Hilton Grand Vacations (US:HGV)2022-05-08 16:00Company Operations - As of March 31, 2022, the company operates 154 properties across the U.S., Europe, Mexico, the Caribbean, Canada, and Japan, with approximately 335,000 Hilton Grand Vacations Club and Hilton Club members[185]. - The company operates approximately 60 sales distribution centers in various domestic and international locations, focusing on major markets and leisure destinations[197]. - The integration of Diamond properties into the Hilton brand is ongoing, with a phased rebranding process that began in late 2021[197]. Financial Performance - Total segment revenues for the three months ended March 31, 2022, were $779 million, a significant increase of $544 million compared to $235 million in the same period of 2021[215]. - Adjusted EBITDA for the three months ended March 31, 2022, was $202 million, a substantial increase of $160 million compared to $42 million in the same period of 2021[216]. - Net income for the three months ended March 31, 2022, was $51 million, compared to a net loss of $7 million in the same period of 2021, representing a positive variance of $58 million[216]. - The company reported a net income of $45 million for the three months ended March 31, 2022[265]. Contract Sales and Financing - For the three months ended March 31, 2022, contract sales from fee-for-service, just-in-time, developed inventory, and points-based sources were 25%, 14%, 19%, and 42% respectively[194]. - The estimated contract sales value related to inventory currently available for sale is approximately $13 billion at current pricing[194]. - Financing propensity for the three months ended March 31, 2022, was 65%, indicating the volume of financed contracts originated[198]. - Contract sales increased by $370 million for the three months ended March 31, 2022, reaching $509 million, primarily due to an increase in tour flow and average transaction prices[230]. Revenue Segments - Real estate sales and financing segment generated revenues of $452 million, up from $123 million year-over-year, reflecting a variance of $329 million[215]. - Resort operations and club management segment revenues increased by $188 million for the three months ended March 31, 2022, driven by increases in rental and ancillary revenue of $104 million and resort and club management revenue of $80 million[225]. - Financing profit increased by $21 million for the three months ended March 31, 2022, reaching $45 million, with financing revenue increasing by 73% to $64 million[234]. - Rental and ancillary services revenues increased by $104 million for the three months ended March 31, 2022, totaling $136 million, with rental revenues alone increasing by $94 million[240]. Cost and Expenses - Cost reimbursements increased by 88.6% to $66 million for the three months ended March 31, 2022, compared to $35 million in the same period of 2021[215]. - General and administrative expenses increased by $21 million for the three months ended March 31, 2022, primarily due to increased salaries and wages expenses[243]. - Acquisition and integration-related expenses slightly decreased to $13 million for the three months ended March 31, 2022, compared to $15 million in the same period in 2021[244]. Cash and Debt Management - As of March 31, 2022, the company had total cash and cash equivalents of $817 million, including $303 million of restricted cash[249]. - The company reported net cash provided by operating activities of $270 million for the three months ended March 31, 2022, an increase of $62 million compared to the same period in 2021[251]. - The company had $5,501 million in contractual obligations over 9 years as of March 31, 2022, with $581 million due in the remainder of 2022[259]. - The company had a remaining borrowing capacity of $699 million under its revolver facility as of March 31, 2022[249]. Securitization and Share Repurchase - A $246 million securitization of gross timeshare financing receivables was completed on April 21, 2022, with a weighted average interest rate of 4.30 percent[266]. - The Timeshare Facility borrowing capacity was increased from $450 million to $750 million on May 3, 2022, allowing borrowing until May 2024[267]. - The company approved a share repurchase program on May 4, 2022, authorizing the repurchase of up to $500 million of its outstanding shares[268]. Foreign Currency Exposure - The company is primarily exposed to foreign currency exchange rate risk, particularly from timeshare financing receivables in Japanese yen and Canadian dollars[274]. - Earnings and cash flow volatility may occur due to changes in foreign currency exchange rates[274]. - The reporting currency for the company is the U.S. dollar, which may lead to material changes in the value of foreign-denominated receivables[274].