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

TheFuture COVID-19global pandemicor had,regional health concerns, outbreaks, and pandemics (each a future “Health Crisis”) may have,have serious adverse effects on our business, financial condition, cash flows, and results of operations for an unknown period of time.

TheOur successsales of our businessvolume and ourrental financialrevenue results depend, in substantial part, upon the health of the travel industry. Our business and financial results wereare materially adversely affectedimpacted by the COVID-19 pandemic in 2020; for example, we saw marked declines in occupancy, rentals,desire and contractability salesof vacationers to travel, because of the temporary closure of nearly all of our sales centers and many of our resorts and the reduction in operations and amenities at all of our resorts. When Health Crises make headlines, consumer fear about contracting an illness and government recommendations or mandates to avoid large gatherings of people or self-quarantine may increase. These fears, recommendations and mandates have affected, and may affect in the future, resort occupancies. Aa substantial amount of our sales activity occurs at our resorts,resorts. andConcerns theabout numbertravel of prospective and current owners who visit our resorts impacts sales volume. Our rental revenue is also substantially impacted by the desire and ability of vacationers to travel. Fear of exposure to illnesses, government restrictions on travel,restrictions, low vaccination rates in some parts of the world and illnesses that may be resistantexposure to availableillness, vaccinesincluding vaccine-resistant illnesses could cause travelers to cancel or delay plans to visit our resorts.resorts, These changes in vacation and travel patternswhich could adversely affect our cash flows, revenues, and results of operations. Moreover, wheneven after travel advisories and restrictions are lifted, travel demand could be unpredictable and could remain so for a significant period. Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, inflation, recession and loss of personal wealth whether or not resulting from the impact of a future Health Crisis may negatively affect travel demand for a prolonged period.

We rely on a variety of marketing techniques, including digital marketing (e-mail), telemarketing, postal mailings, websites and social media. Adoption of new laws, or changes in existing laws, in any of the jurisdictions in which we operate regulating marketing and solicitation or data protection could adversely affect the effectiveness of our marketing strategies. For example, in the U.S., California enacted the California Consumer Privacy Act of 2018 (“CCPA”). The CCPA provides California consumers with certain access, deletion and opt-out rights related to their personal information, imposes civil penalties for violations and affords, in certain cases, a private right of action for data breaches. Similar legislation has been proposed or adopted in other states. In addition, foreign data protection, privacy, consumer protection, content regulation and other laws and regulations may be more restrictive or burdensome than those in the United States. For example, the European Union (“E.U.”) General Data Protection Regulation (“GDPR”) imposes significant obligations on businesses that sell products or services to E.U. customers or otherwise control or process personal data of E.U. residents. Complying with the GDPR or other laws and regulations could subject us to increased costs; and our failure to comply with these laws and regulations could result in significant fines, litigation, losses, third-party damages and other liabilities, any of which may have a material adverse effect on our brands, marketing, reputation, business, financial condition and results of operations. The cost of our compliance with privacy laws has increased and may continue to increase as laws change and we expand into new jurisdictions. If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected. We also obtain access to potential customers from travel service providers and other companies.companies, including our licensors. If our access to these third-party customer lists is prohibited or restricted, our ability to attract new customers could be impaired.

We use, and are expanding our use of, machine learning and AI technologies in our products and processes. If we fail to keep pace with rapidly evolving AI technological developments, our competitive position and business results may be negatively impacted. Our use of AI technologies requires resources to develop, test and maintain such products, which is costly.costly and may be subject to delays. We may not achieve our objectives from these efforts. In addition, third parties may be more successful in the use of AI or create technologies that could require us to change how we currently operate certain of our businesses.

The introduction of AI technologies, particularly generative AI, into new or existing offerings may result in new or expanded risks and liabilities,liabilities due to enhanced governmental scrutiny, litigation, compliance issues, ethical concerns, confidentiality, data privacy or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. If the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, unreliable, misleading, biased, discriminatory or otherwise flawed, any of which may not be easily detectable, our business and reputation may be adversely affected. Use of AI technologies, and the evolving legal, regulatory and compliance framework for AI, could impact our ability to protect our data and intellectual property, as well as vendor and client information, and could expose us to intellectual property or other claims by third parties. Use of AI technologies may also increase risks related to cyberattacks or other security incidents or result in a failure to protect confidential information. Because AI technology is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to AI.

Our businesses will be adversely impacted if they cannot compete effectively in their respective industries, each of which is highly competitive. A number of highly competitive companies participate in the vacation ownership industry. Our brands compete with the vacation ownership brands of major hotel chains in national and international venues, as well as with the vacation rental options (such as hotels, resorts and condominium or apartment rentals) offered by the lodging industry. Our competitors may have greater access to capital resources and broader marketing, sales and distribution capabilities than we do. Competitive pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our business, financial condition and results of operations.

We are subject to audit in various jurisdictions, and these jurisdictions may assess additional taxes against us. Developments in an audit, litigation, or laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows. An unfavorable outcome from any tax audit could result in higher tax costs,expense, penalties and interest, and could materially and adversely affect our financial condition or results of operations.

Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of severenatural weatheror andman-made otherdisasters regionalor eventsadverse economic conditions in these areas.

Our business is susceptible to the effects of natural or man-made disasters, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills, erosion and nuclear incidents, in the areas where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, California, South Carolina and Hawaii. Properties in these markets have had to close in the past, including for extended periods, in order to repair or assess damage caused by disasters. For example, we temporarily closed our resorts and sales centers in 2023 as a result of wildfires in Maui. Depending on the severity of future disasters, the resulting damage could require closure of all or substantially all of our properties in one or more of these markets while we complete repairs, restoration or renovations. Our insurance may not cover all damages caused by any such event, including the loss of sales of VOIs at sales centers that are not fully operational. In 2023, our cost to insure our properties in these areas increased significantly. Our insurance costs may rise again and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

We have expanded in part through acquisitions of other businesses and may continue to do so in the future. Our acquisition strategy depends on our ability to identify, and the availability of, suitable acquisition candidates. We may incur costs in connection with proposed acquisitions, but may ultimately be unable or unwilling to consummate any particular proposed transaction for various reasons. In addition, acquisitions involve numerous risks, including risks that we will not be able to: successfully integrate acquired businesses in an efficient and cost-effective manner; properly measure or identify all risks associated with the acquisition; achieve anticipated benefits of an acquisition, including expected synergies; control potential increases in operating costs; manage geographically remote operations; successfully expand our system of internal controls or our technological infrastructure to include an acquired business; avoid potential disruptions in ongoing operations during an acquisition process or integration efforts; successfully enter markets in which we have limited or no direct experience, including foreign markets whose practices or laws may pose increased risk; and retain key employees, clients, vendors and business partners of the acquired businesses. Failure to achieve the anticipated benefits of any acquisition may adversely affect our financial condition, operating results and prospects. Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, impairments of assets or substantial amortization expenses associated with other intangible assets.

Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies, including policies relating to the recognition of revenue, determination of cost of sales and evaluation of our assets for impairment, are highly complex and involve many assumptions, estimates and judgments. We review thesenumerous assumptions, estimates and judgments which we regularly review and revise themas when necessary.needed. Our actual results of operations vary from period to period based on revisions to these estimates. For example, higher loan delinquencies or defaults have caused us to increase and in the future could lead to annew increaseincreases in our estimated reserve for vacation ownership notes receivable. In addition, changes to our assumptions and estimates used to determine the fair value of our assets or actual operating results that are lower than our current estimates could result in impairment losses and require us to write off all or a portion of our assets. For example, in 2025, we incurred $577 million in impairment losses in the aggregate. See the “Critical Accounting Estimates” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information. In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial Accounting Standards Board, periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements. Changes to these standards or their interpretation could significantly impact our reported results in future periods. See Footnote 2 “Summary of Significant Accounting Policies” to our Financial Statements for more information regarding changes in accounting standards that we recently adopted or expect to adopt in the future.

Companies are facing increasing and frequently evolving scrutiny globally from customers, regulators, investors, employees and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.disclosure as expectations for, and support or criticism of, such matters continues to evolve. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy.practices. Third parties have developed proprietary ratings or analyses of companies based on certain ESG metrics. ESG disclosure rules have been adopted by CaliforniaCalifornia, the European Union and other jurisdictions; various ESG regulations are under consideration, and the EuropeanCompany Union,cannot anddetermine arewhat beingfinal consideredregulations bywill be enacted, modified, or reversed or the SEC.ultimate impact on its business. Increased ESG-related compliance costs could increase our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or other stakeholder expectations and standards could increase the risk of antidiscrimination lawsuits and customer backlash, negatively impact our reputation, ability to do business with certain partners, sales and stock price, and result in penalties. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. Our corporate responsibility initiatives and goals are based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. As we report on our corporate responsibility initiatives or goals, we may be subject to heightened reputational and operational risk and compliance costs related to these matters. Our control over resorts and properties that we manage is generally limited by the terms of the applicable management agreements. As a result, our ability to achieve some or all of our corporate responsibility initiatives or goals may be limited without additional support or action by the owners’ associations of the vacation ownership resorts and properties we manage. Complying with increased regulations could increase our costs and adversely impact our results of operations. Our inability or failure to meet, or the perceived failure to meet, such stakeholders’ expectations, as well as adverse incidents, could negatively impact our stock price, results of operations, or reputation and increase our cost of capital.

Our success depends, in part, on our relationships with Marriott International and Hyatt. These relationships are governed by various agreements, including long-term license agreements that expire between 2090 and 2095, subject to renewal. However, if we breach our obligations under a license agreement and remainfail in breach after the applicable notice andto cure period,such breach, or if our properties do not meet brand standards, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands.brands In addition, if any of our properties does not meet applicable brand standards, the applicable licensor can terminate our right to use itsand trademarks at the subject properties.

The termination of our license agreements with Marriott International, Hyatt or their affiliates wouldcould materially harm our business and results of operations and materially impair our ability to market and sell our products and maintain our competitive position, and could have a material adverse effect on our financial position, results of operations or cash flows. Our inability to rely on the strength of the Marriott, Sheraton, Westin, or Hyatt brands to attract qualified prospects in the marketplace would likely cause our results of operations to decline and our marketing and sales expenses to increase. Our inability to market to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing relationships with Marriott International or Hyatt reservation centers would likely cause our sales to decline, which could adversely affect our financial condition and results of operations. In addition, we would not be able to use the brand websites as channels through which to rent available inventory, which wouldcould cause our rental revenue to decline materially.

In connection with our vacation ownership business, we provide loans to purchasers to finance their purchase of VOIs. Accordingly, we are subject to the risk that those borrowers may default on the financing that we provide. The risk of borrower defaults may increase due to man-made or natural disasters, inflation, recessions or other economic downturns that cause financial hardship for borrowers. In the past, we have experienced increased defaults as a result of economic downturns. Certain of our borrowers have been impacted by man-made and natural disasters, including the recent wildfires near Los Angeles. However, at this time, we cannot quantify the effect the wildfires near Los Angeles may have on borrower defaults.disasters. The risk of borrower defaults may also increase if we do not evaluate accurately the creditworthiness of the customers to whom we extend financing or due to the influence of timeshare relief firms. Borrower defaults have caused, and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility. If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would adversely affect our results of operations and cash flows.

Selling VOIs in a system of resorts under a points-based business model increases the risk of temporary inventory depletion. Currently, our VOI sales are made primarily through a limited number of trust entities that issue VOIs. These structures can lead to a temporary depletion of inventory available for sale caused by: (1) delayed delivery of inventory under construction by us or third parties; (2) delayed receipt of required governmental registrations of inventory for sale; or (3) significant unanticipated increases in sales pace. If the inventory available for sale for a particular trust were to be depleted before new inventory is added and available for sale, we wouldmay be required to temporarily suspend sales until inventory is replenished orreplenished, shift to selling an alternative product,product or buy additional inventory at a higher cost, which mayhappened increasein marketingThailand andin sales costs and lower volume per guest (“VPG”).2025. Our efforts to avoid the risk of temporary inventory depletion by maintaining a surplus supply of completed inventory based on our forecasted sales pace, and by employing other mitigation strategies such as accelerating completion of resorts under construction, acquiring VOIs on the secondary market, or reducing sales pace by adjusting prices or sales incentives, may not be successful. A depletion of VOI inventory could decrease our financing revenues generated from purchasers of VOIs and fee revenues generated by providing club, management, exchange, sales, and marketing services. In addition, any temporary suspension of sales due to lack of inventory could reduce our cash flow and have a negative impact on our results of operations.

Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards. If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which could result in the loss of management fees, decreased customer satisfaction, and impairment ofimpair our ability to market and sell our products at the non-compliant locations. Increases in maintenance fees to keep pace with operating expenses, maintenance and other costs may make our products less desirable, which could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio. If the owners’ associations that we manage are unable to collect sufficient maintenance fees to cover operating and maintenance costs, the related resorts may have to close or file for bankruptcy, which may result in termination of our management agreements. We may also lose resort management contracts if they are not renewed when they expire, or the contract terms may be renegotiated in a manner adverse to us. The loss or renegotiation of a significant number of our management contracts may adversely affect our cash flows and results of operations.

As of December 31, 2024,2025, we had approximately $3$3.6 billion of total corporate indebtedness outstanding and could borrow an additional $607$787 million under a revolving corporate credit facility with a borrowing capacity of $750$800 million (the “Revolving Corporate Credit Facility”). The credit agreement that governs our corporate credit facility (“Corporate Credit Facility”) and the indentures that govern our various senior notes impose significant operating and financial restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets. The Corporate Credit Facility also requires us to not exceed a maximum first lien leverage ratio and maintain a specifiedminimum leverageinterest coverage ratio. These restrictions could restrict our flexibility to react to changes in our businesses, industries and economic conditions and increase borrowing costs.

In addition, our credit ratings will impact the cost and availability of future borrowings and, accordingly, our cost of capital. DowngradesThe Company has experienced ratings downgrades in the past, including being downgraded to ‘B+’ by S&P in 2025. Additional downgrades in our ratings could adversely affect our businesses, cash flows, financial condition, operating results and share and debt prices, as well as our ability to meet our obligations under our capital efficient inventory acquisitions.

We may be required to raise additional capital to refinance our existing debt, or to expand or support our operations. For example, during 2025, we issued $575 million aggregate principal amount of 6.500% Senior Notes due 2033 to raise the funds necessary to repay our convertible notes maturing in 2026. Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings, and the outlook for our industry as a whole. The terms of future debt agreements could include more restrictive covenants or require incremental collateral, which may further restrict our business operations or adversely affect our ability to obtain additional financing. There is no guarantee that debt or equity financings will be available in the future on terms favorable to us or at all. If we are unable to access additional funds on acceptable terms, we may have to adjust our business operations, and our ability to acquire additional vacation ownership inventory, repurchase VOIs, or make other investments in our business could be impaired, any of which may adversely affect our cash flows and results of operations.

We and our subsidiaries may incur substantial additional indebtedness in the future, including secured indebtedness, as well as obligations that do not constitute indebtedness as defined in our debt agreements. To the extent that we and our subsidiaries incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above will increase.

Our Vacation Ownership segment generates most of its revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.

Our Exchange & Third-Party Management segment includes an exchange network and membership programs, as well as the provision of management services to other resorts and lodging properties. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and owners’ association management, and other related products and services. We provide these services through our Interval International and Aqua-Aston businesses. In April 2022, we disposed of VRI Americas after determining that the business was not a core component of our future growth strategy and operating model. This business was a component of our Exchange & Third-Party Management segment through the date of the sale.

Corporate and other represents thatthe portion of our results that are not allocable to our segments, including those relating to Consolidated Property Owners’ Associations.

Significant Accounting Policies Used in Describing Results of Operations

Sales of vacation ownership products may be made for cash or we may provide financing. In addition, we recognize settlement fees associated with the transfer of vacation ownership productsVOIs and commission revenues from sales of vacation ownership productsVOIs on behalf of third parties, which we refer to as “resales revenue.”

Finally, as more fully described in “Financing” below, we record the difference between the contract receivable or vacation ownership note receivable and the consideration to whichamount we expect to becollect entitledfrom debtors (also known as a vacation ownership notes receivable reserve or a sales reserve) as a reduction of revenues from the sale of vacation ownership productsVOIs at the time we recognize revenues from a sale.

We report, on a supplemental basis, contract sales for our Vacation Ownership segment. Contract sales consist of the total amount of vacation ownership productVOI sales under contract signed during the period where we have generally received a down payment of at least ten percent of the contract price, reduced by actual rescissions during the period, inclusive of contracts associated with sales of vacation ownership productsVOIs on behalf of third parties, which we refer to as “resales contract sales.” In circumstances where a customer applies any or all of their existing ownership interests as part of the purchase price for additional interests (also referred to as an equity upgrade), we include only the incremental value purchased as contract sales. Contract sales differ from revenues from the sale of vacation ownership productsVOIs that we report on our income statements due to the requirements for revenue recognition described above. We consider contract sales to be an important operating measure because it reflects the pace of sales in our business.

Cost of vacation ownership products includes costs to acquire, develop and construct our projects (also known as real estate inventory costs), other non-capitalizable costs associated with the overall project development process and settlement expenses associated with the closing process. For each project, we expense real estate inventory costs in the same proportion as the revenue recognized. Consistent with the applicable accounting guidance, to the extent there is a change in the estimated sales revenues or inventory costs for the project in a period, a non-cash adjustment is recorded on our income statements to true up costs in that period to those that would have been recorded historically if the revised estimates had been used. These true-ups, which we refer to as product cost true-up activity, can have a positive or negative impact on our income statements.

Management and exchange expenses include costs to operate the food and beverage outlets andoutlets, other ancillary operations and to provide overall customer support services, including reservations, and certain transaction-based expenses relating to third-party exchange service providers.

We offer financing to qualified customers for the purchase of most types of our vacation ownership products.VOIs. The typical financing agreement provides for monthly payments of principal and interest with the principal balance of the loan fully amortizing over the term of the related vacation ownership note receivable, which is generally ten to fifteen years. While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates. We may use incentives to encourage our customers to choose our financing. Included within our vacation ownership notes receivable are originated vacation ownership notes receivable and vacation ownership notes receivable acquired in connection with the ILG Acquisition and the Welk Acquisition.

In the event of a default, we generally have the right to foreclose on or revoke the underlying VOI. We return VOIs that we reacquire through foreclosure or revocation back to inventory. As discussed above, for originated vacation ownership notes receivable, we record a reserve at the time of sale and classify the reserve as a reduction to revenues from the sale of vacation ownership products on our Income Statements. Revisions to estimates that result in decreases or increases to the reserve for originated vacation ownership notes receivable can increase or decrease revenues, respectively. In contrast, for acquired vacation ownership notes receivable, we record changes to the reserve as an adjustment to Financing expenses on our Income Statements. See Footnote 5 “Vacation Ownership Notes Receivable” to our Financial Statements for further information.

In our Vacation Ownership segment, we operate a rental business to provide owner flexibility and to help mitigate carrying costs associated with our inventory. We obtain rental inventory and generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs, inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs and rentals of unregistered inventory and owned-hotel properties. We also recognize rental revenue from the utilization of plus points at redemption for rental stays at one of our resorts or other third-party offerings. For rental revenues associated with vacation ownership productsVOIs which we own and which are registered and held for sale, to the extent that the revenues from rental are less than costs, revenues are reported net of rental expenses in accordance with Accounting Standards Codification (“ASC”) Topic 978, “Real Estate - Time-Sharing Activities” (“ASC 978”). The rental activity associated with discounted vacation packages requiring a tour (“preview stays”) is not included in transient rental metrics, and because the majority of these preview stays are sourced directly or indirectly from unsold inventory, the associated revenues and expenses are reported net in Marketing and sales expense.

Rental metrics, including the average daily transient rate or the number of transient keys rented, may not be comparable between periods given fluctuation in available occupancy by location, unit size (such as two bedroom, one bedroom or studio unit), owner use and exchange behavior, rental inventory on hand and keys allocated for preview stays. In addition, rental metrics may not correlate with rental revenues due to the requirement to report certain rental revenues net of rental expenses in accordance with ASC 978 (as discussed above). Further, as our ability to rent certain inventory may be limited on a site-by-site basis, rental operations may not generate adequate rental revenues to cover associated costs. Our Vacation Ownership segment units are either “full villas” or “lock-off” villas. Lock-off villas are units that can be separated into a primary unit and a guest room. Full villas are “non-lock-off” villas because they cannot be separated. A “key” is the lowest increment for reporting occupancy statistics based upon the mix of non-lock-off and lock-off villas. Lock-off villas represent two keys and non-lock-off villas represent one key. The “transient keys” metric represents the blended mix of inventory available for rent and includes all of the combined inventory configurations available in our resort system.

Cost reimbursements include direct and indirect costs that are reimbursed to us by owners’ associations and customers under management contracts.contracts, which costs are principally payroll-related costs at the locations where we employ the associates providing on-site services, costs associated with property refurbishments (including those where we act as the project manager), and insurance costs. All costs reimbursed to us by owners’ associations and customers, with the exception of taxes assessed by a governmental authority, are reported on a gross basis. We recognize cost reimbursements when we incur the related reimbursable costs. Cost reimbursements consist of actual expenses with no added margin.

•Contract sales from the sale of vacation ownership products is considered to be an important operating measure because itVOIs reflects the pace of sales in our business.

•Volume per guest (“VPG”) is calculated by dividingas consolidated vacation ownership contract sales, excluding fractional sales, telesales, resales, and other sales that are not attributed to a sales tour (referredcollectively, to“Tours”) as Tours, see below),divided by the number of toursTours inconducted aduring giventhe applicable period. We believe that VPG is valuablea inkey evaluatingdriver of profitability as it reflects both the average contract price and the effectiveness of the sales process as it combines the impact of average contract price with the number ofconverting touring guests whointo make a purchase.purchasers.

•Tours is defined as the number of sales tours performedconducted during the applicable period, and generally includesincluding virtual and offsite sales tours,tours and excludes telesales. We believe thatview Tours isas aan valuableimportant metric because it represents the volumeindicator of touring guests.guest volume.

•Development profit margin is calculated by dividingas Development profit divided by revenues from the sale of vacation ownership products. WeDevelopment referprofit torepresents revenues from the sale of vacation ownership productsproducts, lessnet of the cost of vacation ownership products and related marketing and sales costs as Development profit.costs. We believe that Development profit margin is ana importantkey measureindicator of the profitability of our development activities and subsequentthe effectiveness of its associated marketing and sales of VOIs.efforts.

•Total active members isrepresents the number of active members of the Interval Network active members atas of the end of the applicable period. We consider activethis membersmetric to be an important metricindicator because it representsof the populationsize of ownersthe member base eligible to booktransact transactions usingwithin the Interval Network.

•Average revenue per member is calculated by dividing membership fee revenue, transaction revenue, rental revenue, and other member revenue forgenerated by the Interval Network by the monthly weighted average number of active members of the Interval Network active members during the applicable period. We believe this metric is valuablea inmeaningful measuring the overall engagementindicator of ourmember Interval Network active members.engagement.

•Segment financial results attributable to common stockholders representsreflects revenues less expenses that are directly attributable to each applicablerespective reportable business segment (Vacation Ownership and Exchange & Third-Party Management). We considerbelieve this measure toprovides bemeaningful importantinsight in evaluatinginto the operating performance of our reportable business segments. See Footnote 2019 “Business Segments” to our Financial Statements for further information about our reportable business segments.

•Adjusted EBITDA margin representsis calculated as Adjusted EBITDA divided by the Company’s total revenues less cost reimbursements revenues.

•Segment Adjusted EBITDA margin representsis calculated as Segment Adjusted EBITDA divided by the applicablerespective segment’s total revenues less cost reimbursements revenues.

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We consider Adjusted EBITDA margin to be an indicator of our operating profitability. We also use Adjusted EBITDA and Adjusted EBITDA margin, as do analysts, lenders, investors, and others, because these measures exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin also exclude depreciation and amortization as well as amortization of cloud computing software implementation costs because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating or amortizing productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful as indicators of operating performance and profitability, respectively, because they allow for period-over-period comparisons of our ongoing core operations before the impact of the excluded items. Adjusted EBITDA and Adjusted EBITDA margin also facilitate comparisons by us, analysts, investors, and others of results from our ongoing core operations before the impact of these items with results from other companies.

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.

The decreaseincrease in Development profit was due to the following:

•lowerhigher salesSale of vacation ownership products due to the increase in sales reserve (discussed above); and

•$19$8 million of higher compensation due to inflationmarketing and higherother contract salescosts; and

There have been no material changes to the risk factors set forth in Item 1A of Part 1I of our 2025 Annual Report, except to the extent factual information disclosed elsewhere in this Quarterly Report relates to such risk factors, which is incorporated herein by reference.

We make forward-looking statements throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, the information concerning: our possible or assumed future results of operations, cash flows, financial condition, leverage, liquidity,liquidity; rental profit;future dividend payments; business strategies and management priorities for 2026, including improvingefforts profitabilityto andimprove cashprofitability, flow, acceleratingaccelerate growth, lower costs andcosts, monetize non-core assets and key initiatives to enhance theTour quality and compositionVPG, ofexpected ourtrends in rental profit, marketing and sales Tours, increase Tour flowexpenses and strengthen cost discipline; expected improvements in Tour quality, VPG, and default rates on newly originatedof vacation ownership notesproducts receivableas a percentage of revenue; financing plans, financing terms and the adequacy of capital to meet short-term and long-term liquidity requirements; our expectations regarding the objectives, costs and benefits of our modernization efforts; our plan to reduce our corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio; our expectations regarding inventory spending; and the impact of inventory repurchases and timing of payments for inventory. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. We caution you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: uncertainty in the current global macroeconomic environment created by rapid governmental policy and regulatory changes, including those affecting international trade or travel; future health crises and related governmental responses and their potential adverse effects; variations in demand for vacation ownership and exchange products and services; failure of vendors and other third parties to timely comply with their contractual obligations; worker absenteeism; our ability to attract and retain our global workforce; price inflation; difficulties associated with implementing new or maintaining existing technologies; the ability to useintegrate artificial intelligence (“AI”) technologies successfully while managing and potentialmitigating business,related compliance,operational, orlegal, intellectual property, data security and reputational risks associated with the use of AI technologies; changes in privacy and other laws and regulations affecting our business; instability, disruptions, or distress in the impact of a future banking crisissystem or financial institutions; impacts fromof 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 economyeconomies and credit markets,markets; the impacts of ongoing global conflicts and related sanctions andor othergeopolitical measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs and accelerate growth and profitability; political or social strife; and other matters referred to under the heading “Risk Factors” contained herein and also in our 2025 Annual Report, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission (the “SEC”).

•Total active members represents the number of active members of the Interval Network active members as of the end of the applicable period. We consider this metric to be an important indicator of the size of the member base eligible to transact within the Interval Network.

•Improve profitability and cash flow by driving higher free cash flow conversion through disciplined execution, tighteroptimizing working capitalcapital, andmanaging capital spending, and focusingimproving onAdjusted EBITDA performance.

•Strengthen leadership and talent through onboarding new leadership with the external expertise to drive improvement in consistency and long-term growth execution. We have also retainedRetain key existing leadership and talent throughout the organization to ensurefacilitate continuity and retainretention of 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 operatingbusiness. ecosystem. InflightCurrent initiatives arefocus intendedon to expandexpanding and diversifydiversifying marketing opportunities. This will occuropportunities by improving lead generation, increasing 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 improvedimprove cash flow through execution and cost management.

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

•Disciplined capital allocation to fund thehigh highest-returnreturn growth initiatives while prioritizing liquidity and balance sheet flexibility.

•MonetizeFollowing non-corethe decision to retain certain assets tofor operational use, we now expect that we will generate proceeds and support deleveraging and reinvestment priorities. By the end of 2027 we expect to generate betweenapproximately $200 million and $250 million of gross cash proceeds from the disposition of non-core assets Proceedsin 2026 and 2027. We realized proceeds of $50 million were realized in the first quarter of 2026 from the disposition of an entity that owned and operated a hotel in Cancun, Mexico and overwe $125expect to realize an additional $50 million of additional gross proceeds from dispositions are expected forduring the remainder of 2026.

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

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 firstthree quarterand ofsix 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 $3$2 million and $4$5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and March$3 31,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 or loss attributable to common stockholders, which is the most directly comparable GAAP financial measure.

(1)Includes $6$5 million of severance expense relating to changes in executive leadership that was recorded as General and administrative expense in the firstsix quartermonths ofended 2026..June 30, 2026.

(2)For customers who financedwe expect to finance a vacation ownership purchase and for whom a credit score was available, generally U.S. and Canadian residents.

The decreaseincrease in Sale of vacation ownership products for the firstsecond quarter of 2026 iswas attributeddriven toby lowerhigher contract salessales, andpartially offset by lower revenue reportability.

The overall 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 intentionalstrategy reductionto inimprove ToursTour quality for FICOfirst scorestime below 640.buyers. Excluding Asia‑Pacific, Tours decreasedincreased 1%3% year-over-year. VPG increased 1%23% year-over-year on a consolidated basis andand, wasexcluding upAsia-Pacific, VPG increased nearly 5022% basisyear pointsover excluding Asia‑Pacific.year.

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

•highera decline in Cost of vacation ownership products as a percentage of revenue 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), partially offset by lower favorable product cost true up activity; and

Rental profit declinedincreased due to $7a $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 $4$3 million of higher marketing, variable and other costs, partially offset by a $2 million increase in transient rental revenues, including plus points.costs.

Rental revenues and Rental expenses are both $6$5 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 salesale. which is reclassified to Rental revenues.revenues (net presentation).

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

•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.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 firstthree quarterand ofsix 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 $3$2 million and $4$5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and March$3 31,million and $7 million for the three and six months ended June 30, 2025, respectively. In addition, consumer financing interest expense increased by $2 million due to higher average securitized debt in the first quarter of 2026.

(Losses) Gains and Other (Expense) Income

During the first quarterhalf 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, and a less than $1 million gain on the disposition of a parcel of land.Acquisition.

During the first quarterhalf 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.Acquisition, and $1 million of other gains.