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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS | ACQUISITIONS Bluegreen Acquisition On January 17, 2024, we completed the Bluegreen Acquisition in an all-cash transaction, with total consideration of approximately $1.6 billion. The Bluegreen Acquisition is expected to broaden HGV’s offerings, customer reach and sales locations. Costs related to the Bluegreen Acquisition were $191 million and $17 million, for the years ended December 31, 2024 and 2023. These costs were expensed as incurred and included within Acquisition and integration-related expense in our consolidated statements of income. The following table presents the fair value of each class of consideration transferred in relation to the Bluegreen Acquisition as of the Bluegreen Acquisition Date:
($ in millions, except share and per share data) |
Number of Class A shares issued and outstanding | 12,504,138
Number of Class B shares issued and outstanding | 3,664,117
Number of Class A shares deliverable as equity awards | 673,169
Total shares and related equity awards outstanding | 16,841,424
Cash consideration to Bluegreen shareholders and equity award holders per share | $ | 75.00 |
Purchase price | $ | 1,263 |
Repayment of Bluegreen debt(1) | 265 |
Payment of seller transaction fees(2) | 28 |
Total consideration transferred | $ | 1,556 |
(1)Reflects the balance of Bluegreen's debt repaid by HGV. (2)Reflects transaction-related expenses incurred by Bluegreen but paid by HGV. Fair Values of Assets Acquired, Liabilities Assumed and Noncontrolling Interest We accounted for the Bluegreen Acquisition as a business combination, which requires us to record the assets acquired, liabilities assumed and noncontrolling interest at fair value as of the Bluegreen Acquisition Date. The values attributed to Timeshare financing receivables, Inventory, Intangible assets, Property and equipment and Noncontrolling interest are based on valuations prepared using Level 3 inputs and assumptions in accordance with ASC Topic 820, “Fair Value Measurement” (“ASC 820”). The values attributed to Debt, Non-recourse debt, Operating lease right-of-use assets and Operating lease liabilities are based on Level 2 inputs in accordance with ASC 820. The following table presents the fair values of the assets acquired, liabilities assumed, and noncontrolling interest, as finalized:
($ in millions) | January 17, 2024 (as reported at March 31, 2024) | Adjustments(1) | January 17, 2024 (as finalized at December 31, 2024)
Assets acquired |  |  |
Cash and cash equivalents | $ | 58 |  | $ | 13 |  | $ | 71 |
Restricted cash | 44 |  | — |  | 44 |
Accounts receivable | 32 |  | — |  | 32 |
Timeshare financing receivables, net | 925 |  | (54) |  | 871 |
Inventory | 365 |  | (2) |  | 363 |
Property and equipment | 177 |  | 19 |  | 196 |
Investment in unconsolidated affiliates | 1 |  | 4 |  | 5 |
Operating lease right-of-use assets | 18 |  | 1 |  | 19 |
Intangible assets | 812 |  | (57) |  | 755 |
Other assets | 83 |  | 2 |  | 85 |
Total assets acquired | $ | 2,515 |  | $ | (74) |  | $ | 2,441 |
Liabilities assumed |  |  |
Accounts payable, accrued expenses and other | $ | 129 |  | $ | 13 |  | $ | 142 |
Advanced deposits | 2 |  | 38 |  | 40 |
Debt | 162 |  | 1 |  | 163 |
Non-recourse debt | 606 |  | — |  | 606 |
Operating lease liabilities | 20 |  | — |  | 20 |
Deferred revenue | 57 |  | (38) |  | 19 |
Deferred income tax liabilities | 348 |  | (28) |  | 320 |
Total liabilities assumed | 1,324 |  | (14) |  | 1,310 |
Net assets acquired | $ | 1,191 |  | $ | (60) |  | $ | 1,131 |
Total consideration transferred | $ | 1,556 |  | $ | — |  | $ | 1,556 |
Less: Net assets acquired | (1,191) |  | 60 |  | (1,131) |
Plus: Noncontrolling interest | 158 |  | (18) |  | 140 |
Goodwill(2) | $ | 523 |  | $ | 42 |  | $ | 565 |
(1)There were measurement period adjustments not impacting goodwill for the year ended December 31, 2024, primarily due to management's review of historical accounting records and alignment of policies. These adjustments primarily consisted of $13 million from Cash and cash equivalents to Accounts payable, accrued expenses and other and $38 million from Deferred revenue to Advanced deposits. (2)Goodwill is calculated as total consideration transferred less net assets acquired plus noncontrolling interest and it primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined Company post-acquisition. Timeshare Financing Receivables We acquired timeshare financing receivables, net which consist of loans to customers who purchased vacation ownership products and chose to finance their purchases. These timeshare financing receivables, net are collateralized by the underlying VOIs and generally have 10-year amortizing repayment terms. We measured the fair value of the timeshare financing receivables using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivables. The significant assumption used in determining the fair value of timeshare financing receivables was the default rate. We have determined that the entire acquired timeshare financing receivables portfolio was considered PCD assets as it shows evidence of more-than-insignificant deterioration in credit quality since origination. See Note 7: Timeshare Financing Receivables for additional information. Acquired timeshare financing receivables with credit deterioration as of the Bluegreen Acquisition Date were as follows:
($ in millions) | As of January 17, 2024
Purchase price | $ | 871 |
Allowance for credit losses | 163 |
Premium attributable to other factors | (76) |
Par value | $ | 958 |
Inventory We acquired inventory which primarily consists of completed unsold VOIs. We measured the fair value of acquired inventory using a discounted cash flows method, which included an estimate of cash flows expected to be generated from the sale of VOIs. The significant assumptions used to determine the fair value of acquired inventory were projected revenues to be derived from such VOIs. Other assumptions impacting the fair value of the acquired inventory include our estimates of operating costs and margins, and the discount rate. Property and Equipment We acquired property and equipment, which includes land, buildings and improvements, leasehold improvements, computer hardware and software, furniture, fixtures, and office equipment, machinery and equipment, vehicles, construction in progress, and other assets. We determined the fair value of the property and equipment using a mix of cost and market approaches. In determining the fair value using the cost approach, we estimated the reproduction cost by applying inflation trending indices to the historical capitalized costs within the fixed asset details. We also relied on the market approach to determine the fair value of certain assets. In applying the market approach to value, we relied on the percent of cost method. In addition, certain property and equipment assets were held at their carrying value. Operating Lease Right-of-Use-Assets and Lease Liabilities We have recorded a liability for those operating leases assumed in connection with the Bluegreen Acquisition with a remaining term in excess of one year. We measured the lease liabilities assumed at the present value of the remaining contractual lease payments, based on the guidance in ASC Topic 842: Leases, discounted at an incremental borrowing rate applicable to HGV determined as of the Bluegreen Acquisition Date. The right-of-use assets for such leases were measured at an amount equal to the lease liabilities, adjusted for the favorable or unfavorable leasehold position considering the contractual terms of the lease when compared with market terms. A small number of operating lease right of use assets and lease liabilities were measured at carrying value. Additionally, any equipment lease was held at carrying value. Intangible Assets The following table presents our fair values of the acquired Bluegreen's identified intangible assets and their related remaining useful lives as of the Bluegreen Acquisition Date:
| Weighted Average Estimated Useful Life (in years) |  | Estimated Fair Value ($ in millions)
Trade name | 7 |  | $ | 30 |
Management contracts | 19 |  | 479 |
Club member relationships | 11 |  | 35 |
Capitalized software | 3 |  | 7 |
Marketing agreements | 17 |  | 154 |
Other contract-related intangible assets | 10 |  | 50 |
Total intangible assets acquired |  |  | $ | 755 |
We measured the fair value of Bluegreen’s trade name using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value. We measured the fair value of management contracts and club member relationships using the multi-period excess earnings method, which is a variation of the income approach. This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset. Our significant assumptions used in determining the fair value of the management contracts included anticipated revenue growth rates and the discount rate. The marketing agreements were valued using the with‑and‑without method of the income approach. Under this method, the value of an asset is a function of the differential of projected cash flows with the asset in place and the projected cash flows without the asset in place, discounted to present value. Debt As part of the acquisition and consideration transferred, we paid off $265 million of Bluegreen’s existing corporate debt and accrued interest. We valued the remaining assumed debt using a discounted cash flow model under the income approach. The significant assumptions include prepayment rates and market interest rates. Non-Recourse Debt We valued the securitized debt and warehouse loan facilities using a discounted cash flow model under the income approach. The significant assumptions include default rates of the timeshare financing receivables which collateralize the non-recourse debt, prepayment rates and market bond interest rates. Deferred Revenue Deferred revenue primarily relates to deferred sales incentives revenues, including Bonus Points, which are deferred and recognized upon redemption; and Club membership fees, which are deferred and recognized over the terms of the applicable contract term or membership on a straight-line basis. We measured the fair value of the deferred revenue at the carrying value of such liabilities as of the Bluegreen Acquisition Date. Deferred Income Taxes Deferred income taxes primarily relate to the fair value of assets and liabilities acquired from Bluegreen, including timeshare financing receivables, inventory, property and equipment, intangible assets, and debt. We valued deferred income taxes based on the blended U.S. federal and state statutory tax rate which approximates to 25%. Noncontrolling Interest The acquired noncontrolling interest relates to Big Cedar, a joint venture in which we are deemed to hold a controlling financial interest based on our 51% equity interest, our active role as the day-to-day manager of its activities, and our majority voting control of its management committee. We measured the fair value of the noncontrolling interest using a discounted cash flow model. Goodwill We have recorded goodwill of $565 million in connection with the Bluegreen Acquisition. We have allocated the acquired goodwill to our segments, Real Estate Sales and Financing and Resort Operations and Club Management, as indicated in the table below. The majority of goodwill is not expected to be deductible for tax purposes.
| Resort Operations and Club Management Segment |  | Real Estate Sales and Financing Segment |  | Total Consolidated
Goodwill | $ | 142 |  |  | $ | 423 |  |  | $ | 565 |
Pro Forma Results of Operations The following unaudited pro forma information presents the combined results of operations of HGV and Bluegreen as if we had completed the Bluegreen Acquisition on January 1, 2023, the first day of our 2023 fiscal year, but using the fair values of assets and liabilities as of the Bluegreen Acquisition Date. These unaudited pro forma results do not reflect any synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Bluegreen Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.
| Year Ended December 31,
($ in millions) | 2024 |  | 2023
Revenue | $ | 5,028 |  |  | $ | 5,013 |
Net income | 66 |  |  | 224 |
Bluegreen Results of Operations The following table presents the results of Bluegreen operations included in our consolidated statement of income for the period from the Bluegreen Acquisition Date through December 31, 2024:
($ in millions) | January 17, 2024 to December 31, 2024
Revenue | $ | 985 |
Net income | 6 |
Grand Islander Acquisition On December 1, 2023 (“Grand Islander Acquisition Date”), the Company completed the acquisition of BRE Grand Islander Parent LLC (“Grand Islander”), by exchanging 100% of the outstanding equity interests of Grand Islander for approximately $117 million (the “Grand Islander Acquisition”). Prior to the acquisition, we managed the resort property in Hawaii owned by Grand Islander. The acquisition expands our product offerings and provides existing members upgrade opportunities to locations outside of the prior Fee-for-service arrangement. The purchase price of $117 million included cash consideration, as well as $4 million of non-cash consideration attributable to the effective settlement of a pre-existing relationship based on the contract value. The fair values of the assets acquired included $8 million of cash and cash equivalents, $28 million of restricted cash, $5 million of accounts receivable, $199 million of securitized timeshare financing receivables, net, $53 million of unsecuritized timeshare financing receivables, net, $15 million of inventory, and $2 million of other assets. Of the securitized timeshare financing receivables acquired, $128 million was used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Grand Islander Timeshare Facility”). The fair values of the liabilities assumed consisted of $193 million of non-recourse debt and $4 million of other liabilities. The fair values of the assets acquired, and liabilities assumed and the related acquisition accounting were based on management’s estimates and assumptions, as well as other information compiled by management. We determined the fair value of the timeshare financing receivables and inventory using a discounted cash flow model, which calculated a present value of expected future risk-adjusted cash flows over the remaining term of the respective timeshare financing receivable and the sell-out period of the inventory, respectively. For non-recourse debt we determined the fair value using recent trades of the debt, using adjustments to recent trades of similar debt or the settlement amounts for debt that was repaid in close proximity to the Grand Islander Acquisition Date. The timeshare financing receivables acquired are considered PCD assets. The following table presents the acquired assets with credit deterioration as of the Grand Islander Acquisition Date:
($ in millions) | As of December 1, 2023
Purchase price | $ | 252 |
Allowance for credit losses | 24 |
Premium attributable to other factors | (2) |
Par value | $ | 274 |
Goodwill of $4 million was calculated as total consideration transferred less net assets acquired. The adjustments recorded during the measurement period resulted from changes to our estimates of the fair value of the acquired assets and assumed liabilities based on updates to assumptions in valuations of acquired timeshare financing receivables and inventory. These resulted in an increase to goodwill for the period of $2 million. We have allocated the acquired goodwill of $4 million to our Real Estate Sales and Financing segment. The majority of goodwill is expected to be deductible for tax purposes.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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