Hilton Grand Vacations Inc

. HILTON GRAND VACATIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

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.

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.

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 Receivablesfor 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, 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 aseven-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.

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.

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 tofive 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 havetwo 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.

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 toforty years); furniture and equipment (three tofifteen 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.

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 liabilitiesin 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: Leasesfor 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.

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, netand Non-recourse debt, netin 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 debtfor 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 gains 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 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 an impact on our consolidated balance sheets and statements of income. See Note 22: Business Segmentsfor 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

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:

(1)Reflects the balance of Bluegreen's debt repaid by HGV.

(2)Reflects transaction-related expenses incurred by Bluegreen but paid by HGV.

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:

(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 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:

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:

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 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.

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.

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:

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:

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.

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 followingtwo 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.

(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:

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.

The following table presents the composition of our contract liabilities:

(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:

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:

NOTE 5: RESTRICTED CASH

Restricted cash was as follows:

(1)See Note 15: Debt and Non-recourse Debtfor 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:

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:

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:

(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 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:

(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:

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 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:

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:

The following table details our gross originated timeshare financing receivables by the origination year and average FICO score as of December 31, 2024:

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:

Acquired Timeshare Financing Receivables

Our gross balances by average FICO score of our acquired timeshare financing receivables were as follows:

The following tables details our gross acquired timeshare financing receivables by the origination year and average FICO score as of December 31, 2024:

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:

NOTE 8: INVENTORY

Inventory was comprised of the following:

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 forfour 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:

(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:

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 wereno 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.

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 Debtfor additional information regarding acquired VIEs.

Our consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following:

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. Thesetwo 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 thetwo 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 Transactionsfor 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.

NOTE 12: INTANGIBLE ASSETS

Intangible assets and related amortization expense were as follows:

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: Acquisitionsfor 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:

NOTE 13: OTHER ASSETS

Other assets were as follows:

NOTE 14: ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER

Accounts payable, accrued expenses and other were as follows:

(1)Other accrued expenses includes amounts due to HOAs and various accrued liabilities.

NOTE 15: DEBT AND NON-RECOURSE DEBT

Debt

The following table details our outstanding debt balance and its associated interest rates:

(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 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:

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.

Non-recourse Debt

The following table details our outstanding non-recourse debt balance and associated interest rates:

(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 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 Cashin our consolidated balance sheets.

Debt Maturities

The contractual maturities of our debt and non-recourse debt as of December 31, 2024, were as follows:

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:

(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 didnot recognize any impairments during the year ended December 31, 2024.

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:

Supplemental cash flow information related to operating leases was as follows:

Supplemental balance sheet information related to operating leases was as follows:

The future minimum rent payments under non-cancelable operating leases as of December 31, 2024, are as follows:

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:

The components of our provision for income taxes were as follows:

Reconciliations of our tax provision at the U.S. statutory rate to the provision for income taxes were as follows:

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:

The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax liability were as follows:

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:

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 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:

The following table summarizes the activity of our RSUs during the year ended December 31, 2024:

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:

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:

(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:

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 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:

The following table summarizes the activity of our Performance RSUs during the year ended December 31, 2024:

(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.

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.

(1)Earnings per share amounts are calculated using whole numbers.

(2) There wereno anti-dilutive RSUs for the years ended December 31, 2024, 2023, and 2022, respectively.

(3) There wereno 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 atwo-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 atwo-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:

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.

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.

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 followingtwo 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.

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:

(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:

(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.

The following table presents Adjusted EBITDA for our reportable segments reconciled to net income and net income attributable to stockholders:

(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:

The following table presents capital expenditures for property and equipment (including inventory and leases) for our reportable segments, reconciled to consolidated amounts:

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 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:

(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.

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 otherand 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%.