What changed in this filing

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Item 1. Business

2025-03-03 compared with 2024-02-29 · 91 added, 76 removed, 379 unchanged (31% of the section changed)

On January 3, 2017, HGV became an independent publicly traded company as a result of Hilton Worldwide Holdings Inc.'s (“Hilton”) tax-free spin-off of each of HGV and Park Hotels & Resorts Inc.

As a result of the spin-off, HGV became an independent publicly traded company with common stock listed on the New York Stock Exchange under the symbol “HGV.” Following the spin-off, Hilton did not retain any ownership in our company.

HGV's common stock is listed on the New York Stock Exchange under the symbol “HGV.” Following the spin-off, Hilton did not retain any ownership in our company.

In connection with the spin-off, we entered into agreements with Hilton and other third parties, including licenses to use the Hilton Grand Vacations brand.

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(“Apollo”) and other minority shareholders, which previously owned 100% of Diamond, held approximately 28% of HGV's common stock at the time the Diamond Acquisition was completed.

We refer to the business that we acquired from Diamond as “Legacy-Diamond”.

On January 17, 2024 (the “Bluegreen Acquisition Date"), we completed the acquisition of Bluegreen Vacations Holding Corporation (the “Bluegreen Acquisition”) in an all-cash transaction, with total consideration of approximately $1.6 billion, inclusive of net debt.

The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations, creating a premier vacation ownership and experiences company.

We are 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.

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

We refer to the business that we acquired from Bluegreen as “Legacy-Bluegreen”.

Our operations primarily consist of:

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operating resorts and timeshare plans;

and managing our clubs and exchange programs.

As of December 31, 2023, we had over 150 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.

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

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

A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, South Carolina, California, Arizona, Virginia, and Nevada, inclusive of the new locations acquired in connection with the Bluegreen Acquisition.

We have commenced rebranding many of the Bluegreen sales centers and expect to continue during 2025 along with starting to rebrand the majority of Bluegreen properties to Hilton Grand Vacations brands and Hilton standards.

In addition, we continued to rebrand the remaining Diamond properties that were in our plan and expect to continue to do so in 2025.

As of December 31, 2024, we had approximately 724,000 members across our Club offerings.

Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 22 industry-leading brands across approximately 7,500 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

Based on the type of Club membership, certain members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 24 industry-leading brands across approximately 8,300 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

Bluegreen Vacation Club members have the flexibility to stay at units available at any of Bluegreen’s resorts and have access to other hotels and resorts through Bluegreen partnerships and exchange networks.

Our compelling VOI product allows customers to advance purchase a lifetime of vacations.

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Furthermore, our points-based platform offers members tremendous flexibility, enabling us to more effectively adapt to their changing vacation needs over time.

Building on the strength of that platform, we continuously seek new ways to add value to our Club memberships, including enhanced product offerings, greater geographic distribution, broader exchange networks and further technological innovation, all of which drive better, more personalized vacation experiences and guest satisfaction.

Building on the strength of that platform, we continuously

seek new ways to add value to our Club memberships, including enhanced product offerings, greater geographic distribution, broader exchange networks and further technological innovation, all of which drive better, more personalized vacation experiences and guest satisfaction.

As innovators in the timeshare business, we enhance our inventory strategy by developing an inventory mix focused on developed properties as well as fee-for-service and just-in-time agreements to sell VOIs on behalf of or acquired from third-party developers.

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Through Bluegreen’s points-based system, the approximately 200,000 BG Vacation Club members have the flexibility to stay at units available at any of Bluegreen’s resorts and have access to approximately 11,600 other hotels and resorts through partnerships and exchange networks.

Bluegreen’s sales and marketing platform is currently supported by marketing relationships with nationally recognized consumer brands, such as Bass Pro and Choice Hotels.

Since 2000, Bluegreen has been the official vacation ownership provider for Bass Pro Shops and Cabela’s, among the nation’s leading outdoor retailers, with strong brand equity and loyal customer base.

Bluegreen has a marketing presence in the majority of Bass Pro stores that are located in nearly 200 locations across North America.

Bluegreen’s sales and marketing platform is supported by marketing relationships with nationally recognized consumer brands and companies, such as Bass Pro, LLC and its affiliates (“Bass Pro”), which operate Bass Pro Shops and Cabela’s, and Choice Hotels International, Inc.

(“Choice Hotels” or “Choice”).

Since 2000, Bluegreen was the official vacation ownership provider for Bass Pro Shops and Cabela’s, among the nation’s leading outdoor retailers, with strong brand equity and loyal customer base.

There is a Bluegreen marketing presence in the majority of Bass Pro stores that are located in nearly 200 locations across North America.

Additionally, the joint venture between Bluegreen and Bass Pro includes four high-end wilderness resorts under Big Cedar Lodge brand.

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Most resorts feature studio to three-bedroom condominium-style accommodations and amenities such as full kitchens, in-unit washers and dryers, spas and kids’ clubs.

Our timeshare properties are relatively concentrated in significant tourist markets, including Florida, Europe, Hawaii, California, Arizona, Nevada and Virginia.

Our timeshare properties are relatively concentrated in significant tourist markets, including Florida, Europe, Hawaii, South Carolina, California, Arizona, Virginia, and Nevada, inclusive of the new locations we have expanded into through the Bluegreen Acquisition.

Our deeded VOI product that we market and sell is fee-simple, deeded in perpetuity and right to use real estate interests, developed either by us or by third parties.

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In addition to an annual membership fee, members pay incremental fees depending on exchange or services they choose.

Our trust VOI product, which we acquired in the Diamond Acquisition, that we market and sell is a beneficial interest in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.

Our trust VOI product that we market and sell is a beneficial interest in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.

In general, purchasers of a VOI in a collection do not acquire a direct ownership interest in the resort properties in the Collection.

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In addition to an annual membership fee, members pay transaction fees depending upon the exchange or service options they choose.

Through the Bluegreen Acquisition, we also offer a points-based use right in perpetuity coupled with a freehold estate whereby upon purchase of a VOI, the purchaser directs conveyance of the VOI to the trustee of the Bluegreen Vacation Club who holds the timeshare interest pursuant to the Bluegreen Vacation Club Trust Agreement, dated as of May 18, 1994.

At the time of conveyance of the timeshare interest, the purchaser becomes a member and is designated an “Owner Beneficiary” of the Bluegreen Vacation Club.

Bluegreen Vacation Club members may use their allotment of points for stays at Bluegreen’s resorts or other hotels and resorts available through partnerships and exchange networks.

Our club membership offering is HGV Max.

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Prior to the offering of HGV Max, purchasers of deeded and trust VOI products generally became members of Hilton Grand Vacations Club and Hilton Club exchange programs and Diamond points-based multi-resort timeshare clubs.

Bluegreen’s club offering was the BG Vacation Club, which was assumed as part of the acquisition.

Our club memberships, including HGV Max, are collectively referred to as “Clubs”.

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These development activities, and the related management of construction activities, are performed either by us or third-party developers.

The development and construction of the units require a large upfront investment of capital and can take several years to complete in the case of a ground-up project.

The development and construction of the units require a

large upfront investment of capital and can take several years to complete in the case of a ground-up project.

Additionally, the VOIs must be legally registered prior to sale to our end customers.

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Traditionally, timeshare operators have funded 100% of the investment necessary to acquire land and construct timeshare properties.

We also source VOIs through fee-for-service agreements with third-party developers.

These agreements enable us to generate fees from the marketing and sale of VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund up-front acquisition and construction costs or incur unsold inventory maintenance costs.

The capital investment we make in connection with these projects is typically limited to the cost of constructing our on-site sales centers.

In just-in-time transactions, we acquire and sell inventory in transactions that are designed to closely correlate the timing of our acquisition of inventory with our sale of that inventory to purchasers.

We also source developed VOI inventory through fee-for-service and just-in-time agreements with third-party developers and have focused our inventory strategy on developing an optimal inventory mix.

The fee-for-service agreements enable us to generate fees from the sales and marketing of the VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund up-front acquisition and construction costs or incur unsold inventory maintenance costs.

The capital investment made in connection with these projects is typically limited to the cost of constructing an on site sales center.

The just-in-time agreements enable us to source VOI inventory in a manner that allows us to correlate the timing of acquisition of the inventory with the sale to purchasers.

We refer to fee-for-service transactions and just-in-time sales as “capital-efficient transactions.” Over time, these capital-efficient transactions have evolved from sourcing inventory from distressed properties to sourcing from new construction projects.

For the year ended December 31, 2024, sales from fee-for-service and just-in-time inventory were 18% and 19% of contract sales, respectively.

The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is approximately $11 billion at current pricing.

Capital-efficient arrangements

represent approximately 35% of that supply.

Our fee-for-service sales generally improve returns on invested capital and liquidity, while sales of owned inventory, including just-in-time inventory, typically result in a greater contribution to the profitability of our real estate sales and financing segment.

The estimated contract sales value related to our inventory pipeline, which includes inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is $12.7 billion at current pricing as of December 31, 2024.

Capital efficient arrangements, comprised of our fee-for-service and just-in-time inventory, represent approximately 28% of that supply.

We believe that the visibility into our long-term supply allows us to efficiently manage inventory to meet predicted sales, reduce capital investments, minimize our exposure to the cyclicality of the real estate market and mitigate the risks of entering into new markets.

Sales of owned, including just-in-time, inventory generally result in greater Adjusted EBITDA contributions and greater profitability of our real estate sales and financing segment, while fee-for-service sales require less initial investment and allow us to accelerate our sales growth and improve returns on invested capital and liquidity.

Both sales of owned inventory and fee-for-service sales generate long-term, predictable fee streams, by adding to the Club membership base and properties under management that generate strong returns on invested capital.

Owners can generally offer their VOIs for resale on the secondary market, which can create pricing pressure on the sale of developer inventory.

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Purchasers of a Legacy-Diamond VOI on the secondary market may elect to join a Legacy-Diamond Club.

Purchasers of a Legacy-Bluegreen VOI on the secondary market will become Legacy-Bluegreen club members.

Once a member of the Clubs, the member will be responsible for paying annual fees.

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We use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products, are frequent leisure travelers and have an affinity with our brands.

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flows impacts sales revenue and the collectability of our timeshare financing receivables.

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables.

For the year ended December 31, 2024, 72% of our contract sales were to our existing owners, compared to 70% for the year ended December 31, 2023.

We sell our vacation ownership products through our distribution network of both in-market and off-site sales centers.

Our products are currently marketed for sale throughout the United States, Mexico, Canada, Europe and Asia.

We sell our vacation ownership products primarily through our distribution network of both-in-market and off-site sales centers.

Our products are currently marketed for sale throughout the United States, Europe, Canada, the Caribbean, Mexico, and Asia.

We operate sales distribution centers in major markets and popular leisure destinations with year-round demand and a history of being a friendly environment for vacation ownership.

We have over 60 sales distribution centers in various domestic and international locations.

We have approximately 100 sales distribution centers in various domestic and international locations.

As discussed in “Our Business” above, our marketing and sales activities also include marketing relationships with nationally-recognized consumer brands such as Bass Pro, a fishing, marine, hunting, camping and sports gear retailer, and Choice Hotels in connection with the Bluegreen Acquisition.

In November 2023, HGV signed a 10-year exclusive marketing agreement with Bass Pro that provides HGV 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 of December 31, 2024, HGV had sales and marketing operations at a total of 133 Bass Pro Shops and

Cabela’s Stores, including 9 virtual kiosks.

Additionally, the joint venture between HGV and Bass Pro includes four high-end wilderness resorts under the Big Cedar Lodge brand.

We also assumed an exclusive strategic relationship with Choice Hotels that involves several areas of its business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages.

Our sales tours are designed to provide potential members with an overview of our company and our products, as well as a customized presentation to explain how our products can meet their vacationing needs.

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We also earn fee revenue from servicing our own portfolio and the loans provided by third-party developers of our fee-for-service projects to purchasers of their VOIs.

Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully amortizing loans that bear a fixed interest rate ranging from 2.5% to 25% per annum.

Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully-amortizing loans that bear a fixed interest rate typically ranging from 2.5% to 25% per annum.

The interest rate on our loans is determined by, among other factors, the amount of the down payment, the borrower’s credit profile and the loan term.

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In underwriting each loan, we obtain a credit application and a minimum down payment of 10% of the purchase price on the majority of sales of VOIs.

and Canadian purchasers seeking financing, which represented

approximately 85% of the individuals we provided financing to over the last three years, we apply the credit evaluation score methodology developed by the Fair Isaac Corporation (“FICO”) to credit files compiled and maintained by Experian and Equifax.

and Canadian purchasers seeking financing, which represented approximately 90% of the individuals we provided financing to over the last three years, we apply the credit evaluation score methodology developed by the Fair Isaac Corporation (“FICO”) to credit files compiled and maintained by Experian and Equifax.

Higher credit scores equate to lower collection risk and lower credit scores equate to higher collection risk.

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Our underwriting standards have resulted in a strong, well-seasoned consumer loan portfolio.

As of December 31, 2023, our entire portfolio consists of originated loans and loans that were acquired as part of the Diamond Acquisition and the Grand Islander Acquisition, which are referred to as acquired loans.

As of December 31, 2024, our entire portfolio consists of originated loans and loans that were acquired as part of the Diamond Acquisition, the Grand Islander Acquisition and the Bluegreen Acquisition, which are referred to as acquired loans.

As of December 31, 2024, the entire portfolio had a gross balance of approximately $4,016 million derived from approximately 182,000 loans.

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We target securitizations that range in size from $100 million to $500 million and we expect the timing of future securitizations will depend on our anticipated sales volume, financing propensity and capital needs.

The strong performance of our outstanding loan securitizations demonstrates that loans originated by us are well regarded for their performance in the securitization market.

The strong performance of our outstanding loan securitizations demonstrates that loans originated by us are well regarded

for their performance in the securitization market.

In the future, we expect to regularly access the term securitization market, replenishing capacity on our Timeshare Facility in the process.

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Our HOA management agreements provide for a cost-plus management fee, which means we generally earn a fee between 10% and 15% of the costs to operate the applicable resort.

The management fees are recurring and paid annually.

As a result, the fees we earn are highly predictable, unlike traditional revenue-based hotel management fees, and our management fees generally are unaffected by changes in rental rate or occupancy.

Further, because maintenance fees are paid annually by owners, our management fees are recurring and less volatile than hotel management fees.

We are also reimbursed for the costs incurred to perform our services, principally related to personnel providing on-site services.

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These fees represent each owner’s allocable share of the management fee and the costs of operating and maintaining the resorts, which generally includes personnel, property taxes, insurance, a capital asset reserve to fund refurbishment and other related costs.

If a VOI owner defaults on payment of its

maintenance fees and there is no lien against the mortgage note or contract, the HOA has the right to recover the defaulting owner’s VOI.

If a VOI owner defaults on payment of its maintenance fees and there is no lien against the mortgage note or contract, the HOA has the right to recover the defaulting owner’s VOI.

As a service to HOAs at certain owned resorts, subject to our inventory needs, we have the ability to reduce the bad debt expense at the HOAs by assuming the defaulted owner’s obligations in exchange for an agreed purchase price.

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There is also significant competition for talent at all levels within the industry, in particular for sales and management.

Our primary competitors in the timeshare space include Marriott Vacations Worldwide, Travel + Leisure Co., Disney Vacation Club, Holiday Inn Club Vacations, Westgate Resorts and Bluegreen Vacations, which we acquired on January 17, 2024.

Our primary competitors in the timeshare space include Marriott Vacations Worldwide, Travel + Leisure Co., Disney Vacation Club, Holiday Inn Club Vacations and Westgate Resorts.

In addition, our timeshare business competes with other entities engaged in the leisure and vacation industry, including resorts, hotels, cruises and other accommodation alternatives, such as condominium and single-family home rentals.

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These measures have significantly increased the costs associated with telemarketing, in particular with respect to telemarketing to mobile numbers.

While we continue to be subject to telemarketing risks and potential liability, we believe that our exposure to adverse effects from telemarketing legislation and enforcement is mitigated in some instances by the use of permission-based marketing in which we obtain permission to contact prospective purchasers in the

We have also implemented procedures to comply with federal and state “do not call” regulations including subscribing to the federal do not call registry and certain state “do not call” registries as well as maintaining an internal “do not call” list.

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We are committed to an inclusive workforce that fully represents many different cultures, backgrounds and viewpoints.

Our Team Member Resource Groups ("TMRGs"), which are voluntary, employee-led groups, play an integral part in our culture of inclusion as we strive to foster openness, integrity and respect.

We currently have 12 TMRG’s:

Our Team Member Resource Groups ("TMRGs"), which are non-exclusive voluntary, employee-led groups, play an integral part in our culture of inclusion as we strive to foster openness, integrity and respect.

We currently have 12 TMRGs, which are open to all team members:

African American, Asia Pacific Islander, Hispanic Latino, LGBTQ & Friends, Military, Women’s, Disabilities, Environmental, Wisdom, Multi-Cultural, Parenting & Caregivers, and Young Professionals.

Each group is sponsored by a senior executive who provides leadership and helps drive initiatives across the business.

In addition, we believe that multiple perspectives generate better solutions and relatability with our diverse base of customers and consumers.

We strive to ensure a common inclusion that we believe is reflected in our programs and initiatives, and we regularly seek team member feedback through our monthly pulse-checks, our annual engagement survey and ongoing discussions with our TMRG’s.

In addition, we believe that multiple perspectives generate better solutions and relatability with our of customers

and consumers.

We strive to ensure a common culture that we believe is reflected in our programs and initiatives, and we regularly seek team member feedback through our monthly pulse-checks, our annual engagement survey and ongoing discussions with our TMRG’s.

Through a variety of delivery methods, we offer over 460 training and development courses to all of our team members focused on a variety of core competencies, including:

leadership, diversity and inclusion, skills training, business acumen, culture and personal growth.

leadership, skills training, business acumen, culture and personal growth.

In 2024, team members had approximately 123,000 course completions totaling 98,000 training hours, of which over 67,000 course completions and 61,000 training hours were dedicated to compliance training.

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The following is a summary of the terms of such agreements.

Amended and Restated License Agreement

In connection with the spin-off, we entered into a long-term license agreement with Hilton granting us (i) the right to use certain trademarks, including, without limitation, “Hilton Grand Vacations,” “HGV,” and “Hilton Club” (collectively, the “Hilton Marks”), in connection with the current and future operation of a Hilton branded vacation ownership business (the “Licensed Business”), (ii) a license or right to use certain other Hilton-owned intellectual property, including promotional content and access to Hilton’s reservation system and property management software (collectively with the Hilton Marks, the “Hilton IP”), (iii) the right to use Hilton’s loyalty program data and other customer information (“Hilton Data”) to promote the Licensed Business and for other internal business purposes, and (iv) certain other rights.

License Agreement

In connection with the spin-off, we entered into a long-term license agreement with Hilton granting us (i) the right to use certain trademarks, including, without limitation, “Hilton Grand Vacations,” “HGV,” "HGV Max," "Hilton Vacation Club," and “Hilton Club” (collectively, the “Hilton Marks”), in connection with the current and future operation of a Hilton branded vacation ownership business (the “Licensed Business”), (ii) a license or right to use certain other Hilton-owned intellectual property, including promotional content and access to Hilton’s reservation system and property management software (collectively with the Hilton Marks, the “Hilton IP”), (iii) the right to use Hilton’s loyalty program data and other customer information (“Hilton Data”) to promote the Licensed Business and for other internal business purposes, and (iv) certain other rights.

In exchange for these rights, we have agreed to pay Hilton license and other fees, and have agreed to certain restrictions on the operation of our business.

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While the license agreement permits us to operate certain businesses that do not conflict with Hilton’s business, including non-Hilton branded vacation ownership business, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded portions of our businesses without Hilton’s prior consent.

In March 2021, in connection with entering into a definitive agreement for the Diamond Acquisition, we and Hilton amended and restated the license agreement (which we refer to hereinafter, as amended, as the “License Agreement”) to account for integrating the Diamond business and properties.

In April 2022, we and Hilton entered into the first amendment to the License Agreement (the “First Amendment”) to define, among other things, (a) a 5-year plan for rebranding and integrating a majority of the Diamond properties into our branded properties, along with minimum room conversion requirements, (b) converting all of the Diamond sales centers into our branded sales centers, and (c) the new licensed marks, “HGV Max” and “Hilton Vacation Club” (which new licensed marks are part of the Hilton Marks).

In November 2023, in connection with entering into a definitive agreement to complete, and in anticipation of consummating, the Bluegreen Acquisition, we and Hilton entered into the second amendment to the License Agreement (the “Second Amendment”) to provide certain terms for the integration of the properties, assets and business of Bluegreen into our business following the expected completion of the merger.

In connection with the January 2024 closing of the Bluegreen Acquisition, we and Hilton entered into the third amendment to the License Agreement (the “Third Amendment”) that addresses our assumption of certain of Bluegreen’s strategic relationships, including its relationship with Choice Hotels International, Inc.

(“Choice”), as more fully described below, and pursuant to which we committed to a schedule for rebranding and converting certain of Bluegreen’s properties and sales centers.

In connection with the Diamond Acquisition and the Bluegreen Acquisition, we and Hilton entered into a series of amendments to the license agreement, including most recently the Second Amended and Restated License Agreement, dated as of November 1, 2024, which incorporates all prior amendments (as amended and restated, the "License Agreement").

Initial Term and Renewal Terms

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License Fee and Other Fees

In exchange for the license and various rights granted to us by Hilton, we pay a license fee of 5% of gross revenues to Hilton quarterly in arrears, as well as specified additional fees.

Except for the phase-in license fees related to the Diamond Acquisition and the Bluegreen Acquisition as described below, in exchange for the license and various rights granted to us by Hilton, we pay a license fee of 5% of gross revenues to Hilton quarterly in arrears, as well as specified additional fees.

Gross revenues include our gross sales for the initial sale or re-sale of interests in the Licensed Business (subject to certain limited exceptions), property operations revenue, transient rental revenue and other certain revenues earned all with respect to the Licensed Business.

To account for the integration of the Diamond business into our operations, Hilton agreed to a reduced license fee for the initial five (5) years following the closing of the Diamond Acquisition for gross revenue arising from properties and sales centers that are rebranded and become part of the Licensed Business.

The reduced license fee ranges from 2% to 4% of the applicable gross revenue, increasing annually until it reaches 5% during the fifth year and beyond.

This reduced license fee structure is contingent upon us achieving certain minimum rebranding milestones related to room conversions with respect to the Diamond business and properties on an annual and cumulative basis over the five-year rebranding plan.

If we do not achieve such minimum milestones, we will be subject to an escalated license fee of up to an additional 1%, plus the original fee percentage, of the applicable gross revenue.

To account for the integration of the Diamond and Bluegreen businesses into our operations, Hilton agreed to a reduced license fee for the initial (i) five (5) years following the closing of the Diamond Acquisition and (ii) four (4) years following the closing of the Bluegreen Acquisition, in each case for gross revenue arising from Diamond or Bluegreen properties and sales centers, as applicable, that are rebranded and become part of the Licensed Business.

The reduced license fees range from 2% to 4% of the applicable gross revenue, increasing steadily until it reaches 5% during the fifth year and beyond for the Diamond Acquisition and during the fourth year and beyond for the Bluegreen Acquisition.

This reduced license fee structure is contingent upon us achieving certain minimum rebranding milestones related to room conversions with respect to the Diamond and Bluegreen businesses and properties on an annual and cumulative basis over several years.

If we do not achieve the applicable minimum milestones, we will be subject to an escalated license fee of up to an additional 1%, plus the original fee percentage, of the applicable gross revenue.

The escalated license fee is subject to being readjusted to the original fee percentage if we achieve the applicable cumulative rebranding target milestone in subsequent years.

If we fail to achieve the final cumulative target by September 30, 2031, Hilton has the election, by notice to us, to prohibit our future offering of HGV Max.

The License Agreement also provides for a reduced license fee, ranging from 0% to 1.5%, over the initial five (5) years following the closing of the Diamond Acquisition for certain property level revenues (such as retail, food and beverage and transient rental at properties operating under the new Hilton Vacations Club brand) related to Diamond properties that are converted into our branded properties and become part of the Licensed Business.

In connection with the integration of the Bluegreen business, pursuant to the Second Amendment, we will pay Hilton a gradual ramp up of the license fee for the initial four (4) years following the completion of the transaction with respect to sales at converted Bluegreen sales facilities sourced by or through Bluegreen’s existing lead generation sources or to those who are already members of HGV Max or a branded loyalty program, as well as various property-level

revenues associated with the Bluegreen business (such as management fees and HOA expense reimbursements) (collectively, the "Bluegreen Related License Fees").

In connection with the Third Amendment, we have agreed to obtain certain amendments to the Choice agreements by December 31, 2024 to enable us to rebrand the Bluegreen properties and sales centers in accordance with a rebranding schedule.

Further, pursuant to the Third Amendment, we have agreed to pay Hilton minimum Bluegreen Related License Fees for each of the years 2024 and 2025.

In the event we are unable to obtain the amendments described above by December 31, 2024, we have agreed to continue to pay to Hilton minimum Bluegreen Related License Fees in years 2026 through 2029.

If we fail to achieve the final cumulative target related to Diamond by September 30, 2031 or the final cumulative target related to Bluegreen by September 30, 2032, Hilton has the election, by notice to us, to prohibit our future offering of HGV Max.

Notwithstanding for the foregoing, we have agreed to pay Hilton certain minimum license fees related to the Bluegreen business for each of 2024 and 2025.

The License Agreement also provides for a reduced license fee, ranging from 0% to 1.5%, over the initial (i) five (5) years following the closing of the Diamond Acquisition and (ii) four (4) years following the closing of the Bluegreen Acquisition in each case for certain property level revenues (such as retail, food and beverage and transient rental at properties operating under the new Hilton Vacations Club brand) related to Diamond and Bluegreen properties, as the case may be, that are converted into our branded properties and become part of the Licensed Business.

For the years ended December 31, 2024, 2023 and 2022, we incurred license fee expense to Hilton of $156 million, $138 million, and $124 million, respectively.

Separate Operations and Related Matters

Pending the rebranding, and so long as they remain non-Hilton licensed branded properties, the Diamond properties and Bluegreen properties are required to be operated as separate operations in accordance with the License Agreement.

As discussed above, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded properties, and, accordingly, no license fees are generally owed to Hilton in connection with revenues associated with such properties and unbranded operations, except as may be required pursuant to the Second Amendment and the Third Amendment.

The License Agreement sets forth specific parameters and requirements for any separation operations, including, without limitation, requirements for separate sales centers and personnel for sales related to such non-Hilton branded properties and operating such properties in completely separate physical locations as our Hilton-branded properties, subject to certain limited exceptions.

For the years ended December 31, 2023, 2022 and 2021, we incurred license fee expense of $138 million, $124 million, and $80 million, respectively.

None of these license fees reflect the integration of Bluegreen, which closed on January 17, 2024.

The License Agreement sets forth specific parameters and requirements for any separate operations, including, without limitation, requirements for separate sales centers and personnel for sales related to such non-Hilton branded properties and operating such properties in completely separate physical locations as our Hilton-branded properties, subject to certain limited exceptions.

Hilton Honors Points;

Call Transfers

During the term of the License Agreement, we are required to participate in Hilton’s loyalty program, currently known as the Hilton Honors program.

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The conversion of any Diamond property or Bluegreen property into our branded property is subject to an approval process by Hilton.

In addition, the Diamond and Bluegreen properties rebranding and conversions are subject to an additional fire and life safety review process by Hilton.

addition, the Diamond and Bluegreen properties rebranding and conversions are subject to an additional fire and life safety review process by Hilton.

Hilton also has the right to enter our vacation ownership properties at any time without notice and additional permission from us in order to verify that we are complying with the License Agreement and Hilton’s standards and guidelines.

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or (iii) be acquired or combined with any entity other than an affiliate.

However, we may acquire control of a business that is not a vacation ownership business or a

lodging business without Hilton’s consent, but we are required to operate such business as a “separate operation” that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.

However, we may acquire control of a business that is not a vacation ownership business or a lodging business without Hilton’s consent, but we are required to operate such business as a “separate operation” that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.

As previously noted, under the License Agreement, we are required to operate the Diamond business and the Bluegreen business as separate operations.

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Other Restrictions

The License Agreement imposes various other restrictions and requirements that pertain to, without limitation, co-sponsoring credit cards and other payment alternatives, engaging in any lodging business, confidentiality and data security, and strict maintenance of, and compliance with, separation of operations that do not use any of Hilton IP or Hilton Data.

The License Agreement imposes various other restrictions and requirements that pertain to, without limitation, co-sponsoring credit cards and other payment alternatives, entering into marketing, sponsorship and similar agreements, engaging in any lodging business, confidentiality and data security, and strict maintenance of, and compliance with, separation of operations that do not use any of Hilton IP or Hilton Data.

Notwithstanding the foregoing, we and Hilton have agreed to designate no more than fifteen (15) Bluegreen properties (based on an agreed list) to be affiliated with and operated under a Choice brand in accordance with the terms of the Choice agreements during the term of such agreements.

With respect to marketing, sponsorship and similar agreements, we have expressly agreed with Hilton that we will not enter into, or extend, renew, or expand the scope of any existing marketing agreements, with a Hilton competitor without Hiltons’ prior written consent.

Further, we have agreed with Hilton to terminate the Choice agreement on the earlier of the expiration date of the current term or if and when we have a definitive termination right under the Choice agreements.

Termination Rights;

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or (vii) we assign the agreement to a non-affiliate without Hilton’s consent.

In addition, if we are unable to obtain certain amendments to the Choice agreements by December 31, 2024, in addition to the minimum license fees payable from 2026 through 2029, Hilton has reserved various rights and remedies available to it under the License Agreement , including, without limitation, its right to terminate our exclusive rights to use the licensed marks in connection with a vacation ownership business and to engage in vacation ownership under any Hilton marks.

See “Item 1A .

Risk-Factors—Risks Related to the Integration of Bluegreen— We may not be able to integrate successfully and many of the anticipated benefits of combining us and Bluegreen may not be realized.”

Our right to use the Hilton Marks as a trade, corporate, d/b/a or similar name under the License Agreement will automatically terminate if:

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Hilton has the right to demand liquidated damages based upon its uncollected royalties and fees for the remainder of the term.

Generally, if our revenues from the Licensed Business during any calendar year are less than sixty-seven percent (67%) of our audited annual revenues for the same year, Hilton has the right to terminate the exclusivity and compete with us in the timeshare business using the Licensed Marks.

We are required to indemnify, defend and hold harmless Hilton from and against any claim or liability resulting from:

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Additionally, we reaffirmed our indemnification obligations and agreed to certain expense reimbursement provisions in connection with the Third Amendment for third-party claims that may arise out of the Bluegreen Acquisition.

This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, the First Amendment, and the Second Amendment, which are filed as Exhibits 10.2(a), 10.2(b) and 10.2(c), respectively, to this Annual Report on Form 10-K, and the Third Amendment, which is filed as Exhibit 10.2 of the Current Report on Form 8-K filed on January 17, 2024.

This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, which is filed as Exhibit 10.2(e) to this Annual Report on Form 10-K.

Distribution Agreement

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The parties share responsibility, in accordance with sharing percentages applicable to Shared Contingent Liabilities, for any such taxes imposed on Hilton that are not attributable to actions taken by a party.

In addition, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable periods prior to the spin-offs relates to our timeshare business, we would be liable for the full amount under the Tax Matters Agreement.

In addition, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable

periods prior to the spin-offs relates to our timeshare business, we would be liable for the full amount under the Tax Matters Agreement.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Tax Matters Agreement, which is filed as Exhibit 10.1 to this Annual Report on Form 10-K.

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and (b) ownership below 11,967,853 of the Apollo Closing Shares, the second Apollo Designee will be required to resign, and the Apollo Investors will no longer be entitled to any representation on our Board.

The Apollo Investors are

not permitted to “buy back” into the right to designate any Apollo Designees to our Board by acquiring shares of our common stock in the future.

The Apollo Investors are not permitted to “buy back” into the right to designate any Apollo Designees to our Board by acquiring shares of our common stock in the future.

Transfer Restrictions

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provided, that certain provisions have different termination dates.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the stockholder's agreement, which was filed as Exhibit 10.1 to HGV’s Current Report on Form 8-K filed with the SEC on August 3, 2021.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the stockholder's agreement, which is filed as Exhibit 10.16 to this Annual Report on Form 10-K.

Where You Can Find More Information

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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-K

Item 1. Business