Hilton Grand Vacations (HGV) - 2024 Q3 - Quarterly Report

Acquisition and Market Presence - The acquisition of Bluegreen Vacations Holding Corporation was completed on January 17, 2024, enhancing the company's portfolio and market presence[141]. - The company completed the acquisition of Bluegreen Vacations Holding Corporation for approximately $1.6 billion on January 17, 2024[183]. Property and Membership - As of September 30, 2024, the company operates approximately 200 properties across the U.S., Europe, the Caribbean, Mexico, Canada, and Asia, with a significant concentration in Florida, Europe, Hawaii, California, South Carolina, Arizona, Virginia, and Nevada[141]. - The company has approximately 722,000 members across its Club offerings, providing access to over 8,000 properties within the Hilton system and various experiential vacation options[141]. Financial Performance - Total revenues for the nine months ended September 30, 2024, were $3,697 million, a 24.9% increase from $2,959 million in the same period of 2023[156]. - Real estate sales and financing revenues for Q3 2024 reached $814 million, a 33.0% increase from $612 million in Q3 2023[156]. - Total segment revenues for Q3 2024 were $1,197 million, up 28.2% from $934 million in Q3 2023[156]. - Net income attributable to stockholders for the three months ended September 30, 2024, was $29 million, a decrease of 68.5% compared to $92 million for the same period in 2023[158]. - The company reported a net income of $32 million for the three months ended September 30, 2024, down 65.2% from $92 million in the same period of 2023[158]. Sales and Marketing Metrics - Contract sales increased to $777 million for the three months ended September 30, 2024, up 28.9% from $603 million in the same period of 2023[170]. - Tour flow increased to 227,790, up from 163,699 in the same period last year, reflecting a significant growth in customer engagement[170]. - Sales revenue for the three months ended September 30, 2024, reached $633 million, a 33.5% increase from $474 million in 2023[171]. Financing and Profitability - Financing propensity for the nine months ended September 30, 2024, was 69%, up from 62% in the same period of 2023[144]. - Financing profit margin is calculated as a percentage of financing profit to financing revenue, indicating the profitability of the financing business[153]. - Financing revenue increased by $30 million to $105 million for the three months ended September 30, 2024, representing a 40.0% growth from $75 million in 2023[173]. - Interest expense for the three months ended September 30, 2024, was $84 million, an increase of 86.7% from $45 million in the same period of 2023[158]. Operational Metrics - Real estate profit margin is considered an important non-GAAP operating measure, reflecting the efficiency of sales and marketing spending[153]. - The management agreements with HOAs provide for a cost-plus management fee, typically earning 10% to 15% of the costs to operate the applicable resort, ensuring predictable revenue streams[147]. - Adjusted EBITDA attributable to stockholders is a key measure used by management to evaluate operating performance, although it is not recognized under U.S. GAAP[150]. Expenses and Costs - Sales and marketing expense increased by 39.8% to $467 million in Q3 2024 from $334 million in Q3 2023[166]. - General and administrative expenses rose by 10.0% to $44 million in Q3 2024 from $40 million in Q3 2023[163]. - Depreciation and amortization expenses for the three months ended September 30, 2024, were $68 million, an increase of 28.3% from $53 million in the same period of 2023[158]. Cash Flow and Investments - Net cash used in investing activities was $1,514 million for the nine months ended September 30, 2024, compared to $47 million for the same period in 2023[189]. - Net cash provided by financing activities was $971 million for the nine months ended September 30, 2024, compared to net cash used of $270 million for the same period in 2023[190]. - The company had $308 million remaining borrowing capacity under the revolver facility as of September 30, 2024[184]. Other Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2024, increased by 14.1% to $307 million from $269 million in the same period of 2023[161]. - Total Adjusted EBITDA attributable to stockholders for the nine months ended September 30, 2024, was $838 million, up 14.0% from $735 million in the same period of 2023[161]. - Real estate profit increased by 4.4% to $167 million in Q3 2024 compared to $160 million in Q3 2023[163].