What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 124 added, 85 removed, 419 unchanged (33% of the section changed)

33 unchanged sentences

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.

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

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

Our operations primarily consist of:

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operating resorts and timeshare plans;

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

As of March 31, 2025, we have over 200 properties located in the United States (“U.S.”), Europe, Canada, the Caribbean, Mexico, and Asia.

and managing our exchange programs through which our members may receive HGV Max benefits.

Together our timeshare plans and exchange programs are collectively referred to as “Clubs”.

As of June 30, 2025, we have over 200 properties located in the United States (“U.S.”), Europe, Canada, the Caribbean, Mexico, and Asia.

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

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We have rebranded many of the Diamond properties, and we expect to continue this process for a majority of the remaining Diamond properties.

During 2025, we anticipate rebranding certain Bluegreen properties to Hilton Grand Vacations brands by meeting Hilton standards.

As of March 31, 2025, we had approximately 725,000 members across our Club offerings.

Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 24 industry-leading brands across approximately 8,400 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

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

During 2025, we anticipate rebranding certain Bluegreen properties to Hilton Grand Vacations brands upon meeting Hilton brand standards.

As of June 30, 2025, we had approximately 725,000 members across our Club offerings.

Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at Hilton Grand Vacations resorts, properties in the Hilton system of 24 industry-leading brands across approximately 8,600 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

We operate our business across two segments:

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

For the three months ended March 31, 2025, sales from fee-for-service and just-in-time inventory were 15%, and 10% of contract sales, respectively.

For the six months ended June 30, 2025, sales from fee-for-service and just-in-time inventory were 16%, and 11% of contract sales, respectively.

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

The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is $13.2 billion at current pricing.

The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will be made available for sale is $13.3 billion at current pricing.

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

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With the Bluegreen Acquisition, our marketing and sales activities also include marketing relationships with nationally-recognized consumer brands such as Bass Pro, a fishing, marine, hunting, camping and sports gear retailer, and Choice Hotels.

In November 2023, HGV signed a 10-year exclusive marketing agreement with Bass Pro that provides HGV with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means.

HGV is party to an exclusive marketing agreement with Bass Pro that provides HGV with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means.

This agreement became effective on the Bluegreen Acquisition Date.

As of March 31, 2025, HGV had sales and marketing operations at a total of 138 Bass Pro Shops and Cabela’s Stores, including 8 virtual kiosks.

As of June 30, 2025, HGV had sales and marketing operations at a total of 140 Bass Pro Shops and Cabela’s Stores, including 8 virtual kiosks.

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

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

For the three months ended March 31, 2025, 75% of our contract sales were to our existing owners, compared to 76% for the three months ended March 31, 2024.

For the six months ended June 30, 2025, 74% of our contract sales were to our existing owners, compared to 71% for the six months ended June 30, 2024.

We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans.

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

Financing propensity was 64% and 65% for the three months ended March 31, 2025 and 2024, respectively.

Financing propensity was 65% for both the six months ended June 30, 2025 and 2024, respectively.

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

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and Canadian borrowers at the time of origination were as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Weighted-average FICO score 737 738

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

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

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

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

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Within each of our two reportable segments, we present additional profit and profit margin information for certain key activities—real estate, financing, resort and club management, and rental and ancillary services.

These non-GAAP

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

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

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

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Results of Operations

Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024

Three and Six Months Ended June 30, 2025 Compared with the Three and Six Months Ended June 30, 2024

Segment Results

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

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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

Three Months Ended March 31, Variance (1)

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance (1)

($ in millions) 2025 2024 $ % 2025 2024 $ %

Net loss attributable to stockholders $ (17) $ (4) $ (13) NM

Net income (loss) attributable to stockholders

$ 25 $ 2 $ 23 NM $ 8 $ (2) $ 10 NM

Net income attributable to noncontrolling interest

Net loss (12) (2) (10) NM

3 2 1 50.0 8 4 4 100.0

28 4 24 NM 16 2 14 NM

Interest expense 79 87 (8) (9.2) 156 166 (10) (6.0)

Income tax expense (benefit)

15 3 12 NM 21 (8) 29 NM

Depreciation and amortization 59 68 (9) (13.2) 126 130 (4) (3.1)

2 unchanged sentences

Other (gain) loss, net

(6) 5 (11) NM

(4) 3 (7) NM (10) 8 (18) NM

Share-based compensation expense 23 18 5 27.8 35 27 8 29.6

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Adjusted EBITDA attributable to noncontrolling interest

5 4 1 25.0 10 7 3 42.9

Adjusted EBITDA attributable to stockholders

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

We evaluate our business segment operating performance using segment Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders, as described in Note 17:

We evaluate our business segment operating performance using segment Adjusted EBITDA, as described in Note 17:

Business Segments in our unaudited condensed consolidated financial statements.

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

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Adjusted EBITDA attributable to noncontrolling interest

5 4 1 25.0 10 7 3 42.9

Total Adjusted EBITDA attributable to stockholders

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

Real estate sales and financing Adjusted EBITDA decreased by $73 million for the three months ended March 31, 2025, compared to the same period in 2024 primarily due to decreased Sales of VOIs, net of $60 million and increased Sales and marketing expense of $24 million, partially offset by decreased Cost of VOI Sales of $23 million and increased Financing profit of $5 million.

Real estate sales and financing Adjusted EBITDA decreased by $17 million for the three months ended June 30, 2025, compared to the same period in 2024 primarily due to an increase in Sales and marketing expense of $26 million and a decrease in Sales of VOI, net of $2 million, partially offset by an increase in Financing profit of $14 million.

Real estate sales and financing Adjusted EBITDA decreased by $90 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a decrease in Sales of VOI, net of $62 million and an increase in Sales and marketing expense of $50 million, partially offset by an increase in Financing profit of $19 million.

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

Resort operations and club management segment adjusted EBITDA remained consistent for the three months ended March 31, 2025, compared to the same period in 2024.

Resort operations and club management segment adjusted EBITDA remained consistent for both the three and six months ended June 30, 2025 when compared to the same periods in 2024.

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

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

Three Months Ended March 31, Variance (1)

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance (1)

($ in millions) 2025 2024 $ % 2025 2024 $ %

Net loss attributable to stockholders $ (17) $ (4) $ (13) NM

Net income (loss) attributable to stockholders

$ 25 $ 2 $ 23 NM $ 8 $ (2) $ 10 NM

Net income attributable to noncontrolling interest

Net loss (12) (2) (10) NM

3 2 1 50.0 8 4 4 100.0

28 4 24 NM 16 2 14 NM

Interest expense 79 87 (8) (9.2) 156 166 (10) (6.0)

Income tax expense (benefit)

15 3 12 NM 21 (8) 29 NM

Depreciation and amortization 59 68 (9) (13.2) 126 130 (4) (3.1)

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Other (gain) loss, net

(6) 5 (11) NM

(4) 3 (7) NM (10) 8 (18) NM

Equity in earnings from unconsolidated affiliates (2)

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Resort and club management profit 127 123 4 3.3 256 235 21 8.9

Rental and ancillary services profit (19) 8 (27) NM

Rental and ancillary services profit (8) 7 (15) NM (27) 15 (42) NM

Profit $ 308 $ 308 $ — — $ 558 $ 627 $ (69) (11.0)

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

(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $1 million for the three months ended March 31, 2024.

(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $1 million for the three and six months ended June 30, 2025, and $2 million and $3 million for the three and six months ended June 30, 2024, respectively.

Reconciliation of Non-GAAP Real Estate Measures to GAAP Measures

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See “Real Estate Sales and Financing Segment—Real Estate” below.

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ 2025 2024 $

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Net Sales and marketing expense (deferrals) recognitions

(14) (1) (13) (35) (1) (34)

Net construction (deferrals) recognitions

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

Three Months Ended March 31, Variance (1)

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance (1)

($ in millions, except Tour flow and VPG) 2025 2024 $ % 2025 2024 $ %

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Reportability and other:

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

(126) 2 (128) NM

Net (deferrals) recognitions of sales of VOIs under construction (3)

(82) (13) (69) NM (208) (11) (197) NM

(46) (31) (15) 48.4 (80) (62) (18) 29.0

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

Contract sales increased by $90 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in VPG 14.4% and new inventory available for sale during the fourth quarter of 2024.

Three Months Ended March 31, Variance

Contract sales increased $77 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to an 11.1% increase in VPG and new inventory available for sale.

Contract sales increased $167 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a 12.6% increase in VPG and new inventory available for sale.

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Fee-for-service commissions

84 88 (4) (4.5) 152 152 — —

Sales revenue 553 559 (6) (1.1) 999 1,061 (62) (5.8)

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21.2 % 21.5 % 18.7 % 23.9 %

(1) Excluding the marketing revenue and other fees adjustment, Real estate profit margin was 13.5% and 23.0% for the three months ended March 31, 2025 and 2024, respectively.

Real estate profit decreased $64 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in Sales of VOI, net and increase in Sales and marketing expense, net partially offset by a decrease in Cost of VOI sales.

Sales revenue decreased $56 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to net deferrals during the first quarter of 2025 of $126 million, compared to a net recognition of $2 million in the first quarter of 2024, partially offset by an increase in owned contract sales of $79 million.

Real estate expense increased $8 million for the three months ended March 31, 2025, compared to the same periods in 2024, primarily due to net deferrals of $58 million during the first quarter of 2025, compared to a net deferral of $1 million in the first quarter of 2024, partially offset by increases in selling expenses of $36 million and marketing expenses of $18 million.

Three Months Ended March 31, Variance

(1) Excluding the marketing revenue and other fees adjustment, Real estate profit margin was 18.5% and 18.8% for the three months ended June 30, 2025 and 2024, respectively, and 16.2% and 20.8% for the six months ended June 30, 2025 and 2024, respectively.

For the three months ended June 30, 2025, Real estate profit, Sales revenue and Real estate expense remained consistent when compared to the same period in 2024.

Real estate profit decreased $67 million, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a decrease in Sales of VOI, net and increase in Sales and marketing expense, net partially offset by a decrease in Cost of VOI sales.

Sales revenue decreased $62 million, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to net deferrals of $208 million in 2025 compared to net deferrals of $11 million in 2024, partially offset by an increase in owned contract sales of $162 million.

Real estate expense increased $5 million, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to an increase in selling expenses of $63 million and an increase in marketing and other expenses of $34 million, partially offset net deferrals of $95 million in 2025 compared to net deferrals of $6 million in 2024.

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Consumer financing interest expense

26 22 4 18.2 55 45 10 22.2

Other financing expense 26 20 6 30.0 51 34 17 50.0

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Financing profit margin 57.1 % 56.9 % 56.6 % 59.7 %

Financing profit increased by $5 million for the three months ended March 31, 2025, compared to the same period in 2024 primarily due to an increase in financing revenue, offset by an increase in financing expense.

Financing revenue increased by $21 million for three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in the weighted average outstanding balance of the timeshare financing receivables portfolio and a decrease in the premium amortization of the acquired timeshare financing receivables of $8 million.

Financing expense increased by $16 million for three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase of $9 million of expenses incurred to manage our portfolios and an increase in consumer financing interest expense of $6 million due to an increase in the non-recourse debt balance.

Financing profit increased $14 million and $19 million for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to an increase in financing revenues, partially offset by an increase in financing expenses.

Financing revenue increased $24 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to a decrease in the premium amortization of acquired timeshare financing receivables.

Financing revenue increased $45 million, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to an increase in the average outstanding balance of the timeshare financing receivables portfolio and a decrease in the premium amortization of the acquired timeshare financing receivables of $28 million.

Financing expense increased $10 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to a $6 million increase in expenses incurred to manage our portfolios and an increase in consumer financing interest expense of $4 million due to an increase in the weighted average non-recourse debt balance.

Financing expense increased $26 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a $16 million increase in expenses incurred to manage our portfolios and an increase in consumer financing interest expense of $10 million due to an increase in the weighted average non-recourse debt balance.

Resort Operations and Club Management Segment

Resort and Club Management

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Resort and club management profit margin 69.4 % 71.9 % 69.9 % 69.7 %

Resort and club management profit increased by $17 million for the three months ended March 31, 2025, compared to the same period in 2024, due to the increase in revenues.

Resort and club management revenue increased $17 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to increases in revenue from annual club dues of $5 million, management fee revenue of $4 million and $3 million of license fee revenue.

Resort and club management expenses remained consistent for the three months ended March 31, 2025, compared to the same period in 2024.

Resort and club management profit increased $4 million and $21 million for both the three and six months ended June 30, 2025, compared to the same periods in 2024, due to an increase in revenues partially offset by an increase in expenses.

Resort and club management revenue increased $12 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to increases in management fee revenue of $6 million, license fee revenue of $3 million and annual club dues revenue of $2 million.

Resort and club management revenue increased $29 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to increases in management fee revenue of $10 million, annual club dues revenue of $7 million and license fee revenue of $6 million.

Resort and club management expenses increased $8 million for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to an increase in property management expenses.

Rental and Ancillary Services

Three Months Ended March 31, Variance (1)

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance (1)

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Rental and ancillary services expenses 203 188 15 8.0 409 361 48 13.3

Rental and ancillary services profit $ (19) $ 8 $ (27) NM

Rental and ancillary services profit $ (8) $ 7 $ (15) NM $ (27) $ 15 $ (42) NM

Rental and ancillary services profit margin (4.1) % 3.6 % (7.1) % 4.0 %

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

Rental and ancillary services profit decreased by $27 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in rental expenses, partially offset by an increase in rental revenues.

Rental and ancillary services revenue increased $6 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in arrivals for transient stays.

Rental and ancillary services expenses increased $33 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to an increase in maintenance fees.

Rental and ancillary services profit decreased by $15 million and $42 million for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to an increase in expenses.

Rental and ancillary services revenue remained consistent for both the three and six months ended June 30, 2025, compared to the same periods in 2024.

Rental and ancillary services expenses increased $15 million and $48 million for the three months ended June 30, 2025, compared to the same periods in 2024, primarily due to an increase in maintenance fees.

Other Operating Expenses

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

4 unchanged sentences

1 — 1 100.0 1 2 (1) (50.0)

General and administrative expenses remained consistent for the three months ended March 31, 2025, compared to the same period in 2024.

Depreciation and amortization increased by $5 million for the three months ended March 31, 2025, when compared to the same period in 2024.

The increase primarily was due to depreciation expense in connection with assets acquired as part of the Bluegreen Acquisition.

License fee expense increased by $14 million for the three months ended March 31, 2025, when compared to the same period in 2024.

The increase was primarily due to an increase in licensing fees paid to Hilton.

For the three and six months ended June 30, 2025, the increase in other operating expenses was primarily due to an increase in license fee expense partially offset by a decrease in depreciation and amortization, when compared to the same periods in 2024.

License fee expense increased by $12 million and $26 million for both the three and six months ended June 30, 2025, when compared to the same periods in 2024.

The increase was primarily due to licensing fees paid to Hilton.

Acquisition and Integration-Related Expense

Three Months Ended March 31, Variance

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

($ in millions) 2025 2024 $ % 2025 2024 $ %

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Integration costs include technology-related costs, fees paid to management consultants, rebranding fees and employee-related costs such as severance and retention.

For the three months ended March 31, 2025, acquisition and integration-related costs decreased by $81 million when compared to the same period in 2024.

For the three and six months ended June 30, 2025, acquisition and integration-related costs decreased by $22 million and $103 million, respectively, when compared to the same periods in 2024.

The decrease was primarily driven by the Bluegreen Acquisition that occurred in the first quarter of 2024.

Non-Operating Expenses

Three Months Ended March 31, Variance (1)

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance (1)

($ in millions) 2025 2024 $ % 2025 2024 $ %

2 unchanged sentences

Other (gain) loss, net

(6) 5 (11) NM

Income tax expense

(4) 3 (7) NM (10) 8 (18) NM

Income tax expense (benefit)

15 3 12 NM 21 (8) 29 NM

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

The change in non-operating expenses for the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to an increase in income tax expense of $17 million and a change in other (gain) loss of $11 million.

The increase in income tax expense was primarily driven by discrete items.

The changes in non-operating expenses for the three and six months ended June 30, 2025, compared to the same periods in 2024, were primarily due to decreases in interest expense and other (gain) loss, net partially offset by an increase in income tax expense.

The decrease in interest expense was primarily due to a decrease in the overall debt balance and a decrease in the weighted average interest rate.

The change in other (gain) loss is primarily due to revaluation of our foreign currency transactions.

For the three months ended June 30, 2025, the increase in income tax expense was primarily driven by the overall change in pretax earnings compared to the same period in 2024.

For the six months ended June 30, 2025, the increase in income tax expense was primarily driven by the overall change in pretax earnings and discrete items compared to the same period in 2024.

Net income attributable to noncontrolling interest

Three Months Ended June 30, Variance (1)

Six Months Ended June 30, Variance

($ in millions) 2025 2024 $ % 2025 2024 $ %

Net income attributable to noncontrolling interest

$ 3 $ 2 $ 1 50.0 $ 8 $ 4 $ 4 100.0

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

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

Net income attributable to the noncontrolling interest in Big Cedar was $5 million and $2 million during the three months ended March 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

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We finance our short- and long-term liquidity needs primarily through cash and cash equivalents, cash generated from our operations, draws on our revolver credit facility, our non-recourse revolving timeshare credit facility (“Timeshare Facility”), and through periodic securitizations of our timeshare financing receivables.

• As of March 31, 2025, we had total cash and cash equivalents of $259 million and restricted cash of $311 million.

• As of June 30, 2025, we had total cash and cash equivalents of $269 million and restricted cash of $323 million.

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

• During the three months ended March 31, 2025, we repurchased 4 million shares for $150 million under our share repurchase program.

• During the six months ended June 30, 2025, we repurchased 8 million shares for $300 million under our share repurchase program.

Earnings Per Share for additional information.

• As of March 31, 2025, we had $870 million remaining borrowing capacity under the revolver facility.

• As of March 31, 2025, we had an aggregate of $100 million remaining borrowing capacity under our Timeshare Facility.

As of March 31, 2025, we had $951 million of notes that were current on payments but not securitized.

• In June 2025, we completed a securitization of approximately $300 million of gross timeshare financing receivables.

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

Debt and Non-Recourse Debt for additional information.

• As of June 30, 2025, we had $794 million remaining borrowing capacity under the revolver facility.

• As of June 30, 2025, we had an aggregate of $120 million remaining borrowing capacity under our Timeshare Facility.

As of June 30, 2025, we had $937 million of notes that were current on payments but not securitized.

Of that figure, approximately $429 million could be monetized through either warehouse borrowing or securitization while another $260 million of mortgage notes we anticipate being eligible following certain customary milestones such as first payment, deeding and recording.

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We have made commitments with developers to purchase vacation ownership units at a future date to be marketed and sold under our Hilton Grand Vacations brand.

As of March 31, 2025, our inventory-related purchase commitments totaled $120 million to be fulfilled over a period of 11 years.

As of June 30, 2025, our inventory-related purchase commitments totaled $256 million to be fulfilled over a period of 10 years.

Sources and Uses of Our Cash

The following table summarizes our net cash flows and key metrics related to our liquidity:

Three Months Ended March 31, Variance

Six Months Ended June 30, Variance

($ in millions) 2025 2024 $

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over time, we generally receive more cash from the sale of an owned VOI as compared to that from a fee-for-service sale.

The increase in net cash provided by operating activities for the three months ended March 31, 2025, compared to the same period in 2024 was primarily due to a decrease in cash utilized for working capital, partially offset by an increase in provision for financing receivable losses.

The decrease in net cash provided by operating activities for the six months ended June 30, 2025, compared to the same period in 2024, was primarily due to a decrease in depreciation and amortization expenses of $30 million and an increase in purchases of inventory from a third-party developer of $11 million, partially offset by an increase in provision for financing receivable losses of $21 million and an increase in share-based compensation expense of $8 million.

The following table summarizes our VOI inventory spending:

Three Months Ended March 31,

Six Months Ended June 30,

($ in millions) 2025 2024

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We believe the renovations of our existing assets are necessary to stay competitive in the markets in which we operate.

Net cash used in investing activities was $32 million for the three months ended March 31, 2025 compared to $1,473 million for the same period in 2024.

Net cash used in investing activities was $66 million for the six months ended June 30, 2025 compared to $1,482 million for the same period in 2024.

The decrease was primarily due to the Bluegreen Acquisition in 2024.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 was $201 million compared to net cash provided by financing activities of $1,272 million for the same period in 2024.

The decrease was primarily due to net proceeds from debt and non-recourse debt of $1,426 million in 2024 compared to net payments of $36 million in 2025 and an increase in share repurchases of $51 million, partially offset by a decrease in cash paid for debt issuance costs of $$32 million and a decrease of payment on withholding taxes on vesting of RSUs of $14 million.

Net cash used in financing activities for the six months ended June 30, 2025 was $213 million compared to net cash provided by financing activities of $1,101 million for the same period in 2024.

The change was primarily due to net proceeds from debt and non-recourse debt of $1,362 million in 2024 compared to net proceeds of $99 million in 2025 and an increase in share repurchases of $101 million, partially offset by a decrease in cash paid for debt issuance costs of $38 million and a decrease of payment on withholding taxes on vesting of RSUs of $13 million.

Contractual Obligations

Our commitments primarily relate to agreements with developers to purchase or construct vacation ownership units, operating leases, marketing and license fee agreements and obligations associated with our debt, non-recourse debt and the related interest.

As of March 31, 2025, we were committed to approximately $9,356 million in contractual obligations over 16 years, $734 million of which will be fulfilled in the remainder of 2025.

As of June 30, 2025, we were committed to approximately $9,415 million in contractual obligations over 16 years, $496 million of which will be fulfilled in the remainder of 2025.

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

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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 $669 million as of March 31, 2025, which primarily consist of escrow, subsidy and construction related bonds.

We have commitments from surety providers in the amount of $538 million as of June 30, 2025, which primarily consist of escrow and subsidy related bonds.

Subsequent Events

On July 11, 2025, we completed a term securitization of approximately ¥9.5 billion of timeshare loans through Hilton Grand Vacations Japan Trust 2025-1 (“the Trust” or “SMRAI”), with a coupon rate of 1.41%.

One class of notes were issued by the Trust, and the collateralized timeshare notes are domiciled in Japan.

The proceeds will primarily be used for general corporate purposes.

On July 29, 2025, our Board of Directors approved a new share repurchase program authorizing us to repurchase up to an aggregate of $600 million of its outstanding shares of common stock over a two-year period, which is in addition to the amount remaining under the current 2024 Repurchase Plan .

Repurchases may be conducted in the open market, in privately negotiated transactions or such other manner as determined by us, including through repurchase plans complying with the rules and regulations of the SEC.

The timing and actual number of shares repurchased under any share repurchase plan will depend on a variety of factors, including the stock price, available liquidity and market conditions.

The shares are retired upon repurchase.

The share repurchase plans do not obligate HGV to repurchase any dollar amount or number of shares of common stock, and they may be suspended or discontinued at any time.

Critical Accounting Policies and Estimates

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis