Hilton Grand Vacations Inc.

Previous wording

This Quarterly Report on Form 10-Q includes discussion of key business operational metrics, including contract sales, tour flow, and volume per guest (“VPG”).

Current wording

This Quarterly Report on Form 10-Q includes discussion of key business and financial metrics, including contract sales, tour flow, and volume per guest (“VPG”).

Previous wording

As of March 31, 2026, 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, California, South Carolina, Arizona, Nevada and Virginia. Our properties feature spacious, condominium-style accommodations with superior amenities and quality service. We have rebranded many of the properties acquired in the Diamond acquisition, and we expect to continue this process for the remaining planned Diamond properties. During 2025, we began rebranding certain properties acquired in the Bluegreen Acquisition to Hilton Grand Vacations brands and expect to continue this process for the majority of the Bluegreen properties.

Current wording

As of June 30, 2026, we had approximately 200 properties located in the United States (“U.S.”), Europe, Canada, the Caribbean, Mexico, and Japan. Our properties feature spacious, condominium-style accommodations with superior amenities and quality service. We have rebranded many of the properties acquired in the Diamond acquisition, and we expect to continue this process for the remaining planned Diamond properties. During 2025, we began rebranding certain properties acquired in the Bluegreen Acquisition to Hilton Grand Vacations brands and expect to continue this process for the majority of the Bluegreen properties.

Previous wording

As of March 31, 2026, we had more than 720,000 members across our Club offerings. Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at Hilton Grand Vacations resorts, properties in the Hilton system of 27 industry-leading brands with over 9,100 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

Current wording

As of June 30, 2026, we had more than 720,000 members across our Club offerings. Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at Hilton Grand Vacations resorts, properties in the Hilton system of 27 industry-leading brands with over 9,200 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

Previous wording

Traditionally, timeshare operators have funded 100% of the investment necessary to acquire land and construct timeshare properties. We source VOIs through developed properties and fee-for-service and just-in-time agreements with third-party developers and have focused our inventory strategy on developing an optimal inventory mix. The fee-for-service agreements enable us to generate fees from the sales and marketing of the VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund acquisition and construction costs. The just-in-time agreements enable us to source VOI inventory in a manner that allows us to correlate the timing of acquisition of the inventory with the sale to purchasers. Sales of owned, including just-in-time, inventory generally result in greater Adjusted EBITDA contributions, while fee-for-service sales require less initial investment and allow us to accelerate our sales growth. Both sales of owned inventory and fee-for-service sales generate long-term, predictable fee streams, by adding to the Club membership base and properties under management, that generate strong returns on invested capital. For the three months ended March 31, 2026, sales from fee-for-service and just-in-time inventory were 17%, and 6% of contract sales. See “Key Business and Financial Metrics — Real Estate Sales Operating Metrics” for additional discussion of contract sales.

Current wording

Traditionally, timeshare operators have funded 100% of the investment necessary to acquire land and construct timeshare properties. We source VOIs through developed properties and fee-for-service and just-in-time agreements with third-party developers and have focused our inventory strategy on developing an optimal inventory mix. The fee-for-service agreements enable us to generate fees from the sales and marketing of the VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund acquisition and construction costs. The just-in-time agreements enable us to source VOI inventory in a manner that allows us to correlate the timing of acquisition of the inventory with the sale to purchasers. Sales of owned, including just-in-time, inventory generally result in greater Adjusted EBITDA contributions, while fee-for-service sales require less initial investment and allow us to accelerate our sales growth. Both sales of owned inventory and fee-for-service sales generate long-term, predictable fee streams, by adding to the Club membership base and properties under management, that generate strong returns on invested capital. For the six months ended June 30, 2026, sales from fee-for-service and just-in-time inventory were 15%, and 9% of contract sales. See “Key Business and Financial Metrics — Real Estate Sales Operating Metrics” for additional discussion of contract sales.

Previous wording

We sell our vacation ownership products primarily through our distribution network of both-in-market and off-site sales centers. Our products are currently marketed for sale throughout the United States, Europe, Canada, the Caribbean, Mexico, and Asia. We operate sales distribution centers in major markets and popular leisure destinations with year-round demand and a history of being a friendly environment for vacation ownership. We have over 100 sales distribution centers in various domestic and international locations. Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach. We use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products, are frequent leisure travelers, and have an affinity with our brands.

Current wording

We sell our vacation ownership products primarily through our distribution network of both-in-market and off-site sales centers. Our products are currently marketed for sale throughout the United States, Europe, Canada, the Caribbean, Mexico, and Asia. We operate sales distribution centers in major markets and popular leisure destinations with year-round demand and a history of being a friendly environment for vacation ownership. We have 100 sales distribution centers in various domestic and international locations. Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach. We use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products, are frequent leisure travelers, and have an affinity with our brands.

Previous wording

Our marketing and sales activities also include marketing relationships with nationally-recognized consumer brands such as Bass Pro, a fishing, marine, hunting, camping and sports gear retailer, and Choice Hotels. HGV is party to an exclusive marketing agreement with Bass Pro that provides HGV with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. As of March 31, 2026, HGV had sales and marketing operations at a total of 144 Bass Pro Shops and Cabela’s Stores, including 7 virtual kiosks. Additionally, the joint venture between HGV and Bass Pro includes four high-end wilderness resorts under the Big Cedar Lodge brand. We also assumed an exclusive strategic relationship with Choice Hotels that involves several areas of its business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages.

Current wording

Our marketing and sales activities also include marketing relationships with nationally-recognized consumer brands such as Bass Pro, a fishing, marine, hunting, camping and sports gear retailer, and Choice Hotels. HGV is party to an exclusive marketing agreement with Bass Pro that provides HGV with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. As of June 30, 2026, HGV had sales and marketing operations at a total of 145 Bass Pro Shops and Cabela’s Stores, including 7 virtual kiosks. Additionally, the joint venture between HGV and Bass Pro includes four high-end wilderness resorts under the Big Cedar Lodge brand. We also have an exclusive strategic relationship with Choice Hotels that involves several areas of its business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages.

Previous wording

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables. For the three months ended March 31, 2026 and 2025, 74% and 75% of our contract sales were to our existing owners.

Current wording

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables. For the six months ended June 30, 2026 and 2025, 73% and 74% of our contract sales were to our existing owners.

Previous wording

We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans. Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully-amortizing loans that bear a fixed interest rate typically ranging from 2.5% to 25% per annum. Financing propensity was 67% and 64% for the three months ended March 31, 2026 and 2025. We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume originated in the period.

Current wording

We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans. Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully-amortizing loans that bear a fixed interest rate typically ranging from 2.5% to 25% per annum. Financing propensity was 68% and 65% for the six months ended June 30, 2026 and 2025. We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume originated in the period.

Previous wording

Contract sales decreased $2 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a 8.1% decrease in VPG offset by an increase in tour flow of 8.5%.

Current wording

Contract sales decreased $24 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to a 8.6% decrease in VPG offset by an increase in tour flow of 6.1%.

Previous wording

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Current wording

Three and Six Months Ended June 30, 2026 Compared with the Three and Six Months Ended June 30, 2025

Previous wording

(1)Excluding the package sales and other fees adjustment, Real estate profit margin was 21.8% and 13.5% for the three months ended March 31, 2026 and 2025.

Current wording

(1)Excluding the package sales and other fees adjustment, Real estate profit margin was 21.8% and 18.5% for the three months ended June 30, 2026 and 2025, and 21.8% and 16.2% for the six months ended June 30, 2026 and 2025.

Previous wording

Sales revenue increased $80 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a net construction deferral of $25 million in 2026 compared to a net construction deferral of $126 million in 2025, partially offset by increases in the provision for receivable losses of $17 million and sales incentives of $14 million.

Current wording

Sales revenue increased $98 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to a net construction deferral of $79 million in 2026 compared to a net construction deferral of $208 million in 2025, partially offset by decreases in fee-for-service commissions of $17 million and sales incentives of $14 million.

Previous wording

Real estate expense increased $16 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to net construction deferral activity of $7 million in 2026 compared to $58 million in 2025, partially offset by decreases in costs of contract sales excluding fee-for-service of $20 million and selling expenses of $14 million.

Current wording

Real estate expense increased $6 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to net construction deferral activity of $33 million in 2026 compared to $95 million in 2025, partially offset by decreases in costs of contract sales excluding fee-for-service of $30 million and selling expenses of $19 million.

Previous wording

Financing revenue increased $13 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a decrease in the premium amortization of acquired timeshare financing receivables of $5 million and an increase in the average outstanding balance of the timeshare financing receivables portfolio.

Current wording

Financing revenue increased $18 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in the average outstanding balance of the timeshare financing receivables portfolio and a decrease in the premium amortization of acquired timeshare financing receivables of $4 million.

Previous wording

Financing expense decreased $4 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a decrease in the provision for credit losses of the acquired portfolio of $7 million, offset by an increase in consumer financing interest expense of $3 million due to an increase in the average non-recourse debt balance.

Current wording

Financing expense increased $4 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in consumer financing interest expense of $11 million due to an increase in the average non-recourse debt balance partially offset by a decrease in the provision for credit losses of the acquired portfolio of $6 million.

Previous wording

Rental and ancillary services revenue increased $10 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by higher transient revenue as a result of increased occupied room nights and average daily rate.

Current wording

Rental and ancillary services revenue increased $15 million and $25 million for both the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily driven by higher transient revenues as a result of increased occupied room nights and average daily rates.

Previous wording

Rental and ancillary services expenses increased $10 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to an increase in maintenance fees on unsold inventory and other rental expenses.

Current wording

Rental and ancillary services expenses increased $17 million and $27 million for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to increases in maintenance fees on unsold inventory and other rental expenses.

Previous wording

For the three months ended March 31, 2026, operating expenses increased when compared to the same period in 2025. Depreciation and amortization expense increased by $4 million primarily due to amortization expense of software intangibles. License fee expense increased by $4 million primarily due to licensing fees paid to Hilton. General and administrative increased by $3 million primarily due to employee-related expenses.

Current wording

For the three months ended June 30, 2026, operating expenses increased compared to the same period in 2025. Loss on sale and impairment increased $47 million primarily due to the disposition of our interests in certain properties. Depreciation and amortization expense increased by $12 million primarily due to amortization expense of software intangibles. General and administrative increased by $9 million primarily due to professional fees and employee-related expenses. License fees increased by $6 million primarily due to licensing fees paid to Hilton.

Previous wording

Acquisition and integration-related costs include direct expenses related to our recent acquisitions including integration costs, legal and other professional fees. Integration costs include technology-related costs, fees paid to management consultants, rebranding fees and employee-related costs such as severance and retention. For the three months ended March 31, 2026, acquisition and integration-related costs decreased by $16 million compared to the same period in 2025, primarily due to decreases of $10 million in employee-related expenses and $5 million in professional services fees.

Current wording

Acquisition and integration-related costs include direct expenses related to our recent acquisitions including integration costs, legal and other professional fees. Integration costs include technology-related costs, fees paid to management consultants, rebranding fees and employee-related costs such as severance and retention. For the three and six months ended June 30, 2026, acquisition and integration-related costs decreased by $12 million and $28 million compared to the same period in 2025, primarily due to decreases of $10 million and $20 million in employee-related expenses and professional service fees of $2 million and $7 million.

Previous wording

The change in non-operating expenses for the three months ended March 31, 2026, compared to the same period in 2025, was primarily due to other loss (gain), net and interest expense. The change in other loss (gain), net is primarily due to revaluation of our foreign currency transactions. The decrease in interest expense was primarily due to a decrease in the weighted average interest rate.

Current wording

The changes in non-operating expenses for both the three and six months ended June 30, 2026, compared to the same periods in 2025, were primarily due to interest expense, other (gain) loss, net and income tax expense. The decrease in interest expense was primarily due to a decrease in the weighted average interest rate on our corporate debt. The change in other loss (gain), net is primarily due to revaluation of our foreign currency transactions. For the three months ended June 30, 2026, the decrease in income tax expense was primarily driven by the overall change in pretax earnings compared to the same period in 2025. For the six months ended June 30, 2026, the decrease in income tax expense was driven by discrete items, partially offset by the overall change in pretax earnings compared to the same period in 2025.

Previous wording

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

Current wording

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

Previous wording

•As of March 31, 2026, we had total cash and cash equivalents of $261 million and restricted cash of $291 million. Restricted cash primarily consists of escrow deposits received on VOI sales and reserves related to non-recourse debt.

Current wording

•As of June 30, 2026, we had total cash and cash equivalents of $272 million and restricted cash of $296 million. Restricted cash primarily consists of escrow deposits received on VOI sales and reserves related to non-recourse debt.

Previous wording

•During the three months ended March 31, 2026, we repurchased 3 million shares for $150 million, excluding the excise tax, under our share repurchase programs. See Note 14: Earnings Per Sharefor additional information.

Current wording

•During the six months ended June 30, 2026, we repurchased 6 million shares for $300 million, excluding the excise tax, under our share repurchase programs. See Note 15: Earnings Per Sharefor additional information.

Previous wording

•As of March 31, 2026, we had $591 million remaining borrowing capacity under the revolver facility.

Current wording

•As of June 30, 2026, we had $463 million remaining borrowing capacity under the revolver facility.

Previous wording

•As of March 31, 2026, we had an aggregate of $150 million remaining borrowing capacity under our Timeshare Facility. As of March 31, 2026, we had $929 million of notes that were current on payments but not securitized. Of that figure, approximately $370 million could be monetized through either warehouse borrowing or securitization while another $367 million of mortgage notes we anticipate being eligible following certain customary milestones such as first payment, deeding and recording.

Current wording

•As of June 30, 2026, we had an aggregate of $755 million remaining borrowing capacity under our Timeshare Facility. As of June 30, 2026, we had $1.3 billion of notes that were current on payments but not securitized. Of that figure, approximately $719 million could be monetized through either warehouse borrowing or securitization while another $372 million of mortgage notes we anticipate being eligible following certain customary milestones such as first payment, deeding and recording.

Previous wording

The increase in net cash provided by operating activities for the three months ended March 31, 2026, compared to the same period in 2025, was primarily due to increases of $80 million in net income and provision for loan losses of $10 million.

Current wording

The increase in net cash provided by operating activities for the six months ended June 30, 2026, compared to the same period in 2025, was primarily due to an increase of $67 million in net income, along with increases in loss on sale and impairment of $47 million, provision for loan losses of $31 million and depreciation and amortization of $16 million.

Previous wording

The decrease in net cash used in investing activities for the three months ended March 31, 2026 compared to the same period in 2025, was primarily due to decreased capital expenditures for property and equipment (excluding inventory).

Current wording

The increase in net cash used in investing activities for the six months ended June 30, 2026 compared to the same period in 2025, was primarily due to cash paid $100 million for the Elara Acquisition in 2026, partially offset by a decrease in capital expenditures for property and equipment (excluding inventory) of $20 million.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 was $122 million compared to $201 million for the same period in 2025. The change was primarily due to net proceeds from debt and non-recourse debt of $43 million in 2026 compared to net payments of $36 million in 2025.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 was $115 million compared to $213 million for the same period in 2025. The change was primarily due to net proceeds from debt and non-recourse debt of $192 million in 2026 compared to net proceeds of $99 million in 2025.

Previous wording

On July 29, 2025, our Board of Directors approved a share repurchase program authorizing us to repurchase up to an aggregate of $600 million of its outstanding shares of common stock over a two-year period (the “2025 Repurchase Plan”). As of March 31, 2026, we had $278 million of remaining availability under the 2025 Repurchase Plan.

Current wording

On July 29, 2025, our Board of Directors approved a share repurchase program authorizing us to repurchase up to an aggregate of $600 million of its outstanding shares of common stock over a two-year period (the “2025 Repurchase Plan”). As of June 30, 2026, we had $128 million of remaining availability under the 2025 Repurchase Plan.

Previous wording

$698 million of which will be fulfilled in the remainder of 2026. The ultimate amount and timing of certain commitments is subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances. See Note 17: Commitments and Contingencies and Note 10: Debt and Non-recourse Debt for additional information.

Current wording

Our commitments primarily relate to agreements with developers to purchase or construct vacation ownership units, operating leases, marketing and license fee agreements and obligations associated with our debt, non-recourse debt and the related interest. As of June 30, 2026, we were committed to $9.8 billion in contractual obligations over 14 years, $587 million of which will be fulfilled in the remainder of 2026. The ultimate amount and timing of certain commitments is subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances. See Note 18: Commitments and Contingencies and Note 11: Debt and Non-recourse Debt for additional information.

Previous wording

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 $400 million as of March 31, 2026, that primarily consist of escrow and subsidy related bonds.

Current wording

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 $336 million as of June 30, 2026, that primarily consist of escrow and subsidy related bonds.