tax authorities.

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The amount of the unrecognized tax benefits may increase or decrease within the next twelve months as a result of audits or audit settlements.

As of December 31, 2024, the $ 16 million tax reserve for non-income tax issues is predominantly related to the ILG Acquisition.

We expect that we will be indemnified for liabilities of $ 3 million in connection with the Legacy-ILG non-income tax matters pursuant to the Tax Matters Agreement and consequently have recorded a corresponding indemnification asset.

VACATION OWNERSHIP NOTES RECEIVABLE

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Securitized $ 1,824 $ 93 $ 1,917 $ 1,764 $ 148 $ 1,912

Non-securitized

Eligible for securitization (1)

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417 12 429 363 16 379

Subtotal 414 17 431 385 21 406

Non-securitized 509 14 523 414 17 431

$ 2,333 $ 107 $ 2,440 $ 2,178 $ 165 $ 2,343

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Total interest income associated with vacation ownership notes receivable $ 331 $ 312 $ 284

Vacation Ownership Notes Receivable Reserves

Vacation Ownership Notes Receivable Reserve

The estimates of the variable consideration for originated vacation ownership notes receivable and 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 estimates regarding future defaults.

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

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

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

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

This additional reserve adjusted our future default rate estimate, which reflected then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.

In the third quarter of 2022, in connection with the combination and alignment of the reserves for the Marriott-, Sheraton-, and Westin-brands (see Footnote 2 “Summary of Significant Accounting Policies”), we recorded a reversal of credit loss expense for our acquired vacation ownership notes receivable of $ 19 million, which was recorded in Financing expenses on our Income Statement for the year ended December 31, 2022, and an increase in the reserve for our originated vacation ownership notes receivable of $ 21 million, which was recorded as a reduction of Sale of vacation ownership products and partially offset by a corresponding $ 5 million increase in Cost of vacation ownership products on our Income Statement for the year ended December 31, 2022.

In 2020, we increased our vacation ownership notes receivable reserves by $ 69 million as a result of higher actual and projected default activity which was predominantly due to the COVID-19 pandemic.

At that time, we allocated $ 59 million of the reserve to our originated vacation ownership notes receivable reserve (recorded as a reduction of Sale of vacation ownership products), $ 10 million to our acquired vacation ownership notes receivable reserve (recorded as an increase in Financing expenses), and a corresponding $ 19 million reduction in Cost of vacation ownership products on our Income Statement for the year ended December 31, 2020.

Given the uncertainty as to which vacation ownership notes receivable (originated or acquired) would default, from 2020 through the second quarter of 2022, we assessed the sufficiency of our reserves for all vacation ownership notes receivable in total.

There were no additional adjustments to our vacation ownership notes receivables reserves due to the COVID-19 pandemic during either 2021 or 2022.

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

The 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 to reflect increases in expected cumulative loss rates for our vacation ownership notes receivable originated during 2021 to 2024.

As a result, we increased our originated vacation ownership notes receivable reserve by $ 70 million.

Consistent with our analysis in the third quarter of 2023, we considered the cumulative impact of inflation and the 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.

Credit Quality Indicators - Vacation Ownership Notes Receivable

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The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 725 and 723 at December 31, 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 reserves, and interest rates for our acquired vacation ownership notes receivable at December 31, 2023.

Acquired Vacation Ownership Notes Receivable

($ in millions) Non-Securitized Securitized Total

2024 $ 3 $ 31 $ 34

Thereafter 5 27 32

Balance at December 31, 2023 $ 17 $ 148 $ 165

Weighted average stated interest rate 13.7 % 14.2 % 14.1 %

Range of stated interest rates 0.0 % to 21.9 %

0.0 % to 21.9 %

The following table summarizes the activity related to our acquired vacation ownership notes receivable reserve.

Acquired Vacation Ownership Notes Receivable Reserve

($ in millions) Non-Securitized Securitized Total

Balance at December 31, 2020 $ 39 $ 21 $ 60

Securitizations ( 9 ) 9 —

Clean-up call 3 ( 3 ) —

Write-offs ( 49 ) — ( 49 )

Recoveries 27 — 27

Defaulted vacation ownership notes receivable repurchase activity (1)

Initial allowance for credit losses for Legacy-Welk vacation ownership notes receivable 11 21 32

(Decrease) increase in vacation ownership notes receivable reserve ( 7 ) 7 —

Balance at December 31, 2021 47 23 70

Clean-up call 1 ( 1 ) —

Write-offs ( 57 ) — ( 57 )

Recoveries 35 — 35

Defaulted vacation ownership notes receivable repurchase activity (1)

(Decrease) increase in vacation ownership notes receivable reserve ( 40 ) 21 ( 19 )

Balance at December 31, 2022 11 18 29

Securitizations ( 2 ) 2 —

Clean-up call 2 ( 2 ) —

Write-offs ( 28 ) — ( 28 )

Recoveries 17 — 17

Defaulted vacation ownership notes receivable repurchase activity (1)

(Decrease) increase in vacation ownership notes receivable reserve ( 12 ) 9 ( 3 )

Balance at December 31, 2023 $ 6 $ 9 $ 15

(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 acquired vacation ownership notes receivable, before reserves, by brand and borrower FICO score.

Acquired Vacation Ownership Notes Receivable as of December 31, 2023

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

Combined Marriott $ 46 $ 32 $ 4 $ 9 $ 91

Hyatt and Welk 53 34 1 1 89

$ 99 $ 66 $ 5 $ 10 $ 180

Acquired Vacation Ownership Notes Receivable as of December 31, 2022

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

Combined Marriott $ 67 $ 47 $ 6 $ 16 $ 136

Hyatt and Welk 80 53 1 1 135

$ 147 $ 100 $ 7 $ 17 $ 271

The following tables detail the origination year of our acquired vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination as of December 31, 2023, and gross write-offs by brand for the year ended December 31, 2023.

Acquired Vacation Ownership Notes Receivable - Combined Marriott

($ in millions) 2021 2020 2019 & Prior Total

700 + $ — $ — $ 46 $ 46

600 - 699 — — 32 32

< 600 — — 4 4

No Score — — 9 9

$ — $ — $ 91 $ 91

Gross write-offs $ — $ — $ 13 $ 13

Acquired Vacation Ownership Notes Receivable - Hyatt & Welk

($ in millions) 2021 2020 2019 & Prior Total

700 + $ 4 $ 12 $ 37 $ 53

600 - 699 2 6 26 34

< 600 — — 1 1

No Score — — 1 1

$ 6 $ 18 $ 65 $ 89

Gross write-offs $ 1 $ 4 $ 10 $ 15

Originated Vacation Ownership Notes Receivable

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Defaulted vacation ownership notes receivable repurchase activity (1)

105 ( 105 ) —

Balance at December 31, 2023 195 260 455

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

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 December 31, 2024

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

Combined Marriott $ 1,381 $ 609 $ 57 $ 323 $ 2,370

Hyatt and Welk 188 70 2 3 263

Marriott Vacation Ownership $ 1,513 $ 634 $ 58 $ 365 $ 2,570

Hyatt Vacation Ownership 210 75 2 3 290

$ 1,723 $ 709 $ 60 $ 368 $ 2,860

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

Combined Marriott $ 1,210 $ 549 $ 55 $ 278 $ 2,092

Hyatt and Welk 157 64 3 2 226

Marriott Vacation Ownership $ 1,381 $ 609 $ 57 $ 323 $ 2,370

Hyatt Vacation Ownership 188 70 2 3 263

$ 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 December 31, 2024, and gross write-offs by brand for the year ended December 31, 2024.

Originated Vacation Ownership Notes Receivable - Combined Marriott

Originated Vacation Ownership Notes Receivable - Marriott Vacation Ownership

($ in millions) 2024 2023 2022 2021 2020 & Prior Total

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Gross write-offs $ 8 $ 44 $ 49 $ 27 $ 38 $ 166

Originated Vacation Ownership Notes Receivable - Hyatt and Welk

Originated Vacation Ownership Notes Receivable - Hyatt Vacation Ownership

($ in millions) 2024 2023 2022 2021 2020 & Prior Total

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Gross write-offs $ 2 $ 12 $ 13 $ 6 $ — $ 33

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 $ 9 million reserve, and interest rates for our acquired vacation ownership notes receivable at December 31, 2024.

Acquired Vacation Ownership Notes Receivable

($ in millions) Non-Securitized Securitized Total

2025 $ 6 $ 23 $ 29

Thereafter 1 14 15

Balance at December 31, 2024 $ 14 $ 93 $ 107

Weighted average stated interest rate 13.8 % 14.2 % 14.2 %

Range of stated interest rates 0.0 % to 21.9 %

0.0 % to 21.9 %

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

Acquired Vacation Ownership Notes Receivable as of December 31, 2024

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

Marriott Vacation Ownership $ 30 $ 21 $ 3 $ 5 $ 59

Hyatt Vacation Ownership 34 22 — 1 57

$ 64 $ 43 $ 3 $ 6 $ 116

Acquired Vacation Ownership Notes Receivable as of December 31, 2023

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

Marriott Vacation Ownership $ 46 $ 32 $ 4 $ 9 $ 91

Hyatt Vacation Ownership 53 34 1 1 89

$ 99 $ 66 $ 5 $ 10 $ 180

Vacation Ownership Notes Receivable on Non-Accrual Status

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The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.

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, Accrued liabilities, and derivative instruments, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

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 December 31, 2024 At December 31, 2023

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2029 Notes, net ( 496 ) ( 467 ) ( 495 ) ( 445 )

2029 Notes, net ( 495 ) ( 445 ) ( 494 ) ( 417 )

2026 Convertible notes, net

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Value Carrying

Vacation ownership notes receivable, net

Securitized $ 1,917 $ 1,981 $ 1,912 $ 1,994

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Non-securitized 523 527 431 433

$ 2,343 $ 2,427 $ 2,198 $ 2,245

Total $ 2,440 $ 2,508 $ 2,343 $ 2,427

We estimate the fair value of our vacation ownership notes receivable that have been securitized using a discounted cash flow model.

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

Due to factors that impact the general marketability of our vacation ownership notes receivable that have not been securitized, as well as current market conditions, we bifurcate our non-securitized vacation ownership notes receivable at each balance sheet date into those eligible and not eligible for securitization using criteria applicable to current

securitization transactions in the asset-backed securities (“ABS”) market.

Generally, vacation ownership notes receivable are considered not eligible for securitization if any of the following attributes are present:

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or (3) the collateral is located in Asia or Europe.

In some cases, eligibility may also be determined based on the credit score of the borrower, the remaining term of the loans and other similar factors that may reflect investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable.

cases, eligibility may also be determined based on the credit score of the borrower, the remaining term of the loans and other similar factors that may reflect investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable.

The table above shows the bifurcation of our vacation ownership notes receivable that have not been securitized into those eligible and not eligible for securitization based upon the aforementioned eligibility criteria.

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Contracts Receivable for Financed VOI Sales

At the time at which we recognize revenue for Marriott-branded VOI sales, we temporarily record a contract receivable for financed VOI sales, until the time at which we originate a vacation ownership note receivable, which occurs at closing.

We believe that the carrying value of the contracts receivable for financed VOI sales approximates fair value because the stated, or otherwise imputed, interest rates of these receivables are generally consistent with current market rates and the reserve for these contracts receivable for financed VOI sales appropriately accounts for risks in default rates, prepayment rates, and discount rates.

At the time at which we recognize revenue for our VOI sales, we temporarily record a contract receivable for financed VOI sales, until the time at which we originate a vacation ownership note receivable, which occurs at closing.

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

Other assets include $ 99 million of COLI policies acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan that are held in a rabbi trust.

Other assets include $ 131 million and $ 99 million of COLI policies acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan at December 31, 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).

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

We estimate the fair value of our 2025 Notes, 2028 Notes, and 2029 Notes (each as defined in Footnote 16 “Debt”) using quoted market prices as of the last trading day for the quarter;

We estimate the fair value of our 2028 Notes and 2029 Notes (each as defined in Footnote 16 “Debt”) using quoted market prices as of the last trading day for the quarter;

however these notes have only a limited trading history and volume, and, as such, this fair value estimate is not necessarily indicative of the value at which these notes could be retired or transferred.

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We concluded that this fair value measurement should be categorized within Level 2.

Non-Interest Bearing Note Payable

The carrying value of our non-interest bearing note payable issued in connection with the acquisition of vacation ownership units located in Bali, Indonesia approximates fair value.

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

EARNINGS PER SHARE

Basic earnings or loss per common share attributable to common stockholders is calculated by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the reporting period.

Basic earnings per share attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the reporting period.

Treasury stock is excluded from the weighted average number of shares of common stock outstanding.

Diluted earnings or loss per common share attributable to common stockholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period, except in periods when there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.

The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings or loss per common share applicable to common stockholders by application of the treasury stock method using average market prices during the period.

We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method.

ASU 2020-06 is applicable to our convertible notes outstanding as of adoption and requires us to calculate the impact of our convertible notes on diluted earnings per share using the “if-converted” method, regardless of our intent to settle or partially settle the debt in cash.

Under the “if-converted” method, shares issuable upon conversion of our convertible notes are assumed to be converted into common stock at the beginning of the period, to the extent dilutive.

Earnings per share for 2021 have not been retrospectively restated and continue to be reported under the accounting standards in effect for that period.

Diluted earnings per share attributable to common stockholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period.

The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings per share applicable to common stockholders by application of the treasury stock method using average market prices during the period.

The shares issuable on exercise of the warrants sold in connection with the issuance of our convertible notes will not impact the total dilutive weighted average shares outstanding unless and until the price of our common stock exceeds the respective strike price.

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The convertible note hedges purchased in connection with each issuance of the convertible notes are considered to be anti-dilutive and do not impact our calculation of diluted earnings per share attributable to common stockholders for any periods presented herein.

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

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

(in millions, except per share amounts) 2024 2023 2022

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Basic earnings per share $ 6.16 $ 6.96 $ 9.69

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

(in millions, except per share amounts) 2024 2023 2022

Net income attributable to common stockholders $ 218 $ 254 $ 391

Add back of interest expense related to convertible notes subsequent to the adoption of ASU 2020-06, net of tax 19 5 —

Add back of interest expense related to convertible notes, net of tax

Numerator used to calculate diluted earnings per share

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Restricted stock units 0.1 0.3 0.3

2022 Convertible Notes ($ 230 million of principal)

2026 Convertible Notes ($ 575 million of principal)

2027 Convertible Notes ($ 575 million of principal)

2022 Convertible Notes

2026 Convertible Notes

2027 Convertible Notes

Shares for diluted earnings per share 42.1 43.5 45.2

Diluted earnings per share $ 5.61 $ 6.28 $ 8.77

(1) The computations of diluted earnings per share attributable to common stockholders exclude approximately 193,000 , 129,000 , and 166,000 shares of common stock, the maximum number of shares issuable as of December 31, 2023, December 31, 2022, and December 31, 2021, 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.

The computations of diluted earnings per share attributable to common stockholders above exclude approximately 222,000 , 193,000 , and 129,000 shares of common stock, the maximum number of shares issuable as of December 31, 2024, December 31, 2023, and December 31, 2022, 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 year ended December 31, 2024, we excluded from our calculation of diluted earnings per share 643,167 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 the year ended December 31, 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.

For the year ended December 31, 2021, we excluded from our calculation of diluted earnings per share 126,804 shares underlying SARs that may settle in shares of common stock because the exercise price of $ 173.88 of such SARs was greater than the average market price of our common stock for the applicable period.

For the year ended December 31, 2022, we excluded from our calculation of diluted earnings per share 199,813 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARS, which ranged from $ 159.27 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:

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In addition to the above, at December 31, 2024 and December 31, 2023, we had $ 271 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 $ 33 million at December 31, 2024, of which $ 29 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.

See Footnote 21 “Impairment and Restructuring” for information on the impairment of inventory recorded during 2024.

PROPERTY AND EQUIPMENT

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$ 1,170 $ 1,260

The following table details the carrying amount of our goodwill at December 31, 2023 and December 31, 2022, and reflects goodwill attributed to the ILG Acquisition and the Welk Acquisition.

($ in millions) Vacation Ownership Exchange & Third-Party Management Total Consolidated

Balance at December 31, 2021 $ 2,778 $ 372 $ 3,150

Measurement period adjustments ( 8 ) — ( 8 )

Disposition of VRI Americas — ( 25 ) ( 25 )

Balance at December 31, 2022 2,770 347 3,117

Adjustments — — —

Balance at December 31, 2023 $ 2,770 $ 347 $ 3,117

We performed our annual goodwill impairment test as of October 1, 2023 and prepared a quantitative assessment for both the Vacation Ownership and the Exchange & Third-Party Management reporting units.

For each reporting unit, the fair value of the reporting unit was in excess of the carrying value and therefore we concluded there was no impairment.

During 2022 we conducted our annual goodwill impairment test, which was a qualitative evaluation, and no impairment charges were recorded.

The estimated fair values of all of our reporting units exceeded their carrying values at the date of their most recent estimated fair value determination.

At both December 31, 2024 and December 31, 2023, the balance of our goodwill was $ 3,117 million, of which $ 2,770 million was in our Vacation Ownership reporting unit and $ 347 million was in our Exchange & Third-Party Management reporting unit, and reflects goodwill attributed to the ILG Acquisition and the Welk Acquisition.

We performed our annual goodwill impairment test as of October 1, 2024 and prepared a qualitative assessment for both the Vacation Ownership and the Exchange & Third-Party Management reporting units, and determined that no impairment exists.

INTANGIBLE ASSETS

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Definite-lived intangible assets, all of which were acquired as part of the ILG and Welk Acquisitions, are amortized on a straight-line basis over their estimated useful lives, ranging from 15 to 20 years.

We recorded amortization expense of $ 61 million in the Depreciation and amortization line of our Income Statements for each of the years ended December 31, 2023, 2022, and 2021, and we estimate that our annual amortization expense will continue to be $ 61 million for each of the next five fiscal years.

We recorded amortization expense of $ 60 million for the year ended December 31, 2024, and $ 61 million for each of the years ended December 31, 2023 and 2022, in the Depreciation and amortization line of our Income Statements.

We estimate that our annual amortization expense will continue to be approximately $ 60 million for each of the next five fiscal years.

Indefinite-Lived Intangible Assets

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As of December 31, 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.

Our aggregate commitment under these contracts was $ 110 million, of which we expect $ 57 million, $ 27 million, $ 16 million, $ 6 million, and $ 4 million will be paid in 2024, 2025, 2026, 2027, and 2028, respectively.

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

Refer to Footnote 19 “Variable Interest Entities” for additional information and our activities relating to the VIE involved in this transaction.

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

Our aggregate commitment under these contracts was $ 82 million, of which we expect $ 49 million, $ 24 million, $ 7 million, and $ 2 million will be paid in 2025, 2026, 2027, and 2028, respectively.

• We have a commitment of $ 122 million to purchase property and vacation ownership units located in Nashville, Tennessee, contingent upon completion of construction to agreed-upon standards within specified timeframes, for use in our Vacation Ownership segment.

We expect to complete the acquisition of 168 vacation ownership units in 2027, and we expect to make payments when specific construction milestones are completed as follows:

$ 14 million in 2026 and $ 108 million in 2027.

• We have remaining commitments of $ 32 million to purchase vacation ownership units located in Bali, Indonesia in two separate transactions, contingent upon completion of construction to agreed-upon standards within specified timeframes, for use in our Vacation Ownership segment.

• We expect to complete the acquisition of 32 vacation ownership units in 2025 pursuant to one of the commitments, and to make remaining payments with respect to these units when specific construction milestones are completed as follows:

$ 10 million in 2025 and $ 1 million in 2026.

• We expect to complete the acquisition of 26 vacation ownership units in 2026 pursuant to the other commitment, and to make remaining payments with respect to these units when specific construction milestones are completed as follows:

$ 6 million in 2025, $ 14 million in 2026, and $ 1 million in 2027.

• We have remaining commitments of $ 80 million to purchase vacation ownership units located in Thailand, in two separate transactions for use in our Vacation Ownership segment.

• We expect to complete the acquisition of 52 vacation ownership units in 2025 pursuant to one of the commitments, subject to performance of agreed-upon pre-closing obligations by the seller, and to make a remaining payment with respect to these units upon closing as follows:

$ 43 million in 2025.

• We expect to complete the acquisition of 60 vacation ownership units in 2026 pursuant to the other commitment, contingent upon completion of construction to agreed-upon standards within specified timeframes, and to make remaining payments with respect to these units when specific construction milestones are completed as follows:

$ 4 million in 2025, $ 31 million in 2026, and $ 2 million in 2027.

• 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 3 “Acquisitions and Dispositions” for information about purchases that occurred in 2024 pursuant to this commitment and Footnote 19 “Variable Interest Entities” for additional information about this commitment and our activities relating to the VIE involved in this commitment.

Surety bonds issued as of December 31, 2024 totaled $ 130 million, the majority of which were requested by federal, state or local governments in connection with our operations.

As of December 31, 2023, we had $ 24 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 16 “Debt”), of which $ 23 million were related to and in lieu of reserves required for our most recent outstanding securitization transaction.

In addition, as of December 31, 2023, we had $ 1 million in letters of credit outstanding related to and in lieu of reserves required for several vacation ownership notes receivable securitization transactions outstanding, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

As of December 31, 2024, we had $ 18 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 16 “Debt”), of which $ 17 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 December 31, 2024, we had $ 22 million in letters of credit outstanding that were related to and in lieu of reserves required for our most recent outstanding securitization transaction completed in the third quarter of 2024, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

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 December 31, 2023, our maximum exposure under fixed dollar guarantees was $ 5 million, of which $ 2 million, $ 1 million, $ 1 million, $ 1 million and less than $ 1 million relate to 2024, 2025, 2026, 2027, and 2028, respectively.

At December 31, 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.

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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.

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Plaintiff filed a motion for reconsideration of that appellate ruling, and in October 2023, the appellate court denied that motion.

In November 2022, the Court granted our motion to dismiss the amended complaint with respect to the Remaining Claim and again granted plaintiff leave to amend its complaint.

In November 2022, the Court granted our motion to dismiss the amended complaint

with respect to the Remaining Claim and again granted plaintiff leave to amend its complaint.

The plaintiff filed an amended complaint with respect to the Remaining Claim and again appealed the dismissal of the other claims.

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In September 2023, the Court granted our motion to dismiss the amended complaint with respect to the Remaining Claim and denied plaintiff permission to file any additional amended complaints.

Plaintiff has appealed that dismissal.

We believe we have meritorious defenses to the claims in this matter and intend to vigorously defend against them.

Plaintiff’s appeal of the September 2023 ruling was dismissed as untimely by the appellate court on June 10, 2024.

In the ordinary course of our business, various claims and lawsuits have been filed or are pending against us.

A number of these lawsuits and claims may exist at any given time.

Additionally, the COVID-19 pandemic may give rise to various claims and lawsuits from owners, members and other parties.

We record and accrue for legal contingencies when we determine that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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We review these accruals each reporting period and make revisions based on changes in facts and circumstances.

We have not accrued for the pending matter described above and we cannot estimate a range of the potential liability associated with this pending matter, if any, at this time.

We have not accrued for the matter described above and we cannot estimate a range of the potential liability associated with this matter, if any, at this time.

We have accrued for other claims and lawsuits, but the amount accrued is not material individually or in the aggregate.

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$ 94 $ 199 $ 293

(1) Includes new corporate headquarters discussed below.

Corporate Headquarters Finance Lease

During 2020, we entered into a finance lease arrangement for our new corporate headquarters in Orlando, Florida.

The lease term commenced for accounting purposes during the first quarter of 2023, upon the substantial completion of construction.

The lease includes a 26-year lease term consisting of a 16-year initial term plus two five-year renewal options.

As of December 31, 2023, the carrying amount of the related finance lease asset was $ 76 million and the corresponding finance lease liability was $ 100 million.

Upon our relocation to the new corporate headquarters during the fourth quarter of 2023, we recorded a non-cash impairment charge of $ 16 million to the right-to-use asset related to the operating leases for our previous corporate headquarters as we do not expect proceeds from subleasing the spaces to exceed our future obligations under the operating leases.

Lease Term and Discount Rate

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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 2023, and as of December 31, 2023, we had 14 securitized vacation ownership notes receivable pools outstanding, none of which were out of compliance with their respective established parameters.

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

As of December 31, 2024, we had 12 securitized vacation ownership notes receivable pools outstanding.

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.

During the second quarter of 2023, we securitized a pool of $ 388 million of vacation ownership notes receivable.

During the first quarter of 2024, we securitized a pool of $ 439 million of vacation ownership notes receivable.

In connection with the securitization, $ 430 million in vacation ownership loan backed notes were issued by MVW 2024-1 LLC (the “2024-1 LLC”) in a private placement.

Four classes of vacation ownership loan backed notes were issued by the 2023-1 LLC:

$ 237 million of Class A Notes, $ 65 million of Class B Notes, $ 48 million of Class C Notes, and $ 30 million of Class D Notes.

The Class A Notes have an interest rate of 4.93 %, the Class B Notes have an interest rate of 5.42 %, the Class C Notes have an interest rate of 6.54 %, and the Class D Notes have an interest rate of 8.83 %.

Investors purchased $ 369 million of the vacation ownership loan backed notes issued by the 2023-1 LLC, composed of the Class A Notes, the Class B Notes, the Class C Notes, and a portion of the Class D Notes, of which we retained $ 11 million.

Proceeds from the transaction, net of fees and a reserve, were used to repay the outstanding obligations on our warehouse credit facility (as defined below) and for other general corporate purposes.

The Class D notes that we retained were subsequently sold at par during the second quarter of 2023.

During the fourth quarter of 2023, we securitized a pool of $ 459 million of vacation ownership notes receivable.

Three classes of vacation ownership loan backed notes were issued by the 2024-1 LLC:

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

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, were used to repay the outstanding obligations on our warehouse credit facility (as defined below) 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.

Four classes of vacation ownership loan backed notes were issued by the 2023-2 LLC:

$ 303 million of Class A Notes, $ 72 million of Class B Notes, $ 46 million of Class C Notes, and $ 29 million of Class D Notes.

The Class A Notes have an interest rate of 6.18 %, the Class B Notes have an interest rate of 6.33 %, the Class C Notes have an interest rate of 7.06 %, and the Class D Notes have an interest rate of 9.33 %, for an overall weighted average interest rate of 6.49 %.

Proceeds from the transaction, net of fees and a reserve, were used to repay the outstanding obligations on our warehouse credit facility (as defined below) and for other general corporate purposes.

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 (as defined below) and for other general corporate purposes.

Warehouse Credit Facility

Our warehouse credit facility (the “Warehouse Credit Facility”) allows for the securitization of vacation ownership notes receivable on a revolving non-recourse basis.

Our warehouse credit facility (the “Warehouse Credit Facility”), which has a borrowing capacity of $ 500 million, allows for the securitization of vacation ownership notes receivable on a revolving non-recourse basis.

If not renewed prior to termination, any amounts outstanding under the Warehouse Credit Facility would become due and payable 13 months after termination, at which time all principal and interest collected with respect to the vacation ownership notes receivable held in the Warehouse Credit Facility would be redirected to the lenders to pay down the outstanding debt under the facility.

The interest rate applicable to most borrowings under the Warehouse Credit Facility is based on a U.S.

Treasury overnight financing rate (Secured Overnight Financing Rate or “SOFR”) plus a 0.10 % adjustment (“Adjusted SOFR”).

The credit spread for the Warehouse Credit Facility is 135 basis points over Adjusted SOFR.

During the second quarter of 2024, we amended certain agreements associated with our Warehouse Credit Facility (the “Warehouse Amendment”).

The Warehouse Amendment extended the revolving period from May 31, 2025 to June 11, 2026, and modified the benchmark interest rate applicable to most borrowings under the Warehouse Credit Facility to the Secured Overnight Financing Rate (“SOFR”).

The Warehouse Amendment also removed the use of Adjusted SOFR, which was defined as SOFR plus a 0.10 % adjustment.

Additionally, as part of the Warehouse Amendment, the credit spread was changed from 135 basis points over Adjusted SOFR to 115 basis points over SOFR.

The Warehouse Amendment made no other material changes to the Warehouse Credit Facility.

The advance rate for vacation ownership notes receivable securitized using the Warehouse Credit Facility varies based on the characteristics of the securitized vacation ownership notes receivable.

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We generally expect to securitize our vacation ownership notes receivable, including any vacation ownership notes receivable held in the Warehouse Credit Facility, in the ABS market typically twice a year.

During the second quarter of 2023, we amended certain agreements associated with our Warehouse Credit Facility (the “Warehouse Amendment”).

The Warehouse Amendment increased the borrowing capacity of the existing facility from $ 425 million to $ 500 million and extended the revolving period from July 28, 2024 to May 31, 2025.

The Warehouse Amendment made no other material changes to the Warehouse Credit Facility.

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

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Unamortized debt issuance costs

Senior Secured Notes

2025 Notes — 250

Unamortized debt discount and issuance costs — ( 2 )

Senior Unsecured Notes

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$ 3,089 $ 3,049

(1) Effective interest rate as of December 31, 2023 was 7.46 %.

(2) Excludes $ 5 million of unamortized debt issuance costs as of December 31, 2022.

As no cash borrowings were outstanding under the Revolving Corporate Credit Facility at that time, the unamortized debt issuance costs were included in Other assets.

(1) The effective interest rate as of December 31, 2024 was 6.6 %.

(2) The effective interest rate as of December 31, 2024 was 6.3 %.

The following table shows scheduled principal payments for our debt, excluding finance leases, as of December 31, 2024.

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2027 Convertible Notes — — 575 — — — 575

Non-Interest Bearing Note Payable

$ 8 $ 583 $ 708 $ 358 $ 508 $ 756 $ 2,921

$ 4 $ 784 $ 575 $ 680 $ 350 $ 500 $ 2,893

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 $ 900 million term loan facility (the “Term Loan”), which matures on August 31, 2025, 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.

During the second quarter of 2023, we entered into an amendment to the Corporate Credit Facility (the “Amendment”), which modified the interest rate applicable to borrowings under the Term Loan.

Beginning July 31, 2023, the Term Loan references SOFR and is based on “Adjusted Term SOFR,” which is calculated as Term SOFR (as defined in the Amendment), plus a 0.10 % adjustment for a one-month interest period, a 0.15 % adjustment for a three-month interest period, or a 0.25 % adjustment for a six-month interest period, subject to a 0.00 % floor.

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.

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”).

Prior to the Amendment, the Corporate Credit Facility included a $ 900 million term loan facility.

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.

The interest rate applicable to the New Term Loan is SOFR plus 2.25 %.

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.

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.

Borrowings under the Revolving Corporate Credit Facility generally bear interest at a floating rate plus an applicable margin that varies from 0.75 % to 2.25 % depending on the type of loan and our leverage.

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In addition, we pay a commitment fee on the unused availability under the Revolving Corporate Credit Facility at a rate that varies from 25 to 35 basis points per annum, also depending on our leverage.

Any amounts borrowed under the Corporate Credit Facility, as well as obligations with respect to letters of credit issued pursuant to the Revolving Corporate Credit Facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrower under, and guarantors of, that facility (which include MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries).

Prior to 2022, we entered into interest rate swaps and an interest rate collar under which we may pay a fixed rate and receive a floating interest rate to hedge a portion of our interest rate risk on the Term Loan.

During the second quarter of 2023, we amended these interest rate swaps and the collar to reference SOFR rather than LIBOR, effective July 31, 2023.

As a result of this transition, the fixed rate on the $ 250 million of interest rate swaps that matured in September 2023 was amended to 2.88 %, the fixed rate on the $ 200 million of interest rate swaps maturing in April 2024 was amended to 2.17 %, and the cap strike price on the $ 100 million interest rate collar was amended to 2.43 %.

Both the interest rate swaps and the interest rate collar have been designated and qualify as cash flow hedges of interest rate risk and are recorded in Other assets on our Balance Sheet as of December 31, 2023 and December 31, 2022.

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

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 December 31, 2024.

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 2024, 2023 and 2022.

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Our senior notes include:

• $ 500 million aggregate principal amount of 6.125 % Senior Secured Notes due 2025 issued in 2020 with a maturity date of September 15, 2025 (the “2025 Notes”), of which none was outstanding as of December 31, 2023.

• $ 350 million aggregate principal amount of 4.750 % Senior Unsecured Notes due 2028 issued in 2019 with a maturity date of January 15, 2028 (the “2028 Notes”).

• $ 500 million aggregate principal amount of 4.500 % Senior Unsecured Notes due 2029 issued in 2021 with a maturity date of June 15, 2029 (the “2029 Notes”).

The 2025 Notes were pari passu with, and secured by the same collateral as, our Corporate Credit Facility.

We paid interest on the 2025 Notes on May 15 and November 15 of each year.

We received net proceeds of approximately $ 493 million from the offering of the 2025 Notes, after deducting offering expenses and the underwriting discount.

During 2021, we redeemed, prior to maturity, $ 250 million aggregate principal amount of the 2025 Notes pursuant to the terms of the indenture governing the 2025 Notes.

In connection with this redemption, we incurred charges of $ 19 million, inclusive of a redemption premium and the write-off of unamortized debt issuance costs, which was recorded in Gains (losses) and other income (expense), net line on our Income Statement for the year ended December 31, 2021.

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

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

We issued the 2028 Notes under an indenture with The Bank of New York Mellon Trust Company, N.A., as trustee.

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During 2021, we issued $ 575 million aggregate principal amount of convertible senior notes (the “2026 Convertible Notes”) that bear interest at a rate of 0.00 %.

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

The conversion rate is subject to adjustment for certain events as described in the indenture governing the notes, and was subject to adjustment as of December 31, 2023 to 6.1576 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 162.40 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 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 December 31, 2024 to 6.3809 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 156.72 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 December 31, 2024, the effective interest rate was 0.55 %.

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

($ in millions) 2023 2022 2021

Amortization of debt discount (1)

Amortization of debt issuance costs 3 3 2

(1) As a result of the adoption of ASU 2020-06 during 2022, we no longer account for the liability and equity components of the convertible notes separately, and we reclassified the conversion feature related to the 2026 Convertible Notes from equity to liabilities.

Prior period amounts have not been adjusted to reflect our adoption of ASU 2020-06 under the modified retrospective method.

See Footnote 2 “Summary of Significant Accounting Policies” for information on our adoption of ASU 2020-06.

Amortization of debt issuance costs related to the 2026 Convertible Notes was $ 3 million in each of the three years ended December 31, 2024, 2023, and 2022.

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 3.5 million shares of our common stock, and warrant transactions (“2026 Warrants”), whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire approximately 3.5 million shares of our common stock in each case, as of December 31, 2023.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to approximately $ 162.40 and $ 203.00 as of December 31, 2023, respectively, and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.

convertible note hedge transactions with respect to our common stock (the “2026 Convertible Note Hedges”), covering a total of 3.7 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 3.7 million shares of our common stock, in each case, as of December 31, 2024.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 156.72 and $ 195.89 , respectively, as of December 31, 2024 and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.

2027 Convertible Notes

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

The 2027 Convertible Notes are convertible at a rate of 5.2753 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 189.56 per share of our common stock) as of December 31, 2023.

The conversion rate is subject to adjustment for certain events as described in the indenture governing the notes.

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 December 31, 2024 to 5.2870 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 189.14 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 December 31, 2024, the effective interest rate was 3.88 %.

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

The following table provides the components of interest expense related to the 2027 Convertible Notes.

($ in millions) 2024 2023 2022

Contractual interest expense

$ 19 $ 19 $ 1

Amortization of debt issuance costs 3 3 —

$ 22 $ 22 $ 1

2027 Convertible Note Hedges and Warrants

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 December 31, 2023.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were $ 189.56 and $ 286.13 as of December 31, 2023, respectively, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

“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 December 31, 2024.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 189.14 and $ 285.49 , respectively, as of December 31, 2024, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

Finance Leases

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Security and Guarantees

Amounts borrowed under the Corporate Credit Facility, as well as obligations with respect to letters of credit issued pursuant to the Corporate Credit Facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrowers under, and guarantors of, that facility (which include MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries), subject to certain exceptions.

In addition, the Corporate Credit Facility, the 2026 Convertible Notes, the 2027 Convertible Notes, the 2028 Notes, and the 2029 Notes are guaranteed by MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding bankruptcy remote special purpose subsidiaries.

STOCKHOLDERS’ EQUITY

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During the second quarter of 2023, our Board of Directors increased the then-remaining authorization under our previously approved Share Repurchase Program to authorize purchases up to $ 600 million and extended the term of this program to December 31, 2024.

As of December 31, 2023, approximately $ 439 million remained available for share repurchases under the Share Repurchase Program.

During the fourth quarter of 2024, our Board of Directors extended the term of this program to December 31, 2025.

As of December 31, 2024, approximately $ 383 million remained available for share repurchases under the current Share Repurchase Program.

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

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Acquired shares of our common stock are currently held as treasury shares and carried at cost in our Financial Statements.

The Inflation Reduction Act of 2022, which was enacted in August 2022, imposes a 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

For purposes of calculating the excise tax, the fair value of certain share issuances may be netted against the fair market value of stock repurchases during the same taxable year.

In 2023, we reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in Accrued liabilities on our Balance Sheet.

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

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

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We declared cash dividends to holders of common stock during the year ended December 31, 2024 as follows.

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

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

There can be no assurance that we will pay dividends in the future.

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Distribution Date Dividend per Share

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

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December 6, 2024 December 19, 2024 January 3, 2025 $ 0.79

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.

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.

SHARE-BASED COMPENSATION

We maintain the MVW Equity Plan for the benefit of our officers, directors, and employees.

The MVW Equity Plan is maintained for the benefit of our officers, directors, and employees.

Under the MVW Equity Plan, we are authorized to award:

(1) RSUs of our common stock, (2) SARs relating to our common stock, and (3) stock options to purchase our common stock.

A total of 1.8 million shares are authorized for issuance pursuant to grants under the MVW Equity Plan.

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

As of December 31, 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.

We recognized $ 7 million, $ 7 million, and $ 6 million of tax benefits associated with share-based compensation during 2024, 2023, and 2022, respectively.

($ in millions) 2024 2023 2022

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Performance-based RSUs 5 1

(1) As of December 31, 2023, the weighted average remaining term for RSU grants outstanding at year-end 2023 was one to two years and we expect that deferred compensation expense will be recognized over a weighted average period of one to three years .

(1) As of December 31, 2024, the weighted average remaining term for RSU grants outstanding at year-end 2024 was one to three years and we expect that deferred compensation expense will be recognized over a weighted average period of one to three years .

Restricted Stock Units

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The fair value of the RSUs which vested in 2024, 2023, and 2022 was $ 22 million, $ 36 million, and $ 65 million, respectively.

The fair value of the RSUs which vested in 2021 included $ 3 million related to RSUs converted from ILG equity-based RSUs to MVW equity-based RSUs in the ILG Acquisition.

Stock Appreciation Rights

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The weighted average grant-date fair value per SAR granted in 2024, 2023, and 2022 was $ 34.58 , $ 58.50 , and $ 59.68 , respectively.

The SARS which vested in 2023 did not have any intrinsic value.

The intrinsic value of SARs which vested in 2022 and 2021 was $ 2 million and $ 5 million, respectively.

The aggregate intrinsic value of SARs which were exercised in 2023, 2022, and 2021 was less than $ 1 million, $ 1 million, and $ 14 million, respectively.

The SARs which vested in 2024 and 2023 did not have any intrinsic value.

The intrinsic value of SARs which vested in 2022 was $ 2 million.

The aggregate intrinsic value of SARs which were exercised in 2024, 2023, and 2022 was $ 1 million, less than $ 1 million, and $ 1 million, respectively.

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

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There is no noncontrolling interest balance related to these entities and the creditors of these entities do not have general recourse to us.

The following table shows consolidated assets, which are collateral for the obligations of these VIEs, and consolidated liabilities included on our Balance Sheet at December 31, 2023:

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 December 31, 2024:

($ in millions) Vacation Ownership

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Securitizations Warehouse

Facility Total

Credit Facility

Consolidated Assets

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Principal payments ( 553 ) ( 508 )

Voluntary repurchases of defaulted vacation ownership notes receivable, net ( 118 ) ( 94 )

Voluntary repurchases of defaulted vacation ownership notes receivable ( 161 ) ( 118 )

Voluntary clean-up call ( 92 ) ( 51 )

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Principal payments ( 18 ) ( 39 )

Voluntary repurchases of defaulted vacation ownership notes receivable, net ( 5 ) —

Voluntary repurchases of defaulted vacation ownership notes receivable ( 3 ) ( 5 )

Repayment of Warehouse Credit Facility ( 455 ) ( 610 )

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Under the terms of our vacation ownership notes receivable securitizations, we have the right to substitute loans for, or repurchase, defaulted loans at our option, subject to certain limitations.

We made voluntary repurchases of defaulted vacation ownership notes receivable, net of substitutions, of $ 123 million during 2023, $ 94 million during 2022 and $ 99 million during 2021.

We made voluntary repurchases of defaulted vacation ownership notes receivable of $ 164 million during 2024, $ 123 million during 2023 and $ 94 million during 2022.

We also made voluntary repurchases of $ 615 million, $ 774 million and $ 338 million of other non-defaulted vacation ownership notes receivable during 2024, 2023 and 2022, respectively, to retire previous vacation ownership notes receivable securitizations.

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The property is held by a VIE for which we are not the primary beneficiary.

We do not control the decisions that most significantly impact the economic performance of the entity during construction.

Further, our purchase commitment is generally contingent upon the property being redeveloped to our brand standards.

We do not control the decisions that most significantly impact the economic performance of the entity because we cannot prevent the variable interest entity from selling the property at a higher price.

Accordingly, we have not consolidated the VIE.

We expect to acquire the property over time and as of December 31, 2023, we expect to make payments for the property as follows:

$ 112 million in 2024, $ 82 million in 2025, and $ 41 million in 2026.

As of December 31, 2023, our Balance Sheet reflected $ 2 million in Accounts and contracts receivable, including a note receivable of less than $ 1 million, $ 4 million in Property and equipment, net and $ 1 million in Accrued liabilities.

We expect to acquire the property over time and as of

December 31, 2024, we expect to make payments for the property as follows:

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

As of December 31, 2024, our Balance Sheet reflected $ 1 million in Accounts and contracts receivable, net, including a note receivable of less than $ 1 million, $ 12 million in Property and equipment, net, and $ 1 million in the Other line within liabilities on our Balance Sheet.

We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $ 15 million as of December 31, 2024.

Subsequent to the end of 2023, we fulfilled our outstanding commitment to purchase retail space for $ 48 million.

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.

Refer to Footnote 3 “Acquisitions and Dispositions” for information about purchases pursuant to this commitment that occurred during 2024 .

BUSINESS SEGMENTS

We define our reportable segments based on the way in which the chief operating decision maker (“CODM”), currently our president and chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

We define our reportable segments based on the way in which the chief operating decision maker (“CODM”), currently our chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

We operate in two operating and reportable business segments:

Vacation Ownership and Exchange & Third-Party Management.

These segments are managed independently due to the differing nature of their products and services.

Vacation Ownership 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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Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to consolidated owners’ associations, as our CODM does not use this information to make operating segment resource allocations.

Our CODM uses Adjusted Earnings before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) to evaluate the profitability of our operating segments, and the components of net income or loss attributable to common stockholders excluded from Adjusted EBITDA are not separately evaluated.

Adjusted EBITDA is defined as net income or loss attributable to common stockholders, before interest expense (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization, excluding share-based compensation expense and adjusted for certain items that affect the comparability of our operating performance.

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

($ in millions) 2023 2022 2021

Our CODM uses Adjusted Earnings before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) to evaluate the profitability of our operating segments, and the components of net income attributable to common stockholders excluded from Adjusted EBITDA are not separately evaluated.

Our CODM reviews budget-to-actual variances on a monthly basis using Adjusted EBITDA to make decisions about capital allocation and resource distribution to the segments.

Adjusted EBITDA is defined as net income attributable to common stockholders, before interest expense (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization, excluding share-based compensation expense and adjusted for certain items that affect the comparability of our operating performance.

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

Segment Revenues and Adjusted EBITDA

The table below presents the following for the periods presented:

revenues, disaggregated by segment, reconciled to consolidated revenue;

segment expenses, including significant expense categories and amounts that align with segment-level information regularly provided to our CODM;

and segment Adjusted EBITDA reconciled to Net income attributable to common stockholders.

2024 2023 2022

($ in millions) Vacation Ownership

Exchange & Third-Party Management

Vacation Ownership

Exchange & Third-Party Management

Total segment revenues 4,730 4,633 3,859

Consolidated Property Owners’ Associations

Vacation Ownership

Exchange & Third-Party Management

Revenues from external customers $ 4,730 $ 231 $ 4,961 $ 4,468 $ 262 $ 4,730 $ 4,342 $ 291 $ 4,633

Reconciliation of revenues

Corporate and other (1)

Total consolidated revenues

$ 4,967 $ 4,727 $ 4,656

Adjusted EBITDA and Reconciliation to Net Income Attributable to Common Stockholders

($ in millions) 2023 2022 2021

Adjusted EBITDA Vacation Ownership $ 883 $ 1,033 $ 699

Adjusted EBITDA Exchange & Third-Party Management 130 148 144

Reconciling items:

Cost of vacation ownership products ( 200 ) — ( 224 ) — ( 289 ) —

Marketing and sales ( 919 ) — ( 823 ) — ( 807 ) —

Management and exchange ( 293 ) ( 122 ) ( 270 ) ( 118 ) ( 240 ) ( 120 )

Rental ( 498 ) — ( 466 ) — ( 400 ) —

Financing ( 146 ) — ( 113 ) — ( 75 ) —

Royalty fee ( 114 ) — ( 117 ) — ( 114 ) —

Other segment items (2)

( 1,715 ) ( 7 ) ( 1,572 ) ( 14 ) ( 1,384 ) ( 23 )

Segment Adjusted EBITDA 845 102 947 883 130 1,013 1,033 148 1,181

Corporate and other (1)

( 220 ) ( 252 ) ( 215 )

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

Tax provision ( 146 ) ( 191 ) ( 74 )

Depreciation and amortization ( 146 ) ( 135 ) ( 132 )

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Certain items ( 79 ) ( 50 ) ( 95 )

Provision for income taxes

( 89 ) ( 146 ) ( 191 )

Net income attributable to common stockholders $ 218 $ 254 $ 391

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

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

Our CODM does not use this information for operating segment resource allocations.

(2) Other segment items include cost reimbursements, non-cash share-based compensation, purchase accounting adjustments related to the Welk acquisition, and other.

Depreciation and Amortization

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IMPAIRMENT AND RESTRUCTURING

We incurred total impairment charges during 2023, 2022, and 2021 as follows:

We incurred impairment charges during 2024, 2023, and 2022 as follows:

($ in millions) 2024 2023 2022

Lease $ 16 $ — $ —

Inventory $ 28 $ — $ —

Equity method investment — 8 —

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Property & equipment

$ 30 $ 32 $ 2

Inventory Impairment

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.

We used the income approach to estimate the fair value less costs to sell of the assets.

Under the income approach, a Level 3 input, fair value is measured through a discounted cash flow.

Under the income approach, we contemplated alternative uses to comply with the highest and best use provisions of ASC Topic 820, “Fair Value Measurements.”

Lease Impairment

See Footnote 14 “Leases” for information on the impairment of our right-to-use operating lease asset.

During the first quarter of 2023, the lease term commenced for the finance lease arrangement for our new corporate headquarters in Orlando, Florida, upon the substantial completion of construction.

Upon our relocation to the new corporate headquarters during the fourth quarter of 2023, we recorded a non-cash impairment charge of $ 16 million to the right-to-use asset related to the operating leases for our previous corporate headquarters as we did not expect proceeds from subleasing these spaces to exceed our future obligations under the operating leases.

Restructuring Costs

During 2023, we realigned our management structure and made additional headcount reductions, resulting in severance costs of $ 6 million associated with the elimination of certain positions, of which $ 5 million was accrued on our Balance Sheet as of December 31, 2023.

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.

During 2024, we incurred $ 10 million of restructuring charges, including $ 6 million of severance and $ 4 million of other costs associated with these efforts.

As of December 31, 2024, $ 6 million was accrued on our Balance Sheet related to these charges.

During 2023, we realigned our management structure and made headcount reductions, resulting in severance costs of $ 6 million associated with the elimination of certain positions.

As of December 31, 2023, $ 5 million was accrued on our Balance Sheet related to these charges.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data