Hilton Grand Vacations Inc. 10-K

ITEM 8. Financial Statements and Supplementary Data HILTON GRAND VACATIONS INC. INDEX TO FINANCIAL STATEMENTS Audited Consolidated Financial Statements of Hilton Grand Vacations Inc. Management’s Report on Internal Control Over Financial Reporting 73 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 74 Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 77 Internal Control Over Financial Reporting Consolidated Balance Sheets as of December 31, 202 4 and 202 3 78 Consolidated Statements of I ncome for the years ended December 31, 202 4 , 202 3 and 20 22 79 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 4 , 202 3 and 20 22 80 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 20 22 81 Consolidated Statements of Equity for the years ended December 31, 202 4 , 202 3 and 20 22 82 Notes to Consolidated Financial Statements 83 72 Table of Contents Management's Report on Internal Control Over Financial Reporting Management of Hilton Grand Vacations Inc. (the "Company") is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets of the Company that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). The scope of our efforts to comply with Section 404 of the Sarbanes-Oxley Act with respect to 2024 included all of our operations other than those of Bluegreen Vacations Holding Corporation ("Bluegreen") which we acquired in 2024 as described in Note 3 to the consolidated financial statements. In accordance with the SEC’s published guidance, because we acquired these operations during the year, we excluded these operations from our efforts to comply with Section 404 with respect to 2024. The acquired operations of Bluegreen constituted approximately 26.0% of total assets as of December 31, 2024 and 19.8% and 15.4% of revenues and income before income taxes, respectively, for the year then ended. The SEC’s published guidance specifies that the period in which management may omit an assessment of an acquired business’s internal control over financial reporting from its assessment of the Company’s internal control may not extend beyond one year from the date of acquisition. Based on our assessment, which as discussed herein excluded the operations of Bluegreen, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2024. Ernst & Young LLP, the independent registered public accounting firm that has audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2024. The report is included herein. 73 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Hilton Grand Vacations Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Hilton Grand Vacations Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 3, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Cost of VOI Sales Description of the Matter For the year ended December 31, 2024, the Company’s cost of vacation ownership intervals and interests (“VOI”) sales was $239 million, which includes amounts recognized by the Legacy-HGV, Legacy-Diamond and Legacy-Bluegreen operations. As discussed in Note 2 to the consolidated financial statements, the Company accounts for cost of VOI sales using the relative sales value method. Changes in estimates within the relative sales value calculations are recognized on a retrospective basis through corresponding adjustments to inventory and cost of sales in the period in which the estimates are revised. Auditing management’s application of the relative sales value method was complex and highly judgmental due to the estimation uncertainty in determining the significant assumptions required to apply the method, including future VOI sales prices, timing and volume of VOI sales, and provisions for financing receivables losses on financed sales of VOIs. 74 Table of Contents Cost of VOI Sales (Continued) How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Legacy-Diamond cost of VOI sales process. For example, we tested controls over management’s review of the Legacy-Diamond cost of VOI sales calculations used as part of the relative sales value method, including the significant assumptions described above. To test cost of VOI sales for Legacy-HGV, Legacy-Diamond and Legacy-Bluegreen, we performed audit procedures that included, among others, assessing the methodologies used by management, evaluating the significant assumptions discussed above and testing the underlying data used by the Company within its analyses. We performed analytical procedures to evaluate whether individual timeshare project or individual collection cost of VOI sales rates are consistent with expectations. We also compared the significant assumptions used by management to historical trends to determine whether the projections of future VOI sales prices and the timing and volume of VOI sales are appropriate. Furthermore, we compared the estimated provisions for financing receivables to projections separately audited for the allowance for financing receivables Allowance for Financing Receivables Losses Description of the Matter At December 31, 2024, the Company’s allowance for financing receivables losses was $1.1 billion, which includes amounts recognized by the Legacy-HGV, Legacy-Diamond and Legacy-Bluegreen operations, inclusive of acquired portfolios for Legacy-Diamond and Legacy-Bluegreen. As discussed in Note 2 to the consolidated financial statements, for the originated portfolio, the Company records an estimate of variable consideration as a reduction of revenue from financed VOI sales at the time revenue is recognized. Variable consideration, which has not been included within the transaction price, is presented as a reserve on the financing receivable. For the acquired portfolio, an allowance is established on the acquisition date, and any changes to the estimates of the allowance are recorded within Financing expense on the consolidated statements of income in the period in which the change occurs. The Company uses a technique referred to as the static pool analysis as the basis for determining the default rates and the allowance for financing receivables losses. The static pool analysis uses default rate information accumulated from several years of historical loan data to estimate future expected defaults on the outstanding financing receivables. The adequacy of the related allowance is determined by management through analysis of several factors, such as current and forward-looking economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. Specifically, as it relates to the acquired Legacy-Bluegreen portfolio, the Company estimated default rates with adjustments to historical data to capture management’s estimates of where historical data may not be representative of future estimated defaults. Auditing the allowance for financing receivables losses was challenging and required additional audit effort due to the high volume of data that is utilized in applying the static pool analysis. Additionally, the allowance for financing receivables losses is sensitive to changes in the estimated default rates given the size of the outstanding timeshare financing receivable balance as of year-end. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Legacy-Diamond allowance for the financing receivables losses process. For example, we tested controls over management’s review of the Legacy-Diamond allowance for financing receivables losses calculations, including the completeness and accuracy of the underlying data in the static pool model, and management’s review that the historical data is representative of current and forward-looking economic conditions and industry trends, as well as the specific risk characteristics of the portfolio. To test the allowance for financing receivables, we performed audit procedures that included, among others, assessing the methodology discussed above, and testing the completeness and accuracy of the underlying data used by the Company in its analyses. We evaluated management’s assessment of whether historical data reflects current and forward-looking economic conditions in estimating the allowance. We also compared data used in the static pool analyses to historical data from prior periods. We analytically compared current year default rates to prior year default rates. In addition, we recalculated the allowance for financing receivables for certain pools of loans. For the acquired portfolio of Legacy – Bluegreen, we involved our valuation specialists to assist with our evaluation of the allowance for financing receivable losses. 75 Table of Contents Accounting for the Acquisition of Bluegreen Vacations Holding Corporation Description of the Matter As described in Note 3 to the consolidated financial statements, the Company acquired Bluegreen Vacations Holding Corporation (“Bluegreen”), on January 17, 2024, in an all-cash transaction, with total consideration of approximately $1.6 billion. The acquisition was accounted for as a business combination and, as such, the Company was required to record the assets acquired, liabilities assumed and noncontrolling interest at their acquisition-date fair values, which included $871 million of timeshare financing receivables, net, $479 million of management contracts intangible asset and $363 million of inventory. Auditing management’s acquisition of Bluegreen involved especially subjective judgments and complex analysis relating to the fair value estimates of timeshare financing receivables, net, management contracts intangible asset and inventory. The estimates of fair value of timeshare financing receivables, net, management contracts intangible asset and inventory are sensitive to changes in significant assumptions. The significant assumption used by management in determining the fair value of timeshare financing receivables, net was the default rate. The significant assumptions used by management in determining the fair value of the management contracts intangible asset included anticipated revenue growth rates and the discount rate. The significant assumption used by management in determining the fair value of inventory was projected revenues to be derived from such inventory. The aforementioned significant assumptions are affected by expectations about future market and economic conditions. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Bluegreen business combination accounting process. We tested controls over the valuation of the timeshare financing receivables, net, management contracts intangible asset and inventory, including the Company’s controls over its determination of valuation approaches and methods selected, as well as evaluation of the significant assumptions used in the fair value measurements as described above. To test the fair values of timeshare financing receivables, net, the management contracts intangible asset and inventory, our audit procedures, among others, included evaluating the Company's valuation methods and significant assumptions used and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We compared the significant assumptions used by management to current and future economic trends, where applicable, the historical results of the acquired business, and other relevant factors, including industry publications. Where applicable, we compared actual results to the forecasted assumptions. We involved our valuation specialists to assist with our evaluation of the valuation methods and the significant assumptions noted above, including the default rate for timeshare financing receivables, net, the anticipated revenue growth rates and the discount rate for the management contracts intangible asset and projected revenues for inventory. /s/ Ernst & Young LLP We have served as the Company's auditor since 2016. Orlando, Florida March 3, 2025 76 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Hilton Grand Vacations Inc. Opinion on Internal Control Over Financial Reporting We have audited Hilton Grand Vacation Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Hilton Grand Vacations Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Bluegreen Vacations Holding Corporation, which is included in the 2024 consolidated financial statements of the Company and constituted approximately 26.0% of total assets as of December 31, 2024 and 19.8% and 15.4% of revenues and income before taxes, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Bluegreen Vacations Holding Corporation. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated March 3, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Orlando, Florida March 3, 2025 77 Table of Contents HILTON GRAND VACATIONS INC. CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) December 31, 2024 2023 ASSETS Cash and cash equivalents $ 328 $ 589 Restricted cash 438 296 Accounts receivable, net 315 507 Timeshare financing receivables, net 3,006 2,113 Inventory 2,244 1,400 Property and equipment, net 792 758 Operating lease right-of-use assets, net 84 61 Investments in unconsolidated affiliates 73 71 Goodwill 1,985 1,418 Intangible assets, net 1,787 1,158 Other assets 390 314 TOTAL ASSETS (variable interest entities - $ 2,192 in 2024 and $ 1,459 in 2023) $ 11,442 $ 8,685 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ 1,125 $ 952 Advanced deposits 226 179 Debt, net 4,601 3,049 Non-recourse debt, net 2,318 1,466 Operating lease liabilities 100 78 Deferred revenues 252 215 Deferred income tax liabilities 925 631 Total liabilities (variable interest entities - $ 2,318 in 2024 and $ 1,472 in 2023) 9,547 6,570 Commitments and contingencies - see Note 23 Equity: Preferred stock, $ 0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2024 and 2023 — — Common stock, $ 0.01 par value; 3,000,000,000 authorized shares, 96,720,179 shares issued and outstanding as of December 31, 2024, and 105,961,160 shares issued and outstanding as of December 31, 2023 1 1 Additional paid-in capital 1,399 1,504 Accumulated retained earnings 352 593 Accumulated other comprehensive income — 17 Total stockholders' equity 1,752 2,115 Noncontrolling interest 143 — Total equity 1,895 2,115 TOTAL LIABILITIES AND EQUITY $ 11,442 $ 8,685 See notes to consolidated financial statements. 78 Table of Contents HILTON GRAND VACATIONS INC. CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share amounts) Year Ended December 31, 2024 2023 2022 Revenues Sales of VOIs, net $ 1,909 $ 1,416 $ 1,491 Sales, marketing, brand and other fees 637 634 620 Financing 464 307 267 Resort and club management 722 569 534 Rental and ancillary services 733 666 626 Cost reimbursements 516 386 297 Total revenues 4,981 3,978 3,835 Expenses Cost of VOI sales 239 194 274 Sales and marketing 1,768 1,281 1,146 Financing 188 99 103 Resort and club management 211 177 161 Rental and ancillary services 724 612 579 General and administrative 199 194 212 Acquisition and integration-related expense 237 68 67 Depreciation and amortization 268 213 244 License fee expense 171 138 124 Impairment expense 2 3 17 Cost reimbursements 516 386 297 Total operating expenses 4,523 3,365 3,224 Interest expense ( 329 ) ( 178 ) ( 142 ) Equity in earnings from unconsolidated affiliates 18 12 13 Other (loss) gain, net ( 11 ) 2 ( 1 ) Income before income taxes 136 449 481 Income tax expense ( 76 ) ( 136 ) ( 129 ) Net income 60 313 352 Net income attributable to noncontrolling interest 13 — — Net income attributable to stockholders $ 47 $ 313 $ 352 Earnings per share attributable to stockholders: Basic $ 0.46 $ 2.84 $ 2.98 Diluted $ 0.45 $ 2.80 $ 2.93 See notes to consolidated financial statements. 79 Table of Contents HILTON GRAND VACATIONS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2024 2023 2022 Net income $ 60 $ 313 $ 352 Derivative instrument adjustments, net of tax ( 4 ) ( 16 ) 46 Foreign currency translation adjustments, net of tax ( 13 ) ( 6 ) ( 7 ) Other comprehensive (loss) income, net of tax ( 17 ) ( 22 ) 39 Comprehensive income attributable to noncontrolling interest 13 — — Comprehensive income attributable to stockholders $ 30 $ 291 $ 391 See notes to consolidated financial statements. 80 Table of Contents HILTON GRAND VACATIONS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2024 2023 2022 Operating Activities Net income $ 60 $ 313 $ 352 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 268 213 244 Amortization of deferred financing costs, acquisition premiums and other 83 33 52 Provision for financing receivables losses 377 171 142 Impairment expense 2 3 17 Other loss (gain), net 11 ( 2 ) 3 Share-based compensation 47 40 46 Deferred income tax benefit ( 29 ) ( 23 ) ( 38 ) Equity in earnings from unconsolidated affiliates ( 18 ) ( 12 ) ( 13 ) Return on investment in unconsolidated affiliates 16 16 — Net changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net 224 10 ( 177 ) Timeshare financing receivables, net ( 563 ) ( 315 ) ( 224 ) Inventory ( 78 ) ( 64 ) 100 Purchases and development of real estate for future conversion to inventory ( 127 ) ( 39 ) ( 8 ) Other assets ( 8 ) ( 8 ) ( 34 ) Accounts payable, accrued expenses and other 21 ( 86 ) 294 Advanced deposits 6 29 37 Deferred revenues 17 33 ( 46 ) Net cash provided by operating activities 309 312 747 Investing Activities Acquisitions, net of cash, cash equivalents and restricted cash acquired ( 1,444 ) ( 74 ) — Capital expenditures for property and equipment (excluding inventory) ( 42 ) ( 31 ) ( 58 ) Software capitalization costs ( 84 ) ( 44 ) ( 39 ) Other ( 1 ) ( 9 ) — Net cash used in investing activities ( 1,571 ) ( 158 ) ( 97 ) Financing Activities Proceeds from debt 2,758 758 40 Proceeds from non-recourse debt 1,849 868 769 Repayment of debt ( 1,353 ) ( 373 ) ( 313 ) Repayment of non-recourse debt ( 1,590 ) ( 694 ) ( 990 ) Payment of debt issuance costs ( 62 ) ( 7 ) ( 13 ) Repurchase and retirement of common stock ( 432 ) ( 368 ) ( 272 ) Payment of withholding taxes on vesting of restricted stock units ( 21 ) ( 14 ) ( 8 ) Proceeds from employee stock plan purchases 12 8 5 Proceeds from stock option exercises 7 9 2 Distributions to noncontrolling interest holder ( 10 ) — — Other ( 2 ) ( 4 ) ( 2 ) Net cash provided by (used in) financing activities 1,156 183 ( 782 ) Effect of changes in exchange rates on cash, cash equivalents and restricted cash ( 13 ) ( 7 ) ( 8 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 119 ) 330 ( 140 ) Cash, cash equivalents and restricted cash, beginning of period 885 555 695 Cash, cash equivalents and restricted cash, end of period 766 885 555 Less: Restricted cash 438 296 332 Cash and cash equivalents $ 328 $ 589 $ 223 See notes to consolidated financial statements. 81 Table of Contents HILTON GRAND VACATIONS INC. CONSOLIDATED STATEMENTS OF EQUITY (in millions) Common Stock Additional Paid-in Capital Accumulated Retained Earnings Accumulated Other Comprehensive Income Noncontrolling Interest Total Equity Shares Amount Balance as of December 31, 2021 120 $ 1 $ 1,630 $ 357 $ — $ — $ 1,988 Net income — — — 352 — — 352 Activity related to share-based compensation — — 40 — — — 40 Employee stock plan issuance — — 4 — — — 4 Foreign currency translation adjustments, net of tax — — — — ( 7 ) — ( 7 ) Derivative instrument adjustments, net of tax — — — — 46 — 46 Repurchase and retirement of common stock ( 7 ) — ( 92 ) ( 180 ) — — ( 272 ) Balance as of December 31, 2022 113 $ 1 $ 1,582 $ 529 $ 39 $ — $ 2,151 Net income — — — 313 — — 313 Activity related to share-based compensation 1 — 35 — — — 35 Employee stock plan issuance — — 8 — — — 8 Foreign currency translation adjustments, net of tax — — — — ( 6 ) — ( 6 ) Derivative instrument adjustments, net of tax — — — — ( 16 ) — ( 16 ) Repurchase and retirement of common stock ( 8 ) — ( 121 ) ( 249 ) — — ( 370 ) Balance as of December 31, 2023 106 $ 1 $ 1,504 $ 593 $ 17 $ — $ 2,115 Net income — — — 47 — 13 60 Acquisition of noncontrolling interest — — — — — 140 140 Distributions to noncontrolling interest holder — — — — — ( 10 ) ( 10 ) Activity related to share-based compensation 1 — 32 — — — 32 Employee stock plan issuance — — 12 — — — 12 Foreign currency translation adjustments, net of tax — — — — ( 13 ) — ( 13 ) Derivative instrument adjustments, net of tax — — — — ( 4 ) — ( 4 ) Repurchase and retirement of common stock ( 10 ) — ( 149 ) ( 288 ) — — ( 437 ) Balance as of December 31, 2024 97 $ 1 $ 1,399 $ 352 $ — $ 143 $ 1,895 See notes to consolidated financial statements. 82 Table of Contents . HILTON GRAND VACATIONS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION Our Business 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 brands. Our operations primarily consist of selling vacation ownership intervals and vacation ownership interests (collectively, “VOIs” or “VOI”) for us and third parties; financing and servicing loans provided to consumers for their timeshare purchases; operating resorts and timeshare plans; and managing our clubs and exchange programs. As of December 31, 2024, we had 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, South Carolina, California, Arizona, Virginia, and Nevada. Bluegreen Acquisition On January 17, 2024 (“Bluegreen Acquisition Date”), we completed the acquisition of Bluegreen Vacations Holding Corporation (“Bluegreen”) (the “Bluegreen Acquisition”) in an all-cash transaction, for total consideration of approximately $ 1.6 billion, inclusive of net debt assumed. The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations, creating a premier vacation ownership and experiences company. This Annual Report on Form 10-K includes Bluegreen’s results of operations beginning on January 17, 2024. See Note 3: Acquisitions for additional information. Basis of Presentation The consolidated financial statements presented herein include all of our assets, liabilities, revenues, expenses and cash flows as well as all entities in which we have a controlling financial interest. The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of rights held by other interests. If the entity is considered to be a variable interest entity (“VIE”), we determine whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity. We consolidate entities when we own more than 50% of the voting shares of a company or otherwise have a controlling financial interest, including Bluegreen/Big Cedar Vacations LLC, a joint venture in which HGV is deemed to hold a controlling financial interest based on its 51 % equity interest (“Big Cedar”), its active role as the day-to-day manager of its activities, and majority voting control of its management committee. HGV acquired its equity interest in Big Cedar as part of the Bluegreen Acquisition. All material intercompany transactions and balances have been eliminated in consolidation. Our accompanying consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation. The consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606. Revenue is recognized upon the transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve the core principle of the guidance, we take the following steps: (i) identify the contract with the customer; (ii) determine whether the promised goods or services are separate performance obligations in the contract; (iii) determine the transaction price, including considering the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract based on the standalone selling price or estimated standalone selling price of the good or service; and (v) recognize revenue when (or as) we satisfy each performance obligation. 83 Table of Contents Contracts with Multiple Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. For arrangements that contain multiple goods or services, we determine whether such goods or services are distinct performance obligations that should be accounted for separately in the arrangement, and allocate the transaction price based on the relative standalone sales price of the performance obligations. We then recognize the revenue allocated to each performance obligation as the related performance obligation is satisfied as discussed below. • Sales of VOIs, net — Customers who purchase our vacation ownership products, whether paid in cash or financed, enter into multiple contracts, which we combine and account for as a single contract. Revenue from VOI sales is recognized at the point in time when control of the VOI is transferred to the customer which is when the customer has executed a binding sales contract, collectability is reasonably assured, the purchaser’s period to cancel for a refund has expired and the customer has the right to use the VOI. Revenue from sales of VOIs under construction is deferred until the point in time when construction activities are deemed to be completed, occupancy of the development is permissible, and the above criteria has been met. For financed sales, we estimate the variable consideration to be received under such contracts and recognize revenue net of amounts deemed uncollectible, as the VOI is returned to inventory upon customer default. The variable consideration is estimated based on the expected value method, which is based on historical default rates, to the extent that it is probable that a significant reversal is not expected to occur. Variable consideration which has not been included within the transaction price is presented as a reserve on the financing receivable. See Note 7: Timeshare Financing Receivables for additional information regarding our estimate of variable consideration. Vacation ownership product sales include revenue from the sale of VOIs, which in the case of the trust products, are represented by an annual or biennial allotment of points that can be utilized for vacations at resorts in our network for varying lengths of stay. Typical contracts include the sale of VOIs, certain sales incentives primarily in the form of additional points for use over a specified period of time (“Bonus Points”), and generally membership of HGV Max, Hilton Grand Vacations Club, Hilton Club, Diamond clubs or Bluegreen Vacation Club (collectively the “Clubs”), each of which represent a separate and distinct performance obligation for which consideration is allocated based on the estimated stand-alone selling price of the sales incentives and membership dues. We recognize revenue related to our VOIs when control of the points passes to the customer, which generally occurs after the expiration of the applicable statutory rescission period and after collectability is reasonably assured and the customer has the right to use the VOI. Bonus Points are valid for a specified period of time (generally for a period between 18 and 30 months) and may be used for stays at properties within our resort network, or converted to use for hotel reservations within Hilton’s system and VOI interval exchanges with other third-party vacation ownership exchanges. At the time of the VOI sale, we estimate the fair value of sales incentives to be redeemed, including an adjustment for estimated breakage, to determine the standalone selling price of these incentives. We defer a portion of the total transaction price for the combined VOI contract as a liability for the incentives and recognize the corresponding revenue at the point in time when the customer receives the benefits of the incentives, which is upon the customer’s redemption of the Bonus Points. At that time, we also determine whether we are principal or agent for the redeemed good or service and recognize revenue on a gross or net basis accordingly. • Sales, marketing, brand and other fees — We enter into contracts with third-party developers to sell VOIs on their behalf through fee-for-service agreements for which we earn sales commissions and other fees. These commissions are variable as they are based on the sales and marketing results, which are subject to the constraint on variable consideration and resolved on a monthly basis over the contract term. We estimate such commissions to the extent that it is probable that a significant reversal of such revenue will not occur and recognize the commissions as the developer receives and consumes the benefits of the services. Any changes in these estimates would affect revenue and earnings in the period such variances are realized. Additionally, we enter into contracts to sell prepaid vacation packages. Our obligation in such contracts is satisfied when customers stay at our properties; therefore, we recognize revenue inclusive of an estimate for expected breakage for these packages when they are redeemed. • Resort and club management — As part of our VOI sales, a majority of our customers enter into a Club arrangement which allows the member to exchange points for a number of vacation options. We manage the Clubs, receiving annual dues, transaction fees from member exchanges, and, when applicable, 84 Table of Contents activation fees. The member's first year of annual dues and, when applicable, the activation fee, are payable at the time of the VOI sale. The Club activation fee relates to a one-time fee paid by the customer at the time a customer joins one of our Clubs. Since our customers are granted the opportunity to renew their membership on an annual basis for no additional activation fee, we defer and amortize the activation fee on a straight-line basis using a seven-year average club membership. Annual dues for membership renewals are billed each year, and we recognize revenue from these annual dues over the period services are rendered. A member may elect to enter into an optional exchange transaction at which point the member pays their required transaction fee. This option does not represent a material right as the transactions are priced at their standalone selling price. Revenue related to the transaction is recognized when the services are rendered. As part of our resort operations, we contract with Homeowner’s Associations (“HOAs”) to provide day-to-day-management services, including housekeeping services, operation of a reservation system, maintenance, and certain accounting and administrative services. We receive compensation for such management services, which is generally based on a percentage of costs to operate the resorts, on a monthly basis. These fees represent a form of variable consideration and are recognized over time as the HOAs receive and consume the benefits of the management services. Management fees earned related to the portion of unsold VOIs at each resort which we own are recognized on a net basis given we retain these VOIs in our inventory. • Rental and ancillary services — Our rental and ancillary services consist primarily of rental revenues on unoccupied vacation ownership units and inventory made available due to ownership exchanges through our club program and ancillary revenues. Rental revenue is recognized when occupancy has occurred. Advance deposits on the rental unit and the corresponding revenue are deferred and recognized upon the customer’s vacation stay. Ancillary revenues consist of food and beverage, retail, spa offerings and other items. We recognize ancillary revenue when goods have been provided and/or services have been rendered. We account for rental operations of unsold VOIs, including accommodations provided through the use of our vacation sampler programs, as incidental operations. In all periods presented, incremental carrying costs exceeded incremental revenues, and all revenues and expenses are recognized in the period earned or incurred. • Cost reimbursements — As part of our management agreements with HOAs and fee-for-service developers, we receive cost reimbursements for performing the day-to-day management services, including direct and indirect costs that HOAs and developers reimburse to us. These costs primarily consist of insurance, payroll and payroll related costs for management of the HOAs and other services we provide where we are the employer and provide insurance. Cost reimbursements are based upon actual expenses with no added margin, and are billed to the HOA on a monthly basis. We recognize cost reimbursements when we incur the related reimbursable costs as the HOA receives and consumes the benefits of the management services. We capitalize all incremental costs incurred to obtain a contract when such costs would not have been incurred if the contract had not been obtained. We elect to expense costs incurred to obtain a contract when the deferral period would be one year or less. These contract costs are recognized at the point in time that the revenue related to the incentive is recognized. Commissions for VOI sales for resorts under construction are expensed when the associated VOI revenue is recognized which is upon completion of the resort. These commissions are classified as Sales and marketing expense in our consolidated statements of income. As of December 31, 2024 and 2023, the ending asset balances for costs to obtain a contract were $ 19 million and $ 11 million, respectively, relating to deferred commission costs for certain vacation package sales and VOI sales of resorts under construction. For the year ended December 31, 2024, we recognized $ 11 million of expense related to costs deferred as of December 31, 2023. For the year ended December 31, 2023, we recognized $ 7 million of expense related to costs deferred as of December 31, 2022. For the year ended December 31, 2022, we recognized $ 9 million of expense related to costs deferred as of December 31, 2021. Other than the United States, there were no countries that individually represented more than 10% of total revenues for the years ended December 31, 2024, 2023 and 2022. 85 Table of Contents For the years ended December 31, 2024, 2023 and 2022, we did not earn more than 10% of our total revenue from one customer. We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent with respect to these taxes and fees. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. See Note 4: Revenue from Contracts with Customers for additional information. Business Combinations We account for our business combinations in accordance with the acquisition method of accounting. We allocate the purchase price of an acquisition to the tangible and intangible assets acquired, liabilities assumed and noncontrolling interest based on their estimated fair values at the acquisition date. For each acquisition, we recognize goodwill as the amount in which consideration transferred for the acquired entity exceeds the fair values of net assets plus noncontrolling interest. The fair value of net assets is the fair value assigned to the assets acquired reduced by the fair value assigned to liabilities assumed. In determining the fair values of assets acquired, liabilities assumed and noncontrolling interest, we use various recognized valuation methods including discounted cash flow models, and the income, cost and market approaches. We utilize independent valuation specialists under our supervision for certain of our assignments of fair value. We record the net assets, noncontrolling interest and results of operations of an acquired entity in our consolidated financial statements from the acquisition date through period-end. We expense acquisition-related expenses as incurred and include such expenses within Acquisition and integration-related expense on our consolidated statements of income. See Note 3: Acquisitions for additional information. Acquired Financial Assets with Credit Deterioration When financial assets are acquired, whether in connection with a business combination or an asset acquisition, we evaluate whether those acquired financial assets have experienced a more-than-insignificant deterioration in credit quality since origination. Financial assets that were acquired with evidence of such credit deterioration are referred to as purchased credit deteriorated (“PCD”) assets and reflect the acquirer’s assessment at the acquisition date. The evaluation of PCD assets is a qualitative assessment requiring management judgment. We consider indicators such as delinquency, FICO score deterioration, purchased credit impaired status from prior acquisition, certain account status codes which we believe are indicative of credit deterioration, foreign currency exchange risks, as well as certain loan activity such as modifications and downgrades. In addition, we consider the impact of current and forward-looking economic conditions relative to the conditions which would have existed at origination. Acquired PCD assets are recorded at the purchase price, represented by the acquisition date fair value, and subsequently “grossed-up” by the acquirer’s acquisition date assessment of the allowance for credit losses. The purchase price and the initial allowance for credit losses collectively represent the PCD asset’s initial amortized cost basis. While the initial allowance for credit losses of PCD assets does not impact period earnings, the Company remeasures the allowance for credit losses for PCD assets during each subsequent reporting period; changes in the allowance are recognized as provision expense within period earnings. The difference over which par value of the acquired PCD assets exceeds the purchase price plus the initial allowance for credit losses is reflected as a non-credit discount (or premium) and is accreted into interest income (or as a reduction to interest income) under the effective interest method. Acquired financial assets which are not PCD assets are also recorded at the purchase price but are not similarly “grossed-up”. The acquirer recognizes an allowance for credit losses as of the acquisition date, which is recognized with a corresponding provision expense impact within earnings. The allowance is remeasured within each subsequent reporting period in the same manner as for PCD assets, with any change in the allowance recognized as provision expense in period earnings. We acquired PCD assets as part of the Diamond Acquisition, the Grand Islander Acquisition and the Bluegreen Acquisition which are referred to as “Legacy-Diamond”, “Legacy-Grand Islander”, and “Legacy-Bluegreen”, respectively. See Note 3: Acquisitions and Note 7: Timeshare Financing Receivables for additional information. Investments in Unconsolidated Affiliates We account for investments in unconsolidated affiliates under the equity method of accounting when we exercise significant influence, but do not maintain a controlling financial interest over the affiliates. We evaluate our investments in affiliates for impairment when there are indicators that the fair value of our investment may be less than our carrying value. See Note 11: Investments in Unconsolidated Affiliates for additional information. 86 Table of Contents Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less. Restricted Cash Restricted cash includes deposits received on VOI sales that are held in escrow until legal requirements of the local jurisdictions are met with regards to project construction or contract status and cash reserves required by our non-recourse debt agreements. Restricted cash also includes certain amounts collected on behalf of HOAs. See Note 5: Restricted Cash for additional information. Accounts Receivable and Allowance for Credit Losses Accounts receivable primarily consists of trade receivables and is reported as the customers’ outstanding balances, less any allowance for credit losses. The expected credit losses are measured using an expected-loss model that reflects the risk of loss and considers the losses expected over the outstanding period of the receivable. See Note 6: Accounts Receivable for additional information. Cloud Computing Arrangements We capitalize certain costs associated with cloud computing arrangements (“CCAs”). These costs are included in Other assets in our consolidated balance sheets and are expensed in the same line as the hosting arrangement in our consolidated statements of income using the straight-line method over the assets’ estimated useful lives, which is generally three to five years . We review the CCAs for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of income. Derivative Instruments We use derivative instruments as part of our overall strategy to manage our exposure to market risks primarily associated with fluctuations in interest rates and do not use derivatives for trading or speculative purposes. We record the derivative instrument at fair value either as an asset or liability. We assess the effectiveness of our hedging instruments quarterly and record changes in fair value in Accumulated other comprehensive income for the effective portion of the hedge and record the ineffectiveness of a hedge immediately in earnings in our consolidated statement of income. We release the derivative’s gain or loss from accumulated other comprehensive income to match the timing of the underlying hedged item's effect on earnings. See Note 15: Debt and Non-recourse Debt for additional information. Timeshare Financing Receivables and Allowance for Financing Receivables Losses Our timeshare financing receivables consist of loans that are secured by the underlying timeshare properties. We have two timeshare financing receivables portfolios: (i) originated and (ii) acquired. Our originated portfolio represents timeshare financing receivables that originated by Legacy-Diamond, Legacy-Grand Islander, and Legacy-Bluegreen subsequent to each respective acquisition date and all HGV timeshare financing receivables. Our acquired portfolio includes all timeshare financing receivables acquired from Legacy-Diamond, Legacy-Grand Islander and Legacy-Bluegreen that existed as of the respective acquisition dates. We evaluate each portfolio collectively, since each holds a large group of homogeneous timeshare financing receivables, which are individually immaterial. We monitor the collectability of our receivables on an ongoing basis. There are no significant concentrations of collection risk with any individual counterparty or groups of counterparties. We use a technique referred to as static pool analysis as the basis for estimating expected defaults and determining our allowance for financing receivable losses on our timeshare financing receivables. The static pool analysis includes several years of default data through which we stratify our portfolio using certain key dimensions such as FICO scores and equity percentage at the time of sale. The adequacy of the related allowance is determined by management through analysis of several factors, such as current and forward-looking economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. Specifically as it relates to the acquired Legacy-Bluegreen portfolio, we estimated default rates with adjustments to historical data to capture our estimates of where historical data may not be representative of future estimated defaults. For our originated portfolio, we record an estimate of variable consideration as a reduction of revenue from financed VOI sales at the time revenue is recognized; for our acquired portfolio, any changes to the estimates of our allowance are recorded within Financing expense on our consolidated statements of income in the period in which the change occurs. In addition, for our acquired portfolio we also develop an inventory recovery assumption to reflect the recovery value of VOIs from future potential defaults. Our estimate of inventory recovery is principally based upon the fair value of underlying VOIs and assumed default rates and is reflected as a reduction to the estimated gross allowance. Once a timeshare financing receivable within the acquired portfolio is charged-off, the loan's corresponding inventory recovery amount is reclassified from the allowance into inventory. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. 87 Table of Contents We determine our timeshare financing receivables to be past due based on the contractual terms of the individual mortgage loans. We recognize interest income on our timeshare financing receivables as earned. The interest rate charged on the notes correlates to the risk profile of the borrower at the time of purchase and the percentage of the purchase that is financed, among other factors. We apply payments we receive for loans, including those in non-accrual status, to amounts due in the following order: servicing fees; interest; principal; and late charges. Once a loan is 91 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 91 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the loan is 121 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process, which is governed by product type and law, is complete. See Note 7: Timeshare Financing Receivables for additional information. Inventory and Cost of Sales Inventory includes unsold, completed VOIs and VOIs under construction. We carry our completed VOI inventory at the lower of cost or estimated fair value, less costs to sell, which can result in impairment losses and/or recoveries of previous impairments. Projects under development are under a held and use impairment model and are reviewed for indicators of impairment quarterly. We capitalize costs directly associated with the acquisition, development and construction of a real estate project when it is probable that the project will move forward. We capitalize salary and related costs only to the extent they directly relate to the project. We capitalize interest expense, taxes and insurance costs when activities that are necessary to get the property ready for its intended use are underway. We cease capitalization of costs during prolonged gaps in development when substantially all activities are suspended or when projects are considered substantially complete. For the years ended December 31, 2024, 2023 and 2022, we had capitalized interest of $ 10 million, $ 3 million and $ 2 million, respectively. We account for our VOI inventory and cost of VOI sales using the relative sales value method. Also, we do not reduce inventory for the cost of VOI sales related to anticipated defaults, and accordingly, no adjustment is made when inventory is reacquired upon default of the related receivable. This results in changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as cost of sales true-ups, and are included in Cost of VOI sales in our consolidated statements of income to retrospectively adjust the margin previously recognized subject to those estimates. Significant assumptions include future VOI sales prices, timing and volume of VOI sales, and provisions for financing receivables losses on financed sales of VOIs. Other assumptions include sales incentives, projected future cost and volume of recoveries. See Note 8: Inventory for additional information. Property and Equipment Property and equipment are recorded at cost and include land, buildings and leasehold improvement and furniture and equipment at our corporate offices, sales centers and management offices. Additionally, certain property and equipment is held for future conversion into inventory. Construction in progress primarily relates to development activities. Costs that are capitalized related to development activities are classified as property and equipment until they are registered for sale. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. Other than the United States, there were no countries that individually represented over 10% of total property and equipment, net as of December 31, 2024 and 2023. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: buildings and improvements ( eight to forty years ); furniture and equipment ( three to fifteen years , including our corporate jet); and computer equipment and acquired software ( three years ). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term. We evaluate the carrying value of our property and equipment if there are indicators of potential impairment. We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, we calculate the asset’s fair value. The impairment loss recognized is equal to the amount that the net book value is in excess of fair value. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers. See Note 9: Property and Equipment for additional information. 88 Table of Contents Leases We lease sales centers, office space and equipment under lease agreements. We determine if an arrangement is a lease at inception. Amounts related to operating leases are included in Operating lease right-of-use (“ROU”) assets, net and Operating lease liabilities in our consolidated balance sheets. ROU assets are adjusted for lease incentives received. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Because most of our leases do not provide an explicit or implicit rate of return, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. Our operating leases may require minimum rent payments, contingent rent payments based on a percentage of revenue or income, or rental payments adjusted periodically for inflation or rent payments equal to the greater of a minimum rent or contingent rent. Our leases do not contain any residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and lease expense is recognized on a straight-line basis over the lease term. We monitor events or changes in circumstances that change the timing or amount of future lease payments which results in the remeasurement of a lease liability, with a corresponding adjustment to the ROU asset. ROU assets for operating and finance leases are periodically reviewed for impairment losses under ASC 360-10, Property, Plant, and Equipment , to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. See Note 17: Leases for additional information. Goodwill Goodwill acquired in business combinations is assigned to the reporting units expected to benefit from the combination as of the acquisition date. We do not amortize goodwill. We evaluate goodwill for potential impairment at least annually, on October 1, or more frequently if an event or other circumstance indicates that it is more-likely-than-not that we may not be able to recover the carrying amount (book value) of the net assets of the related reporting unit. The review is based on either a qualitative assessment or a two-step impairment test. When evaluating goodwill for impairment, we may perform the optional qualitative assessment by considering factors including macroeconomic conditions, industry and market conditions, overall financial performance of our reporting units, and other relevant entity-specific events. If we bypass the qualitative assessment, or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount. We only recognize an impairment on goodwill if the estimated fair value of a reporting unit is less than its carrying value, in an amount not to exceed the carrying value of the reporting unit's goodwill. No goodwill impairment charges were recognized during the years ended December 31, 2024, 2023 and 2022, and there is no accumulated impairment of goodwill for any period presented in the consolidated financial statements. The changes in goodwill for the periods presented in the consolidated financial statements were limited to increases in goodwill resulting from the Grand Islander and Bluegreen Acquisitions and increases or decreases resulting from any related measurement period adjustments. See Note 3: Acquisitions for additional information. Intangible Assets Our intangible assets consist of trade name, management contracts, club member relationships, marketing agreements, and other contract-related intangible assets. As part of the Bluegreen Acquisition, we acquired certain intangible assets that were recorded at their fair value. See Note 3: Acquisitions for additional information. Additionally, we capitalize costs incurred to develop internal-use computer software, including costs incurred in connection with development of upgrades or enhancements that result in additional functionality. These capitalized costs are included in Intangible assets, net in our consolidated balance sheets. Intangible assets with finite useful lives are amortized using the straight-line method over their respective useful lives, which varies for each type of intangible, unless another amortization method is deemed to be more appropriate. In our consolidated statements of income, the amortization of these intangible assets is included in Depreciation and amortization expense. In estimating the useful life of acquired assets, we reviewed the expected use of the assets acquired, factors that may limit the useful life of an acquired asset or may enable the extension of the useful life of an acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. 89 Table of Contents We review all finite life intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of the carrying value over the fair value in our consolidated statements of income. As of December 31, 2024 and 2023, other than goodwill, we do not have any indefinite lived intangible assets. See Note 12: Intangible Assets for additional information. Deferred Financing Costs Deferred financing costs, including legal fees and upfront lenders fees, related to the Company’s debt and non-recourse debt are deferred and amortized over the life of the respective debt using the effective interest method. The capitalized costs related to the Timeshare Facility and the Revolver are included in Other assets while the remaining capitalized costs related to all other debt instruments are included in Debt, net and Non-recourse debt, net in our consolidated balance sheets. The amortization of deferred financing costs is included in Interest expense in our consolidated statements of income. See Note 15: Debt & Non-recourse debt for additional information. Costs Incurred to Sell VOIs and Vacation Packages We expense indirect sales and marketing costs we incur to sell VOIs and vacation packages when incurred. Deferred selling expenses, which are direct selling costs related to a contract for which revenue has not yet been recognized, were $ 24 million and $ 18 million as of December 31, 2024 and 2023, respectively, and were included in Other assets on our consolidated balance sheets. Fair Value Measurements—Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). We use the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-level hierarchy of inputs is summarized below: • Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and • Level 3—Valuation is based upon unobservable inputs that are significant to the fair value measurement. The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. See Note 15: Debt and non-recourse debt and Note 16: Fair Value Measurements for additional information. Currency Translation and Remeasurement The United States dollar (“USD”) is our reporting currency and is the functional currency of the majority of our operations. For operations whose functional currency is not the USD, assets and liabilities measured in foreign currencies are translated into USD at the prevailing exchange rates in effect as of the financial statement date, and the related gains and losses are reflected within Accumulated other comprehensive income in our consolidated balance sheets. Related income and expense accounts are translated at the average exchange rate for the period. Gains and losses from foreign exchange rate changes related to transactions denominated in a currency other than an entity’s functional currency or transactions related to intercompany receivables and payables denominated in a currency other than an entity’s functional currency that are not of a long-term investment nature are recognized as g ains or losses on foreign currency transactions. These gains or losses are included in Other (loss) gain, net in our consolidated statements of income. Share-Based Compensation Certain of our employees participated in our 2023 Omnibus Incentive Plan which compensates eligible employees and directors. The measurement objective for these equity awards is the estimated fair value at the grant date of the equity instruments that we are obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. Compensation expense is based on the share-based 90 Table of Contents awards granted to our employees and recognized ratably over the requisite service period and the corresponding change is recognized in Additional paid-in capital in our consolidated balance sheets. The requisite service period is the period during which an employee is required to provide service in exchange for an award. We recognize forfeitures of awards as they occur. See Note 19: Share-based Compensation for additional information. Income Taxes We account for income taxes using the asset and liability method. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and to recognize the deferred tax assets and liabilities that relate to tax consequences in future years. Deferred tax assets and liabilities result from differences between the respective tax basis of assets and liabilities and their financial reporting amounts, and tax loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the respective temporary differences or operating loss or tax credit carryforwards are expected to be recovered or settled. The realization of deferred tax assets is contingent upon the generation of future taxable income and other restrictions that may exist under the tax laws of the jurisdiction in which a deferred tax asset exists. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized. We use a prescribed recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. For all income tax positions, we first determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If it is determined that a position meets the more-likely-than-not recognition threshold, the benefit recognized in the financial statements is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense in the accompanying consolidated statement of income. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. We made an accounting policy election related to accounting for the tax effects of Global Intangible Low-Taxed Income (“GILTI”) that was implemented as part of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). With regard to GILTI, we have elected to recognize any current tax as an expense in the period it is incurred. See Note 18: Income Taxes for additional information. Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing the earnings attributable to stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. When there is a year-to-date loss, potential common shares should not be included in the computation of diluted EPS; hence, diluted EPS would equal basic EPS in a period of loss. See Note 20: Earnings Per Share for additional information. Defined Contribution Plan We administer and maintain a defined contribution plan for the benefit of all employees meeting certain eligibility requirements who elect to participate in the plan. Contributions are determined based on a specified percentage of salary and bonus deferrals by participating employees. We recognized compensation expense for our participating employees totaling $ 34 million, $ 23 million and $ 19 million for the years ended December 31, 2024, 2023 and 2022, respectively. Noncontrolling Interest Noncontrolling interest reflects a third party’s ownership interest in Big Cedar that is consolidated in our consolidated financial statements but is less than 100% owned by HGV. The noncontrolling interest is recognized as equity in our consolidated balance sheet and presented separately from the equity attributable to stockholders. The amounts of consolidated net income and comprehensive income attributable to stockholders and noncontrolling interest are separately presented in the consolidated statements of income and comprehensive income. Recently Issued Accounting Pronouncements Adopted Accounting Standards For the year ended December 31, 2024, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . ASU 2023-07 provides amendments to improve reportable segment disclosure requirements both on an interim and annual basis, primarily through enhanced disclosures about significant segment expenses and is applied retrospectively for all periods presented. The impact of adoption of ASU 2023-07 was in disclosure only and did not have 91 Table of Contents an impact on our consolidated balance sheets and statements of income. See Note 22: Business Segments for additional information. Accounting Standards Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 states that an entity must provide greater disaggregation of its effective tax rate reconciliation disclosure. The ASU also states that an entity must separately disclose net cash taxes paid between federal, state, and foreign jurisdictions. The guidance is effective for fiscal years beginning after December 15, 2024. The guidance is to be applied prospectively, although retrospective application is permitted. The adoption of ASU 2023-09 is expected to impact disclosures only and not have a material impact on our consolidated balance sheet and statement of income. In November 2024, the FASB issued Accounting Standards Update 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . ASU 2024-03 provides amendments to improve disclosure requirements of specified information about certain costs and expenses, both on an interim and annual basis. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The guidance should be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented. The impact of adoption of ASU 2024-03 is expected to impact disclosures only and not have a material impact on our consolidated balance sheet and statement of income. NOTE 3: ACQUISITIONS Bluegreen Acquisition On January 17, 2024, we completed the Bluegreen Acquisition in an all-cash transaction, with total consideration of approximately $ 1.6 billion. The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations. Costs related to the Bluegreen Acquisition were $ 191 million and $ 17 million, for the years ended December 31, 2024 and 2023. These costs were expensed as incurred and included within Acquisition and integration-related expense in our consolidated statements of income. The following table presents the fair value of each class of consideration transferred in relation to the Bluegreen Acquisition as of the Bluegreen Acquisition Date: ($ in millions, except share and per share data) Number of Class A shares issued and outstanding 12,504,138 Number of Class B shares issued and outstanding 3,664,117 Number of Class A shares deliverable as equity awards 673,169 Total shares and related equity awards outstanding 16,841,424 Cash consideration to Bluegreen shareholders and equity award holders per share $ 75.00 Purchase price $ 1,263 Repayment of Bluegreen debt (1) 265 Payment of seller transaction fees (2) 28 Total consideration transferred $ 1,556 (1) Reflects the balance of Bluegreen's debt repaid by HGV. (2) Reflects transaction-related expenses incurred by Bluegreen but paid by HGV. 92 Table of Contents Fair Values of Assets Acquired, Liabilities Assumed and Noncontrolling Interest We accounted for the Bluegreen Acquisition as a business combination, which requires us to record the assets acquired, liabilities assumed and noncontrolling interest at fair value as of the Bluegreen Acquisition Date. The values attributed to Timeshare financing receivables, Inventory, Intangible assets, Property and equipment and Noncontrolling interest are based on valuations prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820, “ Fair Value Measurement ” (“ASC 820”). The values attributed to Debt, Non-recourse debt, Operating lease right-of-use assets and Operating lease liabilities are based on Level 2 inputs in accordance with ASC 820. The following table presents the fair values of the assets acquired, liabilities assumed, and noncontrolling interest, as finalized: ($ in millions) January 17, 2024 (as reported at March 31, 2024) Adjustments (1) January 17, 2024 (as finalized at December 31, 2024) Assets acquired Cash and cash equivalents $ 58 $ 13 $ 71 Restricted cash 44 — 44 Accounts receivable 32 — 32 Timeshare financing receivables, net 925 ( 54 ) 871 Inventory 365 ( 2 ) 363 Property and equipment 177 19 196 Investment in unconsolidated affiliates 1 4 5 Operating lease right-of-use assets 18 1 19 Intangible assets 812 ( 57 ) 755 Other assets 83 2 85 Total assets acquired $ 2,515 $ ( 74 ) $ 2,441 Liabilities assumed Accounts payable, accrued expenses and other $ 129 $ 13 $ 142 Advanced deposits 2 38 40 Debt 162 1 163 Non-recourse debt 606 — 606 Operating lease liabilities 20 — 20 Deferred revenue 57 ( 38 ) 19 Deferred income tax liabilities 348 ( 28 ) 320 Total liabilities assumed 1,324 ( 14 ) 1,310 Net assets acquired $ 1,191 $ ( 60 ) $ 1,131 Total consideration transferred $ 1,556 $ — $ 1,556 Less: Net assets acquired ( 1,191 ) 60 ( 1,131 ) Plus: Noncontrolling interest 158 ( 18 ) 140 Goodwill (2) $ 523 $ 42 $ 565 (1) There were measurement period adjustments not impacting goodwill for the year ended December 31, 2024, primarily due to management's review of historical accounting records and alignment of policies. These adjustments primarily consisted of $ 13 million from Cash and cash equivalents to Accounts payable, accrued expenses and other and $ 38 million from Deferred revenue to Advanced deposits . (2) Goodwill is calculated as total consideration transferred less net assets acquired plus noncontrolling interest and it primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined Company post-acquisition. Timeshare Financing Receivables We acquired timeshare financing receivables, net which consist of loans to customers who purchased vacation ownership products and chose to finance their purchases. These timeshare financing receivables, net are collateralized by the underlying VOIs and generally have 10-year amortizing repayment terms. We measured the fair value of the timeshare financing receivables using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivables. The significant assumption used in determining the fair value of timeshare financing receivables was the default rate. We have determined that the entire 93 Table of Contents acquired timeshare financing receivables portfolio was considered PCD assets as it shows evidence of more-than-insignificant deterioration in credit quality since origination. See Note 7: Timeshare Financing Receivables for additional information. Acquired timeshare financing receivables with credit deterioration as of the Bluegreen Acquisition Date were as follows: ($ in millions) As of January 17, 2024 Purchase price $ 871 Allowance for credit losses 163 Premium attributable to other factors ( 76 ) Par value $ 958 Inventory We acquired inventory which primarily consists of completed unsold VOIs. We measured the fair value of acquired inventory using a discounted cash flows method, which included an estimate of cash flows expected to be generated from the sale of VOIs. The significant assumptions used to determine the fair value of acquired inventory were projected revenues to be derived from such VOIs. Other assumptions impacting the fair value of the acquired inventory include our estimates of operating costs and margins, and the discount rate. Property and Equipment We acquired property and equipment, which includes land, buildings and improvements, leasehold improvements, computer hardware and software, furniture, fixtures, and office equipment, machinery and equipment, vehicles, construction in progress, and other assets. We determined the fair value of the property and equipment using a mix of cost and market approaches. In determining the fair value using the cost approach, we estimated the reproduction cost by applying inflation trending indices to the historical capitalized costs within the fixed asset details. We also relied on the market approach to determine the fair value of certain assets. In applying the market approach to value, we relied on the percent of cost method. In addition, certain property and equipment assets were held at their carrying value. Operating Lease Right-of-Use-Assets and Lease Liabilities We have recorded a liability for those operating leases assumed in connection with the Bluegreen Acquisition with a remaining term in excess of one year. We measured the lease liabilities assumed at the present value of the remaining contractual lease payments, based on the guidance in ASC Topic 842: Leases, discounted at an incremental borrowing rate applicable to HGV determined as of the Bluegreen Acquisition Date. The right-of-use assets for such leases were measured at an amount equal to the lease liabilities, adjusted for the favorable or unfavorable leasehold position considering the contractual terms of the lease when compared with market terms. A small number of operating lease right of use assets and lease liabilities were measured at carrying value. Additionally, any equipment lease was held at carrying value. Intangible Assets The following table presents our fair values of the acquired Bluegreen's identified intangible assets and their related remaining useful lives as of the Bluegreen Acquisition Date: Weighted Average Estimated Useful Life (in years) Estimated Fair Value ($ in millions) Trade name 7 $ 30 Management contracts 19 479 Club member relationships 11 35 Capitalized software 3 7 Marketing agreements 17 154 Other contract-related intangible assets 10 50 Total intangible assets acquired $ 755 We measured the fair value of Bluegreen’s trade name using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value. We measured the fair value of 94 Table of Contents management contracts and club member relationships using the multi-period excess earnings method, which is a variation of the income approach. This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset. Our significant assumptions used in determining the fair value of the management contracts included anticipated revenue growth rates and the discount rate. The marketing agreements were valued using the with‑and‑without method of the income approach. Under this method, the value of an asset is a function of the differential of projected cash flows with the asset in place and the projected cash flows without the asset in place, discounted to present value. Debt As part of the acquisition and consideration transferred, we paid off $ 265 million of Bluegreen’s existing corporate debt and accrued interest. We valued the remaining assumed debt using a discounted cash flow model under the income approach. The significant assumptions include prepayment rates and market interest rates. Non-Recourse Debt We valued the securitized debt and warehouse loan facilities using a discounted cash flow model under the income approach. The significant assumptions include default rates of the timeshare financing receivables which collateralize the non-recourse debt, prepayment rates and market bond interest rates. Deferred Revenue Deferred revenue primarily relates to deferred sales incentives revenues, including Bonus Points, which are deferred and recognized upon redemption; and Club membership fees, which are deferred and recognized over the terms of the applicable contract term or membership on a straight-line basis. We measured the fair value of the deferred revenue at the carrying value of such liabilities as of the Bluegreen Acquisition Date. Deferred Income Taxes Deferred income taxes primarily relate to the fair value of assets and liabilities acquired from Bluegreen, including timeshare financing receivables, inventory, property and equipment, intangible assets, and debt. We valued deferred income taxes based on the blended U.S. federal and state statutory tax rate which approximates to 25%. Noncontrolling Interest The acquired noncontrolling interest relates to Big Cedar, a joint venture in which we are deemed to hold a controlling financial interest based on our 51 % equity interest, our active role as the day-to-day manager of its activities, and our majority voting control of its management committee. We measured the fair value of the noncontrolling interest using a discounted cash flow model. Goodwill We have recorded goodwill of $ 565 million in connection with the Bluegreen Acquisition. We have allocated the acquired goodwill to our segments, Real Estate Sales and Financing and Resort Operations and Club Management, as indicated in the table below. The majority of goodwill is not expected to be deductible for tax purposes. Resort Operations and Club Management Segment Real Estate Sales and Financing Segment Total Consolidated Goodwill $ 142 $ 423 $ 565 Pro Forma Results of Operations The following unaudited pro forma information presents the combined results of operations of HGV and Bluegreen as if we had completed the Bluegreen Acquisition on January 1, 2023, the first day of our 2023 fiscal year, but using the fair values of assets and liabilities as of the Bluegreen Acquisition Date. These unaudited pro forma results do not reflect any synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Bluegreen Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations. Year Ended December 31, ($ in millions) 2024 2023 Revenue $ 5,028 $ 5,013 Net income 66 224 95 Table of Contents Bluegreen Results of Operations The following table presents the results of Bluegreen operations included in our consolidated statement of income for the period from the Bluegreen Acquisition Date through December 31, 2024: ($ in millions) January 17, 2024 to December 31, 2024 Revenue $ 985 Net income 6 Grand Islander Acquisition On December 1, 2023 (“Grand Islander Acquisition Date”), the Company completed the acquisition of BRE Grand Islander Parent LLC (“Grand Islander”), by exchanging 100 % of the outstanding equity interests of Grand Islander for approximately $ 117 million (the “Grand Islander Acquisition”). Prior to the acquisition, we managed the resort property in Hawaii owned by Grand Islander. The acquisition expands our product offerings and provides existing members upgrade opportunities to locations outside of the prior Fee-for-service arrangement. The purchase price of $ 117 million included cash consideration, as well as $ 4 million of non-cash consideration attributable to the effective settlement of a pre-existing relationship based on the contract value. The fair values of the assets acquired included $ 8 million of cash and cash equivalents, $ 28 million of restricted cash, $ 5 million of accounts receivable, $ 199 million of securitized timeshare financing receivables, net, $ 53 million of unsecuritized timeshare financing receivables, net, $ 15 million of inventory, and $ 2 million of other assets. Of the securitized timeshare financing receivables acquired, $ 128 million was used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Grand Islander Timeshare Facility”). The fair values of the liabilities assumed consisted of $ 193 million of non-recourse debt and $ 4 million of other liabilities. The fair values of the assets acquired, and liabilities assumed and the related acquisition accounting were based on management’s estimates and assumptions, as well as other information compiled by management. We determined the fair value of the timeshare financing receivables and inventory using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivable and the sell-out period of the inventory, respectively. For non-recourse debt we determined the fair value using recent trades of the debt, using adjustments to recent trades of similar debt or the settlement amounts for debt that was repaid in close proximity to the Grand Islander Acquisition Date. The timeshare financing receivables acquired are considered PCD assets. The following table presents the acquired assets with credit deterioration as of the Grand Islander Acquisition Date: ($ in millions) As of December 1, 2023 Purchase price $ 252 Allowance for credit losses 24 Premium attributable to other factors ( 2 ) Par value $ 274 Goodwill of $ 4 million was calculated as total consideration transferred less net assets acquired. The adjustments recorded during the measurement period resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on updates to assumptions in valuations of acquired timeshare financing receivables and inventory. These resulted in an increase to goodwill for the period of $ 2 million. We have allocated the acquired goodwill of $ 4 million to our Real Estate Sales and Financing segment. The majority of goodwill is expected to be deductible for tax purposes. 96 Table of Contents NOTE 4: REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following tables show our disaggregated revenues by product and segment from contracts with customers. We operate our business in the following two segments: (i) Real estate sales and financing and (ii) Resort operations and club management . See Note 22: Business Segments for more information related to our segments. ($ in millions) Year Ended December 31, Real Estate Sales and Financing Segment 2024 2023 2022 Sales of VOIs, net $ 1,909 $ 1,416 $ 1,491 Sales, marketing, brand and other fees 637 634 620 Interest income 425 273 235 Other financing revenue 39 34 32 Real estate sales and financing segment revenues $ 3,010 $ 2,357 $ 2,378 ($ in millions) Year Ended December 31, Resort Operations and Club Management Segment 2024 2023 2022 Club management $ 303 $ 240 $ 227 Resort management 419 329 307 Rental (1) 682 623 586 Ancillary services 51 43 40 Resort operations and club management segment revenues $ 1,455 $ 1,235 $ 1,160 (1) Excludes intersegment eliminations. See Note 22: Business Segments for additional information. Receivables from Contracts with Customers, Contract Liabilities, and Contract Assets Our accounts receivable that relates to our contracts with customers includes amounts associated with our contractual right to consideration for completed performance obligations and are settled when the related cash is received. Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the passage of time. Our timeshare financing receivables consist of loans related to our financing of VOI sales that are secured by the underlying timeshare properties. See Note 7: Timeshare financing receivables for additional information. The following table provides information on our contracts with customers which are included in Accounts Receivable, net and Timeshare financing receivables, net , respectively, on our consolidated balance sheets: ($ in millions) December 31, Receivables from contracts with customers: 2024 2023 Accounts receivable, net $ 219 $ 343 Timeshare financing receivables, net 3,006 2,113 Total $ 3,225 $ 2,456 Contract liabilities include payments received or due in advance of satisfying our performance obligations. Such contract liabilities include advance deposits received on prepaid vacation packages for future stays at our resorts, deferred revenues related to sales of VOIs of projects under construction, Club activation fees and annual dues, the liability for bonus points awarded to our customers for purchase of VOIs at our properties or properties under our fee-for-service arrangements that may be redeemed in the future, deferred maintenance fees and other deferred revenue. 97 Table of Contents The following table presents the composition of our contract liabilities: ($ in millions) December 31, Contract liabilities: 2024 2023 Advanced deposits $ 226 $ 179 Deferred sales of VOIs of projects under construction 92 39 Club activation fees and annual dues 79 97 Bonus Point incentive liability (1) 86 83 Deferred maintenance fees 12 12 Other deferred revenue 35 38 (1) This balance includes $ 52 million and $ 54 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our consolidated balance sheets as of December 31, 2024, and 2023, respectively. This liability is for incentives from VOI sales and sales and marketing expenses in conjunction with our fee-for-service arrangements. Revenue earned for the year ended December 31, 2024, that was included in the contract liabilities balance at December 31, 2023 was approximately $ 194 million. Revenue earned for the year ended December 31, 2023, that was included in the contract liabilities balance at December 31, 2022 was approximately $ 173 million. Contract assets relate to incentive fees that can be earned for meeting certain targets on sales of VOIs at properties under our fee-for-service arrangements; however, our right to consideration is conditional upon completing the requirements of the annual incentive fee period. As of December 31, 2024 and 2023, contract assets were $ 3 million and $ 13 million, respectively. Transaction Price Allocated to Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contract revenue that has not yet been recognized. Our contracts with remaining performance obligations primarily include (i) sales of VOIs under construction, (ii) Club activation fees paid at closing of a VOI purchase, (iii) customers’ advanced deposits on prepaid vacation packages and (iv) Bonus Points that may be redeemed in the future. Deferred VOI sales primarily include the deferred revenues of sales associated with incomplete phases or buildings and the sales of unacquired inventory. The following table presents the deferred revenue, deferred cost of VOI sales and deferred direct selling costs from sales of VOIs related to projects under construction: December 31, ($ in millions) 2024 2023 Sales of VOIs, net $ 92 $ 39 Cost of VOI sales 28 10 Sales and marketing expense 13 6 During the year ended December 31, 2024, we recognized $ 106 million of sales of VOIs, net, offset by deferrals of $ 158 million, related to sales of projects under construction, some of which were completed during the year. We expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of December 31, 2024, upon their completion. The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus Points as of December 31, 2024: ($ in millions) Remaining Transaction Price Recognition Period Recognition Method Advanced deposits $ 226 18 months Upon customer stays Club activation fees 67 7 years Straight-line basis over average inventory holding period Bonus Points incentive liability 86 18 - 30 months Upon redemption 98 Table of Contents NOTE 5: RESTRICTED CASH Restricted cash was as follows: December 31, ($ in millions) 2024 2023 Escrow deposits on VOI sales $ 204 $ 199 Reserves related to non-recourse debt (1) 193 48 Other (2) 41 49 Total $ 438 $ 296 (1) See Note 15: Debt and Non-recourse Debt for additional information. (2) Other restricted cash primarily includes cash collected on behalf of HOAs, deposits related to servicer arrangements and other deposits. NOTE 6: ACCOUNTS RECEIVABLE Accounts receivable within the scope of ASC 326 are measured at amortized cost. The following table represents our accounts receivable, net of allowance for credit losses: December 31, ($ in millions) 2024 2023 Fee-for-service commissions $ 48 $ 57 Real estate and financing 34 87 Resort and club operations 137 199 Tax receivables 89 97 Insurance claims receivable — 54 Other receivables 7 13 Total $ 315 $ 507 Our accounts receivable are generally due within one year of origination. We use delinquency status and economic factors such as credit quality indicators to monitor our receivables within the scope of ASC 326 and use these as a basis for how we develop our expected loss estimates. The changes in our allowance during the year ended December 31, 2024 were as follows: ($ in millions) Fee-for-service commissions Real estate and financing Resort and club operations Total Balance as of December 31, 2023 $ 23 $ 34 $ 3 $ 60 Current period provision for expected credit losses 9 27 — 36 Write-offs charged against the allowance ( 8 ) ( 12 ) ( 2 ) ( 22 ) Balance at December 31, 2024 $ 24 $ 49 $ 1 $ 74 99 Table of Contents NOTE 7: TIMESHARE FINANCING RECEIVABLES We define our timeshare financing receivables portfolios as (i) originated and (ii) acquired. The following table presents the components of each portfolio by class of timeshare financing receivables: Originated Acquired ($ in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Securitized $ 1,168 $ 770 $ 641 $ 214 Unsecuritized (1) 1,764 1,326 443 551 Timeshare financing receivables, gross $ 2,932 $ 2,096 $ 1,084 $ 765 Unamortized non-credit acquisition premium (2) — — 62 32 Less: allowance for financing receivables losses ( 804 ) ( 500 ) ( 268 ) ( 279 ) Timeshare financing receivables, net $ 2,128 $ 1,596 $ 878 $ 518 (1) Includes amounts used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Timeshare Facility”) as well as amounts held as future collateral for securitization activities. (2) Non-credit premium of $ 97 million was recognized at the Diamond Acquisition Date, of which $ 16 million and $ 26 million remains unamortized as of December 31, 2024 and 2023, respectively. A non-credit premium of $ 2 million was recognized at the Grand Islander Acquisition Date with $ 1 million remaining unamortized as of December 31, 2024 and 2023, respectively. Non-credit premium of $ 76 million was recognized at the Bluegreen Acquisition Date, of which $ 45 million remains unamortized as of December 31, 2024. In April 2024, we completed a securitization of approximately $ 240 million of gross timeshare financing receivables and issued approximately $ 101 million of 5.75 % notes, $ 58 million of 5.99 % notes, $ 46 million of 6.62 % notes, and $ 35 million of 8.85 % notes due September 2039. The securitization transaction did not qualify as a sale and, accordingly, no gain or loss was recognized. The transaction is considered a secured borrowing, and the notes from the transaction are presented as non-recourse debt. The proceeds were used to pay down in part some of the existing debt and for other general corporate purposes. In May 2024, we completed a securitization of approximately $ 375 million of gross timeshare financing receivables and issued approximately $ 217 million of 5.50 % notes, $ 80 million of 5.65 % notes, $ 57 million of 5.99 % notes, and $ 21 million of 6.91 % notes due March 2038. The securitization transaction did not qualify as a sale and, accordingly, no gain or loss was recognized. The transaction is considered a secured borrowing, and the notes from the transaction are presented as non-recourse debt. The proceeds were used to pay down in part some of the existing debt and for other general corporate purposes. In November 2024, we completed a securitization of approximately $ 500 million of timeshare loans and issued approximately $ 273 million of 4.98 % notes, $ 147 million of 5.27 % notes, and $ 80 million of 5.71 % notes due August 2040. The securitization transaction did not qualify as a sale and, accordingly, no gain or loss was recognized. The transaction is considered a secured borrowing, and the notes from the transaction are presented as non-recourse debt. The proceeds were used to pay down in part some of the existing debt and for other general corporate purposes. See Note 10: Consolidated Variable Interest Entities and Note 15: Debt and Non-recourse Debt for additional information on our securitizations. As of December 31, 2024 and 2023, we had timeshare financing receivables with a carrying value of $ 455 million and $ 415 million, respectively, securing the Timeshare Facility. In connection with the acquisitions of Grand Islander and Bluegreen, we had access to additional timeshare facilities, which were terminated during the first quarter of 2024. For our originated portfolio, we record an estimate of variable consideration for estimated defaults as a reduction of revenue from VOI sales at the time revenue is recognized on a VOI sale. We record the difference between the timeshare financing receivable and the variable consideration included in the transaction price for the sale of the related VOI as an allowance for financing receivables and record the receivable net of the allowance. For our acquired portfolio, any changes to the estimates of our allowance are recorded within Financing expense on our consolidated statements of income in the period in which the change occurs. We recognize interest income on our timeshare financing receivables as earned. As of December 31, 2024 and 2023, we had interest receivable outstanding of $ 22 million and $ 17 million, respectively, on our originated timeshare financing receivables. As of both December 31, 2024 and 2023, we had interest receivable outstanding of $ 7 million and $ 4 million on our acquired timeshare financing receivables. Interest receivable is included in Other Assets within our consolidated balance sheets. The interest rate charged on the notes correlates to the risk profile of the customer at the time of purchase and the percentage of the purchase that is financed, among other factors. As of December 31, 2024, our originated timeshare financing receivables had interest rates ranging from 1.5 % to 25.8 %, a weighted-average interest rate 100 Table of Contents of 14.9 %, a weighted-average remaining term of 8.6 years and maturities through 2039. Our acquired timeshare financing receivables had interest rates ranging from 2.0 % to 25.0 %, a weighted-average interest rate of 15.0 %, a weighted-average remaining term of 6.9 years and maturities through 2039. Allowance for Financing Receivables Losses The changes in our allowance for financing receivables losses were as follows: ($ in millions) Originated Acquired Balance as of December 31, 2021 $ 280 $ 482 Provision for financing receivables losses (1) 140 — Write-offs ( 70 ) ( 119 ) Inventory recoveries — 29 Upgrades (3) 54 ( 54 ) Balance as of December 31, 2022 $ 404 $ 338 Provision for financing receivables losses (1) 171 ( 1 ) Initial allowance for purchased credit deteriorated financing receivables acquired during the period (2) — 30 Write-offs ( 73 ) ( 116 ) Inventory recoveries — 26 Upgrades (3) ( 2 ) 2 Balance as of December 31, 2023 $ 500 $ 279 Provision for financing receivables losses (1) 363 14 Initial allowance for purchased credit deteriorated financing receivables acquired during the period (2) — 157 Write-offs ( 106 ) ( 258 ) Inventory recoveries — 123 Upgrades (3) 47 ( 47 ) Balance as of December 31, 2024 $ 804 $ 268 (1) For the Originated portfolio, this amount includes incremental provision for financing receivables losses, net of activity related to the repurchase of defaulted and upgraded timeshare financing receivables. For the Acquired portfolio, this amount includes incremental provision for credit loss expense from Acquired loans. (2) The initial gross allowance determined for receivables with credit deterioration was $ 163 million as of the Bluegreen Acquisition Date and $ 30 million as of the Grand Islander Acquisition Date. We also reduced the initial allowance determined for receivables with credit deterioration for Legacy-Grand Islander by $ 6 million during the first quarter of 2024. (3) Represents the initial change in allowance resulting from upgrades of Acquired loans. Upgraded Acquired loans and their related allowance are included in the Originated portfolio. Originated Timeshare Financing Receivables Our originated timeshare financing receivables as of December 31, 2024, mature as follows: Originated Timeshare Financing Receivables ($ in millions) Securitized Unsecuritized Total Year 2025 $ 118 $ 113 $ 231 2026 124 120 244 2027 129 135 264 2028 133 151 284 2029 135 170 305 Thereafter 529 1,075 1,604 Total $ 1,168 $ 1,764 $ 2,932 Acquired Timeshare Financing Receivables with Credit Deterioration Our acquired timeshare financing receivables were deemed to be purchased credit deteriorated financial assets. These notes receivable were initially recognized at their purchase price, represented by the acquisition date fair value, and subsequently “grossed-up” by our acquisition date assessment of the allowance for credit losses. The difference over which 101 Table of Contents par value of the acquired purchased credit deteriorated assets exceeds the purchase price plus the initial allowance for financing receivable losses is reflected as a non-credit premium and is amortized as a reduction to interest income under the effective interest method. See Note 2: Summary of Significant Accounting Policies for additional information on the fair value methodology for our acquired timeshare financing receivables and related allowances for credit losses. Our acquired timeshare financing receivables as of December 31, 2024, mature as follows: Acquired Timeshare Financing Receivables ($ in millions) Securitized Unsecuritized Total Year 2025 $ 78 $ 53 $ 131 2026 84 55 139 2027 89 54 143 2028 87 55 142 2029 80 53 133 Thereafter 223 173 396 Total $ 641 $ 443 $ 1,084 Credit Quality of Timeshare Financing Receivables Originated Timeshare Financing Receivables Our originated gross balances by average FICO score of our originated timeshare financing receivables were as follows: Originated December 31, 2024 ($ in millions) HGV DRI Grand Islander Bluegreen Total FICO score 700+ $ 956 $ 505 $ 23 $ 356 $ 1,840 600-699 336 287 5 95 723 <600 41 42 — 2 85 No score (1) 249 11 21 3 284 Total $ 1,582 $ 845 $ 49 $ 456 $ 2,932 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. Originated December 31, 2023 ($ in millions) HGV DRI Grand Islander Bluegreen Total FICO score 700+ $ 882 $ 403 $ 3 $ — $ 1,288 600-699 311 220 — — 531 <600 39 31 — — 70 No score (1) 196 8 3 — 207 Total $ 1,428 $ 662 $ 6 $ — $ 2,096 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. 102 Table of Contents The following table details our gross originated timeshare financing receivables by the origination year and average FICO score as of December 31, 2024: Originated Timeshare Financing Receivables ($ in millions) 2024 2023 2022 2021 2020 Prior Total FICO score 700+ $ 1,009 $ 355 $ 252 $ 102 $ 23 $ 99 $ 1,840 600-699 343 162 124 45 9 40 723 <600 33 21 17 6 1 7 85 No score (1) 148 55 28 14 9 30 284 Total $ 1,533 $ 593 $ 421 $ 167 $ 42 $ 176 $ 2,932 Current period gross write-offs $ 8 $ 7 $ 45 $ 25 $ 4 $ 17 $ 106 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. As of December 31, 2024 and 2023, we had ceased accruing interest on originated timeshare financing receivables with an aggregate principal balance of $ 323 million and $ 208 million, respectively. The following tables detail an aged analysis of our gross timeshare financing receivables balance: Originated - Securitized December 31, 2024 ($ in millions) HGV DRI Grand Islander Bluegreen Total Current $ 714 $ 279 $ 2 $ 135 $ 1,130 31 - 90 days past due 12 8 — 4 24 91 - 120 days past due 4 3 — 1 8 121 days and greater past due 4 2 — — 6 Total $ 734 $ 292 $ 2 $ 140 $ 1,168 Originated - Unsecuritized December 31, 2024 ($ in millions) HGV DRI Grand Islander Bluegreen Total Current $ 683 $ 389 $ 44 $ 301 $ 1,417 31 - 90 days past due 15 15 1 7 38 91 - 120 days past due 6 6 1 3 16 121 days and greater past due 144 143 1 5 293 Total $ 848 $ 553 $ 47 $ 316 $ 1,764 103 Table of Contents Originated - Securitized December 31, 2023 ($ in millions) HGV DRI Grand Islander Bluegreen Total Current $ 577 $ 162 $ — $ — $ 739 31 - 90 days past due 11 8 — — 19 91 - 120 days past due 4 3 — — 7 121 days and greater past due 2 3 — — 5 Total $ 594 $ 176 $ — $ — $ 770 Originated - Unsecuritized December 31, 2023 ($ in millions) HGV DRI Grand Islander Bluegreen Total Current $ 723 $ 366 $ 6 $ — $ 1,095 31 - 90 days past due 16 18 — — 34 91 - 120 days past due 4 7 — — 11 121 days and greater past due 91 95 — — 186 Total $ 834 $ 486 $ 6 $ — $ 1,326 Acquired Timeshare Financing Receivables Our gross balances by average FICO score of our acquired timeshare financing receivables were as follows: Acquired December 31, 2024 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total FICO score 700+ $ 159 $ 44 $ 385 $ 588 600-699 114 13 203 330 <600 25 — 8 33 No score (1) 9 120 4 133 Total $ 307 $ 177 $ 600 $ 1,084 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. Acquired December 31, 2023 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total FICO score 700+ $ 256 $ 66 $ — $ 322 600-699 189 20 — 209 <600 42 — — 42 No score (1) 12 180 — 192 Total $ 499 $ 266 $ — $ 765 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. 104 Table of Contents The following tables details our gross acquired timeshare financing receivables by the origination year and average FICO score as of December 31, 2024: Acquired Timeshare Financing Receivables ($ in millions) 2024 2023 2022 2021 2020 Prior Total FICO score 700+ $ 15 $ 212 $ 89 $ 72 $ 53 $ 147 $ 588 600-699 6 86 52 49 35 102 330 <600 — 2 2 5 6 18 33 No score (1) — 28 21 12 16 56 133 Total $ 21 $ 328 $ 164 $ 138 $ 110 $ 323 $ 1,084 Current period gross write-offs $ — $ 60 $ 33 $ 33 $ 30 $ 102 $ 258 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. As of December 31, 2024 and 2023, we had ceased accruing interest on acquired timeshare financing receivables with an aggregate principal balance of $ 231 million and $ 279 million, respectively. The following tables detail an aged analysis of our gross timeshare receivables balance: Acquired - Securitized December 31, 2024 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total Current $ 104 $ 84 $ 418 $ 606 31 - 90 days past due 4 1 17 22 91 - 120 days past due 1 — 8 9 121 days and greater past due 2 1 1 4 Total $ 111 $ 86 $ 444 $ 641 Acquired - Unsecuritized December 31, 2024 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total Current $ 36 $ 68 $ 112 $ 216 31 - 90 days past due 2 2 5 9 91 - 120 days past due 1 1 2 4 121 days and greater past due 157 20 37 214 Total $ 196 $ 91 $ 156 $ 443 Acquired - Securitized December 31, 2023 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total Current $ 131 $ 71 $ — $ 202 31 - 90 days past due 6 1 — 7 91 - 120 days past due 2 — — 2 121 days and greater past due 3 — — 3 Total $ 142 $ 72 $ — $ 214 105 Table of Contents Acquired - Unsecuritized December 31, 2023 ($ in millions) Legacy-DRI Legacy-Grand Islander Legacy-Bluegreen Total Current $ 92 $ 177 $ — $ 269 31 - 90 days past due 5 3 — 8 91 - 120 days past due 2 1 — 3 121 days and greater past due 258 13 — 271 Total $ 357 $ 194 $ — $ 551 NOTE 8: INVENTORY Inventory was comprised of the following: December 31, ($ in millions) 2024 2023 Completed unsold VOIs $ 1,898 $ 1,259 Construction in process 345 140 Land, infrastructure and other 1 1 Total $ 2,244 $ 1,400 For the year ended December 31, 2024, we recorded non-cash operating activity transfers, net of $ 271 million related to the registrations for timeshare units under construction for four properties from Property and equipment, net to Inventory . As VOI inventory is constructed, it is recorded into Property and equipment, net until such units are registered and made available for sale. Once registered and available for sale, the units are then transferred into Inventory . See Note 24: Supplemental Disclosures of Cash Flow Information for information regarding non-cash transfers. The table below presents cost of sales true-ups relating to VOI products and the related impacts to the carrying value of inventory and cost of VOI sales: Year Ended December 31, ($ in millions) 2024 2023 2022 Cost of sales true-up (1) $ 23 $ 61 $ 23 (1) Costs of sales true-up decreased cost of VOI sales and increased inventory in all periods presented. NOTE 9: PROPERTY AND EQUIPMENT Property and equipment were comprised of the following: December 31, ($ in millions) 2024 2023 Land $ 283 $ 232 Building and leasehold improvements 491 415 Furniture and equipment 134 113 Construction in progress 147 221 1,055 981 Accumulated depreciation ( 263 ) ( 223 ) Total $ 792 $ 758 Depreciation expense on property and equipment was $ 52 million, $ 51 million, and $ 52 million for the years ended December 31, 2024, 2023 and 2022, respectively. We recognized a $ 2 million impairment for the year ended December 31, 2024 related to the closure of certain sales centers. There were no impairment charges for the year ended December 31, 2023. During the year ended December 31, 2022, we recorded a reversal of impairment expense of $ 7 million, corresponding with an asset reclassification and an impairment charge of $ 4 million for retirement of certain assets. 106 Table of Contents NOTE 10: CONSOLIDATED VARIABLE INTEREST ENTITIES As of December 31, 2024, we consolidated 17 VIEs. The activities of these entities are limited to purchasing qualifying non-recourse timeshare financing receivables from us and issuing debt securities and/or borrowing under a debt facility to facilitate such purchases. The timeshare financing receivables held by these entities are not available to our creditors and are not our legal assets, nor is the debt that is securitized through these entities a legal liability to us. We have determined that we are the primary beneficiaries of the VIEs as we have the power to direct the activities that most significantly affect their economic performance. We are also the servicer of these timeshare financing receivables and often replace or repurchase timeshare financing receivables that are in default at their outstanding principal amounts. Additionally, we have the right to receive benefits that could be significant to them. Only the assets of our VIEs are available to settle the obligations of the respective entities. As part of the Grand Islander Acquisition, we acquired the variable interests in the entities associated with Grand Islander outstanding timeshare financing receivables securitization transactions. They have been aggregated for disclosure purposes as they are similar in nature to our previously established VIEs. We also assumed a timeshare facility that had an outstanding balance of $ 124 million as of December 31, 2023 and was considered a VIE. The timeshare facility was terminated in January 2024. As part of the Bluegreen Acquisition, we acquired variable interest entities, including those associated with Bluegreen's outstanding timeshare financing receivables securitization transactions. They have been aggregated for disclosure purposes as they are similar in nature to our previously established VIEs. See Note 15: Debt and Non-recourse Debt for additional information regarding acquired VIEs. Our consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: December 31, ($ in millions) 2024 2023 Restricted cash $ 193 $ 48 Timeshare financing receivables, net 1,975 1,395 Non-recourse debt, net 2,285 1,466 NOTE 11: INVESTMENTS IN UNCONSOLIDATED AFFILIATES As of December 31, 2024 and 2023, we had ownership interests in BRE Ace LLC and 1776 Holding LLC, which are VIEs. We do not consolidate BRE Ace LLC and 1776 Holding LLC because we are not the primary beneficiary. These two unconsolidated affiliates have aggregated debt balances of $ 384 million and $ 427 million as of December 31, 2024 and 2023, respectively. The debt is secured by their assets and is without recourse to us. Our maximum exposure to loss as a result of our investment interests in the two unconsolidated affiliates is primarily limited to (i) the carrying amount of the investments which totaled $ 73 million and $ 71 million as of December 31, 2024 and 2023, respectively and (ii) receivables for commission and other fees earned under fee-for-service arrangements. See Note 21: Related Party Transactions for additional information. During each of the years ended December 31, 2024 and 2023, we received a cash distribution of approximately $ 16 million from our investment in BRE Ace LLC. For these VIEs, our investment interests are included in the consolidated balance sheets as Investments in unconsolidated affiliates, and equity earned is included in the consolidated statements of income as Equity in earnings from unconsolidated affiliates . As part of the Bluegreen Acquisition, we obtained variable interests within statutory business trusts (collectively, the “Trusts”) formed previously by wholly owned subsidiaries of Bluegreen. Each subsidiary issued trust preferred securities as part of a larger pooled trust securities offering which was not registered under the Securities Act of 1933 and invested the proceeds thereof in its junior subordinated debentures. The Trusts were VIEs in which the subsidiaries are not the primary beneficiaries. As of December 31, 2024, we paid down $ 171 million, which represented the full balance of the junior subordinated debentures acquired as part of the Bluegreen acquisition. See Note 15: Debt and Non-recourse Debt for additional information. 107 Table of Contents NOTE 12: INTANGIBLE ASSETS Intangible assets and related amortization expense were as follows: December 31, 2024 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name $ 48 $ ( 22 ) $ 26 Management contracts 1,819 ( 479 ) 1,340 Club member relationships 174 ( 76 ) 98 Capitalized software 302 ( 167 ) 135 Marketing agreements 154 ( 11 ) 143 Other contract-related intangible assets 50 ( 5 ) 45 Total $ 2,547 $ ( 760 ) $ 1,787 December 31, 2023 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name $ 18 $ ( 18 ) $ — Management contracts 1,340 ( 347 ) 993 Club member relationships 139 ( 57 ) 82 Capitalized software 207 ( 124 ) 83 Total $ 1,704 $ ( 546 ) $ 1,158 We acquired definite-life intangible assets as part of the Bluegreen Acquisition in the amount of $ 755 million as of the Bluegreen Acquisition Date. Refer to Note 3: Acquisitions for additional information. Amortization expense on intangible assets was $ 216 million, $ 163 million, and $ 192 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, the weighted average life on trade name was 4.6 years, management agreements was 30.3 years, club member relationships was 13.7 years, capitalized software was 2.9 years, marketing agreements was 16.1 years, and other contract-related intangible was 10.0 years. During the year ended December 31, 2022, we recognized $ 3 million of intangible impairment charges. No intangible impairment charges were recognized during the years ended December 31, 2024, and 2023. As of December 31, 2024, our future amortization expense for our amortizing intangible assets is estimated to be as follows: ($ in millions) Future Amortization Expense 2025 $ 221 2026 195 2027 168 2028 127 2029 120 Thereafter 956 Total $ 1,787 108 Table of Contents NOTE 13: OTHER ASSETS Other assets were as follows: December 31, ($ in millions) 2024 2023 Deferred selling, marketing, general and administrative expenses 25 20 Prepaid expenses 96 89 Cloud computing arrangements 17 19 Interest receivable 29 21 Deferred income tax assets 12 9 Interest rate swap 37 42 Other 174 114 Total $ 390 $ 314 NOTE 14: ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER Accounts payable, accrued expenses and other were as follows: December 31, ($ in millions) 2024 2023 Accrued employee compensation and benefits $ 160 $ 122 Accounts payable 180 144 Bonus point incentive liability 52 54 Due to Hilton 53 48 Income taxes payable 83 28 Sales and other taxes payable 158 150 Interest payable 48 16 Accrued legal settlements 7 123 Other accrued expenses (1) 384 267 Total $ 1,125 $ 952 (1) Other accrued expenses includes amounts due to HOAs and various accrued liabilities . 109 Table of Contents NOTE 15: DEBT AND NON-RECOURSE DEBT Debt The following table details our outstanding debt balance and its associated interest rates: December 31, ($ in millions) 2024 2023 Debt (1) Senior secured credit facility Term loan A with a rate of 6.107 %, due 2028 $ 400 $ — Term loan B with a rate of 6.857 %, due 2028 858 1,271 Term loan B with a rate of 6.607 %, due 2031 893 — Revolver with a rate of 6.737 %, due 2026 233 438 Senior notes with a rate of 5.000 %, due 2029 850 850 Senior notes with a rate of 4.875 %, due 2031 500 500 Senior notes with a rate of 6.625 %, due 2032 900 — Other debt (4) 38 33 Total debt, gross 4,672 3,092 Less: unamortized deferred financing costs and discounts (2)(3)(5) ( 71 ) ( 43 ) Total debt, net $ 4,601 $ 3,049 (1) As of December 31, 2024 and 2023, weighted-average interest rates were 6.140 % and 6.649 %, respectively. (2) Amount includes unamortized deferred financing costs related to our term loan and senior notes of $ 39 million and $ 25 million, respectively, as of December 31, 2024 and $ 21 million and $ 17 million, respectively, as of December 31, 2023. This amount also includes unamortized original issuance discounts of $ 5 million as of December 31, 2024 and 2023, respectively. (3) Amount does not include unamortized deferred financing costs of $ 3 million as of December 31, 2024, and 2023, respectively, related to our revolving facility which are included in Other assets in our consolidated balance sheets. (4) This amount includes $ 6 million related to the recourse portion on the NBA Receivables Facility, which is generally limited to the greater of 15 % of the outstanding borrowings and $ 5 million, subject to certain exceptions. (5) Amount also includes unamortized discount of $ 2 million related to the Bluegreen debt recognized at the Bluegreen Acquisition Date. Senior Secured Credit Facilities On January 17, 2024, we entered into Amendment No. 4 (the “Amendment”) to the Credit Agreement and incurred $ 900 million of new term loans that will mature on January 17, 2031. Proceeds from the new term loans were used to pay the Bluegreen Acquisition consideration, fees and expenses incurred in connection with the Amendment and to refinance the repayment of certain indebtedness of Bluegreen and its subsidiaries. On April 8, 2024, we amended our Term Loan B due 2028 under the Senior secured credit facility. Under the amendment, the new interest rate is SOFR plus 2.50 %, down from SOFR plus 2.75 %. Also, the credit spread adjustment for the Term Loan B due 2028 was removed. On July 18, 2024, we amended our Term Loan B due 2031 under the Senior secured credit facility. Under the amendment, the new interest rate is SOFR plus 2.25 %, down from SOFR plus 2.75 %. On October 8, 2024, we entered into a new $ 400 million senior secured term loan (“Term Loan A”) due January 2028, with a pricing of SOFR plus 1.75 %. The proceeds were used to partially pre-pay the Term Loan B due 2028. During the year ended December 31, 2024, we repaid $ 1.2 billion under the senior secured credit facilities. As of December 31, 2024, we had $ 52 million of letters of credit outstanding under the revolving credit facility and $ 1 million outstanding backed by cash collateral. We were in compliance with all applicable maintenance and financial covenants and ratios as of December 31, 2024. As of December 31, 2024, we have $ 715 million remaining borrowing capacity under the revolver facility. We primarily use interest rate swaps as part of our interest rate risk management strategy for our variable-rate debt. These interest rate swaps are associated with the SOFR-based senior secured credit facility. As of December 31, 2024, these interest rate swaps convert the SOFR-based variable rate on our Term Loan B due 2028 to average fixed rates of 1.55 % per annum with maturities between 2026 and 2028, for the balance on this borrowing up to the notional values of our interest rate swaps. As of December 31, 2024, the aggregate notional values of the interest rate swaps under our Term Loan B due 2028 was $ 550 million. Our interest rate swaps have been designated and qualify as cash flow hedges of interest rate risk and recorded at their estimated fair value as an asset in Other assets in our consolidated balance sheets. As of December 31, 2024 and 2023, the estimated fair value of our cash flow hedges was $ 37 million and $ 42 million, respectively. We characterize payments we make in connection with these derivative instruments as interest expense and a 110 Table of Contents reclassification of accumulated other comprehensive income for presentation purposes. We classify cash inflows and outflows from derivatives that hedge interest rate risk within operating activities in the consolidated statements of cash flows. The following table reflects the activity, net of tax, in Accumulated other comprehensive income related to our derivative instruments during the year ended December 31, 2024: Net unrealized gain on derivative instruments Balance as of December 31, 2023 $ 32 Other comprehensive income before reclassifications, net 11 Reclassifications to net income ( 15 ) Balance as of December 31, 2024 $ 28 Senior Notes due 2032 On January 2024, we completed an offering for $ 900 million aggregate principal amount of 6.625 % senior secured notes due 2032 (“Senior Notes due 2032”) issued by our wholly-owned subsidiaries, Hilton Grand Vacations Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow, Inc. Proceeds from the new secured notes were used to pay the Bluegreen Acquisition consideration, fees and expenses incurred in connection with the Amendment and to refinance the repayment of certain indebtedness of Bluegreen and its subsidiaries. The Senior Notes due 2032 are guaranteed on a senior secured basis by certain of our subsidiaries. We were in compliance with all applicable financial covenants as of December 31, 2024. Senior Notes due 2029 and 2031 The Senior Unsecured Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries. We were in compliance with all applicable financial covenants as of December 31, 2024. Junior subordinated debentures As part of the Bluegreen Acquisition, we assumed junior subordinated debentures. During the year ended December 31, 2024, the junior subordinated debentures were paid down in full for $ 171 million. See Note 11: Investments in Unconsolidated Affiliates for additional information. 111 Table of Contents Non-recourse Debt The following table details our outstanding non-recourse debt balance and associated interest rates: December 31, ($ in millions) 2024 2023 Non-recourse debt (1) Timeshare Facility with an average rate of 5.818 %, due 2027 (2) $ 428 $ 400 Grand Islander Timeshare Facility with an average rate of 6.716 %, due 2029 — 124 HGV Securitized Debt 2018 with a weighted average rate of 3.602 %, due 2032 41 66 HGV Securitized Debt 2019 with a weighted average rate of 2.431 %, due 2033 48 70 HGV Securitized Debt 2022-1 with a weighted average rate of 4.304 %, due 2034 78 118 HGV Securitized Debt 2022-2 with a weighted average rate of 4.826 %, due 2037 129 188 HGV Securitized Debt 2023 with a weighted average rate of 5.937 %, due 2038 172 264 HGV Securitized Debt 2024-2 with a weighted average rate of 5.685 %, due 2038 302 — HGV Securitized Debt 2024-1 with a weighted average rate of 6.419 %, due 2039 175 — HGV Securitized Debt 2020 with a weighted average rate of 3.658 %, due 2039 67 95 HGV Securitized Debt 2024-3 with a weighted average rate of 5.182 %, due 2040 482 — Grand Islander Securitized Debt with a weighted average rate of 2.965 %, due 2029 — 15 Grand Islander Securitized Debt with a weighted average rate of 3.316 %, due 2033 37 55 Diamond Resorts Owner Trust 2021 with a weighted average rate of 2.160 %, due 2033 61 87 Bluegreen Securitized Debt 2018 with a weighted average rate of 4.019 %, due 2034 17 — Bluegreen Securitized Debt 2020 with a weighted average rate of 2.597 %, due 2036 40 — Bluegreen Securitized Debt 2022 with a weighted average rate of 4.599 %, due 2037 87 — Bluegreen Securitized Debt 2023 with a weighted average rate of 6.321 %, due 2038 147 — Quorum Purchase Facility with an average rate of 5.020 %, due 2034 6 — NBA Receivables Facility with an average rate of 6.110 %, due 2031 (5) 33 — Total non-recourse debt, gross 2,350 1,482 Less: unamortized deferred financing costs and discounts (3)(4) ( 32 ) ( 16 ) Total non-recourse debt, net $ 2,318 $ 1,466 (1) As of December 31, 2024, and 2023, weighted-average interest rates were 5.235 % and 5.095 %, respectively. (2) The revolving commitment period of the Timeshare Facility terminates in November 2026; however the repayment maturity date extends 12 months beyond the commitment termination date to November 2027. (3) Amount relates to securitized debt only and does not include unamortized deferred financing costs of $ 2 million as of December 31, 2024, and 2023, respectively, relating to the Timeshare Facility included in Other Assets in our consolidated balance sheets. (4) Amount also includes unamortized discount of $ 2 million related to the Grand Islander securitized debt recognized at the Grand Islander Acquisition Date and unamortized discount of $ 9 million related to the Bluegreen securitized and non-recourse debt recognized at the Bluegreen Acquisition Date. (5) Recourse on the NBA Receivables Facility is generally limited to the greater of 15 % of the outstanding borrowings and $ 5 million, subject to certain exceptions. In April 2024, we completed a securitization of approximately $ 240 million of gross timeshare financing receivables and issued approximately $ 101 million of 5.75 % notes, $ 58 million of 5.99 % notes, $ 46 million of 6.62 % notes, and $ 35 million of 8.85 % notes due September 2039. The issued notes are backed by pledged assets, consisting primarily of a pool of Bluegreen timeshare financing receivables secured by first mortgages and a letter of credit. The notes are a non-recourse obligation and are payable solely from the pool of timeshare financing receivables pledged as collateral for the notes. The proceeds of the notes were used to pay down in part some of our existing debt and for other general corporate purposes. Additionally, in connection with the securitization, we incurred $ 4 million in debt issuance costs. In May 2024, we completed a securitization of approximately $ 375 million of gross timeshare financing receivables and issued approximately $ 217 million of 5.50 % notes, $ 80 million of 5.65 % notes, $ 57 million of 5.99 % notes, and $ 21 million of 6.91 % notes due March 2038. The issued notes are backed by pledged assets, consisting primarily of a pool of timeshare loans secured by first mortgages, first deeds of trust, membership interests or timeshare interests (other than a fee simple interest in real estate). The notes are a non-recourse obligation and are payable solely from the timeshare financing receivables pledged as collateral for the notes. The proceeds of the notes were used to pay down in part 112 Table of Contents some of our existing debt and for other general corporate purposes. Additionally, in connection with the securitization, we incurred $ 5 million in debt issuance costs. In November 2024, we completed a securitization of approximately $ 500 million of timeshare financing receivables and issued approximately $ 273 million of 4.98 % notes, $ 147 million of 5.27 % notes, and $ 80 million of 5.71 % notes due August 2040. The issued notes are backed by pledged assets, consisting of a pool of HGV, Diamond Resorts, and Bluegreen Vacations collateral combined, secured by first mortgages, first deeds of trust, membership interests or timeshare interests (other than a fee simple interest in real estate) and a Letter of Credit. The notes are a non-recourse obligation and are payable solely from the pool of timeshare financing receivables pledged as collateral for the notes. The proceeds of the notes were used to pay down in part some of our existing debt and for other general corporate purposes. Additionally, in connection with the securitization, we incurred $ 7 million in debt issuance costs. The Timeshare Facility is a non-recourse obligation payable solely from the pool of timeshare financing receivables pledged as collateral and related assets. In March 2024, we renewed our Timeshare Facility agreement under new terms, which included extending the commitment and maturity period to March 2026 and March 2027, respectively, and permitting to pledge as collateral certain timeshare loans associated to Grand Islander. In November 2024, we amended our Timeshare Facility agreement which included terms to increase the capacity to $ 850 million, amend the commitment and maturity periods to November 2026 and November 2027, respectively, and permitted to pledge as collateral certain timeshare loans associated with Bluegreen. As of December 31, 2024, the Timeshare Facility has a remaining borrowing capacity of $ 423 million. On January 31, 2024, we terminated the Grand Islander Timeshare Facility. In connection with the Bluegreen Acquisition, we acquired an additional timeshare facility which was subsequently terminated in February 2024. During the year ended December 31, 2024, we repaid $ 814 million on the Timeshare Facility and $ 765 million on Securitized Debt. We are required to deposit payments received from customers on the timeshare financing receivables securing the Timeshare Facility and Securitized Debt into depository accounts maintained by third parties. On a monthly basis, the depository accounts are utilized to make required principal, interest and other payments due under the respective loan agreements. The balances in the depository accounts were $ 193 million and $ 48 million as of December 31, 2024 and 2023, respectively, and were included in Restricted Cash in our consolidated balance sheets. Debt Maturities The contractual maturities of our debt and non-recourse debt as of December 31, 2024, were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2025 $ 27 $ 462 $ 489 2026 260 387 647 2027 23 736 759 2028 1,239 239 1,478 2029 868 183 1,051 Thereafter 2,255 343 2,598 Total $ 4,672 $ 2,350 $ 7,022 113 Table of Contents NOTE 16: FAIR VALUE MEASUREMENTS The carrying amounts and estimated fair values of our financial assets and liabilities, which are required for disclosure, were as follows: December 31, 2024 Fair Value ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables, net (1) $ 3,006 $ — $ 3,203 Liabilities: Debt, net (2) 4,601 4,309 283 Non-recourse debt, net (2) 2,318 1,873 446 December 31, 2023 Fair Value ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables, net (1) $ 2,113 $ — $ 2,289 Liabilities: Debt, net (2) 3,049 2,496 483 Non-recourse debt, net (2) 1,466 867 592 (1) Carrying amount net of allowance for financing receivables losses. (2) Carrying amount net of unamortized deferred financing costs and discounts Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. The table above excludes cash and cash equivalents, restricted cash, accounts receivable and advance deposits, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. The estimated fair values of our originated and acquired timeshare financing receivables were determined using a discounted cash flow model. Our model incorporates default rates, coupon rates, credit quality and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. The estimated fair value of our Level 2 derivative financial instruments was determined utilizing projected future cash flows discounted based on an expectation of future interest rates derived from observable market interest rate curves and market volatility. See Note 15: Debt and Non-recourse Debt above. The estimated fair values of our Level 1 debt and non-recourse debt were based on prices in active debt markets. The estimated fair value of our Level 3 debt and non-recourse debt were based on the following: • Debt – based on indicative quotes obtained for similar issuances or projected future cash flows discounted at risk-adjusted rates. • Non-recourse debt – based on projected future cash flows discounted at risk-adjusted rates. NOTE 17: LEASES We lease sales centers, office space and equipment under operating leases. Our leases expire at various dates from 2025 through 2056, with varying renewal and termination options. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. During the years ended December 31, 2023 and 2022, we ceased utilizing certain offices as part of our integration of business operations and recognized impairments of related operating lease right-of-use assets of $ 3 million and $ 6 million, respectively. We did not recognize any impairments during the year ended December 31, 2024. 114 Table of Contents We recognize rent expense on leases with both contingent and non-contingent lease payment terms. Rent associated with non-contingent lease payments are recognized on a straight-line basis over the lease term. Contingent rental expense includes short term and variable rent. Rent expense for all operating leases was as follows: Year Ended December 31, ($ in millions) 2024 2023 2022 Minimum rentals $ 30 $ 28 $ 34 Contingent rentals 20 11 4 Total $ 50 $ 39 $ 38 Supplemental cash flow information related to operating leases was as follows: Year Ended December 31, ($ in millions) 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 30 $ 27 $ 27 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 26 9 25 Supplemental balance sheet information related to operating leases was as follows: December 31, 2024 2023 Weighted-average remaining lease term of operating leases (in years) 6 6 Weighted-average discount rate of operating leases 4.90 % 4.85 % The future minimum rent payments under non-cancelable operating leases as of December 31, 2024, are as follows: ($ in millions) Operating Leases Year 2025 $ 27 2026 21 2027 15 2028 12 2029 11 Thereafter 37 Total future minimum lease payments 123 Less: imputed interest ( 23 ) Present value of lease liabilities $ 100 NOTE 18: INCOME TAXES Our tax provision includes federal, state and foreign income taxes payable. The domestic and foreign components of our income before taxes and noncontrolling interests were as follows: Year Ended December 31, ($ in millions) 2024 2023 2022 U.S. (loss) income before tax $ ( 61 ) $ 335 $ 384 Foreign income before tax 197 114 97 Total income before taxes $ 136 $ 449 $ 481 115 Table of Contents The components of our provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2024 2023 2022 Current: Federal $ 23 $ 105 $ 102 State 4 18 19 Foreign 78 36 46 Total current 105 159 167 Deferred: Federal ( 18 ) ( 22 ) ( 21 ) State ( 3 ) ( 1 ) ( 16 ) Foreign ( 8 ) — ( 1 ) Total deferred ( 29 ) ( 23 ) ( 38 ) Total provision for income taxes $ 76 $ 136 $ 129 Reconciliations of our tax provision at the U.S. statutory rate to the provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2024 2023 2022 Statutory U.S. federal income tax provision $ 29 $ 94 $ 101 State and local income taxes, net of U.S. federal tax benefit 1 17 4 Taxes attributable to noncontrolling interest ( 3 ) — — Impact of foreign operations 27 10 17 Interest on installment sales, net of U.S. federal tax benefit 4 3 1 Uncertain tax positions 1 5 4 US permanent differences 12 2 — Share-based compensation, net of IRC § 162(m) limitation 3 2 3 Other 2 3 ( 1 ) Provision for income taxes $ 76 $ 136 $ 129 Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items. The compositions of net deferred tax balances were as follows: December 31, ($ in millions) 2024 2023 Deferred tax assets $ 12 $ 9 Deferred tax liabilities ( 925 ) ( 631 ) Net deferred tax liability $ ( 913 ) $ ( 622 ) 116 Table of Contents The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax liability were as follows: December 31, ($ in millions) 2024 2023 Deferred tax assets: Compensation $ 30 $ 20 Domestic tax loss and credit carryforwards 130 35 Foreign tax loss carryforwards 44 41 Other reserves 261 177 465 273 Valuation allowance ( 174 ) ( 81 ) Deferred tax assets 291 192 Deferred tax liabilities: Property and equipment ( 144 ) ( 128 ) Amortizable intangible assets ( 419 ) ( 251 ) Deferred income ( 641 ) ( 435 ) Deferred tax liabilities ( 1,204 ) ( 814 ) Net deferred tax liability $ ( 913 ) $ ( 622 ) As of December 31, 2024, we have $ 276 million of federal net operating loss carryforwards, $ 20 million of federal credit carryforwards, $ 987 million of state tax net operating loss carryforwards, $ 6 million of state tax credits, and $ 170 million foreign net operating loss carryforwards. Most of these tax attributes are fully valued. The majority of our federal and state tax attributes will expire through 2034, while our foreign tax losses can be carried forward indefinitely. We establish valuation allowances for financial reporting purposes to offset certain deferred tax assets due to uncertainty regarding our ability to realize them in the future. The valuation allowance increased from $ 81 million as of December 31, 2023, to $ 174 million as of December 31, 2024, primarily due to acquired deferred tax assets from the Bluegreen Acquisition for which no future tax benefit is expected. Reconciliations of the amounts of unrecognized tax benefits were as follows: December 31, ($ in millions) 2024 2023 2022 Unrecognized tax benefits at beginning of year $ 25 $ 23 $ 12 Current period tax position increases 3 2 2 Prior period tax position increases — 3 11 Decreases due to lapse in applicable statute of limitations ( 4 ) ( 3 ) ( 2 ) Unrecognized tax benefits at end of year $ 24 $ 25 $ 23 We recorded $ 24 million and $ 25 million as of December 31, 2024 and 2023, respectively, excluding interest and penalties, which would have favorably impacted the annual effective tax rate if recognized. We record these liabilities in Accounts payable, accrued expenses and other in the consolidated balance sheet. The total liability accrued for interest and penalties was $ 36 million and $ 34 million as of December 31, 2024, and 2023, respectively. We do not anticipate any significant increases or decreases in our unrecognized tax benefits within the next twelve months. We file federal, state and foreign income tax returns in jurisdictions with varying statute of limitations. We are currently under audit in several tax jurisdictions. The open tax years for major tax jurisdictions are 2006 through 2024. While there is no assurance as to the results, we believe we are adequately reserved for these audits. The Organization for Economic Co-operation and Development (“OECD”) has created a framework for the implementation of a global minimum tax rate of 15%, commonly referred to as Pillar Two. Certain countries in which we do business have enacted Pillar Two legislation effective January 1, 2024, however, Pillar Two legislation did not have a material impact to our income tax provision. Although the Tax Act generally eliminates U.S. federal income tax on dividends from foreign subsidiaries, foreign withholding taxes may be incurred if these profits are distributed. No income or deferred taxes have been accrued on foreign earnings or other outside basis differences, as we intend to indefinitely reinvest these amounts in our foreign 117 Table of Contents operations. An estimate of these amounts is not practicable due to the inherent complexity of the multi-jurisdictional tax environment in which we operate. NOTE 19: SHARE-BASED COMPENSATION Stock Plan On May 3, 2023, the 2023 Omnibus Incentive Plan (“2023 Plan”) was approved by our shareholders to replace the 2017 Omnibus Incentive Plan and the 2017 Plan for Non-Employee Directors (the “2017 Plans”). The 2023 Plan authorizes the issuance of restricted stock units (“Service RSUs” or “RSUs”), nonqualified stock options (“Options”), time and performance-vesting restricted stock units (“Performance RSUs” or “PSUs”), and stock appreciation rights (“SARs”) to certain employees and directors. Pursuant to the 2023 Plan, 5,240,000 shares of our common stock are reserved for issuance. The 2017 Plans remain in place until all of the awards previously granted thereunder have been paid, forfeited or expired. Shares underlying awards that are canceled or forfeited under the 2017 Plans without the issuance of any shares are added to the 2023 Plan share pool. However, the shares which remained available for issuance under the 2017 Plans are no longer available for issuance, and all future awards will be granted pursuant to the 2023 Plan. On March 4, 2024, we filed a Registration Statement on Form S-8 to register 118,078 shares of common stock, par value $ 0.01 per share, of HGV’s Common Stock that may be issued under the 2023 Plan in accordance with, and subject to the terms and conditions of, an exception under Rule 303A.08 of the NYSE Listed Company Manual (“Rule 303A.08”). The shares of Common Stock registered represent the number of shares of Bluegreen common stock that were available for issuance under the Bluegreen’s 2021 Incentive Plan immediately prior to the Bluegreen Acquisition, as appropriately adjusted to reflect the Bluegreen Acquisition and assumed by HGV, in accordance with Rule 303A.08. On March 5, 2024, our Board of Directors approved transaction incentive awards (“Transaction Incentive Awards”) in connection with the Bluegreen Acquisition consisting of Performance RSUs and performance-based cash awards (the “Performance Cash Awards”) for certain executive officers and employees. The Transaction Incentive Awards were granted under, and pursuant to the terms and conditions of, the 2023 Plan, and the award agreements approved by the Compensation Committee. The Performance Cash Awards are payable based on the level of achievement of pre-established performance goals relating to run rate cost savings following an 18-month performance period commencing on the Bluegreen Acquisition Date, and ending on June 30, 2025. On September 30, 2024, due to achievement of certain run rate cost savings, fifty percent ( 50 %) of the Performance Cash Awards vested and were payable to certain executive officers and employees. These performance cash awards were included within Acquisition and integration-related expense in our consolidated statements of income for the year ended December 31, 2024. As of December 31, 2024, there were 3,930,194 shares of common stock available for future issuance under the 2023 plan. We recognized share-based compensation expense of $ 45 million, $ 39 million and $ 46 million during the years ended December 31, 2024, 2023 and 2022, respectively. The total tax benefit recognized related to this compensation was $ 8 million, $ 6 million and $ 6 million for the years ended December 31, 2024, 2023 and 2022, respectively. In addition, we withheld common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of awards under our employee equity incentive program. For the years ended December 31, 2024, 2023 and 2022, we withheld approximately 445,000 , 264,000 and 147,000 shares at a total cost of $ 21 million, $ 14 million and $ 8 million, respectively, through net share settlements. Shares withheld to cover tax withholding obligations are retired. As of December 31, 2024, unrecognized compensation cost for unvested awards was approximately $ 37 million, which is expected to be recognized over a weighted average period of 1.7 years. Service RSUs Service RSUs vest in annual installments over three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested Service RSUs generally will be settled for common stock. The grant date fair value is equal to closing stock price on the date of grant. The following table provides information about our Service RSU grants for the last three fiscal years: Year Ended December 31, 2024 2023 2022 Number of shares granted 717,858 537,964 800,378 Weighted average grant date fair value per share $ 44.00 $ 48.60 $ 44.12 Fair value of shares vested (in millions) $ 26 $ 23 $ 25 118 Table of Contents The following table summarizes the activity of our RSUs during the year ended December 31, 2024: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 1,144,853 45.21 Granted 717,858 44.00 Vested ( 588,583 ) 43.64 Forfeited ( 47,747 ) 45.47 Outstanding, end of period 1,226,381 45.24 Options Options vest over three years in annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date and will terminate 10 years from the date of grant or earlier on the unvested portion of an individual whose service was terminated. The exercise price is equal to the closing price of the common stock on the date of grant. The following table provides information about our option grants for the last three fiscal years: Year Ended December 31, 2024 2023 2022 Number of options granted 388,084 301,215 389,536 Weighted average exercise price per share $ 44.45 $ 49.14 $ 44.09 Weighted average grant date fair value per share $ 22.63 $ 24.78 $ 20.08 The weighted-average grant date fair value of each of these options were determined using the Black-Scholes-Merton option-pricing model with the following assumptions: expected volatility is calculated using the historical volatility of our share price; risk-free rate is based on the Treasury Constant Maturity Rate closest to the expected life as of the grant date; and expected term is estimated using the vesting period and contractual term of the Options: Year Ended December 31, 2024 2023 2022 Expected volatility 47.7 % 46.8 % 45.8 % Dividend yield (1) — % — % — % Risk-free rate 4.1 % - 4.3 % 4.2 % 1.7 % Expected term (in years) 6.0 6.0 6.0 (1) At the date of grant we had no plans to pay dividends during the expected term of these options. The following table summarizes the activity of our options during the year ended December 31, 2024: Number of Shares Weighted Average Exercise Price Per Share Outstanding, beginning of period 2,417,718 $ 36.65 Granted 388,084 44.45 Exercised ( 205,463 ) 30.38 Forfeited, canceled or expired ( 23,361 ) 45.45 Outstanding, end of period 2,576,978 38.24 Exercisable, end of period 1,885,026 35.51 As of December 31, 2024, we had 1,885,026 options outstanding that were exercisable with an aggregate intrinsic value of $ 10 million and weighted average remaining contractual term of approximately 4.9 years. The intrinsic value of all options exercised during the year was $ 3.1 million. Performance RSUs During the year ended December 31, 2024, we issued 156,809 Performance RSUs with a weighted-average grant date fair value of $ 44.54 . The Performance RSUs are settled at the end of a 3-year performance period, with 50 % of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization, further adjusted for net deferral and recognition of revenues and related direct expenses 119 Table of Contents related to sales of VOIs of projects under construction. The remaining 50 % of the Performance RSUs are subject to the achievement of certain contract sales targets. As part of the Transaction Incentive Awards, we issued 275,477 Performance RSUs with a grant date fair value of $ 44.32 . These Performance RSUs are settled at the end of a 2-year performance period commencing as of the Bluegreen Acquisition Date, with 50 % of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization, further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 50 % of the Performance RSUs are subject to the achievement of certain run rate cost savings. These Performance RSUs are subject to the executive’s continued employment with the Company. Compensation expense will be recorded through the end of the performance period if it is deemed probable that the performance goals will be met. If the performance goals are not met, no compensation cost will be recognized and any previously recognized compensation cost will be reversed. We determined that the performance conditions for our Performance RSUs are probable of achievement and we recognized compensation expense based on the number of Performance RSUs we expect to vest. The following table provides information about our Performance RSU grants for the last three fiscal years: Year Ended December 31, 2024 2023 2022 Number of shares granted 432,286 119,887 93,064 Weighted average grant date fair value per share $ 44.40 $ 49.14 $ 44.09 Fair value of shares vested (in millions) $ 29 $ 8 $ — The following table summarizes the activity of our Performance RSUs during the year ended December 31, 2024: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 560,167 $ 42.77 Granted 432,286 44.40 Performance achievement shares adjustment (1) 272,160 40.96 Vested ( 714,604 ) 41.03 Forfeited, canceled or expired — — Outstanding, end of period 550,009 45.41 (1) Reflects the number of shares achieved above target, based on actual performance as determined at the completion of the performance period for the August 2021 and March 2022 Performance RSU grants Employee Stock Purchase Plan In March 2017, the Board of Directors adopted the Hilton Grand Vacations Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective during 2017. In connection with the Plan, we reserved 2.5 million shares of common stock which may be purchased under the ESPP. The ESPP allows eligible employees to purchase shares of our common stock at a price per share not less than 95 % of the fair market value per share of common stock on the purchase date, up to a maximum threshold established by the plan administrator for the offering period. For the year ended December 31, 2022, we issued 121,095 shares and recognized less than $ 1 million of compensation expense related to this plan. During the fourth quarter of 2022, the Board of Directors amended the ESPP plan to allow eligible employees to purchase shares of our common stock at a price per share not less than 85 % of the fair market value per share of common stock on the first day of the Purchase Period or the last day of the Purchase Period, whichever is lower, up to a maximum threshold established by the plan administrator for the offering period. The amendment became effective in 2023. During the years ended December 31, 2024 and 2023, we issued 326,330 and 221,562 shares, respectively, and recognized $ 2 million and $ 1 million of compensation expense, respectively, related to this plan. 120 Table of Contents NOTE 20: EARNINGS PER SHARE The following tables present the calculation of our basic and diluted EPS and the corresponding weighted average shares outstanding referenced in these calculations for the years ended December 31, 2024, 2023, and 2022. Year Ended December 31, ($ and shares outstanding in millions, except per share amounts) 2024 2023 2022 Basic EPS: Numerator: Net income attributable to stockholders $ 47 $ 313 $ 352 Denominator: Weighted average shares outstanding 101.9 110.1 118.0 Basic EPS (1) $ 0.46 $ 2.84 $ 2.98 Diluted EPS: Numerator: Net income attributable to stockholders $ 47 $ 313 $ 352 Denominator: Weighted average shares outstanding 103.1 111.6 119.6 Diluted EPS (1) $ 0.45 $ 2.80 $ 2.93 Basic weighted average shares outstanding 101.9 110.1 118.0 RSUs (2) , PSUs (3) , Options (4) and ESPP 1.2 1.5 1.6 Diluted weighted average shares outstanding 103.1 111.6 119.6 (1) Earnings per share amounts are calculated using whole numbers. (2) There were no anti-dilutive RSUs for the years ended December 31, 2024, 2023, and 2022, respectively. (3) There were no anti-dilutive PSUs for the years ended December 31, 2024, 2023, and 2022, respectively. (4) Excludes approximately 1,140,000 , 818,000 and 760,000 shares of Options that would have been anti-dilutive to EPS for the years ended December 31, 2024, 2023, and 2022, respectively, under the treasury stock method. These Options could potentially dilute EPS in the future. Share Repurchases On May 3, 2023, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to an aggregate of $ 500 million of its outstanding shares of common stock over a two-year period (the "2023 Repurchase Plan"). On August 7, 2024, our Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to an aggregate of $ 500 million of its outstanding shares of common stock over a two-year period (the "2024 Repurchase Plan") which is in addition to the 2023 Repurchase Plan. The repurchases can be made through any combination of open market purchases, accelerated share repurchases, privately negotiated transactions or an other permissible manner. The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements and other market and economic conditions. The shares are retired upon repurchase. The stock repurchase programs may be suspended or discontinued at any time and will automatically expire at the end of each plan's respective term. As of December 31, 2024, $ 428 million remains available to be repurchased under the 2024 Repurchase Plan. The following table summarizes stock repurchase activity under the share repurchase programs as of December 31, 2024: (in millions) Shares Cost As of December 31, 2023 31 $ 1,117 Repurchases 10 432 As of December 31, 2024 41 $ 1,549 From January 1, 2025, through February 20, 2025, we repurchased approximately 1.6 million shares for $ 66 million. As of February 20, 2025, we had $ 361 million of remaining availability under the 2024 Repurchase Plan. 121 Table of Contents NOTE 21: RELATED PARTY TRANSACTIONS BRE Ace LLC and 1776 Holding, LLC We hold an ownership interest in BRE Ace LLC, a VIE, which owns a timeshare resort property and related operations, commonly known as “Elara, a Hilton Grand Vacations Club.” We hold an ownership interest in 1776 Holdings, LLC, a VIE, which owns a timeshare resort property and related operations, known as “Liberty Place Charleston, a Hilton Club.” We record Equity in earnings from our unconsolidated affiliates in our consolidated statements of income. See Note 11: Investments in Unconsolidated Affiliates for additional information. Additionally, we earn commissions and other fees related to fee-for-service agreements with the investees to sell VOIs at Elara, a Hilton Grand Vacations Club and Liberty Place Charleston, a Hilton Club. These amounts are summarized in the following table and are included in Sales, marketing, brand, and other fees on our consolidated statements of income as of the date they became related parties. December 31, ($ in millions) 2024 2023 2022 Equity in earnings from unconsolidated affiliates $ 18 $ 12 $ 13 Commissions and other fees 165 204 200 We also had $ 5 million and $ 19 million of outstanding receivables related to the fee-for-service agreements included in Accounts receivable, net on our consolidated balance sheets as of December 31, 2024 and 2023, respectively. Apollo Global Management Inc. ("Apollo") As part of the Diamond Acquisition in 2021, Apollo obtained more than 20 % of our common stock. We did not have outstanding balances or any transactions due to/from Apollo as of and for the years ended December 31, 2023, and 2022, respectively. During the year ended December 31, 2024, we received a reimbursement from Apollo of approximately $ 1 million for expenses incurred on their behalf. NOTE 22: BUSINESS SEGMENTS We operate our business through the following two reportable segments based on the nature of the products and services provided: • Real estate sales and financing – We market and sell VOIs that we own. We also source VOIs through fee-for-service agreements with third-party developers. Related to the sales of the VOIs that we own, we provide consumer financing, which includes interest income generated from the origination of consumer loans to customers to finance their purchase of VOIs and revenue from servicing the loans. We also generate fee revenue from servicing the loans provided by third-party developers to purchasers of their VOIs. • Resort operations and club management – We manage the clubs and earn activation fees, annual dues and transaction fees from member exchanges for other vacation products. We also earn fees for managing the timeshare properties. We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges under our club programs. We also earn revenue from food and beverage, retail and spa outlets at our timeshare properties. Our chief operating decision maker “CODM” is our Chief Executive Officer. The CODM is our primary decision maker and is responsible for allocating resources to the components of the company and assessing company performance. The CODM uses Adjusted EBITDA to allocate resources (including employees and financial or capital resources) in the budgeting and forecasting process as well as assess performance and profitability for each segment. The performance of our operating segments, which are also our reportable segments, is evaluated based on adjusted earnings before interest expense (excluding non-recourse debt), taxes, depreciation and amortization (“EBITDA”). We define Adjusted EBITDA as EBITDA, further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) other gains, including asset dispositions and foreign currency transactions; (ii) debt restructurings/retirements; (iii) non-cash impairment losses; (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. We do not include equity in earnings from unconsolidated affiliates in our measures of segment operating performance. 122 Table of Contents The following table below presents revenues for our reportable segment results which include the acquired Grand Islander and Bluegreen operations, within both segments and as of their respective acquisition dates, reconciled to consolidated amounts: Year Ended December 31, ($ in millions) 2024 2023 2022 Revenues: Real estate sales and financing $ 3,010 $ 2,357 $ 2,378 Resort operations and club management (1) 1,528 1,291 1,197 Total segment revenues 4,538 3,648 3,575 Cost reimbursements 516 386 297 Intersegment eliminations (1) ( 73 ) ( 56 ) ( 37 ) Total revenues $ 4,981 $ 3,978 $ 3,835 (1) Includes charges to the Real estate sales and financing segment from the Resort operations and club management segment for fulfillment of discounted marketing package stays at resorts. We account for intersegment revenues as if they were sales to third parties at current market prices. The following tables present Adjusted EBITDA for our reportable segments: For the year ended December 31, 2024 Real Estate and Financing Resort Operations and Club Management Total Revenues from external customers $ 3,010 $ 1,455 $ 4,465 Intersegment revenues — 73 73 Total segment revenues 3,010 1,528 4,538 (a) Less: Cost of VOI Sales 239 — 239 Selling expense 727 — 727 Marketing expense 914 — 914 Financing expense 188 — 188 Club expense — 83 83 Property management expense — 128 128 Rental expense — 681 681 Other expenses 127 43 170 Total segment expenses 2,195 (b) 935 (c) 3,130 Other: Share-based compensation expense 12 6 18 Other segment adjustment items 48 5 53 (d) Intersegment elimination ( 73 ) — ( 73 ) (a) Segment Adjusted EBITDA $ 802 $ 604 $ 1,406 123 Table of Contents For the year ended December 31, 2023 Real Estate and Financing Resort Operations and Club Management Total Revenues from external customers $ 2,357 $ 1,235 $ 3,592 Intersegment revenues — 56 56 Total segment revenues 2,357 1,291 3,648 (a) Less: Cost of VOI Sales 194 — 194 Selling expense 501 — 501 Marketing expense 682 — 682 Financing expense 99 — 99 Club expense — 60 60 Property management expense — 117 117 Rental expense — 573 573 Other expenses 98 39 137 Total segment expenses 1,574 (b) 789 (c) 2,363 Other: Share-based compensation expense 12 3 15 Other segment adjustment items 15 ( 1 ) 14 (d) Intersegment elimination ( 56 ) — ( 56 ) (a) Segment Adjusted EBITDA $ 754 $ 504 $ 1,258 For the year ended December 31, 2022 Real Estate and Financing Resort Operations and Club Management Total Revenues from external customers $ 2,378 $ 1,160 $ 3,538 Intersegment revenues — 37 37 Total segment revenues 2,378 1,197 3,575 (a) Less: Cost of VOI Sales 274 — 274 Selling expense 480 — 480 Marketing expense 551 — 551 Financing expense 103 — 103 Club expense — 42 42 Property management expense — 119 119 Rental expense — 544 544 Other expenses 115 35 150 Total segment expenses 1,523 (b) 740 (c) 2,263 Other: Share-based compensation expense 11 5 16 Other segment adjustment items 36 1 37 (d) Intersegment elimination ( 37 ) — ( 37 ) (a) Segment Adjusted EBITDA $ 865 $ 463 $ 1,328 (a) Includes charges to the Real estate sales and financing segment from the Resort operations and club management segment for fulfillment of discounted marketing package stays at resorts. We account for intersegment revenues as if they were sales to third parties at current market prices. (b) Consists of Costs of VOI Sales , Sales and Marketing , and Financing expense on the statements of income. (c) Consists of Resort and club management and Rental and ancillary services expense on the statements of income. (d) Consists of costs associated with restructuring, one-time charges, other non-cash items, and for the Real Estate and Financing Segment, amortization of fair value premiums and discounts resulting from purchase accounting. 124 Table of Contents The following table presents Adjusted EBITDA for our reportable segments reconciled to net income and net income attributable to stockholders: Year Ended December 31, ($ in millions) 2024 2023 2022 Adjusted EBITDA: Real estate sales and financing (1) $ 802 $ 754 $ 865 Resort operations and club management (1) 604 504 463 Segment Adjusted EBITDA 1,406 1,258 1,328 Acquisition and integration-related expense ( 237 ) ( 68 ) ( 67 ) General and administrative ( 199 ) ( 194 ) ( 212 ) Depreciation and amortization ( 268 ) ( 213 ) ( 244 ) License fee expense ( 171 ) ( 138 ) ( 124 ) Other (loss) gain, net ( 11 ) 2 ( 1 ) Interest expense ( 329 ) ( 178 ) ( 142 ) Income tax expense ( 76 ) ( 136 ) ( 129 ) Equity in earnings from unconsolidated affiliates 18 12 13 Impairment expense ( 2 ) ( 3 ) ( 17 ) Other adjustment items (2) ( 71 ) ( 29 ) ( 53 ) Net income 60 313 352 Net income attributable to noncontrolling interest 13 — — Net income attributable to stockholders $ 47 $ 313 $ 352 (1) Includes intersegment transactions. Refer to our table presenting revenues by reportable segment above for additional discussion. (2) These amounts include costs associated with share-based compensation, restructuring, one-time charges and other non-cash items included within our reportable segments. The following table presents total assets for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2024 2023 Real estate sales and financing $ 7,349 $ 6,559 Resort operations and club management 3,163 1,735 Total segment assets 10,512 8,294 Corporate 930 391 Total assets $ 11,442 $ 8,685 The following table presents capital expenditures for property and equipment (including inventory and leases) for our reportable segments, reconciled to consolidated amounts: Year Ended December 31, ($ in millions) 2024 2023 2022 Real estate sales and financing $ 152 $ 61 $ 26 Resort operations and club management 2 2 2 Total segment capital expenditures 154 63 28 Corporate 45 34 65 Total capital expenditures $ 199 $ 97 $ 93 NOTE 23: COMMITMENTS AND CONTINGENCIES Bass Pro Shops Marketing Agreement Commitments In November 2023, we entered into a 10-year exclusive marketing agreement with Bass Pro Shops (“Bass Pro”), a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides us with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. This agreement 125 Table of Contents became effective on the Bluegreen Acquisition Date. As a part of this agreement, we are required to make certain minimum annual payments and certain variable payments based upon the number of travel packages sold during the year or the number of Bass Pro and Cabela’s retail locations HGV maintains during the year. As of 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. Other Commitments We have fulfilled certain arrangements with developers where we were committed to purchase vacation ownership units or other real estate at a future date to be marketed and sold under our Hilton Grand Vacations brand. As of December 31, 2024, we were committed to purchase approximately $ 15 million of inventory over a period of 2 years and $ 21 million of other commitments in the normal course of business. We are also committed to an agreement to exchange parcels of land in Hawaii, subject to the successful completion of zoning, land use requirements and other applicable regulatory requirements. The actual amount and timing of the acquisitions are subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances. During the years ended December 31, 2024, 2023 and 2022, we fulfilled $ 63 million, $ 156 million and $ 92 million, respectively, of purchases required under our inventory commitments. As of December 31, 2024, our remaining obligations pursuant to these arrangements were expected to be incurred as follows: ($ in millions) 2025 2026 2027 2028 2029 Thereafter Total Marketing and license fee agreements $ 57 $ 37 $ 38 $ 38 $ 38 $ 134 $ 342 Inventory purchase obligations (1) 6 9 — — — — 15 Other commitments (2) 11 5 1 1 2 1 21 Total $ 74 $ 51 $ 39 $ 39 $ 40 $ 135 $ 378 (1) Includes commitments for a property in Missouri. (2) Primarily relates to commitments related to information technology and sponsorships. Litigation Contingencies We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums. We evaluate these legal proceedings and claims at each balance sheet date to determine the degree of probability of an unfavorable outcome and, when it is probable that a liability has been incurred, our ability to reasonably estimate the amount of loss. We record a contingent litigation liability when it is determined that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of December 31, 2024, and 2023, we accrued liabilities of approximately $ 7 million and $ 123 million, respectively, for all legal matters. In March 2022, there was a judgment entered against Diamond in connection with a case filed in 2015 ( O'Malley v. Diamond Resorts Management, Inc. ). During the first quarter of 2024, the judgment entered in O’Malley v. Diamond Resorts Management, Inc. was fully satisfied for approximately $ 104 million. Of this $ 104 million, we made a payment of approximately $ 50 million and our insurance policies covered the remaining $ 54 million. Since we received the portion from our insurance policies, we no longer have an insurance claim receivable within Accounts receivable, net in our consolidated balance sheet as of December 31, 2024. During the years ended December 31, 2024, 2023 and 2022, we recognized charges of approximately $ 2 million, $ 33 million and $ 15 million, respectively, to General and administrative in our consolidated statements of income that represents the amount of the settlement liability not deemed probable of recovery from the insurance carriers, prior to the full settlement of the matter. In May 2024, we settled an additional legal matter for approximately $ 13 million that was previously recorded in Accounts payable and accrued expenses. On July 22, 2024, an adverse interim award was entered in an arbitration related to a matter that existed as of the Bluegreen Acquisition Date involving Bluegreen Vacations Unlimited, Inc., a Bluegreen subsidiary, in connection with an alleged breach of a purchase and sale agreement for The Manhattan Club property in New York, New York. Prior to any decision by the arbitration panel on potential damages for breach, the interim award allowed Bluegreen to propose a cure for the breach. We and the opposing party both proposed forms of cure to the arbitration panel. On February 10, 2025, the arbitration panel issued a decision on what is required to cure, which involves purchases of inventory and assuming the management agreement at The Manhattan Club. We are proceeding towards complying and curing, with the first steps of cure having been completed on February 20, 2025 and February 26, 2025. We also filed a petition to vacate the interim award in the United States District Court for the Southern District of New York. The petition was recently denied as premature. However, the order provides that once the panel issues a final award (rather than an interim award), the Company may file a new petition. 126 Table of Contents While we currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material effect on the Company’s financial condition, cash flows, or materially adversely affect overall trends in our results of operations, legal proceedings are inherently uncertain and unfavorable rulings could, individually or in aggregate, have a material adverse effect on the Company’s business, financial condition or results of operations. Surety Bonds We utilize surety bonds related to the sales of VOIs in order to meet regulatory requirements of certain states. The availability, terms and conditions and pricing of such bonding capacity are dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity and our corporate credit rating. We have commitments from surety providers in the amount of $ 670 million as of December 31, 2024, which primarily consist of escrow, subsidy and construction related bonds. NOTE 24: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest, net was $ 354 million, $ 187 million and $ 175 million for the years ended December 31, 2024, 2023 and 2022, respectively. Cash paid for income taxes, net of refunds, was $ 36 million, $ 187 million and $ 141 million for the years ended December 31, 2024, 2023 and 2022, respectively. The following non-cash activities were excluded from the consolidated statements of cash flows: • In 2024, we recorded non-cash operating activity transfers, net of $ 271 million related to the registrations for timeshare units under construction for from Property and equipment, net to Inventory, pertaining to properties in Hawaii and South Carolina. • In 2023, we completed the acquisition of Grand Islander, by exchanging 100 % of the outstanding equity interests of Grand Islander for $ 117 million. The purchase price of $ 117 million included cash consideration, as well as 4 million of non-cash consideration attributable to the effective settlement of a pre-existing relationship based on the contract value. • In 2023, we recorded non-cash operating activity transfer of $ 20 million to Property and equipment, net, related to the purchase of units in South Carolina, of which $ 17 million was accrued within Accounts payable, accrued expenses and other and the remaining $ 3 million was an inventory deposit in Other Assets . • In 2023, we recorded non-cash operating activity transfers of $ 92 million related to the registrations for timeshare units under construction from Property and equipment, net to Inventory , pertaining to properties in Hawaii. • In 2022, we recorded non-cash operating activity transfer of $ 48 million related to certain undeveloped land and infrastructure that was previously recorded within the classification of Land and infrastructure held for sale to Property and equipment, net . NOTE 25: SUBSEQUENT EVENTS On January 31, 2025, we amended our Revolver Credit Facility ("Revolver") and both our Term Loan B due 2028 and Term Loan B due 2031. The terms of the Revolver were amended to reduce pricing spreads, expand covenants, reset certain incurrence baskets and extend maturity to January 2030. The Term Loan B due 2028 was repriced to SOFR plus 2.00 %, down from SOFR plus 2.50 %. The Term Loan B due 2031 was repriced to SOFR plus 2.00 %, down from SOFR plus 2.25 %. Additionally, the Term Loan A, due January 2028, was repriced to SOFR plus 1.65 %, down from SOFR plus 1.75 %. 127 Table of Contents ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes in or disagreements with our accountants on accounting and financial disclosure matters.