Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 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 | Large Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 99,251,898 | ||
Entity Public Float | $ 2,471 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 246 | $ 48 |
Restricted cash | 51 | 103 |
Accounts receivable, net of allowance for doubtful accounts of $9 and $6 | 112 | 123 |
Timeshare financing receivables, net | 1,071 | 1,025 |
Inventory | 509 | 513 |
Property and equipment, net | 238 | 256 |
Investment in unconsolidated affiliate | 41 | 0 |
Intangible assets, net | 72 | 70 |
Other assets | 44 | 42 |
TOTAL ASSETS (variable interest entities - $471 and $258) | 2,384 | 2,180 |
LIABILITIES AND EQUITY | ||
Accounts payable, accrued expenses and other | 339 | 231 |
Advanced deposits | 104 | 103 |
Debt, net | 482 | 490 |
Non-recourse debt, net | 583 | 694 |
Deferred revenues | 109 | 106 |
Deferred income tax liabilities | 249 | 389 |
Total liabilities (variable interest entities - $455 and $245) | 1,866 | 2,013 |
Commitments and contingencies - see Note 20 | ||
Equity: | ||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2017 and 2016 | 0 | 0 |
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 99,136,304 and 98,802,597 issued and outstanding as of December 31, 2017 and 2016, respectively | 1 | 1 |
Additional paid-in capital | 162 | 138 |
Accumulated retained earnings | 355 | 28 |
Total equity | 518 | 167 |
TOTAL LIABILITIES AND EQUITY | $ 2,384 | $ 2,180 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 9 | $ 6 |
Assets, variable interest entity | 471 | 258 |
Liabilities, variable interest entity | $ 455 | $ 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) | 99,136,304 | 98,802,597 |
Common Stock, shares outstanding (in shares) | 99,136,304 | 98,802,597 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Revenues | ||||||||||||||
Sales of VOIs, net | $ 548,000,000 | $ 508,000,000 | $ 492,000,000 | |||||||||||
Sales, marketing, brand and other fees | 544,000,000 | 499,000,000 | 457,000,000 | |||||||||||
Financing | 147,000,000 | 134,000,000 | 127,000,000 | |||||||||||
Resort and club management | 158,000,000 | 143,000,000 | 125,000,000 | |||||||||||
Rental and ancillary services | 179,000,000 | 173,000,000 | 164,000,000 | |||||||||||
Cost reimbursements | 135,000,000 | 126,000,000 | 110,000,000 | |||||||||||
Total revenues | $ 447,000,000 | $ 426,000,000 | $ 439,000,000 | $ 399,000,000 | $ 415,000,000 | $ 407,000,000 | $ 391,000,000 | $ 370,000,000 | 1,711,000,000 | 1,583,000,000 | 1,475,000,000 | |||
Expenses | ||||||||||||||
Cost of VOI sales | 148,000,000 | 152,000,000 | 173,000,000 | |||||||||||
Sales and marketing | 663,000,000 | 605,000,000 | 541,000,000 | |||||||||||
Financing | 43,000,000 | 32,000,000 | 32,000,000 | |||||||||||
Resort and club management | 43,000,000 | 36,000,000 | 32,000,000 | |||||||||||
Rental and ancillary services | 122,000,000 | 113,000,000 | 113,000,000 | |||||||||||
General and administrative | 104,000,000 | 92,000,000 | 57,000,000 | |||||||||||
Depreciation and amortization | 29,000,000 | 24,000,000 | 22,000,000 | |||||||||||
License fee expense | 87,000,000 | 80,000,000 | 74,000,000 | |||||||||||
Cost reimbursements | 135,000,000 | 126,000,000 | 110,000,000 | |||||||||||
Total operating expenses | 360,000,000 | 350,000,000 | 348,000,000 | 316,000,000 | 339,000,000 | 333,000,000 | 304,000,000 | 284,000,000 | 1,374,000,000 | 1,260,000,000 | 1,154,000,000 | |||
Interest expense | (27,000,000) | (3,000,000) | 0 | |||||||||||
Allocated Parent interest expense | 0 | (26,000,000) | (29,000,000) | |||||||||||
Equity in earnings from unconsolidated affiliate | 1,000,000 | 0 | 0 | |||||||||||
Other loss, net | 0 | (1,000,000) | 0 | |||||||||||
Income before income taxes | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 65,000,000 | 68,000,000 | 80,000,000 | 80,000,000 | 311,000,000 | 293,000,000 | 292,000,000 | |||
Income tax benefit (expense) | 16,000,000 | (125,000,000) | (118,000,000) | |||||||||||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] | $ 174,096,269 | [1] |
Earnings per share: | ||||||||||||||
Basic | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.30 | [3] | $ 1.70 | [3] | $ 1.76 | [3] | ||||
Diluted | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.28 | [3] | $ 1.70 | [3] | $ 1.76 | [3] | ||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. | |||||||||||||
[3] | For the years ended December 31, 2016 and 2015, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ shareholders on January 3, 2017. See Note 17: Earnings Per Share for further discussion. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Operating Activities | ||||||
Net income | [1] | $ 326,777,744 | $ 167,618,659 | [2] | $ 174,096,269 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 29,000,000 | 24,000,000 | 22,000,000 | |||
Amortization of deferred financing costs and other | 5,000,000 | 5,000,000 | 5,000,000 | |||
Provision for loan losses | 58,000,000 | 49,000,000 | 39,000,000 | |||
Other loss, net | 0 | 1,000,000 | 0 | |||
Share-based compensation | 15,000,000 | 0 | 0 | |||
Deferred income taxes | (129,000,000) | 23,000,000 | 20,000,000 | |||
Equity in earnings from unconsolidated affiliate | (1,000,000) | 0 | 0 | |||
Net changes in assets and liabilities: | ||||||
Accounts receivables, net | 12,000,000 | (30,000,000) | (6,000,000) | |||
Timeshare financing receivables, net | (103,000,000) | (98,000,000) | (88,000,000) | |||
Inventory | 47,000,000 | 7,000,000 | (38,000,000) | |||
Other assets | (4,000,000) | (4,000,000) | 2,000,000 | |||
Accounts payable, accrued expenses and other | 95,000,000 | 28,000,000 | 18,000,000 | |||
Advanced deposits | 1,000,000 | 7,000,000 | (1,000,000) | |||
Deferred revenues | 3,000,000 | 3,000,000 | 3,000,000 | |||
Other | 1,000,000 | (1,000,000) | 2,000,000 | |||
Net cash provided by operating activities | 356,000,000 | 182,000,000 | 152,000,000 | |||
Investing Activities | ||||||
Capital expenditures for property and equipment | (35,000,000) | (26,000,000) | (12,000,000) | |||
Software capitalization costs | (12,000,000) | (8,000,000) | (6,000,000) | |||
Investment in unconsolidated affiliate | (40,000,000) | 0 | 0 | |||
Net cash used in investing activities | (87,000,000) | (34,000,000) | (18,000,000) | |||
Financing Activities | ||||||
Issuance of non-recourse debt | 350,000,000 | 300,000,000 | 0 | |||
Repayment of non-recourse debt | (459,000,000) | (110,000,000) | (125,000,000) | |||
Repayment of debt | (10,000,000) | 0 | 0 | |||
Issuance of debt | 0 | 200,000,000 | 0 | |||
Debt issuance costs | (5,000,000) | (10,000,000) | 0 | |||
Allocated debt activity | 0 | 111,000,000 | [3] | (87,000,000) | [4] | |
Net transfers (to) from Parent | 0 | (567,000,000) | [3] | 95,000,000 | [4] | |
Distribution to Parent | 0 | 0 | [3] | (2,000,000) | [4] | |
Proceeds from stock option exercises | 1,000,000 | 0 | 0 | |||
Net cash used in financing activities | (123,000,000) | (76,000,000) | (119,000,000) | |||
Net increase in cash, cash equivalents and restricted cash | 146,000,000 | 72,000,000 | 15,000,000 | |||
Cash, cash equivalents and restricted cash, beginning of period | 151,000,000 | 79,000,000 | 64,000,000 | |||
Cash, cash equivalents and restricted cash, end of period | $ 297,000,000 | $ 151,000,000 | $ 79,000,000 | |||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. | |||||
[3] | Amounts represent activities with Hilton | |||||
[4] | Amounts represent activities with Hilton. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Total | Common Stock | Parent Equity (Deficit) | Additional Paid-in Capital | Accumulated Retained Earnings | ||
Equity, beginning balance at Dec. 31, 2014 | $ (373,000,000) | $ (373,000,000) | |||||
Net income | 174,096,269 | [1] | 174,000,000 | ||||
Net transfers (to) from Parent | 95,000,000 | 95,000,000 | |||||
Distribution to Parent | (2,000,000) | (2,000,000) | |||||
Equity, ending balance at Dec. 31, 2015 | (106,000,000) | (106,000,000) | |||||
Net income | [2] | 167,618,659 | [1] | 140,000,000 | $ 28,000,000 | ||
Net transfers (to) from Parent | (567,000,000) | (567,000,000) | |||||
Capital contribution from Parent | 672,000,000 | 672,000,000 | |||||
Issuance of common stock, value | [3] | $ 1,000,000 | (1,000,000) | ||||
Issuance of common stock, shares | [3] | 99,000,000 | |||||
Reclassification of Parent equity to additional paid-in capital | [3] | $ (138,000,000) | $ 138,000,000 | ||||
Equity, ending balance at Dec. 31, 2016 | $ 167,000,000 | $ 1,000,000 | 138,000,000 | 28,000,000 | |||
Shares, ending balance at Dec. 31, 2016 | 98,802,597 | 99,000,000 | |||||
Net income | $ 50,000,000 | ||||||
Equity, beginning balance at Dec. 31, 2016 | $ 167,000,000 | $ 1,000,000 | 138,000,000 | 28,000,000 | |||
Shares, beginning balance at Dec. 31, 2016 | 98,802,597 | 99,000,000 | |||||
Net income | $ 326,777,744 | [1] | 327,000,000 | ||||
Deferred intercompany transaction | [4] | 9,000,000 | 9,000,000 | ||||
Activity related to share-based compensation | 12,000,000 | 12,000,000 | |||||
Other | [4] | 3,000,000 | 3,000,000 | ||||
Equity, ending balance at Dec. 31, 2017 | $ 518,000,000 | $ 1,000,000 | $ 162,000,000 | $ 355,000,000 | |||
Shares, ending balance at Dec. 31, 2017 | 99,136,304 | 99,000,000 | |||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | ||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. | ||||||
[3] | Parent equity (deficit) was reclassified and allocated between common stock and additional paid-in capital based on the number of shares issued and outstanding as of the stock split that occurred on January 3, 2017. See Note 1: Organization for further discussion. | ||||||
[4] | Includes pre-spin tax adjustment, refer to Note 15: Income Taxes for further discussion. |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Note 1: Organization Our Spin-off from Hilton Worldwide Holdings Inc. During 2016, Hilton Worldwide Holdings Inc. (“Former Hilton Parent” and together with its then consolidated subsidiaries “Hilton”) completed an internal reorganization to contribute to Hilton Grand Vacations Inc. (“Hilton Grand Vacations,” “we,” “us,” “our,” “HGV” or the “Company”) its U.S. and non- U.S. timeshare subsidiaries, including Hilton Resorts Corporation in preparation of the tax-free spin-offs of Park Hotels & Resorts Inc. (“Park”) and HGV. We are a Delaware corporation formed on May 2, 2016. On May 4, 2016, the Company issued 100 shares of its common stock, par value $0.01 per share, to Park for $1.00 in cash. On October 24, 2016, the Company issued one share of its common stock, par value $0.01 per share, to Park in connection with the contribution by Park of all shares of common stock of Hilton Resorts Corporation owned by Park to HGV. Net income earned prior to October 24, 2016, is included in Additional paid-in capital Accumulated retained earnings On December 30, 2016, we filed an Amended & Restated Charter with an effective date of 4:59 p.m., Eastern time, on January 3, 2017, whereby our shares were split into 98,802,597 shares using a formula by reference to the number of Hilton shares outstanding. On January 3, 2017, the spin-offs were completed, and 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 audited consolidated financial statements reflect the effect of these agreements. For the year ended December 31, 2017, we incurred $178 million in costs relating to the agreements entered with Hilton. See Key Agreements Related to the Spin-Off Business Prior to the spin-off, we had a number of existing arrangements whereby Hilton and others provided services to us. See Note 18: Related Party Transactions Net transfers (to) from Parent 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 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 December 31, 2017, we had 48 resorts, comprised of 8,102 units, located in the United States (“U.S.”) and Europe. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2: Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Principles of Consolidation The consolidated financial statements 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 consolidated financial statements presented herein were prepared on a stand-alone basis and were derived from the consolidated financial statements and accounting records of Hilton. The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of rights held by other interests. If the entity is considered to be a variable interest entity (“VIE”), we determine whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity. We consolidate entities when we own more than 50 percent of the voting shares of a company or otherwise have a controlling financial interest. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). All of our significant transactions with Hilton had been included in these consolidated financial statements. The net effect of the settlement of any intercompany transactions prior to the spin-off has been included in the consolidated statements of cash flows as a financing activity within Net transfers (to) from Parent 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. 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 had been expired for six months and therefore retained the liability until six months after expiration. During our review in the second quarter of 2017, we determined that we had sufficiently reliable updated information under current business practices to revise our estimate of expired packages that we expected to redeem. As a result, during the second quarter of 2017, we changed our accounting estimate for expected redemptions of expired packages to relieve a portion of the remaining liability post 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 year ended December 31, 2017, our net income increased by $10 million and basic and diluted earnings per share increased by $0.10. Allocations Prior to the spin-off, our consolidated financial statements included certain indirect general and administrative costs allocated to us by Hilton for certain functions and services including, but not limited to, executive office, finance and other administrative support primarily on the basis of financial and operating metrics that Hilton had historically used to allocate resources and evaluate performance against its strategic objectives. Both we and Hilton considered the basis on which expenses had been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. These costs were included in General and administrative Summary of Significant Accounting Policies Revenue Recognition • Sales of VOIs, net— Revenue from a deeded VOI sale is recognized when the customer has executed a binding sales contract, a minimum 10 percent down payment has been received, certain minimum sales thresholds for a timeshare project have been attained, the purchaser’s period to cancel for a refund has expired and the related receivable is deemed to be collectible. In addition, before we recognize any revenues, the purchaser must have met the initial and continuing investment criteria. We defer revenue recognition for sales that do not meet these criteria. During periods of construction, revenue from VOI sales is recognized under the percentage-of-completion method, which includes judgments and estimates, including total project costs to complete. Additionally, we record an estimate of uncollectible amounts at the time of a financed sale with a charge to provision for loan loss, which we classify as a reduction of in our consolidated statements of operations. We account for rental operations of unsold VOIs, including accommodations provided through the use of our vacation sampler programs, as incidental operations. Incremental carrying costs in excess of incremental revenues are recognized in the period incurred. In all periods presented, incremental carrying costs exceeded incremental revenues and all revenues and expenses are recognized in the period earned or incurred. We award Club Bonus Points (“Bonus Points”) to our customers. These points are valid for a maximum of two years and may be used toward reservations at Club resorts, hotel reservations within Hilton’s system and VOI interval exchanges with other third-party vacation ownership exchanges. We also take into consideration the fair value of certain incentives, including Bonus Points, provided to the purchaser when assessing the adequacy of the purchaser’s initial investment, which requires us to make certain estimates and assumptions in deriving the fair value of these incentives. We defer a portion of the VOI sales price as a liability and recognize the corresponding revenue upon the customer’s redemption of the Bonus Points. One of our VOI products is accounted for as a long-term lease with a reversionary interest, rather than the sale of a deeded interest in real estate. In this case, sales revenue is recognized on a straight-line basis over the term of the lease. • Sales, marketing, brand and other fees— We sell VOIs through fee-for-service agreements with third-party developers for which we earn sales commissions and other fees. We recognize revenue from commissions on these sales and other fees as intervals are sold and the service requirements of the respective agreements with the developers have been fulfilled. Additionally, we sell prepaid vacation packages and recognize revenue when they are redeemed for stays at properties other than our timeshare resorts; stays using these prepaid packages at our properties are included in in our consolidated statements of operations. • Financing— VOI sales may be made for cash or we may provide financing for sales of our owned intervals. Revenue from the financing of timeshare sales is recognized on the accrual method as earned based on the outstanding principal, interest rate and terms stated in each individual financing agreement. See “— ” below for further discussion of the policies applicable to our timeshare financing receivables. We also recognize revenue from servicing the loans provided by third-party developers to purchasers of their VOIs over the period services are rendered. • Resort and club management— We manage the Club, receiving activation fees, annual dues and transaction fees from member exchanges. Each purchaser of a vacation ownership unit is automatically enrolled in the Club, which gives the purchaser an annual allotment of Club points that allow the purchaser to exchange the Club points for a number of vacation options. Revenue from Club activation fees are deferred and amortized on a straight-line basis over the average inventory holding period. We recognize revenue from annual dues and transaction fees over the period services are rendered. We earn recurring management fees under our agreements with homeowners’ association (“HOA”s) and generally recognize these fees over the period services are rendered. We provide day-to-day-management services, including housekeeping services, operation of a reservation system, maintenance, and certain accounting and administrative services for HOAs. We receive compensation for such management services which is generally based on a percentage of costs to operate the resorts. • Rental and ancillary services— We offer rentals of unoccupied vacation ownership units and recognize rental revenues when occupancy has occurred. We defer advance deposits on rentals until the customer’s stay. We also recognize rental revenues from the utilization of Bonus Points and prepaid vacation packages when those points and packages are redeemed for rental stays at one of our resorts. We defer the advance payment as a liability and recognize the corresponding revenue upon the customer’s vacation stay. Ancillary revenues include food and beverage, retail, spa offerings and other guest services. • Cost reimbursements— Cost reimbursements include direct and indirect costs that HOAs and developers reimburse to us. These costs primarily consist of payroll and payroll related costs for management of the HOAs and other services we provide where we are the employer. We recognize cost reimbursements when we incur the related reimbursable costs. Cost reimbursements are based upon actual expenses with no added margin. Other than the United States, there were no countries that individually represented more than 10 percent of total revenues for the years ended December 31, 2017, 2016 and 2015. We earn commission and other fees related to fee-for-service agreements to sell VOIs. For the years ended December 31, 2017, 2016 and 2015, approximately 15 percent, 11 percent and 10 percent, respectively, of our total revenue was earned from one customer. We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent with respect to these taxes and fees. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. Multiple Element Arrangements When we enter into transactions for the sale of multiple products or services, we evaluate whether the delivered elements have value to the customer on a stand-alone basis, and if the arrangement includes a general right of return relative to the delivered items, we consider whether delivery or performance of the undelivered items is probable and substantially in our control. If these criteria are met, then we account for each deliverable in the transaction separately. We generally recognize revenue for undelivered elements on a straight-line basis over the contractual performance period for time-based elements or upon delivery to the customer. Investments in Unconsolidated Affiliates We account for investments in unconsolidated affiliates under the equity method of accounting when we exercise significant influence, but do not maintain a controlling financial interest over the affiliates. We evaluate our investments in affiliates for impairment when there are indicators that the fair value of our investment may be less than our carrying value. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less. Restricted Cash Restricted cash includes advance deposits received on VOI sales that are held in escrow until the contract is closed and cash reserves required by our non-recourse debt agreements. For purposes of our consolidated statements of cash flows, changes in restricted cash caused by changes in lender reserves due to restrictions under our loan agreements are shown as financing activities and the remaining changes in restricted cash, primarily relating to VOI sales, are the result of our normal operations and are reflected as operating activities. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable primarily consists of trade receivables and is reported at the customers’ outstanding balances, less any allowance for doubtful accounts. An allowance for doubtful accounts is provided on accounts receivable when losses are probable based on historical collection activity and current business conditions. Timeshare Financing Receivables and Allowance for Loan Loss Our timeshare financing receivables consist of loans related to our financing of VOI sales that are secured by the underlying timeshare properties. We determine our timeshare financing receivables to be past due based on the contractual terms of the individual mortgage loans. We recognize interest income on our timeshare financing receivables as earned. 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. We record an estimate of uncollectibility as a reduction of revenue from VOI sales at the time revenue is recognized on a VOI sale. 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 three key dimensions to stratify our portfolio: FICO scores and equity percentage at the time of sale. 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. 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 note 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. Inventory and Cost of Sales Inventory includes unsold, completed VOIs; VOIs under construction; and land and infrastructure held for future VOI product development at our current resorts. We carry our completed VOI inventory at the lower of cost or estimated fair value, less costs to sell, which can result in impairment losses and/or recoveries of previous impairments. Projects under development, along with land and infrastructure for future development are under held and use impairment model and are reviewed for indicators of impairment quarterly. We capitalize costs directly associated with the acquisition, development and construction of a real estate project when it is probable that the project will move forward. We capitalize salary and related costs only to the extent they directly relate to the project. We capitalize interest expense, taxes and insurance costs when activities that are necessary to get the property ready for its intended use are underway. We cease capitalization of costs during prolonged gaps in development when substantially all activities are suspended or when projects are considered substantially complete. We account for our VOI inventory and cost of VOI sales using the relative sales value method. Also, we do not reduce inventory for the cost of VOI sales related to anticipated credit losses, and accordingly, no adjustment is made when inventory is reacquired upon default of the related receivable. This results in changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as cost of sales true-ups, and are included in Cost of VOI sales Property and Equipment Property and equipment includes land, building and leasehold improvements and furniture and equipment at our corporate offices, sales centers and management offices. Additionally, certain property and equipment is held for future conversion into inventory. Construction-in-progress primarily relates to leasehold improvements not yet placed in service. Property and equipment are recorded at cost. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. Other than the United States, there were no countries that individually represented over 10 percent of total property and equipment, net as of December 31, 2017 and 2016. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: buildings and improvements (eight to 40 years); furniture and equipment (three to eight years); and computer equipment and acquired software (three years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term. We evaluate the carrying value of our property and equipment if there are indicators of potential impairment. We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, to the extent the net book value is in excess of fair value we recognize an impairment loss. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers. If sufficient information exists to reasonably estimate the fair value of a conditional asset retirement obligation, including environmental remediation liabilities, we recognize the fair value of the obligation when the obligation is incurred. Intangible Assets Our intangible assets consist of management agreements and certain proprietary technologies with finite lives. We have management agreements that were recorded at their fair value at the time of the completion of a merger on October 24, 2007 where Hilton became a wholly-owned subsidiary of an affiliate of The Blackstone Group L.P. (“Blackstone”). Additionally, we capitalize direct and incremental costs to obtain management agreements and costs incurred to develop internal-use computer software, including costs incurred in connection with development of upgrades or enhancements that result in additional functionality. These capitalized costs are amortized on a straight-line basis over the term of the management agreement or the estimated useful life of the software, respectively. These capitalized costs are included in Intangible assets, net We review all finite life intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations. Deferred Financing Costs Deferred financing costs, including legal fees and upfront lenders fees, related to the Company’s debt and non-recourse debt are deferred and amortized over the life of the respective debt using the effective interest method. These capitalized costs are included in Other or Debt, net Debt & Non-recourse debt Costs Incurred to Sell VOIs We expense indirect sales and marketing costs we incur to sell VOIs when incurred. Deferred selling and marketing expenses, which are direct selling and marketing costs related either to an unclosed contract or a contract for which 100 percent of revenue has not yet been recognized, were $8 million and $9 million as of December 31, 2017 and 2016, respectively, and were included in Other assets Fair Value Measurements—Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). We use the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-level hierarchy of inputs is summarized below: • Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and • Level 3—Valuation is based upon unobservable inputs that are significant to the fair value measurement. The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. Currency Translation The U.S. dollar is our reporting currency and is the functional currency of the majority of our operations. Income and expense accounts are remeasured at the average exchange rate for the period. Gains and losses from foreign exchange rate changes related to transactions denominated in a currency other than an entity’s functional currency or intercompany receivables and payables denominated in a currency other than an entity’s functional currency that are not of a long-term investment nature are recognized as Other loss, net Share-Based Compensation Costs Certain of our employees participate in our 2017 Omnibus Incentive Plan (the “Stock Plan”) which compensates eligible employees and directors with restricted stock units (“RSUs”) and nonqualified stock options (“options”). We record compensation expense based on the share-based awards granted to our employees. Share-based compensation awards issued prior to the spin-off have been converted to reflect the separation from Hilton. Upon the separation on January 3, 2017, holders of Hilton share-based awards received an adjusted award based on our shares. The adjustments were designed to generally preserve the fair value of each award before and after the separation. • RSUs vest in annual installments over three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested RSUs generally will be settled for Hilton Grand Vacation’s common stock. The grant date fair value is equal to Hilton Grand Vacation’s closing stock price on the date of grant. • Options vest over three years in equal annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date, and will terminate 10 years from the date of grant or earlier if the individual’s service terminates. The exercise price is equal to the closing price of the Hilton Grand Vacation’s common stock on the date of grant. The grant date fair value is estimated using the Black-Scholes-Merton Model. We recognize the cost of services received in share-based payment transactions with employees as services are received and recognize a corresponding change in Total Equity Income Taxes We account for income taxes using the asset and liability method. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, to recognize the deferred tax assets and liabilities that relate to tax consequences in future years, which result from differences between the respective tax basis of assets and liabilities and their financial reporting amounts, and tax loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the respective temporary differences or operating loss or tax credit carryforwards are expected to be recovered or settled. The realization of deferred tax assets and tax loss and tax credit carryforwards is contingent upon the generation of future taxable income and other restrictions that may exist under the tax laws of the jurisdiction in which a deferred tax asset exists. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized. We use a prescribed recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. For all income tax positions, we first determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If it is determined that a position meets the more-likely-than-not recognition threshold, the benefit recognized in the financial statements is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing the earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. 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 In November 2016, the FASB issued ASU No. 2016-18, (“ASU 2016-18”) Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 804): Clarifying the Definition of a Business Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606) Effective January 1, 2018, we will adopt ASC 606 using the modified retrospective approach in which the cumulative effect of applying the new standard will be recognized at the date of initial application with an adjustment to our opening balance of retained earnings. This approach applies to all contracts as of January 1, 2018. We are finalizing our evaluation of the impacts of the standard, specifically with regards to (1) the allocation of the transaction price to our identified performance obligations in VOI sales and marketing packages, (2) the historical deferral of VOI sales due to the initial and continuing investment criteria and 3) the recognition of breakage on prepaid discounted vacation packages. We do not anticipate significant changes to our consolidated financial statements aside from the following: • Sales of VOIs, net – We currently recognize revenue for sales of VOIs under construction in accordance with the percentage of completion method. Upon the adoption of ASC 606, the timing of revenue recognition for under construction and all related direct costs will be deferred until the completion of construction activities and the permissible occupancy of the timeshare development by our customers. Compared with current accounting, this will result in a deferral of all revenues and associated expenses for sales of VOIs under construction until construction is complete. As a result, we anticipate an approximate $66 million reduction of as of January 1, 2018. • Sales, marketing, brand and other fees – We currently recognize revenue from prepaid discounted vacation packages when a package is redeemed or the likelihood of redemption is remote post expiration. Upon the adoption of ASC 606, using a portfolio approach, we will recognize the expected breakage on packages not expected to be redeemed as proportionately when our other customers redeem their packages. • Sales, marketing, brand and other fees – Certain sales incentives where we are acting as the agent (e.g., delivery of Hilton Honors points) will be recognized on a net basis in . This presentation change will have no impact on as of January 1, 2018. See the unaudited 2018 Outlook Management’s Discussion and Analysis of Financial Condition and Results of Operations In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) Leases (Topic 840). In June 2016, the FASB issued ASU No. 2016-13, (“ASU 2016-13”), Financial Instruments-Credit Losses In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU 2017-03 (“ASU 2017-03”), Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323) |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Restricted Cash | Note 3: Restricted Cash Restricted cash was as follows: December 31, ($ in millions) 2017 2016 Escrow deposits on VOI sales $ 29 $ 81 Reserves related to non-recourse debt (1) 22 22 $ 51 $ 103 (1) See Note 11: Debt & Non-recourse Debt |
Timeshare Financing Receivables
Timeshare Financing Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Timeshare Financing Receivables | Note 4: Timeshare Financing Receivables Timeshare financing receivables were as follows: December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 471 $ 741 $ 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 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 December 31, 2017, our timeshare financing receivables had interest rates ranging from 5.3 percent to 20.5 percent, a weighted average interest rate of 12.2 percent, a weighted average remaining term of 7.7 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. In connection with the spin-off, in December 2016, we drew down $300 million under the Timeshare Facility to primarily settle historical intercompany obligations to Hilton. See Note 11: Debt & Non-recourse Debt 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 $59 million of 2.96 percent notes, which have a stated maturity date of December 2028. The securitization transaction did not qualify as sales and, accordingly, no gain or loss was recognized. The transaction is considered a secured borrowing; therefore, the proceeds from the transaction are presented as non-recourse debt (collectively, the “Securitized Debt”). The proceeds were used to pay down a portion of our timeshare facility. Our timeshare financing receivables as of December 31, 2017 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2018 $ 74 $ 73 $ 147 2019 72 63 135 2020 70 69 139 2021 65 74 139 2022 57 79 136 Thereafter 133 383 516 471 741 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 Our gross timeshare financing receivables balances by FICO score were as follows: December 31, ($ in millions) 2017 2016 FICO score 700+ $ 770 $ 725 600-699 225 211 <600 28 28 No score (1) 189 181 $ 1,212 $ 1,145 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. As of December 31, 2017 and 2016, we had ceased accruing interest on timeshare financing receivables with an aggregate principal balance of $49 million and $38 million, respectively. The following tables detail an aged analysis of our gross timeshare financing receivables balance: December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 462 $ 685 $ 1,147 31 - 90 days past due 6 10 16 91 - 120 days past due 1 4 5 121 days and greater past due 2 42 44 $ 471 $ 741 $ 1,212 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: ($ in millions) Securitized and Pledged Unsecuritized Total December 31, 2014 $ 28 $ 68 $ 96 Write-offs — (29 ) (29 ) Provision for loan loss (1) (11 ) 50 39 December 31, 2015 17 89 106 Write-offs — (35 ) (35 ) Provision for loan loss (1) (8 ) 57 49 December 31, 2016 9 111 120 Write-offs — (37 ) (37 ) Securitizations 28 (28 ) — Provision for loan loss (1) (10 ) 68 58 December 31, 2017 $ 27 $ 114 $ 141 (1) Includes activity related to repurchase of defaulted and upgraded securitized timeshare financing receivables, net of incremental provision for loan loss. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5: Inventory Inventory was as follows: December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 191 $ 233 Construction in process 60 20 Land, infrastructure and other 258 260 $ 509 $ 513 We benefited from $4 million and $10 million in costs of sales true-ups relating to VOI products for the years ended December 31, 2017 and 2016, respectively, which resulted in a $4 million and $10 million increase to the carrying value of inventory as of December 31, 2017 and 2016, respectively. Shown below are expenses incurred, recorded in Cost of VOI sales December 31, ($ in millions) 2017 2016 2015 Cost of VOI sales related to fee-for-service upgrades $ 36 $ 49 $ 67 In 2017, we had non-cash transfers from property and equipment into inventory. See Note 21: Supplemental Disclosure of Cash Flow Information In 2016, Hilton transferred certain hotel assets to us for conversion to vacation ownership units. See Note 18: Related Party Transactions |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 6: Property and Equipment Property and equipment and related accumulated depreciation were as follows: December 31, ($ in millions) 2017 2016 Land $ 53 $ 71 Buildings and leasehold improvements 182 185 Furniture and equipment 48 44 Construction-in-progress 20 12 303 312 Accumulated depreciation (65 ) (56 ) $ 238 $ 256 In 2017, we had non-cash transfers from property and equipment to inventory. See Note 21: Supplemental Disclosure of Cash Flow Information In 2016, Hilton transferred certain property and equipment to us for future conversion to vacation ownership units. See Note 18: Related Party Transactions Depreciation expense on property and equipment was $17 million, $12 million, and $10 million for the years ended December 31, 2017, 2016 and 2015 respectively. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Note 7: Consolidated Variable Interest Entities As of December 31, 2017 and 2016, we consolidated three and two VIEs, respectively, that issued debt securitized by our timeshare financing receivables (the “Securitized Debt”), which is without recourse to us. We are the primary beneficiaries of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. We are also the servicer of these timeshare financing receivables and we are required to replace or repurchase timeshare financing receivables that are in default at their outstanding principal amounts. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our VIEs are only available to settle the obligations of the respective entities. Our consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: December 31, ($ in millions) 2017 2016 Restricted cash $ 18 $ 10 Timeshare financing receivables, net 445 244 Non-recourse debt (1) 454 244 (1) Net of deferred financing costs. During the years ended December 31, 2017, 2016 and 2015, 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. |
Investment in Unconsolidated Af
Investment in Unconsolidated Affiliate | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Investment in Unconsolidated Affiliate | Note 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 The Blackstone Group L.P. (“Blackstone”) and formed BRE Ace LLC, a VIE. Because we are not the primary beneficiary, we do not consolidate 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. Our investment interest in and equity earned from BRE Ace LLC are included in the consolidated balance sheets as Investment in unconsolidated affiliate Equity in earnings from unconsolidated affiliate BRE Ace LLC had debt of $199 million and non-recourse debt of $289 million as of December 31, 2017. The debt and non-recourse debt are secured by its assets and are without recourse to us. Our maximum exposure to loss as a result of our investment interest in BRE Ace LLC is primarily limited to the carrying amount of the investment which totals $41 million as of December 31, 2017, as well as receivables for commission and other fees earned under a fee-for-service arrangement. See Note 18: Related Party Transactions |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 9: Intangible Assets Intangible assets and related amortization expense were as follows: December 31, 2017 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (37 ) $ 51 Capitalized software 51 (30 ) 21 $ 139 $ (67 ) $ 72 December 31, 2016 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (33 ) $ 55 Capitalized software 41 (26 ) 15 $ 129 $ (59 ) $ 70 Amortization expense on intangible assets was $12 million for each of the years ended December 31, 2017, 2016 and 2015. As of December 31, 2017, the weighted average amortization period on management agreements was 14.1 years and capitalized software was 2.7 years We had approximately $15 million and $8 million of capitalized software additions for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, we estimated our future amortization expense for our amortizing intangible assets to be as follows: ($ in millions) Future Amortization Expense Year 2018 $ 13 2019 11 2020 9 2021 5 2022 4 Thereafter 30 $ 72 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other | Note 10: Accounts Payable, Accrued Expenses and Other Accounts payable, accrued expenses and other were as follows: December 31, ($ in millions) 2017 2016 Accrued employee compensation and benefits $ 70 $ 64 Accounts payable 45 31 Bonus point incentive liability 52 46 Due to Hilton 23 5 Income taxes payable (1) 64 1 Other accrued expenses (2) 85 84 $ 339 $ 231 (1) During the year ended December 31, 2017, we deferred approximately $63 million in federal tax payment as permitted by the federal government pursuant to a tax relief program for regions impacted by Hurricane Irma. See Item 7 Management’s Discussion and Analysis of Financial Condition and Result of Operations (2) Other accrued expenses consist of taxes, rent, interest and other accrued balances. |
Debt & Non-recourse Debt
Debt & Non-recourse Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt & Non-recourse Debt | Note 11: Debt & Non-recourse Debt Debt The following table details our outstanding debt balance and its associated interest rates: December 31 ($ in millions) 2017 2016 Debt (1) Senior secured credit facilities: Term loans with an average rate of 3.814%, due 2021 $ 190 $ 200 Senior notes with a rate of 6.125%, due 2024 300 300 490 500 Less: unamortized deferred financing costs and discount (2)(3) (8 ) (10 ) $ 482 $ 490 (1) For the years ended December 31, 2017 and 2016, weighted average interest rates were 5.229 percent and 4.851 percent, respectively. (2) (3) Amount does not include deferred financing costs of $2 million as of December 31, 2017 and 2016, relating to our revolving facility included in Other Assets Senior Secured Credit Facilities In December 2016, we entered into the senior secured facilities (the “Senior Secured Credit Facilities”), consisting of a $200 million variable rate term loan facility (the “Term Loans”) and a revolving credit facility in an aggregate principal amount of up to $200 million (the “Revolving Facility”), each with a five-year maturity. The Revolving Facility has borrowing capacity available in an amount up to $30 million for letters of credit and $10 million for short-term borrowings. As of December 31, 2017, we had $1 million of outstanding letter of credit under the Revolving Facility. We are required to pay an unused commitment fee of 0.35 percent per annum under the Revolving Facility for unused commitments thereunder. The Term Loans bear interest at a variable rate, which is payable monthly. The Senior Secured Credit Facilities provide the option to increase the amount available under the Term Loans and/or the Revolving Credit Facility by an aggregate of up to $300 million plus an unlimited amount subject to compliance with a first lien net leverage ratio not to exceed 0.25:1.00. The obligations under the Senior Secured Credit Facility are unconditionally and irrevocably guaranteed by us and certain of our subsidiaries. We are in compliance with all applicable financial covenants as of December 31, 2017. Senior Notes In November 2016, we issued $300 million aggregate principal amount of 6.125 percent senior unsecured notes due 2024 (the “Senior Unsecured Notes”) and incurred $8 million of debt issuance costs. Interest on the Senior Unsecured Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2017. We may, at our sole option, redeem the Senior Unsecured Notes, in whole or in part, at any time prior to December 1, 2021, at a price equal to 100 percent of the principal amount, plus an applicable make-whole premium and accrued and unpaid interest. On and after, December 1, 2021, we may, at our sole option, redeem the Senior Unsecured Notes at 103.25 percent, 101.625 percent or 100 percent of the principal amount in 2021, 2022 or 2023, respectively, without any make-whole premium. The Senior Unsecured Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries. We are in compliance with all applicable financial covenants as of December 31, 2017. Non-recourse Debt The following table details our outstanding non-recourse debt balance and its associated interest rates: December 31 ($ in millions) 2017 2016 Non-recourse debt (1) Timeshare Facility with an average rate of 2.675%, due 2019 $ 129 $ 450 Securitized Debt with an average rate of 2.441%, due 2028 459 246 588 696 Less: unamortized deferred financing costs (2) (5 ) (2 ) $ 583 $ 694 (1) For the years ended December 31, 2017 and 2016, weighted average interest rates were 2.492 percent and 1.946 percent, respectively. (2) Amount relates to Securitized Debt only and does not include deferred financing costs of $2 million and $3 million as of December 31, 2017 and 2016, respectively, relating to our Timeshare Facility included in Other Assets The Timeshare Facility is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral to the debt and related assets. In August and December 2016, we amended the terms of the Timeshare Facility to, among other things, increase the borrowing capacity from $300 million to $450 million, allowing us to borrow up to the maximum amount until August 2018 and requiring all amounts borrowed to be repaid in August 2019. In December 2016, we borrowed $300 million under the Timeshare Facility. The Timeshare Facility is secured by certain of our timeshare financing receivables. See Note 4: Timeshare Financing Receivables 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 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. The proceeds from the securitization were used to pay down a portion of our Timeshare Facility. 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 were $22 million as of December 31, 2017 and 2016, and were included in Restricted cash Debt Maturities The contractual maturities of our debt and non-recourse debt as of December 31, 2017 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2018 $ 10 $ 140 $ 150 2019 10 251 261 2020 10 89 99 2021 160 34 194 2022 — 26 26 Thereafter 300 48 348 $ 490 $ 588 $ 1,078 |
Deferred Revenues
Deferred Revenues | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenues | Note 12: Deferred Revenues Deferred revenues were as follows: December 31, ($ in millions) 2017 2016 Deferred VOI sales $ 45 $ 46 Club activation fees 54 45 Other 10 15 $ 109 $ 106 Deferred VOI sales include the deferred revenues associated with: the sales associated with incomplete phases or buildings that are recognized under the percentage-of-completion method; the sales of unacquired inventory; and deferred sales associated with our long-term lease product with a reversionary interest. Club activation fees are paid at closing of a VOI purchase, which grants access to our points-based Club. The revenue from these fees are deferred and amortized on a straight-line basis over the average inventory holding period. Deferred revenues do not include prepaid vacation packages or other prepayments for future stays at our resorts, which are included in Advanced deposits |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 13: Fair Value Measurements The carrying amounts and estimated fair values of our financial assets and liabilities were as follows: December 31, 2017 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,071 $ — $ 1,292 Liabilities: Debt (2) 482 329 194 Non-recourse debt (2) 583 — 577 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 includes allowance for loan loss. (2) Carrying amount includes 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. We do not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2017 or 2016. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases | Note 14: Leases We lease sales centers, office space and equipment under operating leases. Our operating leases may require minimum rent payments, contingent rent payments based on a percentage of revenue or income or rent payments equal to the greater of a minimum rent or contingent rent. Our leases expire at various dates from 2018 through 2026, with varying renewal options. The future minimum rent payments under non-cancelable leases, due in each of the next five years and thereafter as of December 31, 2017, were as follows: ($ in millions) Operating Leases Year 2018 $ 14 2019 12 2020 11 2021 10 2022 8 Thereafter 23 Total minimum rent payments $ 78 Rent expense for all operating leases was as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Minimum rentals $ 17 $ 16 $ 12 Contingent rentals 3 1 5 $ 20 $ 17 $ 17 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15: Income Taxes On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Act”), resulting in significant modifications to existing law. HGV follows the guidance in SEC Staff Accounting Bulletin 118 (“SAB 118”), which provides additional clarification regarding the application of Accounting Standards Codification Topic 740 (“ASC Topic 740”) in situations where we do not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Act’s enactment date and ending when we have obtained, prepared, and analyzed the information needed in order to complete the accounting requirements but in no circumstances should the measurement period extend beyond one year from the enactment date. As of December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Act. However, in certain cases, as described below, we have made a reasonable estimate of the effects on the one-time repatriation tax and its existing deferred tax balances. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes One-Time Repatriation Tax : We have included a provisional current income tax payable in the amount of $1 million (net of applicable foreign tax credit) related to the one-time deemed repatriation transition tax on unrepatriated foreign earnings. The provisional amount is based on information currently available, including estimated tax earnings and profits from foreign investments. We will continue to gather and analyze information, including historical adjustments to earnings and profits of foreign subsidiaries, in order to complete the accounting for the effects of the estimated transition tax. It is our intention to complete the necessary analysis within the measurement period. Deferred tax assets and liabilities : We have re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balance was $132 million of deferred tax benefit, which consisted primarily of the re-measurement of deferred tax assets and liabilities from 35% to 21%. 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 HGV, 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 consolidated balance sheet as of December 31, 2017. Additionally, upon Hilton’s filing of the pre spin-off income tax returns, we recorded a return-to-provision true-up, which resulted in a reduction to our net deferred tax liability and an increase in our Additional paid-in capital of $1 million on the consolidated balance sheet as of December 31, 2017. Our tax provision includes federal, state and foreign income taxes payable. The domestic and foreign components of income before taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 U.S. income before tax $ 283 $ 270 $ 275 Foreign income before tax 28 23 17 Income before taxes $ 311 $ 293 $ 292 The components of our provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Current: Federal $ 94 $ 87 $ 85 State 11 8 7 Foreign 8 7 6 Total current 113 102 98 Deferred: Federal (137 ) 21 18 State 8 2 2 Total deferred (129 ) 23 20 Total provision for income taxes $ (16 ) $ 125 $ 118 Reconciliations of our tax provision at the U.S. statutory rate to the provision (benefit) for income taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Statutory U.S. federal income tax provision $ 109 $ 102 $ 102 State and local income taxes, net of U.S. federal tax benefit 12 10 9 Foreign income tax expense 7 7 6 U.S. benefit of foreign taxes (7 ) (7 ) (6 ) Non-deductible transactions costs — 5 — Interest on installment sales, net of U.S. federal tax benefit 3 7 7 Interest on installment sales adjustment (5 ) — — U.S. tax reform: one-time repatriation tax 1 — — U.S. tax reform: remeasurement of deferred tax (132 ) — — U.S. tax reform: remeasurement of long-term interest liability on installment sales, net of federal tax benefit at 21% (2 ) — — Other (2 ) 1 — Provision for income taxes $ (16 ) $ 125 $ 118 Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items. The compositions of net deferred tax balances were as follows: December 31, ($ in millions) 2017 2016 Deferred income taxes assets $ 1 $ — Deferred income tax liabilities (250 ) (389 ) Net deferred taxes $ (249 ) $ (389 ) Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items. The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax liability were as follows: December 31, ($ in millions) 2017 2016 Deferred tax assets: Compensation $ 9 $ 11 Other reserves 42 52 Deferred tax assets 51 63 Deferred tax liabilities: Property and equipment (54 ) (87 ) Amortizable intangible assets (10 ) (17 ) Deferred income (236 ) (347 ) Other liabilities — (1 ) Deferred tax liabilities (300 ) (452 ) Net deferred taxes $ (249 ) $ (389 ) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 16: Share-Based Compensation Stock Plan The share-based compensation award amounts presented below have been converted to reflect the separation from Hilton. Upon the separation on January 3, 2017, holders of Hilton stock options, RSUs and performance shares received an adjusted award based on our shares. The adjustments were designed to generally preserve the fair value of each award before and after the separation. Hilton modified the existing performance shares grant, converting the performance shares granted in 2016 and 2015 to RSUs based on a 100 percent achievement percentage with the same vesting periods as the original awards. We issue time-vesting restricted stock units (“RSUs”) and nonqualified stock options (“options”) to certain employees. We recognized share-based compensation expense of $15 million, $8 million and $8 million during the years ended December 31, 2017, 2016 and 2015 respectively. The total tax benefit recognized related to this compensation was $4 million, $3 million and $3 million for the years ended December 31, 2017, 2016 and 2015 respectively. As of December 31, 2017, unrecognized compensation costs for unvested awards were approximately $11 million, which is expected to be recognized over a weighted average period of 1.9 years. As of December 31, 2017, there were 7,652,477 shares of common stock available for future issuance. RSUs The following table provides information about our RSU grants for the last three fiscal years: Year Ended December 31, 2017 2016 2015 Number of shares granted 534,329 331,227 231,185 Weighted average grant date fair value per share $ 29.23 $ 18.68 $ 26.16 Fair value of shares vested (in millions) $ 11 $ 4 $ 8 The following table summarizes the activity of our RSUs during the year ended December 31, 2017: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 721,557 $ 21.41 Granted 534,329 29.23 Vested (330,072 ) 23.37 Forfeited (86,014 ) 24.54 Outstanding, end of period 839,800 25.29 Options The following table provides information about our option grants for the last three fiscal years: Year Ended December 31, 2017 2016 2015 Number of options granted 669,658 148,929 89,641 Weighted average exercise price per share $ 28.30 $ 18.69 $ 26.16 Weighted average grant date fair value per share $ 8.66 $ 5.21 $ 7.99 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: Year Ended December 31, 2017 2016 2015 Expected volatility (1) 26.3 % 32.0 % 28.0 % Dividend yield (2) — % 1.4 % — % Risk-free rate (3) 2.3 % 1.4 % 1.7 % Expected term (in years) (4) 6.0 6.0 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 its share price. As a result, we used an 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) For the 2017 and 2015 options, HGV and Hilton had no plans to pay dividends during the expected term of these options. For the 2016 options, estimated based on the expected annualized dividend payment at the date of grant. (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. The following table summarizes the activity of our options during the year ended December 31, 2017: Number of Shares Weighted Average Exercise Price Per Share Outstanding, beginning of period 333,108 $ 21.21 Granted 669,658 28.30 Exercised (34,183 ) 21.76 Forfeited, canceled or expired (94,009 ) 27.36 Outstanding, end of period 874,574 25.96 Exercisable, end of period 169,926 21.71 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 17: 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 years ended December 31, 2016 and 2015 reflect 98,802,597 shares distributed on January 3, 2017, our spin-off date, to our stockholders. See Note 1: Organization Year Ended December 31, ($ in millions, except per share amounts) 2017 2016 2015 Basic EPS Numerator: Net Income (1) $ 327 $ 168 $ 174 Denominator: Weighted average shares outstanding 99 99 99 Basic EPS $ 3.30 $ 1.70 $ 1.76 Diluted EPS Numerator: Net Income (1) $ 327 $ 168 $ 174 Denominator: Weighted average shares outstanding 100 99 99 Diluted EPS $ 3.28 $ 1.70 $ 1.76 (1) Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. The dilutive effect of outstanding share-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period. For the year ended December 31, 2017, we excluded 229,621 share-based compensation awards because their effect would have been anti-dilutive under the treasury stock method. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18: Related Party Transactions Relationship between HGV and Hilton Before and After Spin-Off On January 3, 2017, when the spin-off was completed, Hilton and Park Hotels & Resorts Inc. ceased to be related parties of HGV. In connection with the spin-off, we entered into certain agreements with Hilton (who at the time was a related party) and other third parties. See Key Agreements Related to Spin-Off Business Prior to the spin-off, we had a number of existing arrangements whereby Hilton and others have provided services to us. The following tables summarize amounts included in our consolidated financial statements related to the arrangements with Former Parent Hilton: December 31, ($ in millions) 2016 Consolidated Balance Sheets Assets: Accounts receivable, net Due from Hilton $ 5 Liabilities: Accounts payable, accrued expenses, and other Due to Hilton $ 5 Year Ended December 31, ($ in millions) 2016 2015 Consolidated Statements of Operations Expenses: General and administrative Allocated general and administrative $ 27 $ 13 Shared services 12 11 Defined contribution plan 7 7 Insurance 2 2 License fee expense 80 74 Interest expense Related party interest expense 2 — Shared Services and Corporate allocations Our consolidated financial statements include costs for services provided to us by Hilton including, but not limited to, information technology support, financial services, human resources and other shared services. Historically, these costs were charged to us on a basis determined by Hilton to reflect a reasonable allocation of actual costs incurred to perform the services. Additionally, Hilton allocated indirect general and administrative costs to us for certain functions and services provided to us, including, but not limited to, executive office, finance and other administrative support. Insurance Hilton provided us with insurance coverage for general liability, group health insurance, property, business interruption and other risks with respect to business operations and charges us a fee based on estimates of claims. Hilton Grand Vacations Brand We licensed the Hilton Grand Vacations brand from Hilton and paid them an annual fee based on a percentage of revenue for rights to operate under this brand. Defined Contribution Plan Hilton administered and maintained a defined contribution plan for the benefit of Hilton employees meeting certain eligibility requirements who elect to participate in the plan. Contributions are determined based on a specified percentage of salary deferrals by participating employees. Hilton Honors Program We participate in Hilton’s guest loyalty program, Hilton Honors. Club members can exchange Club points for Hilton Honors points, which we purchase from Hilton. Hilton maintains and administers the program. We pay Hilton in advance based on an estimated cost per point for the costs of future club exchanges. The associated expense is included in respective operating expenses line item based on the revenue stream in our consolidated statement of operations. For the years ended December 31, 2016 and 2015, we paid Hilton $58 million and $56 million, respectively, for Hilton Honors points. Our prepaid expenses, included in Other assets Cash Management Hilton used a centralized approach for cash management. Historically, up until October 2016, the majority of our cash was transferred to Hilton daily, and Hilton funded our operating and investing activities as needed. Accordingly, the cash and cash equivalents held by Hilton at the corporate level were not allocated to us for any of the periods presented prior to October 2016. As a result of the spin-off, beginning in the fourth quarter of 2016, we no longer transferred our cash to Hilton. We reflect transfers of cash to and from Hilton’s cash management system as a component of Total equity Net Parent Transfers The components of Net transfers (to) from Parent December 31, ($ in millions) 2016 2015 Cash pooling and general financing activities $ (715 ) $ (39 ) Corporate allocations 53 42 Income taxes 95 92 Net transfers (to) from Parent $ (567 ) $ 95 Hotel Conversions and Other Hotel Transactions In 2016, Hilton transferred to us certain assets and related deferred tax liabilities for conversion to vacation ownership units: ($ in millions) Assets Deferred Tax Liabilities Parent Capital Contribution Certain floors at the Hilton New York (1)(2) $ 33 $ 9 $ 17 Certain floors at the Embassy Suites Washington, DC 40 7 33 Hotel tower and restaurant at the Hilton Waikoloa Village (2) 178 49 129 Land parcel adjacent to Hilton Waikoloa Village 54 16 38 (1) Parent capital contribution includes the release of the $7 million included in Other assets . (2) Certain floors at the Hilton New York, were subject to a lease arrangement with Park whereby Park retained the right to occupy and operate those floors, which lease expired September 30, 2017. The hotel tower and restaurant at the Hilton Waikoloa Village, are subject to a lease arrangement with Park whereby Park has retained the right to occupy and operate certain floors of the properties with lease terms expiring on December 31, 2019. We pay rental fees and fees for other amenities to certain Hilton wholly owned hotels. During the years ended December 31, HNA Tourism Group Co., Ltd On March 15, 2017, Blackstone completed the previously announced sale of 24,750,000 shares of our common stock to HNA Tourism Group Co., Ltd. (“HNA”), representing approximately 25 percent of the outstanding shares of our common stock. In connection with the consummation of the sale, we adopted our amended and restated by-laws, effective March 15, 2017, to remove references to Blackstone’s ownership of at least 40 percent of the total voting power of our common stock and revised certain provisions referencing the Blackstone Stockholders Agreement, as appropriate, to include references to the HNA Stockholder Agreement. The Blackstone Group Upon completion of the sale to HNA, on March 31, 2017, Blackstone held 15,008,689 shares, or approximately 15 percent of our outstanding common stock. On May 25, 2017, Blackstone filed a Registration Statement on Form S-1 and registered all of our common stock held by them. The following table summarizes amounts included in our consolidated statements of operations related to a fee-for-service arrangement with Blackstone affiliates to sell VOIs on their behalf through September 30, 2017 were as follows: September 30, December 31, ($ in millions) 2017 2016 2015 Commission and other fees $ 135 $ 177 $ 154 Also related to the fee-for-service agreement, as of September 30, 2017 and December 31, 2016, we have outstanding receivables of $8 and $20 million, respectively. BRE Ace LLC On July 18, 2017, we entered into an agreement with BRE Ace Holdings to form BRE Ace LLC. In conjunction with this agreement we acquired a 25 percent ownership interest in BRE Ace LLC. During the year ended December 31, 2017, we recorded $1 million in Equity in earnings from unconsolidated affiliates Investment in Unconsolidated Affiliate December 31, ($ in millions) 2017 2016 2015 Commission and other fees $ 79 $ — $ — Also related to the fee-for-service agreement, as of December 31, 2017, we have outstanding receivables of $29 million. |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | Note 19: Business Segments We operate our business through the following two segments: • Real estate sales and financing – • Resort operations and club management – The performance of our operating segments is evaluated primarily based on adjusted earnings before interest expense, taxes, depreciation and amortization (“EBITDA”). We define Adjusted EBITDA as EBITDA which has been further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) asset dispositions; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) reorganization costs, including severance and relocation costs; (vi) share-based and other compensation expenses; (vii) costs related to the spin-off; and (viii) other items. During the first quarter of 2017, we revised our definition of EBITDA to exclude the adjustment of interest expense relating to our non-recourse debt as a reconciling item to arrive at net income (loss) in order to conform to the presentation of the timeshare industry following the consummation of the spin-off from Hilton. This adjustment was retrospectively applied to prior period(s) to conform with the current presentation. We do not include equity in earnings from unconsolidated affiliate in our measures of segment revenues. The following table presents revenues for our reportable segments reconciled to consolidated amounts: Year Ended December 31, ($ in millions) 2017 2016 2015 Revenues: Real estate sales and financing (1) $ 1,239 $ 1,143 $ 1,078 Resort operations and club management (2) 367 339 307 Total segment revenues 1,606 1,482 1,385 Cost reimbursements 135 126 110 Intersegment eliminations (1)(2)(3) (30 ) (25 ) (20 ) Total revenues $ 1,711 $ 1,583 $ 1,475 (1) Includes charges to the resort operations and club management segment for billing and collection services provided by the real estate sales and financing segment. These charges totaled 31, and 2015 (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 $29 million (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 $1 million for the years ended December 31, 2017 and 2015. There were no charges for the year ended December 31, 2016. The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Year Ended December 31, ($ in millions) 2017 2016 2015 Adjusted EBITDA: Real estate sales and financing (1) $ 359 $ 336 $ 316 Resort operations and club management (1) 204 189 162 Segment Adjusted EBITDA 563 525 478 General and administrative (104 ) (92 ) (57 ) Depreciation and amortization (29 ) (24 ) (22 ) License fee expense (87 ) (80 ) (74 ) Interest expense (27 ) (3 ) — Allocated Parent interest expense (2) — (26 ) (29 ) Other loss, net — (1 ) — Equity in earnings from unconsolidated affiliate (4) 1 — — Income tax benefit (expense) (3) 16 (125 ) (118 ) Other adjustment items (6 ) (6 ) (4 ) Net income $ 327 $ 168 $ 174 (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. (3) On December 22, 2017, the United States enacted tax reform legislation, the Act, resulting in significant modifications to existing law which resulted in a reduction in income tax expense for the year ended December 31, 2017. See Note 15: Income Taxes (4) This amount represents our 25 percent interest in BRE Ace LLC. See Note 8: Investment in Unconsolidated Affiliate The following table presents total assets for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2017 2016 Real estate sales and financing $ 2,255 $ 2,067 Resort operations and club management 78 80 Total segment assets 2,333 2,147 Corporate 51 33 Total assets $ 2,384 $ 2,180 The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2017 2016 2015 Real estate sales and financing $ 28 $ 19 $ 10 Resort operations and club management 2 1 1 Total segment capital expenditures for property and equipment 30 20 11 Corporate 5 6 1 Total capital expenditures for property and equipment $ 35 $ 26 $ 12 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 20: 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 December 31, 2017, we were committed to purchase approximately $372 million of inventory and land over a period of seven 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 years ended December 31, 2017 and 2016, we purchased $12 million and $14 million, respectively, of VOI inventory as required under our commitments. As of December 31, 2017, our remaining obligation pursuant to these arrangements was expected to be incurred as follows: ($ in millions) Purchase Obligations Year 2018 $ 3 2019 187 2020 9 2021 56 2022 35 Thereafter 82 Total $ 372 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 December 31, 2017 will not have a material effect on our consolidated results of operations, financial position or cash flows. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Note 21: Supplemental Disclosures of Cash Flow Information Cash paid for interest during the years ended December 31, 2017, 2016 and 2015, was $42 million, $37 million and $37 million, respectively. Cash paid for income taxes during the year ended December 31, 2017 was $57 million. Prior to 2017, we were part of Hilton’s consolidated income tax return. The following non-cash activities were excluded from the consolidated statements of cash flows: • In 2017, we had $40 million of non-cash operating activity transfer from property and equipment to inventory. • In 2016, Hilton transferred to us $72 million of net inventory and $138 million of net property and equipment for conversion into timeshare units. See Note 18: Related Party Transactions • In 2016, we had $300 million of a non-cash financing activity related to the issuance of our Senior Unsecured Notes and $8 million of related non-cash deferred financing costs. |
Condensed Consolidating Guarant
Condensed Consolidating Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Guarantor Financial Information | Note 22: Condensed Consolidating Guarantor Financial Information During 2016, Hilton completed an internal reorganization to contribute to HGV its U.S. and non-U.S. timeshare subsidiaries including HRC. HGV is a Delaware corporation formed on May 2, 2016. HRC is considered our predecessor entity for periods prior to the formation of HGV. However, for the condensed consolidating information below, HRC is included in the Guarantors column to more faithfully represent the historical combined financial position and results of operations and cash flows of the subsidiaries currently serving as the guarantors of the debt. See Note 1: Organization The following schedules present the condensed consolidating financial information as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors. December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash and cash equivalents $ — $ — $ 230 $ 16 $ — $ 246 Restricted cash — — 29 22 — 51 Accounts receivable, net — — 113 5 (6 ) 112 Timeshare financing receivables, net — — 457 614 — 1,071 Inventory — — 509 — — 509 Property and equipment, net — — 232 6 — 238 Investment in unconsolidated affiliate — — 41 — — 41 Intangible assets, net — — 72 — — 72 Other assets — 2 36 7 (1 ) 44 Investments in subsidiaries 518 999 81 — (1,598 ) — TOTAL ASSETS $ 518 $ 1,001 $ 1,800 $ 670 $ (1,605 ) $ 2,384 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ 1 $ 338 $ 7 $ (7 ) $ 339 Advance deposits — — 104 — — 104 Debt, net — 482 — — — 482 Non-recourse debt, net — — — 583 — 583 Deferred revenues — — 109 — — 109 Deferred income tax liabilities — — 250 (1 ) — 249 Total equity 518 518 999 81 (1,598 ) 518 TOTAL LIABILITIES AND EQUITY $ 518 $ 1,001 $ 1,800 $ 670 $ (1,605 ) $ 2,384 December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash $ — $ — $ 47 $ 1 $ — $ 48 Restricted cash — — 81 22 — 103 Accounts receivable, net — — 123 18 (18 ) 123 Timeshare financing receivables, net — — 263 762 — 1,025 Inventory — — 510 3 — 513 Property and equipment, net — — 253 3 — 256 Intangible assets, net — — 70 — — 70 Other assets — 2 43 14 (17 ) 42 Investments in subsidiaries 167 657 115 — (939 ) — TOTAL ASSETS $ 167 $ 659 $ 1,505 $ 823 $ (974 ) $ 2,180 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ 2 $ 251 $ 3 $ (25 ) $ 231 Advance deposits — — 102 1 — 103 Debt, net — 490 — 10 (10 ) 490 Non-recourse debt, net — — — 694 — 694 Deferred revenues — — 106 — — 106 Deferred income tax liabilities — — 389 — — 389 Total equity 167 167 657 115 (939 ) 167 TOTAL LIABILITIES AND EQUITY $ 167 $ 659 $ 1,505 $ 823 $ (974 ) $ 2,180 For the Year Ended December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 518 $ 30 $ — $ 548 Sales, marketing, license and other fees — — 545 3 (4 ) 544 Financing — — 71 83 (7 ) 147 Resort and club management — — 156 2 — 158 Rental and ancillary service — — 177 2 — 179 Cost reimbursements — — 131 4 — 135 Total revenues — — 1,598 124 (11 ) 1,711 Expenses Cost of VOI sales — — 145 3 — 148 Sales and marketing — — 650 17 (4 ) 663 Financing — — 19 31 (7 ) 43 Resort and club management — — 41 2 — 43 Rental and ancillary service — — 120 2 — 122 General and administrative — — 101 3 — 104 Depreciation and amortization — — 29 — — 29 License fee expense — — 87 — — 87 Cost reimbursements — — 131 4 — 135 Total operating expenses — — 1,323 62 (11 ) 1,374 Interest expense — (27 ) — — — (27 ) Equity in earnings from unconsolidated affiliate — — 1 — — 1 Income (loss) before income taxes — (27 ) 276 62 — 311 Income tax benefit (expense) — — 18 (2 ) — 16 Income (loss) before equity in earnings (loss) from subsidiaries — (27 ) 294 60 — 327 Equity in earnings (loss) from subsidiaries 327 354 60 — (741 ) — Net income (loss) $ 327 $ 327 $ 354 $ 60 $ (741 ) $ 327 For the Year Ended December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 495 $ 13 $ — $ 508 Sales, marketing, license and other fees — — 501 2 (4 ) 499 Financing — — 73 66 (5 ) 134 Resort and club management — — 143 — — 143 Rental and ancillary service — — 171 2 — 173 Cost reimbursements — — 123 3 — 126 Total revenues — — 1,506 86 (9 ) 1,583 Expenses Cost of VOI sales — — 150 2 — 152 Sales and marketing — — 605 4 (4 ) 605 Financing — — 18 19 (5 ) 32 Resort and club management — — 36 — — 36 Rental and ancillary service — — 108 5 — 113 General and administrative — 1 91 — — 92 Depreciation and amortization — — 24 — — 24 License fee expense — — 80 — — 80 Cost reimbursements — — 123 3 — 126 Total operating expenses — 1 1,235 33 (9 ) 1,260 Interest expense — (3 ) — — — (3 ) Allocated Parent interest expense (17 ) — (9 ) — — (26 ) Other loss, net — — (1 ) — — (1 ) Income (loss) before income taxes (17 ) (4 ) 261 53 — 293 Income tax expense — — (125 ) — — (125 ) Income (loss) before equity in earnings (loss) from subsidiaries (17 ) (4 ) 136 53 — 168 Equity in earnings (loss) from subsidiaries 185 189 53 — (427 ) — Net income (loss) $ 168 $ 185 $ 189 $ 53 $ (427 ) $ 168 For the Year Ended December 31, 2015 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 488 $ 4 $ — $ 492 Sales, marketing, license and other fees — — 457 2 (2 ) 457 Financing — — 60 73 (6 ) 127 Resort and club management — — 125 — — 125 Rental and ancillary service — — 161 3 — 164 Cost reimbursements — — 106 4 — 110 Total revenues — — 1,397 86 (8 ) 1,475 Expenses Cost of VOI sales — — 172 1 — 173 Sales and marketing — — 542 1 (2 ) 541 Financing — — 16 22 (6 ) 32 Resort and club management — — 32 — — 32 Rental and ancillary service — — 108 5 — 113 General and administrative — — 57 — — 57 Depreciation and amortization — — 22 — — 22 License fee expense — — 74 — — 74 Cost reimbursements — — 106 4 — 110 Total operating expenses — — 1,129 33 (8 ) 1,154 Allocated Parent interest expense — — (29 ) — — (29 ) Income before income taxes — — 239 53 — 292 Income tax expense — — (118 ) — — (118 ) Income before equity in earnings (loss) from subsidiaries — — 121 53 — 174 Equity in earnings (loss) from subsidiaries — — 53 — (53 ) — Net income (loss) $ — $ — $ 174 $ 53 $ (53 ) $ 174 For the Year Ended December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ (27 ) $ 156 $ 235 $ (8 ) $ 356 Investing Activities Capital expenditures for property and equipment — — (33 ) (2 ) — (35 ) Software capitalization costs — — (12 ) — — (12 ) Investment in unconsolidated affiliate — — (40 ) — — (40 ) Net cash used in investing activities — — (85 ) (2 ) — (87 ) Financing Activities Issuance of non-recourse debt — — — 350 — 350 Repayment of non-recourse debt — — — (459 ) — (459 ) Repayment of debt — (10 ) — — — (10 ) Debt issuance costs — — — (5 ) — (5 ) Proceeds from stock option exercises — — 1 — — 1 Intercompany transfers — 37 59 (104 ) 8 — Net cash provided by (used in) financing activities — 27 60 (218 ) 8 (123 ) Net increase in cash, cash equivalents and restricted cash — — 131 15 — 146 Cash, cash equivalents and restricted cash, beginning of period — — 128 23 — 151 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 259 $ 38 $ — $ 297 For the Year Ended December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ 4 $ 432 $ (187 ) $ (67 ) $ 182 Investing Activities Capital expenditures for property and equipment — — (26 ) — — (26 ) Software capitalization costs — — (8 ) — — (8 ) Net cash used in investing activities — — (34 ) — — (34 ) Financing Activities Issuance of non-recourse debt — — — 300 — 300 Repayment of non-recourse debt — — — (110 ) — (110 ) Issuance of debt — 200 — — — 200 Debt issuance costs — (4 ) (3 ) (3 ) — (10 ) Allocated debt activity (1) 111 — — — — 111 Net transfers to Parent (1) (567 ) — — — — (567 ) Distribution to Parent (1) — — — — — — Intercompany transfers 456 (200 ) (329 ) 6 67 — Net cash provided by (used in) financing activities — (4 ) (332 ) 193 67 (76 ) Net increase in cash, cash equivalents and restricted cash — — 66 6 — 72 Cash, cash equivalents and restricted cash, beginning of period — — 62 17 — 79 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 128 $ 23 $ — $ 151 (1) Amounts represent activities with Hilton. For the Year Ended December 31, 2015 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by operating activities $ — $ — $ 17 $ 117 $ 18 $ 152 Investing Activities Capital expenditures for property and equipment — — (12 ) — — (12 ) Software capitalization costs — — (6 ) — — (6 ) Net cash used in investing activities — — (18 ) — — (18 ) Financing Activities Repayment of non-recourse debt — — — (125 ) — (125 ) Allocated debt activity (1) — — (87 ) — — (87 ) Net transfers from Parent (1) — — 95 — — 95 Distribution to Parent (1) — — (2 ) — — (2 ) Intercompany transfers — — 18 — (18 ) — Net cash provided by (used in) financing activities — — 24 (125 ) (18 ) (119 ) Net increase in cash, cash equivalents and restricted cash — — 23 (8 ) — 15 Cash, cash equivalents and restricted cash, beginning of period — — 39 25 — 64 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 62 $ 17 $ — $ 79 (1) Amounts represent activities with Hilton. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information | Note 23: Selected Quarterly Financial Information (unaudited) The following table sets forth the historical unaudited quarterly financial data for the periods indicated. The information for each of these periods has been prepared on the same basis as the audited consolidated financial statements and, in our opinion, reflects all adjustments necessary to present fairly our financial results. Operating results for previous periods do not necessarily indicate results that may be achieved in any future period. 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 399 $ 439 $ 426 $ 447 $ 1,711 Total operating expenses 316 348 350 360 1,374 Income before income taxes 76 84 71 80 311 Net income 50 51 43 183 327 Basic earnings per share $ 0.51 $ 0.51 $ 0.43 $ 1.85 $ 3.30 Diluted earnings per share $ 0.51 $ 0.51 $ 0.43 $ 1.83 $ 3.28 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 370 $ 391 $ 407 $ 415 $ 1,583 Total operating expenses 284 304 333 339 1,260 Income before income taxes 80 80 68 65 293 Net income 48 47 35 38 168 Basic and diluted earnings per share (1) $ 0.48 $ 0.48 $ 0.35 $ 0.38 $ 1.70 (1) Earnings Per Share |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 24: Subsequent Events In February 2018, we entered into a commitment to acquire $41 million of inventory. |
Basis of Presentation and Sum31
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements 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 consolidated financial statements presented herein were prepared on a stand-alone basis and were derived from the consolidated financial statements and accounting records of Hilton. The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of rights held by other interests. If the entity is considered to be a variable interest entity (“VIE”), we determine whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity. We consolidate entities when we own more than 50 percent of the voting shares of a company or otherwise have a controlling financial interest. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). All of our significant transactions with Hilton had been included in these consolidated financial statements. The net effect of the settlement of any intercompany transactions prior to the spin-off has been included in the consolidated statements of cash flows as a financing activity within Net transfers (to) from Parent |
Use of Estimates | 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. 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 had been expired for six months and therefore retained the liability until six months after expiration. During our review in the second quarter of 2017, we determined that we had sufficiently reliable updated information under current business practices to revise our estimate of expired packages that we expected to redeem. As a result, during the second quarter of 2017, we changed our accounting estimate for expected redemptions of expired packages to relieve a portion of the remaining liability post 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 year ended December 31, 2017, our net income increased by $10 million and basic and diluted earnings per share increased by $0.10. |
Allocations | Allocations Prior to the spin-off, our consolidated financial statements included certain indirect general and administrative costs allocated to us by Hilton for certain functions and services including, but not limited to, executive office, finance and other administrative support primarily on the basis of financial and operating metrics that Hilton had historically used to allocate resources and evaluate performance against its strategic objectives. Both we and Hilton considered the basis on which expenses had been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. These costs were included in General and administrative |
Revenue Recognition | Revenue Recognition • Sales of VOIs, net— Revenue from a deeded VOI sale is recognized when the customer has executed a binding sales contract, a minimum 10 percent down payment has been received, certain minimum sales thresholds for a timeshare project have been attained, the purchaser’s period to cancel for a refund has expired and the related receivable is deemed to be collectible. In addition, before we recognize any revenues, the purchaser must have met the initial and continuing investment criteria. We defer revenue recognition for sales that do not meet these criteria. During periods of construction, revenue from VOI sales is recognized under the percentage-of-completion method, which includes judgments and estimates, including total project costs to complete. Additionally, we record an estimate of uncollectible amounts at the time of a financed sale with a charge to provision for loan loss, which we classify as a reduction of in our consolidated statements of operations. We account for rental operations of unsold VOIs, including accommodations provided through the use of our vacation sampler programs, as incidental operations. Incremental carrying costs in excess of incremental revenues are recognized in the period incurred. In all periods presented, incremental carrying costs exceeded incremental revenues and all revenues and expenses are recognized in the period earned or incurred. We award Club Bonus Points (“Bonus Points”) to our customers. These points are valid for a maximum of two years and may be used toward reservations at Club resorts, hotel reservations within Hilton’s system and VOI interval exchanges with other third-party vacation ownership exchanges. We also take into consideration the fair value of certain incentives, including Bonus Points, provided to the purchaser when assessing the adequacy of the purchaser’s initial investment, which requires us to make certain estimates and assumptions in deriving the fair value of these incentives. We defer a portion of the VOI sales price as a liability and recognize the corresponding revenue upon the customer’s redemption of the Bonus Points. One of our VOI products is accounted for as a long-term lease with a reversionary interest, rather than the sale of a deeded interest in real estate. In this case, sales revenue is recognized on a straight-line basis over the term of the lease. • Sales, marketing, brand and other fees— We sell VOIs through fee-for-service agreements with third-party developers for which we earn sales commissions and other fees. We recognize revenue from commissions on these sales and other fees as intervals are sold and the service requirements of the respective agreements with the developers have been fulfilled. Additionally, we sell prepaid vacation packages and recognize revenue when they are redeemed for stays at properties other than our timeshare resorts; stays using these prepaid packages at our properties are included in in our consolidated statements of operations. • Financing— VOI sales may be made for cash or we may provide financing for sales of our owned intervals. Revenue from the financing of timeshare sales is recognized on the accrual method as earned based on the outstanding principal, interest rate and terms stated in each individual financing agreement. See “— ” below for further discussion of the policies applicable to our timeshare financing receivables. We also recognize revenue from servicing the loans provided by third-party developers to purchasers of their VOIs over the period services are rendered. • Resort and club management— We manage the Club, receiving activation fees, annual dues and transaction fees from member exchanges. Each purchaser of a vacation ownership unit is automatically enrolled in the Club, which gives the purchaser an annual allotment of Club points that allow the purchaser to exchange the Club points for a number of vacation options. Revenue from Club activation fees are deferred and amortized on a straight-line basis over the average inventory holding period. We recognize revenue from annual dues and transaction fees over the period services are rendered. We earn recurring management fees under our agreements with homeowners’ association (“HOA”s) and generally recognize these fees over the period services are rendered. We provide day-to-day-management services, including housekeeping services, operation of a reservation system, maintenance, and certain accounting and administrative services for HOAs. We receive compensation for such management services which is generally based on a percentage of costs to operate the resorts. • Rental and ancillary services— We offer rentals of unoccupied vacation ownership units and recognize rental revenues when occupancy has occurred. We defer advance deposits on rentals until the customer’s stay. We also recognize rental revenues from the utilization of Bonus Points and prepaid vacation packages when those points and packages are redeemed for rental stays at one of our resorts. We defer the advance payment as a liability and recognize the corresponding revenue upon the customer’s vacation stay. Ancillary revenues include food and beverage, retail, spa offerings and other guest services. • Cost reimbursements— Cost reimbursements include direct and indirect costs that HOAs and developers reimburse to us. These costs primarily consist of payroll and payroll related costs for management of the HOAs and other services we provide where we are the employer. We recognize cost reimbursements when we incur the related reimbursable costs. Cost reimbursements are based upon actual expenses with no added margin. Other than the United States, there were no countries that individually represented more than 10 percent of total revenues for the years ended December 31, 2017, 2016 and 2015. We earn commission and other fees related to fee-for-service agreements to sell VOIs. For the years ended December 31, 2017, 2016 and 2015, approximately 15 percent, 11 percent and 10 percent, respectively, of our total revenue was earned from one customer. We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent with respect to these taxes and fees. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. |
Multiple Element Arrangements | Multiple Element Arrangements When we enter into transactions for the sale of multiple products or services, we evaluate whether the delivered elements have value to the customer on a stand-alone basis, and if the arrangement includes a general right of return relative to the delivered items, we consider whether delivery or performance of the undelivered items is probable and substantially in our control. If these criteria are met, then we account for each deliverable in the transaction separately. We generally recognize revenue for undelivered elements on a straight-line basis over the contractual performance period for time-based elements or upon delivery to the customer. |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates We account for investments in unconsolidated affiliates under the equity method of accounting when we exercise significant influence, but do not maintain a controlling financial interest over the affiliates. We evaluate our investments in affiliates for impairment when there are indicators that the fair value of our investment may be less than our carrying value. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less. |
Restricted Cash | Restricted Cash Restricted cash includes advance deposits received on VOI sales that are held in escrow until the contract is closed and cash reserves required by our non-recourse debt agreements. For purposes of our consolidated statements of cash flows, changes in restricted cash caused by changes in lender reserves due to restrictions under our loan agreements are shown as financing activities and the remaining changes in restricted cash, primarily relating to VOI sales, are the result of our normal operations and are reflected as operating activities. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable primarily consists of trade receivables and is reported at the customers’ outstanding balances, less any allowance for doubtful accounts. An allowance for doubtful accounts is provided on accounts receivable when losses are probable based on historical collection activity and current business conditions. |
Timeshare Financing Receivables and Allowance for Loan Loss | Timeshare Financing Receivables and Allowance for Loan Loss Our timeshare financing receivables consist of loans related to our financing of VOI sales that are secured by the underlying timeshare properties. We determine our timeshare financing receivables to be past due based on the contractual terms of the individual mortgage loans. We recognize interest income on our timeshare financing receivables as earned. 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. We record an estimate of uncollectibility as a reduction of revenue from VOI sales at the time revenue is recognized on a VOI sale. 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 three key dimensions to stratify our portfolio: FICO scores and equity percentage at the time of sale. 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. 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 note 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. |
Inventory and Cost of Sales | Inventory and Cost of Sales Inventory includes unsold, completed VOIs; VOIs under construction; and land and infrastructure held for future VOI product development at our current resorts. We carry our completed VOI inventory at the lower of cost or estimated fair value, less costs to sell, which can result in impairment losses and/or recoveries of previous impairments. Projects under development, along with land and infrastructure for future development are under held and use impairment model and are reviewed for indicators of impairment quarterly. We capitalize costs directly associated with the acquisition, development and construction of a real estate project when it is probable that the project will move forward. We capitalize salary and related costs only to the extent they directly relate to the project. We capitalize interest expense, taxes and insurance costs when activities that are necessary to get the property ready for its intended use are underway. We cease capitalization of costs during prolonged gaps in development when substantially all activities are suspended or when projects are considered substantially complete. We account for our VOI inventory and cost of VOI sales using the relative sales value method. Also, we do not reduce inventory for the cost of VOI sales related to anticipated credit losses, and accordingly, no adjustment is made when inventory is reacquired upon default of the related receivable. This results in changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as cost of sales true-ups, and are included in Cost of VOI sales |
Property and Equipment | Property and Equipment Property and equipment includes land, building and leasehold improvements and furniture and equipment at our corporate offices, sales centers and management offices. Additionally, certain property and equipment is held for future conversion into inventory. Construction-in-progress primarily relates to leasehold improvements not yet placed in service. Property and equipment are recorded at cost. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. Other than the United States, there were no countries that individually represented over 10 percent of total property and equipment, net as of December 31, 2017 and 2016. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: buildings and improvements (eight to 40 years); furniture and equipment (three to eight years); and computer equipment and acquired software (three years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term. We evaluate the carrying value of our property and equipment if there are indicators of potential impairment. We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, to the extent the net book value is in excess of fair value we recognize an impairment loss. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers. If sufficient information exists to reasonably estimate the fair value of a conditional asset retirement obligation, including environmental remediation liabilities, we recognize the fair value of the obligation when the obligation is incurred. |
Intangible Assets | Intangible Assets Our intangible assets consist of management agreements and certain proprietary technologies with finite lives. We have management agreements that were recorded at their fair value at the time of the completion of a merger on October 24, 2007 where Hilton became a wholly-owned subsidiary of an affiliate of The Blackstone Group L.P. (“Blackstone”). Additionally, we capitalize direct and incremental costs to obtain management agreements and costs incurred to develop internal-use computer software, including costs incurred in connection with development of upgrades or enhancements that result in additional functionality. These capitalized costs are amortized on a straight-line basis over the term of the management agreement or the estimated useful life of the software, respectively. These capitalized costs are included in Intangible assets, net We review all finite life intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs, including legal fees and upfront lenders fees, related to the Company’s debt and non-recourse debt are deferred and amortized over the life of the respective debt using the effective interest method. These capitalized costs are included in Other or Debt, net Debt & Non-recourse debt |
Costs Incurred to Sell VOIs | Costs Incurred to Sell VOIs We expense indirect sales and marketing costs we incur to sell VOIs when incurred. Deferred selling and marketing expenses, which are direct selling and marketing costs related either to an unclosed contract or a contract for which 100 percent of revenue has not yet been recognized, were $8 million and $9 million as of December 31, 2017 and 2016, respectively, and were included in Other assets |
Fair Value Measurements—Valuation Hierarchy | Fair Value Measurements—Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). We use the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-level hierarchy of inputs is summarized below: • Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2—Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and • Level 3—Valuation is based upon unobservable inputs that are significant to the fair value measurement. The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. |
Currency Transactions | Currency Translation The U.S. dollar is our reporting currency and is the functional currency of the majority of our operations. Income and expense accounts are remeasured at the average exchange rate for the period. Gains and losses from foreign exchange rate changes related to transactions denominated in a currency other than an entity’s functional currency or intercompany receivables and payables denominated in a currency other than an entity’s functional currency that are not of a long-term investment nature are recognized as Other loss, net |
Share-Based Compensation Costs | Share-Based Compensation Costs Certain of our employees participate in our 2017 Omnibus Incentive Plan (the “Stock Plan”) which compensates eligible employees and directors with restricted stock units (“RSUs”) and nonqualified stock options (“options”). We record compensation expense based on the share-based awards granted to our employees. Share-based compensation awards issued prior to the spin-off have been converted to reflect the separation from Hilton. Upon the separation on January 3, 2017, holders of Hilton share-based awards received an adjusted award based on our shares. The adjustments were designed to generally preserve the fair value of each award before and after the separation. • RSUs vest in annual installments over three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested RSUs generally will be settled for Hilton Grand Vacation’s common stock. The grant date fair value is equal to Hilton Grand Vacation’s closing stock price on the date of grant. • Options vest over three years in equal annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date, and will terminate 10 years from the date of grant or earlier if the individual’s service terminates. The exercise price is equal to the closing price of the Hilton Grand Vacation’s common stock on the date of grant. The grant date fair value is estimated using the Black-Scholes-Merton Model. We recognize the cost of services received in share-based payment transactions with employees as services are received and recognize a corresponding change in Total Equity |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, to recognize the deferred tax assets and liabilities that relate to tax consequences in future years, which result from differences between the respective tax basis of assets and liabilities and their financial reporting amounts, and tax loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the respective temporary differences or operating loss or tax credit carryforwards are expected to be recovered or settled. The realization of deferred tax assets and tax loss and tax credit carryforwards is contingent upon the generation of future taxable income and other restrictions that may exist under the tax laws of the jurisdiction in which a deferred tax asset exists. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized. We use a prescribed recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. For all income tax positions, we first determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If it is determined that a position meets the more-likely-than-not recognition threshold, the benefit recognized in the financial statements is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing the earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. |
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 In November 2016, the FASB issued ASU No. 2016-18, (“ASU 2016-18”) Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 804): Clarifying the Definition of a Business Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606) Effective January 1, 2018, we will adopt ASC 606 using the modified retrospective approach in which the cumulative effect of applying the new standard will be recognized at the date of initial application with an adjustment to our opening balance of retained earnings. This approach applies to all contracts as of January 1, 2018. We are finalizing our evaluation of the impacts of the standard, specifically with regards to (1) the allocation of the transaction price to our identified performance obligations in VOI sales and marketing packages, (2) the historical deferral of VOI sales due to the initial and continuing investment criteria and 3) the recognition of breakage on prepaid discounted vacation packages. We do not anticipate significant changes to our consolidated financial statements aside from the following: • Sales of VOIs, net – We currently recognize revenue for sales of VOIs under construction in accordance with the percentage of completion method. Upon the adoption of ASC 606, the timing of revenue recognition for under construction and all related direct costs will be deferred until the completion of construction activities and the permissible occupancy of the timeshare development by our customers. Compared with current accounting, this will result in a deferral of all revenues and associated expenses for sales of VOIs under construction until construction is complete. As a result, we anticipate an approximate $66 million reduction of as of January 1, 2018. • Sales, marketing, brand and other fees – We currently recognize revenue from prepaid discounted vacation packages when a package is redeemed or the likelihood of redemption is remote post expiration. Upon the adoption of ASC 606, using a portfolio approach, we will recognize the expected breakage on packages not expected to be redeemed as proportionately when our other customers redeem their packages. • Sales, marketing, brand and other fees – Certain sales incentives where we are acting as the agent (e.g., delivery of Hilton Honors points) will be recognized on a net basis in . This presentation change will have no impact on as of January 1, 2018. See the unaudited 2018 Outlook Management’s Discussion and Analysis of Financial Condition and Results of Operations In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) Leases (Topic 840). In June 2016, the FASB issued ASU No. 2016-13, (“ASU 2016-13”), Financial Instruments-Credit Losses In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU 2017-03 (“ASU 2017-03”), Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323) |
Restricted Cash (Tables)
Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Restricted Cash | Restricted cash was as follows: December 31, ($ in millions) 2017 2016 Escrow deposits on VOI sales $ 29 $ 81 Reserves related to non-recourse debt (1) 22 22 $ 51 $ 103 (1) See Note 11: Debt & Non-recourse Debt |
Timeshare Financing Receivabl33
Timeshare Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of financing receivables | Timeshare financing receivables were as follows: December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Timeshare financing receivables $ 471 $ 741 $ 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 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 December 31, 2017 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2018 $ 74 $ 73 $ 147 2019 72 63 135 2020 70 69 139 2021 65 74 139 2022 57 79 136 Thereafter 133 383 516 471 741 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 |
Schedule of financing receivables by FICO score | Our gross timeshare financing receivables balances by FICO score were as follows: December 31, ($ in millions) 2017 2016 FICO score 700+ $ 770 $ 725 600-699 225 211 <600 28 28 No score (1) 189 181 $ 1,212 $ 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: December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 462 $ 685 $ 1,147 31 - 90 days past due 6 10 16 91 - 120 days past due 1 4 5 121 days and greater past due 2 42 44 $ 471 $ 741 $ 1,212 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: ($ in millions) Securitized and Pledged Unsecuritized Total December 31, 2014 $ 28 $ 68 $ 96 Write-offs — (29 ) (29 ) Provision for loan loss (1) (11 ) 50 39 December 31, 2015 17 89 106 Write-offs — (35 ) (35 ) Provision for loan loss (1) (8 ) 57 49 December 31, 2016 9 111 120 Write-offs — (37 ) (37 ) Securitizations 28 (28 ) — Provision for loan loss (1) (10 ) 68 58 December 31, 2017 $ 27 $ 114 $ 141 (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) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, current | Inventory was as follows: December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 191 $ 233 Construction in process 60 20 Land, infrastructure and other 258 260 $ 509 $ 513 December 31, ($ in millions) 2017 2016 2015 Cost of VOI sales related to fee-for-service upgrades $ 36 $ 49 $ 67 |
Schedule of inventory, noncurrent | Inventory was as follows: December 31, ($ in millions) 2017 2016 Completed unsold VOIs $ 191 $ 233 Construction in process 60 20 Land, infrastructure and other 258 260 $ 509 $ 513 December 31, ($ in millions) 2017 2016 2015 Cost of VOI sales related to fee-for-service upgrades $ 36 $ 49 $ 67 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment and Related Depreciation Expenses | Property and equipment and related accumulated depreciation were as follows: December 31, ($ in millions) 2017 2016 Land $ 53 $ 71 Buildings and leasehold improvements 182 185 Furniture and equipment 48 44 Construction-in-progress 20 12 303 312 Accumulated depreciation (65 ) (56 ) $ 238 $ 256 |
Consolidated Variable Interes36
Consolidated Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Consolidated Variable Interest Entities | Our consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: December 31, ($ in millions) 2017 2016 Restricted cash $ 18 $ 10 Timeshare financing receivables, net 445 244 Non-recourse debt (1) 454 244 (1) Net of deferred financing costs. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Related Amortization Expense | Intangible assets and related amortization expense were as follows: December 31, 2017 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (37 ) $ 51 Capitalized software 51 (30 ) 21 $ 139 $ (67 ) $ 72 December 31, 2016 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (33 ) $ 55 Capitalized software 41 (26 ) 15 $ 129 $ (59 ) $ 70 |
Schedule of Estimated Future Amortization Expense | As of December 31, 2017, we estimated our future amortization expense for our amortizing intangible assets to be as follows: ($ in millions) Future Amortization Expense Year 2018 $ 13 2019 11 2020 9 2021 5 2022 4 Thereafter 30 $ 72 |
Accounts Payable, Accrued Exp38
Accounts Payable, Accrued Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Summary of Accounts Payable, Accrued Expenses and Other | Accounts payable, accrued expenses and other were as follows: December 31, ($ in millions) 2017 2016 Accrued employee compensation and benefits $ 70 $ 64 Accounts payable 45 31 Bonus point incentive liability 52 46 Due to Hilton 23 5 Income taxes payable (1) 64 1 Other accrued expenses (2) 85 84 $ 339 $ 231 (1) During the year ended December 31, 2017, we deferred approximately $63 million in federal tax payment as permitted by the federal government pursuant to a tax relief program for regions impacted by Hurricane Irma. See Item 7 Management’s Discussion and Analysis of Financial Condition and Result of Operations (2) Other accrued expenses consist of taxes, rent, interest and other accrued balances. |
Debt & Non-recourse Debt (Table
Debt & Non-recourse Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Borrowings | The following table details our outstanding debt balance and its associated interest rates: December 31 ($ in millions) 2017 2016 Debt (1) Senior secured credit facilities: Term loans with an average rate of 3.814%, due 2021 $ 190 $ 200 Senior notes with a rate of 6.125%, due 2024 300 300 490 500 Less: unamortized deferred financing costs and discount (2)(3) (8 ) (10 ) $ 482 $ 490 (1) For the years ended December 31, 2017 and 2016, weighted average interest rates were 5.229 percent and 4.851 percent, respectively. (2) (3) Amount does not include deferred financing costs of $2 million as of December 31, 2017 and 2016, relating to our revolving facility included in Other Assets The following table details our outstanding non-recourse debt balance and its associated interest rates: December 31 ($ in millions) 2017 2016 Non-recourse debt (1) Timeshare Facility with an average rate of 2.675%, due 2019 $ 129 $ 450 Securitized Debt with an average rate of 2.441%, due 2028 459 246 588 696 Less: unamortized deferred financing costs (2) (5 ) (2 ) $ 583 $ 694 (1) For the years ended December 31, 2017 and 2016, weighted average interest rates were 2.492 percent and 1.946 percent, respectively. (2) Amount relates to Securitized Debt only and does not include deferred financing costs of $2 million and $3 million as of December 31, 2017 and 2016, respectively, relating to our Timeshare Facility included in Other Assets |
Schedule of Contractual Maturities of Debt | The contractual maturities of our debt and non-recourse debt as of December 31, 2017 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2018 $ 10 $ 140 $ 150 2019 10 251 261 2020 10 89 99 2021 160 34 194 2022 — 26 26 Thereafter 300 48 348 $ 490 $ 588 $ 1,078 |
Deferred Revenues (Tables)
Deferred Revenues (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Deferred Revenues | Deferred revenues were as follows: December 31, ($ in millions) 2017 2016 Deferred VOI sales $ 45 $ 46 Club activation fees 54 45 Other 10 15 $ 109 $ 106 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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: December 31, 2017 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables (1) $ 1,071 $ — $ 1,292 Liabilities: Debt (2) 482 329 194 Non-recourse debt (2) 583 — 577 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 includes allowance for loan loss. (2) Carrying amount includes unamortized deferred financing costs and discount. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Future Minimum Rent Payments Under Non-Cancelable Leases | The future minimum rent payments under non-cancelable leases, due in each of the next five years and thereafter as of December 31, 2017, were as follows: ($ in millions) Operating Leases Year 2018 $ 14 2019 12 2020 11 2021 10 2022 8 Thereafter 23 Total minimum rent payments $ 78 |
Schedule of Rent Expense | Rent expense for all operating leases was as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Minimum rentals $ 17 $ 16 $ 12 Contingent rentals 3 1 5 $ 20 $ 17 $ 17 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Before Income Taxes | The domestic and foreign components of income before taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 U.S. income before tax $ 283 $ 270 $ 275 Foreign income before tax 28 23 17 Income before taxes $ 311 $ 293 $ 292 |
Schedule of Components of Provision for Income Taxes | The components of our provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Current: Federal $ 94 $ 87 $ 85 State 11 8 7 Foreign 8 7 6 Total current 113 102 98 Deferred: Federal (137 ) 21 18 State 8 2 2 Total deferred (129 ) 23 20 Total provision for income taxes $ (16 ) $ 125 $ 118 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of our tax provision at the U.S. statutory rate to the provision (benefit) for income taxes were as follows: Year Ended December 31, ($ in millions) 2017 2016 2015 Statutory U.S. federal income tax provision $ 109 $ 102 $ 102 State and local income taxes, net of U.S. federal tax benefit 12 10 9 Foreign income tax expense 7 7 6 U.S. benefit of foreign taxes (7 ) (7 ) (6 ) Non-deductible transactions costs — 5 — Interest on installment sales, net of U.S. federal tax benefit 3 7 7 Interest on installment sales adjustment (5 ) — — U.S. tax reform: one-time repatriation tax 1 — — U.S. tax reform: remeasurement of deferred tax (132 ) — — U.S. tax reform: remeasurement of long-term interest liability on installment sales, net of federal tax benefit at 21% (2 ) — — Other (2 ) 1 — Provision for income taxes $ (16 ) $ 125 $ 118 |
Schedule of Compositions of Net Deferred Tax Balances | The compositions of net deferred tax balances were as follows: December 31, ($ in millions) 2017 2016 Deferred income taxes assets $ 1 $ — Deferred income tax liabilities (250 ) (389 ) Net deferred taxes $ (249 ) $ (389 ) |
Schedule of Tax Effects of Temporary Differences and Carryforwards of Our Net Deferred Tax Liability | The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax liability were as follows: December 31, ($ in millions) 2017 2016 Deferred tax assets: Compensation $ 9 $ 11 Other reserves 42 52 Deferred tax assets 51 63 Deferred tax liabilities: Property and equipment (54 ) (87 ) Amortizable intangible assets (10 ) (17 ) Deferred income (236 ) (347 ) Other liabilities — (1 ) Deferred tax liabilities (300 ) (452 ) Net deferred taxes $ (249 ) $ (389 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Restricted Stock Unit Grants | The following table provides information about our RSU grants for the last three fiscal years: Year Ended December 31, 2017 2016 2015 Number of shares granted 534,329 331,227 231,185 Weighted average grant date fair value per share $ 29.23 $ 18.68 $ 26.16 Fair value of shares vested (in millions) $ 11 $ 4 $ 8 |
Schedule of Restricted Stock Units Activity | The following table summarizes the activity of our RSUs during the year ended December 31, 2017: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 721,557 $ 21.41 Granted 534,329 29.23 Vested (330,072 ) 23.37 Forfeited (86,014 ) 24.54 Outstanding, end of period 839,800 25.29 |
Schedule of Stock Option Grants | The following table provides information about our option grants for the last three fiscal years: Year Ended December 31, 2017 2016 2015 Number of options granted 669,658 148,929 89,641 Weighted average exercise price per share $ 28.30 $ 18.69 $ 26.16 Weighted average grant date fair value per share $ 8.66 $ 5.21 $ 7.99 |
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: Year Ended December 31, 2017 2016 2015 Expected volatility (1) 26.3 % 32.0 % 28.0 % Dividend yield (2) — % 1.4 % — % Risk-free rate (3) 2.3 % 1.4 % 1.7 % Expected term (in years) (4) 6.0 6.0 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 its share price. As a result, we used an 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) For the 2017 and 2015 options, HGV and Hilton had no plans to pay dividends during the expected term of these options. For the 2016 options, estimated based on the expected annualized dividend payment at the date of grant. (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. |
Schedule of Stock Options Activity | The following table summarizes the activity of our options during the year ended December 31, 2017: Number of Shares Weighted Average Exercise Price Per Share Outstanding, beginning of period 333,108 $ 21.21 Granted 669,658 28.30 Exercised (34,183 ) 21.76 Forfeited, canceled or expired (94,009 ) 27.36 Outstanding, end of period 874,574 25.96 Exercisable, end of period 169,926 21.71 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2016 and 2015 reflect 98,802,597 shares distributed on January 3, 2017, our spin-off date, to our stockholders. See Note 1: Organization Year Ended December 31, ($ in millions, except per share amounts) 2017 2016 2015 Basic EPS Numerator: Net Income (1) $ 327 $ 168 $ 174 Denominator: Weighted average shares outstanding 99 99 99 Basic EPS $ 3.30 $ 1.70 $ 1.76 Diluted EPS Numerator: Net Income (1) $ 327 $ 168 $ 174 Denominator: Weighted average shares outstanding 100 99 99 Diluted EPS $ 3.28 $ 1.70 $ 1.76 (1) Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |
Summary of Amounts Included in Consolidation Financial Statements Related to Arrangements with Hilton | The following tables summarize amounts included in our consolidated financial statements related to the arrangements with Former Parent Hilton: December 31, ($ in millions) 2016 Consolidated Balance Sheets Assets: Accounts receivable, net Due from Hilton $ 5 Liabilities: Accounts payable, accrued expenses, and other Due to Hilton $ 5 Year Ended December 31, ($ in millions) 2016 2015 Consolidated Statements of Operations Expenses: General and administrative Allocated general and administrative $ 27 $ 13 Shared services 12 11 Defined contribution plan 7 7 Insurance 2 2 License fee expense 80 74 Interest expense Related party interest expense 2 — |
Components of Net Transfers (to) from Parent in the Consolidated Statements of Stockholders' Equity (Deficit) | The components of Net transfers (to) from Parent December 31, ($ in millions) 2016 2015 Cash pooling and general financing activities $ (715 ) $ (39 ) Corporate allocations 53 42 Income taxes 95 92 Net transfers (to) from Parent $ (567 ) $ 95 |
Transferred of Certain Assets and Related Deferred Tax Liabilities for Conversion to Vacation Ownership Units | In 2016, Hilton transferred to us certain assets and related deferred tax liabilities for conversion to vacation ownership units: ($ in millions) Assets Deferred Tax Liabilities Parent Capital Contribution Certain floors at the Hilton New York (1)(2) $ 33 $ 9 $ 17 Certain floors at the Embassy Suites Washington, DC 40 7 33 Hotel tower and restaurant at the Hilton Waikoloa Village (2) 178 49 129 Land parcel adjacent to Hilton Waikoloa Village 54 16 38 (1) Parent capital contribution includes the release of the $7 million included in Other assets . (2) Certain floors at the Hilton New York, were subject to a lease arrangement with Park whereby Park retained the right to occupy and operate those floors, which lease expired September 30, 2017. The hotel tower and restaurant at the Hilton Waikoloa Village, are subject to a lease arrangement with Park whereby Park has retained the right to occupy and operate certain floors of the properties with lease terms expiring on December 31, 2019. |
Blackstone | |
Related Party Transaction [Line Items] | |
Summary of Amounts Included in Consolidation Financial Statements Related to Arrangements with Hilton | The following table summarizes amounts included in our consolidated statements of operations related to a fee-for-service arrangement with Blackstone affiliates to sell VOIs on their behalf through September 30, 2017 were as follows: September 30, December 31, ($ in millions) 2017 2016 2015 Commission and other fees $ 135 $ 177 $ 154 |
BRE Ace Holdings | |
Related Party Transaction [Line Items] | |
Summary of Amounts Included in Consolidation Financial Statements Related to Arrangements with Hilton | These amounts are summarized in the following table and included in our consolidated statements of operations as of the date they became a related party. December 31, ($ in millions) 2017 2016 2015 Commission and other fees $ 79 $ — $ — |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenues Reconciled to Consolidated Amounts | We do not include equity in earnings from unconsolidated affiliate in our measures of segment revenues. The following table presents revenues for our reportable segments reconciled to consolidated amounts: Year Ended December 31, ($ in millions) 2017 2016 2015 Revenues: Real estate sales and financing (1) $ 1,239 $ 1,143 $ 1,078 Resort operations and club management (2) 367 339 307 Total segment revenues 1,606 1,482 1,385 Cost reimbursements 135 126 110 Intersegment eliminations (1)(2)(3) (30 ) (25 ) (20 ) Total revenues $ 1,711 $ 1,583 $ 1,475 (1) Includes charges to the resort operations and club management segment for billing and collection services provided by the real estate sales and financing segment. These charges totaled 31, and 2015 (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 $29 million (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 $1 million for the years ended December 31, 2017 and 2015. There were no charges for the year ended December 31, 2016. |
Schedule of Adjusted EBITDA Reconciled to Net Income | The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Year Ended December 31, ($ in millions) 2017 2016 2015 Adjusted EBITDA: Real estate sales and financing (1) $ 359 $ 336 $ 316 Resort operations and club management (1) 204 189 162 Segment Adjusted EBITDA 563 525 478 General and administrative (104 ) (92 ) (57 ) Depreciation and amortization (29 ) (24 ) (22 ) License fee expense (87 ) (80 ) (74 ) Interest expense (27 ) (3 ) — Allocated Parent interest expense (2) — (26 ) (29 ) Other loss, net — (1 ) — Equity in earnings from unconsolidated affiliate (4) 1 — — Income tax benefit (expense) (3) 16 (125 ) (118 ) Other adjustment items (6 ) (6 ) (4 ) Net income $ 327 $ 168 $ 174 (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. (3) On December 22, 2017, the United States enacted tax reform legislation, the Act, resulting in significant modifications to existing law which resulted in a reduction in income tax expense for the year ended December 31, 2017. See Note 15: Income Taxes (4) This amount represents our 25 percent interest in BRE Ace LLC. See Note 8: Investment in Unconsolidated Affiliate |
Schedule of Assets Reconciled to Consolidated Amounts | The following table presents total assets for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2017 2016 Real estate sales and financing $ 2,255 $ 2,067 Resort operations and club management 78 80 Total segment assets 2,333 2,147 Corporate 51 33 Total assets $ 2,384 $ 2,180 |
Schedule of Capital Expenditures for Property and Equipment Reconciled to Consolidated Amounts | The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2017 2016 2015 Real estate sales and financing $ 28 $ 19 $ 10 Resort operations and club management 2 1 1 Total segment capital expenditures for property and equipment 30 20 11 Corporate 5 6 1 Total capital expenditures for property and equipment $ 35 $ 26 $ 12 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Remaining Purchase Obligations | As of December 31, 2017, our remaining obligation pursuant to these arrangements was expected to be incurred as follows: ($ in millions) Purchase Obligations Year 2018 $ 3 2019 187 2020 9 2021 56 2022 35 Thereafter 82 Total $ 372 |
Condensed Consolidating Guara49
Condensed Consolidating Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Guarantor Balance Sheets | The following schedules present the condensed consolidating financial information as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors. December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash and cash equivalents $ — $ — $ 230 $ 16 $ — $ 246 Restricted cash — — 29 22 — 51 Accounts receivable, net — — 113 5 (6 ) 112 Timeshare financing receivables, net — — 457 614 — 1,071 Inventory — — 509 — — 509 Property and equipment, net — — 232 6 — 238 Investment in unconsolidated affiliate — — 41 — — 41 Intangible assets, net — — 72 — — 72 Other assets — 2 36 7 (1 ) 44 Investments in subsidiaries 518 999 81 — (1,598 ) — TOTAL ASSETS $ 518 $ 1,001 $ 1,800 $ 670 $ (1,605 ) $ 2,384 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ 1 $ 338 $ 7 $ (7 ) $ 339 Advance deposits — — 104 — — 104 Debt, net — 482 — — — 482 Non-recourse debt, net — — — 583 — 583 Deferred revenues — — 109 — — 109 Deferred income tax liabilities — — 250 (1 ) — 249 Total equity 518 518 999 81 (1,598 ) 518 TOTAL LIABILITIES AND EQUITY $ 518 $ 1,001 $ 1,800 $ 670 $ (1,605 ) $ 2,384 December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash $ — $ — $ 47 $ 1 $ — $ 48 Restricted cash — — 81 22 — 103 Accounts receivable, net — — 123 18 (18 ) 123 Timeshare financing receivables, net — — 263 762 — 1,025 Inventory — — 510 3 — 513 Property and equipment, net — — 253 3 — 256 Intangible assets, net — — 70 — — 70 Other assets — 2 43 14 (17 ) 42 Investments in subsidiaries 167 657 115 — (939 ) — TOTAL ASSETS $ 167 $ 659 $ 1,505 $ 823 $ (974 ) $ 2,180 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ 2 $ 251 $ 3 $ (25 ) $ 231 Advance deposits — — 102 1 — 103 Debt, net — 490 — 10 (10 ) 490 Non-recourse debt, net — — — 694 — 694 Deferred revenues — — 106 — — 106 Deferred income tax liabilities — — 389 — — 389 Total equity 167 167 657 115 (939 ) 167 TOTAL LIABILITIES AND EQUITY $ 167 $ 659 $ 1,505 $ 823 $ (974 ) $ 2,180 |
Schedule of Condensed Consolidating Guarantor Statements of Operations | For the Year Ended December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 518 $ 30 $ — $ 548 Sales, marketing, license and other fees — — 545 3 (4 ) 544 Financing — — 71 83 (7 ) 147 Resort and club management — — 156 2 — 158 Rental and ancillary service — — 177 2 — 179 Cost reimbursements — — 131 4 — 135 Total revenues — — 1,598 124 (11 ) 1,711 Expenses Cost of VOI sales — — 145 3 — 148 Sales and marketing — — 650 17 (4 ) 663 Financing — — 19 31 (7 ) 43 Resort and club management — — 41 2 — 43 Rental and ancillary service — — 120 2 — 122 General and administrative — — 101 3 — 104 Depreciation and amortization — — 29 — — 29 License fee expense — — 87 — — 87 Cost reimbursements — — 131 4 — 135 Total operating expenses — — 1,323 62 (11 ) 1,374 Interest expense — (27 ) — — — (27 ) Equity in earnings from unconsolidated affiliate — — 1 — — 1 Income (loss) before income taxes — (27 ) 276 62 — 311 Income tax benefit (expense) — — 18 (2 ) — 16 Income (loss) before equity in earnings (loss) from subsidiaries — (27 ) 294 60 — 327 Equity in earnings (loss) from subsidiaries 327 354 60 — (741 ) — Net income (loss) $ 327 $ 327 $ 354 $ 60 $ (741 ) $ 327 For the Year Ended December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 495 $ 13 $ — $ 508 Sales, marketing, license and other fees — — 501 2 (4 ) 499 Financing — — 73 66 (5 ) 134 Resort and club management — — 143 — — 143 Rental and ancillary service — — 171 2 — 173 Cost reimbursements — — 123 3 — 126 Total revenues — — 1,506 86 (9 ) 1,583 Expenses Cost of VOI sales — — 150 2 — 152 Sales and marketing — — 605 4 (4 ) 605 Financing — — 18 19 (5 ) 32 Resort and club management — — 36 — — 36 Rental and ancillary service — — 108 5 — 113 General and administrative — 1 91 — — 92 Depreciation and amortization — — 24 — — 24 License fee expense — — 80 — — 80 Cost reimbursements — — 123 3 — 126 Total operating expenses — 1 1,235 33 (9 ) 1,260 Interest expense — (3 ) — — — (3 ) Allocated Parent interest expense (17 ) — (9 ) — — (26 ) Other loss, net — — (1 ) — — (1 ) Income (loss) before income taxes (17 ) (4 ) 261 53 — 293 Income tax expense — — (125 ) — — (125 ) Income (loss) before equity in earnings (loss) from subsidiaries (17 ) (4 ) 136 53 — 168 Equity in earnings (loss) from subsidiaries 185 189 53 — (427 ) — Net income (loss) $ 168 $ 185 $ 189 $ 53 $ (427 ) $ 168 For the Year Ended December 31, 2015 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 488 $ 4 $ — $ 492 Sales, marketing, license and other fees — — 457 2 (2 ) 457 Financing — — 60 73 (6 ) 127 Resort and club management — — 125 — — 125 Rental and ancillary service — — 161 3 — 164 Cost reimbursements — — 106 4 — 110 Total revenues — — 1,397 86 (8 ) 1,475 Expenses Cost of VOI sales — — 172 1 — 173 Sales and marketing — — 542 1 (2 ) 541 Financing — — 16 22 (6 ) 32 Resort and club management — — 32 — — 32 Rental and ancillary service — — 108 5 — 113 General and administrative — — 57 — — 57 Depreciation and amortization — — 22 — — 22 License fee expense — — 74 — — 74 Cost reimbursements — — 106 4 — 110 Total operating expenses — — 1,129 33 (8 ) 1,154 Allocated Parent interest expense — — (29 ) — — (29 ) Income before income taxes — — 239 53 — 292 Income tax expense — — (118 ) — — (118 ) Income before equity in earnings (loss) from subsidiaries — — 121 53 — 174 Equity in earnings (loss) from subsidiaries — — 53 — (53 ) — Net income (loss) $ — $ — $ 174 $ 53 $ (53 ) $ 174 |
Schedule of Condensed Consolidating Guarantor Statements of Cash Flows | For the Year Ended December 31, 2017 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ (27 ) $ 156 $ 235 $ (8 ) $ 356 Investing Activities Capital expenditures for property and equipment — — (33 ) (2 ) — (35 ) Software capitalization costs — — (12 ) — — (12 ) Investment in unconsolidated affiliate — — (40 ) — — (40 ) Net cash used in investing activities — — (85 ) (2 ) — (87 ) Financing Activities Issuance of non-recourse debt — — — 350 — 350 Repayment of non-recourse debt — — — (459 ) — (459 ) Repayment of debt — (10 ) — — — (10 ) Debt issuance costs — — — (5 ) — (5 ) Proceeds from stock option exercises — — 1 — — 1 Intercompany transfers — 37 59 (104 ) 8 — Net cash provided by (used in) financing activities — 27 60 (218 ) 8 (123 ) Net increase in cash, cash equivalents and restricted cash — — 131 15 — 146 Cash, cash equivalents and restricted cash, beginning of period — — 128 23 — 151 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 259 $ 38 $ — $ 297 For the Year Ended December 31, 2016 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ 4 $ 432 $ (187 ) $ (67 ) $ 182 Investing Activities Capital expenditures for property and equipment — — (26 ) — — (26 ) Software capitalization costs — — (8 ) — — (8 ) Net cash used in investing activities — — (34 ) — — (34 ) Financing Activities Issuance of non-recourse debt — — — 300 — 300 Repayment of non-recourse debt — — — (110 ) — (110 ) Issuance of debt — 200 — — — 200 Debt issuance costs — (4 ) (3 ) (3 ) — (10 ) Allocated debt activity (1) 111 — — — — 111 Net transfers to Parent (1) (567 ) — — — — (567 ) Distribution to Parent (1) — — — — — — Intercompany transfers 456 (200 ) (329 ) 6 67 — Net cash provided by (used in) financing activities — (4 ) (332 ) 193 67 (76 ) Net increase in cash, cash equivalents and restricted cash — — 66 6 — 72 Cash, cash equivalents and restricted cash, beginning of period — — 62 17 — 79 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 128 $ 23 $ — $ 151 (1) Amounts represent activities with Hilton. For the Year Ended December 31, 2015 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by operating activities $ — $ — $ 17 $ 117 $ 18 $ 152 Investing Activities Capital expenditures for property and equipment — — (12 ) — — (12 ) Software capitalization costs — — (6 ) — — (6 ) Net cash used in investing activities — — (18 ) — — (18 ) Financing Activities Repayment of non-recourse debt — — — (125 ) — (125 ) Allocated debt activity (1) — — (87 ) — — (87 ) Net transfers from Parent (1) — — 95 — — 95 Distribution to Parent (1) — — (2 ) — — (2 ) Intercompany transfers — — 18 — (18 ) — Net cash provided by (used in) financing activities — — 24 (125 ) (18 ) (119 ) Net increase in cash, cash equivalents and restricted cash — — 23 (8 ) — 15 Cash, cash equivalents and restricted cash, beginning of period — — 39 25 — 64 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 62 $ 17 $ — $ 79 (1) Amounts represent activities with Hilton. |
Selected Quarterly Financial 50
Selected Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Financial Information | The following table sets forth the historical unaudited quarterly financial data for the periods indicated. The information for each of these periods has been prepared on the same basis as the audited consolidated financial statements and, in our opinion, reflects all adjustments necessary to present fairly our financial results. Operating results for previous periods do not necessarily indicate results that may be achieved in any future period. 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 399 $ 439 $ 426 $ 447 $ 1,711 Total operating expenses 316 348 350 360 1,374 Income before income taxes 76 84 71 80 311 Net income 50 51 43 183 327 Basic earnings per share $ 0.51 $ 0.51 $ 0.43 $ 1.85 $ 3.30 Diluted earnings per share $ 0.51 $ 0.51 $ 0.43 $ 1.83 $ 3.28 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 370 $ 391 $ 407 $ 415 $ 1,583 Total operating expenses 284 304 333 339 1,260 Income before income taxes 80 80 68 65 293 Net income 48 47 35 38 168 Basic and diluted earnings per share (1) $ 0.48 $ 0.48 $ 0.35 $ 0.38 $ 1.70 (1) Earnings Per Share |
Organization - Additional Infor
Organization - Additional Information (Details) | Jan. 03, 2017shares | Dec. 31, 2017USD ($)propertyunit$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Oct. 24, 2016$ / sharesshares | May 04, 2016USD ($)$ / sharesshares |
Related Party Transaction [Line Items] | |||||
Common stock issued | shares | 99,136,304 | 98,802,597 | |||
Common stock, par value per share | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, value | $ | $ 1,000,000 | $ 1,000,000 | |||
Stock split, share | shares | 98,802,597 | ||||
Costs related to agreements with related parties | $ | $ 178,000,000 | ||||
Number of timeshare properties | property | 48 | ||||
Number of units in timeshare properties | unit | 8,102 | ||||
Park Hotels & Resorts Inc | |||||
Related Party Transaction [Line Items] | |||||
Common stock issued | shares | 1 | 100 | |||
Common stock, par value per share | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, value | $ | $ 1 |
Basis of Presentation and Sum52
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2017USD ($)Customer$ / shares | Dec. 31, 2016USD ($)Customer$ / shares | Dec. 31, 2015USD ($)Customer | Jan. 01, 2018USD ($) | ||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Advanced deposits | $ 104,000,000 | $ 103,000,000 | $ 104,000,000 | $ 103,000,000 | |||||||||||
Sales, marketing, brand and other fees | 544,000,000 | 499,000,000 | $ 457,000,000 | ||||||||||||
Accounts payable, accrued expenses and other | 339,000,000 | 231,000,000 | 339,000,000 | 231,000,000 | |||||||||||
Net income | 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] | $ 174,096,269 | [1] | |
Earnings per share, Basic (in dollars per share) | $ / shares | $ 0.38 | $ 0.35 | $ 0.48 | $ 0.48 | $ 1.70 | ||||||||||
Club bonus points to customers, maximum valid duration period | 2 years | ||||||||||||||
Adjustments on inventory reacquired upon related receivables | $ 0 | $ 0 | |||||||||||||
Percentage of property and equipment, net | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||
Percentage of revenue not yet recognized related to deferred selling and marketing expenses | 100.00% | ||||||||||||||
Deferred revenues | $ 109,000,000 | $ 106,000,000 | $ 109,000,000 | $ 106,000,000 | |||||||||||
Adjustment of accumulated retained earnings | 355,000,000 | 28,000,000 | 355,000,000 | 28,000,000 | |||||||||||
Other Assets | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Deferred revenues | $ 8,000,000 | $ 9,000,000 | $ 8,000,000 | $ 9,000,000 | |||||||||||
Blackstone | Management Agreements | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Merger agreement completion date | Oct. 24, 2007 | ||||||||||||||
Computer Equipment and Acquired Software | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Property and equipment, estimated useful life | 3 years | ||||||||||||||
Total Revenue | Customer Concentration Risk | Single Customer | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Concentration Risk, Percentage | 15.00% | 11.00% | 10.00% | ||||||||||||
Number of Customers Accounted for Revenue | Customer | 1 | 1 | 1 | ||||||||||||
VOI sale | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Minimum percentage of down payment received through binding sales contract | 10.00% | ||||||||||||||
VOI sale | Revenue from Contracts with Customers (ASC 606) | Difference between Revenue Guidance in Effect before and after Topic 606 | Subsequent Event | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Adjustment of accumulated retained earnings | $ (66,000,000) | ||||||||||||||
Changed in Estimate of Expected Redemption of Expired Prepaid Discounted Vacation Packages | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Advanced deposits | 11,000,000 | ||||||||||||||
Sales, marketing, brand and other fees | 10,000,000 | ||||||||||||||
Accounts payable, accrued expenses and other | $ 1,000,000 | ||||||||||||||
Net income | $ 10,000,000 | ||||||||||||||
Earnings per share, Basic (in dollars per share) | $ / shares | $ 0.10 | ||||||||||||||
Minimum | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Variable interest entity, ownership percentage | 50.00% | ||||||||||||||
Income tax recognition and measurement of tax position threshold benefit recognized percentage realized upon settlement. | 50.00% | ||||||||||||||
Minimum | Buildings and Improvements | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Property and equipment, estimated useful life | 8 years | ||||||||||||||
Minimum | Furniture and Equipment | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Property and equipment, estimated useful life | 3 years | ||||||||||||||
Minimum | Other than United States | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Percent of total revenues | 10.00% | 10.00% | 10.00% | ||||||||||||
Maximum | Restricted Stock Units (RSUs) | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Award vesting period | 3 years | ||||||||||||||
Maximum | Stock Options | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Award vesting period | 3 years | ||||||||||||||
Award termination period from date of grant or earlier | 10 years | ||||||||||||||
Maximum | Buildings and Improvements | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Property and equipment, estimated useful life | 40 years | ||||||||||||||
Maximum | Furniture and Equipment | |||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Property and equipment, estimated useful life | 8 years | ||||||||||||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | ||||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. |
Restricted Cash - Schedule of R
Restricted Cash - Schedule of Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 51 | $ 103 |
Escrow deposits on VOI sales | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 29 | 81 |
Reserves related to non-recourse debt | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 22 | $ 22 |
Timeshare Financing Receivabl54
Timeshare Financing Receivables - Schedule of Timeshare Financing Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | $ 1,212 | $ 1,145 | ||
Less: allowance for loan loss | (141) | (120) | $ (106) | $ (96) |
Timeshare financing receivables, net | 1,071 | 1,025 | ||
Securitized and Pledged | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 471 | 253 | ||
Less: allowance for loan loss | (27) | (9) | (17) | (28) |
Timeshare financing receivables, net | 444 | 244 | ||
Unsecuritized | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 741 | 892 | ||
Less: allowance for loan loss | (114) | (111) | $ (89) | $ (68) |
Timeshare financing receivables, net | $ 627 | $ 781 |
Timeshare Financing Receivabl55
Timeshare Financing Receivables - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, weighted average interest rate (as a percent) | 12.20% | ||
Financing receivable, weighted average remaining term (in years) | 7 years 8 months 12 days | ||
Financing receivable weighted average maturities year | 2,028 | ||
Timeshare financing receivable not accruing interest | $ 49,000,000 | $ 38,000,000 | |
Securitized and Pledged | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Timeshare financing receivables securitized | $ 357,000,000 | ||
Non-recourse Debt | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 450,000,000 | ||
Line of credit facility, current borrowing capacity | 300,000,000 | ||
Gross timeshare receivables securing the Timeshare Facility | $ 143,000,000 | $ 509,000,000 | |
Debt instrument stated maturity date | 2028-12 | ||
Non-recourse Debt | Securitized and Pledged | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument stated maturity date | 2028-12 | ||
Non-recourse Debt | 2.66% Notes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 291,000,000 | ||
Debt instrument, stated interest rate | 2.66% | ||
Non-recourse Debt | 2.96% Notes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 59,000,000 | ||
Debt instrument, stated interest rate | 2.96% | ||
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 5.30% | ||
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 20.50% |
Timeshare Financing Receivabl56
Timeshare Financing Receivables - Maturities of Financing Receivables (Details) $ in Millions | Dec. 31, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,018 | $ 147 |
2,019 | 135 |
2,020 | 139 |
2,021 | 139 |
2,022 | 136 |
Thereafter | 516 |
Timeshare financing receivable maturities, gross | 1,212 |
Less: allowance for loan loss | (141) |
Timeshare financing receivable maturities, net | 1,071 |
Securitized and Pledged | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,018 | 74 |
2,019 | 72 |
2,020 | 70 |
2,021 | 65 |
2,022 | 57 |
Thereafter | 133 |
Timeshare financing receivable maturities, gross | 471 |
Less: allowance for loan loss | (27) |
Timeshare financing receivable maturities, net | 444 |
Unsecuritized | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,018 | 73 |
2,019 | 63 |
2,020 | 69 |
2,021 | 74 |
2,022 | 79 |
Thereafter | 383 |
Timeshare financing receivable maturities, gross | 741 |
Less: allowance for loan loss | (114) |
Timeshare financing receivable maturities, net | $ 627 |
Timeshare Financing Receivabl57
Timeshare Financing Receivables - Financing Receivable by FICO Score (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | $ 1,212 | $ 1,145 |
More than 700 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 770 | 725 |
600-699 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 225 | 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 | $ 189 | $ 181 |
Timeshare Financing Receivabl58
Timeshare Financing Receivables - Past Due Financing Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 1,147 | $ 1,095 |
Financing receivable, past due | 1,212 | 1,145 |
Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 462 | 248 |
Financing receivable, past due | 471 | 253 |
Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 685 | 847 |
Financing receivable, past due | 741 | 892 |
31 - 90 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 16 | 12 |
31 - 90 days past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 6 | 3 |
31 - 90 days past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 10 | 9 |
91 - 120 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 5 | 5 |
91 - 120 days past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 1 | 1 |
91 - 120 days past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 4 | 4 |
121 days and greater past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 44 | 33 |
121 days and greater past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 2 | 1 |
121 days and greater past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | $ 42 | $ 32 |
Timeshare Financing Receivabl59
Timeshare Financing Receivables - Schedule of Change in Allowance For Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | $ 120 | $ 106 | $ 96 |
Write-offs | (37) | (35) | (29) |
Securitizations | 0 | ||
Provision for loan losses | 58 | 49 | 39 |
Allowance for loan loss, ending balance | 141 | 120 | 106 |
Securitized and Pledged | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | 9 | 17 | 28 |
Write-offs | 0 | 0 | 0 |
Securitizations | 28 | ||
Provision for loan losses | (10) | (8) | (11) |
Allowance for loan loss, ending balance | 27 | 9 | 17 |
Unsecuritized | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | 111 | 89 | 68 |
Write-offs | (37) | (35) | (29) |
Securitizations | (28) | ||
Provision for loan losses | 68 | 57 | 50 |
Allowance for loan loss, ending balance | $ 114 | $ 111 | $ 89 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Noncurrent (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Completed unsold VOIs | $ 191 | $ 233 |
Construction in process | 60 | 20 |
Land, infrastructure and other | 258 | 260 |
Inventory | $ 509 | $ 513 |
Inventory - Additional informat
Inventory - Additional information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory [Line Items] | |||
Cost of VOI sales (less than for the $1 million) | $ 148 | $ 152 | $ 173 |
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | (47) | (7) | $ 38 |
Time Share | |||
Inventory [Line Items] | |||
Cost of VOI sales (less than for the $1 million) | 4 | 10 | |
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | $ 4 | $ 10 |
Inventory - Schedule of Expense
Inventory - Schedule of Expenses Incurred, Recorded in Cost of VOI Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |||
Cost of VOI sales related to fee-for-service upgrades | $ 36 | $ 49 | $ 67 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Related Depreciation Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment Gross [Abstract] | ||
Land | $ 53 | $ 71 |
Buildings and leasehold improvements | 182 | 185 |
Furniture and equipment | 48 | 44 |
Construction-in-progress | 20 | 12 |
Property and equipment, gross | 303 | 312 |
Accumulated depreciation | (65) | (56) |
Property and equipment, net | $ 238 | $ 256 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment Gross [Abstract] | |||
Depreciation expense | $ 17 | $ 12 | $ 10 |
Consolidated Variable Interes65
Consolidated Variable Interest Entities - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)entity | Dec. 31, 2016USD ($)entity | Dec. 31, 2015USD ($) | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Number of VIEs consolidated | entity | 3 | 2 | |
Financial or other support to any VIEs | $ | $ 0 | $ 0 | $ 0 |
Consolidated Variable Interes66
Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | $ 471 | $ 258 |
Liabilities, variable interest entity | 455 | 245 |
Variable Interest Entity, Primary Beneficiary | Restricted cash | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 18 | 10 |
Variable Interest Entity, Primary Beneficiary | Timeshare financing receivables, net | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 445 | 244 |
Variable Interest Entity, Primary Beneficiary | Non-recourse debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities, variable interest entity | $ 454 | $ 244 |
Investment in Unconsolidated 67
Investment in Unconsolidated Affiliate - Additional Information (Details) $ in Millions | Jul. 18, 2017USD ($)unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Schedule Of Investments [Line Items] | |||
Debt | $ 482 | $ 490 | |
Non-recourse debt | 583 | 694 | |
Investment in unconsolidated affiliate | $ 41 | $ 0 | |
BRE Ace Holdings | |||
Schedule Of Investments [Line Items] | |||
Cash contributed to an equity method investment | $ 40 | ||
Equity method investment, ownership percentage | 25.00% | 25.00% | |
Number of real estate units | unit | 1,201 | ||
Debt | $ 199 | ||
Non-recourse debt | 289 | ||
Investment in unconsolidated affiliate | $ 41 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets and Related Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 139 | $ 129 |
Accumulated Amortization | (67) | (59) |
Net Carrying Amount | 72 | 70 |
Management Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 88 | 88 |
Accumulated Amortization | (37) | (33) |
Net Carrying Amount | 51 | 55 |
Capitalized Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 51 | 41 |
Accumulated Amortization | (30) | (26) |
Net Carrying Amount | $ 21 | $ 15 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets Net | |||
Amortization expense on intangible assets | $ 12 | $ 12 | $ 12 |
Capitalized software additions | $ 15 | $ 8 | |
Management Agreements | |||
Finite Lived Intangible Assets Net | |||
Weighted average amortization period | 14 years 1 month 6 days | ||
Capitalized Software | |||
Finite Lived Intangible Assets Net | |||
Weighted average amortization period | 2 years 8 months 12 days |
Intangible Assets - Schedule 70
Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2,018 | $ 13 | |
2,019 | 11 | |
2,020 | 9 | |
2,021 | 5 | |
2,022 | 4 | |
Thereafter | 30 | |
Net Carrying Amount | $ 72 | $ 70 |
Accounts Payable, Accrued Exp71
Accounts Payable, Accrued Expenses and Other - Summary of Accounts Payable, Accrued Expenses and Other (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued employee compensation and benefits | $ 70 | $ 64 |
Accounts payable | 45 | 31 |
Bonus point incentive liability | 52 | 46 |
Due to Hilton | 23 | 5 |
Income taxes payable | 64 | 1 |
Other accrued expenses | 85 | 84 |
Accounts payable, accrued expenses and other | $ 339 | $ 231 |
Accounts Payable, Accrued Exp72
Accounts Payable, Accrued Expenses and Other - Summary of Accounts Payable, Accrued Expenses and Other (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Line Items] | ||
Deferred federal tax payment | $ 300 | $ 452 |
Hurricane Irma | ||
Payables And Accruals [Line Items] | ||
Deferred federal tax payment | $ 63 |
Debt & Non-recourse Debt - Sche
Debt & Non-recourse Debt - Schedule of Outstanding Borrowings (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 490 | $ 500 | |
Less: unamortized deferred financing costs and discount | (8) | (10) | |
Long-term debt | 482 | 490 | |
Line of Credit | Term loans with an average rate of 3.814%, due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 190 | 200 | |
Less: unamortized deferred financing costs and discount | (1) | (2) | |
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 300 | ||
Less: unamortized deferred financing costs and discount | (7) | (8) | $ (8) |
Senior Notes | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 300 | 300 | |
Non-recourse Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 588 | 696 | |
Less: unamortized deferred financing costs and discount | (5) | (2) | |
Long-term debt | 583 | 694 | |
Non-recourse Debt | Timeshare Facility with an average rate of 2.675%, due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 129 | 450 | |
Less: unamortized deferred financing costs and discount | (2) | (3) | |
Non-recourse Debt | Securitized Debt with an average rate of 2.441%, due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 459 | $ 246 |
Debt & Non-recourse Debt - Sc74
Debt & Non-recourse Debt - Schedule of Outstanding Borrowings (Parenthetical) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 5.229% | 4.851% | |
Less: unamortized deferred financing costs and discount | $ (8) | $ (10) | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Less: unamortized deferred financing costs and discount | $ (2) | $ (2) | |
Line of Credit | Term loans with an average rate of 3.814%, due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 3.814% | 3.814% | |
Debt instrument, maturity year | 2,021 | 2,021 | |
Less: unamortized deferred financing costs and discount | $ (1) | $ (2) | |
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate | 6.125% | 6.125% | |
Debt instrument, maturity year | 2,024 | ||
Less: unamortized deferred financing costs and discount | $ (8) | $ (7) | $ (8) |
Senior Notes | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate | 6.125% | 6.125% | |
Debt instrument, maturity year | 2,024 | 2,024 | |
Non-recourse Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 2.492% | 1.946% | |
Less: unamortized deferred financing costs and discount | $ (5) | $ (2) | |
Non-recourse Debt | Timeshare Facility with an average rate of 2.675%, due 2019 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 2.675% | 2.675% | |
Debt instrument, maturity year | 2,019 | 2,019 | |
Less: unamortized deferred financing costs and discount | $ (2) | $ (3) | |
Non-recourse Debt | Securitized Debt with an average rate of 2.441%, due 2028 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 2.441% | 2.441% | |
Debt instrument, maturity year | 2,028 | 2,028 |
Debt & Non-recourse Debt - Addi
Debt & Non-recourse Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 10,000,000 | $ 8,000,000 | $ 10,000,000 | ||
Principal Amount Outstanding | 500,000,000 | 490,000,000 | 500,000,000 | ||
Timeshare financing receivables, gross | 1,212,000,000 | ||||
Restricted cash | 103,000,000 | 51,000,000 | 103,000,000 | ||
Reserves related to non-recourse debt | |||||
Debt Instrument [Line Items] | |||||
Restricted cash | 22,000,000 | $ 22,000,000 | 22,000,000 | ||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee percentage under revolving facility | 0.35% | ||||
Credit facility, interest rate description | The Term Loans bear interest at a variable rate, which is payable monthly. | ||||
First lien net leverage ratio description | first lien net leverage ratio not to exceed 0.25:1.00. | ||||
Deferred financing costs | 2,000,000 | $ 2,000,000 | 2,000,000 | ||
Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Maximum first lien net leverage ratio | 25.00% | ||||
Term Loans | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Maximum amount of credit facility can be increased | $ 300,000,000 | ||||
Senior Secured Credit Facilities | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | 200,000,000 | |||
Debt instrument maturity period | 5 years | ||||
Letters of credit outstanding, amount | 1,000,000 | ||||
Short-term borrowings | $ 10,000,000 | 10,000,000 | |||
Senior Secured Credit Facilities | Letter of Credit | Maximum | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, current borrowing capacity | 30,000,000 | 30,000,000 | |||
Senior Secured Credit Facilities | Term Loans | |||||
Debt Instrument [Line Items] | |||||
Line of credit | 200,000,000 | 200,000,000 | |||
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | 8,000,000 | $ 8,000,000 | $ 7,000,000 | 8,000,000 | |
Principal Amount Outstanding | $ 300,000,000 | ||||
Debt instrument, stated interest rate | 6.125% | 6.125% | |||
Debt instrument, maturity year | 2,024 | ||||
Debt instrument rate description | Interest on the Senior Unsecured Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2017. | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument redemption description | We may, at our sole option, redeem the Senior Unsecured Notes, in whole or in part, at any time prior to December 1, 2021, at a price equal to 100 percent of the principal amount, plus an applicable make-whole premium and accrued and unpaid interest. On and after, December 1, 2021, we may, at our sole option, redeem the Senior Unsecured Notes at 103.25 percent, 101.625 percent or 100 percent of the principal amount in 2021, 2022 or 2023, respectively, without any make-whole premium. | ||||
Debt instrument redemption beginning period | Dec. 1, 2021 | ||||
Senior Notes | Prior to December 1, 2021 | |||||
Debt Instrument [Line Items] | |||||
Percentage of debt redemption on principal amount | 100.00% | ||||
Senior Notes | On and After, December 1, 2021 | |||||
Debt Instrument [Line Items] | |||||
Percentage of debt redemption on principal amount | 103.25% | ||||
Debt instrument redemption period | 2,021 | ||||
Senior Notes | On and After, December 1, 2022 | |||||
Debt Instrument [Line Items] | |||||
Percentage of debt redemption on principal amount | 101.625% | ||||
Debt instrument redemption period | 2,022 | ||||
Senior Notes | On and After, December 1, 2023 | |||||
Debt Instrument [Line Items] | |||||
Percentage of debt redemption on principal amount | 100.00% | ||||
Debt instrument redemption period | 2,023 | ||||
Senior Notes | Senior notes with a rate of 6.125%, due 2024 | |||||
Debt Instrument [Line Items] | |||||
Principal Amount Outstanding | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||
Debt instrument, stated interest rate | 6.125% | 6.125% | 6.125% | ||
Debt instrument, maturity year | 2,024 | 2,024 | |||
Non-recourse Debt | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 450,000,000 | $ 450,000,000 | |||
Line of credit facility, current borrowing capacity | 300,000,000 | 300,000,000 | |||
Deferred financing costs | 2,000,000 | $ 5,000,000 | 2,000,000 | ||
Principal Amount Outstanding | 696,000,000 | $ 588,000,000 | 696,000,000 | ||
Timeshare financing receivables, gross | $ 357,000,000 | ||||
Debt instrument stated maturity date | 2028-12 | ||||
Non-recourse Debt | Timeshare Facility with an average rate of 2.675%, due 2019 | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 450,000,000 | 450,000,000 | |||
Deferred financing costs | 3,000,000 | $ 2,000,000 | 3,000,000 | ||
Principal Amount Outstanding | 450,000,000 | $ 129,000,000 | $ 450,000,000 | ||
Debt instrument, maturity year | 2,019 | 2,019 | |||
Debt instrument maximum borrowing amount borrowing date | 2018-08 | ||||
Debt instrument required amounts borrowed to be repaid date | 2019-08 | ||||
Debt instrument borrowed amount | $ 300,000,000 | ||||
Non-recourse Debt | 2.66% Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 2.66% | ||||
Debt instrument, face amount | $ 291,000,000 | ||||
Non-recourse Debt | 2.96% Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 2.96% | ||||
Debt instrument, face amount | $ 59,000,000 |
Debt & Non-recourse Debt - Sc76
Debt & Non-recourse Debt - Schedule of Contractual Maturities of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
2,018 | $ 10 | |
2,019 | 10 | |
2,020 | 10 | |
2,021 | 160 | |
2,022 | 0 | |
Thereafter | 300 | |
Long-term debt | 490 | $ 500 |
Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2,018 | 140 | |
2,019 | 251 | |
2,020 | 89 | |
2,021 | 34 | |
2,022 | 26 | |
Thereafter | 48 | |
Long-term debt | 588 | $ 696 |
Debt and Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2,018 | 150 | |
2,019 | 261 | |
2,020 | 99 | |
2,021 | 194 | |
2,022 | 26 | |
Thereafter | 348 | |
Long-term debt | $ 1,078 |
Deferred Revenues - Schedule of
Deferred Revenues - Schedule of Deferred Revenues (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues | $ 109 | $ 106 |
Deferred VOI Sales | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues | 45 | 46 |
Club Activation Fees | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues | 54 | 45 |
Other | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues | $ 10 | $ 15 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying and Estimated Fair Value Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Assets: | ||
Timeshare financing receivables | $ 1,071 | $ 1,025 |
Liabilities: | ||
Debt | 482 | 490 |
Non-recourse debt | 583 | 694 |
Level 1 | ||
Assets: | ||
Timeshare financing receivables | 0 | 0 |
Liabilities: | ||
Debt | 329 | 314 |
Non-recourse debt | 0 | 0 |
Level 3 | ||
Assets: | ||
Timeshare financing receivables | 1,292 | 1,147 |
Liabilities: | ||
Debt | 194 | 200 |
Non-recourse debt | $ 577 | $ 696 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Assets measured at fair value on recurring basis | $ 0 | $ 0 |
Liabilities measured at fair value on recurring basis | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases starting expiration date | 2,018 |
Leases ending expiration date | 2,026 |
Leases - Future Minimum Rent Pa
Leases - Future Minimum Rent Payments Under Non-Cancelable Leases (Details) $ in Millions | Dec. 31, 2017USD ($) |
Operating Leases | |
2,018 | $ 14 |
2,019 | 12 |
2,020 | 11 |
2,021 | 10 |
2,022 | 8 |
Thereafter | 23 |
Total minimum rent payments | $ 78 |
Leases - Schedule of Rent Expen
Leases - Schedule of Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Rent Expense [Abstract] | |||
Minimum rentals | $ 17 | $ 16 | $ 12 |
Contingent rentals | 3 | 1 | 5 |
Rent expense | $ 20 | $ 17 | $ 17 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Disclosure [Line Items] | |||||
Tax Cuts and Jobs Act 2017, provisional current income tax net of foreign tax credit | $ 1 | $ 0 | $ 0 | ||
Tax Cuts and Jobs Act 2017, provisional deferred tax benefit | $ (132) | $ 0 | $ 0 | ||
Federal tax rate | 35.00% | ||||
Increase (decrease) in net deferred tax liability | [1] | $ 9 | |||
Increase in additional paid-in capital, return to provision true-up | $ 1 | ||||
Scenario, Forecast | |||||
Income Tax Disclosure [Line Items] | |||||
Federal tax rate | 21.00% | ||||
[1] | Includes pre-spin tax adjustment, refer to Note 15: Income Taxes for further discussion. |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. income before tax | $ 283 | $ 270 | $ 275 | ||||||||
Foreign income before tax | 28 | 23 | 17 | ||||||||
Income before income taxes | $ 80 | $ 71 | $ 84 | $ 76 | $ 65 | $ 68 | $ 80 | $ 80 | $ 311 | $ 293 | $ 292 |
Income Taxes - Schedule of Co85
Income Taxes - Schedule of Components of Provision for Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ 94 | $ 87 | $ 85 |
State | 11 | 8 | 7 |
Foreign | 8 | 7 | 6 |
Total current | 113 | 102 | 98 |
Deferred: | |||
Federal | (137) | 21 | 18 |
State | 8 | 2 | 2 |
Total deferred | (129) | 23 | 20 |
Total provision for income taxes | $ (16) | $ 125 | $ 118 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax provision | $ 109 | $ 102 | $ 102 |
State and local income taxes, net of U.S. federal tax benefit | 12 | 10 | 9 |
Foreign income tax expense | 7 | 7 | 6 |
U.S. benefit of foreign taxes | (7) | (7) | (6) |
Non-deductible transactions costs | 0 | 5 | 0 |
Interest on installment sales, net of U.S. federal tax benefit | 3 | 7 | 7 |
Interest on installment sales adjustment | (5) | 0 | 0 |
U.S. tax reform: one-time repatriation tax | 1 | 0 | 0 |
U.S. tax reform: remeasurement of deferred tax | (132) | 0 | 0 |
U.S. tax reform: remeasurement of long-term interest liability on installment sales, net of federal tax benefit at 21% | (2) | 0 | 0 |
Other | (2) | 1 | 0 |
Total provision for income taxes | $ (16) | $ 125 | $ 118 |
Income Taxes - Schedule of Ef87
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||
Net of federal tax benefit | 35.00% | |
Scenario, Forecast | ||
Income Tax Disclosure [Line Items] | ||
Net of federal tax benefit | 21.00% |
Income Taxes - Schedule of Co88
Income Taxes - Schedule of Compositions of Net Deferred Tax Balances (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Deferred income taxes assets | $ 1 | $ 0 |
Deferred income tax liabilities | (250) | (389) |
Net deferred taxes | $ (249) | $ (389) |
Income Taxes - Schedule of Ef89
Income Taxes - Schedule of Effects of Temporary Differences and Carryforwards of Our Net Deferred Tax Liability (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Compensation | $ 9 | $ 11 |
Other reserves | 42 | 52 |
Deferred tax assets | 51 | 63 |
Deferred tax liabilities: | ||
Property and equipment | (54) | (87) |
Amortizable intangible assets | (10) | (17) |
Deferred income | (236) | (347) |
Other liabilities | 0 | (1) |
Deferred tax liabilities | (300) | (452) |
Net deferred taxes | $ (249) | $ (389) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share-based compensation expense | $ 15 | $ 8 | $ 8 |
Total tax benefit recognized related to share-based compensation | 4 | $ 3 | $ 3 |
Unrecognized compensation costs for unvested awards | $ 11 | ||
Unrecognized compensation costs, weighted average period for recognition | 1 year 10 months 24 days | ||
Shares of common stock available for future issuance | 7,652,477 | ||
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Achievement percentage | 100.00% |
Share-Based Compensation - Info
Share-Based Compensation - Information on RSU Grants (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 534,329 | 331,227 | 231,185 |
Weighted average grant date fair value per share | $ 29.23 | $ 18.68 | $ 26.16 |
Fair value of shares vested (in millions) | $ 11 | $ 4 | $ 8 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Activity of RSUs (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares Outstanding, beginning of period | 721,557 | ||
Number of Shares, Granted | 534,329 | 331,227 | 231,185 |
Number of Shares, Vested | (330,072) | ||
Number of Shares, Forfeited | (86,014) | ||
Number of Shares Outstanding, end of period | 839,800 | 721,557 | |
Weighted Average Grant Date Fair Value Outstanding, beginning of period | $ 21.41 | ||
Weighted Average Grant Date Fair Value, Granted | 29.23 | $ 18.68 | $ 26.16 |
Weighted Average Grant Date Fair Value, Vested | 23.37 | ||
Weighted Average Grant Date Fair Value, Forfeited | 24.54 | ||
Weighted Average Grant Date Fair Value Outstanding, end of period | $ 25.29 | $ 21.41 |
Share-Based Compensation - In93
Share-Based Compensation - Information on Option Grants (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of options granted | 669,658 | 148,929 | 89,641 |
Weighted average exercise price per share | $ 28.30 | $ 18.69 | $ 26.16 |
Weighted average grant date fair value per share | $ 8.66 | $ 5.21 | $ 7.99 |
Share-Based Compensation - Opti
Share-Based Compensation - Options Assumptions (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected volatility | 26.30% | 32.00% | 28.00% |
Dividend yield | 0.00% | 1.40% | 0.00% |
Risk-free rate | 2.30% | 1.40% | 1.70% |
Expected term (in years) | 6 years | 6 years | 6 years |
Share-Based Compensation - Su95
Share-Based Compensation - Summary of Options Activity (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Outstanding, beginning of period | 333,108 | ||
Number of Shares, Granted | 669,658 | 148,929 | 89,641 |
Number of Shares, Exercised | (34,183) | ||
Number of Shares, Forfeited, canceled or expired | (94,009) | ||
Number of Shares, Outstanding, end of period | 874,574 | 333,108 | |
Number of Shares, Exercisable, end of period | 169,926 | ||
Weighted Average Exercise Price Per Share, Outstanding, beginning of period | $ 21.21 | ||
Weighted Average Exercise Price Per Share, Granted | 28.30 | $ 18.69 | $ 26.16 |
Weighted Average Exercise Price Per Share, Exercised | 21.76 | ||
Weighted Average Exercise Price Per Share, Forfeited, canceled or expired | 27.36 | ||
Weighted Average Exercise Price Per Share, Outstanding, end of period | 25.96 | $ 21.21 | |
Weighted Average Exercise Price Per Share, Exercisable, end of period | $ 21.71 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | Jan. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Issuance of common stock (in shares) | 98,802,597 | |||
Weighted average shares outstanding, Basic | 98,934,352 | 99,000,000 | 99,000,000 | |
Weighted average shares outstanding, diluted | 99,621,199 | 99,000,000 | 99,000,000 | |
Stock Compensation Plan | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 229,621 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Numerator: | ||||||||||||||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] | $ 174,096,269 | [1] |
Denominator: | ||||||||||||||
Weighted average shares outstanding, Basic | 98,934,352 | 99,000,000 | 99,000,000 | |||||||||||
Basic EPS | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.30 | [3] | $ 1.70 | [3] | $ 1.76 | [3] | ||||
Denominator: | ||||||||||||||
Weighted average shares outstanding, diluted | 99,621,199 | 99,000,000 | 99,000,000 | |||||||||||
Diluted EPS | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.28 | [3] | $ 1.70 | [3] | $ 1.76 | [3] | ||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. | |||||||||||||
[3] | For the years ended December 31, 2016 and 2015, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ shareholders on January 3, 2017. See Note 17: Earnings Per Share for further discussion. |
Earnings Per Share - Schedule98
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Parenthetical) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Earnings Per Share [Abstract] | ||||||||||||||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] | $ 174,096,269 | [1] |
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. |
Related Party Transactions - Su
Related Party Transactions - Summary of Amounts Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due to related party | $ 23 | $ 5 |
Accounts Receivable, Net | Hilton | ||
Related Party Transaction [Line Items] | ||
Due from related party | 5 | |
Accounts Payable, Accrued Expenses and Other | Hilton | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 5 |
Related Party Transactions -100
Related Party Transactions - Summary of Amounts Included in Consolidated Statement of Operations (Details) - Hilton - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Related party interest expense | $ 2 | $ 0 |
Allocated general and administrative | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses from transactions with related party | 27 | 13 |
General and administrative, shared services | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses from transactions with related party | 12 | 11 |
General and administrative, defined contribution plan | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses from transactions with related party | 7 | 7 |
General and administrative, insurance | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses from transactions with related party | 2 | 2 |
License fee expense | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses from transactions with related party | $ 80 | $ 74 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 14, 2017 | Mar. 15, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Jul. 18, 2017 |
Related Party Transaction [Line Items] | ||||||||
Common Stock, shares outstanding (in shares) | 99,136,304 | 98,802,597 | ||||||
Equity in earnings from unconsolidated affiliate | $ 1 | $ 0 | $ 0 | |||||
Certain Hilton Wholly Owned Hotels | ||||||||
Related Party Transaction [Line Items] | ||||||||
Rental fees and fees for other amenities | 27 | 25 | ||||||
Blackstone | ||||||||
Related Party Transaction [Line Items] | ||||||||
Sale of stock (in shares) | 24,750,000 | |||||||
Percentage of outstanding shares sold | 25.00% | |||||||
Percentage of outstanding shares before transaction | 40.00% | |||||||
Due from related party | 20 | $ 8 | ||||||
BRE Ace Holdings | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from related party | 29 | |||||||
Equity in earnings from unconsolidated affiliate | $ 1 | |||||||
Equity method investment, ownership percentage | 25.00% | |||||||
Sale of Stock from Blackstone to JP Morgan Chase | Blackstone | ||||||||
Related Party Transaction [Line Items] | ||||||||
Sale of stock (in shares) | 9,650,000 | |||||||
Percentage of outstanding shares before transaction | 15.00% | |||||||
Common Stock, shares outstanding (in shares) | 15,008,689 | |||||||
Price per share (in dollars per share) | $ 35.40 | |||||||
Sale of stock, transaction date | Jun. 20, 2017 | |||||||
Other Assets | Hilton Honors Points | ||||||||
Related Party Transaction [Line Items] | ||||||||
Prepaid expense | $ 58 | $ 56 |
Related Party Transactions - Co
Related Party Transactions - Components of Net Transfers (to) from Parent in the Consolidated Statements of Stockholders' Equity (Deficit) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | $ (567) | $ 95 |
Cash pooling and general financing activities | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | (715) | (39) |
Corporate allocations | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | 53 | 42 |
Income taxes | ||
Related Party Transaction [Line Items] | ||
Net transfers (to) from Parent | $ 95 | $ 92 |
Related Party Transactions - Tr
Related Party Transactions - Transferred of Certain Assets and Related Deferred Tax Liabilities for Conversion to Vacation Ownership Units (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Assets | $ 2,180 | $ 2,384 |
Deferred Tax Liabilities | 389 | $ 249 |
Parent Capital Contribution | 672 | |
Certain floors at the Hilton New York | ||
Related Party Transaction [Line Items] | ||
Assets | 33 | |
Deferred Tax Liabilities | 9 | |
Parent Capital Contribution | 17 | |
Certain floors at the Embassy Suites Washington, DC | ||
Related Party Transaction [Line Items] | ||
Assets | 40 | |
Deferred Tax Liabilities | 7 | |
Parent Capital Contribution | 33 | |
Hotel tower and restaurant at the Hilton Waikoloa Village | ||
Related Party Transaction [Line Items] | ||
Assets | 178 | |
Deferred Tax Liabilities | 49 | |
Parent Capital Contribution | 129 | |
Land parcel adjacent to Hilton Waikoloa Village | ||
Related Party Transaction [Line Items] | ||
Assets | 54 | |
Deferred Tax Liabilities | 16 | |
Parent Capital Contribution | $ 38 |
Related Party Transactions -104
Related Party Transactions - Transferred of Certain Assets and Related Deferred Tax Liabilities for Conversion to Vacation Ownership Units (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Parent capital contribution release included in other assets | $ 42 | $ 44 |
Certain floors at the Hilton New York | ||
Related Party Transaction [Line Items] | ||
Parent capital contribution release included in other assets | $ 7 | |
Certain floors at the Hilton New York | Park | ||
Related Party Transaction [Line Items] | ||
Lease expiration date | Sep. 30, 2017 | |
Hotel tower and restaurant at the Hilton Waikoloa Village | Park | ||
Related Party Transaction [Line Items] | ||
Lease expiration date | Dec. 31, 2019 |
Related Party Transactions -105
Related Party Transactions - Summary of Amounts Included in Condensed Consolidated Statements of Operations Related to Fee for Service Arrangement (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Blackstone | ||||
Related Party Transaction [Line Items] | ||||
Commission and other fees | $ 135 | $ 177 | $ 154 | |
BRE Ace Holdings | ||||
Related Party Transaction [Line Items] | ||||
Commission and other fees | $ 79 | $ 0 | $ 0 |
Business Segments - Additional
Business Segments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Revenues Reconciled to Consolidated Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total revenues | $ 447 | $ 426 | $ 439 | $ 399 | $ 415 | $ 407 | $ 391 | $ 370 | $ 1,711 | $ 1,583 | $ 1,475 |
Cost reimbursements | 135 | 126 | 110 | ||||||||
Operating segments | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total revenues | 1,606 | 1,482 | 1,385 | ||||||||
Operating segments | Real estate sales and financing | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total revenues | 1,239 | 1,143 | 1,078 | ||||||||
Operating segments | Resort operations and club management | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total revenues | 367 | 339 | 307 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Cost reimbursements | 135 | 126 | 110 | ||||||||
Intersegment eliminations | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total revenues | $ (30) | $ (25) | $ (20) |
Business Segments - Schedule108
Business Segments - Schedule of Segment Revenues Reconciled to Consolidated Amounts (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Charges for billing and collection services | $ 43,000,000 | $ 32,000,000 | $ 32,000,000 |
Intersegment eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Charges for billing and collection services | 0 | 2,000,000 | 2,000,000 |
Charges for discounts on property stays | 29,000,000 | 23,000,000 | 17,000,000 |
Rental expense for model units | $ 1,000,000 | $ 0 | $ 1,000,000 |
Business Segments - Schedule109
Business Segments - Schedule of Adjusted EBITDA Reconciled to Net Income (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
General and administrative | $ (104,000,000) | $ (92,000,000) | $ (57,000,000) | |||||||||||
Depreciation and amortization | (29,000,000) | (24,000,000) | (22,000,000) | |||||||||||
License fee expense | (87,000,000) | (80,000,000) | (74,000,000) | |||||||||||
Interest expense | (27,000,000) | (3,000,000) | 0 | |||||||||||
Allocated Parent interest expense | 0 | (26,000,000) | (29,000,000) | |||||||||||
Other loss, net | 0 | (1,000,000) | 0 | |||||||||||
Equity in earnings from unconsolidated affiliate | 1,000,000 | 0 | 0 | |||||||||||
Income tax benefit (expense) | (16,000,000) | 125,000,000 | 118,000,000 | |||||||||||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | 326,777,744 | [1] | 167,618,659 | [1],[2] | 174,096,269 | [1] |
Operating segments | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 563,000,000 | 525,000,000 | 478,000,000 | |||||||||||
Operating segments | Real estate sales and financing | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 359,000,000 | 336,000,000 | 316,000,000 | |||||||||||
Operating segments | Resort operations and club management | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 204,000,000 | 189,000,000 | 162,000,000 | |||||||||||
Segment Reconciling Items | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
General and administrative | (104,000,000) | (92,000,000) | (57,000,000) | |||||||||||
Depreciation and amortization | (29,000,000) | (24,000,000) | (22,000,000) | |||||||||||
License fee expense | (87,000,000) | (80,000,000) | (74,000,000) | |||||||||||
Interest expense | (27,000,000) | (3,000,000) | 0 | |||||||||||
Allocated Parent interest expense | 0 | (26,000,000) | (29,000,000) | |||||||||||
Other loss, net | 0 | (1,000,000) | 0 | |||||||||||
Equity in earnings from unconsolidated affiliate | 1,000,000 | 0 | 0 | |||||||||||
Income tax benefit (expense) | 16,000,000 | (125,000,000) | (118,000,000) | |||||||||||
Other adjustment items | $ (6,000,000) | $ (6,000,000) | $ (4,000,000) | |||||||||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. |
Business Segments - Schedule110
Business Segments - Schedule of Adjusted EBITDA Reconciled to Net Income (Parenthetical) (Details) | Dec. 31, 2017 | Jul. 18, 2017 |
BRE Ace Holdings | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equity method investment, ownership percentage | 25.00% | 25.00% |
Business Segments - Schedule111
Business Segments - Schedule of Assets Reconciled to Consolidated Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 2,384 | $ 2,180 |
Operating segments | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 2,333 | 2,147 |
Operating segments | Real estate sales and financing | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 2,255 | 2,067 |
Operating segments | Resort operations and club management | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 78 | 80 |
Corporate | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 51 | $ 33 |
Business Segments - Schedule112
Business Segments - Schedule of Capital Expenditures for Property and Equipment Reconciled to Consolidated Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | $ 35 | $ 26 | $ 12 |
Operating segments | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 30 | 20 | 11 |
Operating segments | Real estate sales and financing | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 28 | 19 | 10 |
Operating segments | Resort operations and club management | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 2 | 1 | 1 |
Corporate | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | $ 5 | $ 6 | $ 1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Long-term Purchase Commitment [Line Items] | ||
Estimate of possible losses | $ 0 | |
Inventories | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment | $ 372,000,000 | |
Purchase commitment, period (in years) | 7 years | |
Purchase commitment, purchases made | $ 12,000,000 | $ 14,000,000 |
Commitments and Contingencie114
Commitments and Contingencies - Schedule of Remaining Purchase Obligations (Details) - Inventories $ in Millions | Dec. 31, 2017USD ($) |
Long-term Purchase Commitment [Line Items] | |
2,018 | $ 3 |
2,019 | 187 |
2,020 | 9 |
2,021 | 56 |
2,022 | 35 |
Thereafter | 82 |
Total | $ 372 |
Supplemental Disclosures of 115
Supplemental Disclosures of Cash Flow Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Significant Noncash Transactions [Line Items] | |||
Cash paid for interest | $ 42 | $ 37 | $ 37 |
Cash paid for income taxes | 57 | ||
Transfer from property and equipment to inventory | $ 40 | ||
Non-cash financing activity related to non-cash deferred financing costs | 8 | ||
Senior Unsecured Notes | |||
Other Significant Noncash Transactions [Line Items] | |||
Non-cash financing activity related to issuance of notes | 300 | ||
Hilton | |||
Other Significant Noncash Transactions [Line Items] | |||
Transfer of net inventory for conversion into timeshare units | 72 | ||
Transfer of net property and equipment for conversion into timeshare units | $ 138 |
Condensed Consolidating Guar116
Condensed Consolidating Guarantor Financial Information - Narrative (Details) - Senior Unsecured Notes | 1 Months Ended |
Nov. 30, 2016 | |
Subsidiary Issuers | |
Condensed Financial Statements Captions [Line Items] | |
Percentage owned by parent | 100.00% |
Guarantors | |
Condensed Financial Statements Captions [Line Items] | |
Percentage owned domestic subsidiaries | 100.00% |
Condensed Consolidating Guar117
Condensed Consolidating Guarantor Financial Information - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 246 | $ 48 | ||
Restricted cash | 51 | 103 | ||
Accounts receivable, net | 112 | 123 | ||
Timeshare financing receivables, net | 1,071 | 1,025 | ||
Inventory | 509 | 513 | ||
Property and equipment, net | 238 | 256 | ||
Investment in unconsolidated affiliate | 41 | 0 | ||
Intangible assets, net | 72 | 70 | ||
Other assets | 44 | 42 | ||
Investments in subsidiaries | 0 | 0 | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | 2,384 | 2,180 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 339 | 231 | ||
Advanced deposits | 104 | 103 | ||
Debt, net | 482 | 490 | ||
Non-recourse debt, net | 583 | 694 | ||
Deferred revenues | 109 | 106 | ||
Deferred income tax liabilities | 249 | 389 | ||
Deferred income taxes assets | 1 | 0 | ||
Total equity | 518 | 167 | $ (106) | $ (373) |
TOTAL LIABILITIES AND EQUITY | 2,384 | 2,180 | ||
Eliminations | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Accounts receivable, net | (6) | (18) | ||
Timeshare financing receivables, net | 0 | 0 | ||
Inventory | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | |||
Intangible assets, net | 0 | 0 | ||
Other assets | (1) | (17) | ||
Investments in subsidiaries | (1,598) | (939) | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | (1,605) | (974) | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | (7) | (25) | ||
Advanced deposits | 0 | 0 | ||
Debt, net | 0 | (10) | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Total equity | (1,598) | (939) | ||
TOTAL LIABILITIES AND EQUITY | (1,605) | (974) | ||
Parent | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Timeshare financing receivables, net | 0 | 0 | ||
Inventory | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | |||
Intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investments in subsidiaries | 518 | 167 | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | 518 | 167 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 0 | 0 | ||
Advanced deposits | 0 | 0 | ||
Debt, net | 0 | 0 | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Total equity | 518 | 167 | ||
TOTAL LIABILITIES AND EQUITY | 518 | 167 | ||
Issuers | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Timeshare financing receivables, net | 0 | 0 | ||
Inventory | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | |||
Intangible assets, net | 0 | 0 | ||
Other assets | 2 | 2 | ||
Investments in subsidiaries | 999 | 657 | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | 1,001 | 659 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 1 | 2 | ||
Advanced deposits | 0 | 0 | ||
Debt, net | 482 | 490 | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Total equity | 518 | 167 | ||
TOTAL LIABILITIES AND EQUITY | 1,001 | 659 | ||
Guarantors | ||||
ASSETS | ||||
Cash and cash equivalents | 230 | 47 | ||
Restricted cash | 29 | 81 | ||
Accounts receivable, net | 113 | 123 | ||
Timeshare financing receivables, net | 457 | 263 | ||
Inventory | 509 | 510 | ||
Property and equipment, net | 232 | 253 | ||
Investment in unconsolidated affiliate | 41 | |||
Intangible assets, net | 72 | 70 | ||
Other assets | 36 | 43 | ||
Investments in subsidiaries | 81 | 115 | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | 1,800 | 1,505 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 338 | 251 | ||
Advanced deposits | 104 | 102 | ||
Debt, net | 0 | 0 | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 109 | 106 | ||
Deferred income tax liabilities | 250 | 389 | ||
Total equity | 999 | 657 | ||
TOTAL LIABILITIES AND EQUITY | 1,800 | 1,505 | ||
Non-Guarantors | ||||
ASSETS | ||||
Cash and cash equivalents | 16 | 1 | ||
Restricted cash | 22 | 22 | ||
Accounts receivable, net | 5 | 18 | ||
Timeshare financing receivables, net | 614 | 762 | ||
Inventory | 0 | 3 | ||
Property and equipment, net | 6 | 3 | ||
Investment in unconsolidated affiliate | 0 | |||
Intangible assets, net | 0 | 0 | ||
Other assets | 7 | 14 | ||
Investments in subsidiaries | 0 | 0 | ||
TOTAL ASSETS (variable interest entities - $471 and $258) | 670 | 823 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 7 | 3 | ||
Advanced deposits | 0 | 1 | ||
Debt, net | 0 | 10 | ||
Non-recourse debt, net | 583 | 694 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | |||
Deferred income taxes assets | (1) | |||
Total equity | 81 | 115 | ||
TOTAL LIABILITIES AND EQUITY | $ 670 | $ 823 |
Condensed Consolidating Guar118
Condensed Consolidating Guarantor Financial Information - Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Revenues | ||||||||||||||
Sales of VOIs, net | $ 548,000,000 | $ 508,000,000 | $ 492,000,000 | |||||||||||
Sales, marketing, brand and other fees | 544,000,000 | 499,000,000 | 457,000,000 | |||||||||||
Financing | 147,000,000 | 134,000,000 | 127,000,000 | |||||||||||
Resort and club management | 158,000,000 | 143,000,000 | 125,000,000 | |||||||||||
Rental and ancillary services | 179,000,000 | 173,000,000 | 164,000,000 | |||||||||||
Cost reimbursements | 135,000,000 | 126,000,000 | 110,000,000 | |||||||||||
Total revenues | $ 447,000,000 | $ 426,000,000 | $ 439,000,000 | $ 399,000,000 | $ 415,000,000 | $ 407,000,000 | $ 391,000,000 | $ 370,000,000 | 1,711,000,000 | 1,583,000,000 | 1,475,000,000 | |||
Expenses | ||||||||||||||
Cost of VOI sales | 148,000,000 | 152,000,000 | 173,000,000 | |||||||||||
Sales and marketing | 663,000,000 | 605,000,000 | 541,000,000 | |||||||||||
Financing | 43,000,000 | 32,000,000 | 32,000,000 | |||||||||||
Resort and club management | 43,000,000 | 36,000,000 | 32,000,000 | |||||||||||
Rental and ancillary services | 122,000,000 | 113,000,000 | 113,000,000 | |||||||||||
General and administrative | 104,000,000 | 92,000,000 | 57,000,000 | |||||||||||
Depreciation and amortization | 29,000,000 | 24,000,000 | 22,000,000 | |||||||||||
License fee expense | 87,000,000 | 80,000,000 | 74,000,000 | |||||||||||
Cost reimbursements | 135,000,000 | 126,000,000 | 110,000,000 | |||||||||||
Total operating expenses | 360,000,000 | 350,000,000 | 348,000,000 | 316,000,000 | 339,000,000 | 333,000,000 | 304,000,000 | 284,000,000 | 1,374,000,000 | 1,260,000,000 | 1,154,000,000 | |||
Allocated Parent interest expense | 0 | (26,000,000) | (29,000,000) | |||||||||||
Interest expense | (27,000,000) | (3,000,000) | 0 | |||||||||||
Other loss, net | 0 | (1,000,000) | 0 | |||||||||||
Equity in earnings from unconsolidated affiliate | 1,000,000 | 0 | 0 | |||||||||||
Income before income taxes | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 65,000,000 | 68,000,000 | 80,000,000 | 80,000,000 | 311,000,000 | 293,000,000 | 292,000,000 | |||
Income tax benefit (expense) | 16,000,000 | (125,000,000) | (118,000,000) | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 327,000,000 | 168,000,000 | 174,000,000 | |||||||||||
Equity in earnings (loss) from subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | 326,777,744 | [1] | 167,618,659 | [1],[2] | 174,096,269 | [1] |
Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Sales of VOIs, net | 0 | 0 | 0 | |||||||||||
Sales, marketing, brand and other fees | (4,000,000) | (4,000,000) | (2,000,000) | |||||||||||
Financing | (7,000,000) | (5,000,000) | (6,000,000) | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total revenues | (11,000,000) | (9,000,000) | (8,000,000) | |||||||||||
Expenses | ||||||||||||||
Cost of VOI sales | 0 | 0 | 0 | |||||||||||
Sales and marketing | (4,000,000) | (4,000,000) | (2,000,000) | |||||||||||
Financing | (7,000,000) | (5,000,000) | (6,000,000) | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
General and administrative | 0 | 0 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
License fee expense | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total operating expenses | (11,000,000) | (9,000,000) | (8,000,000) | |||||||||||
Allocated Parent interest expense | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | ||||||||||||
Other loss, net | 0 | |||||||||||||
Equity in earnings from unconsolidated affiliate | 0 | |||||||||||||
Income before income taxes | 0 | 0 | 0 | |||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 0 | 0 | 0 | |||||||||||
Equity in earnings (loss) from subsidiaries | (741,000,000) | (427,000,000) | (53,000,000) | |||||||||||
Net income | (741,000,000) | (427,000,000) | (53,000,000) | |||||||||||
Parent | ||||||||||||||
Revenues | ||||||||||||||
Sales of VOIs, net | 0 | 0 | 0 | |||||||||||
Sales, marketing, brand and other fees | 0 | 0 | 0 | |||||||||||
Financing | 0 | 0 | 0 | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Cost of VOI sales | 0 | 0 | 0 | |||||||||||
Sales and marketing | 0 | 0 | 0 | |||||||||||
Financing | 0 | 0 | 0 | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
General and administrative | 0 | 0 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
License fee expense | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total operating expenses | 0 | 0 | 0 | |||||||||||
Allocated Parent interest expense | (17,000,000) | 0 | ||||||||||||
Interest expense | 0 | 0 | ||||||||||||
Other loss, net | 0 | |||||||||||||
Equity in earnings from unconsolidated affiliate | 0 | |||||||||||||
Income before income taxes | 0 | (17,000,000) | 0 | |||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 0 | (17,000,000) | 0 | |||||||||||
Equity in earnings (loss) from subsidiaries | 327,000,000 | 185,000,000 | 0 | |||||||||||
Net income | 327,000,000 | 168,000,000 | 0 | |||||||||||
Issuers | ||||||||||||||
Revenues | ||||||||||||||
Sales of VOIs, net | 0 | 0 | 0 | |||||||||||
Sales, marketing, brand and other fees | 0 | 0 | 0 | |||||||||||
Financing | 0 | 0 | 0 | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Cost of VOI sales | 0 | 0 | 0 | |||||||||||
Sales and marketing | 0 | 0 | 0 | |||||||||||
Financing | 0 | 0 | 0 | |||||||||||
Resort and club management | 0 | 0 | 0 | |||||||||||
Rental and ancillary services | 0 | 0 | 0 | |||||||||||
General and administrative | 0 | 1,000,000 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
License fee expense | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 0 | 0 | 0 | |||||||||||
Total operating expenses | 0 | 1,000,000 | 0 | |||||||||||
Allocated Parent interest expense | 0 | 0 | ||||||||||||
Interest expense | (27,000,000) | (3,000,000) | ||||||||||||
Other loss, net | 0 | |||||||||||||
Equity in earnings from unconsolidated affiliate | 0 | |||||||||||||
Income before income taxes | (27,000,000) | (4,000,000) | 0 | |||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | (27,000,000) | (4,000,000) | 0 | |||||||||||
Equity in earnings (loss) from subsidiaries | 354,000,000 | 189,000,000 | 0 | |||||||||||
Net income | 327,000,000 | 185,000,000 | 0 | |||||||||||
Guarantors | ||||||||||||||
Revenues | ||||||||||||||
Sales of VOIs, net | 518,000,000 | 495,000,000 | 488,000,000 | |||||||||||
Sales, marketing, brand and other fees | 545,000,000 | 501,000,000 | 457,000,000 | |||||||||||
Financing | 71,000,000 | 73,000,000 | 60,000,000 | |||||||||||
Resort and club management | 156,000,000 | 143,000,000 | 125,000,000 | |||||||||||
Rental and ancillary services | 177,000,000 | 171,000,000 | 161,000,000 | |||||||||||
Cost reimbursements | 131,000,000 | 123,000,000 | 106,000,000 | |||||||||||
Total revenues | 1,598,000,000 | 1,506,000,000 | 1,397,000,000 | |||||||||||
Expenses | ||||||||||||||
Cost of VOI sales | 145,000,000 | 150,000,000 | 172,000,000 | |||||||||||
Sales and marketing | 650,000,000 | 605,000,000 | 542,000,000 | |||||||||||
Financing | 19,000,000 | 18,000,000 | 16,000,000 | |||||||||||
Resort and club management | 41,000,000 | 36,000,000 | 32,000,000 | |||||||||||
Rental and ancillary services | 120,000,000 | 108,000,000 | 108,000,000 | |||||||||||
General and administrative | 101,000,000 | 91,000,000 | 57,000,000 | |||||||||||
Depreciation and amortization | 29,000,000 | 24,000,000 | 22,000,000 | |||||||||||
License fee expense | 87,000,000 | 80,000,000 | 74,000,000 | |||||||||||
Cost reimbursements | 131,000,000 | 123,000,000 | 106,000,000 | |||||||||||
Total operating expenses | 1,323,000,000 | 1,235,000,000 | 1,129,000,000 | |||||||||||
Allocated Parent interest expense | (9,000,000) | (29,000,000) | ||||||||||||
Interest expense | 0 | 0 | ||||||||||||
Other loss, net | (1,000,000) | |||||||||||||
Equity in earnings from unconsolidated affiliate | 1,000,000 | |||||||||||||
Income before income taxes | 276,000,000 | 261,000,000 | 239,000,000 | |||||||||||
Income tax benefit (expense) | 18,000,000 | (125,000,000) | (118,000,000) | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 294,000,000 | 136,000,000 | 121,000,000 | |||||||||||
Equity in earnings (loss) from subsidiaries | 60,000,000 | 53,000,000 | 53,000,000 | |||||||||||
Net income | 354,000,000 | 189,000,000 | 174,000,000 | |||||||||||
Non-Guarantors | ||||||||||||||
Revenues | ||||||||||||||
Sales of VOIs, net | 30,000,000 | 13,000,000 | 4,000,000 | |||||||||||
Sales, marketing, brand and other fees | 3,000,000 | 2,000,000 | 2,000,000 | |||||||||||
Financing | 83,000,000 | 66,000,000 | 73,000,000 | |||||||||||
Resort and club management | 2,000,000 | 0 | 0 | |||||||||||
Rental and ancillary services | 2,000,000 | 2,000,000 | 3,000,000 | |||||||||||
Cost reimbursements | 4,000,000 | 3,000,000 | 4,000,000 | |||||||||||
Total revenues | 124,000,000 | 86,000,000 | 86,000,000 | |||||||||||
Expenses | ||||||||||||||
Cost of VOI sales | 3,000,000 | 2,000,000 | 1,000,000 | |||||||||||
Sales and marketing | 17,000,000 | 4,000,000 | 1,000,000 | |||||||||||
Financing | 31,000,000 | 19,000,000 | 22,000,000 | |||||||||||
Resort and club management | 2,000,000 | 0 | 0 | |||||||||||
Rental and ancillary services | 2,000,000 | 5,000,000 | 5,000,000 | |||||||||||
General and administrative | 3,000,000 | 0 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
License fee expense | 0 | 0 | 0 | |||||||||||
Cost reimbursements | 4,000,000 | 3,000,000 | 4,000,000 | |||||||||||
Total operating expenses | 62,000,000 | 33,000,000 | 33,000,000 | |||||||||||
Allocated Parent interest expense | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | ||||||||||||
Other loss, net | 0 | |||||||||||||
Equity in earnings from unconsolidated affiliate | 0 | |||||||||||||
Income before income taxes | 62,000,000 | 53,000,000 | 53,000,000 | |||||||||||
Income tax benefit (expense) | (2,000,000) | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 60,000,000 | 53,000,000 | 53,000,000 | |||||||||||
Equity in earnings (loss) from subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | $ 60,000,000 | $ 53,000,000 | $ 53,000,000 | |||||||||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. |
Condensed Consolidating Guar119
Condensed Consolidating Guarantor Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Operating Activities | |||||
Net cash provided by (used in) operating activities | $ 356 | $ 182 | $ 152 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | (35) | (26) | (12) | ||
Software capitalization costs | (12) | (8) | (6) | ||
Investment in unconsolidated affiliate | (40) | 0 | 0 | ||
Net cash used in investing activities | (87) | (34) | (18) | ||
Financing Activities | |||||
Issuance of non-recourse debt | 350 | 300 | 0 | ||
Repayment of non-recourse debt | (459) | (110) | (125) | ||
Issuance of debt | 0 | 200 | 0 | ||
Repayment of debt | (10) | 0 | 0 | ||
Debt issuance costs | (5) | (10) | 0 | ||
Proceeds from stock option exercises | 1 | 0 | 0 | ||
Allocated debt activity | 0 | 111 | [1] | (87) | [2] |
Net transfers (to) from Parent | 0 | (567) | [1] | 95 | [2] |
Distribution to Parent | 0 | 0 | [1] | (2) | [2] |
Intercompany transfers | 0 | 0 | 0 | ||
Net cash used in financing activities | (123) | (76) | (119) | ||
Net increase in cash, cash equivalents and restricted cash | 146 | 72 | 15 | ||
Cash, cash equivalents and restricted cash, beginning of period | 151 | 79 | 64 | ||
Cash, cash equivalents and restricted cash, end of period | 297 | 151 | 79 | ||
Eliminations | |||||
Operating Activities | |||||
Net cash provided by (used in) operating activities | (8) | (67) | 18 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | 0 | 0 | 0 | ||
Software capitalization costs | 0 | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | ||||
Net cash used in investing activities | 0 | 0 | 0 | ||
Financing Activities | |||||
Issuance of non-recourse debt | 0 | 0 | |||
Repayment of non-recourse debt | 0 | 0 | 0 | ||
Issuance of debt | 0 | 0 | |||
Repayment of debt | 0 | ||||
Debt issuance costs | 0 | 0 | |||
Proceeds from stock option exercises | 0 | ||||
Allocated debt activity | 0 | [1] | 0 | [2] | |
Net transfers (to) from Parent | 0 | [1] | 0 | [2] | |
Distribution to Parent | 0 | [1] | 0 | [2] | |
Intercompany transfers | 8 | 67 | (18) | ||
Net cash used in financing activities | 8 | 67 | (18) | ||
Net increase in cash, cash equivalents and restricted cash | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, end of period | 0 | 0 | 0 | ||
Parent | |||||
Operating Activities | |||||
Net cash provided by (used in) operating activities | 0 | 0 | 0 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | 0 | 0 | 0 | ||
Software capitalization costs | 0 | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | ||||
Net cash used in investing activities | 0 | 0 | 0 | ||
Financing Activities | |||||
Issuance of non-recourse debt | 0 | 0 | |||
Repayment of non-recourse debt | 0 | 0 | 0 | ||
Issuance of debt | 0 | 0 | |||
Repayment of debt | 0 | ||||
Debt issuance costs | 0 | 0 | |||
Proceeds from stock option exercises | 0 | ||||
Allocated debt activity | 111 | [1] | 0 | [2] | |
Net transfers (to) from Parent | (567) | [1] | 0 | [2] | |
Distribution to Parent | 0 | [1] | 0 | [2] | |
Intercompany transfers | 0 | 456 | 0 | ||
Net cash used in financing activities | 0 | 0 | 0 | ||
Net increase in cash, cash equivalents and restricted cash | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, end of period | 0 | 0 | 0 | ||
Issuers | |||||
Operating Activities | |||||
Net cash provided by (used in) operating activities | (27) | 4 | 0 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | 0 | 0 | 0 | ||
Software capitalization costs | 0 | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | ||||
Net cash used in investing activities | 0 | 0 | 0 | ||
Financing Activities | |||||
Issuance of non-recourse debt | 0 | 0 | |||
Repayment of non-recourse debt | 0 | 0 | 0 | ||
Issuance of debt | 0 | 200 | |||
Repayment of debt | (10) | ||||
Debt issuance costs | 0 | (4) | |||
Proceeds from stock option exercises | 0 | ||||
Allocated debt activity | 0 | [1] | 0 | [2] | |
Net transfers (to) from Parent | 0 | [1] | 0 | [2] | |
Distribution to Parent | 0 | [1] | 0 | [2] | |
Intercompany transfers | 37 | (200) | 0 | ||
Net cash used in financing activities | 27 | (4) | 0 | ||
Net increase in cash, cash equivalents and restricted cash | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, end of period | 0 | 0 | 0 | ||
Guarantors | |||||
Operating Activities | |||||
Net cash provided by (used in) operating activities | 156 | 432 | 17 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | (33) | (26) | (12) | ||
Software capitalization costs | (12) | (8) | (6) | ||
Investment in unconsolidated affiliate | (40) | ||||
Net cash used in investing activities | (85) | (34) | (18) | ||
Financing Activities | |||||
Issuance of non-recourse debt | 0 | 0 | |||
Repayment of non-recourse debt | 0 | 0 | 0 | ||
Issuance of debt | 0 | 0 | |||
Repayment of debt | 0 | ||||
Debt issuance costs | 0 | (3) | |||
Proceeds from stock option exercises | 1 | ||||
Allocated debt activity | 0 | [1] | (87) | [2] | |
Net transfers (to) from Parent | 0 | [1] | 95 | [2] | |
Distribution to Parent | 0 | [1] | (2) | [2] | |
Intercompany transfers | 59 | (329) | 18 | ||
Net cash used in financing activities | 60 | (332) | 24 | ||
Net increase in cash, cash equivalents and restricted cash | 131 | 66 | 23 | ||
Cash, cash equivalents and restricted cash, beginning of period | 128 | 62 | 39 | ||
Cash, cash equivalents and restricted cash, end of period | 259 | 128 | 62 | ||
Non-Guarantors | |||||
Operating Activities | |||||
Net cash provided by (used in) operating activities | 235 | (187) | 117 | ||
Investing Activities | |||||
Capital expenditures for property and equipment | (2) | 0 | 0 | ||
Software capitalization costs | 0 | 0 | 0 | ||
Investment in unconsolidated affiliate | 0 | ||||
Net cash used in investing activities | (2) | 0 | 0 | ||
Financing Activities | |||||
Issuance of non-recourse debt | 350 | 300 | |||
Repayment of non-recourse debt | (459) | (110) | (125) | ||
Issuance of debt | 0 | 0 | |||
Repayment of debt | 0 | ||||
Debt issuance costs | (5) | (3) | |||
Proceeds from stock option exercises | 0 | ||||
Allocated debt activity | 0 | [1] | 0 | [2] | |
Net transfers (to) from Parent | 0 | [1] | 0 | [2] | |
Distribution to Parent | 0 | [1] | 0 | [2] | |
Intercompany transfers | (104) | 6 | 0 | ||
Net cash used in financing activities | (218) | 193 | (125) | ||
Net increase in cash, cash equivalents and restricted cash | 15 | 6 | (8) | ||
Cash, cash equivalents and restricted cash, beginning of period | 23 | 17 | 25 | ||
Cash, cash equivalents and restricted cash, end of period | $ 38 | $ 23 | $ 17 | ||
[1] | Amounts represent activities with Hilton | ||||
[2] | Amounts represent activities with Hilton. |
Selected Quarterly Financial120
Selected Quarterly Financial Information - Schedule of Selected Quarterly Financial Information (unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||
Total revenues | $ 447,000,000 | $ 426,000,000 | $ 439,000,000 | $ 399,000,000 | $ 415,000,000 | $ 407,000,000 | $ 391,000,000 | $ 370,000,000 | $ 1,711,000,000 | $ 1,583,000,000 | $ 1,475,000,000 | |||
Total operating expenses | 360,000,000 | 350,000,000 | 348,000,000 | 316,000,000 | 339,000,000 | 333,000,000 | 304,000,000 | 284,000,000 | 1,374,000,000 | 1,260,000,000 | 1,154,000,000 | |||
Income before income taxes | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 65,000,000 | 68,000,000 | 80,000,000 | 80,000,000 | 311,000,000 | 293,000,000 | 292,000,000 | |||
Net income | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 38,000,000 | $ 35,000,000 | $ 47,000,000 | $ 48,000,000 | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] | $ 174,096,269 | [1] |
Basic | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.30 | [3] | $ 1.70 | [3] | $ 1.76 | [3] | ||||
Diluted | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.28 | [3] | 1.70 | [3] | $ 1.76 | [3] | ||||
Basic and diluted earnings per share | $ 0.38 | $ 0.35 | $ 0.48 | $ 0.48 | $ 1.70 | |||||||||
[1] | Net income for years ended December 31, 2017, 2016, and 2015 was $326,777,744; $167,618,659 and $174,096,269, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in capital instead of Accumulated retained earnings since the accumulation of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotel & Resorts. See Note 1: Organization for further discussion. | |||||||||||||
[3] | For the years ended December 31, 2016 and 2015, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations’ shareholders on January 3, 2017. See Note 17: Earnings Per Share for further discussion. |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Inventories - USD ($) $ in Millions | Feb. 28, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||
Purchase commitment | $ 372 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Purchase commitment | $ 41 |