WYNDHAM HOTELS & RESORTS, INC.

(Unless otherwise noted, all amounts are in millions, except share and per share amounts)

1. BASIS OF PRESENTATION

Wyndham Hotels & Resorts, Inc. (collectively with its consolidated subsidiaries, “Wyndham Hotels” or the “Company”) is a leading global hotel franchisor, licensing its renowned hotel brands to hotel owners in approximately 100 countries around the world.

The Condensed Consolidated Financial Statements have been prepared on a stand-alone basis. The Condensed Consolidated Financial Statements include the Company’s assets, liabilities, revenues, expenses and cash flows and all entities in which it has a controlling financial interest. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements.

In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2024 Consolidated Financial Statements included in its most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and any subsequent reports filed with the SEC.

Business Description

Wyndham Hotels’ primary segment is hotel franchising which principally consists of licensing the Company’s lodging brands and providing related services to third-party hotel owners and others.

2. NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued an accounting update, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). This update also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. The Company adopted the guidance on January 1, 2025, as required on a prospective basis and will begin disclosing with its Annual Report on Form 10-K for the year ending December 31, 2025.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued an accounting update, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses on an annual and interim basis. This update requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Other than additional disclosure, the Company does not expect a change to its consolidated financial statements. The Company will adopt the guidance on January 1, 2027, as required.

3. REVENUE RECOGNITION

Deferred Revenues

Deferred revenues, or contract liabilities, generally represent payments or consideration received in advance for goods or services that the Company has not yet provided to the customer. Deferred revenues as of June 30, 2025 and December 31, 2024 are as follows:

Deferred initial franchise fees represent payments received in advance from prospective franchisees upon the signing of a franchise agreement and are generally recognized to revenue within 13 years. Deferred loyalty revenues represent the portion of loyalty program fees charged to franchisees, net of redemption costs, that have been deferred and will be recognized over time based upon loyalty point redemption patterns. Deferred co-branded credit card program revenue represents payments received in advance from the Company’s co-branded credit card partners, primarily for card member activity.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. The consideration received from a customer is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. The following table summarizes the Company’s remaining performance obligations for the twelve-month periods set forth below:

Disaggregation of Net Revenues

The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products:

Capitalized Contract Costs

The Company incurs certain direct and incremental sales commissions costs in order to obtain hotel franchise contracts. Such costs are capitalized and subsequently amortized, beginning upon hotel opening, over the first non-cancellable period of the agreement. In the event an agreement is terminated prior to the end of the first non-cancellable period, any unamortized cost is immediately expensed. In addition, the Company also capitalizes costs associated with the sale and installation of property management systems to its franchisees, which are amortized over the remaining non-cancellable period of the franchise agreement. As of June 30, 2025 and December 31, 2024, capitalized contract costs were $79 million and $76 million, respectively, of which $5 million for both periods was included in other current assets and $74 million and $71 million, respectively, were included in other non-current assets on its Condensed Consolidated Balance Sheets.

4. EARNINGS PER SHARE

The computation of basic and diluted earnings per share (“EPS”) is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively.

The following table sets forth the computation of basic and diluted EPS (in millions, except per share data):

(a) Anti-dilutive shares related to stock options were immaterial for both the three and six months ended June 30, 2025 and 2024. Diluted shares outstanding excludes anti-dilutive shares related to RSUs of 0.3 million and 0.2 million for the three and six months ended June 30, 2025, respectively and 0.6 million for both the three and six months ended June 30, 2024.

Stock Repurchase Program

The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data) which includes excise taxes and fees:

The Company had $386 million of remaining availability under its program as of June 30, 2025.

5. RECEIVABLES

Trade Accounts Receivables

The following table sets forth the activity in the Company’s allowance for doubtful accounts on trade accounts receivable for the six months ended:

Loan Receivables

The Company occasionally provides financing to franchisees or their affiliates to support hotel development efforts and related initiatives, typically in the form of loan receivables. These loans vary by region and have differing maturities, ranging from under twelve months to over three years. The loans bear interest and are expected to be repaid in accordance with the terms, though in some cases they may be converted into development advance notes usually tied to hotel openings or the completion of required property improvements. In most instances, the Company obtains guarantees from the borrower or an affiliate and/or secures collateral to mitigate credit risk. Since the loan receivables do not share similar risk characteristics, the Company evaluates expected credit losses on an individual basis rather than on a collective (pool) basis. At loan inception, the Company evaluates the collectability of each loan, which includes reviewing collection history on any amounts which had been due from these franchisees, and records expected credit losses as required. Additionally, the Company evaluates the collectability of these loans each reporting period to determine if a change to the allowance for loan loss is needed. Loans deemed uncollectible are written-off against the allowance for doubtful accounts. The Company also considers whether the historical economic conditions are comparable to current economic conditions. If current or expected future conditions differ from the conditions in effect when the historical experience was generated, the Company would adjust the allowance for doubtful accounts to reflect the expected effects of the current environment on the collectability of the Company’s loan receivables.

The Company’s Condensed Consolidated Balance Sheets include the following with respect to loan receivables:

(a) Loan receivables had a weighted average interest rate of 7.1% and 5.0% and a weighted average remaining contractual term of 2.5 years and 0.5 years as of June 30, 2025 and December 31, 2024, respectively.

6. FRANCHISING, MARKETING AND RESERVATION ACTIVITIES

Royalties and franchise fee revenues on the Condensed Consolidated Statements of Income include initial franchise fees of $6 million and $5 million for the three months ended June 30, 2025 and 2024, respectively, and $11 million and $14 million for the six months ended June 30, 2025 and 2024, respectively.

In accordance with its franchise agreements, the Company is generally contractually obligated to expend the marketing and reservation fees it collects from franchisees for the operation of an international, centralized, brand-specific reservation system and for marketing purposes such as advertising, promotional and co-marketing programs, and training for the respective franchisees.

Development Advance Notes

The Company may, at its discretion, provide development advance notes to certain franchisees/hotel owners in order to assist them in converting to one of its brands, in building a new hotel to be flagged under one of its brands or in assisting in other franchisee expansion efforts. Provided the franchisee/hotel owner is in compliance with the terms of the franchise agreement, all or a portion of the development advance notes may be forgiven by the Company over the period of the franchise agreement. Otherwise, the related principal is due and payable to the Company. In certain instances, the Company may earn interest on unpaid franchisee development advance notes.

The Company’s Condensed Consolidated Financial Statements include the following with respect to development advances:

The Company evaluates the recoverability of the carrying value of its development advance notes on a quarterly basis. As a result, the Company recorded an impairment charge of $10 million during the first quarter of 2024.

(a) Amounts are recorded as a reduction of both royalties and franchise fees and marketing, reservation and loyalty revenues on the Condensed Consolidated Statements of Income.

(b) Amount is recorded within impairment on the Condensed Consolidated Statements of Income.

The Company made a non-cash reclassification of $11 million and $3 million during the six months ended June 30, 2025 and 2024, respectively, from loan receivables to development advance notes, both of which were reported within other non-current assets.

Restricted Cash

There wasno restricted cash as of June 30, 2025. As of December 31, 2024, the Company had $10 million of restricted cash that is reported within other non-current assets on the Condensed Consolidated Balance Sheets.

7. INCOME TAXES

The Company files income tax returns in the U.S. federal and state jurisdictions, as well as in foreign jurisdictions. With certain exceptions, the Company is no longer subject to federal income tax examinations for years prior to 2021. The Company is no longer subject to state and local, or foreign, income tax examinations for years prior to 2017.

The Company made cash income tax payments, net of refunds, of $44 million and $37 million for the six months ended June 30, 2025 and 2024, respectively.

The Company’s effective tax rates were 25.0% and 23.2% during the three months ended June 30, 2025 and 2024, respectively. During 2024, the effective tax rate was lower primarily as a result of the non-taxable reversal of a separation-related reserve.

The Company’s effective tax rates were 23.2% and 23.3% during the six months ended June 30, 2025 and 2024, respectively.

Various jurisdictions in which the Company operates have enacted the Pillar II directive which establishes a global minimum corporate tax rate of 15% initiated by the Organization for Economic Co-operation and Development with an effective date of January 1, 2024. The Company does not expect Pillar II to have a material impact on its financial results, including its annual estimated effective tax rate or liquidity for 2025.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. The Company is evaluating the full effects of the OBBBA and does not expect the legislation to have a material impact on its financial results, including its annual effective tax rate or liquidity for 2025. As the legislation was signed into law after the close of the Company's second quarter, its impacts are not reflected in the Company’s results for the three and six months ended June 30, 2025.

8. LONG-TERM DEBT AND BORROWING ARRANGEMENTS

The Company’s indebtedness consisted of:

(a) The carrying amount of the term loans and senior unsecured notes are net of deferred debt issuance costs of $11 million and $13 million as of June 30, 2025 and December 31, 2024, respectively. The carrying amount of the term loan B is net of unamortized discounts of $5 million as of both June 30, 2025 and December 31, 2024.

(b) Weighted average interest rates are based on the stated interest rate for the year-to-date periods and include the effects of hedging.

Maturities and Capacity

The Company’s outstanding debt as of June 30, 2025 matures as follows:

As of June 30, 2025, the available capacity under the Company’s revolving credit facility was as follows:

Revolving Credit Facility

The Company had $221 million and $88 million of outstanding borrowings on its revolving credit facility as of June 30, 2025 and December 31, 2024, respectively. Such borrowings were included within long-term debt on the Condensed Consolidated Balance Sheets.

Deferred Debt Issuance Costs

The Company classifies deferred debt issuance costs related to its revolving credit facility within other non-current assets on the Condensed Consolidated Balance Sheets. Such deferred debt issuance costs were $2 million as of both June 30, 2025 and December 31, 2024.

Cash Flow Hedge

As of June 30, 2025, the Company has pay-fixed/receive-variable interest rate swaps in place to hedge interest rate exposure on $1.4 billion on its variable-rate debt, effectively covering nearly 95% of its outstanding term loan B. These swaps carry weighted average fixed rates (plus applicable spreads) ranging from 3.31% to 3.84% based on the effective dates of each agreement, with $475 million of swaps expiring in the fourth quarter of 2027, $600 million expiring in the second quarter of 2028, and $350 million expiring in the third quarter of 2028. For the six months ended June 30, 2025 and 2024, the weighted average fixed rate (plus applicable spreads) on the swaps was 3.58% and 1.74%, respectively. The aggregate fair value of these interest rate swaps was a net liability of $9 million and a net asset of $18 million as of June 30, 2025 and December 31, 2024, respectively, which were included within other non-current liabilities and other non-current assets on the Consolidated Balance Sheets, respectively. The swaps resulted in $3 million and $10 million of income recognized in interest expense, net on the Condensed Consolidated Statements of Income during the three months ended June 30, 2025 and 2024, respectively, and $5 million and $20 million of income during the six months ended June 30, 2025 and 2024, respectively.

There was no hedging ineffectiveness recognized in the six months ended June 30, 2025 or 2024. The Company expects to reclassify $3 million of gains from accumulated other comprehensive income (“AOCI”) to interest expense during the next 12 months.

Interest Expense, Net

The Company incurred net interest expense of $34 million and $30 million for the three months ended June 30, 2025 and 2024, respectively and $68 million and $59 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid related to such interest was $70 million and $58 million for the six months ended June 30, 2025 and 2024, respectively.

Early Extinguishment of Debt

The Company incurred non-cash early extinguishment of debt costs of $3 million during the three and six months ended June 30, 2024 relating to the repricing of the Company's term loan B.

9. 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 Company’s 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 fair value of financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The carrying amounts of cash and cash equivalents, trade and notes receivables, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The carrying amounts of loans receivables, primarily included in other non-current assets in the Condensed Consolidated Balance Sheets, approximate fair value as the interest rates on such notes are comparable to market rates. The carrying amounts and estimated fair values of all other financial instruments are as follows:

The Company estimates the fair value of its debt using Level 2 inputs based on indicative bids from investment banks or quoted market prices.

Financial Instruments

Changes in interest rates and foreign exchange rates expose the Company to market risk. The Company uses cash flow hedges as part of its overall strategy to manage its exposure to market risks associated with fluctuations in interest rates and foreign currency exchange rates. As a matter of policy, the Company only enters into transactions that it believes will be highly effective at offsetting the underlying risk, and it does not use derivatives for trading or speculative purposes. The Company estimates the fair value of its derivatives using Level 2 inputs.

Interest Rate Risk

A portion of debt used to finance the Company’s operations is exposed to interest rate fluctuations. The Company uses various hedging strategies and derivative financial instruments to create a desired mix of fixed and floating rate assets and liabilities. Derivative instruments currently used in these hedging strategies include interest rate swaps. The derivatives used to manage the risk associated with the Company’s floating rate debt are derivatives designated as cash flow hedges. See Note 8 - Long-Term Debt and Borrowing Arrangements for the impact of such cash flow hedges.

Foreign Currency Risk

The Company has foreign currency rate exposure to exchange rate fluctuations worldwide, particularly with respect to the Canadian Dollar, Chinese Yuan, Euro, Brazilian Real, British Pound and Argentine Peso. The Company uses foreign currency forward contracts at various times to manage and reduce the foreign currency exchange rate risk associated with its foreign currency denominated receivables and payables, forecasted royalties and forecasted earnings and cash flows of foreign subsidiaries and other transactions. The Company recognized $1 million of losses andimmaterial gains from freestanding foreign currency exchange contracts during the three months ended June 30, 2025 and 2024, respectively. The Company recognized $6 million of losses and $1 million of gains from freestanding foreign currency exchange contracts during the six months ended June 30, 2025 and 2024, respectively. Such gains and losses are included in operating expenses in the Condensed Consolidated Statements of Income.

The Company accounts for certain countries as a highly inflationary economy, with its exposure primarily related to Argentina. The Company incurred immaterial foreign currency exchange losses related to highly inflationary countries during both the three months ended June 30, 2025 and 2024. The Company incurred $1 million of foreign currency exchange losses andimmaterial gains during the six months ended June 30, 2025 and 2024, respectively. Such gains and losses are included in operating expenses in the Condensed Consolidated Statements of Income.

Credit Risk and Exposure

The Company is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and often by requiring collateral in instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amounts at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties.

10. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved, at times, in claims, legal and regulatory proceedings and governmental inquiries arising in the ordinary course of its business, including but not limited to: breach of contract, fraud and bad faith claims with franchisees in connection with franchise agreements, as well as negligence, breach of contract, fraud, employment, consumer protection and other statutory claims asserted in connection with alleged acts or occurrences at owned, franchised or managed properties or in relation to guest reservations and bookings. The Company may also at times be involved in claims, legal and regulatory proceedings and governmental inquiries relating to bankruptcy proceedings involving efforts to collect receivables from a debtor in bankruptcy, employment matters, claims of infringement upon third parties’ intellectual property rights, claims relating to information security, privacy and consumer protection, fiduciary duty/trust claims, tax claims, environmental claims and landlord/tenant disputes. Along with many of its competitors, the Company and/or certain of its subsidiaries have been named as defendants in litigation matters filed in state and federal courts, alleging statutory and common law claims related to purported incidents of sex trafficking at certain franchised and managed hotel facilities. Many of these matters are in the pleading or discovery stages at this time. In certain matters, discovery has closed and the parties are engaged in dispositive motion practice or preparing for potential trial. As of June 30, 2025, the Company is aware of approximately 60 pending matters filed naming the Company and/or subsidiaries. Due to the cadence of litigation filings, dismissals and settlements, including litigants attempting to preserve claims by filing within applicable statutory limitations periods, the number of pending matters may fluctuate from time to time. Based upon the status of these matters, the Company has not made a determination as to the likelihood of any probable loss of any one of these matters and is unable to estimate a range of losses at this time.

The Company records an accrual for legal contingencies when it determines, after consultation with outside counsel, that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations, the Company evaluates, among other things, the degree of probability of an unfavorable outcome, and when it is probable that a liability has been incurred, its ability to make a reasonable estimate of loss. The Company reviews these accruals each reporting period and makes revisions based on changes in facts and circumstances, including changes to its strategy in dealing with these matters.

The Company believes that it has adequately accrued for such matters with reserves of $2 million and $3 million as of June 30, 2025 and December 31, 2024, respectively. The Company also had receivables for certain matters which are covered by insurance. Such receivables were immaterial as of both June 30, 2025 and December 31, 2024 and are included within other current assets on the Company’s Condensed Consolidated Balance Sheets. Litigation is inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to the Company with respect to earnings and/or cash flows in any given reporting period. As of June 30, 2025, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to approximately $8 million in excess of recorded accruals. However, the Company does not believe that the impact of such litigation will result in a material liability to the Company in relation to its combined financial position or liquidity.

Guarantees

Separation-related guarantees

The Company assumed one-third of certain contingent and other corporate liabilities of former Parent incurred prior to the spin-off, including liabilities of former Parent related to, arising out of or resulting from certain terminated or divested businesses, certain general corporate matters of former Parent and any actions with respect to the separation plan or the distribution made or brought by any third party.

11. STOCK-BASED COMPENSATION

The Company has a stock-based compensation plan available to grant non-qualified stock options, incentive stock options, stock-settled appreciation rights (“SSARs”), RSUs, performance-vesting restricted stock units (“PSUs”) and/or other stock-based awards to key employees and non-employee directors. Under the Wyndham Hotels & Resorts, Inc. 2018 Equity and Incentive Plan (“Stock Plan”), a maximum of 10.0 million shares of common stock may be awarded. As of June 30, 2025,4.2 million shares remained available.

During 2025, the Company granted incentive equity awards totaling $32 million to key employees and senior officers in the form of RSUs. The RSUs generally vest ratably over a period offour years based on continuous service. Additionally, the Company approved incentive equity awards to key employees and senior officers in the form of PSUs with a maximum grant value of $20 million. The PSUs generally cliff vest on the third anniversary of the grant date based on continuous service with the number of shares earned (0% to 200% of the target award) dependent upon the extent the Company achieves certain performance metrics.

Incentive Equity Awards Granted by the Company

The activity related to the Company’s incentive equity awards for the six months ended June 30, 2025 consisted of the following:

(a)Represents awards granted by the Company primarily in March 2025.

(b)Represents awards granted by the Company at the maximum achievement level of 200% of target payout. Actual shares that may be issued can range from 0% to 200% of target.

(c)RSUs outstanding as of June 30, 2025 have an aggregate unrecognized compensation expense of $64 million, which is expected to be recognized over a weighted average period of 2.8 years.

(d)PSUs outstanding as of June 30, 2025 have an aggregate maximum potential unrecognized compensation expense of $37 million, which may be recognized over a weighted average period of 2.1 years based on attainment of targets.

There were no stock options granted in 2025 or 2024. The activity related to stock options for the six months ended June 30, 2025 consisted of the following:

Stock-Based Compensation Expense

Stock-based compensation expense was $9 million and $12 million for the three months ended June 30, 2025 and 2024, respectively and $19 million and $22 million for the six months ended June 30, 2025 and 2024, respectively. For the three and six months ended June 30, 2025, such expenses include $1 million for both periods which were recorded within transaction-related costs on the Condensed Consolidated Statements of Income. For the three and six months ended June 30, 2024, such expenses include $2 million for both periods which were recorded within restructuring costs and animmaterial amount and $1 million, respectively, which were recorded within transaction-related costs on the Condensed Consolidated Statements of Income.

12. SEGMENT INFORMATION

Wyndham Hotels’ primary segment is Hotel Franchising which principally consists of licensing the Company’s lodging brands and providing related services to third-party hotel owners and others. This reportable segment represents the Company’s operating segment for which separate financial information is available and is utilized on a regular basis by its chief operating decision maker to assess performance and allocate resources. The Company’s chief operating decision maker (“CODM”) is the chief executive officer. In identifying its reportable segment, the Company also considers the nature of services provided by its operating segment. Due to the adoption of the November 2023 Accounting Update, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company changed its primary measure of segment profit or loss from adjusted EBITDA to net income. The CODM evaluates the operating results of the Company on a consolidated basis based upon net revenues and net income, which is the measure of profit or loss that is most consistent with GAAP measurement principles and is used by the CODM internally to assess operating performance. The CODM also uses adjusted EBITDA to evaluate the operating results of its Hotel Franchising reportable segment.

Provided below is the Company’s segment profitability measure and significant segment expenses.

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the Company’s CODM.

(b) Information technology costs primarily include maintenance costs and software as a service cost.

(c) Other segment items include depreciation and amortization, stock-based compensation, restructuring costs, impairment charge, cost reimbursements, travel and entertainment, insurance and other operating expenses. 2025 periods also include pass-through expenses associated with the Company's global franchisee conference.

(d) Corporate expenses include interest expense, net, transaction and separation-related expenses, provision for income taxes, early extinguishment of debt, compensation costs, and other overhead costs.

13. OTHER EXPENSES AND CHARGES

Transaction-Related

The Company recognized transaction-related expenses of $1 million during both the three and six months ended June 30, 2025, primarily related to stock-based compensation costs associated with the failed hostile takeover defense. The Company recognized transaction-related expenses of $5 million and $46 million during the three and six months ended June 30, 2024, primarily related to costs associated with the failed hostile takeover defense and costs related to the repricing of the Company’s term loan B. During the six months ended June 30, 2024 the Company made $50 million of transaction-related payments. Such amounts primarily consisted of legal and advisory costs.

Separation-Related

The Company recognized $12 million and $11 million of separation-related income for the three and six months ended June 30, 2024, respectively, which were due to the reversal of a reserve associated with the expiration of a tax matter.

Restructuring

During the second quarter of 2025, the Company approved a restructuring plan focused on streamlining its organizational structure, primarily within its marketing, reservation and loyalty functions. As a result, during the three and six months ended June 30, 2025, the Company incurred $13 million of restructuring expenses, primarily in its Hotel Franchising segment and impacting a total of 156 employees. Such expenses included $8 million related to the closure of a leased call center facility in Canada, of which $3 million were personnel-related and impacting 69 employees.

During the first quarter of 2024, the Company approved a restructuring plan focused on enhancing its organizational efficiency. As a result, during the three and six months ended June 30, 2024, the Company incurred $7 million and $9 million, respectively, of restructuring expenses, all of which were personnel-related and primarily in its Hotel Franchising segment. Such plan resulted in a reduction of 135 employees in full year 2024. The following table presents activity for both plans for the six months ended June 30, 2025:

(a)Reported within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.

(b)Reported within accrued expenses and other current liabilities of $10 million and other non-current liabilities of $3 million as of June 30, 2025 on the Condensed Consolidated Balance Sheets.

The following table presents activity for the six months ended June 30, 2024:

(a)Represents non-cash payments in Company stock.

Impairment

As a result of the Company’s evaluation of the recoverability of the carrying value of certain assets, the Company recorded an impairment charge of $12 million, primarily related to development advance notes, during the first quarter of 2024. The impairment charge was reported within the impairment line item on the Condensed Consolidated Statements of Income.

14. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The components of AOCI are as follows: