What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-05 · 244 added, 195 removed, 455 unchanged (49% of the section changed)

3 unchanged sentences

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 possible or assumed future results of operations, cash flows, financial condition, leverage, liquidity;

future dividend payments;

business strategies and management priorities for 2026, including efforts to improve profitability, accelerate growth, lower costs, monetize non-core assets and enhance Tour quality and VPG, expected trends in rental profit, marketing and sales expenses and cost of vacation ownership products as a percentage of revenue;

the adequacy of capital to meet short-term and long-term liquidity requirements;

our expectations regarding the costs and benefits of our modernization efforts;

our plan to reduce our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio;

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worker absenteeism;

our ability to attract and retain our global workforce;

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;

the ability to integrate artificial intelligence (“AI”) technologies successfully while managing and mitigating related operational, legal, intellectual property, data security and reputational risks;

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;

instability, disruptions, or distress in the banking system or financial institutions;

impacts of severe weather events, climate conditions or natural or man-made disasters;

delinquency and default rates in our financing business;

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;

volatility in the international and national economies and credit markets;

the impacts of ongoing global conflicts and related sanctions or geopolitical measures;

competitive conditions;

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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.

• Total active members represents the number of active members of the Interval Network 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.

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Management Priorities

During the second quarter of 2026, we continued to execute our previously described management priorities and made meaningful progress across our strategic, operational, and financial objectives.

The following discussion provides an update on our progress.

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.

• Improve profitability and cash flow by driving higher free cash flow conversion through disciplined execution, optimizing working capital, managing capital spending, and improving Adjusted EBITDA performance.

• We improved net income and Adjusted EBITDA in the second quarter of 2026 as compared to the second quarter of 2025 and improved operating cash flow for the first half of 2026, shifting to cash provided by operating activities in 2026 from cash used in operating activities during the comparable period in 2025.

• 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.

Retain key existing leadership and talent throughout the organization to facilitate continuity and retention of historical business knowledge.

• During the first half of 2026, we enhanced key leadership talent and capabilities and made targeted investments in our workforce.

We believe these actions have strengthened our leadership bench, enhanced critical commercial capabilities across the organization, and supported the execution of our strategic and operational objectives.

We will regularly evaluate our talent needs and organizational structure to help maintain the capabilities we believe are necessary to support long-term growth and value creation.

Current initiatives focus on expanding and diversifying marketing opportunities by improving lead generation, increasing marketing efficiency and enhancing our products and services.

• We have continued to onboard top-performing sales and marketing professionals while investing in innovation and industry-leading tools that we believe help our teams to operate more effectively and support long-term value creation.

• In the second quarter of 2026, we enhanced our Owner Benefit Levels, including by introducing new ownership tiers, providing exclusive access to deeper discounts for certain reservation types and additional onsite benefits when visiting the Marriott Vacation Clubs.

We plan to continue to focus on creating more personalized, engaging and experience-driven vacations for our owners to elevate the owner experience.

• In the second quarter of 2026, we launched “Inner Circle,” a new owner-exclusive experiences platform offering access to private concerts, sporting events, culinary experiences and on-site events to owners of Marriott Vacation Club, Westin Vacation Club and Sheraton Vacation Club.

Early owner participation and engagement levels have been favorable among those who have attended these events, providing evidence that these initiatives are resonating with our owner base.

• We expect the enhanced owner experience, new owner benefits and Inner Circle platforms to increase owner engagement and retention which we anticipate will generate increased referrals of potential new customers to support contract sales growth and higher VPG.

We expect the financial benefits of these actions to grow in the second half of 2026 and continue into 2027 as we build a Tour pipeline that reflects these changes.

We expect that marketing and sales expenses to decline as a percentage of Development revenue during the second half of 2026.

• As a result of these actions, Contract sales increased 22% and VPG increased 23% during the second quarter of 2026 over the comparable period in 2025 despite a 1% decline in Tours.

• Lower cost base by emphasizing operating discipline to improve cash flow through execution and cost management.

• We intend to continue to advance this priority through focused expense control, operational efficiencies, and disciplined management of working capital and capital expenditures.

We believe these efforts contributed to a significant improvement in operating cash flow, which transitioned from cash used in operating activities during the comparable 2025 period to cash provided by operating activities in 2026.

• Protect and grow recurring, high margin revenue streams by maintaining stable performance in our financing and management and exchange businesses to promote earnings durability and cash flow generation.

• Our financing, management and exchange businesses continue to be high-margin, recurring revenue streams which contribute to earnings and cash flow generation, reinforcing the resilience of our business model and supporting our objective of delivering consistent financial performance across varying market conditions.

• Disciplined capital allocation to fund high return growth initiatives while prioritizing liquidity and balance sheet flexibility.

• We seek to balance investment in growth with maintaining liquidity and balance sheet flexibility.

We are prioritizing initiatives that we believe have the greatest potential to drive long-term returns while maintaining the financial flexibility necessary to support our strategic objectives and navigate macroeconomic uncertainty.

• In July 2026, we amended certain agreements associated with our Warehouse Credit Facility to extend the revolving period from the second quarter of 2027 to the second quarter of 2028.

The extension strengthens our liquidity profile and financial flexibility, while providing continued access to a key source of funding to support our strategic and operational objectives.

• Monetize non-core assets to generate proceeds and support our deleveraging and reinvestment priorities.

• While we continue to evaluate opportunities to monetize non-core assets as part of our capital allocation framework, recent increases in contract sales volume and improved sales trends have increased our inventory requirements to support anticipated future sales.

As a result, we now expect to retain certain assets for operational use that we previously identified for potential disposition, reducing our near term estimated proceeds from non-core asset monetization but supporting future revenue generation and long-term value creation.

• Following the decision to retain certain assets for operational use, we now expect that we will generate approximately $200 million of gross cash proceeds from the disposition of non-core assets in 2026 and 2027.

We realized proceeds of $50 million in the first quarter of 2026 from the disposition of an entity that owned and operated a hotel in Cancun, Mexico and we expect to realize an additional $50 million of gross proceeds from dispositions during the remainder of 2026.

• Optimize geographic mix by scaling back our operations in lower return areas to improve capital efficiency overall and future margins.

• As part of our previously announced Asia Pacific strategy, we reduced Tours to certain customers in select markets, aligned regional staffing levels with anticipated demand, and deferred the purchase of a future phase of our Khao Lak, Thailand resort development.

• During the second quarter of 2026, we decided to close our sales gallery in Dubai, United Arab Emirates.

This decision reflected the anticipated impact of heightened geopolitical uncertainty in the region on anticipated operating performance and our commitment to deploying capital in a manner that supports long-term value creation.

Consolidated Results

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Sale of vacation ownership products $ 430 $ 370 $ 773 $ 725

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TOTAL EXPENSES 1,159 1,134 2,328 2,205

Gains and other income, net 2 13

(Losses) gains and other (expense) income, net (4) 24 (2) 37

Interest expense, net (43) (42) (87) (82)

Other — — (1) —

INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 114 94 159 196

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Operating Statistics

Three Months Ended

(Contract sales $ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

(Contract sales $ in millions) June 30, 2026 June 30, 2025 Change

June 30, 2026 June 30, 2025 Change

Vacation Ownership

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Average revenue per member $ 36.83 $ 37.40 $ (0.57) (2%) $ 76.04 $ 77.40 $ (1.36) (2%)

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Vacation Ownership $ 1,260 $ 1,188 $ 72 6% $ 2,453 $ 2,323 $ 130 6%

Exchange & Third-Party Management 57 58 (1) (2%)

Exchange & Third-Party Management 54 53 1 2% 111 111 — NM

Total Segment Revenues 1,314 1,241 73 6% 2,564 2,434 130 5%

Consolidated Property Owners’ Associations 7 7 — NM

Consolidated Property Owners’ Associations 6 5 1 NM 13 12 1 NM

Total Revenues $ 1,320 $ 1,246 $ 74 6% $ 2,577 $ 2,446 $ 131 5%

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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.

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

For the three and six months ended June 30, 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 $2 million and $5 million for the three and six months ended June 30, 2026, respectively, and $3 million and $7 million for the three and six months ended June 30, 2025, respectively.

The table below shows our EBITDA and Adjusted EBITDA calculation and reconciles these measures with net income attributable to common stockholders, which is the most directly comparable GAAP financial measure.

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Net income attributable to common stockholders

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EBITDA 189 174 15 8% 312 353 (41) (12%)

Share-based compensation expense 10 7 3 44%

Share-based compensation expense 12 12 — NM 22 19 3 15%

Amortization of cloud computing software implementation costs

2 1 1 29% 3 2 1 30%

Certain items

12 16 (4) NM 39 21 18 NM

Adjusted EBITDA

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Adjusted EBITDA Margin

19.5% 23.2% (3.7 pts)

23.4% 24.3% (0.9 pts) 21.5% 23.7% (2.2 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)

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Loss (gain) on disposition of hotel, land, and other $ 1 $ — $ (2) $ —

Foreign currency 2 (18) 5 (21)

Insurance proceeds — (1) — (8)

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Other (1) (2) (2) (3)

Gains and other income, net (2) (13)

Losses (gains) and other expense (income), net 4 (24) 2 (37)

Litigation charges (1) 5 1 12

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Restructuring †

Other (1) 1 4 —

Total Certain items

$ 12 $ 16 $ 39 $ 21

† 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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Vacation Ownership

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Share-based compensation expense

10 9 1 (1%) 17 14 3 21%

(1) 1 (2) NM 5 — 5 NM

Adjusted EBITDA

$ 215 $ 203 $ 12 6% $ 376 $ 395 $ (19) (5%)

(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..

(1) Includes $5 million of severance expense relating to changes in executive leadership that was recorded as General and administrative expense in the six months ended June 30, 2026.

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Segment financial results $ 219 $ 197 $ 22 12% $ 386 $ 395 $ (9) (2%)

Depreciation and amortization 22 28 (6) (19%) 46 54 (8) (14%)

Share-based compensation expense 2 1 1 NM

Share-based compensation expense 2 3 (1) (3%) 4 4 — 1%

Amortization of cloud computing software implementation costs

Certain items (6) (5) (1) NM

2 1 1 47% 3 2 1 47%

Certain items 1 2 (1) NM (5) (3) (2) NM

Segment Adjusted EBITDA

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Segment Adjusted EBITDA Margin

24.8% 29.2% (4.4 pts)

28.9% 29.8% (0.9 pts) 27.0% 29.5% (2.5 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) $ —

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Loss (gain) on disposition of hotel, land, and other $ 1 $ — $ (2) $ —

Insurance proceeds — — — (7)

Change in estimates relating to pre-acquisition contingencies — — (4) (2)

Gains and other income, net (7) (9)

Other — (1) — (1)

Losses (gains) and other expense (income), net 1 (1) (6) (10)

Litigation charges — 3 1 7

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Exchange & Third-Party Management

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Segment financial results $ 17 $ 16 $ 1 2% $ 36 $ 34 $ 2 3%

Depreciation and amortization 5 7 (2) (27%) 10 14 (4) (30%)

Share-based compensation expense 1 1 — NM

Share-based compensation expense — — — (1%) 1 1 — 2%

Certain items

— — — NM (1) 2 (3) NM

Segment Adjusted EBITDA

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Segment Adjusted EBITDA Margin

44.9% 49.0% (4.1 pts)

43.3% 45.9% (2.6 pts) 44.1% 47.5% (3.4 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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Gains and other income, net $ — $ — (1) —

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Vacation Ownership

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Sale of vacation ownership products $ 430 $ 370 $ 773 $ 725

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TOTAL EXPENSES 1,040 992 2,072 1,938

Gains and other income, net 7 9

(Losses) gains and other (expense) income, net (1) 1 6 10

Other — — (1) —

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 219 $ 197 $ 386 $ 395

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 % of Contract Sales, Net of Resales

June 30, 2025 % of Contract Sales, Net of Resales

June 30, 2026 % of Contract Sales, Net of Resales

June 30, 2025 % of Contract Sales, Net of Resales

Contract sales

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Tours 112,721 114,402 (1,681) (1%) 207,971 212,400 (4,429) (2%)

Financing propensity

Expected financing propensity as a % of contract sales 66% 64% 2 pts 62% 61% 1 pts

Average FICO Score (2)

756 742 754 741

(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.

(2) For customers who we expect to finance 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.

Second Quarter

The increase in Sale of vacation ownership products for the second quarter of 2026 was driven by higher contract sales, partially offset by lower revenue reportability.

• Owner contract sales increased 41% reflecting a 33% increase in VPG and a 7% increase in owner Tours.

These results reflect changes in our second quarter sales strategy to focus on existing owners upon the launch of our recent owner engagement initiatives and greater incremental purchase activity by existing owners.

• First time buyer contract sales decreased 16% driven by lower VPG and Tours.

We continue to believe there is a significant long-term opportunity to expand our first time buyer base through targeted marketing, enhanced lead generation efforts, and continued refinement of our sales and customer acquisition strategies.

The overall decline in Tours was largely attributable to change in strategy for our Asia-Pacific business as well as our strategy to improve Tour quality for first time buyers.

Excluding Asia‑Pacific, Tours increased 3% year-over-year.

VPG increased 23% year-over-year on a consolidated basis and, excluding Asia-Pacific, VPG increased nearly 22% year over year.

We expect the higher contract sales and VPG to continue throughout the remainder of the year, partially offset by an increase in our Sales reserve attributed to higher average transaction size and propensity.

The increase in Sale of vacation ownership products for the first half of 2026 was driven by higher contract sales, partially offset by lower revenue reportability.

• Owner contract sales increased 22% reflecting a 19% increase in VPG and higher Tours.

• First time buyer contract sales decreased 14% reflecting lower Tours and a lower VPG.

The decline in Tours was largely attributable to the change in strategy for our Asia-Pacific business as well as our strategy to improve Tour quality for first time buyers.

Excluding Asia‑Pacific, Tours increased 1% year-over-year.

VPG increased 13% year-over-year on a consolidated basis and, excluding Asia-Pacific, increased nearly 12% year over year.

Development Profit

First Quarter

Three Months Ended

($ in millions) March 31, 2026 % of Revenue March 31, 2025 % of Revenue Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 % of Revenue June 30, 2025 % of Revenue Change June 30, 2026 % of Revenue June 30, 2025 % of Revenue Change

Sale of vacation ownership products $ 430 $ 370 $ 60 16% $ 773 $ 725 $ 48 7%

2 unchanged sentences

Development profit $ 106 $ 92 $ 14 16% $ 161 $ 171 $ (10) (5%)

Development profit margin 16.1% 22.2% (6.1 pts)

Development profit margin 24.6% 24.7% (0.1 pts) 20.8% 23.5% (2.7 pts)

Second Quarter and First Half

The change in Development profit was due to the following:

• lower Sale of vacation ownership products (discussed above);

• 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);

• higher Marketing and sales costs due to higher salaries, sales materials and preview costs, partially offset by lower commissions.

• higher Sale of vacation ownership products (discussed above);

• a decline in Cost of vacation ownership products as a percentage of revenue due to the sale of lower average cost inventory (including resulting from the impairments in inventory from the fourth quarter of 2025), partially offset by lower favorable product cost true up activity;

• higher Marketing and sales costs due to higher salaries, commissions and incentive compensation, marketing costs and severance associated with restructuring our marketing and sales leadership changes.

Cost of vacation ownership products as a percentage of revenue is expected to increase during the remainder of 2026, although will ultimately be determined through pricing increases, upgrade volume, repurchase activity and change in mix of inventory being sold.

In addition, we expect to further leverage our fixed Marketing and sales expenses as we continue to invest in initiatives that support sales growth, reflecting our expectation that the growth in contract sales achieved during the second quarter of 2026 will continue through year-end resulting in an increase in Development profit margin.

Resort Management and Other Services Revenues, Expenses and Profit

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Management fee revenues $ 56 $ 55 $ 1 1% $ 112 $ 110 $ 2 1%

4 unchanged sentences

Resort management and other services profit $ 93 $ 89 $ 4 4% $ 177 $ 172 $ 5 3%

Resort management and other services profit margin 53.9% 53.6% 0.3 pts

Resort management and other services profit margin 56.0% 54.1% 1.9 pts 55.0% 53.9% 1.1 pts

Resort occupancy (1)

90.5% 90.3% 0.2 pts

89.8% 89.5% 0.3 pts 90.1% 89.9% 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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Rental revenues $ 165 $ 150 $ 15 9% $ 332 $ 309 $ 23 7%

Rental expenses (143) (129) (14) (11%) (286) (255) (31) (12%)

Rental profit $ 24 $ 33 $ (9) (27%)

Rental profit margin 14.2% 20.4% (6.2 pts)

Rental profit $ 22 $ 21 $ 1 NM $ 46 $ 54 $ (8) (16%)

Rental profit margin 13.7% 15.0% (1.3 pts) 13.9% 17.8% (3.9 pts)

Transient keys rented (1)

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Rental occupancy (2)

75.0% 74.3% 0.7 pts

74.9% 73.8% 1.1 pts 74.9% 74.1% 0.8 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

Second Quarter

Rental profit increased due to a $9 million increase in transient rental revenues, including plus points, partially offset by $6 million of higher unsold maintenance fees associated with developer-owned inventory and $3 million of higher marketing, variable and other costs.

Rental revenues and Rental expenses are both $5 million higher due to a reduction in costs in excess of rental revenues for developer-owned inventory which is registered and held for sale.

which is reclassified to Rental revenues (net presentation).

We continue to expect a decline in rental profit in 2026 due to higher inventory and related unsold maintenance fees .

Rental profit declined due to $13 million of higher unsold maintenance fees associated with developer-owned inventory and $8 million of higher marketing, variable and other costs, partially offset by a $12 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.

Rental revenues and Rental expenses are both $11 million higher due to a reduction in costs in excess of rental revenues for developer-owned inventory which is registered and held for sale, which is reclassified to Rental revenues (net presentation).

Financing Revenues, Expenses and Profit

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Financing revenues $ 92 $ 90 $ 2 3% 184 178 6 4%

Financing expenses (10) (11) 1 5%

Financing expenses (10) (10) — NM (20) (21) 1 4%

Consumer financing interest expense (32) (27) (5) (20%) (63) (52) (11) (21%)

Financing profit $ 50 $ 53 $ (3) (5%) $ 101 $ 105 $ (4) (3%)

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.

Financing profit margin 54.3% 58.8% (4.5 pts) 55.0% 59.0% (4.0 pts)

Second Quarter and First Half

• Financing revenues reflect higher interest income as a result of a higher average notes receivable balance.

• 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.

For the three and six months ended June 30, 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net.

• In addition, consumer financing interest expense increased by $2 million and $4 million in the second quarter and first half of 2026, respectively, due to a higher average securitized debt balance.

(Losses) Gains and Other (Expense) Income

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

(Losses) gains and other (expense) income, net $ (1) $ 1 $ (2) NM $ 6 $ 10 $ (4) NM

During the first half of 2026, we benefited from a $2 million gain on the disposition of an entity that owned and operated a hotel in Cancun, Mexico, and a $4 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition.

During the first half of 2025, we benefited from $7 million of proceeds from service interruption insurance relating to the Maui wildfires, a $2 million reduction in certain pre-acquisition contingencies associated with the ILG Acquisition, and $1 million of other gains.

Exchange & Third-Party Management

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Management and exchange $ 42 $ 41 $ 86 $ 87

Rental 8 10 17 20

Cost reimbursements 4 2 8 4

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Gains and other income, net — — 1 —

Other — 1 — 1

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 17 $ 16 $ 36 $ 34

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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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Resort management and other services $ 17 $ 13 $ 33 $ 27

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Interest expense, net (43) (42) (87) (82)

Other — (1) — (1)

FINANCIAL RESULTS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS (122) (119) (263) (233)

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† 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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Modernization $ 10 $ 34 $ (24) (71%) $ 26 $ 44 $ (18) (42%)

First Quarter

Second Quarter and First Half

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

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and capture significant savings from initiatives related to procurement and corporate overhead.

Modernization expenses during the first quarter of 2026 related to:

• $9 million for consulting costs relating to implementation of initiatives;

• $4 million for technology;

• $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.

The following table shows the composition of our modernization expenses during the second quarter and first half of 2026 and 2025, respectively:

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Advisory services

$ (1) $ 22 $ (1) $ 31

Consulting (implementation)

Transition costs

$ 10 $ 34 $ 26 $ 44

We expect to incur less than $60 million of non-recurring expenses in the remainder of 2026 primarily related to technology, as we wind down consulting spend and expect no further advisory services costs.

(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.

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

(Losses) gains and other (expense) income, net $ (3) $ 23 $ (26) NM $ (9) $ 27 $ (36) NM

Second Quarter

In the second quarter of 2026, we recorded $2 million of foreign currency losses and a $2 million reduction in the receivable from Marriott International for indemnified tax matters, partially offset by $1 million of other gains.

In the second quarter of 2025, we recorded $18 million of foreign currency gains, $3 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $1 million of insurance proceeds and $1 million of other gains.

In the first half of 2026, we recorded $5 million of foreign currency losses and a $5 million reduction in the receivable from Marriott International for indemnified tax matters, partially offset by $1 million of other gains.

In the first half of 2025, we recorded $21 million of foreign currency gains, $3 million of tax related adjustments to the receivable from Marriott International for indemnified tax matters, $2 million of other gains, and $1 million of insurance proceeds.

Interest Expense

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025 Change

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Interest expense, net $ (43) $ (42) $ (1) (3%) $ (87) $ (82) $ (5) (6%)

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.

Second Quarter and First Half

The increase in Interest expense, net is primarily attributed to 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) for the second quarter and first half 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.

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.

For the three and six months ended June 30, 2025, interest expense associated with our Warehouse Credit Facility is included as a component of Interest expense, net.

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 Change June 30, 2026 June 30, 2025 Change

Provision for income taxes $ (37) $ (25) $ (12) (46%) $ (60) $ (70) $ 10 14%

Second Quarter

Our effective tax rate was 32.4% and 26.8% for the three months ended June 30, 2026 and June 30, 2025, respectively.

The effective tax rate for the three months ended June 30, 2026 differed from the blended U.S.

federal and state statutory tax rate primarily due to projected losses in certain foreign jurisdictions for which no tax benefit was recognized as a result of valuation allowances with respect to such foreign jurisdictions, as well as discrete tax benefits related to uncertain tax positions and the effective settlement of a domestic tax audit, partially offset by penalties accrued for foreign tax matters.

The effective tax rate for the three months ended June 30, 2025 was generally consistent with the blended U.S.

federal and state statutory tax rate, with no significant variances.

Our effective tax rate was 37.5% and 35.5% for the six months ended June 30, 2026 and June 30, 2025, respectively.

The effective tax rate for the six months ended June 30, 2026 differed from the blended U.S.

federal and state statutory tax rate primarily due to projected losses in certain foreign jurisdictions for which no tax benefit was recognized as a result of valuation allowances with respect to such foreign jurisdictions, as well as discrete tax benefits related to uncertain tax positions, partially offset by a $6 million cumulative adjustment related to a foreign tax provision and penalties accrued for foreign tax matters.

The effective tax rate for the six months ended June 30, 2025 differed from the blended U.S.

federal and state statutory tax rate primarily due to the effect of losses incurred in certain non-U.S.

jurisdictions for which no tax benefit was recognized.

Additionally, permanent differences between the book and tax treatment contributed to the variance from the statutory rate.

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

Three Months Ended Six Months Ended

($ in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Resort management and other services $ 17 $ 13 $ 33 $ 27

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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.

At June 30, 2026, our gross corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was 4.0, 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.

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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.

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.

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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.

During the second quarter of 2026, and as of June 30, 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 $11.2 billion of debt securities in securitization transactions in the term ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.

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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.

At June 30, 2026, we had $165 million of borrowings outstanding on our Warehouse Credit Facility.

See Footnote 11 “Securitized Debt” to our Financial Statements for further information.

As of June 30, 2026, $67 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.

Our Revolving Corporate Credit Facility, 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 June 30, 2026, $145 million of borrowings and $5 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.

We expect that we will generate approximately $200 million of gross cash proceeds from the disposition of non-core assets in 2026 and 2027.

We minimize our working capital needs through cash management, strict credit-granting policies, and disciplined collection efforts.

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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.

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

Six Months Ended

($ in millions) June 30, 2026 June 30, 2025

Inventory spending $ (49) $ (60)

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Vacation Ownership Notes Receivable Collections Less Than Originations

Three Months Ended

($ in millions) March 31, 2026 March 31, 2025

Six Months Ended

($ in millions) June 30, 2026 June 30, 2025

Vacation ownership notes receivable collections — non-securitized $ 93 $ 80

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Vacation ownership notes receivable collections less than originations $ (141) $ (147)

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.

Vacation ownership notes receivable collections were less than originations in the first halves of 2026 and 2025 due to the growth of our vacation ownership notes receivable portfolio.

Repurchase of Common Stock

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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

For the first half of 2026 — — $ —

As of June 30, 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:

We distributed cash dividends to holders of our common stock during the first half of 2026 as follows:

Declaration Date Stockholder Record Date Distribution Date Dividend per Share

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February 19, 2026 March 4, 2026 March 18, 2026 $0.80

May 14, 2026 May 27, 2026 June 10, 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.

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Material Cash Requirements

The following table summarizes our future material cash requirements from known contractual or other obligations as of March 31, 2026:

The following table summarizes our future material cash requirements from known contractual or other obligations as of June 30, 2026:

Payments Due by Period

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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.

The following tables present consolidating financial information as of June 30, 2026 and December 31, 2025, and for the six months ended June 30, 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

Six Months Ended June 30, 2026

Issuers Senior Notes Guarantors Non-Guarantor Subsidiaries Total Eliminations MVW Consolidated

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Condensed Consolidating Balance Sheet

As of March 31, 2026 As of December 31, 2025

As of June 30, 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

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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-Q

Item 2. Management’s Discussion and Analysis