MARRIOTT VACATIONS WORLDWIDE Corp

Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations

The following table shows consolidated assets, which are collateral for the obligations of the VIEs related to our vacation ownership notes receivable securitizations, and consolidated liabilities included on our Balance Sheet at March 31, 2024:

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first quarter of 2024:

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

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

Under the terms of our vacation ownership notes receivable securitizations, we have the right to substitute loans for, or repurchase, defaulted loans at our option, subject to certain limitations. Our maximum exposure to potential loss relating to the special purpose entities that purchase, sell, and own these vacation ownership notes receivable is the overcollateralization amount (the difference between the loan collateral balance and the balance of the outstanding vacation ownership notes receivable), plus cash reserves and any residual interest in future cash flows from collateral.

Other Variable Interest Entities

We have a commitment to purchase a property located in Waikiki, Hawaii. The property is held by a VIE for which we are not the primary beneficiary. We do not control the decisions that most significantly impact the economic performance of the entity during construction. Further, our purchase commitment is generally contingent upon the property being redeveloped to our brand standards. Accordingly, we have not consolidated the VIE. We expect to acquire the property over time and as of March 31, 2024, we expect to make remaining payments for the property as follows: $65 million in the remainder of 2024, $82 million in 2025, and $41 million in 2026. As of March 31, 2024, our Balance Sheet reflected $1 million in Accounts and contracts receivable, net, including a note receivable of less than $1 million, $8 million in Property and equipment, net, $1 million in Accrued liabilities and $1 million in the Other line within liabilities on our Balance Sheets. We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $10 million as of March 31, 2024. During the first quarter of 2024, we fulfilled our outstanding commitment to purchase retail space for $48 million and incurred $1 million of cost related to the fit-out of this space. We have an agreement to sell the retail space to a third party, at cost, upon completion of construction, which we expect to occur in the second half of 2024.

Deferred Compensation Plan

We consolidate the liabilities of the Deferred Compensation Plan and the related assets, which consist of the COLI policies held in a rabbi trust. The rabbi trust is considered a VIE. We are the primary beneficiary of the rabbi trust because we direct the activities of the trust and are the beneficiary of the trust. At March 31, 2024 and December 31, 2023, the value of the assets held in the rabbi trust was $110 million and $99 million, respectively, and was included in the Other line within assets on our Balance Sheets.