Schedule of Preliminary Fair Values of Assets Acquired and Liabilities Assumed

Any potential adjustments made could be material in relation to the values presented in the table below.

As discussed more fully below, the primary areas of the purchase price allocation that are not yet finalized include the following: (1) finalizing the review and valuation of acquired intangible assets and assigning the useful lives to such assets; (2) finalizing the review and valuation of acquired inventory, property and equipment (including key assumptions, inputs and estimates) and assigning the remaining useful lives to the depreciable assets; (3) finalizing the review and valuation of acquired timeshare financing receivables; (4) finalizing the review of accounts receivable, including the evaluation of which receivables are purchased credit deteriorated; (5) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization period; (6) finalizing the review and valuation of other acquired assets and assumed liabilities; and (7) finalizing our estimate of the impact of purchase accounting on deferred income tax liabilities.


($ in millions)	Preliminary Amounts Recognized as of the Acquisition Date
Assets acquired
Cash and cash equivalents	$	310
Restricted cash		127
Accounts receivable, net of allowance for doubtful accounts		58
Timeshare financing receivables, net		825
Inventory		497
Property and equipment, net		298
Operating lease right-of-use assets, net		30
Intangible assets, net		1,431
Other assets		250
Total assets acquired	$	3,826

Liabilities assumed
Accounts payable, accrued expenses and other	$	470
Debt, net		14
Non-recourse debt, net		660
Operating lease liabilities		33
Advanced deposits		4
Deferred revenues		140
Deferred income tax liabilities		472
Total liabilities assumed	$	1,793

Net assets acquired	$	2,033

Total consideration transferred	$	3,410

Goodwill(1)	$	1,377

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(1) Goodwill is calculated as total consideration transferred less net assets acquired and it primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined Company post-acquisition. The majority of goodwill is not expected to be deductible for tax purposes.

The measurement period adjustments recorded during the quarter ended December 31, 2021 resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on management’s review of the historical accounting records of Diamond and third-party valuations. The measurement period adjustments recognized include an adjustment to reduce the initial vacation ownership customer relationship initially recognized, based on management’s determination that the intangible should no longer be separately recognized, an adjustment to reduce the initial estimate of the fair value of the acquired inventory based on management’s review of the key assumptions impacting fair value, other working capital adjustments, and the impact of the measurement period adjustments on deferred tax balances, which resulted in net adjustments to goodwill for the period of $557 million. The net income effect associated with the measurement period adjustments during the year ended December 31, 2021 were immaterial.

Schedule of Goodwill

Diamond 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. Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Diamond Acquisition.


	Real Estate Sales and Financing Segment		Resort Operations and Club Management Segment	Total Consolidated
Goodwill	$	1,011	366	$	1,377

Schedule of Acquisition Pro Forma Information

The following unaudited pro forma information presents the combined results of operations of HGV and Diamond as if we had completed the Diamond Acquisition on January 1, 2020, the first day of our 2020 fiscal year, but using our preliminary fair values of assets and liabilities as of the 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 Diamond Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.


	Year Ended December 31,
($ in millions, except per share data)	2021		2020
Revenue	$	3,146	$	1,896
Net income (loss)		374		(561	)