TNL 10-K & 10-Q changes, risk factors and insider trading

You should carefully consider each of the following risk factors and all of the other information set forth in this report. Based on the information currently known to us, we believe that the following information identifies the material risk factors affecting our company. However, the risks and uncertainties we face are not limited to those set forth in the risk factors described below. Additional risks and uncertainties not presently known to us or that we currently believe not to be material risks may also adversely affect our business.

We will be adversely impacted if we cannot compete effectively in the highly competitive timeshare industry. The continued success and future growth of our timeshare and exchange businesses dependsdepend upon our ability to compete effectively in marketsan industry that containcontains numerous competitors, some of which may have significantly greater financial, marketing, and other resources and flexibility than we have. ConsolidationWe principally compete with short-term leisure travel options such as lodging (hotels and resorts), cruises, and home and apartment rental or sharing services. We also compete with other timeshare companies for customers, projects and talent, and consolidation in the timeshare industry can also lead to larger competitors withthat may have greater resources thatthan compete with our Vacation Ownership business for customers, projects, and talent. We principally compete with short-term vacation options such as lodging, cruise, and home and apartment sharing services, as well as other timeshare developers.us. We compete based on brand name recognition and reputation, lifetime value, location and the availability of desirable development sites for new vacation ownership properties, convenience, quality of accommodations, alignment with customer lifestyles and evolving customer travel preferences, service levels, technological innovation, cost, amenities, customer loyalty and flexibility. In order to compete,compete with the multitude of short-term leisure travel options for customers, we incent potential new owners and existing owners to tour with us to better understand our products and services. New resortsdevelopments are being constructed and additional properties are being added to rental and sharing platforms, and these additions to supply may create new competitors, in some cases without corresponding increases in demand. Competition may reduce fee structures, potentially causing us to lower our fees or prices, which may adversely impact our profits. New competition or existing competition that uses a business model that is different from our business model may require us to change our model so that we can remain competitive. We also face competition from national and regional timeshare resale companies as well as from private resales of VOIs, which has in the past and likely will in the future impact VOI sales. WeNew owners have also increased new owner sales as a percentage of aggregate VOI sales, as new owners have historically engaged in upgrade purchases over time which favorably impact our business. However, we cannot guarantee that the historic upgrade trends will continue in the future at the same rates we have generated in the past.past or that we will continue to succeed in creating new owners at levels sufficient to continue historic upgrade trends.

Our RCI exchange business primarily depends on vacation ownership developers for new members and on existing members and participants renewing their memberships with us and engaging in exchange and travel club transactions. Our new member enrollment and exchange member volumes dropped significantly during the COVID-19 pandemic, due in large part to the industry wide drop in VOI sales to new owners, and the total number of our exchange members continues to be below pre-pandemic levels. Although new owner sales levels have recovered from their lows in 2020, there is no assurance that they will continue to result in increased new owner memberships insufficient theto timeframereach orpre-pandemic at the levels that we expect or at all.levels. Developers and members also supply resort accommodations for use in exchanges. If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members or developers in our RCI network, the number of new and/or existing members, the supply of resort accommodations available through our exchange networks and related revenue will decrease. These effects on our exchange business are more pronounced as the proportion of corporate member relationships,relationships has increased, where the developer renews RCI membership fees for all of its active owners, increases.owners. The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially impact our financial condition and results of operations. Our ability to maintain affiliate agreements with resort developers is also impacted by consolidation in the vacation ownership industry. For example, in connection with the acquisition of Welk Hospitality Group, Inc. (“Welk”) by Marriott Vacations Worldwide Corporation, the RCI contract with Welk was terminated. In addition, developers haveare beenincreasingly competing with our Exchange business by creating, operating and expanding internal exchange and points-based vacation club networks to offer their respective owners travel flexibility. By design, these networks decrease the propensity of owners to continue their membership in and use of external vacation ownership exchange programs, such as RCI, which in turn adversely impacts the supply of resort accommodations available for exchange through our exchange networks and reduces exchange and travel club transactions and our related revenue. The success of our Exchange business is also dependent upon our ongoing ability to successfully adjust and restructure our business models, including seeking to lower our costs, which we have been undertaking to meet changing conditions.

Our B2B white label travel clubs business is largely dependent on the success of marketing efforts to closed user groups through partner brands and the subsequent propensity of the members of those groups to use the platform for their travel bookings and upgrade to receive premium services. Our travel clubs businesses are also reliant on our ability to leverage new and existing relationships with travel suppliers, including hotels, airlines, rental car companies, and wholesale suppliers, and their willingness to distribute products and services through our platforms. This business is also impacted by third-party internet travel intermediaries and peer-to-peer online networks that may be used by consumers to search for, book and rent their resort and other travel accommodations. Our success in these leisure travel clubs is also dependent upon our ability to efficiently customize our travel offerings to particular areas of interest and focus on the groups to which we market and promote our services and offerings. Our success here is also dependent upon our ongoing ability to successfully adjust and restructure our business models, including seeking to lower our costs, which we have been undertaking to meet changing conditions and customer requirements compared to those we had originally anticipated and planned for. There is no assurance that these efforts will be successful within the timeframe or at the levels we expect, or at all.

•potential dilutive issuances of equity securities in payment of the acquisition price in a strategic transaction;

•risks associated with entering into markets in which we have limited or no prior experienceexperience, including new domestic and international geographic locations and new consumer markets such as the collegesports sportsfan community and(for environment,example, includingthe risk that we may have less visibility into demand in such markets);

In 2021, we acquired the Travel + Leisure brand and all related assets from People Inc. (formerly Dotdash Meredith (formerlyand Meredith Corporation) and we also changed our name to Travel + Leisure Co. The expected results of the transaction and the future prospects for and plans of our company more broadly, including our strategies to accelerate growth of our global businesses through the addition of new vacation ownership brands and growing our travel clubs, are subject to a number of risks and uncertainties, many of which are beyond our control, and may not be achieved in the time or at the level we expect, or at all.

Our efforts to establish and grow our travel clubs businesses and add brands to our existing portfolio of vacation ownership brands, such as through the planned launch of a network of sports-themed resorts and lifestyle resorts under the Sports Illustrated Resorts brand and the acquisition of Accor Vacation Club, subject us to greater risks and uncertainties than those historically considered for our core timeshare and exchange businesses. These risks and uncertainties include requiring us to utilize and augment human capital and other resources beyond those required by our historical business offerings to source and establish relationships with new partners and to develop and market vacation ownership resorts, products, and services that meet the demands of new consumers.

PromotionPromotional activities associated with our businesses may not yield increased revenue in the time or levels expected, and even if revenue does increase, it may not be sufficient to offset the expenses we incur in building our brands and businesses. If we fail to successfully promote and maintain our businessesbrands and brandsbusinesses or incur substantial expenses in an unsuccessful attempt to promote and maintain our brands and businesses, we may fail to attract or retain customers to the extent necessary to realize a sufficient return with respect to the acquisition, our branding efforts and our businesses, which would adversely impact our results of operations and financial condition.

In addition, a portion of the value associated with the Travel + Leisure brand is derived from the long-standing commitment to high-quality, independent travel journalism by Travel + Leisure magazine and associated media properties, which continue to be operated by People Inc. (formerly Dotdash Meredith and Meredith Corporation) outside of our control. If the quality or reach of such media properties deteriorates in the future, it could negatively impact the perception of the Travel + Leisure brand and adversely impact our business.

OurWe business isare subject to numerous business, financial, operating and other risks common to the timeshare industry and the leisure travel industry more broadly, such as adverse changes with respect to any of the following:

•desirability or continued desirability of geographic regions where resorts in or affiliated with our businesses are located;

•our ability to operate our managed resorts and to conduct tours of our properties at the levels we have in the past;

•a decrease in the supply of available exchange accommodations due to, among other reasons, a decrease in inventory included in the system (including as a result of extreme weather events such as have occurred in our geographic markets in recent years, ongoing property renovations or a decrease in member deposits) which could adversely affect our exchange business;

We are subject to risks that purchasers of VOIs who finance a portion of the purchase price default or otherwise delay payments on their loans due to adverse macro or personal economic conditions, third-party organizations that encourage defaults, or otherwise, which necessitates increases in loan loss reserves and adversely affects loan portfolio performance. In addition, fluctuations in orderconsumer down‑payment behavior and overall financing levels may still increase our loan loss provision and negatively impact the performance of our loan portfolio. We manage our consumer credit exposure in part through portfolio management and tools that impact the mix of developer-financed sales, such as offering credit cards and other third-party financing directly to accelerateconsumers theto growthfacilitate cash down payments and periodic sales of consumerVOCRs. financingReduced income, we have taken actions to increase the percentageeffectiveness of theour saleportfolio amountmanagement ofactivities, VOIslower thatdown ispayments financedor bya owners,reduction whichin weperiodic alsoVOCR expectsales, tocould increase the loan loss provisionallowance associated with such increased financed amount.VOCRs.

While we maintain what we believe are reasonable security controls over personal and proprietary information (including the personal information of customers, shareholders, and employees), and our information technology staff regularly assesses and identifiesseeks to identify vulnerabilities in our information technology and cybersecurity systems and controls, breaches of or breakdowns in our systems that result in the theft, loss, access to, fraudulent use or other unauthorized release of personal, confidential or other proprietary information, source code information, or other data have occurred in the past and may occur in the future. While we have sought and will continue to seek to appropriately address and remedy these vulnerabilities as they are identified, we cannot assure you that all such vulnerabilities will be adequately or timely remediated to prevent unauthorized access to our information technology systems in the future.

In addition, any such cyber-attacks could persist for an extended period of time without detection, which could likely have a material adverse effect on our brands, reputation, customer confidence in us,confidence, business, financial condition and results of operations, as well as subject us to significant regulatory actions and fines, litigation, losses, third-party damages and other liabilities. Such a breach or a breakdown could also materially increase our costs to protect such information and to protect and insure against such risks. Our and our third-party service providers’ vulnerability to attack exists in relation to known and unknown threats. As a consequence, the security measures we deploy are not perfect or impenetrable, and we may likely be unable to anticipate or prevent all unauthorized access attempts made on our systems or those of our third-party service providers.

Data breaches and other serious cyber incidents have increased globally, along with the sophistication of the methods and techniques of the intrusions and complexity of the attacks, including use of viruses, ransomware and other malicious software, phishingphishing, deepfake technology, artificial intelligence (“AI”) technology, and other ever-evolving efforts to discover and exploit any design flaws, bugs or other security vulnerabilities. Continued geopolitical turmoil (including the ongoing conflict between Russia and Ukraine and the ongoing conflicts in the Middle East) has heightened the risk of cyber-attacks. We have experienced and likely will continue to experience,experience such cyber-attacks. Further, because methods used by third-party actors to obtain unauthorized access to or interference with information systems are ever-evolving, they may not be identified until long after they are used against a target and, as a result, our cybersecurity measures then in place may be inadequate in preventing any such intrusion or in identifying or assessing the breadth or significance of any such intrusion. Also, the same cybersecurity threats exist for the third parties with whom we interact (such as parties providing us software or services) or share information, and cyber-attacks on third parties with which we interact or which possess, use or have access to our customer, and other information have in the past adversely impacted us in the same way as a direct cyber-attack on us. Additionally, we currently have a hybrid work environment in which many corporate associates work both in the office and remotely on an ongoing basis. The increase in the number of our associates working remotely has increased certain risks to our business, including increased demand on our information technology resources and systems, and greater potential for phishing and other cybersecurity attacks.

Our information technology infrastructure (including our, and our third-party service providers’, information systems and legacy proprietary online reservation and management systems) has been and will likely continue to be vulnerable to system failures such as server malfunction or software or hardware failures, computer hacking, phishing attacks, user error, cyber-terrorism, loss of data, computer viruses, ransomware and malware installation, deepfake technology, and other intentional or unintentional interference, negligence, fraud, misuse and other unauthorized attempts to access or interfere with these systemssystems, including through the use of AI technology, and our personal and proprietary information. In addition, as we continue to transition from our legacy systems to new, cloud-based technologies and other technology systems, we will likely continue to face issues that may negatively impact customers, other individuals and third parties. In addition, as we pursue new initiatives that are designed to improve our operations and cost structure, the expansion and implementation of new technologies and systems (including our increasing use, and the likely increasing use by our third-party service providers, of artificial intelligence (“AI”) technologies) carries significant potential risks, including failure to operate as designed, potential loss of or corruption of information, changes in security processes, implementation delays, and disruption of operations. The increased scope and complexity of our information technology infrastructure and systems could contribute to the risk of future material security breaches or breakdowns, any of which could have a material adverse impact on our business, brands, reputation, and results of operations. Further, if we fail to fully assess, identify and address all cybersecurity risks associated with acquisitions (such as our recent acquisition of Accor Vacation Club) or fail successfully to integrate all information technology systems of such acquired businesses into and with our existing technology framework and cybersecurity controls, we would become increasingly vulnerable to all of the above risks.

Additionally, weWe are subject to federal, state, and international laws and regulations relating to the collection, use, retention, security and transfer of personally identifiable information and individual payment data. The information, security and privacy requirements imposed by such laws and regulations are constantly evolving and are becoming increasingly demanding in the U.S., both at the federal and state levels, and in other jurisdictions where we operate. Aspects of these laws and regulations, as well as their enforcement, remain unclear, and foreign laws and regulations are often more restrictive or burdensome than those in the U.S. Moreover, we have incurred and will likely continue to incur significant costs relating to compliance with these laws and regulations, including costs related to updating certain business practices and systems. Further, any changes to laws or regulations, including new restrictions or requirements applicable to our business, or an increase in enforcement of existing laws and regulations, such as restricting use or sharing of consumer data, including for marketing or advertising or limiting the use of, limiting our ability to provide certain consumer data to our customers, or otherwise regulating artificial intelligence (“AI”) and machine learning (including the use of algorithms and automated processing), could expose us to additional costs and liability. In addition, should we violate or not comply with any applicable laws, regulations, contractual requirements relating to data security and privacy, such as the recently adopted SECregulations rulesfor requiringthe publicCalifornia companiesConsumer toPrivacy disclose material cybersecurity incidents to which they become subject on a Current Report on Form 8-K,Act, or with our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries, it could have a material adverse effect on our brands, marketing, reputation, business, financial condition, and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.

We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and on uninterrupted operation of service facilities, including those used for our travel clubs businesses, reservation systems, payments systems, vacation exchange systems, property management, communications, procurement, member record databases, call centers, operation of our loyalty programs and administrative systems. We also maintain physical facilities to support these systems and related services. Our backup systems and disaster recovery systems, or those of our third-party service providers, may be insufficient to address or prevent breakdown of systems, loss of critical information or prolonged interruption. A natural disaster, cyberattack, disruption or other impairment in our technology capabilities and service facilities (including ITinformation technology systems, data centers and backup systems, or those of our third-party service providers) could result in denial or interruption of service, significant investment in resources to restore and remedy such systems, prolonged outages and interruption, financial losses, customer claims, litigation or damage to our reputation, or otherwise harm our business and financial results. In addition, any failure of our ability to provide our reservation systems, as a result of failures related to us or our third-party providers, may deter prospective resort owners from entering into agreements with us, and may expose us to liability from other parties with whom we have contracted to provide reservation services. Similarly, any failure to keep pace with developments in technology and technology infrastructures (including continuing upgrades to our technology systems which interface with customers), which is a significant part of our business, could impair our operations, financial results and competitive position.

Further, any failure to keep pace with new or innovative use of technologies (including digital technologies within the leisure travel and timeshare industry, as well as evolutionary changes in social media (including third-party social media sites) which consumers increasingly rely upon for assessments and decisions concerning travel and vacation information) could adversely impact our competitive position and future prospects. Our industry is marked by rapid technological developments and innovations (such as the use of AI and machine learning) and evolving industry standards. We are increasingly incorporating AI technologies into our processes, marketing and services, and these technologies are becoming increasingly important to our operations and important in maintaining our competitive position, both in our vacation ownership business and in our exchange and travel club businesses. The development, capabilities, adoption and use forof AI and machine learning technologies arehave stillbeen inadvancing theirat earlya stagesrapid pace, and the further development of AI technologies is complex, involving technical challenges associated with achieving the desired level of accuracy, efficiency, and reliability. Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs and any failure of our business continuity planning as to any of these matters could have a material adverse impact on our business, brand, and financial results.

•the interest rates, inclusive of benchmark rates and spread premium, being charged on recently issued and floating rate corporate debt and securitized debt havehad increased significantly beginning in 2022 and higher interest costs on our debt may recur or continue in the future, and although rates have fallen from their peak in 2023, we have not been able to and in the future likely will not be able to pass along the full amount of such costs to purchasers of VOIs to whom we provide financing;

•we may be unable to comply with the terms of the financial covenants under our revolving credit facility or other debt agreements, including a breach of the financial ratio tests, which could result in a default and acceleration of the underlying debt (and under other debt and financial instruments that contain cross-default provisions) as well as increase the cost of that debt;

We are subject to taxation at the federal, state and local levels in the U.S., and various other countries and jurisdictions. Our future effective tax rate and future cash flows could be affected by changes in the composition of earnings in jurisdictions with differing tax rates, changes in statutory rates and other legislative changes, changes in the valuation of our deferred tax assets and liabilities, changes in determinations regarding the jurisdictions in which we are subject to tax, and our ability to repatriate earnings from foreign jurisdictions. From time to time, U.S. federal, state and local, and foreign governments make substantive changes to tax rules and their application. For example, effective beginning for the 2023 tax year, the Inflation Reduction Act of 2022 made changes to the U.S. corporate income tax system, including a 15% minimum tax on adjusted financial statement income for certain large corporations and a 1% excise tax on share repurchases. We currently are not subject to the 15% minimum tax, but we will continue to monitor as this could change. In addition, the One Big Beautiful Bill Act, enacted in 2025, extends permanently, with modifications, tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act and restores and makes permanent many business provisions, in addition to providing for new tax relief measures and various revenue raising measures. For the provisions effective in 2025, there was no material impact to our effective tax rate for the year ended December 31, 2025, but we continue to assess the potential impact of these law changes, including provisions becoming effective in 2026, on our business and financial results. Further changes to the tax laws may be contemplated both in the U.S. and certain other countries, which could result in materially higher corporate taxes than would be incurred under existing tax law and could otherwise adversely affect our financial condition or results of operations.

The international tax environment remains highly uncertain and increasingly complex as evidenced by initiatives put forth by the Organization for Economic Co-operation and Development (“OECD”), which includes the introduction of a global minimum tax at a rate of 15% under the OECD’s Pillar Two rules. A number of countries around the world have enacted or are in the process of enacting legislation implementing OECD’s Pillar Two rules. As of December 31, 2024,2025, based on the countries in which we do business that have enacted legislation effective Januaryon 1,or 2024, the impact of these rules to our financial statements was not material. For the rules effectivebefore January 1, 2025, we do expect the impactrules todid increase our effective tax rate but overall the rules are not expectedimpact to have a material impact on our financial statements.statements was not material. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts. The OECD may continue to release guidance, and enacting legislation may continue to be implemented, that could impact our assessment as to the impact of Pillar Two on our consolidatedConsolidated financialFinancial statementsStatements and operations.

Our total assets include goodwill and other intangible assets. We evaluate our goodwill for impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value is below the carrying value. We may be required to record a significant non-cash impairment charge in our financial statements during the period in which any impairment of our goodwill, other intangible assets or other assets is determined, negatively impacting our results of operations and shareholders’ equity. For example, during 2025, we identified certain resorts requiring significant reinvestment or located in markets that no longer align with owner demand, and we have undertaken actions to remove or reduce our interests in those properties. These restructuring activities have resulted in inventory write-downs and impairments and may lead to additional impairments or other charges as the initiative progresses. See Note 25—Restructuring for further information.

We carry insurance for general liability, property, business interruption, cybersecurity, directors and officers (“D&O”), and other insurable risks with respect to our business operations. We also self-insure for certain risks up to certain monetary limits. The terms and conditions or the amounts of coverage of our insurance may not at all times be sufficient to pay or reimburse us for the amount of our liabilities, losses or replacement costs. There are risks for which we do not carry insurance for the full range of possible outcomes or at all concerning a potential loss or liability, due to the cost, availability or terms and conditions of such insurance. As a result, we may incur liabilities or losses in the operation of our business that are substantial and not sufficiently covered by the insurance we maintain, or at all, which could have a material adverse effect on our business, financial condition and results of operations. Following the significant property and casualty losses incurred by the insurance industry due to hurricanes, wildfires, cybersecurity breaches and other events, as well as market dynamics (such as those resulting from the recent rapid increase in interest rates),dynamics, insurance costs have increased and may be higher (and availability may be lower) in future periods. In addition, increased storm intensity, increased wildfires and rising sea levels as well as other natural disasters, whether resulting from climate change or other factors, have increased and will likely in the future increase the cost and decrease the available coverage levels of property insurance, particularly in certain geographies which have been or may be viewed as more likely in the future to be subject to such events and natural disasters.

Many factors influence our reputation and the value of our brands, including the perceptionperceptions held by our customers andcustomers, other key stakeholders and the communities in which we do business. Our business faces increasing scrutiny related to our environmental, social and governance activitiesactivities. The public holds diverse and riskoften conflicting views on these matters, and customer, government and other stakeholder perceptions of our environmental, social and governance initiatives may differ widely. If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust, harm our reputation and the value of our brands, constrain our investment opportunities, and damage our ability to compete effectively and grow and operate our business. At the same time, our reputation and the value of our brands may be damaged if we fail to act responsibly or comply with regulatory requirements in a number of areas, such as business ethics and compliance, safety and security, responsible tourism, public health, environmental stewardship and sustainability, supply chain management, climate change, diversity, human rights and modern slavery, philanthropyphilanthropy, employee relations, and support for local communities.

The trading price of our common stock may continue to fluctuate depending upon many factors, some of which may be beyond our control, including our quarterly or annual earnings or earnings outlook or those of other companies in our industry; customer acceptance and success of our strategic growth initiatives; actual or anticipated fluctuations in our operating results due to seasonality, economic conditions, including increased inflationinflation, tariffs and higher interest rates,rate fluctuations, and other factors related to our business; our credit ratings; announcements by us or our competitors of significant acquisitions or dispositions; lower than expected earnings or revenues or outlook for such financial measures, changes in earnings or revenues estimates by us or by securities analysts or our ability to meet those estimates; the operating and stock price performance of comparable companies; and overall market fluctuations. Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our common stock.

We are a global provider of hospitality services and travel products and operate our business inwith the following two reportable segments:

While we continue to benefit from the changes we made to our marketing criteria to strengthen sales efficiencies and improve the performance of our vacation ownership contract receivables (“VOCR”) portfolio, similar to a number of other companies, we are experiencing some pressure on our loan portfolio primarily due to andelinquencies increaseremaining inelevated delinquencies.over Wehistorical have also taken steps to increase the percentage of developer-financed sales since 2022 with the goal of accelerating growth in our consumer financing revenues, while also balancing our portfolio performance.levels.

Our Vacation Ownership business is benefited by the fact that the majority of our owners do not have loans and are therefore less dependent on economic conditions when making travel decisions, which provides opportunities for upgrade sales. This business, and, to a greater extent, our Travel and Membership businesses are highly dependent on the health of the travel industry and wedeclines in, or disruptions to, the industry such as those caused by adverse economic conditions may adversely affect us. We are also subject to the other risks and uncertainties discussed in “Risk Factors” contained in Part I, Item 1A of this Annual Report on Form 10-K.

The Organization for Economic Co-operation and Development (“OECD”), continues to put forth variousadvance initiatives, including Pillar Two rules which include the introduction ofintroduced a global minimum tax at a rate of 15%. EuropeanA Unionnumber memberof statescountries agreedhave to implementimplemented the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive and most have already enacted legislation. A number of other countries have also implemented similar legislation.directive. As of December 31, 2024,2025, based on the countries in which we do business that have enacted legislation effective January 1, 2024,2025, the impact of these rules to our financial statements was not material. For the rules effective January 1, 2025, we do expect the impact todid increase our effective tax rate but overall the rules are not expectedimpact to have a material impact on our financial statements.statements was not material. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts.impacts, including the OECD’s published administrative guidance, released January 5, 2026, on a side-by-side system, which would effectively exempt U.S. multinationals from certain provisions of Pillar Two.

We leverage a number of different tools to impact the percentage of developer-financed sales,sales and balance our consumer default risk profile, such as offering credit cards and other third-party financing directly to consumers to facilitate cash down payments and sales, underwriting discipline, and periodic sales whileof balancing our consumer default risk profile.VOCRs.

In connection with entering into a VOI sale, we may provide our customers with certain non-cash incentives, such as credits for future stays at our resorts. For those VOI sales, we allocate the sales price between the VOI sale and the non-cash incentive.incentive based upon the relative standalone selling price of the performance obligations within the contract. Non-cash incentives generally have expiration periods of two years or less and are recognized at a point in time upon transfer of control.

We provide day-to-day property management services including oversight of housekeeping services, maintenance, and certain accounting and administrative services for property owners’ associations and clubs. These services may also include reservation and resort renovation activities. The initial terms of thesuch property management agreements are generally between three to five years; however, the vast majority of the agreements provide a mechanism for an automatic one year renewal upon expiration of the terms. Our management agreements contain cancellation clauses, which allow for either party to cancel the agreement, by either a majority board vote or a majority vote of non-developer interests. We receive fees for such property management services which are collected monthly in advance and are based upon total costs to operate such resorts (or as services are provided in the case of resort renovation activities). Fees for property management services typically approximate 10% of budgeted operating expenses. We are entitled to consideration for reimbursement of costs incurred on behalf of the property owners’ association in providing management services (“reimbursable revenue”). These reimbursable costs principally relate to the payroll costs for management of the associations, club and resort properties where we are the employer and are reflected as a component of Operating expenses on the Consolidated Statements of Income. We reduce our management fees revenue for amounts paid to the property owners’ association that reflect maintenance fees for VOIs for which we retain ownership, as we have concluded that such payments are consideration payable to a customer. Property management fee revenues and reimbursable revenues are recognized when the services are performed and are recorded as a component of Service and membership fees on the Consolidated Statements of Income.

Within our Vacation Ownership segment, we measure operating performance using the following key operating statistics: (i) gross VOI sales, which represents total sales of VOIs, including sales under our Fee-for-Service program before the effect of loan loss provisions, (ii) tours, which represents the number of tours taken by guests in our efforts to sell VOIs, and (iii) volume per guest, which measures the efficiency of this business’ efforts in generating sales from tours, is calculated by dividing the gross VOI sales (excluding telesales and virtual sales) by the number of tours. We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel.

We derive a majority of our revenues from membership dues and fees for facilitating members’ trading of their timeshare intervals. Revenues from membership dues represent the fees paid by members or affiliated clubs on their behalf. As a provider of vacation exchange services, we enter into affiliation agreements with developers of vacation ownership properties to allow owners of VOIs to trade their intervals for intervals at other properties affiliated with our vacation exchange network and, for some members, for other leisure-related services and products. We recognize revenues from membership dues paid by the member on a straight-line basis over the membership period as the performance obligations are fulfilled through delivery of publications, if applicable, and by providing access to travel-related products and services. Estimated net contract consideration payable by affiliated clubs for memberships is recognized as revenue over the term of the contract with the affiliated club in proportion to the estimated average monthly member count. Such estimates are adjusted periodically for changes in the actual and forecasted member activity. For additional fees, members have the right to exchange their intervals for intervals at other properties affiliated with our vacation exchange networks and, for certain members, for other leisure-related services and products. We also derive revenue from facilitating bookings of travel accommodations that were acquired from various sources. Revenue is recognized when these transactions have been confirmed, net of expected cancellations.

We earn revenue from our RCI Elite Rewards co–branded credit card program, which is primarily generated by cardholder spending and the enrollment of new cardholders. The advance payments received under the program are recognized as a contract liability until our performance obligations have been satisfied. The primary performance obligation for the program relates to brand performance services. Total contract consideration is estimated and recognized on a straight-line basis over the contract term.

We have two reportable segments: Vacation Ownership and Travel and Membership. The reportable segments presented below are those for which discrete financial information is available and which are utilized on a regular basis by the chief operating decision maker (“CODM”) to assess performance and to allocate resources. In identifying our reportable segments, we also consider the nature of services provided by the operating segments. Based on this analysis we aggregate two geographical operating segments within the Vacation Ownership reportable segment and two operating segments within the Travel and Membership reportable segment. Management uses Adjusted EBITDA to assess the performance of the reportable segments. During the thirdfourth quarter of 2024,2025, we updated ourthe definition of Adjusted EBITDA to exclude certaininventory non-recurringwrite-downs costsassociated directlywith incurredthe Company’s resort optimization initiative. This initiative resulted in inventory write-downs related to integrateagreements mergersto and/orsupply acquisitionsreplacement intoinventory to vacation ownership clubs impacted by this initiative. These charges are included within Cost of vacation ownership interests on the existingConsolidated businessStatements asof theseIncome. costsFor doadditional notdetail reflecton recurringthe operatingresort expenses.optimization Thisinitiative changesee wasNote made25—Restructuring. asAs a result of our acquisition of Accor Vacation Club. As this business is being further integrated into our operations, it has begun incurring certain discrete non-recurring costs directly attributable to integration activities andresult, we believe excluding these types of costs would assist investors in understanding our ongoing performance when considered with generally accepted accounting principles in the U.S. (“GAAP”) measures. Wenow define Adjusted EBITDA as net income from continuing operations before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes. Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction and integration costs associated with mergers, acquisitions, and divestitures, asset impairments/recoveries,recoveries and inventory write-downs associated with the Company’s resort optimization initiative, gains and losses on sale/disposition of business, and items that meet the conditions of unusual and/or infrequent. Legacy items include the resolution of and adjustments to certain contingent assets and liabilities related to acquisitions of continuing businesses and dispositions, including the separation of Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”) and Avis Budget Group, Inc. (“ABG”) formerly Cendant Corporation, and the sale of the vacation rentals businesses. Integration costs represent certain non-recurring costs directly incurred to integrate mergers and/or acquisitions into the existing business. We believe that Adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, we believe gives a more complete understanding of our operating performance. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

The table below presents our operating statistics for the years ended December 31, 20242025 and 2023.2024. These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses. Refer to “The Year Ended December 31, 20242025 vs. The Year Ended December 31, 20232024” section for a discussion ofon how these operating statistics affected our business for the periods presented.

Net revenues increased $114$157 million during 20242025 compared with 2023.2024. This increase was unfavorably impacted by foreign currency of $3$5 million (0.1%).million. Excluding the impacts of foreign currency, the increase in net revenues was primarily due to:

•$131$195 million of increased revenues at our Vacation Ownership segment primarily due to an increase in net VOI sales as a result of increasedan tours, partially offset by a decreaseincrease in VPG due to a higher new owner transaction mix which generally produce lowerhigher VPGs and increased tours; higher property management revenues resulting from higher property management fees and reimbursable revenues; and an increase in consumer financing revenues primarily due to a higher average portfolio balance; partially offset by a decrease in commissionother revenues due to lowerhigher volumeco-branded ofcredit card and VOI Fee-for-Serviceincentive sales as a result of fewer commitments.revenues. This increase in revenues was partially offset by:

•$14$33 million of decreased revenues at our Travel and Membership segment primarily due to a decrease in transaction revenue driven by lower transaction revenue due to lower revenue per transaction resulting from a higher mix of Travel Club transactions, which generally produce lower revenue per transaction. Exchange transactions andwere impacted by an increasing mix of exchange members with a club affiliation who have a lower transaction propensity,propensity. partiallyAdditionally, offsetsubscription byrevenues higherdeclined revenuedue perto transactionlower resultingaverage frommember price increases.count.

Expenses increased $103$337 million during 20242025 compared with 2023.2024. This increase in expenses was favorably impacted by foreign currency of $3$1 million (0.1%).million. Excluding the impacts of foreign currency, the increase in expenses was primarily the result of:

•$21$7 million increase in generalcost of sales at the Travel and administrativeMembership expensessegment drivendue byto variableincreased compensationTravel Clubs transactions and othera employeeheavier relatedweighting costs.of rentals;

Interest expense decreased $2$17 million during 20242025 compared with 20232024 primarily due to a lower average outstanding balance on corporate debt, partially offset by a higher weighted average interest rate on corporate borrowings.borrowings, partially offset by a higher average outstanding balance on corporate debt.

Other income, net of other expense increaseddecreased $12$8 million during 20242025 compared with 2023,2024, primarily due to a $7 million reduction in the fair value of contingent consideration associated with business acquisitions.acquisitions in 2024; partially offset by a $4 million gain on a building held-for-sale during 2025.

Our effective tax rates were 26.4%31.8% and 19.4%26.4% for the years ended December 31, 20242025 and 2023.2024. Our effective tax rate for 20232025 iswas lowerimpacted primarily due toby the partialinventory reversalwrite-down ofand impairment charges recorded in the valuationyear allowancethat relatedsignificantly toreduced our foreignpre-tax tax credits based on our determination that it is more likely than not that the benefit will be realized.income.

Gain on disposal of discontinued business, net of income taxes increaseddecreased $28$33 million during 20242025 compared with 20232024 driven by the release of expired guarantees of $32 million, net of tax in 2024, related to the sale of the European vacation rentals business.

As a result of these items, Net income attributable to Travel + Leisure Co. shareholders increaseddecreased $15$181 million in 20242025 as compared with 2023.2024.

The tables below present our reportable segment information (see Note 23—Segment Information to the Consolidated Financial Statements for a breakout of significant expenses related to our reportable segments), followed by a discussion of each segment’s 20242025 results compared to 20232024 (in millions):

The discussion of our business and operations should be read together with the risk factors contained in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on February 18, 2026, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner. As of MarchJune 31,30, 2026, there have been no material changes to the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

This report includes “forward-looking statements” as that term is defined by the Securities and Exchange Commission (“SEC”). Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “may,” “will,” “expects,” “should,” “believes,” “plans,” “anticipates,” “estimates,” “predicts,” “potential,” “projects,” “continue,” “guidance,” “commitments,” “future,” “outlook,” or other words of similar meaning. Forward-looking statements are subject to risks and uncertainties that could cause actual results of Travel + Leisure Co. and its subsidiaries (“Travel + Leisure Co.” or “we”) to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks associated with: the acquisition of the Travel + Leisure brand and the future prospects and plans for Travel + Leisure Co., including our ability to execute our strategies to grow our cornerstone timeshare and exchange businesses and expand into the broader leisure travel industry through travel clubs; the health of the travel industry and declines or disruptions caused by adverse economic conditions (including inflation, recent tariff actions and other trade restrictions, higher interest rates, and recessionary pressures), travel restrictions, terrorism or acts of violence, political strife, war (including hostilities in Ukraine and the Middle East), pandemics, and severe weather events and other natural disasters; our ability to compete in the highly competitive timeshare and leisure travel industries; uncertainties related to acquisitions, dispositions and other strategic transactions; adverse changes in consumer travel and vacation patterns, consumer preferences and demand for our products; increased or unanticipated operating costs and other inherent business risks; our ability to comply with financial and restrictive covenants under our indebtedness; our ability to access capital and insurance markets on reasonable terms, at a reasonable cost or at all; maintaining the integrity of internal or customer data and protecting our systems from cyber-attacks; compliance with consumer privacy laws; the timing and amount of future dividends and share repurchases, if any; failure to obtain the necessary court approvals associated with our resort optimization initiative; and those other factors disclosed as risks under “Risk Factors” in documents we have filed with the SEC, including in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 18, 2026. We caution readers that any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we undertake no obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

Our firstresults quarterfor the three and six months ended June 30, 2026 results highlight the strength and efficiency of our vacation ownership sales process driven by high quality tours, and the recognition of benefits resulting from strategic decisions made in 2025, mainly the resort optimization initiative. These benefits are apparent in both the firstquarter quarterto date and year to date results of our Vacation Ownership segment with year over year revenue and Adjusted EBITDA growth.increases as compared to the prior year. Revenue growth at this segment was driven by higher tours and volume per guest (“VPGs”), with Adjusted EBITDA further benefitedbenefitted by cost savings attributable to lower maintenance fees incurred on unsold VOIs as a result of resorts closed as part of the resort optimization initiative. We believe the tour increase, coupled with a significant increase in VPGs as compared to the prior year, highlights consumers’ recognition of the value proposition of our products. Such value proposition becomes especially apparent during periods of inflation when the costs of other accommodation types are rising. Our Vacation Ownership business is benefited by the fact that the majority of our owners do not have loans and are therefore less dependent on economic conditions when making travel decisions, which provides opportunities for upgrade sales. ThisSubsequent trendto isthe reflectedend inof the quarter, we closed on the acquisition of Yes& Vacations and entered into a definitive agreement to acquire Spinnaker Resorts. These transactions will expand our first quarter results as we experienced an increased mixnetwork of resorts and number of owners. Upon closing, these transactions are expected to be immediately accretive and create opportunities for owner upgrademonetization, sales.receivables optimization, and recurring management fee growth. These acquisitions will be included within our Vacation Ownership segment. See Note 23—Subsequent Events for additional information.

At our Travel and Membership business, the firstresults quarterfor ofthe three and six months ended June 30, 2026 reflectsreflect the impacts of continued exchange headwinds associated with reduced membersmember counts and the increased mix of members with club affiliations. While Travel Club transactions have increased on both a quarter to date and year to date basis as compared to the prior year, this shift in transaction mix is putting downward pressure on revenue per transaction.transaction as there was a significant decline in Travel Club revenue per transaction due to an increased mix of transactions sourced from lower commission partners. Given recent declines in the number of exchange members, this business may be negatively impacted in the future if we are required to purchase additional inventory to supplement the inventory supplied by exchange members. Despite the headwinds faced by this business it remains a capital-light, high-margin business that generates significant cash flows,flows. and weWe continue to evaluatefocus opportunitieson to maximizestabilizing the platformlong-term earnings and enhancecash returnsflow overgeneration time.of this business through operational improvements, new strategic partnerships, and digital initiatives.

While we continue to benefit from the changes we made to our marketing criteria to strengthen sales efficiencies and improve the performance of our vacation ownership contract receivables (“VOCR”) portfolio, similar to a number of other companies, we are experiencing some pressure on our loan portfolio primarily due to delinquencies remaining elevated over historical levels.levels, however delinquency levels are beginning to normalize with sequential improvement as compared to the first quarter of the year.

Our interest expense during the first quarterhalf of 2026 was benefitted by savings associated with our 2025 and 2026 corporate debt refinancing activities. TheseThe 2025 refinancing activities reduced the associated interest rate spread on borrowings under our revolving credit facility by 25 basis points at all pricing levels, reduced the interest rate on our term loan B facility by 50 basis points, and provided for a nearly 50 basis point interest rate reduction on our refinanced $350 million notes. These savings are apparent inDuring the reductionsecond inquarter of 2026, we reduced the associated interest rate on our refinanced $650 million notes by nearly 40 basis points. As a result, interest expense for the quarterfirst half of the year remained flat despite higher outstanding borrowings. Additionally, we closed on a $325 million term securitization at the end of the first quarter of 2026 which reflects our ability to access the capital markets even during times of market volatility. This transaction closed with a 98% advance rate and weighted average coupon rate of 5.11%, which is well below the average interest rate on our portfolio creating significant interest income opportunities and serving to strengthen our liquidity position. Subsequent to the end of the second quarter, we closed on additional term securitization financings of $300 million with a 98% advance rate and weighted average coupon rate of 5.52%. These transactions reflect our ability to access the capital markets even during times of market volatility.

While overall we had a strong first quarter,half of the year, the sustained effects of hostilities in the Middle East, inflationary pressures, high interest rates, high fuel costs, and risk of recession inherently result in uncertainty in business trends and consumer behavior. Since our Vacation Ownership and Travel and Membership businesses are highly dependent on the health of the travel industry, declines in, or disruptions to, the industry such as those caused by adverse economic conditions may adversely affect us. We are also subject to the other risks and uncertainties discussed in “Risk Factors” contained in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 18, 2026.

In order to promote the long-term strength of our vacation ownership resorts, during 2025 we undertook a strategic review with the intent of optimizing the overall quality of our resort portfolio, aligning with evolving owner preferences, preserving the affordability of maintenance fees, and mitigating the need for costly special assessments in the future. This review identified 17 resorts requiring significant owner reinvestment, or those located in markets that no longer align with owner demand. This initiative has generated, and is expected to generate further, meaningful savings attributable to developer obligations, which represent the maintenance fees we incur on unsold VOIs. Such savings are partially offset by the loss of, or reduction in, VOI sales and property management fees earned at the impacted resorts, but are expected to result in a positive net impact to Adjusted EBITDA. These benefits are reflected in the $40 million reduction in developer obligations associated with this initiative through the first half of the year, as compared to the prior year.

During the threesix months ended MarchJune 31,30, 2026, we incurred an additional $22$31 million of charges associated with the resort optimization initiative, consisting of $8$11 million of inventory impairment charges and $11$14 million of inventory write-downs driven by actions that were approved by owners during the first quarterhalf of 2026, and $3$6 million of resort closure, severance, and other associated employee costs.

As of MarchJune 31,30, 20262026, we have received confirmation of both HOA board and required member approvals of the proposed actions under this initiative.

The Organization for Economic Co-operation and Development (“OECD”), continues to advance initiatives, including Pillar Two which introduced a global minimum tax at a rate of 15%. A number of countries have implemented the OECD’s Pillar Two rules with varying effective dates for different aspects of the directive. As of MarchJune 31,30, 2026, based on the countries in which we do business that have enacted legislation in effect as of January 1, 2026, the impact of these rules did increase our effective tax rate but overall the impact to our financial statements was not material. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts, including the OECD’s published administrative guidance, released January 5, 2026, on a side-by-side system, which would effectively exempt U.S. multinationals from certain provisions of Pillar Two.

On July 4, 2025, the bill commonly referred to as the “One Big Beautiful Bill Act” was signed into law. Among other provisions, the bill extends permanently, with modifications, tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act and restores and makes permanent many business provisions, such as full expensing for research and development and capital investments. In addition, the bill contains other new tax relief measures and various revenue raising measures. The legislation has multiple effective dates. For the provisions effective in 2026 and 2025, there was no material impact to our effective tax rate for the quarterthree and six months ended MarchJune 31,30, 20262026, or the year ended December 31, 20252025. and weWe do not expect the impact to be material to our full year 2026 effective tax rate.

The table below presents our operating statistics for the three months ended MarchJune 31,30, 2026 and 2025. These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses. Refer to the Three Months Ended MarchJune 31,30, 2026 vs. Three Months Ended MarchJune 31,30, 2025 section for a discussion on how these operating statistics affected our business for the periods presented.

(i)The following table provides a reconciliation of Vacation ownership interest sales, net to Gross VOI sales for the three months ended MarchJune 31,30, 2026 and 2025 (in millions):

(1)Represents total sales of VOIs through our Fee-for-Service programs where inventory is sold through our sales and marketing channels for a commission. The Fee-for-Service commission revenues were $11 million and $16$26 million for the three months ended MarchJune 31,30, 2026 and 2025. These commissions are reported within Service and membership fees on the Condensed Consolidated Statements of Income.

THREE MONTHS ENDED MARCHJUNE 31,30, 2026 VS. THREE MONTHS ENDED MARCHJUNE 31,30, 2025

Net revenues increased $27$45 million for the three months ended MarchJune 31,30, 2026, compared with the same period last year. This increase was favorably impacted by foreign currency of $8$7 million. Excluding the impacts of foreign currency, the increase in net revenues was primarily the result of:

•$37$48 million of increased revenues at our Vacation Ownership segment primarily due to an increase in net VOI sales resulting from an increase in VPG due to a higher mix of owner upgrade transactions which generally produce higher VPGs and increased tours; and higher VOI travel package and incentive revenues; partially offset by a decrease in commission revenues; partially offset by

•$17$10 million of decreased revenues at our Travel and Membership segment primarily due to a decrease in transaction revenue as a result of a higher mix of Travel Club transactions which generally produce lower revenue per transaction andalong with an increased mix of transactions sourced from lower Travelcommission Club revenue per transaction due to changes in affiliates.partners.

Expenses increased $24$41 million for the three months ended MarchJune 31,30, 2026, compared with the same period last year. This increase in expenses was unfavorably impacted by foreign currency of $6$3 million. Excluding the impacts of foreign currency, the increase in expenses was primarily the result of:

•$16$13 million increase in sales and commission expenses at the Vacation Ownership segment due to higher Gross VOI sales, net of Fee-for-Service sales; and an

•$18$11 million decreaseincrease in developerproperty obligationmanagement expenses due to thehigher reimbursable resort optimizationoperating initiativecosts and expenses;

Our effective tax rates were 26.8%29.7% and 28.0%28.9% during the three months ended MarchJune 31,30, 2026 and 2025. The effective tax rate for the three months ended MarchJune 31,30, 2026 was primarily impacted by the excessdiscrete tax benefitadjustments from stock-based compensation, which resulted from increasesrecorded in the Company’squarter, stockprimarily price.related to an increase in unrecognized tax benefits. The effective tax rate for the three months ended MarchJune 31,30, 2025 was primarily impacted by Pillaran Two taxes offset by a decreaseincrease in stateunrecognized taxes.tax benefits.

As a result of these items, Net income attributable to Travel + Leisure Co. shareholders increased $6$1 million for the three months ended MarchJune 31,30, 2026 as compared to the same period last year.

(cb)Includes $5$2 million of resortdebt closure and employee relatedmodification costs associated with refinancing of the resort$650 optimizationmillion initiative6.625% secured notes for the three months ended MarchJune 31,30, 2026, included within Operating expense on the Condensed Consolidated Statements of Income.2026.

Net revenues increased $43$54 million and Adjusted EBITDA increased $32$29 million for the three months ended MarchJune 31,30, 2026, compared with the same period of 2025. The net revenue increase was favorably impacted by foreign currency of $6 million and Adjusted EBITDA was favorably impacted by $2$3 million of foreign currency.

•$47$60 million increase in Gross VOI sales, net of Fee-for-Service sales, due to a 3.4%2.1% increase in VPG due to a higher owner upgrade transaction mix (69% in the current period compared to 68% in the same period of 2025) which generally produce higher VPGs, and a 4.9%1.4% increase in tours; and a

•$5$12 million increase in otherproperty management revenues primarily due to higher VOIreimbursable travel packagerevenues; and incentive revenues.a