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What changed in Hilton Grand Vacations Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Hilton Grand Vacations Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+437 added−455 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Hilton Grand Vacations Inc.'s 2024 10-K

437 paragraphs added · 455 removed · 332 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

93 edited+22 added−13 removed122 unchanged
Biggest changeRisk-Factors—Risks Related to the Integration of Bluegreen— We may not be able to integrate successfully and many of the anticipated benefits of combining us and Bluegreen may not be realized.” Our right to use the Hilton Marks as a trade, corporate, d/b/a or similar name under the License Agreement will automatically terminate if: (i) the aggregate number of units of accommodation in our Licensed Business falls below two-thirds of the total number of units of accommodation in our entire vacation ownership business (subject to certain limited exceptions related to the integration periods for the Diamond Acquisition and Bluegreen Acquisition); (ii) we merge with or acquire control of the assets of certain Hilton competitors and we or they use their brands in any business after such acquisition; or (iii) we become an affiliate of another Hilton competitor.
Biggest changeOur right to use the Hilton Marks as a trade, corporate, d/b/a or similar name under the License Agreement will automatically terminate if: (i) the aggregate number of units of accommodation in our Licensed Business falls below two-thirds of the total number of units of accommodation in our entire vacation ownership business (subject to certain limited exceptions related to the integration periods for the Diamond Acquisition and Bluegreen Acquisition); (ii) we merge with or acquire control of the assets of certain Hilton competitors and we or they use their brands in any business after such acquisition; or (iii) we become an affiliate of another Hilton competitor. 13 Table of Contents If we breach our obligations under the License Agreement, Hilton may, in addition to terminating the License Agreement, be entitled to (depending on the nature of the breach): seek injunctive relief and/or monetary damages; suspend our access to and terminate our rights to use Licensed IP and/or Hilton Data (other than the Hilton Marks and certain other content); or terminate our rights to use the Licensed IP (including the Hilton Marks) and Hilton Data at specific locations that are not in compliance with performance standards.
We also earn fee revenue from servicing our own portfolio and the loans provided by third-party developers of our fee-for-service projects to purchasers of their VOIs. 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 ranging from 2.5% to 25% per annum.
We also earn fee revenue from servicing our own portfolio and the loans provided by third-party developers of our fee-for-service projects to purchasers of their VOIs. 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.
The License Agreement sets forth specific parameters and requirements for any separation operations, including, without limitation, requirements for separate sales centers and personnel for sales related to such non-Hilton branded properties and operating such properties in completely separate physical locations as our Hilton-branded properties, subject to certain limited exceptions.
The License Agreement sets forth specific parameters and requirements for any separate operations, including, without limitation, requirements for separate sales centers and personnel for sales related to such non-Hilton branded properties and operating such properties in completely separate physical locations as our Hilton-branded properties, subject to certain limited exceptions.
If we do not achieve such minimum milestones, we will be subject to an escalated license fee of up to an additional 1%, plus the original fee percentage, of the applicable gross revenue. The escalated license fee is subject to being readjusted to the original fee percentage if we achieve the applicable cumulative rebranding target milestone in subsequent years.
If we do not achieve the applicable minimum milestones, we will be subject to an escalated license fee of up to an additional 1%, plus the original fee percentage, of the applicable gross revenue. The escalated license fee is subject to being readjusted to the original fee percentage if we achieve the applicable cumulative rebranding target milestone in subsequent years.
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 flows impacts sales revenue and the collectability of our timeshare financing receivables.
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.
Bluegreen’s resort network operates close to 50 Club Resorts (resorts in which owners in the Bluegreen Vacation Club (the “BG Vacation Club”) have the right to control and use most of the units in connection with their VOI ownership) and over 20 Club Associate Resorts (resorts in which owners in the BG Vacation Club have the right to use only a limited number of units in connection with their VOI ownership).
Bluegreen’s resort network operates close to 50 Club Resorts (resorts in which owners in the Bluegreen Vacation Club (the “BG Vacation Club”) have the right to control and use most of the units in connection with their VOI ownership) and over 24 Club Associate Resorts (resorts in which owners in the BG Vacation Club have the right to use only a limited number of units in connection with their VOI ownership).
Higher credit scores equate to lower collection risk and lower credit scores equate to higher collection risk. Over the last three years, the weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination was 737 (out of a maximum potential score of 850).
Higher credit scores equate to lower collection risk and lower credit scores equate to higher collection risk. Over the last three years, the weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination was 738 (out of a maximum potential score of 850).
However, we do face competition from financial institutions providing other forms of consumer credit, which may lead to full or partial prepayment of our timeshare financing receivables. 7 Table of Contents Seasonality and Cyclicality We experience modest seasonality in timeshare sales at certain resorts, with stronger revenue generation during traditional vacation periods for those locations.
However, we do face competition from financial institutions providing other forms of consumer credit, which may lead to full or partial prepayment of our timeshare financing receivables. Seasonality and Cyclicality We experience modest seasonality in timeshare sales at certain resorts, with stronger revenue generation during traditional vacation periods for those locations.
Amended and Restated License Agreement General In connection with the spin-off, we entered into a long-term license agreement with Hilton granting us (i) the right to use certain trademarks, including, without limitation, “Hilton Grand Vacations,” “HGV,” and “Hilton Club” (collectively, the “Hilton Marks”), in connection with the current and future operation of a Hilton branded vacation ownership business (the “Licensed Business”), (ii) a license or right to use certain other Hilton-owned intellectual property, including promotional content and access to Hilton’s reservation system and property management software (collectively with the Hilton Marks, the “Hilton IP”), (iii) the right to use Hilton’s loyalty program data and other customer information (“Hilton Data”) to promote the Licensed Business and for other internal business purposes, and (iv) certain other rights.
License Agreement General In connection with the spin-off, we entered into a long-term license agreement with Hilton granting us (i) the right to use certain trademarks, including, without limitation, “Hilton Grand Vacations,” “HGV,” "HGV Max," "Hilton Vacation Club," and “Hilton Club” (collectively, the “Hilton Marks”), in connection with the current and future operation of a Hilton branded vacation ownership business (the “Licensed Business”), (ii) a license or right to use certain other Hilton-owned intellectual property, including promotional content and access to Hilton’s reservation system and property management software (collectively with the Hilton Marks, the “Hilton IP”), (iii) the right to use Hilton’s loyalty program data and other customer information (“Hilton Data”) to promote the Licensed Business and for other internal business purposes, and (iv) certain other rights.
As innovators in the timeshare business, we enhance our inventory strategy by developing an inventory mix focused on developed properties as well as fee-for-service and just-in-time agreements to sell VOIs on behalf of or acquired from third-party developers. 2 Table of Contents Bluegreen Acquisition On January 17, 2024, we completed the Bluegreen Acquisition.
As innovators in the timeshare business, we enhance our inventory strategy by developing an inventory mix focused on developed properties as well as fee-for-service and just-in-time agreements to sell VOIs on behalf of or acquired from third-party developers. Bluegreen Acquisition On January 17, 2024, we completed the Bluegreen Acquisition.
The Apollo Investors are responsible for paying all expenses for the registration of their shares. Pre-emptive Rights The Apollo Investors have limited preemptive rights on certain future equity issuances by us, subject to customary carve-outs and limitations, so long as the Apollo Investors own at least 11,967,853 shares of the Apollo Closing Shares.
The Apollo Investors are responsible for paying all expenses for the registration of their shares. 15 Table of Contents Pre-emptive Rights The Apollo Investors have limited preemptive rights on certain future equity issuances by us, subject to customary carve-outs and limitations, so long as the Apollo Investors own at least 11,967,853 shares of the Apollo Closing Shares.
Building on the strength of that platform, we continuously seek new ways to add value to our Club memberships, including enhanced product offerings, greater geographic distribution, broader exchange networks and further technological innovation, all of which drive better, more personalized vacation experiences and guest satisfaction.
Building on the strength of that platform, we continuously 2 Table of Contents seek new ways to add value to our Club memberships, including enhanced product offerings, greater geographic distribution, broader exchange networks and further technological innovation, all of which drive better, more personalized vacation experiences and guest satisfaction.
Pending the rebranding, and so long as they remain non-Hilton licensed branded properties, the Diamond properties and Bluegreen properties are required to be operated as separate operations in accordance with the License Agreement.
Separate Operations and Related Matters Pending the rebranding, and so long as they remain non-Hilton licensed branded properties, the Diamond properties and Bluegreen properties are required to be operated as separate operations in accordance with the License Agreement.
The Apollo Investors are 14 Table of Contents not permitted to “buy back” into the right to designate any Apollo Designees to our Board by acquiring shares of our common stock in the future. Transfer Restrictions The Apollo Investors were subject to a 160-day lock-up period that expired on January 9, 2022.
The Apollo Investors are not permitted to “buy back” into the right to designate any Apollo Designees to our Board by acquiring shares of our common stock in the future. Transfer Restrictions The Apollo Investors were subject to a 160-day lock-up period that expired on January 9, 2022.
While we continue to be subject to telemarketing risks and potential liability, we believe that our exposure to adverse effects from telemarketing legislation and enforcement is mitigated in some instances by the use of permission-based marketing in which we obtain permission to contact prospective purchasers in the 8 Table of Contents future.
While we continue to be subject to telemarketing risks and potential liability, we believe that our exposure to adverse effects from telemarketing legislation and enforcement is mitigated in some instances by the use of permission-based marketing in which we obtain permission to contact prospective purchasers in the future.
See “—Resort and Club Management Activities” below for additional information. • Rental of Available Inventory —We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges through our Club programs. This allows us to utilize otherwise unoccupied inventory to generate additional revenues.
See “—Resort and Club Management Activities” below for additional information. 3 Table of Contents • Rental of Available Inventory —We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges through our Club programs. This allows us to utilize otherwise unoccupied inventory to generate additional revenues.
Our trust VOI product, which we acquired in the Diamond Acquisition, that we market and sell is a beneficial interest in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.
Our trust VOI product that we market and sell is a beneficial interest in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.
However, we may acquire control of a business that is not a vacation ownership business or a 12 Table of Contents lodging business without Hilton’s consent, but we are required to operate such business as a “separate operation” that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.
However, we may acquire control of a business that is not a vacation ownership business or a lodging business without Hilton’s consent, but we are required to operate such business as a “separate operation” that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.
Copies of these reports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC. 15 Table of Contents
Copies of these reports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC. 16 Table of Contents
For the years ended December 31, 2023, 2022 and 2021, we paid Hilton $11 million, $12 million and $9 million, respectively, for such call transfers.
For the years ended December 31, 2024, 2023 and 2022, we paid Hilton $9 million, $11 million and $12 million, respectively, for such call transfers.
We refer to fee-for-service transactions and just-in-time sales as “capital-efficient transactions.” Over time, these capital-efficient transactions have evolved from sourcing inventory from distressed properties to sourcing from new construction projects. For the year ended December 31, 2023, sales from fee-for-service and just-in-time inventory were 28% and 19% of contract sales, respectively.
We refer to fee-for-service transactions and just-in-time sales as “capital-efficient transactions.” Over time, these capital-efficient transactions have evolved from sourcing inventory from distressed properties to sourcing from new construction projects. For the year ended December 31, 2024, sales from fee-for-service and just-in-time inventory were 18% and 19% of contract sales, respectively.
If a VOI owner defaults on payment of its 6 Table of Contents maintenance fees and there is no lien against the mortgage note or contract, the HOA has the right to recover the defaulting owner’s VOI.
If a VOI owner defaults on payment of its maintenance fees and there is no lien against the mortgage note or contract, the HOA has the right to recover the defaulting owner’s VOI.
For the years ended December 31, 2023, 2022 and 2021, we paid Hilton $53 million, $68 million and $43 million, respectively, for Hilton Honors points. We have entered into a separate agreement with Hilton that governs the transfer of calls from Hilton to us and other related telemarketing services.
For the years ended December 31, 2024, 2023 and 2022, we paid Hilton $91 million, $53 million and $68 million, respectively, for Hilton Honors points. We have entered into a separate agreement with Hilton that governs the transfer of calls from Hilton to us and other related telemarketing services.
To fund resort operations, owners are assessed an annual maintenance fee, which includes our management fee. In 2023, HOAs collected approximately $1,092 million in maintenance fees, including our applicable management fees, which is net of our contributions to the HOAs for unsold VOIs that we own.
To fund resort operations, owners are assessed an annual maintenance fee, which includes our management fee. In 2024, HOAs collected approximately $1,164 million in maintenance fees, including our applicable management fees, which is net of our contributions to the HOAs for unsold VOIs that we own.
Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 22 industry-leading brands across approximately 7,500 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.
Based on the type of Club membership, certain members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 24 industry-leading brands across approximately 8,300 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.
In addition, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable periods prior to the spin-offs relates to our timeshare business, we would be liable for the full amount under the Tax Matters Agreement.
In addition, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable 14 Table of Contents periods prior to the spin-offs relates to our timeshare business, we would be liable for the full amount under the Tax Matters Agreement.
As of December 31, 2023, approximately 12% of our employees were covered by various collective bargaining agreements, generally addressing pay rates, working hours, other terms and conditions of employment, certain employee benefits and orderly settlement of labor disputes.
As of December 31, 2024, approximately 7% of our employees were covered by various collective bargaining agreements, generally addressing pay rates, working hours, other terms and conditions of employment, certain employee benefits and orderly settlement of labor disputes.
Purchasers of a trust VOI are offered the opportunity to become members of a Club through which they can exchange their points for a number of vacation options. In addition to an annual membership fee, members pay transaction fees depending upon the exchange or service options they choose. Our club membership offering is HGV Max.
Purchasers of a trust VOI are offered the opportunity to become members of a Club through which they can exchange their points for a number of vacation options. In addition to an annual membership fee, members pay transaction fees depending upon the exchange or service options they choose.
Through a variety of delivery methods, we offer over 390 training and development courses to all of our team members focused on a variety of core competencies, including: leadership, diversity and inclusion, skills training, business acumen, culture and personal growth.
Through a variety of delivery methods, we offer over 460 training and development courses to all of our team members focused on a variety of core competencies, including: leadership, skills training, business acumen, culture and personal growth.
For U.S. and Canadian purchasers seeking financing, which represented 5 Table of Contents approximately 85% of the individuals we provided financing to over the last three years, we apply the credit evaluation score methodology developed by the Fair Isaac Corporation (“FICO”) to credit files compiled and maintained by Experian and Equifax.
For U.S. and Canadian purchasers seeking financing, which represented approximately 90% of the individuals we provided financing to over the last three years, we apply the credit evaluation score methodology developed by the Fair Isaac Corporation (“FICO”) to credit files compiled and maintained by Experian and Equifax.
Other Restrictions The License Agreement imposes various other restrictions and requirements that pertain to, without limitation, co-sponsoring credit cards and other payment alternatives, engaging in any lodging business, confidentiality and data security, and strict maintenance of, and compliance with, separation of operations that do not use any of Hilton IP or Hilton Data.
Other Restrictions The License Agreement imposes various other restrictions and requirements that pertain to, without limitation, co-sponsoring credit cards and other payment alternatives, entering into marketing, sponsorship and similar agreements, engaging in any lodging business, confidentiality and data security, and strict maintenance of, and compliance with, separation of operations that do not use any of Hilton IP or Hilton Data.
During the term of the License Agreement, we are required to participate in Hilton’s loyalty program, currently known as the Hilton Honors program.
Hilton Honors Points; Call Transfers During the term of the License Agreement, we are required to participate in Hilton’s loyalty program, currently known as the Hilton Honors program.
Our compelling VOI product allows customers to advance purchase a lifetime of vacations. Because our VOI owners generally purchase only the vacation time they intend to use each year, they are able to efficiently split the full cost of owning and maintaining a vacation residence with other owners. Our customers also benefit from the amenities and service at our resorts.
Because our VOI owners generally purchase only the vacation time they intend to use each year, they are able to efficiently split the full cost of owning and maintaining a vacation residence with other owners. Our customers also benefit from the amenities and service at our resorts.
The interest rate on our loans is determined by, among other factors, the amount of the down payment, the borrower’s credit profile and the loan term. As of December 31, 2023, the average loan outstanding was approximately $24,000 with a weighted average interest rate of 14.8%. Prepayment is permitted without penalty.
The interest rate on our loans is determined by, among other factors, the amount of the down payment, the borrower’s credit profile and the loan term. As of December 31, 2024, the average loan outstanding was approximately $24,000 with a weighted average interest rate of 15.0%. Prepayment is permitted without penalty.
On January 17, 2024 (the "Bluegreen Acquisition Date"), we completed the acquisition of Bluegreen Vacations Holding Corporation (the “Bluegreen Acquisition”) in an all-cash transaction, with total consideration of approximately $1.6 billion, inclusive of net debt. The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations, creating a premier vacation ownership and experiences company.
On January 17, 2024 (the “Bluegreen Acquisition Date"), we completed the acquisition of Bluegreen Vacations Holding Corporation (the “Bluegreen Acquisition”) in an all-cash transaction, with total consideration of approximately $1.6 billion, inclusive of net debt. The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations.
The License Agreement also provides for a reduced license fee, ranging from 0% to 1.5%, over the initial five (5) years following the closing of the Diamond Acquisition for certain property level revenues (such as retail, food and beverage and transient rental at properties operating under the new Hilton Vacations Club brand) related to Diamond properties that are converted into our branded properties and become part of the Licensed Business.
The License Agreement also provides for a reduced license fee, ranging from 0% to 1.5%, over the initial (i) five (5) years following the closing of the Diamond Acquisition and (ii) four (4) years following the closing of the Bluegreen Acquisition in each case for certain property level revenues (such as retail, food and beverage and transient rental at properties operating under the new Hilton Vacations Club brand) related to Diamond and Bluegreen properties, as the case may be, that are converted into our branded properties and become part of the Licensed Business.
As discussed above, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded properties, and, accordingly, no license fees are generally owed to Hilton in connection with revenues associated with such properties and unbranded operations, except as may be required pursuant to the Second Amendment and the Third Amendment.
As discussed above, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded properties, and, accordingly, no license fees are generally owed to Hilton in connection with revenues associated with such properties and unbranded operations, except as may be required in certain cases.
In addition, the Diamond and Bluegreen properties rebranding and conversions are subject to an additional fire and life safety review process by Hilton.
In 12 Table of Contents addition, the Diamond and Bluegreen properties rebranding and conversions are subject to an additional fire and life safety review process by Hilton.
These agreements enable us to generate fees from the marketing and sale of VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund up-front acquisition and construction costs or incur unsold inventory maintenance costs.
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 up-front acquisition and construction costs or incur unsold inventory maintenance costs.
If we fail to achieve the final cumulative target by September 30, 2031, Hilton has the election, by notice to us, to prohibit our future offering of HGV Max.
If we fail to achieve the final cumulative target related to Diamond by September 30, 2031 or the final cumulative target related to Bluegreen by September 30, 2032, Hilton has the election, by notice to us, to prohibit our future offering of HGV Max.
There is also significant competition for talent at all levels within the industry, in particular for sales and management. Our primary competitors in the timeshare space include Marriott Vacations Worldwide, Travel + Leisure Co., Disney Vacation Club, Holiday Inn Club Vacations, Westgate Resorts and Bluegreen Vacations, which we acquired on January 17, 2024.
There is also significant competition for talent at all levels within the industry, in particular for sales and management. Our primary competitors in the timeshare space include Marriott Vacations Worldwide, Travel + Leisure Co., Disney Vacation Club, Holiday Inn Club Vacations and Westgate Resorts.
This reduced license fee structure is contingent upon us achieving certain minimum rebranding milestones related to room conversions with respect to the Diamond business and properties on an annual and cumulative basis over the five-year rebranding plan.
This reduced license fee structure is contingent upon us achieving certain minimum rebranding milestones related to room conversions with respect to the Diamond and Bluegreen businesses and properties on an annual and cumulative basis over several years.
As of December 31, 2023, our entire portfolio consists of originated loans and loans that were acquired as part of the Diamond Acquisition and the Grand Islander Acquisition, which are referred to as acquired loans. As of December 31, 2023, the entire portfolio had a gross balance of approximately $2,861 million derived from approximately 120,000 loans.
As of December 31, 2024, our entire portfolio consists of originated loans and loans that were acquired as part of the Diamond Acquisition, the Grand Islander Acquisition and the Bluegreen Acquisition, which are referred to as acquired loans. As of December 31, 2024, the entire portfolio had a gross balance of approximately $4,016 million derived from approximately 182,000 loans.
Information on our website is not incorporated by reference herein. We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A (both preliminary and final, as applicable), and certain amendments to these reports.
We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A (both preliminary and final, as applicable), and certain amendments to these reports.
To account for the integration of the Diamond business into our operations, Hilton agreed to a reduced license fee for the initial five (5) years following the closing of the Diamond Acquisition for gross revenue arising from properties and sales centers that are rebranded and become part of the Licensed Business.
To account for the integration of the Diamond and Bluegreen businesses into our operations, Hilton agreed to a reduced license fee for the initial (i) five (5) years following the closing of the Diamond Acquisition and (ii) four (4) years following the closing of the Bluegreen Acquisition, in each case for gross revenue arising from Diamond or Bluegreen properties and sales centers, as applicable, that are rebranded and become part of the Licensed Business.
The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is approximately $11 billion at current pricing.
The estimated contract sales value related to our inventory pipeline, which includes inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is $12.7 billion at current pricing as of December 31, 2024.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the stockholder's agreement, which was filed as Exhibit 10.1 to HGV’s Current Report on Form 8-K filed with the SEC on August 3, 2021. Where You Can Find More Information Our website address is www.hgv.com.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the stockholder's agreement, which is filed as Exhibit 10.16 to this Annual Report on Form 10-K. Where You Can Find More Information Our website address is www.hgv.com. Information on our website is not incorporated by reference herein.
The development and construction of the units require a large upfront investment of capital and can take several years to complete in the case of a ground-up project. Additionally, the VOIs must be legally registered prior to sale to our end customers. This investment cannot be recovered until the individual VOIs are sold to purchasers which can take several years.
The development and construction of the units require a 4 Table of Contents large upfront investment of capital and can take several years to complete in the case of a ground-up project. Additionally, the VOIs must be legally registered prior to sale to our end customers.
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 VOI purchases; operating resorts and timeshare plans; and managing our clubs and exchange programs.
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 VOI purchases; operating resorts and timeshare plans; and managing our clubs and exchange programs that include HGV Max, Hilton Grand Vacations Club, Hilton Club, Diamond clubs and Bluegreen Vacation Club (collectively referred to as “Clubs”).
This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, the First Amendment, and the Second Amendment, which are filed as Exhibits 10.2(a), 10.2(b) and 10.2(c), respectively, to this Annual Report on Form 10-K, and the Third Amendment, which is filed as Exhibit 10.2 of the Current Report on Form 8-K filed on January 17, 2024. 13 Table of Contents Distribution Agreement We entered into a Distribution Agreement with Hilton and Park (the “Distribution Agreement”) in connection with the spin-off.
This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, which is filed as Exhibit 10.2(e) to this Annual Report on Form 10-K. Distribution Agreement We entered into a Distribution Agreement with Hilton and Park (the “Distribution Agreement”) in connection with the spin-off.
Purchasers of a Legacy-Diamond VOI on the secondary market may elect to join a Legacy-Diamond Club. Once a member of the Clubs, the member will be responsible for paying annual fees. All purchasers will be responsible for paying applicable maintenance fees, property taxes and any assessments that are levied by the relevant HOA.
Once a member of the Clubs, the member will be responsible for paying annual fees. All purchasers will be responsible for paying applicable maintenance fees, property taxes and any assessments that are levied by the relevant HOA.
Our Business 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 brand.
We refer to the business that we acquired from Bluegreen as “Legacy-Bluegreen”. Our Business 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.
We monitor numerous metrics including collection rates, defaults and bankruptcies. Our consumer finance team is also responsible for selecting and processing loans pledged or to be pledged in our securitizations and preparing monthly servicing reports.
Our consumer finance team is also responsible for selecting and processing loans pledged or to be pledged in our securitizations and preparing monthly servicing reports.
When owners purchase a VOI, they are generally enrolled in a Club which allows the member to exchange their points for a number of vacation options. In addition to an annual membership fee, Club members pay incremental fees depending on exchanges they choose within the Club system.
Purchasers of a deeded VOI also generally become members of a Club which allows the member to exchange their points for a number of vacation options. In addition to an annual membership fee, members pay incremental fees depending on exchange or services they choose.
We focus on hiring practices that are reflective of our values and seek customer-centric individuals that embody a spirit of service towards our owners, guests and fellow team members.
We focus on hiring practices that are reflective of our values and seek customer-centric individuals that embody a spirit of service towards our owners, guests and fellow team members. We believe hiring people with different backgrounds, cultures and perspectives leads to increased creativity and innovation.
In 2023, team members had approximately 150,000 course completions totaling 92,000 training hours, of which over 117,000 course completions and 74,000 training hours were dedicated to compliance training. Approximately 70% of our team members are enrolled in our health and well-being programs.
In 2024, team members had approximately 123,000 course completions totaling 98,000 training hours, of which over 67,000 course completions and 61,000 training hours were dedicated to compliance training. Approximately 69% of our team members are enrolled in our health and well-being programs.
We strive to ensure a common inclusion that we believe is reflected in our programs and initiatives, and we regularly seek team member feedback through our monthly pulse-checks, our annual engagement survey and ongoing discussions with our TMRG’s.
In addition, we believe that multiple perspectives generate better solutions and relatability with our of customers 10 Table of Contents and consumers. We strive to ensure a common culture that we believe is reflected in our programs and initiatives, and we regularly seek team member feedback through our monthly pulse-checks, our annual engagement survey and ongoing discussions with our TMRG’s.
For the year ended December 31, 2023, 70% of our contract sales were to our existing owners, compared to 71% for the year ended December 31, 2022. We sell our vacation ownership products through our distribution network of both in-market and off-site sales centers. Our products are currently marketed for sale throughout the United States, Mexico, Canada, Europe and Asia.
For the year ended December 31, 2024, 72% of our contract sales were to our existing owners, compared to 70% for the year ended December 31, 2023. We sell our vacation ownership products primarily through our distribution network of both-in-market and off-site sales centers.
The reduced license fee ranges from 2% to 4% of the applicable gross revenue, increasing annually until it reaches 5% during the fifth year and beyond.
The reduced license fees range from 2% to 4% of the applicable gross revenue, increasing steadily until it reaches 5% during the fifth year and beyond for the Diamond Acquisition and during the fourth year and beyond for the Bluegreen Acquisition.
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 60 sales distribution centers in various domestic and international locations.
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 approximately 100 sales distribution centers in various domestic and international locations.
While the license agreement permits us to operate certain businesses that do not conflict with Hilton’s business, including non-Hilton branded vacation ownership business, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded portions of our businesses without Hilton’s prior consent. 10 Table of Contents In March 2021, in connection with entering into a definitive agreement for the Diamond Acquisition, we and Hilton amended and restated the license agreement (which we refer to hereinafter, as amended, as the “License Agreement”) to account for integrating the Diamond business and properties.
While the license agreement permits us to operate certain businesses that do not conflict with Hilton’s business, including non-Hilton branded vacation ownership business, we are not permitted to use any Hilton IP or Hilton Data for such non-Hilton branded portions of our businesses without Hilton’s prior consent.
Other than the United States, there were no countries that individually represented more than 10% of total revenues for the year ended December 31, 2023. 3 Table of Contents For more information regarding our segments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in Item 7, and Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
For more information regarding our segments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in Item 7, and Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Our lending and related activities are also subject to the laws and regulations of other jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage lending, fair debt collection and credit reporting practices, loan servicing, consumer debt collection practices, mortgage disclosure, lender or mortgage loan originator licensing and registration and anti-money laundering.
Our lending and related activities are also subject to the laws and regulations of other jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage lending, fair debt collection and credit reporting practices, loan servicing, consumer debt collection practices, mortgage disclosure, lender or mortgage loan originator licensing and registration and anti-money laundering. 9 Table of Contents Resort and Club Management Regulation Our resort management activities are subject to laws and regulations regarding community association management, public lodging, food and beverage services, liquor licensing, labor, employment, health care, health and safety, accessibility, discrimination, immigration, gaming and the environment (including climate change).
As of December 31, 2023, we had over 150 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. As of December 31, 2023, we had approximately 529,000 members across our club offerings.
As of December 31, 2024, we had over 200 properties located in the United States (“United States” or “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, inclusive of the new locations acquired in connection with the Bluegreen Acquisition.
Our HOA management agreements provide for a cost-plus management fee, which means we generally earn a fee between 10% and 15% of the costs to operate the applicable resort. As a result, the fees we earn are highly predictable, unlike traditional revenue-based hotel management fees, and our management fees generally are unaffected by changes in rental rate or occupancy.
Our HOA management agreements provide for a cost-plus management fee, which means we generally earn a fee between 10% and 15% of the costs to operate the applicable resort. The management fees are recurring and paid annually.
We target securitizations that range in size from $250 million to $350 million and we expect the timing of future securitizations will depend on our anticipated sales volume, financing propensity and capital needs. The strong performance of our outstanding loan securitizations demonstrates that loans originated by us are well regarded for their performance in the securitization market.
We target securitizations that range in size from $100 million to $500 million and we expect the timing of future securitizations will depend on our anticipated sales volume, financing propensity and capital needs.
We focus on employee retention initiatives and have designed purposeful programs to nourish every aspect of the team member experience. These programs reward and highlight milestones, recognize the exceptional service standards of our diverse team member population, and promote our values. Additionally, we make it a priority to appreciate and recognize team member milestones throughout their journey with HGV.
These programs reward and highlight milestones, recognize the exceptional service standards of our diverse team member population, and promote our values. Additionally, we make it a priority to appreciate and recognize team member milestones throughout their journey with HGV. We offer flexible recognition programs that support leaders to create meaningful and impactful moments for their teams.
We will continue to be subject to applicable new legislation, rules and regulations that have been proposed, or may be proposed, by federal, state and local authorities relating to the origination, servicing and securitization of mortgage loans.
We will continue to be subject to applicable new legislation, rules and regulations that have been proposed, or may be proposed, by federal, state and local authorities relating to the origination, servicing and securitization of mortgage loans. 8 Table of Contents Real Estate Development Regulation Our real estate development activities are regulated under a number of different timeshare, condominium and land sales disclosure statutes in many jurisdictions.
For the years ended December 31, 2023, 2022 and 2021, we incurred license fee expense of $138 million, $124 million, and $80 million, respectively. None of these license fees reflect the integration of Bluegreen, which closed on January 17, 2024.
For the years ended December 31, 2024, 2023 and 2022, we incurred license fee expense to Hilton of $156 million, $138 million, and $124 million, respectively.
The capital investment we make in connection with these projects is typically limited to the cost of constructing our on-site sales centers. In just-in-time transactions, we acquire and sell inventory in transactions that are designed to closely correlate the timing of our acquisition of inventory with our sale of that inventory to purchasers.
The capital investment made in connection with these projects is typically limited to the cost of constructing an on site sales center. 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.
Capital-efficient arrangements 4 Table of Contents represent approximately 35% of that supply. Our fee-for-service sales generally improve returns on invested capital and liquidity, while sales of owned inventory, including just-in-time inventory, typically result in a greater contribution to the profitability of our real estate sales and financing segment.
Sales of owned, including just-in-time, inventory generally result in greater Adjusted EBITDA contributions and greater profitability of our real estate sales and financing segment, while fee-for-service sales require less initial investment and allow us to accelerate our sales growth and improve returns on invested capital and liquidity.
Prior to the offering of HGV Max, purchasers of deeded and trust VOI products generally became members of Hilton Grand Vacations Club and Hilton Club exchange programs and Diamond points-based multi-resort timeshare clubs. Our club memberships, including HGV Max, are collectively referred to as “Clubs”. As of December 31, 2023, we had approximately 529,000 members across our various club offerings.
Prior to the offering of HGV Max, purchasers of deeded and trust VOI products generally became members of Hilton Grand Vacations Club and Hilton Club exchange programs and Diamond points-based multi-resort timeshare clubs. Bluegreen’s club offering was the BG Vacation Club, which was assumed as part of the acquisition.
(“Apollo”) and other minority shareholders, which previously owned 100% of Diamond, held approximately 28% of HGV's common stock at the time the Diamond Acquisition was completed.
As a result of the Diamond Acquisition, certain funds controlled by Apollo Global Management Inc. (“Apollo”) and other minority shareholders, which previously owned 100% of Diamond, held approximately 28% of HGV's common stock at the time the Diamond Acquisition was completed. We refer to the business that we acquired from Diamond as “Legacy-Diamond”.
Our Reportable Segments We operate our business across two segments: (1) real estate sales and financing and (2) resort operations and club management.
Additionally, the joint venture between Bluegreen and Bass Pro includes four high-end wilderness resorts under Big Cedar Lodge brand. Our Reportable Segments We operate our business across two segments: (1) Real estate sales and financing and (2) Resort operations and club management.
Rental of Available Inventory We rent unsold VOI inventory, third-party inventory and inventory made available due to ownership exchanges through our Club programs.
In addition to an annual membership fee, Club members pay incremental fees depending on exchanges they choose within the Club system. 7 Table of Contents Rental of Available Inventory We rent unsold VOI inventory, third-party inventory and inventory made available due to ownership exchanges through our Club programs.
License Fee and Other Fees In exchange for the license and various rights granted to us by Hilton, we pay a license fee of 5% of gross revenues to Hilton quarterly in arrears, as well as specified additional fees.
In addition, in connection with the Bluegreen Acquisition, we agreed to the establishment of a minimum percentage of revenue that is required to be derived from the Hilton licensed business to maintain continued exclusivity. 11 Table of Contents License Fee and Other Fees Except for the phase-in license fees related to the Diamond Acquisition and the Bluegreen Acquisition as described below, in exchange for the license and various rights granted to us by Hilton, we pay a license fee of 5% of gross revenues to Hilton quarterly in arrears, as well as specified additional fees.
Our ability to elect to make such additional payment to cover any shortfall is subject to a maximum of five payments during the renewal terms. In addition, in connection with the Bluegreen Acquisition, we agreed to the establishment of a minimum percentage of revenue that is required to be derived from the Hilton licensed business to maintain continued exclusivity.
Our ability to elect to make such additional payment to cover any shortfall is subject to a maximum of five payments during the renewal terms.
Owners can generally offer their VOIs for resale on the secondary market, which can create pricing pressure on the sale of developer inventory. Given the structure of our Legacy-HGV products, purchasers of Legacy-HGV VOIs on the secondary market will generally become a Legacy-HGV Club member.
Given the structure of our Legacy-HGV products, purchasers of Legacy-HGV VOIs on the secondary market will generally become a Legacy-HGV Club member. Purchasers of a Legacy-Diamond VOI on the secondary market may elect to join a Legacy-Diamond Club. Purchasers of a Legacy-Bluegreen VOI on the secondary market will become Legacy-Bluegreen club members.
As a result of the spin-off, HGV became an independent publicly traded company with common stock listed on the New York Stock Exchange under the symbol “HGV.” Following the spin-off, Hilton did not retain any ownership in our company.
HGV's common stock is listed on the New York Stock Exchange under the symbol “HGV.” Following the spin-off, Hilton did not retain any ownership in our company. In connection with the spin-off, we entered into agreements with Hilton and other third parties, including licenses to use the Hilton Grand Vacations brand.
We reserve for all loans based on our static pool method. When a loan associated with a product is more than 121 days past due, it is reserved at 100%. Arrangements are then made to recover the interval through various processes depending on the type of inventory and regulatory requirements which could include a deed-in-lieu of foreclosure or foreclosure.
Arrangements are then made to recover the interval through various processes depending on the type of inventory and regulatory requirements which could include a deed-in-lieu of foreclosure or foreclosure. We monitor numerous metrics including collection rates, defaults and bankruptcies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCurrent and future international operations expose us to a number of additional challenges and risks that may not be inherent in operating solely in the U.S., including, for example, the following: • rapid changes in governmental, economic, legislative or political policy; • political or civil unrest, acts of terrorism or the threat of international boycotts or U.S. anti-boycott legislation; • negative impact on governmental relationships between those countries in which we currently operate or have future expansion plans, on one hand, and the U.S., on the other hand, which may result in undesirable trade, travel or similar regulations, thereby negatively affecting the tourism industry generally, and the timeshare and leisure industry specifically; • increases in anti-American sentiment and the identification of the Hilton brands as American brands; • recessionary trends or economic instability in international markets; • changes in foreign currency exchange rates or currency restructurings and hyperinflation or deflation in the countries in which we operate; • the effect of disruptions caused by severe weather, natural disasters, outbreaks of disease or other events that make travel to a particular region less attractive or more difficult; • the presence and acceptance of varying levels of business corruption in international markets and the effect of various anti-corruption and other laws; • the imposition of restrictions on currency conversion or the transfer of funds; • the ability to comply with or effect of complying with complex and changing laws, regulations and policies of foreign governments that may affect investments or operations, including foreign ownership restrictions, import and export controls, tariffs, embargoes, increases in taxes paid and other changes in applicable tax laws; • uncertain, unfamiliar and/or unpredictable regulatory environment that may adversely affect the acquisition, development, management, marketing, sales, financings, and related activities that affect the lodging, real estate, and travel industries, and, more specifically, to the timeshare industry, such as zoning laws, real estate development regulations, and consumer privacy; • exposure to litigation in foreign jurisdictions, including the expense and time necessary to litigate and the potential of adverse outcomes; • uncertainties as to local laws regarding, and enforcement of, contract and intellectual property rights; • forced nationalization of resort properties by local, state or national governments; • different social or cultural norms and practices that are not customary in the U.S.; and 24 Table of Contents • the difficulties involved in managing an organization doing business in different countries.
Biggest changeCurrent and future international operations expose us to a number of additional challenges and risks are inherent in operating in countries other than the United States, such as: • compliance with laws of both United States and non-U.S. jurisdictions, including foreign ownership restrictions, import and export controls, tariffs, embargoes and changes in applicable tax law, and other laws affecting our acquisition, development, management, marketing, sales, financings, and related activities; 24 Table of Contents • political or civil unrest, acts of terrorism, the threat of international boycotts or anti-U.S. legislation or sentiment and the identification of the Hilton brands as U.S. brands; • the negative impact of relationships between governments in those countries and the United States, which may result in or from undesirable trade, tariff, travel or other policies and regulations (including pursuant to policies of the new U.S. administration); • local economic risks in such countries including, but not limited to foreign currency exchange risks and the imposition of restrictions on currency conversion or the transfer of funds; • employee matters, including laws and regulations related to employment; • exposure to litigation in foreign jurisdictions and uncertainties as to local laws regarding, and enforcement of, contract and intellectual property rights; and • other difficulties involved in managing an organization doing business internationally.
These include our Elara joint venture with Blackstone and the Bluegreen-Bass Pro joint venture that we assumed as part of the Bluegreen Acquisition.
These include our Elara joint venture with Blackstone and our joint venture with Bass Pro that we assumed as part of the Bluegreen Acquisition.
Despite our retention and recruiting efforts, key employees may be unwilling to continue their employment with us, and we may be unable to timely find suitable replacements. Ultimately, the integration process is subject to a number of uncertainties, and no assurance can be given that our integration efforts will be successful.
Despite our retention and recruiting efforts, key employees may be unwilling to continue their employment with us, and we may be unable to timely find suitable replacements. Ultimately, the completion of the integration process is subject to a number of uncertainties, and no assurance can be given that our integration efforts will be successful.
Breaches in the security of our information systems or those of our service providers or other disruptions in data services could lead to an interruption in the operation of our systems or require us to consider changes to our customer data or payment systems, resulting in operational inefficiencies, additional expense and a loss of profits.
Breaches in the security of our information systems or those of our service providers or vendors or other disruptions in data services could lead to an interruption in the operation of our systems or require us to consider changes to our customer data or payment systems, resulting in operational inefficiencies, additional expense and a loss of profits.
During a period of overall economic weakness, if we are unable to meaningfully decrease these costs as demand for our products and services decreases, our business operations and financial performance may be adversely affected. 18 Table of Contents We are subject to business, financial and operating risks inherent to the timeshare and hospitality industry, any of which could reduce our revenues and limit opportunities for growth.
During a period of overall economic weakness, if we are unable to meaningfully decrease these costs as demand for our products and services decreases, our business operations and financial performance may be adversely affected. 19 Table of Contents We are subject to business, financial and operating risks inherent to the timeshare and hospitality industry, any of which could reduce our revenues and limit opportunities for growth.
These and other risks are discussed more fully in the section entitled “Risk Factors” in Part I, Item 1A and elsewhere in this Annual Report on Form 10-K. 17 Table of Contents Risk Factors We are subject to various risks that could materially and adversely affect our business, financial condition, results of operations, liquidity and stock price.
These and other risks are discussed more fully in the section entitled “Risk Factors” in Part I, Item 1A and elsewhere in this Annual Report on Form 10-K. 18 Table of Contents Risk Factors We are subject to various risks that could materially and adversely affect our business, financial condition, results of operations, liquidity and stock price.
These factors include, but are not limited to: • changes in general economic conditions, including low consumer confidence, high unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the U.S. or global economy; • war, political conditions or civil unrest, violence or terrorist activities or threats and heightened travel security measures instituted in response to these events; • the financial and general business condition of the travel industry; • statements, actions or interventions by governmental officials related to travel and the resulting negative public perception of such travel; • conditions that negatively shape public perception of travel, including travel-related accidents and outbreaks of pandemic or contagious diseases, such as COVID-19, Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virus; • cyber-attacks; • price and availability of natural resources and supplies; • natural or manmade disasters, such as earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents, and the effects of climate change increasing the frequency and severity of extreme weather events; and • organized labor activities, which could cause a diversion of business from resorts involved in labor negotiations and loss of business generally for the resorts we manage as a result of certain labor tactics.
These factors include, but are not limited to: • changes in general economic conditions, including low consumer confidence, high unemployment levels, inflation, rising interest rates, and depressed real estate prices resulting from the severity and duration of any downturn in the U.S. or global economy; • war, political conditions or civil unrest, violence or terrorist activities or threats and heightened travel security measures instituted in response to these events; • the financial and general business condition of the travel industry; • statements, actions or interventions by governmental officials related to travel and the resulting negative public perception of such travel; • conditions that negatively shape public perception of travel, including travel-related accidents and outbreaks of pandemic or contagious diseases, such as coronavirus, Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virus; • cyber-attacks; • price and availability of natural resources and supplies; • natural or manmade disasters, such as earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills and nuclear incidents, and the effects of climate change increasing the frequency and severity of extreme weather events; and • organized labor activities, which could cause a diversion of business from resorts involved in labor negotiations and loss of business generally for the resorts we manage as a result of certain labor tactics.
Similarly, in connection with the Bluegreen Acquisition, we issued $900 million in aggregate principal amount of 6.625% senior notes due 2032 and borrowed term loans in an initial aggregate principal amount of $900 million due 2031. The new term loans are subject to an interest rate of SOFR plus 2.75%.
Similarly, in connection with the Bluegreen Acquisition, we issued $900 million in aggregate principal amount of 6.625% senior notes due 2032 and borrowed term loans in an initial aggregate principal amount of $900 million due 2031. The new term loans are subject to an interest rate of SOFR plus 2.25%.
We are not obligated to repurchase any specific number or amount of shares of common stock pursuant to the Repurchase Program, and we may modify, suspend or terminate the Repurchase Program at any time without prior notice. Repurchases of our common stock pursuant to the Repurchase Program could impact our stock price and increase its volatility.
We are not obligated to repurchase any specific number or amount of shares of common stock pursuant to the Repurchase Program, and we may modify, suspend or terminate the Repurchase Program at any time without prior notice. The existence of the Repurchase Program and related repurchases of our common stock could impact our stock price and increase its volatility.
For more information on derivatives refer to Note 15: Debt & Non-recourse Debt of the financial statements. Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
For more information on derivatives see Note 15: Debt & Non-recourse Debt of the financial statements. Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
In addition, remediation plans can be costly and divert critical attention of our internal personnel and resources, which could increase our general and administrative expenses and decrease our net operating results. Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures, including as a result of the material weakness identified by management.
In addition, remediation plans can be costly and divert critical attention of our internal personnel and resources, which could increase our general and administrative expenses and decrease our net operating results. 26 Table of Contents Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures, including as a result of the material weakness identified by management.
We issued $850 million in aggregate principal amount of 5.000% senior notes due 2029 and $500 million in aggregate principal amount of 4.875% senior notes due 2031, and we borrowed term loans in an initial aggregate principal amount of $1.3 billion under a new senior secured term loan credit facility due 34 Table of Contents 2028. to repay certain indebtedness of HGV and Diamond, as part of the Diamond Acquisition.
We issued $850 million in aggregate principal amount of 5.000% senior notes due 2029 and $500 million in aggregate principal amount of 4.875% senior notes due 2031, and we borrowed term loans in an initial aggregate principal amount of $1.3 billion under a new senior secured term loan credit facility due 2028 to repay certain indebtedness of HGV and Diamond, as part of the Diamond Acquisition.
If these brands or program deteriorate or materially change in an adverse manner, or the reputation of these brands or program declines, our market share, reputation, business, financial condition or results of operations could be materially adversely affected. 21 Table of Contents We rely on several critical marketing programs and activities to generate tour flow and contract sales and increase our revenues.
If these brands or program deteriorate or materially change in an adverse manner, or the reputation of these brands or program declines, our market share, reputation, business, financial condition or results of operations could be materially adversely affected. We rely on several critical marketing programs and activities to generate tour flow and contract sales and increase our revenues.
We may also need to obtain approvals of developers or HOAs in various instances to include additional resorts in the multi-resort trusts marketed, sold and managed by the acquired Diamond business (the “Diamond Collections”) or increase maintenance fees or impose additional requirements in order to meet our brand and operating standards.
We may also need to obtain approvals of developers or HOAs in various instances to include additional resorts in the multi-resort trusts marketed, sold and managed by the acquired Diamond business (the “Diamond Collections”) or increase maintenance fees or impose additional requirements 38 Table of Contents in order to meet our brand and operating standards.
The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to: • shifts in our investor base; • our quarterly and annual earnings, or those of comparable companies; • actual or anticipated fluctuations in our operating results; • our ability to obtain financing as needed; • changes in laws and regulations affecting our business; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating performance and stock price of comparable companies; • overall market fluctuations; • a decline in the real estate markets; and • general economic conditions and other external factors.
The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to: • shifts in our investor base; • our quarterly and annual earnings, or those of comparable companies; • actual or anticipated fluctuations in our operating results; • our ability to obtain financing as needed; • changes in laws and regulations affecting our business; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating performance and stock price of comparable companies; • overall market fluctuations; • a decline in the real estate markets; and • general economic conditions and other external factors. 43 Table of Contents Future issuances of common stock by us may cause the market price of our common stock to decline.
Our systems and the systems operated by our service providers may be unable to satisfy changing regulatory requirements and customer and employee expectations and/or may require significant additional investments or time to do so. The steps we take to deter and mitigate risks related to cybersecurity may not provide the intended level of protection.
Our systems and the systems operated by our service providers may be unable to satisfy changing regulatory requirements and customer and employee expectations and/or may require significant additional investments or time to do so. 31 Table of Contents The steps we take to deter and mitigate risks related to cybersecurity may not provide the intended level of protection.
If bonding capacity is unavailable, or alternatively, if the terms and conditions and pricing of such bonding capacity are unacceptable to us, our business could be negatively affected. We have and will continue to enter into fee-for-service agreements with third-party developers to source inventory.
If bonding capacity is unavailable, or alternatively, if the 27 Table of Contents terms and conditions and pricing of such bonding capacity are unacceptable to us, our business could be negatively affected. We have and will continue to enter into fee-for-service agreements with third-party developers to source inventory.
Although we carry cyber/privacy liability insurance that is designed to protect us against certain losses related to 31 Table of Contents cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in connection with cyber-attacks, security breaches, and other related breaches.
Although we carry cyber/privacy liability insurance that is designed to protect us against certain losses related to cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in connection with cyber-attacks, security breaches, and other related breaches.
Failure to obtain required consents and comply with other provisions in these agreements could discourage, materially delay or prevent a transaction that otherwise may be in the best interests of our stockholders. 45 Table of Contents The market price and trading volume of our common stock may fluctuate widely.
Failure to obtain required consents and comply with other provisions in these agreements could discourage, materially delay or prevent a transaction that otherwise may be in the best interests of our stockholders. The market price and trading volume of our common stock may fluctuate widely.
If we are not able to use Hilton’s marketing databases and corporate-level advertising channels to reach potential members and guests, including Hilton’s internet address as a channel through which to market available inventory, our member growth would be 20 Table of Contents adversely affected and our revenue would materially decline, and it is unlikely that we would be able to replace the revenue associated with those channels.
If we are not able to use Hilton’s marketing databases and corporate-level advertising channels to reach potential members and guests, including Hilton’s internet address as a channel through which to market available inventory, our member growth would be adversely affected and our revenue would materially decline, and it is unlikely that we would be able to replace the revenue associated with those channels.
The license agreement was amended and restated in connection with the Diamond Acquisition and the Bluegreen Acquisition to facilitate our integration of the Diamond and Bluegreen businesses and create a license fee structure related to the integrations.
The license agreement was amended and restated in connection with the Diamond Acquisition and the Bluegreen Acquisition to facilitate our integration of the Diamond and Bluegreen businesses and create a license fee structure for the integrations.
If we fail to develop timeshare properties, acquire inventory or are unsuccessful in entering into new agreements with third-party developers, we may experience a decline in VOI supply, which could result in a decrease in our revenues. Approximately 47% of our contract sales were from capital-efficient sources for the year ended December 31, 2023.
If we fail to develop timeshare properties, acquire inventory or are unsuccessful in entering into new agreements with third-party developers, we may experience a decline in VOI supply, which could result in a decrease in our revenues. Approximately 37% of our contract sales were from capital-efficient sources for the year ended December 31, 2024.
Despite our efforts, it is possible that the integration process could take longer than anticipated and/or could be more difficult than anticipated due to a number of reasons, including the lack of complementary products and resort offerings, delays or other challenges in converting the Diamond resorts into resorts that are suitable for HGV as part of our overall strategy and our rebranding plan, loss of valuable employees, disruption of each company’s ongoing businesses, processes and systems, inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements between the two businesses, and differences in corporate cultures and philosophies, and other challenges that are inherent in such a complex integration of businesses.
The completion of the integration process could ultimately take longer than anticipated and/or could be more difficult than anticipated due to a number of reasons, including the lack of complementary products and resort offerings, delays or other challenges in converting the Diamond resorts into resorts that are suitable for HGV as part of our overall strategy and our rebranding plan, loss of valuable employees, disruption of each company’s ongoing businesses, processes and systems, inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements between the two businesses, and differences in corporate cultures and philosophies, and other challenges that are inherent in such a complex integration of businesses.
Apollo also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may be unavailable to us. In addition, Apollo may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investments, even though such transactions might involve risks to you.
Apollo also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may 42 Table of Contents be unavailable to us. In addition, Apollo may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investments, even though such transactions might involve risks to you.
In addition, we are in competition with national and independent timeshare resale companies and members reselling existing VOIs on the secondary market, which could reduce demand or prices for sales of new VOIs.
In addition, we are in competition with national and independent timeshare resale companies and members reselling existing VOIs on the 20 Table of Contents secondary market, which could reduce demand or prices for sales of new VOIs.
Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While limitations on our subsidiaries restrict their ability to pay dividends or make other intercompany payments to us, these 36 Table of Contents limitations are subject to certain qualifications and exceptions.
Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While limitations on our subsidiaries restrict their ability to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions.
Our license agreement with Hilton requires us to obtain Hilton’s consent prior to taking certain significant corporate actions, including engaging in a takeover transaction. There can be no assurance that any consent from Hilton to a change of control of our company could be obtained on a basis satisfactory to us or any potential acquirer.
Our license agreement with Hilton requires us to obtain Hilton’s consent prior to taking certain significant corporate actions, including change of control of our company. There can be no assurance that any consent from Hilton to a change of control of our company could be obtained on a basis satisfactory to us or any potential acquirer.
These risks include, but are not limited to, the following: • Macroeconomic and other factors beyond our control; • Contraction in the global economy or low levels of economic growth; • Risks inherent to the timeshare and hospitality industry, including reliance on tourism and travel, and competition within the industry; • Pandemics, epidemics and related events, including the various measures implemented or adopted to respond to such events; • Material harm to our business if we breach our license agreement with Hilton and Hilton exercises any of its remedies thereunder, which may include the loss of certain rights (such as exclusivity in the timeshare business) that we have or the termination of the license agreement; • Our ability to use the Hilton brands and trademarks and rebrand the acquired Diamond and Bluegreen business and properties, and any potential consequences under the license agreement if we fail to do so; • The quality and reputation of the Hilton brands and affiliation with the Hilton Honors loyalty program; • The ability of our critical marketing programs and activities to generate tour flow and contract sales and increase our revenues; • Financial and operational risks related to acquisitions and business ventures, including partnerships or joint ventures; • Our dependence on development activities and risks related to our real estate investments; • The geographic concentration of properties we manage; • Our current operations and future expansion outside of the United States; • Our ability to hire, retain and motivate key personnel and our reliance on the services of our management team and employees; • Third-party reservation channels affecting our bookings for room rental revenue; • Impairment losses that could adversely affect our results of operations; • Our insurance policies not covering all potential losses; • Our ability to remediate an identified material weakness and maintain effective internal controls over financial reporting and disclosure controls and procedures; • A decline in developed or acquired VOI inventory or failure to enter into and maintain fee-for service agreements or inability to source VOI inventory or finance sales if we or third-party developers are unable to access capital; • The sales of VOIs in the secondary market; • Our limited underwriting standards and a possible decline in the default rates or other credit metrics underlying our timeshare financing receivables; • The expiration, termination or renegotiation of our management agreements; • Disagreements with VOI owners or HOAs or the failure of HOA boards to collect sufficient fees or increases in maintenance fees at our resorts; • Failure to keep pace with developments in technology; • Lack of awareness or understanding of and failure to effectively manage our social media; • Cyber-attacks or our failure to maintain the security and integrity of company, employee, customer or third-party data; 16 Table of Contents • Our ability to comply with a wide variety of laws, regulations and policies, including those applicable to our international operations; • Changes in privacy laws, environmental laws, tax laws or accounting rules or regulations; • Failure to comply with laws and regulations applicable to our international operations; • Our substantial indebtedness and other contractual obligations, restrictions imposed on us by certain of our debt agreements and instruments and our variable rate indebtedness which subjects us to interest rate risk; • Failure to comply with agreements relating to our outstanding indebtedness; • Our ability, or the ability of our subsidiaries, to generate sufficient cash to meet our needs and service our indebtedness; • Potential liabilities related to our spin-off from Hilton, including U.S. federal income tax liabilities, liabilities arising out of state and federal fraudulent conveyance laws and the possible assumption of responsibilities for obligations allocated to Hilton or Park; • The sufficiency of any indemnity Hilton or Park is required to provide us and the amount of any indemnity we may be required to provide Hilton or Park related to the period prior to the spin-off; • The ability of our board of directors to change corporate policies without stockholder approval; • Anti-takeover provisions in our organizational documents and Delaware law and consent requirements in our license agreement with Hilton that may deter a potential business combination transaction; • Fluctuation in the market price and trading volume of our common stock; • Our ability to repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value.
These risks include, but are not limited to, the following: • Macroeconomic and other factors beyond our control; • Contraction in the global economy or low levels of economic growth; • Risks inherent to the timeshare and hospitality industry, including reliance on tourism and travel, and competition within the industry; • Pandemics, epidemics and related events, including the various measures implemented or adopted to respond to such events; • Material harm to our business if we breach our license agreement with Hilton and Hilton exercises any of its remedies thereunder, which may include the loss of certain rights (such as exclusivity in the timeshare business) that we have or the termination of the license agreement; • Our ability to use the Hilton brands and trademarks and rebrand the Diamond and Bluegreen businesses and properties, and any potential consequences under the license agreement if we fail to do so; • The quality and reputation of the Hilton brands and affiliation with the Hilton Honors loyalty program; • The ability of our critical marketing programs and activities to generate tour flow and contract sales and increase our revenues; • Financial and operational risks related to acquisitions and business ventures, including partnerships or joint ventures; • Our dependence on development activities and risks related to our real estate investments; • Our current operations and future expansion outside of the United States; • Our ability to hire, retain and motivate key personnel and our reliance on the services of our management team and employees; • Third-party reservation channels affecting our bookings for room rental revenue; • Impairment losses that could adversely affect our results of operations; • Our insurance policies not covering all potential losses; • Our ability to remediate an identified material weakness and maintain effective internal controls over financial reporting and disclosure controls and procedures; • A decline in developed or acquired VOI inventory or failure to enter into and maintain fee-for service agreements or inability to source VOI inventory or finance sales if we or third-party developers are unable to access capital; • The sales of VOIs in the secondary market; • Our limited underwriting standards and a possible decline in the default rates or other credit metrics underlying our timeshare financing receivables; • The expiration, termination or renegotiation of our management agreements; • Disagreements with VOI owners or HOAs or the failure of HOA boards to collect sufficient fees or increases in maintenance fees at our resorts; • Failure to keep pace with developments in technology; • Lack of awareness or understanding of and failure to effectively manage our social media; • Cyber-attacks or our failure to maintain the security and integrity of company, employee, customer or third-party data; • Our ability to comply with a wide variety of laws, regulations and policies, including those applicable to our international operations; • Changes in privacy laws, environmental laws, tax laws or accounting rules or regulations; 17 Table of Contents • Failure to comply with laws and regulations applicable to our international operations; • Our substantial indebtedness and other contractual obligations, restrictions imposed on us by certain of our debt agreements and instruments and our variable rate indebtedness which subjects us to interest rate risk; • Failure to comply with agreements relating to our outstanding indebtedness; • Our ability, or the ability of our subsidiaries, to generate sufficient cash to meet our needs and service our indebtedness; • The ability of our board of directors to change corporate policies without stockholder approval; • Anti-takeover provisions in our organizational documents and Delaware law and consent requirements in our license agreement with Hilton that may deter a potential business combination transaction; • Fluctuation in the market price and trading volume of our common stock; • Our ability to repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value.
Failure to comply with applicable laws, regulations and policies could also render sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation. 32 Table of Contents Changes in privacy law could adversely affect our ability to market our products effectively.
Failure to comply with applicable laws, regulations and policies could also render sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation. Changes in privacy law could adversely affect our ability to market our products effectively.
If we are unable to remediate this material weakness, experience additional material weaknesses, or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial results, in which case our business may be harmed, our stock price could be adversely affected, and we may otherwise experience other adverse consequences.
If we experience additional material weaknesses, or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial results, in which case our business may be harmed, our stock price could be adversely affected, and we may otherwise experience other adverse consequences.
Accordingly, during that period of time, Apollo may have influence with respect to our management, 44 Table of Contents business plans and policies, including the appointment and removal of our officers.
Accordingly, during that period of time, Apollo may have influence with respect to our management, business plans and policies, including the appointment and removal of our officers.
In addition, as a Delaware corporation, we are also subject to provisions of Delaware law, which may impair a takeover attempt that our stockholders may find beneficial.
In addition, as a Delaware corporation, we are also subject to provisions of Delaware law, which continue to evolve and may impair a takeover attempt that our stockholders may find beneficial.
Under the Tax Matters Agreement, we have agreed to indemnify Hilton and Park against certain tax liabilities. The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the spin-off is not tax-free.
Under the Tax Matters Agreement, we have agreed to indemnify Hilton and Park against certain tax liabilities. The Tax Matters 45 Table of Contents Agreement also provides special rules for allocating tax liabilities in the event that the spin-off is not tax-free.
Our future success depends, in part, upon our ability to manage this expanded business, including in non-US jurisdictions where we did not have operations prior to the Diamond Acquisition, including challenges related to the management and monitoring of expanded operations and associated increased costs and complexity.
The size of our business increased significantly as a result of the Diamond Acquisition. Our future success depends, in part, upon our ability to manage this expanded business, including in non-US jurisdictions where we did not have operations prior to the Diamond Acquisition, including challenges related to the management and monitoring of expanded operations and associated increased costs and complexity.
In 42 Table of Contents addition, various disclosures are required in connection with marketing and sale of timeshare interests or plans, which are required to be continually updated and current.
In addition, various disclosures are required in connection with marketing and sale of timeshare interests or plans, which are required to be continually updated and current.
As a result, interest rates on our revolving credit facility or other variable rate debt offerings could be higher than current levels. As of December 31, 2023, we had approximately $2.2 billion of notional variable rate debt, representing 49% of our total indebtedness.
As a result, interest rates on our revolving credit facility or other variable rate debt offerings could be higher than current levels. As of December 31, 2024, we had approximately $2.9 billion of notional variable rate debt, representing 41% of our total indebtedness.
Further, we could remain obligated under guarantees or other financial obligations related to the property despite the loss of product inventory, and our members could be required to contribute toward deductibles to help cover losses. We have identified a material weakness in our internal control over financial reporting.
Further, we could remain obligated under guarantees or other financial obligations related to the property despite the loss of product inventory, and our members could be required to contribute toward deductibles to help cover losses. We previously identified a material weakness in our internal control over financial reporting related to the prior two fiscal years.
Instability in the financial markets could also affect the timing and volume of any 27 Table of Contents securitizations we undertake, as well as the financial terms of such securitizations.
Instability in the financial markets could also affect the timing and volume of any securitizations we undertake, as well as the financial terms of such securitizations.
We entered into a license agreement with Hilton granting us the right to use the Hilton-branded trademarks, trade names and related intellectual property in our business for the term of the agreement.
We are party to a license agreement with Hilton granting us the right to use the Hilton-branded trademarks, trade names and related intellectual property in our business for the term of the license agreement.
To the extent new debt is added to our current debt levels, the substantial leverage risks described in the preceding six risk factors would increase. Risks Related to the Integration of Diamond We may not be able to integrate the acquired Diamond business successfully. We continue to integrate the Diamond business from the August 2021 closing of the Diamond Acquisition.
To the extent new debt is added to our current debt levels, the substantial leverage risks described in the preceding six risk factors would increase. Risks Related to the Integration of Diamond We may not be able to integrate the acquired Diamond business successfully.
Bluegreen may have various potential liabilities relating to the conduct of its business prior to the Bluegreen Acquisition, including, but not limited to, existing and potential legal claims pertaining to various areas of the Bluegreen business, tax audits, regulatory violations (including environmental violations and claims), and other liabilities that are greater than we had anticipated, were not known to us, and/or were not disclosed to us.
Bluegreen may have various potential liabilities relating to the conduct of its business prior to the Bluegreen Acquisition, including, but not limited to, existing and potential legal claims or contractual disputes pertaining to various areas of the Bluegreen business, tax audits, regulatory violations (including environmental violations and claims), and other liabilities that are, individually or in the aggregate, greater than we had anticipated, more likely than we estimated were not known to us, and/or were not disclosed to us.
We compete with other timeshare companies for off-site sales centers, through which we market our products to potential members, including in locations like high-traffic shopping centers and tourist attractions in leisure destinations. We compete for property acquisitions and partnerships with entities that have similar investment objectives as we do.
We compete with other timeshare companies for off-site sales centers, through which we market our products to potential members, including in locations like high-traffic shopping centers and tourist attractions in leisure destinations. Finally, we also compete for property acquisitions (either for development or existing VOI inventory) and partnerships with entities that have similar investment objectives as we do.
We also compete with numerous other smaller owners and operators of timeshare resorts, as well as home and apartment sharing services that market available privately owned residential properties that can be rented on a nightly, weekly or monthly basis.
Our competitors include numerous other smaller owners and operators of timeshare resorts, as well as home and apartment sharing services that market available privately owned residential properties that can be rented on a nightly, weekly or monthly basis.
Providing secured financing to some purchasers of VOIs subjects us to the risk of purchaser default. As of December 31, 2023, our consumer loan portfolio had a balance of approximately $2.9 billion and experienced default rates of 8.56%, 7.92% and 8.93% for the fiscal years ended December 31, 2023, 2022 and 2021, respectively.
Providing secured financing to some purchasers of VOIs subjects us to the risk of purchaser default. As of December 31, 2024, our consumer loan portfolio had a balance of approximately $4.0 billion and experienced default rates of 10.77%, 8.56% and 7.92% for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.
Further, the SEC has recently enacted rules requiring public companies to disclose material cybersecurity incidents that they experience on a Current Report on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy and governance.
Further, effective December 18, 2023, the SEC requires public companies to disclose material cybersecurity incidents that they experience on a Current Report on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy and governance.
Share repurchases could also increase the volatility of the price of our common stock and diminish our cash reserves. Our Board of Directors has authorized a share repurchase program (the “Repurchase Program”) pursuant to which we may repurchase our common stock through any combination of open market repurchases, accelerated share repurchases or privately negotiated transactions .
Our board of directors has authorized a share repurchase program (the “Repurchase Program”) pursuant to which we may repurchase our common stock through any combination of open market repurchases, accelerated share repurchases or privately negotiated transactions .
These restrictions limit our ability and/or the ability of our restricted subsidiaries to, among other things: • incur or guarantee additional debt or issue disqualified stock or preferred stock; • pay dividends (including to us) and make other distributions on, or redeem or repurchase, capital stock; • make certain investments; • incur certain liens; • enter into transactions with affiliates; • merge or consolidate; • enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to us; • designate restricted subsidiaries as unrestricted subsidiaries; and • transfer or sell assets. 35 Table of Contents In addition, our credit agreement related to our senior secured credit facilities contains affirmative covenants that will require us to be in compliance with certain leverage and financial ratios.
These restrictions limit our ability and/or the ability of our restricted subsidiaries to, among other things: • incur or guarantee additional debt or issue disqualified stock or preferred stock; • pay dividends (including to us) and make other distributions on, or redeem or repurchase, capital stock; • make certain investments; • incur certain liens; 35 Table of Contents • enter into transactions with affiliates; • merge or consolidate; • enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to us; • designate restricted subsidiaries as unrestricted subsidiaries; and • transfer or sell assets.
If we breach our obligations under the license agreement, Hilton may be entitled to terminate the license agreement or terminate our rights to use the Hilton brands and other Hilton intellectual property at properties that do not meet applicable standards and policies, or to exercise other remedies.
If we breach our obligations under the license agreement, Hilton may be entitled to terminate the license agreement, terminate our rights to use the Hilton brands and other Hilton intellectual property at properties that do not meet applicable standards and policies, terminate the noncompetition that generally prohibits Hilton from using its mark to engage in the timeshare business, or to exercise other remedies.
As of December 31, 2023, our total indebtedness was approximately $4.5 billion, of which approximately $1.5 billion was non-recourse debt. We significantly increased our level of indebtedness in connection with financing the Diamond Acquisition and the Bluegreen Acquisition.
As of December 31, 2024, our total indebtedness was approximately $6.9 billion, of which approximately $2.3 billion was non-recourse debt. We significantly increased our level of indebtedness in connection with financing the Diamond Acquisition and the Bluegreen Acquisition.
The interests of certain of our stockholders may conflict with ours or yours in the future . We have entered into a stockholder's agreement with Apollo that, among other things, provides Apollo the right, under certain circumstances, to designate a certain number of directors to our board of directors.
We have entered into a stockholder's agreement with Apollo that, among other things, provides Apollo the right, under certain circumstances, to designate a certain number of directors to our board of directors.
These new reporting requirements were effective for us as of December 18, 2023. If we fail to comply with these new requirements we could incur regulatory fines in addition to other adverse consequences to our reputation, business, financial condition and results of operations.
If we fail to comply with these requirements we could incur regulatory fines in addition to other adverse consequences to our reputation, business, financial condition and results of operations.
Additionally, if the distribution of our common stock and/or the distribution of Park common stock do not qualify as tax-free under Section 355 of the Code, Hilton stockholders will be treated as having received a taxable dividend to the extent of Hilton’s current and accumulated earnings and profits, would have a tax-free basis recovery up to the amount of their tax basis in their shares, and would have taxable gain from the sale or exchange of the shares to the extent of any excess.
Additionally, if the distribution of our common stock and/or the distribution of Park common stock do not qualify as tax-free under Section 355 of the Code, Hilton stockholders will be treated as having received a taxable dividend to the extent of Hilton’s current and accumulated earnings and profits, would have a tax-free basis recovery up to the amount of their tax basis in their shares, and would have taxable gain from the sale or exchange of the shares to the extent of any excess. 44 Table of Contents The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.
In addition, the transactions in which we have securitized timeshare financing receivables in the capital markets contain certain portfolio performance requirements related to default, delinquency and recovery rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements. 28 Table of Contents If the default rates or other credit metrics underlying our timeshare financing receivables deteriorate, our timeshare financing receivable securitization program could be adversely affected.
In addition, the transactions in which we have securitized timeshare financing receivables in the capital markets contain certain portfolio performance requirements related to default, delinquency and recovery rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.
Failure to comply with current or future applicable laws, regulations and policies could have a material adverse effect on our business. For example, if we do not comply with applicable laws, regulations and policies, governmental authorities in the jurisdictions where the violations occurred may revoke or refuse to renew licenses or registrations necessary to operate our business.
For example, if we do not comply with applicable laws, regulations and policies, governmental authorities in the jurisdictions where the violations occurred may revoke or refuse to renew licenses or registrations 32 Table of Contents necessary to operate our business.
In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments. Any such default could materially and adversely affect our results of operations and our financial condition.
In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments.
Similarly, increased license fees and related costs associated with the integration of the two brands and any necessary modifications to the license agreement may result in increased costs and could hinder such integration.
In addition, we may incur additional and/or unexpected costs in order to realize these cost savings. Similarly, increased license fees and related costs associated with the integration of the two brands and any necessary modifications to the license agreement may result in increased costs and could hinder such integration.
We have inherited and extended the exclusive marketing agreement with Bass Pro for a period of ten years to provide us with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means.
We inherited and extended the exclusive marketing agreement with Bass Pro for a period of ten years to provide us with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means, which arrangement have contributed significantly to Bluegreen’s historical standalone annual VOI sales volume during recent years prior to our acquisition.
Although it is expected that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the two businesses, will offset the incremental transaction related costs over time, this net benefit may not be achieved in the near term, may be delayed, or not achieved at all for a number of reasons. 41 Table of Contents We and Bluegreen may be subject to complaints, litigation or reputational harm due to dissatisfaction with, or concerns related to, the acquisition from our current owners.
Although it is expected that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the two businesses, will offset the incremental transaction related costs over time, this net benefit may not be achieved in the near term, may be delayed, or not achieved at all for a number of reasons.
In addition, as part of our business strategy, we intend to continue the expansion of our operations in Japan, including by developing property there and selling VOIs at properties located in Japan, as well as explore further expansion opportunities in other countries located in the Asia Pacific region, Mexico, Europe and the Caribbean.
In addition, as part of our business strategy, we intend to continue the expansion of our operations in Japan, including by continuing to market and sell VOIs at Sesoko and Odawara resorts and continuing to opportunistically develop additional property or acquire additional inventory, as well as explore further expansion opportunities in other countries located in the Asia Pacific region, Mexico, Europe and the Caribbean.
Risks Related to the Operation of Our Business We do not own the Hilton brands and our business will be materially harmed if we breach our license agreement with Hilton or it is terminated. Following the spin-off, Hilton retained ownership of the Hilton-branded trademarks, tradenames and certain related intellectual property used in the operation of our business.
Risks Related to the Operation of Our Business We do not own the Hilton brands and our business will be materially harmed if we breach our license agreement with Hilton or it is terminated.
Consequently, actions by or disputes with partners or co- 22 Table of Contents venturers might result in subjecting assets owned by the partnership or joint venture, and to the extent of any guarantee our assets, to additional risk. In addition, we may, in certain circumstances, be liable for the actions of our third-party partners or co-venturers.
Consequently, actions by or disputes with partners or co-venturers might result in subjecting assets owned by the partnership or joint venture, and to the extent of any guarantee our assets, to additional risk.
Repayment of our debt is dependent on cash flow generated by our subsidiaries, which may be subject to limitations beyond our control. Our subsidiaries own a substantial portion of our assets and conduct a substantial portion of our operations.
Any such default could materially and adversely affect our results of operations and our financial condition. 36 Table of Contents Repayment of our debt is dependent on cash flow generated by our subsidiaries, which may be subject to limitations beyond our control. Our subsidiaries own a substantial portion of our assets and conduct a substantial portion of our operations.
However, when interest rates increase the cost of acquiring, developing, expanding or renovating real property increases, and real property values may decrease as the number of potential buyers decrease. Similarly, as financing becomes less available, it becomes more difficult both to acquire and develop real property.
However, when interest rates increase the cost of acquiring, developing, expanding or renovating real property increases, and real property values may decrease as the number of potential buyers decrease.
Indemnities that we may be required to provide Hilton and/or Park, or any liabilities for which we may be responsible proportionately or wholly, pursuant to these agreements may be significant and could negatively affect our business. Risks Related to Ownership of Our Common Stock Our board of directors may change significant corporate policies without stockholder approval.
Indemnities that we may be required to provide Hilton and/or Park, or any liabilities for which we may be responsible proportionately or wholly, pursuant to these agreements may be significant and could negatively affect our business.
Risks Related to Our Indebtedness Our substantial indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts, and could divert our cash flow from operations for debt payments.
If we fail to comply with the requirements of the GDPR, we could face significant administrative and monetary sanctions, which could materially adversely impact our results of operations and financial condition. 34 Table of Contents Risks Related to Our Indebtedness Our substantial indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts, and could divert our cash flow from operations for debt payments.
Any similarly significant but individually immaterial liabilities in the aggregate, and/or any material liability that was unknown or not estimable by us at the time of the acquisition, may have a material adverse effect on our financial condition and operating results. See Part II — Item 8.
Any significant but individually immaterial liabilities in the aggregate, and/or any material liability that was unknown or not estimable by us at the time of the acquisition, may have a material adverse effect on our financial condition and operating results. Our results will suffer if we do not effectively manage our expanded operations resulting from the Diamond Acquisition.
In addition, our ability to pay dividends is limited by our credit agreement related to our senior secured credit facilities. Our ability to pay dividends may also be limited by covenants of other indebtedness that we or our subsidiaries incur in the future.
In addition, our ability to pay dividends is limited by our credit agreement related to our senior secured credit facilities and may further be limited by covenants of other indebtedness that we or our subsidiaries incur in the future. Risks Related to the Spin-Off We may be responsible for U.S. federal income tax liabilities that relate to the spin-off.
It is possible that the integration process could take longer than anticipated and could result in the loss of valuable employees, the disruption of our ongoing business, processes and systems or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, any of which could adversely affect our ability to achieve the anticipated benefits of the Bluegreen Acquisition.
It is possible that the integration process could take longer than anticipated and could result in the loss of valuable employees, the disruption of our ongoing business, processes and systems or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, any of which could adversely affect our ability to achieve the anticipated benefits of the Bluegreen Acquisition. 39 Table of Contents We also may not successfully fully realize the expected benefits related to various key strategic and marketing partnerships and alliances of Bluegreen or may otherwise be constrained by existing strategic and marketing partnerships.
Asset-backed securities issued in our timeshare financing receivable securitization program could be downgraded by credit agencies in the future. If a downgrade occurs, our ability to complete other securitization transactions on acceptable terms or at all could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.
If a downgrade occurs, our ability to complete other securitization transactions on acceptable terms or at all could be jeopardized, and we could be 28 Table of Contents forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.
If we fail to meet such minimum percentage of revenue requirement, then Hilton would have the option to terminate our exclusivity under the Hilton license agreement, which would permit Hilton to license to other parties the trademarks, other intellectual property and certain other rights that are currently exclusively licensed to us under the Hilton license agreement.
If we fail to meet such minimum percentage of revenue requirement, then Hilton would have the option to terminate our exclusivity under the Hilton license agreement, which would permit Hilton to license to other parties the trademarks, other intellectual property and certain other rights that are currently exclusively licensed to us under the Hilton license agreement. 40 Table of Contents In addition, the Hilton license agreement contains a number of prohibitions on us entering into certain agreements and arrangements, including certain enterprise-wide marketing arrangements and/or arrangements with competitors of Hilton.
As our organization grows, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture and attract and retain employees. This could negatively affect our future success. Third-party reservation channels may negatively affect our bookings for room rental revenues.
As our organization continues to grow, including as a result of any recent acquisitions and any future strategic acquisitions, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture and attract and retain employees. This could negatively affect our future success.
Our information systems and records, including those we maintain with our service providers, have been, and likely will continue to be, subject to such cyber-attacks, which include efforts to hack or breach security measures in order to obtain or misuse information, phishing attempts, viruses or other malicious codes, “ransomware” or other malware.
Our information systems and records, including those we maintain with our service providers and vendors, have been, and likely will continue to be, subject to such cyber-attacks and technology disruptions, which include efforts to hack or breach security measures in order to obtain or misuse information or cause business disruption, including through, for example, phishing attempts, brute force attacks, denial of service attacks, exploiting software vulnerabilities (including “zero-day attacks”), viruses or other malicious code, “ransomware” or other malware, and supply chain attacks.
Our ability to remain competitive and to attract and retain members depends on our success in distinguishing the quality and value of our products and services from those offered by others.
This competition could limit the number of, or negatively affect the cost of, suitable investment opportunities available to us. Our ability to remain competitive and to attract and retain members depends on our success in distinguishing the quality and value of our products and services from those offered by others.
In addition, the license agreement requires Hilton’s approval in connection with our anticipated rebranding of the Diamond properties into our branded HGV Max properties and/or another new brand of properties.
In addition, the license agreement requires Hilton’s approval in connection with our anticipated rebranding of the Diamond properties into our branded HGV Max properties and/or another new brand of properties. Hilton also has the right to review our sales, reservation and marketing activities related to HGV Max and review and approve our rebranded sales centers.
Moreover, there may be significant potential liabilities associated with the Legacy-Diamond business that may have been unknown to us at or prior to the closing of the Diamond Acquisition, we may uncover after the closing during the integration period, or may be more significant than we believed at such time.
Moreover, there may be significant potential liabilities associated with the Legacy-Diamond business that may have been unknown to us at or prior to the closing of the Diamond Acquisition, or that may be more significant than we initially believed at or prior to the closing. There is no assurance that our insurance policies will cover all of any such liabilities.
Although we do not expect to be liable for any obligations that were not allocated to us under the Distribution Agreement, a court could disregard the allocation agreed to among the parties, and require that we assume responsibility for obligations allocated to Hilton or Park (for example, tax and/or environmental liabilities), particularly if Hilton or Park were to refuse or were unable to pay or perform the allocated obligations. 43 Table of Contents In addition, losses in respect of certain Shared Contingent Liabilities, which generally are not specifically attributable to any of the timeshare business, the Park business or the retained business of Hilton, were determined on or prior to the date on which the Distribution Agreement was entered.
Although we do not expect to be liable for any obligations that were not allocated to us under the Distribution Agreement, a court could disregard the allocation agreed to among the parties, and require that we assume responsibility for obligations allocated to Hilton or Park (for example, tax and/or environmental liabilities), particularly if Hilton or Park were to refuse or were unable to pay or perform the allocated obligations.
There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the transaction.
There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the transaction. In addition, there will be increased compliance and regulatory risk as a result of the expanded size of our business.
Further, unlawful, fraudulent or deceptive third-party VOI resale or vacation package sales schemes could damage the reputation of the industry, our reputation and brand value, or affect our ability to collect management fees, which may adversely affect our revenues and results of operations.
Fraudulent or illegal activity related to the sale and purchase of timeshares may deter consumers from purchasing our product. Unlawful, fraudulent or deceptive third-party VOI resale or vacation package sales schemes could damage the reputation of the timeshare industry, our reputation and brand value, or affect our ability to collect management fees.
We also market our products and services in the Asia Pacific region, primarily in Japan and South Korea.
We currently have timeshare properties located internationally in Europe, Mexico, the Caribbean, Canada and Asia. We also market our products and services in the Asia Pacific region, primarily in Japan and South Korea.
Hilton also has the right to review our sales, reservation and marketing activities related to HGV Max and review and approve our rebranded sales centers. 37 Table of Contents We have agreed with Hilton to operate the Diamond properties and business as a separate operation, pending the rebranding and rebranding plan, after which we expect to continue to operate certain Diamond properties that are not rebranded as a separate operation.
We have agreed with Hilton to operate the Diamond properties and business as a separate operation, pending the rebranding and rebranding plan, after which we expect to continue to operate certain Diamond properties that are not rebranded as a separate operation.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBoard Level Governance The Audit Committee has primary Board-level responsibility for oversight of our cybersecurity and data protection risks. and serves as a liaison between management and the full Board. The Audit Committee receives regular reports from our CTO and CISO regarding the primary cybersecurity risks facing HGV, and the steps management is taking to mitigate such risks.
Biggest changeThe Audit Committee receives regular reports from our CTO and CISO regarding the primary cybersecurity risks facing HGV, and the steps management is taking to mitigate such risks. The CISO and the CTO provide comprehensive briefings to the Audit Committee on a regular basis, generally at least once per quarter.
The CISO and the CTO provide comprehensive briefings to the Audit Committee on a regular basis, generally at least once per quarter. These briefings include: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident reports and learnings from any cybersecurity incidents, if applicable; and • Compliance with regulatory requirements and industry standards.
These briefings include: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident reports and learnings from any cybersecurity incidents, if applicable; and • Compliance with regulatory requirements and industry standards. The Audit Committee also reviews our cybersecurity management strategy and initiatives on a regular basis with our CTO and CISO.
Third-Party Engagement Recognizing the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts, including cybersecurity assessors, consultants, and auditors, to periodically evaluate and test our risk management systems.
Both the Audit Committee and Board will promptly be made aware of any significant cybersecurity incident, as specified in our cybersecurity incident response plan. Third-Party Engagement Recognizing the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts, including cybersecurity assessors, consultants, and auditors, to periodically evaluate and test our risk management systems.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan. 47 Table of Contents This plan includes immediate actions designed to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan.
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The Audit Committee also reviews our cybersecurity management strategy and initiatives on a regular basis with our CTO and CISO. Both the Audit Committee and Board will promptly be made aware of any significant cybersecurity incident, as specified in our cybersecurity incident response plan.
Added
This plan includes immediate actions designed to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 46 Table of Contents Board Level Governance The Audit Committee has primary Board-level responsibility for oversight of our cybersecurity and data protection risks. and serves as a liaison between management and the full Board.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur call centers are located in Orlando, Las Vegas, Virginia Beach and the United Kingdom. 48 Table of Contents Corporate Headquarters Our main corporate headquarters are located at 6355 MetroWest Boulevard, Suite 180, Orlando, Florida 32835. The lease for this property expires in 2026 with two additional five-year renewal periods.
Biggest changeCorporate Headquarters Our main corporate headquarters are located at 6355 MetroWest Boulevard, Suite 180, Orlando, Florida 32835. The lease for this property expires in 2026 with two additional five-year renewal periods. We also have additional 47 Table of Contents corporate headquarters that are located at 5323 and 5337 Millenia Lakes Boulevard, Orlando, Florida, 32839.
Sales and Marketing Locations As of December 31, 2023, we had 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. Our products are for sale throughout the United States, Mexico, Canada, Europe and Asia.
Sales and Marketing Locations As of December 31, 2024, we had 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. Our products are for sale throughout the United States, Mexico, Canada, Europe and Asia.
These units and properties include those developed by us or by third-party developers with whom we have entered into fee-for-service arrangements. As of December 31, 2023, we owned approximately 64% of all unsold intervals including 100% of all unsold points-based intervals.
These units and properties include those developed by us or by third-party developers with whom we have entered into fee-for-service arrangements. As of December 31, 2024, we owned approximately 73% of all unsold intervals including 100% of all unsold points-based intervals.
ITEM 2. Properties Timeshare Properties As of December 31, 2023, we had over 150 properties open and operating, including properties not yet fully developed but in which VOIs were being sold. Most of our properties and units are located in vacation destinations such as Florida, Europe, Hawaii, California, Arizona, Nevada, and Virginia.
ITEM 2. Properties Timeshare Properties As of December 31, 2024, we had over 200 properties open and operating, including properties not yet fully developed but in which VOIs were being sold. Most of our properties and units are located in vacation destinations such as Florida, Europe, Hawaii, California, South Carolina, Arizona, Virginia, and Nevada.
We also have additional corporate headquarters that are located at 5323 and 5337 Millenia Lakes Boulevard, Orlando, Florida, 32839. The lease for these properties expires in 2034. We believe that our existing office properties are in good condition and are sufficient and suitable for the conduct of our business.
The lease for these properties expires in 2034. We believe that our existing office properties are in good condition and are sufficient and suitable for the conduct of our business.
We have over 60 sales distribution centers in various domestic and international locations. Our distribution centers and sales galleries are operated through leased and owned properties. Additionally, we have 6 call centers that are leased.
We have approximately 100 sales distribution centers in various domestic and international locations. Our distribution centers and sales galleries are operated through leased and owned properties. Additionally, we have 11 call centers that are leased. Our call centers are located in Orlando, Las Vegas, Virginia Beach, Boca Raton, Knoxville, Indianapolis and the United Kingdom.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Related to the Legacy-Diamond business, an appeal for judgment was rendered in favor of the plaintiffs in November 2023 (with the California Supreme Court rejecting further appeals in February 2024) related to a personal injury lawsuit, O’Malley et al. v.
Removed
Diamond Resorts Management, Inc. , which was filed against Diamond in 2015 and for which we have accrued liabilities of approximately $102 million as of December 31, 2023. In November 2023 we initiated litigation against the various insurers disputing all or parts of coverage for this matter seeking to obtain full coverage.
Removed
We believe that through this litigation, these existing insurance policies will cover a significant portion, if not substantially all, of this liability.
Removed
However, it’s possible our insurance policies may still not cover a significant portion of the total amount and we will need to make a payment of approximately $50 million towards the judgment while litigation with the insurers over further coverage proceeds.
Removed
While we presently believe that the ultimate outcome of any currently known proceedings (including the Legacy-Diamond lawsuit discussed above), individually and in the aggregate, will not materially harm our financial position, cash flows, or overall trends in results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in the aggregate, have a material adverse effect on our business, financial condition, or operating results.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the three-month period ended December 31, 2023, we repurchased the following shares: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan October 1 – October 31, 2023 727,931 $ 37.44 727,931 $ 431,374,901 November 1 – November 30, 2023 939,687 35.43 939,687 398,078,432 December 1 – December 31, 2023 985,449 38.81 985,449 359,828,593 Total 2,653,067 $ 37.24 2,653,067 From January 1, 2024, through February 23, 2024, we repurchased approximately 1.7 million shares for $71 million.
Biggest changeDuring the three-month period ended December 31, 2024, we repurchased the following shares: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under Plans October 1 – October 31, 2024 1,309,276 $ 36.66 1,309,276 $ 504,778,477 November 1 – November 30, 2024 1,324,869 41.90 1,324,869 449,246,364 December 1 – December 31, 2024 516,712 41.60 516,712 427,742,644 Total 3,150,857 $ 39.67 3,150,857 From January 1, 2024, through February 20, 2025, we repurchased approximately 1.6 million shares for $66 million.
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HGV.” Performance Graph The following graph compares cumulative total stockholder return of our common stock with the S&P MidCap 400 (“MidCap 400”)* Index and the Dow Jones US Travel & Leisure Total Return Index GICS Level 2 (“DJUSGCT”) over a five-year period ended on December 31, 2023.
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HGV.” Performance Graph The following graph compares cumulative total stockholder return of our common stock with the S&P MidCap 400 (“MidCap 400”)* Index and the Dow Jones US Travel & Leisure Total Return Index GICS Level 2 (“DJUSCGT”) over a five-year period ended on December 31, 2024.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2018, and that all dividends and other distributions were reinvested.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2019, and that all dividends and other distributions were reinvested.
Issuer Purchases of Equity Securities On May 4, 2022, 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 a two-year period (the "2022 Repurchase Plan").
Issuer Purchases of Equity Securities 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 a two-year period (the "2023 Repurchase Plan").
On May 3, 2023, 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 a two-year period (the "2023 Repurchase Plan") which is in addition to the 2022 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 a two-year period (the "2024 Repurchase Plan") which is in addition to the 2023 Repurchase Plan.
Holders of Record The number of stockholders of record of our common stock as of February 22, 2024, was 366. Dividends Although we may return capital to stockholders through dividends or otherwise in the future, we have no current plans to pay dividends on our common stock.
Holders of Record The number of stockholders of record of our common stock as of February 20, 2025, was 367. Dividends Although we may return capital to stockholders through dividends or otherwise in the future, we have no current plans to pay dividends on our common stock.
The repurchases can be made through any combination of open market purchases, accelerated share repurchases or privately negotiated transactions. The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and 50 Table of Contents regulatory requirements and other market and economic conditions. The shares are retired upon repurchase.
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 stock repurchase programs may be suspended or discontinued at any time and will automatically expire at the end of the respective plan terms.
The shares are 49 Table of Contents retired upon repurchase. The stock repurchase programs may be suspended or discontinued at any time and will automatically expire at the end of the respective plan terms.
As of February 23, 2024, we had $289 million of remaining availability under the 2023 Repurchase Plan.
As of February 20, 2025, we had $361 million of remaining availability under the 2024 Repurchase Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePrincipal Components of Expenses • Cost of VOI sales represents the costs attributable to the sales of owned VOIs recognized, as well as charges incurred related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects. • Sales and marketing represents costs incurred to sell and market VOIs, including costs incurred relating to marketing and incentive programs, costs for tours, rental expense and wages and sales commissions. • Financing represents consumer financing interest expense related to our debt securitized by gross timeshare financing receivables (“Securitized Debt”) and Timeshare Facility, amortization of the related deferred loan costs and other expenses incurred in providing consumer financing and servicing loans. • Resort and club management represents costs incurred to manage resorts and the Clubs, including payroll and related costs and other administrative costs. 55 Table of Contents • Rental and ancillary services include payroll and related costs, costs incurred from participating in the Hilton Honors loyalty program, retail, food and beverage costs and maintenance fees on unsold inventory. • General and administrative consists primarily of compensation expense for our corporate staff and personnel supporting our business segments, professional fees (including consulting, audit and legal fees), administrative and related expenses.
Biggest changePrincipal Components of Expenses • Cost of VOI sales represents the costs attributable to the sales of owned VOIs recognized, as well as charges incurred related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects. • Sales and marketing represents costs incurred to sell and market VOIs, including costs incurred relating to marketing and incentive programs, costs for tours, rental expense and wages and sales commissions. • Financing represents consumer financing interest expense related to our debt securitized by gross timeshare financing receivables (“Securitized Debt”) and Timeshare Facility, amortization of the related deferred loan costs and other expenses incurred in providing consumer financing and servicing loans. • Resort and club management represents costs incurred to manage resorts and the Clubs, including payroll and related costs and other administrative costs. • Rental and ancillary services include payroll and related costs, costs incurred from participating in the Hilton Honors loyalty program, retail, food and beverage costs and maintenance fees on unsold inventory. • General and administrative consists primarily of compensation expense for our corporate staff and personnel supporting our business segments, professional fees (including consulting, audit and legal fees), administrative and related expenses. • Depreciation and amortization are non-cash expenses that primarily consist of depreciation of fixed assets such as buildings and leasehold improvements and furniture and equipment at our sales centers, corporate offices, and assets purchased for future conversion to inventory, as well as amortization of our trade names, management agreement contracts, club member relationship intangibles and capitalized software. • License fee expense represents primarily the royalty fee paid to Hilton under a license agreement for the exclusive right to use the Hilton Grand Vacations mark, which is generally based on a percentage of gross sales volume of certain revenue streams. • Acquisition and integration-related expense represents direct expenses for the Diamond Acquisition and the Bluegreen Acquisition, including integration costs, legal and other professional fees.
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, Mexico, Canada, Europe 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 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, 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.
These costs primarily consist of payroll and payroll-related costs for management of the HOAs and other services we provide where we are the employer and insurance. The corresponding expenses are presented as Cost reimbursements expense in our consolidated statements of operations resulting in no effect on net income. Factors Affecting Revenues • Relationships with developers .
These costs primarily consist of payroll and payroll-related costs for management of the HOAs and other services we provide where we are the employer and insurance. The corresponding expenses are presented as Cost reimbursements expense in our consolidated statements of income resulting in no effect on net income. Factors Affecting Revenues • Relationships with developers .
We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period. The interest rate on our loans is determined by, among other factors, the amount of the down payment, the borrower’s credit profile and the loan term.
We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume originated in the period. The interest rate on our loans is determined by, among other factors, the amount of the down payment, the borrower’s credit profile and the loan term.
We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) EBITDA and Adjusted EBITDA are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions; and (ii) EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.
We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions; and (ii) EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.
The corresponding revenues are presented as Cost reimbursements revenue in our consolidated statements of operations resulting in no effect on net income. Factors Affecting Expenses • Costs of VOI sales.
The corresponding revenues are presented as Cost reimbursements revenue in our consolidated statements of income resulting in no effect on net income. Factors Affecting Expenses • Costs of VOI sales.
Such limitations include the fact that these measures only include those revenues and expenses related to one of the four specified operating activities as opposed to on a consolidated basis, and other limitations that are similar to those discussed above under “ EBITDA and Adjusted EBITDA .” See below under “ Reconciliation of Non-GAAP Profit Measures to GAAP Measure ” for reconciliation of these four profit measures to net income, our most comparable U.S.
Such limitations include the fact that these measures only include those revenues and expenses related to one of the four specified operating activities as opposed to on a consolidated basis, and other limitations that are similar to those discussed above under “ EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders .” See below under “ Reconciliation of Non-GAAP Profit Measures to GAAP Measure ” for reconciliation of these four profit measures to net income attributable to stockholders and net income, our most comparable U.S.
Capital-efficient arrangements, comprised of our fee-for-service and just-in-time inventory, represented approximately 35% of that supply. We believe that the visibility into our long-term supply allows us to efficiently manage inventory to meet predicted sales, reduce capital investments, minimize our exposure to the cyclicality of the real estate market and mitigate the risks of entering into new markets.
Capital-efficient arrangements, comprised of our fee-for-service and just-in-time inventory, represented approximately 28% of that supply. We believe that the visibility into our long-term supply allows us to efficiently manage inventory to meet predicted sales, reduce capital investments, minimize our exposure to the cyclicality of the real estate market and mitigate the risks of entering into new markets.
We consider real estate profit margin to be an important non-GAAP operating measure because it measures the efficiency of our sales and marketing spending, management of inventory costs, and initiatives intended to improve profitability. • Financing profit represents financing revenue, net of financing expense, both of which correspond to the applicable line items from our consolidated statements of operations.
We consider real estate profit margin to be an important non-GAAP operating measure because it measures the efficiency of our sales and marketing spending, management of inventory costs, and initiatives intended to improve profitability. • Financing profit represents financing revenue, net of financing expense, both of which correspond to the applicable line items from our consolidated statements of income.
We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our resort and club management business that support our VOI sales business. • Rental and ancillary services profit represents rental and ancillary services revenues, net of rental and ancillary services expenses, both of which correspond to the applicable line items from our consolidated statements of operations.
We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our resort and club management business that support our VOI sales business. • Rental and ancillary services profit represents rental and ancillary services revenues, net of rental and ancillary services expenses, both of which correspond to the applicable line items from our consolidated statements of income.
We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our financing business in connection with our VOI sales. • Resort and club management profit represents resort and club management revenue, net of resort and club management expense, both of which correspond to the applicable line items from our consolidated statements of operations.
We consider this to be an important non-GAAP operating measure because it measures the efficiency and profitability of our financing business in connection with our VOI sales. • Resort and club management profit represents resort and club management revenue, net of resort and club management expense, both of which correspond to the applicable line items from our consolidated statements of income.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, 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.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, 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 56 Table of Contents acquisitions, restructuring, amortization of premiums and discounts resulting from purchase accounting, and other non-cash and one-time charges.
We consider VPG to be an important operating measure because it measures the effectiveness of our sales process, combining the average transaction price with the closing rate. EBITDA and Adjusted EBITDA EBITDA, presented herein, is a financial measure that is not recognized under U.S.
We consider VPG to be an important operating measure because it measures the effectiveness of our sales process, combining the average transaction price with the closing rate. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders EBITDA, presented herein, is a financial measure that is not recognized under U.S.
EBITDA and Adjusted EBITDA are not recognized terms under U.S. GAAP and should not be considered as alternatives to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders are not recognized terms under U.S. GAAP and should not be considered as alternatives to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Real estate expense represents Costs of VOI sales and Sales and marketing expense, net . Sales and marketing expense, net represents sales and marketing expense, which corresponds to the applicable line item from our consolidated statements of operations, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.
Real estate expense represents Costs of VOI sales and Sales and marketing expense, net . Sales and marketing expense, net represents sales and marketing expense, which corresponds to the applicable line item from our consolidated statements of income, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.
Resort and club management also includes recurring management fees under our agreements with HOAs for day-to-day-management services, including housekeeping services, maintenance, and certain accounting and administrative services for HOAs, generally based on a percentage of costs to operate the resorts. • Rental and ancillary services represents revenues from transient rentals of unoccupied vacation ownership units and revenues recognized from the utilization of Club points and vacation packages when points and packages are redeemed for rental stays at one of our resorts.
Resort and club management also includes recurring management fees under our agreements with HOAs for day-to-day-management services, including housekeeping services, 53 Table of Contents maintenance, and certain accounting and administrative services for HOAs, generally based on a percentage of costs to operate the resorts. • Rental and ancillary services represents revenues from transient rentals of unoccupied vacation ownership units and revenues recognized from the utilization of Club points and vacation packages when points and packages are redeemed for rental stays at one of our resorts.
Fee-for-service commissions and brand fees represents sales, marketing, brand and other fees, which corresponds to the applicable line item from our consolidated statements of operations, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.
Fee-for-service commissions and brand fees represents sales, marketing, brand and other fees, which corresponds to the applicable line item from our consolidated statements of income, adjusted by marketing revenue and other fees earned primarily from discounted marketing related packages which encompass a sales tour to prospective owners.
We believe these additional measures are also important in helping investors understand the performance and efficiency with which we are able to convert revenues for each of these primary activities into operating profit, both in dollars and as margins, and are frequently used by securities analysts, investors and other interested parties as one of common performance measures to compare results or estimate valuations across companies in our industry.
We believe these additional measures are also important in helping investors understand the performance and efficiency with which we are able to convert revenues for each of these primary activities into operating profit, both in dollars and as margins, and are frequently used by securities analysts, investors and other 57 Table of Contents interested parties as one of common performance measures to compare results or estimate valuations across companies in our industry.
(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $2 million, $2 million and $1 million for the years ended December 31, 2023, 2022 and 2021, respectively. 61 Table of Contents Reconciliation of Non-GAAP Real Estate Measures to GAAP Measures The following table reconciles our Sales, marketing, brand and other fees revenue, our most comparable U.S.
(2) Excludes impact of interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates of $2 million for the years ended December 31, 2024, 2023 and 2022, respectively. 61 Table of Contents Reconciliation of Non-GAAP Real Estate Measures to GAAP Measures The following table reconciles our Sales, marketing, brand and other fees revenue, our most comparable U.S.
Segment Results The following tables present our revenues by segment for the year ended December 31, 2023, compared to the years ended December 31, 2022, and 2021. We do not include equity in earnings from unconsolidated affiliates in our measures of segment revenues.
Segment Results The following tables present our revenues by segment for the year ended December 31, 2024, compared to the years ended December 31, 2023, and 2022. We do not include equity in earnings from unconsolidated affiliates in our measures of segment revenues.
Some of these limitations are: • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • EBITDA and Adjusted EBITDA do not reflect our interest expense (excluding interest expense on non-recourse debt), or the cash requirements necessary to service interest or principal payments on our indebtedness; • EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; 57 Table of Contents • EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations; • EBITDA and Adjusted EBITDA do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized; and • EBITDA and Adjusted EBITDA may be calculated differently from other companies in our industry limiting their usefulness as comparative measures.
Some of these limitations are: • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect changes in, or cash requirements for, our working capital needs; • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect our interest expense (excluding interest expense on non-recourse debt), or the cash requirements necessary to service interest or principal payments on our indebtedness; • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect our tax expense or the cash requirements to pay our taxes; • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations; • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized; and • EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders may be calculated differently from other companies in our industry limiting their usefulness as comparative measures.
Contract sales differ from revenues from the Sales of VOIs, net that we report in our consolidated statements of operations due to the requirements for revenue recognition, as well as adjustments for incentives.
Contract sales differ from revenues from the Sales of VOIs, net that we report in our consolidated statements of income due to the requirements for revenue recognition, as well as adjustments for incentives.
Conversely, if interest rates increase significantly, it would increase the cost of purchasing VOIs for any purchaser who is financing their acquisition and may deter potential purchasers from buying a VOI, which could result in sales declines. • Competition.
Conversely, if interest rates increase significantly, it would increase 54 Table of Contents the cost of purchasing VOIs for any purchaser who is financing their acquisition and may deter potential purchasers from buying a VOI, which could result in sales declines. • Competition.
We allocate the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed 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.
We allocate the purchase price of a business acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. For each business acquisition, we recognize goodwill as the amount in which consideration transferred for the acquired entity exceeds the fair values of net assets.
EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income, cash flow or other methods of analyzing our results as reported under U.S. GAAP.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income, cash flow or other methods of analyzing our results as reported under U.S. GAAP.
For the years ended December 31, 2023, 2022 and 2021, 70%, 71% and 70% of our contract sales were to our existing owners, respectively. We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans.
For the years ended December 31, 2024, 2023 and 2022, 72%, 70% and 71% of our contract sales were to our existing owners, respectively. 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 63% and 62% for the years ended December 31, 2023, and 2022, respectively.
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 63% for the years ended December 31, 2024, and 2023, respectively.
These relationships exist with a diverse group of developers and are not significantly concentrated with any particular third party. 54 Table of Contents • Construction activities . We have entered into agreements with third parties to acquire both completed VOIs and property.
These relationships exist with a diverse group of developers and are not significantly concentrated with any particular third party. • Construction activities . We have entered into agreements with third parties to acquire both completed VOIs and property.
Historical default rates, which represent annual defaults as a percentage of each year’s beginning gross timeshare financing receivables balance, were as follows: Year Ended December 31, 2023 2022 2021 Historical default rates (1) 8.56 % 7.92 % 8.93 % (1) A loan is considered to be in default if it is equal to or greater than 121 days past due as of the prior month end.
Historical default rates, which represent annual defaults as a percentage of each year’s beginning gross timeshare financing receivables balance, were as follows: Year Ended December 31, 2024 2023 2022 Historical default rates (1) 10.77 % 8.56 % 7.92 % (1) A loan is considered to be in default if it is equal to or greater than 121 days past due as of the prior month end.
The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is approximately $11.3 billion at current pricing.
The estimated contract sales value related to our inventory that is currently available for sale at open or soon-to-be open projects and inventory at new or existing projects that will become available for sale in the future upon registration, delivery or construction is approximately $12.7 billion at current pricing.
Cash flows used in operating activities primarily include spending for the purchase and development of real estate for future conversion to inventory and funding our working capital needs.
Cash flows used in operating activities primarily include spending for the purchase and development of real estate for future 67 Table of Contents conversion to inventory and funding our working capital needs.
Discussions of our financial condition and results of operations for the year ended December 31, 2022 compared to December 31, 2021 that have been omitted under this item can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2022 , which was filed with the Securities and Exchange Commission on March 1, 2023.
Discussions of our financial condition and results of operations for the year ended December 31, 2023 compared to December 31, 2022 that have been omitted under this item can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023 , which was filed with the Securities and Exchange Commission on February 29, 2024.
The following table exhibits our VOI inventory spending for the years ended December 31, 2023, 2022 and 2021.
The following table exhibits our VOI inventory spending for the years ended December 31, 2024, 2023 and 2022.
In accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”), revenue and the related costs to fulfill and acquire the contract (“direct costs”) from sales of VOIs under construction are deferred until the point in time when construction activities are deemed to be completed.
Real Estate Sales and Financing Segment In accordance with Accounting Standards Codification Topic 606, “ Revenue from Contracts with Customers” (“ASC 606”), revenue and the related costs to fulfill and acquire the contract (“direct costs”) from sales of VOIs under construction are deferred until the point in time when construction activities are deemed to be completed.
Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 22 industry-leading brands across approximately 7,500 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.
Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort, any property in the Hilton system of 24 industry-leading brands across approximately 8,300 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.
This amount includes $1,074 million of interest on our debt and non-recourse debt, of which $224 million will be incurred in 2024. 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.
This amount includes $1,824 million of interest on our debt and non-recourse debt, of which $387 million will be incurred in 2025. The ultimate amount and timing of certain commitments is subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances.
Year Ended December 31, ($ in millions) 2023 2022 2021 VOI spending - owned properties (1) $ 243 $ 161 $ 200 VOI spending - fee-for-service upgrades (2) 16 13 10 Purchases and development of real estate for future conversion to inventory 39 8 33 Total VOI inventory spending $ 298 $ 182 $ 243 (1) For the years ended December 31, 2023, 2022, and 2021, our VOI inventory spending on owned properties relates to properties that are classified as Inventory on our consolidated balance sheets.
Year Ended December 31, ($ in millions) 2024 2023 2022 VOI spending - owned properties (1) $ 318 $ 243 $ 161 VOI spending - fee-for-service upgrades (2) — 16 13 Purchases and development of real estate for future conversion to inventory 127 39 8 Total VOI inventory spending $ 445 $ 298 $ 182 (1) For the years ended December 31, 2024, 2023, and 2022, our VOI inventory spending on owned properties relates to properties that are classified as Inventory on our consolidated balance sheets.
Contractual Obligations Our commitments primarily relate to agreements with developers to purchase or construct vacation ownership units, operating leases and obligations associated with our debt, non-recourse debt and the related interest. As of December 31, 2023, we were committed to $5,790 million in contractual obligations over 9 years, $563 million of which will be fulfilled in 2024.
Contractual Obligations Our commitments primarily relate to agreements with developers to purchase or construct vacation ownership units, operating leases and obligations associated with our debt, non-recourse debt and the related interest. As of December 31, 2024, we were committed to $9,333 million in contractual obligations over 10 years, $972 million of which will be fulfilled in 2025.
Investing Activities Our capital expenditures include spending related to technology and buildings and leasehold improvements used to support sales and marketing locations, resort operations and corporate activities. We believe the renovations of our existing assets are necessary to stay competitive in the markets in which we operate.
Investing Activities Investing activities include cash paid for acquisitions, capital expenditures and software capitalization costs. Our capital expenditures include spending related to technology and buildings and leasehold improvements used to support sales and marketing locations, resort operations and corporate activities. We believe the renovations of our existing assets are necessary to stay competitive in the markets in which we operate.
(2) Includes expense related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects of $12 million, $9 million and $7 million recorded in Costs of VOI sales for the years ended December 31, 2023, 2022 and 2021, respectively.
(2) Includes expense related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects of $12 million and $9 million recorded in Costs of VOI sales for the years ended December 31, 2023 and 2022, respectively. There was no expense for the year ended December 31, 2024.
See Note 2: Summary of Significant Accounting Policies and Note 3: Acquisitions in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
See Note 2: Summary of Significant Accounting Policies in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information. 70 Table of Contents
We have made commitments with developers to purchase vacation ownership units at a future date to be marketed and sold under our Hilton Grand Vacations brand. As of December 31, 2023, our inventory-related purchase commitments totaled $37 million over 1 year.
We have made commitments with developers to purchase vacation ownership units at a future date to be marketed and sold under our Hilton Grand Vacations brand. As of December 31, 2024, our inventory-related purchase commitments totaled $15 million over 2 years.
Sources and Uses of Our Cash The following table summarizes our net cash flows and key metrics related to our liquidity: Year Ended December 31, 2023 vs 2022 ($ in millions) 2023 2022 2021 $ Net cash provided by (used in): Operating activities $ 312 $ 747 $ 168 $ (435) Investing activities (158) (97) (1,631) (61) Financing activities 183 (782) 1,636 965 Operating Activities Cash flow provided by operating activities is primarily generated from (1) sales and financing of VOIs and (2) net cash generated from managing our resorts, Club operations and providing related rental and ancillary services.
Sources and Uses of Our Cash The following table summarizes our net cash flows and key metrics related to our liquidity: Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ Net cash provided by (used in): Operating activities $ 309 $ 312 $ 747 $ (3) Investing activities (1,571) (158) (97) (1,413) Financing activities 1,156 183 (782) 973 Operating Activities Cash flow provided by operating activities is primarily generated from (1) sales and financing of VOIs and (2) net cash generated from managing our resorts, Club operations and providing related rental and ancillary services.
GAAP financial measure. 59 Table of Contents Results of Operations Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 The following discussion and analysis of our financial condition and results of operations is for the year ended December 31, 2023 compared with the year ended December 31, 2022.
GAAP financial measures. 58 Table of Contents Results of Operations Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 The following discussion and analysis of our financial condition and results of operations is for the year ended December 31, 2024 compared with the year ended December 31, 2023.
(2) Represents contract sales from fee-for-service properties on which we earn Fee-for-service commissions and brand fees. (3) Represents the net recognition of revenues related to the Sales of VOIs under construction that are recognized when construction is complete.
(2) Represents contract sales from fee-for-service properties on which we earn Fee-for-service commissions and brand fees. (3) Represents the net recognition of revenues related to the Sales of VOIs under construction that are recognized when construction is complete. (4) Includes adjustments for revenue recognition, including amounts in rescission and sales incentives.
See “ Cautionary Note Regarding Forward-Looking Statements .” Overview Our Business 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 brand.
See “ Cautionary Note Regarding Forward-Looking Statements .” Overview Our Business 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 brand. During 2021, we completed the Diamond Acquisition and on January 17, 2024, we completed the Bluegreen Acquisition.
Furthermore, construction delays, zoning and other local, state or federal governmental approvals, particularly in new geographic areas with which we are unfamiliar, cost overruns, lender financial defaults, or natural or man-made disasters, as well as failure by third-party contractors to perform for any reason, could lead to an adverse effect on our cash flows, margins and profits. • Sales and marketing expense .
In periods where more upgrades are occurring and we are not generating increased sales volume on unsold supply, we could see an adverse effect on our cash flows, margins and profits. 55 Table of Contents Furthermore, construction delays, zoning and other local, state or federal governmental approvals, particularly in new geographic areas with which we are unfamiliar, cost overruns, lender financial defaults, or natural or man-made disasters, as well as failure by third-party contractors to perform for any reason, could lead to an adverse effect on our cash flows, margins and profits. • Sales and marketing expense .
Rental and ancillary services profit margin is calculated as a percentage by 58 Table of Contents dividing rental and ancillary services profit by rental and ancillary services revenue.
Rental and ancillary services profit margin is calculated as a percentage by dividing rental and ancillary services profit by rental and ancillary services revenue.
We aggregate these factors to calculate total net cost of sales of VOIs as a percentage of net sales of VOIs and apply this ratio to allocate the cost of sales to recognized sales of VOIs.
Other assumptions include sales incentives, projected future cost and volume of recoveries. We aggregate these factors to calculate total net cost of sales of VOIs as a percentage of net sales of VOIs and apply this ratio to allocate the cost of sales to recognized sales of VOIs.
Our primary trust VOI product, which we acquired in the Diamond Acquisition, includes the marketing and selling of beneficial interests in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.
Our trust VOI product that we market and sell is a beneficial interest in one of our Collections, which are represented by an annual or biennial allotment of points that can be utilized for vacations at any of the resorts in that Collection.
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.
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 year ended December 31, 2024, sales from fee-for-service and just-in-time inventory were 18% and 19% of contract sales, respectively.
Year Ended December 31, 2023 vs 2022 ($ in millions) 2023 2022 2021 $ % Revenues: Real estate sales and financing $ 2,357 $ 2,378 $ 1,451 $ (21) (0.9) Resort operations and club management 1,291 1,197 700 94 7.9 Total segment revenues 3,648 3,575 2,151 73 2.0 Cost reimbursements 386 297 202 89 30.0 Intersegment eliminations (1) (56) (37) (18) (19) 51.4 Total revenues $ 3,978 $ 3,835 $ 2,335 $ 143 3.7 (1) Refer to Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for details on the intersegment eliminations.
Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % Revenues: Real estate sales and financing $ 3,010 $ 2,357 $ 2,378 $ 653 27.7 Resort operations and club management 1,528 1,291 1,197 237 18.4 Total segment revenues 4,538 3,648 3,575 890 24.4 Cost reimbursements 516 386 297 130 33.7 Intersegment eliminations (1) (73) (56) (37) (17) 30.4 Total revenues $ 4,981 $ 3,978 $ 3,835 $ 1,003 25.2 (1) See Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for details on the intersegment eliminations.
GAAP financial measure, to EBITDA and Adjusted EBITDA: Year Ended December 31, 2023 vs 2022 (1) ($ in millions) 2023 2022 2021 $ % Net income $ 313 $ 352 $ 176 $ (39) (11.1) Interest expense 178 142 105 36 25.4 Income tax expense 136 129 93 7 5.4 Depreciation and amortization 213 244 126 (31) (12.7) Interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates 2 2 1 — — EBITDA 842 869 501 (27) (3.1) Other (gain) loss, net (2) 1 26 (3) NM Share-based compensation expense 40 46 48 (6) (13.0) Impairment expense 3 17 2 (14) (82.4) Acquisition and integration-related expense 68 67 106 1 1.5 Other adjustment items (2) 54 65 33 (11) (16.9) Adjusted EBITDA $ 1,005 $ 1,065 $ 716 $ (60) (5.6) (1) NM - fluctuation in terms of percentage change is not meaningful.
GAAP financial measures, to EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders: Year Ended December 31, 2024 vs 2023 (1) ($ in millions) 2024 2023 2022 $ % Net income attributable to stockholders $ 47 $ 313 $ 352 $ (266) (85.0) Net income attributable to noncontrolling interest 13 — — 13 100% Net income 60 313 352 (253) (80.8) Interest expense 329 178 142 151 84.8 Income tax expense 76 136 129 (60) (44.1) Depreciation and amortization 268 213 244 55 25.8 Interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates 2 2 2 — — EBITDA 735 842 869 (107) (12.7) Other loss (gain), net 11 (2) 1 13 NM Share-based compensation expense 47 40 46 7 17.5 Impairment expense 2 3 17 (1) (33.3) Acquisition and integration-related expense 237 68 67 169 NM Other adjustment items (2) 62 54 65 8 14.8 Adjusted EBITDA 1,094 1,005 1,065 89 8.9 Adjusted EBITDA attributable to noncontrolling interest 16 — — 16 100% Adjusted EBITDA attributable to stockholders $ 1,078 $ 1,005 $ 1,065 $ 73 100% (1) NM - fluctuation in terms of percentage change is not meaningful.
See below under “Segment Results” for reconciliation of our EBITDA and Adjusted EBITDA to net income, our most comparable U.S. GAAP financial measure. Non-GAAP Measures within Our Segments Within each of our two reportable segments, we present additional profit and profit margin information for certain key activities—real estate, financing, resort and club management, and rental and ancillary services.
Non-GAAP Measures within Our Segments Within each of our two reportable segments, we present additional profit and profit margin information for certain key activities—real estate, financing, resort and club management, and rental and ancillary services.
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.
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 51 Table of Contents third-party developers and have focused our inventory strategy on developing an optimal inventory mix.
Year Ended December 31, 2023 vs 2022 (1) ($ in millions) 2023 2022 2021 $ % Net income $ 313 $ 352 $ 176 $ (39) (11.1) Interest expense 178 142 105 36 25.4 Income tax expense 136 129 93 7 5.4 Depreciation and amortization 213 244 126 (31) (12.7) Interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates 2 2 1 — — EBITDA 842 869 501 (27) (3.1) Other (gain) loss, net (2) 1 26 (3) NM Equity in earnings from unconsolidated affiliates (2) (14) (15) (11) 1 (6.7) Impairment expense 3 17 2 (14) (82.4) License fee expense 138 124 80 14 11.3 Acquisition and integration-related expense 68 67 106 1 1.5 General and administrative 194 212 151 (18) (8.5) Profit $ 1,229 $ 1,275 $ 855 $ (46) (3.6) Real estate profit 575 691 402 (116) (16.8) Financing profit 208 164 118 44 26.8 Resort and club management profit 392 373 260 19 5.1 Rental and ancillary services profit 54 47 75 7 14.9 Profit $ 1,229 $ 1,275 $ 855 $ (46) (3.6) (1) NM - fluctuation in terms of percentage change is not meaningful.
Year Ended December 31, 2024 vs 2023 (1) ($ in millions) 2024 2023 2022 $ % Net income attributable to stockholders $ 47 $ 313 $ 352 $ (266) (85.0) Net income attributable to noncontrolling interest 13 — — 13 100% Net income 60 313 352 (253) (85.0) Interest expense 329 178 142 151 84.8 Income tax expense 76 136 129 (60) (44.1) Depreciation and amortization 268 213 244 55 25.8 Interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates 2 2 2 — — EBITDA 735 842 869 (107) (12.7) Other loss (gain), net 11 (2) 1 13 NM Equity in earnings from unconsolidated affiliates (2) (20) (14) (15) (6) 42.9 Impairment expense 2 3 17 (1) (33.3) License fee expense 171 138 124 33 23.9 Acquisition and integration-related expense 237 68 67 169 NM General and administrative 199 194 212 5 2.6 Profit $ 1,335 $ 1,229 $ 1,275 $ 106 8.6 Real estate profit 539 575 691 (36) (6.3) Financing profit 276 208 164 68 32.7 Resort and club management profit 511 392 373 119 30.4 Rental and ancillary services profit 9 54 47 (45) (83.3) Profit $ 1,335 $ 1,229 $ 1,275 $ 106 8.6 (1) NM - fluctuation in terms of percentage change is not meaningful.
Non-Operating Expenses Year Ended December 31, 2023 vs 2022 Variance (1) ($ in millions) 2023 2022 2021 $ % Interest expense $ 178 $ 142 $ 105 $ 36 25.4 Equity in earnings from unconsolidated affiliates (12) (13) (10) 1 (7.7) Other (gain) loss, net (2) 1 26 (3) NM Income tax expense 136 129 93 7 5.4 (1) NM - Fluctuation in terms of percentage change is not meaningful.
Non-Operating Expenses Year Ended December 31, 2024 vs 2023 (1) ($ in millions) 2024 2023 2022 $ % Interest expense $ 329 $ 178 $ 142 $ 151 84.8 Equity in earnings from unconsolidated affiliates (18) (12) (13) (6) 50.0 Other loss (gain), net 11 (2) 1 13 NM Income tax expense 76 136 129 (60) (44.1) (1) NM - Fluctuation in terms of percentage change is not meaningful.
Year Ended December 31, 2023 vs 2022 ($ in millions) 2023 2022 2021 $ % Sales, marketing, brand and other fees $ 634 $ 620 $ 385 $ 14 2.3 Less: Marketing revenue and other fees (1) (241) (208) (149) (33) 15.9 Fee-for-service commissions and brand fees $ 393 $ 412 $ 236 $ (19) (4.6) Sales and marketing expense $ 1,281 $ 1,146 $ 653 $ 135 11.8 Less: Marketing revenue and other fees (1) (241) (208) (149) (33) 15.9 Sales and marketing expense, net $ 1,040 $ 938 $ 504 $ 102 10.9 (1) Includes revenue recognized through our marketing programs for existing owners and prospective first-time buyers and revenue associated with sales incentives, title service and document compliance.
Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % Sales, marketing, brand and other fees $ 637 $ 634 $ 620 $ 3 0.5 Less: Marketing revenue and other fees (1) (309) (241) (208) (68) 28.2 Fee-for-service commissions and brand fees $ 328 $ 393 $ 412 $ (65) (16.5) Sales and marketing expense $ 1,768 $ 1,281 $ 1,146 $ 487 38.0 Less: Marketing revenue and other fees (1) (309) (241) (208) (68) 28.2 Sales and marketing expense, net $ 1,459 $ 1,040 $ 938 $ 419 40.3 (1) Includes revenue recognized through our marketing programs for existing owners and prospective first-time buyers and revenue associated with sales incentives, title service and document compliance.
Increases in interest rates would increase the consumer financing interest expense we pay on the Timeshare Facility and could adversely affect our financing operations in future securitization or other debt transactions, affecting net cash flow, margins and profits. 56 Table of Contents Key Business and Financial Metrics Real Estate Sales Operating Metrics We measure our performance using the following key operating metrics: • Contract sales represents the total amount of VOI products (fee-for-service, just-in-time, developed, and points-based) under purchase agreements signed during the period where we have received a down payment of at least 10% of the contract price.
Key Business and Financial Metrics Real Estate Sales Operating Metrics We measure our performance using the following key operating metrics: • Contract sales represents the total amount of VOI products (fee-for-service, just-in-time, developed, and points-based) under purchase agreements signed during the period where we have received a down payment of at least 10% of the contract price.
Year Ended December 31, 2023 vs 2022 Variance ($ in millions) 2023 2022 2021 $ % Sales of VOIs, net $ 1,416 $ 1,491 $ 883 $ (75) (5.0) Fee-for-service commissions and brand fees 393 412 236 (19) (4.6) Sales revenue 1,809 1,903 1,119 (94) (4.9) Less: Cost of VOI sales 194 274 213 (80) (29.2) Sales and marketing expense, net 1,040 938 504 102 10.9 Real Estate expense 1,234 1,212 717 22 1.8 Real Estate profit $ 575 $ 691 $ 402 $ (116) (16.8) Real Estate profit margin (1) 31.8 % 36.3 % 35.9 % (1) Excluding the marketing revenue and other fees adjustment, Real estate profit margin was 28.0%, 32.7% and 31.7% for the years ended December 31, 2023, 2022 and 2021, respectively.
Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % Sales of VOIs, net $ 1,909 $ 1,416 $ 1,491 $ 493 34.8 Fee-for-service commissions and brand fees 328 393 412 (65) (16.5) Sales revenue 2,237 1,809 1,903 428 23.7 Less: Cost of VOI sales 239 194 274 45 23.2 Sales and marketing expense, net 1,459 1,040 938 419 40.3 Real Estate expense 1,698 1,234 1,212 464 37.6 Real Estate profit $ 539 $ 575 $ 691 $ (36) (6.3) Real Estate profit margin (1) 24.1 % 31.8 % 36.3 % (1) Excluding the marketing revenue and other fees adjustment, Real estate profit margin was 21.2%, 28.0% and 32.7% for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023, we had over 150 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 and feature spacious, condominium-style accommodations with superior amenities and quality service.
As of December 31, 2024, we have 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, Virginia and Nevada, inclusive of the new locations acquired in connection with the Bluegreen Acquisition.
Real Estate Year Ended December 31, 2023 vs 2022 Variance (1) ($ in millions, except Tour flow and VPG) 2023 2022 2021 $ % Contract sales $ 2,310 $ 2,381 $ 1,352 $ (71) (3.0) Adjustments: Fee-for-service sales (2) (644) (693) (424) 49 (7.1) Provision for financing receivables losses (171) (142) (121) (29) 20.4 Reportability and other: Net (deferral) recognition of sales of VOIs under construction (3) (35) 31 133 (66) NM Fee-for-service sale upgrades, net 19 18 14 1 5.6 Other (4) (63) (104) (71) 41 (39.4) Sales of VOIs, net $ 1,416 $ 1,491 $ 883 $ (75) (5.0) Tour flow 608,367 517,117 298,044 91,250 VPG $ 3,760 $ 4,432 $ 4,332 $ (672) (1) NM - fluctuation in terms of percentage change is not meaningful.
Year Ended December 31, 2024 vs 2023 (1) ($ in millions, except Tour flow and VPG) 2024 2023 2022 $ % Contract sales $ 3,002 $ 2,310 $ 2,381 $ 692 30.0 Adjustments: Fee-for-service sales (2) (540) (644) (693) 104 (16.1) Provision for financing receivables losses (363) (171) (142) (192) NM Reportability and other: Net recognition (deferral) of sales of VOIs under construction (3) (52) (35) 31 (17) 48.6 Fee-for-service sale upgrades, net — 19 18 (19) (100.0) Other (4) (138) (63) (104) (75) NM Sales of VOIs, net $ 1,909 $ 1,416 $ 1,491 $ 493 34.8 Tour flow 835,181 608,367 517,117 226,814 VPG $ 3,572 $ 3,760 $ 4,432 $ (188) (1) NM - fluctuation in terms of percentage change is not meaningful.
Our services include day-to-day operations of the resorts, maintenance of the resorts, preparation of books and financial records including reports, budgets and projections, arranging for annual audits and maintenance fee billing and collections and employment training and personnel oversight. 53 Table of Contents Our HOA management agreements provide for a cost-plus management fee, which means we generally earn a fee equal to 10% to 15% of the costs to operate the applicable resort.
Our services include day-to-day operations of the resorts, maintenance of the resorts, preparation of books and financial records including reports, budgets and projections, arranging for annual audits and maintenance fee billing and collections and employment training and personnel oversight.
The weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination were as follows: Year Ended December 31, 2023 2022 2021 Weighted-average FICO score 737 735 734 Prepayment is permitted without penalty. When a member defaults, we ultimately return their VOI to inventory for resale and that member no longer participates in our Clubs.
The weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination were as follows: Year Ended December 31, 2024 2023 2022 Weighted-average FICO score 741 737 735 52 Table of Contents Prepayment is permitted without penalty.
Other Operating Expenses Year Ended December 31, 2023 vs 2022 Variance ($ in millions) 2023 2022 2021 $ % General and administrative $ 194 $ 212 $ 151 $ (18) (8.5) Depreciation and amortization 213 244 126 (31) (12.7) License fee expense 138 124 80 14 11.3 Impairment expense 3 17 2 (14) (82.4) The change in other operating expenses for the year ended December 31, 2023, compared to the same period in 2022, was driven by decreased general and administrative costs and decreased depreciation and amortization expense.
Other Operating Expenses Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % General and administrative $ 199 $ 194 $ 212 $ 5 2.6 Depreciation and amortization 268 213 244 55 25.8 License fee expense 171 138 124 33 23.9 Impairment expense 2 3 17 (1) (33.3) General and administrative expenses increased by $5 million for the year ended December 31, 2024, compared to the same period in 2023.
We have over 60 sales distribution centers in various domestic and international locations. A phased rebranding of sales centers that were acquired as part of the Diamond Acquisition began in late 2021. Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach.
We have approximately 100 sales distribution centers in various domestic and international locations. Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach.
Rental and Ancillary Services Year Ended December 31, 2023 vs 2022 Variance ($ in millions) 2023 2022 2021 $ % Rental revenues $ 623 $ 586 $ 315 $ 37 6.3 Ancillary services revenues 43 40 27 3 7.5 Rental and ancillary services revenues 666 626 342 40 6.4 Rental expenses 573 544 242 29 5.3 Ancillary services expense 39 35 25 4 11.4 Rental and ancillary services expenses 612 579 267 33 5.7 Rental and ancillary services profit $ 54 $ 47 $ 75 $ 7 14.9 Rental and ancillary services profit margin 8.1 % 7.5 % 21.9 % Rental and ancillary services profit increased by $7 million for the year ended December 31, 2023, compared to the same period in 2022, driven by an increase of $40 million in rental and ancillary services revenue primarily due to an increase in occupied room nights compared to the same period in 2022.
Rental and Ancillary Services Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % Rental revenues $ 682 $ 623 $ 586 $ 59 9.5 Ancillary services revenues 51 43 40 8 18.6 Rental and ancillary services revenues 733 666 626 67 10.1 Rental expenses 681 573 544 108 18.8 Ancillary services expense 43 39 35 4 10.3 Rental and ancillary services expenses 724 612 579 112 18.3 Rental and ancillary services profit $ 9 $ 54 $ 47 $ (45) (83.3) Rental and ancillary services profit margin 1.2 % 8.1 % 7.5 % Rental and ancillary services profit decreased by $45 million for the year ended December 31, 2024, compared to the same period in 2023.
Real estate profit decreased by $116 million for the year ended December 31, 2023, compared to the same period in 2022, driven by a decrease of $94 million in Sales revenue due to lower Sales of VOIs, net of $75 million driven primarily by net deferrals of sales of VOIs under construction and lower Fee-for-service commissions and brand fees of $19 million.
Sales revenue increased $428 million for the year ended December 31, 2024, compared to the same period in 2023. Sales revenue decreased by $116 million excluding the impact of $544 million related to the Bluegreen Acquisition, primarily due to a decrease in Fee-for-service commissions and brand fees revenues, partially offset by an increase in Sales of VOI, net.
Additionally, cash flow from operations will also vary depending upon our sales mix of VOIs; over time, we generally receive more cash from the sale of an owned VOI as compared to that from a fee-for-service sale. 67 Table of Contents The change in net cash flows provided by operating activities for the year ended December 31, 2023, compared to the same period in 2022 was primarily due to increases in cash utilized for working capital and purchase of inventory from a third party developer.
Additionally, cash flow from operations will also vary depending upon our sales mix of VOIs; over time, we generally receive more cash from the sale of an owned VOI as compared to that from a fee-for-service sale.
The change in net cash used in investing activities for the year ended December 31, 2023, compared to the same period in 2022 was primarily due to the Grand Islander Acquisition partially offset by decreased capital expenditures.
The change in net cash flows provided by operating activities for the year ended December 31, 2024, compared to the same period in 2023 was primarily due to decreases in net income and cash used for working capital, partially offset by increases in provision for financing receivable losses and depreciation and amortization expenses.
The change in non-operating expenses for the year ended December 31, 2023 compared to the same period in 2022, was primarily due to a $36 million increase in interest expense driven by an increase in interest rates and draws on our revolver credit facility to support operations and a $7 million increase in income tax expense primarily due to non-recurring state tax benefits recognized in the prior year.
The change in non-operating expenses for the year ended December 31, 2024 compared to the same period in 2023, was primarily due to a $151 million increase in interest expense, partially offset by a $60 million decrease in income tax expense.
Refer to “—Real Estate” and “—Financing” for further discussion on the revenues and expenses of the real estate sales and financing segment.
Refer to “—Real Estate” and “—Financing” for further discussion on the revenues and expenses of the real estate sales and financing segment. Resort operations and club management segment Adjusted EBITDA increased $100 million for the year ended December 31, 2024 compared to the same period in 2023.
We evaluate our business segment operating performance using segment Adjusted EBITDA, as described in Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
(2) These amounts include costs associated with restructuring, one-time charges, other non-cash items, and amortization of fair value premiums and discounts resulting from purchase accounting. 59 Table of Contents We evaluate our business segment operating performance using segment Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders, as described in Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Refer to “—Resort and Club Management” and “—Rental and Ancillary Services” for further discussion on the revenues and expenses of the resort operations and club management segment. Real Estate Sales and Financing Segment See “Reconciliation of Profit Measures to GAAP Measure” above.
Refer to “—Resort and Club Management” and “—Rental and Ancillary Services” for further discussion on the revenues and expenses of the resort operations and club management segment. 60 Table of Contents Reconciliation of Non-GAAP Profit Measures to GAAP Measure The following table reconciles net income attributable to stockholders and net income, our most comparable U.S.
We have commitments from surety providers in the amount of $454 million as of December 31, 2023, which primarily consist of escrow, construction and subsidy related bonds.
We have commitments from surety providers in the amount of $670 million as of December 31, 2024, which primarily consist of escrow, construction and subsidy related bonds. 68 Table of Contents Subsequent Events On January 31, 2025, we amended our Revolver Credit Facility ("Revolver") and both our Term Loan B due 2028 and Term Loan B due 2031.
We record the net assets and results of operations of an acquired entity in our consolidated financial statements from the acquisition date through period-end. We expense acquisition-related expenses as incurred and include such expenses within Acquisition and integration-related expense on our consolidated statements of operations.
We utilize independent valuation specialists under our supervision for certain of our assignments of fair value. We record the 69 Table of Contents net assets and results of operations of an acquired entity in our consolidated financial statements from the acquisition date through period-end.
Year Ended December 31, 2023 vs 2022 ($ in millions) 2023 2022 2021 $ % Adjusted EBITDA: Real estate sales and financing (1) $ 754 $ 865 $ 537 $ (111) (12.8) Resort operations and club management (1) 504 463 353 41 8.9 Adjustments: Adjusted EBITDA from unconsolidated affiliates 14 15 11 (1) (6.7) License fee expense (138) (124) (80) (14) 11.3 General and administrative (2) (129) (154) (105) 25 (16.2) Adjusted EBITDA $ 1,005 $ 1,065 $ 716 $ (60) (5.6) (1) Includes intersegment transactions, share-based compensation, depreciation and other adjustments attributable to the segments.
For a discussion of our definition of EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders, how management uses them to manage our business and material limitations on their usefulness, refer to “—Key Business and Financial Metrics—EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders.” The following table reconciles our segment Adjusted EBITDA to Adjusted EBITDA to Adjusted EBITDA Attributable to Stockholders: Year Ended December 31, 2024 vs 2023 ($ in millions) 2024 2023 2022 $ % Adjusted EBITDA: Real estate sales and financing (1) $ 802 $ 754 $ 865 $ 48 6.4 Resort operations and club management (1) 604 504 463 100 19.8 Adjustments: Adjusted EBITDA from unconsolidated affiliates 20 14 15 6 42.9 License fee expense (171) (138) (124) (33) 23.9 General and administrative (2) (161) (129) (154) (32) 24.8 Adjusted EBITDA 1,094 1,005 1,065 89 8.9 Adjusted EBITDA attributable to noncontrolling interest 16 — — 16 100% Adjusted EBITDA attributable to stockholders $ 1,078 $ 1,005 $ 1,065 $ 73 100% (1) Includes intersegment transactions, share-based compensation, depreciation and other adjustments attributable to the segments.
A 0.5% increase to our projected default rates used in the allowance calculation would increase our allowance for financing receivables losses by approximately $18 million. See Note 2: Summary of Significant Accounting Policies in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
We then recognize the revenue allocated to each performance obligation as the related performance obligation is satisfied. See Note 2: Summary of Significant Accounting Policies in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Although the allowance includes several factors requiring judgment, the static pool model is not highly uncertain as it relies upon historical metrics. Changes in the estimates used in developing our default rates could result in a material change to our allowance.
Although the allowance includes several factors requiring judgment, the static pool model is not highly uncertain as it relies upon historical metrics. 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.
Resort operations and club management segment Adjusted EBITDA increased $41 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to the increase in resort and club management and rental revenues described above, partially offset by an increase in resort and club management expenses due to personnel-related costs incurred to service increased arrivals and transaction activity.
For the same period, Resort operations and club management segment Adjusted EBITDA increased by $20 million, excluding the $80 million impact related to the Bluegreen Acquisition, primarily due to increases in resort management revenue and rental revenue partially offset by an increase in rental expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table sets forth the contractual maturities, weighted-average interest rates and the total fair values as of December 31, 2023, for our financial instruments that are materially affected by interest rate risk: Maturities by Period ($ in millions) Weighted Average Interest Rate (1) 2024 2025 2026 2027 2028 There- after Total (2) Fair Value Assets: Fixed-rate securitized timeshare financing receivables 14.275 % $ 124 $ 130 $ 135 $ 133 $ 122 $ 340 $ 984 $ 918 Fixed-rate unsecuritized timeshare financing receivables 15.070 % 154 157 170 185 202 1,009 1,877 1,371 Liabilities: (3) Fixed-rate debt 4.718 % 259 206 163 119 94 1,500 2,341 2,194 Variable-rate debt 7.641 % 13 413 451 13 1,219 124 2,233 2,244 (1) Weighted-average interest rate as of December 31, 2023.
Biggest changeThe following table sets forth the contractual maturities, weighted-average interest rates and the total fair values as of December 31, 2024, for our financial instruments that are materially affected by interest rate risk: Maturities by Period ($ in millions) Weighted Average Interest Rate (1) 2025 2026 2027 2028 2029 There- after Total (2) Fair Value Assets: Fixed-rate securitized timeshare financing receivables 14.716 % $ 196 $ 208 $ 218 $ 220 $ 215 $ 752 $ 1,809 $ 1,646 Fixed-rate unsecuritized timeshare financing receivables 15.118 % 166 175 189 206 223 1,248 2,207 1,557 Liabilities: (3) Fixed-rate debt 5.386 % 467 386 300 239 1,035 1,744 4,171 4,070 Variable-rate debt 6.498 % 22 261 459 1,239 16 854 2,851 2,841 (1) Weighted-average interest rate as of December 31, 2024.
(2) Amount excludes unamortized deferred financing costs. (3) Includes debt and non-recourse debt. 72 Table of Contents Foreign Currency Exchange Rate Risk Though the majority of our operations are conducted in United States dollar (“U.S. dollar”), we are exposed to earnings and cash flow volatility associated with changes in foreign currency exchange rates.
(2) Amount excludes unamortized deferred financing costs. (3) Includes debt and non-recourse debt. Foreign Currency Exchange Rate Risk Though the majority of our operations are conducted in United States dollar (“U.S. dollar”), we are exposed to earnings and cash flow volatility associated with changes in foreign currency exchange rates.
For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in foreign currency exchange rates and determined that an adverse change in exchange rates of 10% would be considered immaterial as of December 31, 2023. 73 Table of Contents
For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in foreign currency exchange rates and determined that an adverse change in exchange rates of 10% would be considered immaterial as of December 31, 2024. 71 Table of Contents

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