Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 27, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Hilton Grand Vacations Inc. | |
Entity Central Index Key | 1,674,168 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 99,082,128 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 191 | $ 48 |
Restricted cash | 62 | 103 |
Accounts receivable, net of allowance for doubtful accounts of $10 and $6 | 123 | 123 |
Timeshare financing receivables, net | 1,034 | 1,025 |
Inventory | 492 | 513 |
Property and equipment, net | 255 | 256 |
Intangible assets, net | 71 | 70 |
Other assets | 59 | 42 |
TOTAL ASSETS (variable interest entities - $534 and $258) | 2,287 | 2,180 |
Liabilities: | ||
Accounts payable, accrued expenses and other | 265 | 231 |
Advanced deposits | 100 | 103 |
Debt | 486 | 490 |
Non-recourse debt | 645 | 694 |
Deferred revenues | 128 | 106 |
Deferred income tax liabilities | 380 | 389 |
Total liabilities (variable interest entities - $518 and $245) | 2,004 | 2,013 |
Commitments and contingencies - see Note 14 | ||
Equity: | ||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of June 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 99,082,128 issued and outstanding as of June 30, 2017 and 98,802,597 issued and outstanding as of December 31, 2016 | 1 | 1 |
Additional paid-in capital | 153 | 138 |
Accumulated retained earnings | 129 | 28 |
Total equity | 283 | 167 |
TOTAL LIABILITIES AND EQUITY | $ 2,287 | $ 2,180 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 10 | $ 6 |
Assets, variable interest entity | 534 | 258 |
Liabilities, variable interest entity | $ 518 | $ 245 |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 300,000,000 | 300,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common Stock, shares issued (in shares) | 99,082,128 | 98,802,597 |
Common Stock, shares outstanding (in shares) | 99,082,128 | 98,802,597 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Revenues | |||||
Sales of VOIs, net | $ 143,000,000 | $ 114,000,000 | $ 261,000,000 | $ 229,000,000 | |
Sales, marketing, brand and other fees | 144,000,000 | 128,000,000 | 274,000,000 | 246,000,000 | |
Financing | 36,000,000 | 34,000,000 | 71,000,000 | 66,000,000 | |
Resort and club management | 35,000,000 | 34,000,000 | 71,000,000 | 65,000,000 | |
Rental and ancillary services | 47,000,000 | 49,000,000 | 93,000,000 | 94,000,000 | |
Cost reimbursements | 34,000,000 | 32,000,000 | 68,000,000 | 61,000,000 | |
Total revenues | 439,000,000 | 391,000,000 | 838,000,000 | 761,000,000 | |
Expenses | |||||
Cost of VOI sales | 34,000,000 | 28,000,000 | 67,000,000 | 66,000,000 | |
Sales and marketing | 169,000,000 | 151,000,000 | 321,000,000 | 286,000,000 | |
Financing | 11,000,000 | 8,000,000 | 21,000,000 | 16,000,000 | |
Resort and club management | 10,000,000 | 8,000,000 | 20,000,000 | 16,000,000 | |
Rental and ancillary services | 31,000,000 | 30,000,000 | 58,000,000 | 56,000,000 | |
General and administrative | 29,000,000 | 21,000,000 | 52,000,000 | 37,000,000 | |
Depreciation and amortization | 7,000,000 | 6,000,000 | 14,000,000 | 11,000,000 | |
License fee expense | 23,000,000 | 20,000,000 | 43,000,000 | 39,000,000 | |
Cost reimbursements | 34,000,000 | 32,000,000 | 68,000,000 | 61,000,000 | |
Total operating expenses | 348,000,000 | 304,000,000 | 664,000,000 | 588,000,000 | |
Gain on foreign currency transactions | 0 | 1,000,000 | 0 | 1,000,000 | |
Allocated Parent interest expense | 0 | (7,000,000) | 0 | (13,000,000) | |
Interest expense | (7,000,000) | 0 | (14,000,000) | 0 | |
Other loss, net | 0 | (1,000,000) | 0 | (1,000,000) | |
Income before income taxes | 84,000,000 | 80,000,000 | 160,000,000 | 160,000,000 | |
Income tax expense | (33,000,000) | (33,000,000) | (59,000,000) | (65,000,000) | |
Net income | $ 50,828,907 | $ 47,400,289 | $ 101,041,522 | $ 95,069,102 | |
Earnings per share: | |||||
Earnings per share, Basic (in dollars per share) | [1] | $ 0.51 | $ 0.48 | $ 1.02 | $ 0.96 |
[1] | For the three and six months ended June 30, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ stockholders on January 3, 2017. See Note 11: Earnings Per Share for additional information. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Operating Activities | |||||
Net income | $ 50,828,907 | $ 47,400,289 | $ 101,041,522 | $ 95,069,102 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 7,000,000 | 6,000,000 | 14,000,000 | 11,000,000 | |
Amortization of deferred financing costs and other | 3,000,000 | 2,000,000 | |||
Provision for loan losses | 27,000,000 | 23,000,000 | |||
Other loss, net | 0 | (1,000,000) | 0 | (1,000,000) | |
Gain on foreign currency transactions | 0 | (1,000,000) | 0 | (1,000,000) | |
Share-based compensation | 8,000,000 | 0 | |||
Deferred income taxes | 1,000,000 | 1,000,000 | |||
Net changes in assets and liabilities: | |||||
Accounts receivables, net | 0 | (28,000,000) | |||
Timeshare financing receivables, net | (35,000,000) | (27,000,000) | |||
Inventory | 22,000,000 | 3,000,000 | |||
Purchase of assets for future conversion to inventory | 0 | (14,000,000) | |||
Other assets | (19,000,000) | (17,000,000) | |||
Accounts payable, accrued expenses and other | 36,000,000 | 11,000,000 | |||
Advanced deposits | (3,000,000) | 6,000,000 | |||
Deferred revenues | 22,000,000 | 20,000,000 | |||
Net cash provided by operating activities | 177,000,000 | 86,000,000 | |||
Investing Activities | |||||
Capital expenditures for property and equipment | (15,000,000) | (14,000,000) | |||
Software capitalization costs | (6,000,000) | (3,000,000) | |||
Net cash used in investing activities | (21,000,000) | (17,000,000) | |||
Financing Activities | |||||
Issuance of non-recourse debt | 350,000,000 | 0 | |||
Repayment of non-recourse debt | 395,000,000 | 58,000,000 | |||
Repayment of debt | (5,000,000) | 0 | |||
Repayment of debt | (5,000,000) | 0 | |||
Net transfers to Parent | 0 | (15,000,000) | |||
Proceeds from stock option exercises | 1,000,000 | 0 | |||
Net cash used in financing activities | (54,000,000) | (73,000,000) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 102,000,000 | (4,000,000) | |||
Cash, cash equivalents and restricted cash, beginning of period | 151,000,000 | 79,000,000 | $ 79,000,000 | ||
Cash, cash equivalents and restricted cash, end of period | $ 253,000,000 | $ 75,000,000 | 253,000,000 | 75,000,000 | $ 151,000,000 |
Non-cash financing activity | |||||
Transfer of inventory from Parent | 0 | 9,000,000 | |||
Transfer of property and equipment from Parent | $ 0 | $ 33,000,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity (UNAUDITED) - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | |
Shares, beginning balance at Dec. 31, 2016 | 98,802,597 | 99,000,000 | |||
Equity, beginning balance at Dec. 31, 2016 | $ 167,000,000 | $ 1,000,000 | $ 138,000,000 | $ 28,000,000 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 101,041,522 | 101,000,000 | |||
Deferred intercompany transaction | [1] | 9,000,000 | 9,000,000 | ||
Activity related to share-based compensation | $ 6,000,000 | 6,000,000 | |||
Shares, ending balance at Jun. 30, 2017 | 99,082,128 | 99,000,000 | |||
Equity, ending balance at Jun. 30, 2017 | $ 283,000,000 | $ 1,000,000 | 153,000,000 | 129,000,000 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 50,828,907 | ||||
Shares, ending balance at Jun. 30, 2017 | 99,082,128 | 99,000,000 | |||
Equity, ending balance at Jun. 30, 2017 | $ 283,000,000 | $ 1,000,000 | $ 153,000,000 | $ 129,000,000 | |
[1] | Refer to Note 9: Income Taxes for further discussion. |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Our Spin-off from Hilton Worldwide Holdings Inc. On January 3, 2017, the previously announced spin-off was completed by way of a pro rata distribution of Hilton Grand Vacations Inc.’s (“Hilton Grand Vacations,” “we,” “us,” “our,” “HGV” or the “Company”) common stock to Hilton Worldwide Holdings Inc. (“Former Hilton Parent” and together with its then consolidated subsidiaries, “Hilton”) stockholders. Each Hilton stockholder received one share of our common stock for every ten shares of Hilton common stock. As a result of the spin-off, we became a separate publicly-traded company on the New York Stock Exchange under the ticker symbol “HGV,” and Hilton did not retain any ownership interest in our company. In connection with the completion of the spin-off, we entered into agreements with Hilton (who at the time was a related party) and other third parties, including licenses to use the Hilton brand. The unaudited condensed consolidated financial statements reflect the effect of these agreements. For the three months ended June 30, 2017 and 2016 , we incurred $40 million and $44 million , respectively, and for the six months ended June 30, 2017 and 2016 , we incurred $98 million and $104 million , respectively, in costs relating to the agreements entered with Hilton. See Key Agreements Related to the Spin-Off section in Part I - Item 1. Business of our Annual Report on Form 10-K for the year ended December 31, 2016 for further information. Prior to the spin-off, Hilton maintained a share-based compensation plan for the benefit of its officers, directors and employees which was presented as a component of Net transfers (to) from Parent, a financing activity, on the condensed consolidated statements of cash flows. Subsequent to the spin-off, share-based compensation expense is presented as a component of operating activities on the condensed consolidated statements of cash flows. Our Business Hilton Grand Vacations is a global timeshare company engaged in developing, marketing, selling and managing timeshare resorts primarily under the Hilton Grand Vacations brand. Our operations primarily consist of: selling vacation ownership intervals (“VOIs”) for us and third parties; operating our resorts; financing and servicing loans provided to consumers for their timeshare purchases; and managing our points-based Hilton Grand Vacations Club exchange program (the “Club”). As of June 30, 2017 , we had 48 timeshare properties, comprised of 8,101 units, located in the United States (“U.S.”) and Europe. Basis of Presentation The unaudited condensed consolidated financial statements presented herein include 100 percent of our assets, liabilities, revenues, expenses and cash flows and all entities in which we have a controlling financial interest. Through the date of the spin-off, the unaudited condensed consolidated financial statements presented herein were prepared on a stand-alone basis and were derived from the unaudited consolidated financial statements and accounting records of Hilton. The unaudited condensed consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although we believe the disclosures made are adequate to prevent information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2016, included in our Annual Report on Form 10-K filed with the SEC on March 2, 2017. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Interim results are not necessarily indicative of full year performance. The accompanying unaudited condensed consolidated financial statements, in our opinion, reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions and balances have been eliminated in consolidation. We review our estimate of the expected redemption of expired prepaid discounted vacation packages (“packages”) on an ongoing basis. We only reduce the liability for expired packages when a package is redeemed or the likelihood of redemption is remote. This review considers factors such as historical experience, current business practices for pursuing individuals to redeem expired packages and the sufficiency and reliability of data available following a change in those redemption business practices. Previously, we concluded that redemption of an expired package was remote once a package has been expired for six months and therefore retained the liability until six months after expiration. During the review in the second quarter of 2017, we determined we now had sufficiently reliable updated information under current business practices to revise our estimate of expired packages that we expect to redeem. As a result, we changed our accounting estimate for expected redemptions of expired packages to relieve a portion of the remaining liability at expiration and recorded an $11 million reduction to the Advanced Deposits liability, with corresponding increases to Sales, marketing, brand and other fees revenue of $10 million and Accounts payable, accrued expenses and other for the related sales tax liability of $1 million . As a result, for the six months ended June 30, 2017, our net income increased by $10 million and basic and diluted earnings per share increased by $0.10 . |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 includes provisions intended to simplify several aspects of the accounting and presentation of share-based payments. These provisions include the recognition of the income tax effects of awards in the consolidated statement of operations when the awards vest or are settled, permitting an employer to withhold shares in an amount up to the employee’s maximum individual tax rate without resulting in liability classification of the award, permitting entities to make a policy election to account for forfeitures as they occur, and changes to the classification of tax-related cash flows resulting from share-based payments and cash payments made to taxing authorities on the employee’s behalf on the statement of cash flows. This ASU 2016-09 was effective for reporting periods beginning after December 15, 2016. We adopted ASU 2016-09 retrospectively as of January 1, 2017 and have applied to all periods herein with no material impact to our unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, (“ASU 2016-18”) Statement of Cash Flows (Topic 230): Restricted Cash. This ASU is intended to provide guidance on the presentation of restricted cash or restricted cash equivalents and reduce the diversity in practice. This ASU requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts on the statement of cash flows. We elected, as permitted by the standard, to early adopt ASU 2016-18 retrospectively as of January 1, 2017 and have applied it to all periods presented herein. The adoption of ASU 2016-18 did not have a material impact to our unaudited condensed consolidated financial statements. The effect of the adoption of ASU 2016-18 on our condensed consolidated statements of cash flows was to include restricted cash balances in the beginning and end of period balances of cash and cash equivalent and restricted cash. The change in restricted cash was previously disclosed in operating activities and financing activities in the condensed consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 804): Clarifying the Definition of a Business . This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. We elected, as permitted by the standard, to early adopt ASU 2017-01 prospectively as of January 1, 2017. The adoption of ASU 2017-01 did not have a material impact to our unaudited condensed consolidated financial statements. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606) . This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) , and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB has issued several related ASUs amending the original ASU. The provisions of this ASU are to be applied retrospectively or using a modified retrospective approach for reporting periods beginning after December 15, 2017. We are currently evaluating the effect that this ASU will have on our consolidated financial statements by analyzing both transactional and analytical data for each of our revenue streams. The following is a status of our evaluation of impacts by significant revenue stream: • Sales of VOIs, net - We do not expect material changes to our accounting for Sales of VOIs, net, including the accounting for uncollectible timeshare financing receivables. We are still evaluating the impact on revenue recognition for sales of VOIs that are under construction. • Sales, marketing, brand and other fees - We expect changes to gross versus net presentation of certain non-cash first day incentives. We do not expect material changes to our accounting for our commissions, brand and other fees under fee-for-service arrangements. We are still evaluating impacts to certain marketing revenue streams, including sales of marketing preview packages. • Financing - We do not expect material changes to our accounting for financing revenues, as these revenues are out of the scope of Topic 606. • Resort and club management - We do not expect material changes to our accounting for ongoing management fees from our homeowners’ association management agreements and the fees earned from our Club members. • Rental and ancillary services - We do not expect significant changes to our revenue recognition of transient guest transactions, including rental and ancillary services. • Cost reimbursements - While we do not expect significant changes to the timing of recognition of cost reimbursements, we are still evaluating potential impacts to changes in presentation. We will continue to evaluate and disclose expected impacts that ASU 2014-09 will have on our unaudited condensed consolidated financial statements as more information becomes available. A determination as to whether we will apply the retrospective or modified retrospective adoption method will be made once our qualitative evaluation is complete and we commence quantifying the expected impacts later this year. In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The provisions of this ASU are effective for reporting periods beginning after December 15, 2017; early adoption is permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-03 (“ASU 2017-03”), Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323) . ASU 2017-03 requires registrants to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. The SEC staff expects the additional qualitative disclosures to include a description of the effect of the accounting policies that the registrant expects to apply, if determined, and a comparison to the registrant’s current accounting policies. In addition, a registrant should describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed. ASU 2017-03 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. |
Restricted Cash
Restricted Cash | 6 Months Ended |
Jun. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash Restricted cash was as follows: June 30, December 31, ($ in millions) 2017 2016 Escrow deposits on VOI sales $ 38 $ 81 Reserves related to non-recourse debt (1) 24 22 $ 62 $ 103 ____________ (1) See Note 7 : Debt & Non-recourse debt for further discussion. |
Timeshare Financing Receivables
Timeshare Financing Receivables | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Timeshare Financing Receivables | Timeshare Financing Receivables Timeshare financing receivables were as follows: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 541 $ 623 $ 1,164 Less: allowance for loan loss (33 ) (97 ) (130 ) $ 508 $ 526 $ 1,034 December 31, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 253 $ 892 $ 1,145 Less: allowance for loan loss (9 ) (111 ) (120 ) $ 244 $ 781 $ 1,025 The interest rate charged on the notes correlates to the risk profile of the borrower at the time of purchase and the percentage of the purchase that is financed, among other factors. As of June 30, 2017 , our timeshare financing receivables had interest rates ranging from 5.3 percent to 20.5 percent, a weighted average interest rate of 12.1 percent, a weighted average remaining term of 7.6 years and maturities through 2028 . We pledge a portion of our timeshare financing receivables as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Timeshare Facility”) with a borrowing capacity of $450 million . As of June 30, 2017 and December 31, 2016 , we had $148 million and $509 million , respectively, of gross timeshare financing receivables securing the Timeshare Facility. We recognize interest income on our timeshare financing receivables as earned. We record an estimate of uncollectibility as a reduction of revenue from VOI sales at the time revenue is recognized on a VOI sale. In March 2017, we completed a securitization of approximately $357 million of gross timeshare financing receivables and issued approximately $291 million of 2.66 percent notes and approximately $59 million of 2.96 percent notes, which have a stated maturity date of December 2028. The securitization transactions did not qualify as sales and, accordingly, no gain or loss was recognized. The transaction is considered a secured borrowing; therefore, the proceeds from the transaction are presented as non-recourse debt (collectively, the “Securitized Debt”). See Note 7 : Debt & Non-recourse debt for further discussion. Our timeshare financing receivables as of June 30, 2017 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2017 (remaining) $ 39 $ 39 $ 78 2018 79 52 131 2019 78 56 134 2020 75 61 136 2021 69 64 133 Thereafter 201 351 552 541 623 1,164 Less: allowance for loan loss (33 ) (97 ) (130 ) $ 508 $ 526 $ 1,034 We evaluate this portfolio collectively, since we hold a large group of homogeneous timeshare financing receivables, which are individually immaterial. We monitor the credit quality of our receivables on an ongoing basis. There are no significant concentrations of credit risk with any individual counterparty or groups of counterparties. We use a technique referred to as static pool analysis as the basis for determining our loan loss reserve requirements on our timeshare financing receivables. For static pool analysis, we use certain key dimensions to stratify our portfolio, including FICO scores, equity percentage at the time of sale and certain other factors. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. Our gross timeshare financing receivables balances by FICO score were as follows: June 30, December 31, ($ in millions) 2017 2016 FICO score 700+ $ 746 $ 725 600-699 216 211 <600 28 28 No score (1) 174 181 $ 1,164 $ 1,145 ____________ (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. We apply payments we receive for loans, including those in non-accrual status, to amounts due in the following order: servicing fees; interest; principal; and late charges. Once a loan is 91 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 91 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the loan is 121 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process is complete and we receive the deed for the foreclosed unit. As of June 30, 2017 and December 31, 2016 , we had ceased accruing interest on timeshare financing receivables with an aggregate principal balance of $46 million and $38 million , respectively. The following tables detail an aged analysis of our gross timeshare financing receivables balance: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 530 $ 575 $ 1,105 31 - 90 days past due 6 7 13 91 - 120 days past due 2 2 4 121 days and greater past due 3 39 42 $ 541 $ 623 $ 1,164 December 31, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 248 $ 847 $ 1,095 31 - 90 days past due 3 9 12 91 - 120 days past due 1 4 5 121 days and greater past due 1 32 33 $ 253 $ 892 $ 1,145 The changes in our allowance for loan loss were as follows: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Balance as of December 31, 2016 $ 9 $ 111 $ 120 Write-offs — (17 ) (17 ) Securitization 28 (28 ) — Provision for loan loss (1) (4 ) 31 27 Balance as of June 30, 2017 $ 33 $ 97 $ 130 June 30, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Balance as of December 31, 2015 $ 17 $ 89 $ 106 Write-offs — (17 ) (17 ) Provision for loan loss (1) (4 ) 27 23 Balance as of June 30, 2016 $ 13 $ 99 $ 112 ____________ (1) Includes activity related to repurchase of defaulted and upgraded securitized timeshare financing receivables, net of incremental provision for loan loss. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory was as follows: June 30, December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 220 $ 233 Construction in process 14 20 Land, infrastructure and other 258 260 $ 492 $ 513 We benefited from $3 million in costs of sales true-ups relating to VOI products for the six months ended June 30, 2017 , which resulted in a $3 million increase to the carrying value of inventory as of June 30, 2017 . We benefited from $10 million in costs of sales true-ups relating to VOI products for the year ended December 31, 2016 , which resulted in a $10 million increase to the carrying value of inventory as of December 31, 2016 . Shown below are expenses incurred, recorded in Cost of VOI sales , related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects. Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Cost of VOI sales related to fee-for-service upgrades $ 9 $ 14 $ 20 $ 24 |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities As of June 30, 2017 and December 31, 2016 , we consolidated three and two variable interest entities ("VIEs"), respectively, that issued Securitized Debt, backed by pledged assets consisting primarily of a pool of timeshare financing receivables, which is without recourse to us. We are the primary beneficiaries of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. We are also the servicer of these timeshare financing receivables and we are required to replace or repurchase timeshare financing receivables that are in default at their outstanding principal amounts. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. Only assets of our VIEs are available to settle the obligations of the respective entities. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: June 30, December 31, ($ in millions) 2017 2016 Restricted cash $ 21 $ 10 Timeshare financing receivables, net 508 244 Non-recourse debt (1) 517 244 ____________ (1) Net of deferred financing costs. During the six months ended June 30, 2017 and 2016 , we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future. |
Debt & Non-recourse debt
Debt & Non-recourse debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt & Non-recourse debt | Debt & Non-recourse debt Debt The following table details our outstanding debt balance and its associated interest rates: June 30, December 31, ($ in millions) 2017 2016 Debt (1) Senior secured credit facilities: Term loan with an average rate of 3.47%, due 2021 $ 195 $ 200 Senior notes with a rate of 6.125%, due 2024 300 300 495 500 Less: unamortized deferred financing costs and discount (2)(3) (9 ) (10 ) $ 486 $ 490 ____________ (1) For the six months ended June 30, 2017 and year ended December 31, 2016 , weighted average interest rates were 5.081 percent and 4.851 percent , respectively. (2) Amount includes deferred financing costs of $2 million and $7 million as of June 30, 2017 and $2 million and $8 million as of December 31, 2016 , relating to our term loan and senior notes, respectively. (3) Amount does not include deferred financing costs of $2 million as of June 30, 2017 and December 31, 2016 , relating to our revolving facility included in Other Assets in our condensed consolidated balance sheets. We were in compliance with all applicable financial covenants as of June 30, 2017 . Non-recourse Debt The following table details our outstanding non-recourse debt balance and its associated interest rates: June 30, December 31, ($ in millions) 2017 2016 Non-recourse debt (1) Timeshare Facility with an average rate of 2.36%, due 2019 $ 128 $ 450 Securitized Debt with an average rate of 2.42%, due 2028 523 246 651 696 Less: unamortized deferred financing costs (2) (6 ) (2 ) $ 645 $ 694 __________ (1) For the six months ended June 30, 2017 and year ended December 31, 2016 , weighted average interest rates were 2.410 percent and 1.946 percent , respectively. (2) Amount relates to securitized debt only and does not include deferred financing costs of $2 million as of June 30, 2017 and $3 million as of December 31, 2016 , relating to our Timeshare Facility included in Other Assets in our condensed consolidated balance sheets. The Timeshare Facility is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral and related assets. In March 2017, we completed a securitization of approximately $357 million of gross timeshare financing receivables and issued approximately $291 million of 2.66 percent notes and $59 million of 2.96 percent notes due December 2028. The Securitized Debt is backed by pledged assets, consisting primarily of a pool of timeshare financing receivables secured by first mortgages or deeds of trust on timeshare interests. The Securitized Debt is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral to the debt. We are required to deposit payments received from customers on the timeshare financing receivables securing the Timeshare Facility and Securitized Debt into depository accounts maintained by third parties. On a monthly basis, the depository accounts are utilized to make required principal, interest and other payments due under the respective loan agreements. The balances in the depository accounts as of June 30, 2017 and December 31, 2016 were $ 24 million and $ 22 million , respectively, and were included in Restricted cash in our condensed consolidated balance sheets . Debt Maturities The contractual maturities of our debt and non-recourse debt as of June 30, 2017 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2017 (remaining) $ 5 $ 61 $ 66 2018 10 126 136 2019 10 230 240 2020 10 122 132 2021 160 34 194 Thereafter 300 78 378 $ 495 $ 651 $ 1,146 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying amounts and estimated fair values of our financial assets and liabilities were as follows: June 30, 2017 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,034 $ — $ 1,299 Liabilities: Debt (2) 486 325 201 Non-recourse debt (2) 645 — 646 December 31, 2016 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,025 $ — $ 1,147 Liabilities: Debt (2) 490 314 200 Non-recourse debt (2) 694 — 696 ____________ (1) Carrying amount net of allowance for loan loss. (2) Carrying amount net of unamortized deferred financing costs and discount. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. The table above excludes cash and cash equivalents, restricted cash, accounts receivable, accounts payable, advance deposits and accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. The estimated fair values of our timeshare financing receivables were determined using a discounted cash flow model. Our model incorporates default rates, coupon rates, credit quality and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. The estimated fair values of our Level 1 debt was based on prices in active debt markets. The estimated fair value of our Level 3 debt and non-recourse debt were as follows: • Debt - based on indicative quotes obtained for similar issuances and projected future cash flows discounted at risk-adjusted rates. • Non-recourse debt - based on projected future cash flows discounted at risk-adjusted rates. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each quarter, we estimate the effective tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of pre-tax income or loss, which is subject to federal, foreign, state and local income taxes. The effective income tax rate for the six months ended June 30, 2017 and 2016 was approximately 37 percent and 40 percent , respectively, which decreased primarily due to a decrease in cumulative installment sale interest liability, partially offset by an increase in the cumulative effect of a change in the state effective tax rate. The Company was a party to several intercompany asset transfers with Hilton prior to the spin-off. As required under U.S. tax regulations, the gain resulting from the intercompany transfer of these assets should be deferred and no deferred tax asset or liability should be recognized until a recognition event occurs. On January 3, 2017, Hilton executed a tax-free spin-off of the Company, which met the requirement of a recognition event. On the spin-off date, for the assets transferred, we recognized a stepped up tax basis, re-measured the asset by applying applicable tax rate changes and evaluated the realizability of the asset. This resulted in a reduction to our net deferred tax liability and an increase in our Additional paid-in capital of $9 million on our condensed consolidated balance sheet as of June 30, 2017 . |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Stock Plan We issue time-vesting restricted stock units ("RSUs") and nonqualified stock options ("options") to certain employees. All performance shares that were issued under the Stock Plan of our former Parent, Hilton, were converted to RSUs as of December 31, 2016 . We recognized share-based compensation expense of $ 5 million and $ 3 million during the three months ended June 30, 2017 and 2016 , respectively and $ 8 million and $ 5 million during the six months ended June 30, 2017 and 2016 , respectively. As of June 30, 2017 , unrecognized compensation costs for unvested awards were approximately $ 17 million , which is expected to be recognized over a weighted average period of 2.2 years. As of June 30, 2017 , there were 7,806,023 shares of common stock available for future issuance. RSUs During the six months ended June 30, 2017 , we issued 487,718 RSUs with a weighted average grant date fair value of $ 28.64 , which generally vest 25 percent in the first year, 25 percent in the second year and 50 percent in the third year from the date of grant. Options During the six months ended June 30, 2017 , we issued 669,658 options with a grant date fair value of $8.66 and an exercise price of $ 28.30 , which generally vest 25 percent in the first year, 25 percent in the second year and 50 percent in the third year from the date of grant. The grant date fair value of each of these option grants was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 26.3 % Dividend yield (2) — % Risk-free rate (3) 2.3 % Expected term (in years) (4) 6.0 ____________ (1) Due to limited trading history for Hilton Grand Vacations’ common stock, we did not have sufficient information available on which to base a reasonable and supportable estimate of the expected volatility of our share price. As a result, we used a weighted-average of the implied volatility and the average historical volatility of our peer group over a time period consistent with its expected term assumption. Our peer group was determined based upon companies in our industry with similar business models and is consistent with those used to benchmark its executive compensation. (2) At the date of grant we had no plans to pay dividends during the expected term of these options. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. As of June 30, 2017 , we had 169,926 options outstanding that were exercisable. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the calculation of our basic and diluted earnings per share ("EPS"). The weighted average shares outstanding for the three and six months ended June 30, 2016 reflect 98,802,597 shares distributed on January 3, 2017, our spin-off date, to our stockholders. See Note 1 : Organization and Basis of Presentation for further discussion. The weighted average shares outstanding used to compute basic EPS and diluted EPS for the three months ended June 30, 2017 is 98,959,438 and 99,529,301 , respectively and for the six months ended June 30, 2017 is 98,881,494 and 99,442,829 , respectively. Three Months Ended June 30, Six Months Ended June 30, ($ and shares outstanding in millions, except per share amounts) 2017 2016 2017 2016 Basic EPS: Numerator: Net Income (1) $ 51 $ 47 $ 101 $ 95 Denominator: Weighted average shares outstanding 99 99 99 99 Basic EPS $ 0.51 $ 0.48 $ 1.02 $ 0.96 Diluted EPS: Numerator: Net Income (1) $ 51 $ 47 $ 101 $ 95 Denominator: Weighted average shares outstanding 100 99 99 99 Diluted EPS $ 0.51 $ 0.48 $ 1.02 $ 0.96 ____________ (1) Net income for the three months ended June 30, 2017 and 2016 was $50,828,907 and $47,400,289 , respectively, and for the six months ended June 30, 2017 and 2016 was $101,041,522 and $95,069,102 , respectively. The dilutive effect of outstanding share-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period. For the three and six months ended June 30, 2017 , we excluded 295,316 and 399,194 share-based compensation awards because their effect would have been anti-dilutive under the treasury stock method. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Relationship Between HGV and Hilton after the Spin-Off On January 3, 2017, when the spin-off was completed, Hilton and Park ceased to be related parties of HGV. In connection with the spin-off, we entered into certain agreements with Hilton (who at the time was a related party) and other third parties. See Key Agreements Related to the Spin-Off section in Part I - Item 1. Business of our Annual Report on Form 10-K for the year ended December 31, 2016 for further information. HNA Tourism Group Co., Ltd. On March 15, 2017, Blackstone completed the previously announced sale of 24,750,000 shares of our common stock to HNA Tourism Group Co., Ltd. (“HNA”), representing approximately 25 percent of the outstanding shares of our common stock. In connection with the consummation of the sale, we adopted our amended and restated by-laws, effective March 15, 2017, to remove references to Blackstone’s ownership of at least 40 percent of the total voting power of our common stock and revised certain provisions referencing the Blackstone Stockholders Agreement, as appropriate, to include references to the HNA Stockholder Agreement. The Blackstone Group As of March 31, 2017, Blackstone held 15,008,689 shares, or approximately 15 percent of our outstanding common stock. On May 25, 2017, The Blackstone Group L.P. ("Blackstone") filed a Registration Statement on Form S-1 and registered all of our common stock held by them. On June 14, 2017, Blackstone entered into an underwriting agreement with J.P. Morgan Securities LLC pursuant to which J.P. Morgan Securities LLC agreed to purchase from Blackstone 9,650,000 shares of our common stock at a price of $35.40 per share. The sale was completed on June 20, 2017. We did not receive any proceeds from the sale. As of June 30, 2017, Blackstone held approximately five percent of the outstanding shares of our common stock. The following table summarizes amounts included in our condensed consolidated statements of operations related to a fee-for-service arrangement with a Blackstone affiliate to sell VOIs on their behalf: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Commission and other fees $ 42 $ 44 $ 93 $ 88 Also related to the fee-for-service agreement, as of June 30, 2017 and December 31, 2016, we recognized receivables of $8 million and $20 million , respectively. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We operate our business through the following two segments: • Real estate sales and financing – We market and sell VOIs that we own. We also source VOIs through fee-for-service agreements with third-party developers. Related to the sales of the VOIs that we own, we provide consumer financing, which includes interest income generated from the origination of consumer loans to customers to finance their purchase of VOIs and revenue from servicing the loans. We also generate fee revenue from servicing the loans provided by third-party developers to purchasers of their VOIs. • Resort operations and club management – We manage the Club, earn activation fees, annual dues and transaction fees from member exchanges for other vacation products. We earn fees for managing the timeshare properties. We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges under our Club program. We also earn revenue from food and beverage, retail and spa outlets at our timeshare properties. The performance of our operating segments is evaluated primarily based on adjusted earnings before interest expense, taxes, depreciation and amortization ("EBITDA"). We define Adjusted EBITDA as EBITDA which has been further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) asset dispositions; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) reorganization costs, including severance and relocation costs; (vi) share-based and other compensation expenses; (vii) costs related to the spin-off; and (viii) other items. During the first quarter of 2017, we revised our definition of EBITDA to exclude the adjustment of interest expense relating to our non-recourse debt as a reconciling item to arrive at net income (loss) in order to conform to the presentation of the timeshare industry following the consummation of the spin-off from Hilton. This adjustment was retrospectively applied to prior period(s) to conform with the current presentation. The following table presents revenues for our reportable segments reconciled to consolidated amounts: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Revenues: Real estate sales and financing (1) $ 323 $ 276 $ 606 $ 542 Resort operations and club management (2) 92 89 180 170 Total segment revenues 415 365 786 712 Cost reimbursements 34 32 68 61 Intersegment eliminations (1)(2)(3) (10 ) (6 ) (16 ) (12 ) Total revenues $ 439 $ 391 $ 838 $ 761 ____________ (1) Includes charges of $ 1 million to the resort operations and club management segment for billing and collection services provided by the real estate sales and financing segment for the six months ended June 30, 2016 . There were no charges for the three months ended June 30, 2016 or for the three and six months ended June 30, 2017 . (2) Includes charges to the real estate sales and financing segment from the resort operations and club management segment for discounted stays at properties resulting from marketing packages. These charges totaled $ 10 million and $ 6 million for the three months ended June 30, 2017 and 2016 , respectively, and $ 16 million and $ 11 million for the six months ended June 30, 2017 and 2016 , respectively. (3) Includes charges to the real estate sales and financing segment from the resort operations and club management segment for the rental of model units to show prospective buyers. These charges totaled less than $1 million for each of the three and six months ended June 30, 2017 and 2016 . The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Adjusted EBITDA: Real estate sales and financing (1) $ 99 $ 84 $ 182 $ 165 Resort operations and club management (1) 52 51 103 97 Segment Adjusted EBITDA 151 135 285 262 General and administrative (29 ) (21 ) (52 ) (37 ) Depreciation and amortization (7 ) (6 ) (14 ) (11 ) License fee expense (23 ) (20 ) (43 ) (39 ) Other loss, net — 1 — 1 Gain on foreign currency transactions — (1 ) — (1 ) Allocated Parent interest expense (2) — (7 ) — (13 ) Interest expense (7 ) — (14 ) — Income tax expense (33 ) (33 ) (59 ) (65 ) Other adjustment items (1 ) (1 ) (2 ) (2 ) Net income $ 51 $ 47 $ 101 $ 95 ____________ (1) Includes intersegment eliminations. Refer to our table presenting revenues by reportable segment above for additional discussion. (2) This amount represents interest expense on an unconditional obligation to guarantee certain Hilton allocated debt balances which were released in November 2016. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have entered into certain arrangements with developers whereby we have committed to purchase vacation ownership units at a future date to be marketed and sold under our Hilton Grand Vacations brand. As of June 30, 2017 , we were committed to purchase approximately $ 212 million of inventory and land over a period of five years. The ultimate amount and timing of the acquisitions is subject to change pursuant to the terms of the respective arrangements, which could also allow for cancellation in certain circumstances. During the six months ended June 30, 2017 and 2016 , we purchased $4 million and $ 11 million , respectively, of VOI inventory as required under our commitments. As of June 30, 2017 , our remaining obligation pursuant to these arrangements was expected to be incurred as follows: $4 million in 2017 , $3 million in 2018 , $187 million in 2019 , $9 million in 2020 , and $9 million in 2021 . We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of June 30, 2017 , will not have a material effect on our condensed consolidated results of operations, financial position or cash flows. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 18, 2017, we entered into an agreement with BRE Ace Holdings LLC, a Delaware limited liability company ("BRE Ace Holdings"), an affiliate of Blackstone Real Estate Partners VIII, which is an affiliate of Blackstone and formed BRE Ace LLC. Pursuant to the agreement, we contributed $40 million in cash for a 25 percent interest in BRE Ace LLC, which owns, a 1,201 -key timeshare resort property and related operations, commonly known as “Elara, by Hilton Grand Vacations,” located in Las Vegas Nevada. The Company's investment in BRE Ace LLC will be accounted for under equity method of accounting. |
Recently Issued Accounting Pr22
Recently Issued Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements presented herein include 100 percent of our assets, liabilities, revenues, expenses and cash flows and all entities in which we have a controlling financial interest. Through the date of the spin-off, the unaudited condensed consolidated financial statements presented herein were prepared on a stand-alone basis and were derived from the unaudited consolidated financial statements and accounting records of Hilton. The unaudited condensed consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Although we believe the disclosures made are adequate to prevent information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2016, included in our Annual Report on Form 10-K filed with the SEC on March 2, 2017. |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Interim results are not necessarily indicative of full year performance. The accompanying unaudited condensed consolidated financial statements, in our opinion, reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions and balances have been eliminated in consolidation. |
Recently Issued Accounting Pronouncements Adopted and Not Yet Adopted | Recently Issued Accounting Pronouncements Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 includes provisions intended to simplify several aspects of the accounting and presentation of share-based payments. These provisions include the recognition of the income tax effects of awards in the consolidated statement of operations when the awards vest or are settled, permitting an employer to withhold shares in an amount up to the employee’s maximum individual tax rate without resulting in liability classification of the award, permitting entities to make a policy election to account for forfeitures as they occur, and changes to the classification of tax-related cash flows resulting from share-based payments and cash payments made to taxing authorities on the employee’s behalf on the statement of cash flows. This ASU 2016-09 was effective for reporting periods beginning after December 15, 2016. We adopted ASU 2016-09 retrospectively as of January 1, 2017 and have applied to all periods herein with no material impact to our unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, (“ASU 2016-18”) Statement of Cash Flows (Topic 230): Restricted Cash. This ASU is intended to provide guidance on the presentation of restricted cash or restricted cash equivalents and reduce the diversity in practice. This ASU requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts on the statement of cash flows. We elected, as permitted by the standard, to early adopt ASU 2016-18 retrospectively as of January 1, 2017 and have applied it to all periods presented herein. The adoption of ASU 2016-18 did not have a material impact to our unaudited condensed consolidated financial statements. The effect of the adoption of ASU 2016-18 on our condensed consolidated statements of cash flows was to include restricted cash balances in the beginning and end of period balances of cash and cash equivalent and restricted cash. The change in restricted cash was previously disclosed in operating activities and financing activities in the condensed consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 804): Clarifying the Definition of a Business . This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. We elected, as permitted by the standard, to early adopt ASU 2017-01 prospectively as of January 1, 2017. The adoption of ASU 2017-01 did not have a material impact to our unaudited condensed consolidated financial statements. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606) . This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) , and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB has issued several related ASUs amending the original ASU. The provisions of this ASU are to be applied retrospectively or using a modified retrospective approach for reporting periods beginning after December 15, 2017. We are currently evaluating the effect that this ASU will have on our consolidated financial statements by analyzing both transactional and analytical data for each of our revenue streams. The following is a status of our evaluation of impacts by significant revenue stream: • Sales of VOIs, net - We do not expect material changes to our accounting for Sales of VOIs, net, including the accounting for uncollectible timeshare financing receivables. We are still evaluating the impact on revenue recognition for sales of VOIs that are under construction. • Sales, marketing, brand and other fees - We expect changes to gross versus net presentation of certain non-cash first day incentives. We do not expect material changes to our accounting for our commissions, brand and other fees under fee-for-service arrangements. We are still evaluating impacts to certain marketing revenue streams, including sales of marketing preview packages. • Financing - We do not expect material changes to our accounting for financing revenues, as these revenues are out of the scope of Topic 606. • Resort and club management - We do not expect material changes to our accounting for ongoing management fees from our homeowners’ association management agreements and the fees earned from our Club members. • Rental and ancillary services - We do not expect significant changes to our revenue recognition of transient guest transactions, including rental and ancillary services. • Cost reimbursements - While we do not expect significant changes to the timing of recognition of cost reimbursements, we are still evaluating potential impacts to changes in presentation. We will continue to evaluate and disclose expected impacts that ASU 2014-09 will have on our unaudited condensed consolidated financial statements as more information becomes available. A determination as to whether we will apply the retrospective or modified retrospective adoption method will be made once our qualitative evaluation is complete and we commence quantifying the expected impacts later this year. In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The provisions of this ASU are effective for reporting periods beginning after December 15, 2017; early adoption is permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-03 (“ASU 2017-03”), Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323) . ASU 2017-03 requires registrants to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. The SEC staff expects the additional qualitative disclosures to include a description of the effect of the accounting policies that the registrant expects to apply, if determined, and a comparison to the registrant’s current accounting policies. In addition, a registrant should describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed. ASU 2017-03 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the effect that this ASU will have on our consolidated financial statements. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Restricted Cash | Restricted cash was as follows: June 30, December 31, ($ in millions) 2017 2016 Escrow deposits on VOI sales $ 38 $ 81 Reserves related to non-recourse debt (1) 24 22 $ 62 $ 103 ____________ (1) See Note 7 : Debt & Non-recourse debt for further discussion. |
Timeshare Financing Receivabl24
Timeshare Financing Receivables (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Schedule of financing receivables | Timeshare financing receivables were as follows: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 541 $ 623 $ 1,164 Less: allowance for loan loss (33 ) (97 ) (130 ) $ 508 $ 526 $ 1,034 December 31, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 253 $ 892 $ 1,145 Less: allowance for loan loss (9 ) (111 ) (120 ) $ 244 $ 781 $ 1,025 |
Schedule of future payments due from financing receivables | Our timeshare financing receivables as of June 30, 2017 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2017 (remaining) $ 39 $ 39 $ 78 2018 79 52 131 2019 78 56 134 2020 75 61 136 2021 69 64 133 Thereafter 201 351 552 541 623 1,164 Less: allowance for loan loss (33 ) (97 ) (130 ) $ 508 $ 526 $ 1,034 |
Schedule of financing receivables by FICO score | Our gross timeshare financing receivables balances by FICO score were as follows: June 30, December 31, ($ in millions) 2017 2016 FICO score 700+ $ 746 $ 725 600-699 216 211 <600 28 28 No score (1) 174 181 $ 1,164 $ 1,145 ____________ (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. |
Schedule of past due financing receivables | The following tables detail an aged analysis of our gross timeshare financing receivables balance: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 530 $ 575 $ 1,105 31 - 90 days past due 6 7 13 91 - 120 days past due 2 2 4 121 days and greater past due 3 39 42 $ 541 $ 623 $ 1,164 December 31, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 248 $ 847 $ 1,095 31 - 90 days past due 3 9 12 91 - 120 days past due 1 4 5 121 days and greater past due 1 32 33 $ 253 $ 892 $ 1,145 |
Schedule of change in allowance for loan loss | The changes in our allowance for loan loss were as follows: June 30, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Balance as of December 31, 2016 $ 9 $ 111 $ 120 Write-offs — (17 ) (17 ) Securitization 28 (28 ) — Provision for loan loss (1) (4 ) 31 27 Balance as of June 30, 2017 $ 33 $ 97 $ 130 June 30, 2016 ($ in millions) Securitized and Pledged Unsecuritized Total Balance as of December 31, 2015 $ 17 $ 89 $ 106 Write-offs — (17 ) (17 ) Provision for loan loss (1) (4 ) 27 23 Balance as of June 30, 2016 $ 13 $ 99 $ 112 ____________ (1) Includes activity related to repurchase of defaulted and upgraded securitized timeshare financing receivables, net of incremental provision for loan loss. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, current | Shown below are expenses incurred, recorded in Cost of VOI sales , related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects. Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Cost of VOI sales related to fee-for-service upgrades $ 9 $ 14 $ 20 $ 24 Inventory was as follows: June 30, December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 220 $ 233 Construction in process 14 20 Land, infrastructure and other 258 260 $ 492 $ 513 |
Schedule of inventory, noncurrent | Inventory was as follows: June 30, December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 220 $ 233 Construction in process 14 20 Land, infrastructure and other 258 260 $ 492 $ 513 Shown below are expenses incurred, recorded in Cost of VOI sales , related to granting credit to customers for their existing ownership when upgrading into fee-for-service projects. Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Cost of VOI sales related to fee-for-service upgrades $ 9 $ 14 $ 20 $ 24 |
Consolidated Variable Interes26
Consolidated Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Consolidated Variable Interest Entities | Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: June 30, December 31, ($ in millions) 2017 2016 Restricted cash $ 21 $ 10 Timeshare financing receivables, net 508 244 Non-recourse debt (1) 517 244 ____________ (1) Net of deferred financing costs. |
Debt & Non-recourse debt (Table
Debt & Non-recourse debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding borrowings | The following table details our outstanding non-recourse debt balance and its associated interest rates: June 30, December 31, ($ in millions) 2017 2016 Non-recourse debt (1) Timeshare Facility with an average rate of 2.36%, due 2019 $ 128 $ 450 Securitized Debt with an average rate of 2.42%, due 2028 523 246 651 696 Less: unamortized deferred financing costs (2) (6 ) (2 ) $ 645 $ 694 __________ (1) For the six months ended June 30, 2017 and year ended December 31, 2016 , weighted average interest rates were 2.410 percent and 1.946 percent , respectively. (2) Amount relates to securitized debt only and does not include deferred financing costs of $2 million as of June 30, 2017 and $3 million as of December 31, 2016 , relating to our Timeshare Facility included in Other Assets in our condensed consolidated balance sheets. The following table details our outstanding debt balance and its associated interest rates: June 30, December 31, ($ in millions) 2017 2016 Debt (1) Senior secured credit facilities: Term loan with an average rate of 3.47%, due 2021 $ 195 $ 200 Senior notes with a rate of 6.125%, due 2024 300 300 495 500 Less: unamortized deferred financing costs and discount (2)(3) (9 ) (10 ) $ 486 $ 490 ____________ (1) For the six months ended June 30, 2017 and year ended December 31, 2016 , weighted average interest rates were 5.081 percent and 4.851 percent , respectively. (2) Amount includes deferred financing costs of $2 million and $7 million as of June 30, 2017 and $2 million and $8 million as of December 31, 2016 , relating to our term loan and senior notes, respectively. (3) Amount does not include deferred financing costs of $2 million as of June 30, 2017 and December 31, 2016 , relating to our revolving facility included in Other Assets in our condensed consolidated balance sheets. |
Schedule of contractual maturities of debt | The contractual maturities of our debt and non-recourse debt as of June 30, 2017 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2017 (remaining) $ 5 $ 61 $ 66 2018 10 126 136 2019 10 230 240 2020 10 122 132 2021 160 34 194 Thereafter 300 78 378 $ 495 $ 651 $ 1,146 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying and estimated fair value amounts | The carrying amounts and estimated fair values of our financial assets and liabilities were as follows: June 30, 2017 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,034 $ — $ 1,299 Liabilities: Debt (2) 486 325 201 Non-recourse debt (2) 645 — 646 December 31, 2016 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,025 $ — $ 1,147 Liabilities: Debt (2) 490 314 200 Non-recourse debt (2) 694 — 696 ____________ (1) Carrying amount net of allowance for loan loss. (2) Carrying amount net of unamortized deferred financing costs and discount. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Valuation Assumptions | The grant date fair value of each of these option grants was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 26.3 % Dividend yield (2) — % Risk-free rate (3) 2.3 % Expected term (in years) (4) 6.0 ____________ (1) Due to limited trading history for Hilton Grand Vacations’ common stock, we did not have sufficient information available on which to base a reasonable and supportable estimate of the expected volatility of our share price. As a result, we used a weighted-average of the implied volatility and the average historical volatility of our peer group over a time period consistent with its expected term assumption. Our peer group was determined based upon companies in our industry with similar business models and is consistent with those used to benchmark its executive compensation. (2) At the date of grant we had no plans to pay dividends during the expected term of these options. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table presents the calculation of our basic and diluted earnings per share ("EPS"). The weighted average shares outstanding for the three and six months ended June 30, 2016 reflect 98,802,597 shares distributed on January 3, 2017, our spin-off date, to our stockholders. See Note 1 : Organization and Basis of Presentation for further discussion. The weighted average shares outstanding used to compute basic EPS and diluted EPS for the three months ended June 30, 2017 is 98,959,438 and 99,529,301 , respectively and for the six months ended June 30, 2017 is 98,881,494 and 99,442,829 , respectively. Three Months Ended June 30, Six Months Ended June 30, ($ and shares outstanding in millions, except per share amounts) 2017 2016 2017 2016 Basic EPS: Numerator: Net Income (1) $ 51 $ 47 $ 101 $ 95 Denominator: Weighted average shares outstanding 99 99 99 99 Basic EPS $ 0.51 $ 0.48 $ 1.02 $ 0.96 Diluted EPS: Numerator: Net Income (1) $ 51 $ 47 $ 101 $ 95 Denominator: Weighted average shares outstanding 100 99 99 99 Diluted EPS $ 0.51 $ 0.48 $ 1.02 $ 0.96 ____________ (1) Net income for the three months ended June 30, 2017 and 2016 was $50,828,907 and $47,400,289 , respectively, and for the six months ended June 30, 2017 and 2016 was $101,041,522 and $95,069,102 , respectively. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Summary of Amounts Included in Consolidation Financial Statements Related to Arrangements with Hilton | The following table summarizes amounts included in our condensed consolidated statements of operations related to a fee-for-service arrangement with a Blackstone affiliate to sell VOIs on their behalf: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Commission and other fees $ 42 $ 44 $ 93 $ 88 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment revenues reconciled to consolidated amounts | The following table presents revenues for our reportable segments reconciled to consolidated amounts: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Revenues: Real estate sales and financing (1) $ 323 $ 276 $ 606 $ 542 Resort operations and club management (2) 92 89 180 170 Total segment revenues 415 365 786 712 Cost reimbursements 34 32 68 61 Intersegment eliminations (1)(2)(3) (10 ) (6 ) (16 ) (12 ) Total revenues $ 439 $ 391 $ 838 $ 761 ____________ (1) Includes charges of $ 1 million to the resort operations and club management segment for billing and collection services provided by the real estate sales and financing segment for the six months ended June 30, 2016 . There were no charges for the three months ended June 30, 2016 or for the three and six months ended June 30, 2017 . (2) Includes charges to the real estate sales and financing segment from the resort operations and club management segment for discounted stays at properties resulting from marketing packages. These charges totaled $ 10 million and $ 6 million for the three months ended June 30, 2017 and 2016 , respectively, and $ 16 million and $ 11 million for the six months ended June 30, 2017 and 2016 , respectively. (3) Includes charges to the real estate sales and financing segment from the resort operations and club management segment for the rental of model units to show prospective buyers. These charges totaled less than $1 million for each of the three and six months ended June 30, 2017 and 2016 . |
Schedule of adjusted EBITDA reconciled to net income | The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2017 2016 2017 2016 Adjusted EBITDA: Real estate sales and financing (1) $ 99 $ 84 $ 182 $ 165 Resort operations and club management (1) 52 51 103 97 Segment Adjusted EBITDA 151 135 285 262 General and administrative (29 ) (21 ) (52 ) (37 ) Depreciation and amortization (7 ) (6 ) (14 ) (11 ) License fee expense (23 ) (20 ) (43 ) (39 ) Other loss, net — 1 — 1 Gain on foreign currency transactions — (1 ) — (1 ) Allocated Parent interest expense (2) — (7 ) — (13 ) Interest expense (7 ) — (14 ) — Income tax expense (33 ) (33 ) (59 ) (65 ) Other adjustment items (1 ) (1 ) (2 ) (2 ) Net income $ 51 $ 47 $ 101 $ 95 ____________ (1) Includes intersegment eliminations. Refer to our table presenting revenues by reportable segment above for additional discussion. (2) This amount represents interest expense on an unconditional obligation to guarantee certain Hilton allocated debt balances which were released in November 2016. |
Organization and Basis of Pre33
Organization and Basis of Presentation (Details) | Jan. 03, 2017 | Jun. 30, 2017USD ($)unitproperty$ / shares | Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2017USD ($)unitproperty$ / shares | Jun. 30, 2016USD ($)$ / shares | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||||||
Costs related to agreements with related parties | $ 40,000,000 | $ 44,000,000 | $ 98,000,000 | $ 104,000,000 | |||
Number of timeshare properties | property | 48 | 48 | |||||
Number of units in timeshare properties | unit | 8,101 | 8,101 | |||||
Stock split, conversion ratio | 0.01 | ||||||
Advanced deposits | $ (100,000,000) | $ (100,000,000) | $ (103,000,000) | ||||
Sales, marketing, brand and other fees | 144,000,000 | 128,000,000 | 274,000,000 | 246,000,000 | |||
Accounts payable, accrued expenses and other | 265,000,000 | 265,000,000 | $ 231,000,000 | ||||
Net income | $ 50,828,907 | $ 47,400,289 | $ 101,041,522 | $ 95,069,102 | |||
Earnings per share, Basic (in dollars per share) | $ / shares | [1] | $ 0.51 | $ 0.48 | $ 1.02 | $ 0.96 | ||
Changed in Estimate of Expected Redemption of Expired Prepaid Discounted Vacation Packages | |||||||
Related Party Transaction [Line Items] | |||||||
Advanced deposits | $ 11,000,000 | $ 11,000,000 | |||||
Sales, marketing, brand and other fees | 10,000,000 | ||||||
Accounts payable, accrued expenses and other | $ 1,000,000 | 1,000,000 | |||||
Net income | $ 10,000,000 | ||||||
Earnings per share, Basic (in dollars per share) | $ / shares | [1] | $ 0.10 | |||||
[1] | For the three and six months ended June 30, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ stockholders on January 3, 2017. See Note 11: Earnings Per Share for additional information. |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 62 | $ 103 |
Escrow deposits on VOI sales | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 38 | 81 |
Reserves related to non-recourse debt | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 24 | $ 22 |
Timeshare Financing Receivabl35
Timeshare Financing Receivables - Schedule of Timeshare Financing Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | $ 1,164 | $ 1,145 | ||
Less: allowance for loan loss | (130) | (120) | $ (112) | $ (106) |
Timeshare financing receivables, net | 1,034 | 1,025 | ||
Securitized and Pledged | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 541 | 253 | ||
Less: allowance for loan loss | (33) | (9) | (13) | (17) |
Timeshare financing receivables, net | 508 | 244 | ||
Unsecuritized | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 623 | 892 | ||
Less: allowance for loan loss | (97) | (111) | $ (99) | $ (89) |
Timeshare financing receivables, net | $ 526 | $ 781 |
Timeshare Financing Receivabl36
Timeshare Financing Receivables - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, weighted average interest rate (as a percent) | 12.00% | ||
Financing receivable, weighted average remaining term (in years) | 7 years 7 months 6 days | ||
Timeshare financing receivable not accruing interest | $ 46,000,000 | $ 38,000,000 | |
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 5.25% | ||
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 20.50% | ||
Timeshare Facility with an average rate of 2.36%, due 2019 | Non-recourse Debt | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 450,000,000 | ||
Gross timeshare receivables securing the Timeshare Facility | $ 148,000,000 | $ 509,000,000 | |
2.66% Notes | Non-recourse Debt | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 291,000,000 | ||
Debt instrument, stated interest rate | 2.66% | ||
2.96% Notes | Non-recourse Debt | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 59,000,000 | ||
Debt instrument, stated interest rate | 2.96% | ||
Securitized and Pledged | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Timeshare financing receivables securitized | $ 357,000,000 |
Timeshare Financing Receivabl37
Timeshare Financing Receivables - Maturities of Financing Receivables (Details) $ in Millions | Jun. 30, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2017 (remaining) | $ 78 |
2,018 | 131 |
2,019 | 134 |
2,020 | 136 |
2,021 | 133 |
Thereafter | 552 |
Timeshare financing receivable maturities, gross | 1,164 |
Less: allowance for loan loss | (130) |
Timeshare financing receivable maturities, net | 1,034 |
Securitized and Pledged | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2017 (remaining) | 39 |
2,018 | 79 |
2,019 | 78 |
2,020 | 75 |
2,021 | 69 |
Thereafter | 201 |
Timeshare financing receivable maturities, gross | 541 |
Less: allowance for loan loss | (33) |
Timeshare financing receivable maturities, net | 508 |
Unsecuritized | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2017 (remaining) | 39 |
2,018 | 52 |
2,019 | 56 |
2,020 | 61 |
2,021 | 64 |
Thereafter | 351 |
Timeshare financing receivable maturities, gross | 623 |
Less: allowance for loan loss | (97) |
Timeshare financing receivable maturities, net | $ 526 |
Timeshare Financing Receivabl38
Timeshare Financing Receivables - Financing Receivable by FICO Score (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | $ 1,164 | $ 1,145 |
More than 700 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 746 | 725 |
600-699 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 216 | 211 |
Less than 600 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 28 | 28 |
No score | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | $ 174 | $ 181 |
Timeshare Financing Receivabl39
Timeshare Financing Receivables - Past Due Financing Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 1,105 | $ 1,095 |
Financing receivable, past due | 1,164 | 1,145 |
31 - 90 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 13 | 12 |
91 - 120 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 4 | 5 |
121 days and greater past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 42 | 33 |
Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 530 | 248 |
Financing receivable, past due | 541 | 253 |
Securitized and Pledged | 31 - 90 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 6 | 3 |
Securitized and Pledged | 91 - 120 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 2 | 1 |
Securitized and Pledged | 121 days and greater past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 3 | 1 |
Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 575 | 847 |
Financing receivable, past due | 623 | 892 |
Unsecuritized | 31 - 90 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 7 | 9 |
Unsecuritized | 91 - 120 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 2 | 4 |
Unsecuritized | 121 days and greater past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | $ 39 | $ 32 |
Timeshare Financing Receivabl40
Timeshare Financing Receivables - Allowance For Losses (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Allowance for loan loss, beginning balance | $ 120 | $ 106 |
Write-offs | (17) | (17) |
Securitization | 0 | |
Provision for loan loss | 27 | 23 |
Allowance for loan loss, ending balance | 130 | 112 |
Securitized and Pledged | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Allowance for loan loss, beginning balance | 9 | 17 |
Write-offs | 0 | 0 |
Securitization | 28 | |
Provision for loan loss | (4) | (4) |
Allowance for loan loss, ending balance | 33 | 13 |
Unsecuritized | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Allowance for loan loss, beginning balance | 111 | 89 |
Write-offs | (17) | (17) |
Securitization | (28) | |
Provision for loan loss | 31 | 27 |
Allowance for loan loss, ending balance | $ 97 | $ 99 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Inventory [Line Items] | |||||
Completed unsold VOIs | $ 220 | $ 220 | $ 233 | ||
Construction in process | 14 | 14 | 20 | ||
Land, infrastructure and other | 258 | 258 | 260 | ||
Inventory | 492 | 492 | 513 | ||
Cost of VOI sales (less than for the $1 million) | 34 | $ 28 | 67 | $ 66 | |
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | (22) | (3) | |||
Promotional allowances | $ 9 | $ 14 | 20 | $ 24 | |
Time Share | |||||
Inventory [Line Items] | |||||
Cost of VOI sales (less than for the $1 million) | 3 | 10 | |||
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | $ 3 | $ 10 |
Consolidated Variable Interes42
Consolidated Variable Interest Entities (Details) $ in Millions | Jun. 30, 2017USD ($)entity | Dec. 31, 2016USD ($)entity |
Variable Interest Entity [Line Items] | ||
Number of variable interest entities consolidated | entity | 3 | 2 |
Assets, variable interest entity | $ 534 | $ 258 |
Liabilities, variable interest entity | 518 | 245 |
Variable Interest Entity, Primary Beneficiary | Restricted cash | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 21 | 10 |
Variable Interest Entity, Primary Beneficiary | Timeshare financing receivables, net | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 508 | 244 |
Variable Interest Entity, Primary Beneficiary | Non-recourse debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities, variable interest entity | $ 517 | $ 244 |
Debt & Non-recourse debt - Sche
Debt & Non-recourse debt - Schedule of Outstanding Borrowings (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 495 | $ 500 |
Less: unamortized deferred financing costs and discount | (9) | (10) |
Long-term debt | $ 486 | $ 490 |
Debt instrument, average interest rate | 5.081% | 4.851% |
Line of Credit | Term loan with an average rate of 3.47%, due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 195 | $ 200 |
Less: unamortized deferred financing costs and discount | $ (2) | (2) |
Debt instrument, average interest rate | 3.47% | |
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | ||
Debt Instrument [Line Items] | ||
Less: unamortized deferred financing costs and discount | $ (7) | (8) |
Senior Notes | Senior notes with a rate of 6.125%, due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 300 | 300 |
Debt instrument, stated interest rate | 6.125% | |
Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 651 | 696 |
Less: unamortized deferred financing costs and discount | (6) | (2) |
Long-term debt | $ 645 | $ 694 |
Debt instrument, average interest rate | 2.41% | 1.946% |
Non-recourse Debt | Timeshare Facility with an average rate of 2.36%, due 2019 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 128 | $ 450 |
Less: unamortized deferred financing costs and discount | $ (2) | (3) |
Debt instrument, average interest rate | 2.36% | |
Non-recourse Debt | Securitized Debt with an average rate of 2.42%, due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 523 | 246 |
Debt instrument, average interest rate | 2.42% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized deferred financing costs and discount | $ (2) | $ (2) |
Debt & Non-recourse debt - Narr
Debt & Non-recourse debt - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Restricted cash | $ 62 | $ 103 | |
Non-recourse Debt | 2.66% Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 291 | ||
Debt instrument, stated interest rate | 2.66% | ||
Non-recourse Debt | 2.96% Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 59 | ||
Debt instrument, stated interest rate | 2.96% | ||
Reserves related to non-recourse debt | |||
Debt Instrument [Line Items] | |||
Restricted cash | $ 24 | $ 22 | |
Securitized and Pledged | |||
Debt Instrument [Line Items] | |||
Timeshare financing receivables securitized | $ 357 |
Debt & Non-recourse debt - Debt
Debt & Non-recourse debt - Debt Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
2017 (remaining) | $ 5 | |
2,018 | 10 | |
2,019 | 10 | |
2,020 | 10 | |
2,021 | 160 | |
Thereafter | 300 | |
Long-term debt | 495 | $ 500 |
Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2017 (remaining) | 61 | |
2,018 | 126 | |
2,019 | 230 | |
2,020 | 122 | |
2,021 | 34 | |
Thereafter | 78 | |
Long-term debt | 651 | $ 696 |
Debt and Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2017 (remaining) | 66 | |
2,018 | 136 | |
2,019 | 240 | |
2,020 | 132 | |
2,021 | 194 | |
Thereafter | 378 | |
Long-term debt | $ 1,146 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Level 1 | ||
Assets: | ||
Timeshare financing receivables | $ 0 | $ 0 |
Liabilities: | ||
Debt | 325 | 314 |
Non-recourse debt | 0 | 0 |
Level 3 | ||
Assets: | ||
Timeshare financing receivables | 1,299 | 1,147 |
Liabilities: | ||
Debt | 201 | 200 |
Non-recourse debt | 646 | 696 |
Carrying Amount | ||
Assets: | ||
Timeshare financing receivables | 1,034 | 1,025 |
Liabilities: | ||
Debt | 486 | 490 |
Carrying Amount | Non-recourse Debt | ||
Liabilities: | ||
Non-recourse debt | $ 645 | $ 694 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | ||
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (as a percent) | 37.00% | 40.00% | |
Increase (decrease) in net deferred tax liability | [1] | $ 9 | |
[1] | Refer to Note 9: Income Taxes for further discussion. |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 5 | $ 3 | $ 8 | $ 5 |
Unrecognized compensation costs for unvested awards | $ 17 | $ 17 | ||
Unrecognized compensation costs, weighted average period for recognition | 2 years 2 months 12 days | |||
Common stock available for future issuance | 7,806,023 | 7,806,023 | ||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 487,718 | |||
Grant date fair value (in dollars per share) | $ 28.64 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 669,658 | |||
Grant date fair value (in dollars per share) | $ 8.66 | |||
Exercise price (in dollars per share) | $ 28.30 | |||
Stock options exercisable (in shares) | 169,926 | 169,926 | ||
First year after date of grant | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
First year after date of grant | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Second year after date of grant | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Second year after date of grant | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Third year after date of grant | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Third year after date of grant | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% |
Share-Based Compensation - Opti
Share-Based Compensation - Options Assumptions (Details) - Stock Options | 6 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 26.30% |
Dividend yield | 0.00% |
Risk-free rate | 2.30% |
Expected term (in years) | 6 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | Jan. 03, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Issuance of common stock (in shares) | 98,802,597 | |||||
Numerator: | ||||||
Net income | $ 50,828,907 | $ 47,400,289 | $ 101,041,522 | $ 95,069,102 | ||
Denominator: | ||||||
Weighted average shares outstanding, Basic | 98,959,438 | 99,000,000 | 98,881,494 | 99,000,000 | ||
Weighted average shares outstanding, diluted | 99,529,301 | 99,000,000 | 99,442,829 | 99,000,000 | ||
Basic EPS (in dollars per share) | [1] | $ 0.51 | $ 0.48 | $ 1.02 | $ 0.96 | |
Diluted EPS (in dollars per share) | $ 0.51 | $ 0.48 | $ 1.02 | $ 0.96 | ||
Stock Compensation Plan | ||||||
Denominator: | ||||||
Antidilutive securities excluded from computation of EPS | 295,316 | 399,194 | ||||
[1] | For the three and six months ended June 30, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ stockholders on January 3, 2017. See Note 11: Earnings Per Share for additional information. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 30, 2017 | Jun. 20, 2017 | Jun. 19, 2017 | Mar. 15, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||||||||
Number of shares of common stock held (in shares) | 99,082,128 | 99,082,128 | 99,082,128 | 98,802,597 | ||||||
Commission and other fees | $ 42 | $ 44 | $ 93 | $ 88 | ||||||
Blackstone | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Stock sold (in shares) | 24,750,000 | |||||||||
Percentage of outstanding shares sold | 25.00% | |||||||||
Percentage of outstanding shares before transaction | 40.00% | |||||||||
Due from related parties | $ 8 | $ 8 | $ 8 | $ 20 | ||||||
Sale of Stock from Blackstone to JP Morgan Chase | Blackstone | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Stock sold (in shares) | 9,650,000 | |||||||||
Percentage of outstanding shares before transaction | 15.00% | |||||||||
Number of shares of common stock held (in shares) | 15,008,689 | |||||||||
Price per share (in dollars per share) | $ 35.40 | |||||||||
Percentage of outstanding shares after transaction | 5.00% |
Business Segments - Narrative (
Business Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segments - Segment Rev
Business Segments - Segment Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 439,000,000 | $ 391,000,000 | $ 838,000,000 | $ 761,000,000 |
Cost reimbursements | 34,000,000 | 32,000,000 | 68,000,000 | 61,000,000 |
Charges for billing and collection services | 11,000,000 | 8,000,000 | 21,000,000 | 16,000,000 |
Operating segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 415,000,000 | 365,000,000 | 786,000,000 | 712,000,000 |
Operating segments | Real estate sales and financing | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 323,000,000 | 276,000,000 | 606,000,000 | 542,000,000 |
Operating segments | Resort operations and club management | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 92,000,000 | 89,000,000 | 180,000,000 | 170,000,000 |
Segment Reconciling Items | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Cost reimbursements | 34,000,000 | 32,000,000 | 68,000,000 | 61,000,000 |
Intersegment eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | (10,000,000) | (6,000,000) | (16,000,000) | (12,000,000) |
Charges for billing and collection services | 0 | 0 | 0 | 1,000,000 |
Charges for discounts on property stays | 10,000,000 | 6,000,000 | 16,000,000 | 11,000,000 |
Rental expense for model units (less than) | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
Business Segments - Adjusted EB
Business Segments - Adjusted EBITDA Reconciled to Net Income (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative | $ (29,000,000) | $ (21,000,000) | $ (52,000,000) | $ (37,000,000) |
Depreciation and amortization | (7,000,000) | (6,000,000) | (14,000,000) | (11,000,000) |
License fee expense | (23,000,000) | (20,000,000) | (43,000,000) | (39,000,000) |
Other loss, net | 0 | (1,000,000) | 0 | (1,000,000) |
Gain on foreign currency transactions | 0 | 1,000,000 | 0 | 1,000,000 |
Allocated Parent interest expense | 0 | (7,000,000) | 0 | (13,000,000) |
Interest expense | (7,000,000) | 0 | (14,000,000) | 0 |
Income tax expense | (33,000,000) | (33,000,000) | (59,000,000) | (65,000,000) |
Net income | 50,828,907 | 47,400,289 | 101,041,522 | 95,069,102 |
Operating segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment Adjusted EBITDA | 151,000,000 | 135,000,000 | 285,000,000 | 262,000,000 |
Operating segments | Real estate sales and financing | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment Adjusted EBITDA | 99,000,000 | 84,000,000 | 182,000,000 | 165,000,000 |
Operating segments | Resort operations and club management | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment Adjusted EBITDA | 52,000,000 | 51,000,000 | 103,000,000 | 97,000,000 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative | (29,000,000) | (21,000,000) | (52,000,000) | (37,000,000) |
Depreciation and amortization | (7,000,000) | (6,000,000) | (14,000,000) | (11,000,000) |
License fee expense | (23,000,000) | (20,000,000) | (43,000,000) | (39,000,000) |
Other loss, net | 0 | 1,000,000 | 0 | 1,000,000 |
Gain on foreign currency transactions | 0 | (1,000,000) | 0 | (1,000,000) |
Allocated Parent interest expense | 0 | (7,000,000) | 0 | (13,000,000) |
Interest expense | (7,000,000) | 0 | (14,000,000) | 0 |
Income tax expense | (33,000,000) | (33,000,000) | (59,000,000) | (65,000,000) |
Other adjustment items | $ (1,000,000) | $ (1,000,000) | $ (2,000,000) | $ (2,000,000) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment, amount to be paid in 2020 | $ 9 | |
Purchase commitment, amount to be paid in 2021 | 9 | |
Inventories | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment | $ 212 | |
Purchase commitment, period (in years) | 5 years | |
Purchase commitment, purchases made | $ 4 | $ 11 |
Purchase commitment, amount to be paid in 2017 | 4 | |
Purchase commitment, amount to be paid in 2018 | 3 | |
Purchase commitment, amount to be paid in 2019 | $ 187 |
Subsequent Events (Details)
Subsequent Events (Details) - BRE Ace Holdings - Subsequent Event $ in Millions | Jul. 18, 2017USD ($)property |
Subsequent Event [Line Items] | |
Cash contributed to an equity method investment | $ | $ 40 |
Equity method investment, ownership percentage | 25.00% |
Number of real estate properties | property | 1,201 |