Hilton Grand Vacations Inc. (NYSE: HGV) (“HGV” or “the Company”)
today reports its fourth quarter and full year 2023 results.
Fourth quarter of 2023 highlights1
- Total contract sales were $572 million.
- Contract sales were affected by approximately $40 million due
to the ongoing impact of the Maui wildfires, along with a temporary
outage impacting our sales system early in the quarter.
- Member count was 529,000. Consolidated Net Owner Growth (NOG)
for the year ended Dec. 31, 2023, was 2.0%.
- Total revenues for the fourth quarter were $1,019 million
compared to $992 million for the same period in 2022.
- Total revenues were affected by a net deferral of $21 million
in the current period compared to a net deferral of $3 million in
the same period in 2022.
- Net income for the fourth quarter was $68 million compared to
$78 million for the same period in 2022.
- Adjusted net income for the fourth quarter was $111 million
compared to $118 million for the same period in 2022.
- Net income and adjusted net income were affected by a net
deferral of $12 million in the current period compared to a net
deferral of $1 million in the same period in 2022.
- Diluted EPS for the fourth quarter was $0.62 compared to $0.67
for the same period in 2022.
- Adjusted diluted EPS for the fourth quarter was $1.01 compared
to $1.01 for the same period in 2022.
- Diluted EPS and adjusted diluted EPS were affected by a net
deferral of $12 million in the current period compared to a net
deferral of $1 million in the same period in 2022, or $(0.11) and
$(0.01) per share in the current period and the same period in
2022, respectively.
- Adjusted EBITDA for the fourth quarter was $270 million
compared to $252 million for the same period in 2022.
- Adjusted EBITDA was affected by a net deferral of $12 million
in the current period compared to a net deferral of $1 million in
the same period in 2022.
- Adjusted EBITDA was also affected by approximately $21 million
due to the ongoing impact of the Maui wildfires, along with a
temporary outage impacting our sales system early in the
quarter.
- During the quarter, the Company repurchased 2.7 million shares
of common stock for $99 million.
- Through Feb. 23, 2024, the Company has repurchased
approximately 1.7 million shares for $71 million, and currently has
$289 million of remaining availability under the 2023 Repurchase
Plan.
Full Year 2024 Outlook
- The Company expects full-year 2024 Adjusted EBITDA excluding
deferrals and recognitions to be in a range of $1.2 billion to
$1.26 billion, inclusive of the operations of Bluegreen Vacations
and expected synergies.
“We closed out the year on a positive note, with a solid margin
performance enabling us to deliver annual adjusted EBITDA slightly
ahead of our revised guidance,” said Mark Wang, president and CEO
of Hilton Grand Vacations. “Looking back at 2023, we generated
strong tour growth and navigated several challenges through the
year to deliver solid adjusted free cash flow, enabling us to
return significant cash to shareholders as well as to capitalize on
the opportunity to acquire Bluegreen Vacations. We’re very excited
about this transaction, which will enhance our cash flow and
recurring EBITDA through increased scale and diversification, while
providing us new avenues for growth with our strategic partners and
reinforcing our position as the premier vacation ownership and
experiences company. Our focus for the coming year will be on
engaging with our teams, members, and partners to ensure a smooth
integration of Bluegreen, along with enhancing the efficiency of
our tour flow to deliver EBITDA and cash flow growth.”
(1)
The Company’s current period results and
prior year results include impacts related to deferrals of revenues
and direct expenses related to the Sales of VOIs under construction
that are recognized when construction is complete. These impacts
are reflected in the sub-bullets.
Overview
For the quarter ended Dec. 31, 2023, diluted EPS was $0.62
compared to $0.67 for the quarter ended Dec. 31, 2022. Net income
and Adjusted EBITDA were $68 million and $270 million,
respectively, for the quarter ended Dec. 31, 2023, compared to net
income and Adjusted EBITDA of $78 million and $252 million,
respectively, for the quarter ended Dec. 31, 2022. Total revenues
for the quarter ended Dec. 31, 2023, were $1,019 million compared
to $992 million for the quarter ended Dec. 31, 2022.
Net income and Adjusted EBITDA for the quarter ended Dec. 31,
2023, included a net deferral of $12 million relating to the sales
of intervals of projects under construction in Japan and Hawaii
during the period. The Company anticipates recognizing these
revenues and related expenses in 2024 when it expects to complete
these projects.
Consolidated Segment Highlights – Fourth quarter of
2023
Real Estate Sales and Financing
For the quarter ended Dec. 31, 2023, Real Estate Sales and
Financing segment revenues were $591 million, a decrease of $4
million compared to the quarter ended Dec. 31, 2022. Real Estate
Sales and Financing segment Adjusted EBITDA and Adjusted EBITDA
profit margin were $191 million and 32.3%, respectively, for the
quarter ended Dec. 31, 2023, compared to $199 million and 33.4%,
respectively, for the quarter ended Dec. 31, 2022. Results in the
fourth quarter of 2023 declined due to lower contract sales and
lower fee-for-services commissions partially offset by reduced cost
of product coupled with growth in interest income driven by an
increase in the loan portfolio and the weighted-average interest
rate.
Real Estate Sales and Financing segment Adjusted EBITDA reflects
a reduction of $12 million due to the net deferral of sales and
related expenses of VOIs under construction in the fourth quarter
of 2023. These deferrals were related to sales of intervals of
projects under construction in Japan and Hawaii for the quarter
ended Dec. 31, 2023. This compares with a net deferral of $1
million due to the sales and related VOI expenses associated with a
project under construction in Hawaii during the quarter ended Dec.
31, 2022.
Contract sales for the quarter ended Dec. 31, 2023, decreased
$62 million to $572 million compared to the quarter ended Dec. 31,
2022. For the quarter ended Dec. 31, 2023, tours increased by 7.3%
and VPG decreased by 14.3% compared to the quarter ended Dec. 31,
2022. For the quarter ended Dec. 31, 2023, fee-for-service contract
sales represented 20.3% of contract sales compared to 32.3% for the
quarter ended Dec. 31, 2022.
Financing revenues for the quarter ended Dec. 31, 2023,
increased by $11 million compared to the quarter ended Dec. 31,
2022. This was driven primarily by the increase related to interest
income on the timeshare financing receivables. The Company
experienced an increase in the timeshare financing receivables
balance along with a 55 basis point increase in the weighted
average interest rate for the originated portfolio as of Dec. 31,
2023, compared to Dec. 31, 2022.
Resort Operations and Club Management
For the quarter ended Dec. 31, 2023, Resort Operations and Club
Management segment revenue was $347 million, an increase of $20
million compared to the quarter ended Dec. 31, 2022. Resort
Operations and Club Management segment Adjusted EBITDA and Adjusted
EBITDA profit margin were $146 million and 42.1%, respectively, for
the quarter ended Dec. 31, 2023, compared to $131 million and
40.1%, respectively, for the quarter ended Dec. 31, 2022. Revenue
increased in the fourth quarter of 2023 compared to the prior-year
period due to an increase in the Company’s member base and
increased activity, coupled with strong rental performance.
Inventory
The estimated value of the Company’s total contract sales
pipeline is approximately $11.3 billion at current pricing.
The total pipeline includes $7.1 billion of sales relating to
inventory that is currently available for sale at open or
soon-to-open projects. The remaining $4.2 billion of sales is
related to inventory at new or existing projects that will become
available for sale in the future upon registration, delivery or
construction.
Owned inventory represents 88.3% of the Company’s total
pipeline. Approximately 63.9% of the owned inventory pipeline is
currently available for sale.
Fee-for-service inventory represents 11.7% of the Company’s
total pipeline. Approximately 54.5% of the fee-for-service
inventory pipeline is currently available for sale.
With 23.7% of the pipeline consisting of just-in-time inventory
and 11.7% consisting of fee-for-service inventory,
capital-efficient inventory represents 35.4% of the Company’s total
contract sales pipeline.
Balance Sheet and Liquidity
Total cash and cash equivalents were $589 million and total
restricted cash was $296 million as of Dec. 31, 2023.
As of Dec. 31, 2023, the Company had $3,049 million of corporate
debt, net outstanding with a weighted average interest rate of
6.65% and $1,466 million of non-recourse debt, net outstanding with
a weighted average interest rate of 5.10%.
As of Dec. 31, 2023, the Company’s liquidity position consisted
of $589 million of unrestricted cash and restricted cash of $296
million. Restricted cash primarily consists of escrow deposits
received on VOI sales and reserves related to non-recourse
debt.
As of Dec. 31, 2023, the Company had $553 million remaining
borrowing capacity under the revolver facility.
As of Dec. 31, 2023, HGV has $350 million remaining borrowing
capacity in total under the Timeshare Facility and an additional $1
million remaining borrowing capacity under the acquired Grand
Islander, a Hilton Grand Vacations Club timeshare facility. Of this
amount, HGV has $155 million of mortgage notes that are available
to be securitized and another $317 million of mortgage notes that
the Company expects will become eligible as soon as it meets
typical milestones including receipt of first payment, deeding, or
recording.
Free cash flow was $(28) million for the quarter ended Dec. 31,
2023, compared to $(62) million for the same period in the prior
year. Adjusted free cash flow was $255 million for the quarter
ended Dec. 31, 2023, compared to $(92) million for the same period
in the prior year. Adjusted free cash flow for the quarter ended
Dec. 31, 2023, and 2022, includes add-backs of $49 million and $38
million, respectively for acquisition and integration related
costs.
In October 2023, HGV amended its Term loan under the Senior
secured credit facility. Under the amendment, the new interest rate
is SOFR plus a spread adjustment of 0.11% plus 2.75%, down from
SOFR plus a spread adjustment of 0.11% plus 3.00%. Additionally,
the interest rate floor for the Term loan was lowered from 0.50% to
0.00%.
As of Dec. 31, 2023, the Company’s total net leverage on a
trailing 12-month basis was approximately 2.44x.
Subsequent Events
On Jan. 17, 2024, HGV completed the Bluegreen Vacations
acquisition in an all-cash transaction for 100% of the outstanding
voting equity interests of Bluegreen Vacations, with total
consideration of approximately $1.6 billion, inclusive of net debt
assumed. The Bluegreen Vacations acquisition will be considered a
business combination and accounted for using the acquisition
method. Due to the close proximity of the Bluegreen Vacations
acquisition date and the Company's filing of its Annual Report on
Form 10-K for the year ended Dec. 31, 2023, the initial accounting
for the business combination is incomplete, and therefore the
Company is unable to disclose the information required by ASC 805,
Business Combinations. HGV will include relevant disclosures as
required in the first quarter of 2024.
In connection with the Bluegreen acquisition, HGV executed the
following transactions:
- Completed an offering of $900 million aggregate principal
amount of the escrow issuers’ 6.625% senior secured notes due 2032
issued by our wholly-owned subsidiaries, Hilton Grand Vacations
Borrower Escrow, LLC and Hilton Grand Vacations Borrower Escrow,
Inc. The proceeds were used to finance the Bluegreen Vacations
acquisition, repay certain outstanding indebtedness and pay related
fees, costs, premiums and expenses in connection with these
transactions.
- Entered into Amendment No. 4, dated Jan. 17, 2024, to the
Credit Agreement, dated as of Aug. 2 2021 (the “Amendment”) and
incurred $900 million of new term loans that will mature on Jan.
17, 2031. Under the Amendment, the related interest rate is SOFR
plus 2.75%. Proceeds were used to pay the Bluegreen Vacations
acquisition consideration, fees and expenses incurred in connection
with the Amendment and to refinance the repayment of certain
indebtedness of Bluegreen Vacations and its subsidiaries.
Total Construction Deferrals and/or Recognitions Included in
Results Reported Under Accounting Standards Codification Topic 606
(“ASC 606”)
The Company’s Adjusted EBITDA as reported under ASC 606 includes
construction-related recognitions and deferrals of revenues and
related expenses as detailed in Table T-1 below. Under ASC 606, the
Company defers revenues and related expenses pertaining to sales at
projects that occur during periods when that project is under
construction until the period when construction is completed.
T-1
NET CONSTRUCTION DEFERRAL
ACTIVITY
(in millions)
2023
NET CONSTRUCTION DEFERRAL
ACTIVITY
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Sales of VOIs recognitions (deferrals)
$
4
$
(6
)
$
(12
)
$
(21
)
$
(35
)
Cost of VOI sales recognitions
(deferrals)(1)
1
(1
)
(3
)
(6
)
(9
)
Sales and marketing expense recognitions
(deferrals)
1
(1
)
(2
)
(3
)
(5
)
Net construction recognitions
(deferrals)(2)
$
2
$
(4
)
$
(7
)
$
(12
)
$
(21
)
Net income
$
73
$
80
$
92
$
68
$
313
Interest expense
44
44
45
45
178
Income tax expense
17
35
44
40
136
Depreciation and amortization
51
52
53
57
213
Interest expense and depreciation and
amortization included in equity in earnings from unconsolidated
affiliates
—
1
—
1
2
EBITDA
185
212
234
211
842
Other (gain) loss, net
(1
)
(3
)
1
1
(2
)
Share-based compensation expense
10
16
12
2
40
Acquisition and integration-related
expense
17
13
12
26
68
Impairment expense
—
3
—
—
3
Other adjustment items(3)
7
7
10
30
54
Adjusted EBITDA
$
218
$
248
$
269
$
270
$
1,005
T-1
NET CONSTRUCTION DEFERRAL
ACTIVITY
(CONTINUED, in
millions)
2022
NET CONSTRUCTION DEFERRAL
ACTIVITY
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Full
Year
Sales of VOIs (deferrals) recognitions
$
(42
)
$
(10
)
$
86
$
(3
)
$
31
Cost of VOI sales (deferrals)
recognitions(1)
(13
)
(5
)
30
(1
)
11
Sales and marketing expense (deferrals)
recognitions
(7
)
(1
)
13
(1
)
4
Net construction (deferrals)
recognitions(2)
$
(22
)
$
(4
)
$
43
$
(1
)
$
16
Net income
$
51
$
73
$
150
$
78
$
352
Interest expense
33
35
37
37
142
Income tax expense
20
41
54
14
129
Depreciation and amortization
60
64
57
63
244
Interest expense and depreciation and
amortization included in equity in earnings from unconsolidated
affiliates
—
—
2
—
2
EBITDA
164
213
300
192
869
Other (gain) loss, net
(1
)
2
(2
)
2
1
Share-based compensation expense
11
15
14
6
46
Acquisition and integration-related
expense
13
17
19
18
67
Impairment expense (reversal)
3
(3
)
—
17
17
Other adjustment items(3)
12
29
7
17
65
Adjusted EBITDA
$
202
$
273
$
338
$
252
$
1,065
(1)
Includes anticipated Costs of VOI sales
related to inventory associated with Sales of VOIs under
construction that will be acquired once construction is
complete.
(2)
The table represents deferrals and
recognitions of Sales of VOIs revenue and direct costs for
properties under construction.
(3)
Includes costs associated with
restructuring, one-time charges and other non-cash items. This
amount also includes the amortization of premiums resulting from
purchase accounting.
Conference Call
Hilton Grand Vacations will host a conference call on Feb. 29,
2024, at 11 a.m. (ET) to discuss fourth quarter and full year 2023
results.
To access the live teleconference, please dial 1-877-407-0784 in
the U.S./Canada (or +1-201-689-8560 internationally) approximately
15 minutes prior to the teleconference’s start time. A live webcast
will also be available by logging onto the HGV Investor Relations
website at https://investors.hgv.com.
In the event of audio difficulties during the call on the
toll-free number, participants are advised that accessing the call
using the +1-201-689-8560 dial-in number may bypass the source of
audio difficulties.
A replay will be available within 24 hours after the
teleconference’s completion through March 7, 2024. To access the
replay, please dial 1-844-512-2921 in the U.S. (+1-412-317-6671
internationally) using ID#13743184. A webcast replay and transcript
will also be available within 24 hours after the live event at
https://investors.hgv.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements convey management’s
expectations as to the future of HGV, and are based on management’s
beliefs, expectations, assumptions and such plans, estimates,
projections and other information available to management at the
time HGV makes such statements. Forward-looking statements include
all statements that are not historical facts, and may be identified
by terminology such as the words “outlook,” “believe,” “expect,”
“potential,” “goal,” “continues,” “may,” “will,” “should,” “could,”
“would,” “seeks,” “approximately,” “projects,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates,” “future,”
“guidance,” “target,” or the negative version of these words or
other comparable words, although not all forward-looking statements
may contain such words. The forward-looking statements contained in
this press release include statements related to HGV’s revenues,
earnings, taxes, cash flow and related financial and operating
measures, and expectations with respect to future operating,
financial and business performance and other anticipated future
events and expectations that are not historical facts, including,
related to the acquisition and integration of Bluegreen Vacations
Holding Corporation ("Bluegreen").
HGV cautions you that our forward-looking statements involve
known and unknown risks, uncertainties and other factors, including
those that are beyond HGV’s control, which may cause the actual
results, performance or achievements to be materially different
from the future results. Any one or more of these risks or
uncertainties, including those related to HGV's acquisition of
Bluegreen, could adversely impact HGV’s operations, revenue,
operating profits and margins, key business operational metrics,
financial condition or credit rating.
For a more detailed discussion of these factors, see the
information under the captions “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in HGV’s most recent Annual Report on Form 10-K, which
may be supplemented and updated by the risk factors in HGV’s
quarterly reports, current reports and other filings HGV makes with
the SEC.
HGV’s forward-looking statements speak only as of the date of
this communication or as of the date they are made. HGV disclaims
any intent or obligation to update any “forward-looking statement”
made in this communication to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time.
Non-GAAP Financial Measures
The Company refers to certain non-GAAP financial measures in
this press release, including Adjusted Net Income or Loss, Adjusted
Diluted EPS, EBITDA, Adjusted EBITDA, EBITDA profit margin,
Adjusted EBITDA profit margin, Free Cash Flow and Adjusted Free
Cash Flow, profits and profit margins for HGV’s key activities -
real estate, financing, resort and club management, and rental and
ancillary services. Please see the tables in this press release and
“Definitions” for additional information and reconciliations of
such non-GAAP financial measures.
The Company believes 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 key 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.
The Company refers to Adjusted EBITDA guidance excluding
deferrals and recognitions, which does not take into account any
future deferrals of revenues and direct expenses related to the
sales of VOIs under construction that are recognized, only on a
non-GAAP basis, as the quantification of reconciling items to the
most directly comparable U.S. GAAP financial measure is not readily
available without unreasonable effort due to uncertainties
associated with the timing and amount of such items. These items
may create a material difference between the non-GAAP and
comparable U.S. GAAP results.
About Hilton Grand Vacations Inc.
Hilton Grand Vacations Inc. (NYSE:HGV) is recognized as a
leading global timeshare company and is the exclusive vacation
ownership partner of Hilton. With headquarters in Orlando, Florida,
Hilton Grand Vacations develops, markets, and operates a system of
brand-name, high-quality vacation ownership resorts in select
vacation destinations. Hilton Grand Vacations has a reputation for
delivering a consistently exceptional standard of service, and
unforgettable vacation experiences for guests and approximately
700,000 Club Members. Membership with the Company provides
best-in-class programs, exclusive services and maximum flexibility
for our Members around the world.
For more information, visit www.corporate.hgv.com. Follow us on
Instagram, Facebook, LinkedIn, X (formerly Twitter), Pinterest and
YouTube.
HILTON GRAND VACATIONS INC.
DEFINITIONS
EBITDA and Adjusted EBITDA
EBITDA, presented herein, is a financial measure that is not
recognized under U.S. GAAP that reflects net income, before
interest expense (excluding non-recourse debt), a provision for
income taxes and depreciation and amortization.
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.
EBITDA profit margin, presented herein, represents EBITDA, as
previously defined, divided by total revenues. Adjusted EBITDA
profit margin, presented herein, represents Adjusted EBITDA, as
previously defined, divided by total revenues.
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.
HGV believes 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. 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. 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;
- 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.
Because of these limitations, EBITDA and Adjusted EBITDA 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.
Adjusted Net Income or Loss and Adjusted Diluted EPS
Adjusted Net Income or Loss, presented herein, is calculated as
net income further adjusted to exclude certain items, including,
but not limited to, gains, losses and expenses in connection with
costs associated with acquisitions, restructuring, amortization of
premiums and discounts resulting from purchase accounting, and
other non-cash and one-time charges. Adjusted Diluted EPS,
presented herein, is calculated as Adjusted Net Income, as defined
above, divided by diluted weighted average shares outstanding.
Adjusted Net Income or Loss and Adjusted Diluted EPS are not
recognized terms under U.S. GAAP and should not be considered as
alternatives to net income (loss) or other measures of financial
performance or liquidity derived in accordance with U.S. GAAP. In
addition, our definition may not be comparable to similarly titled
measures of other companies.
Adjusted Net Income or Loss and Adjusted Diluted EPS are useful
to assist our investors in evaluating our ongoing operating
performance for the current reporting period and, where provided,
over different reporting periods.
Free Cash Flow and Adjusted Free Cash Flow
Free Cash Flow represents cash from operating activities less
non-inventory capital spending.
Adjusted Free Cash Flow represents free cash flow further
adjusted to exclude net non-recourse debt activities and other
one-time adjustment items including, but not limited to, costs
associated with acquisitions.
We consider Free Cash Flow and Adjusted Free Cash Flow to be
liquidity measures not recognized under U.S. GAAP that provides
useful information to both management and investors about the
amount of cash generated by operating activities that can be used
for investing and financing activities, including strategic
opportunities and debt service. We do not believe these non-GAAP
measures to be a representation of how we will use excess cash.
Non-GAAP Measures within Our Segments
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, marketing, brand and other fees, which
corresponds to the applicable line item from our condensed
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 condensed 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. Both fee-for-service
commissions and brand fees and sales and marketing expense, net,
represent non-GAAP measures. HGV presents 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.
Real estate profit represents sales revenue less real
estate expense. Real estate margin is calculated as a percentage by
dividing real estate profit by sales revenue. HGV considers real
estate profit margin to be an important non-GAAP operating measure
because it measures the efficiency of 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 the Company's consolidated statements of operations.
Financing profit margin is calculated as a percentage by dividing
financing profit by financing revenue. HGV considers 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
condensed consolidated statements of operations. Resort and club
management profit margin is calculated as a percentage by dividing
resort and club management profit by resort and club management
revenue. HGV considers 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 condensed consolidated statements of operations.
Rental and ancillary services profit margin is calculated as a
percentage by dividing rental and ancillary services profit by
rental and ancillary services revenue. HGV considers this to be an
important non-GAAP operating measure because it measures our
ability to convert available inventory and unoccupied rooms into
revenue and profit by transient rentals, as well as profitability
of other services, such as food and beverage, retail, spa offerings
and other guest services.
Real Estate 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. Contract sales differ from revenues from the Sales
of VOIs, net that we report in our condensed consolidated
statements of operations 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 condensed 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 HGV’s results the results of our
competitors which may source their VOI products differently. HGV
believes 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,
included in “—Real Estate” below, is useful for investors who are
interested in the underlying capital structures of the Company’s
projects. See Note 2: Summary of Significant Accounting Policies in
HGV's consolidated financial statements included in Item 8 in the
Annual Report on form 10-K for the year ended December 31, 2023,
for additional information on Sales of VOIs, net.
Developed Inventory refers to VOI inventory that is
sourced from projects the Company develops.
Fee-for-Service Inventory refers to VOI inventory HGV
sells and manages on behalf of third-party developers.
Just-in-Time Inventory refers to VOI inventory primarily
sourced in transactions that are designed to closely correlate the
timing of the acquisition with HGV’s sale of that inventory to
purchasers.
Points-Based Inventory refers to VOI sales that are
backed by physical real estate that is contributed to a trust.
NOG or Net Owner Growth represents the year-over-year
change in membership.
Sales revenue represents Sale of VOIs, net and
fee-for-service commissions and brand fees earned from the sale of
fee-for-service VOIs.
Tour flow represents the number of sales presentations
given at HGV’s sales centers during the period.
Volume per guest (“VPG”) represents the sales
attributable to tours at HGV’s sales locations and is calculated by
dividing contract sales, excluding telesales, by tour flow. The
Company considers VPG to be an important operating measure because
it measures the effectiveness of HGV’s sales process, combining the
average transaction price with closing rate.
HILTON GRAND VACATIONS
INC.
FINANCIAL TABLES
CONSOLIDATED BALANCE SHEETS
T-2
CONSOLIDATED STATEMENTS OF OPERATIONS
T-3
CONSOLIDATED STATEMENTS OF CASH FLOWS
T-4
FREE CASH FLOW RECONCILIATION
T-5
SEGMENT REVENUE RECONCILIATION
T-6
SEGMENT EBITDA AND ADJUSTED EBITDA TO NET
INCOME
T-7
REAL ESTATE SALES PROFIT DETAIL
SCHEDULE
T-8
CONTRACT SALES MIX BY TYPE SCHEDULE
T-9
FINANCING PROFIT DETAIL SCHEDULE
T-10
RESORT AND CLUB PROFIT DETAIL SCHEDULE
T-11
RENTAL AND ANCILLARY PROFIT DETAIL
SCHEDULE
T-12
REAL ESTATE SALES AND FINANCING SEGMENT
ADJUSTED EBITDA
T-13
RESORT AND CLUB MANAGEMENT SEGMENT
ADJUSTED EBITDA
T-14
ADJUSTED NET INCOME AND ADJUSTED DILUTED
EARNINGS PER SHARE - DILUTED (Non-GAAP)
T-15
RECONCILIATION OF NON-GAAP PROFIT MEASURES
TO GAAP MEASURE
T-16
T-2
HILTON GRAND VACATIONS
INC.
CONSOLIDATED BALANCE
SHEETS
(in millions, except share and
per share data)
December 31,
2023
2022
ASSETS
Cash and cash equivalents
$
589
$
223
Restricted cash
296
332
Accounts receivable, net
507
511
Timeshare financing receivables, net
2,113
1,767
Inventory
1,400
1,159
Property and equipment, net
758
798
Operating lease right-of-use assets,
net
61
76
Investments in unconsolidated
affiliates
71
72
Goodwill
1,418
1,416
Intangible assets, net
1,158
1,277
Other assets
314
373
TOTAL ASSETS
$
8,685
$
8,004
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable, accrued expenses and
other
$
952
$
1,007
Advanced deposits
179
150
Debt, net
3,049
2,651
Non-recourse debt, net
1,466
1,102
Operating lease liabilities
78
94
Deferred revenues
215
190
Deferred income tax liabilities
631
659
Total liabilities
6,570
5,853
Stockholders' Equity:
Preferred stock, $0.01 par value;
300,000,000 authorized shares, none issued or outstanding as of
December 31, 2023 and 2022
—
—
Common stock, $0.01 par value;
3,000,000,000 authorized shares, 105,961,160 shares issued and
outstanding as of December 31, 2023, and 113,628,706 shares issued
and outstanding as of December 31, 2022
1
1
Additional paid-in capital
1,504
1,582
Accumulated retained earnings
593
529
Accumulated other comprehensive income
17
39
Total stockholders' equity:
2,115
2,151
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
8,685
$
8,004
T-3
HILTON GRAND VACATIONS
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in millions, except per share
data)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Revenues
Sales of VOIs, net
$
376
$
361
$
1,416
$
1,491
Sales, marketing, brand and other fees
133
163
634
620
Financing
82
71
307
267
Resort and club management
167
155
569
534
Rental and ancillary services
164
160
666
626
Cost reimbursements
97
82
386
297
Total revenues
1,019
992
3,978
3,835
Expenses
Cost of VOI sales
53
67
194
274
Sales and marketing
310
297
1,281
1,146
Financing
26
37
99
103
Resort and club management
48
43
177
161
Rental and ancillary services
152
153
612
579
General and administrative
64
54
194
212
Acquisition and integration-related
expense
26
18
68
67
Depreciation and amortization
57
63
213
244
License fee expense
37
34
138
124
Impairment expense
—
17
3
17
Cost reimbursements
97
82
386
297
Total operating expenses
870
865
3,365
3,224
Interest expense
(45
)
(37
)
(178
)
(142
)
Equity in earnings from unconsolidated
affiliates
5
4
12
13
Other (loss) gain, net
(1
)
(2
)
2
(1
)
Income before income taxes
108
92
449
481
Income tax expense
(40
)
(14
)
(136
)
(129
)
Net income
$
68
$
78
$
313
$
352
Earnings per share(1):
Basic
$
0.63
$
0.68
$
2.84
$
2.98
Diluted
$
0.62
$
0.67
$
2.80
$
2.93
(1)
Earnings per share is calculated using
whole numbers.
T-4
HILTON GRAND VACATIONS
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions)
Three Months Ended December
31,
Years Ended
December 31,
2023
2022
2023
2022
Operating Activities
Net income
$
68
$
78
$
313
$
352
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
57
63
213
244
Amortization of deferred financing costs,
acquisition premiums and other
11
18
33
52
Provision for financing receivables
losses
54
39
171
142
Impairment expense
—
17
3
17
Other loss (gain), net
1
2
(2
)
3
Share-based compensation
2
6
40
46
Deferred income tax expense
(23
)
(37
)
(23
)
(38
)
Equity in earnings from unconsolidated
affiliates
(5
)
(4
)
(12
)
(13
)
Return on investment in unconsolidated
affiliates
10
—
16
—
Net changes in assets and liabilities, net
of effects of acquisition:
Accounts receivable, net
(60
)
(113
)
10
(177
)
Timeshare financing receivables, net
(105
)
(83
)
(315
)
(224
)
Inventory
(27
)
(1
)
(64
)
100
Purchases and development of real estate
for future conversion to inventory
(11
)
(4
)
(39
)
(8
)
Other assets
59
(13
)
(8
)
(34
)
Accounts payable, accrued expenses and
other
(11
)
37
(86
)
294
Advanced deposits
(6
)
12
29
37
Deferred revenues
(14
)
(33
)
33
(46
)
Net cash (used in) provided by operating
activities
—
(16
)
312
747
Investing Activities
Acquisition of a business, net of cash and
restricted cash acquired
(74
)
—
(74
)
—
Capital expenditures for property and
equipment (excluding inventory)
(13
)
(33
)
(31
)
(58
)
Software capitalization costs
(15
)
(13
)
(44
)
(39
)
Investments in unconsolidated
affiliates
(1
)
—
(1
)
—
Other
(8
)
—
(8
)
—
Net cash used in investing activities
(111
)
(46
)
(158
)
(97
)
Financing Activities
Proceeds from debt
270
40
708
40
Proceeds from non-recourse debt
400
98
868
769
Repayment of debt
47
(3
)
(323
)
(313
)
Repayment of non-recourse debt
(166
)
(166
)
(694
)
(990
)
Payment of debt issuance costs
(1
)
(1
)
(7
)
(13
)
Repurchase and retirement of common
stock
(100
)
(110
)
(368
)
(272
)
Payment of withholding taxes on vesting of
restricted stock units
—
—
(14
)
(8
)
Proceeds from employee stock plan
purchases
4
3
8
5
Proceeds from stock option exercises
—
—
9
2
Other
(1
)
1
(4
)
(2
)
Net cash provided (used in) by financing
activities
453
(138
)
183
(782
)
Effect of changes in exchange rates on
cash, cash equivalents and restricted cash
8
11
(7
)
(8
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
350
(189
)
330
(140
)
Cash, cash equivalents and restricted
cash, beginning of period
535
744
555
695
Cash, cash equivalents and restricted
cash, end of period
885
555
885
555
Less: Restricted Cash
296
332
296
332
Cash and cash equivalents
$
589
$
223
$
589
$
223
T-5
HILTON GRAND VACATIONS
INC.
FREE CASH FLOW
RECONCILIATION
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Net cash provided (used in) by
operating activities
$
—
$
(16
)
$
312
$
747
Capital expenditures for property and
equipment
(13
)
(33
)
(31
)
(58
)
Software capitalization costs
(15
)
(13
)
(44
)
(39
)
Free Cash Flow
$
(28
)
$
(62
)
$
237
$
650
Non-recourse debt activity, net
234
(68
)
174
(221
)
Acquisition and integration-related
expense
26
18
68
67
Other adjustment items(1)
23
20
53
67
Adjusted Free Cash Flow
$
255
$
(92
)
$
532
$
563
(1)
Includes capitalized acquisition and
integration-related costs.
T-6
HILTON GRAND VACATIONS
INC.
SEGMENT REVENUE
RECONCILIATION
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Revenues:
Real estate sales and financing
$
591
$
595
$
2,357
$
2,378
Resort operations and club management
347
327
1,291
1,197
Total segment revenues
938
922
3,648
3,575
Cost reimbursements
97
82
386
297
Intersegment eliminations
(16
)
(12
)
(56
)
(37
)
Total revenues
$
1,019
$
992
$
3,978
$
3,835
T-7
HILTON GRAND VACATIONS
INC.
SEGMENT EBITDA AND ADJUSTED
EBITDA TO NET INCOME
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Net income
$
68
$
78
$
313
$
352
Interest expense
45
37
178
142
Income tax expense
40
14
136
129
Depreciation and amortization
57
63
213
244
Interest expense, depreciation and
amortization included in equity in earnings from unconsolidated
affiliates
1
—
2
2
EBITDA
211
192
842
869
Other loss (gain), net
1
2
(2
)
1
Share-based compensation expense
2
6
40
46
Acquisition and integration-related
expense
26
18
68
67
Impairment (reversal) expense
—
17
3
17
Other adjustment items(1)
30
17
54
65
Adjusted EBITDA
$
270
$
252
$
1,005
$
1,065
Segment Adjusted EBITDA:
Real estate sales and financing(2)
$
191
$
199
$
754
$
865
Resort operations and club
management(2)
146
131
504
463
Adjustments:
Adjusted EBITDA from unconsolidated
affiliates
6
3
14
15
License fee expense
(37
)
(34
)
(138
)
(124
)
General and administrative(3)
(36
)
(47
)
(129
)
(154
)
Adjusted EBITDA
$
270
$
252
$
1,005
$
1,065
Adjusted EBITDA profit margin
26.5
%
25.4
%
25.3
%
27.8
%
EBITDA profit margin
20.7
%
19.4
%
21.2
%
22.7
%
(1)
Includes costs associated with
restructuring, one-time charges, other non-cash items and
amortization of premiums resulting from purchase accounting.
(2)
Includes intersegment transactions,
share-based compensation, depreciation and other adjustments
attributable to the segments.
(3)
Excludes segment related share-based
compensation, depreciation and other adjustment items.
T-8
HILTON GRAND VACATIONS
INC.
REAL ESTATE SALES PROFIT
DETAIL SCHEDULE
(in millions, except Tour Flow
and VPG)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Tour flow
151,956
141,610
608,367
517,117
VPG
3,730
4,350
3,760
4,432
Owned contract sales mix
79.7
%
67.7
%
72.1
%
70.9
%
Fee-for-service contract sales mix
20.3
%
32.3
%
27.9
%
29.1
%
Contract sales
$
572
$
634
$
2,310
$
2,381
Adjustments:
Fee-for-service sales(1)
(116
)
(205
)
(644
)
(693
)
Provision for financing receivables
losses
(54
)
(39
)
(171
)
(142
)
Reportability and other:
Net (deferral) recognition of sales of
VOIs under construction(2)
(21
)
(3
)
(35
)
31
Fee-for-service sale upgrades, net
1
4
19
18
Other(3)
(6
)
(30
)
(63
)
(104
)
Sales of VOIs, net
$
376
$
361
$
1,416
$
1,491
Plus:
Fee-for-service commissions and brand
fees
68
119
393
412
Sales revenue
444
480
1,809
1,903
Cost of VOI sales
53
67
194
274
Sales and marketing expense, net
245
253
1,040
938
Real estate expense
298
320
1,234
1,212
Real estate profit
$
146
$
160
$
575
$
691
Real estate profit margin(4)
32.9
%
33.3
%
31.8
%
36.3
%
Reconciliation of fee-for-service
commissions:
Sales, marketing, brand and other fees
133
163
634
620
Less: Marketing revenue and other
fees(5)
(65
)
(44
)
(241
)
(208
)
Fee-for-service commissions and brand
fees
$
68
$
119
$
393
$
412
Reconciliation of sales and marketing
expense:
Sales and marketing expense
310
297
1,281
1,146
Less: Marketing revenue and other
fees(5)
(65
)
(44
)
(241
)
(208
)
Sales and marketing expense, net
$
245
$
253
$
1,040
$
938
(1)
Represents contract sales from
fee-for-service properties on which we earn commissions and brand
fees.
(2)
Represents the net impact related to
deferrals of revenues and direct expenses related to the Sales of
VOIs under construction that are recognized when construction is
complete.
(3)
Includes adjustments for revenue
recognition, including amounts in rescission and sales
incentives.
(4)
Excluding the marketing revenue and other
fees adjustment, Real Estate profit margin was 28.7% and 30.5% for
the three months ended December 31, 2023, and 2022, respectively
and 28.0% and 32.7% for the year ended December 31, 2023 and 2022,
respectively.
(5)
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.
T-9
HILTON GRAND VACATIONS
INC.
CONTRACT SALES MIX BY TYPE
SCHEDULE
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Just-In-Time Contract Sales Mix
26.9
%
15.3
%
19.4
%
14.7
%
Fee-For-Service Contract Sales Mix
20.0
%
32.2
%
27.8
%
29.1
%
Total Capital-Efficient Contract Sales
Mix
46.9
%
47.5
%
47.2
%
43.8
%
T-10
HILTON GRAND VACATIONS
INC.
FINANCING PROFIT DETAIL
SCHEDULE
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Interest income(1)
$
74
$
65
$
273
$
235
Other financing revenue
8
6
34
32
Financing revenue
82
71
307
267
Consumer financing interest expense(2)
14
21
48
47
Other financing expense
12
16
51
56
Financing expense
26
37
99
103
Financing profit
$
56
$
34
$
208
$
164
Financing profit margin
68.3
%
47.9
%
67.8
%
61.4
%
(1)
For the three and twelve months ended
December 31, 2023, this amount includes $3 million and $14 million,
respectively, of amortization of the premium related to the
acquired timeshare financing receivables resulting from the Diamond
Acquisition.
(2)
For the three and twelve months ended
December 31, 2023, this amount includes less than $1 million and $2
million, respectively, of amortization of the premium related to
the acquired non-recourse debt resulting from the Diamond
Acquisition.
T-11
HILTON GRAND VACATIONS
INC.
RESORT AND CLUB PROFIT DETAIL
SCHEDULE
(in millions, except for
Members and Net Owner Growth)
Years Ended December
31,
2023
2022
Total members
528,789
518,602
Consolidated Net Owner Growth (NOG)(1)
10,187
19,535
Consolidated Net Owner Growth %
(NOG)(1)
2.0
%
3.9
%
(1)
Consolidated NOG is a
trailing-twelve-month concept for which the twelve months includes
member count for Legacy-HGV, Legacy-DRI, and HGV Max members on a
consolidated basis.
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Club management revenue
$
80
$
77
$
240
$
227
Resort management revenue
87
78
329
307
Resort and club management revenues
167
155
569
534
Club management expense
16
11
60
42
Resort management expense
32
32
117
119
Resort and club management expenses
48
43
177
161
Resort and club management profit
$
119
$
112
$
392
$
373
Resort and club management profit
margin
71.3
%
72.3
%
68.9
%
69.9
%
T-12
HILTON GRAND VACATIONS
INC.
RENTAL AND ANCILLARY PROFIT
DETAIL SCHEDULE
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Rental revenues
$
154
$
150
$
623
$
586
Ancillary services revenues
10
10
43
40
Rental and ancillary services revenues
164
160
666
626
Rental expenses
142
143
573
544
Ancillary services expense
10
10
39
35
Rental and ancillary services expenses
152
153
612
579
Rental and ancillary services profit
$
12
$
7
$
54
$
47
Rental and ancillary services profit
margin
7.3
%
4.4
%
8.1
%
7.5
%
T-13
HILTON GRAND VACATIONS
INC.
REAL ESTATE SALES AND
FINANCING SEGMENT ADJUSTED EBITDA
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Sales of VOIs, net
$
376
$
361
$
1,416
$
1,491
Sales, marketing, brand and other fees
133
163
634
620
Financing revenue
82
71
307
267
Real estate sales and financing segment
revenues
591
595
2,357
2,378
Cost of VOI sales
(53
)
(67
)
(194
)
(274
)
Sales and marketing expense
(310
)
(297
)
(1,281
)
(1,146
)
Financing expense
(26
)
(37
)
(99
)
(103
)
Marketing package stays
(16
)
(12
)
(56
)
(37
)
Share-based compensation
2
2
12
11
Other adjustment items
3
15
15
36
Real estate sales and financing segment
adjusted EBITDA
$
191
$
199
$
754
$
865
Real estate sales and financing segment
adjusted EBITDA profit margin
32.3
%
33.4
%
32.0
%
36.4
%
T-14
HILTON GRAND VACATIONS
INC.
RESORT AND CLUB MANAGEMENT
SEGMENT ADJUSTED EBITDA
(in millions)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Resort and club management revenues
$
167
$
155
$
569
$
534
Rental and ancillary services
164
160
666
626
Marketing package stays
16
12
56
37
Resort and club management segment
revenue
347
327
1,291
1,197
Resort and club management expenses
(48
)
(43
)
(177
)
(161
)
Rental and ancillary services expenses
(152
)
(153
)
(612
)
(579
)
Share-based compensation
—
—
3
5
Other adjustment items
(1
)
—
(1
)
1
Resort and club segment adjusted
EBITDA
$
146
$
131
$
504
$
463
Resort and club management segment
adjusted EBITDA profit margin
42.1
%
40.1
%
39.0
%
38.7
%
T-15
HILTON GRAND VACATIONS
INC.
ADJUSTED NET INCOME
AND
ADJUSTED DILUTED EARNINGS PER
SHARE - DILUTED (Non-GAAP)
(in millions except per share
data)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Net income
$
68
$
78
$
313
$
352
Income tax expense
40
14
136
129
Income before income taxes
108
92
449
481
Certain items:
Other loss (gain), net
1
2
(2
)
1
Impairment expense
—
17
3
17
Acquisition and integration-related
expense
26
18
68
67
Other adjustment items(1)
30
17
54
65
Adjusted income before income
taxes
$
165
$
146
$
572
$
631
Income tax expense
(54
)
(28
)
(167
)
(167
)
Adjusted net income
$
111
$
118
$
405
$
464
Weighted average shares
outstanding
Diluted
110.0
116.4
111.6
119.6
Earnings per share(2):
Diluted
$
0.62
$
0.67
$
2.80
$
2.93
Adjusted diluted
$
1.01
$
1.01
$
3.63
$
3.88
(1)
Includes costs associated with
restructuring, one-time charges, the amortization of premiums
resulting from purchase accounting and other non-cash items.
(2)
Earnings per share amounts are calculated
using whole numbers.
T-16
HILTON GRAND VACATIONS
INC.
RECONCILIATION OF NON-GAAP
PROFIT MEASURES TO GAAP MEASURE
(in millions)
Three Months Ended December
31,
Years Ended December
31,
($ in millions)
2023
2022
2023
2022
Net income
$
68
$
78
$
313
$
352
Interest expense
45
37
178
142
Income tax expense
40
14
136
129
Depreciation and amortization
57
63
213
244
Interest expense, depreciation and
amortization included in equity in earnings from unconsolidated
affiliates
1
—
2
2
EBITDA
211
192
842
869
Other loss (gain), net
1
2
(2
)
1
Equity in earnings from unconsolidated
affiliates(1)
(6
)
(4
)
(14
)
(15
)
Impairment expense
—
17
3
17
License fee expense
37
34
138
124
Acquisition and integration-related
expense
26
18
68
67
General and administrative
64
54
194
212
Profit
$
333
$
313
$
1,229
$
1,275
Real estate profit
$
146
$
160
$
575
$
691
Financing profit
56
34
208
164
Resort and club management profit
119
112
392
373
Rental and ancillary services profit
12
7
54
47
Profit
$
333
$
313
$
1,229
$
1,275
(1)
Excludes impact of interest expense,
depreciation and amortization included in equity in earnings from
unconsolidated affiliates of $1 million and none for the three
months ended December 31, 2023, and 2022, respectively, and $2
million for the year ended December 31, 2023, and 2022,
respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228834341/en/
Investor Contact: Mark Melnyk 407-613-3327
mark.melnyk@hgv.com
Media Contact: Lauren George 407-613-8431
lauren.george@hgv.com
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