Hilton Grand Vacations Inc

Currently, and from time to time, we are subject to claims in legal proceedings arising in the normal course of business, including, among others, legal proceedings for which we accrue liabilities as discussed in Note 23: Commitments and Contingenciesto our consolidated financial statements included in this Annual Report on Form 10-K. Related to the Legacy-Diamond business, an appeal for judgment was rendered in favor of the plaintiffs in November 2023 (with the California Supreme Court rejecting further appeals in February 2024) related to a personal injury lawsuit, O’Malley et al. v. Diamond Resorts Management, Inc., which was filed against Diamond in 2015 and for which we have accrued liabilities of approximately $102 million as of December 31, 2023. In November 2023 we initiated litigation against the various insurers disputing all or parts of coverage for this matter seeking to obtain full coverage. We believe that through this litigation, these existing insurance policies will cover a significant portion, if not substantially all, of this liability. However, it’s possible our insurance policies may still not cover a significant portion of the total amount and we will need to make a payment of approximately $50 million towards the judgment while litigation with the insurers over further coverage proceeds.

While we presently believe that the ultimate outcome of any currently known proceedings (including the Legacy-Diamond lawsuit discussed above), individually and in the aggregate, will not materially harm our financial position, cash flows, or overall trends in results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.