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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-02-29 · 210 added, 201 removed, 464 unchanged (47% of the section changed)

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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.

During 2021, we acquired Diamond Resorts and are in the process of rebranding Diamond properties and sales centers to the Hilton Grand Vacations brand and Hilton standards.

On January 17, 2024 (the "Bluegreen Acquisition Date"), we completed the Bluegreen Acquisition.

During 2021, we completed the Diamond Acquisition and on January 17, 2024, we completed the Bluegreen Acquisition.

Our operations primarily consist of selling vacation ownership intervals and vacation ownership interests (collectively, “VOIs” or “VOI”) for us and third parties;

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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 feature spacious, condominium-style accommodations with superior amenities and quality service.

As of December 31, 2024, we have over 200 properties located in the United States (“U.S.”), Europe, Canada, the Caribbean, Mexico 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 acquired in connection with the Bluegreen Acquisition.

Our properties feature spacious, condominium-style accommodations with superior amenities and quality service.

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

We began rebranding the Bluegreen sales centers during 2024 and expect to begin rebranding of certain Bluegreen properties in 2025 to the Hilton Grand Vacations brands and Hilton standards.

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.

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 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.

We operate our business across two segments:

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Real Estate Sales and Financing

Our primary deeded product includes the marketing and selling of fee-simple VOIs deeded in perpetuity and right to use real estate interests, developed either by us or by third parties.

This ownership interest is an interest in real estate generally equivalent to one week on an annual or biennial basis, at the timeshare resort in which the VOI is located.

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.

This ownership interest is generally equivalent to one week on an annual or biennial basis, at the timeshare resort in which the VOI is located.

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.

Rather, for each Collection, one or more trustees hold legal title to the deeded fee simple real estate interests or the functional equivalent, or, in some cases, leasehold real estate interests for the benefit of the respective Collection’s association members in accordance with the applicable agreements.

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.

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

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

We source VOIs through developed properties and 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 acquisition and construction costs.

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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.

Our primary trust VOI product, which we acquired in the Diamond Acquisition, includes the marketing and selling of beneficial interests 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.

Rather, for each Collection, one or more trustees hold legal title to the deeded fee simple real estate interests, or the functional equivalent, or, in some cases, leasehold real estate interests for the benefit of the respective Collection’s association members in accordance with the applicable agreements.

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.

See “ Key Business and Financial Metrics—Real Estate Sales Operating Metrics ” for

additional discussion of contract sales.

See “ Key Business and Financial Metrics—Real Estate Sales Operating Metrics ” for additional discussion of contract sales.

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 $12.7 billion at current pricing.

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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, Mexico, Canada, Europe and Asia.

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

A phased rebranding of sales centers that were acquired as part of the Diamond Acquisition began in late 2021.

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

Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach.

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.

With the Bluegreen Acquisition, 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 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.

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.

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Financing propensity was 67% and 63% for the years ended December 31, 2024, and 2023, respectively.

We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period.

We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume originated in the period.

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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• Resort and club management represents revenues from Club activation fees, annual dues and transaction fees from member exchanges.

Resort and club management also includes recurring management fees under our agreements with HOAs for day-to-day-management services, including housekeeping services, maintenance, and certain accounting and administrative services for HOAs, generally based on a percentage of costs to operate the resorts.

Resort and club management also includes recurring management fees under our agreements with HOAs for day-to-day-management services, including housekeeping services,

maintenance, and certain accounting and administrative services for HOAs, generally based on a percentage of costs to operate the resorts.

• Rental and ancillary services represents revenues from transient rentals of unoccupied vacation ownership units and revenues recognized from the utilization of Club points and vacation packages when points and packages are redeemed for rental stays at one of our resorts.

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These costs primarily consist of payroll and payroll-related costs for management of the HOAs and other services we provide where we are the employer and insurance.

The corresponding expenses are presented as Cost reimbursements expense in our consolidated statements of operations resulting in no effect on net income.

The corresponding expenses are presented as Cost reimbursements expense in our consolidated statements of income resulting in no effect on net income.

Factors Affecting Revenues

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We generate interest income from consumer loans we originate and declines in interest rates may cause us to lower our interest rates on our originated loans, which would adversely affect our income generated on future loans.

Conversely, if interest rates increase significantly, it would increase the cost of purchasing VOIs for any purchaser who is financing their acquisition and may deter potential purchasers from buying a VOI, which could result in sales declines.

Conversely, if interest rates increase significantly, it would increase

the cost of purchasing VOIs for any purchaser who is financing their acquisition and may deter potential purchasers from buying a VOI, which could result in sales declines.

• Competition.

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• General and administrative consists primarily of compensation expense for our corporate staff and personnel supporting our business segments, professional fees (including consulting, audit and legal fees), administrative and related expenses.

General and administrative also includes costs for services provided to us by Hilton.

• Depreciation and amortization are non-cash expenses that primarily consist of depreciation of fixed assets such as buildings and leasehold improvements and furniture and equipment at our sales centers, corporate offices, and assets purchased for future conversion to inventory, as well as amortization of our trade names, management agreement contracts, club member relationship intangibles and capitalized software.

• License fee expense represents the royalty fee paid to Hilton under a license agreement for the exclusive right to use the Hilton Grand Vacations mark, which is generally based on a percentage of gross sales volume of certain revenue streams.

• License fee expense represents primarily the royalty fee paid to Hilton under a license agreement for the exclusive right to use the Hilton Grand Vacations mark, which is generally based on a percentage of gross sales volume of certain revenue streams.

• Acquisition and integration-related expense represents direct expenses for the Diamond Acquisition and the Bluegreen Acquisition, including integration costs, legal and other professional fees.

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These costs primarily consist of payroll and payroll-related costs for management of the HOAs and other services we provide where we are the employer and insurance.

The corresponding revenues are presented as Cost reimbursements revenue in our consolidated statements of operations resulting in no effect on net income.

The corresponding revenues are presented as Cost reimbursements revenue in our consolidated statements of income resulting in no effect on net income.

Factors Affecting Expenses

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• Contract sales represents the total amount of VOI products (fee-for-service, just-in-time, developed, and points-based) under purchase agreements signed during the period where we have received a down payment of at least 10% of the contract price.

Contract sales differ from revenues from the Sales of VOIs, net that we report in our consolidated statements of operations due to the requirements for revenue recognition, as well as adjustments for incentives.

Contract sales differ from revenues from the Sales of VOIs, net that we report in our consolidated statements of income due to the requirements for revenue recognition, as well as adjustments for incentives.

While we do not record the purchase price of sales of VOI products developed by fee-for-service partners as revenue in our consolidated financial statements, rather recording the commission earned as revenue in accordance with U.S.

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We consider VPG to be an important operating measure because it measures the effectiveness of our sales process, combining the average transaction price with the closing rate.

EBITDA and Adjusted EBITDA

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders

EBITDA, presented herein, is a financial measure that is not recognized under U.S.

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(iv) share-based and other compensation expenses;

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

EBITDA and Adjusted EBITDA are not recognized terms under U.S.

and (v) other items, including but not limited to costs associated with

acquisitions, restructuring, amortization of premiums and discounts resulting from purchase accounting, and other non-cash and one-time charges.

Adjusted EBITDA Attributable to Stockholders is Adjusted EBITDA excluding amounts attributable to the noncontrolling interest in Bluegreen/Big Cedar Vacations LLC, a joint venture in which HGV is deemed to hold a controlling financial interest based on its 51% equity interest (“Big Cedar”), its active role as the day-to-day manager of its activities, and majority voting control of its management committee.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are not recognized terms under U.S.

GAAP and should not be considered as alternatives to net income or other measures of financial performance or liquidity derived in accordance with U.S.

In addition, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons:

(i) EBITDA and Adjusted EBITDA are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions;

and (ii) EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.

EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income, cash flow or other methods of analyzing our results as reported under U.S.

We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders provide useful information to investors about us and our financial condition and results of operations for the following reasons:

(i) EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions;

and (ii) EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income, cash flow or other methods of analyzing our results as reported under U.S.

Some of these limitations are:

• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA and Adjusted EBITDA do not reflect our interest expense (excluding interest expense on non-recourse debt), or the cash requirements necessary to service interest or principal payments on our indebtedness;

• EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;

• EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

• EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

• EBITDA and Adjusted EBITDA do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized;

• EBITDA and Adjusted EBITDA may be calculated differently from other companies in our industry limiting their usefulness as comparative measures.

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect our interest expense (excluding interest expense on non-recourse debt), or the cash requirements necessary to service interest or principal payments on our indebtedness;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect our tax expense or the cash requirements to pay our taxes;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized;

• EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders may be calculated differently from other companies in our industry limiting their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

See below under “Segment Results” for reconciliation of our EBITDA and Adjusted EBITDA to net income, our most comparable U.S.

See below under “Segment Results” for reconciliation of our EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders to net income attributable to stockholders and net income, our most comparable U.S.

GAAP financial measure.

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These non-GAAP measures are used by our management team to evaluate the operating performance of each of our key activities, and to make day-to-day operating decisions.

We believe these additional measures are also important in helping investors understand the performance and efficiency with which we are able to convert revenues for each of these primary activities into operating profit, both in dollars and as margins, and are frequently used by securities analysts, investors and other interested parties as one of common performance measures to compare results or estimate valuations across companies in our industry.

interested parties as one of common performance measures to compare results or estimate valuations across companies in our industry.

Specifically—

• Sales revenue represents sales of VOIs, net, and Fee-for-service commissions and brand fees earned from the sale of fee-for-service VOIs.

Fee-for-service commissions and brand fees represents sales, marketing, brand and other fees, which corresponds to the applicable line item from our consolidated statements of operations, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.

Fee-for-service commissions and brand fees represents sales, marketing, brand and other fees, which corresponds to the applicable line item from our consolidated statements of income, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.

Real estate expense represents Costs of VOI sales and Sales and marketing expense, net .

Sales and marketing expense, net represents sales and marketing expense, which corresponds to the applicable line item from our consolidated statements of operations, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.

Sales and marketing expense, net represents sales and marketing expense, which corresponds to the applicable line item from our consolidated statements of income, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.

Both fee-for-service commissions and brand fees and sales and marketing expense, net, represent non-GAAP measures.

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We consider real estate profit margin to be an important non-GAAP operating measure because it measures the efficiency of our sales and marketing spending, management of inventory costs, and initiatives intended to improve profitability.

• Financing profit represents financing revenue, net of financing expense, both of which correspond to the applicable line items from our consolidated statements of operations.

• Financing profit represents financing revenue, net of financing expense, both of which correspond to the applicable line items from our consolidated statements of income.

Financing profit margin is calculated as a percentage by dividing financing profit by financing revenue.

We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our financing business in connection with our VOI sales.

• Resort and club management profit represents resort and club management revenue, net of resort and club management expense, both of which correspond to the applicable line items from our consolidated statements of operations.

Resort and club management profit margin is calculated as a percentage by dividing resort and club management profit by resort and club management revenue.

We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our resort and club management business that support our VOI sales business.

• Rental and ancillary services profit represents rental and ancillary services revenues, net of rental and ancillary services expenses, both of which correspond to the applicable line items from our consolidated statements of operations.

Rental and ancillary services profit margin is calculated as a percentage by

dividing rental and ancillary services profit by rental and ancillary services revenue.

Rental and ancillary services profit margin is calculated as a percentage by dividing rental and ancillary services profit by rental and ancillary services revenue.

We consider this to be an important non-GAAP operating measure because it measures our ability to convert available inventory and unoccupied rooms into revenue and profit by transient rentals, as well as profitability of other services, such as food and beverage, retail, spa offerings and other guest services.

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Furthermore, these measures have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income or other methods of analyzing our results as reported under U.S.

Such limitations include the fact that these measures only include those revenues and expenses related to one of the four specified operating activities as opposed to on a consolidated basis, and other limitations that are similar to those discussed above under “ EBITDA and Adjusted EBITDA .” See below under “ Reconciliation of Non-GAAP Profit Measures to GAAP Measure ” for reconciliation of these four profit measures to net income, our most comparable U.S.

GAAP financial measure.

Such limitations include the fact that these measures only include those revenues and expenses related to one of the four specified operating activities as opposed to on a consolidated basis, and other limitations that are similar to those discussed above under “ EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders .” See below under “ Reconciliation of Non-GAAP Profit Measures to GAAP Measure ” for reconciliation of these four profit measures to net income attributable to stockholders and net income, our most comparable U.S.

GAAP financial measures.

Results of Operations

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The following discussion and analysis of our financial condition and results of operations is for the year ended December 31, 2024 compared with the year ended December 31, 2023.

Discussions of our financial condition and results of operations for the year ended December 31, 2022 compared to December 31, 2021 that have been omitted under this item can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2022 , which was filed with the Securities and Exchange Commission on March 1, 2023.

Discussions of our financial condition and results of operations for the year ended December 31, 2023 compared to December 31, 2022 that have been omitted under this item can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the Securities and Exchange Commission on February 29, 2024.

Segment Results

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Total revenues $ 4,981 $ 3,978 $ 3,835 $ 1,003 25.2

(1) Refer to Note 22:

(1) See Note 22:

Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for details on the intersegment eliminations.

We evaluate our business segment operating performance using segment Adjusted EBITDA, as described in Note 22:

Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

For a discussion of our definition of EBITDA and Adjusted EBITDA, how management uses them to manage our business and material limitations on their usefulness, refer to “—Key Business and Financial Metrics—EBITDA and Adjusted EBITDA.” The following table reconciles net income, our most comparable U.S.

GAAP financial measure, to EBITDA and Adjusted EBITDA:

The following table reconciles net income attributable to stockholders and net income, our most comparable U.S.

GAAP financial measures, to EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders:

Year Ended December 31, 2024 vs 2023 (1)

($ in millions) 2024 2023 2022 $ %

Net income attributable to stockholders $ 47 $ 313 $ 352 $ (266) (85.0)

Net income attributable to noncontrolling interest

13 — — 13 100%

60 313 352 (253) (80.8)

Interest expense 329 178 142 151 84.8

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EBITDA 735 842 869 (107) (12.7)

Other (gain) loss, net

Other loss (gain), net

11 (2) 1 13 NM

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Impairment expense 2 3 17 (1) (33.3)

Acquisition and integration-related expense 68 67 106 1 1.5

Acquisition and integration-related expense 237 68 67 169 NM

Other adjustment items (2)

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Adjusted EBITDA 1,094 1,005 1,065 89 8.9

Adjusted EBITDA attributable to noncontrolling interest 16 — — 16 100%

Adjusted EBITDA attributable to stockholders $ 1,078 $ 1,005 $ 1,065 $ 73 100%

(1) NM - fluctuation in terms of percentage change is not meaningful.

(2) For the years ended December 31, 2023, 2022 and 2021, this amount includes costs associated with restructuring, one-time charges, other non-cash items, and amortization of fair value premiums and discounts resulting from purchase accounting.

The following table reconciles our segment Adjusted EBITDA to Adjusted EBITDA.

(2) These amounts include costs associated with restructuring, one-time charges, other non-cash items, and amortization of fair value premiums and discounts resulting from purchase accounting.

We evaluate our business segment operating performance using segment Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders, as described in Note 22:

Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

For a discussion of our definition of EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders, how management uses them to manage our business and material limitations on their usefulness, refer to “—Key Business and Financial Metrics—EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders.” The following table reconciles our segment Adjusted EBITDA to Adjusted EBITDA to Adjusted EBITDA Attributable to Stockholders:

Year Ended December 31, 2024 vs 2023

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Adjusted EBITDA 1,094 1,005 1,065 89 8.9

Adjusted EBITDA attributable to noncontrolling interest

16 — — 16 100%

Adjusted EBITDA attributable to stockholders $ 1,078 $ 1,005 $ 1,065 $ 73 100%

(1) Includes intersegment transactions, share-based compensation, depreciation and other adjustments attributable to the segments.

(2) Adjusts for segment related share-based compensation, depreciation and other adjustment items.

Real estate sales and financing Adjusted EBITDA increased by $48 million compared to the same period in 2023.

For the same period, Real estate sales and financing Adjusted EBITDA decreased $131 million excluding the $179 million impact related to the Bluegreen Acquisition, primarily due to decreases in Sales, marketing, brand and other fees revenue and overall real estate expenses partially offset by an increase in financing profit.

Refer to “—Real Estate” and “—Financing” for further discussion on the revenues and expenses of the real estate sales and financing segment.

Resort operations and club management segment Adjusted EBITDA increased $100 million for the year ended December 31, 2024 compared to the same period in 2023.

For the same period, Resort operations and club management segment Adjusted EBITDA increased by $20 million, excluding the $80 million impact related to the Bluegreen Acquisition, primarily due to increases in resort management revenue and rental revenue partially offset by an increase in rental expense.

Refer to “—Resort and Club Management” and “—Rental and Ancillary Services” for further discussion on the revenues and expenses of the resort operations and club management segment.

Reconciliation of Non-GAAP Profit Measures to GAAP Measure

The following table reconciles net income, our most comparable U.S.

GAAP financial measure, to EBITDA and the total of our real estate, financing, resort and club management, and rental and ancillary services profit measures.

The following table reconciles net income attributable to stockholders and net income, our most comparable U.S.

GAAP financial measures, to EBITDA and the total of our real estate, financing, resort and club management, and rental and ancillary services profit measures.

Year Ended December 31, 2024 vs 2023 (1)

($ in millions) 2024 2023 2022 $ %

Net income attributable to stockholders $ 47 $ 313 $ 352 $ (266) (85.0)

Net income attributable to noncontrolling interest

13 — — 13 100%

60 313 352 (253) (85.0)

Interest expense 329 178 142 151 84.8

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EBITDA 735 842 869 (107) (12.7)

Other (gain) loss, net

Other loss (gain), net

11 (2) 1 13 NM

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License fee expense 171 138 124 33 23.9

Acquisition and integration-related expense 68 67 106 1 1.5

Acquisition and integration-related expense 237 68 67 169 NM

General and administrative 199 194 212 5 2.6

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(1) NM - fluctuation in terms of percentage change is not meaningful.

(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $2 million, $2 million and $1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Reconciliation of Non-GAAP Real Estate Measures to GAAP Measures

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(1) Includes revenue recognized through our marketing programs for existing owners and prospective first-time buyers and revenue associated with sales incentives, title service and document compliance.

Real Estate Sales and Financing

Real estate sales and financing segment revenues decreased by $21 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to a $75 million decrease in Sales of VOIs, net, driven by a $66 million increase in net deferrals of sales of VOIs under construction, a 15% decrease in VPG, and a $29 million increase in provision for financing receivable losses, offset by a $49 million decrease in fee for service sales.

Sales, marketing, brand and other fees increased $14 million driven by higher commissions earned on sales of fee-for-service properties.

In addition, there was a $40 million increase in financing revenue primarily related to an increase in our loan portfolio combined with an increase in the weighted-average interest rate.

Real estate sales and financing Adjusted EBITDA decreased by $111 million compared to the same period in 2022, primarily due to an increase in marketing costs due to our emphasis in adding new owners, which typically carry a higher cost per tour, in addition to the overall decrease in segment revenues described above.

Refer to “—Real Estate” and “—Financing” for further discussion on the revenues and expenses of the real estate sales and financing segment.

Real Estate Sales and Financing Segment

In accordance with Accounting Standards Codification Topic 606, “ Revenue from Contracts with Customers” (“ASC 606”), revenue and the related costs to fulfill and acquire the contract (“direct costs”) from sales of VOIs under construction are deferred until the point in time when construction activities are deemed to be completed.

2 unchanged sentences

In periods where previously deferred Sales of VOIs and related direct costs are recognized upon construction completion, margin percentages will generally expand as the indirect marketing and selling costs associated with these sales were recognized in prior periods.

The following table represents deferrals and recognitions of Sales of VOIs revenue and direct costs for properties under construction:

The following table represents deferrals and recognitions of Sales of VOI revenue and direct costs for properties under construction:

Year Ended December 31, 2024 vs 2023

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Net Sales and marketing expense (deferrals) recognitions

(7) (5) 4 (2)

Net construction (deferrals) recognitions

$ (27) $ (21) $ 16 $ (6)

Resort Operations and Club Management

Resort operations and club management segment revenues increased $94 million for the year ended December 31, 2023, compared to the same period in 2022, primarily driven by greater Rental and ancillary revenue as a result of increased average daily rates.

The segment revenue increase is also attributable to higher Resort management revenues, primarily driven by higher fees as well as an increase in Club members.

Resort operations and club management segment Adjusted EBITDA increased $41 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to the increase in resort and club management and rental revenues described above, partially offset by an increase in resort and club management expenses due to personnel-related costs incurred to service increased arrivals and transaction activity.

Refer to “—Resort and Club Management” and “—Rental and Ancillary Services” for further discussion on the revenues and expenses of the resort operations and club management segment.

Real Estate Sales and Financing Segment

See “Reconciliation of Profit Measures to GAAP Measure” above.

See “Reconciliation of Non-GAAP Profit Measures to GAAP Measure” above.

Year Ended December 31, 2024 vs 2023 (1)

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(540) (644) (693) 104 (16.1)

Provision for financing receivables losses (171) (142) (121) (29) 20.4

Provision for financing receivables losses (363) (171) (142) (192) NM

Reportability and other:

Net (deferral) recognition of sales of VOIs under construction (3)

(35) 31 133 (66) NM

Fee-for-service sale upgrades, net 19 18 14 1 5.6

Net recognition (deferral) of sales of VOIs under construction (3)

(52) (35) 31 (17) 48.6

Fee-for-service sale upgrades, net — 19 18 (19) (100.0)

(138) (63) (104) (75) NM

Sales of VOIs, net $ 1,909 $ 1,416 $ 1,491 $ 493 34.8

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(4) Includes adjustments for revenue recognition, including amounts in rescission and sales incentives.

Contract sales decreased $71 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to a 15.2% decrease in VPG, and partially offset by a 17.6% increase in tour flow.

Contract sales increased $692 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding the impact of $727 million related to the Bluegreen Acquisition, contract sales decreased $35 million, primarily due to decreases in both VPG and tour flow.

Year Ended December 31, 2024 vs 2023

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(1) Excluding the marketing revenue and other fees adjustment, Real estate profit margin was 21.2%, 28.0% and 32.7% for the years ended December 31, 2024, 2023 and 2022, respectively.

Real estate profit decreased by $116 million for the year ended December 31, 2023, compared to the same period in 2022, driven by a decrease of $94 million in Sales revenue due to lower Sales of VOIs, net of $75 million driven primarily by net deferrals of sales of VOIs under construction and lower Fee-for-service commissions and brand fees of $19 million.

Additionally, Real estate expense increased by $22 million due to an increase in payroll expense from additional employee headcount and increases in wage rates as a result of competitive labor conditions experienced in most geographical markets.

Real estate profit decreased by $36 million for the year ended December 31, 2024, compared to the same period in 2023.

Real estate profit decreased $128 million excluding the impact of $92 million related to the Bluegreen Acquisition, primarily due to a decrease in fee-for-service commissions and brand fees revenue and an increase in sales and marketing expense, net, partially offset by a decrease in Cost of VOI Sales, net.

Sales revenue increased $428 million for the year ended December 31, 2024, compared to the same period in 2023.

Sales revenue decreased by $116 million excluding the impact of $544 million related to the Bluegreen Acquisition, primarily due to a decrease in Fee-for-service commissions and brand fees revenues, partially offset by an increase in Sales of VOI, net.

Additionally, Real estate expense increased by $464 million for the year ended December 31, 2024, compared to the same period in 2023.

Real estate expense increased by $12 million excluding the impact of $452 million related to the Bluegreen Acquisition, primarily due to increases in sales and marketing expense, net, partially offset by a decrease in Cost of VOI Sales.

Year Ended December 31, 2024 vs 2023 (1)

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Other financing revenue 39 34 32 5 14.7

Premium amortization of acquired timeshare financing receivables

(43) (14) (33) (29) NM

Financing revenue 464 307 267 157 51.1

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Other financing expense 82 51 56 31 60.8

Amortization of acquired non-recourse debt discounts and premiums, net

Financing expense 188 99 103 89 89.9

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Financing profit margin 59.5 % 67.8 % 61.4 %

Financing profit increased by $44 million for the year ended December 31, 2023, compared to the same period in 2022, driven by an increase of $40 million in financing revenue, accompanied by a decrease in financing expense of $4 million.

Financing revenue increased by $40 million primarily due to interest income driven by an increase in our loan portfolio and an increase in the weighted-average interest rate.

Financing expense decreased by $4 million due to a decrease in bank fees partially offset by higher compensation costs due to increased headcount.

(1) NM - fluctuation in terms of percentage change is not meaningful.

Financing profit increased by $68 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding the $53 million impact of the Bluegreen Acquisition, Financing Profit increased $15 million, primarily due to higher interest income revenues partially offset by increased financing expenses.

Financing revenue increased by $157 million for the year ended December 31, 2024, compared to the same period in 2023.

For the same period, Financing revenue increased $53 million, excluding the $104 million impact related to the Bluegreen Acquisition, primarily due to an increase in the weighted average interest rate and carrying balance of the timeshare financing receivables portfolio.

Financing expense increased by $89 million for the year ended December 31, 2024, compared to the same period in 2023.

For the same period, Financing expense increased $38 million, excluding the $51 million impact related to the Bluegreen Acquisition, primarily due to an increase in the balance and weighted average interest rate on our non-recourse debt.

Resort Operations and Club Management Segment

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Resort and club management profit margin 70.8 % 68.9 % 69.9 %

Resort and club management profit increased by $19 million for the year ended December 31, 2023, compared to the same period in 2022, driven by an increase of $35 million in resort and club management revenue and partially offset by an increase of $16 million in resort and club management expenses.

The increases in resort operations and club management revenues were driven by an increase in license fee revenue and maintenance fees for the period.

The increase in resort and club management expenses is primarily due to personnel related costs incurred to service the increased transactions.

Resort and club management profit increased by $119 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding the $97 million impact related to the Bluegreen Acquisition, Resort and club management profit increased by $22 million, largely driven by higher management and license fees revenues partially offset by resort management expense to support the higher revenues.

Resort and club management revenues increased $153 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding the $113 million impact related to the Bluegreen Acquisition, Resort and club management revenues increased by $40 million, primarily due to higher management and license fees.

Resort and club management expenses increased $34 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding the $16 million impact related to the Bluegreen Acquisition, Resort and club

management expenses increased by $18 million, primarily due to personnel related costs incurred to manage the properties, in line with the increases in revenues.

Rental and Ancillary Services

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Rental and ancillary services profit margin 1.2 % 8.1 % 7.5 %

Rental and ancillary services profit increased by $7 million for the year ended December 31, 2023, compared to the same period in 2022, driven by an increase of $40 million in rental and ancillary services revenue primarily due to an increase in occupied room nights compared to the same period in 2022.

This was partially offset by an increase of $33 million in rental and ancillary expenses, consistent with the aforementioned increase in rental revenue.

Rental and ancillary services profit decreased by $45 million for the year ended December 31, 2024, compared to the same period in 2023.

Rental and ancillary services profit decreased by $28 million, excluding the $17 million unfavorable impact related to the Bluegreen Acquisition, primarily due to increases in rental expenses, partially offset by increases in rental revenue.

Rental and ancillary services revenue increased $67 million for the year ended December 31, 2024, compared to the same period in 2023.

For the same period, Rental and ancillary services revenue increased by $23 million, excluding the $44 million impact related to the Bluegreen Acquisition, primarily due to an increase in occupied room nights and higher daily rates.

Rental and ancillary services expenses increased $112 million for the year ended December 31, 2024, compared to the same period in 2023.

For the same periods, Rental and ancillary services expenses increased $51 million, excluding the $61 million impact related to the Bluegreen Acquisition, primarily due to an increase in development and maintenance fees.

Other Operating Expenses

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Impairment expense 2 3 17 (1) (33.3)

The change in other operating expenses for the year ended December 31, 2023, compared to the same period in 2022, was driven by decreased general and administrative costs and decreased depreciation and amortization expense.

General and administrative expenses decreased by $18 million, primarily related to decreased legal and professional fees.

Depreciation and amortization decreased by $31 million due to decreased amortization of trade names, management

contracts, and club member relationships acquired as a part of the Diamond Acquisition.

License fee expense increased by $14 million due to improved results related to increased travel demand.

Impairment expense decreased by $14 million due to fewer assets deemed unrecoverable in 2023 compared to the same period in 2022.

General and administrative expenses increased by $5 million for the year ended December 31, 2024, compared to the same period in 2023.

Excluding $37 million related to the impact of the Bluegreen Acquisition, General and administrative expenses decreased by $32 million when comparing to the same periods in 2023, primarily due to interest expense for a legal matter that was settled in early 2024.

Depreciation and amortization increased by $55 million for the year ended December 31, 2024, compared to the same period in 2023.

The increases were due to certain assets acquired in connection with the Bluegreen Acquisition.

License fee expense increased by $33 million for the year ended December 31, 2024, compared to the same period in 2023.

The increase was primarily due to amendments to our License Agreement as a result of the Bluegreen Acquisition.

Acquisition and Integration-Related Expense

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($ in millions) 2024 2023 2022 $ %

Acquisition and integration-related expense $ 68 $ 67 $ 106 $ 1 1.5

For the year ended December 31, 2023, acquisition and integration-related costs remained consistent compared to the same period in 2022.

Acquisition and integration-related costs incurred consisted of professional fees related to the Diamond Acquisition and the Bluegreen Acquisition in 2023 and solely related to the Diamond Acquisition in 2022.

Acquisition and integration-related expense $ 237 $ 68 $ 67 $ 169 NM

(1) NM - Fluctuation in terms of percentage change is not meaningful.

Acquisition and integration-related costs include direct expenses related to our recent acquisitions including integration costs, legal and other professional fees.

Integration costs include technology-related costs, fees paid to

management consultants, rebranding fees and employee-related costs such as severance and retention.

For the year ended December 31, 2024, acquisition and integration-related costs increased by $169 million compared to the same period in 2023.

The increases were primarily driven by costs associated with the Bluegreen Acquisition.

Non-Operating Expenses

3 unchanged sentences

Equity in earnings from unconsolidated affiliates (18) (12) (13) (6) 50.0

Other (gain) loss, net

Other loss (gain), net

11 (2) 1 13 NM

1 unchanged sentence

(1) NM - Fluctuation in terms of percentage change is not meaningful.

The change in non-operating expenses for the year ended December 31, 2023 compared to the same period in 2022, was primarily due to a $36 million increase in interest expense driven by an increase in interest rates and draws on our revolver credit facility to support operations and a $7 million increase in income tax expense primarily due to non-recurring state tax benefits recognized in the prior year.

The change in non-operating expenses for the year ended December 31, 2024 compared to the same period in 2023, was primarily due to a $151 million increase in interest expense, partially offset by a $60 million decrease in income tax expense.

The increase in interest expense was primarily due to an increase in the debt balance outstanding used to fund the Bluegreen acquisition compared to the same period in 2023.

The decrease in income tax expense was primarily driven by an overall change in earnings compared to the same period in 2023.

Net income attributable to noncontrolling interest

We include in our consolidated financial statements the results of operations and financial condition of Big Cedar, the joint venture with Bluegreen/Big Cedar Vacations, LLC in which HGV holds 51% equity interest.

Net income attributable to noncontrolling interest is the portion of Big Cedar that is attributable to Big Cedar Vacations, LLC, which holds the remaining 49% equity interest.

Net income attributable to the noncontrolling interest in Big Cedar was $13 million for the year ended December 31, 2024.

Liquidity and Capital Resources

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The following highlights certain matters that impacted our liquidity for the year ended December 31, 2024:

• In January 2023, we acquired inventory associated with a property in New York for $136 million from a third-party developer.

• In August 2023, we completed a securitization of $293 million of gross timeshare financing receivables.

The proceeds were primarily used to pay down in part some of the existing debt and for other general

corporate purposes.

Timeshare Financing Receivables and Note 15:

Debt and Non-recourse Debt for additional information.

• In December 2023, we completed the Grand Islander Acquisition for $117 million.

• During the year ended December 31, 2023, we repurchased $368 million of shares under our share repurchase programs.

• As of December 31, 2024, we had total cash and cash equivalents of $328 million and restricted cash of $438 million.

Restricted cash primarily consists of escrow deposits received on VOI sales and reserves related to non-recourse debt.

• During the year ended December 31, 2024, we repurchased 10 million shares for $432 million under our share repurchase programs.

Earnings Per Share for additional information.

• On January 10, 2024, we completed an offering for $900 million of senior secured notes due 2032 (“Senior Notes due 2032”).