Hilton Grand Vacations (HGV) - 2024 Q4 - Annual Report

Financial Performance - Total revenues for the year ended December 31, 2024, were $4.981 billion, up from $3.978 billion in 2023, representing a growth of 25.2%[472] - Net income attributable to stockholders decreased to $47 million in 2024 from $313 million in 2023, a decline of 85%[472] - The company reported a diluted earnings per share of $0.45 for 2024, down from $2.80 in 2023[472] - For the year ended December 31, 2024, net income decreased to $60 million from $313 million in 2023, representing a decline of approximately 80.8%[477] - The company reported pro forma revenue of $5,028 million for the year ended December 31, 2024, compared to $5,013 million for 2023, with net income of $66 million for 2024, down from $224 million in 2023[564] Assets and Liabilities - Total assets increased to $11.442 billion as of December 31, 2024, compared to $8.685 billion in 2023, reflecting a growth of 31.5%[470] - The company’s debt, net, increased to $4.601 billion in 2024 from $3.049 billion in 2023, an increase of 50.8%[470] - The company had over 200 properties located in various regions, including the U.S., Europe, and Asia, as of December 31, 2024[482] - The total gross carrying amount of intangible assets increased to $2,547 million as of December 31, 2024, up from $1,704 million in 2023, with a net carrying amount of $1,787 million after accumulated amortization of $760 million[612] Acquisitions - The company completed the acquisition of Bluegreen Vacations Holding Corporation for approximately $1.6 billion on January 17, 2024, expected to enhance offerings and customer reach[483] - The fair value of total assets acquired in the Bluegreen Acquisition was $2,515 million, while total liabilities assumed were $1,324 million, resulting in net assets acquired of $1,191 million[548] - Goodwill recorded in connection with the Bluegreen Acquisition amounted to $565 million, allocated to the Resort Operations and Club Management Segment ($142 million) and Real Estate Sales and Financing Segment ($423 million)[561] - The Grand Islander Acquisition was completed on December 1, 2023, for approximately $117 million, expanding the company's product offerings and providing upgrade opportunities for existing members[566] Financing and Debt - The company expects to secure fixed-rate funding to match its fixed-rate timeshare financing receivables while monitoring interest rate risk for any future variable-rate debt[427] - The company has variable-rate debt with a weighted average interest rate of 6.498%, totaling $2,841 million as of December 31, 2024[429] - Proceeds from debt in 2024 amounted to $2.758 billion, significantly higher than $758 million in 2023[477] - The company entered into a new $400 million senior secured term loan due January 2028, with a pricing of SOFR plus 1.75%[620] Revenue Recognition - The company recognizes revenue from prepaid vacation packages when customers stay at properties, including an estimate for expected breakage[491] - Revenue from annual dues for membership renewals is recognized over the period services are rendered, reflecting a steady income stream from club memberships[494] - The company recognizes management fees based on a percentage of costs to operate resorts, with fees recognized over time as services are consumed[495] Interest and Financing Receivables - The allowance for financing receivables losses as of December 31, 2024, was $1.1 billion, encompassing amounts from Legacy-HGV, Legacy-Diamond, and Legacy-Bluegreen operations[451] - The total originated timeshare financing receivables as of December 31, 2024, amounted to $2.932 billion, with a weighted-average interest rate of 14.9%[588] - The total acquired timeshare financing receivables as of December 31, 2024, was $1.084 billion, with a weighted-average interest rate of 15.0%[593] - The allowance for credit losses increased to $74 million in 2024 from $60 million in 2023, reflecting a 23.3% rise[581] Internal Controls and Compliance - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2024, excluding the operations of Bluegreen, which were acquired during the year[436] - The company maintained effective internal control over financial reporting as of December 31, 2024, based on COSO criteria[460] Cash Flow and Investments - Net cash provided by operating activities for 2024 was $309 million, slightly down from $312 million in 2023[477] - The company reported a net cash used in investing activities of $1.571 billion in 2024, compared to $158 million in 2023[477] - As of December 31, 2024, the company had investments in unconsolidated affiliates with a carrying amount of $73 million and received cash distributions of approximately $16 million from BRE Ace LLC[609][610] Expenses and Impairments - The acquisition and integration-related expenses for 2024 were $237 million, significantly higher than $68 million in 2023[472] - The company recognized a $2 million impairment for the year ended December 31, 2024, related to the closure of certain sales centers[603] - Amortization expense on intangible assets for the year ended December 31, 2024, was $216 million, compared to $163 million in 2023[613] Inventory and Assets Management - The total inventory as of December 31, 2024, was $2,244 million, up from $1,400 million in 2023, indicating a 60.3% growth[601] - The current balance of completed unsold Vacation Ownership Interests (VOIs) increased to $1,898 million in 2024 from $1,259 million in 2023, representing a 50.8% increase[601] - The company evaluates the carrying value of property and equipment for impairment, recognizing losses when expected future cash flows are less than the net book value[519]