Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ____________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________ to ________ Commission file number 001-37794 _____________________________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ____________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________ to ________ Commission file number 001-37794 __________________________________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ____________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________ to ________ Commission file number 001-37794 _________________________________________ ...

Financial Data and Key Metrics - Club and resort revenue reached a record $155 million, driven by new buyer growth and increased member activity [1] - Contract sales for the year were a record $2.4 billion, with EBITDA of $1 billion, nearly 40% ahead of pro forma 2019, and a margin improvement of nearly 600 basis points to 28% [6] - Adjusted free cash flow for 2022 was $563 million, significantly ahead of pro forma 2019 cash flow, with a return on invested capital of over 20% [7] - Total revenue in Q4 was just under $1 billion, with year-over-year growth in all segments, led by real estate and financing [8] - Q4 adjusted EBITDA was $253 million with margins of 25% [8] - VPG (Volume per Guest) for the quarter was $4,350, growing against prior year and 2019, and finishing 31% ahead of 2019 for the year [11] - Cost of product was 19% of net VOI (Vacation Ownership Interest) sales for the quarter, with real estate S&F (Sales and Financing) expense of $243 million, or 38% of gross contract sales [13] - Real estate profit for the quarter was $172 million, with margins of 36% [13] - Financing business revenue in Q4 was $71 million, with segment profit of $34 million [14] - Combined gross receivables for the quarter were $2.5 billion, or $1.8 billion net of allowance, with interest income of $65 million [15] - Annualized default rate for consolidated portfolios was 7.9%, over 100 basis points lower than last year [17] - Provision for bad debt was $39 million, or 9% of owned contract sales [18] - Rental and ancillary revenues were $160 million in the quarter, with segment profit of $7 million [19] - Adjusted free cash flow in Q4 was a use of $92 million, including inventory spending of $73 million and excluding acquisition-related costs of $40 million [23] - For 2023, total inventory spend is expected to be approximately $400 million versus $175 million in 2022 [26] - The company repurchased 2.5 million shares of common stock for $100 million in Q4, and 7 million shares for $272 million for the year [27] - Liquidity position as of December 31 includes $223 million of unrestricted cash and $959 million of availability under the revolving credit facility [29] - Total net leverage at the end of Q4 was 2.4 times [35] Business Line Data and Key Metrics - Within real estate, total contract sales were $634 million, with strong sales momentum in the owner channel and a recovery in the new buyer channel [9] - New buyer tour flow and contract sales pace improved significantly from the first half to the second half of the year, driving NOG (Net Owner Growth) of 3.9% [10] - Activated packages are at the highest level since 2019, with strong arrival growth in the marketing channel [11] - Financing segment profit was $34 million in Q4, with a one-time non-cash true-up adjustment of $9 million related to the acquired Diamond portfolio [14] - Consolidated member count in the resort and club business was 519,000, with NOG of 3.9% at the end of the quarter [18] - Resort and club revenue was $155 million for the quarter, with segment profit of $112 million and margins of 72% [19] - Rental and ancillary revenues were $160 million in the quarter, with segment profit of $7 million [19] Market Data and Key Metrics - System occupancy was 79% in Q4, seasonally lower than Q3 but in line with the previous year [114] - Booked arrivals for the first half of 2023 are ahead of 2019, with particular strength in rental arrivals [115] - The company expects continued normalization of VPG performance against 2019 as the year progresses [12] - The company anticipates a year-over-year impact of roughly $14 million in Q1 due to timing shifts in Diamond's member benefit expense, which will reverse in the second half of the year [21][22] Company Strategy and Industry Competition - The company has built a strong foundation for 2023 and beyond with new membership, programming, destinations, and rebranded resorts, enhancing its value proposition [3] - The company is focused on creating shareholder value through operational improvements and capital returns [3] - The company has successfully integrated Diamond, achieving cost synergies ahead of schedule and creating real economic value [6][105] - The company is committed to driving new buyer sales and NOG, with a focus on tour flow growth in 2023 [46][107] - The company has rebranded Diamond's largest properties and plans to rebrand nearly a dozen additional properties in 2023 [103][107] - The company is leveraging its direct sales approach and high-quality customer base from Hilton Honors to drive transactions [64][65] Management Commentary on Operating Environment and Future Outlook - Management is proud of the progress made on integration and the creation of shareholder value through the Diamond acquisition [6] - The company expects continued normalization of VPG performance against 2019, with a decline in Q1 2023 compared to the record VPG in Q1 2022 [12] - The company is optimistic about 2023 and beyond, with strong demand for leisure travel and a high level of engagement from its member base [100] - The company is monitoring the macro environment but believes its leisure focus and strong value proposition position it well for ongoing shifts in consumer spending preferences [97] - The company has set 2023 adjusted EBITDA guidance to a range of $1.09 billion to $1.12 billion, implying EBITDA growth of 4% to 7% [33] Other Important Information - The company identified a material weakness related to Diamond's internal controls, but it does not impact business operations, financial results, or historical financials [30][70] - The company has a remediation plan in place and expects to resolve the material weakness expeditiously [30][73] - The company has repurchased an additional 1.8 million shares for $80 million through February 24, with $148 million remaining under the $500 million repurchase plan [32] Summary of Q&A Session Question: Feedback on rebranding sales centers and properties - The company has rebranded all legacy Diamond sales centers and implemented HGV's selling technology and approach, with positive results in tour flow and revenue synergies [39][40] - The company has started marketing rebranded properties to Hilton Honors members, with 72,000 packages sold and guests beginning to arrive [40] Question: Fee-for-service mix and outlook - The fee-for-service mix is expected to decrease to 20%-25% in 2023, driven by the pipeline being primarily owned inventory [41] Question: Granularity on forward trends - New buyer tour flow is outpacing other channels, with expectations of strong tour flow growth in 2023 [46][47] - VPG is expected to moderate as the mix shifts to more new buyers, with a target of 10%-15% above 2019 levels [50] Question: Contingencies and sensitivities in a potential recession - The company is mindful of macro impacts but sees strong demand for travel and prioritizes NOG as core to its strategy [61][63] - The company believes its direct sales approach and high-quality customer base provide resilience in any environment [64][65] Question: Balance sheet and leverage management - The company is currently 2.4 times levered and plans to maintain leverage in the range of 2-3 times, with flexibility to adjust inventory spend if necessary [66] Question: Material weakness related to Diamond - The material weakness is related to Diamond's lack of investment in internal controls, particularly user access controls, but does not impact financials or operations [70][71] - The company has a remediation plan and expects to resolve the issue expeditiously [73] Question: Close rates and provision for bad debt - Close rates have been running approximately 400 basis points ahead of 2019 levels but are expected to moderate as the mix shifts to more new buyers [76][78] - The provision for bad debt was 9% in 2022 and is expected to increase but may not fully reach 15%-16% in 2023 [80][81] Question: Quarter-to-quarter volatility in adjusted EBITDA - The company does not provide specifics on quarter-to-quarter volatility due to the timing of specific feed projects and consumer choices [84]

Membership and Sales - As of December 31, 2022, the company had approximately 519,000 members across its club offerings[36] - For the year ended December 31, 2022, 71% of the company's contract sales were to existing owners[41] - The estimated contract sales value related to inventory currently available for sale is approximately $11 billion at current pricing[39] - Sales from fee-for-service agreements accounted for 29% of contract sales in 2022, while just-in-time inventory sales represented 15%[39] - The company offers a new club membership called HGV Max, providing broader vacation opportunities for both Legacy-HGV and Legacy-Diamond club owners[26] - The company’s VOI product allows customers to purchase a lifetime of vacations, efficiently splitting the cost of ownership with other owners[27] - Approximately 44% of contract sales were from capital-efficient sources for the year ended December 31, 2022[174] Financial Performance and Debt - As of December 31, 2022, the average loan outstanding was approximately $23,000 with a weighted average interest rate of 14.7%[45] - The entire loan portfolio had a gross balance of approximately $2,468 million derived from approximately 107,000 loans, with a weighted average length of loan of 10 years and a weighted average remaining length of loan of 8 years[48] - HOAs collected approximately $1,016 million in maintenance fees in 2022, which includes management fees[54] - The consumer loan portfolio had a balance of approximately $2.5 billion as of December 31, 2022, with default rates of 7.92%, 8.93%, and 6.34% for the fiscal years ended December 31, 2022, 2021, and 2020, respectively[183] - The company faces substantial indebtedness and contractual obligations, which may affect its ability to generate sufficient cash to meet its needs and service its debt[125] Operations and Workforce - The company operates approximately 50 sales distribution centers in various domestic and international locations[42] - As of December 31, 2022, the company employed over 14,500 team members across its timeshare resorts, call centers, sales centers, and corporate locations[74] - In 2022, team members completed approximately 140,000 training courses totaling 77,000 training hours, with over 40,000 course completions dedicated to compliance training[79] - Approximately 71% of team members are enrolled in health and well-being programs, which include medical, dental, vision, and various voluntary benefits[80] Acquisitions and Partnerships - The company completed the acquisition of Dakota Holdings, Inc. on August 2, 2021, resulting in pre-existing shareholders owning approximately 72% of the combined company[22] - The company is committed to an inclusive workforce, with 12 Team Member Resource Groups (TMRGs) aimed at fostering diversity and engagement[77] - The company plans to pursue strategic acquisitions to expand inventory and distribution capabilities, but faces risks related to integration and potential liabilities[147] - Collaboration with Hilton on timeshare development and marketing partnerships is part of the growth strategy, but success is not guaranteed[148] Regulatory and Compliance Risks - The company must maintain effective internal controls over financial reporting and disclosure controls to avoid material weaknesses[122] - The company is required to pay a license fee of 5% of gross revenues to Hilton quarterly, with a reduced fee structure of 2% to 4% for the first five years following the Diamond Acquisition[89] - The company is required to comply with Hilton brand standards and obtain consent for developing or operating additional vacation ownership properties under Hilton Marks[95] - The company faces significant compliance costs and potential liabilities under various environmental laws, which could result in substantial fines or penalties[210] - The company is subject to ongoing tax audits, and unfavorable outcomes could lead to higher tax costs and adversely affect financial results[215] Market and Economic Conditions - The company faces risks related to the COVID-19 pandemic, including reliance on tourism and travel[122] - The COVID-19 pandemic has had a material adverse effect on the company's business, financial condition, and results of operations, impacting domestic and international travel demand[135] - Economic conditions, including low consumer confidence and high unemployment, could adversely affect the company's revenues and profitability[128] - The company competes in a highly competitive timeshare industry, facing competition from major hotel chains and vacation rental options[130] Risks and Challenges - The company is exposed to project cost and completion risks due to its dependence on development activities for VOI inventory[152] - Geographic concentration of properties in regions like Florida and California increases vulnerability to regional economic downturns and natural disasters[154] - International operations expose the company to risks such as political instability, currency fluctuations, and compliance with foreign regulations[156] - The company must manage fixed costs effectively during economic downturns to avoid adverse impacts on financial performance[128] Technology and Cybersecurity - Failure to keep pace with technology developments could impair operations and competitive position, leading to higher costs[192] - Cybersecurity risks, including data breaches, could disrupt business operations and adversely affect reputation and financial performance[195] - Compliance with evolving privacy laws may incur significant costs and impact service provision, with potential fines for non-compliance[197] Legal and Taxation Issues - The company must indemnify Hilton against claims resulting from breaches of the license agreement or unauthorized use of Hilton Data[105] - Changes in tax laws could increase the company's tax burden and adversely affect its financial condition[212] - The company is subject to the Foreign Corrupt Practices Act (FCPA) and trade sanctions, with non-compliance potentially leading to financial penalties and reputational harm[216]

Hilton Grand Vacations Inc. (NYSE:HGV) Q3 2022 Earnings Conference Call November 9, 2022 11:00 AM ET Company Participants Mark Melnyk - Senior Vice President, Investor Relations Mark Wang - President and Chief Executive Officer Dan Mathewes - Executive Vice President and Chief Financial Officer Conference Call Participants Ben Chaiken - Credit Suisse David Katz - Jefferies Patrick Scholes - Truist Securities Brandt Montour - Barclays Operator Good morning, and welcome to the Hilton Grand Vacations Third Qua ...

Hilton Grand Vacations Inc. (NYSE:HGV) Q2 2022 Results Conference Call August 9, 2022 11:00 AM ET Company Participants Mark Melnyk - Senior Vice President of Investor Relations Mark Wang - President and Chief Executive Officer Daniel Mathewes - Chief Financial Officer Conference Call Participants Patrick Scholes - Truist Securities Brandt Montour - Barclays David Katz - Jefferies Benjamin Chaiken - Credit Suisse Operator Good morning, and welcome to the Hilton Grand Vacations’ Second Quarter 2022 Earnings C ...

Hilton Grand Vacations Inc. (NYSE:HGV) Q1 2022 Earnings Conference Call May 9, 2022 11:00 AM ET Company Participants Mark Melnyk - VP, IR Mark Wang - President and CEO Dan Mathewes - CFO Conference Call Participants Stephen Grambling - Goldman Sachs Ben Chaiken - Credit Suisse David Katz - Jefferies Operator Good morning, and welcome to the Hilton Grand Vacations' First Quarter 2022 Earnings Conference Call. A telephone replay will be available for seven days following the call. The dial-in number is 844-51 ...

May 9, 2022 Q1 2022 Investor Update A The Diamond acquisition presents a transformational opportunity for HGV 1 Significant value creation from scale benefits of combining the largest independent timeshare company with the strength of Hilton Grand Vacations' brand and culture 2 Diversifies HGV portfolio, adding additional drive-to destinations and allowing HGV to leverage the Hilton network to penetrate a broader customer segment Accelerates launch of HGV-branded trust 3 6 product offering by rebranding Dia ...

| --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q4 2021 | | | | | | | | | Investor Update | | | | | | | | | Quarterly Results March 1, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | The acquisition of Diamond Resorts presents a transformational opportunity 1 Significant value creation from scale benefits of combining the largest independent timeshare ...