HGV 10-K & 10-Q changes, risk factors and insider trading

•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;

•conditions that negatively shape public perception of travel, including travel-related accidents andor outbreaksstatements of pandemicactions or contagiousinterventions diseases,by suchgovernmental as coronavirus, Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virusofficials;

Any one or more of these factors can adversely affect, and from time to time have adversely affected, individual resorts and particular regions. With some of our properties being concentrated in certain geographic areas including Arizona, California, Florida, Europe, Hawaii, Nevada, South Carolina, andCalifornia, Arizona, Virginia in the United States and in Europe,Nevada, we are, therefore, particularly susceptible to adverse developments in those areas. All of the foregoing factors could have an adverse effect on our business, financial condition and results of operations.

The timeshare industry is highly competitive. The Hilton brands we use compete with the timeshare brands affiliated with major hotel chains in national and international venues, and we compete generally with the vacation rental options generally offered by the lodging and travel industry (e.g., hotels, resorts, home and apartment sharing services, and condominium rentals) and other options such as cruises.cruises and alternative travel options like travel clubs.

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. 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 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. Pursuant to the license agreement, Hilton would be the sole owner of certain licensed marks related to any new brands associated with the Diamond portfolio that we developed or may develop. If the license agreement is terminated, we could lose the right to use one or more of such new brands.

Finally, the license agreement imposes a number of restrictions or prohibitions on our business and operations, and our ability to engage in a number of transactions, including, without limitations, acquiring or being acquired by another entity, engaging in any lodging business or otherwise competing with Hilton, and entering into or amending in any manner certain types of marketing agreements, including with Hilton’s competitors (such as Choice), in each case without Hilton’s consent. Any noncompliance with any of these provisions may result in the termination of the license agreement, either automatically or at Hilton’s election. In addition, while we are permitted under the license agreement to engage in certain other businesses, including owning and operating vacation ownership business and properties that are not Hilton-branded, in such instances, we are not permitted to use any of the rights and assets provided by Hilton under the license agreement in connection with such business and operation. In fact, we are required to comply with various requirements to operate such business and properties as separate operations. However, if any such non-Hilton branded vacation ownership properties and related units and revenues exceed certain thresholds, we may lose certain rights, including the right related to our use of Hilton-branded trademarks, including our “Hilton Grand Vacations” corporate name. In addition, any non-compliance with the separate operations provision may give rise to Hilton’s ability to terminate the license agreement. Any of the foregoing and other factors that lead to Hilton’s termination of the license agreement will have a material and irreparable adverse impact on our business. See “Item 1. Business—Key Agreements with Hilton Worldwide Holdings.”

Under the terms of our license agreement with Hilton, we are required to obtain Hilton’s consent to use its trademarks in circumstances specified in the license agreement. Hilton may reject a proposed project in certain circumstances. Any requirements to obtain Hilton’s consent to our expansion plans, including the ongoing rebranding of the acquired Diamond resorts and planned rebranding of the acquired Bluegreen resorts to Hilton branded properties, or the need to identify and secure alternative expansion opportunities because Hilton does not allow us to use its trademarks with proposed new projects, may delay implementation of our expansion plans, cause us to incur additional expense or reduce the financial viability of our projects. Further, if Hilton does not permit us to use its trademarks in connection with our expansion plans, our ability to expand our Hilton-branded timeshare business would cease and our ability to remain competitive may be materially adversely affected. See “Risks Related to theOur Integration of DiamondAcquisitions—Our ability to successfully integrate the acquired Diamond businessand couldBluegreen bebusinesses harmeddepends ifon Hiltonour does not consent to the use of its trademarks in connectioncompliance with the rebranding of Diamond resorts,” “Risks Related to the Integration of Bluegreen—Our ability to integrate the acquired Bluegreen business could be harmed if Hilton doeslicense not consent to the use of its trademarks in connection with the rebranding of Bluegreen resortsagreement” and “Item 1. Business—Key Agreements with Hilton Worldwide Holdings.”

Currently, our LegacyOur HGV branded products and services are offered under the Hilton brand names and affiliated with the Hilton Honors loyalty program, and we intend to continue to develop and offer products and services under the Hilton brands and affiliated with the Hilton Honors loyalty program in the future, including the products acquired in the Diamond Acquisition and the Bluegreen Acquisition.future. In addition, the license agreement contains significant prohibitions on our ability to own or operate properties that are not Hilton brand names. The concentration of our products and services under these brands and program may expose us to risks of brand or program deterioration, or reputational decline, that are greater than if our portfolio were more diverse. Furthermore, as we are not the owner of the Hilton brands or the Hilton Honors loyalty program, changes to these brands and program or our access to them, including our ability to buy points to offer to our members and potential members, could negatively affect our business. Any failure by Hilton to protect the trademarks, trade names and intellectual property that we license from it could reduce the value of the Hilton brands and also harm our business. 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 activities and arrangements to engage with potential VOI purchasers for generating tour flow, contract sales and financing fees, resort management and other revenues. These include targeted direct marketing, transfers of calls by Hilton of its customers to us pursuant to Marketingexisting Servicesarrangements Agreement,with Hilton, our marketing and joint venture agreements with Bass Pro, our strategic and related agreements with Choice, the successful implementation of our digital and technology-based marketing strategy and the integration of the marketing technologies of Bluegreen and Diamond with our strategy. Any significant changes to one or more factors that adversely affect such marketing activities and arrangements will adversely impact our revenue and growth strategy.

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. 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 SesokoSesoko, Odawara and OdawaraKyoto 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. Such activities may not be limited only to marketing efforts for existing international and U.S. properties and products in other countries, but may also include acquiring, developing, managing, marketing, offering and/or financing timeshare properties and VOI related products and services in such countries.

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 AcquisitionAcquisition, and on January 17, 2024, we completed the Bluegreen Acquisition.

Our operations primarily consist of: selling vacation ownership intervals and vacation ownership interests (collectively, “VOIs” or “VOI”) for us and third parties; financing and servicing loans provided to consumers for their timeshareVOI purchases; operating resorts and timeshare plans; and managing our clubsexchange programs through which our members may receive HGV Max benefits. Together our timeshare plans and exchange programs.programs are collectively referred to as “Clubs”.

As of December 31, 2024,2025, 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, California, Arizona, VirginiaNevada and Nevada, inclusive of the new locations acquired in connection with the Bluegreen Acquisition.Virginia. Our properties feature spacious, condominium-style accommodations with superior amenities and quality service. We arehave in the process of rebrandingrebranded many of the Diamond properties, and we expect to continue this process for a majority of the remaining Diamond properties. During 2025, we began rebranding certain Bluegreen properties andto Hilton Grand Vacation brands. We anticipate rebranding the majority of Bluegreen properties. We began rebranding the Bluegreen sales centers during 2024 and expect to begin rebranding of certain Bluegreen properties in 2025 to themeet Hilton Grand Vacations brands and Hiltonbrand standards.

As of December 31, 2024,2025, we had approximatelymore 724,000than 720,000 members across our club offerings. Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at any Hilton Grand Vacations resort,resorts, any propertyproperties in the Hilton system of 2425 industry-leading brands acrosswith approximatelyover 8,3009,000 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. Bluegreen Vacation Club members have the flexibility to stay at units available at any of Bluegreen’s resorts and have access to other hotels and resorts through Bluegreen partnerships and exchange networks.

For the year ended December 31, 2024,2025, sales from fee-for-service and just-in-time inventory were 18%17% and 19%9% of contract sales, respectively. See “Key Business and Financial Metrics—Real Estate Sales Operating Metrics” for additional discussion of contract sales. 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 becomebe made available for sale in the future uponat registration,planned delivery or constructionprojects is approximately $12.7$14.7 billion at current pricing. Capital-efficient arrangements, comprised of our fee-for-service and just-in-time inventory, represented approximately 28%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.

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. We have approximatelyover 100 sales distribution centers in various domestic and international locations. Our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach. We use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products, are frequent leisure travelers, and have an affinity with our brands.

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables. For the years ended December 31, 2024,2025, 20232024 and 2022,2023, 72%,74%, 70%72% and 71%70% of our contract sales were to our existing owners, respectively.owners.

We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans. Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully amortizing loans that bear a fixed interest rate typically ranging from 2.5% to 25% per annum. Financing propensity was 67% andfor 63%both forof the years ended December 31, 2024,2025, and 2023, respectively.2024. 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. The weighted-average FICO scorescores for loans to U.S. and Canadian borrowers at the time of origination were as follows:

•Sales,Fee-for-service marketing,commissions, brandpackage sales and other fees represents sales commissions, brand fees and other fees earned on the sales of VOIs through fee-for-service agreements with third-party developers. All sales commissions and brand fees are based on the total sales price of the VOIs. Also included in Sales,Fee-for-service marketing,commissions, brandpackage sales and other fees are revenues from marketing and incentive programs, except for redemption of prepaid vacation packages and Club bonus points for stays at HGV properties, which are included in Rental and ancillary services.

•Rental and ancillary services represents revenues from transient rentals of unoccupied vacation ownership units and revenues recognized from the utilization of Clubbonus points and vacation packages when points and packages are redeemed for rental stays at one of our resorts. We also earn fees from the rental of inventory owned by third parties. Ancillary revenues include food and beverage, retail, spa offerings and other guest services provided to resort guests.

•Cost reimbursements include costs that HOAs and developers reimburse to us. 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.insurer. The corresponding expenses are presented as Cost reimbursements expense in our consolidated statements of income resulting in no effect on net income.

•Competition. We compete with other hotel and resort timeshare operators for sales of VOIs based principally on location, quality of accommodations, price, service levels and amenities, financing terms, quality of service, terms of property use, reservation systems and flexibility for VOI owners to exchange into time at other timeshare properties or other travel rewards. In addition, we compete based on brand name recognition and reputation. Our primary branded competitors in the timeshare space include Marriott Vacations Worldwide, Travel + Leisure Co., Disney Vacation Club, Holiday Inn Club Vacations, Westgate Resorts,Resorts and Bluegreenthe Vacations,Berkley which we acquired on January 17, 2024.Group.

•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.recognized.

•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 and marketing agreement intangibles and capitalized software.

•Cost reimbursements include costs that HOAs and developers reimburse to us. 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.insurer. The corresponding revenues are presented as Cost reimbursements revenue in our consolidated statements of income resulting in no effect on net income.

•Costs of VOI sales. In periods where there is increased demand for VOIs, we may incur increased costs to acquire inventory in the short-term, which can have an adverse effect on our cash flows, margins and profits. In addition, the registration of inventory for sale requires time and cost, and in many jurisdictions the exact date of registration approval cannot be predicted accurately. As we encourage owners to upgrade into other products, we incur expenses when owners upgrade from an interval in a project we developed into fee-for-service projects, on which we earn fees. 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.

•Interest rates. Increases in interest rates would increase the consumer financing interest expense we pay on the Timeshare Facility and securitized debt and could adversely affect our financing operations in future securitization or other debt transactions, affecting net cash flow, margins and profits.

•Contract sales representsrepresent 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. 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. While we do not record the purchase price of sales of VOI products developed by fee-for-service partners as revenue in our consolidated financial statements, rather recording the commission earned as revenue in accordance with U.S. GAAP, we believe contract sales to be an important operational metric, reflective of the overall volume and pace of sales in our business and believe it provides meaningful comparability of our results to the results of our competitors which may source their VOI products differently.

We believe that the presentation of contract sales on a combined basis (fee-for-service, just-in-time, developed and points-based) is most appropriate for the purpose of the operating metric, additional information regarding the split of contract sales, is included in “—Real Estate Sales Operating Metrics” below. See Note 2: Summary of Significant Accounting Policies in our consolidated financial statements included in Item 8 in this Annual Report on form 10-K, for additional information on Sales of VOIs, net.

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,gains and losses, 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 Attributable to Stockholders is Adjusted EBITDA excluding amounts attributable to the noncontrolling interest in Bluegreen/Big Cedar Vacations LLC,LLC (“Big Cedar”), a joint venture in which HGV is deemed to hold a controlling financial interest based on its 51% equity interest (“Big Cedar”),interest, its active role as the day-to-day manager of its activities, and majority voting control of its management committee.

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, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders may not be comparable to similarly titled measures of other companies.

Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

See below under “SegmentReconciliation Resultsof Non-GAAP Measures to GAAP Measures” for reconciliation of our EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders to net income attributable to stockholders and net income, our most comparable U.S. GAAP financial measure.measures.

•Sales revenue represents sales of VOIs, net, and Fee-for-service commissions and brand fees earned from the sale of fee-for-service VOIs. Fee-for-service commissions and brand fees represents sales,Fee-for-service marketing,commissions, brandpackage sales 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. 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. Both fee-for-service commissions and brand fees and sales and marketing expense, net, represent non-GAAP measures. We present these items net because it provides a meaningful measure of our underlying real estate profit related to our primary real estate activities which focus on the sales and costs associated with our VOIs.

Each of the foregoing four profit measures is not a recognized term under U.S. GAAP and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our calculation of such measures may not be comparable to similarly titled measures of other companies. Furthermore, these measures have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income or other methods of analyzing our results as reported under U.S. GAAP. 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 MeasureMeasures” for reconciliation of these four profit measures to net income attributable to stockholders and net income, our most comparable U.S. GAAP financial measures.

As of MarchJune 31,30, 2026, there have been no material changes from the risk factors previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025. These risk factors may be important to understanding statements in the Form 10-Q and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part 1, Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.

OperationalReal Estate Sales Operating Metrics

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

As of MarchJune 31,30, 2026, we had overapproximately 200 properties located in the United States (“U.S.”), Europe, Canada, the Caribbean, Mexico, and Asia. A significant number of our properties and VOIs are concentrated in Florida, Europe, Hawaii, California, South Carolina, Arizona, Nevada and Virginia.Japan. Our properties feature spacious, condominium-style accommodations with superior amenities and quality service. We have rebranded many of the properties acquired in the Diamond acquisition, and we expect to continue this process for the remaining planned Diamond properties. During 2025, we began rebranding certain properties acquired in the Bluegreen Acquisition to Hilton Grand Vacations brands and expect to continue this process for the majority of the Bluegreen properties.

As of MarchJune 31,30, 2026, we had more than 720,000 members across our Club offerings. Based on the type of Club membership, members have the flexibility to exchange their VOIs for stays at Hilton Grand Vacations resorts, properties in the Hilton system of 27 industry-leading brands with over 9,1009,200 properties, or affiliated properties, as well as numerous experiential vacation options, such as cruises and guided tours, or they have the option to exchange their VOI for various other timeshare resorts throughout the world through an external exchange program, including travel services options.

Traditionally, timeshare operators have funded 100% of the investment necessary to acquire land and construct timeshare properties. We source VOIs through developed properties and fee-for-service and just-in-time agreements with third-party developers and have focused our inventory strategy on developing an optimal inventory mix. The fee-for-service agreements enable us to generate fees from the sales and marketing of the VOIs and Club memberships and from the management of the timeshare properties without requiring us to fund acquisition and construction costs. The just-in-time agreements enable us to source VOI inventory in a manner that allows us to correlate the timing of acquisition of the inventory with the sale to purchasers. Sales of owned, including just-in-time, inventory generally result in greater Adjusted EBITDA contributions, while fee-for-service sales require less initial investment and allow us to accelerate our sales growth. Both sales of owned inventory and fee-for-service sales generate long-term, predictable fee streams, by adding to the Club membership base and properties under management, that generate strong returns on invested capital. For the threesix months ended MarchJune 31,30, 2026, sales from fee-for-service and just-in-time inventory were 17%,15%, and 6%9% of contract sales. See “Key Business and Financial Metrics — Real Estate Sales Operating Metrics” for additional discussion of contract sales.

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

Our marketing and sales activities also include marketing relationships with nationally-recognized consumer brands such as Bass Pro, a fishing, marine, hunting, camping and sports gear retailer, and Choice Hotels. HGV is party to an exclusive marketing agreement with Bass Pro that provides HGV with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. As of MarchJune 31,30, 2026, HGV had sales and marketing operations at a total of 144145 Bass Pro Shops and Cabela’s Stores, including 7 virtual kiosks. Additionally, the joint venture between HGV and Bass Pro includes four high-end wilderness resorts under the Big Cedar Lodge brand. We also assumedhave an exclusive strategic relationship with Choice Hotels that involves several areas of its business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages.

Tour flow quality impacts key metrics such as close rate and VPG, defined in “Key Business and Financial Metrics—Real Estate Sales Operating Metrics.” Additionally, the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables. For the threesix months ended MarchJune 31,30, 2026 and 2025, 74%73% and 75%74% of our contract sales were to our existing owners.

We provide financing for members purchasing our developed and acquired inventory and generate interest income on the loans. Our timeshare financing receivables are collateralized by the underlying VOIs and are generally structured as 10-year, fully-amortizing loans that bear a fixed interest rate typically ranging from 2.5% to 25% per annum. Financing propensity was 67%68% and 64%65% for the threesix months ended MarchJune 31,30, 2026 and 2025. We calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume originated in the period.

Contract sales decreased $2$24 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to a 8.1%8.6% decrease in VPG offset by an increase in tour flow of 8.5%.6.1%.

Three and Six Months Ended MarchJune 31,30, 2026 Compared with the Three and Six Months Ended MarchJune 31,30, 2025

(1)Excluding the package sales and other fees adjustment, Real estate profit margin was 21.8% and 13.5%18.5% for the three months ended MarchJune 31,30, 2026 and 2025, and 21.8% and 16.2% for the six months ended June 30, 2026 and 2025.

Sales revenue increased $80$18 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to a net construction deferral of $25$54 million in 2026 compared to a net construction deferral of $126$82 million in 2025,2025 and an increase in contract sales excluding fee-for-service of $14 million, partially offset by increasesa decrease in thefee-for-service provision for receivable lossescommissions of $17 million and sales incentives of $14$20 million.

RealSales estate expenserevenue increased $16$98 million for the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to a net construction deferral activity of $7$79 million in 2026 compared to $58a net construction deferral of $208 million in 2025, partially offset by decreases in costsfee-for-service commissions of contract sales excluding fee-for-service of $20$17 million and sellingsales expensesincentives of $14 million.

Financing revenue increased $13$18 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to an increase in the average outstanding balance of the timeshare financing receivables portfolio and a decrease in the premium amortization of acquired timeshare financing receivables of $5$4 million and an increase in the average outstanding balance of the timeshare financing receivables portfolio.million.

Financing expense decreasedincreased $4 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to an increase in consumer financing interest expense of $11 million due to an increase in the average non-recourse debt balance partially offset by a decrease in the provision for credit losses of the acquired portfolio of $7$6 million, offset by an increase in consumer financing interest expense of $3 million due to an increase in the average non-recourse debt balance.million.

Resort and club management expensesrevenue increased $5$6 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to employee-relatedincreases expenses.in club annual dues revenue of $2 million, management fees revenue of $2 million and license fee revenue of $1 million.

For the three months ended MarchJune 31,30, 2026, operating expenses increased when compared to the same period in 2025. Loss on sale and impairment increased $47 million primarily due to the disposition of our interests in certain properties. Depreciation and amortization expense increased by $4$12 million primarily due to amortization expense of software intangibles. LicenseGeneral feeand expenseadministrative increased by $4$9 million primarily due to professional fees and employee-related expenses. License fees increased by $6 million primarily due to licensing fees paid to Hilton. General and administrative increased by $3 million primarily due to employee-related expenses.

Acquisition and Integration-Related Expense

Acquisition and integration-related costs include direct expenses related to our recent acquisitions including integration costs, legal and other professional fees. Integration costs include technology-related costs, fees paid to management consultants, rebranding fees and employee-related costs such as severance and retention. For the three and six months ended MarchJune 31,30, 2026, acquisition and integration-related costs decreased by $16$12 million and $28 million compared to the same period in 2025, primarily due to decreases of $10 million and $20 million in employee-related expenses and $5professional service fees of $2 million inand professional$7 services fees.million.

(1) NM - fluctuation in terms of percentage change is not meaningful The changechanges in non-operating expenses for both the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025, were primarily due to interest expense, other (gain) loss, net and income tax expense. The decrease in interest expense was primarily due to othera lossdecrease (gain),in netthe andweighted average interest expense.rate on our corporate debt. The change in other loss (gain), net is primarily due to revaluation of our foreign currency transactions. TheFor the three months ended June 30, 2026, the decrease in interestincome tax expense was primarily duedriven by the overall change in pretax earnings compared to athe same period in 2025. For the six months ended June 30, 2026, the decrease in income tax expense was driven by discrete items, partially offset by the weightedoverall averagechange interestin rate.pretax earnings compared to the same period in 2025.

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

•As of MarchJune 31,30, 2026, we had total cash and cash equivalents of $261$272 million and restricted cash of $291$296 million. Restricted cash primarily consists of escrow deposits received on VOI sales and reserves related to non-recourse debt.

•During the threesix months ended MarchJune 31,30, 2026, we repurchased 36 million shares for $150$300 million, excluding the excise tax, under our share repurchase programs. See Note 1415: Earnings Per Share for additional information.

•As of MarchJune 31,30, 2026, we had $591$463 million remaining borrowing capacity under the revolver facility.

•As of MarchJune 31,30, 2026, we had an aggregate of $150$755 million remaining borrowing capacity under our Timeshare Facility. As of MarchJune 31,30, 2026, we had $929$1.3 millionbillion of notes that were current on payments but not securitized. Of that figure, approximately $370$719 million could be monetized through either warehouse borrowing or securitization while another $367$372 million of mortgage notes we anticipate being eligible following certain customary milestones such as first payment, deeding and recording.

We believe that our capital allocation strategy provides adequate funding for our operations, is flexible enough to fund our development pipeline, securitizes the optimal level of receivables, and provides the ability to be strategically opportunistic in the marketplace. 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 MarchJune 31,30, 2026, our inventory-related purchase commitments totaled $212 million to be fulfilled over a period of 9 years.

The increase in net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, was primarily due to increasesan increase of $80$67 million in net incomeincome, along with increases in loss on sale and impairment of $47 million, provision for loan losses of $10$31 million and depreciation and amortization of $16 million.

The decreaseincrease in net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025, was primarily due to decreasedcash paid $100 million for the Elara Acquisition in 2026, partially offset by a decrease in capital expenditures for property and equipment (excluding inventory). of $20 million.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $122$115 million compared to $201$213 million for the same period in 2025. The change was primarily due to net proceeds from debt and non-recourse debt of $43$192 million in 2026 compared to net paymentsproceeds of $36$99 million in 2025.

On July 29, 2025, our Board of Directors approved a share repurchase program authorizing us to repurchase up to an aggregate of $600 million of its outstanding shares of common stock over a two-year period (the “2025 Repurchase Plan”). As of MarchJune 31,30, 2026, we had $278$128 million of remaining availability under the 2025 Repurchase Plan.

Our commitments primarily relate to agreements with developers to purchase or construct vacation ownership units, operating leases, marketing and license fee agreements and obligations associated with our debt, non-recourse debt and the related interest. As of MarchJune 31,30, 2026, we were committed to $9.3$9.8 billion in contractual obligations over 14 years, $698$587 million of which will be fulfilled in the remainder of 2026. The ultimate amount and timing of certain commitments is subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances. See Note 1718: Commitments and Contingencies and Note 1011: Debt and Non-recourse Debt for additional information.

We utilize surety bonds related to the sales of VOIs in order to meet regulatory requirements of certain states. The availability, terms and conditions and pricing of such bonding capacity are dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity and our corporate credit rating. We have commitments from surety providers in the amount of $400$336 million as of MarchJune 31,30, 2026, that primarily consist of escrow and subsidy related bonds.