Hilton Grand Vacations Inc. (NYSE: HGV) (“HGV” or “the Company”) today reports its second quarter 2022 results.

Second Quarter 2022 Results1

  • Total contract sales in the second quarter were $617 million, 105% of pro-forma combined Q2 2019 contract sales.
  • Member count increased for the eighth straight quarter. Net Owner Growth (NOG) for the Legacy-HGV business for the 12 months ended June 30, 2022, was 3.2%, and Diamond added over 1,400 net new members in the quarter.
  • Total revenues for the second quarter were $948 million compared to $334 million for the same period in 2021.
    • Total revenues were affected by a net deferral of $10 million in the current period compared to a deferral of $42 million in the same period in 2021.
  • Net income for the second quarter was $73 million compared to $9 million net income for the same period in 2021.
    • Net income was affected by a net deferral of $4 million in the current period compared to a net deferral of $22 million in the same period in 2021.
    • Net income includes a charge of $16 million related to litigation settlements incurred in the second quarter, which has been excluded from Adjusted EBITDA.
  • Diluted EPS for the second quarter was $0.60 compared to $0.10 for the same period in 2021.
    • Diluted EPS was affected by a net deferral of $4 million in the current period compared to a net deferral of $22 million in the same period in 2021, or $(0.03) and $(0.25) per share in the current period and the same period in 2021, respectively.
  • Adjusted EBITDA for the second quarter was $273 million compared to $70 million for the same period in 2021.
    • Adjusted EBITDA was affected by a net deferral of $4 million in the current period compared to a net deferral of $22 million in the same period in 2021.

Full Year 2022 Outlook

  • The Company is reiterating its 2022 guidance for Deferral Adjusted EBITDA to be in a range of $960 million to $990 million.

“Building upon the improvement we’ve seen throughout the year, we produced solid results this quarter that exceeded 2019 levels,” said Mark Wang, president and CEO of Hilton Grand Vacations. “Travel trends remain strong among consumers, and the value proposition of our offering stands out in the current economic environment. With new properties, a new brand, a new membership program, and a loyal base of owners who are committed to their future travel, we’re well-positioned to capitalize on the growth catalysts that we see ahead.”

  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.

Diamond Acquisition

On Aug. 2, 2021 (The "Acquisition Date"), HGV completed the acquisition of Dakota Holdings, Inc., the parent of Diamond Resorts International (the “Diamond Acquisition”). HGV completed the acquisition by exchanging 100% of the outstanding equity interests of Diamond for shares of HGV common stock. Pre-existing HGV shareholders owned approximately 72% of the combined company after giving effect of the Diamond Acquisition, with certain funds controlled by Apollo Global Management Inc. (the "Apollo Funds" or, "Apollo") and other minority shareholders, who previously owned 100% of Diamond, holding approximately 28% at the time the Diamond Acquisition was completed.

Diamond also operates in the hospitality and VOI industry, with a worldwide resort network of global vacation destinations. Diamond’s portfolio consists of resort properties that the Company manages, which are included in one of Diamond's single- and multi-use trusts (collectively, the "Diamond Collections" or "Collections"), or are Diamond-branded resorts in which the Company owns inventory. It also includes affiliated resorts and hotels, which the Company does not manage, and which do not carry the Diamond brand but are a part of Diamond's network and, through THE Club® and other Club offerings (the “Diamond Clubs”), are available for its members to use as vacation destinations.

The financial results in this report include Diamond’s results of operations beginning on the Acquisition Date. The Company refers to Diamond's business and operations that were acquired as “Legacy-Diamond” or “Diamond,” and HGV's operations as “Legacy-HGV,” which is inclusive of operations that existed both prior to and following the Diamond Acquisition.

Overview

For the quarter ended June 30, 2022, diluted EPS was $0.60 compared to $0.10 for the quarter ended June 30, 2021. Net income and Adjusted EBITDA were $73 million and $273 million, respectively, for the quarter ended June 30, 2022, compared to net income and Adjusted EBITDA of $9 million and $70 million, respectively, for the quarter ended June 30, 2021. Total revenues for the quarter ended June 30, 2022, were $948 million compared to $334 million for the quarter ended June 30, 2021.

Net income and Adjusted EBITDA for the quarter ended June 30, 2022, included a net deferral of $4 million relating to sales of intervals at Maui Bay Villas Phase IB which was under construction during the period. The Company anticipates recognizing these revenues and related expenses in the second half of 2022 when it expects to complete this project.

Consolidated Segment Highlights – Second Quarter 2022

Real Estate Sales and Financing

For the quarter ended June 30, 2022, Real Estate Sales and Financing segment revenues were $586 million, an increase of $392 million compared to the quarter ended June 30, 2021. Real Estate Sales and Financing segment Adjusted EBITDA and Adjusted EBITDA profit margin were $218 million and 37.2%, respectively, for the quarter ended June 30, 2022, compared to $45 million and 23.2%, respectively, for the quarter ended June 30, 2021. Results in the second quarter 2022 improved due to an increase in tour flow related to an improvement in travel demand versus the prior year, as well as an increase in volume per guest.

Real Estate Sales and Financing segment adjusted EBITDA reflects a reduction of $4 million due to the net deferral of sales and related expenses of VOIs under construction in the second quarter 2022. These deferrals were related sales of intervals at the Maui Bay Villas Phase IB project for the quarter ended June 30, 2022, and compare to $22 million of net deferrals related to Ocean Tower Phase II, Maui Bay Villas Phase I and The Beach Resort Sesoko Phase I projects for the quarter ended June 30, 2021.

Contract sales for the quarter ended June 30, 2022, increased $358 million to $617 million compared to the quarter ended June 30, 2021. For the quarter ended June 30, 2022, tours increased by 138% and VPG increased by 2% compared to the quarter ended June 30, 2021. For the quarter ended June 30, 2022, fee-for-service contract sales represented 29.8% of contract sales compared to 42.1% for the quarter ended June 30, 2021.

Financing revenues for the quarter ended June 30, 2022, increased by $27 million compared to the quarter ended June 30, 2021. This was driven primarily by a $23 million increase related to interest income on the timeshare financing receivables. The Company experienced an increase in the timeshare financing receivables balance along with an increase in the weighted average interest rate for the originated portfolio of 130 basis points as of June 30, 2022, compared to June 30, 2021.

Resort Operations and Club Management

For the quarter ended June 30, 2022, Resort Operations and Club Management segment revenue was $124 million, an increase of $76 million compared to the quarter ended June 30, 2021. Resort Operations and Club Management segment Adjusted EBITDA and Adjusted EBITDA profit margin were $119 million and 39.3%, respectively, for the quarter ended June 30, 2022, compared to $61 million and 57.0%, respectively, for the quarter ended June 30, 2021. Compared to the prior-year period, results in the second quarter 2022 increased due to the addition of Diamond's resort network and member base, along with an increase in the number of transactions compared to the same period in 2021, which more than offset the increases in segment operating expenses.

Inventory

The estimated value of the Company’s total contract sales pipeline is approximately $12 billion at current pricing.

The total pipeline includes approximately $6 billion of sales relating to inventory that is currently available for sale at open or soon-to-open projects. The remaining approximately $6 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 84% of the Company’s total pipeline. Approximately 52% of the owned inventory pipeline is currently available for sale.

Fee-for-service inventory represents 16% of the Company’s total pipeline. Approximately 44% of the fee-for-service inventory pipeline is currently available for sale.

With 24% of the pipeline consisting of just-in-time inventory and 16% consisting of fee-for-service inventory, capital-efficient inventory represents 40% of the Company’s total contract sales pipeline.

Balance Sheet and Liquidity

Total cash and cash equivalents were $666 million as of June 30, 2022, including $292 million of restricted cash.

As of June 30, 2022, the Company had $2,787 million of corporate debt, net outstanding with a weighted average interest rate of 4.81% and $1,024 million of non-recourse debt, net outstanding with a weighted average interest rate of 3.34%.

As of June 30, 2022, the Company’s liquidity position consisted of $374 million of unrestricted cash and $824 million remaining borrowing capacity under the revolver facility.

As of June 30, 2022, HGV has $874 million remaining borrowing capacity in total under the Timeshare Facility and conduit facility due in 2023. Of this amount, HGV has $242 million of mortgage notes that are available to be securitized and another $225 million of mortgage notes that the Company expects will become eligible as soon as they meet typical milestones including receipt of first payment, deeding, or recording.

Free cash flow was $239 million for the quarter ended June 30, 2022, compared to $22 million for the same period in the prior year. Adjusted free cash flow was $103 million for the quarter ended June 30, 2022, compared to $(13) million for the same period in the prior year. Adjusted free cash flow for the quarter ended June 30, 2022 includes add-backs of $17 million related to the Diamond Acquisition.

As of June 30, 2022, the Company’s total net leverage on a pro-forma trailing 12-month basis was approximately 2.12x, not giving effect to anticipated synergies. Inclusive of anticipated synergies, HGV was at 2.01x total net leverage on a pro-forma trailing 12-month basis.

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. 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)

 

 

 

2022

NET CONSTRUCTION DEFERRAL ACTIVITY

 

First Quarter

 

Second Quarter

 

Third Quarter

 

Fourth Quarter

 

Full Year

Sales of VOIs (deferrals) recognitions

 

$

(42

)

 

$

(10

)

 

$

 

$

 

$

(52

)

Cost of VOI sales (deferrals) recognitions(1)

 

 

(13

)

 

 

(5

)

 

 

 

 

 

 

(18

)

Sales and marketing expense (deferrals) recognitions

 

 

(7

)

 

 

(1

)

 

 

 

 

 

 

(8

)

Net construction (deferrals) recognitions(2)

 

$

(22

)

 

$

(4

)

 

$

 

$

 

$

(26

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

51

 

 

$

73

 

 

$

 

$

 

$

124

 

Interest expense

 

 

33

 

 

 

35

 

 

 

 

 

 

 

68

 

Income tax expense

 

 

20

 

 

 

41

 

 

 

 

 

 

 

61

 

Depreciation and amortization

 

 

60

 

 

 

64

 

 

 

 

 

 

 

124

 

Interest expense and depreciation and amortization included in equity in earnings from unconsolidated affiliates

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

164

 

 

 

213

 

 

 

 

 

 

 

377

 

Other (gain) loss, net

 

 

(1

)

 

 

2

 

 

 

 

 

 

 

1

 

Share-based compensation expense

 

 

11

 

 

 

15

 

 

 

 

 

 

 

26

 

Impairment expense (reversal)

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

 

Acquisition and integration-related expense

 

 

13

 

 

 

17

 

 

 

 

 

 

 

30

 

Other adjustment items(3)

 

 

12

 

 

 

29

 

 

 

 

 

 

 

41

 

Adjusted EBITDA

 

$

202

 

 

$

273

 

 

$

 

$

 

$

475

 

   

 

T-1

NET CONSTRUCTION DEFERRAL ACTIVITY

(CONTINUED, in millions)

 

 

 

2021

NET CONSTRUCTION DEFERRAL ACTIVITY

 

First Quarter

 

Second Quarter

 

Third Quarter

 

Fourth Quarter

 

Full Year

Sales of VOIs (deferrals) recognitions

 

$

(32

)

 

$

(42

)

 

$

241

 

$

(34

)

 

$

133

Cost of VOI sales (deferrals) recognitions(1)

 

 

(10

)

 

 

(13

)

 

 

73

 

 

(12

)

 

 

38

Sales and marketing expense (deferrals) recognitions

 

 

(4

)

 

 

(7

)

 

 

35

 

 

(5

)

 

 

19

Net construction (deferrals) recognitions(2)

 

$

(18

)

 

$

(22

)

 

$

133

 

$

(17

)

 

$

76

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

(7

)

 

$

9

 

 

$

99

 

$

75

 

 

$

176

Interest expense

 

 

15

 

 

 

17

 

 

 

42

 

 

31

 

 

 

105

Income tax (benefit) expense

 

 

(6

)

 

 

3

 

 

 

49

 

 

47

 

 

 

93

Depreciation and amortization

 

 

11

 

 

 

12

 

 

 

48

 

 

55

 

 

 

126

Interest expense and depreciation and amortization included in equity in earnings from unconsolidated affiliates

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

EBITDA

 

 

14

 

 

 

41

 

 

 

238

 

 

208

 

 

 

501

Other loss, net

 

 

1

 

 

 

1

 

 

 

20

 

 

4

 

 

 

26

Share-based compensation expense

 

 

4

 

 

 

14

 

 

 

14

 

 

16

 

 

 

48

Impairment expense

 

 

1

 

 

 

 

 

 

1

 

 

 

 

 

2

Acquisition and integration-related expense

 

 

15

 

 

 

14

 

 

 

54

 

 

23

 

 

 

106

Other adjustment items(3)

 

 

7

 

 

 

 

 

 

13

 

 

13

 

 

 

33

Adjusted EBITDA

 

$

42

 

 

$

70

 

 

$

340

 

$

264

 

 

$

716

(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 for the periods subsequent to the Diamond Acquisition.

Conference Call

Hilton Grand Vacations will host a conference call on Aug. 9, 2022, at 11 a.m. (ET) to discuss second quarter 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 Aug. 16, 2022. To access the replay, please dial 1-844-512-2921 in the U.S. (+1-412-317-6671 internationally) using ID#13726010. 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, may be identified by terminology such as the words “outlook,” “believe,” “expect,” “potential,” “goal,” “continues,” “may,” “will,” “should,” “could,” “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.

HGV cautions you that forward-looking statements involve known and unknown risks, uncertainties and other factors, including those that are beyond HGV’s control, that may cause its actual results, performance or achievements to be materially different from the future results. Any one or more of these risks or uncertainties could adversely impact HGV’s operations, revenue, operating profits and margins, key business operational metrics, financial condition and/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 filed with the SEC on March 1, 2022, as supplemented and updated by the risk factors in HGV's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which may be further updated from time to time 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 EBITDA, Adjusted EBITDA, EBITDA profit margin, Adjusted EBITDA profit margin, free cash flow and adjusted free cash flow. Please see the tables in this press release and “Definitions” for additional information and reconciliations of such non-GAAP financial measures.

The Company refers to Deferral Adjusted EBITDA guidance, 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. 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. As one of Hilton’s 18 premier brands, Hilton Grand Vacations has a reputation for delivering a consistently exceptional standard of service, and unforgettable vacation experiences for guests and more than 720,000 owners. 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.hiltongrandvacations.com.

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 (loss), 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 (loss) 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 (loss), 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.

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.

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 percent 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. We consider contract sales to be an important operating measure because it reflects the pace of sales in our business and is used to manage the performance of the sales organization. While 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 our consolidated financial statements included in Item 8 in our Annual Report on form 10-K for the year ended December 31, 2021, 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.

Real estate profit represents sales revenue less the cost of VOI sales and sales and marketing costs, net of marketing revenue. Real estate profit margin is calculated by dividing real estate profit by sales revenue. The Company considers this to be an important operating measure because it measures the efficiency of our sales and marketing spending and management of inventory costs.

Sales revenue represents Sale of VOIs, net and fee-for-service commissions and brand fees earned from the sale of fee-for-service intervals.

Fee-for-service commissions and brand fees, net represents commissions and brand fees earned from the sale of fee-for-service intervals net of related reserves.

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

 

CONDENSED CONSOLIDATED BALANCE SHEETS

T-2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

T-3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

T-4

FREE CASH FLOWS 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

 

T-2

HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

 

 

June 30, 2022

 

December 31, 2021

 

(unaudited)

 

 

ASSETS

 

 

 

Cash and cash equivalents

$

374

 

$

432

Restricted cash

 

292

 

 

263

Accounts receivable, net

 

413

 

 

302

Timeshare financing receivables, net

 

1,689

 

 

1,747

Inventory

 

1,241

 

 

1,240

Property and equipment, net

 

801

 

 

756

Operating lease right-of-use assets, net

 

60

 

 

70

Investments in unconsolidated affiliates

 

66

 

 

59

Goodwill

 

1,357

 

 

1,377

Intangible assets, net

 

1,358

 

 

1,441

Land and infrastructure held for sale

 

 

 

41

Other assets

 

481

 

 

280

TOTAL ASSETS

$

8,132

 

$

8,008

LIABILITIES AND EQUITY

 

 

 

Accounts payable, accrued expenses and other

$

976

 

$

673

Advanced deposits

 

130

 

 

112

Debt, net

 

2,787

 

 

2,913

Non-recourse debt, net

 

1,024

 

 

1,328

Operating lease liabilities

 

80

 

 

87

Deferred revenues

 

360

 

 

237

Deferred income tax liabilities

 

698

 

 

670

Total liabilities

 

6,055

 

 

6,020

 

 

 

 

Equity:

 

 

 

Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of June 30, 2022 and December 31, 2021

 

 

 

Common stock, $0.01 par value; 3,000,000,000 authorized shares, 118,501,896 shares issued and outstanding as of June 30, 2022 and 119,904,001 shares issued and outstanding as of December 31, 2021

 

1

 

 

1

Additional paid-in capital

 

1,626

 

 

1,630

Accumulated retained earnings

 

424

 

 

357

Accumulated other comprehensive income

 

26

 

 

Total equity

 

2,077

 

 

1,988

TOTAL LIABILITIES AND EQUITY

$

8,132

 

$

8,008

 

 

T-3

HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share data)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenues

 

 

 

 

 

 

 

Sales of VOIs, net

$

361

 

 

$

76

 

 

$

630

 

 

$

109

 

Sales, marketing, brand and other fees

 

161

 

 

 

81

 

 

 

280

 

 

 

134

 

Financing

 

64

 

 

 

37

 

 

 

128

 

 

 

74

 

Resort and club management

 

124

 

 

 

48

 

 

 

249

 

 

 

93

 

Rental and ancillary services

 

171

 

 

 

54

 

 

 

307

 

 

 

86

 

Cost reimbursements

 

67

 

 

 

38

 

 

 

133

 

 

 

73

 

Total revenues

 

948

 

 

 

334

 

 

 

1,727

 

 

 

569

 

Expenses

 

 

 

 

 

 

 

Cost of VOI sales

 

65

 

 

 

21

 

 

 

105

 

 

 

24

 

Sales and marketing

 

284

 

 

 

116

 

 

 

527

 

 

 

198

 

Financing

 

22

 

 

 

11

 

 

 

41

 

 

 

24

 

Resort and club management

 

37

 

 

 

11

 

 

 

73

 

 

 

19

 

Rental and ancillary services

 

150

 

 

 

36

 

 

 

282

 

 

 

67

 

General and administrative

 

66

 

 

 

30

 

 

 

108

 

 

 

51

 

Acquisition and integration-related expense

 

17

 

 

 

14

 

 

 

30

 

 

 

29

 

Depreciation and amortization

 

64

 

 

 

12

 

 

 

124

 

 

 

23

 

License fee expense

 

32

 

 

 

19

 

 

 

57

 

 

 

33

 

Impairment (reversal) expense

 

(3

)

 

 

 

 

 

 

 

 

1

 

Cost reimbursements

 

67

 

 

 

38

 

 

 

133

 

 

 

73

 

Total operating expenses

 

801

 

 

 

308

 

 

 

1,480

 

 

 

542

 

Interest expense

 

(35

)

 

 

(17

)

 

 

(68

)

 

 

(32

)

Equity in earnings from unconsolidated affiliates

 

4

 

 

 

4

 

 

 

7

 

 

 

6

 

Other loss, net

 

(2

)

 

 

(1

)

 

 

(1

)

 

 

(2

)

Income (loss) before income taxes

 

114

 

 

 

12

 

 

 

185

 

 

 

(1

)

Income tax (expense) benefit

 

(41

)

 

 

(3

)

 

 

(61

)

 

 

3

 

Net income

$

73

 

 

$

9

 

 

$

124

 

 

$

2

 

Earnings per share(1):

 

 

 

 

 

 

 

Basic

$

0.60

 

 

$

0.10

 

 

$

1.03

 

 

$

0.02

 

Diluted

$

0.60

 

 

$

0.10

 

 

$

1.01

 

 

$

0.02

 

Weighted average shares outstanding(2)

 

 

 

 

 

 

 

Basic

 

120,811

 

 

 

85,650

 

 

 

120,398

 

 

 

85,480

 

Diluted

 

122,309

 

 

 

86,839

 

 

 

122,096

 

 

 

86,540

 

(1) Earnings per share is calculated based on unrounded dollars. (2) Presented in thousands.

 

T-4

HILTON GRAND VACATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Operating Activities

 

 

 

 

 

 

 

Net income

$

73

 

 

$

9

 

 

$

124

 

 

$

2

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

64

 

 

 

12

 

 

 

124

 

 

 

23

 

Amortization of deferred financing costs, acquisition premiums and other

 

13

 

 

 

4

 

 

 

25

 

 

 

10

 

Provision for financing receivables losses

 

40

 

 

 

12

 

 

 

71

 

 

 

28

 

Impairment (reversal) expense

 

(3

)

 

 

 

 

 

 

 

 

1

 

Other loss, net

 

2

 

 

 

1

 

 

 

2

 

 

 

2

 

Share-based compensation

 

15

 

 

 

14

 

 

 

26

 

 

 

18

 

Deferred income tax expense

 

 

 

 

30

 

 

 

 

 

 

9

 

Equity in earnings from unconsolidated affiliates

 

(4

)

 

 

(4

)

 

 

(7

)

 

 

(6

)

Net changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

34

 

 

 

(109

)

 

 

(73

)

 

 

(101

)

Timeshare financing receivables, net

 

(41

)

 

 

(1

)

 

 

(52

)

 

 

18

 

Inventory

 

(6

)

 

 

(15

)

 

 

20

 

 

 

(29

)

Purchases and development of real estate for future conversion to inventory

 

 

 

 

(11

)

 

 

(1

)

 

 

(17

)

Other assets

 

105

 

 

 

(8

)

 

 

(159

)

 

 

(35

)

Accounts payable, accrued expenses and other

 

 

 

 

57

 

 

 

290

 

 

 

59

 

Advanced deposits

 

3

 

 

 

3

 

 

 

17

 

 

 

 

Deferred revenues

 

(35

)

 

 

36

 

 

 

123

 

 

 

110

 

Net cash provided by operating activities

 

260

 

 

 

30

 

 

 

530

 

 

 

92

 

Investing Activities

 

 

 

 

 

 

 

Capital expenditures for property and equipment

 

(11

)

 

 

(3

)

 

 

(19

)

 

 

(4

)

Software capitalization costs

 

(10

)

 

 

(5

)

 

 

(16

)

 

 

(9

)

Net cash used in investing activities

 

(21

)

 

 

(8

)

 

 

(35

)

 

 

(13

)

Financing Activities

 

 

 

 

 

 

 

Issuance of debt

 

 

 

 

1,350

 

 

 

 

 

 

1,350

 

Issuance of non-recourse debt

 

247

 

 

 

 

 

 

402

 

 

 

 

Repayment of debt

 

(129

)

 

 

(53

)

 

 

(132

)

 

 

(55

)

Repayment of non-recourse debt

 

(420

)

 

 

(49

)

 

 

(697

)

 

 

(118

)

Debt issuance costs and discounts

 

(7

)

 

 

 

 

 

(7

)

 

 

(3

)

Repurchase and retirement of common stock

 

(78

)

 

 

 

 

 

(78

)

 

 

 

Payment of withholding taxes on vesting of restricted stock units

 

 

 

 

 

 

 

(8

)

 

 

(5

)

Proceeds from employee stock plan purchases

 

2

 

 

 

1

 

 

 

2

 

 

 

1

 

Proceeds from stock option exercises

 

 

 

 

4

 

 

 

1

 

 

 

6

 

Other financing activity

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Net cash used in financing activities

 

(385

)

 

 

1,253

 

 

 

(518

)

 

 

1,175

 

Effect of changes in exchange rates on cash, cash equivalents & restricted cash

 

(5

)

 

 

 

 

 

(6

)

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(151

)

 

 

1,275

 

 

 

(29

)

 

 

1,254

 

Cash, cash equivalents and restricted cash, beginning of period

 

817

 

 

 

505

 

 

 

695

 

 

 

526

 

Cash, cash equivalents and restricted cash, end of period

$

666

 

 

$

1,780

 

 

$

666

 

 

$

1,780

 

 

T-5

HILTON GRAND VACATIONS INC.

FREE CASH FLOW RECONCILIATION

(in millions)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Net cash provided by operating activities

 

$

260

 

 

$

30

 

 

$

530

 

 

$

92

 

Capital expenditures for property and equipment

 

 

(11

)

 

 

(3

)

 

 

(19

)

 

 

(4

)

Software capitalization costs

 

 

(10

)

 

 

(5

)

 

 

(16

)

 

 

(9

)

Free Cash Flow

 

$

239

 

 

$

22

 

 

$

495

 

 

$

79

 

Non-recourse debt activity, net

 

 

(173

)

 

 

(49

)

 

 

(295

)

 

 

(118

)

Acquisition and integration-related expense

 

 

17

 

 

 

14

 

 

 

30

 

 

 

29

 

Other adjustment items(1)

 

 

20

 

 

 

 

 

 

33

 

 

 

 

Adjusted Free Cash Flow

 

$

103

 

 

$

(13

)

 

$

263

 

 

$

(10

)

(1)

Includes capitalized acquisition and integration-related costs for the three and six months ended June 30, 2022.

 

T-6

HILTON GRAND VACATIONS INC.

SEGMENT REVENUE RECONCILIATION

(in millions)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

 

Real estate sales and financing

 

$

586

 

 

$

194

 

 

$

1,038

 

 

$

317

 

Resort operations and club management

 

 

303

 

 

 

107

 

 

 

571

 

 

 

187

 

Total segment revenues

 

 

889

 

 

 

301

 

 

 

1,609

 

 

 

504

 

Cost reimbursements

 

 

67

 

 

 

38

 

 

 

133

 

 

 

73

 

Intersegment eliminations

 

 

(8

)

 

 

(5

)

 

 

(15

)

 

 

(8

)

Total revenues

 

$

948

 

 

$

334

 

 

$

1,727

 

 

$

569

 

 

 

T-7

HILTON GRAND VACATIONS INC.

SEGMENT EBITDA AND ADJUSTED EBITDA TO NET INCOME

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Net income

$

73

 

 

$

9

 

 

$

124

 

 

$

2

 

 

Interest expense

 

35

 

 

 

17

 

 

 

68

 

 

 

32

 

 

Income tax expense (benefit)

 

41

 

 

 

3

 

 

 

61

 

 

 

(3

)

 

Depreciation and amortization

 

64

 

 

 

12

 

 

 

124

 

 

 

23

 

 

Interest expense, depreciation and amortization included in equity in earnings from unconsolidated affiliates

 

 

 

 

 

 

 

 

 

 

1

 

 

EBITDA

 

213

 

 

 

41

 

 

 

377

 

 

 

55

 

 

Other loss, net

 

2

 

 

 

1

 

 

 

1

 

 

 

2

 

 

Share-based compensation expense

 

15

 

 

 

14

 

 

 

26

 

 

 

18

 

 

Impairment (reversal) expense

 

(3

)

 

 

 

 

 

 

 

 

1

 

 

Acquisition and integration-related expense

 

17

 

 

 

14

 

 

 

30

 

 

 

29

 

 

Other adjustment items(1)

 

29

 

 

 

 

 

 

41

 

 

 

7

 

 

Adjusted EBITDA

$

273

 

 

$

70

 

 

$

475

 

 

$

112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA:

 

 

 

 

 

 

 

 

Real estate sales and financing(2)

$

218

 

 

$

45

 

 

$

371

 

 

$

72

 

 

Resort operations and club

management(2)

 

119

 

 

 

61

 

 

 

220

 

 

 

103

 

 

Adjustments:

 

 

 

 

 

 

 

 

Adjusted EBITDA from

unconsolidated affiliates

 

4

 

 

 

4

 

 

 

7

 

 

 

7

 

 

License fee expense

 

(32

)

 

 

(19

)

 

 

(57

)

 

 

(33

)

 

General and administrative(3)

 

(36

)

 

 

(21

)

 

 

(66

)

 

 

(37

)

 

Adjusted EBITDA

$

273

 

 

$

70

 

 

$

475

 

 

$

112

 

 

Adjusted EBITDA profit margin

 

28.8

%

 

 

21.0

%

 

 

27.5

%

 

 

19.7

%

 

EBITDA profit margin

 

22.5

%

 

 

12.3

%

 

 

21.8

%

 

 

9.7

%

 

(1)

Includes costs associated with restructuring, one-time charges and other non-cash items. For the three and six months ended June 30, 2022, this amount also includes the amortization of premiums resulting from the Diamond Acquisition.

(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 June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Tour flow

 

134,259

 

 

 

56,345

 

 

 

232,860

 

 

 

84,293

 

 

VPG

 

4,452

 

 

 

4,385

 

 

 

4,620

 

 

 

4,472

 

 

Owned contract sales mix

 

70.2

%

 

 

57.9

%

 

 

72.2

%

 

 

58.5

%

 

Fee-for-service contract sales mix

 

29.8

%

 

 

42.1

%

 

 

27.8

%

 

 

41.5

%

 

 

 

 

 

 

 

 

 

 

Contract sales

$

617

 

 

$

259

 

 

$

1,126

 

 

$

398

 

 

Adjustments:

 

 

 

 

 

 

 

 

Fee-for-service sales(1)

 

(184

)

 

 

(109

)

 

 

(313

)

 

 

(165

)

 

Provision for financing receivables losses

 

(40

)

 

 

(12

)

 

 

(71

)

 

 

(28

)

 

Reportability and other:

 

 

 

 

 

 

 

 

Net deferral of sales of VOIs under construction(2)

 

(10

)

 

 

(42

)

 

 

(52

)

 

 

(74

)

 

Fee-for-service sale upgrades, net

 

5

 

 

 

3

 

 

 

9

 

 

 

5

 

 

Other(3)

 

(27

)

 

 

(23

)

 

 

(69

)

 

 

(27

)

 

Sales of VOIs, net

$

361

 

 

$

76

 

 

$

630

 

 

$

109

 

 

Plus:

 

 

 

 

 

 

 

 

Fee-for-service commissions and brand fees, net

 

99

 

 

 

57

 

 

 

168

 

 

 

89

 

 

Sales revenue

 

460

 

 

 

133

 

 

 

798

 

 

 

198

 

 

Less:

 

 

 

 

 

 

 

 

Cost of VOI sales

 

65

 

 

 

21

 

 

 

105

 

 

 

24

 

 

Sales and marketing expense, net(4)

 

212

 

 

 

83

 

 

 

398

 

 

 

142

 

 

Real estate profit

$

183

 

 

$

29

 

 

$

295

 

 

$

32

 

 

Real estate profit margin

 

39.8

%

 

 

21.8

%

 

 

37.0

%

 

 

16.2

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of fee-for-service commissions:

 

 

 

 

 

 

 

 

Sales, marketing, brand and other fees

 

161

 

 

 

81

 

 

 

280

 

 

 

134

 

 

Less:

 

 

 

 

 

 

 

 

Marketing revenue and other fees

 

62

 

 

 

24

 

 

 

112

 

 

 

45

 

 

Fee-for-service commissions and brand fees, net

$

99

 

 

$

57

 

 

$

168

 

 

$

89

 

 

(1)

Represents contract sales from fee-for-service properties on which we earn commissions and brand fees.

(2)

Represents the net impact of deferred revenues 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)

 

Includes revenue recognized through our marketing programs for existing owners and prospective first-time buyers and revenue associated with sales incentives and document compliance.

 

T-9

HILTON GRAND VACATIONS INC.

CONTRACT SALES MIX BY TYPE SCHEDULE

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Just-In-Time Contract Sales Mix

 

12

%

 

23

%

 

13

%

 

25

%

Fee-For-Service Contract Sales Mix

 

30

%

 

42

%

 

28

%

 

41

%

Total Capital-Efficient Contract Sales Mix(1)

 

42

%

 

65

%

 

41

%

 

66

%

(1)

Diamond contract sales are related to developed properties and therefore are not included in capital efficient contract sales.

 

T-10

HILTON GRAND VACATIONS INC.

FINANCING PROFIT DETAIL SCHEDULE

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Interest income(1)

$

54

 

 

$

31

 

 

$

109

 

 

$

62

 

 

Other financing revenue

 

10

 

 

 

6

 

 

 

19

 

 

 

12

 

 

Financing revenue

 

64

 

 

 

37

 

 

 

128

 

 

 

74

 

 

Consumer financing interest expense(2)

 

8

 

 

 

7

 

 

 

15

 

 

 

14

 

 

Other financing expense

 

14

 

 

 

4

 

 

 

26

 

 

 

10

 

 

Financing expense

 

22

 

 

 

11

 

 

 

41

 

 

 

24

 

 

Financing profit

$

42

 

 

$

26

 

 

$

87

 

 

$

50

 

 

Financing profit margin

 

65.6

%

 

 

70.3

%

 

 

68.0

%

 

 

67.6

%

%

(1)

 

For the three and six months ended June 30, 2022, this amount includes $11 million and $20 million, respectively, of amortization of the premium related to the acquired timeshare financing receivables resulting from the Diamond Acquisition.

(2)

 

For the three and six months ended June 30, 2022, this amount includes $3 million and $6 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)

 

 

Twelve Months Ended June 30,

 

 

2022

 

2021

 

Total members

507,952

 

 

328,441

 

 

Legacy-HGV Net Owner Growth (NOG)(1)

10,412

 

 

1,631

 

 

Legacy-HGV Net Owner Growth % (NOG)(1)

3.2

%

 

0.5

%

 

(1)

NOG is a twelve-trailing-month concept and thus not calculated for Diamond under HGV's ownership.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Club management revenue

$

51

 

 

$

29

 

 

$

102

 

 

$

56

 

 

Resort management revenue

 

73

 

 

 

19

 

 

 

147

 

 

 

37

 

 

Resort and club management revenues

 

124

 

 

 

48

 

 

 

249

 

 

 

93

 

 

Club management expense

 

10

 

 

 

5

 

 

 

20

 

 

 

10

 

 

Resort management expense

 

27

 

 

 

6

 

 

 

53

 

 

 

9

 

 

Resort and club management expenses

 

37

 

 

 

11

 

 

 

73

 

 

 

19

 

 

Resort and club management profit

$

87

 

 

$

37

 

 

$

176

 

 

$

74

 

 

Resort and club management profit margin

 

70.2

%

 

 

77.1

%

 

 

70.7

%

 

 

79.6

%

 

 

 

T-12

HILTON GRAND VACATIONS INC.

RENTAL AND ANCILLARY PROFIT DETAIL SCHEDULE

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Rental revenues

$

155

 

 

$

50

 

 

$

279

 

 

$

80

 

 

Ancillary services revenues

 

16

 

 

 

4

 

 

 

28

 

 

 

6

 

 

Rental and ancillary services revenues

 

171

 

 

 

54

 

 

 

307

 

 

 

86

 

 

Rental expenses

 

138

 

 

 

32

 

 

 

260

 

 

 

61

 

 

Ancillary services expense

 

12

 

 

 

4

 

 

 

22

 

 

 

6

 

 

Rental and ancillary services expenses

 

150

 

 

 

36

 

 

 

282

 

 

 

67

 

 

Rental and ancillary services profit

$

21

 

 

$

18

 

 

$

25

 

 

$

19

 

 

Rental and ancillary services profit margin

 

12.3

%

 

 

33.3

%

 

 

8.1

%

 

 

22.1

%

 

 

T-13

HILTON GRAND VACATIONS INC.

REAL ESTATE SALES AND FINANCING SEGMENT ADJUSTED EBITDA

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Sales of VOIs, net

$

361

 

 

$

76

 

 

$

630

 

 

$

109

 

 

Sales, marketing, brand and other fees

 

161

 

 

 

81

 

 

 

280

 

 

 

134

 

 

Financing revenue

 

64

 

 

 

37

 

 

 

128

 

 

 

74

 

 

Real estate sales and financing segment revenues

 

586

 

 

 

194

 

 

 

1,038

 

 

 

317

 

 

Cost of VOI sales

 

(65

)

 

 

(21

)

 

 

(105

)

 

 

(24

)

 

Sales and marketing expense, net

 

(284

)

 

 

(116

)

 

 

(527

)

 

 

(198

)

 

Financing expense

 

(22

)

 

 

(11

)

 

 

(41

)

 

 

(24

)

 

Marketing package stays

 

(8

)

 

 

(5

)

 

 

(15

)

 

 

(8

)

 

Share-based compensation

 

3

 

 

 

2

 

 

 

6

 

 

 

4

 

 

Other adjustment items

 

8

 

 

 

2

 

 

 

15

 

 

 

5

 

 

Real estate sales and financing segment adjusted EBITDA

$

218

 

 

$

45

 

 

$

371

 

 

$

72

 

 

Real estate sales and financing segment adjusted EBITDA profit margin

 

37.2

%

 

 

23.2

%

 

 

35.7

%

 

 

22.7

%

 

   

 

T-14

HILTON GRAND VACATIONS INC.

RESORT AND CLUB MANAGEMENT SEGMENT ADJUSTED EBITDA

(in millions)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

Resort and club management revenues

$

124

 

 

$

48

 

 

$

249

 

 

$

93

 

 

Rental and ancillary services

 

171

 

 

 

54

 

 

 

307

 

 

 

86

 

 

Marketing package stays

 

8

 

 

 

5

 

 

 

15

 

 

 

8

 

 

Resort and club management segment revenue

 

303

 

 

 

107

 

 

 

571

 

 

 

187

 

 

Resort and club management expenses

 

(37

)

 

 

(11

)

 

 

(73

)

 

 

(19

)

 

Rental and ancillary services expenses

 

(150

)

 

 

(36

)

 

 

(282

)

 

 

(67

)

 

Share-based compensation

 

2

 

 

 

2

 

 

 

3

 

 

 

2

 

 

Other adjustment items

 

1

 

 

 

(1

)

 

 

1

 

 

 

 

 

Resort and club segment adjusted EBITDA

$

119

 

 

$

61

 

 

$

220

 

 

$

103

 

 

Resort and club management segment adjusted EBITDA profit margin

 

39.3

%

 

 

57.0

%

 

 

38.5

%

 

 

55.1

%

 

 

Investors: Mark Melnyk 407-613-3327 mark.melnyk@hgv.com

Media: Lauren George 407-613-8431 lauren.george@hgv.com

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