What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 229 added, 187 removed, 1005 unchanged (29% of the section changed)

3 unchanged sentences

(in millions, except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and cash equivalents $ 297 $ 589

23 unchanged sentences

300,000,000 authorized shares, none

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

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

Common stock, $ 0.01 par value;

3,000,000,000 authorized shares,

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

99,850,114 shares issued and outstanding as of September 30, 2024 and

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

10 unchanged sentences

(in millions, except per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Equity in earnings from unconsolidated affiliates 4 2 12 7

Other (loss) gain, net

( 3 ) 3 ( 8 ) 4

Income (loss) before income taxes

Other gain (loss), net

Income before income taxes

93 136 87 341

Income tax (expense) benefit

Income tax expense

( 61 ) ( 44 ) ( 53 ) ( 96 )

Net income attributable to noncontrolling interest

Net income (loss) attributable to stockholders

Net income attributable to stockholders

$ 29 $ 92 $ 27 $ 245

Earnings (loss) per share attributable to stockholders:

Earnings per share attributable to stockholders:

Basic $ 0.28 $ 0.84 $ 0.26 $ 2.21

4 unchanged sentences

(in millions)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

1 unchanged sentence

Derivative instrument adjustments, net of tax ( 13 ) 4 ( 10 ) ( 1 )

Foreign currency translation adjustments ( 9 ) ( 10 ) ( 15 ) ( 10 )

Foreign currency translation adjustments, net of tax 10 ( 4 ) ( 5 ) ( 14 )

Other comprehensive loss, net of tax ( 3 ) — ( 15 ) ( 15 )

Comprehensive income attributable to noncontrolling interest 3 — 7 —

Comprehensive (loss) income attributable to stockholders $ ( 8 ) $ 75 $ ( 14 ) $ 138

Comprehensive income attributable to stockholders $ 26 $ 92 $ 12 $ 230

See notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

4 unchanged sentences

Impairment expense 2 3

Other loss (gain), net

Other (gain) loss, net

Share-based compensation 38 38

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Proceeds from stock option exercises 7 9

Distributions to noncontrolling interest holders

Other ( 2 ) ( 3 )

Net cash provided by (used in) financing activities

Effect of changes in exchange rates on cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

( 344 ) ( 20 )

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 284 ) 33

Cash, cash equivalents and restricted cash, beginning of period 885 555

19 unchanged sentences

Activity related to share-based compensation

Foreign currency translation adjustments — — — — ( 6 ) — ( 6 )

1 — ( 4 ) — — — ( 4 )

Foreign currency translation adjustments, net of tax

— — — — ( 6 ) — ( 6 )

Derivative instrument adjustments, net of tax — — — — 4 — 4

4 unchanged sentences

Activity related to share-based compensation

— — 17 — — — 17

Employee stock plan issuance — — 5 — — — 5

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

Foreign currency translation adjustments, net of tax

— — — — ( 9 ) — ( 9 )

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

2 unchanged sentences

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

Net income — — — 29 — 3 32

Distributions to noncontrolling interest holders

— — — — — ( 5 ) ( 5 )

Adjustment to acquisition of third-party equity interest in consolidated entity

— — — — — ( 18 ) ( 18 )

Activity related to share-based compensation

— — 11 — — — 11

Foreign currency translation adjustments, net of tax

— — — — 10 — 10

Derivative instrument adjustments, net of tax — — — — ( 13 ) — ( 13 )

Repurchase and retirement of common stock

( 2 ) — ( 39 ) ( 71 ) — — ( 110 )

Balance as of September 30, 2024

100 $ 1 $ 1,428 $ 414 $ 2 $ 142 $ 1,987

See notes to unaudited condensed consolidated financial statements.

9 unchanged sentences

Activity related to share-based compensation

1 — 3 — — — 3

Derivative instrument adjustments, net of tax — — — — ( 10 ) — ( 10 )

4 unchanged sentences

Activity related to share-based compensation

— — 16 — — — 16

Employee stock plan issuance — — 4 — — — 4

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

Foreign currency translation adjustments, net of tax

— — — — ( 10 ) — ( 10 )

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

2 unchanged sentences

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

Net income — — — 92 — — 92

Activity related to share-based compensation

— — 14 — — — 14

Foreign currency translation adjustments, net of tax

— — — — ( 4 ) — ( 4 )

Derivative instrument adjustments, net of tax — — — — 4 — 4

Repurchase and retirement of common stock ( 1 ) — ( 20 ) ( 43 ) — — ( 63 )

Balance as of September 30, 2023

108 $ 1 $ 1,535 $ 588 $ 24 $ — $ 2,148

See notes to unaudited condensed consolidated financial statements.

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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 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.

and managing our clubs and exchange programs.

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

A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, California, South Carolina, Arizona, Virginia, and Nevada 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.

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 in 2025 to the Hilton Grand Vacations brands and Hilton standards.

Basis of Presentation

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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 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.

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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 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.

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 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.

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 were $ 37 million and $ 137 million during the three and six months ended June 30, 2024.

Costs related to the Bluegreen Acquisition were $ 25 million and $ 162 million during the three and nine months ended September 30, 2024.

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

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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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(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.

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

The measurement period adjustments recorded during the nine months ended September 30, 2024 resulted primarily from a reduction to timeshare financing receivables of $ 17 million and an increase to inventory of $ 69 million based on management's review of key assumptions and historical performance of the acquired portfolio, a decrease in the marketing agreement intangible asset of $ 55 million driven by a modification to the projected cash flows, decreases to our estimates of the fair value of property plant and equipment of $ 42 million and capitalized software of $ 5 million, and a decrease in noncontrolling interest of $ 18 million resulting from a change in the projected cash flows.

These adjustments resulted in a net increase to goodwill for the period of $ 17 million, net of tax impacts of $ 10 million.

There were measurement period adjustments not impacting goodwill for the nine months ended September 30, 2024, primarily due to management's review of historical accounting records and

alignment of policies.

These adjustments primarily consisted of $ 13 million from Cash and cash equivalents to Accounts payable, accrued expenses and other and $ 39 million from Deferred revenue to Advanced deposits .

The prior period net income effect associated with the measurement period adjustments recorded during the nine months ended September 30, 2024 was $( 4 ) million.

Timeshare Financing Receivables

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

We have determined that the entire acquired timeshare financing receivables portfolio shows evidence of more-than-insignificant deterioration in credit quality since origination.

We have determined that the entire acquired timeshare financing receivables portfolio was considered purchase credit deteriorated (“PCD”) assets as it shows evidence of more-than-insignificant deterioration in credit quality since origination.

Timeshare Financing Receivables, net for additional information.

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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 and other factors impacting the discounted cash flows.

short-term and long-term revenue growth rates 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.

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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.

A small number of operating lease right of use assets and lease liabilities were preliminarily estimated at carrying value.

A small number of operating lease right of use assets and lease liabilities were preliminarily estimated at

carrying value.

Additionally, any equipment lease was held at carrying value.

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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 as of the Bluegreen Acquisition Date, which could result in changes to our preliminary estimate.

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.

Deferred Revenue

Deferred revenue primarily relates to deferred sales incentives revenues, primarily related to Bonus Points, which are deferred and recognized upon redemption;

Deferred revenue primarily relates to deferred sales incentives revenues, including Bonus Points, which are deferred and recognized upon redemption;

and Club membership fees, which are deferred and recognized over the terms of the applicable contract term or membership on a straight-line basis.

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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 as of the Bluegreen Acquisition Date, which could result in changes to these preliminary values.

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 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 preliminarily estimated the fair value of the noncontrolling interest using a discounted cash flow model.

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

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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.

Six Months Ended June 30,

Nine Months Ended September 30,

($ in millions) 2024 2023

1 unchanged sentence

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 second quarter of 2024:

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

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

Revenue $ 679

5 unchanged sentences

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 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.

As of September 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 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 purchase credit deteriorated (“PCD”) assets.

The timeshare financing receivables acquired were considered 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 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.

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

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

We have allocated the acquired goodwill of $ 4 million to our Real Estate Sales and Financing segment.

Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Grand Islander Acquisition.

Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Grand Islander Acquisition, not to exceed one year from the Grand Islander Acquisition Date.

The majority of goodwill is expected to be deductible for tax purposes.

All amounts recorded, including those based on estimates and assumptions, are subject to change during the measurement period, not to exceed one year from the Grand Islander Acquisition Date.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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Business Segments for more information related to our segments.

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

($ in millions) Three Months Ended September 30, Nine Months Ended September 30,

Real Estate Sales and Financing Segment 2024 2023 2024 2023

4 unchanged sentences

Real estate sales and financing segment revenues $ 814 $ 612 $ 2,241 $ 1,766

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

($ in millions) Three Months Ended September 30, Nine Months Ended September 30,

Resort Operations and Club Management Segment 2024 2023 2024 2023

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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) June 30, 2024 December 31, 2023

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

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

Contract liabilities:

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Other deferred revenue 48 38

(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.

(1) The balance includes $ 56 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 September 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 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.

Revenue earned for the three and nine months ended September 30, 2024, that was included in the contract liabilities balance at December 31, 2023, was approximately $ 31 million and $ 167 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.

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

As of September 30, 2024 and December 31, 2023, contract assets were $ 1 million and $ 13 million, respectively.

Transaction Price Allocated to Remaining Performance Obligations

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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) June 30, 2024 December 31, 2023

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

Sales of VOIs, net $ 2 $ 39

1 unchanged sentence

Sales and marketing expense — 6

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:

During the nine months ended September 30, 2024, we recognized $ 106 million of sales of VOIs, net, offset by deferrals of $ 68 million, related to sales of projects under construction, some of which were completed during the year.

We expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of September 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 September 30, 2024:

($ in millions) Remaining

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

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

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

Fee-for-service commissions $ 53 $ 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 six months ended June 30, 2024:

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

($ in millions) Fee-for-service commissions

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Write-offs charged against the allowance ( 8 ) ( 10 ) ( 1 ) ( 19 )

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 21 $ 35 $ 15 $ 71

1 unchanged sentence

We define our timeshare financing receivables portfolio segments as (i) originated and (ii) acquired.

Our originated portfolio represents timeshare financing receivables that originated after August 2, 2021 related to Diamond (“Legacy-Diamond”), after December 1, 2023 related to Grand Islander (“Legacy-Grand Islander”), after January 17, 2024 related to Bluegreen (“Legacy-Bluegreen”) and timeshare financing receivables that existed both prior to and following the various acquisition dates (“Legacy-HGV”).

various acquisition dates (“Legacy-HGV”).

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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Originated Acquired

($ in millions) June 30,

($ in millions) September 30,

2024 December 31,

2023 June 30,

2023 September 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 $ 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.

(2) Non-credit premium of $ 97 million was recognized at the Diamond Acquisition Date, of which $ 17 million and $ 26 million remains unamortized as of September 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 September 30, 2024 and December 31, 2023, respectively.

Non-credit premium of $ 169 million was recognized at the Bluegreen Acquisition Date, of which $ 113 million remains unamortized as of September 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.

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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.

As of September 30, 2024 and December 31, 2023, we had timeshare financing receivables of $ 13 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.

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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 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 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.

As of September 30, 2024 and December 31, 2023, we had interest receivable outstanding of $ 19 million and $ 17 million, respectively, on our originated timeshare financing receivables.

As of September 30, 2024 and December 31, 2023, we had interest receivable outstanding of $ 8 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 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.

As of September 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 8.5 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 7.1 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 six months ended June 30, 2024 and 2023, we reversed

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

During the nine months ended September 30, 2024 and 2023, we reversed $ 54 million and $ 55 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.

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Inventory recoveries — 74

Balance as of June 30, 2024

Balance as of September 30, 2024

($ in millions) Originated

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Inventory recoveries — 21

Balance as of June 30, 2023

Balance as of September 30, 2023

(1) The initial allowance determined for receivables with credit deterioration was $ 220 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.

We also reduced the initial 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.

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Originated Timeshare Financing Receivables

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

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

Originated Timeshare Financing Receivables

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These notes receivable were initially recognized at their purchase price, represented by the acquisition date fair value, and subsequently “grossed-up” by our acquisition date assessment of the allowance for credit losses.

The difference over which par value of the acquired purchased credit deteriorated assets exceeds the purchase price plus the initial allowance for financing receivable losses is reflected as a non-credit premium and is amortized as a reduction to interest income under the effective interest method.

The difference over which

par value of the acquired purchased credit deteriorated assets exceeds the purchase price plus the initial allowance for financing receivable losses is reflected as a non-credit premium and is amortized as a reduction to interest income under the effective interest method.

The fair value of our acquired timeshare financing receivables as of each respective acquisition date was determined using a discounted cash flow method, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivables.

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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 June 30, 2024 mature as follows:

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

Acquired Timeshare Financing Receivables

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

June 30, 2024

September 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.

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

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

Originated Timeshare Financing Receivables

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

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.

As of September 30, 2024 and December 31, 2023, we had ceased accruing interest on originated timeshare financing receivables with an aggregate principal balance of $ 282 million and $ 208 million, respectively.

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

Originated - Securitized

June 30, 2024

September 30, 2024

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

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Originated - Unsecuritized

June 30, 2024

September 30, 2024

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

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

June 30, 2024

September 30, 2024

($ in millions) 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.

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

The following tables detail our gross acquired timeshare financing receivables by the origination year and average FICO score as of September 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 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.

As of September 30, 2024 and December 31, 2023, we had ceased accruing interest on acquired timeshare financing receivables with an aggregate principal balance of $ 254 million and $ 279 million, respectively.

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

Acquired - Securitized

June 30, 2024

September 30, 2024

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

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Acquired - Unsecuritized

June 30, 2024

September 30, 2024

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

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Inventory was comprised of the following:

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

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

Completed unsold VOIs $ 1,665 $ 1,259

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Total $ 2,243 $ 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 .

For the nine months ended September 30, 2024, we recorded non-cash operating activity transfers of $ 285 million related to the registrations for timeshare units under construction for three 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.

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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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2024 2023 2024 2023

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$ 4 $ 22 $ 15 $ 51

(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.

(1) For the three and nine months ended September 30, 2024 and 2023, respectively, the cost of sales true-up decreased cost of VOI sales and increased inventory.

CONSOLIDATED VARIABLE INTEREST ENTITIES

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

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

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

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

Restricted cash $ 51 $ 48

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INVESTMENTS IN UNCONSOLIDATED AFFILIATES

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

As of September 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 $ 368 million and $ 427 million as of June 30, 2024 and December 31, 2023, respectively.

These two unconsolidated affiliates have aggregated debt balances of $ 382 million and $ 427 million as of September 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 $ 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.

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 $ 73 million and $ 71 million as of September 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 obtained variable interests within statutory business trusts (collectively, the “Trusts”) formed previously by wholly owned subsidiaries of the Company.

During the nine months ended September 30, 2024, we received a cash distribution of $ 10 million from our investment in BRE Ace LLC.

For these VIEs, our investment interests are included in the condensed consolidated balance sheets as Investments in unconsolidated affiliates , and equity earned is included in the unaudited condensed consolidated statements of operations as Equity in earnings from unconsolidated affiliates .

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

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 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.

As of September 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.

INTANGIBLE ASSETS

Intangible assets and related accumulated amortization were as follows:

June 30, 2024

September 30, 2024

($ in millions) Gross Carrying Amount Accumulated Amortization

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Acquisitions for additional information.

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.

Amortization expense on intangible assets was $ 56 million and $ 40 million for the three months ended September 30, 2024 and 2023, respectively, and $ 162 million and $ 118 million for the nine months ended September 30, 2024 and 2023, respectively.

No intangible impairment charges were recognized during the three and nine months ended September 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) June 30, 2024 December 31, 2023

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

Senior secured credit facility

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Total debt, net $ 5,039 $ 3,049

(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.

(1) As of September 30, 2024 and December 31, 2023, weighted-average interest rates were 6.699 % and 6.649 %, respectively.

(2) Amount includes unamortized deferred financing costs related to our term loans and senior notes of $ 39 million and $ 25 million, respectively, as of September 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 September 30, 2024 and December 31, 2023, respectively.

(3) Amount does not include unamortized deferred financing costs of $ 3 million as of September 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.

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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.

On October 8, 2024, we entered into a new $ 400 million senior secured term loan (“Term Loan A”) due January 2028, with a pricing of SOFR plus 1.75 %.

The proceeds were used to partially pre-pay the Term Loan due 2028.

As of September 30, 2024, we had $ 24 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 September 30, 2024.

As of September 30, 2024, we have $ 308 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 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.

As of September 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 September 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 September 30, 2024 and December 31, 2023, the estimated fair values of our cash flow hedges were $ 29 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.

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:

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

Net unrealized gain on derivative instruments

2 unchanged sentences

Reclassifications to net income

Balance as of June 30, 2024

Balance as of September 30, 2024

Senior Notes due 2032

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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.

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

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

Junior subordinated debentures

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.

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

Investments in Unconsolidated Affiliates for additional information.

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

($ in millions) June 30,

($ in millions) September 30,

2024 December 31, 2023

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Total non-recourse debt, net $ 1,564 $ 1,466

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

(1) As of September 30, 2024 and December 31, 2023, weighted-average interest rates were 5.068 % 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 $ 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.

(3) Amount relates to securitized debt only and does not include unamortized deferred financing costs of $ 3 million and $ 2 million as of September 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 $ 11 million related to the Bluegreen securitized and non-recourse debt recognized at the Bluegreen Acquisition Date.

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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.

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

As of September 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.

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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 June 30, 2024 and December 31, 2023, respectively, and were included in Restricted cash in our condensed consolidated balance sheets.

The balances in the depository accounts were $ 51 million and $ 48 million as of September 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 June 30, 2024 were as follows:

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

($ in millions) Debt Non-recourse Debt Total

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

2024 (remaining three months) $ 6 $ 112 $ 118

2025 27 378 405

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

June 30, 2024

September 30, 2024

($ in millions) Carrying

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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 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 for the three months ended September 30, 2024 and 2023 was approximately 68 % and 32 %, respectively.

The effective tax rate for the nine months ended September 30, 2024 and 2023 was approximately 66 % and 28 %, 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 effective tax rate increase year over year is primarily due to the overall change in earnings partially offset by discrete items relative to income before taxes.

The discrete items are primarily comprised of unrecognized tax benefits.

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The Transaction Incentive Awards were granted under, and pursuant to the terms and conditions of, the 2023 Plan, and the award agreements approved by the Compensation Committee.

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 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.

On September 30, 2024, due to achievement of certain run rate cost savings, fifty percent ( 50 %) of the Performance Cash Awards vested and were payable to certain executive officers and employees.

These performance cash awards were included within Acquisition and integration-related expense in our unaudited condensed consolidated statements of operations.

As of September 30, 2024, there were 3,921,501 shares of common stock available for future issuance under the 2023 Plan.

We recognized share-based compensation expense of $ 11 million and $ 12 million for the three months ended September 30, 2024 and 2023 and $ 37 million, for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, unrecognized compensation costs for unvested awards were approximately $ 46 million, which is expected to be recognized over a weighted average period of 1.8 years.

During the nine months ended September 30, 2024, we issued 710,784 Service RSUs with a weighted-average grant date fair value of $ 44.06 , which generally vest in equal annual installments over three years from the date of grant.

During the nine months ended September 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.

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

As of September 30, 2024, we had 1,903,655 Options outstanding that were exercisable.

Performance RSUs

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 .

During the nine months ended September 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 six months ended June 30, 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 nine months ended September 30, 2024, and 2023, we recognized compensation expense based on the number of Performance RSUs we expect to vest.

Employee Stock Purchase Plan

4 unchanged sentences

The amendment became effective in 2023.

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.

During the three months ended September 30, 2024, we recognized less than $ 1 million of compensation expense related to this plan.

During the nine months ended September 30, 2024, we recognized $ 1 million of compensation expense related to this plan.

During the three and nine months ended September 30, 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

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

Net income (loss) attributable to stockholders

Net income attributable to stockholders

$ 29 $ 92 $ 27 $ 245

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$ 0.28 $ 0.84 $ 0.26 $ 2.21

Net income (loss) attributable to stockholders

Net income attributable to stockholders

$ 29 $ 92 $ 27 $ 245

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

(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.

(2) Excludes approximately 42,000 and 214,000 shares of RSUs that would have been anti-dilutive to EPS under the treasury stock method for the three and nine months ended September 30, 2024.

Also excludes approximately 11,000 shares of RSUs that would have been anti-dilutive to EPS under the treasury stock method for the three months ended September 30, 2023.

These RSUs could potentially dilute EPS in the future.

(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.

There were no anti-dilutive RSUs for the nine months ended September 30, 2023.

(3) Excludes approximately 14,000 and 9,000 shares of PSUs that would have been anti-dilutive to EPS under the treasury stock method for the three and nine months ended September 30, 2024.

These PSUs could potentially dilute EPS in the future.

(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.

There were no anti-dilutive PSUs for the three and nine months ended September 30, 2023.

(4) Excludes approximately 1,209,000 and 1,120,000 shares of Options that would have been anti-dilutive to EPS under the treasury stock method for the three and nine months ended September 30, 2024.

Also excludes approximately 854,000 and 663,000 shares of Options that would have been anti-dilutive to EPS under the treasury stock method for the three and nine months ended September 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 1,239,081 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 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:

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 (the “2024 Repurchase Plan”), which is in addition to the 2023 Share Repurchase Plan.

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

(in millions) Shares Cost

1 unchanged sentence

Repurchases 7 307

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.

As of September 30, 2024

From October 1, 2024 through October 31, 2024, we repurchased approximately 1.4 million shares for $ 50 million.

As of October 31, 2024, we had $ 503 million of remaining availability under the share repurchase programs, of which $ 3 million was under the 2023 Repurchase Plan and $ 500 million was under the 2024 Repurchase Plan.

RELATED PARTY TRANSACTIONS

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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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2024 2023 2024 2023

1 unchanged sentence

Commissions and other fees 38 51 118 159

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.

We also had $ 3 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 September 30, 2024 and December 31, 2023, respectively.

BUSINESS SEGMENTS

17 unchanged sentences

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2024 2023 2024 2023

9 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2024 2023 2024 2023

9 unchanged sentences

License fee expense ( 49 ) ( 37 ) ( 124 ) ( 101 )

Other (loss) gain, net

( 3 ) 3 ( 8 ) 4

Other gain (loss), net

Interest expense ( 84 ) ( 45 ) ( 250 ) ( 133 )

Income tax (expense) benefit

Income tax expense

( 61 ) ( 44 ) ( 53 ) ( 96 )

5 unchanged sentences

Net income attributable to noncontrolling interest

Net income (loss) attributable to stockholders

Net income attributable to stockholders

$ 29 $ 92 $ 27 $ 245

1 unchanged sentence

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

(2) 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 share-based compensation, restructuring, one-time charges and other non-cash items included within our reportable segments.

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

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.

As of September 30, 2024, HGV had sales and marketing operations at a total of 132 Bass Pro Shops and Cabela’s Stores, including 9 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 June 30, 2024, there are no future inventory commitments and we have not entered into new arrangements with developers.

As of September 30, 2024, we are committed to purchase approximately $ 52 million of inventory over a period of two years and $ 25 million of other commitments in the normal course of business.

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 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:

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

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

($ in millions) 2024

2 unchanged sentences

$ 5 $ 49 $ 64 $ 78 $ 83 $ 198 $ 477

Inventory purchase obligations (1)

37 6 9 — — — 52

Other commitments (2)

1 unchanged sentence

Total $ 46 $ 66 $ 79 $ 79 $ 84 $ 200 $ 554

(1) Commitments for a properties in Japan and Missouri.

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

On October 8, 2024, we fulfilled our inventory commitment and purchased a property in Japan for $ 36 million.

Litigation Contingencies

2 unchanged sentences

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 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.

As of September 30, 2024, we accrued liabilities of approximately $ 8 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.

3 unchanged sentences

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 June 30, 2024.

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.

During the nine months ended September 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.

2 unchanged sentences

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.

The Company has also filed a petition to vacate the interim award in the United States District Court for the Southern District of New York.

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 $ 805 million as of June 30, 2024, which primarily consist of escrow, construction and subsidy related bonds.

We have commitments from surety providers in the amount of $ 732 million as of September 30, 2024, which primarily consist of escrow, subsidy and construction related bonds.

SUBSEQUENT EVENTS

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.

On November 6, 2024, we entered into the Second Amended and Restated License Agreement (the “Amended License Agreement”) with Hilton Worldwide Holdings Inc.

The Amended License Agreement amends, restates and supersedes the First Amended and Restated License Agreement, dated as of March 10, 2021, between HGV and Hilton, as amended by the First Amendment, dated as of April 4, 2022, the Second Amendment, dated as of November 5, 2023, and the Third Amendment, dated as of January 16, 2024.

The Amended License Agreement covers certain amendments relating to, among other things, our continued integration of the Bluegreen Acquisition, including a rebranding plan of the Bluegreen properties to the Hilton Grand Vacations brands and Hilton standards and certain matters related to Bluegreen’s marketing arrangement with Choice Hotels International, Inc., which we assumed in connection with the Bluegreen Acquisition.

On November 7, 2024, we completed a $ 500 million securitization of timeshare loans through Hilton Grand Vacations Trust 2024-3 with an overall weighted average interest rate of 5.18 % and an overall advance rate of 98 %.

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

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