MARRIOTT VACATIONS WORLDWIDE Corp 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements We make forward-looking statements throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: our possible or assumed future results of operations and growth opportunities, revenues, financial condition, leverage, liquidity, returns on investments, margins and related financing, development and rental profits; dividend payments; business strategies; financing plans and the adequacy of capital to meet short-term and long-term liquidity requirements; our competitive position; our plans to pursue growth opportunities; our expectations regarding average consumer financing interest rates and our financing profit margin; our expectations regarding the objectives, costs and benefits of our Strategic Business Operations office including revenue growth, operational efficiencies and savings, and benefits for our owners; our ability to reduce our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio; our expectations regarding inventory spending in 2025, the impact of inventory repurchases and timing of payments for inventory; taxes; our ability to securitize consumer loans; and expectations related to sales reserves, delinquencies and default rates. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: uncertainty in the current global macroeconomic environment created by rapid governmental policy and regulatory changes, including those affecting international trade; a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; failure of vendors and other third parties to timely comply with their contractual obligations; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; the ability to use artificial intelligence (“AI”) technologies successfully and potential business, compliance, or reputational risks associated with the use of AI technologies; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui and Los Angeles area wildfires; delinquency and default rates; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza, Israel and Iran, and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs and accelerate growth and profitability; political or social strife; and other matters referred to under the heading “Risk Factors” contained herein and also in our 2024 Annual Report, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission (the “SEC”). All forward-looking statements in this Quarterly Report apply only as of the date of this Quarterly Report or as of the date they were made or as otherwise specified herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. You should not put undue reliance on any forward-looking statements in this Quarterly Report. The risk factors discussed in “Risk Factors” in our 2024 Annual Report and under Item 1A of Part II of this Quarterly Report could cause actual results to differ materially from those expressed or implied in forward-looking statements in this Quarterly Report. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements. Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows. The financial information discussed below and included in this Quarterly Report may not, however, necessarily reflect what our financial condition, results of operations or cash flows may be in the future. In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Interim Consolidated Statements of Cash Flows as our 32 Table of Contents “Cash Flows.” References throughout to numbered “Footnotes” refer to the numbered Notes in the Interim Condensed Notes to Consolidated Financial Statements included in this Quarterly Report. We routinely post important information, including news releases, announcements and other statements about our business and results of operations, that may be deemed material to investors on the Investor Relations section of our website, www.marriottvacationsworldwide.com. We use our website as a means of disclosing material, nonpublic information and for complying with our disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of our website in addition to following our press releases, filings with the SEC, public conference calls and webcasts. The information on our website is not part of, and is not incorporated by reference into, this Quarterly Report. Business Overview We are a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management. Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term relationships. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Vacation Club brands. 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. We also have a license to use the St. Regis brand for specified fractional ownership products. Our Vacation Ownership segment generates most of its revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory. Our Exchange & Third-Party Management segment includes an exchange network and membership programs, as well as the provision of management services to other resorts and lodging properties. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. We provide these services through our Interval International and Aqua-Aston businesses. Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to consolidated property owners’ associations (“Consolidated Property Owners’ Associations”). Strategic Business Operations In the fourth quarter of 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; increase sales efficiency and inventory optimization; and capture significant savings from initiatives related to procurement and corporate overhead. We believe that we can drive $150 million to $200 million of annualized benefits from these initiatives by the end of 2026, with approximately half of these benefits coming from cost savings and efficiencies and the balance from accelerating revenue growth. We also expect to realize additional savings that will benefit our owners’ maintenance fees. We expect to incur non-recurring cash costs related to these modernization initiatives of approximately $100 million in each of 2025 and 2026. 33 Table of Contents Performance Measures We measure operating performance using the key metrics described below: • Contract sales from the sale of vacation ownership products is considered to be an important operating measure because it reflects the pace of sales in our business. • Total contract sales include contract sales from the sale of vacation ownership products, including non-consolidated joint ventures. • Consolidated contract sales exclude contract sales from the sale of vacation ownership products for non-consolidated joint ventures. • Volume per guest (“VPG”) is calculated by dividing consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (referred to as Tours , see below), by the number of tours in a given period. We believe that VPG is valuable in evaluating the effectiveness of the sales process as it combines the impact of average contract price with the number of touring guests who make a purchase. • Tours is the number of sales tours performed during the applicable period, and generally includes virtual and offsite sales tours, and excludes telesales. We believe that Tours is a valuable metric because it represents the volume of touring guests. • Development profit margin is calculated by dividing Development profit by revenues from the sale of vacation ownership products. We refer to revenues from the sale of vacation ownership products less the cost of vacation ownership products and marketing and sales costs as Development profit. We believe that Development profit margin is an important measure of the profitability of our development and subsequent marketing and sales of VOIs. • Total active members is the number of Interval Network active members at the end of the applicable period. We consider active members to be an important metric because it represents the population of owners eligible to book transactions using the Interval Network. • Average revenue per member is calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue for the Interval Network by the monthly weighted average number of Interval Network active members during the applicable period. We believe this metric is valuable in measuring the overall engagement of our Interval Network active members. • Segment financial results attributable to common stockholders represents revenues less expenses directly attributable to each applicable reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We consider this measure to be important in evaluating the performance of our reportable business segments. See Footnote 16 “Business Segments” to our Financial Statements for further information about our reportable business segments. • Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursements revenues. • Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursements revenues. NM = Not meaningful. 34 Table of Contents Consolidated Results Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUES Sale of vacation ownership products $ 370 $ 309 $ 725 $ 661 Management and exchange 219 215 434 426 Rental 160 153 329 311 Financing 90 85 178 168 Cost reimbursements 407 378 780 769 TOTAL REVENUES 1,246 1,140 2,446 2,335 EXPENSES Cost of vacation ownership products 41 38 83 91 Marketing and sales 237 226 471 449 Management and exchange 121 119 238 235 Rental 125 111 248 218 Financing 37 35 73 69 General and administrative 61 54 122 117 Depreciation and amortization 38 35 76 73 Litigation charges 5 10 12 13 Restructuring 34 1 46 3 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 (losses) and other income (expense), net 24 (7) 37 (7) Interest expense, net (42) (43) (82) (83) Transaction and integration costs — (3) — (18) Other — (1) — (2) INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 94 48 196 129 Provision for income taxes (25) (10) (70) (45) NET INCOME 69 38 126 84 Net income attributable to noncontrolling interests — (1) (1) — NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 69 $ 37 $ 125 $ 84 Operating Statistics Three Months Ended Six Months Ended (Contract sales $ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Vacation Ownership Total contract sales $ 449 $ 452 $ (3) (1%) $ 874 $ 885 $ (11) (1%) Consolidated contract sales $ 445 $ 449 $ (4) (1%) $ 865 $ 877 $ (12) (1%) Joint venture contract sales $ 4 $ 3 $ 1 21% $ 9 $ 8 $ 1 6% VPG $ 3,631 $ 3,741 $ (110) (3%) $ 3,791 $ 3,921 $ (130) (3%) Tours 114,402 111,752 2,650 2% 212,400 208,331 4,069 2% Exchange & Third-Party Management Total active members at end of period (000's) 1,507 1,530 (23) (2%) 1,507 1,530 (23) (2%) Average revenue per member $ 37.40 $ 38.30 $ (0.90) (2%) $ 77.40 $ 80.14 $ (2.74) (3%) 35 Table of Contents Revenues Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Vacation Ownership $ 1,188 $ 1,078 $ 110 10% $ 2,323 2,208 $ 115 5% Exchange & Third-Party Management 53 58 (5) (10%) 111 123 (12) (10%) Total Segment Revenues 1,241 1,136 105 9% 2,434 2,331 103 4% Consolidated Property Owners’ Associations 5 4 1 NM 12 4 8 NM Total Revenues $ 1,246 $ 1,140 $ 106 9% 2,446 2,335 $ 111 5% Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense and amortization of cloud computing software implementation costs. Share-based compensation expense is excluded to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. 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. For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We consider Adjusted EBITDA margin to be an indicator of our operating profitability. We also use Adjusted EBITDA and Adjusted EBITDA margin, as do analysts, lenders, investors, and others, because these measures exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization, as well as amortization of cloud computing software implementation costs because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating or amortizing productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing core operations before the impact of these items with results from other companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, other companies in our industry may calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. 36 Table of Contents The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income attributable to common stockholders, which is the most directly comparable GAAP financial measure. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Net income attributable to common stockholders $ 69 $ 37 $ 32 89% $ 125 $ 84 $ 41 50% Interest expense, net 42 43 (1) (2%) 82 83 (1) (1%) Provision for income taxes 25 10 15 NM 70 45 25 53% Depreciation and amortization 38 35 3 7% 76 73 3 4% EBITDA 174 125 49 39% 353 285 68 24% Share-based compensation expense 12 9 3 38% 19 16 3 24% Amortization of cloud computing software implementation costs 1 1 — NM 2 1 1 NM Certain items 16 23 (7) NM 21 43 (22) NM Adjusted EBITDA $ 203 $ 158 $ 45 29% $ 395 $ 345 $ 50 15% Adjusted EBITDA Margin 24.3% 20.7% 360.0 pts 23.7% 22.0% 1.7 pts 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, and have reclassified prior year amounts to conform with our current year presentation. The table below details the components of Certain items for the periods presented. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Gain on disposition of hotel, land, and other $ — $ (1) $ — $ (1) Foreign currency translation (18) 4 (21) 6 Insurance proceeds (1) — (8) — Change in indemnification asset (3) 4 (3) 2 Change in estimates relating to pre-acquisition contingencies — — (2) — Other (2) — (3) — (Gains) losses and other (income) expense, net (24) 7 (37) 7 Transaction and integration costs — 3 — 18 Purchase accounting adjustments — — — 1 Litigation charges 5 10 12 13 Restructuring charges 34 1 46 3 Impairment charges — 2 — 2 Other 1 — — (1) Total Certain items $ 16 $ 23 $ 21 $ 43 During the second quarter of 2024, we discontinued classifying costs associated with the continued integration of Welk in Transaction and integration costs. Welk integration costs incurred after this period are reflected in the operating results of each of our segments and/or General and administrative expenses. 37 Table of Contents Segment Adjusted EBITDA Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Vacation Ownership $ 231 $ 181 $ 50 28% $ 452 $ 394 $ 58 15% Exchange & Third-Party Management 23 25 (2) (7%) 51 57 (6) (11%) Segment adjusted EBITDA 254 206 48 24% 503 451 52 12% General and administrative (61) (54) (7) (12%) (122) (117) (5) (4%) Other 10 6 4 NM 14 11 3 NM Adjusted EBITDA $ 203 $ 158 $ 45 29% $ 395 $ 345 $ 50 15% The following tables present segment financial results attributable to common stockholders reconciled to segment Adjusted EBITDA. Vacation Ownership Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Segment financial results $ 196 $ 144 $ 52 36% $ 394 $ 326 $ 68 21% Depreciation and amortization 28 25 3 14% 54 50 4 8% Share-based compensation expense 3 2 1 12% 4 4 — 10% Amortization of cloud computing software implementation costs 1 1 — NM 2 1 1 NM Certain items 3 9 (6) NM (2) 13 (15) NM Segment adjusted EBITDA $ 231 $ 181 $ 50 28% $ 452 $ 394 $ 58 15% Segment Adjusted EBITDA Margin 29.8% 26.0% 3.8 pts 29.5% 27.7% 1.8 pts The table below details the components of Certain items for Vacation Ownership segment financial results. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Gain on disposition of hotel, land, and other $ — $ (1) $ — $ (1) Insurance proceeds — — (7) — Change in estimates relating to pre-acquisition contingencies — — (2) — Other (1) — (1) — Gains and other income, net (1) (1) (10) (1) Purchase accounting adjustments — — — 1 Litigation charges 3 10 7 13 Restructuring charges 1 — 1 — Total Certain items $ 3 $ 9 $ (2) $ 13 Exchange & Third-Party Management Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Segment financial results $ 16 $ 15 $ 1 —% $ 34 $ 40 $ (6) (15%) Depreciation and amortization 7 7 — (4%) 14 14 — (4%) Share-based compensation expense — 1 (1) 11% 1 1 — 7% Certain items — 2 (2) NM 2 2 — NM Segment adjusted EBITDA $ 23 $ 25 $ (2) (7%) $ 51 $ 57 $ (6) (11%) Segment Adjusted EBITDA Margin 45.9% 44.5% 1.4 pts 47.5% 48.1% (0.6 pts) 38 Table of Contents The table below details the components of Certain items for Exchange and Third-Party Management segment financial results. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Restructuring charges $ — $ — 2 — Impairment charges — 2 — 2 Total Certain items $ — $ 2 $ 2 $ 2 Business Segments Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 16 “Business Segments” to our Financial Statements for further information about our segments. Vacation Ownership Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUES Sale of vacation ownership products $ 370 $ 309 $ 725 $ 661 Resort management and other services 165 157 320 305 Rental 150 143 309 290 Financing 90 85 178 168 Cost reimbursements 413 384 791 784 TOTAL REVENUES 1,188 1,078 2,323 2,208 EXPENSES Cost of vacation ownership products 41 38 83 91 Marketing and sales 237 226 471 449 Resort management and other services 76 73 148 144 Rental 129 113 255 223 Financing 37 35 73 69 Depreciation and amortization 28 25 54 50 Litigation charges 3 10 7 13 Restructuring 1 — 1 — Royalty fee 28 29 56 57 Cost reimbursements 413 384 791 784 TOTAL EXPENSES 993 933 1,939 1,880 Gains and other income, net 1 1 10 1 Other — (2) — (3) SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 196 $ 144 $ 394 $ 326 39 Table of Contents Sale of Vacation Ownership Products Second Quarter and First Half Three Months Ended Six Months Ended ($ in millions) June 30, 2025 % of Consolidated Contract Sales, Net of Resales June 30, 2024 % of Consolidated Contract Sales, Net of Resales Change June 30, 2025 % of Consolidated Contract Sales, Net of Resales June 30, 2024 % of Consolidated Contract Sales, Net of Resales Change Consolidated contract sales $ 445 $ 449 $ (4) (1%) $ 865 $ 877 $ (12) (1%) Joint venture contract sales 4 3 1 21% 9 8 1 6% Total contract sales 449 452 (3) (1%) 874 885 (11) (1%) Less: Resales contract sales (7) (9) 2 (16) (21) 5 Less: Joint venture contract sales (4) (3) (1) (9) (8) (1) Consolidated contract sales, net of resales 438 440 (2) (1%) 849 856 (7) (1%) Plus: Settlement revenue 11 2% 10 2% 1 20 2% 18 2% 2 Resales revenue 5 1% 6 1% (1) 9 1% 11 1% (2) Revenue recognition adjustments: Reportability 2 1% 1 —% 1 7 1% (8) (1%) 15 Sales reserve (58) (13%) (122) (28%) 64 (108) (13%) (168) (20%) 60 Other (1) (28) (6%) (26) (6%) (2) (52) (6%) (48) (6%) (4) Sale of vacation ownership products $ 370 85% $ 309 70% $ 61 20% $ 725 85% $ 661 77% $ 64 10% VPG $ 3,631 $ 3,741 $(110) (3%) $ 3,791 $ 3,921 $(130) (3%) Tours 114,402 111,752 2,650 2% 212,400 208,331 4,069 2% Financing propensity 56.2% 54.5% 1.7 pts 55.2% 54.0% 1.2 pts Average FICO Score (2) 742 737 741 738 (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. (2) For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents. 40 Table of Contents Second Quarter and First Half The increase in Sale of vacation ownership products was primarily due to a decrease in our sales reserve reflecting last year’s $70 million sales reserve adjustment (the “additional sales reserve”) recorded in the second quarter of 2024, partially offset by higher financing propensity and defaults in Asia Pacific in both the second quarter and first half of 2025. Excluding the impact of last year’s additional sales reserve, our sales reserve as a percent of contract sales in the second quarter and first half of 2025 increased 140 basis points and 130 basis points, respectively, compared to the prior year comparative period. Contract sales decreased during the second quarter and first half of 2025 due to a 3% decrease in VPG, partially offset by a 2% increase in tours, in each period. • The decreases in VPG in each period were due to a larger percentage mix of first time buyer and international tours, which carry a lower VPG than existing owner tours, and lower Owner VPG. • Second Quarter 2025 compared to Second Quarter 2024 • First time buyer contract sales increased 6% on higher VPG and tours • Owner contract sales declined 4% on lower VPG and flat tours • First Half 2025 compared to First Half 2024 • First time buyer contract sales increased 6% on higher tours • Owner contract sales declined 5% on lower VPG and tours While delinquency rates have declined, we plan to continue to assume an increased sales reserve for new originations until we have sufficient evidence of continued improvement in delinquency and default rates. Development Profit Second Quarter Three Months Ended ($ in millions) June 30, 2025 % of Revenue June 30, 2024 % of Revenue Change Sale of vacation ownership products $ 370 $ 309 $ 61 20% Cost of vacation ownership products (41) 11% (38) 12% (3) (10%) Marketing and sales (237) 64% (226) 73% (11) (5%) Development profit $ 92 $ 45 $ 47 101% Development profit margin 24.7% 14.7% 10.0 pts The increase in Development profit was due to the following: • higher sales of vacation ownership products (discussed above), partially offset by: • higher cost of vacation ownership products due to the $13 million favorable impact of the additional sales reserve in the second quarter of 2024 and the sale of lower average cost inventory. • Excluding the impact of the additional sales reserve, cost of vacation ownership products decreased $10 million and cost of vacation ownership products as a percentage of sales decreased approximately 230 basis points in the second quarter of 2025. • higher marketing and sales costs due to: • $6 million of higher wages and benefits, including variable compensation; and • $5 million of higher marketing costs. Excluding the impact of the additional sales reserve, Development profit decreased $10 million and Development profit margin decreased approximately 230 basis points in the second quarter of 2025. 41 Table of Contents First Half Six Months Ended ($ in millions) June 30, 2025 % of Revenue June 30, 2024 % of Revenue Change Sale of vacation ownership products $ 725 $ 661 $ 64 10% Cost of vacation ownership products (83) 12% (91) 14% 8 8% Marketing and sales (471) 65% (449) 68% (22) (5%) Development profit $ 171 $ 121 $ 50 41% Development profit margin 23.5% 18.3% 5.2 pts The increase in Development profit was due to the following: • higher sales of vacation ownership products (discussed above), partially offset by: • lower cost of vacation ownership products due to the sale of lower average cost inventory, including $8 million of favorable product cost true-up activity, slightly offset by $2 million of higher revenue reportability. • Excluding the favorable impact of the additional sales reserve in the first half of 2024, cost of vacation ownership products decreased $21 million and cost of vacation ownership products as a percentage of sales decreased approximately 280 basis points in the first half of 2025. These were partially offset by: • higher marketing and sales costs due to: • $9 million of higher wages and benefits, including variable compensation; • $7 million of higher marketing costs; and • $6 million of higher preview costs. Excluding the impact of the additional sales reserve, Development profit decreased $7 million and Development profit margin decreased approximately 80 basis points. Resort Management and Other Services Revenues, Expenses and Profit Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Management fee revenues $ 55 $ 51 $ 4 7% $ 110 $ 103 $ 7 7% Ancillary revenues 75 72 3 5% 140 137 3 3% Other management and exchange revenues 35 34 1 3% 70 65 5 6% Resort management and other services revenues 165 157 8 5% 320 305 15 5% Resort management and other services expenses (76) (73) (3) (4%) (148) (144) (4) (3%) Resort management and other services profit $ 89 $ 84 $ 5 5% $ 172 $ 161 $ 11 7% Resort management and other services profit margin 54.1% 53.9% 0.2 pts 53.9% 52.9% 1.0 pts Resort occupancy (1) 89.5% 90.1% (0.6 pts) 89.9% 90.1% (0.2 pts) (1) Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service. Second Quarter The increase in Resort management and other services profit reflects $3 million of higher management profit and $2 million of higher ancillary profit. First Half The increase in Resort management and other services profit reflects $7 million of higher management profit, $2 million of higher ancillary profit and $2 million of higher exchange profit. 42 Table of Contents Rental Revenues, Expenses and Profit Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Rental revenues $ 150 $ 143 $ 7 6% $ 309 $ 290 $ 19 7% Rental expenses (129) (113) (16) (13%) (255) (223) (32) (14%) Rental profit $ 21 $ 30 $ (9) (23%) $ 54 $ 67 $ (13) (17%) Rental profit margin 15.0% 20.7% (5.7 pts) 17.8% 23.0% (5.2 pts) Transient keys rented (1) 587,670 575,704 11,966 2% 1,157,140 1,118,674 38,466 3% Average transient rate $ 255 $ 245 $ 10 4% $ 269 $ 265 $ 4 1% Rental occupancy (2) 73.8% 74.4% (0.6 pts) 74.1% 73.6% 0.5 pts (1) Transient keys rented exclude plus points and preview stays. (2) Rental occupancy represents transient and preview keys divided by keys available to rent, which is total available keys excluding owner usage. Second Quarter and First Half Rental profit, excluding profit from owned hotels, declined due to lower plus points revenue attributed to the non-recurring impact of sales incentive programs put in place during COVID, which increased the amount of plus points issued and lengthened the use period in the prior year comparable period, and higher marketing, variable and other costs, partially offset by an increase in costs allocated to marketing and sales expense for occupancy used for previews. Rental profit for our owned hotels remained in-line with the prior year comparable period. Financing Revenues, Expenses and Profit Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Financing revenues $ 90 $ 85 $ 5 5% 178 168 10 6% Financing expenses (10) (8) (2) (20%) (21) (17) (4) (18%) Consumer financing interest expense (27) (27) — NM (52) (52) — NM Financing profit $ 53 $ 50 $ 3 7% $ 105 $ 99 $ 6 6% Financing profit margin 58.8% 58.0% 0.8 pts 59.0% 58.7% 0.3 pts Financing propensity 56.2% 54.5% 1.7 pts 55.2% 54.0% 1.2 pts Second Quarter and First Half • Financing revenues reflect higher interest income as a result of a higher average notes receivable balance, partially offset by a slightly lower average interest rate for the three and six months ended June 30, 2025. • The increase in financing expense is primarily attributed to higher credit card fees and other operating costs. We expect our average interest rate to continue to increase as the current interest rate environment for new securitization transactions exceeds the average interest rate on our existing securitized debt. We do not adjust interest rates on consumer financing offerings at the same pace as, or in lock-step with, broader market interest rates; as a result, we expect our financing profit margin to continue to decrease in 2025, as we repay existing securitization transactions with proceeds from newer securitization transactions with lower interest rates. Litigation Charges Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Litigation charges $ 3 $ 10 $ (7) NM $ 7 $ 13 $ (6) NM Second Quarter and First Half Litigation charges during the second quarters of 2025 and 2024, as well as the first halves of 2025 and 2024, relate primarily to certain resorts in Europe. 43 Table of Contents Gains and Other Income Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Gains and other income, net $ 1 $ 1 $ — NM $ 10 $ 1 $ 9 NM First Half During the first half of 2025, we recorded $7 million related to the receipt of service interruption insurance proceeds from the Maui wildfires, a $2 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, and $1 million of other gains. Exchange & Third-Party Management Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUES Management and exchange $ 41 $ 45 $ 87 $ 97 Rental 10 10 20 21 Cost reimbursements 2 3 4 5 TOTAL REVENUES 53 58 111 123 EXPENSES Management and exchange 29 31 58 62 Depreciation and amortization 7 7 14 14 Restructuring — — 2 — Impairment — 2 — 2 Cost reimbursements 2 3 4 5 TOTAL EXPENSES 38 43 78 83 Other 1 — 1 — SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 16 $ 15 $ 34 $ 40 Management and Exchange Profit Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Management and exchange revenue $ 41 $ 45 $ (4) (11%) $ 87 $ 97 $ (10) (10%) Management and exchange expense (29) (31) 2 9% (58) (62) 4 7% Management and exchange profit $ 12 $ 14 $ (2) (15%) $ 29 $ 35 $ (6) (17%) Management and exchange profit margin 29.2% 30.6% (1.4 pts) 33.4% 35.9% (2.5 pts) Second Quarter • Interval International management and exchange revenues declined $1 million, or 4%, primarily due to 8% lower exchange transaction volume, partially offset by a 5% increase in average exchange fees. • Management and exchange revenue reflects a $2 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent, lower occupancy, and a lower average daily rate in the Hawaii market. • Management and exchange revenue declined $1 million, attributed to the sale of an immaterial subsidiary in the second quarter of 2024. • The remaining decrease in management and exchange profit was primarily attributable to lower wages and benefits and other costs. 44 Table of Contents First Half • Interval International management and exchange revenues declined $4 million, or 5%, primarily due to 10% lower exchange transaction volume, partially offset by a 4% increase in average exchange fees. • Management and exchange revenue reflects a $4 million decline in Aqua-Aston management revenues resulting from fewer available nights for rent, lower occupancy, and a lower average daily rate in the Hawaii market. • Management and exchange revenue declined $2 million, attributed to the sale of an immaterial subsidiary in the second quarter of 2024. • The remaining decrease in management and exchange profit was primarily attributable to lower wages and benefits and other costs. Restructuring Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Restructuring $ — $ — $ — NM $ 2 $ — $ 2 NM Second Quarter and First Half During the first half of 2025, we recorded a $2 million impairment related to an operating lease and related assets. Corporate and Other Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and Other includes the revenues and expenses from Consolidated Property Owners’ Associations. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUES Resort management and other services $ 13 $ 13 $ 27 $ 24 Cost reimbursements (8) (9) (15) (20) TOTAL REVENUES 5 4 12 4 EXPENSES Resort management and other services 16 15 32 29 Rental (4) (2) (7) (5) General and administrative 61 54 122 117 Depreciation and amortization 3 3 8 9 Litigation charges 2 — 5 — Restructuring 33 1 43 3 Cost reimbursements (8) (9) (15) (20) TOTAL EXPENSES 103 62 188 133 Gains (losses) and other income (expense), net 23 (8) 27 (8) Interest expense, net (42) (43) (82) (83) Transaction and integration costs — (3) — (18) Other (1) 1 (1) 1 FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (118) (111) (232) (237) Provision for income taxes (25) (10) (70) (45) Net income attributable to noncontrolling interests — (1) (1) — FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (143) $ (122) $ (303) $ (282) 45 Table of Contents General and Administrative Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change General and administrative $ 61 $ 54 $ 7 12% $ 122 $ 117 $ 5 4% Second Quarter General and administrative expenses for the second quarter of 2025 increased primarily due to $14 million of higher compensation and benefits expense, driven by lower variable compensation expense due to the sales reserve adjustment in the prior year comparable period, partially offset by $4 million of lower insurance expense and $3 million of lower other costs. First Half General and administrative expenses for the first half of 2025 increased primarily due to $14 million of higher compensation and benefits expense, driven by lower variable compensation expense due to the sales reserve adjustment in the prior year comparable period, partially offset by $3 million of lower insurance expense, $3 million of lower consulting and $3 million of lower other costs. Litigation Charges Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Litigation charges $ 2 $ — $ 2 NM $ 5 $ — $ 5 NM Second Quarter and First Half Litigation charges during the second quarter and first half of 2025 relate to a dispute with a service provider. Restructuring Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Restructuring $ 33 $ 1 $ 32 NM $ 43 $ 3 $ 40 NM Second Quarter and First Half 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; increase sales efficiency and inventory optimization; and capture significant savings from initiatives related to procurement and corporate overhead. See “Strategic Business Operations” section above for further information. During the second quarter and first half of 2025, we incurred $32 million and $43 million, respectively, of restructuring charges associated with these efforts, the majority of which related to advisory services. See Footnote 17 “Restructuring” to our Financial Statements for further information related to our restructuring charges. During the second quarter and first half of 2024, we incurred $1 million and $3 million, respectively, of restructuring charges associated with the elimination of certain positions as a result of the realignment of our management structure and headcount reductions in 2023. 46 Table of Contents Gains (Losses) and Other Income (Expense) Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Gains (losses) and other income (expense), net $ 23 $ (8) $ 31 NM $ 27 $ (8) $ 35 NM Second Quarter In the second quarter of 2025, we recorded $18 million of foreign currency translation gains, $3 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $1 million of insurance proceeds, and $1 million of other gains. In the second quarter of 2024, we recorded $4 million of foreign currency translation losses and $4 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters. First Half In the first half of 2025, we recorded $21 million of foreign currency translation gains, $3 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $2 million of other gains, and $1 million of insurance proceeds. In the first half of 2024, we recorded $6 million of foreign currency translation losses and $2 million net of tax related adjustments to the receivable from Marriott International for indemnified tax matters. Income Tax Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Change June 30, 2025 June 30, 2024 Change Provision for income taxes $ (25) $ (10) $ (15) NM $ (70) $ (45) $ (25) (53%) Second Quarter Our effective tax rate was 26.8% and 22.0% for the three 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. First Half Our effective tax rate was 35.5% and 35.2% for the six months ended June 30, 2025 and June 30, 2024, respectively. 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 $22 million decrease as a result of the expiration of statutes of limitation on certain unrecognized tax benefits. 47 Table of Contents Consolidated Property Owners’ Associations The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance. Three Months Ended Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 REVENUES Resort management and other services $ 13 $ 13 $ 27 $ 24 Cost reimbursements (8) (9) (15) (20) TOTAL REVENUES 5 4 12 4 EXPENSES Resort management and other services 16 15 32 29 Rental (4) (2) (7) (5) Cost reimbursements (8) (9) (15) (20) TOTAL EXPENSES 4 4 10 4 Interest expense, net — 1 — 1 FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 1 2 1 Provision for income taxes (1) (1) (1) (1) Net income attributable to noncontrolling interests — (1) (1) — FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ — $ (1) $ — $ — Liquidity and Capital Resources Typically, our capital needs are supported by cash on hand, cash generated from operations, our ability to access funds under the Warehouse Credit Facility and the Revolving Corporate Credit Facility, our ability to raise capital through securitizations in the ABS market, and, to the extent necessary, our ability to issue new debt and refinance existing debt. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to stockholders. We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs. At June 30, 2025, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 3.9, above our targeted range of 2.5 to 3.0, and we remain focused on reducing this ratio over time. We have no material principal payment obligations for the remainder of 2025. See Footnote 12 “Debt” to our Financial Statements for further information related to maturities of our debt. Sources of Liquidity Cash from Operations Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) cash generated from our rental and resort management and other services operations. Vacation Ownership Notes Receivable Securitizations We periodically securitize, without recourse through bankruptcy remote special purpose entities, the majority of the notes receivable originated in connection with the sale of vacation ownership products to institutional investors in the ABS term securitization market. These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes. In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are collateralized by a single pool of transferred vacation ownership notes receivable. In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued. 48 Table of Contents Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default. Loan defaults under securitizations offset a portion of the excess spread we receive, on a monthly basis. Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. At the recent level of defaults, there is no impact to cash whether we repurchase defaulted vacation ownership notes receivable from a securitization VIE and pursue foreclosure or foreclose on behalf of a securitization VIE. During 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 required parameters. As of June 30, 2025, we had 11 term securitization transactions outstanding. Since 2000, we have issued approximately $10.3 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions. On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize, on a revolving non-recourse basis, eligible consumer loans derived from certain vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur twice a year. During the second quarter of 2025, we amended certain agreements associated with our Warehouse Credit Facility, which, among other things, extended the revolving period from June 11, 2026 to June 11, 2027. At June 30, 2025, we had $158 million of borrowings outstanding on our Warehouse Credit Facility. See Footnote 11 “Securitized Debt’ to our Financial Statement for further information on our Warehouse Amendment. As of June 30, 2025, $55 million of gross vacation ownership notes receivable were eligible for securitization. Corporate Credit Facility During the first quarter of 2025, we entered into an amendment to the Corporate Credit Facility, which, among other things, increased the borrowing capacity on our Revolving Corporate Credit Facility from $750 million to $800 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions. The Amendment also extended the termination date from March 31, 2027 to March 24, 2030, reduced certain fees and interest costs, and increased the letter of credit sub-facility of the Revolving Corporate Credit Facility from $75 million to $150 million. At June 30, 2025, $235 million of borrowings and $26 million of letters of credit were outstanding under our Revolving Corporate Credit Facility. Additionally, the Amendment provided for a new $450 million senior secured Delayed-Draw Term Loan with a maturity date of December 31, 2027. The Delayed-Draw Term Loan is only available to finance the redemption or repurchase of our 2026 Convertible Notes, which are due January 15, 2026. As of June 30, 2025, there were no outstanding borrowings on the Delayed-Draw Term Loan. See Footnote 12 “Debt” to our Financial Statements for further information. Uses of Cash We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners’ associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, timing and amount of voluntary repurchases of defaulted vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisitions and development. 49 Table of Contents Seasonality Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments. Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year. Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we generally have variable compensation-related cash outflows associated with payment of annual bonuses. Timing of Estimated Tax Payments As part of the federal tax relief provided by the Internal Revenue Service for businesses in areas of Florida affected by hurricanes during the third and fourth quarters of 2024, we were permitted to defer certain federal income tax payments without incurring interest or penalties. As a result, we deferred $38 million of estimated tax payments from the third and fourth quarters of 2024 to the second quarter of 2025. Similarly, in the prior year, under comparable relief measures related to hurricanes in 2023, we deferred $32 million of estimated tax payments from the third and fourth quarters of 2023 to the first quarter of 2024. Operations In addition to net income and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities: Inventory Spending (In Excess of) Less Than Cost of Sales Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Inventory spending $ (60) $ (63) Purchase and development of property for future transfer to inventory (49) — Inventory costs 59 67 Inventory spending (in excess of) less than cost of sales $ (50) $ 4 Although we have adequate inventory on hand, we intend to continue selectively pursuing growth opportunities by targeting high-quality inventory that allows us to add desirable new destinations to our systems with new on-site sales locations to support anticipated future contract sales growth. Where possible, we will structure transactions to limit our up-front capital investment and allow us to purchase finished inventory closer to the time it is needed for sale. These capital efficient vacation ownership transaction structures may consist of the development of new inventory, or the conversion of previously built units, by third parties. In addition, we may develop inventory on our balance sheet in key markets where we believe the opportunities will generate acceptable risk adjusted returns. Through our existing VOI repurchase program, we proactively acquire previously sold VOIs from owners’ associations and individual owners at lower costs than would be required to develop new inventory. Among other reasons for repurchasing inventory, we expect these repurchases will help stabilize the future cost of our vacation ownership products. We expect inventory spending to continue to exceed cost of sales for the remainder of 2025. Vacation Ownership Notes Receivable Collections Less Than Originations Six Months Ended ($ in millions) June 30, 2025 June 30, 2024 Vacation ownership notes receivable collections — non-securitized $ 80 $ 67 Vacation ownership notes receivable collections — securitized 261 244 Vacation ownership notes receivable originations (488) (446) Vacation ownership notes receivable collections less than originations $ (147) $ (135) Vacation ownership notes receivable collections were less than originations in the first half of 2025 and 2024 due to the growth of our vacation ownership notes receivable portfolio. 50 Table of Contents Repurchase of Common Stock 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 As of December 31, 2024 25,790,550 $ 2,461 $ 95.40 For the first half of 2025 496,484 36 $ 73.10 As of June 30, 2025 26,287,034 $ 2,497 $ 94.98 See Footnote 13 “Stockholders' Equity” to our Financial Statements for further information related to our current share repurchase program. Payment of Dividends to Common Stockholders We distributed cash dividends to holders of common stock during the first half of 2025 as follows: Declaration Date Stockholder Record Date Distribution Date Dividend per Share December 6, 2024 December 19, 2024 January 3, 2025 $0.79 February 20, 2025 March 5, 2025 March 19, 2025 $0.79 May 12, 2025 May 23, 2025 June 6, 2025 $0.79 We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all. Material Cash Requirements The following table summarizes our future material cash requirements from known contractual or other obligations as of June 30, 2025: Payments Due by Period ($ in millions) Total Remainder of 2025 2026 2027 2028 2029 Thereafter Debt (1)(2) $ 3,469 $ 59 $ 688 $ 685 $ 426 $ 564 $ 1,047 Securitized debt (1)(3) 2,859 146 289 285 397 249 1,493 Purchase obligations (4) 490 139 160 162 16 2 11 Operating lease obligations (5) 90 11 22 15 11 9 22 Finance lease obligations (5) 529 10 17 15 13 13 461 Other long-term obligations 17 14 1 1 1 — — $ 7,454 $ 379 $ 1,177 $ 1,163 $ 864 $ 837 $ 3,034 (1) Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs. (2) Excludes the Delayed-Draw Term Loan as there were no outstanding borrowings at June 30, 2025. See Footnote 12 “Debt” to our Financial Statements for further information. (3) Payments based on estimated timing of cash flow associated with securitized notes receivable. (4) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts reflected herein represent expected funding requirements under such contracts and primarily relate to future purchases of property and vacation ownership units and information technology assets (hardware and software). Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above. (5) Includes interest. 51 Table of Contents In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the owners’ associations, these obligations have minimal impact on our net income and cash flow. These purchase commitments are excluded from the table above. Supplemental Guarantor Information The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. (“MORI”), and certain other subsidiaries whose voting securities are wholly owned directly or indirectly by MORI (such subsidiaries collectively, the “Senior Notes Guarantors”). These guarantees are full and unconditional and joint and several. The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The following tables present consolidating financial information as of June 30, 2025 and December 31, 2024, and for the six months ended June 30, 2025 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVWC, and MVW on a consolidated basis. Condensed Consolidating Statement of Income Six Months Ended June 30, 2025 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI Revenues $ — $ 540 $ 1,379 $ 549 $ (22) $ 2,446 Expenses (20) (647) (1,211) (394) 22 (2,250) Benefit from (provision for) income taxes 6 34 (53) (57) — (70) Equity in net income of subsidiaries 139 242 — — (381) — Net income 125 169 115 98 (381) 126 Net income attributable to noncontrolling interests — — — (1) — (1) Net income attributable to common stockholders $ 125 $ 169 $ 115 $ 97 $ (381) $ 125 52 Table of Contents Condensed Consolidating Balance Sheet As of June 30, 2025 As of December 31, 2024 Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated ($ in millions) MVWC MORI MVWC MORI Cash and cash equivalents $ 1 $ 9 $ 67 $ 128 $ — $ 205 $ 1 $ 14 $ 59 $ 123 $ — $ 197 Restricted cash — 22 94 147 — 263 — 25 134 172 — 331 Accounts and contracts receivable, net 18 200 75 99 (14) 378 18 166 118 88 (3) 387 Vacation ownership notes receivable, net — 155 166 2,164 — 2,485 — 177 161 2,102 — 2,440 Inventory — 307 327 110 — 744 — 282 345 108 — 735 Property and equipment, net — 332 649 303 — 1,284 — 280 652 238 — 1,170 Goodwill — — 3,117 — — 3,117 — — 3,117 — — 3,117 Intangibles, net — — 734 28 — 762 — — 763 27 — 790 Investments in subsidiaries 3,465 3,761 — — (7,226) — 3,466 3,743 — — (7,209) — Other 162 161 277 152 (103) 649 148 199 261 105 (72) 641 Total assets $ 3,646 $ 4,947 $ 5,506 $ 3,131 $ (7,343) $ 9,887 $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808 Accounts payable $ 18 $ 50 $ 83 $ 74 $ — $ 225 $ 51 $ 52 $ 164 $ 76 $ — $ 343 Advance deposits — 71 75 18 — 164 — 68 79 15 — 162 Accrued liabilities 3 115 141 114 (10) 363 2 103 149 127 3 384 Deferred revenue — 10 190 216 (19) 397 — 15 157 190 (8) 354 Payroll and benefits liability — 78 68 30 — 176 — 103 86 31 — 220 Deferred compensation liability — 149 48 6 — 203 — 143 48 4 — 195 Securitized debt, net — — — 2,216 (28) 2,188 — — — 2,163 (27) 2,136 Debt, net 1,141 1,877 179 — — 3,197 1,138 1,771 179 1 — 3,089 Other — 2 112 18 — 132 — 2 118 19 — 139 Deferred taxes — 148 227 43 (60) 358 — 121 236 31 (43) 345 MVW stockholders' equity 2,484 2,447 4,383 396 (7,226) 2,484 2,442 2,508 4,394 307 (7,209) 2,442 Noncontrolling interests — — — — — — — — — (1) — (1) Total liabilities and equity $ 3,646 $ 4,947 $ 5,506 $ 3,131 $ (7,343) $ 9,887 $ 3,633 $ 4,886 $ 5,610 $ 2,963 $ (7,284) $ 9,808 53 Table of Contents Recent Accounting Pronouncements See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards. Critical Accounting Policies and Estimates Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our 2024 Annual Report. Since the date of our 2024 Annual Report, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.