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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________

FORM 10-Q

____________________________________________

(Mark One)

x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

o    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________ to ________

Commission file number 001-37794

____________________________________________

Hilton Grand Vacations Inc.

(Exact Name of Registrant as Specified in Its Charter)

____________________________________________

Delaware	81-2545345
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

6355 MetroWest Boulevard, Suite 180,
Orlando, Florida	32835
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code (407) 613-3100

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

____________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	HGV	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	o
Non-Accelerated Filer	o	Smaller Reporting Company	o
Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of May 2, 2024 was 103,703,246.

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HILTON GRAND VACATIONS INC.

FORM 10-Q TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	51
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	54
	Signatures	56

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PART I FINANCIAL INFORMATION

Item 1.    Financial Statements

HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

	March 31, 2024		December 31, 2023
	(unaudited)
ASSETS
Cash and cash equivalents	$	355	$	589
Restricted cash	323		296
Accounts receivable, net	515		507
Timeshare financing receivables, net	3,030		2,113
Inventory	1,805		1,400
Property and equipment, net	953		758
Operating lease right-of-use assets, net	85		61
Investments in unconsolidated affiliates	78		71
Goodwill	1,943		1,418
Intangible assets, net	1,927		1,158
Other assets	650		314
TOTAL ASSETS (variable interest entities - $1,568 and $1,459)	$	11,664	$	8,685
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and other	$	1,176	$	952
Advanced deposits	181		179
Debt, net	5,144		3,049
Non-recourse debt, net	1,534		1,466
Operating lease liabilities	103		78
Deferred revenue	382		215
Deferred income tax liabilities	980		631
Total liabilities (variable interest entities - $1,521 and $1,472)	9,500		6,570
Commitments and contingencies - see Note 18
Equity:
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none  issued or outstanding as of March 31, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 104,760,243 shares issued and outstanding as of March 31, 2024 and  105,961,160 shares issued and outstanding as of December 31, 2023	1		1
Additional paid-in capital	1,467		1,504
Accumulated retained earnings	521		593
Accumulated other comprehensive income	15		17
Total stockholders equity	2,004		2,115
Noncontrolling interest	160		—
Total equity	2,164		2,115
TOTAL LIABILITIES AND EQUITY	$	11,664	$	8,685

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share data)

	Three Months Ended March 31,
	2024		2023
Revenues
Sales of VOIs, net	$	438	$	318
Sales, marketing, brand and other fees	145		158
Financing	104		74
Resort and club management	166		131
Rental and ancillary services	181		158
Cost reimbursements	122		95
Total revenues	1,156		934
Expenses
Cost of VOI sales	48		50
Sales and marketing	401		301
Financing	39		24
Resort and club management	54		42
Rental and ancillary services	173		152
General and administrative	45		42
Acquisition and integration-related expense	109		17
Depreciation and amortization	62		51
License fee expense	35		30
Impairment expense	2		—
Cost reimbursements	122		95
Total operating expenses	1,090		804
Interest expense	(79)		(44)
Equity in earnings from unconsolidated affiliates	5		3
Other (loss) gain, net	(5)		1
(Loss) income before income taxes	(13)		90
Income tax benefit (expense)	11		(17)
Net (loss) income	(2)		73
Net income attributable to noncontrolling interest	2		—
Net (loss) income attributable to stockholders	$	(4)	$	73
(Loss) earnings per share:
Basic	$	(0.04)	$	0.65
Diluted	$	(0.04)	$	0.64

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in millions)

	Three Months Ended March 31,
	2024		2023
Net (loss) income	$	(2)	$	73
Derivative instrument adjustments, net of tax	4		(10)
Foreign currency translation adjustments	(6)		—
Other comprehensive loss, net of tax	(2)		(10)
Comprehensive income attributable to noncontrolling interest	2		—
Comprehensive (loss) income attributable to stockholders	$	(6)	$	63

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

	Three Months Ended March 31,
	2024		2023
Operating Activities
Net (loss) income	$	(2)	$	73
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	62		51
Amortization of deferred financing costs, acquisition premiums and other	25		7
Provision for financing receivables losses	64		30
Impairment expense	2		—
Other loss (gain), net	5		(1)
Share-based compensation	9		10
Equity in earnings from unconsolidated affiliates	(5)		(3)
Net changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	24		8
Timeshare financing receivables, net	(78)		(24)
Inventory	(25)		(101)
Purchases and development of real estate for future conversion to inventory	(33)		(2)
Other assets	(245)		(244)
Accounts payable, accrued expenses and other	88		84
Advanced deposits	—		24
Deferred revenue	109		114
Net cash provided by operating activities	—		26
Investing Activities
Acquisitions, net of cash, cash equivalents and restricted cash acquired	(1,454)		—
Capital expenditures for property and equipment (excluding inventory)	(10)		(5)
Software capitalization costs	(9)		(6)
Net cash used in investing activities	(1,473)		(11)
Financing Activities
Proceeds from debt	2,060		438
Proceeds from non-recourse debt	290		175
Repayment of debt	(108)		(153)
Repayment of non-recourse debt	(816)		(182)
Debt issuance costs	(39)		—
Repurchase and retirement of common stock	(99)		(85)
Payment of withholding taxes on vesting of restricted stock units	(21)		(14)
Proceeds from stock option exercises	6		5
Other	(1)		(1)
Net cash provided by financing activities	1,272		183
Effect of changes in exchange rates on cash, cash equivalents & restricted cash	(6)		(1)
Net (decrease) increase in cash, cash equivalents and restricted cash	(207)		197
Cash, cash equivalents and restricted cash, beginning of period	885		555
Cash, cash equivalents and restricted cash, end of period	678		752
Less: Restricted cash	323		363
Cash and cash equivalents	$	355	$	389

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(in millions)

	Common Stock			Additional Paid-in Capital		Accumulated Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Equity
	Shares	Amount
Balance as of December 31, 2023	106	$	1	$	1,504	$	593	$	17	—		$	2,115
Acquisition of third party equity interest in consolidated entity	—	—		—		—		—		158		158
Net (loss) income	—	—		—		(4)		—		2		(2)
Activity related to share-based compensation	1	—		(4)		—		—		—		(4)
Foreign currency translation adjustments	—	—		—		—		(6)		—		(6)
Derivative instrument adjustments, net of tax	—	—		—		—		4		—		4
Repurchase and retirement of common stock	(2)	—		(33)		(68)		—		—		(101)
Balance as of March 31, 2024	105	$	1	$	1,467	$	521	$	15	$	160	$	2,164

	Common Stock			Additional Paid-in Capital		Accumulated Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Equity
	Shares	Amount
Balance as of December 31, 2022	113	$	1	$	1,582	$	529	$	39	$	—	$	2,151
Net income	—	—		—		73		—		—		73
Activity related to share-based compensation	1	—		3		—		—		—		3
Derivative instrument adjustments, net of tax	—	—		—		—		(10)		—		(10)
Repurchase and retirement of common stock	(2)	—		(26)		(59)		—		—		(85)
Balance as of March 31, 2023	112	$	1	$	1,559	$	543	$	29	$	—	$	2,132

See notes to unaudited condensed consolidated financial statements.

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HILTON GRAND VACATIONS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

Our Business

Hilton Grand Vacations Inc. (“Hilton Grand Vacations,” “we,” “us,” “our,” “HGV” or the “Company”) is 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 brand. On January 17, 2024 (“Bluegreen Acquisition Date”), we completed the acquisition of Bluegreen Vacations Holding Corporation (“Bluegreen”) (the “Bluegreen Acquisition”).

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 that include HGV Max, Hilton Grand Vacations Club and Hilton Club, Diamond points-based multi-resort timeshare clubs and Bluegreen Vacation Club (collectively referred to as “Clubs”).

As of March 31, 2024, we had approximately 200 properties located in the United States (“U.S.”), Europe, Mexico, the Caribbean, Canada and Asia. A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, California, Arizona, Nevada and Virginia, inclusive of the new locations we have expanded into through the Bluegreen Acquisition. We are in the process of rebranding many of the Diamond properties and anticipate rebranding the majority of Bluegreen properties and sales centers. As of March 31, 2024, we expect to begin rebranding certain Bluegreen properties during the fourth quarter of 2024 to the Hilton Grand Vacations brands and Hilton standards.

Basis of Presentation

The unaudited condensed 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 HGV/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 unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation.

The unaudited condensed 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”). Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although we believe the disclosures made are adequate to prevent information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2024.

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. Interim results are not necessarily indicative of full year performance.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Noncontrolling Interest

Noncontrolling interest reflects a third party’s ownership interest in Big Cedar that is consolidated in the Company’s unaudited condensed consolidated financial statements but is less than 100% owned by the Company. The

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noncontrolling interest is recognized as equity in the Company’s unaudited condensed consolidated balance sheet and presented separately from the equity attributable to its stockholders.

    The amounts of unaudited consolidated net income and unaudited comprehensive income attributable to the Company’s stockholders and noncontrolling interest are separately presented in the condensed unaudited consolidated statements of operations and comprehensive income.

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued 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. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The impact of adoption of ASU 2023-07 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

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, including interim periods within those fiscal years. The guidance is to be applied prospectively, although retrospective application is permitted. The impact of adoption of ASU 2023-09 is expected to impact disclosures only and not have a material impact on our consolidated financial statements or results.

NOTE 3: ACQUISITIONS

Bluegreen Acquisition

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 for three months ended March 31, 2024 were $100 million, which were expensed as incurred, and reflected as Acquisition and integration-related expense in our unaudited condensed consolidated statements of operations.

The following table presents the preliminary fair value of each class of consideration transferred in relation to the Bluegreen Acquisition as of the Bluegreen Acquisition Date:

($ in millions, except share and per share data)
Number of Class A Shares issued and outstanding	12,504,138
Number of Class B Shares issued and outstanding	3,664,117
Number of Class A shares deliverable as equity awards	673,169
Total shares and related equity awards outstanding	16,841,424
Cash consideration to Bluegreen shareholders and equity award holders per share	$	75.00
Purchase price	$	1,263
Repayment of Bluegreen Debt(1)	265
Payment of Seller Transaction Fees(2)	28
Total Consideration Transferred	$	1,556

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

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

Preliminary Fair Values of Assets Acquired and Liabilities Assumed

We accounted for the Bluegreen Acquisition as a business combination, which requires us to record the assets acquired and liabilities assumed at fair value as of the Bluegreen Acquisition Date. The preliminary fair values of the assets acquired, liabilities assumed, and noncontrolling interest, which are presented in the table below, and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as information compiled by management, including the books and records of Bluegreen. Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the Bluegreen Acquisition Date. The magnitude of the Bluegreen Acquisition could necessitate the need to use the full one-year measurement period to adequately analyze and assess a number of the factors used in establishing the asset, liability and noncontrolling interest fair values as of the Bluegreen Acquisition Date. The final values may also result in changes to amortization expense related to intangible assets and depreciation expense related to property and equipment, among other changes. Any potential adjustments made could be material in relation to the values presented in the table below.

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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 (including key assumptions, inputs and estimates) 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 (including key assumptions, inputs and estimates); (4) finalizing the valuation of certain in-place contracts or contractual relationships (including but not limited to leases), including determining the appropriate amortization periods; (5) finalizing the review and valuation of other acquired assets, assumed liabilities, and noncontrolling interest, including debt assumed; and (6) finalizing our estimate of the impact of purchase accounting on deferred income tax liabilities.

($ in millions)	Preliminary Amounts Recognized as of the Bluegreen Acquisition Date
Assets acquired
Cash and cash equivalents	$	58
Restricted cash	44
Accounts receivable	32
Timeshare financing receivables, net	925
Inventory	365
Property and equipment	177
Investment in unconsolidated affiliates	1
Operating lease right-of-use assets	18
Intangible assets	812
Other assets	83
Total assets acquired	$	2,515
Liabilities assumed
Accounts payable, accrued expenses and other	$	129
Advanced deposits	2
Debt	162
Non-recourse debt	606
Operating lease liabilities	20
Deferred revenue	57
Deferred income tax liabilities	348
Total liabilities assumed	1,324
Net assets acquired	$	1,191
Total consideration transferred	$	1,556
Less: Net assets acquired	(1,191)
Plus: Noncontrolling interest	158
Goodwill(1)	$	523

(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.

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 preliminarily estimated 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. We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default, severity and prepayment assumptions, which could result in changes to our preliminary estimate. We have determined that the entire acquired timeshare financing receivables portfolio shows evidence of more-than-insignificant deterioration in credit quality since origination. See Note 6: Timeshare Financing Receivables, net for additional information.

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Acquired timeshare financing receivables with credit deterioration as of the Bluegreen Acquisition Date were as follows:

($ in millions)	As of January 17, 2024
Purchase price	$	925
Allowance for credit losses	137
Premium attributable to other factors	(102)
Par value	$	960

Inventory

We acquired inventory which primarily consists of completed unsold VOIs. We preliminarily estimated 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. Significant estimates and assumptions impacting the fair value of the acquired inventory that are subjective and/or require complex judgments include our estimates of operating costs and margins, and the discount rate. Certain other estimates and assumptions impacting the fair value of the acquired inventory involving less subjective and/or less complex judgments include: short-term and long-term revenue growth rates, capital expenditures, tax rates and other factors impacting the discounted cash flows. We are continuing to assess the market assumptions and property conditions, which could result in changes to these preliminary values.

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. For our preliminary analysis, we estimated 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 new by applying BLS 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, which is our best estimate of fair value at this time given the information available. We are continuing to assess the market assumptions and property conditions, which could result in changes to these preliminary values.

Operating Lease Right-of-Use-Assets and Lease Liabilities

We have recorded a preliminary estimate of the 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 842 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 preliminarily estimated at carrying value. Additionally, any equipment lease was held at carrying value. We continue to assess the market assumptions, which could result in changes to our preliminary estimate.

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Intangible Assets

The following table presents our preliminary estimates of the fair values of the acquired Bluegreen’s identified intangible assets and their related estimated remaining useful lives:

	Weighted Average Estimated Useful Life (in years)	Estimated Fair Value ($ in millions)
Trade name	7	$	30
Management contracts	19	479
Club member relationships	11	36
Capitalized software	3	12
Marketing agreements	17	209
Other contract-related intangible assets	12	46
Total intangible assets acquired		$	812

We preliminarily estimated 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 provisionally estimated the value of management contracts and 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. 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. We continue to review Bluegreen's contracts and historical performance in addition to evaluating the assumptions impacting the estimated values of such intangible assets and their respective useful lives, including the discount rate applied to the estimated cash flows and renewal and growth estimates and expected margins, which could result in changes to these preliminary values.

Debt

As part of the acquisition and consideration transferred, we paid off $265 million of Bluegreen’s existing corporate debt and accrued interest. We preliminarily estimated the fair value of the remaining assumed debt using a discounted cash flow model under the income approach. We are continuing to evaluate the significant assumptions underlying the discounted cash flow model, which could result in changes to our preliminary estimate.

Non-Recourse Debt

We preliminarily estimated the fair value of the securitized debt and warehouse loan facilities, using a discounted cash flow model under the income approach. The significant assumptions in our analysis include default rates, prepayment rates, bond interest rates and other structural factors. We are continuing to evaluate the significant assumptions underlying the discounted cash flow model including default and prepayment assumptions, which could result in changes to our preliminary estimate.

Deferred Revenue

Deferred revenue primarily relates to deferred sales incentives revenues, primarily related to 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 preliminarily estimated the fair value of the deferred revenue at the carrying value of such liabilities as of the Bluegreen Acquisition Date. We continue to review Bluegreen’s contracts, which could result in changes to the preliminary estimate.

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 preliminarily estimated deferred income taxes based on the blended U.S. federal and state statutory tax rate which approximates to 25%. Within the measurement period, we will continue to assess the tax rates used, and we will update our estimate of deferred income taxes based on changes to our preliminary valuations of the related assets and liabilities and refinement of the effective tax rates, which could result in changes to these preliminary values.

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Noncontrolling Interest

The acquired noncontrolling interest relates to Big Cedar Vacations, LLC, a joint venture in which we are deemed to hold a controlling financial interest based on our 51% equity interest, its active role as the day-to-day manager of its activities, and our majority voting control of its management committee. We preliminarily estimated the fair value of the noncontrolling interest using a discounted cash flow model under the income approach. We continue to assess the market assumptions, which could result in changes to our preliminary estimate.

Goodwill

We have recorded a preliminary estimate of $523 of goodwill 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. Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Bluegreen Acquisition. The majority of goodwill is not expected to be deductible for tax purposes.

	Resort Operations and Club Management Segment		Real Estate Sales and Financing Segment		Total Consolidated
Goodwill	$	177	$	346	$	523

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 our preliminary 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.

	Three Months Ended March 31,
($ in millions)	2024		2023
Revenue	$	1,202	$	1,164
Net (loss) income	(10)		52

Bluegreen Results of Operations

The following table presents the results of Bluegreen operations included in our unaudited condensed consolidated statement of operations for the period from the Bluegreen Acquisition Date through the first quarter of 2024:

($ in millions)	January 17, 2024 to March 31, 2024
Revenue	$	189
Net loss	(33)

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.

As of March 31, 2024, the preliminary fair values of the assets acquired includes $8 million of cash and cash equivalents, $28 million of restricted cash, $5 million of accounts receivable, $53 million of unsecuritized timeshare financing receivables, net, $199 million of securitized timeshare financing receivables, net, $15 million of inventory, and $2 million of other assets. Of the securitized timeshare financing receivables acquired, $128 million is used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Grand Islander Timeshare Facility”). The preliminary fair values of the liabilities assumed consist of $193 million of non-recourse debt and $4 million of other liabilities.

The estimated fair values of the assets acquired, and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management. We preliminarily estimated the fair value of the timeshare financing receivables and inventory using a discounted cash flow

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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 estimated 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 were considered PCD assets. The following table presents the acquired assets with credit deterioration as of the Grand Islander Acquisition Date:

($ in millions)	As of December 1, 2023
Purchase price	$	252
Allowance for credit losses	24
Premium attributable to other factors	(2)
Par value	$	274

Goodwill of $4 million is calculated as total consideration transferred less net assets acquired. The measurement period adjustments recorded during the quarter ended March 31, 2024 resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on updated preliminary 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. Our allocations may change throughout the measurement period as we continue to finalize the fair value of assets acquired and liabilities assumed in the Grand Islander Acquisition. The majority of goodwill is expected to be deductible for tax purposes. All amounts recorded, including those based on estimates and assumptions, are subject to change during the measurement period, not to exceed one year from the Grand Islander Acquisition Date.

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 following two reportable segments: (i) Real estate sales and financing and (ii) Resort operations and club management. See Note 17: Business Segments for more information related to our segments.

($ in millions)	Three Months Ended March 31,
Real Estate Sales and Financing Segment	2024		2023
Sales of VOIs, net	$	438	$	318
Sales, marketing, brand and other fees	145		158
Interest income	96		66
Other financing revenue	8		8
Real estate sales and financing segment revenues	$	687	$	550

($ in millions)	Three Months Ended March 31,
Resort Operations and Club Management Segment	2024		2023
Club management	$	63	$	51
Resort management	103		80
Rental(1)	169		147
Ancillary services	12		11
Resort operations and club management segment revenues	$	347	$	289

(1)Excludes intersegment transactions. See Note 17: Business Segments for additional information.

Receivables from Contracts with Customers, Contract Liabilities, and Contract Assets

Our accounts receivable that relate 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

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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 6: 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 condensed consolidated balance sheets:

($ in millions)	March 31, 2024		December 31, 2023
Receivables from contracts with customers:
Accounts receivable, net	$	360	$	343
Timeshare financing receivables, net	3,030		2,113
Total	$	3,390	$	2,456

Contract liabilities include payments received or due in advance of satisfying our performance obligations. Such contract liabilities include advanced deposits received on prepaid vacation packages for future stays at our resorts, deferred revenue 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:

($ in millions)	March 31, 2024		December 31, 2023
Contract liabilities:
Advanced deposits	$	181	$	179
Deferred sales of VOIs of projects under construction	35		39
Club activation fees and annual dues	180		97
Bonus point incentive liability(1)	94		83
Deferred maintenance fees	39		12
Other deferred revenue	86		38

(1)The balance includes $52 million and $54 million of bonus point incentive liabilities included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 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 three months ended March 31, 2024, that was included in the contract liabilities balance at December 31, 2023, was approximately $82 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. There were no contract assets as of March 31, 2024, and $13 million of contract assets as of December 31, 2023.

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 includes deferred revenue from sales associated with phases or buildings under-construction and not yet completed. 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:

($ in millions)	March 31, 2024		December 31, 2023
Sales of VOIs, net	$	35	$	39
Cost of VOI sales	11		10
Sales and marketing expense	5		6

During the three months ended March 31, 2024, we recognized $41 million of sales of VOIs, net, offset by deferrals of $39 million, related to sales of projects under construction, some of which were completed during the year. We

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expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of March 31, 2024, upon their completion in 2024.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus points incentive liability as of March 31, 2024:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	181	18 months	Upon customer stays
Club activation fees	66		7 years	Straight-line basis over average inventory holding period
Bonus point incentive liability	94		18 - 30 months	Upon redemption

NOTE 5: 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:

($ in millions)	March 31, 2024		December 31, 2023
Fee-for-service commissions	$	44	$	57
Real estate and financing	79		87
Resort and club operations	237		199
Tax receivables	150		97
Insurance claims receivable	—		54
Other receivables	5		13
Total	$	515	$	507

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 were as follows during the three months ended March 31, 2024:

($ in millions)	Fee-for-service commissions		Real estate and financing		Resort and club operations		Total
Balance as of December 31, 2023	$	23	$	34	$	3	$	60
Current period provision for expected credit losses	2		3		11		16
Write-offs charged against the allowance	(8)		(7)		—		(15)
Balance as of March 31, 2024	$	17	$	30	$	14	$	61

NOTE 6: TIMESHARE FINANCING RECEIVABLES

We define our timeshare financing receivables portfolio segments as (i) originated and (ii) acquired. Our originated portfolio represents timeshare financing receivables that originated after August 2, 2021 related to Diamond (“Legacy-Diamond”), after December 1, 2023 related to Grand Islander (“Legacy-Grand Islander”), after January 17, 2024 related to Bluegreen (“Legacy-Bluegreen”) and timeshare financing receivables that existed both prior to and following the various acquisition dates (“Legacy-HGV”). 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.

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The following table presents the components of each portfolio segment by class of timeshare financing receivables:

	Originated				Acquired
($ in millions)	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Securitized	$	715	$	770	$	610	$	214
Unsecuritized(1)	1,517		1,326		973		551
Timeshare financing receivables, gross	$	2,232	$	2,096	$	1,583	$	765
Unamortized non-credit acquisition premium(2)	—		—		115		32
Less: allowance for financing receivables losses	(539)		(500)		(361)		(279)
Timeshare financing receivables, net	$	1,693	$	1,596	$	1,337	$	518

(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 $22 million and $26 million remains unamortized as of March 31, 2024 and December 31, 2023, respectively. Non-credit premium of $1 million was recognized at the Grand Islander Acquisition Date with $1 remaining unamortized as of March 31, 2024 and December 31, 2023. Non-credit premium of $102 million was recognized at the Bluegreen Acquisition Date, of which $92 million remains unamortized as of March 31, 2024.

As of March 31, 2024 and December 31, 2023, we had timeshare financing receivables of $396 million and $415 million, respectively, securing the Timeshare Facility. In connection with the acquisition of Grand Islander and Bluegreen, we had access to additional timeshare facilities, which were terminated as of March 31, 2024.

For our originated portfolio, we record an estimate of variable consideration for defaults as a reduction of revenue from financed VOI sales at the time revenue is recognized. 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. During the three months ended March 31, 2024, and 2023, we recorded an adjustment to our estimate of variable consideration of $64 million and $30 million, respectively. For our acquired portfolio, any changes to the estimates of our allowance are recorded within Financing expense on our unaudited condensed consolidated statements of operations in the period in which the change occurs.

We recognize interest income on our timeshare financing receivables as earned. As of March 31, 2024 and December 31, 2023, we had interest receivable outstanding of $17 million each period, on our originated timeshare financing receivables. As of March 31, 2024 and December 31, 2023, we had interest receivable outstanding of $11 million and $4 million, respectively, on our acquired timeshare financing receivables. Interest receivable is included in Other Assets within our unaudited condensed 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 March 31, 2024, our originated timeshare financing receivables had interest rates ranging from 1.5% to 25.8%, a weighted-average interest rate of 15.1%, a weighted-average remaining term of 8.3 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 14.9%, a weighted-average remaining term of 7.5 years and maturities through 2039.

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. During the three months ended March 31, 2024, and 2023, we reversed $19 million and $18 million, respectively, of accrued interest income. 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 is complete.

Allowance for Financing Receivables Losses

The changes in our allowance for financing receivables losses were as follows:

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($ in millions)	Originated		Acquired
Balance as of December 31, 2023	$	500	$	279
Initial allowance for PCD financing receivables acquired during the period(1)	—		131
Provision for financing receivables losses(2)	64		—
Write-offs	(27)		(54)
Inventory recoveries	—		7
Upgrades(4)	2		(2)
Balance as of March 31, 2024	$	539	$	361

($ in millions)	Originated		Acquired
Balance as of December 31, 2022	$	404	$	338
Provision for financing receivables losses(2)	30		—
Write-offs	(17)		(16)
Inventory recoveries	—		4
Upgrades(4)	1		(1)
Balance as of March 31, 2023	$	418	$	325

(1)The initial gross allowance determined for receivables with credit deterioration was $137 million as of the Bluegreen Acquisition Date. We also reduced the gross allowance determined for receivables with credit deterioration for Legacy-Grand Islander by $6 million

(2)Includes incremental provision for financing receivables losses, net of activity related to the repurchase of defaulted and upgraded timeshare financing receivables.

(3)Includes incremental provision for credit loss expense from Acquired loans.

(4)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 segment.

Originated Timeshare Financing Receivables

Our originated timeshare financing receivables as of March 31, 2024 mature as follows:

	Originated Timeshare Financing Receivables
($ in millions)	Securitized		Unsecuritized		Total
Year
2024 (remaining)	$	63	$	78	$	141
2025	89		110		199
2026	92		119		211
2027	93		130		223
2028	88		146		234
Thereafter	290		934		1,224
Total	$	715	$	1,517	$	2,232

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.

The fair value of our acquired timeshare financing receivables as of each respective acquisition date was determined using a discounted cash flow method, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivables. Consequently, the fair value of the acquired timeshare financing receivables recorded on our unaudited condensed consolidated balance sheet as of the respective acquisition date included an estimate of expected financing receivable losses which became the historical cost basis for that portfolio going forward.

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The allowance for financing receivable losses for our acquired timeshare financing receivables is remeasured at each period end and takes into consideration an estimated measure of anticipated defaults and early repayments. We consider historical timeshare financing receivables performance and the current economic environment in the re-measurement of the allowance for financing receivable losses for our acquired timeshare financing receivables. Subsequent changes to the allowance for acquired financing receivable losses are recorded within Financing expense on our unaudited condensed consolidated statements of operations in the period in which the change occurs.

Our gross acquired timeshare financing receivables as of March 31, 2024 mature as follows:

	Acquired Timeshare Financing Receivables
($ in millions)	Securitized		Unsecuritized		Total
Year
2024 (remaining)	$	54	$	66	$	120
2025	79		93		172
2026	81		100		181
2027	83		106		189
2028	79		112		191
Thereafter	234		496		730
Total	$	610	$	973	$	1,583

Credit Quality of Timeshare Financing Receivables

We evaluate these portfolios collectively for purposes of estimating variable consideration, since we hold 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 credit 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 receivables losses on our timeshare financing receivables. For the static pool analysis, we use several years of default data through which we stratify our portfolio using certain key dimensions to stratify our portfolio, including FICO scores, equity percentage at the time of sale and certain other factors. 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.

Originated Timeshare Financing Receivables

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

	Originated
	March 31, 2024
($ in millions)	Legacy-HGV		Legacy-DRI		Legacy-Grand Islander		Legacy-Bluegreen		Total
FICO score
700+	$	896	$	414	$	7	$	67	$	1,384
600-699	316		229		2		15		562
<600	39		31		—		—		70
No score(1)	200		8		7		1		216
Total	$	1,451	$	682	$	16	$	83	$	2,232

(1)Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

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	Originated
	December 31, 2023
($ in millions)	Legacy-HGV		Legacy-DRI		Legacy-Grand Islander		Legacy-Bluegreen		Total
FICO score
700+	$	882	$	403	$	3	$	—	$	1,288
600-699	311		220		—		—		531
<600	39		31		—		—		$	70
No score(1)	196		8		3		—		207
Total	$	1,428	$	662	$	6	$	—	$	2,096

(1)Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

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

	Originated Timeshare Financing Receivables
($ in millions)	2024		2023		2022		2021		2020		Prior		Total
FICO score
700+	$	249	$	501	$	333	$	131	$	31	$	139	$	1,384
600-699	75		205		157		59		11		55		562
<600	6		25		21		8		2		8