Travel & Leisure Co.

We have two reportable segments: Vacation Ownership and Travel and Membership. The reportable segments presented are those for which discrete financial information is available and which are utilized on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying the reportable segments, we also consider the nature of services provided by our operating segments. Management uses Adjusted EBITDA to assess the performance of the reportable segments. During the third quarter of 2024, we updated our definition of Adjusted EBITDA to exclude certain non-recurring costs incurred to integrate mergers and/or acquisitions into the existing business as these costs do not reflect recurring operating expenses. This change was made as a result of our acquisition of Accor Vacation Club. As this business is being further integrated into our operations, we have begun incurring certain discrete non-recurring costs directly attributable to integration activities and believe excluding these types of costs would assist investors in understanding our ongoing performance when considered with GAAP measures. As a result of this change, we now define Adjusted EBITDA as net income from continuing operations before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes. Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction and integration costs associated with mergers, acquisitions, and divestitures, asset impairments/recoveries, gains and losses on sale/disposition of business, and items that meet the conditions of unusual and/or infrequent. Legacy items include the resolution of and adjustments to certain contingent assets and liabilities related to acquisitions of continuing businesses and dispositions, including the separation of Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”) and Cendant, and the sale of the vacation rentals businesses. We believe that Adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, we believe gives a more complete understanding of our operating performance. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

OPERATING STATISTICS

The table below presents our operating statistics for the three months ended September 30, 2024 and 2023. These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses. Refer to the Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023 section for a discussion on how these operating statistics affected our business for the periods presented.

(a)Includes the impact of acquisitions from the acquisition dates forward.

(b)Represents total sales of VOIs, including sales under the Fee-for-Service program before the effect of loan loss provisions. We believe that Gross VOI sales provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the sales volume of this business during a given reporting period.

(c)Represents the number of tours taken by guests in our efforts to sell VOIs.

(d)VPG is calculated by dividing Gross VOI sales (excluding telesales and virtual sales) by the number of tours. We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel. We believe that VPG provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the efficiency of this business’ tour selling efforts during a given reporting period.

(e)Represents the number of exchanges and travel bookings recognized as revenue during the period, net of cancellations.

(f)Represents transaction revenue divided by transactions.

(g)Represents the average number of paid members in our vacation exchange programs who are considered to be in good standing, during a given reporting period.

(h)Percentage change may not calculate due to rounding.

(i)The following table provides a reconciliation of Vacation ownership interest sales, net to Gross VOI sales for the three months ended September 30, 2024 and 2023 (in millions):

(1)Represents total sales of VOIs through our Fee-for-Service programs where inventory is sold through our sales and marketing channels for a commission. The commission revenues recognized on these sales were $16 million and $40 million for the three months ended September 30, 2024 and 2023. These commissions are reported within Service and membership fees on the Condensed Consolidated Statements of Income.

THREE MONTHS ENDED SEPTEMBER 30, 2024 VS. THREE MONTHS ENDED SEPTEMBER 30, 2023

Our consolidated results are as follows (in millions):

Net revenues increased $7 million for the three months ended September 30, 2024, compared with the same period last year. This increase, excluding immaterial foreign currency impacts, was primarily the result of:

•$12 million of increased revenues at our Vacation Ownership segment primarily due to an increase in net VOI sales as a result of increased tours, partially offset by a decrease in VPG due to a higher new owner transaction mix which generally produce lower VPGs; higher property management revenues resulting from higher property management fees; and increased consumer financing revenues primarily due to a higher average portfolio balance; partially offset by lower commission revenues due to the lower volume of VOI Fee-for-Service sales as a result of fewer commitments; and

•$5 million of decreased revenues at our Travel and Membership segment primarily due to a decrease in transaction revenue as a result of lower transactions, partially offset by higher revenue per transaction resulting from price increases.

Expenses increased $25 million for the three months ended September 30, 2024, compared with the same period last year. This increase in expenses, excluding immaterial foreign currency impacts, was primarily the result of:

•$14 million increase in sales and commission expenses at the Vacation Ownership segment due to higher gross VOI sales, net of Fee-for-Service sales;

•$12 million increase in restructuring costs driven by the 2024 restructuring plan;

•$11 million increase in marketing costs in support of increased tour flow and new owner mix;

•$9 million increase in property management expenses due to higher resort operating costs and expenses;

•$6 million increase in consumer financing interest expense primarily due to an increased weighted average coupon rate and higher average non-recourse debt balance; and a

•$4 million increase in general and administrative expenses driven by higher variable compensation and other employee related costs.

These increases were partially offset by a $16 million decrease in sales and commission expenses for VOI Fee-for-Service sales due to lower volume and a $16 million decrease in cost of VOIs sold primarily due to product mix, partially offset by increased sales volume.

Interest expense decreased $1 million for the three months ended September 30, 2024 compared with the same period last year primarily due to a decreased average outstanding debt balance, partially offset by higher interest rates on corporate borrowings.

Our effective tax rates were 25.3% and 25.9% during the three months ended September 30, 2024 and 2023. The effective tax rate for the three months ended September 30, 2024, was primarily impacted by a decrease in the valuation allowance on foreign tax credits. The effective tax rate for the three months ended September 30, 2023, was primarily impacted by a decrease in the valuation allowance on foreign tax credits partially offset by an increase in unrecognized tax benefits.

As a result of these items, Net income attributable to Travel + Leisure Co. shareholders decreased $13 million for the three months ended September 30, 2024 as compared to the same period last year.

Our segment results are as follows (in millions):

Net revenues increased $13 million and Adjusted EBITDA decreased $1 million for the three months ended September 30, 2024, compared with the same period of 2023. Net revenues and Adjusted EBITDA were not materially impacted by foreign currency.

The net revenue increase, excluding immaterial foreign currency impacts, was primarily driven by:

•$47 million increase in gross VOI sales, net of Fee-for-Service sales, due to a 4.5% increase in tours, partially offset by a 3.1% decrease in VPG due to a higher new owner transaction mix (36% in the current period compared to 35% in the same period of 2023) which generally produce lower VPGs;

•$10 million increase in property management revenues primarily due to higher management fees; and a

•$7 million increase in consumer financing revenues primarily due to a higher average portfolio balance.

These increases were partially offset by a $26 million increase in our provision for loan losses primarily due to a higher provision rate associated with increased defaults and increased gross VOI sales, net of Fee-for-Service sales; and a $24 million decrease in commission revenues due to the lower volume of VOI Fee-for-Service sales as a result of fewer commitments.

In addition to the net revenue change explained above, Adjusted EBITDA was further impacted by a:

•$14 million increase in marketing costs in support of increased tour flow and new owner mix;

•$14 million increase in sales and commission expenses due to higher gross VOI sales, net of Fee-for-Service sales;

•$9 million increase in property management expenses due to higher resort operating costs and expenses;

•$6 million increase in consumer financing interest expense primarily due to an increased weighted average coupon rate and higher average non-recourse debt balance; and a

•$4 million increase in variable compensation.

These increases were partially offset by:

•$16 million decrease in sales and commission expense for VOI Fee-for-Service sales due to lower volume; and a

•$16 million decrease in cost of VOIs sold primarily due to product mix, partially offset by increased sales volume.

Net revenues decreased $6 million and Adjusted EBITDA was flat during the three months ended September 30, 2024, compared with the same period of 2023. The net revenues decrease was unfavorably impacted by foreign currency of $1 million (0.6%) and Adjusted EBITDA was not materially impacted by foreign currency.

The decrease in net revenues, excluding foreign currency impacts, was primarily driven by a $5 million decrease in transaction revenue due to lower transactions and a $1 million decrease in subscription revenue, partially offset by higher revenue per transaction resulting from price increases. Subscription revenue and transactions were impacted by an increasing mix of exchange members with a club affiliation who have a lower transaction propensity.

In addition to the net revenue decrease explained above, Adjusted EBITDA was further impacted by:

•$3 million decrease in marketing costs; and a

•$1 million decrease in other operating costs.

Corporate and other

For the three months ended September 30, 2024 compared to the same period of 2023, Corporate and other net revenue was flat and Adjusted EBITDA decreased $5 million. The adjusted EBITDA decrease was due to a $4 million increase in general and administrative expenses driven by higher variable compensation and other employee related costs.

NINE MONTHS ENDED SEPTEMBER 30, 2024 VS. NINE MONTHS ENDED SEPTEMBER 30, 2023

Our consolidated results are as follows (in millions):

Net revenues increased $79 million for the nine months ended September 30, 2024 compared with the same period last year. This increase was unfavorably impacted by foreign currency of $2 million (0.1%). Excluding the impacts of foreign currency, the increase in net revenues was primarily the result of:

•$94 million of increased revenues at our Vacation Ownership segment primarily due to an increase in net VOI sales as a result of increased tours, partially offset by a decrease in VPG due to a higher new owner transaction mix which generally produce lower VPGs; higher property management revenues resulting from higher property management fees and reimbursable revenues; and an increase in consumer financing revenues primarily due to a higher average portfolio balance; partially offset by a decrease in commission revenues due to the lower volume of VOI Fee-for-Service sales as a result of fewer commitments. This increase in revenues was partially offset by;

•$14 million of decreased revenues at our Travel and Membership segment primarily due to a decrease in transaction revenue due to lower transactions, partially offset by higher revenue per transaction resulting from price increases.

Expenses increased $83 million for the nine months ended September 30, 2024 compared with the same period last year and was favorably impacted by foreign currency of $2 million (0.1%). Excluding the impacts of foreign currency, the increase in expenses was primarily due to:

•$42 million increase in sales and commission expenses at the Vacation Ownership segment due to higher gross VOI sales, net of Fee-for-Service sales;

•$38 million increase in marketing costs in support of increased tour flow and new owner mix;

•$24 million increase in property management expenses due to higher reimbursable resort operating costs and expenses;

•$20 million increase in consumer financing interest expense primarily due to a higher average non-recourse debt balance and increased weighted average coupon rate; and a

•$4 million increase in general and administrative expenses driven by variable compensation and other employee related costs.

These increases were partially offset by a:

•$28 million decrease in sales and commission expenses for VOI Fee-for-Service sales due to lower volume; and a

•$24 million decrease in the cost of VOIs sold primarily due to product mix, partially offset by increased sales volume.

We recognized a loss on sale of business of $2 million during the nine months ended September 30, 2023 resulting from the sale of the Love Home Swap business.

Interest expense increased $6 million for the nine months ended September 30, 2024 compared with the same period last year, primarily due to higher interest rates on corporate borrowings.

Other income, net of other expense increased $3 million for the nine months ended September 30, 2024, compared with the same period last year, primarily due to dividend income during the current period.

Interest income increased $3 million for the nine months ended September 30, 2024 compared with the same period last year primarily due to higher interest rates.

Our effective tax rates were 26.9% for both the nine months ended September 30, 2024 and 2023. The effective tax rate for the nine months ended September 30, 2024 was primarily impacted by the portion of stock-based compensation expense that is not deductible for tax purposes, an increase in taxes on foreign income, and an increase in unrecognized tax benefits, partially offset by a decrease in the valuation allowance on foreign tax credits. The effective tax rate for the nine months ended September 30, 2023, was primarily impacted by the portion of stock-based compensation expense that is not deductible for tax purposes.

Gain on disposal of discontinued business, net of income taxes was $32 million and $5 million during the nine months ended September 30, 2024 and 2023, primarily resulting from the release of expired guarantees related to the sale of the European vacation rentals business.

As a result of these items, Net income attributable to Travel + Leisure Co. shareholders increased $25 million for the nine months ended September 30, 2024 as compared to the same period last year.

Our segment results are as follows (in millions):

(b)Represents the loss on sale of the Love Home Swap business.

Net revenues increased $93 million and Adjusted EBITDA increased $22 million during the nine months ended September 30, 2024 compared with the same period of 2023. Net revenues and Adjusted EBITDA were not materially impacted by foreign currency.

The net revenue increase excluding the impact of foreign currency was primarily driven by:

•$153 million increase in gross VOI sales, net of Fee-for-Service sales, due to a 10.1% increase in tours, partially offset by a 3.8% decrease in VPG due to a higher new owner transaction mix (36% in the current year compared to 33% in the same period of 2023) which generally produce lower VPGs;

•$27 million increase in property management revenues primarily due to higher management fees and reimbursable revenues; and a

•$22 million increase in consumer financing revenues primarily due to a higher average portfolio balance.

These increases were partially offset by a $59 million increase in our provision for loan losses primarily due to a higher provision rate and higher gross VOI sales, net of Fee-for-Service sales, and a $47 million decrease in commission revenues due to the lower volume of VOI Fee-for-Service sales as a result of fewer commitments.

In addition to the net revenue change explained above, Adjusted EBITDA was further impacted by a:

•$49 million increase in marketing costs in support of increased tour flow and new owner mix;

•$42 million increase in sales and commission expenses due to higher gross VOI sales, net of Fee-for-Service sales;

•$24 million increase in property management expenses due to higher reimbursable resort operating costs and expenses; and a

•$20 million increase in consumer financing interest expense primarily due to a higher average non-recourse debt balance and increased weighted average coupon rate.

These increases were partially offset by:

•$28 million decrease in sales and commission expense for VOI Fee-for-Service sales due to lower volume;

•$24 million decrease in the cost of VOIs sold primarily due to product mix, partially offset by increased sales volume; and a

•$7 million decrease in general and administrative expenses due to decreased professional fees; partially offset by a $4 million increase in variable compensation.

Net revenues decreased $15 million and Adjusted EBITDA increased $3 million during the nine months ended September 30, 2024 compared with the same period of 2023. The net revenues decrease was unfavorably impacted by foreign currency of $1 million (0.2%) and Adjusted EBITDA increase was not materially impacted by foreign currency.

The decrease in net revenues was primarily driven by a $13 million decrease in transaction revenue due to lower transactions, partially offset by higher revenue per transaction resulting from price increases; and a $2 million decrease in subscription revenues. Transactions were impacted by an increasing mix of exchange members with a club affiliation who have a lower transaction propensity.

In addition to the revenue change explained above, Adjusted EBITDA was further impacted by:

•$11 million decrease in marketing costs; and

•$8 million of cost savings primarily driven by the strategic restructuring of the segment and rationalizing operations, including $4 million of general and administrative savings and $4 million decrease in other operating costs; partially offset by a

•$2 million increase in cost of sales due to a heavier weighting of rentals.

Corporate and other

For the nine months ended September 30, 2024, Corporate and other net revenue increased $1 million and Adjusted EBITDA decreased $15 million compared to 2023. These amounts were not materially impacted by foreign currency.

Corporate and other net revenue was impacted by a $3 million decrease in eliminated transactions between segments, partially offset by a $2 million decrease related to fees charged for managing an insurance program on behalf of homeowners associations.

In addition to the impacts described above, Adjusted EBITDA was further impacted by $12 million of higher general and administrative expenses driven by higher variable compensation and other employee related costs.

RESTRUCTURING PLANS

2024 Restructuring Plan

During the three and nine months ended September 30, 2024, we incurred $14 million of restructuring charges. These actions were primarily focused on enhancing organizational efficiency and rationalizing operations. These charges included personnel-related costs resulting from a reduction of approximately 300 employees and other expenses. The 2024 restructuring plan charges consisted of (i) $9 million of personnel-related costs at the Travel and Membership segment, (ii) $3 million of personnel-related costs at our corporate operations, and (iii) $2 million of personnel-related costs at the Vacation Ownership segment. All material initiative and related expenses are expected to be incurred by the end of 2024. We reduced our 2024 restructuring liability by $2 million of cash payments during the nine months ended September 30, 2024. The remaining 2024 restructuring liability of $12 million is expected to be paid by the end of 2025.

2023 Restructuring Plan

We incurred $26 million of charges during 2023 associated with the 2023 restructuring plan. This action was primarily focused on enhancing organizational efficiency and rationalizing operations. These charges included personnel-related costs resulting from a reduction of approximately 250 employees and other expenses. As part of this restructuring plan, we also decided to decrease our facilities by closing our owned office in Indianapolis, Indiana, and exiting other leased locations. The charges consisted of (i) $11 million of personnel-related costs at the Travel and Membership segment, (ii) $9 million of personnel-related costs and $1 million of lease costs at the Vacation Ownership segment, and (iii) $5 million of personnel-related costs at our corporate operations. These restructuring charges included $2 million of accelerated stock-based compensation expense. As of December 31, 2023, this restructuring liability was $15 million. We reduced our 2023 restructuring liability by $14 million of cash payments during the nine months ended September 30, 2024. The remaining 2023 restructuring liability of $1 million is expected to be paid by the end of 2025.

We also have plans implemented prior to 2023, for which we made $2 million of cash payments during the nine months ended September 30, 2024. See Note 20—Restructuringto the Condensed Consolidated Financial Statements for additional details of these restructuring activities.

FINANCIAL CONDITION

Total assets decreased by $40 million from December 31, 2023 to September 30, 2024, primarily due to:

•$88 million decrease in Cash and cash equivalents driven by repayment of the $300 million 5.65% notes which were due in April of 2024, $162 million of share repurchases, $108 million of dividend payments, $58 million of property and equipment additions, $44 million of net payments related to the acquisition of Accor Vacation Club, and $43 million of net repayments on non-recourse debt, partially offset by $366 million of net cash provided by operating activities and $275 million of net borrowings on the revolving credit facility;

•$61 million decrease in Property and equipment, net driven by $56 million of net transfers of completed VOI inventory to Inventory;

•$30 million decrease in Other assets driven by a $24 million decrease in income tax receivables;

•$27 million decrease in Trade receivables, net, due to net collections of $35 million of property management fees and developer receivables, partially offset by $8 million of receivables obtained through the Accor Vacation Club acquisition; and

•$21 million decrease in Restricted cash due to a $27 million decrease in escrow deposits and a $10 million net decrease related to securitization activity, partially offset by $15 million of net premiums received for the captive insurance program we manage on behalf of homeowners associations.

These decreases were partially offset by:

•$85 million increase in Vacation ownership contract receivables, net driven by $1.14 billion of VOI originations, partially offset by $734 million of principal collections and net provision for loan losses of $316 million;

•$73 million increase in Inventory driven by $98 million of inventory additions, including $9 million from the acquisition of Accor Vacation Club, $56 million of net transfers of completed VOI inventory from property and equipment, and an offset of $82 million for the sale of VOI inventory; and a

•$16 million increase in Other intangibles, net driven by $23 million associated with acquisition of Accor Vacation Club, partially offset by $8 million of amortization.

Total liabilities decreased by $96 million from December 31, 2023 to September 30, 2024, primarily due to:

•$42 million decrease in Non-recourse vacation ownership debt, primarily due to net repayments;

•$28 million decrease in Accrued expenses and other liabilities due to the release of a $36 million accrual related to the expiration of certain guarantees associated with the European vacation rentals business and a decrease of $11 million of income taxes payable, partially offset by $15 million of net premiums received for the captive insurance program we manage on behalf of homeowners associations;

•$27 million decrease in Debt due to repayment of the $300 million 5.65% notes which were due in April of 2024, partially offset by $275 million of net borrowings on the revolving credit facility; and an

•$18 million decrease in Accounts payable due to timing of invoice payments.

These decreases were partially offset by an $11 million increase in Deferred income taxes primarily driven by installment sales.

Total deficit decreased $56 million from December 31, 2023 to September 30, 2024, primarily due to $292 million of Net income attributable to Travel + Leisure Co. shareholders, a $30 million increase in Additional paid-in-capital primarily due to stock-based compensation, and $9 million of favorable currency translation adjustments driven by fluctuations in exchange rates, primarily the British pound sterling and the Australian dollar, partially offset by $165 million of share repurchases and $109 million of dividends.

LIQUIDITY AND CAPITAL RESOURCES

We believe that we have sufficient sources of liquidity to meet our expected ongoing short-term and long-term cash needs, including capital expenditures, operational and/or strategic opportunities, and expenditures for human capital, intellectual property, contractual obligations, off-balance sheet arrangements, and other such requirements. Our net cash from operations and cash and cash equivalents are key sources of liquidity along with our revolving credit facility, bank conduit facilities, and continued access to debt markets. We believe these anticipated sources of liquidity are sufficient to meet our expected ongoing short-term and long-term cash needs, including the repayment of our 2018 Term Loan B facility due in May 2025. Our discussion below highlights these sources of liquidity and how they have been utilized to support our cash needs.

Cash and Cash Equivalents

As of September 30, 2024, we had $194 million of Cash and cash equivalents, which includes highly-liquid investments with an original maturity of three months or less.

$1.0 Billion Revolving Credit Facility

We generally utilize our revolving credit facility to finance our short-term to medium-term business operations, as needed; and on occasion to make certain repayments of debt. The facility expires in October 2026 and had $724 million of available capacity as of September 30, 2024.

The revolving credit facility and term loan B facilities are subject to covenants including the maintenance of specific financial ratios as defined in the credit agreement. The financial ratio covenants consist of a minimum interest coverage ratio of no less than 2.50 to 1.0 as of the measurement date and a maximum first lien leverage ratio not to exceed 4.25 to 1.0 as of the measurement date. The interest coverage ratio is calculated by dividing consolidated EBITDA (as defined in the credit agreement) by consolidated interest expense (as defined in the credit agreement), both as measured on a trailing 12-month basis preceding the measurement date. The first lien leverage ratio is calculated by dividing consolidated first lien debt (as defined in the credit agreement) as of the measurement date by consolidated EBITDA (as defined in the credit agreement) as measured on a trailing 12-month basis preceding the measurement date. Our first lien leverage ratio determines the interest rate spread on revolver borrowings and fees associated with letters of credit, which subjects them to fluctuation.

As of September 30, 2024, our interest coverage ratio was 4.23 to 1.0 and our first lien leverage ratio was 3.39 to 1.0. These ratios do not include interest expense or indebtedness related to any qualified securitization financing (as defined in the credit agreement). As of September 30, 2024, we were in compliance with the financial covenants described above.

On March 30, 2023, we entered into the fourth amendment to the credit agreement governing our revolving credit facility and term loan B facilities. Through this amendment we exercised our early opt-in election to change the benchmark rate on the revolving credit facility and the 2018 Term Loan B Facility due May 2025 from the USD London Interbank Offered Rate (“LIBOR”) to the Term Secured Overnight Financing Rate (“SOFR”). This change became effective on March 31, 2023, for both new borrowings and rollovers of then existing USD LIBOR based borrowings (except Base Rate borrowings) and eliminated our exposure to LIBOR.

Secured Notes and Term Loan B facilities

We generally utilize borrowing via secured note issuances to meet our long-term financing needs. During 2022, we entered into the third amendment to the credit agreement governing our revolving credit facility and the original 2018 Term Loan B facility which provided for the 2022 Incremental Term Loan B facility of $300 million due 2029. On December 20, 2023, we further amended the credit agreement governing our revolving credit facility and term loan B facilities (“Fifth Amendment”). The Fifth Amendment refinanced $298 million of outstanding borrowings under the 2022 Incremental Term Loan B facility, with a 75 basis point rate reduction; and included additional borrowings of $300 million. This new 2023 Incremental Term Loan B facility matures on December 14, 2029. These transactions reinforce our expectation that we will maintain adequate liquidity for the next year and beyond.

As of September 30, 2024, we had $3.25 billion of outstanding borrowings under our secured notes and term loan B facilities with maturities ranging from 2025 to 2030. During the second quarter of 2024, we used net proceeds from the 2023 Incremental Term Loan B Facility, together with available cash on hand and revolving credit facility borrowings, to repay our outstanding $300 million 5.65% secured notes that came due April 2024 and related fees and expenses.

Non-recourse Vacation Ownership Debt

Our Vacation Ownership business finances certain of its VOCRs through (i) asset-backed conduit facilities and (ii) term asset-backed securitizations, all of which are non-recourse to us with respect to principal and interest. For the securitizations, we pool qualifying VOCRs and sell them to bankruptcy-remote entities, all of which are consolidated into the accompanying Condensed Consolidated Balance Sheets. We plan to continue using these sources to finance certain VOCRs. As of September 30, 2024, these facilities have a combined capacity of $754 million ($385 million available as of September 30, 2024). Our USD bank conduit facility has a term through September 2025 and we expect to renew our AUD/NZD bank conduit facility during the fourth quarter of 2024. We believe these facilities, along with our ability to issue term asset-backed securities, provide sufficient liquidity to finance the sale of VOIs beyond the next year.

We closed on securitization financings of $350 million and $375 million during the first and third quarters of 2024, and subsequent to the end of the quarter we closed on an additional securitization financing of $325 million. During the full year of 2023, we closed on $1.09 billion of securitization financings. These transactions positively impacted our liquidity and reinforce our expectation that we will maintain adequate liquidity for the next year and beyond.

Our liquidity position may be negatively affected by unfavorable conditions in the capital markets in which we operate or if our VOCR portfolios do not meet specified portfolio credit parameters. Our liquidity, as it relates to our VOCR securitization program, could be adversely affected if we were to fail to renew or replace our conduit facilities on their expiration dates, or if a particular receivables pool were to fail to meet certain ratios, which could occur in certain instances if the default rates or other credit metrics of the underlying VOCRs deteriorate. Our ability to sell securities backed by our VOCRs depends on the continued ability and willingness of capital market participants to invest in such securities.

Each of our non-recourse securitized term notes and the bank conduit facilities contain various triggers relating to the performance of the applicable loan pools. If the VOCR pool that collateralizes one of our securitization notes fails to perform within the parameters established by the contractual triggers (such as higher default or delinquency rates), there are provisions pursuant to which the cash flows for that pool will be maintained in the securitization as extra collateral for the note holders or applied to accelerate the repayment of outstanding principal to the note holders. As of September 30, 2024, all of our securitized loan pools were in compliance with applicable contractual triggers.

We may, from time to time, depending on market conditions and other factors, repurchase our outstanding indebtedness, whether or not such indebtedness trades above or below its face amount, for cash and/or in exchange for other securities or other consideration, in each case in open market purchases and/or privately negotiated transactions.

For additional details regarding our credit facilities, term loan B facilities, and non-recourse debt see Note 10—Debt to the Condensed Consolidated Financial Statements.

Material Cash Requirements

The following table summarizes material future contractual obligations of our continuing operations as of September 30, 2024 (in millions). We plan to fund these obligations, along with our other cash requirements, with net cash from operations, cash and cash equivalents, and through the use of our revolving credit facilities, bank conduit facilities, and continued access to debt markets.

(a)Represents required principal payments on notes, term loans, and finance leases.

(b)Represents required principal payments on debt that is securitized through bankruptcy-remote special purpose entities; the creditors of which have no recourse to us for principal and interest.

(c)Includes interest on debt and non-recourse debt; estimated using the stated interest rates.

(d)Includes $530 million for marketing-related activities and $100 million for information technology activities.

(e)Excludes a $33 million liability for unrecognized tax benefits as it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities.

In addition to the amounts shown in the table above and in connection with our separation from Cendant, we entered into certain guarantee commitments with Cendant (pursuant to our assumption of certain liabilities and our obligation to indemnify Cendant, Realogy (now Anywhere Real Estate Inc.), and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with Cendant and Realogy. We also entered into certain guarantee commitments and indemnifications related to the sale of our vacation rentals businesses. For information on matters related to our former parent and subsidiaries see Note 21—Transactions with Former Parent and Former Subsidiaries to the Condensed Consolidated Financial Statements.

In addition to the key contractual obligation and separation related commitments described above, we also utilize surety bonds in our Vacation Ownership business for sales and development transactions in order to meet regulatory requirements of certain states. In the ordinary course of our business, we have assembled commitments from 13 surety providers in the amount of $2.38 billion, of which we had $541 million outstanding as of September 30, 2024. The availability, terms and conditions and pricing of bonding capacity are dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity, and our corporate credit rating. If the bonding capacity is unavailable or, alternatively, the terms and conditions and pricing of the bonding capacity are unacceptable to us, our Vacation Ownership business could be negatively impacted.

As of September 30, 2024, our secured debt is rated Ba3 with a “stable outlook” by Moody’s Investors Service, Inc., BB- with a “stable outlook” by Standard & Poor’s Rating Services, and BB+ with a “stable outlook” by Fitch Rating Agency. A security rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal by the assigning rating organization. Reference in this report to any such credit rating is intended for the limited purpose of discussing or referring to aspects of our liquidity and of our costs of funds. Any reference to a credit rating is not intended to be any guarantee or assurance of, nor should there be any undue reliance upon, any credit rating or change in credit rating, nor is any such reference intended as any inference concerning future performance, future liquidity, or any future credit rating.

CASH FLOW

The following table summarizes the changes in cash, cash equivalents, and restricted cash during the nine months ended September 30, 2024 and 2023 (in millions):

Operating Activities

Net cash provided by operating activities increased $168 million for the nine months ended September 30, 2024 compared to the prior year. This increase was primarily attributable to a decrease in cash utilized for working capital mainly due to lower prepayments, lower tax payments, and higher collections.

Investing Activities

Net cash used in investing activities from continuing operations increased $55 million during the nine months ended September 30, 2024 compared to the prior year. This increase is primarily due to $44 million paid for the acquisition of Accor Vacation Club and a $16 million increase in property and equipment additions.

Financing Activities

Net cash used in financing activities decreased $70 million during the nine months ended September 30, 2024, compared to the prior year. This decrease was primarily due to $107 million decrease in share repurchases, a $100 million decrease in note repayments, and a $32 million decrease in net payments on non-recourse vacation ownership debt in the current period, partially offset by $177 million of lower net proceeds from the revolving credit facility.

Capital Deployment

We focus on deploying capital for the highest possible returns. Ultimately, our business objective is to grow our business while optimizing cash flow and Adjusted EBITDA. We intend to continue to invest in select capital and technological improvements across our business. We also regularly consider a wide array of potential acquisitions and other strategic transactions, including acquisitions of businesses and real property, joint ventures, business combinations, strategic investments, and dispositions. Any of these transactions could be material to our business. As part of this strategy, we have made, and expect to continue to make, proposals and enter into non-binding letters of intent, allowing us to conduct due diligence on a confidential basis. A potential transaction contemplated by a letter of intent may never reach the point where we enter into a definitive agreement, nor can we predict the timing of such a potential transaction. Finally, we intend to continue to return value to shareholders through the repurchase of common stock and payment of dividends. All future declarations of quarterly cash dividends and increases to the capacity of our share repurchase program are subject to final approval by the Board of Directors.

During the nine months ended September 30, 2024, we spent $81 million on vacation ownership development projects (inventory). We believe that our existing Vacation Ownership business currently has adequate finished inventory to support vacation ownership sales for several years. As such, we expect to remain below historical levels of spending for vacation ownership development projects in 2024 with anticipated spending between $105 million and $130 million. As we add new brands to our existing portfolio, our spending may increase commensurate with the sales associated with these brands.

During the nine months ended September 30, 2024, we spent $58 million on capital expenditures, primarily for information technology and sales center improvement projects. During 2024, we anticipate spending between $85 million and $90 million on capital expenditures, primarily for continuation of information technology digital initiatives, sales center facility and related system enhancements, and resort improvements.

In connection with our focus on optimizing cash flow, we are continuing our asset-light efforts in vacation ownership by seeking opportunities with financial partners whereby they make strategic investments to develop assets on our behalf. We refer to this as Just-in-Time. The partner may invest in new ground-up development projects or purchase from us, for cash, existing in-process inventory which currently resides on our Condensed Consolidated Balance Sheets. The partner will complete the development of the project and we may purchase finished inventory at a future date as needed or as obligated under the agreement.

We expect that the majority of the expenditures that will be required to pursue our capital spending programs, strategic investments, and vacation ownership development projects will be financed with cash flow generated through operations and cash and cash equivalents. We expect that additional expenditures will be financed with general secured corporate borrowings, including through the use of available capacity under our revolving credit facility.

Share Repurchase Program

On August 20, 2007, our Board of Directors authorized a share repurchase program that enables us to purchase our common stock. As of September 30, 2024, the Board of Directors has increased the capacity of the program 10 times, most recently in May 2024 by $500 million, bringing the total authorization under the current program to $7.0 billion. Proceeds received from stock option exercises have increased the repurchase capacity by $85 million since the inception of this program. As of September 30, 2024, we had $509 million of remaining availability in our program.

Under our current share repurchase program, we repurchased 3.8 million shares at an average price of $43.84 for a cost of $165 million during the nine months ended September 30, 2024. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors, including capital allocation priorities. Repurchases may be conducted in the open market or in privately negotiated transactions.

Dividends

We paid cash dividends of $0.50 per share during the first, second, and third quarters of 2024 and $0.45 per share during the first, second, and third quarters of 2023. The aggregate dividends paid to shareholders were $108 million and $104 million during the nine months ended September 30, 2024 and 2023. Our long-term plan is to grow our dividend at the rate of growth of our earnings at a minimum. The declaration and payment of future dividends to holders of our common stock are at the discretion of our Board of Directors and depend upon many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with certain debt obligations, legal requirements, regulatory constraints, industry practice, and other factors that our Board of Directors deems relevant. There is no assurance that a payment of a dividend or a dividend at current levels will occur in the future.

SEASONALITY

We experience seasonal fluctuations in our net revenues and net income from sales of VOIs and vacation exchange fees. Revenues from sales of VOIs are generally higher in the third quarter than in other quarters due to increased leisure travel. Revenues from vacation exchange fees are generally highest in the first quarter, which is typically when members of our vacation exchange business book their vacations for the year.

The seasonality of our business may cause fluctuations in our quarterly operating results. As we expand into new markets and geographical locations, we may experience increased or different seasonality dynamics that create fluctuations in operating results different from the fluctuations we have experienced in the past.

COMMITMENTS AND CONTINGENCIES

From time to time, we are involved in claims, legal and regulatory proceedings, and governmental inquiries related to our business, none of which, in the opinion of management, is expected to have a material effect on our results of operations or financial condition. See Note 16—Commitments and Contingencies to the Condensed Consolidated Financial Statements for a description of claims and legal actions arising in the ordinary course of our business along with our guarantees and indemnifications and Note 21—Transactions with Former Parent and Former Subsidiaries to the Condensed Consolidated Financial Statements for a description of our obligations regarding Cendant contingent litigation, matters related to Wyndham Hotels & Resorts, Inc., and matters related to the vacation rentals businesses.

CRITICAL ACCOUNTING ESTIMATES

In presenting our Condensed Consolidated Financial Statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material impact to our consolidated results of operations, financial position, and liquidity. We believe that the estimates and assumptions we used when preparing our Condensed Consolidated Financial Statements were the most appropriate at that time. These Condensed Consolidated Financial Statements should be read in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited Consolidated Financial Statements included in the Annual Report on Form 10-K filed with the SEC on February 21, 2024, which includes a description of our critical accounting estimates that involve subjective and complex judgments that could potentially affect reported results. There have been no material changes to these critical accounting estimates since the filing of the Annual Report on Form 10-K for the year ended December 31, 2023.