Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
We make forward-looking statements throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: our possible or assumed future results of operations, cash flows, financial condition, leverage, liquidity, rental profit; dividend payments; business strategies and management priorities for 2026, including improving profitability and cash flow, accelerating growth, lower costs and monetize non-core assets and key initiatives to enhance the quality and composition of our sales Tours, increase Tour flow and strengthen cost discipline; expected improvements in Tour quality, VPG, and default rates on newly originated vacation ownership notes receivable; financing plans, financing terms and the adequacy of capital to meet short-term and long-term liquidity requirements; our expectations regarding the objectives, costs and benefits of our modernization efforts; our plan to reduce our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio; our expectations regarding inventory spending; and the impact of inventory repurchases and timing of payments for inventory. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: uncertainty in the current global macroeconomic environment created by rapid governmental policy and regulatory changes, including those affecting international trade or travel; future health crises and related governmental responses and their potential adverse effects; variations in demand for vacation ownership and exchange products and services; failure of vendors and other third parties to timely comply with their contractual obligations; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technologies; the ability to use artificial intelligence (“AI”) technologies successfully and potential business, compliance, or reputational risks associated with the use of AI technologies; changes in privacy and other laws and regulations affecting our business; the impact of a future banking crisis; impacts from natural or man-made disasters; delinquency and default rates; global supply chain disruptions; volatility in the international and national economy and credit markets, the impacts of ongoing global conflicts and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs and accelerate growth and profitability; political or social strife; and other matters referred to under the heading “Risk Factors” contained herein and also in our 2025 Annual Report, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission (the “SEC”).
All forward-looking statements in this Quarterly Report apply only as of the date of this Quarterly Report or as of the date they were made or as otherwise specified herein. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. You should not put undue reliance on any forward-looking statements in this Quarterly Report.
The risk factors discussed in “Risk Factors” in our 2025 Annual Report, and under Item 1A of Part II of this Quarterly Report could cause actual results to differ materially from those expressed or implied in forward-looking statements in this Quarterly Report. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements.
Our Financial Statements (as defined below), which we discuss below, reflect our historical financial condition, results of operations and cash flows. The financial information discussed below and included in this Quarterly Report may not, however, necessarily reflect what our financial condition, results of operations or cash flows may be in the future.
In order to make this report easier to read, we refer to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Income Statements,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” References throughout to numbered “Footnotes” refer to the numbered Notes in the Interim Condensed Notes to Consolidated Financial Statements included in this Quarterly Report.
We routinely post important information, including news releases, announcements and other statements about our business and results of operations, that may be deemed material to investors on the Investor Relations section of our
30
Table of Contents
website, www.marriottvacationsworldwide.com. We use our website as a means of disclosing material, nonpublic information and for complying with our disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of our website in addition to following our press releases, filings with the SEC, public conference calls and webcasts. The information on our website is not part of, and is not incorporated by reference into, this Quarterly Report.
Business Overview
We are a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. Our business operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management.
Our Vacation Ownership segment includes a diverse portfolio of resorts that includes some of the world’s most iconic brands licensed under exclusive long-term relationships. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Vacation Club brands. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. We also have a license to use the St. Regis brand for specified fractional ownership products.
Our Vacation Ownership segment generates revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.
Our Exchange & Third-Party Management segment includes an exchange network and membership programs, as well as the provision of management services to other resorts and lodging properties. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. We provide these services through our Interval International and Aqua-Aston businesses.
Corporate and other represents the portion of our results that are not allocable to our segments, including those relating to consolidated property owners’ associations (“Consolidated Property Owners’ Associations”).
Performance Measures
Management uses the following key performance metrics to assess the Company’s operational efficiency and market competitiveness, identify trends, develop financial projections, and support strategic decision-making. Management continuously monitors and analyzes these metrics to help ensure that the Company remains responsive to changing market conditions and aligned with our long-term growth objectives. The definitions and methodologies of certain of these metrics may differ from those used by other companies, and as a result, these metrics may not be directly comparable to similarly titled measures reported by other companies.
• Contract sales reflects the pace of sales in our business and excludes contract sales from the sale of vacation ownership products for non-consolidated joint ventures.
• Volume per guest (“VPG”) is calculated as contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (collectively, “ Tours” as defined below) divided by the number of Tours conducted during the applicable period. We believe that VPG is a key driver of profitability as it reflects both the average contract price and the effectiveness of converting touring guests into purchasers.
• Tours is defined as the number of sales tours conducted during the applicable period, including virtual and offsite sales tours and excluding telesales.
• Development profit margin is calculated as Development profit divided by revenues from the sale of vacation ownership products. Development profit represents revenues from the sale of vacation ownership products, net of the cost of vacation ownership products and related marketing and sales costs. We believe that Development profit margin is a key indicator of the profitability of our development activities and the effectiveness of our associated marketing and sales efforts.
• Total active members represents the number of active members of the Interval Network active members as of the end of the applicable period. We consider this metric to be an important indicator of the size of the member base eligible to transact within the Interval Network.
31
Table of Contents
• Average revenue per member is calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue generated by the Interval Network by the monthly weighted average number of active members of the Interval Network during the applicable period. We believe this metric is a meaningful indicator of member engagement.
• Segment financial results attributable to common stockholders reflects revenues less expenses that are directly attributable to each respective reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We believe this measure provides meaningful insight into the operating performance of our reportable business segments. See Footnote 16 “Business Segments” to our Financial Statements for further information about our reportable business segments.
• Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues less cost reimbursements revenues.
• Segment Adjusted EBITDA margin is calculated as Segment Adjusted EBITDA divided by the respective segment’s total revenues less cost reimbursements revenues.
NM = Not meaningful.
Management Priorities
Our management priorities for 2026 are as follows:
• Improve profitability and cash flow by driving higher free cash flow conversion through disciplined execution, tighter working capital and capital spending, and focusing on EBITDA performance.
• Strengthen leadership and talent through onboarding new leadership with the external expertise to drive improvement in consistency and long-term growth execution. We have also retained key existing leadership and talent throughout the organization to ensure continuity and retain historical business knowledge.
• Accelerate near-term, sustainable revenue growth by increasing contract sales through strengthened marketing and sales leadership, hiring proven frontline sales talent and critically improving our daily management discipline throughout our operating ecosystem. Inflight initiatives are intended to expand and diversify marketing opportunities. This will occur by improving lead generation, marketing efficiency and enhancing our products and services. The enhanced owner experience and events platforms should increase owner retention and generate referrals of potential new customers to support contract sales growth and higher VPG. We expect the financial benefits of these actions to become more evident in the second half of 2026 and into 2027 as we build a Tour pipeline that reflects these changes. In the interim, we expect that marketing and sales expenses will remain higher than 2025 to support these new initiatives in the near-term.
• Lower cost base by emphasizing operating discipline to drive improved cash flow through execution and cost management.
• Protect and grow recurring, high margin revenue streams thorough sustaining stable performance in our financing and management and exchange businesses to support earnings durability and cash flow.
• Disciplined capital allocation to fund the highest-return growth initiatives while prioritizing liquidity and balance sheet flexibility.
• Monetize non-core assets to generate proceeds and support deleveraging and reinvestment priorities. By the end of 2027 we expect to generate between $200 million and $250 million of gross cash proceeds from the disposition of non-core assets Proceeds of $50 million were realized in the first quarter of 2026 from the disposition of a hotel in Cancun, Mexico and over $125 million of additional gross proceeds from dispositions are expected for the remainder of 2026.
• Optimize geographic mix by scaling back our operations in lower return areas, including our Asia Pacific business, to improve capital efficiency overall and future margins.
32
Table of Contents
Consolidated Results
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
REVENUES
Sale of vacation ownership products $ 343 $ 355
Management and exchange 216 215
Rental 176 169
Financing 92 88
Cost reimbursements 430 373
TOTAL REVENUES 1,257 1,200
EXPENSES
Cost of vacation ownership products 46 42
Marketing and sales 242 234
Management and exchange 120 117
Rental 140 123
Financing 41 36
Royalty fee 28 28
General and administrative 64 61
Depreciation and amortization 34 38
Litigation charges 2 7
Modernization †
16 10
Restructuring †
6 —
Impairment †
— 2
Cost reimbursements 430 373
TOTAL EXPENSES 1,169 1,071
Gains and other income, net 2 13
Interest expense, net (44) (40)
Other (1) —
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 45 102
Provision for income taxes (23) (45)
NET INCOME 22 57
Net income attributable to noncontrolling interests — (1)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 22 $ 56
† Prior year amounts have been reclassified to conform with our current year presentation.
Operating Statistics
Three Months Ended
(Contract sales $ in millions) March 31, 2026 March 31, 2025 Change
Vacation Ownership
Contract sales
$ 411 $ 420 $ (9) (2%)
VPG $ 4,016 $ 3,979 $ 37 1%
Tours 95,250 97,998 (2,748) (3%)
Exchange & Third-Party Management
Total active members at end of period (000's) 1,507 1,538 (31) (2%)
Average revenue per member $ 39.13 $ 39.94 $ (0.81) (2%)
33
Table of Contents
Revenues
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Vacation Ownership $ 1,193 $ 1,135 $ 58 5%
Exchange & Third-Party Management 57 58 (1) (2%)
Total Segment Revenues 1,250 1,193 57 5%
Consolidated Property Owners’ Associations 7 7 — NM
Total Revenues $ 1,257 $ 1,200 $ 57 5%
Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA
EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense and amortization of cloud computing software implementation costs. Share-based compensation expense is excluded to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. Amortization of cloud computing software implementation costs, which are not included in depreciation and amortization expense, are excluded from Adjusted EBITDA for comparability purposes to address the considerable variability among companies in the utilization of productive assets.
For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We consider Adjusted EBITDA margin to be an indicator of our operating profitability.
We also use Adjusted EBITDA and Adjusted EBITDA margin, as do analysts, lenders, investors, and others, because these measures exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Adjusted EBITDA and Adjusted EBITDA margin also exclude depreciation and amortization, as well as amortization of cloud computing software implementation costs, because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating or amortizing productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing core operations before the impact of these items with results from other companies.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, other companies in our industry may calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.
Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the first quarter of 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $3 million and $4 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
34
Table of Contents
The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income or loss attributable to common stockholders, which is the most directly comparable GAAP financial measure.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Net income attributable to common stockholders
$ 22 $ 56 $ (34) (61%)
Interest expense, net 44 40 4 9%
Provision for income taxes
23 45 (22) (49%)
Depreciation and amortization 34 38 (4) (11%)
EBITDA 123 179 (56) (31%)
Share-based compensation expense 10 7 3 44%
Amortization of cloud computing software implementation costs
1 1 — NM
Certain items
27 5 22 NM
Adjusted EBITDA
$ 161 $ 192 $ (31) (16%)
Adjusted EBITDA Margin
19.5% 23.2% (3.7 pts)
The table below details the components of Certain items for the periods presented.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
Gain on disposition of hotel, land, and other $ (3) $ —
Foreign currency translation 3 (3)
Insurance proceeds — (7)
Change in indemnification asset 3 —
Change in estimates relating to pre-acquisition contingencies (4) (2)
Other (1) (1)
Gains and other income, net (2) (13)
Litigation charges 2 7
Modernization †
16 10
Restructuring †
6 —
Impairment †
— 2
Other 5 (1)
Total Certain items
$ 27 $ 5
† Prior year amounts have been reclassified to conform with our current year presentation.
Segment Adjusted EBITDA
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Vacation Ownership
$ 188 $ 221 $ (33) (15%)
Exchange & Third-Party Management 24 28 (4) (14%)
Segment Adjusted EBITDA
212 249 (37) (15%)
General and administrative
(64) (61) (3) (5%)
Share-based compensation expense
7 5 2 61%
Other (1)
6 (1) 7 NM
Adjusted EBITDA
$ 161 $ 192 $ (31) (16%)
(1) Includes $6 million of severance expense relating to changes in executive leadership that was recorded as General and administrative expense in the first quarter of 2026..
35
Table of Contents
The following tables present segment financial results attributable to common stockholders reconciled to segment Adjusted EBITDA.
Vacation Ownership
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Segment financial results $ 167 $ 198 $ (31) (16%)
Depreciation and amortization 24 26 (2) (9%)
Share-based compensation expense 2 1 1 NM
Amortization of cloud computing software implementation costs
1 1 — NM
Certain items (6) (5) (1) NM
Segment Adjusted EBITDA
$ 188 $ 221 $ (33) (15%)
Segment Adjusted EBITDA Margin
24.8% 29.2% (4.4 pts)
The table below details the components of Certain items for Vacation Ownership segment financial results.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
Gain on disposition of hotel, land, and other $ (3) $ —
Insurance proceeds — (7)
Change in estimates relating to pre-acquisition contingencies (4) (2)
Gains and other income, net (7) (9)
Litigation charges 1 4
Total Certain items $ (6) $ (5)
Exchange & Third-Party Management
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Segment financial results $ 19 $ 18 $ 1 4%
Depreciation and amortization 5 7 (2) (32%)
Share-based compensation expense 1 1 — NM
Certain items
(1) 2 (3) NM
Segment Adjusted EBITDA
$ 24 $ 28 $ (4) (14%)
Segment Adjusted EBITDA Margin
44.9% 49.0% (4.1 pts)
The table below details the components of Certain items for Exchange and Third-Party Management segment financial results.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
Gains and other income, net $ (1) $ —
Impairment †
— 2
Total Certain items $ (1) $ 2
† Prior year amounts have been reclassified to conform with our current year presentation.
36
Table of Contents
Business Segments
Our business is grouped into two reportable business segments: Vacation Ownership and Exchange & Third-Party Management. See Footnote 16 “Business Segments” to our Financial Statements for further information.
Vacation Ownership
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
REVENUES
Sale of vacation ownership products $ 343 $ 355
Resort management and other services 156 155
Rental 167 159
Financing 92 88
Cost reimbursements 435 378
TOTAL REVENUES 1,193 1,135
EXPENSES
Cost of vacation ownership products 46 42
Marketing and sales 242 234
Resort management and other services 72 72
Rental 143 126
Financing 41 36
Royalty fee 28 28
Depreciation and amortization 24 26
Litigation charges 1 4
Cost reimbursements 435 378
TOTAL EXPENSES 1,032 946
Gains and other income, net 7 9
Other (1) —
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 167 $ 198
37
Table of Contents
Sale of Vacation Ownership Products
First Quarter
Three Months Ended
($ in millions) March 31, 2026 % of Contract Sales, Net of Resales
March 31, 2025 % of Contract Sales, Net of Resales
Change
Contract sales
$ 411 $ 420 $ (9) (2%)
Less: Resales contract sales (6) (9) 3
Contract sales, net of resales
405 411 (6) (2%)
Plus:
Settlement revenue 10 2% 9 2% 1
Resales revenue 2 1% 4 1% (2)
Revenue recognition adjustments:
Reportability (2) —% 5 1% (7)
Sales reserve (50) (12%) (50) (12%) —
Other (1)
(22) (6%) (24) (6%) 2
Sale of vacation ownership products $ 343 85% $ 355 86% $ (12) (3%)
VPG $ 4,016 $ 3,979 $ 37 1%
Tours 95,250 97,998 (2,748) (3%)
Financing propensity
55% 55% NM
Average FICO Score (2)
753 740
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.
(2) For customers who financed a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents.
First Quarter
The decrease in Sale of vacation ownership products for the first quarter of 2026 is attributed to lower contract sales and lower revenue reportability.
Contract sales decreased during the first quarter of 2026 due to a 3% decrease in Tours, partially offset by a 1% increase in VPG.
• Owner contract sales increased 3% on higher VPG partially offset by lower Tours.
• First time buyer contract sales decreased 12% on lower VPG and Tours.
The decline in Tours was largely attributable to our planned actions relating to the change in strategy for our Asia-Pacific business as well as our intentional reduction in Tours for FICO scores below 640. Excluding Asia‑Pacific, Tours decreased 1% year-over-year. VPG increased 1% year-over-year on a consolidated basis and was up nearly 50 basis points excluding Asia‑Pacific.
Development Profit
First Quarter
Three Months Ended
($ in millions) March 31, 2026 % of Revenue March 31, 2025 % of Revenue Change
Sale of vacation ownership products $ 343 $ 355 $ (12) (3%)
Cost of vacation ownership products (46) 13% (42) 12% (4) (9%)
Marketing and sales (242) 70% (234) 66% (8) (3%)
Development profit $ 55 $ 79 $ (24) (30%)
Development profit margin 16.1% 22.2% (6.1 pts)
The change in Development profit was due to the following:
• lower Sale of vacation ownership products (discussed above);
38
Table of Contents
• higher Cost of vacation ownership products due to lower favorable product cost true up activity partially offset by the sale of lower average cost inventory (including resulting from the impairments in inventory from the fourth quarter of 2025); and
• higher Marketing and sales costs due to higher salaries, sales materials and preview costs, partially offset by lower commissions.
Resort Management and Other Services Revenues, Expenses and Profit
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Management fee revenues $ 56 $ 55 $ 1 1%
Ancillary revenues 65 65 — —%
Other management and exchange revenues 35 35 — 1%
Resort management and other services revenues 156 155 1 1%
Resort management and other services expenses (72) (72) — —%
Resort management and other services profit $ 84 $ 83 $ 1 1%
Resort management and other services profit margin 53.9% 53.6% 0.3 pts
Resort occupancy (1)
90.5% 90.3% 0.2 pts
(1) Resort occupancy represents all transient, preview, and owner keys divided by total keys available, net of keys out of service.
Rental Revenues, Expenses and Profit
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Rental revenues $ 167 $ 159 $ 8 5%
Rental expenses (143) (126) (17) (14%)
Rental profit $ 24 $ 33 $ (9) (27%)
Rental profit margin 14.2% 20.4% (6.2 pts)
Transient keys rented (1)
578,274 569,470 8,804 2%
Average transient rate $ 285 $ 284 $ 1 —%
Rental occupancy (2)
75.0% 74.3% 0.7 pts
(1) Transient keys rented exclude plus points and preview stays.
(2) Rental occupancy represents transient and preview keys divided by keys available to rent, which is total available keys excluding owner usage.
First Quarter
Rental profit declined due to $7 million of higher unsold maintenance fees associated with developer-owned inventory and $4 million of higher marketing, variable and other costs, partially offset by a $2 million increase in transient rental revenues, including plus points.
Rental revenues and Rental expenses are both $6 million higher due to a reduction in the amount of costs in excess of rental revenues for developer-owned inventory which is registered and held for sale reclassified to Rental revenues.
We continue to expect a decline in rental profit in 2026 attributed to higher inventory and related unsold maintenance fees.
39
Table of Contents
Financing Revenues, Expenses and Profit
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Financing revenues $ 92 $ 88 $ 4 4%
Financing expenses (10) (11) 1 5%
Consumer financing interest expense (31) (25) (6) (21%)
Financing profit $ 51 $ 52 $ (1) (2%)
Financing profit margin 55.8% 59.3% (3.5 pts)
First Quarter
• Financing revenues reflect higher interest income as a result of a higher average notes receivable balance, partially offset by a slightly lower average interest rate.
• Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the first quarter of 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $3 million and $4 million for the three months ended March 31, 2026 and March 31, 2025, respectively. In addition, consumer financing interest expense increased by $2 million due to higher average securitized debt in the first quarter of 2026.
Gains and Other Income
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Gains and other income, net $ 7 $ 9 $ (2) NM
First Quarter
During the first quarter of 2026, we benefited from a $2 million gain on the disposition of a hotel in Cancun, Mexico, a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, and a less than $1 million gain on the disposition of a parcel of land.
During the first quarter of 2025, we benefited from $7 million of proceeds from service interruption insurance relating to the Maui wildfires, and a $2 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.
Exchange & Third-Party Management
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
REVENUES
Management and exchange $ 44 $ 46
Rental 9 10
Cost reimbursements 4 2
TOTAL REVENUES 57 58
EXPENSES
Management and exchange 30 29
Depreciation and amortization 5 7
Impairment †
— 2
Cost reimbursements 4 2
TOTAL EXPENSES 39 40
Gains and other income, net 1 —
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 19 $ 18
† Prior year amounts have been reclassified to conform with our current year presentation.
40
Table of Contents
Corporate and Other
Corporate and Other consists of results that are not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, transaction and integration costs, and income taxes. In addition, Corporate and Other includes the revenues and expenses from Consolidated Property Owners’ Associations.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
REVENUES
Resort management and other services $ 16 $ 14
Cost reimbursements (9) (7)
TOTAL REVENUES 7 7
EXPENSES
Resort management and other services 18 16
Rental (3) (3)
General and administrative 64 61
Depreciation and amortization 5 5
Litigation charges 1 3
Modernization †
16 10
Restructuring †
6 —
Cost reimbursements (9) (7)
TOTAL EXPENSES 98 85
(Losses) gains and other (expense) income, net (6) 4
Interest expense, net (44) (40)
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (141) (114)
Provision for income taxes (23) (45)
Net income attributable to noncontrolling interests — (1)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (164) $ (160)
† Prior year amounts have been reclassified to conform with our current year presentation.
General and Administrative
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
General and administrative $ 64 $ 61 $ 3 5%
First Quarter
General and administrative expenses for the first quarter of 2026 increased primarily due to $6 million of severance expense relating to changes in executive leadership and $3 million of share-based compensation for new executives, partially offset by $3 million of lower insurance expense and $3 million of lower other costs.
Modernization
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Modernization $ 16 $ 10 $ 6 51%
First Quarter
In November 2024, we announced the creation of a Strategic Business Operations office focused on accelerating our growth and driving operating efficiencies in all areas of our business while increasing organizational agility. The 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.
41
Table of Contents
Modernization expenses during the first quarter of 2026 related to:
• $9 million for consulting costs relating to implementation of initiatives;
• $4 million for technology; and
• $3 million for the partial outsourcing of corporate overhead functions.
During the first quarter of 2025, the majority of our Modernization expenses were related to advisory services.
We expect to incur non-recurring expenses of approximately $85 million in the remainder of 2026 related to these modernization initiatives.
Restructuring
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Restructuring $ 6 $ — $ 6 NM
First Quarter
During the first quarter of 2026, we incurred $6 million of severance expense associated with certain organizational changes, primarily in our corporate support functions. An additional $6 million of severance expense associated with the organizational changes in our executive leadership team is presented as a component of General and Administrative expenses on our Income Statement.
(Losses) Gains and Other (Expense) Income
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
(Losses) gains and other (expense) income, net $ (6) $ 4 $ (10) NM
First Quarter
In the first quarter of 2026, we recorded $3 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters and $3 million of foreign currency translation losses.
In the first quarter of 2025, we recorded $3 million of foreign currency translation gains and $1 million of other gains.
Interest Expense
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Interest expense, net $ (44) $ (40) $ (4) (9%)
First Quarter
The increase in Interest expense, net is primarily attributed to $10 million of interest on our 6.500% Senior Unsecured Notes due 2033 issued in the third quarter of 2025 (the proceeds of which were used to repay our $575 million 0.000% 2026 Convertible Notes). This increase was partially offset by the change in presentation of interest on our Warehouse Credit Facility and by lower interest on our Corporate Credit Facility and 2026 Convertible Notes which were repaid during the first quarter of 2026.
Commencing in the first quarter of 2026, interest expense associated with our Warehouse Credit Facility is included as a component of Consumer financing interest expense within Financing expense. For the first quarter of 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net. Interest expense on our Warehouse Credit Facility was $3 million and $4 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
42
Table of Contents
Income Tax
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025 Change
Provision for income taxes $ (23) $ (45) $ 22 NM
First Quarter
Our effective tax rate was 50.3% and 43.6% for the three months ended March 31, 2026 and March 31, 2025, respectively.
The effective tax rate for the three months ended March 31, 2026 differed from the blended U.S. federal and state statutory tax rate primarily due to a permanent adjustment related to interest on installment sales, higher projected foreign losses, for which a valuation allowance was recorded, and discrete income tax adjustments primarily associated with foreign operations, including a $6 million cumulative adjustment related to a foreign tax provision, and share-based compensation.
The effective tax rate for the three months ended March 31, 2025 differed from the blended U.S federal and state statutory tax rate primarily due to lower pre-tax book income forecast at that time for the year in 2025, which was largely driven by our modernization efforts and related costs expected to be incurred, higher expected foreign losses, for which a valuation allowance was recorded, and discrete income tax adjustments, primarily related to share-based compensation.
Consolidated Property Owners’ Associations
The following table illustrates the impact of certain Consolidated Property Owners’ Associations under the relevant accounting guidance.
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
REVENUES
Resort management and other services $ 16 $ 14
Cost reimbursements (9) (7)
TOTAL REVENUES 7 7
EXPENSES
Resort management and other services 18 16
Rental (3) (3)
Cost reimbursements (9) (7)
TOTAL EXPENSES 6 6
FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 1 1
Provision for income taxes (1) —
Net income attributable to noncontrolling interests — (1)
FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ — $ —
Liquidity and Capital Resources
Typically, our capital needs are supported by cash on hand, cash generated from operations, our ability to access funds under the Warehouse Credit Facility and the Revolving Corporate Credit Facility, our ability to raise capital through securitizations in the ABS market, and, to the extent necessary, our ability to issue new debt and refinance existing debt. We believe these sources of capital will be adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, satisfy debt service requirements, fulfill other cash requirements, and return capital to stockholders. We continuously monitor the capital markets to evaluate the effect that changes in market conditions may have on our ability to fund our liquidity needs.
At March 31, 2026, our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.2, which we believe is a manageable leverage level, and we remain focused on reducing this ratio over time.
During the first quarter of 2026, we used the proceeds from the 2033 Notes to repay our 2026 Convertible Notes upon maturity. We have no material principal payment obligations for the remainder of 2026. See Footnote 12 “Debt” to our Financial Statements for further information related to maturities of our debt.
43
Table of Contents
Sources of Liquidity
Cash from Operations
Our primary sources of funds from operations are (1) cash sales and down payments on financed sales, (2) cash from our financing operations, including principal and interest payments received on outstanding vacation ownership notes receivable, (3) cash from fee-based membership, exchange and rental transactions, and (4) cash generated from our rental and resort management and other services operations.
Vacation Ownership Notes Receivable Securitizations
We periodically securitize, without recourse through bankruptcy remote special purpose entities, the majority of the notes receivable originated in connection with the sale of vacation ownership products to institutional investors in the ABS term securitization market. These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes. In a vacation ownership notes receivable term securitization, several classes of debt securities issued by a special purpose entity are collateralized by a single pool of transferred vacation ownership notes receivable. In connection with each vacation ownership notes receivable securitization, we may retain all or a portion of the securities that are issued.
Typically, we receive cash at inception of the term securitization transaction for the amount of notes issued less fees and monies held in reserve and we receive cash during the life of the transaction in amounts reflecting the excess spread of interest received on the related vacation ownership notes receivable less the interest payable on the ABS securities, less administrative fees and amounts from related vacation ownership notes receivable that default. Loan defaults under securitizations offset a portion of the excess spread we receive, on a monthly basis.
Each of the securitized vacation ownership notes receivable transactions contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread of interest accruing on the related vacation ownership notes receivable less the interest accruing on the ABS securities and fees we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. At the recent level of defaults, there is no impact to cash whether we repurchase defaulted vacation ownership notes receivable from a securitization VIE and pursue foreclosure or foreclose on behalf of a securitization VIE. During the first quarter of 2026, and as of March 31, 2026, we had 12 term securitization transactions outstanding, none of which were out of compliance with their respective required parameters. Since 2000, we have issued approximately $10.7 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.
On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize, on a revolving non-recourse basis, eligible consumer loans derived from certain vacation ownership sales. Those loans may later be transferred to term securitization transactions in the ABS market, which typically occur twice a year. At March 31, 2026, we had $343 million of borrowings outstanding on our Warehouse Credit Facility. See Footnote 11 “Securitized Debt’ to our Financial Statement for further information.
As of March 31, 2026, $108 million of gross vacation ownership notes receivable were eligible for securitization.
Revolving Corporate Credit Facility
Our Revolving Corporate Credit, which expires on March 24, 2030, provides for up to $800 million of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions. At March 31, 2026, $310 million of borrowings and $12 million of letters of credit were outstanding under our Revolving Corporate Credit Facility. See Footnote 12 “Debt” to our Financial Statements for further information.
Disposition of Non-core Assets
As part of our broader financial strategic review in the fourth quarter of 2025, 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 then-current inventory position and identifying opportunities to monetize non-core assets. During the first quarter of 2026, we received cash proceeds of $50 million from the sale of an entity that owned and operated a Vacation Ownership segment hotel in Cancun. Over the next two years we expect to generate between $200 million and $250 million of additional net cash proceeds from the disposition of certain non-core property and equipment and other assets with proceeds over $125 million in the remainder of 2026.
44
Table of Contents
Uses of Cash
We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts. Our working capital needs fluctuate throughout the year given the timing of annual maintenance fees on unsold inventory we pay to owners’ associations and certain annual compensation-related outflows. In addition, our cash from operations varies due to the timing of repayment by owners of vacation ownership notes receivable, timing and amount of voluntary repurchases of defaulted vacation ownership notes receivable, the closing or recording of sales contracts for vacation ownership products, financing propensity, and cash outlays for inventory acquisitions and development.
Seasonality
Our cash flow from operations fluctuates during the year due to the timing of certain receipts and contractual and compensation-related payments. Significant changes in cash flow can result from the timing of our collection of maintenance fees, club dues, and other customer payments, which typically occurs in either the fourth quarter or the first quarter of each year. Generally, cash outflows related to our payment of maintenance fees associated with unsold inventory occurs in the fourth quarter for our points-based products, and in the first quarter for our weeks-based products. In addition, during the first quarter of each year, we generally have variable compensation-related cash outflows associated with payment of annual bonuses and, subject to the continued issuance of quarterly dividends, the payment of two quarterly cash dividends declared in December and February.
Timing of Estimated Tax Payments
As part of the federal tax relief provided by the Internal Revenue Service for businesses in areas of Florida affected by hurricanes during the third and fourth quarters of 2024, we were permitted to defer certain federal income tax payments without incurring interest or penalties. As a result, $38 million of estimated tax payments otherwise due in the third and fourth quarters of 2024 were deferred and paid in the second quarter of 2025. We do not have similar deferrals of estimated tax payments from 2025 into 2026.
Operations
In addition to net income and adjustments for non-cash items, the following are key drivers of our cash flow from operating activities:
Inventory Spending Less than (In Excess of) Cost of Sales
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
Inventory spending $ (25) $ (29)
Purchase and development of property for future transfer to inventory — (2)
Inventory costs 35 30
Inventory spending less than (in excess of) cost of sales $ 10 $ (1)
We plan to restrict our new inventory spending to capital efficient arrangements where our cash outlay coincides with the start of sales, as well as low-cost reacquired inventory. Through our existing VOI repurchase program, we proactively acquire previously sold VOIs from owners’ associations and individual owners at lower costs than would be required to develop new inventory. Among other reasons for repurchasing inventory, we expect these repurchases will help stabilize the future cost of our vacation ownership products.
Vacation Ownership Notes Receivable Collections Less Than Originations
Three Months Ended
($ in millions) March 31, 2026 March 31, 2025
Vacation ownership notes receivable collections — non-securitized $ 47 $ 41
Vacation ownership notes receivable collections — securitized 138 135
Vacation ownership notes receivable originations (241) (233)
Vacation ownership notes receivable collections less than originations $ (56) $ (57)
Vacation ownership notes receivable collections were less than originations in the first quarters of 2026 and 2025 due to the growth of our vacation ownership notes receivable portfolio.
45
Table of Contents
Repurchase of Common Stock
The following table summarizes share repurchase activity under our Share Repurchase Program:
($ in millions, except per share amounts) Number of Shares Repurchased Cost Basis of Shares Repurchased Average Price
Paid per Share
As of December 31, 2025 26,795,163 $ 2,522 $ 94.12
For the first quarter of 2026 — — $ —
As of March 31, 2026 26,795,163 $ 2,522 $ 94.12
See Footnote 13 “Stockholders' Equity” to our Financial Statements for further information related to our current share repurchase program.
Payment of Dividends to Common Stockholders
We distributed cash dividends to holders of our common stock during the first quarter of 2026 as follows:
Declaration Date Stockholder Record Date Distribution Date Dividend per Share
December 12, 2025 December 24, 2025 January 7, 2026 $0.80
February 19, 2026 March 4, 2026 March 18, 2026 $0.80
We currently expect to pay quarterly dividends in the future, but any future dividend payments will be subject to the approval of our Board of Directors, which will depend on our financial condition, results of operations and capital requirements at the time, as well as applicable law, regulatory constraints, industry practice, and other business considerations that our Board of Directors considers relevant. In addition, our Corporate Credit Facility and the indentures governing our senior notes contain restrictions on our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit the payment of dividends. The payment of certain cash dividends may also result in an adjustment to the conversion rate of our convertible notes in a manner adverse to us. Accordingly, there can be no assurance that we will pay dividends in the future at any particular rate or at all.
Material Cash Requirements
The following table summarizes our future material cash requirements from known contractual or other obligations as of March 31, 2026:
Payments Due by Period
($ in millions) Total Remainder
of 2026 2027 2028 2029 2030 Thereafter
Debt (1)
$ 3,771 $ 132 $ 725 $ 464 $ 602 $ 401 $ 1,447
Securitized debt (1)(2)
2,947 233 292 570 249 243 1,360
Purchase obligations (3)
574 153 201 131 39 31 19
Operating lease obligations (4)
78 17 16 13 10 7 15
Finance lease obligations (4)
518 13 17 14 13 13 448
Other long-term obligations 27 23 2 2 — — —
$ 7,915 $ 571 $ 1,253 $ 1,194 $ 913 $ 695 $ 3,289
(1) Includes principal as well as interest payments and excludes unamortized debt discount and issuance costs.
(2) Payments based on estimated timing of cash flow associated with securitized notes receivable.
(3) Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Amounts reflected herein represent expected funding requirements under such contracts and primarily relate to future purchases of property and vacation ownership units, outsourced services, and arrangements related to information technology, including cloud computing. Amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
(4) Includes interest.
In the normal course of our resort management business, we enter into purchase commitments on behalf of owners’ associations to manage the daily operating needs of our resorts. Since we are reimbursed for these commitments from the cash flows of the owners’ associations, these obligations generally have minimal impact on our net income and cash flow. These purchase commitments are excluded from the table above.
46
Table of Contents
Supplemental Guarantor Information
The 2028 Notes are guaranteed by MVWC, Marriott Ownership Resorts, Inc. (“MORI”), and certain other subsidiaries whose voting securities are wholly owned directly or indirectly by MORI (such subsidiaries collectively, the “Senior Notes Guarantors”). These guarantees are full and unconditional and joint and several. The guarantees of the Senior Notes Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.
The following tables present consolidating financial information as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 for MVWC and MORI on a stand-alone basis (collectively, the “Issuers”), the Senior Notes Guarantors, the combined non-guarantor subsidiaries of MVWC, and MVW on a consolidated basis.
Condensed Consolidating Statement of Income
Three Months Ended March 31, 2026
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI
Revenues $ — $ 254 $ 713 $ 301 $ (11) $ 1,257
Expenses (17) (279) (707) (220) 11 (1,212)
Benefit from (provision for) income taxes 6 10 4 (43) — (23)
Equity in net income of subsidiaries 33 113 — — (146) —
Net income 22 98 10 38 (146) 22
Net income attributable to noncontrolling interests — — — — — —
Net income attributable to common stockholders $ 22 $ 98 $ 10 $ 38 $ (146) $ 22
47
Table of Contents
Condensed Consolidating Balance Sheet
As of March 31, 2026 As of December 31, 2025
Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated
($ in millions) MVWC MORI MVWC MORI
Cash and cash equivalents $ — $ 50 $ 87 $ 131 $ — $ 268 $ 135 $ 70 $ 69 $ 132 $ — $ 406
Restricted cash — 44 115 169 — 328 — 21 145 161 — 327
Accounts and contracts receivable, net 21 171 123 100 1 416 21 135 166 117 (11) 428
Vacation ownership notes receivable, net — 154 126 2,287 — 2,567 — 251 192 2,122 — 2,565
Inventory — 340 212 128 — 680 — 324 231 137 — 692
Property and equipment, net — 251 589 104 — 944 — 252 593 105 — 950
Goodwill — — 2,958 — — 2,958 — — 2,958 — — 2,958
Intangibles, net — — 669 27 — 696 — — 683 28 — 711
Investments in subsidiaries 2,394 3,506 — — (5,900) — 2,894 3,592 — — (6,486) —
Other 177 163 391 204 (156) 779 180 155 323 191 (129) 720
Total assets $ 2,592 $ 4,679 $ 5,270 $ 3,150 $ (6,055) $ 9,636 $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
Accounts payable $ 24 $ 58 $ 101 $ 87 $ — $ 270 $ 91 $ 45 $ 144 $ 79 $ (1) $ 358
Advance deposits — 76 79 17 — 172 — 72 73 18 — 163
Accrued liabilities 5 121 129 120 8 383 1 130 123 124 (2) 376
Deferred revenue and other — 12 218 265 (29) 466 — 11 157 212 (9) 371
Payroll and benefits liability 1 113 81 26 — 221 1 109 74 34 — 218
Deferred compensation liability — 132 80 2 — 214 — 165 55 5 — 225
Securitized debt, net — — — 2,330 (26) 2,304 — — — 2,173 (27) 2,146
Debt, net 570 2,515 179 1 — 3,265 1,144 2,210 179 1 — 3,534
Other — 3 93 24 — 120 — 5 113 24 — 142
Deferred taxes — 113 204 20 (108) 229 — 105 209 18 (101) 231
MVW stockholders' equity 1,992 1,536 4,106 258 (5,900) 1,992 1,993 1,948 4,233 305 (6,486) 1,993
Total liabilities and equity $ 2,592 $ 4,679 $ 5,270 $ 3,150 $ (6,055) $ 9,636 $ 3,230 $ 4,800 $ 5,360 $ 2,993 $ (6,626) $ 9,757
48
Table of Contents
Recent Accounting Pronouncements
See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” to our Financial Statements for a discussion of recently issued accounting pronouncements, including information about new accounting standards and the future adoption of such standards.
Critical Accounting Policies and Estimates
Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our 2025 Annual Report. Since the date of our 2025 Annual Report, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.