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 Company’s portfolio and reduce the number of units at certain other resorts.

As of March 31, 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 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 Company executed agreements to supply replacement inventory to the vacation ownership clubs impacted by removal of the identified resorts in exchange for the clubs’ pro-rata distributions of net sales proceeds.

During 2025, the Company incurred $233 million of costs in connection with these actions, including $216 million of inventory write-downs and impairments at its Vacation Ownership segment associated with the removal of the identified resorts and the agreements to supply replacement inventory to the impacted vacation ownership clubs which were included within Cost of vacation ownership interests on the Consolidated Statements of Income. During 2025, the Company also incurred $8 million of impairments of other property and equipment, which were included within Asset impairments, net and $9 million of other charges consisting primarily of employee-related costs, of which $5 million was included within Operating expense and $4 million was included in Restructuring on the Consolidated Statements of Income.

During the three months ended March 31, 2026, the Company incurred an additional $22 million of costs associated with this initiative at its Vacation Ownership segment, including $19 million of inventory write-downs and impairments driven by actions that were approved by owners during the first quarter of 2026.

The valuation method used in the determination of the fair value of inventory impacted by this initiative was based on a discounted cash flow model which used Level 3 inputs consisting of available property information and comparable sales to estimate income and operating expenses to determine an estimated price range.

The Company’s financial statements included the following impacts related to the resort optimization initiative (in millions):

Three Months Ended March 31, 2026

Income Statement Classification

Inventory write-downs

Cost of vacation ownership interests

Inventory impairments

Cost of vacation ownership interests

Resort closure costs

Operating

Severance and related benefits

(2)

Restructuring

Other employee related costs

Operating

Total resort optimization initiative costs

As of December 31, 2025, there was $4 million of restructuring liabilities associated with this initiative. During the three months ended March 31, 2026, the Company reversed $2 million of restructuring expense for costs incurred during 2025 on behalf of the HOAs which are subject to reimbursement. As these costs will be paid by the Company on behalf of the HOAs these $2 million of charges are maintained within the restructuring liability with an offsetting receivable included in Trade receivables, net on the Condensed Consolidated Balance Sheet. This liability was reduced by $1 million of cash payments during the three months ended March 31, 2026. The remaining resort optimization initiative liability of $3 million is expected to be paid by the end of 2027.

During 2025, the Company incurred $15 million of restructuring charges associated with the 2025 restructuring plan. These actions were primarily focused on enhancing organizational efficiency and rationalizing operations. These charges included personnel-related costs resulting from a reduction of approximately 250 employees and other expenses. The 2025 restructuring plan charges consisted of (i) $7 million of personnel-related costs at the Company’s corporate operations, (ii) $5 million of personnel-related costs and $2 million of fees associated with the termination of a licensing agreement at the Travel and Membership segment, and (iii) $1 million of personnel-related costs at the Vacation Ownership segment. All material initiative and related expenses have been incurred as of December 31, 2025. The 2025 restructuring liability was reduced by $3 million of cash payments during the year ended December 31, 2025. As of December 31, 2025, this restructuring liability was $12 million. The 2025 restructuring liability was reduced by $9 million of cash payments during the three months ended March 31, 2026. The remaining 2025 restructuring liability of $3 million is expected to be paid by the end of 2027.

The Company has additional restructuring plans which were implemented prior to 2025. As of both March 31, 2026 and December 31, 2025, the restructuring liability related to these plans was $12 million, all of which is related to leased facilities. The remaining liability associated with these prior restructuring plans is expected to be paid by the end of 2029.

The Company’s restructuring liabilities are included within Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. The table below summarizes the activity associated with the Company’s aforementioned restructuring plans (in millions):