What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-02-28 · 383 added, 342 removed, 1362 unchanged (35% of the section changed)

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Summary of Significant Accounting Policies

Acquisitions and Dispositions

Vacation Ownership Notes Receivable

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Business Segments

Impairment and Restructuring

Restructuring and Impairment

Modernization

MANAGEMENT’S REPORT ON

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill

Description of the Matter At December 31, 2025, the balance of Goodwill was $2,958 million.

During the year ended December 31, 2025, the Company recorded a goodwill impairment charge of $159 million.

As discussed in Notes 2 and 10 to the consolidated financial statements, the Company performs an annual review for potential impairment of the carrying value of goodwill in the fourth quarter, or more frequently if events or circumstances indicate a possible impairment.

The Company’s goodwill is tested for impairment at the reporting unit level.

Auditing the Company’s goodwill impairment assessment was complex and highly judgmental due to the significant estimation uncertainty in determining the fair value of the reporting units.

In particular, the fair value estimates for the reporting units were sensitive to significant assumptions including projections of revenues, EBITDA margin, and discount rate.

These significant assumptions are forward-looking and could be affected by company-specific, market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the fair value of the reporting units, including management’s review of the valuation model and the significant assumptions used in the valuation.

To test the estimated fair value of the reporting units, we performed audit procedures that included, among others, evaluating the valuation methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We compared the significant assumptions used by the Company to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry.

We also performed sensitivity analyses on the significant assumptions described above to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions.

We involved our valuation specialists to assist in our evaluation of the Company’s valuation methodologies and significant assumptions discussed above.

Cost of Vacation Ownership Products

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

Cost of Vacation Ownership Products

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

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

Originated Vacation Ownership Notes Receivable Reserve

Description of the Matter As of December 31, 2025, the Company’s originated vacation ownership notes receivable reserve was $527 million.

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

As discussed in Notes 2 and 5 to the consolidated financial statements, for originated notes, the Company records the difference between the vacation ownership note receivable and variable consideration included in the transaction price for the sale of the related vacation ownership products as a reserve on the Company’s originated vacation ownership notes receivable.

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

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

In addition, we recalculated the resulting originated vacation ownership notes receivable reserve recognized by the Company.

We also compared the assumptions regarding future defaults to the Company’s historical and current default rates and performed a retrospective review of the defaults projected from the analyses.

We involved real estate subject matter resources on our team because the static pool analyses are unique to companies in the real estate time-sharing industry.

/s/ Ernst & Young LLP

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Financing 150 146 113

Royalty fee 113 114 117

General and administrative

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Litigation charges

Modernization

Restructuring

Royalty fee 114 117 114

Impairment 577 30 32

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TOTAL EXPENSES 5,209 4,477 4,191

(Losses) gains and other (expense) income, net ( 1 ) 47 40

Gains (losses) and other income (expense), net 47 ( 1 ) 47

Interest expense, net ( 169 ) ( 162 ) ( 145 )

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Other — ( 3 ) ( 3 )

INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 306 398 582

(LOSS) INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS ( 299 ) 306 398

Provision for income taxes ( 8 ) ( 89 ) ( 146 )

NET INCOME 217 252 391

Net loss attributable to noncontrolling interests 1 2 —

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 218 $ 254 $ 391

EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

NET (LOSS) INCOME ( 307 ) 217 252

Net (income) loss attributable to noncontrolling interests ( 1 ) 1 2

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 308 ) $ 218 $ 254

(LOSS) EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

Basic $ ( 8.84 ) $ 6.16 $ 6.96

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2025 2024 2023

NET INCOME $ 217 $ 252 $ 391

NET (LOSS) INCOME $ ( 307 ) $ 217 $ 252

Foreign currency translation adjustments ( 3 ) ( 21 ) 11

Reclassification of foreign currency translation adjustments realized upon disposition of entities — — ( 10 )

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

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX ( 3 ) ( 24 ) 1

Net loss attributable to noncontrolling interests 1 2 —

COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1 2 —

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

Net (income) loss attributable to noncontrolling interests ( 1 ) 1 2

COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS ( 1 ) 1 2

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 311 ) $ 194 $ 255

See Notes to Consolidated Financial Statements

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Accrued liabilities (including $ 4 and $ 4 from VIEs, respectively)

Deferred revenue 354 382

Deferred revenue and other 371 354

Payroll and benefits liability 218 220

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Additional paid-in capital 3,996 3,975

Accumulated other comprehensive (loss) income ( 8 ) 16

Accumulated other comprehensive income ( 11 ) ( 8 )

Retained earnings 434 852

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OPERATING ACTIVITIES

Net income $ 217 $ 252 $ 391

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

Net (loss) income $ ( 307 ) $ 217 $ 252

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

Depreciation and amortization of intangibles 149 146 135

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Share-based compensation 38 33 31

Impairment charges 30 30 —

Impairment 577 30 30

Gains and other income, net — ( 5 ) ( 6 )

Foreign currency remeasurement (gain) loss ( 22 ) 13 ( 6 )

Deferred income taxes ( 103 ) 38 ( 64 )

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Accounts payable, advance deposits and accrued liabilities ( 5 ) 9 1

Deferred revenue ( 27 ) 34 ( 9 )

Deferred revenue and other 15 ( 27 ) 34

Payroll and benefit liabilities ( 2 ) 16 ( 46 )

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Other liabilities ( 3 ) ( 109 ) 78

Deconsolidation of certain Consolidated Property Owners' Associations — — ( 48 )

Purchase of property for future transfer to inventory ( 10 ) ( 27 ) ( 12 )

Purchase and development of property for future transfer to inventory ( 140 ) ( 10 ) ( 27 )

Other, net ( 2 ) ( 7 ) 5

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INVESTING ACTIVITIES

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

Capital expenditures for property and equipment (excluding inventory) ( 57 ) ( 57 ) ( 118 )

Issuance of note receivable to VIE — — ( 47 )

Proceeds from collection of note receivable from VIE — — 47

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

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Dispositions, net 3 8 16

Other, net — — 2

Net cash, cash equivalents, and restricted cash (used in) provided by investing activities ( 115 ) ( 112 ) 16

Net cash, cash equivalents, and restricted cash used in investing activities ( 70 ) ( 115 ) ( 112 )

See Notes to Consolidated Financial Statements

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Repayments of debt ( 1,298 ) ( 2,107 ) ( 1,221 )

Purchase of convertible note hedges — — ( 107 )

Proceeds from issuance of warrants — — 43

Finance lease incentive — — 10

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Payment of withholding taxes on vesting of restricted stock units ( 7 ) ( 8 ) ( 12 )

Net cash, cash equivalents, and restricted cash used in financing activities ( 132 ) ( 401 ) ( 486 )

Net cash, cash equivalents, and restricted cash provided by (used in) financing activities 241 ( 132 ) ( 401 )

Effect of changes in exchange rates on cash, cash equivalents, and restricted cash 6 ( 4 ) 1

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SUPPLEMENTAL DISCLOSURES

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

Non-cash transfer from inventory to property and equipment $ 1 $ 21 $ 12

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

— Impact of adoption of ASU 2020-06

— — ( 111 ) — 31 ( 80 ) — ( 80 )

75.5 OPENING BALANCE 2022 1 ( 1,356 ) 3,961 ( 16 ) 306 2,896 10 2,906

— Net income — — — — 391 391 — 391

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

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

— Reclassification of foreign currency translation adjustments realized upon disposition of subsidiary — — — ( 10 ) — ( 10 ) — ( 10 )

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

— Adjustment for 2022 Convertible Note Hedges — — 6 — — 6 — 6

— Tax effect on equity, convertible notes — — 25 — — 25 — 25

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

— Purchase of convertible note hedges — — ( 107 ) — — ( 107 ) — ( 107 )

— Issuance of warrants — — 43 — — 43 — 43

— Expiration of warrants — — ( 3 ) — — ( 3 ) — ( 3 )

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

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

— Employee stock plan issuance — 1 3 — — 4 — 4

— Deconsolidation of certain Consolidated Property Owners' Associations — — — — — — ( 8 ) ( 8 )

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

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75.9 BALANCE AT YEAR-END 2024 1 ( 2,378 ) 3,975 ( 8 ) 852 2,442 ( 1 ) 2,441

— Net income (loss) — — — — 218 218 ( 1 ) 217

— Net (loss) income — — — — ( 308 ) ( 308 ) 1 ( 307 )

— Foreign currency translation adjustments — — — ( 3 ) — ( 3 ) — ( 3 )

— Derivative instrument adjustment — — — ( 3 ) — ( 3 ) — ( 3 )

— Share-based compensation plans — 12 21 — — 33 — 33

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Actual results could differ from our estimates, and such differences may be material.

Reclassifications

For the year ended December 31, 2025, we separately presented Modernization expense in our Income Statements.

As a result, prior year amounts were reclassified from Restructuring expense to conform to the current year presentation.

Additionally during the year ended December 31, 2025, we reclassified $ 6 million of certain amounts related to ongoing litigation from General and administrative expense to Litigation charges in order to conform our 2024 results with our current year presentation.

Acquisition of Welk

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

Acquisition of ILG and Disposition of VRI Americas

Acquisition of ILG

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

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

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

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

Revenues were reduced during 2025 by $ 10 million due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods.

Additionally, revenues were reduced during 2024 and 2023 by $ 68 million and $ 69 million, respectively, due to changes in our estimates of variable consideration for performance obligations that were satisfied in prior periods due to the increase in our reserve for originated vacation ownership notes receivable.

See Footnote 5 “Vacation Ownership Notes Receivable” for additional information on our reserve for vacation ownership notes receivable and adjustments recorded for the years presented.

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

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

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

In the third quarter of 2022 and the fourth quarter of 2024, we aligned our business practices and contract terms for the sale of vacation ownership products (the “Contract Alignments”), resulting in the prospective change in the timing of the transfer of control to the customer for Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts, respectively.

Prior to these changes, control transfer occurred at closing for these vacation ownership products.

Subsequent to the Contract Alignments, transfer of control of these vacation ownership products occurs at expiration of the statutory rescission period, consistent with the historical timing of Sheraton-, Westin- and Hyatt- branded transactions.

Marriott-branded VOIs and Hyatt-branded VOIs derived from Legacy-Welk sales contracts executed prior to the applicable Contract Alignment have been accounted for with the transfer of control of the VOI occurring at closing.

We recognize revenues from the sale of vacation ownership products when control of the vacation ownership product is transferred to the customer and the transaction price is deemed collectible, which typically correlates to expiration of the statutory rescission period.

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

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

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

For incentives provided by third parties (i.e.

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We recognize Incentive management fees as earned throughout the incentive period based on actual results, which is subject to estimation of the transaction price.

Any consideration we receive in advance of services being rendered is recorded as Deferred revenue on our Balance Sheets and is recognized ratably across the service period to which it relates.

Any consideration we receive in advance of services being rendered is recorded as Deferred revenue and other on our Balance Sheets and is recognized ratably across the service period to which it relates.

We recognize variable consideration for Cost reimbursements revenues when the reimbursable costs are incurred.

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Other services revenues includes revenues from membership fees, club dues and additional fees for services we provide to customers.

Membership fees and club dues are received in advance of providing access to the exchange services, are recorded as Deferred revenue on our Balance Sheets and are earned regardless of whether exchange services are provided.

Membership fees and club dues are received in advance of providing access to the exchange services, are recorded as Deferred revenue and other on our Balance Sheets and are earned regardless of whether exchange services are provided.

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

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

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

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

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

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In cases where the standalone selling price is not readily available, we generally determine the standalone selling prices utilizing the adjusted market approach, using prices from similar contracts, our historical pricing on similar contracts, our internal marketing and selling data and other internal and external inputs we deem to be appropriate.

Significant judgment is required in determining the standalone selling price under the adjusted market approach.

Receivables, Contract Assets & Contract Liabilities

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in other cases, after appropriate credit evaluations, payment is due in arrears.

When the timing of our delivery of goods and services is different from the timing of the payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance or when we have a right to consideration that is unconditional before the transfer of goods or services to a customer).

precedes performance or when we have a right to consideration that is unconditional before the transfer of goods or services to a customer).

Receivables are recorded when the right to consideration becomes unconditional.

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Earnings Per Share Attributable to Common Stockholders

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

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

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

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

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

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

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We also apply the provisions of fair value measurement to various non-recurring measurements for our financial and non-financial assets and liabilities.

The applicable accounting standards define fair value as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

ASC Topic 820, “Fair Value Measurements” (“ASC 820”) defines fair value as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

We measure fair value of our assets and liabilities using inputs from the following three levels of the fair value hierarchy:

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We account for vacation ownership inventory and cost of vacation ownership products in accordance with the authoritative guidance for accounting for real estate time-sharing transactions, which defines a specific application of the relative sales value method for reducing vacation ownership inventory and recording cost of sales as described in our policy for revenue recognition for vacation ownership products.

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

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

when inventory is reacquired upon default of the related originated vacation ownership note receivable).

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

Product cost true-up activity relating to vacation ownership products increased carrying values of inventory by $ 40 million, $ 39 million and $ 36 million during 2025, 2024 and 2023, respectively.

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

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

Capitalized implementation costs of $ 35 million are recorded in Other assets on our Balance Sheets as of both December 31, 2025 and December 31, 2024.

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

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For the income approach, we use internally developed discounted cash flow models that include the following assumptions, among others:

projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends;

projections of revenues, expenses, EBITDA margin, and related cash flows based on assumed long-term growth rates and demand trends;

expected future investments to grow new units;

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For the market approach, we use internal analyses based primarily on market comparables.

We base these assumptions on our historical data and experience, third-party appraisals, industry projections, micro and macro general economic condition projections, and our expectations.

Convertible Notes

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

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

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

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

The application of the “if-converted” method reduces our reported diluted earnings per share.

The impacts of the adoption were recorded as a cumulative effect in the opening balance of retained earnings and the conversion feature related to our convertible notes was reclassified from equity to liabilities.

In addition, we eliminated the related equity adjustment associated with the deferred tax liability.

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

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

We base these assumptions on our historical data and experience, in consideration of industry projections, micro and macro general economic condition projections, and our expectations.

Derivative Instruments

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

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

We may use derivative instruments as part of our

overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates.

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

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

Loss Contingencies

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Share-Based Compensation Costs

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

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

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

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

Generally, share-based awards granted to our employees, other than RSUs with performance vesting conditions, vest ratably over a four-year period.

Generally, share-based awards granted to our employees, other than RSUs with performance

vesting conditions, vest ratably over a four-year period.

For share-based awards with service-only vesting conditions, we record compensation expense on a straight-line basis over the requisite service period.

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

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

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

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

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

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

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

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

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

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The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income tax in the period that includes the enactment date.

Changes in existing tax laws and rates, their related interpretations, and the uncertainty generated by the current economic environment may affect the amounts of deferred tax liabilities or the valuations of deferred tax assets over time.

Our accounting for deferred tax consequences represents management’s best estimate of future events that can be appropriately reflected in the accounting estimates.

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New Accounting Standards

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

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

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

The ASU did not change how we identify operating segments.

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

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

Future Adoption of Accounting Standards

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

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

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

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

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

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

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

We adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025.

The adoption did not have a material impact on our financial statements or disclosures other than the addition of incremental disclosures intended to enhance and expand our annual effective tax rate reconciliation disclosure and income taxes paid disclosure.

See Footnote 4 “Income Taxes” for the additional disclosures required by the adoption of ASU 2023-09.

Future Adoption of Accounting Standards

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

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

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

This update is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, and may be adopted on a prospective or retrospective basis, with early adoption permitted.

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

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

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

ACQUISITIONS AND DISPOSITIONS

Orlando, Florida

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

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

Waikiki, Hawaii

During the third quarter of 2024, we acquired 38 completed vacation ownership units located at our Marriott Vacation Club, Waikiki property for $ 65 million.

The transaction was accounted for as an asset acquisition with all of the purchase price allocated to Inventory.

See Footnote 19 “Variable Interest Entities” for additional information about this transaction, including our remaining commitment related to this property, and our activities relating to the VIE involved in this transaction.

Additionally, during the first quarter of 2024, we acquired retail space located at our Marriott Vacation Club, Waikiki property for $ 48 million.

The transaction was accounted for as an asset acquisition and was classified as held-for-sale and included in Other assets as of December 31, 2024.

Savannah, Georgia

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

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

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

Charleston, South Carolina

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

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

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

During 2022, we acquired 88 completed vacation ownership units, as well as a sales center, located in Bali, Indonesia for $ 36 million.

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

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

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

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

The results of VRI Americas are included in our Exchange and Third-Party Management segment through the date of the sale.

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

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

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

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

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

We expect to adopt ASU 2024-04 effective January 1, 2026 with no material impact to our financial statements and disclosures.

Accounting Standards Update 2025-05 - “Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”)

In July 2025, the FASB issued ASU 2025-05, which introduces a practical expedient for estimating expected credit losses on current accounts receivable and contract assets.

Under this expedient, entities may assume that conditions

existing at the balance sheet date will persist for the remaining life of the asset, which simplifies the estimation process by eliminating the need to forecast future economic conditions for short-term assets.

This update is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, and is to be adopted on a prospective basis, with early adoption permitted.

We are evaluating the impact of ASU 2025-05 but do not expect a material impact on our financial statements and disclosures.

REVENUE AND RECEIVABLES

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Advance deposits (1)

Deferred revenue 354 382

Deferred revenue and other (1)

(1) Includes $ 99 million and $ 105 million of other refundable deposits at December 31, 2025 and December 31, 2024, respectively.

Revenue recognized during the year ended December 31, 2025 that was included in our contract liabilities balance at December 31, 2024 was $ 339 million.

Remaining Performance Obligations

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

At December 31, 2024, approximately 95 % of this amount is expected to be recognized as revenue over the next two years .

Our recorded contract liabilities (excluding other refundable deposits) represent the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2025.

At December 31, 2025, approximately 90 % of the recorded contract liabilities are expected to be recognized as revenue over the next two years .

Accounts and Contracts Receivable

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Income Tax Provision

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

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

($ in millions) 2025 2024 2023

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$ ( 299 ) $ 306 $ 398

Our (provision for) benefit from income taxes consisted of:

Our (provision for) or benefit from income taxes consisted of:

($ in millions) 2025 2024 2023

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$ ( 8 ) $ ( 89 ) $ ( 146 )

Reconciliation of U.S.

Federal Statutory Income Tax Rate to Actual Income Tax Rate

The following table reconciles the U.S.

statutory income tax rate to our effective income tax rate:

2024 2023 2022

statutory income tax rate 21.0 % 21.0 % 21.0 %

state income taxes, net of U.S.

federal tax benefit 4.6 4.5 5.0

Share-based compensation, net of Section 162(m) limitation 0.8 0.3 ( 0.2 )

Other permanent differences (1)

1.0 ( 3.0 ) 1.5

Tax rate changes 0.3 ( 0.8 ) 2.8

income 9.4 2.7 5.5

Tax credits ( 0.8 ) ( 0.6 ) ( 0.2 )

Unrecognized tax benefits ( 6.3 ) 5.5 ( 2.7 )

Change in valuation allowance

( 2.6 ) 7.1 1.0

Other items 1.6 ( 0.2 ) ( 0.8 )

Effective rate 29.0 % 36.5 % 32.9 %

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

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

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

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

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

Deferred Income Taxes

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Inventory $ 108 $ 74

Reserves 166 139

Provision for doubtful accounts and sales reserve

Convertible debt 12 24

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Tax credits 29 30

Right-of-use asset 50 50

Finance lease assets 51 50

Other, net 81 31

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Deferred sales of VOIs ( 537 ) ( 549 )

Right-of-use liability ( 43 ) ( 44 )

Finance lease liabilities ( 42 ) ( 43 )

Other, net ( 45 ) ( 41 )

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Total net deferred tax liabilities $ ( 206 ) $ ( 307 )

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

loss carryforwards.

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

In 2025, the change in valuation allowance is primarily attributable to changes in our assessment of the realizability of net deferred tax assets related to certain entities in Mexico.

We have $ 7 million in foreign capital loss carryforwards, $ 20 million in foreign tax credits, and $ 159 million of foreign net operating loss carryforwards, some of which will expire in 2026;

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

We have $ 11 million of state net operating loss carryforwards, the majority of which will not expire within the next five years, $ 4 million of business interest deduction carryforwards and $ 6 million of state tax credit carryforwards, both of which have an indefinite carryforward period.

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

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

We continue to assert indefinite reinvestment in the basis of certain foreign subsidiaries.

Accordingly, no deferred taxes have been accrued with respect to these outside basis differences.

An estimate of the applicable tax impact is not practicable to determine.

Reconciliation of U.S.

Federal Statutory Income Tax Rate to Actual Income Tax Rate

The following table reconciles the U.S.

statutory income tax rate to our effective income tax rate for 2025:

$ in millions

Federal Statutory Tax Rate $ ( 63 ) 21.0 %

State and Local Income Tax, Net of Federal Effect (1)

Foreign Tax Effects

Investment basis difference ( 36 ) 12.0 %

Valuation allowance established on investment basis difference 36 ( 12.0 %)

Valuation allowance established due to updated realizability assessment 37 ( 12.4 %)

Change in position regarding interest expense deductibility ( 13 ) 4.4 %

Other 3 ( 1.0 %)

Released valuation allowance due to updated realizability assessment ( 7 ) 2.2 %

Other 1 ( 0.3 %)

Other foreign jurisdictions 20 ( 6.6 %)

Total Foreign Tax Effects 41 ( 13.7 %)

Effect of Cross-Border Tax Laws

Deferred withholding taxes 5 ( 1.6 %)

Other — ( 0.1 %)

Total Effect of Cross-Border Tax Laws 5 ( 1.8 %)

Nontaxable or Nondeductible Items

Investment basis difference ( 10 ) 3.4 %

Goodwill impairment 33 ( 11.2 %)

Other 4 ( 1.2 %)

Total Nontaxable or Nondeductible Items 27 ( 9.0 %)

Other adjustments 2 ( 0.6 %)

Total Tax Provision $ 8 ( 2.8 %)

(1) State taxes in Hawaii and California made up the majority of the tax effect in this category.

The following table reconciles the U.S.

statutory income tax rate to our effective income tax rate for 2024 and 2023:

statutory income tax rate 21.0 % 21.0 %

state income taxes, net of U.S.

federal tax benefit 4.6 4.5

Share-based compensation, net of Section 162(m) limitation 0.8 0.3

Other permanent differences (1)

Tax rate changes 0.3 ( 0.8 )

income 9.4 2.7

Tax credits ( 0.8 ) ( 0.6 )

Unrecognized tax benefits ( 6.3 ) 5.5

Change in valuation allowance

Other items 1.6 ( 0.2 )

Effective rate 29.0 % 36.5 %

(1) The 2024 permanent differences are primarily related to non-deductible interest, other expenses and foreign taxes

partially offset by non-taxable income.

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

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

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

Income Taxes Paid, net of Refunds

The following table presents the components of our income taxes paid, net of refunds by jurisdiction for 2025:

($ in millions) 2025

Federal $ 106

Other foreign countries 4

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 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 2024 to 2025.

Similarly, in 2024, under comparable relief measures related to hurricanes in 2023, we deferred $ 32 million of estimated tax payments from 2023 to 2024.

In addition, in 2023, under similar circumstances, we deferred $ 45 million of estimated tax payments from 2022 to 2023.

None of our 2025 estimated tax payments were deferred into 2026.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows:

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

Increases related to tax positions taken during the current period 3 — —

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

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Unrecognized tax benefits at end of year $ 27 $ 23 $ 106

The increase in 2025 is attributable to reserves established for interest relief provided under government relief programs, including amounts reported on the 2024 U.S.

corporate income tax return and estimated amounts expected to be claimed on the 2025 return.

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

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jurisdictions.

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

We recognized an income tax expense of $ 4 million in 2025, an income tax benefit of $ 11 million in 2024, and an income tax expense of $ 20 million in 2023 related to accrued interest and penalties.

Unrecognized tax benefits (including interest and penalties) of $ 32 million and $ 29 million, net of indemnification, would have impacted the effective tax rate for the years ended December 31, 2025 and December 31, 2024, respectively, if recognized.

We anticipate $ 31 million of unrecognized tax benefits, including interest and penalties, will be indemnified pursuant to a Tax Matters Agreement dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc., (the “Tax Matters Agreement”) and consequently have recorded a corresponding indemnification asset.

We anticipate $ 36 million of unrecognized tax benefits, including interest and penalties, to be indemnified pursuant to a Tax Matters Agreement dated May 11, 2016 by and among Starwood Hotels & Resorts Worldwide, Inc., Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc., (the “Tax Matters Agreement”) and consequently have recorded a corresponding indemnification asset.

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

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

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

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

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

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

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

As of December 31, 2025, the $ 14 million tax reserve for non-income tax issues is predominantly related to the ILG Acquisition.

We expect that we will be indemnified for liabilities of $ 4 million in connection with the Legacy-ILG non-income tax matters pursuant to the Tax Matters Agreement and consequently have recorded a corresponding indemnification asset.

During the third quarter of 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, making several provisions of the Tax Cuts and Jobs Act permanent.

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

We have evaluated the impact of OBBBA and have incorporated the effect of these changes into our financial statements.

For the provisions effective in 2025, there was no material impact to our effective tax rate for the year ended December 31, 2025, but we continue to assess the potential impact of these law changes, including provisions becoming effective in 2026, on our business and financial results.

VACATION OWNERSHIP NOTES RECEIVABLE

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The additional reserve recorded in 2023 was the result of an adjustment to our future default rate estimate to reflect then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.

During the second quarter of 2024, we increased our sales reserve to reflect increases in expected cumulative loss rates for our vacation ownership notes receivable originated during 2021 to 2024.

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

Consistent with our analysis in the third quarter of 2023, we considered the cumulative impact of inflation and the mixed economic environment on delinquencies and default rates.

We believed the related impact of higher than historical year-over-year increases in maintenance fees for 2023 and 2024 would continue to drive elevated delinquencies and defaults.

As expected, maintenance fee increases for our points-based products for 2025, which were approved by the relevant property owners’ association, returned to levels consistent with historical experience.

We have increased our sales reserve rate to reflect higher expected cumulative losses on new originations and do not expect to lower the sales reserve rate until we have sufficient evidence of improvement in delinquency and default rates.

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

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

While our delinquency rates for 2025 have declined from those experienced in 2024 and 2023, we do not expect to lower the sales reserve for new originations until we have sufficient, sustained evidence of continued improvement in delinquency and default rates.

Credit Quality Indicators - Vacation Ownership Notes Receivable

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Defaulted vacation ownership notes receivable repurchase activity (1)

105 ( 105 ) —

Balance at December 31, 2023 195 260 455

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Acquired vacation ownership notes receivable represent vacation ownership notes receivable acquired as part of the ILG Acquisition and the Welk Acquisition.

The following table shows future contractual principal payments, net of a $ 9 million reserve, and interest rates for our acquired vacation ownership notes receivable at December 31, 2024.

The following table shows future contractual principal payments, net of an $ 8 million reserve, and interest rates for our acquired vacation ownership notes receivable at December 31, 2025.

Acquired Vacation Ownership Notes Receivable

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

The table excludes Cash and cash equivalents, Restricted cash, Accounts and contracts receivable (excluding contracts receivable for financed VOI sales, net), deposits included in Other assets, Accounts payable, Advance deposits, and Accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

The table excludes Cash and cash equivalents, Restricted cash, Accounts and contracts receivable (excluding contracts receivable for financed VOI sales, net), deposits included in Other assets, Accounts payable, Advance deposits, Accrued liabilities, and derivative instruments, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

At December 31, 2025 At December 31, 2024

($ in millions) Carrying

Value Carrying

($ in millions) Carrying Amount

Carrying Amount

Vacation ownership notes receivable, net $ 2,565 $ 2,645 $ 2,440 $ 2,508

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2029 Notes, net ( 497 ) ( 479 ) ( 496 ) ( 467 )

2033 Notes, net ( 567 ) ( 553 ) — —

2026 Convertible notes, net ( 575 ) ( 564 ) ( 572 ) ( 546 )

( 572 ) ( 546 ) ( 568 ) ( 508 )

2027 Convertible notes, net ( 569 ) ( 548 ) ( 566 ) ( 541 )

Non-interest bearing note payable, net — — ( 4 ) ( 4 )

Total financial liabilities $ ( 5,482 ) $ ( 5,474 ) $ ( 5,026 ) $ ( 4,958 )

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At December 31, 2025 At December 31, 2024

($ in millions) Carrying

Value Carrying

($ in millions) Carrying Amount

Carrying Amount

Securitized $ 1,900 $ 1,975 $ 1,917 $ 1,981

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

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

In some cases, eligibility may also be determined based on the credit score of the borrower, the remaining term of the loans and

other similar factors that may reflect investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable.

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

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

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

We estimate the fair value of our 2028 Notes, 2029 Notes, and 2033 Notes (each as defined in Footnote 15 “Debt”) using quoted market prices as of the last trading day for the quarter;

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

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EARNINGS PER SHARE

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

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

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

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

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

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

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

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

If and when the price of our common stock exceeds the respective strike price of any of the warrants, we will include the dilutive effect of the additional shares that may be issued upon exercise of the warrants in total dilutive weighted average shares outstanding, which we calculate using the treasury stock method.

If the price of our common stock exceeds the respective strike price of any of the warrants, we will include the dilutive effect of the additional shares that may be issued upon exercise of the warrants in total dilutive weighted average shares outstanding, which we calculate using the treasury stock method, to the extent that the additional shares are dilutive.

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

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

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

(in millions, except per share amounts) 2025 2024 2023

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

Shares for basic earnings per share 35.4 36.5 40.4

Basic earnings per share $ 6.16 $ 6.96 $ 9.69

Net (loss) income attributable to common stockholders $ ( 308 ) $ 218 $ 254

Shares for basic (loss) earnings per share 34.9 35.4 36.5

Basic (loss) earnings per share $ ( 8.84 ) $ 6.16 $ 6.96

(in millions, except per share amounts) 2025 2024 (1)

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

Net (loss) income attributable to common stockholders $ ( 308 ) $ 218 $ 254

Add back of interest expense related to convertible notes, net of tax (2)

Numerator used to calculate diluted earnings per share

$ 237 $ 273 $ 396

Shares for basic earnings per share 35.4 36.5 40.4

Numerator used to calculate diluted (loss) earnings per share $ ( 308 ) $ 237 $ 273

Shares for basic (loss) earnings per share 34.9 35.4 36.5

Effect of dilutive shares outstanding (3)

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2027 Convertible Notes

Shares for diluted (loss) earnings per share 34.9 42.1 43.5

Diluted (loss) earnings per share $ ( 8.84 ) $ 5.61 $ 6.28

(1) The computations of diluted earnings per share attributable to common stockholders above exclude approximately 222,000 and 193,000 shares of common stock, the maximum number of shares issuable as of December 31, 2024 and December 31, 2023, respectively, upon the vesting of certain performance-based awards, because the performance conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.

(2) For the year ended December 31, 2025, $ 18 million of interest expense related to convertible notes, net of tax, was excluded from the above calculation of diluted net loss per share attributable to common stockholders as the effects of inclusion would have been anti-dilutive.

(3) For the year ended December 31, 2025, the following potentially dilutive securities were excluded from the above calculation of diluted net loss per share attributable to common stockholders as the effects of including these securities would have been anti-dilutive .

(in millions, except per share amounts) 2025

Restricted stock units 0.2

2026 Convertible Notes 3.0

Shares for diluted earnings per share 42.1 43.5 45.2

Diluted earnings per share $ 5.61 $ 6.28 $ 8.77

The computations of diluted earnings per share attributable to common stockholders above exclude approximately 222,000 , 193,000 , and 129,000 shares of common stock, the maximum number of shares issuable as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively, upon the vesting of certain performance-based awards, because the performance conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.

2027 Convertible Notes 3.0

In accordance with the applicable accounting guidance for calculating earnings per share, for the year ended December 31, 2024, we excluded from our calculation of diluted earnings per share 643,167 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 93.73 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the year ended December 31, 2023, we excluded from our calculation of diluted earnings per share 287,125 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $ 143.38 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

For the year ended December 31, 2022, we excluded from our calculation of diluted earnings per share 199,813 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARS, which ranged from $ 159.27 to $ 173.88 , were greater than the average market price of our common stock for the applicable period.

The following table shows the composition of our inventory balances:

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In addition to the above, at December 31, 2025 and December 31, 2024, we had $ 224 million and $ 271 million, respectively, of completed vacation ownership units which are classified as a component of Property and equipment, net until the time at which they are available and legally registered for sale as vacation ownership products.

We also had deposits on future purchases of inventory of $ 33 million at December 31, 2024, of which $ 29 million was included in Other assets and $ 4 million was included in Accounts and contracts receivable, net on our Balance Sheet, and $ 3 million at December 31, 2023, which was included in Other assets on our Balance Sheet.

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

We also had deposits on future purchases of inventory of $ 31 million at December 31, 2025, of which $ 26 million was included in Other assets and $ 5 million was included in Accounts and contracts receivable, net on our Balance Sheet, and $ 33 million at December 31, 2024, of which $ 29 million was included in Other assets and $ 4 million was included in Accounts and contracts receivable, net on our Balance Sheet.

See Footnote 20 “Restructuring and Impairment” for information on the impairment of inventory.

PROPERTY AND EQUIPMENT

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$ 950 $ 1,170

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

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

See Footnote 20 “Restructuring and Impairment” for information on the impairment of property and equipment.

The following table details the carrying amount of our goodwill at December 31, 2025 and December 31, 2024, and reflects goodwill attributed to the ILG Acquisition and the Welk Acquisition.

($ in millions) Vacation Ownership

Exchange & Third-Party Management

Total Consolidated

Balance at December 31, 2024 2,770 347 3,117

Impairment — ( 159 ) ( 159 )

Balance at December 31, 2025 $ 2,770 $ 188 $ 2,958

We performed our annual goodwill impairment test as of October 1, 2025 and prepared a quantitative assessment for both the Vacation Ownership and the Exchange & Third-Party Management reporting units.

We utilized a combination of the income and market approaches to estimate the fair value of our reporting units (Level 3) and concluded that there was no impairment of the Vacation Ownership unit.

We recognized a non-cash impairment charge of $ 159 million in the Impairment line on our Income Statement during 2025 related to the Exchange & Third-Party Management reporting unit, as a result of the change in expected future operating results based on a sustained decline in operating performance in comparison to prior expectations and the impact of market factors, including a decline in our stock price and market capitalization.

Accumulated impairment losses to Goodwill in our Exchange & Third-Party Management reporting unit at December 31, 2025 and December 31, 2024 were $ 232 million and $ 73 million, respectively.

INTANGIBLE ASSETS

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

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

We recorded amortization expense of $ 62 million, $ 60 million, and $ 61 million during 2025, 2024, and 2023, respectively, in the Depreciation and amortization line of our Income Statements.

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

Indefinite-Lived Intangible Assets

All of our indefinite-lived intangible assets are related to the Exchange & Third-Party Management segment.

We performed our annual impairment test of indefinite-lived intangible assets during the fourth quarters of 2024 and 2023, and no impairment charges were recorded in either year.

The following table summarizes the activity related to our indefinite-lived intangible assets, all of which are related to the Exchange & Third-Party Management segment.

($ in millions) Trade Names and Trademarks

Balance at December 31, 2024 $ 63

Impairment ( 21 )

Balance at December 31, 2025 $ 42

We performed our annual impairment test of indefinite-lived intangible assets during the fourth quarter of 2025.

We used the relief of royalty method under the income approach in calculating the fair value of the trade names and trademarks (Level 3).

As a result of our annual impairment test, we recorded a non-cash impairment charge of $ 21 million in the

Impairment line on our Income Statement, which was primarily attributed to the decline in estimated future revenues in comparison to prior estimates.

CONTINGENCIES AND COMMITMENTS

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

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

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

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

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

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

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

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

• We have various agreements for cloud computing and outsourcing of development, maintenance and support related to information technology that we use in the normal course of business.

We expect aggregate obligations under these contracts of $ 131 million, of which we expect $ 78 million, $ 28 million, $ 11 million, $ 5 million, $ 6 million and $ 3 million will be paid in 2026, 2027, 2028, 2029, 2030, and thereafter, respectively.

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

We expect to complete the acquisition of 168 vacation ownership units in 2027, and we expect to make payments when specific construction milestones are completed of $ 122 million in 2027.

• We have a remaining commitment of $ 11 million to purchase 32 vacation ownership units located in Bali, Indonesia, contingent upon completion of construction to agreed-upon standards within specified timeframes, for use in our Vacation Ownership segment.

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

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

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

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

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

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

$ 43 million in 2025.

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

• We have a remaining commitment of $ 41 million to purchase 60 vacation ownership units located in Khao Lak, Thailand, contingent upon completion of construction to agreed-upon standards within specified timeframes, for use in our Vacation Ownership segment.

We expect to complete the acquisition of these vacation ownership units in 2026, and we expect to make remaining payments with respect to these units as follows:

$ 4 million in 2026, $ 4 million in 2027, and $ 33 million in 2028.

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

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

Refer to Footnote 18 “Variable Interest Entities” for additional information about this commitment, including purchases that occurred during 2025 and 2024 pursuant to this commitment, and for additional information about our activities relating to the VIE involved in this commitment.

• In connection with our sale of a hotel in Cancun, we entered into a commitment to purchase vacation ownership units located in Puerto Vallarta, Mexico, contingent upon completion of construction to agreed-upon standards within specified timeframes, for use in our Vacation Ownership segment.

We expect to complete the acquisition of 64 vacation ownership units in 2028, and we expect to make payments of $ 46 million when specific construction milestones are completed in 2028.

Surety bonds issued as of December 31, 2025 totaled $ 140 million, the majority of which were requested by federal, state or local governments in connection with our operations.

As of December 31, 2024, we had $ 18 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 16 “Debt”), of which $ 17 million were related to and in lieu of reserves required for our outstanding securitization transactions completed during the first quarter of 2024 and the fourth quarter of 2023.

In addition, as of December 31, 2024, we had $ 22 million in letters of credit outstanding that were related to and in lieu of reserves required for our most recent outstanding securitization transaction completed in the third quarter of 2024, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

Certain of our rental management agreements in our Exchange & Third-Party Management segment provide for owners of properties we manage to receive specified percentages of rental revenue or guaranteed amounts generated under our management.

In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and we either retain the balance of the rental revenue (if any) as our fee or we make up the deficit if the owners have not received their guaranteed amounts.

At December 31, 2024, our maximum exposure under fixed dollar guarantees was $ 3 million, of which $ 1 million, $ 1 million, $ 1 million, and less than $ 1 million relate to 2025, 2026, 2027, and 2028, respectively.

As of December 31, 2025, we had $ 13 million of letters of credit outstanding under our Revolving Corporate Credit Facility (as defined in Footnote 15 “Debt”), of which $ 12 million were related to and in lieu of reserves required for certain of our outstanding securitization transactions.

In addition, as of December 31, 2025, we had $ 25 million in letters of credit outstanding that were related to and in lieu of reserves required for certain other outstanding securitization transactions, which were not issued pursuant to, nor do they impact our borrowing capacity under, the Revolving Corporate Credit Facility.

We have a commitment to an owners’ association that we manage to pay for any shortfall between the actual expenses incurred by the owners’ association and the income received by the owners’ association, in lieu of our payment of maintenance fees for unsold inventory.

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Loss Contingencies

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

Regis Residence Club, New York filed a lawsuit in the Supreme Court for the State of New York, New York County, Commercial Division against ILG and several of its subsidiaries and certain third parties.

The operative complaint alleged that the defendants breached their fiduciary duties related to sale and rental practices, aided and abetted certain breaches of fiduciary duty, engaged in self-dealing as the sponsor and manager of the club, tortiously interfered with the management agreement, were unjustly enriched, and engaged in anticompetitive conduct.

The plaintiff sought unspecified damages, punitive damages and disgorgement of payments under the management and purchase agreements.

In February 2022, the Court granted our motion to dismiss the complaint and dismissed with prejudice all claims except one (such claim, the “Remaining Claim”), with respect to which the plaintiff was granted leave to amend its complaint.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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2029 10 13 23

Thereafter 16 448 464

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(1) Interest rates as of December 31, 2025 range from 1.5 % to 6.6 %, with a weighted average interest rate of 4.8 %.

(2) Effective interest rate as of December 31, 2024 was 5.7 %.

(2) Excludes $ 2 million of unamortized debt issuance costs classified as a component of Other Assets on our Balance Sheet as of December 31, 2025, as no cash borrowings were outstanding under the Warehouse Credit Facility at that time.

All of our securitized debt is non-recourse.

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

Vacation Ownership Notes Receivable Securitizations Warehouse Credit Facility (1)

($ in millions)

($ in millions) Vacation Ownership Notes Receivable Securitizations

Payments Year

2025 $ 177 $ 6 $ 183

2026 183 6 189

2027 186 112 298

2028 187 — 187

2029 183 — 183

Thereafter 1,223

$ 2,039 $ 124 $ 2,163

(1) Excludes future Warehouse Credit Facility renewals.

Vacation Ownership Notes Receivable Securitizations

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As the contractual terms of the underlying securitized vacation ownership notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may occur earlier than shown above due to prepayments by the vacation ownership notes receivable obligors.

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

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

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

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

During the third quarter of 2024, we securitized a pool of $ 454 million of vacation ownership notes receivable.

During the fourth quarter of 2025, we securitized a pool of $ 479 million of vacation ownership notes receivable.

In connection with the securitization, $ 470 million in vacation ownership loan backed notes were issued by MVW 2025-2 LLC (the “2025-2 LLC”) in a private placement.

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

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

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

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

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

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

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Unamortized debt discount and issuance costs ( 3 ) ( 4 )

2033 Notes 575 —

Unamortized debt discount and issuance costs ( 8 ) —

Convertible Notes

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Finance Leases

Non-Interest Bearing Note Payable

$ 3,534 $ 3,089

(1) The effective interest rate as of December 31, 2025 was 6.0 %.

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

(2) Excludes $ 4 million of unamortized debt issuance costs classified as a component of Other Assets on our Balance Sheet as of December 31, 2025, as no cash borrowings were outstanding under the Revolving Corporate Credit Facility at that time.

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

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Term Loan $ 8 $ 8 $ 8 $ 8 $ 8 $ 748 $ 788

Revolving Corporate Credit Facility — — 125 — — — 125

2028 Notes — — 350 — — — 350

2029 Notes — — — 500 — — 500

2033 Notes — — — — — 575 575

2026 Convertible Notes 575 — — — — — 575

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Corporate Credit Facility

Our corporate credit facility (the “Corporate Credit Facility”), which consists of a term loan facility (the “Term Loan”) and a revolving credit facility (the “Revolving Corporate Credit Facility”), provides support for our business, including ongoing liquidity and letters of credit.

During the second quarter of 2024, we entered into an amendment to the Corporate Credit Facility (the “Amendment”), which, among other things, provided for a new $ 800 million term loan facility scheduled to mature on April 1, 2031 (the “New Term Loan”).

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

The proceeds of the New Term Loan were used to refinance, in full, the Term Loan, which had a balance of $ 784 million as of March 31, 2024 and was scheduled to mature on August 31, 2025.

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

There were no changes to the borrowing capacity or the termination date of the Revolving Corporate Credit Facility or its letter of credit sub-facility.

Our Revolving Corporate Credit Facility has a borrowing capacity of $ 750 million, which includes a letter of credit sub-facility of $ 75 million, and terminates on March 31, 2027.

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

The interest rate applicable to borrowings under the Revolving Corporate Credit Facility references SOFR and is based on “Adjusted Term SOFR,” which is calculated as Term SOFR (as defined in the Revolver Amendment), plus a 0.10 % adjustment, subject to a 0.00 % floor.

Our corporate credit facility (the “Corporate Credit Facility”) provides support for our business, including ongoing liquidity and letters of credit, and consists of a term loan facility (the “Term Loan”) and a revolving credit facility (the “Revolving Corporate Credit Facility”), which includes a letter of credit sub-facility.

During the first quarter of 2025, we entered into an amendment to the Corporate Credit Facility (the “Amendment”), which, among other things;

increased the borrowing capacity of our Revolving Corporate Credit Facility from $ 750 million to $ 800 million;

extended the termination date from March 31, 2027 to March 24, 2030;

and reduced certain fees and interest costs.

The Amendment also increased the letter of credit sub-facility of the Revolving Corporate Credit Facility from $ 75 million to $ 150 million.

Additionally, the Amendment provided for a new $ 450 million senior secured delayed-draw term loan facility (the “Delayed-Draw Term Loan”) scheduled to mature on December 31, 2027, which was subsequently terminated in the third quarter of 2025 in connection with the issuance of the 2033 Notes (as defined and discussed below).

We did not draw on the Delayed-Draw Term Loan at any time.

Borrowings under the Revolving Corporate Credit Facility generally bear interest at a floating rate (SOFR or Prime) plus an applicable margin that varies from 0.50 % to 2.00 % depending on the type of loan and our leverage.

In addition, we pay a commitment fee on the unused availability under the Revolving Corporate Credit Facility at a rate that varies from 20 to 25 basis points per annum, also depending on our leverage.

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

During the second quarter of 2024, $ 200 million of interest rate swaps and a $ 100 million interest rate collar that were entered into prior to 2023 to hedge a portion of our interest rate risk on the Term Loan expired and are no longer recorded on our Balance Sheet as of December 31, 2024.

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

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

This interest rate swap has been designated and qualifies as a cash flow hedge of interest rate risk and is recorded in Other Liabilities on our Balance Sheet as of December 31, 2025.

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

The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during 2025, 2024 and 2023.

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Derivative Instrument Adjustment, Beginning of Year $ — $ 3 $ 13

Other comprehensive (loss) gain before reclassifications ( 3 ) ( 10 ) 31

Other comprehensive loss before reclassifications — ( 3 ) ( 10 )

Derivative Instrument Adjustment, End of Year $ — $ — $ 3

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

• $ 575 million aggregate principal amount of 6.500 % Senior Unsecured Notes due 2033 issued in 2025 with a maturity date of October 1, 2033 (the “2033 Notes”).

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

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We may redeem some or all of the 2029 Notes prior to maturity under the terms provided in the indenture.

We issued the 2033 Notes under an indenture with the Bank of New York Mellon Trust Company, N.A, as trustee.

We received net proceeds of $ 567 million from the offering, after deducting the underwriting fees and transaction expenses, and used these net proceeds to repay our 2026 Convertible Notes (as defined below) subsequent to the end of 2025.

We will pay interest on the 2033 Notes on April 1 and October 1 of each year, commencing on April 1, 2026.

We may redeem some or all of the 2033 Notes prior to maturity under the terms provided in the indenture.

Convertible Notes

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The conversion rate of the 2026 Convertible Notes is subject to adjustment for certain events as described in the indenture governing the notes and was subject to adjustment as of December 31, 2025 to 6.6865 shares of common stock per $1,000 principal amount of 2026 Convertible Notes (equivalent to a conversion price of $ 149.56 per share of our common stock), as a result of the dividends we declared since issuance of the 2026 Convertible Notes that were greater than the quarterly dividend we paid when the 2026 Convertible Notes were issued.

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

As of December 31, 2025, upon conversion, we will pay or deliver cash for the principal balance of the notes, and settle any conversion premium in, shares of our common stock.

As of December 31, 2025, the effective interest rate was 0.55 %.

Amortization of debt issuance costs related to the 2026 Convertible Notes was $ 3 million in each of the three years ended December 31, 2025, 2024, and 2023.

The 2026 Convertible Notes matured at par subsequent to the end of 2025, on January 15, 2026, at which time none of the 2026 Convertible Notes were converted and all were settled in cash, and the deferred financing costs were fully amortized.

2026 Convertible Note Hedges and Warrants

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convertible note hedge transactions with respect to our common stock (the “2026 Convertible Note Hedges”), covering a total of 3.8 million shares of our common stock, and warrant transactions (the “2026 Warrants”), whereby we sold to the counterparties to the 2026 Convertible Note Hedges warrants to acquire 3.8 million shares of our common stock, in each case, as of December 31, 2025.

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

The strike prices of the 2026

Convertible Note Hedges and the 2026 Warrants were subject to adjustment to $ 149.56 and $ 186.94 , respectively, as of December 31, 2025 and no 2026 Convertible Note Hedges or 2026 Warrants have been exercised.

The 2026 Convertible Note Hedges expired upon the maturity of the 2026 Convertible Notes, subsequent to the end of 2025, and none were exercised.

The 2026 Warrants expire in ratable portions over the 70 trading day period commencing on April 15, 2026.

2027 Convertible Notes

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As of December 31, 2025, the effective interest rate was 3.88 %.

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

($ in millions) 2024 2023 2022

Contractual interest expense

$ 19 $ 19 $ 1

Amortization of debt issuance costs 3 3 —

$ 22 $ 22 $ 1

Contractual interest expense related to the 2027 Convertible Notes was $ 19 million and amortization of debt issuance costs was $ 3 million in each of the three years ended December 31, 2025, 2024, and 2023.

2027 Convertible Note Hedges and Warrants

In connection with the offering of the 2027 Convertible Notes, we concurrently entered into the following privately-negotiated separate transactions:

convertible note hedge transactions with respect to our common stock (the “2027 Convertible Note Hedges”), covering a total of 3.0 million shares of our common stock, and warrant transactions (the

“2027 Warrants”), whereby we sold to the counterparties to the 2027 Convertible Note Hedges warrants to acquire 3.0 million shares of our common stock, in each case, as of December 31, 2024.

convertible note hedge transactions with respect to our common stock (the “2027 Convertible Note Hedges”), covering a total of 3.1 million shares of our common stock, and warrant transactions (the “2027 Warrants”), whereby we sold to the counterparties to the 2027 Convertible Note Hedges warrants to acquire 3.1 million shares of our common stock, in each case, as of December 31, 2025.

The strike prices of the 2027 Convertible Note Hedges and the 2027 Warrants were subject to adjustment to $ 188.33 and $ 284.26 , respectively, as of December 31, 2025, and no 2027 Convertible Note Hedges or 2027 Warrants have been exercised.

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

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

In addition, the Corporate Credit Facility, the 2026 Convertible Notes, the 2027 Convertible Notes, the 2028 Notes, the 2029 Notes, and the 2033 Notes are guaranteed by MVWC and certain of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose entities.

STOCKHOLDERS’ EQUITY

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

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

During the second quarter of 2023, our Board of Directors

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

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

During the fourth quarter of 2025, our Board of Directors extended the term of this program to December 31, 2026.

As of December 31, 2025, approximately $ 322 million remained available for share repurchases under the current Share Repurchase Program.

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Distribution Date Dividend per Share

February 15, 2024 February 29, 2024 March 14, 2024 $ 0.76

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

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

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

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

We recognized $ 7 million of tax benefits associated with share-based compensation during each of the three years ended December 31, 2025, 2024, and 2023.

($ in millions) 2025 2024 2023

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Performance-based RSUs 7 5

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

(1) As of December 31, 2025, the weighted average remaining term for RSU grants outstanding at year-end 2025 was one to three years and we expect that deferred compensation expense will be recognized over a weighted average term of two years .

Restricted Stock Units

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(1) As of December 31, 2025, outstanding SARs had an aggregate intrinsic value of $ 1 million and a weighted average remaining term of 5 years.

(2) As of December 31, 2024, 580,534 SARs with a weighted average exercise price of $ 112.42 , an aggregate intrinsic value of $ 3 million and a weighted average remaining contractual term of 4 years were exercisable.

(2) As of December 31, 2025, 630,361 SARs with a weighted average exercise price of $ 118.38 had no intrinsic value, and a weighted average remaining contractual term of 4 years were exercisable .

The weighted average grant-date fair value per SAR granted in 2025, 2024, and 2023 was $ 18.83 , $ 34.58 , and $ 58.50 , respectively.

The SARs which vested in 2025, 2024, and 2023 did not have any intrinsic value.

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

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

The aggregate intrinsic value of SARs which were exercised in 2025, 2024, and 2023 was less than $ 1 million, $ 1 million, and less than $ 1 million, respectively.

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

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Expected volatility 45.79 % - 51.27 %

45.78 % 40.47 %

Dividend yield 4.35 % - 6.64 %

3.21 % 1.87 %

Risk-free rate 3.81 % - 4.03 %

4.23 % 4.07 %

Expected term (in years) 3.5 - 6.25

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We made voluntary repurchases of defaulted vacation ownership notes receivable of $ 157 million during 2025, $ 164 million during 2024 and $ 123 million during 2023.

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

We also made voluntary repurchases of $ 731 million, $ 615 million and $ 774 million of other non-defaulted vacation ownership notes receivable during 2025, 2024 and 2023, respectively, to retire previous vacation ownership notes receivable securitizations and to repay the Warehouse Credit Facility.

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.

We have a commitment to purchase completed vacation ownership units located in Waikiki, Hawaii for $ 41 million in 2026.

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 because we cannot prevent the variable interest entity from selling the property at a higher price.

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

Accordingly, we have not consolidated the VIE.

We expect to acquire the property over time and as of

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

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

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

As of December 31, 2025, our Balance Sheet reflected $ 1 million in Accounts and contracts receivable, net, including a note receivable of less than $ 1 million and $ 4 million in Property and equipment, net.

We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $ 5 million as of December 31, 2025.

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

During the third quarter of 2025, we acquired 48 completed vacation ownership units located at our Marriott Vacation Club, Waikiki property for $ 82 million.

The transaction was accounted for as an asset acquisition with $ 80 million of the purchase price allocated to Property and Equipment, net, representing the portion of vacation ownership units purchased that are not registered and available for sale in their current form, and the remaining $ 2 million was allocated to Inventory.

During the third quarter of 2024, we acquired 38 completed vacation ownership units located at our Marriott Vacation Club, Waikiki property for $ 65 million.

The transaction was accounted for as an asset acquisition with all of the purchase price allocated to Inventory, as all of the vacation ownership units were registered and available for sale in their current form.

Additionally, during the first quarter of 2024, we acquired retail space located at our Marriott Vacation Club, Waikiki property for $ 48 million.

The transaction was accounted for as an asset acquisition and the acquired property is included in Property and Equipment, net on our Balance Sheet as of December 31, 2025.

BUSINESS SEGMENTS

16 unchanged sentences

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.

VRI Americas was part of the Exchange & Third-Party Management segment through the date of sale in April 2022.

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

Our CODM evaluates the performance of our segments based primarily on the results of the segment without allocating corporate expenses or income taxes.

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

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

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

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

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

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

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

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

We do not report asset information by segment because that information is not used to evaluate performance or allocate resources between segments.

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.

Additionally, during the year ended December 31, 2025, we reclassified $ 6 million of certain prior year amounts related to ongoing litigation from General and administrative expense to Litigation charges in order to conform with our current year presentation.

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

Segment Revenues and Adjusted EBITDA

2 unchanged sentences

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

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

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

2025 2024 2023

24 unchanged sentences

Share-based compensation expense ( 38 ) ( 33 ) ( 31 )

Amortization of cloud computing software implementation costs (3)

( 6 ) ( 3 ) —

Certain items (3)

( 689 ) ( 85 ) ( 50 )

Provision for income taxes

( 8 ) ( 89 ) ( 146 )

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

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

Net (loss) income attributable to common stockholders

$ ( 308 ) $ 218 $ 254

(1) Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative expenses, and transaction and integration costs.

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

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

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

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

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

Depreciation and Amortization

5 unchanged sentences

$ 149 $ 146 $ 135

($ in millions) At December 31, 2024 At December 31, 2023

Vacation Ownership $ 8,296 $ 8,167

Exchange & Third-Party Management 777 813

Total segment assets 9,073 8,980

Corporate and other 735 700

$ 9,808 $ 9,680

Capital Expenditures (including inventory)

15 unchanged sentences

$ 950 $ 1,170

IMPAIRMENT AND RESTRUCTURING

RESTRUCTURING AND IMPAIRMENT

Restructuring Costs

2025 Asia Pacific Strategy Change

In the fourth quarter of 2025 we reassessed the strategy for our Asia Pacific vacation ownership business as part of our initiatives to drive strong profitability and improve cash flow.

As a result, we scaled back growth expectations and right‑sized our business in the region.

This includes reducing tours for first‑time buyers in select countries in the region where our borrowers have higher default rates, reducing headcount in the region, deferring the purchase of inventory and canceling a purchase commitment for inventory.

As a result, we incurred restructuring costs in 2025, all of which related to the Asia Pacific strategy change, as follows:

($ in millions) 2025

Cancellation of purchase commitment for inventory

2024 and 2023

Additionally during each of the years ended December 31, 2024 and December 31, 2023, we incurred $ 6 million of restructuring charges relating to severance.

Impairment Charges

We incurred impairment charges during 2025, 2024, and 2023 as follows:

($ in millions) 2025 2024 2023

Inventory $ 28 $ — $ —

Property, equipment, and other assets

$ 160 $ — $ 4

Future phases of existing resorts

Legacy-Welk inventory

Khao Lak, Thailand inventory

Equity method investment 2 — 8

Investment in management contract — 2 4

Property & equipment

$ 30 $ 32 $ 2

Inventory Impairment

During 2024, we recorded a non-cash impairment charge of $ 28 million related to Legacy-Welk inventory.

The impairment charge reflects an elongated pace of sales at a higher marketing and selling cost than that estimated in purchase accounting.

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

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

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

Lease Impairment

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

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

Restructuring Costs

Goodwill 159 — —

Total Impairment charges $ 577 $ 30 $ 32

During the fourth quarter of 2025, as part of our broader financial strategic review, we conducted a comprehensive review to assess the strategic alignment of inventory and property and equipment within our North America vacation ownership business.

This review focused on assessing inventory needs in light of our current inventory holdings and identifying opportunities to monetize certain non-core assets.

The conclusions drawn from the strategic review identified indicators of impairment for certain assets.

As a result of our impairment analyses, we recorded a non‑cash impairment related to assets associated with future phases of our existing resorts.

The carrying values of the assets associated with these resorts exceeded their estimated fair values because the carrying values included historical allocations of common infrastructure costs incurred when we built the resorts.

In addition, we recorded a non-cash impairment related to certain property and equipment identified for disposition including a hotel in Cancun, Mexico, which was classified as a component of Other assets as it was held for sale and ultimately disposed of in January 2026.

For assets where fair value was determined using the sales-comparison method of the market approach, Level 3 inputs were applied in the valuation process.

The fair value measurement was based on analyses of sales and offerings of comparable properties and adjusted to reflect the differences between the asset being valued and the comparable assets, such as market conditions, location, size, physical characteristics, zoning, density and site conditions.

For assets where fair value was determined utilizing the income approach, Level 3 inputs were applied in the valuation process.

The fair value measurement was based on discounted cash flow analyses and consideration was given to potential alternative uses of the assets in accordance with the highest and best use requirements outlined in ASC 820.

Level 3 inputs utilized in the valuation process included projections of revenue, expense and the estimated discount rates applied.

Property, Equipment, and Other Assets Identified for Disposition

A $ 160 million non-cash impairment was recognized for certain non-core Property and equipment and Other assets identified for disposition.

We estimated the fair value of the assets using the sales-comparison method of the market approach, which in certain instances also considered brokers’ opinion of value and our own transaction history, Level 3 inputs, or in the case of our hotel located in Cancun, Mexico, was based on a binding sales contract with a third party, which is a Level 3 input.

Future Phases of Existing Resorts

During 2025, we recorded non-cash impairment charges of $ 131 million as a result of decisions to forgo build out of future phases of existing resorts which were classified as a component of Property and equipment, net.

We estimated the fair value of these assets using the sales-comparison method of the market approach.

We also considered other inputs, including a non-binding letter of intent, Level 3.

Legacy-Welk Inventory

During 2025 and 2024, we recorded non-cash impairment charges of $ 75 million and $ 28 million, respectively, related to Legacy-Welk inventory.

The 2024 impairment reflected an elongated pace of sales at a higher marketing and selling cost than the estimates used in purchase accounting .

The 2025 impairment reflected a further elongated pace of sales at a higher marketing and selling cost as the Hyatt-branded vacation ownership business continues to underperform

expectations.

We used the income approach to estimate the fair value of the assets less costs to sell in both 2025 and 2024.

Khao Lak, Thailand Inventory

We recorded a $ 27 million non-cash impairment for vacation ownership units classified in Inventory due to the strategy change in Asia Pacific which elongated the pace of sales and changed our marketing approach.

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

During 2025, we recorded a $ 2 million impairment related to an operating lease and related assets in our Exchange & Third-Party Management segment.

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

Goodwill and Trade Names

See Footnote 10 “Goodwill” and Footnote 11 “Intangible Assets” for information on the impairments of goodwill and trade names recorded during 2025.

MODERNIZATION

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

We intend to modernize and optimize our processes and systems, including through advanced technology and automation, while focusing on efforts to increase sales efficiency and inventory optimization while capturing significant savings from initiatives related to procurement and corporate overhead.

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

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

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

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

The Strategic Business Operations office was created 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.

The following table shows the composition of our Modernization expense for 2025 and 2024:

($ in millions) 2025 2024

Advisory $ 87 $ 4

Transition Costs 18 —

Technology 12 —

The following table presents the activity for this accrual on our Balance Sheet related to our Modernization efforts.

($ in millions) SBO Initiatives

Balance at December 31, 2024

Modernization charges 122

Cash payments ( 97 )

Balance at December 31, 2025

During the third quarter of 2025, we entered into outsourced service arrangements and completed the transition of a portion of certain corporate overhead functions to outsourced service providers.

The arrangements are for terms of five to six years , and are cancellable for convenience subject to a termination penalty.

As of December 31, 2025,our aggregate expected obligation under these arrangements is $ 142 million, of which $ 42 million, $ 27 million, $ 26 million, $ 26 million, $ 18 million, and $ 3 million is expected to be paid in 2026, 2027, 2028, 2029, 2030, and thereafter, respectively, and the total penalties for early termination were $ 17 million.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data