Financial Analysis

Acquisitions Other . On February 10, 2025, the Company completed a business acquisition for consideration of $3 million. The fair value of purchase consideration was comprised of $1 million of cash paid at closing and $2 million to be paid in 2027. The acquisition resulted in the recognition of (i) $2 million of definite-lived intangible assets consisting of management agreements, and (ii) $1 million of Property and equipment, net. This business is included within the Vacation Ownership segment.

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Commitments and Contingencies The Company is involved in claims, legal and regulatory proceedings, and governmental inquiries related to its business, none of which, in the opinion of management, is expected to have a material effect on the Companys results of operations or financial condition. Travel + Leisure Co. Litigation The Company may be from time to time involved in claims, legal and regulatory proceedings, and governmental inquiries arising in the ordinary course of its business including, but not limited to: for its Vacation Ownership business breach of contract, bad faith, conflict of interest, fraud, consumer protection and other statutory claims by property owners associations, owners and prospective owners in connection with the sale or use of VOIs or land, or the management of vacation ownership resorts; construction defect claims relating to vacation ownership units or resorts or in relation to guest reservations and bookings; and negligence, breach of contract, fraud, consumer protection and other statutory claims by guests and other consumers for alleged injuries sustained at or acts or occurrences related to vacation ownership units or resorts or in relation to guest reservations and bookings; for its Travel and Membership business breach of contract, fraud and bad faith claims by affiliates and customers in connection with their respective agreements, negligence, breach of contract, fraud, consumer protection and other statutory claims asserted by members, …

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Debt The Companys indebtedness consisted of the following (in millions): June 30, 2026 December 31, 2025 Non-recourse vacation ownership debt : (a) Term notes (b) $ 1,512 $ 1,690 USD bank conduit facility (due August 2027) (c) 376 318 AUD/NZD bank conduit facility (due December 2026) (d) 122 116 Total $ 2,010 $ 2,124 Debt : (e) $1.0 billion secured revolving credit facility (due June 2030) (f) $ 45 $ 63 Secured term loan B (due December 2029) (g) 851 854 $650 million 6.625% secured notes (due July 2026) 649 $400 million 6.00% secured notes (due April 2027) (h) 401 402 $650 million 4.50% secured notes (due December 2029) 646 646 $350 million 4.625% secured notes (due March 2030) 348 348 $900 million 6.250% secured notes (due June 2031) 891 $500 million 6.125% secured notes (due September 2033) 495 494 Finance leases 23 18 Total $ 3,700 $ 3,474 (a) Represents non-recourse debt that is securitized through bankruptcy-remote special purpose entities, the creditors of which have no recourse to the Company for principal and interest. These outstanding borrowings (which legally are not liabilities of the Company) are collateralized by $2.28 billion and $2.40 billion of underlying gross VOCRs and related assets (which legally are not assets of the Company) as of June 30, 2026 and December 31, 2025. (b) The carrying amounts of the term notes are net of deferred financing costs of $21 million and $23 million as of June 30, 2026 and December 31, 2025. (c) The Company has a borrowing capa …

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Property management fee and reimbursable revenues were (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Management fee revenues $ 117 $ 114 $ 233 $ 228 Reimbursable revenues 113 103 219 212 Property management fees and reimbursable revenues $ 230 $ 217 $ 452 $ 440 The table below presents a disaggregation of the Companys net revenues from contracts with customers by major services and products for each of the Companys segments (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Vacation Ownership Vacation ownership interest sales $ 524 $ 474 $ 951 $ 858 Property management fees and reimbursable revenues 230 217 452 440 Consumer financing 113 112 226 224 Fee-for-Service commissions 11 26 22 42 Ancillary revenues 29 24 54 45 Total Vacation Ownership 907 853 1,705 1,609 Travel and Membership Transaction revenues 109 117 225 246 Subscription revenues 42 43 84 86 Ancillary revenues 6 6 12 13 Total Travel and Membership 157 166 321 345 Corporate and other Ancillary revenues 1 1 1 Eliminations (1) (2) (3) (4) Total Corporate and other (1) (1) (2) (3) Net revenues $ 1,063 $ 1,018 $ 2,024 $ 1,951 …

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Stock-Based Compensation The Company has a stock-based compensation plan available to grant RSUs, PSUs, stock-settled appreciation rights, NQs, and other stock-based awards to key employees, non-employee directors, advisors, and consultants. Under the Amended and Restated 2006 Equity Incentive Plan, a maximum of 15.7 million shares of common stock may be awarded. As of June 30, 2026, based on the number of awards granted at target performance levels, 9.0 million shares remained available. Incentive Equity Awards Granted by the Company During the six months ended June 30, 2026, the Company granted incentive equity awards to key employees and senior officers of $48 million in the form of RSUs and $20 million in the form of PSUs, based on target performance. Of these awards, the majority of RSUs will vest ratably over a period of four years and the majority of the PSUs will cliff vest on the third anniversary of the grant date, contingent upon the Company achieving certain performance metrics, with a maximum vesting of 200%. During the six months ended June 30, 2025, the Company granted incentive equity awards to key employees and senior officers of $38 million in the form of RSUs and $10 million in the form of PSUs, contingent upon the Company achieving certain performance metrics, with a maximum vesting of 200%. The activity related to incentive equity awards granted by the Company to key employees and senior officers for the six months ended June 30, 2026, consisted of the fo …

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Fair Value The Company measures its financial assets and liabilities at fair value on a recurring basis and utilizes the fair value hierarchy to determine such fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable. Level 3: Unobservable inputs used when little or no market data is available. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input (closest to Level 3) that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Companys derivative instruments currently consist of foreign exchange forward contracts and interest rate caps. As of June 30, 2026, the Company had foreign exchange contracts resulting in less than $1 million of assets which are included within Other assets and $1 mil …

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Income Taxes The Company files U.S. federal and state, and foreign income tax returns in jurisdictions with varying statutes of limitations. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations for years prior to 2022 and state and local income tax examinations prior to 2016. In significant foreign jurisdictions, years prior to 2017 are generally no longer subject to income tax examinations by their respective tax authorities. The Companys effective tax rate was 29.7% and 28.9% for the three months ended June 30, 2026 and 2025; and 28.5% for both the six months ended June 30, 2026 and 2025. The effective tax rate for the three months ended June 30, 2026 was primarily impacted by discrete tax adjustments recorded in the quarter, primarily related to an increase in unrecognized tax benefits. The effective tax rate for the three months ended June 30, 2025 was primarily impacted by an increase in unrecognized tax benefits. The effective tax rate for the six months ended June 30, 2026 was impacted by the excess tax benefit from stock-based compensation offset by an increase in unrecognized tax benefits. The effective tax rate for the six months ended June 30, 2025 was primarily impacted by Pillar Two taxes and an increase in unrecognized tax benefits offset by a decrease in state taxes. The Company made income tax payments, net of tax refunds, of $75 million and $57 million during the six months ended June 30, 2026 and 2025. …

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Recently Issued Accounting Pronouncements Disclosure Improvements . In October 2023, the Financial Accounting Standards Board (FASB) issued guidance to modify the disclosure and presentation requirements of a variety of topics in the Codification. Among other updates, amendments specific to the Company include updates to disclosure requirements related to derivative instruments, diluted earnings per share, commitments, and amounts and terms of unused lines of credit. The effective date for each amendment will be the date on which the SECs removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company will adopt these amendments as they become effective. The amendments primarily affect presentation and disclosure requirements and are not expected to have a material impact on the Companys financial statements. Disaggregation of Disclosures About Income Statement Expenses. In November 2024, the FASB issued guidance which will require public companies to provide disclosure in the footnotes of certain expense captions into specified categories. The objective of the standard is to provide more detailed information about the types of expenses presented within expense captions commonly used in the statements of income. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company i …

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Transactions with Former Parent and Former Subsidiaries Matters Related to Former Parent Pursuant to the Separation and Distribution Agreement with the Companys former parent ABG (formerly Cendant Corporation), the Company entered into certain guarantee commitments with ABG and ABGs former subsidiary, Compass, Inc. (formerly Anywhere Real Estate Inc. and Realogy). These guarantee arrangements primarily related to certain contingent litigation liabilities, contingent tax liabilities, and ABG contingent and other corporate liabilities, of which Wyndham Worldwide Corporation assumed 37.5% of the responsibility while ABGs former subsidiary Compass, Inc. is responsible for the remaining 62.5%. In connection with the Spin-off, Wyndham Hotels agreed to retain one-third of ABGs contingent and other corporate liabilities and associated costs; therefore, Travel + Leisure Co. was effectively responsible for 25% of such matters subsequent to the separation. Since ABGs separation, ABG has settled the majority of the lawsuits that were pending on the date of the separation. On March 21, 2023, the California Office of Tax Appeals (OTA) issued an opinion in favor of the California Franchise Tax Board on a legacy tax matter involving ABG related to a 1999 transaction. The matter concerned (i) whether the statute of limitations barred proposed assessment notices issued by the California Franchise Tax Board; and (ii) whether a transaction undertaken by the taxpayers for the 1999 tax year consti …

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Restructuring Resort Optimization Initiative In order to promote the long-term strength of its portfolio of vacation ownership resorts, the Company undertook a strategic review with the intent of optimizing the overall quality of its 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 are in markets that no longer align with owner demand. As a result, during 2025, the Company proposed to the boards of the respective homeowners associations (HOAs) of these identified resorts, court-supervised restructuring plans to remove select resorts from the Companys portfolio and reduce the number of units at certain other resorts. As of June 30, 2026, the Company had received confirmation of both HOA board and required member approvals of the proposed actions for all HOAs of the identified resorts. When the restructuring plans have been completed, the identified resorts and related assets of the respective HOAs will be sold, and all owners, including the Company and its vacation ownership clubs, will receive pro-rata distributions of the net sales proceeds. The Company anticipates that the respective HOAs will receive the necessary court approvals for the sale of the property governed by the HOAs by the end of 2026. Related to this initiative, during the fourth quarter of 2025, the Co …

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Revenue Recognition Vacation Ownership The Company develops, markets, and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs, and provides property management services at resorts. The Companys sales of VOIs are either cash sales or developer-financed sales. Developer-financed sales are typically collateralized by the underlying VOI. Revenue is recognized on VOI sales upon transfer of control, which is defined as the point in time when a binding sales contract has been executed, the financing contract has been executed for the remaining transaction price, the statutory rescission period has expired, and the transaction price has been deemed to be collectible. For developer-financed sales, the Company reduces the VOI sales transaction price by an estimate of uncollectible consideration at the time of the sale. The Companys estimates of uncollectible amounts are based largely on the results of the Companys static pool analysis which relies on historical payment data by customer class. In connection with entering into a VOI sale, the Company may provide its customers with certain non-cash incentives, such as credits for future stays at its resorts. For those VOI sales, the Company allocates the sales price between the VOI sale and the non-cash 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 a …

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Segment Information The Company has two reportable segments: Vacation Ownership and Travel and Membership. In identifying its reportable segments the Company analyzed the components of each segment, the nature of the segments products and services, and prescribed quantitative thresholds. Based on this analysis the Company aggregates two geographical operating segments within the Vacation Ownership reportable segment and two operating segments within the Travel and Membership reportable segment. The Vacation Ownership segment develops, markets, and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs, and provides property management services at resorts. This segment is wholly comprised of the Vacation Ownership business line. The Travel and Membership segment operates a variety of travel businesses, including vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment is comprised of the Exchange and Travel Club business lines. The financial results of these reportable segments are regularly reviewed by the Companys Chief Executive Officer (CEO) to evaluate performance and allocate resources. Since the Companys CEO makes key operating and resource allocation decisions, the CEO is considered the Companys chief operating decision maker (CODM). Adjusted EBITDA is the profitability measure utilized by the CODM to assess the performance of the reportable segments through comp …

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Subsequent Events Spinnaker Resorts On July 14, 2026, the Company entered into a definitive agreement to acquire Spinnaker Resorts, a fully integrated timeshare business engaged in development, marketing, sales, property management and related services within the vacation ownership industry, for $150 million, subject to customary adjustments and contingent performance-based payments of up to $10 million. This acquisition will further expand the Companys network of resorts and number of owners. The Company expects this acquisition to close in the third quarter of 2026, subject to customary closing conditions. Upon closing, this acquisition will be reported within the Vacation Ownership segment. Yes& Vacations On July 15, 2026, the Company acquired Yes& Vacations, a fully integrated timeshare business engaged in development, marketing, sales, property management and related services within the vacation ownership industry. This acquisition creates opportunities to generate incremental revenue through the addition of highly sought-after destinations and owners to the Companys vacation ownership network. Yes& Vacations was acquired for $193 million, subject to customary post-closing adjustments based on final valuation information and additional analysis. The fair value of purchase consideration was fully comprised of $193 million of cash delivered at closing. The Company has not yet completed the purchase accounting for this transaction. This transaction will be accou …

SubsequentEventsTextBlock · excerpt; the full note is in the filing