What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 306 added, 256 removed, 886 unchanged (39% of the section changed)

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(in millions, except share and per share data)

2024 December 31, 2023

June 30, 2024 December 31, 2023

Cash and cash equivalents $ 328 $ 589

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300,000,000 authorized shares, none

issued or outstanding as of March 31, 2024 and December 31, 2023

issued or outstanding as of June 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value;

3,000,000,000 authorized shares,

104,760,243 shares issued and outstanding as of March 31, 2024 and

102,485,583 shares issued and outstanding as of June 30, 2024 and

105,961,160 shares issued and outstanding as of December 31, 2023

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See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

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(in millions, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Sales of VOIs, net $ 471 $ 355 $ 909 $ 673

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Other (loss) gain, net

(Loss) income before income taxes

Income tax benefit (expense)

Net (loss) income

( 3 ) 3 ( 8 ) 4

Income (loss) before income taxes

7 115 ( 6 ) 205

Income tax (expense) benefit

( 3 ) ( 35 ) 8 ( 52 )

Net income attributable to noncontrolling interest

Net (loss) income attributable to stockholders

(Loss) earnings per share:

Net income (loss) attributable to stockholders

$ 2 $ 80 $ ( 2 ) $ 153

Earnings (loss) per share attributable to stockholders:

Basic $ 0.02 $ 0.72 $ ( 0.02 ) $ 1.37

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See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

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(in millions)

Three Months Ended March 31,

Net (loss) income

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income $ 4 $ 80 $ 2 $ 153

Derivative instrument adjustments, net of tax ( 1 ) 5 3 ( 5 )

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See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

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(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 130 103

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Equity in earnings from unconsolidated affiliates ( 8 ) ( 5 )

Return on investment in unconsolidated affiliates — 6

Net changes in assets and liabilities, net of effects of acquisitions:

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Software capitalization costs ( 20 ) ( 16 )

Other ( 1 ) —

Net cash used in investing activities ( 1,482 ) ( 25 )

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Repayment of non-recourse debt ( 1,231 ) ( 397 )

Debt issuance costs ( 39 ) —

Payment of debt issuance costs

Repurchase and retirement of common stock ( 199 ) ( 206 )

Payment of withholding taxes on vesting of restricted stock units ( 21 ) ( 14 )

Proceeds from employee stock plan purchases 5 4

Proceeds from stock option exercises 7 7

Other ( 2 ) ( 2 )

Net cash provided by financing activities

Net cash provided by (used in) financing activities

1,101 ( 152 )

Effect of changes in exchange rates on cash, cash equivalents & restricted cash ( 16 ) ( 10 )

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See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

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105 $ 1 $ 1,467 $ 521 $ 15 $ 160 $ 2,164

Net income — — — 2 — 2 4

Activity related to share-based compensation — — 17 — — — 17

Employee stock plan issuance — — 5 — — — 5

Foreign currency translation adjustments — — — — ( 9 ) — ( 9 )

Derivative instrument adjustments, net of tax — — — — ( 1 ) — ( 1 )

Repurchase and retirement of common stock ( 3 ) — ( 33 ) ( 67 ) — — ( 100 )

Balance as of June 30, 2024

102 $ 1 $ 1,456 $ 456 $ 5 $ 162 $ 2,080

See notes to unaudited condensed consolidated financial statements.

Common Stock Additional

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Balance as of December 31, 2022

113 $ 1 $ 1,582 $ 529 $ 39 $ — $ 2,151

Net income — — — 73 — — 73

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Balance as of March 31, 2023

112 $ 1 $ 1,559 $ 543 $ 29 $ — $ 2,132

Net income — — — 80 — — 80

Activity related to share-based compensation — — 16 — — — 16

Employee stock plan issuance — — 4 — — — 4

Foreign currency translation adjustments — — — — ( 10 ) — ( 10 )

Derivative instrument adjustments, net of tax — — — — 5 — 5

Repurchase and retirement of common stock ( 3 ) — ( 38 ) ( 84 ) — — ( 122 )

Balance as of June 30, 2023

109 $ 1 $ 1,541 $ 539 $ 24 $ — $ 2,105

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

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Hilton Grand Vacations Inc.

(“Hilton Grand Vacations,” “we,” “us,” “our,” “HGV” or the “Company”) is a global timeshare company engaged in developing, marketing, selling, managing and operating timeshare resorts, timeshare plans and ancillary reservation services, primarily under the Hilton Grand Vacations brand.

On January 17, 2024 (“Bluegreen Acquisition Date”), we completed the acquisition of Bluegreen Vacations Holding Corporation (“Bluegreen”) (the “Bluegreen Acquisition”).

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operating resorts and timeshare plans;

and managing our clubs and exchange programs that include HGV Max, Hilton Grand Vacations Club and Hilton Club, Diamond points-based multi-resort timeshare clubs and Bluegreen Vacation Club (collectively referred to as “Clubs”).

As of March 31, 2024, we had approximately 200 properties located in the United States (“U.S.”), Europe, Mexico, the Caribbean, Canada and Asia.

A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, California, Arizona, Nevada and Virginia, inclusive of the new locations we have expanded into through the Bluegreen Acquisition.

and managing our clubs and exchange programs that include HGV Max, Hilton Grand Vacations Club and Hilton Club, Diamond clubs and Bluegreen Vacation Club (collectively referred to as “Clubs”).

As of June 30, 2024, we had approximately 200 properties located in the United States (“U.S.”), Europe, Mexico, the Caribbean, Canada and Asia.

A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, California, Arizona, Nevada, South Carolina and Virginia, inclusive of the new locations we have expanded into through the Bluegreen Acquisition.

We are in the process of rebranding many of the Diamond properties and anticipate rebranding the majority of Bluegreen properties and sales centers.

As of March 31, 2024, we expect to begin rebranding certain Bluegreen properties during the fourth quarter of 2024 to the Hilton Grand Vacations brands and Hilton standards.

We expect to begin rebranding certain Bluegreen properties during the fourth quarter of 2024 to the Hilton Grand Vacations brands and Hilton standards.

Basis of Presentation

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If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity.

We consolidate entities when we own more than 50% of the voting shares of a company or otherwise have a controlling financial interest, including HGV/Big Cedar Vacations LLC, a joint venture in which HGV is deemed to hold a controlling financial interest based on its 51 % equity interest (“Big Cedar”), its active role as the day-to-day manager of its activities, and majority voting control of its management committee.

We consolidate entities when we own more than 50% of the voting shares of a company or otherwise have a controlling financial interest, including Bluegreen/Big Cedar Vacations LLC, a joint venture in which HGV is deemed to hold a controlling financial interest based on its 51 % equity interest (“Big Cedar”), its active role as the day-to-day manager of its activities, and majority voting control of its management committee.

HGV acquired its equity interest in Big Cedar as part of the Bluegreen Acquisition.

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Noncontrolling Interest

Noncontrolling interest reflects a third party’s ownership interest in Big Cedar that is consolidated in the Company’s unaudited condensed consolidated financial statements but is less than 100% owned by the Company.

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noncontrolling interest is recognized as equity in the Company’s unaudited condensed consolidated balance sheet and presented separately from the equity attributable to its stockholders.

The amounts of unaudited consolidated net income and unaudited comprehensive income attributable to the Company’s stockholders and noncontrolling interest are separately presented in the condensed unaudited consolidated statements of operations and comprehensive income.

Noncontrolling interest reflects a third party’s ownership interest in Big Cedar that is consolidated in our unaudited condensed consolidated financial statements but is less than 100% owned by HGV.

The noncontrolling interest

is recognized as equity in our unaudited condensed consolidated balance sheet and presented separately from the equity attributable to stockholders.

The amounts of consolidated net income and comprehensive income attributable to stockholders and noncontrolling interest are separately presented in the unaudited condensed consolidated statements of operations and comprehensive income.

Accounting Pronouncements Not Yet Adopted

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The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The impact of adoption of ASU 2023-07 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

The adoption of ASU 2023-07 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740):

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The guidance is to be applied prospectively, although retrospective application is permitted.

The impact of adoption of ASU 2023-09 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

The adoption of ASU 2023-09 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

Bluegreen Acquisition

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The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations.

Costs related to the Bluegreen Acquisition for three months ended March 31, 2024 were $ 100 million, which were expensed as incurred, and reflected as Acquisition and integration-related expense in our unaudited condensed consolidated statements of operations.

Costs related to the Bluegreen Acquisition were $ 37 million and $ 137 million during the three and six months ended June 30, 2024.

These costs were expensed as incurred and included within Acquisition and integration-related expense in our unaudited condensed consolidated statements of operations.

The following table presents the preliminary fair value of each class of consideration transferred in relation to the Bluegreen Acquisition as of the Bluegreen Acquisition Date:

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(2) Reflects transaction-related expenses incurred by Bluegreen but paid by HGV.

Preliminary Fair Values of Assets Acquired and Liabilities Assumed

We accounted for the Bluegreen Acquisition as a business combination, which requires us to record the assets acquired and liabilities assumed at fair value as of the Bluegreen Acquisition Date.

Preliminary Fair Values of Assets Acquired, Liabilities Assumed and Noncontrolling Interest

We accounted for the Bluegreen Acquisition as a business combination, which requires us to record the assets acquired, liabilities assumed and noncontrolling interest at fair value as of the Bluegreen Acquisition Date.

The preliminary fair values of the assets acquired, liabilities assumed, and noncontrolling interest, which are presented in the table below, and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as information compiled by management, including the books and records of Bluegreen.

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The magnitude of the Bluegreen Acquisition could necessitate the need to use the full one-year measurement period to adequately analyze and assess a number of the factors used in establishing the asset, liability and noncontrolling interest fair values as of the Bluegreen Acquisition Date.

The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment, among other changes.

The final values may also result in changes to amortization expense

related to intangible assets and depreciation expense related to property and equipment, among other changes.

Any potential adjustments made could be material in relation to the values presented in the table below.

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As discussed more fully below, the primary areas of the purchase price allocation that are not yet finalized include the following:

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(4) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization periods;

(5) finalizing the review and valuation of other acquired assets, assumed liabilities, and noncontrolling interest, including debt assumed;

(5) finalizing the review and valuation of other acquired assets, assumed liabilities, including debt assumed, and noncontrolling interest;

and (6) finalizing our estimate of the impact of purchase accounting on deferred income tax liabilities.

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(1) Goodwill is calculated as total consideration transferred less net assets acquired and it primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined Company post-acquisition.

The measurement period adjustments recorded during the quarter ended June 30, 2024 resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on management’s review of the historical accounting records and third-party valuations.

The measurement period adjustments recognized include a reduction to timeshare financing receivables and an increase to inventory based on management's review of key assumptions and historical performance of the acquired portfolio, and an increase in accrued liabilities resulting from identification of certain costs associated to the period prior to the Bluegreen Acquisition Date.

These resulted in a net adjustment to goodwill for the period of $( 10 ) million, net of tax impacts of adjustments.

The prior period net income effect associated with the measurement period adjustments recorded during the six months ended June 30, 2024 were immaterial.

Timeshare Financing Receivables

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Timeshare Financing Receivables, net for additional information.

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Acquired timeshare financing receivables with credit deterioration as of the Bluegreen Acquisition Date were as follows:

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Certain other estimates and assumptions impacting the fair value of the acquired inventory involving less subjective and/or less complex judgments include:

short-term and long-term revenue growth rates, capital expenditures, tax rates and other factors impacting the discounted cash flows.

We are continuing to assess the market assumptions and property conditions, which could result in changes to these preliminary values.

short-term and long-term revenue growth rates, capital expenditures and other factors impacting the discounted cash flows.

We are continuing to assess the market assumptions and property conditions as of the Bluegreen Acquisition Date, which could result in changes to these preliminary values.

Property and Equipment

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For our preliminary analysis, we estimated the fair value of the property and equipment using a mix of cost and market approaches.

In determining the fair value using the cost approach, we estimated the reproduction cost new by applying BLS trending indices to the historical capitalized costs within the fixed asset details.

In determining the fair value using the cost approach, we estimated the reproduction cost by applying inflation trending indices to the historical capitalized costs within the fixed asset details.

We also relied on the market approach to determine the fair value of certain assets.

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In addition, certain property and equipment assets were held at their carrying value, which is our best estimate of fair value at this time given the information available.

We are continuing to assess the market assumptions and property conditions, which could result in changes to these preliminary values.

We are continuing to assess the market assumptions and property conditions as of the Bluegreen Acquisition Date, which could result in changes to these preliminary values.

Operating Lease Right-of-Use-Assets and Lease Liabilities

We have recorded a preliminary estimate of the liability for those operating leases assumed in connection with the Bluegreen Acquisition with a remaining term in excess of one year.

We measured the lease liabilities assumed at the present value of the remaining contractual lease payments based on the guidance in ASC 842 discounted at an incremental borrowing rate applicable to HGV determined as of the Bluegreen Acquisition Date.

We measured the lease liabilities assumed at the present value of the remaining contractual lease payments based on the guidance in Accounting Standards Codification Topic 842:

Leases discounted at an incremental borrowing rate applicable to HGV determined as of the Bluegreen Acquisition Date.

The right-of-use assets for such leases were measured at an amount equal to the lease liabilities, adjusted for the favorable or unfavorable leasehold position considering the contractual terms of the lease when compared with market terms.

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Additionally, any equipment lease was held at carrying value.

We continue to assess the market assumptions, which could result in changes to our preliminary estimate.

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We continue to assess the market assumptions as of the Bluegreen Acquisition Date, which could result in changes to our preliminary estimate.

Intangible Assets

The following table presents our preliminary estimates of the fair values of the acquired Bluegreen’s identified intangible assets and their related estimated remaining useful lives:

The following table presents our preliminary estimates of the fair values of the acquired Bluegreen’s identified intangible assets and their related estimated useful lives:

Weighted Average Estimated Useful Life

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We preliminarily estimated the fair value of Bluegreen's trade name using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value.

We provisionally estimated the value of management contracts and member relationships using the multi-period excess earnings method, which is a variation of the income approach.

We preliminarily estimated the value of management contracts and club member relationships using the multi-period excess earnings method, which is a variation of the income approach.

This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset.

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Under this method, the value of an asset is a function of the differential of projected cash flows with the asset in place and the projected cash flows without the asset in place, discounted to present value.

We continue to review Bluegreen's contracts and historical performance in addition to evaluating the assumptions impacting the estimated values of such intangible assets and their respective useful lives, including the discount rate applied to the estimated cash flows and renewal and growth estimates and expected margins, which could result in changes to these preliminary values.

We continue to review Bluegreen's contracts and historical performance in addition to evaluating the assumptions impacting the estimated values of such intangible assets and their respective useful lives, including the discount rate applied to the estimated cash flows and renewal and growth estimates and expected margins as of the Bluegreen Acquisition Date, which could result in changes to these preliminary values.

As part of the acquisition and consideration transferred, we paid off $ 265 million of Bluegreen’s existing corporate debt and accrued interest.

We preliminarily estimated the fair value of the remaining assumed debt using a discounted cash flow model under the income approach.

We are continuing to evaluate the significant assumptions underlying the discounted cash flow model, which could result in changes to our preliminary estimate.

The significant assumptions include prepayment rates, interest rates and other structural factors.

We are continuing to evaluate the significant assumptions underlying the discounted cash flow model as of the Bluegreen Acquisition Date, which could result in changes to our preliminary estimate.

Non-Recourse Debt

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The significant assumptions in our analysis include default rates, prepayment rates, bond interest rates and other structural factors.

We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default and prepayment assumptions, which could result in changes to our preliminary estimate.

We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default and prepayment assumptions as of the Bluegreen Acquisition Date, which could result in changes to our preliminary estimate.

Deferred Revenue

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We preliminarily estimated the fair value of the deferred revenue at the carrying value of such liabilities as of the Bluegreen Acquisition Date.

We continue to review Bluegreen’s contracts, which could result in changes to the preliminary estimate.

We continue to review Bluegreen’s contracts as of the Bluegreen Acquisition Date, which could result in changes to the preliminary estimate.

Deferred Income Taxes

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federal and state statutory tax rate which approximates to 25%.

Within the measurement period, we will continue to assess the tax rates used, and we will update our estimate of deferred income taxes based on changes to our preliminary valuations of the related assets and liabilities and refinement of the effective tax rates, which could result in changes to these preliminary values.

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Within the measurement period, we will continue to assess the tax rates used, and we will update our estimate of deferred income taxes based on changes to our preliminary valuations of the related assets and liabilities and refinement of the effective tax rates as of the Bluegreen Acquisition Date, which could result in changes to these preliminary values.

Noncontrolling Interest

The acquired noncontrolling interest relates to Big Cedar Vacations, LLC, a joint venture in which we are deemed to hold a controlling financial interest based on our 51 % equity interest, its active role as the day-to-day manager of its activities, and our majority voting control of its management committee.

The acquired noncontrolling interest relates to Bluegreen/Big Cedar Vacations, LLC, a joint venture in which we are deemed to hold a controlling financial interest based on our 51 % equity interest, our active role as the day-to-day manager of its activities, and our majority voting control of its management committee.

We preliminarily estimated the fair value of the noncontrolling interest using a discounted cash flow model under the income approach.

We continue to assess the market assumptions, which could result in changes to our preliminary estimate.

We have recorded a preliminary estimate of $ 523 of goodwill in connection with the Bluegreen Acquisition.

We continue to assess the market assumptions as of the Bluegreen Acquisition Date, which could result in changes to our preliminary estimate.

We have recorded a preliminary estimate of $ 513 million of goodwill in connection with the Bluegreen Acquisition.

We have allocated the acquired goodwill to our segments, Real Estate Sales and Financing and Resort Operations and Club Management, as indicated in the table below.

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Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Bluegreen Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.

Three Months Ended March 31,

Six Months Ended June 30,

($ in millions) 2024 2023

Revenue $ 2,437 $ 2,449

Net (loss) income

Bluegreen Results of Operations

The following table presents the results of Bluegreen operations included in our unaudited condensed consolidated statement of operations for the period from the Bluegreen Acquisition Date through the first quarter of 2024:

($ in millions) January 17, 2024 to March 31, 2024

($ in millions) January 17, 2024 to June 30, 2024

Revenue $ 433

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Grand Islander Acquisition

On December 1, 2023 (“Grand Islander Acquisition Date”), the Company completed the acquisition of BRE Grand Islander Parent LLC (“Grand Islander”), by exchanging 100 % of the outstanding equity interests of Grand Islander for approximately $ 117 million (the “Grand Islander Acquisition”).

On December 1, 2023 (“Grand Islander Acquisition Date”), the Company completed the acquisition of BRE Grand Islander Parent LLC (“Grand Islander”), by exchanging 100 % of the outstanding equity interests of Grand Islander for $ 117 million (the “Grand Islander Acquisition”).

Prior to the acquisition, we managed the resort property in Hawaii owned by Grand Islander.

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The purchase price of $ 117 million included cash consideration, as well as $ 4 million of non-cash consideration attributable to the effective settlement of a pre-existing relationship based on the contract value.

As of March 31, 2024, the preliminary fair values of the assets acquired includes $ 8 million of cash and cash equivalents, $ 28 million of restricted cash, $ 5 million of accounts receivable, $ 53 million of unsecuritized timeshare financing receivables, net, $ 199 million of securitized timeshare financing receivables, net, $ 15 million of inventory, and $ 2 million of other assets.

As of June 30, 2024, the preliminary fair values of the assets acquired includes $ 8 million of cash and cash equivalents, $ 28 million of restricted cash, $ 5 million of accounts receivable, $ 53 million of unsecuritized timeshare financing receivables, net, $ 199 million of securitized timeshare financing receivables, net, $ 15 million of inventory, and $ 2 million of other assets.

Of the securitized timeshare financing receivables acquired, $ 128 million is used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Grand Islander Timeshare Facility”).

The preliminary fair values of the liabilities assumed consist of $ 193 million of non-recourse debt and $ 4 million of other liabilities.

The estimated fair values of the assets acquired, and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management.

We preliminarily estimated the fair value of the timeshare financing receivables and inventory using a discounted cash flow

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model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivable and the sell-out period of the inventory, respectively.

The estimated fair values of the assets acquired, and liabilities assumed and the related preliminary acquisition accounting were based on management’s estimates and assumptions, as well as other information compiled by

We preliminarily estimated the fair value of the timeshare financing receivables and inventory using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivable and the sell-out period of the inventory, respectively.

For non-recourse debt, we estimated the fair value using recent trades of the debt, using adjustments to recent trades of similar debt or the settlement amounts for debt that was repaid in close proximity to the Grand Islander Acquisition Date.

The timeshare financing receivables acquired were considered PCD assets.

The timeshare financing receivables acquired were considered purchase credit deteriorated (“PCD”) assets.

The following table presents the acquired assets with credit deterioration as of the Grand Islander Acquisition Date:

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Goodwill of $ 4 million is calculated as total consideration transferred less net assets acquired.

The measurement period adjustments recorded during the quarter ended March 31, 2024 resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on updated preliminary valuations of acquired timeshare financing receivables and inventory.

The measurement period adjustments recorded during the six months ended June 30, 2024 resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on updated preliminary valuations of acquired timeshare financing receivables and inventory.

These resulted in an increase to goodwill for the period of $ 2 million.

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Business Segments for more information related to our segments.

($ in millions) Three Months Ended March 31,

($ in millions) Three Months Ended June 30, Six Months Ended June 30,

Real Estate Sales and Financing Segment 2024 2023 2024 2023

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Real estate sales and financing segment revenues $ 740 $ 604 $ 1,427 $ 1,154

($ in millions) Three Months Ended March 31,

($ in millions) Three Months Ended June 30, Six Months Ended June 30,

Resort Operations and Club Management Segment 2024 2023 2024 2023

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Resort management 104 80 207 160

181 162 350 309

Ancillary services 14 11 26 22

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Our accounts receivable that relate to our contracts with customers includes amounts associated with our contractual right to consideration for completed performance obligations and are settled when the related cash is received.

Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the

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passage of time.

Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the passage of time.

Our timeshare financing receivables consist of loans related to our financing of VOI sales that are secured by the underlying timeshare properties.

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The following table provides information on our contracts with customers which are included in Accounts receivable, net and Timeshare financing receivables, net , respectively, on our condensed consolidated balance sheets:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Receivables from contracts with customers:

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The following table presents the composition of our contract liabilities:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Contract liabilities:

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Other deferred revenue 61 38

(1) The balance includes $ 52 million and $ 54 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.

(1) The balance includes $ 55 million and $ 54 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively.

This liability is for incentives from VOI sales and sales and marketing expenses in conjunction with our fee-for-service arrangements.

Revenue earned for the three months ended March 31, 2024, that was included in the contract liabilities balance at December 31, 2023, was approximately $ 82 million.

Revenue earned for the three and six months ended June 30, 2024, that was included in the contract liabilities balance at December 31, 2023, was approximately $ 68 million and $ 150 million, respectively.

Contract assets relate to incentive fees that can be earned for meeting certain targets on sales of VOIs at properties under our fee-for-service arrangements;

however, our right to consideration is conditional upon completing the requirements of the annual incentive fee period.

There were no contract assets as of March 31, 2024, and $ 13 million of contract assets as of December 31, 2023.

As of June 30, 2024 and December 31, 2023, there were $ 2 million and $ 13 million of contract assets, respectively.

Transaction Price Allocated to Remaining Performance Obligations

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Our contracts with remaining performance obligations primarily include (i) sales of VOIs under construction, (ii) club activation fees paid at closing of a VOI purchase, (iii) customers’ advanced deposits on prepaid vacation packages and (iv) bonus points that may be redeemed in the future.

Deferred VOI sales includes deferred revenue from sales associated with phases or buildings under-construction and not yet completed.

Deferred VOI sales include deferred revenue from sales associated with phases or buildings under-construction and not yet completed.

The following table presents the deferred revenue, deferred cost of VOI sales and deferred direct selling costs from sales of VOIs related to projects under construction:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Sales of VOIs, net $ 51 $ 39

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Sales and marketing expense 7 6

During the three months ended March 31, 2024, we recognized $ 41 million of sales of VOIs, net, offset by deferrals of $ 39 million, related to sales of projects under construction, some of which were completed during the year.

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expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of March 31, 2024, upon their completion in 2024.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus points incentive liability as of March 31, 2024:

During the six months ended June 30, 2024, we recognized $ 48 million of sales of VOIs, net, offset by deferrals of $ 59 million, related to sales of projects under construction, some of which were completed during the year.

recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of June 30, 2024, upon their completion.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus points incentive liability as of June 30, 2024:

($ in millions) Remaining

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The following table represents our accounts receivable, net of allowance for credit losses:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Fee-for-service commissions $ 60 $ 57

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We use delinquency status and economic factors such as credit quality indicators to monitor our receivables within the scope of ASC 326 and use these as a basis for how we develop our expected loss estimates.

The changes in our allowance were as follows during the three months ended March 31, 2024:

The changes in our allowance were as follows during the six months ended June 30, 2024:

($ in millions) Fee-for-service commissions

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Write-offs charged against the allowance ( 8 ) ( 8 ) ( 1 ) ( 17 )

Balance as of March 31, 2024

Balance as of June 30, 2024

$ 19 $ 33 $ 14 $ 66

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Our acquired portfolio includes all timeshare financing receivables acquired from Legacy-Diamond, Legacy-Grand Islander and Legacy-Bluegreen that existed as of the respective acquisition dates.

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The following table presents the components of each portfolio segment by class of timeshare financing receivables:

Originated Acquired

($ in millions) March 31,

($ in millions) June 30,

2024 December 31,

2023 March 31,

2023 June 30,

2024 December 31,

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(1) Includes amounts used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Timeshare Facility”) as well as amounts held as future collateral for securitization activities.

(2) Non-credit premium of $ 97 million was recognized at the Diamond Acquisition Date, of which $ 22 million and $ 26 million remains unamortized as of March 31, 2024 and December 31, 2023, respectively.

Non-credit premium of $ 1 million was recognized at the Grand Islander Acquisition Date with $ 1 remaining unamortized as of March 31, 2024 and December 31, 2023.

Non-credit premium of $ 102 million was recognized at the Bluegreen Acquisition Date, of which $ 92 million remains unamortized as of March 31, 2024.

As of March 31, 2024 and December 31, 2023, we had timeshare financing receivables of $ 396 million and $ 415 million, respectively, securing the Timeshare Facility.

In connection with the acquisition of Grand Islander and Bluegreen, we had access to additional timeshare facilities, which were terminated as of March 31, 2024.

(2) Non-credit premium of $ 97 million was recognized at the Diamond Acquisition Date, of which $ 18 million and $ 26 million remains unamortized as of June 30, 2024 and December 31, 2023, respectively.

A non-credit premium of $ 2 million was recognized at the Grand Islander Acquisition Date with $ 1 million remaining unamortized as of June 30, 2024 and December 31, 2023, respectively.

Non-credit premium of $ 152 million was recognized at the Bluegreen Acquisition Date, of which $ 117 million remains unamortized as of June 30, 2024.

In April 2024, we completed a securitization of approximately $ 240 million of gross timeshare financing receivables and issued approximately $ 101 million of 5.75 % notes, $ 58 million of 5.99 % notes, $ 46 million of 6.62 % notes, and $ 35 million of 8.85 % notes due September 2039.

The securitization transaction did not qualify as a sale and, accordingly, no gain or loss was recognized.

The transaction is considered a secured borrowing, and the notes from the transaction are presented as non-recourse debt.

The proceeds were used to pay down in part some of our existing debt and for other general corporate purposes.

Consolidated Variable Interest Entities and Note 11:

Debt and Non-recourse Deb t for additional information.

In May 2024, we completed a securitization of approximately $ 375 million of gross timeshare financing receivables and issued approximately $ 217 million of 5.50 % notes, $ 80 million of 5.65 % notes, $ 57 million of 5.99 % notes, and $ 21 million of 6.91 % notes due March 2038.

The securitization transaction did not qualify as a sale and, accordingly, no gain or loss was recognized.

The transaction is considered a secured borrowing, and the notes from the transaction are presented as non-recourse debt.

The proceeds were used to pay down in part some of our existing debt and for other general corporate purposes.

Consolidated Variable Interest Entities and Note 11:

Debt and Non-recourse Debt for additional information.

As of June 30, 2024 and December 31, 2023, we had timeshare financing receivables of $ 9 million and $ 415 million, respectively, securing the Timeshare Facility.

In connection with the acquisitions of Grand Islander and Bluegreen, we had access to additional timeshare facilities, which were terminated during the first quarter of 2024.

For our originated portfolio, we record an estimate of variable consideration for defaults as a reduction of revenue from financed VOI sales at the time revenue is recognized.

We record the difference between the timeshare financing receivable and the variable consideration included in the transaction price for the sale of the related VOI as an allowance for financing receivables and record the receivable net of the allowance.

During the three months ended March 31, 2024, and 2023, we recorded an adjustment to our estimate of variable consideration of $ 64 million and $ 30 million, respectively.

During the six months ended June 30, 2024, and 2023, we recorded adjustments to our estimate of variable consideration of $ 158 million and $ 71 million, respectively.

For our acquired portfolio, any changes to the estimates of our allowance are recorded within Financing expense on our unaudited condensed consolidated statements of operations in the period in which the change occurs.

We recognize interest income on our timeshare financing receivables as earned.

As of March 31, 2024 and December 31, 2023, we had interest receivable outstanding of $ 17 million each period, on our originated timeshare financing receivables.

As of March 31, 2024 and December 31, 2023, we had interest receivable outstanding of $ 11 million and $ 4 million, respectively, on our acquired timeshare financing receivables.

As of June 30, 2024 and December 31, 2023, we had interest receivable outstanding of $ 17 million for both periods on our originated timeshare financing receivables.

As of June 30, 2024 and December 31, 2023, we had interest receivable outstanding of $ 10 million and $ 4 million, respectively, on our acquired timeshare financing receivables.

Interest receivable is included in Other Assets within our unaudited condensed consolidated balance sheets.

The interest rate charged on the notes correlates to the risk profile of the customer at the time of purchase and the percentage of the purchase that is financed, among other factors.

As of March 31, 2024, our originated timeshare financing receivables had interest rates ranging from 1.5 % to 25.8 %, a weighted-average interest rate of 15.1 %, a weighted-average remaining term of 8.3 years and maturities through 2039.

As of June 30, 2024, our originated timeshare financing receivables had interest rates ranging from 1.5 % to 25.8 %, a weighted-average interest rate of 15.2 %, a weighted-average remaining term of 8.4 years and maturities through 2039.

Our acquired timeshare financing receivables had interest rates ranging from 2.0 % to 25.0 %, a weighted-average interest rate of 14.9 %, a weighted-average remaining term of 7.3 years and maturities through 2039.

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Once a loan is 91 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point.

During the three months ended March 31, 2024, and 2023, we reversed $ 19 million and $ 18 million, respectively, of accrued interest income.

During the six months ended June 30, 2024 and 2023, we reversed

$ 37 million and $ 36 million, respectively, of accrued interest income.

We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 91 days past due.

We fully reserve for a timeshare financing receivable in the month following the date that the loan is 121 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process is complete.

Allowance for Financing Receivables Losses

The changes in our allowance for financing receivables losses were as follows:

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($ in millions) Originated

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Inventory recoveries — 45

Balance as of March 31, 2024 $ 539 $ 361

Balance as of June 30, 2024

($ in millions) Originated

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Inventory recoveries — 8

Balance as of March 31, 2023 $ 418 $ 325

(1) The initial gross allowance determined for receivables with credit deterioration was $ 137 million as of the Bluegreen Acquisition Date.

We also reduced the gross allowance determined for receivables with credit deterioration for Legacy-Grand Islander by $ 6 million

(2) Includes incremental provision for financing receivables losses, net of activity related to the repurchase of defaulted and upgraded timeshare financing receivables.

(3) Includes incremental provision for credit loss expense from Acquired loans.

Balance as of June 30, 2023

(1) The initial allowance determined for receivables with credit deterioration was $ 197 million as of the Bluegreen Acquisition Date.

We also reduced the allowance determined for receivables with credit deterioration for Legacy-Grand Islander by $ 6 million.

(2) For the Originated portfolio segment, this amount includes incremental provision for financing receivables losses, net of activity related to the repurchase of defaulted and upgraded timeshare financing receivables.

For the Acquired portfolio segment, this amount includes incremental provision for credit loss expense from Acquired loans.

(3) Represents the initial change in allowance resulting from upgrades of Acquired loans.

1 unchanged sentence

Originated Timeshare Financing Receivables

Our originated timeshare financing receivables as of March 31, 2024 mature as follows:

Our originated timeshare financing receivables as of June 30, 2024 mature as follows:

Originated Timeshare Financing Receivables

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Consequently, the fair value of the acquired timeshare financing receivables recorded on our unaudited condensed consolidated balance sheet as of the respective acquisition date included an estimate of expected financing receivable losses which became the historical cost basis for that portfolio going forward.

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The allowance for financing receivable losses for our acquired timeshare financing receivables is remeasured at each period end and takes into consideration an estimated measure of anticipated defaults and early repayments.

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Subsequent changes to the allowance for acquired financing receivable losses are recorded within Financing expense on our unaudited condensed consolidated statements of operations in the period in which the change occurs.

Our gross acquired timeshare financing receivables as of March 31, 2024 mature as follows:

Our gross acquired timeshare financing receivables as of June 30, 2024 mature as follows:

Acquired Timeshare Financing Receivables

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We use a technique referred to as static pool analysis as the basis for estimating expected defaults and determining our allowance for financing receivables losses on our timeshare financing receivables.

For the static pool analysis, we use several years of default data through which we stratify our portfolio using certain key dimensions to stratify our portfolio, including FICO scores, equity percentage at the time of sale and certain other factors.

For the static pool analysis, we use several years of default data through which we stratify our portfolio using certain key dimensions to stratify our portfolio such as FICO scores and equity percentage at the time of sale.

The adequacy of the related allowance is determined by management through analysis of several factors, such as current and forward-looking economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables.

1 unchanged sentence

Our originated gross balances by average FICO score of our originated timeshare financing receivables were as follows:

March 31, 2024

June 30, 2024

($ in millions) Legacy-HGV Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

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(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

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December 31, 2023

6 unchanged sentences

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

The following table details our gross originated timeshare financing receivables by the origination year and average FICO score as of March 31, 2024:

The following table details our gross originated timeshare financing receivables by the origination year and average FICO score as of June 30, 2024:

Originated Timeshare Financing Receivables

7 unchanged sentences

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

As of March 31, 2024 and December 31, 2023, we had ceased accruing interest on originated timeshare financing receivables with an aggregate principal balance of $ 227 million and $ 208 million, respectively.

As of June 30, 2024 and December 31, 2023, we had ceased accruing interest on originated timeshare financing receivables with an aggregate principal balance of $ 257 million and $ 208 million, respectively.

The following tables detail an aged analysis of our gross timeshare receivables balance:

Originated - Securitized

March 31, 2024

June 30, 2024

($ in millions) Legacy-HGV Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

5 unchanged sentences

Originated - Unsecuritized

March 31, 2024

June 30, 2024

($ in millions) Legacy-HGV Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

4 unchanged sentences

Total $ 804 $ 432 $ 27 $ 146 $ 1,409

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Originated - Securitized

16 unchanged sentences

Our gross balances by average FICO score of our acquired timeshare financing receivables were as follows:

March 31, 2024

June 30, 2024

($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

11 unchanged sentences

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

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The following tables detail our gross acquired timeshare financing receivables by the origination year and average FICO score as of March 31, 2024:

The following tables detail our gross acquired timeshare financing receivables by the origination year and average FICO score as of June 30, 2024:

Acquired Timeshare Financing Receivables

7 unchanged sentences

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

As of March 31, 2024 and December 31, 2023, we had ceased accruing interest on acquired timeshare financing receivables with an aggregate principal balance of $ 302 million and $ 279 million, respectively.

As of June 30, 2024 and December 31, 2023, we had ceased accruing interest on acquired timeshare financing receivables with an aggregate principal balance of $ 295 million and $ 279 million, respectively.

The following tables detail an aged analysis of our gross timeshare receivables balance:

Acquired - Securitized

March 31, 2024

June 30, 2024

($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

5 unchanged sentences

Acquired - Unsecuritized

March 31, 2024

June 30, 2024

($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen

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Total $ 142 $ 72 $ — $ 214

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Acquired - Unsecuritized

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Inventory was comprised of the following:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Completed unsold VOIs $ 1,623 $ 1,259

2 unchanged sentences

Total $ 1,929 $ 1,400

For the six months ended June 30, 2024, we recorded non-cash operating activity transfers of $ 69 million related to the registrations for timeshare units under construction for two properties from Property and equipment, net to Inventory .

As VOI inventory is constructed it is recorded into Property and equipment, net until such units are registered and made available for sale.

Once registered and available for sale, the units are then transferred into completed unsold VOIs inventory.

The table below presents cost of sales true-ups relating to VOI products and the related impacts to the carrying value of inventory and cost of VOI sales:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2024 2023 2024 2023

Cost of sales true-up (1)

(1) For the three months ended March 31, 2024 and 2023, respectively, the cost of sales true-up decreased cost of VOI sales and increased inventory.

$ ( 4 ) $ 13 $ 11 $ 29

(1) For the three months ended June 30, 2024, the cost of sales true-up increased cost of VOI sales and decreased inventory.

For the six months ended June 30, 2024, the cost of sales true-up decreased cost of VOI sales and increased inventory.

For the three and six months ended June 30, 2023, the cost of sales true-up decreased cost of VOI sales and increased inventory.

CONSOLIDATED VARIABLE INTEREST ENTITIES

As of March 31, 2024, we consolidated 18 VIEs, for which 9 we obtained a controlling financial interest as part of the Bluegreen Acquisition.

As of June 30, 2024, we consolidated 17 VIEs.

The activities of these entities are limited primarily to purchasing qualifying non-recourse timeshare financing receivables from us and issuing debt securities and/or borrowing under a debt facility to facilitate such purchases.

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Only the assets of our VIEs are available to settle the obligations of the respective entities.

We have aggregated the variable interests in the entities, including those associated with Bluegreen's outstanding timeshare financing receivables securitization transactions, for disclosure purposes as they are similar in nature.

Debt and Non-recourse debt for additional information.

Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Restricted cash $ 62 $ 48

2 unchanged sentences

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

As of March 31, 2024 and December 31, 2023, we had ownership interests in BRE Ace LLC and 1776 Holding LLC, which are VIEs.

As of June 30, 2024 and December 31, 2023, we had ownership interests in BRE Ace LLC and 1776 Holding LLC, which are VIEs.

We do not consolidate BRE Ace LLC and 1776 Holding LLC because we are not the primary beneficiary.

These two unconsolidated affiliates have aggregated debt balances of $ 413 million and $ 427 million as of

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March 31, 2024 and December 31, 2023, respectively.

These two unconsolidated affiliates have aggregated debt balances of $ 368 million and $ 427 million as of June 30, 2024 and December 31, 2023, respectively.

The debt is secured by their assets and is without recourse to us.

Our maximum exposure to loss as a result of our investment interests in the two unconsolidated affiliates is primarily limited to (i) the carrying amount of the investments, which totaled $ 76 million and $ 71 million as of March 31, 2024 and December 31, 2023, respectively, and (ii) receivables for commission and other fees earned under fee-for-service arrangements.

Our maximum exposure to loss as a result of our investment interests in the two unconsolidated affiliates is primarily limited to (i) the carrying amount of the investments, which totaled $ 78 million and $ 71 million as of June 30, 2024 and December 31, 2023, respectively, and (ii) receivables for commission and other fees earned under fee-for-service arrangements.

Related Party Transactions for additional information.

As part of the Bluegreen Acquisition, we acquired variable interest within statutory business trusts (collectively, the “Trusts”) formed previously by wholly owned subsidiaries of the Company.

As part of the Bluegreen Acquisition, we obtained variable interests within statutory business trusts (collectively, the “Trusts”) formed previously by wholly owned subsidiaries of the Company.

Each subsidiary issued trust preferred securities as part of a larger pooled trust securities offering which was not registered under the Securities Act of 1933 and invested the proceeds thereof in its junior subordinated debentures.

The Trusts are VIEs in which the subsidiaries are not the primary beneficiaries.

Accordingly, the Company and its subsidiaries do not consolidate the operations of the Trusts;

instead, the beneficial interests in the Trusts are accounted for under the equity method of accounting.

The maximum exposure to loss as a result of involvement with the Trusts is (i) the carrying amount of the investments, which totaled $ 2 million as of March 31, 2024.

We had $ 70 million of junior subordinated debentures outstanding as of March 31, 2024, which we subsequently paid down in April 2024 and terminated our interests in the Trusts.

The Trusts were VIEs in which the subsidiaries are not the primary beneficiaries.

As of June 30, 2024, we paid down $ 171 million, which represented the full balance of the junior subordinated debentures acquired as part of the Bluegreen acquisition.

Debt and Non-recourse debt for additional information.

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Intangible assets and related accumulated amortization were as follows:

March 31, 2024

June 30, 2024

($ in millions) Gross Carrying Amount Accumulated Amortization

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Total $ 1,704 $ ( 546 ) $ 1,158

As of March 31, 2024, we acquired definite-life intangible assets as part of the Bluegreen Acquisition, which have been valued on a preliminary basis, in the amount of $ 812 million as of the Bluegreen Acquisition Date.

We acquired definite-life intangible assets as part of the Bluegreen Acquisition, which have been valued on a preliminary basis, in the amount of $ 812 million as of the Bluegreen Acquisition Date.

Refer to Note 3:

Acquisitions for additional information.

Amortization expense on intangible assets was $ 51 million and $ 40 million for the three months ended March 31, 2024 and 2023, respectively.

No intangible impairment charges were recognized during the three months ended March 31, 2024 and 2023, respectively.

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Amortization expense on intangible assets was $ 55 million and $ 38 million for the three months ended June 30, 2024 and 2023, respectively, and $ 106 million and $ 78 million for the six months ended June 30, 2024 and 2023, respectively.

No intangible impairment charges were recognized during the three and six months ended June 30, 2024 and 2023, respectively.

DEBT AND NON-RECOURSE DEBT

The following table details our outstanding debt balance and its associated interest rates:

($ in millions) March 31, 2024 December 31, 2023

($ in millions) June 30, 2024 December 31, 2023

Senior secured credit facility

6 unchanged sentences

Senior notes with a rate of 6.625 %, due 2032

Junior subordinated debentures 70 —

Other debt (4)

3 unchanged sentences

Total debt, net $ 4,885 $ 3,049

(1) As of March 31, 2024 and December 31, 2023, weighted-average interest rates were 6.963 % and 6.649 %, respectively.

(2) Amount includes unamortized deferred financing costs related to our term loans and senior notes of $ 42 million and $ 27 million, respectively, as of March 31, 2024 and $ 21 million and $ 17 million, respectively, as of December 31, 2023.

This amount also includes unamortized original issuance discounts of $ 7 million and $ 5 million as of March 31, 2024 and December 31, 2023, respectively.

(3) Amount does not include unamortized deferred financing costs of $ 3 million as of March 31, 2024 and December 31, 2023, respectively, related to our revolving facility which are included in Other assets in our unaudited condensed consolidated balance sheets.

(1) As of June 30, 2024 and December 31, 2023, weighted-average interest rates were 6.850 % and 6.649 %, respectively.

(2) Amount includes unamortized deferred financing costs related to our term loans and senior notes of $ 41 million and $ 26 million, respectively, as of June 30, 2024 and $ 21 million and $ 17 million, respectively, as of December 31, 2023.

This amount also includes unamortized original issuance discounts of $ 6 million and $ 5 million as of June 30, 2024 and December 31, 2023, respectively.

(3) Amount does not include unamortized deferred financing costs of $ 3 million as of June 30, 2024 and December 31, 2023, respectively, related to our revolving facility which are included in Other assets in our unaudited condensed consolidated balance sheets.

(4) This amount includes $ 5 million related to the recourse portion on the NBA Receivables Facility, which is generally limited to the greater of 15 % of the outstanding borrowings and $ 5 million, subject to certain exceptions.

(5) Amount also includes unamortized discount of $ 3 million related to the Bluegreen securitized debt recognized at the Bluegreen Acquisition Date.

(5) Amount also includes unamortized discount of $ 3 million related to the Bluegreen debt recognized at the Bluegreen Acquisition Date.

Senior secured credit facility

On January 17, 2024, we entered into Amendment No.

4 (the “Amendment”) to the Credit Agreement and incurred $ 900 million of new term loan that will mature on January 17, 2031.

4 (the “Amendment”) to the Credit Agreement and incurred $ 900 million of new term loans that will mature on January 17, 2031.

Proceeds from the new term loans were used to pay the Bluegreen Acquisition consideration, fees and expenses incurred in connection with the Amendment and to refinance the repayment of certain indebtedness of Bluegreen and its subsidiaries.

As of March 31, 2024, we had $ 9 million of letters of credit outstanding under the revolving credit facility and $ 1 million outstanding backed by cash collateral.

We were in compliance with all applicable maintenance and financial covenants and ratios as of March 31, 2024.

As of March 31, 2024, we have $ 293 million remaining borrowing capacity under the revolver facility.

On April 8, 2024, we amended our Term Loan B under the Senior secured credit facility.

On April 8, 2024, we amended our Term Loan due 2028 under the Senior secured credit facility.

Under the amendment, the new interest rate is SOFR plus 2.50 %, down from SOFR plus 2.75 %.

The credit spread adjustment for the Term Loan B has been removed.

Also the credit spread adjustment for the Term Loan due 2028 was removed.

On July 18, 2024, we amended our Term Loan due 2031 under the Senior secured credit facility.

Under the amendment, the new interest rate is SOFR plus 2.25 %, down from SOFR plus 2.75 %.

As of June 30, 2024, we had $ 41 million of letters of credit outstanding under the revolving credit facility and $ 1 million outstanding backed by cash collateral.

We were in compliance with all applicable maintenance and financial covenants and ratios as of June 30, 2024.

As of June 30, 2024, we have $ 446 million remaining borrowing capacity under the revolver facility.

We primarily use interest rate swaps as part of our interest rate risk management strategy for our variable-rate debt.

These interest rate swaps are associated with the remaining available SOFR based senior secured credit facility.

As of March 31, 2024, these interest rate swaps convert the SOFR-based variable rate on our Term Loan due 2028 to average fixed rates of 1.55 % per annum with maturities between 2026 and 2028, for the balance on this borrowing up to the notional values of our interest rate swaps.

As of March 31, 2024, the aggregate notional values of the interest rate swaps under our Term Loan due 2028 was $ 550 million.

Our interest rate swaps have been designated and qualify as cash flow hedges of interest rate risk and recorded at their estimated fair value as an asset in Other assets in our condensed consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, the estimated fair values of our cash flow hedges were $ 48 million and $ 42 million, respectively.

These interest rate swaps are associated with the SOFR-based senior secured credit facility.

As of June 30, 2024, these interest rate swaps convert the SOFR-based variable rate on our Term Loan due 2028 to average fixed rates of 1.55 % per annum with maturities between 2026 and 2028, for the balance on this borrowing up to the notional values of our interest rate swaps.

As of June 30, 2024, the aggregate notional values of the interest rate swaps under our Term Loan due 2028 was $ 550 million.

Our interest rate swaps have been designated and qualify as cash flow hedges of interest rate risk

and are recorded at their estimated fair value as an asset in Other assets in our condensed consolidated balance sheets.

As of June 30, 2024 and December 31, 2023, the estimated fair values of our cash flow hedges were $ 46 million and $ 42 million, respectively.

We characterize payments we make in connection with these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income for presentation purposes.

We classify cash inflows and outflows from derivatives that hedge interest rate risk within operating activities in the unaudited condensed consolidated statements of cash flows.

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The following table reflects the activity, net of tax, in Accumulated other comprehensive income related to our derivative instruments during the three months ended March 31, 2024:

The following table reflects the activity, net of tax, in Accumulated other comprehensive income related to our derivative instruments during the six months ended June 30, 2024:

Net unrealized gain on derivative instruments

2 unchanged sentences

Reclassifications to net income

Balance as of March 31, 2024

Senior secured notes

On January 10, 2024, we completed an offering for $ 900 million aggregate principal amount of 6.625 % senior secured notes due 2032 issued by our wholly-owned subsidiaries, Hilton Grand Vacations Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow, Inc.

Proceeds from the new secured notes were used to pay the Bluegreen Acquisition consideration, fees and expenses incurred in connection with the Amendment and to refinance the repayment of certain indebtedness of Bluegreen and its subsidiaries.

Balance as of June 30, 2024

Senior Notes due 2032

The Senior Secured Notes are guaranteed on a senior secured basis by certain of our subsidiaries.

We are in compliance with all applicable financial covenants as of March 31, 2024.

On January 10, 2024, we completed an offering for $ 900 million aggregate principal amount of 6.625 % senior secured notes due 2032 (“Senior Notes due 2032”) issued by our wholly-owned subsidiaries, Hilton Grand Vacations Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow, Inc.

The Senior Notes due 2032 are guaranteed on a senior secured basis by certain of our subsidiaries.

We are in compliance with all applicable financial covenants as of June 30, 2024.

Senior Notes due 2029 and 2031

The Senior Unsecured Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries.

We are in compliance with all applicable financial covenants as of March 31, 2024.

We are in compliance with all applicable financial covenants as of June 30, 2024.

Junior subordinated debentures

As part of the Bluegreen Acquisition, we assumed the junior subordinated debentures.

As of March 31, 2024, we had $ 70 million of junior subordinated debentures outstanding, which we subsequently paid down in April 2024.

The junior subordinated debentures bore interest at the three-month SOFR plus 0.26 % and a margin of 3.80 % to 4.90 % and were scheduled to mature between 2035 and 2036.

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As part of the Bluegreen Acquisition, we assumed junior subordinated debentures.

During the six months ended June 30, 2024, the junior subordinated debentures were paid down in full for $ 171 million.

Investments in Unconsolidated Affiliates for additional information.

Non-recourse Debt

The following table details our outstanding non-recourse debt balance and associated interest rates:

($ in millions) March 31,

($ in millions) June 30,

2024 December 31, 2023

8 unchanged sentences

HGV Securitized Debt with a weighted average rate of 5.685 %, due 2038

HGV Securitized Debt with a weighted average rate of 6.419 %, due 2039

HGV Securitized Debt with a weighted average rate of 3.658 %, due 2039

Grand Islander Securitized Debt with a weighted average rate of 2.965 %, due 2029

6 unchanged sentences

Bluegreen Securitized Debt with a weighted average rate of 6.321 %, due 2038

Quorum Purchase Facility with an average rate of 5.020 %, due 2034

4 unchanged sentences

Total non-recourse debt, net $ 1,725 $ 1,466

(1) As of March 31, 2024 and December 31, 2023, weighted-average interest rates were 4.969 % and 5.095 %, respectively.

(1) As of June 30, 2024 and December 31, 2023, weighted-average interest rates were 5.075 % and 5.095 %, respectively.

(2) The revolving commitment period of the Timeshare Facility terminates in March 2026;

however, the repayment maturity date extends 12 months beyond the commitment termination date to March 2027.

(3) Amount relates to securitized debt only and does not include unamortized deferred financing costs of $ 4 million and $ 2 million as of March 31, 2024 and December 31, 2023, respectively, relating to our Timeshare Facility included in Other Assets in our condensed consolidated balance sheets.

(3) Amount relates to securitized debt only and does not include unamortized deferred financing costs of $ 3 million and $ 2 million as of June 30, 2024 and December 31, 2023, respectively, relating to our Timeshare Facility included in Other Assets in our condensed consolidated balance sheets.

(4) Amount also includes unamortized discount of $ 2 million related to the Grand Islander securitized debt recognized at the Grand Islander Acquisition Date and unamortized discount of $ 12 million related to the Bluegreen securitized and non-recourse debt recognized at the Bluegreen Acquisition Date.

(5) Recourse on the NBA Receivables Facility is generally limited to the greater of 15 % of the outstanding borrowings and $ 5.0 million, subject to certain exceptions.

The issued notes are backed by pledged assets, consisting primarily of a pool of Bluegreen timeshare financing receivables secured by first mortgages and a letter of credit.

The notes are a non-recourse obligation and are payable solely from the pool of timeshare financing receivables pledged as collateral for the notes.

The proceeds of the notes were used to pay down in part some of our existing debt and for other general corporate purposes.

Additionally, in connection with the securitization, we incurred $ 4 million in debt issuance costs.

The issued notes are backed by pledged assets, consisting primarily of a pool of timeshare loans secured by first mortgages, first deeds of trust, membership interests or timeshare interests (other than a fee simple interest in real estate).

The notes are a non-recourse obligation and are payable solely from the timeshare financing receivables pledged as collateral for the notes.

The proceeds of the notes were used to pay down in part

some of our existing debt and for other general corporate purposes.

Additionally, in connection with the securitization, we incurred $ 5 million in debt issuance costs.

The Timeshare Facility is a non-recourse obligation payable solely from the pool of timeshare financing receivables pledged as collateral and related assets.

As of March 31, 2024, our Timeshare Facility has a remaining borrowing capacity of $ 460 million.

In March 2024, we renewed our Timeshare Facility agreement under new terms, which include extending the commitment and maturity period to March 2026 and March 2027, respectively, and permitting to pledge as collateral certain timeshare loans associated to Grand Islander.

As of June 30, 2024, our Timeshare Facility has a remaining borrowing capacity of $ 750 million.

In March 2024, we renewed our Timeshare Facility agreement under new terms, which included extending the commitment and maturity period to March 2026 and March 2027, respectively, and permitting to pledge as collateral certain timeshare loans associated to Grand Islander.

On January 31, 2024, we terminated the Grand Islander Timeshare Facility.

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On a monthly basis, the depository accounts are utilized to make required principal, interest and other payments due under the respective loan agreements.

The balances in the depository accounts were $ 62 million and $ 48 million as of March 31, 2024 and December 31, 2023, respectively, and were included in Restricted cash in our condensed consolidated balance sheets.

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The balances in the depository accounts were $ 62 million and $ 48 million as of June 30, 2024 and December 31, 2023, respectively, and were included in Restricted cash in our condensed consolidated balance sheets.

Debt Maturities

The contractual maturities of our debt and non-recourse debt as of March 31, 2024 were as follows:

The contractual maturities of our debt and non-recourse debt as of June 30, 2024 were as follows:

($ in millions) Debt Non-recourse Debt Total

2024 (remaining nine months) $ 90 $ 255 $ 345

2024 (remaining six months) $ 13 $ 230 $ 243

2025 26 383 409

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The carrying amounts and estimated fair values of our financial assets and liabilities were as follows:

March 31, 2024

June 30, 2024

($ in millions) Carrying

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Debt and Non-recourse Debt above.

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The estimated fair values of our Level 1 debt and non-recourse debt were based on prices in active debt markets.

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• Non-recourse debt – based on projected future cash flows discounted at risk-adjusted rates.

The effective tax rate for the three months ended March 31, 2024 and 2023 was approximately 73 % and 19 %, respectively.

The effective tax rate increase year over year is primarily due to the impact of discrete items, primarily unrecognized tax benefits, relative to (loss) income before taxes.

The effective tax rate for the three months ended June 30, 2024 and 2023 was approximately 60 % and 30 %, respectively.

The effective tax rate for the six months ended June 30, 2024 and 2023 was approximately 80 % and 25 %, respectively.

The effective tax rate increase quarter over quarter is due to the overall change in earnings.

The effective tax rate increase year over year is primarily due to the net impact of jurisdictional mix and discrete items relative to income before taxes.

The discrete items are primarily comprised of unrecognized tax benefits.

The difference between our effective tax rate as compared to the U.S.

statutory federal tax rate of 21% is primarily due to the impact of state and foreign income taxes and discrete items, primarily unrecognized tax benefits.

statutory federal tax rate of 21% is primarily due to the impact of state and foreign income taxes, the jurisdictional mix of earnings, and discrete items, primarily unrecognized tax benefits.

SHARE-BASED COMPENSATION

On May 3, 2023, the 2023 Omnibus Incentive Plan (“2023 Plan”) was approved by our shareholders to replace the 2017 Omnibus Incentive Plan and the 2017 Plan for Non-Employee Directors (the “2017 Plans”).

On May 3, 2023, the 2023 Omnibus Incentive Plan (“2023 Plan”) was approved by our stockholders to replace the 2017 Omnibus Incentive Plan and the 2017 Plan for Non-Employee Directors (the “2017 Plans”).

The 2023 Plan authorizes the issuance of restricted stock units (“Service RSUs” or “RSUs”), nonqualified stock options (“Options”), time and performance-vesting restricted stock units (“Performance RSUs” or “PSUs”), and stock appreciation rights (“SARs”) to certain employees and directors.

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The Performance Cash Awards are $ 8 million and are payable based on the level of achievement of pre-established performance goals relating to run rate cost savings following an 18-month performance period commencing on the Bluegreen Acquisition Date, and ending on June 30, 2025, except that fifty percent ( 50 %) of the Performance Cash Award is eligible to vest and be payable on September 30, 2024, if certain run rate cost savings goals are achieved by such date.

As of March 31, 2024, there were 4,163,724 shares of common stock available for future issuance under the 2023 plan.

We recognized share-based compensation expense of $ 9 million and $ 10 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, unrecognized compensation costs for unvested awards was approximately $ 83 million, which is expected to be recognized over a weighted average period of 1.7 years.

During the three months ended March 31, 2024, we issued 603,049 Service RSUs with a grant date fair value of $ 44.32 , which generally vest in equal annual installments over three years from the date of grant.

During the three months ended March 31, 2024 , we granted 366,886 Options with an exercise price of $ 44.32 , which generally vest over three years from the date of the grant.

As of June 30, 2024, there were 3,947,956 shares of common stock available for future issuance under the 2023 plan.

We recognized share-based compensation expense of $ 17 million and $ 15 million for the three months ended June 30, 2024 and 2023 and $ 26 million and $ 25 million, for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, unrecognized compensation costs for unvested awards were approximately $ 70 million, which is expected to be recognized over a weighted average period of 1.6 years.

During the six months ended June 30, 2024, we issued 668,033 Service RSUs with a weighted-average grant date fair value of $ 44.37 , which generally vest in equal annual installments over three years from the date of grant.

During the six months ended June 30, 2024 , we granted 388,084 Options with a weighted-average exercise price of $ 44.45 , which generally vest over three years from the date of the grant.

The weighted-average grant date fair value of these Options was $ 22.63 , which was determined using the Black-Scholes-Merton option-pricing model with the assumptions included in the table below.

Expected volatility is calculated

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using the historical volatility of our share price.

Expected volatility is calculated using the historical volatility of our share price.

Risk-free rate is based on the Treasury Constant Maturity Rate closest to the expected life as of the grant date.

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(1) At the date of grant we had no plans to pay dividends during the expected term of these options.

As of March 31, 2024, we had 1,916,365 Options outstanding that were exercisable.

As of June 30, 2024, we had 1,908,377 Options outstanding that were exercisable.

Performance RSUs

During the three months ended March 31, 2024, we issued 142,629 Performance RSUs with a grant date fair value of $ 44.32 .

During the six months ended June 30, 2024, we issued 156,809 Performance RSUs with a weighted-average grant date fair value of $ 44.54 .

The Performance RSUs are settled at the end of a 3-year performance period, with 50 % of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization, further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction.

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These Performance RSUs are subject to the executive’s continued employment with the Company.

We determined that the performance conditions for our Performance RSUs are probable of achievement and, for the three months ended March 31, 2024, and 2023, we recognized compensation expense based on the number of Performance RSUs we expect to vest.

We determined that the performance conditions for our Performance RSUs are probable of achievement and, for the six months ended June 30, 2024, and 2023, we recognized compensation expense based on the number of Performance RSUs we expect to vest.

Employee Stock Purchase Plan

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The amendment became effective in 2023.

During the three months ended March 31, 2024 and 2023, we recognized less than $ 1 million of compensation expense related to this plan, respectively.

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(LOSS)/EARNINGS PER SHARE

During the three and six months ended June 30, 2024 and 2023, we recognized less than $ 1 million of compensation expense related to this plan, respectively.

EARNINGS PER SHARE

The following tables present the calculation of our basic and diluted earnings per share (“EPS”) and the corresponding weighted average shares outstanding referenced in these calculations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ and shares outstanding in millions, except per share amounts) 2024 2023 2024 2023

Net (loss) income attributable to stockholders

Net income (loss) attributable to stockholders

$ 2 $ 80 $ ( 2 ) $ 153

Weighted average shares outstanding 103.4 110.9 104.3 111.8

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$ 0.02 $ 0.72 $ ( 0.02 ) $ 1.37

Net (loss) income attributable to stockholders

Net income (loss) attributable to stockholders

$ 2 $ 80 $ ( 2 ) $ 153

Weighted average shares outstanding 104.3 112.1 104.3 113.3

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Basic weighted average shares outstanding

103.4 110.9 104.3 111.8

RSUs (2) , PSUs (3) , Options (4) and ESPP

0.9 1.2 — 1.5

Diluted weighted average shares outstanding

104.3 112.1 104.3 113.3

(1) Earnings per share amounts are calculated using whole numbers.

(2) Excludes approximately 136,000 shares of RSUs that would have been anti-dilutive to EPS for the three months ended March 31, 2023 under the treasury stock method.

(2) Excludes approximately 220,000 shares of RSUs that would have been anti-dilutive to EPS under the treasury stock method for the three months ended June 30, 2024.

Also excludes approximately 316,000 and 208,000 shares of RSUs that would have been anti-dilutive to EPS under the treasury stock method for the three and six months ended June 30, 2023.

These RSUs could potentially dilute EPS in the future.

(3) Excludes approximately 33,000 shares of PSUs that would have been anti-dilutive to EPS for the three months ended March 31, 2023 under the treasury stock method.

(3) Excludes approximately 14,000 shares of PSUs that would have been anti-dilutive to EPS under the treasury stock method for the three months ended June 30, 2024.

Also excludes approximately 60,000 and 38,000 shares of PSUs that would have been anti-dilutive to EPS under the treasury stock method for the three and six months ended June 30, 2023.

These PSUs could potentially dilute EPS in the future.

(4) Excludes approximately 530,000 shares of Options that would have been anti-dilutive to EPS for the three months ended March 31, 2023 under the treasury stock method.

(4) Excludes approximately 1,212,000 shares of Options that would have been anti-dilutive to EPS under the treasury stock method for the three months ended June 30, 2024.

Also excludes approximately 735,000 and 635,000 shares of Options that would have been anti-dilutive to EPS under the treasury stock method for the three and six months ended June 30, 2023.

These Options could potentially dilute EPS in the future.

The dilutive effect of outstanding share-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period.

Potentially dilutive shares of 1,553,010 for the three months ended March 31, 2024, were excluded from the calculation of diluted weighted average shares outstanding and diluted earnings per share as a result of our net loss position.

Potentially dilutive shares of 1,239,081 for the six months ended June 30, 2024, were excluded from the calculation of diluted weighted average shares outstanding and diluted earnings per share as a result of our net loss position.

Share Repurchases

On May 3, 2023, our Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to an aggregate of $ 500 million of its outstanding shares of common stock over a two-year period (the “2023 Repurchase Plan”).

The following table summarizes stock repurchase activity under the share repurchase program as of March 31, 2024:

On May 3, 2023, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to an aggregate of $ 500 million of its outstanding shares of common stock over a two-year period (the “2023 Repurchase Plan”).

The following table summarizes stock repurchase activity under the share repurchase program as of June 30, 2024:

(in millions) Shares Cost

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Repurchases 5 199

As of March 31, 2024

From April 1, 2023 through April 30, 2024, we repurchased approximately 1.1 million shares for $ 47 million.

As of April 30, 2024, we had $ 213 million of remaining availability under the 2023 Repurchase Plan.

As of June 30, 2024

From July 1, 2024 through July 31, 2024, we repurchased approximately 1.1 million shares for $ 46 million.

As of August 1, 2024, we had $ 114 million of remaining availability under the 2023 Repurchase Plan.

RELATED PARTY TRANSACTIONS

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We hold an ownership interest in BRE Ace LLC, a VIE, which owns a timeshare resort property and related operations, commonly known as “Elara, by Hilton Grand Vacations.”

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We hold an ownership interest in 1776 Holding, LLC, a VIE, which owns a timeshare resort property and related operations, known as “Liberty Place Charleston, by Hilton Club.”

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These amounts are summarized in the following table and are included in Sales, marketing, brand, and other fees on our unaudited condensed consolidated statements of operations as of the date they became related parties.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2024 2023 2024 2023

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Commissions and other fees 44 56 80 108

We also had $ 4 million and $ 19 million of outstanding receivables related to the fee-for-service agreements included in Accounts receivable, net on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.

We also had $ 8 million and $ 19 million of outstanding receivables related to these fee-for-service agreements included in Accounts receivable, net on our condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively.

BUSINESS SEGMENTS

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and (v) other items, including but not limited to costs associated with acquisitions, restructuring, amortization of premiums and discounts resulting from purchase accounting, and other non-cash and one-time charges.

We define Adjusted EBITDA Attributable to Stockholders as Adjusted EBITDA excluding amounts attributable to the noncontrolling interest in Big Cedar, the joint venture in which HGV owns a 51 % interest.

We do not include equity in earnings (losses) from unconsolidated affiliates in our measures of segment operating performance.

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We do not include equity in earnings from unconsolidated affiliates in our measures of segment operating performance.

The following table below presents revenues for our reportable segment results which include the acquired Grand Islander and Bluegreen operations, within both segments and as of their respective acquisition dates, reconciled to consolidated amounts:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2024 2023 2024 2023

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Resort operations and club management (1)

386 320 746 622

Total segment revenues 1,126 924 2,173 1,776

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The following table presents Adjusted EBITDA for our reportable segments reconciled to net income:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2024 2023 2024 2023

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Real estate sales and financing (1)

$ 193 $ 189 $ 399 $ 358

Resort operations and club management (1)

152 123 286 232

Segment Adjusted EBITDA 345 312 685 590

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Other (loss) gain, net

( 3 ) 3 ( 8 ) 4

Interest expense ( 87 ) ( 44 ) ( 166 ) ( 88 )

Income tax benefit (expense) 11 ( 17 )

Income tax (expense) benefit

( 3 ) ( 35 ) 8 ( 52 )

Equity in earnings from unconsolidated affiliates 3 2 8 5

Impairment expense

— ( 3 ) ( 2 ) ( 3 )

Other adjustment items (2)

Net (loss) income

Income attributable to noncontrolling interest

Net (loss) income attributable to stockholders

( 37 ) ( 8 ) ( 58 ) ( 16 )

Net income attributable to noncontrolling interest

Net income (loss) attributable to stockholders

$ 2 $ 80 $ ( 2 ) $ 153

(1) Includes intersegment transactions.

Refer to our table presenting revenues by reportable segment above for additional discussion.

(2) For the three months ended March 31, 2024 and 2023, these amounts include costs associated with stock-based compensation, restructuring, one-time charges and other non-cash items included within our reportable segments.

(2) These amounts include costs associated with stock-based compensation, restructuring, one-time charges and other non-cash items included within our reportable segments.

COMMITMENTS AND CONTINGENCIES

Bass Pro Shops Marketing Agreement Commitments

In November 2023, we entered into a 10-year exclusive marketing agreement with Bass Pro Shops (“Bass Pro”), a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides us with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means.

This agreement became effective on the Bluegreen Acquisition Date.

As a part of this agreement, we are required to make certain minimum annual payments and certain variable payments based upon the number of travel packages sold during the year or the number of Bass Pro and Cabela’s retail locations HGV maintains during the year.

As of June 30, 2024, HGV had sales and marketing operations at a total of 132 Bass Pro Shops and Cabela’s Stores, including 12 virtual kiosks.

Other Commitments

We have fulfilled certain arrangements with developers where we were committed to purchase vacation ownership units or other real estate at a future date to be marketed and sold under our Hilton Grand Vacations brand.

As of March 31, 2024, there are no future inventory commitments and we have not entered into new arrangements with developers.

As of June 30, 2024, there are no future inventory commitments and we have not entered into new arrangements with developers.

We are also committed to an agreement to exchange parcels of land in Hawaii, subject to the successful completion of zoning, land use requirements and other applicable regulatory requirements.

The actual amount and timing of the acquisitions are

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subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances.

During the three months ended March 31, 2024, we fulfilled $ 27 million of purchases required under our inventory commitments for properties in Japan and completed the payment of $ 17 million related to the inventory commitment in South Carolina included within Accounts payable, accrued expenses and othe r as of December 31, 2023.

As of March 31, 2024, our remaining obligations were expected to be incurred as follows:

The actual amount and timing of the acquisitions are subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances.

During the six months ended June 30, 2024, we fulfilled $ 27 million of purchases required under our inventory commitments for properties in Japan.

As of June 30, 2024, our remaining obligations were expected to be incurred as follows:

($ in millions) 2024

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(1) Primarily relates to commitments related to information technology and sponsorships.

Bass Pro Shops Marketing Agreement Commitments

We entered into a new 10-year exclusive marketing agreement with Bass Pro Shops (“Bass Pro”), a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides us with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela's retail locations and through other means.

As of March 31, 2024, HGV had sales and marketing operations at a total of 132 Bass Pro Shops and Cabela’s Stores, including 16 virtual kiosks.

Litigation Contingencies

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We record a contingent litigation liability when it is determined that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

As of March 31, 2024, we accrued liabilities of approximately $ 20 million for all legal matters, none of which relate to the judgment entered against Diamond in March 2022 in connection with a case filed in 2015 ( O’Malley v.

As of June 30, 2024, we accrued liabilities of approximately $ 7 million for all legal matters, none of which relate to the judgment entered against Diamond in March 2022 in connection with a case filed in 2015 ( O’Malley v.

Diamond Resorts Management, Inc.

As of March 31, 2024, the judgment entered in O’Malley v.

During the first quarter of 2024, the judgment entered in O’Malley v.

Diamond Resorts Management, Inc.

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Of this $ 104 million, we made a payment of approximately $ 50 million and our insurance policies covered the remaining $ 54 million.

Since we received the portion from our insurance policies, we no longer have an insurance claim receivable within Accounts receivable, net in our unaudited condensed consolidated balance sheet as of March 31, 2024.

During the three months ended March 31, 2024, we recognized charges of approximately $ 2 million to General and administrative in our unaudited condensed consolidated statement of operations that represents the amount of the settlement liability not deemed probable of recovery from the insurance carriers, prior to the full settlement of the matter.

During the six months ended June 30, 2024, we recognized charges of approximately $ 2 million to General and administrative in our unaudited condensed consolidated statement of operations that represents the amount of the settlement liability not deemed probable of recovery from the insurance carriers, prior to the full settlement of the matter.

In May 2024, we settled an additional legal matter for approximately $ 13 million that was previously recorded in Accounts payable and accrued expenses.

O n July 22, 2024, an adverse interim award was entered in an arbitration related to a matter that existed as of the Bluegreen Acquisition Date involving Bluegreen Vacations Unlimited, Inc., a Bluegreen subsidiary, in connection with an alleged breach of a purchase and sale agreement for The Manhattan Club property in New York, New York.

Prior to any decision by the arbitration panel on potential damages for breach, the interim award allows Bluegreen to propose a cure for the breach, which may involve purchases of inventory at The Manhattan Club and assuming the management agreement for The Manhattan Club.

The Company is currently evaluating potential cure or other resolution of this matter, which is not currently estimable and could potentially result in a measurement period adjustment related to the liabilities assumed as part of the Bluegreen Acquisition.

While we currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material effect on the Company’s financial condition, cash flows, or materially adversely affect overall trends in our results of operations, legal proceedings are inherently uncertain and unfavorable rulings could, individually or in aggregate, have a material adverse effect on the Company’s business, financial condition or results of operations.

We utilize surety bonds related to the sales of VOIs in order to meet regulatory requirements of certain states.

The availability, terms and conditions and pricing of such bonding capacity are dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity and our corporate credit rating.

We have commitments from surety providers in the amount of $ 503 million as of March 31, 2024, which primarily consist of escrow, construction and subsidy related bonds.

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such capacity and our corporate credit rating.

We have commitments from surety providers in the amount of $ 805 million as of June 30, 2024, which primarily consist of escrow, construction and subsidy related bonds.

SUBSEQUENT EVENTS

On April 25, 2024, we completed a $ 240 million securitization of legacy Bluegreen Vacations timeshare loans through Hilton Grand Vacations Trust 2024-1B with an overall weighted average interest rate of 6.42 % and an overall advance rate of 90.5 %.

The proceeds will primarily be used to pay down debt and for other general corporate purposes.

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On August 7, 2024, our Board of Directors approved a new share repurchase program authorizing us to repurchase up to an aggregate of $ 500 million of our outstanding shares of common stock over a two-year period which is in addition to the amount remaining under the 2023 Share Repurchase Plan.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements