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Item 1. Financial Statements

2025-08-06 compared with 2025-05-08 · 298 added, 178 removed, 703 unchanged (40% of the section changed)

2 unchanged sentences

INTERIM CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

Three Months Ended

March 31, 2025 March 31, 2024

(In millions, except per share amounts, and unaudited)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Sale of vacation ownership products $ 370 $ 309 $ 725 $ 661

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Royalty fee 28 29 56 57

Impairment — 2 — 2

Cost reimbursements 407 378 780 769

TOTAL EXPENSES 1,134 1,038 2,205 2,096

Gains and other income, net 13 —

Gains (losses) and other income (expense), net 24 ( 7 ) 37 ( 7 )

Interest expense, net ( 42 ) ( 43 ) ( 82 ) ( 83 )

4 unchanged sentences

NET INCOME 69 38 126 84

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

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

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 69 $ 37 $ 125 $ 84

6 unchanged sentences

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Three Months Ended

March 31, 2025 March 31, 2024

(In millions and unaudited)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

NET INCOME $ 69 $ 38 $ 126 $ 84

2 unchanged sentences

OTHER COMPREHENSIVE LOSS, NET OF TAX ( 5 ) ( 14 ) ( 6 ) ( 15 )

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

COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS ( 1 ) 1

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

COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS — ( 1 ) ( 1 ) —

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 64 $ 23 $ 119 $ 69

3 unchanged sentences

(In millions, except share and per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 205 $ 197

41 unchanged sentences

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Three Months Ended

March 31, 2025 March 31, 2024

(In millions and unaudited)

Six Months Ended

June 30, 2025 June 30, 2024

OPERATING ACTIVITIES

Net income $ 126 $ 84

Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities:

Adjustments to reconcile net income to net cash, cash equivalents and restricted cash (used in) provided by operating activities:

Depreciation and amortization of intangibles 76 73

2 unchanged sentences

Share-based compensation 19 16

Impairment charges — 2

Foreign currency remeasurement (gain) loss ( 17 ) 5

Deferred income taxes ( 4 ) 79

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Other, net ( 2 ) —

Net cash, cash equivalents and restricted cash provided by operating activities 8 3

Net cash, cash equivalents and restricted cash (used in) provided by operating activities ( 40 ) 33

INVESTING ACTIVITIES

2 unchanged sentences

Purchase and development of property for future sale — ( 49 )

Other dispositions, net 1 —

Net cash, cash equivalents and restricted cash used in investing activities ( 43 ) ( 88 )

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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In millions)

Three Months Ended

March 31, 2025 March 31, 2024

(In millions and unaudited)

Six Months Ended

June 30, 2025 June 30, 2024

FINANCING ACTIVITIES

8 unchanged sentences

Payment of withholding taxes on vesting of restricted stock units ( 6 ) ( 6 )

Net cash, cash equivalents and restricted cash (used in) provided by financing activities ( 32 ) 43

Net cash, cash equivalents and restricted cash provided by (used in) financing activities 19 ( 59 )

Effect of changes in exchange rates on cash, cash equivalents and restricted cash 4 ( 3 )

6 unchanged sentences

Non-cash transfer from property and equipment to inventory 1 23

Non-cash transfer from other assets to property and equipment 59 —

Right-of-use asset obtained in exchange for finance lease obligation 4 12

5 unchanged sentences

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

(In millions and unaudited)

Issued Common

1 unchanged sentence

Stock Additional

Capital Accumulated Other Comprehensive Loss Retained Earnings Total MVW Stockholders' Equity Noncontrolling Interests Total Equity

Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings Total MVW Stockholders' Equity Noncontrolling Interests Total Equity

75.9 BALANCE AT DECEMBER 31, 2024 $ 1 $ ( 2,378 ) $ 3,975 $ ( 8 ) $ 852 $ 2,442 $ ( 1 ) $ 2,441

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75.9 BALANCE AT MARCH 31, 2025 1 ( 2,406 ) 3,968 ( 9 ) 881 2,435 — 2,435

— Net income — — — — 69 69 — 69

— Foreign currency translation adjustments — — — ( 6 ) — ( 6 ) — ( 6 )

— Derivative instrument adjustment — — — 1 — 1 — 1

— Share-based compensation plans — 2 11 — — 13 — 13

— Dividends — — — — ( 28 ) ( 28 ) — ( 28 )

75.9 BALANCE AT JUNE 30, 2025 $ 1 $ ( 2,404 ) $ 3,979 $ ( 14 ) $ 922 $ 2,484 $ — $ 2,484

Issued Common

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75.8 BALANCE AT MARCH 31, 2024 1 ( 2,351 ) 3,951 15 763 2,379 ( 1 ) 2,378

— Net income — — — — 37 37 1 38

— Foreign currency translation adjustments — — — ( 13 ) — ( 13 ) — ( 13 )

— Derivative instrument adjustment — — — ( 1 ) — ( 1 ) — ( 1 )

— Share-based compensation plans — 1 8 — — 9 — 9

— Repurchase of common stock — ( 12 ) — — — ( 12 ) — ( 12 )

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

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

See Interim Condensed Notes to Consolidated Financial Statements

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

SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS

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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.

We are evaluating the impact that the adoption of ASU 2024-04 will have on our financial statements and related disclosures and expect to adopt this update on January 1, 2026.

Khao Lak, Thailand

During the second quarter of 2025, we acquired the interest in 52 completed vacation ownership units located in Khao Lak, Thailand for $ 50 million and included it in Property and equipment, net.

We paid $ 43 million in cash consideration during the second quarter of 2025.

Additionally, during the second quarter of 2025, we reclassified $ 7 million of deposits previously paid in the fourth quarter of 2024 in connection with the project from Other assets to Property and equipment, net.

REVENUE AND RECEIVABLES

Sources of Revenue by Segment

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

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Total Revenues $ 1,188 $ 53 $ 5 $ 1,246

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

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Total Revenues $ 1,078 $ 58 $ 4 $ 1,140

Six Months Ended June 30, 2025

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

Sale of vacation ownership products $ 725 $ — $ — $ 725

Ancillary revenues 140 2 — 142

Management fee revenues 110 4 ( 1 ) 113

Exchange and other services revenues 70 81 28 179

Management and exchange 320 87 27 434

Rental 309 20 — 329

Cost reimbursements 791 4 ( 15 ) 780

Revenue from contracts with customers 2,145 111 12 2,268

Financing 178 — — 178

Total Revenues $ 2,323 $ 111 $ 12 $ 2,446

Six Months Ended June 30, 2024

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

Sale of vacation ownership products $ 661 $ — $ — $ 661

Ancillary revenues 137 2 — 139

Management fee revenues 103 7 ( 2 ) 108

Exchange and other services revenues 65 88 26 179

Management and exchange 305 97 24 426

Rental 290 21 — 311

Cost reimbursements 784 5 ( 20 ) 769

Revenue from contracts with customers 2,040 123 4 2,167

Financing 168 — — 168

Total Revenues $ 2,208 $ 123 $ 4 $ 2,335

Timing of Revenue from Contracts with Customers by Segment

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

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

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Revenue from contracts with customers $ 1,098 $ 53 $ 5 $ 1,156

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

2 unchanged sentences

Revenue from contracts with customers $ 993 $ 58 $ 4 $ 1,055

Six Months Ended June 30, 2025

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

Services transferred over time $ 1,268 $ 41 $ 12 $ 1,321

Goods or services transferred at a point in time 877 70 — 947

Revenue from contracts with customers $ 2,145 $ 111 $ 12 $ 2,268

Six Months Ended June 30, 2024

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

Services transferred over time $ 1,233 $ 46 $ 4 $ 1,283

Goods or services transferred at a point in time 807 77 — 884

Revenue from contracts with customers $ 2,040 $ 123 $ 4 $ 2,167

Sale of Vacation Ownership Products

Revenues were reduced during the first quarter of 2025 by $ 3 million due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods.

Revenues were reduced during the second quarter and first half of 2025 by $ 3 million and $ 6 million, respectively, due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods.

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

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

We had no contract assets at either March 31, 2025 or December 31, 2024.

($ in millions) At March 31, 2025 At December 31, 2024

We had no contract assets at either June 30, 2025 or December 31, 2024.

($ in millions) At June 30, 2025 At December 31, 2024

Receivables from Contracts with Customers

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Deferred revenue 397 354

Revenue recognized during the first quarter of 2025 that was included in our contract liabilities balance at December 31, 2024 was $ 117 million.

Revenue recognized during the second quarter and first half of 2025 that was included in our contract liabilities balance at December 31, 2024 was $ 84 million and $ 201 million, respectively.

Remaining Performance Obligations

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

At March 31, 2025, approximately 93 % of this amount is expected to be recognized as revenue over the next two years .

Our recorded contract liabilities represent the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2025.

At June 30, 2025, approximately 85 % of the recorded contract liabilities are expected to be recognized as revenue over the next two years .

Accounts and Contracts Receivable

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

($ in millions) At March 31, 2025 At December 31, 2024

($ in millions) At June 30, 2025 At December 31, 2024

Receivables from contracts with customers, net $ 221 $ 250

3 unchanged sentences

Employee tax credit receivable 9 10

Our provision for income taxes is calculated using an estimated annual effective tax rate (“AETR”), based upon expected annual income less losses in certain jurisdictions, non-deductible expenses under federal and local tax laws, statutory rates, and planned tax strategies in the various jurisdictions in which we operate.

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

Our effective tax rate was 43.6 % and 43.0 % for the three months ended March 31, 2025 and March 31, 2024, respectively.

The effective tax rate for the three months ended March 31, 2025 differed from the blended statutory tax rate for the same period due to a lower pre-tax book income forecast for the current year, which is largely driven by our modernization efforts and related costs expected to be incurred, higher expected foreign losses, for which a valuation allowance will be recorded, and income tax adjustments for discrete items, primarily related to share-based compensation.

The effective tax rate for the three months ended March 31, 2024 differed from the blended statutory tax rate for the same period due to income tax adjustments for discrete items, including $ 11 million primarily related to a $ 20 million

increase to remove the permanent reinvestment assertion for certain non-U.S.

entities offset by a $ 9 million decrease for the expiration of statutes of limitation on certain unrecognized tax benefits.

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

Certain returns are being audited in various jurisdictions for tax years 2007 through 2020.

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

Our provision for income taxes is calculated using an estimated annual effective tax rate (“AETR”), which is based upon projected annual income, including anticipated losses in certain jurisdictions, non-deductible expenses under applicable federal and local tax laws, statutory rates, and planned tax strategies across the jurisdictions in which we operate.

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

Our effective tax rate was 26.8 % and 22.0 % for the three months ended June 30, 2025 and June 30, 2024, respectively, and 35.5 % and 35.2 % for the six months ended June 30, 2025 and June 30, 2024, respectively.

The effective tax rate for the three months ended June 30, 2025 was generally consistent with the blended U.S.

federal and state statutory tax rate, with no significant variances.

The effective tax rate for the three months ended June 30, 2024 differed from the blended U.S.

federal and state statutory tax rate primarily due to discrete income tax adjustments.

These included a $ 13 million decrease as a result of the expiration of statutes of limitation on certain unrecognized tax benefits, partially offset by a $ 4 million increase related to prior year true-up adjustments in non-U.S.

jurisdictions.

The effective tax rate for the six months ended June 30, 2025 differed from the blended U.S.

federal and state statutory tax rate primarily due to the effect of losses incurred in certain non-U.S.

jurisdictions for which no tax benefit was recognized.

Additionally, permanent differences between the book and tax treatment further contributed to the variance from the statutory rate.

The effective tax rate for the six months ended June 30, 2024 differed from the blended U.S.

federal and state statutory tax rate primarily due to discrete income tax adjustments.

These adjustments included a $ 20 million increase related to the removal of the permanent reinvestment assertion for certain non-U.S.

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

jurisdictions.

These impacts were partially offset by a $ 22 million decrease as a result of the expiration of statutes of limitation on certain unrecognized tax benefits.

Our income tax returns remain subject to examination by the relevant tax authorities.

Certain returns are currently under audit in various jurisdictions for tax years 2007 through 2020.

The amount of the unrecognized tax benefits may change within the next twelve months as a result of audits or resolution of audit-related matters.

Subsequent to the end of the second quarter of 2025, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, making several provisions of the Tax Cuts and Jobs Act permanent.

Under Accounting Standards Codification (“ASC”) 740, “Income Taxes,” the effects of changes in tax laws must be recognized in the period of enactment.

We are currently evaluating the potential impact of OBBBA on our future financial statements, including deferred tax positions and the estimated annual effective tax rate.

No adjustments have been made to the financial statements as of June 30, 2025, as a result of OBBBA.

VACATION OWNERSHIP NOTES RECEIVABLE

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

($ in millions) Originated Acquired Total Originated Acquired Total

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

Three Months Ended

($ in millions) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Interest income - securitized vacation ownership notes receivable

$ 73 $ 72 $ 147 $ 143

Interest income - non-securitized vacation ownership notes receivable

Total interest income associated with vacation ownership notes receivable $ 86 $ 82 $ 172 $ 163

Credit Quality Indicators - Vacation Ownership Notes Receivable

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 vacation ownership interest (“VOI”) they have acquired.

The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 726 and 725 , at March 31, 2025 and December 31, 2024, respectively, based upon the FICO score of the borrower at the time of origination.

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 second quarter of 2024, we increased our sales reserve by $ 70 million to reflect the then-current macroeconomic conditions, including the cumulative impact of inflation on consumers and the related impact on year-over-year increases in maintenance fees for 2023 and 2024, which we believed were driving continued elevated delinquencies and default rates, higher consumer debt levels, continued high interest rates, uncertainty around timing and frequency of interest rate adjustments, and continued mixed economic indicators.

Beginning in the third quarter of 2024, we also increased our sales reserve rate to reflect higher expected cumulative losses on new originations, consistent with more recent trends.

While delinquency rates have declined thus far in 2025, we do not expect to lower the sales reserve for new originations until we have sufficient, sustained evidence of continued improvement in delinquency and default rates.

Credit Quality Indicators - Vacation Ownership Notes Receivable

The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 726 and 725 , at June 30, 2025 and December 31, 2024, respectively, based upon the FICO score of the borrower at the time of origination.

Originated Vacation Ownership Notes Receivable

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

The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at March 31, 2025.

The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at June 30, 2025.

Originated Vacation Ownership Notes Receivable

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Thereafter 227 1,169 1,396

Balance at March 31, 2025 $ 475 $ 1,876 $ 2,351

Balance at June 30, 2025 $ 510 $ 1,890 $ 2,400

Weighted average stated interest rate 11.6 % 13.3 % 12.9 %

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For originated vacation ownership notes receivable, we record the difference between the 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 vacation ownership notes receivable.

The following table summarizes the activity related to our originated vacation ownership notes receivable reserve during the first quarter of 2025.

The following table summarizes the activity related to our originated vacation ownership notes receivable reserve during the first half of 2025.

Originated Vacation Ownership Notes Receivable Reserve

3 unchanged sentences

Securitizations ( 122 ) 122 —

Clean-up call 58 ( 58 ) —

Write-offs ( 99 ) — ( 99 )

Defaulted vacation ownership notes receivable repurchase activity (1)

Balance at March 31, 2025 $ 244 $ 276 $ 520

Balance at June 30, 2025 $ 249 $ 283 $ 532

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

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

Originated Vacation Ownership Notes Receivable as of March 31, 2025

Originated Vacation Ownership Notes Receivable as of June 30, 2025

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

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

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 March 31, 2025, and gross write-offs by brand for the first quarter of 2025.

The following tables detail the origination year of our originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination as of June 30, 2025, and gross write-offs by brand for the first half of 2025.

Originated Vacation Ownership Notes Receivable - Marriott Vacation Ownership

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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 an $ 8 million reserve, and interest rates for our acquired vacation ownership notes receivable at March 31, 2025.

The following table shows future contractual principal payments, net of a $ 7 million reserve, and interest rates for our acquired vacation ownership notes receivable at June 30, 2025.

Acquired Vacation Ownership Notes Receivable

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Thereafter 1 13 14

Balance at March 31, 2025 $ 12 $ 83 $ 95

Balance at June 30, 2025 $ 12 $ 73 $ 85

Weighted average stated interest rate 13.8 % 14.2 % 14.1 %

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

Acquired Vacation Ownership Notes Receivable as of March 31, 2025

Acquired Vacation Ownership Notes Receivable as of June 30, 2025

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

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Vacation Ownership Notes Receivable on Non-Accrual Status

For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rates of 13.86 % as of March 31, 2025 and 13.96 % as of December 31, 2024.

A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $ 14 million as of both March 31, 2025 and December 31, 2024.

For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rates of 13.48 % as of June 30, 2025 and 13.96 % as of December 31, 2024.

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

1 unchanged sentence

($ in millions) Non-Securitized Securitized Total

Investment in vacation ownership notes receivable on non-accrual status at March 31, 2025

Investment in vacation ownership notes receivable on non-accrual status at June 30, 2025

$ 183 $ 17 $ 200

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$ 171 $ 24 $ 195

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of March 31, 2025 and December 31, 2024.

As of March 31, 2025 As of December 31, 2024

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 As of December 31, 2024

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

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

The table also excludes the Delayed-Draw Term Loan (as defined and further discussed in Footnote 11 “Debt”) as there were no outstanding borrowings as of March 31, 2025.

At March 31, 2025 At December 31, 2024

($ in millions) Carrying

Value Carrying

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 also excludes the Delayed-Draw Term Loan (as defined and further discussed in Footnote 12 “Debt”) as there were no outstanding borrowings as of June 30, 2025.

At June 30, 2025 At December 31, 2024

($ in millions) Carrying Amount

Carrying Amount

Vacation ownership notes receivable, net $ 2,485 $ 2,551 $ 2,440 $ 2,508

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Vacation Ownership Notes Receivable

At March 31, 2025 At December 31, 2024

($ in millions) Carrying

Value Carrying

At June 30, 2025 At December 31, 2024

($ in millions) Carrying Amount

Carrying Amount

Securitized $ 1,963 $ 2,028 $ 1,917 $ 1,981

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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.

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.

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

Other assets include $ 130 million and $ 131 million of company owned insurance policies (the “COLI policies”) acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan (the “Deferred Compensation Plan”) at March 31, 2025 and December 31, 2024, respectively, that are held in a rabbi trust.

Other assets include $ 148 million and $ 131 million of company owned insurance policies (the “COLI policies”) acquired on the lives of certain participants in the Marriott Vacations Worldwide Deferred Compensation Plan (the “Deferred Compensation Plan”) at June 30, 2025 and December 31, 2024, 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 estimate the fair value of our convertible notes 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 the convertible notes could be retired or transferred.

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 the convertible notes could be retired or transferred.

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

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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.

Three Months Ended

(in millions, except per share amounts) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Net income attributable to common stockholders

$ 69 $ 37 $ 125 $ 84

Shares for basic earnings per share 34.9 35.4 35.0 35.5

Basic earnings per share $ 1.98 $ 1.04 $ 3.59 $ 2.36

Three Months Ended

(in millions, except per share amounts) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Net income attributable to common stockholders

$ 69 $ 37 $ 125 $ 84

Add back of interest expense related to convertible notes, net of tax 5 4 10 9

1 unchanged sentence

Shares for basic earnings per share

34.9 35.4 35.0 35.5

Effect of dilutive shares outstanding

1 unchanged sentence

2026 Convertible Notes

3.7 3.6 3.7 3.6

2027 Convertible Notes

3.1 3.1 3.1 3.0

Shares for diluted earnings per share 41.7 42.2 41.9 42.2

Diluted earnings per share $ 1.77 $ 0.98 $ 3.23 $ 2.20

The computations of diluted earnings per share attributable to common stockholders above exclude approximately 529,000 and 396,000 shares of common stock, the maximum number of shares issuable as of March 31, 2025 and March 31, 2024, 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 first quarter of 2025, we excluded from our calculation of diluted earnings per share 788,607 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 71.17 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the first quarter of 2024, we excluded from our calculation of diluted earnings per share 645,524 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.

The computations of diluted earnings per share attributable to common stockholders above exclude approximately 645,000 and 393,000 shares of common stock, the maximum number of shares issuable as of June 30, 2025 and June 30, 2024, 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 each of the second quarter and first half of 2025, we excluded from our calculation of diluted earnings per share 788,607 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 71.17 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the second quarter of 2024, we excluded from our calculation of diluted earnings per share 559,444 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 96.82 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

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

The following table shows the composition of our inventory balances:

($ in millions) At March 31, 2025 At December 31, 2024

($ in millions) At June 30, 2025 At December 31, 2024

Real estate inventory (1)

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

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 13 million during the first quarter of 2025 and $ 5 million during the first quarter of 2024.

In addition to the above, at March 31, 2025 and December 31, 2024, we had $ 266 million and $ 271 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, of which $ 29 million was included in Other assets and $ 4 million was included in Accounts and contracts receivable, net on our Balance Sheet as of both March 31, 2025 and December 31, 2024 .

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 28 million during the first half of 2025 and $ 20 million during the first half of 2024.

In addition to the above, at June 30, 2025 and December 31, 2024, we had $ 323 million and $ 271 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 $ 30 million at June 30, 2025, of which $ 25 million was included in Other assets and $ 5 million was included in Accounts and contracts receivable, net on our Balance Sheet, and $ 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 .

CONTINGENCIES AND COMMITMENTS

Commitments and Letters of Credit

As of March 31, 2025, we had the following commitments outstanding:

As of June 30, 2025, we had the following commitments outstanding:

• 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.

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• We expect to complete the acquisition of 32 vacation ownership units in 2027 pursuant to one of these commitments, and to make remaining payments with respect to these units when specific construction milestones are completed as follows:

$ 10 million in the remainder of 2025 and $ 1 million in 2026.

$ 10 million in 2026 and $ 1 million in 2027.

• We expect to complete the acquisition of 26 vacation ownership units in 2027 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 the remainder of 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 these commitments, subject to performance of agreed-upon pre-closing obligations by the seller, and to make the remaining payment of $ 43 million with respect to these units in the second quarter of 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 the remainder of 2025, $ 31 million in 2026, and $ 2 million in 2027.

• 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:

$ 16 million in 2026 and $ 1 million in 2027.

• We have a remaining commitment of $ 37 million to purchase 60 vacation ownership units located in Khao Lak, Thailand, 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 these vacation ownership units in 2027, and we expect to make remaining payments with respect to these units when specific construction milestones are completed as follows:

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

• We have a commitment 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 of $ 122 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 15 “Variable Interest Entities” for information about this commitment, including purchases that occurred during the first quarter of 2024 pursuant to this commitment, and for additional information about our activities relating to the VIE involved in this commitment.

As of March 31, 2025, we had $ 11 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 11 “Debt”), of which $ 10 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 March 31, 2025, we had $ 10 million in letters of credit outstanding that were related to and in lieu of reserves required for our outstanding securitization transaction completed during the third quarter of 2024, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

Surety bonds issued as of March 31, 2025 totaled $ 127 million, the majority of which were requested by federal, state or local governments in connection with our operations.

As of June 30, 2025, we had $ 26 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 12 “Debt”), of which $ 25 million were related to and in lieu of reserves required for certain of our outstanding securitization transactions.

In addition, as of June 30, 2025, we had $ 10 million in letters of credit outstanding that were related to and in lieu of reserves required for a certain other outstanding securitization transaction, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

Surety bonds issued as of June 30, 2025 totaled $ 134 million, the majority of which were requested by federal, state or local governments in connection with our operations.

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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or 2) written notification of termination by either party.

At March 31, 2025, our expected commitment for the remainder of 2025 is $ 18 million, which will ultimately be recorded as a component of rental expense on our income statement.

At June 30, 2025, our expected commitment for the remainder of 2025 is $ 13 million, which will ultimately be recorded as a component of rental expense on our income statement.

Loss Contingencies

In February 2019, the owners’ association for the St.

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 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.

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

In June 2023, the appellate court upheld the dismissal of those claims.

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.

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

In January 2024, the appellate court upheld the dismissal of the other claims.

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’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.

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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 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.

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

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

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

($ in millions) At March 31, 2025 At December 31, 2024

($ in millions) At June 30, 2025 At December 31, 2024

Vacation ownership notes receivable securitizations, gross (1)

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$ 2,188 $ 2,136

(1) Interest rates as of March 31, 2025 range from 1.5 % to 6.6 %, with a weighted average interest rate of 4.7 %.

(2) Effective interest rate as of March 31, 2025 was 5.5 %.

(1) Interest rates as of June 30, 2025 range from 1.5 % to 6.6 %, with a weighted average interest rate of 4.8 %.

(2) Effective interest rate as of June 30, 2025 was 5.4 %.

All of our securitized debt is non-recourse.

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

The following table shows anticipated future principal payments for our securitized debt as of March 31, 2025.

The following table shows anticipated future principal payments for our securitized debt as of June 30, 2025.

Vacation Ownership

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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 the first quarter of 2025, and as of March 31, 2025, we had 12 securitized vacation ownership notes receivable pools outstanding, none of which were out of compliance with their respective established parameters.

During the second quarter of 2025, and as of June 30, 2025, no securitized vacation ownership notes receivable pools were out of compliance with their respective established parameters.

As of June 30, 2025, we had 11 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.

On May 6, 2025, subsequent to the end of the first quarter of 2025, we securitized a pool of $ 459 million of vacation ownership notes receivable.

In connection with the securitization, $ 450 million in vacation ownership loan backed notes were issues by MVW 2025-1 LLC (the “2025-1 LLC”) in a private placement.

During the second quarter of 2025, we securitized a pool of $ 459 million of vacation ownership notes receivable.

In connection with the securitization, $ 450 million in vacation ownership loan backed notes were issued by MVW 2025-1 LLC (the “2025-1 LLC”) in a private placement.

Three classes of vacation ownership loan backed notes were issued by the 2025-1 LLC:

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The Class A Notes have an interest rate of 4.97 %, the Class B Notes have an interest rate of 5.21 %, and the Class C Notes have an interest rate of 5.75 %, for an overall weighted average interest rate of 5.16 %.

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

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”), which has a borrowing capacity of $ 500 million, allows for the securitization of vacation ownership notes receivable on a revolving non-recourse basis.

During the second quarter of 2025, we amended certain agreements associated with our Warehouse Credit Facility (the “Warehouse Amendment”).

The Warehouse Amendment extended the revolving period of the Warehouse Credit Facility from June 11, 2026 to June 11, 2027, and changed the credit spread from 115 basis points over the Secured Overnight Financing Rate (“SOFR”) to 110 basis points over SOFR.

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.

($ in millions) At March 31, 2025 At December 31, 2024

($ in millions) At June 30, 2025 At December 31, 2024

Corporate Credit Facility

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$ 3,197 $ 3,089

(1) The effective interest rate as of March 31, 2025 was 6.6 %.

(2) The effective interest rate as of March 31, 2025 was 5.8 %.

The following table shows scheduled principal payments for our debt, excluding finance leases, as of March 31, 2025.

(1) The effective interest rate as of June 30, 2025 was 6.6 %.

(2) The effective interest rate as of June 30, 2025 was 5.9 %.

The following table shows scheduled principal payments for our debt, excluding finance leases, as of June 30, 2025.

Payments Year

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The Delayed-Draw Term Loan is only available to finance the redemption or repurchase of our 2026 Convertible Notes (as defined below), which are due January 15, 2026.

As of March 31, 2025, there were no outstanding borrowings on the Delayed-Draw Term Loan.

As of June 30, 2025, there were no outstanding borrowings on the Delayed-Draw Term Loan.

During the second quarter of 2025, we entered into a $ 300 million interest rate swap pursuant to which we pay interest at a fixed rate of 3.344 % and receive interest at a floating rate (SOFR) through May 2027 to hedge a portion of our interest rate risk on the Term Loan.

This interest rate swap has been designated and qualifies as a cash flow hedge of interest rate risk and is recorded in Other Assets on our Balance Sheets as of June 30, 2025.

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

The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during the first half of 2025 and 2024.

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

($ in millions) 2025 2024

Derivative instrument adjustment balance, January 1 $ — $ 3

Other comprehensive loss before reclassifications — ( 2 )

Derivative instrument adjustment balance, March 31 — 1

Other comprehensive gain (loss) before reclassifications 1 ( 1 )

Derivative instrument adjustment balance, June 30 $ 1 $ —

Our senior notes include:

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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 March 31, 2025 to 6.4526 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 154.98 per share of our common stock), as a result of the dividends we declared since issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued.

The conversion rate of the 2026 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of June 30, 2025 to 6.5289 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 153.17 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 March 31, 2025, the effective interest rate was 0.55 %.

Amortization of debt issuance costs related to the 2026 Convertible Notes was $ 1 million during each of the first quarters of 2025 and 2024.

As of June 30, 2025, the effective interest rate was 0.55 %.

The following table provides the components of interest expense related to the 2026 Convertible Notes.

Three Months Ended Six Months Ended

($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

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

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 3.7 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 March 31, 2025.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 154.98 and $ 193.72 , respectively, as of March 31, 2025, 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 3.8 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 3.8 million shares of our common stock, in each case, as of June 30, 2025.

The strike prices of the 2026 Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 153.17 and $ 191.45 , respectively, as of June 30, 2025, 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 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 March 31, 2025 to 5.2923 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 188.95 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 March 31, 2025, the effective interest rate was 3.88 %.

The conversion rate of the 2027 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of June 30, 2025 to 5.2978 shares of common stock per $1,000 principal amount of 2027 Convertible Notes (equivalent to a conversion price of $ 188.76 per share of our common stock), as a result of the dividends we declared since issuance of the 2027 Convertible Notes that were greater than the quarterly dividend we paid when the 2027 Convertible notes were issued.

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

As of June 30, 2025, the effective interest rate was 3.88 %.

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

Three Months Ended

($ in millions) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Contractual interest expense $ 5 $ 5 $ 9 $ 9

Amortization of debt issuance costs 1 1 2 2

$ 6 $ 6 $ 11 $ 11

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 March 31, 2025.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 188.95 and $ 285.21 , respectively, as of March 31, 2025, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 188.76 and $ 284.91 , respectively, as of June 30, 2025, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

Security and Guarantees

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

At March 31, 2025, there were 75,855,593 shares of Marriott Vacations Worldwide common stock issued, of which 34,529,409 shares were outstanding and 41,326,184 shares were held as treasury stock.

At June 30, 2025, there were 75,889,673 shares of Marriott Vacations Worldwide common stock issued, of which 34,602,499 shares were outstanding and 41,287,174 shares were held as treasury stock.

At December 31, 2024, there were 75,852,678 shares of Marriott Vacations Worldwide common stock issued, of which 34,877,925 shares were outstanding and 40,974,753 shares were held as treasury stock.

Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $ 0.01 per share, none of which were issued or outstanding as of March 31, 2025 or December 31, 2024.

Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $ 0.01 per share, none of which were issued or outstanding as of June 30, 2025 or December 31, 2024.

Share Repurchase Program

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

As of March 31, 2025, approximately $ 347 million remained available for share repurchases under the current Share Repurchase Program, which authorizes share repurchases through December 31, 2025.

As of June 30, 2025, approximately $ 347 million remained available for share repurchases under the current Share Repurchase Program, which authorizes share repurchases through December 31, 2025.

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

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As of December 31, 2024 25,790,550 $ 2,461 $ 95.40

For the first quarter of 2025 496,484 36 $ 73.21

As of March 31, 2025 26,287,034 $ 2,497 $ 94.98

We declared cash dividends to holders of common stock during the first quarter of 2025 as follows.

For the first half of 2025 496,484 36 $ 73.10

As of June 30, 2025 26,287,034 $ 2,497 $ 94.98

We declared cash dividends to holders of common stock during the first half of 2025 as follows.

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

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February 20, 2025 March 5, 2025 March 19, 2025 $ 0.79

May 12, 2025 May 23, 2025 June 6, 2025 $ 0.79

SHARE-BASED COMPENSATION

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(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.

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

As of March 31, 2025, approximately 1 million shares were available for grants under the MVW Equity Plan.

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

As of June 30, 2025, approximately 1 million shares were available for grants under the MVW Equity Plan.

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

Three Months Ended

($ in millions) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Service-based RSUs $ 10 $ 10 $ 16 $ 16

Performance-based RSUs 2 ( 2 ) 2 ( 1 )

$ 12 $ 9 $ 19 $ 16

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

($ in millions) At March 31, 2025 At December 31, 2024

($ in millions) At June 30, 2025 At December 31, 2024

Service-based RSUs $ 41 $ 24

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Restricted Stock Units

We granted 497,543 service-based RSUs, which are subject to time-based vesting conditions, with a weighted average grant-date fair value of $ 63.90 , to our employees and non-employee directors during the first quarter of 2025.

During the first quarter of 2025, we also granted performance-based RSUs, which are subject to performance-based vesting conditions, to members of management.

A maximum of 307,780 RSUs may be earned under the performance-based RSU awards granted during the first quarter of 2025.

We granted 529,447 service-based RSUs, which are subject to time-based vesting conditions, with a weighted average grant-date fair value of $ 64.37 , to our employees and non-employee directors during the first half of 2025.

During the first half of 2025, we also granted performance-based RSUs, which are subject to performance-based vesting conditions, to members of management.

A maximum of 423,863 RSUs may be earned under the performance-based RSU awards granted during the first half of 2025.

Stock Appreciation Rights

We granted 145,440 SARs, with a weighted average grant-date fair value of $ 23.17 and a weighted average exercise price of $ 71.17 , to members of management during the first quarter of 2025.

We granted 145,440 SARs, with a weighted average grant-date fair value of $ 23.17 and a weighted average exercise price of $ 71.17 , to members of management during the first half of 2025.

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

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

The following table outlines the assumptions used to estimate the fair value of grants during the first quarter of 2025:

The following table outlines the assumptions used to estimate the fair value of grants during the first half of 2025:

Expected volatility 45.79 %

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Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations

The following table shows consolidated assets, which are collateral for the obligations of the VIEs related to our vacation ownership notes receivable securitizations, and consolidated liabilities included on our Balance Sheet at March 31, 2025:

($ in millions) Vacation Ownership

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Total $ 2,061 $ 159 $ 2,220

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first quarter of 2025:

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the second quarter of 2025:

($ in millions) Vacation Ownership

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Debt issuance cost amortization $ 3 $ — $ 3

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first half of 2025:

($ in millions) Vacation Ownership

Notes Receivable

Securitizations Warehouse

Credit Facility Total

Interest income $ 133 $ 14 $ 147

Interest expense $ 47 $ 6 $ 53

Debt issuance cost amortization $ 5 $ 1 $ 6

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

Three Months Ended

($ in millions) March 31, 2025 March 31, 2024

Six Months Ended

($ in millions) June 30, 2025 June 30, 2024

Net proceeds from vacation ownership notes receivable securitizations $ 445 $ 426

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

Three Months Ended

($ in millions) March 31, 2025 March 31, 2024

Six Months Ended

($ in millions) June 30, 2025 June 30, 2024

Proceeds from vacation ownership notes receivable securitizations $ 364 $ 203

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Accordingly, we have not consolidated the VIE.

We expect to acquire the property over time and as of March 31, 2025, we expect to make payments for the property as follows:

We expect to acquire the property over time and as of June 30, 2025, we expect to make payments for the property as follows:

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

As of March 31, 2025, 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 $ 16 million as of March 31, 2025.

As of June 30, 2025, our Balance Sheet reflected $ 1 million in Accounts and contracts receivable, net, including a note receivable of less than $ 1 million, $ 11 million in Property and equipment, net, $ 1 million in Accrued Liabilities, 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 $ 14 million as of June 30, 2025.

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 classified as held-for-sale and included in Other assets as of March 31, 2025.

The transaction was accounted for as an asset acquisition and is included in Property and equipment, net on our Balance Sheet as of June 30, 2025.

Deferred Compensation Plan

2 unchanged sentences

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

At March 31, 2025 and December 31, 2024, the value of the assets held in the rabbi trust was $ 130 million and $ 131 million, respectively, and was included in the Other line within assets on our Balance Sheets.

At June 30, 2025 and December 31, 2024, the value of the assets held in the rabbi trust was $ 148 million and $ 131 million, respectively, and was included in the Other line within assets on our Balance Sheets.

BUSINESS SEGMENTS

10 unchanged sentences

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 amortization of cloud computing software implementation costs, and adjusted for certain items that affect the comparability of our operating performance.

During the first quarter of 2025, we began excluding Amortization of cloud computing software implementation costs, which are not included in Depreciation and amortization, from Adjusted EBITDA for comparability purposes, to address the considerable variability among companies in the utilization of productive assets, and have reclassified prior year amounts to conform with our current year presentation.

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

4 unchanged sentences

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

Three Months Ended

March 31, 2025 March 31, 2024

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

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

($ in millions) Vacation

Exchange & Third-Party Management Total Vacation Ownership Exchange & Third-Party Management Total Vacation Ownership Exchange & Third-Party Management Total Vacation Ownership Exchange & Third-Party Management Total

Revenues from external customers $ 1,188 $ 53 $ 1,241 $ 1,078 $ 58 $ 1,136 $ 2,323 $ 111 $ 2,434 $ 2,208 $ 123 $ 2,331

17 unchanged sentences

Amortization of cloud computing software implementation costs (3)

( 1 ) ( 1 ) ( 2 ) ( 1 )

Certain items ( 16 ) ( 23 ) ( 21 ) ( 43 )

5 unchanged sentences

(2) Other segment items include cost reimbursements, non-cash share-based compensation, amortization of cloud computing software implementation costs, and other.

($ in millions) At March 31, 2025 At December 31, 2024

(3) Prior year amounts have been reclassified to conform with our current year presentation.

($ in millions) At June 30, 2025 At December 31, 2024

Vacation Ownership $ 8,430 $ 8,296

4 unchanged sentences

RESTRUCTURING

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.

The following table shows the composition of our Restructuring charges, by segment, for the three and six months ended June 30, 2025.

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

($ in millions) Vacation

Total Vacation

SBO initiatives

$ 1 $ — $ 32 $ 33 $ 1 $ — $ 43 $ 44

Severance — — 1 1 — — — —

Facility related

— — — — — 2 — 2

$ 1 $ — $ 33 $ 34 $ 1 $ 2 $ 43 $ 46

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

We intend to:

2 unchanged sentences

and capture significant savings from initiatives related to procurement and corporate overhead.

During the first quarter of 2025, we incurred $ 10 million of restructuring charges associated with these efforts and as of March 31, 2025, $ 5 million was accrued on our Balance Sheet related to these charges.

In addition, we recorded a $ 2 million impairment related to an operating lease and related assets.

During the first quarter of 2024, we incurred $ 2 million of restructuring charges associated with the elimination of certain positions as a result of the realignment of our management structure and headcount reductions in 2023.

We expect to incur up to approximately $ 200 million in total restructuring and related charges by the end of 2026 primarily related to advisory services and non-recurring charges resulting from process redesign and implementation, as well as systems development, design, and implementation.

The table below shows the composition of our restructuring costs related to SBO initiatives.

($ in millions) Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Advisory services

As of June 30, 2025, the total amount accrued for restructuring charges on our Balance Sheet was $ 20 million, $ 19 million of which related to our SBO initiatives.

The following table presents the activity for this accrual on our Balance Sheet related to these restructuring charges.

($ in millions) SBO Initiatives

Balance at December 31, 2024

Restructuring charges

Cash payments ( 26 )

Balance at June 30, 2025

In addition, during the first half of 2025, we recorded a $ 2 million impairment charge related to an operating lease and related assets.

During the second quarter and first half of 2024, we incurred $ 1 million and $ 3 million, respectively, of restructuring charges associated with the elimination of certain positions as a result of the realignment of our management structure and headcount reductions in 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements