Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
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, 2018 | ||
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 | 94,620,208 | ||
Entity Public Float | $ 3,336 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 108 | $ 246 | ||
Restricted cash | 72 | 51 | ||
Accounts receivable, net of allowance for doubtful accounts of $14 and $9 | 153 | 112 | ||
Timeshare financing receivables, net | 1,120 | 1,071 | ||
Inventory | 527 | 509 | ||
Property and equipment, net | 559 | 238 | ||
Investments in unconsolidated affiliates | 38 | 41 | ||
Intangible assets, net | 81 | 72 | ||
Other assets | 95 | 44 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,384 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 324 | 339 | ||
Advanced deposits | 101 | 104 | ||
Debt, net | 604 | 482 | ||
Non-recourse debt, net | 759 | 583 | ||
Deferred revenues | 95 | 109 | ||
Deferred income tax liabilities | 254 | 249 | ||
Total liabilities (variable interest entities - $640 and $455) | 2,137 | 1,866 | ||
Commitments and contingencies - see Note 22 | ||||
Equity: | ||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | ||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 | ||
Additional paid-in capital | 174 | 162 | ||
Accumulated retained earnings | 441 | 355 | ||
Total equity | 616 | 518 | $ 167 | $ (106) |
TOTAL LIABILITIES AND EQUITY | $ 2,753 | $ 2,384 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 14 | $ 9 |
Assets, variable interest entity | 647 | 471 |
Liabilities, variable interest entity | $ 640 | $ 455 |
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) | 94,558,086 | 99,136,304 |
Common Stock, shares outstanding (in shares) | 94,558,086 | 99,136,304 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Revenues | |||||
Total revenues | $ 1,999,000,000 | $ 1,711,000,000 | $ 1,583,000,000 | ||
Expenses | |||||
General and administrative | 117,000,000 | 104,000,000 | 92,000,000 | ||
Depreciation and amortization | 36,000,000 | 29,000,000 | 24,000,000 | ||
Total operating expenses | 1,565,000,000 | 1,374,000,000 | 1,260,000,000 | ||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | ||
Allocated Parent interest expense | (26,000,000) | ||||
Equity in earnings from unconsolidated affiliates | 1,000,000 | ||||
Other loss, net | (1,000,000) | (1,000,000) | |||
Income before income taxes | 403,000,000 | 311,000,000 | 293,000,000 | ||
Income tax (expense) benefit | (105,000,000) | 16,000,000 | (125,000,000) | ||
Net income | [1] | $ 298,124,983 | $ 326,777,744 | $ 167,618,659 | [2] |
Earnings per share: | |||||
Basic | [3] | $ 3.07 | $ 3.30 | $ 1.70 | |
Diluted | [3] | $ 3.05 | $ 3.28 | $ 1.70 | |
Sales of VOIs, Net | |||||
Revenues | |||||
Total revenues | $ 734,000,000 | $ 548,000,000 | $ 508,000,000 | ||
Sales, Marketing, Brand and Other Fees | |||||
Revenues | |||||
Total revenues | 570,000,000 | 544,000,000 | 499,000,000 | ||
Financing | |||||
Revenues | |||||
Total revenues | 158,000,000 | 147,000,000 | 134,000,000 | ||
Expenses | |||||
Expenses | 49,000,000 | 43,000,000 | 32,000,000 | ||
Resort and Club Management | |||||
Revenues | |||||
Total revenues | 172,000,000 | 158,000,000 | 143,000,000 | ||
Expenses | |||||
Expenses | 47,000,000 | 43,000,000 | 36,000,000 | ||
Rental and Ancillary Services | |||||
Revenues | |||||
Total revenues | 218,000,000 | 179,000,000 | 173,000,000 | ||
Expenses | |||||
Expenses | 133,000,000 | 122,000,000 | 113,000,000 | ||
Cost Reimbursements | |||||
Revenues | |||||
Total revenues | 147,000,000 | 135,000,000 | 126,000,000 | ||
Expenses | |||||
Expenses | 147,000,000 | 135,000,000 | 126,000,000 | ||
Cost of VOI Sales | |||||
Expenses | |||||
Expenses | 210,000,000 | 148,000,000 | 152,000,000 | ||
Sales and Marketing | |||||
Expenses | |||||
Expenses | 728,000,000 | 663,000,000 | 605,000,000 | ||
License Fee Expense | |||||
Expenses | |||||
Expenses | $ 98,000,000 | $ 87,000,000 | $ 80,000,000 | ||
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | ||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion | ||||
[3] | For the year ended December 31, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations Inc.’s shareholders on January 3, 2017. See Note 19: Earnings Per Share for further discussion. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Operating Activities | ||||
Net income | $ 298 | $ 327 | $ 168 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 36 | 29 | 24 | |
Amortization of costs to obtain a contract | 2 | |||
Amortization of deferred financing costs and other | 5 | 5 | 5 | |
Provision for loan losses | 69 | 58 | 49 | |
Other loss, net | 1 | 1 | ||
Share-based compensation | 16 | 15 | ||
Deferred income tax expense (benefit) | 20 | (129) | 23 | |
Equity in earnings from unconsolidated affiliates | (1) | |||
Distributions received from unconsolidated affiliates | 2 | |||
Net changes in assets and liabilities: | ||||
Accounts receivables, net | (41) | 12 | (30) | |
Timeshare financing receivables, net | (118) | (103) | (98) | |
Inventory | 16 | 47 | 7 | |
Purchase of real estate for future conversion to inventory | (299) | |||
Other assets | (31) | (4) | (4) | |
Accounts payable, accrued expenses and other | (24) | 95 | 28 | |
Advanced deposits | 14 | 1 | 7 | |
Deferred revenues | (126) | 3 | 3 | |
Other | 1 | 1 | (1) | |
Net cash (used in) provided by operating activities | (159) | 356 | 182 | |
Investing Activities | ||||
Capital expenditures for property and equipment | (44) | (35) | (26) | |
Software capitalization costs | (19) | (12) | (8) | |
Return of investment from unconsolidated affiliates | 11 | |||
Investment in unconsolidated affiliates | (10) | (40) | ||
Net cash used in investing activities | (62) | (87) | (34) | |
Financing Activities | ||||
Issuance of debt | 530 | 200 | ||
Issuance of non-recourse debt | 663 | 350 | 300 | |
Repurchase and retirement of common stock | (183) | |||
Repayment of debt | (408) | (10) | ||
Repayment of non-recourse debt | (485) | (459) | (110) | |
Debt issuance costs | (12) | (5) | (10) | |
Allocated debt activity | [1] | 111 | ||
Net transfers to Parent | (567) | |||
Proceeds from stock option exercises | 1 | |||
Payment of withholding taxes on vesting of restricted stock units | (4) | |||
Capital contribution | 3 | |||
Net cash provided by (used in) financing activities | 104 | (123) | (76) | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (117) | 146 | 72 | |
Cash, cash equivalents and restricted cash, beginning of period | 297 | 151 | 79 | |
Cash, cash equivalents and restricted cash, end of period | $ 180 | $ 297 | $ 151 | |
[1] | Amounts represent activities with Hilton. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Total | Common Stock | Parent Deficit | Additional Paid-in Capital | Accumulated Retained Earnings | ||
Beginning balance, value at Dec. 31, 2015 | $ (106,000,000) | $ (106,000,000) | |||||
Net income | [1] | 167,618,659 | [2] | 140,000,000 | $ 28,000,000 | ||
Net transfers 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 | ||||
Ending balance, value at Dec. 31, 2016 | 167,000,000 | $ 1,000,000 | 138,000,000 | 28,000,000 | |||
Ending balance, shares at Dec. 31, 2016 | 99,000,000 | ||||||
Net income | 326,777,744 | [2] | 327,000,000 | ||||
Deferred intercompany transaction | [4] | 9,000,000 | 9,000,000 | ||||
Activity related to share-basedcompensation | 12,000,000 | 12,000,000 | |||||
Other | [4] | 3,000,000 | 3,000,000 | ||||
Ending balance, value at Dec. 31, 2017 | $ 518,000,000 | $ 1,000,000 | 162,000,000 | 355,000,000 | |||
Ending balance, shares at Dec. 31, 2017 | 99,136,304 | 99,000,000 | |||||
Net income | $ 298,124,983 | [2] | 298,000,000 | ||||
Activity related to share-basedcompensation | 13,000,000 | 13,000,000 | |||||
Repurchase and retirement of common stock | (183,000,000) | (7,000,000) | (176,000,000) | ||||
Repurchase and retirement of common stock, shares | (5,000,000) | ||||||
Revenue recognition cumulative-effect adjustment | (38,000,000) | (38,000,000) | |||||
Capital contribution from Parent | 3,000,000 | 3,000,000 | |||||
Other | 5,000,000 | 3,000,000 | 2,000,000 | ||||
Ending balance, value at Dec. 31, 2018 | $ 616,000,000 | $ 1,000,000 | $ 174,000,000 | $ 441,000,000 | |||
Ending balance, shares at Dec. 31, 2018 | 94,558,086 | 94,000,000 | |||||
[1] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion | ||||||
[2] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | ||||||
[3] | Parent 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 information | ||||||
[4] | Includes pre-spin tax adjustment |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Note 1: Organization Our Business Hilton Grand Vacations Inc. (“Hilton Grand Vacations,” “we,” “us,” “our,” “HGV” or the “Company”) 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, 2018, we had 54 properties, comprised of 8,888 units, located in the United States (“U.S.”), Japan and Europe. Our Spin-off from Hilton Worldwide Holdings Inc. During 2016, Hilton Worldwide Holdings Inc. (“Hilton”) completed an internal reorganization and contributed to the Company the US. 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 previously announced spin-off of Hilton Grand Vacations from Hilton was completed. As a result of the spin-off, we became an independent public company, and our common stock is listed on the New York Stock Exchange under the symbol “HGV.” Following the spin-off, 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 Grand Vacations brand. The audited consolidated financial statements reflect the effect of these agreements. For each of the years ended December 31, 2018 and 2017, we incurred $178 million in costs relating to the agreements entered with Hilton. See Key Agreements Related to the Spin-Off Business |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
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. 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 On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The reported results as of and for the year ended December 31, 2018, reflects the application of ASC 606 while the reported financial position as of December 31, 2017 and results for years ended December 31, 2017 and 2016 were prepared under the guidance of ASC 605, Revenue Recognition Real Estate – Time-Sharing Activities, Revenue Recognition In accordance with ASC 606, revenue is recognized upon the transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve the core principle of the new guidance, we take the following steps: (i) identify the contract with the customer; (ii) determine whether the promised goods or services are separate performance obligations in the contract; (iii) determine the transaction price, including considering the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract based on the standalone selling price or estimated standalone selling price of the good or service; and (v) recognize revenue when (or as) we satisfy each performance obligation. Contracts with Multiple Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. For arrangements that contain multiple goods or services, we determine whether such goods or services are distinct performance obligations that should be accounted for separately in the arrangement. When allocating the transaction price in the arrangement, we may not have observable standalone sales for all of the performance obligations in these contracts; therefore, we exercise significant judgement when determining the standalone selling price of certain performance obligations. In order to estimate the standalone selling prices, we primarily rely on the expected cost plus margin and adjusted market assessment approaches. We then recognize the revenue allocated to each performance obligation as the related performance obligation is satisfied as discussed below. • Sales of VOIs, net — Customers who purchase vacation ownership products, whether paid in cash or financed, enter into multiple contracts, which we combine and account for as a single contract. Revenue from VOI sales is recognized at the point in time when control of the VOI is transferred to the customer which is when the customer has executed a binding sales contract, collectability is reasonably assured, the purchaser’s period to cancel for a refund has expired and the customer has the right to use the VOI. Revenue from sales of VOIs under construction is deferred until the point in time when construction activities are deemed to be completed, occupancy of the development is permissible, and the above criteria has been met. For financed sales, we estimate the variable consideration to be received under such contracts and recognize revenue net of amounts deemed uncollectible as the VOI is returned to inventory upon customer default. Variable consideration which has not been included within the transaction price is presented as a reserve on the financing receivable. See Note 5: Timeshare Financing Receivables for more information regarding our estimate of variable consideration. 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. At the time of the VOI sale, we estimate the fair value of the incentives to be redeemed, including an adjustment for breakage, to determine the standalone selling price of the first day incentive (“FDI”). We defer a portion of the total transaction price for the combined VOI contract as a liability for the FDI and recognize the corresponding revenue at the point in time when the customer receives the benefits of the FDI, which is upon the customer’s redemption of the Bonus Points. At that time, we also determine whether we are principal or agent for the redeemed good or service and recognize revenue on a gross or net basis accordingly. • Sales, marketing, brand and other fees— We enter into contracts with third-party developers to sell VOIs on their behalf through fee-for-service agreements for which we earn sales commissions and other fees. These commissions are variable as they are based on the sales and marketing results, which are subject to the constraint on variable consideration and resolved on a monthly basis over the contract term. We estimate such commissions to the extent that it is probable that a significant reversal of such revenue will not occur and recognize the commissions as the developer receives and consumes the benefits of the services. Any changes in these estimates would affect revenue and earnings in the period such variances are realized. Additionally, we enter into contracts to sell prepaid vacation packages. Our obligation in such contracts is satisfied when customers stay at our property; therefore, we recognize revenue for these packages when they are redeemed. On a portfolio basis, we exercise judgement to estimate the amount of expected breakage related to unused prepaid vacation packages and recognize such breakage in proportion to the pattern of packages utilized by our portfolio of customers. • Financing— We offer financing to qualifying customers purchasing our VOI. 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. 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— As part of our VOI sales, our customers enter into a Club arrangement which gives the customer an annual allotment of Club points that allow the customer to exchange the Club points for a number of vacation options. We manage the Club, receiving Club activation fees, annual dues and transaction fees from member exchanges. Club activation fees and the member's first year of annual dues are paid at the time of the VOI sale. The Club activation fee relates to activities we are required to undertake at or near contract inception to fulfill the contract, and does not result in the transfer of a promised good or service. Since our customers are granted the opportunity to renew their membership on an annual basis for no additional activation fee, we defer and amortize the activation fee on a straight-line basis over the seven year average inventory holding period. Annual dues for membership renewals are billed each year, and we recognize revenue from these annual dues over the period services are rendered. A member may elect to enter into an optional exchange transaction with their allotted Club points at which point the member pays their required transaction fee. This option does not represent a material right as the transactions are priced at their standalone selling price. Revenue related to the transaction is recognized when the services are rendered. As part of our resort operations, we contract with homeowner’s associations (“HOAs”) to provide day-to-day-management services, including housekeeping services, operation of a reservation system, maintenance, and certain accounting and administrative services. We receive compensation for such management services, which is generally based on a percentage of costs to operate the resorts, on a monthly basis. These fees represent a form of variable consideration and are estimated and recognized over time as the HOAs receive and consume the benefits of the management services. Management fees received related to the portion of unsold VOIs at each resort which we own are recognized on a net basis given we retain these VOIs in our inventory. • Rental and ancillary services— Our rental and ancillary services consist primarily of rental revenues on unoccupied vacation ownership units and ancillary revenues. Rental revenue is recognized when occupancy has occurred. Advance deposits on the rental unit and the corresponding revenue is deferred and recognized upon the customer’s vacation stay. Ancillary revenues consist of food and beverage, retail, spa offerings and other guest services. We recognize ancillary revenue when goods have been provided and/or services have been rendered. 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. customer’s vacation stay. Ancillary revenues include food and beverage, retail, spa offerings and other guest services. • Cost reimbursements— As part of our management agreements with HOAs and fee-for-service developers, we receive cost reimbursements for performing the day to day management services, including 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. Cost reimbursements are based upon actual expenses with no added margin, and are billed to the HOA on a monthly basis. We recognize cost reimbursements when we incur the related reimbursable costs as the HOA receives and consumes the benefits of the management services. We capitalize all incremental costs incurred to obtain a contract when such costs would not have been incurred if the contract had not been obtained. We elect to expense costs incurred to obtain a contract when the deferral period would be one year or less. Commissions for VOI sales for resorts under construction are expensed when the associated VOI revenue is recognized which is upon completion of the resort. These commissions are classified as Sales and marketing expense As of December 31, 2018, the ending asset balance for costs to obtain a contract was $2 million relating to deferred commission costs for certain vacation package sales. For the year ended December 31, 2018, we recognized 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, 2018, 2017 and 2016. We earn commission and other fees related to fee-for-service agreements to sell VOIs. For the year ended December 31, 2018, we did not earn more than 10 percent of our total revenue from one customer. For the years ended December 31, 2017 and 2016, approximately 15 percent and 11 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. 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. 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 stratify our portfolio using certain key dimensions including: 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 a 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, 2018 and 2017. 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 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 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 assets 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 revenue has not yet been recognized, were $4 million and $8 million as of December 31, 2018 and 2017, 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 and Remeasurement The United States dollar (“USD”) is our reporting currency and is the functional currency of the majority of our operations. For operations whose functional currency is not the USD, assets and liabilities measured in foreign currencies are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses are reflected with Total Equity 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”), time and performance-vesting restricted stock units (“PSUs”) 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. • PSUs are settled at the end of a three-year performance period, with 70 percent of the PSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization. This metric is further adjusted by sales of VOIs under construction. The remaining 30 percent of the PSUs are subject to the achievement of certain VOI sales targets. • Options vest over three years in 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 on the unvested portion of an individual whose service was terminated. 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. Defined Contribution Plan We administer and maintain a defined contribution plan for the benefit of all 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. We recognized compensation expense for our participating employees totaling $10 million for the year ended December 31, 2018. Prior to the year ended December 31, 2018, Hilton administrated the plan on our behalf. Reclassifications Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net income or stockholders’ equity. Recently Issued Accounting Pronouncements Other Than ASC 606 Adopted Accounting Standards In August 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which in part requires entities to assess whether distributions of cash from unconsolidated entities represent a return on the investment or a return of the investment to appropriately classify the distributions in the statement of cash flows. We have made an accounting policy election to use the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. On January 1, 2018, we adopted ASU 2016-15 which had no impact on our historical consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), which supersedes existing guidance on accounting for leases. Under the new provisions of ASU 2016-02 (as subsequently amended), all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. Subsequent to ASU 2016-02, the FASB has issued ASU No. 2018-01 Leases (Topic 842): Land Easement Practical Expedient for |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | Note 3: Revenue from Contracts with Customers Financial Statement Impact of Adopting ASC 606 The cumulative effect of applying the new guidance to all contracts with customers as of January 1, 2018 was recorded as an adjustment to retained earnings as of the adoption date. The following cumulative adjustments were made to the consolidated balance sheet as of January 1, 2018: • Sales of VOIs, net — Under the previous accounting guidance, we recognized revenue for sales of VOIs under construction in accordance with the percentage of completion method. Under ASC 606, the timing of revenue recognition for under construction and all related direct costs have been deferred until construction is complete. • Sales, marketing, brand and other fees — Under the previous accounting guidance, we recognized breakage revenue from prepaid vacation packages when the likelihood of redemption was remote post expiration. Under ASC 606, using a portfolio approach, we have recognized the expected breakage revenue on packages not expected to be redeemed as proportionately when our other customers redeem their packages. The table below shows the adjustments that were made to the consolidated balance sheet as of January 1, 2018: December 31, 2017 Adjustments January 1, 2018 ($ in millions) ASSETS Cash and cash equivalents $ 246 $ — $ 246 Restricted cash 51 — 51 Accounts receivable, net of allowance for doubtful accounts 112 — 112 Timeshare financing receivables, net 1,071 — 1,071 Inventory 509 30 539 Property and equipment, net 238 — 238 Investment in unconsolidated affiliate 41 — 41 Intangible assets, net 72 — 72 Other assets 44 16 60 TOTAL ASSETS $ 2,384 $ 46 $ 2,430 LIABILITIES AND EQUITY Liabilities: Accounts payable, accrued expenses and other $ 339 $ 2 $ 341 Advanced deposits 104 (17 ) 87 Debt, net 482 — 482 Non-recourse debt, net 583 — 583 Deferred revenues 109 112 221 Deferred income tax liabilities 249 (13 ) 236 Total liabilities 1,866 84 1,950 Commitments and contingencies Equity: Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2017 — — — Common stock, $0.01 par value; 3,000,000,000 authorized shares, 99,136,304 issued and outstanding as of December 31, 2017 1 — 1 Additional paid-in capital 162 — 162 Accumulated retained earnings 355 (38 ) 317 Total equity 518 (38 ) 480 TOTAL LIABILITIES AND EQUITY $ 2,384 $ 46 $ 2,430 Disaggregation of Revenue The following tables show our disaggregated revenues by segment from contracts with customers. We operate our business in the following two segments: (i) Real estate sales and financing Resort operations and club management Business Segments Year Ended December 31, 2018 ($ in millions) Real Estate and Financing Segment Sales of VOIs, net $ 734 Sales, marketing, brand and other fees 570 Interest income 140 Other financing revenue 18 Real estate and financing segment revenues $ 1,462 Year Ended December 31, 2018 ($ in millions) Resort Operations and Club Management Segment Club management $ 112 Resort management 60 Rental (1) 191 Ancillary services 27 Resort operations and club management segment revenues $ 390 (1) Includes intersegment eliminations. Contract Balances The following table provides information on our accounts receivable with customers which are included in Accounts Receivable, net ($ in millions) January 1, 2018 December 31, 2018 Receivables ( 1) $ 97 $ 122 (1) Does not include financing receivables from sales of VOIs. See Note 5: Timeshare Financing Receivables The following table presents changes in our contract liabilities for the year ended December 31, 2018. ($ in millions) January 1, 2018 Additions Subtractions December 31, 2018 Contract liabilities: Advanced deposits $ 87 $ 167 $ (153 ) $ 101 Deferred revenue ( 1) 197 264 (389 ) 72 Club Bonus Point incentive liability ( 2) 52 54 (50 ) 56 (1) (2) Amounts related to the Club Bonus Point incentive liability are included in Accounts payable, accrued expenses and other Revenue earned for the year ended December 31, 2018 that was included in the contract liabilities balance at January 1, 2018 was approximately $214 million. Accounts receivable for the year ended December 31, 2018 include amounts associated with our contractual right to consideration for completed performance obligations related primarily to our fee-for-service arrangements and are realized when the related cash is received. Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the passage of time. For the year ended December 31, 2018, there were no associated impairment losses. Refer to Note 5: Timeshare Financing Receivables Contract liabilities include payments received or due in advance of satisfying our performance obligations, offset by revenues recognized. Such contract liabilities include advance deposits received on prepaid vacation packages for future stays at our resorts, deferred revenues and the liability for Club Bonus Points awarded to our customers for purchase of VOIs at our properties or properties under our fee-for-service arrangements that may be redeemed in the future. Transaction Price Allocated to Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contract revenue that has not yet been recognized. Our contracts with remaining performance obligations primarily include (i) Club activation fees paid at closing of a VOI purchase, (ii) customers’ advanced deposits on prepaid vacation packages and (iii) Club Bonus Points that may be redeemed in the future. As of December 31, 2018, we had no remaining performance obligations on sales of VOIs under construction. The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Club Bonus Points as of December 31, 2018: ($ in millions) Remaining Transaction Price Recognition Period Recognition Method Advanced deposits $ 101 18 months Upon customer stays Club activation fees 63 7 years Straight-line basis over average inventory holding period Club Bonus Points 56 24 months Upon redemption ASC 606 provides certain practical expedients that facilitate the disclosure around performance obligations. We have elected the following practical expedients options: • to not disclose the variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation for which revenue recognition criteria have been met; and • to not disclose the transaction price allocated to remaining performance obligations that are part of a contract that has an original expected duration of one year or less. Our performance obligations under the management service arrangements and fee-for-service arrangements are satisfied over time and the related fees represent variable consideration that meets the first practical expedient option. Fees for management services are variable consideration as these fees are based off of costs to operate the resorts in a given annual period, which is resolved on a monthly basis over the contract term. Impact of New Revenue Guidance on Financial Statement Line Items The following tables compare the reported consolidated balance sheet and statement of operations as of and for the year ended December 31, 2018, as well as the cash flows for the year ended December 31, 2018, to the previous accounting guidance: December 31, 2018 As Reported Effects of ASC 606 Previous Accounting Guidance (in millions) ASSETS Cash and cash equivalents $ 108 $ — $ 108 Restricted cash 72 — 72 Accounts receivable, net of allowance for doubtful accounts 153 — 153 Timeshare financing receivables, net 1,120 — 1,120 Inventory 527 — 527 Property and equipment, net 559 — 559 Investments in unconsolidated affiliates 38 — 38 Intangible assets, net 81 — 81 Other assets 95 — 95 TOTAL ASSETS $ 2,753 $ — $ 2,753 LIABILITIES AND EQUITY Liabilities: Accounts payable, accrued expenses and other $ 324 $ (2 ) $ 322 Advanced deposits 101 16 117 Debt, net 604 — 604 Non-recourse debt, net 759 — 759 Deferred revenues 95 — 95 Deferred income tax liabilities 254 — 254 Total liabilities 2,137 14 2,151 Commitments and contingencies Equity: Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 — — — Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 issued and outstanding as of December 31, 2018 1 — 1 Additional paid-in capital 174 — 174 Accumulated retained earnings 441 (14 ) 427 Total equity 616 (14 ) 602 TOTAL LIABILITIES AND EQUITY $ 2,753 $ — $ 2,753 Total reported liabilities were $14 million less than the balance if the previous accounting guidance were in effect as of December 31, 2018. This was primarily due to releasing the advanced deposits liability to recognize expected breakage revenue on prepaid vacation packages proportionally as our customers redeem their packages. Year Ended December 31, 2018 ($ in millions) As Reported Effects of ASC 606 Previous Accounting Guidance Revenues Sales of VOIs, net $ 734 $ (112 ) $ 622 Sales, marketing, brand and other fees 570 16 586 Financing 158 — 158 Resort and club management 172 1 173 Rental and ancillary services 218 — 218 Cost reimbursements 147 — 147 Total revenues 1,999 (95 ) 1,904 Expenses Cost of VOI sales 210 (30 ) 180 Sales and marketing 728 1 729 Financing 49 — 49 Resort and club management 47 — 47 Rental and ancillary services 133 — 133 General and administrative 117 — 117 Depreciation and amortization 36 2 38 License fee expense 98 — 98 Cost reimbursements 147 — 147 Total operating expenses 1,565 (27 ) 1,538 Interest expense (30 ) — (30 ) Other loss, net (1 ) — (1 ) Income before income taxes 403 (68 ) 335 Income tax (expense) benefit (105 ) 17 (88 ) Net income $ 298 $ (51 ) $ 247 Earnings per share: Basic $ 3.07 $ (0.53 ) $ 2.54 Diluted $ 3.05 $ (0.53 ) $ 2.52 The following summarizes the significant changes to our consolidated statement of operations for the year ended December 31, 2018 as a result of the adoption of ASC 606 on January 1, 2018 compared to if we had continued to recognize revenues under the previous accounting guidance: • Under ASC 606, the timing of revenue recognition for sales of VOIs under construction and all related direct costs have been deferred until construction is complete. Under the previous accounting guidance, we recognized revenue for sales of VOIs under construction in accordance with the percentage of completion method. This resulted in a lower Sales of VOIs, net, Cost of VOI sales Total operating expenses • Under ASC 606, using a portfolio approach, we have recognized the expected breakage revenue on packages not expected to be redeemed as Sales, marketing, brand and other fees ; and Under ASC 606, certain sales incentives where we are acting as the agent are recognized on a net basis, therefore, resulted in a lower Sales, marketing, brand and other fees Total operating expenses Sales, marketing, brand and other fees Total operating expenses The adoption of ASC 606 had no impact on our total cash flows provided by operating activities or used by investing and financing activities. ASC 606 resulted in offsetting shifts in cash flows throughout net income and various changes in working capital balances. Year Ended December 31, 2018 ($ in millions) As Reported Previous Accounting Guidance Net income $ 298 $ 247 Adjustments to reconcile net income to net cash used in by operating activities 151 138 Changes in operating assets and liabilities Accounts receivable, net (41 ) (41 ) Timeshare financing receivables, net (118 ) (118 ) Inventory 16 (14 ) Purchases of real estate for future conversion to inventory (299 ) (299 ) Other assets (31 ) (48 ) Accounts payable, accrued expenses and other (24 ) (24 ) Advanced deposits 14 13 Deferred revenues (126 ) (14 ) Other 1 1 Net cash used in operating activities $ (159 ) $ (159 ) |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Restricted Cash | Note 4: Restricted Cash Restricted cash was as follows: December 31, ($ in millions) 2018 2017 Escrow deposits on VOI sales $ 45 $ 29 Reserves related to non-recourse debt ( 1) 27 22 $ 72 $ 51 (1) See Note 14: Debt & Non-recourse Debt |
Timeshare Financing Receivables
Timeshare Financing Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Timeshare Financing Receivables | Note 5: Timeshare Financing Receivables Timeshare financing receivables were as follows: December 31, 2018 ($ in millions) Securitized and Pledged Unsecuritized ( 1) Total Timeshare financing receivables $ 660 $ 632 $ 1,292 Less: allowance for loan loss (43 ) (129 ) (172 ) $ 617 $ 503 $ 1,120 December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized ( 1) Total Timeshare financing receivables $ 471 $ 741 $ 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 (1) Includes amounts used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Timeshare Facility”) as well as amounts held as future collateral for upcoming securitizations. In September 2018, we completed a securitization of approximately $350 million of gross timeshare financing receivables and issued approximately $268 million of 3.54 percent notes, $54 million of 3.70 percent notes and $28 million of 4.0 percent notes, which have a stated maturity date of February 25, 2032. 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 primarily used to pay down a portion of our Timeshare Facility. As of December 31, 2018 and 2017, we had $190 million and $143 million, respectively, of gross timeshare financing receivables securing the Timeshare Facility. See Note 14: Debt and Non-Recourse Debt Our timeshare financing receivables as of December 31, 2018 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2019 $ 86 $ 64 $ 150 2020 87 54 141 2021 86 58 144 2022 83 63 146 2023 80 67 147 Thereafter 238 326 564 660 632 1,292 Less: allowance for loan loss (43 ) (129 ) (172 ) $ 617 $ 503 $ 1,120 We evaluate this portfolio collectively for purposes of estimating variable consideration, 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 allowance for loan loss on our timeshare financing receivables. For static pool analysis, we use certain key dimensions to stratify our portfolio, including FICO scores, equity percentage at the time of sale and certain other factors. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio Our gross timeshare financing receivables balances by FICO score were as follows: December 31, ($ in millions) 2018 2017 FICO score 700+ $ 843 $ 770 600-699 237 225 <600 27 28 No score ( 1) 185 189 $ 1,292 $ 1,212 (1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers. 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. As of December 31, 2018, our timeshare financing receivables had interest rates ranging from 5.25 percent to 20.50 percent, a weighted average interest rate of 12.28 percent, a weighted average remaining term of 7.8 years and maturities through 2030. We apply payments we receive for loans, including those in non-accrual status, to amounts due in the following order: servicing fees; interest; principal; and late charges. Once a loan is 91 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 91 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the loan is 121 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process is complete and we receive the deed for the foreclosed unit. As of December 31, 2018 and 2017, we had ceased accruing interest on timeshare financing receivables with an aggregate principal balance of $69 million and $49 million, respectively. The following tables detail an aged analysis of our gross timeshare financing receivables balance: December 31, 2018 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 648 $ 556 $ 1,204 31 - 90 days past due 8 11 19 91 - 120 days past due 3 3 6 121 days and greater past due 1 62 63 $ 660 $ 632 $ 1,292 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 The changes in our allowance for loan loss were as follows: ($ in millions) Securitized and Pledged Unsecuritized Total 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 Write-offs — (38 ) (38 ) Securitizations 28 (28 ) — Provision for loan loss ( 1) (12 ) 81 69 December 31, 2018 $ 43 $ 129 $ 172 (1) Includes incremental provision for loan loss, net of activity related to the repurchase of defaulted and upgraded securitized timeshare financing receivables. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 6: Inventory Our Inventory was comprised of the following: December 31, ($ in millions) 2018 2017 Completed unsold VOIs $ 243 $ 191 Construction in process 9 60 Land, infrastructure and other 275 258 $ 527 $ 509 We benefited from $10 million and $4 million in cost of sales true-ups relating to VOI products for the years ended December 31, 2018 and 2017, respectively, which resulted in a $10 million and $4 million increase to the carrying value of inventory as of December 31, 2018 and 2017, respectively. The incurred expenses below, recorded in Cost of VOI sales December 31, ($ in millions) 2018 2017 2016 Cost of VOI sales related to fee-for-service upgrades $ 34 $ 36 $ 49 In 2018 and 2017, we recorded non-cash transfers from property and equipment into inventory. See Note 23: Supplemental Disclosure of Cash Flow Information |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 7: Property and Equipment Property and equipment and related accumulated depreciation were as follows: December 31, ($ in millions) 2018 2017 Land $ 268 $ 53 Buildings and leasehold improvements 295 182 Furniture and equipment 54 48 Construction-in-progress 25 20 642 303 Accumulated depreciation (83 ) (65 ) $ 559 $ 238 In June 2018, we acquired an operating hotel in New York City, New York for $176 million for future conversion to timeshare inventory. In September 2018, we acquired land in Honolulu, Hawaii for $123 million which will be used to construct a timeshare resort. Each transaction was accounted for as asset acquisition with the purchase prices being allocated primarily to land, building and leasehold improvements and furniture and equipment. In 2018 and 2017, we recorded non-cash transfers from property and equipment to inventory. See Note 23: Supplemental Disclosure of Cash Flow Information Depreciation expense on property and equipment was $23 million, $17 million, and $12 million for the years ended December 31, 2018, 2017 and 2016 respectively. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Note 8: Consolidated Variable Interest Entities As of December 31, 2018 and 2017, we consolidated four and three variable interest entities (“VIEs”), respectively, that issued Securitized Debt, secured by pledged assets primarily consisting of a pool of timeshare financing receivables, which is without recourse to us. We are the primary beneficiaries of these VIEs as we have the power to direct the activities that most significantly affect their economic performance. We are also the servicer of these timeshare financing receivables and we are required to replace or repurchase timeshare financing receivables that are in default at their outstanding principal amounts. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. Only the assets of the VIEs are available to settle the obligations of the respective entities. Our consolidated balance sheets included the assets and liabilities of these entities, which primarily consisted of the following: December 31, ($ in millions) 2018 2017 Restricted cash $ 23 $ 18 Timeshare financing receivables, net 617 445 Non-recourse debt ( 1) 639 454 (1) Net of deferred financing costs. During the years ended December 31, 2018, 2017 and 2016, we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Investments in Unconsolidated Affiliates | Note In March 2018, we entered into an agreement with SCG 1776, LLC, an affiliate of Strand Capital Group, LLC and formed 1776 Holding, LLC, a VIE. Pursuant to the agreement, during the year ended December 31, 2018, we contributed a total of $10 million in cash for a 50 percent interest in 1776 Holding, LLC, which will construct an approximately 99-unit timeshare resort in Charleston, South Carolina. In July 2017, we entered into an agreement with BRE Ace Holdings LLC, an affiliate of The Blackstone Group L.P. (“Blackstone”) and formed BRE Ace LLC, a VIE. 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. We do not consolidate 1776 Holdings LLC and BRE Ace LLC because we are not the primary beneficiaries. Our investment interests in and equity earned from both VIEs are included in the consolidated balance sheets as Investments in unconsolidated affiliates Equity in earnings from unconsolidated affiliates, During the year ended December 31, 2018, we received cash distributions of $13 million from our investment in BRE Ace LLC, of which $11 million was considered a return of investment. We held investments in our two unconsolidated affiliates with aggregated debt balances of $490 million and $488 million as of December 31, 2018 and 2017, respectively. The debt is secured by their assets and is without recourse to us. Our maximum exposure to loss as a result of our investment interests in the two unconsolidated affiliates is primarily limited to (i) the carrying amount of the investments which totals $38 million and $41 million as of December 31, 2018 and 2017, respectively and (ii) receivables for commission and other fees earned under a fee-for-service arrangement. See Note 20: Related Party Transactions |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 10: Intangible Assets Intangible assets and related amortization expense were as follows: December 31, 2018 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (41 ) $ 47 Capitalized software 71 (37 ) 34 $ 159 $ (78 ) $ 81 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 Amortization expense on intangible assets was $13 million for the year ended December 31, 2018 and $12 million for each of the years ended December 31, 2017 As of December 31, 2018, we estimated our future amortization expense for our amortizing intangible assets to be as follows: ($ in millions) Future Amortization Expense Year 2019 $ 18 2020 16 2021 12 2022 4 2023 3 Thereafter 28 $ 81 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | Note 11: Other Assets Other assets were as follows: December 31, ($ in millions) 2018 2017 Inventory deposits $ 46 $ — Prepaid expenses 18 18 Other 31 26 $ 95 $ 44 During the year ended December 31, 2018, we made $46 million of deposits on real estate for future conversion to timeshare inventory. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other | Note 12: Accounts Payable, Accrued Expenses and Other Accounts payable, accrued expenses and other were as follows: December 31, ($ in millions) 2018 2017 Accrued employee compensation and benefits $ 86 $ 70 Accounts payable 51 45 Bonus point incentive liability 56 52 Due to Hilton 20 23 Income taxes payable 7 64 Other accrued expenses 104 85 $ 324 $ 339 |
Deferred Revenues
Deferred Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Deferred Revenues | Note 13: Deferred Revenues Deferred revenues were as follows: December 31, ($ in millions) 2018 2017 Deferred VOI sales ( 1) $ 19 $ 45 Club activation fees 63 54 Other 13 10 $ 95 $ 109 (1) As of December 31, 2018, we do not have deferred revenues associated with Sales of VOIs under construction. Deferred VOI sales include the deferred revenues associated with: the sales associated with incomplete phases or buildings; 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 |
Debt & Non-recourse Debt
Debt & Non-recourse Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt & Non-recourse Debt | Note 14: Debt & Non-recourse Debt Debt The following table details our outstanding debt balance and its associated interest rates: December 31 ($ in millions) 2018 2017 Debt ( 1) Senior secured credit facilities: Term loans with an average rate of 4.253%, due 2023 $ 197 $ 190 Revolver with an average rate of 4.253%, due 2023 115 — Senior notes with a rate of 6.125%, due 2024 300 300 612 490 Less: unamortized deferred financing costs and discount ( 2)(3) (8 ) (8 ) $ 604 $ 482 (1) For the years ended December 31, 2018 and 2017, weighted average interest rates were 5.170 percent and 5.229 percent, respectively. (2) (3) Amount does not include deferred financing costs of $6 and $2 million as of December 31, 2018 and 2017, relating to our revolving facility included in Other Assets Senior Secured Credit Facilities In November 2018, we amended certain terms of our existing credit facilities (the “Amendment”) such as, but not limited to, (i) the existing term loan was increased to $200 million, (ii) the amount of borrowing capacity under the revolving facility was increased from $200 million to $800 million and (iii) the maturity date was extended to November 28, 2023. The revolving facility has $30 million of borrowing capacity available for letters of credit and $10 million available for short-term borrowings. As of December 31, 2018, we had $1 million of outstanding letter of credit under the revolving facility. In addition, we are required to pay a commitment fee to the lenders under the Revolving Facility in respect of the unutilized commitments thereunder. The commitment fee will be determined based on a first lien net leverage ratio and will range from 0.25% to 0.35% per annum. We are also required to pay customary letter of credit fees. As a result of the Amendment, we incurred $6 million in debt issuance costs of which $5 million is recorded in Other assets 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, 2018. 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 $8 million of debt issuance costs. Interest on the Senior Unsecured Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2017. We may, at our sole option, redeem the Senior Unsecured Notes, in whole or in part, at any time prior to December 1, 2021, at a price equal to 100 percent of the principal amount, plus an applicable make-whole premium and accrued and unpaid interest. On and after, December 1, 2021, we may, at our sole option, redeem the Senior Unsecured Notes at 103.25 percent, 101.625 percent or 100 percent of the principal amount in 2021, 2022 or 2023, respectively, without any make-whole premium. The Senior Unsecured Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries. We are in compliance with all applicable financial covenants as of December 31, 2018. Non-recourse Debt The following table details our outstanding non-recourse debt balance and its associated interest rates: December 31 ($ in millions) 2018 2017 Non-recourse debt ( 1) Timeshare Facility with an average rate of 3.559%, due 2021 $ 120 $ 129 Securitized Debt with a rate of 2.280%, due 2026 33 54 Securitized Debt with an average rate of 1.810%, due 2026 74 112 Securitized Debt with an average rate of 2.711%, due 2028 206 293 Securitized Debt with an average rate of 3.602%, due 2032 333 — 766 588 Less: unamortized deferred financing costs ( 2) (7 ) (5 ) $ 759 $ 583 (1) For the years ended December 31, 2018 and 2017, weighted average interest rates were 3.126 percent and 2.492 percent, respectively. (2) Amount relates to Securitized Debt only and does not include deferred financing costs of $3 million and $2 million as of December 31, 2018 and 2017, respectively, relating to our Timeshare Facility included in Other Assets In September 2018, we completed a securitization of approximately $350 million of gross timeshare financing receivables and issued approximately $268 million of 3.54 percent notes, $54 million of 3.70 percent notes and $28 million of 4.0 percent notes, which have a stated maturity date of February 25, 2032. The securitization transaction did not qualify as a sale 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. The Timeshare Facility is a non-recourse obligation with a borrowing capacity of $450 million and is payable solely from the pool of timeshare financing receivables pledged as collateral and related assets. In March 2018, we extended the commitment termination date to March 2020. The maturity date was extended 12 months from the commitment date to March 2021. As a result of this extension, we incurred $2 million in debt issuance costs recorded in Other assets W e 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 $27 and $22 million as of December 31, 2018 and 2017, respectively, and were included in Restricted cash in our consolidated balance sheets. Debt Maturities The contractual maturities of our debt and non-recourse debt as of December 31, 2018 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2019 $ 10 $ 193 $ 203 2020 10 165 175 2021 10 207 217 2022 10 63 73 2023 272 76 348 Thereafter 300 62 362 $ 612 $ 766 $ 1,378 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 15: Fair Value Measurements The carrying amounts and estimated fair values of our financial assets and liabilities were as follows: December 31, 2018 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables ( 1) $ 1,120 $ — $ 1,339 Liabilities: Debt ( 2) 604 302 309 Non-recourse debt ( 2) 759 — 753 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 (1) Carrying amount net of allowance for loan loss. (2) Carrying amount net of unamortized deferred financing costs and discount. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. The table above excludes cash and cash equivalents, restricted cash, accounts receivable, accounts payable, advance deposits and accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. The estimated fair values of our timeshare financing receivables were determined using a discounted cash flow model. Our model incorporates default rates, coupon rates, credit quality and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. The estimated fair values of our Level 1 debt was based on prices in active debt markets. The estimated fair value of our Level 3 debt and non-recourse debt were as follows: • Debt – based on indicative quotes obtained for similar issuances and projected future cash flows discounted at risk-adjusted rates • Non-recourse debt – based on projected future cash flows discounted at risk-adjusted rates. We do not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2018 or 2017. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Note 16: 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 2019 through 2030, 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, 2018, were as follows: ($ in millions) Operating Leases Year 2019 $ 16 2020 15 2021 14 2022 10 2023 10 Thereafter 29 Total minimum rent payments $ 94 Rent expense for all operating leases was as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 Minimum rentals $ 21 $ 17 $ 16 Contingent rentals 3 3 1 $ 24 $ 20 $ 17 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 17: 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. We followed the guidance in SEC Staff Accounting Bulletin 118 (“SAB 118”), which provided additional clarification regarding the application of ASC Topic 740 in situations where we did 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 provided for a measurement period which began in the reporting period that included the Act’s enactment date and ended when we obtained, prepared, and analyzed the information needed to complete the accounting requirements, but in no circumstances could the measurement period extend beyond one year from the enactment date. As of December 22, 2018, we have completed our accounting for the tax effects of the following elements of the Act, considering all guidance from the U.S. Treasury Department (“U.S. Treasury”) released since the enactment date. One-Time Repatriation Tax: The one-time deemed repatriation transition tax (“Transition Tax”) is a tax on certain previously untaxed accumulated and current earnings and profits (E&P) of our foreign subsidiaries. We were able to reasonably estimate the Transition Tax and recorded a provisional Transition Tax obligation of $1 million, with a corresponding adjustment of $1 million to income tax expense for the year ended December 31, 2017. Based on revised E&P computations that were completed during the reporting period, we recognized an additional measurement-period adjustment to reduce the Transition Tax obligation by $1 million, with a corresponding adjustment to reduce income tax expense by $1 million during the period. The effect of the measurement-period adjustment on the 2018 effective tax rate was approximately (0.2) percent. The Transition Tax, which has now been determined to be complete, resulted in recording an immaterial total Transition Tax obligation, with a corresponding immaterial adjustment to income tax expense. The Act provided for the Transition Tax obligation to be paid in installments over eight years, but we chose to pay the Transition Tax obligation in full since the amount due was immaterial. Deferred Tax Assets and Liabilities: The Act reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent. This required certain deferred tax assets and liabilities to be re-measured as a result of the lower U.S. federal tax rate when the deferred tax assets and liabilities are expected to reverse. The Act also expanded the scope and repealed certain exceptions to the deduction limitation for executive compensation under Internal Revenue Code (“IRC”) section 162(m), resulting in a write-off of the share-based compensation deferred tax asset related to certain executives’ subject to the IRC section 162(m) limitation. We were able to reasonably estimate the impact to our deferred tax assets and liabilities and recorded a provisional adjustment of $132 million to reduce our net deferred tax liability balance, with a corresponding adjustment to reduce income tax expense by $132 million for the year ended December 31, 2017. Based on revised computations that were completed during the reporting period, we recognized an additional measurement-period adjustment of $3 million to reduce our net deferred tax liability balance, with a corresponding adjustment to reduce income tax expense by $3 million during the period. The effect of the measurement-period adjustment on the 2018 effective tax rate was approximately (0.8) percent. The impact to our deferred tax assets and liabilities, which has now been determined to be complete, resulted in recording a total reduction to our net deferred tax liability balance of $135 million, with a corresponding adjustment to reduce income tax expense by $135 million. The Act also subjects a U.S. shareholder to current tax on Global Intangible Low-Taxed Income (“GILTI”). The FASB staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income Tax loss and credit carryforwards as of December 31, 2018 have expiration dates ranging between nine years and no expiration in certain instances. The amount of foreign tax loss carryforwards as of December 31, 2018 were $1 million. The amount of federal tax credit carryforwards as of December 31, 2018 were $2 million. The valuation allowance increased $2 million from none as of December 31, 2017 to $2 million as of December 31, 2018. The valuation allowance has been established for financial reporting purposes to offset certain federal deferred tax assets due to uncertainty regarding our ability to realize them in the future. Our tax provision includes federal, state and foreign income taxes payable. The domestic and foreign components of income before taxes were as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 U.S. income before tax $ 380 $ 283 $ 270 Foreign income before tax 23 28 23 Income before taxes $ 403 $ 311 $ 293 The components of our provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 Current: Federal $ 62 $ 94 $ 87 State 15 11 8 Foreign 8 8 7 Total current 85 113 102 Deferred: Federal 17 (137 ) 21 State 4 8 2 Foreign (1 ) — — Total deferred 20 (129 ) 23 Total provision for income taxes $ 105 $ (16 ) $ 125 Reconciliations of our tax provision at the U.S. statutory rate to the provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 Statutory U.S. federal income tax provision $ 85 $ 109 $ 102 State and local income taxes, net of U.S. federal tax benefit 19 12 10 Foreign income tax expense 6 7 7 U.S. benefit of foreign taxes (6 ) (7 ) (7 ) Valuation allowance changes 2 — — Non-deductible transactions costs — — 5 Interest on installment sales, net of U.S. federal tax benefit 3 3 7 Interest on installment sales adjustment — (5 ) — U.S. tax reform: one-time repatriation tax (1 ) 1 — U.S. tax reform: remeasurement of deferred tax (3 ) (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 $ 105 $ (16 ) $ 125 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) 2018 2017 Deferred income tax assets $ 1 $ 1 Deferred income tax liabilities (255 ) (250 ) Net deferred taxes $ (254 ) $ (249 ) 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) 2018 2017 Deferred tax assets: Compensation $ 11 $ 9 Domestic tax credit carryforwards 2 — Other reserves 57 42 70 51 Valuation allowance (2 ) — Deferred tax assets 68 51 Deferred tax liabilities: Property and equipment (46 ) (54 ) Amortizable intangible assets (10 ) (10 ) Deferred income (266 ) (236 ) Deferred tax liabilities (322 ) (300 ) Net deferred taxes $ (254 ) $ (249 ) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 18: 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. We issue time-vesting restricted stock units (“RSUs”), time and performance-vesting restricted stock units (“PSUs”) and nonqualified stock options (“options”) to certain employees and directors. We recognized share-based compensation expense of $16 million, $15 million and $8 million during the years ended December 31, 2018, 2017 and 2016 respectively. The total tax benefit recognized related to this compensation was $4 million, $4 million and $3 million for the years ended December 31, 2018, 2017 and 2016 respectively. As of December 31, 2018, unrecognized compensation costs for unvested awards were approximately $20 million, which is expected to be recognized over a weighted average period of 2.0 years. As of December 31, 2018, there were 7,509,691 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, 2018 2017 2016 Number of shares granted 378,069 534,329 331,227 Weighted average grant date fair value per share $ 42.63 $ 29.23 $ 18.68 Fair value of shares vested (in millions) $ 13 $ 11 $ 4 The following table summarizes the activity of our RSUs during the year ended December 31, 2018: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 839,800 $ 25.29 Granted 378,069 42.63 Vested (413,440 ) 23.80 Forfeited (61,047 ) 32.91 Outstanding, end of period 743,382 34.31 Options The following table provides information about our option grants for the last three fiscal years: Year Ended December 31, 2018 2017 2016 Number of options granted 312,141 669,658 148,929 Weighted average exercise price per share $ 46.48 $ 28.30 $ 18.69 Weighted average grant date fair value per share $ 14.78 $ 8.66 $ 5.21 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, 2018 2017 2016 Expected volatility ( 1) 26.6 % 26.3 % 32.0 % Dividend yield ( 2) — % — % 1.4 % Risk-free rate ( 3) 2.7 % 2.3 % 1.4 % Expected term (in years) ( 4) 6.0 6.0 6.0 (1) Due to limited trading history for our 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 our executive compensation. (2) At the date of grant we had no plans to pay dividends during the expected term of these options. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. The following table summarizes the activity of our options during the year ended December 31, 2018: Number of Shares Weighted Average Exercise Price Per Share Outstanding, beginning of period 874,574 $ 25.96 Granted 312,141 46.48 Exercised (3,792 ) 28.30 Forfeited, canceled or expired (76,251 ) 34.60 Outstanding, end of period 1,106,672 31.14 Exercisable, end of period 378,137 24.14 Performance Shares During the year ended December 31, 2018 we issued 92,578 PSUs with a weighted average grant date fair value of $42.94. The PSUs are settled at the end of a three-year performance period, with 70 percent of the PSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization. This metric is further adjusted by sales of VOIs under construction. The remaining 30 percent of the PSUs are subject to the achievement of certain VOI sales targets. We determined that the performance conditions for these awards are probable of achievement and, as of December 31, 2018, we recognized compensation expense based on the number of PSUs we expect to vest. The following table provides information about our PSU grants, which is based on our Adjusted EBITDA metric described in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Number of shares granted 64,809 Weighted average grant date fair value per share $ 42.94 Fair value of shares vested (in millions) N/A The following table provides information about our PSU grants, which is based on contract sales as defined in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Number of shares granted 27,769 Weighted average grant date fair value per share $ 42.94 Fair value of shares vested (in millions) N/A The following table summarizes the activity of our PSUs during the year ended December 31, 2018: Adjusted EBITDA ( 1) Contract Sales Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Outstanding, beginning of period — $ — — $ — Granted 64,809 42.94 27,769 42.94 Vested — — — — Forfeited, canceled or expired (7,508 ) 46.62 (3,217 ) 46.62 Outstanding, end of period 57,301 42.46 24,552 42.46 (1) Represents our Adjusted EBITDA metric described in Part 1 of this Form 10-K, further adjusted by net recognition and deferral activity from sales of VOIs under construction. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 19: Earnings Per Share The following table presents the calculation of our basic and diluted earnings per share (“EPS”). Year Ended December 31, ($ in millions, except per share amounts) 2018 2017 2016 Basic EPS Numerator: Net Income ( 1) $ 298 $ 327 $ 168 Denominator: Weighted average shares outstanding 97 99 99 Basic EPS $ 3.07 $ 3.30 $ 1.70 Diluted EPS Numerator: Net Income ( 1) $ 298 $ 327 $ 168 Denominator: Weighted average shares outstanding 98 100 99 Diluted EPS $ 3.05 $ 3.28 $ 1.70 (1) Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, 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 years ended December 31, 2018 and 2017, we excluded 384,860 and 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, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 20: Related Party Transactions BRE Ace LLC In July 2017, we entered into an agreement with BRE Ace Holdings LLC and formed BRE Ace LLC, a VIE. BRE Ace LLC owns the Elara, by Hilton Grand Vacations located in Las Vegas, Nevada. For the year ended December 31, 2017, we recorded $1 million in Equity in earnings from unconsolidated affiliates Equity in earnings from unconsolidated affiliates Investment in Unconsolidated Affiliates December 31, ($ in millions) 2018 2017 2016 Commission and other fees $ 132 $ 79 $ — Also related to the fee-for-service agreement, as of both December 31, 2018 and 2017, we have outstanding receivables of $29 million. 1776 Holding, LLC In March 2018, we entered into an agreement with SCG 1776, LLC to form 1776 Holding, LLC. In conjunction with this agreement we contributed $5 million in cash for a 50 percent ownership interest in 1776 Holding LLC. In December 2018, we contributed an additional $5 million in cash. For the year ended December 31, 2018, we recorded less than $1 million loss included in the consolidated statements of operations as Equity in equity (losses) from unconsolidated affiliates. Investment in Unconsolidated Affiliates HNA Tourism Group Co., Ltd On March 13, 2018, we and HNA Tourism Group Co., Ltd. (“HNA”) and HNA HLT Holdco I LLC (the “Selling Stockholder”), an affiliate of HNA, entered into a Master Amendment and Option Agreement (the “Master Amendment and Option Agreement”) to make certain amendments to the Stockholders Agreement, dated October 24, 2016, between us and HNA (the “Stockholders Agreement”) and the Registration Rights Agreement, dated October 24, 2016, between us and HNA (the “Registration Rights Agreement”), among other things, (i) to permit the sale of up to all 24,750,000 shares of our common stock owned by the Selling Stockholder prior to the expiration of the two-year restricted period originally contained in the Stockholders Agreement, (ii) grant us a right to repurchase up to 4,340,000 shares of our common stock held by the Selling Stockholder, (iii) provide that HNA has customary “demand” registration rights effective March 13, 2018, (iv) require HNA to pay all expenses incurred under the Registration Rights Agreement for registrations or offerings occurring prior to a certain date and (v) eliminate HNA’s right to designate a certain number of directors to our board of directors. We exercised the repurchase option from the Selling Stockholder with respect to 2,500,000 shares at a price of approximately $44.75 per share. On March 14, 2018, HGV and HNA entered into an underwriting agreement with several underwriters, pursuant to which the underwriters agreed to purchase from the Selling Stockholder 22,250,000 shares of common stock, $0.01 par value per share, of the Company at a price of approximately $44.75 per share. On March 19, 2018, the repurchase was completed and the shares were retired. The Blackstone Group In September 2017, Blackstone completed a sale of substantially all of our common stock held by them to several institutional investors and ceased to be a related party to HGV. The following table summarizes amounts included in our consolidated statements of operations related to a fee-for-service arrangement with Blackstone affiliates to sell VOIs on their behalf through September 30, 2017: September 30, December 31, ($ in millions) 2017 2016 Commission and other fees $ 135 $ 177 Also related to the fee-for-service agreement, as of September 30, 2017, we had outstanding receivables of $8 million. Relationship between HGV and Hilton Before and After Spin-Off On January 3, 2017, when the spin-off was completed, Hilton and Park Hotels & Resorts Inc. ceased to be related parties of HGV. In connection with the spin-off, we entered into certain agreements with Hilton (who at the time was a related party) and other third parties. See Key Agreements Related to Spin-Off Business Prior to the spin-off, we had a number of existing arrangements whereby Hilton and others provided services to us. The following tables summarize amounts included in our consolidated financial statements related to the arrangements with Hilton: Year Ended December 31, ($ in millions) 2016 Consolidated Statements of Operations Expenses: General and administrative Allocated general and administrative $ 27 Shared services 12 Defined contribution plan 7 Insurance 2 License fee expense 80 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 year ended December 31, 2016, we paid Hilton $58 million for Hilton Honors points. Our prepaid expenses, included in Other assets Net Parent Transfers The components of Net transfers to Parent December 31, ($ in millions) 2016 Cash pooling and general financing activities $ (715 ) Corporate allocations 53 Income taxes 95 Net transfers to Parent $ (567 ) We paid rental fees and fees for other amenities to certain Hilton wholly-owned hotels. During the year ended December 31, |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | Note 21: Business Segments We operate our business through the following two segments: • Real estate sales and financing – We market and sell VOIs that we own. We also source VOIs through fee-for-service agreements with third-party developers. Related to the sales of the VOIs that we own, we provide consumer financing, which includes interest income generated from the origination of consumer loans to customers to finance their purchase of VOIs and revenue from servicing the loans. We also generate fee revenue from servicing the loans provided by third-party developers to purchasers of their VOIs. • Resort operations and club management – We manage the Club, earn activation fees, annual dues and transaction fees from member exchanges for other vacation products. We earn fees for managing the timeshare properties. We generate rental revenue from unit rentals of unsold inventory and inventory made available due to ownership exchanges under our Club program. We also earn revenue from food and beverage, retail and spa outlets at our timeshare properties. The performance of our operating segments is evaluated primarily based on adjusted earnings before interest expense (excluding non-recourse debt), 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. We do not include equity in earnings (losses) 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) 2018 2017 2016 Revenues: Real estate sales and financing ( 1) $ 1,462 $ 1,239 $ 1,143 Resort operations and club management ( 2) 422 367 339 Total segment revenues 1,884 1,606 1,482 Cost reimbursements 147 135 126 Intersegment eliminations ( 1)(2)(3) (32 ) (30 ) (25 ) Total revenues $ 1,999 $ 1,711 $ 1,583 (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, (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 $31 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 $1 million for the years ended December 31, 2018 and 2017. There were no charges for the year ended December 31, 2016. The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Year Ended December 31, ($ in millions) 2018 2017 2016 Adjusted EBITDA: Real estate sales and financing ( 1) $ 447 $ 359 $ 336 Resort operations and club management ( 1) 245 204 189 Segment Adjusted EBITDA 692 563 525 General and administrative (117 ) (104 ) (92 ) Depreciation and amortization (36 ) (29 ) (24 ) License fee expense (98 ) (87 ) (80 ) Interest expense (30 ) (27 ) (3 ) Allocated Parent interest expense ( 2) — — (26 ) Other loss, net (1 ) — (1 ) Equity in earnings from unconsolidated affiliates ( 4) — 1 — Income tax benefit (expense) ( 3) (105 ) 16 (125 ) Other adjustment items (7 ) (6 ) (6 ) Net income $ 298 $ 327 $ 168 (1) (2) (3) Income Taxes (4) Investment in Unconsolidated Affiliates The following table presents total assets for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2018 2017 Real estate sales and financing $ 2,501 $ 2,255 Resort operations and club management 172 78 Total segment assets 2,673 2,333 Corporate 80 51 Total assets $ 2,753 $ 2,384 The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts: December 31, ($ in millions) 2018 2017 2016 Real estate sales and financing $ 36 $ 28 $ 19 Resort operations and club management — 2 1 Total segment capital expenditures for property and equipment 36 30 20 Corporate 8 5 6 Total capital expenditures for property and equipment $ 44 $ 35 $ 26 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 22: Commitments and Contingencies We have entered into certain arrangements with developers whereby we have committed to purchase vacation ownership units or other real estate at a future date to be marketed and sold under our Hilton Grand Vacations brand. As of December 31, 2018, we were committed to purchase approximately $607 million of inventory and land over a period of six 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, 2018 and 2017, we purchased $18 million and $12 million, respectively, of VOI inventory as required under our commitments. As of December 31, 2018, our remaining obligation pursuant to these arrangements was expected to be incurred as follows: ($ in millions) Purchase Obligations Year 2019 $ 237 2020 160 2021 78 2022 51 2023 47 Thereafter 34 Total $ 607 We are involved in litigation arising from the normal course of business, some of which include 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, 2018 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, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Note 23: Supplemental Disclosures of Cash Flow Information Cash paid for interest during the years ended December 31, 2018, 2017 and 2016, was $49 million, $42 million and $37 million, respectively. Cash paid for income taxes during the year ended December 31, 2018 and 2017 was $153 million and $57 million, respectively. 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 2018, we recorded a cumulative non-cash adjustment of $38 million related to the adoption of ASC 606. See Note 3: Revenue from Contracts with Customers • In 2018, we recorded a $3 million non-cash operating activity transfer from Property and Equipment, net Inventory • In 2018, we recorded a $3 million non-cash financing activity adjustment to equity related to the write-off of expenses due to Hilton prior to the spin-off • In 2017, we recorded a $40 million non-cash operating activity transfer from Property and Equipment net Inventory • In 2016, Hilton transferred to us $72 million of net inventory and $138 million of net P roperty and Equipment, net • In 2016, we had $300 million of a non-cash financing activity related to the issuance of our Senior Unsecured Notes and $8 million of related non-cash deferred financing costs. |
Condensed Consolidating Guarant
Condensed Consolidating Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Consolidating Guarantor Financial Information [Abstract] | |
Condensed Consolidating Guarantor Financial Information | Note 24: Condensed Consolidating Guarantor Financial Information During 2016, Hilton completed an internal reorganization to contribute to HGV its U.S. and non-U.S. timeshare subsidiaries including HRC. HGV is a Delaware corporation formed on May 2, 2016. HRC is considered our predecessor entity for periods prior to the formation of HGV. However, for the condensed consolidating information below, HRC is included in the Guarantors column to more faithfully represent the historical combined financial position and results of operations and cash flows of the subsidiaries currently serving as the guarantors of the debt. See Note 1: Organization The following schedules present the condensed consolidating financial information as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors. December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash and cash equivalents $ 4 $ — $ 89 $ 15 $ — $ 108 Restricted cash — — 45 27 — 72 Accounts receivable, net — — 157 17 (21 ) 153 Timeshare financing receivables, net — — 209 911 — 1,120 Inventory — — 502 25 — 527 Property and equipment, net — — 553 6 — 559 Investments in unconsolidated affiliates — — 38 — — 38 Intangible assets, net — — 81 — — 81 Other assets — 6 41 48 — 95 Investments in subsidiaries 612 1,210 277 — (2,099 ) — TOTAL ASSETS $ 616 $ 1,216 $ 1,992 $ 1,049 $ (2,120 ) $ 2,753 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ — $ 332 $ 13 $ (21 ) $ 324 Advance deposits — — 101 — — 101 Debt, net — 604 — — — 604 Non-recourse debt, net — — — 759 — 759 Deferred revenues — — 95 — — 95 Deferred income tax liabilities — — 254 — — 254 Total equity 616 612 1,210 277 (2,099 ) 616 TOTAL LIABILITIES AND EQUITY $ 616 $ 1,216 $ 1,992 $ 1,049 $ (2,120 ) $ 2,753 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 For the Year Ended December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 716 $ 18 $ — $ 734 Sales, marketing, license and other fees — — 578 4 (12 ) 570 Financing — — 70 95 (7 ) 158 Resort and club management — — 172 — — 172 Rental and ancillary service — — 216 2 — 218 Cost reimbursements — — 143 4 — 147 Total revenues — — 1,895 123 (19 ) 1,999 Expenses Cost of VOI sales — — 208 2 — 210 Sales and marketing — — 725 15 (12 ) 728 Financing — — 19 37 (7 ) 49 Resort and club management — — 47 — — 47 Rental and ancillary service — — 130 3 — 133 General and administrative — — 116 1 — 117 Depreciation and amortization — — 36 — — 36 License fee expense — — 98 — — 98 Cost reimbursements — — 143 4 — 147 Total operating expenses — — 1,522 62 (19 ) 1,565 Interest expense — (30 ) — — — (30 ) Other loss, net — — (1 ) — — (1 ) Income (loss) before income taxes — (30 ) 372 61 — 403 Income tax expense — — (105 ) — — (105 ) Income (loss) before equity in earnings (loss) from subsidiaries — (30 ) 267 61 — 298 Equity in earnings from subsidiaries 298 328 61 — (687 ) — Net income $ 298 $ 298 $ 328 $ 61 $ (687 ) $ 298 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 from subsidiaries 327 354 60 — (741 ) — Net income $ 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 from subsidiaries 185 189 53 — (427 ) — Net income $ 168 $ 185 $ 189 $ 53 $ (427 ) $ 168 For the Year Ended December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ (28 ) $ 163 $ (291 ) $ (3 ) $ (159 ) Investing Activities Capital expenditures for property and equipment — — (37 ) (7 ) — (44 ) Software capitalization costs — — (19 ) — — (19 ) Return of investment from unconsolidated affiliates — — 11 — — 11 Investment in unconsolidated affiliates — — (10 ) — — (10 ) Net cash used in investing activities — — (55 ) (7 ) — (62 ) Financing Activities Issuance of debt — 530 — — — 530 Issuance of non-recourse debt — — — 663 — 663 Repurchase and retirement of common stock — (183 ) — — — (183 ) Repayment of debt — (408 ) — — — (408 ) Repayment of non-recourse debt — — — (485 ) — (485 ) Debt issuance costs — (7 ) — (5 ) — (12 ) Payment of withholding taxes on vesting of restricted stock units — (4 ) — — — (4 ) Capital contributions — 3 — — — 3 Intercompany transfers 4 97 (233 ) 129 3 — Net cash provided by (used in) financing activities 4 28 (233 ) 302 3 104 Net increase in cash, cash equivalents and restricted cash 4 — (125 ) 4 — (117 ) Cash, cash equivalents and restricted cash, beginning of period — — 259 38 — 297 Cash, cash equivalents and restricted cash, end of period $ 4 $ — $ 134 $ 42 $ — $ 180 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 debt — (10 ) — — — (10 ) Repayment of non-recourse debt — — — (459 ) — (459 ) 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 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 debt — 200 — — — 200 Issuance of non-recourse debt — — — 300 — 300 Repayment of non-recourse debt — — — (110 ) — (110 ) Debt issuance costs — (4 ) (3 ) (3 ) — (10 ) Allocated debt activity ( 1) 111 — — — — 111 Net transfers to Parent ( 1) (567 ) — — — — (567 ) 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. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information | Note 25: 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. 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 367 $ 563 $ 427 $ 642 $ 1,999 Total operating expenses 320 408 364 473 1,565 Income before income taxes 40 146 56 161 403 Net income 30 107 41 120 298 Basic earnings per share $ 0.31 $ 1.10 $ 0.42 $ 1.25 $ 3.07 Diluted earnings per share $ 0.30 $ 1.10 $ 0.42 $ 1.24 $ 3.05 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 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 26: Subsequent Events In January 2019, we acquired land in Maui, Hawaii for future development into timeshare inventory. The purchase was comprised of a $60 million cash payment and a $23 million promissory note, which will bear contractual interest of $27 million. The combined principal and interest of the promissory note will be paid in four equal annual installments beginning in January 2028. In January 2019, we purchased timeshare inventory in Barbados for $9 million. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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. |
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 On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The reported results as of and for the year ended December 31, 2018, reflects the application of ASC 606 while the reported financial position as of December 31, 2017 and results for years ended December 31, 2017 and 2016 were prepared under the guidance of ASC 605, Revenue Recognition Real Estate – Time-Sharing Activities, Revenue Recognition In accordance with ASC 606, revenue is recognized upon the transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To achieve the core principle of the new guidance, we take the following steps: (i) identify the contract with the customer; (ii) determine whether the promised goods or services are separate performance obligations in the contract; (iii) determine the transaction price, including considering the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract based on the standalone selling price or estimated standalone selling price of the good or service; and (v) recognize revenue when (or as) we satisfy each performance obligation. Contracts with Multiple Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. For arrangements that contain multiple goods or services, we determine whether such goods or services are distinct performance obligations that should be accounted for separately in the arrangement. When allocating the transaction price in the arrangement, we may not have observable standalone sales for all of the performance obligations in these contracts; therefore, we exercise significant judgement when determining the standalone selling price of certain performance obligations. In order to estimate the standalone selling prices, we primarily rely on the expected cost plus margin and adjusted market assessment approaches. We then recognize the revenue allocated to each performance obligation as the related performance obligation is satisfied as discussed below. • Sales of VOIs, net — Customers who purchase vacation ownership products, whether paid in cash or financed, enter into multiple contracts, which we combine and account for as a single contract. Revenue from VOI sales is recognized at the point in time when control of the VOI is transferred to the customer which is when the customer has executed a binding sales contract, collectability is reasonably assured, the purchaser’s period to cancel for a refund has expired and the customer has the right to use the VOI. Revenue from sales of VOIs under construction is deferred until the point in time when construction activities are deemed to be completed, occupancy of the development is permissible, and the above criteria has been met. For financed sales, we estimate the variable consideration to be received under such contracts and recognize revenue net of amounts deemed uncollectible as the VOI is returned to inventory upon customer default. Variable consideration which has not been included within the transaction price is presented as a reserve on the financing receivable. See Note 5: Timeshare Financing Receivables for more information regarding our estimate of variable consideration. 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. At the time of the VOI sale, we estimate the fair value of the incentives to be redeemed, including an adjustment for breakage, to determine the standalone selling price of the first day incentive (“FDI”). We defer a portion of the total transaction price for the combined VOI contract as a liability for the FDI and recognize the corresponding revenue at the point in time when the customer receives the benefits of the FDI, which is upon the customer’s redemption of the Bonus Points. At that time, we also determine whether we are principal or agent for the redeemed good or service and recognize revenue on a gross or net basis accordingly. • Sales, marketing, brand and other fees— We enter into contracts with third-party developers to sell VOIs on their behalf through fee-for-service agreements for which we earn sales commissions and other fees. These commissions are variable as they are based on the sales and marketing results, which are subject to the constraint on variable consideration and resolved on a monthly basis over the contract term. We estimate such commissions to the extent that it is probable that a significant reversal of such revenue will not occur and recognize the commissions as the developer receives and consumes the benefits of the services. Any changes in these estimates would affect revenue and earnings in the period such variances are realized. Additionally, we enter into contracts to sell prepaid vacation packages. Our obligation in such contracts is satisfied when customers stay at our property; therefore, we recognize revenue for these packages when they are redeemed. On a portfolio basis, we exercise judgement to estimate the amount of expected breakage related to unused prepaid vacation packages and recognize such breakage in proportion to the pattern of packages utilized by our portfolio of customers. • Financing— We offer financing to qualifying customers purchasing our VOI. 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. 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— As part of our VOI sales, our customers enter into a Club arrangement which gives the customer an annual allotment of Club points that allow the customer to exchange the Club points for a number of vacation options. We manage the Club, receiving Club activation fees, annual dues and transaction fees from member exchanges. Club activation fees and the member's first year of annual dues are paid at the time of the VOI sale. The Club activation fee relates to activities we are required to undertake at or near contract inception to fulfill the contract, and does not result in the transfer of a promised good or service. Since our customers are granted the opportunity to renew their membership on an annual basis for no additional activation fee, we defer and amortize the activation fee on a straight-line basis over the seven year average inventory holding period. Annual dues for membership renewals are billed each year, and we recognize revenue from these annual dues over the period services are rendered. A member may elect to enter into an optional exchange transaction with their allotted Club points at which point the member pays their required transaction fee. This option does not represent a material right as the transactions are priced at their standalone selling price. Revenue related to the transaction is recognized when the services are rendered. As part of our resort operations, we contract with homeowner’s associations (“HOAs”) to provide day-to-day-management services, including housekeeping services, operation of a reservation system, maintenance, and certain accounting and administrative services. We receive compensation for such management services, which is generally based on a percentage of costs to operate the resorts, on a monthly basis. These fees represent a form of variable consideration and are estimated and recognized over time as the HOAs receive and consume the benefits of the management services. Management fees received related to the portion of unsold VOIs at each resort which we own are recognized on a net basis given we retain these VOIs in our inventory. • Rental and ancillary services— Our rental and ancillary services consist primarily of rental revenues on unoccupied vacation ownership units and ancillary revenues. Rental revenue is recognized when occupancy has occurred. Advance deposits on the rental unit and the corresponding revenue is deferred and recognized upon the customer’s vacation stay. Ancillary revenues consist of food and beverage, retail, spa offerings and other guest services. We recognize ancillary revenue when goods have been provided and/or services have been rendered. 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. customer’s vacation stay. Ancillary revenues include food and beverage, retail, spa offerings and other guest services. • Cost reimbursements— As part of our management agreements with HOAs and fee-for-service developers, we receive cost reimbursements for performing the day to day management services, including 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. Cost reimbursements are based upon actual expenses with no added margin, and are billed to the HOA on a monthly basis. We recognize cost reimbursements when we incur the related reimbursable costs as the HOA receives and consumes the benefits of the management services. We capitalize all incremental costs incurred to obtain a contract when such costs would not have been incurred if the contract had not been obtained. We elect to expense costs incurred to obtain a contract when the deferral period would be one year or less. Commissions for VOI sales for resorts under construction are expensed when the associated VOI revenue is recognized which is upon completion of the resort. These commissions are classified as Sales and marketing expense As of December 31, 2018, the ending asset balance for costs to obtain a contract was $2 million relating to deferred commission costs for certain vacation package sales. For the year ended December 31, 2018, we recognized 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, 2018, 2017 and 2016. We earn commission and other fees related to fee-for-service agreements to sell VOIs. For the year ended December 31, 2018, we did not earn more than 10 percent of our total revenue from one customer. For the years ended December 31, 2017 and 2016, approximately 15 percent and 11 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. |
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. |
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 stratify our portfolio using certain key dimensions including: 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 a 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, 2018 and 2017. 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 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 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 assets 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 revenue has not yet been recognized, were $4 million and $8 million as of December 31, 2018 and 2017, 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 Translation and Remeasurement | Currency Translation and Remeasurement The United States dollar (“USD”) is our reporting currency and is the functional currency of the majority of our operations. For operations whose functional currency is not the USD, assets and liabilities measured in foreign currencies are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses are reflected with Total Equity 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”), time and performance-vesting restricted stock units (“PSUs”) 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. • PSUs are settled at the end of a three-year performance period, with 70 percent of the PSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization. This metric is further adjusted by sales of VOIs under construction. The remaining 30 percent of the PSUs are subject to the achievement of certain VOI sales targets. • Options vest over three years in 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 on the unvested portion of an individual whose service was terminated. 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. |
Defined Contribution Plan | Defined Contribution Plan We administer and maintain a defined contribution plan for the benefit of all 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. We recognized compensation expense for our participating employees totaling $10 million for the year ended December 31, 2018. Prior to the year ended December 31, 2018, Hilton administrated the plan on our behalf. |
Reclassifications | Reclassifications Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net income or stockholders’ equity. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Other Than ASC 606 Adopted Accounting Standards In August 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which in part requires entities to assess whether distributions of cash from unconsolidated entities represent a return on the investment or a return of the investment to appropriately classify the distributions in the statement of cash flows. We have made an accounting policy election to use the cumulative earnings approach. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment as operating cash flows and those in excess of that amount will be treated as returns of investment as investing cash flows. On January 1, 2018, we adopted ASU 2016-15 which had no impact on our historical consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), which supersedes existing guidance on accounting for leases. Under the new provisions of ASU 2016-02 (as subsequently amended), all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. Subsequent to ASU 2016-02, the FASB has issued ASU No. 2018-01 Leases (Topic 842): Land Easement Practical Expedient for Transition, which clarifies the application of lease easements and eases adoption efforts for some land easements. In addition, ASU No. 2018-11 Leases (Topic 842): Targeted Improvements provides for an additional (and optional) transition method by which entities may elect to initially apply the transition requirements in Topic 842 at that entity’s adoption date with the effects of initially applying Topic 842 recognized as a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption and without retrospective application to any comparative prior periods presented. Also, ASU No. 2018-20 Leases (Topic 842): Narrow-Scope Improvements for Lessors provides certain narrow-scope improvements to Topic 842 as it relates to lessors. The provisions of ASU 2016-02 as clarified are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of this ASU are to be applied using a modified retrospective approach. We expect to elect the initial application on January 1, 2019 without retrospective application to any comparative periods presented in accordance with ASU 2018-11. We will choose to elect the package of practical expedients available to us upon adoption and have selected a lease software solution. We continue to evaluate the effect that this ASU will have on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, (“ASU 2016-13”), Financial Instruments-Credit Losses Measurement of Credit Losses on Financial Instruments 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) In June 2018, the , Compensation – Stock Compensation (Topic 718). T In August 2018, the FASB issued ASU 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 8420): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” In August 2018, the FASB issued ASU 2018-15 (“ASU 2018-15”), Customer’s Accounting Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | |
Schedule of Disaggregated Revenues by Segment from Contracts with Customers | The following tables show our disaggregated revenues by segment from contracts with customers. We operate our business in the following two segments: (i) Real estate sales and financing Resort operations and club management Business Segments Year Ended December 31, 2018 ($ in millions) Real Estate and Financing Segment Sales of VOIs, net $ 734 Sales, marketing, brand and other fees 570 Interest income 140 Other financing revenue 18 Real estate and financing segment revenues $ 1,462 Year Ended December 31, 2018 ($ in millions) Resort Operations and Club Management Segment Club management $ 112 Resort management 60 Rental (1) 191 Ancillary services 27 Resort operations and club management segment revenues $ 390 (1) Includes intersegment eliminations. |
Schedule of Accounts Receivable with Customers and Changes in Contract Liabilities | The following table provides information on our accounts receivable with customers which are included in Accounts Receivable, net ($ in millions) January 1, 2018 December 31, 2018 Receivables ( 1) $ 97 $ 122 (1) Does not include financing receivables from sales of VOIs. See Note 5: Timeshare Financing Receivables The following table presents changes in our contract liabilities for the year ended December 31, 2018. ($ in millions) January 1, 2018 Additions Subtractions December 31, 2018 Contract liabilities: Advanced deposits $ 87 $ 167 $ (153 ) $ 101 Deferred revenue ( 1) 197 264 (389 ) 72 Club Bonus Point incentive liability ( 2) 52 54 (50 ) 56 (1) (2) Amounts related to the Club Bonus Point incentive liability are included in Accounts payable, accrued expenses and other |
Schedule of Remaining Transaction Price Related to Advanced Deposits Club Activation Fees and Club Bonus Points | The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Club Bonus Points as of December 31, 2018: ($ in millions) Remaining Transaction Price Recognition Period Recognition Method Advanced deposits $ 101 18 months Upon customer stays Club activation fees 63 7 years Straight-line basis over average inventory holding period Club Bonus Points 56 24 months Upon redemption |
Topic 606 | |
Disaggregation Of Revenue [Line Items] | |
Schedule of Impact of Topic 606 on Financial Statements | The table below shows the adjustments that were made to the consolidated balance sheet as of January 1, 2018: December 31, 2017 Adjustments January 1, 2018 ($ in millions) ASSETS Cash and cash equivalents $ 246 $ — $ 246 Restricted cash 51 — 51 Accounts receivable, net of allowance for doubtful accounts 112 — 112 Timeshare financing receivables, net 1,071 — 1,071 Inventory 509 30 539 Property and equipment, net 238 — 238 Investment in unconsolidated affiliate 41 — 41 Intangible assets, net 72 — 72 Other assets 44 16 60 TOTAL ASSETS $ 2,384 $ 46 $ 2,430 LIABILITIES AND EQUITY Liabilities: Accounts payable, accrued expenses and other $ 339 $ 2 $ 341 Advanced deposits 104 (17 ) 87 Debt, net 482 — 482 Non-recourse debt, net 583 — 583 Deferred revenues 109 112 221 Deferred income tax liabilities 249 (13 ) 236 Total liabilities 1,866 84 1,950 Commitments and contingencies Equity: Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2017 — — — Common stock, $0.01 par value; 3,000,000,000 authorized shares, 99,136,304 issued and outstanding as of December 31, 2017 1 — 1 Additional paid-in capital 162 — 162 Accumulated retained earnings 355 (38 ) 317 Total equity 518 (38 ) 480 TOTAL LIABILITIES AND EQUITY $ 2,384 $ 46 $ 2,430 The following tables compare the reported consolidated balance sheet and statement of operations as of and for the year ended December 31, 2018, as well as the cash flows for the year ended December 31, 2018, to the previous accounting guidance: December 31, 2018 As Reported Effects of ASC 606 Previous Accounting Guidance (in millions) ASSETS Cash and cash equivalents $ 108 $ — $ 108 Restricted cash 72 — 72 Accounts receivable, net of allowance for doubtful accounts 153 — 153 Timeshare financing receivables, net 1,120 — 1,120 Inventory 527 — 527 Property and equipment, net 559 — 559 Investments in unconsolidated affiliates 38 — 38 Intangible assets, net 81 — 81 Other assets 95 — 95 TOTAL ASSETS $ 2,753 $ — $ 2,753 LIABILITIES AND EQUITY Liabilities: Accounts payable, accrued expenses and other $ 324 $ (2 ) $ 322 Advanced deposits 101 16 117 Debt, net 604 — 604 Non-recourse debt, net 759 — 759 Deferred revenues 95 — 95 Deferred income tax liabilities 254 — 254 Total liabilities 2,137 14 2,151 Commitments and contingencies Equity: Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 — — — Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 issued and outstanding as of December 31, 2018 1 — 1 Additional paid-in capital 174 — 174 Accumulated retained earnings 441 (14 ) 427 Total equity 616 (14 ) 602 TOTAL LIABILITIES AND EQUITY $ 2,753 $ — $ 2,753 Year Ended December 31, 2018 ($ in millions) As Reported Effects of ASC 606 Previous Accounting Guidance Revenues Sales of VOIs, net $ 734 $ (112 ) $ 622 Sales, marketing, brand and other fees 570 16 586 Financing 158 — 158 Resort and club management 172 1 173 Rental and ancillary services 218 — 218 Cost reimbursements 147 — 147 Total revenues 1,999 (95 ) 1,904 Expenses Cost of VOI sales 210 (30 ) 180 Sales and marketing 728 1 729 Financing 49 — 49 Resort and club management 47 — 47 Rental and ancillary services 133 — 133 General and administrative 117 — 117 Depreciation and amortization 36 2 38 License fee expense 98 — 98 Cost reimbursements 147 — 147 Total operating expenses 1,565 (27 ) 1,538 Interest expense (30 ) — (30 ) Other loss, net (1 ) — (1 ) Income before income taxes 403 (68 ) 335 Income tax (expense) benefit (105 ) 17 (88 ) Net income $ 298 $ (51 ) $ 247 Earnings per share: Basic $ 3.07 $ (0.53 ) $ 2.54 Diluted $ 3.05 $ (0.53 ) $ 2.52 The adoption of ASC 606 had no impact on our total cash flows provided by operating activities or used by investing and financing activities. ASC 606 resulted in offsetting shifts in cash flows throughout net income and various changes in working capital balances. Year Ended December 31, 2018 ($ in millions) As Reported Previous Accounting Guidance Net income $ 298 $ 247 Adjustments to reconcile net income to net cash used in by operating activities 151 138 Changes in operating assets and liabilities Accounts receivable, net (41 ) (41 ) Timeshare financing receivables, net (118 ) (118 ) Inventory 16 (14 ) Purchases of real estate for future conversion to inventory (299 ) (299 ) Other assets (31 ) (48 ) Accounts payable, accrued expenses and other (24 ) (24 ) Advanced deposits 14 13 Deferred revenues (126 ) (14 ) Other 1 1 Net cash used in operating activities $ (159 ) $ (159 ) |
Restricted Cash (Tables)
Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Restricted Cash | Restricted cash was as follows: December 31, ($ in millions) 2018 2017 Escrow deposits on VOI sales $ 45 $ 29 Reserves related to non-recourse debt ( 1) 27 22 $ 72 $ 51 (1) See Note 14: Debt & Non-recourse Debt |
Timeshare Financing Receivabl_2
Timeshare Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of financing receivables | Timeshare financing receivables were as follows: December 31, 2018 ($ in millions) Securitized and Pledged Unsecuritized ( 1) Total Timeshare financing receivables $ 660 $ 632 $ 1,292 Less: allowance for loan loss (43 ) (129 ) (172 ) $ 617 $ 503 $ 1,120 December 31, 2017 ($ in millions) Securitized and Pledged Unsecuritized ( 1) Total Timeshare financing receivables $ 471 $ 741 $ 1,212 Less: allowance for loan loss (27 ) (114 ) (141 ) $ 444 $ 627 $ 1,071 (1) Includes amounts used as collateral to secure a non-recourse revolving timeshare receivable credit facility (“Timeshare Facility”) as well as amounts held as future collateral for upcoming securitizations. |
Schedule of future payments due from financing receivables | Our timeshare financing receivables as of December 31, 2018 mature as follows: ($ in millions) Securitized and Pledged Unsecuritized Total Year 2019 $ 86 $ 64 $ 150 2020 87 54 141 2021 86 58 144 2022 83 63 146 2023 80 67 147 Thereafter 238 326 564 660 632 1,292 Less: allowance for loan loss (43 ) (129 ) (172 ) $ 617 $ 503 $ 1,120 |
Schedule of financing receivables by FICO score | Our gross timeshare financing receivables balances by FICO score were as follows: December 31, ($ in millions) 2018 2017 FICO score 700+ $ 843 $ 770 600-699 237 225 <600 27 28 No score ( 1) 185 189 $ 1,292 $ 1,212 (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, 2018 ($ in millions) Securitized and Pledged Unsecuritized Total Current $ 648 $ 556 $ 1,204 31 - 90 days past due 8 11 19 91 - 120 days past due 3 3 6 121 days and greater past due 1 62 63 $ 660 $ 632 $ 1,292 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 |
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, 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 Write-offs — (38 ) (38 ) Securitizations 28 (28 ) — Provision for loan loss ( 1) (12 ) 81 69 December 31, 2018 $ 43 $ 129 $ 172 (1) Includes incremental provision for loan loss, net of activity related to the repurchase of defaulted and upgraded securitized timeshare financing receivables. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, current | Our Inventory was comprised of the following: December 31, ($ in millions) 2018 2017 Completed unsold VOIs $ 243 $ 191 Construction in process 9 60 Land, infrastructure and other 275 258 $ 527 $ 509 |
Schedule of inventory, noncurrent | Our Inventory was comprised of the following: December 31, ($ in millions) 2018 2017 Completed unsold VOIs $ 243 $ 191 Construction in process 9 60 Land, infrastructure and other 275 258 $ 527 $ 509 |
Schedule of expense incurred when customers upgrade existing ownership to fee-for-service project | The incurred expenses below, recorded in Cost of VOI sales December 31, ($ in millions) 2018 2017 2016 Cost of VOI sales related to fee-for-service upgrades $ 34 $ 36 $ 49 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Land $ 268 $ 53 Buildings and leasehold improvements 295 182 Furniture and equipment 54 48 Construction-in-progress 25 20 642 303 Accumulated depreciation (83 ) (65 ) $ 559 $ 238 |
Consolidated Variable Interes_2
Consolidated Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Restricted cash $ 23 $ 18 Timeshare financing receivables, net 617 445 Non-recourse debt ( 1) 639 454 (1) Net of deferred financing costs. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 ($ in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Management agreements $ 88 $ (41 ) $ 47 Capitalized software 71 (37 ) 34 $ 159 $ (78 ) $ 81 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 |
Schedule of Estimated Future Amortization Expense | As of December 31, 2018, we estimated our future amortization expense for our amortizing intangible assets to be as follows: ($ in millions) Future Amortization Expense Year 2019 $ 18 2020 16 2021 12 2022 4 2023 3 Thereafter 28 $ 81 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets were as follows: December 31, ($ in millions) 2018 2017 Inventory deposits $ 46 $ — Prepaid expenses 18 18 Other 31 26 $ 95 $ 44 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 Accrued employee compensation and benefits $ 86 $ 70 Accounts payable 51 45 Bonus point incentive liability 56 52 Due to Hilton 20 23 Income taxes payable 7 64 Other accrued expenses 104 85 $ 324 $ 339 |
Deferred Revenues (Tables)
Deferred Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Deferred Revenues | Deferred revenues were as follows: December 31, ($ in millions) 2018 2017 Deferred VOI sales ( 1) $ 19 $ 45 Club activation fees 63 54 Other 13 10 $ 95 $ 109 (1) As of December 31, 2018, we do not have deferred revenues associated with Sales of VOIs under construction. |
Debt & Non-recourse Debt (Table
Debt & Non-recourse Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Borrowings | The following table details our outstanding debt balance and its associated interest rates: December 31 ($ in millions) 2018 2017 Debt ( 1) Senior secured credit facilities: Term loans with an average rate of 4.253%, due 2023 $ 197 $ 190 Revolver with an average rate of 4.253%, due 2023 115 — Senior notes with a rate of 6.125%, due 2024 300 300 612 490 Less: unamortized deferred financing costs and discount ( 2)(3) (8 ) (8 ) $ 604 $ 482 (1) For the years ended December 31, 2018 and 2017, weighted average interest rates were 5.170 percent and 5.229 percent, respectively. (2) (3) Amount does not include deferred financing costs of $6 and $2 million as of December 31, 2018 and 2017, relating to our revolving facility included in Other Assets The following table details our outstanding non-recourse debt balance and its associated interest rates: December 31 ($ in millions) 2018 2017 Non-recourse debt ( 1) Timeshare Facility with an average rate of 3.559%, due 2021 $ 120 $ 129 Securitized Debt with a rate of 2.280%, due 2026 33 54 Securitized Debt with an average rate of 1.810%, due 2026 74 112 Securitized Debt with an average rate of 2.711%, due 2028 206 293 Securitized Debt with an average rate of 3.602%, due 2032 333 — 766 588 Less: unamortized deferred financing costs ( 2) (7 ) (5 ) $ 759 $ 583 (1) For the years ended December 31, 2018 and 2017, weighted average interest rates were 3.126 percent and 2.492 percent, respectively. (2) Amount relates to Securitized Debt only and does not include deferred financing costs of $3 million and $2 million as of December 31, 2018 and 2017, respectively, relating to our Timeshare Facility included in Other Assets |
Schedule of Contractual Maturities of Debt | The contractual maturities of our debt and non-recourse debt as of December 31, 2018 were as follows: ($ in millions) Debt Non-recourse Debt Total Year 2019 $ 10 $ 193 $ 203 2020 10 165 175 2021 10 207 217 2022 10 63 73 2023 272 76 348 Thereafter 300 62 362 $ 612 $ 766 $ 1,378 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Hierarchy Level ($ in millions) Carrying Amount Level 1 Level 3 Assets: Timeshare financing receivables ( 1) $ 1,120 $ — $ 1,339 Liabilities: Debt ( 2) 604 302 309 Non-recourse debt ( 2) 759 — 753 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 (1) Carrying amount net of allowance for loan loss. (2) Carrying amount net of unamortized deferred financing costs and discount. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018, were as follows: ($ in millions) Operating Leases Year 2019 $ 16 2020 15 2021 14 2022 10 2023 10 Thereafter 29 Total minimum rent payments $ 94 |
Schedule of Rent Expense | Rent expense for all operating leases was as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 Minimum rentals $ 21 $ 17 $ 16 Contingent rentals 3 3 1 $ 24 $ 20 $ 17 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 2016 U.S. income before tax $ 380 $ 283 $ 270 Foreign income before tax 23 28 23 Income before taxes $ 403 $ 311 $ 293 |
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) 2018 2017 2016 Current: Federal $ 62 $ 94 $ 87 State 15 11 8 Foreign 8 8 7 Total current 85 113 102 Deferred: Federal 17 (137 ) 21 State 4 8 2 Foreign (1 ) — — Total deferred 20 (129 ) 23 Total provision for income taxes $ 105 $ (16 ) $ 125 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of our tax provision at the U.S. statutory rate to the provision for income taxes were as follows: Year Ended December 31, ($ in millions) 2018 2017 2016 Statutory U.S. federal income tax provision $ 85 $ 109 $ 102 State and local income taxes, net of U.S. federal tax benefit 19 12 10 Foreign income tax expense 6 7 7 U.S. benefit of foreign taxes (6 ) (7 ) (7 ) Valuation allowance changes 2 — — Non-deductible transactions costs — — 5 Interest on installment sales, net of U.S. federal tax benefit 3 3 7 Interest on installment sales adjustment — (5 ) — U.S. tax reform: one-time repatriation tax (1 ) 1 — U.S. tax reform: remeasurement of deferred tax (3 ) (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 $ 105 $ (16 ) $ 125 |
Schedule of Compositions of Net Deferred Tax Balances | The compositions of net deferred tax balances were as follows: December 31, ($ in millions) 2018 2017 Deferred income tax assets $ 1 $ 1 Deferred income tax liabilities (255 ) (250 ) Net deferred taxes $ (254 ) $ (249 ) |
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) 2018 2017 Deferred tax assets: Compensation $ 11 $ 9 Domestic tax credit carryforwards 2 — Other reserves 57 42 70 51 Valuation allowance (2 ) — Deferred tax assets 68 51 Deferred tax liabilities: Property and equipment (46 ) (54 ) Amortizable intangible assets (10 ) (10 ) Deferred income (266 ) (236 ) Deferred tax liabilities (322 ) (300 ) Net deferred taxes $ (254 ) $ (249 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Number of shares granted 378,069 534,329 331,227 Weighted average grant date fair value per share $ 42.63 $ 29.23 $ 18.68 Fair value of shares vested (in millions) $ 13 $ 11 $ 4 |
Schedule of Restricted Stock Units Activity | The following table summarizes the activity of our RSUs during the year ended December 31, 2018: Number of Shares Weighted Average Grant Date Fair Value Outstanding, beginning of period 839,800 $ 25.29 Granted 378,069 42.63 Vested (413,440 ) 23.80 Forfeited (61,047 ) 32.91 Outstanding, end of period 743,382 34.31 |
Schedule of Stock Option Grants | The following table provides information about our option grants for the last three fiscal years: Year Ended December 31, 2018 2017 2016 Number of options granted 312,141 669,658 148,929 Weighted average exercise price per share $ 46.48 $ 28.30 $ 18.69 Weighted average grant date fair value per share $ 14.78 $ 8.66 $ 5.21 |
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, 2018 2017 2016 Expected volatility ( 1) 26.6 % 26.3 % 32.0 % Dividend yield ( 2) — % — % 1.4 % Risk-free rate ( 3) 2.7 % 2.3 % 1.4 % Expected term (in years) ( 4) 6.0 6.0 6.0 (1) Due to limited trading history for our 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 our executive compensation. (2) At the date of grant we had no plans to pay dividends during the expected term of these options. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. |
Schedule of Stock Options Activity | The following table summarizes the activity of our options during the year ended December 31, 2018: Number of Shares Weighted Average Exercise Price Per Share Outstanding, beginning of period 874,574 $ 25.96 Granted 312,141 46.48 Exercised (3,792 ) 28.30 Forfeited, canceled or expired (76,251 ) 34.60 Outstanding, end of period 1,106,672 31.14 Exercisable, end of period 378,137 24.14 |
Schedule of Performance Stock Units Activity | The following table summarizes the activity of our PSUs during the year ended December 31, 2018: Adjusted EBITDA ( 1) Contract Sales Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Outstanding, beginning of period — $ — — $ — Granted 64,809 42.94 27,769 42.94 Vested — — — — Forfeited, canceled or expired (7,508 ) 46.62 (3,217 ) 46.62 Outstanding, end of period 57,301 42.46 24,552 42.46 (1) Represents our Adjusted EBITDA metric described in Part 1 of this Form 10-K, further adjusted by net recognition and deferral activity from sales of VOIs under construction. |
Performance Shares | Adjusted E B I T D A | |
Schedule Of Performance Stock Unit Grants | The following table provides information about our PSU grants, which is based on our Adjusted EBITDA metric described in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Number of shares granted 64,809 Weighted average grant date fair value per share $ 42.94 Fair value of shares vested (in millions) N/A |
Performance Shares | Contract Sales | |
Schedule Of Performance Stock Unit Grants | The following table provides information about our PSU grants, which is based on contract sales as defined in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Number of shares granted 27,769 Weighted average grant date fair value per share $ 42.94 Fair value of shares vested (in millions) N/A |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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”). Year Ended December 31, ($ in millions, except per share amounts) 2018 2017 2016 Basic EPS Numerator: Net Income ( 1) $ 298 $ 327 $ 168 Denominator: Weighted average shares outstanding 97 99 99 Basic EPS $ 3.07 $ 3.30 $ 1.70 Diluted EPS Numerator: Net Income ( 1) $ 298 $ 327 $ 168 Denominator: Weighted average shares outstanding 98 100 99 Diluted EPS $ 3.05 $ 3.28 $ 1.70 (1) Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |
Summary of Amounts Included in Consolidation Financial Statements Related to Arrangements with Hilton | The following tables summarize amounts included in our consolidated financial statements related to the arrangements with Hilton: Year Ended December 31, ($ in millions) 2016 Consolidated Statements of Operations Expenses: General and administrative Allocated general and administrative $ 27 Shared services 12 Defined contribution plan 7 Insurance 2 License fee expense 80 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 Parent December 31, ($ in millions) 2016 Cash pooling and general financing activities $ (715 ) Corporate allocations 53 Income taxes 95 Net transfers to Parent $ (567 ) |
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) 2018 2017 2016 Commission and other fees $ 132 $ 79 $ — |
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: September 30, December 31, ($ in millions) 2017 2016 Commission and other fees $ 135 $ 177 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenues Reconciled to Consolidated Amounts | We do not include equity in earnings (losses) 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) 2018 2017 2016 Revenues: Real estate sales and financing ( 1) $ 1,462 $ 1,239 $ 1,143 Resort operations and club management ( 2) 422 367 339 Total segment revenues 1,884 1,606 1,482 Cost reimbursements 147 135 126 Intersegment eliminations ( 1)(2)(3) (32 ) (30 ) (25 ) Total revenues $ 1,999 $ 1,711 $ 1,583 (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, (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 $31 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 $1 million for the years ended December 31, 2018 and 2017. There were no charges for the year ended December 31, 2016. |
Schedule of Adjusted EBITDA Reconciled to Net Income | The following table presents Adjusted EBITDA for our reportable segments reconciled to net income: Year Ended December 31, ($ in millions) 2018 2017 2016 Adjusted EBITDA: Real estate sales and financing ( 1) $ 447 $ 359 $ 336 Resort operations and club management ( 1) 245 204 189 Segment Adjusted EBITDA 692 563 525 General and administrative (117 ) (104 ) (92 ) Depreciation and amortization (36 ) (29 ) (24 ) License fee expense (98 ) (87 ) (80 ) Interest expense (30 ) (27 ) (3 ) Allocated Parent interest expense ( 2) — — (26 ) Other loss, net (1 ) — (1 ) Equity in earnings from unconsolidated affiliates ( 4) — 1 — Income tax benefit (expense) ( 3) (105 ) 16 (125 ) Other adjustment items (7 ) (6 ) (6 ) Net income $ 298 $ 327 $ 168 (1) (2) (3) Income Taxes (4) Investment in Unconsolidated Affiliates |
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) 2018 2017 Real estate sales and financing $ 2,501 $ 2,255 Resort operations and club management 172 78 Total segment assets 2,673 2,333 Corporate 80 51 Total assets $ 2,753 $ 2,384 |
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) 2018 2017 2016 Real estate sales and financing $ 36 $ 28 $ 19 Resort operations and club management — 2 1 Total segment capital expenditures for property and equipment 36 30 20 Corporate 8 5 6 Total capital expenditures for property and equipment $ 44 $ 35 $ 26 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Remaining Purchase Obligations | As of December 31, 2018, our remaining obligation pursuant to these arrangements was expected to be incurred as follows: ($ in millions) Purchase Obligations Year 2019 $ 237 2020 160 2021 78 2022 51 2023 47 Thereafter 34 Total $ 607 |
Condensed Consolidating Guara_2
Condensed Consolidating Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Consolidating Guarantor Financial Information [Abstract] | |
Schedule of Condensed Consolidating Guarantor Balance Sheets | The following schedules present the condensed consolidating financial information as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors. December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total ASSETS Cash and cash equivalents $ 4 $ — $ 89 $ 15 $ — $ 108 Restricted cash — — 45 27 — 72 Accounts receivable, net — — 157 17 (21 ) 153 Timeshare financing receivables, net — — 209 911 — 1,120 Inventory — — 502 25 — 527 Property and equipment, net — — 553 6 — 559 Investments in unconsolidated affiliates — — 38 — — 38 Intangible assets, net — — 81 — — 81 Other assets — 6 41 48 — 95 Investments in subsidiaries 612 1,210 277 — (2,099 ) — TOTAL ASSETS $ 616 $ 1,216 $ 1,992 $ 1,049 $ (2,120 ) $ 2,753 LIABILITIES AND EQUITY Accounts payable, accrued expenses and other $ — $ — $ 332 $ 13 $ (21 ) $ 324 Advance deposits — — 101 — — 101 Debt, net — 604 — — — 604 Non-recourse debt, net — — — 759 — 759 Deferred revenues — — 95 — — 95 Deferred income tax liabilities — — 254 — — 254 Total equity 616 612 1,210 277 (2,099 ) 616 TOTAL LIABILITIES AND EQUITY $ 616 $ 1,216 $ 1,992 $ 1,049 $ (2,120 ) $ 2,753 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 |
Schedule of Condensed Consolidating Guarantor Statements of Operations | For the Year Ended December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Revenues Sales of VOI’s, net $ — $ — $ 716 $ 18 $ — $ 734 Sales, marketing, license and other fees — — 578 4 (12 ) 570 Financing — — 70 95 (7 ) 158 Resort and club management — — 172 — — 172 Rental and ancillary service — — 216 2 — 218 Cost reimbursements — — 143 4 — 147 Total revenues — — 1,895 123 (19 ) 1,999 Expenses Cost of VOI sales — — 208 2 — 210 Sales and marketing — — 725 15 (12 ) 728 Financing — — 19 37 (7 ) 49 Resort and club management — — 47 — — 47 Rental and ancillary service — — 130 3 — 133 General and administrative — — 116 1 — 117 Depreciation and amortization — — 36 — — 36 License fee expense — — 98 — — 98 Cost reimbursements — — 143 4 — 147 Total operating expenses — — 1,522 62 (19 ) 1,565 Interest expense — (30 ) — — — (30 ) Other loss, net — — (1 ) — — (1 ) Income (loss) before income taxes — (30 ) 372 61 — 403 Income tax expense — — (105 ) — — (105 ) Income (loss) before equity in earnings (loss) from subsidiaries — (30 ) 267 61 — 298 Equity in earnings from subsidiaries 298 328 61 — (687 ) — Net income $ 298 $ 298 $ 328 $ 61 $ (687 ) $ 298 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 from subsidiaries 327 354 60 — (741 ) — Net income $ 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 from subsidiaries 185 189 53 — (427 ) — Net income $ 168 $ 185 $ 189 $ 53 $ (427 ) $ 168 |
Schedule of Condensed Consolidating Guarantor Statements of Cash Flows | For the Year Ended December 31, 2018 ($ in millions) Parent Issuers Guarantors Non- Guarantors Eliminations Total Operating Activities Net cash provided by (used in) operating activities $ — $ (28 ) $ 163 $ (291 ) $ (3 ) $ (159 ) Investing Activities Capital expenditures for property and equipment — — (37 ) (7 ) — (44 ) Software capitalization costs — — (19 ) — — (19 ) Return of investment from unconsolidated affiliates — — 11 — — 11 Investment in unconsolidated affiliates — — (10 ) — — (10 ) Net cash used in investing activities — — (55 ) (7 ) — (62 ) Financing Activities Issuance of debt — 530 — — — 530 Issuance of non-recourse debt — — — 663 — 663 Repurchase and retirement of common stock — (183 ) — — — (183 ) Repayment of debt — (408 ) — — — (408 ) Repayment of non-recourse debt — — — (485 ) — (485 ) Debt issuance costs — (7 ) — (5 ) — (12 ) Payment of withholding taxes on vesting of restricted stock units — (4 ) — — — (4 ) Capital contributions — 3 — — — 3 Intercompany transfers 4 97 (233 ) 129 3 — Net cash provided by (used in) financing activities 4 28 (233 ) 302 3 104 Net increase in cash, cash equivalents and restricted cash 4 — (125 ) 4 — (117 ) Cash, cash equivalents and restricted cash, beginning of period — — 259 38 — 297 Cash, cash equivalents and restricted cash, end of period $ 4 $ — $ 134 $ 42 $ — $ 180 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 debt — (10 ) — — — (10 ) Repayment of non-recourse debt — — — (459 ) — (459 ) 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 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 debt — 200 — — — 200 Issuance of non-recourse debt — — — 300 — 300 Repayment of non-recourse debt — — — (110 ) — (110 ) Debt issuance costs — (4 ) (3 ) (3 ) — (10 ) Allocated debt activity ( 1) 111 — — — — 111 Net transfers to Parent ( 1) (567 ) — — — — (567 ) 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. |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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. 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Year ($ in millions, except per share data) Total revenues $ 367 $ 563 $ 427 $ 642 $ 1,999 Total operating expenses 320 408 364 473 1,565 Income before income taxes 40 146 56 161 403 Net income 30 107 41 120 298 Basic earnings per share $ 0.31 $ 1.10 $ 0.42 $ 1.25 $ 3.07 Diluted earnings per share $ 0.30 $ 1.10 $ 0.42 $ 1.24 $ 3.05 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 |
Organization - Additional Infor
Organization - Additional Information (Details) | Jan. 03, 2017shares | Dec. 31, 2018USD ($)propertyunit$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Oct. 24, 2016$ / sharesshares | May 04, 2016USD ($)$ / sharesshares |
Related Party Transaction [Line Items] | |||||
Number of timeshare properties | property | 54 | ||||
Number of units in timeshare properties | unit | 8,888 | ||||
Common stock issued | shares | 94,558,086 | 99,136,304 | |||
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 | $ 178,000,000 | |||
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 Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)Customer | Dec. 31, 2017USD ($)Customer | Dec. 31, 2016Customer | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Club bonus points to customers, maximum valid duration period | 2 years | ||
Contract cost | $ 2,000,000 | ||
Commission expense for certain vacation package sales | 17,000,000 | ||
Adjustments on inventory reacquired upon related receivables | $ 0 | ||
Percentage of property and equipment, net | 10.00% | 10.00% | |
Deferred revenue not yet recognized | $ 95,000,000 | $ 109,000,000 | |
Compensation expense recognized | $ 10,000,000 | ||
Performance Shares | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Award vesting period | 3 years | ||
Performance Shares | Vacation Ownership Interests Sale | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Award vesting percentage | 30.00% | ||
Performance Shares | Adjusted E B I T D A | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Award vesting percentage | 70.00% | ||
Other Assets | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Deferred revenue not yet recognized | $ 4,000,000 | $ 8,000,000 | |
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% | |
Number of Customers Accounted for Revenue | Customer | 1 | 1 | 1 |
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 | ||
Maximum | Total Revenue | Customer Concentration Risk | Single Customer | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 10.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Adjustments Made to Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | |||||
Cash and cash equivalents | $ 108 | $ 246 | |||
Restricted cash | 72 | 51 | |||
Accounts receivable, net of allowance for doubtful accounts | 153 | 112 | |||
Timeshare financing receivables, net | 1,120 | 1,071 | |||
Inventory | 527 | 509 | |||
Property and equipment, net | 559 | 238 | |||
Investment in unconsolidated affiliate | 38 | 41 | |||
Intangible assets, net | 81 | 72 | |||
Other assets | 95 | 44 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,384 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | 324 | 339 | |||
Advanced deposits | 101 | 104 | |||
Debt, net | 604 | 482 | |||
Non-recourse debt, net | 759 | 583 | |||
Deferred revenues | 95 | 109 | |||
Deferred income tax liabilities | 254 | 249 | |||
Total liabilities (variable interest entities - $640 and $455) | 2,137 | 1,866 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 | |||
Additional paid-in capital | 174 | 162 | |||
Accumulated retained earnings | 441 | 355 | |||
Total equity | 616 | 518 | $ 167 | $ (106) | |
TOTAL LIABILITIES AND EQUITY | 2,753 | $ 2,384 | |||
Topic 606 | |||||
ASSETS | |||||
Cash and cash equivalents | 108 | $ 246 | |||
Restricted cash | 72 | 51 | |||
Accounts receivable, net of allowance for doubtful accounts | 153 | 112 | |||
Timeshare financing receivables, net | 1,120 | 1,071 | |||
Inventory | 527 | 539 | |||
Property and equipment, net | 559 | 238 | |||
Investment in unconsolidated affiliate | 38 | 41 | |||
Intangible assets, net | 81 | 72 | |||
Other assets | 95 | 60 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,430 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | 324 | 341 | |||
Advanced deposits | 101 | 87 | |||
Debt, net | 604 | 482 | |||
Non-recourse debt, net | 759 | 583 | |||
Deferred revenues | 95 | 221 | |||
Deferred income tax liabilities | 254 | 236 | |||
Total liabilities (variable interest entities - $640 and $455) | 2,137 | 1,950 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 | |||
Additional paid-in capital | 174 | 162 | |||
Accumulated retained earnings | 441 | 317 | |||
Total equity | 616 | 480 | |||
TOTAL LIABILITIES AND EQUITY | 2,753 | 2,430 | |||
Topic 606 | Impact of Adopting ASC 606 | |||||
ASSETS | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Accounts receivable, net of allowance for doubtful accounts | 0 | 0 | |||
Timeshare financing receivables, net | 0 | 0 | |||
Inventory | 0 | 30 | |||
Property and equipment, net | 0 | 0 | |||
Investment in unconsolidated affiliate | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Other assets | 0 | 16 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 0 | 46 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | (2) | 2 | |||
Advanced deposits | 16 | (17) | |||
Debt, net | 0 | 0 | |||
Non-recourse debt, net | 0 | 0 | |||
Deferred revenues | 0 | 112 | |||
Deferred income tax liabilities | 0 | (13) | |||
Total liabilities (variable interest entities - $640 and $455) | 14 | 84 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 0 | 0 | |||
Additional paid-in capital | 0 | 0 | |||
Accumulated retained earnings | (14) | (38) | |||
Total equity | (14) | (38) | |||
TOTAL LIABILITIES AND EQUITY | $ 0 | $ 46 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Adjustments Made to Condensed Consolidated Balance Sheet (Parenthetical) (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
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) | 94,558,086 | 99,136,304 |
Common Stock, shares outstanding (in shares) | 94,558,086 | 99,136,304 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Number of operating segments | segment | 2 | ||
Liabilities | $ 2,137 | $ 1,866 | |
Topic 606 | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenue earned that was included in the contract liabilities balance | 214 | ||
Liabilities | 2,137 | $ 1,950 | |
Topic 606 | Impact of Adopting ASC 606 | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Liabilities | $ 14 | $ 84 | |
Topic 606 | Maximum | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract remaining performance obligations expected term | 1 year | ||
Topic 606 | Accounts Receivables | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Impairment losses | $ 0 | ||
Remaining Performance Obligations | $ 0 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Disaggregated Revenues by Segment from Contracts with Customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation Of Revenue [Line Items] | |||
Total revenues | $ 1,999 | $ 1,711 | $ 1,583 |
Real Estate and Financing Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 1,462 | ||
Resort Operations and Club Management Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 390 | ||
Sales of VOIs, Net | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 734 | 548 | 508 |
Sales of VOIs, Net | Real Estate and Financing Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 734 | ||
Sales, Marketing, Brand and Other Fees | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 570 | $ 544 | $ 499 |
Sales, Marketing, Brand and Other Fees | Real Estate and Financing Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 570 | ||
Interest Income | Real Estate and Financing Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 140 | ||
Other Financing Revenue | Real Estate and Financing Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 18 | ||
Club Management | Resort Operations and Club Management Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 112 | ||
Resort Management | Resort Operations and Club Management Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 60 | ||
Rental | Resort Operations and Club Management Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | 191 | ||
Ancillary Services | Resort Operations and Club Management Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenues | $ 27 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Schedule of Accounts Receivable with Customers (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | |
Accounts Receivables | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Receivables | [1] | $ 122 | $ 97 |
[1] | Does not include financing receivables from sales of VOIs. See Note 5: Timeshare Financing Receivables for additional information. |
Revenue from Contracts with C_8
Revenue from Contracts with Customers - Changes in Contract Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenues | $ 95 | $ 109 | ||
Topic 606 | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenues | 95 | $ 221 | ||
Topic 606 | Advanced deposits | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenues | 101 | 87 | ||
Contract liabilities, Additions | 167 | |||
Contract liabilities, Subtractions | (153) | |||
Topic 606 | Deferred revenue | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenues | [1] | 72 | 197 | |
Contract liabilities, Additions | [1] | 264 | ||
Contract liabilities, Subtractions | [1] | (389) | ||
Topic 606 | Club Bonus Point incentive liability | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenues | [2] | 56 | $ 52 | |
Contract liabilities, Additions | [2] | 54 | ||
Contract liabilities, Subtractions | [2] | $ (50) | ||
[1] | The deferred revenue balance is primarily comprised of (i) sales of VOI under construction, (ii) Club activation fees that are paid at the closing of a VOI purchase, which grants access to our points-based Club and (iii) annual dues for Club membership renewals. As of December 31, 2018, we have no deferred revenues relating to sales of VOIs under construction. | |||
[2] | Amounts related to the Club Bonus Point incentive liability are included in Accounts payable, accrued expenses and other on our consolidated balance sheets. |
Revenue from Contracts with C_9
Revenue from Contracts with Customers - Changes in Contract Liabilities (Parenthetical) (Details) - USD ($) | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred revenues | $ 95,000,000 | $ 109,000,000 | |
Deferred Revenue VOIs Under Construction | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred revenues | 0 | ||
Topic 606 | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred revenues | 95,000,000 | $ 221,000,000 | |
Topic 606 | Deferred Revenue VOIs Under Construction | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred revenues | $ 0 |
Revenue from Contracts with _10
Revenue from Contracts with Customers - Remaining Transaction Price (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Advanced deposits | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining Transaction Price | $ 101 |
Recognition Period | 18 months |
Recognition Method | 0 |
Club Activation Fees | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining Transaction Price | $ 63 |
Recognition Period | 7 years |
Recognition Method | 0 |
Club Bonus Points | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining Transaction Price | $ 56 |
Recognition Period | 24 months |
Recognition Method | 0 |
Revenue from Contracts with _11
Revenue from Contracts with Customers - Schedule of Impact of New Revenue Guidance on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | |||||
Cash and cash equivalents | $ 108 | $ 246 | |||
Restricted cash | 72 | 51 | |||
Accounts receivable, net of allowance for doubtful accounts | 153 | 112 | |||
Timeshare financing receivables, net | 1,120 | 1,071 | |||
Inventory | 527 | 509 | |||
Property and equipment, net | 559 | 238 | |||
Investments in unconsolidated affiliates | 38 | 41 | |||
Intangible assets, net | 81 | 72 | |||
Other assets | 95 | 44 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,384 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | 324 | 339 | |||
Advanced deposits | 101 | 104 | |||
Debt, net | 604 | 482 | |||
Non-recourse debt, net | 759 | 583 | |||
Deferred revenues | 95 | 109 | |||
Deferred income tax liabilities | 254 | 249 | |||
Total liabilities (variable interest entities - $640 and $455) | 2,137 | 1,866 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 | |||
Additional paid-in capital | 174 | 162 | |||
Accumulated retained earnings | 441 | 355 | |||
Total equity | 616 | 518 | $ 167 | $ (106) | |
TOTAL LIABILITIES AND EQUITY | 2,753 | $ 2,384 | |||
Topic 606 | |||||
ASSETS | |||||
Cash and cash equivalents | 108 | $ 246 | |||
Restricted cash | 72 | 51 | |||
Accounts receivable, net of allowance for doubtful accounts | 153 | 112 | |||
Timeshare financing receivables, net | 1,120 | 1,071 | |||
Inventory | 527 | 539 | |||
Property and equipment, net | 559 | 238 | |||
Investments in unconsolidated affiliates | 38 | 41 | |||
Intangible assets, net | 81 | 72 | |||
Other assets | 95 | 60 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,430 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | 324 | 341 | |||
Advanced deposits | 101 | 87 | |||
Debt, net | 604 | 482 | |||
Non-recourse debt, net | 759 | 583 | |||
Deferred revenues | 95 | 221 | |||
Deferred income tax liabilities | 254 | 236 | |||
Total liabilities (variable interest entities - $640 and $455) | 2,137 | 1,950 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 | |||
Additional paid-in capital | 174 | 162 | |||
Accumulated retained earnings | 441 | 317 | |||
Total equity | 616 | 480 | |||
TOTAL LIABILITIES AND EQUITY | 2,753 | 2,430 | |||
Topic 606 | Impact of Adopting ASC 606 | |||||
ASSETS | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Accounts receivable, net of allowance for doubtful accounts | 0 | 0 | |||
Timeshare financing receivables, net | 0 | 0 | |||
Inventory | 0 | 30 | |||
Property and equipment, net | 0 | 0 | |||
Investments in unconsolidated affiliates | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Other assets | 0 | 16 | |||
TOTAL ASSETS (variable interest entities - $647 and $471) | 0 | 46 | |||
Liabilities: | |||||
Accounts payable, accrued expenses and other | (2) | 2 | |||
Advanced deposits | 16 | (17) | |||
Debt, net | 0 | 0 | |||
Non-recourse debt, net | 0 | 0 | |||
Deferred revenues | 0 | 112 | |||
Deferred income tax liabilities | 0 | (13) | |||
Total liabilities (variable interest entities - $640 and $455) | 14 | 84 | |||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | 0 | |||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 0 | 0 | |||
Additional paid-in capital | 0 | 0 | |||
Accumulated retained earnings | (14) | (38) | |||
Total equity | (14) | (38) | |||
TOTAL LIABILITIES AND EQUITY | 0 | $ 46 | |||
Topic 606 | Previous Accounting Guidance | |||||
ASSETS | |||||
Cash and cash equivalents | 108 | ||||
Restricted cash | 72 | ||||
Accounts receivable, net of allowance for doubtful accounts | 153 | ||||
Timeshare financing receivables, net | 1,120 | ||||
Inventory | 527 | ||||
Property and equipment, net | 559 | ||||
Investments in unconsolidated affiliates | 38 | ||||
Intangible assets, net | 81 | ||||
Other assets | 95 | ||||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | ||||
Liabilities: | |||||
Accounts payable, accrued expenses and other | 322 | ||||
Advanced deposits | 117 | ||||
Debt, net | 604 | ||||
Non-recourse debt, net | 759 | ||||
Deferred revenues | 95 | ||||
Deferred income tax liabilities | 254 | ||||
Total liabilities (variable interest entities - $640 and $455) | 2,151 | ||||
Commitments and contingencies - see Note 22 | |||||
Equity: | |||||
Preferred stock, $0.01 par value; 300,000,000 authorized shares, none issued or outstanding as of December 31, 2018 and 2017 | 0 | ||||
Common stock, $0.01 par value; 3,000,000,000 authorized shares, 94,558,086 and 99,136,304 issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | ||||
Additional paid-in capital | 174 | ||||
Accumulated retained earnings | 427 | ||||
Total equity | 602 | ||||
TOTAL LIABILITIES AND EQUITY | $ 2,753 |
Revenue from Contracts with _12
Revenue from Contracts with Customers - Schedule of Impact of New Revenue Guidance on Condensed Consolidated Statement of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenues | ||||||||||||||
Total revenues | $ 1,999,000,000 | $ 1,711,000,000 | $ 1,583,000,000 | |||||||||||
Expenses | ||||||||||||||
General and administrative | 117,000,000 | 104,000,000 | 92,000,000 | |||||||||||
Depreciation and amortization | 36,000,000 | 29,000,000 | 24,000,000 | |||||||||||
Total operating expenses | $ 473,000,000 | $ 364,000,000 | $ 408,000,000 | $ 320,000,000 | $ 360,000,000 | $ 350,000,000 | $ 348,000,000 | $ 316,000,000 | 1,565,000,000 | 1,374,000,000 | 1,260,000,000 | |||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | |||||||||||
Other loss, net | (1,000,000) | (1,000,000) | ||||||||||||
Income before income taxes | 161,000,000 | 56,000,000 | 146,000,000 | 40,000,000 | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 403,000,000 | 311,000,000 | 293,000,000 | |||
Income tax (expense) benefit | (105,000,000) | 16,000,000 | (125,000,000) | |||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 298,124,983 | [1] | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] |
Earnings per share: | ||||||||||||||
Basic | $ 1.25 | $ 0.42 | $ 1.10 | $ 0.31 | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.07 | [3] | $ 3.30 | [3] | $ 1.70 | [3] |
Diluted | $ 1.24 | $ 0.42 | $ 1.10 | $ 0.30 | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.05 | [3] | $ 3.28 | [3] | $ 1.70 | [3] |
Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | $ 734,000,000 | $ 548,000,000 | $ 508,000,000 | |||||||||||
Sales, Marketing, Brand and Other Fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 570,000,000 | 544,000,000 | 499,000,000 | |||||||||||
Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 158,000,000 | 147,000,000 | 134,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 49,000,000 | 43,000,000 | 32,000,000 | |||||||||||
Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 172,000,000 | 158,000,000 | 143,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 47,000,000 | 43,000,000 | 36,000,000 | |||||||||||
Rental And Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 218,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 133,000,000 | |||||||||||||
Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 147,000,000 | 135,000,000 | 126,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 147,000,000 | 135,000,000 | 126,000,000 | |||||||||||
Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 210,000,000 | 148,000,000 | 152,000,000 | |||||||||||
Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 728,000,000 | 663,000,000 | 605,000,000 | |||||||||||
License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 98,000,000 | $ 87,000,000 | $ 80,000,000 | |||||||||||
Topic 606 | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | (95,000,000) | |||||||||||||
Expenses | ||||||||||||||
General and administrative | 0 | |||||||||||||
Depreciation and amortization | 2,000,000 | |||||||||||||
Total operating expenses | (27,000,000) | |||||||||||||
Interest expense | 0 | |||||||||||||
Other loss, net | 0 | |||||||||||||
Income before income taxes | (68,000,000) | |||||||||||||
Income tax (expense) benefit | 17,000,000 | |||||||||||||
Net income | $ (51,000,000) | |||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ (0.53) | |||||||||||||
Diluted | $ (0.53) | |||||||||||||
Topic 606 | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | $ 1,904,000,000 | |||||||||||||
Expenses | ||||||||||||||
General and administrative | 117,000,000 | |||||||||||||
Depreciation and amortization | 38,000,000 | |||||||||||||
Total operating expenses | 1,538,000,000 | |||||||||||||
Interest expense | (30,000,000) | |||||||||||||
Other loss, net | (1,000,000) | |||||||||||||
Income before income taxes | 335,000,000 | |||||||||||||
Income tax (expense) benefit | (88,000,000) | |||||||||||||
Net income | $ 247,000,000 | |||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ 2.54 | |||||||||||||
Diluted | $ 2.52 | |||||||||||||
Topic 606 | Sales of VOIs, Net | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | $ (112,000,000) | |||||||||||||
Topic 606 | Sales of VOIs, Net | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 622,000,000 | |||||||||||||
Topic 606 | Sales, Marketing, Brand and Other Fees | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 16,000,000 | |||||||||||||
Topic 606 | Sales, Marketing, Brand and Other Fees | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 586,000,000 | |||||||||||||
Topic 606 | Financing | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | |||||||||||||
Topic 606 | Financing | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 158,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 49,000,000 | |||||||||||||
Topic 606 | Resort and Club Management | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 1,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | |||||||||||||
Topic 606 | Resort and Club Management | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 173,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 47,000,000 | |||||||||||||
Topic 606 | Rental And Ancillary Services | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | |||||||||||||
Topic 606 | Rental And Ancillary Services | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 218,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 133,000,000 | |||||||||||||
Topic 606 | Cost Reimbursements | Impact of Adopting ASC 606 | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | |||||||||||||
Topic 606 | Cost Reimbursements | Previous Accounting Guidance | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 147,000,000 | |||||||||||||
Expenses | ||||||||||||||
Expenses | 147,000,000 | |||||||||||||
Topic 606 | Cost of VOI Sales | Impact of Adopting ASC 606 | ||||||||||||||
Expenses | ||||||||||||||
Expenses | (30,000,000) | |||||||||||||
Topic 606 | Cost of VOI Sales | Previous Accounting Guidance | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 180,000,000 | |||||||||||||
Topic 606 | Sales and Marketing | Impact of Adopting ASC 606 | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 1,000,000 | |||||||||||||
Topic 606 | Sales and Marketing | Previous Accounting Guidance | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 729,000,000 | |||||||||||||
Topic 606 | License Fee Expense | Impact of Adopting ASC 606 | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | |||||||||||||
Topic 606 | License Fee Expense | Previous Accounting Guidance | ||||||||||||||
Expenses | ||||||||||||||
Expenses | $ 98,000,000 | |||||||||||||
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion | |||||||||||||
[3] | For the year ended December 31, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations Inc.’s shareholders on January 3, 2017. See Note 19: Earnings Per Share for further discussion. |
Revenue from Contracts with _13
Revenue from Contracts with Customers - Schedule of Impact of New Revenue Guidance on Condensed Consolidated Statement of Cash Flows (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 298,124,983 | [1] | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] |
Adjustments to reconcile net income to net cash used in by operating activities | 151,000,000 | |||||||||||||
Net changes in assets and liabilities: | ||||||||||||||
Accounts receivables, net | (41,000,000) | 12,000,000 | (30,000,000) | |||||||||||
Timeshare financing receivables, net | (118,000,000) | (103,000,000) | (98,000,000) | |||||||||||
Inventory | 16,000,000 | 47,000,000 | 7,000,000 | |||||||||||
Purchase of real estate for future conversion to inventory | (299,000,000) | |||||||||||||
Other assets | (31,000,000) | (4,000,000) | (4,000,000) | |||||||||||
Accounts payable, accrued expenses and other | (24,000,000) | 95,000,000 | 28,000,000 | |||||||||||
Advanced deposits | 14,000,000 | 1,000,000 | 7,000,000 | |||||||||||
Deferred revenues | (126,000,000) | 3,000,000 | 3,000,000 | |||||||||||
Other | 1,000,000 | 1,000,000 | (1,000,000) | |||||||||||
Net cash (used in) provided by operating activities | (159,000,000) | $ 356,000,000 | $ 182,000,000 | |||||||||||
Topic 606 | Previous Accounting Guidance | ||||||||||||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||||
Net income | 247,000,000 | |||||||||||||
Adjustments to reconcile net income to net cash used in by operating activities | 138,000,000 | |||||||||||||
Net changes in assets and liabilities: | ||||||||||||||
Accounts receivables, net | (41,000,000) | |||||||||||||
Timeshare financing receivables, net | (118,000,000) | |||||||||||||
Inventory | (14,000,000) | |||||||||||||
Purchase of real estate for future conversion to inventory | (299,000,000) | |||||||||||||
Other assets | (48,000,000) | |||||||||||||
Accounts payable, accrued expenses and other | (24,000,000) | |||||||||||||
Advanced deposits | 13,000,000 | |||||||||||||
Deferred revenues | (14,000,000) | |||||||||||||
Other | 1,000,000 | |||||||||||||
Net cash (used in) provided by operating activities | $ (159,000,000) | |||||||||||||
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion |
Restricted Cash - Schedule of R
Restricted Cash - Schedule of Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 72 | $ 51 |
Escrow deposits on VOI sales | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 45 | 29 |
Reserves related to non-recourse debt | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 27 | $ 22 |
Timeshare Financing Receivabl_3
Timeshare Financing Receivables - Schedule of Timeshare Financing Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | $ 1,292 | $ 1,212 | ||
Less: allowance for loan loss | (172) | (141) | $ (120) | $ (106) |
Timeshare financing receivables, net | 1,120 | 1,071 | ||
Securitized and Pledged | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 660 | 471 | ||
Less: allowance for loan loss | (43) | (27) | (9) | (17) |
Timeshare financing receivables, net | 617 | 444 | ||
Unsecuritized | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Timeshare financing receivables | 632 | 741 | ||
Less: allowance for loan loss | (129) | (114) | $ (111) | $ (89) |
Timeshare financing receivables, net | $ 503 | $ 627 |
Timeshare Financing Receivabl_4
Timeshare Financing Receivables - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, weighted average interest rate (as a percent) | 12.28% | ||
Financing receivable, weighted average remaining term (in years) | 7 years 9 months 18 days | ||
Financing receivable weighted average maturities year | 2,030 | ||
Timeshare financing receivable not accruing interest | $ 69 | $ 49 | |
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 5.25% | ||
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate (as a percent) | 20.50% | ||
Non-recourse Debt | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross timeshare receivables securing the Timeshare Facility | $ 190 | $ 143 | |
Timeshare financing receivables securitized | $ 350 | ||
Debt instrument stated maturity date | Feb. 25, 2032 | ||
Non-recourse Debt | Three Point Fifty Four Percent Notes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 268 | ||
Debt instrument, stated interest rate | 3.54% | ||
Non-recourse Debt | Three Point Seventy Percent Notes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 54 | ||
Debt instrument, stated interest rate | 3.70% | ||
Non-recourse Debt | Four Point Zero Percent Notes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 28 | ||
Debt instrument, stated interest rate | 4.00% |
Timeshare Financing Receivabl_5
Timeshare Financing Receivables - Maturities of Financing Receivables (Details) $ in Millions | Dec. 31, 2018USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,019 | $ 150 |
2,020 | 141 |
2,021 | 144 |
2,022 | 146 |
2,023 | 147 |
Thereafter | 564 |
Timeshare financing receivable maturities, gross | 1,292 |
Less: allowance for loan loss | (172) |
Timeshare financing receivable maturities, net | 1,120 |
Securitized and Pledged | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,019 | 86 |
2,020 | 87 |
2,021 | 86 |
2,022 | 83 |
2,023 | 80 |
Thereafter | 238 |
Timeshare financing receivable maturities, gross | 660 |
Less: allowance for loan loss | (43) |
Timeshare financing receivable maturities, net | 617 |
Unsecuritized | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
2,019 | 64 |
2,020 | 54 |
2,021 | 58 |
2,022 | 63 |
2,023 | 67 |
Thereafter | 326 |
Timeshare financing receivable maturities, gross | 632 |
Less: allowance for loan loss | (129) |
Timeshare financing receivable maturities, net | $ 503 |
Timeshare Financing Receivabl_6
Timeshare Financing Receivables - Financing Receivable by FICO Score (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | $ 1,292 | $ 1,212 |
More than 700 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 843 | 770 |
600-699 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 237 | 225 |
Less than 600 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | 27 | 28 |
No score | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Timeshare financing receivables | $ 185 | $ 189 |
Timeshare Financing Receivabl_7
Timeshare Financing Receivables - Past Due Financing Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 1,204 | $ 1,147 |
Financing receivable, past due | 1,292 | 1,212 |
Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 648 | 462 |
Financing receivable, past due | 660 | 471 |
Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 556 | 685 |
Financing receivable, past due | 632 | 741 |
31 - 90 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 19 | 16 |
31 - 90 days past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 8 | 6 |
31 - 90 days past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 11 | 10 |
91 - 120 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 6 | 5 |
91 - 120 days past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 3 | 1 |
91 - 120 days past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 3 | 4 |
121 days and greater past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 63 | 44 |
121 days and greater past due | Securitized and Pledged | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | 1 | 2 |
121 days and greater past due | Unsecuritized | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivable, past due | $ 62 | $ 42 |
Timeshare Financing Receivabl_8
Timeshare Financing Receivables - Schedule of Change in Allowance For Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | $ 141 | $ 120 | $ 106 |
Write-offs | (38) | (37) | (35) |
Securitizations | 0 | 0 | |
Provision for loan losses | 69 | 58 | 49 |
Allowance for loan loss, ending balance | 172 | 141 | 120 |
Securitized and Pledged | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | 27 | 9 | 17 |
Write-offs | 0 | 0 | 0 |
Securitizations | 28 | 28 | |
Provision for loan losses | (12) | (10) | (8) |
Allowance for loan loss, ending balance | 43 | 27 | 9 |
Unsecuritized | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Allowance for loan loss, beginning balance | 114 | 111 | 89 |
Write-offs | (38) | (37) | (35) |
Securitizations | (28) | (28) | |
Provision for loan losses | 81 | 68 | 57 |
Allowance for loan loss, ending balance | $ 129 | $ 114 | $ 111 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Noncurrent (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Completed unsold VOIs | $ 243 | $ 191 |
Construction in process | 9 | 60 |
Land, infrastructure and other | 275 | 258 |
Inventory | $ 527 | $ 509 |
Inventory - Additional informat
Inventory - Additional information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory [Line Items] | |||
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | $ (16) | $ (47) | $ (7) |
Time Share | |||
Inventory [Line Items] | |||
Cost of VOI sales (less than for the $1 million) | 10 | 4 | |
Increase (decrease) in inventories due to the true up of cost of sale (less than for the $1 million) | $ 10 | $ 4 |
Inventory - Schedule of Expense
Inventory - Schedule of Expenses Incurred, Recorded in Cost of VOI Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |||
Cost of VOI sales related to fee-for-service upgrades | $ 34 | $ 36 | $ 49 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Related Depreciation Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 642 | $ 303 |
Accumulated depreciation | (83) | (65) |
Property and equipment, net | 559 | 238 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 268 | 53 |
Buildings and Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 295 | 182 |
Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 54 | 48 |
Construction-in-Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 25 | $ 20 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | |||||
Depreciation expense | $ 23 | $ 17 | $ 12 | ||
Land, Buildings and Leasehold Improvements | |||||
Property Plant And Equipment [Line Items] | |||||
Purchase of operating property for future conversion | $ 46 | ||||
Land, Buildings and Leasehold Improvements | New York | |||||
Property Plant And Equipment [Line Items] | |||||
Purchase of operating property for future conversion | $ 176 | ||||
Land, Buildings and Leasehold Improvements | Hawaii | |||||
Property Plant And Equipment [Line Items] | |||||
Purchase of operating property for future conversion | $ 123 |
Consolidated Variable Interes_3
Consolidated Variable Interest Entities - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)entity | Dec. 31, 2017USD ($)entity | Dec. 31, 2016USD ($) | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Number of VIEs consolidated | entity | 4 | 3 | |
Financial or other support to any VIEs | $ | $ 0 | $ 0 | $ 0 |
Consolidated Variable Interes_4
Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | $ 647 | $ 471 |
Liabilities, variable interest entity | 640 | 455 |
Variable Interest Entity, Primary Beneficiary | Restricted cash | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 23 | 18 |
Variable Interest Entity, Primary Beneficiary | Timeshare financing receivables, net | ||
Variable Interest Entity [Line Items] | ||
Assets, variable interest entity | 617 | 445 |
Variable Interest Entity, Primary Beneficiary | Non-recourse debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities, variable interest entity | $ 639 | $ 454 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates - Additional Information (Details) $ in Millions | Dec. 31, 2018USD ($)Affiliate | Mar. 31, 2018USD ($)unit | Jul. 31, 2017USD ($)unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Schedule Of Investments [Line Items] | |||||
Distributions received from unconsolidated affiliates | $ 2 | ||||
Return of investment from unconsolidated affiliates | 11 | ||||
Number of unconsolidated affiliates | Affiliate | 2 | ||||
Debt, net | $ 604 | 604 | $ 482 | ||
Investments in unconsolidated affiliates | 38 | 38 | $ 41 | ||
1776 Holding, LLC | |||||
Schedule Of Investments [Line Items] | |||||
Cash contributed to an equity method investment | $ 10 | ||||
Equity method investment, ownership percentage | 50.00% | 50.00% | |||
Number of real estate units | unit | 99 | ||||
BRE Ace LLC | |||||
Schedule Of Investments [Line Items] | |||||
Cash contributed to an equity method investment | $ 40 | ||||
Equity method investment, ownership percentage | 25.00% | ||||
Number of real estate units | unit | 1,201 | ||||
Distributions received from unconsolidated affiliates | 13 | ||||
BRE Ace LLC | Variable Interest Entity, Primary Beneficiary | |||||
Schedule Of Investments [Line Items] | |||||
Return of investment from unconsolidated affiliates | 11 | ||||
BRE Ace LLC and 1776 Holding, LLC | |||||
Schedule Of Investments [Line Items] | |||||
Debt, net | $ 490 | $ 490 | $ 488 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets and Related Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 159 | $ 139 |
Accumulated Amortization | (78) | (67) |
Net Carrying Amount | 81 | 72 |
Management Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 88 | 88 |
Accumulated Amortization | (41) | (37) |
Net Carrying Amount | 47 | 51 |
Capitalized Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71 | 51 |
Accumulated Amortization | (37) | (30) |
Net Carrying Amount | $ 34 | $ 21 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets Net | |||
Amortization expense on intangible assets | $ 13 | $ 12 | $ 12 |
Management Agreements | |||
Finite Lived Intangible Assets Net | |||
Weighted average amortization period | 13 years 3 months 18 days | ||
Capitalized Software | |||
Finite Lived Intangible Assets Net | |||
Weighted average amortization period | 2 years 7 months 6 days |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2,019 | $ 18 | |
2,020 | 16 | |
2,021 | 12 | |
2,022 | 4 | |
2,023 | 3 | |
Thereafter | 28 | |
Net Carrying Amount | $ 81 | $ 72 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Inventory deposits | $ 46 | $ 0 |
Prepaid expenses | 18 | 18 |
Other | 31 | 26 |
Other Assets | $ 95 | $ 44 |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Land, Buildings and Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Purchase of operating property for future conversion to inventory | $ 46 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other - Summary of Accounts Payable, Accrued Expenses and Other (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accrued employee compensation and benefits | $ 86 | $ 70 |
Accounts payable | 51 | 45 |
Bonus point incentive liability | 56 | 52 |
Due to Hilton | 20 | 23 |
Income taxes payable | 7 | 64 |
Other accrued expenses | 104 | 85 |
Accounts payable, accrued expenses and other | $ 324 | $ 339 |
Deferred Revenues - Schedule of
Deferred Revenues - Schedule of Deferred Revenues (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | |||
Deferred revenues | $ 95 | $ 109 | |
Deferred VOI sales | |||
Disaggregation Of Revenue [Line Items] | |||
Deferred revenues | [1] | 19 | 45 |
Club Activation Fees | |||
Disaggregation Of Revenue [Line Items] | |||
Deferred revenues | 63 | 54 | |
Other | |||
Disaggregation Of Revenue [Line Items] | |||
Deferred revenues | $ 13 | $ 10 | |
[1] | As of December 31, 2018, we do not have deferred revenues associated with Sales of VOIs under construction. |
Deferred Revenues - Schedule _2
Deferred Revenues - Schedule of Deferred Revenues (Parenthetical) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Disaggregation Of Revenue [Line Items] | ||
Deferred revenues | $ 95,000,000 | $ 109,000,000 |
Deferred Revenue VOIs Under Construction | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred revenues | $ 0 |
Debt & Non-recourse Debt - Sche
Debt & Non-recourse Debt - Schedule of Outstanding Borrowings (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 612 | $ 490 | |
Less: unamortized deferred financing costs and discount | (8) | (8) | |
Long-term debt | 604 | 482 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Less: unamortized deferred financing costs and discount | (6) | (2) | |
Revolver with an average rate of 4.253%, due 2023 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 115 | 0 | |
Line of Credit | Term loans with an average rate of 4.253%, due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 197 | 190 | |
Less: unamortized deferred financing costs and discount | (2) | (1) | |
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 | (6) | (7) | $ (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 | 766 | 588 | |
Less: unamortized deferred financing costs and discount | (7) | (5) | |
Long-term debt | 759 | 583 | |
Non-recourse Debt | Timeshare Facility with an average rate of 3.559%, due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 120 | 129 | |
Non-recourse Debt | Securitized Debt with a rate of 2.280%, due 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 33 | 54 | |
Non-recourse Debt | Securitized Debt with an average rate of 3.602%, due 2032 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 333 | 0 | |
Non-recourse Debt | Securitized Debt with an average rate of 1.810%, due 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 74 | 112 | |
Non-recourse Debt | Securitized Debt with an average rate of 2.711%, due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 206 | $ 293 |
Debt & Non-recourse Debt - Sc_2
Debt & Non-recourse Debt - Schedule of Outstanding Borrowings (Parenthetical) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 5.17% | 5.229% | |
Less: unamortized deferred financing costs and discount | $ (8) | $ (8) | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Less: unamortized deferred financing costs and discount | $ (6) | $ (2) | |
Revolving Credit Facility | Revolver with an average rate of 4.253%, due 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 4.253% | 4.253% | |
Debt instrument, maturity year | 2,023 | 2,023 | |
Line of Credit | Term loans with an average rate of 4.253%, due 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 4.253% | 4.253% | |
Debt instrument, maturity year | 2,023 | 2,023 | |
Less: unamortized deferred financing costs and discount | $ (2) | $ (1) | |
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity year | 2,024 | ||
Debt instrument, stated interest rate | 6.125% | ||
Less: unamortized deferred financing costs and discount | $ (8) | $ (6) | $ (7) |
Senior Notes | Senior notes with a rate of 6.125%, due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity year | 2,024 | 2,024 | |
Debt instrument, stated interest rate | 6.125% | 6.125% | |
Non-recourse Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 3.126% | 2.492% | |
Less: unamortized deferred financing costs and discount | $ (7) | $ (5) | |
Non-recourse Debt | Timeshare Facility with an average rate of 3.559%, due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 3.559% | 3.559% | |
Debt instrument, maturity year | 2,021 | 2,021 | |
Non-recourse Debt | Securitized Debt with a rate of 2.280%, due 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 2.28% | 2.28% | |
Debt instrument, maturity year | 2,026 | 2,026 | |
Non-recourse Debt | Securitized Debt with an average rate of 1.810%, due 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 1.81% | 1.81% | |
Debt instrument, maturity year | 2,026 | 2,026 | |
Non-recourse Debt | Securitized Debt with an average rate of 2.711%, due 2028 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 2.711% | 2.711% | |
Debt instrument, maturity year | 2,028 | 2,028 | |
Non-recourse Debt | Securitized Debt with an average rate of 3.602%, due 2032 | |||
Debt Instrument [Line Items] | |||
Debt instrument, average interest rate | 3.602% | 3.602% | |
Debt instrument, maturity year | 2,032 | 2,032 | |
Non-recourse Debt | Timeshare Facility with an average rate of 2.54%, due 2019 | |||
Debt Instrument [Line Items] | |||
Less: unamortized deferred financing costs and discount | $ (3) | $ (2) |
Debt & Non-recourse Debt - Addi
Debt & Non-recourse Debt - Additional Information (Details) - USD ($) | Nov. 30, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Nov. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 8,000,000 | $ 8,000,000 | |||||
Principal Amount Outstanding | 612,000,000 | 490,000,000 | |||||
Timeshare financing receivables, gross | 1,292,000,000 | ||||||
Restricted cash | 72,000,000 | 51,000,000 | |||||
Reserves related to non-recourse debt | |||||||
Debt Instrument [Line Items] | |||||||
Restricted cash | 27,000,000 | 22,000,000 | |||||
Timeshare Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term loan outstanding | $ 450,000,000 | ||||||
Timeshare Facility with an average rate of 3.559%, due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument extended maturity date | 2021-03 | ||||||
Debt instrument borrowed amount | 313,000,000 | ||||||
Debt instrument repaid amount | 322,000,000 | ||||||
Extended commitment termination date | 2020-03 | ||||||
Timeshare Facility with an average rate of 3.559%, due 2021 | Other Assets | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 2,000,000 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 6,000,000 | 2,000,000 | |||||
Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Unused commitment fee percentage under revolving facility | 0.35% | ||||||
Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Unused commitment fee percentage under revolving facility | 0.25% | ||||||
Senior Secured Credit Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 6,000,000 | ||||||
Debt instrument borrowed amount | 530,000,000 | ||||||
Debt instrument repaid amount | 408,000,000 | ||||||
Senior Secured Credit Facilities | Other Assets | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | 5,000,000 | ||||||
Senior Secured Credit Facilities | Amended Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument extended maturity date | 2023-11 | ||||||
Senior Secured Credit Facilities | Term Loans | Amended Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Senior Secured Credit Facilities | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Outstanding letter of credit | 1,000,000 | ||||||
Short-term borrowings | 10,000,000 | ||||||
Senior Secured Credit Facilities | Revolving Credit Facility | Amended Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 800,000,000 | ||||||
Senior Secured Credit Facilities | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 30,000,000 | ||||||
Line of Credit | Senior notes with a rate of 6.125%, due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 8,000,000 | $ 6,000,000 | 7,000,000 | ||||
Principal Amount Outstanding | $ 300,000,000 | ||||||
Debt instrument, stated interest rate | 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 | Debt Instrument, Redemption, Period One | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of debt redemption on principal amount | 100.00% | ||||||
Senior Notes | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of debt redemption on principal amount | 103.25% | ||||||
Debt instrument extended maturity date | 2,021 | ||||||
Senior Notes | Debt Instrument, Redemption, Period Three | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of debt redemption on principal amount | 101.625% | ||||||
Debt instrument extended maturity date | 2,022 | ||||||
Senior Notes | Debt Instrument, Redemption, Period Four | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of debt redemption on principal amount | 100.00% | ||||||
Debt instrument extended maturity date | 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 | |||||
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 issuance costs | $ 7,000,000 | $ 5,000,000 | |||||
Principal Amount Outstanding | 766,000,000 | 588,000,000 | |||||
Timeshare financing receivables, gross | $ 350,000,000 | ||||||
Debt instrument stated maturity date | 2032-02 | ||||||
Non-recourse Debt | Timeshare Facility due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.54% | ||||||
Debt instrument, face amount | $ 268,000,000 | ||||||
Non-recourse Debt | Class B Three Point Seventy Percent Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.70% | ||||||
Debt instrument, face amount | $ 54,000,000 | ||||||
Non-recourse Debt | Class C Four Point Zero Percent Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 4.00% | ||||||
Debt instrument, face amount | $ 28,000,000 | ||||||
Non-recourse Debt | Timeshare Facility with an average rate of 3.559%, due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Principal Amount Outstanding | $ 120,000,000 | $ 129,000,000 | |||||
Debt instrument, maturity year | 2,021 | 2,021 |
Debt & Non-recourse Debt - Sc_3
Debt & Non-recourse Debt - Schedule of Contractual Maturities of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
2,019 | $ 10 | |
2,020 | 10 | |
2,021 | 10 | |
2,022 | 10 | |
2,023 | 272 | |
Thereafter | 300 | |
Long-term debt | 612 | $ 490 |
Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2,019 | 193 | |
2,020 | 165 | |
2,021 | 207 | |
2,022 | 63 | |
2,023 | 76 | |
Thereafter | 62 | |
Long-term debt | 766 | $ 588 |
Debt and Non-recourse Debt | ||
Debt Instrument [Line Items] | ||
2,019 | 203 | |
2,020 | 175 | |
2,021 | 217 | |
2,022 | 73 | |
2,023 | 348 | |
Thereafter | 362 | |
Long-term debt | $ 1,378 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying and Estimated Fair Value Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Assets: | ||
Timeshare financing receivables | $ 1,120 | $ 1,071 |
Liabilities: | ||
Debt | 604 | 482 |
Non-recourse debt | 759 | 583 |
Level 1 | ||
Assets: | ||
Timeshare financing receivables | 0 | 0 |
Liabilities: | ||
Debt | 302 | 329 |
Non-recourse debt | 0 | 0 |
Level 3 | ||
Assets: | ||
Timeshare financing receivables | 1,339 | 1,292 |
Liabilities: | ||
Debt | 309 | 194 |
Non-recourse debt | $ 753 | $ 577 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Fair Value, Measurements, Recurring - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
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, 2018 | |
Leases [Abstract] | |
Leases starting expiration date | 2,019 |
Leases ending expiration date | 2,030 |
Leases - Future Minimum Rent Pa
Leases - Future Minimum Rent Payments Under Non-Cancelable Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Operating Leases | |
2,019 | $ 16 |
2,020 | 15 |
2,021 | 14 |
2,022 | 10 |
2,023 | 10 |
Thereafter | 29 |
Total minimum rent payments | $ 94 |
Leases - Schedule of Rent Expen
Leases - Schedule of Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Rent Expense [Abstract] | |||
Minimum rentals | $ 21 | $ 17 | $ 16 |
Contingent rentals | 3 | 3 | 1 |
Rent expense | $ 24 | $ 20 | $ 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 | |
Income Tax Disclosure [Line Items] | |||
Tax Cuts and Jobs Act 2017, provisional current income tax net of foreign tax credit | $ (1) | $ 1 | $ 0 |
Effective tax rate | (0.80%) | (0.20%) | |
Expected term to realize deferred tax asset, years | 8 years | ||
Tax Cuts and Jobs Act 2017, provisional deferred tax benefit | $ (3) | $ (132) | 0 |
Federal tax rate | 35.00% | ||
Tax Cuts and Jobs Act, Change in Tax Rate, Deferred Tax Liability, Income Tax Benefit | $ 135 | ||
Deferred tax assets, Tax credit carryforwards, Foreign | 1 | ||
Deferred tax assets, Federal tax credit carryforwards | 2 | ||
Valuation allowance, deferred tax asset, Increase (Decrease), amount | $ 2 | $ 0 | $ 0 |
Maximum | |||
Income Tax Disclosure [Line Items] | |||
Tax loss and credit carryforwards expiration period | 9 years | ||
Scenario Plan | |||
Income Tax Disclosure [Line Items] | |||
Federal tax rate | 21.00% |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. income before tax | $ 380 | $ 283 | $ 270 | ||||||||
Foreign income before tax | 23 | 28 | 23 | ||||||||
Income before income taxes | $ 161 | $ 56 | $ 146 | $ 40 | $ 80 | $ 71 | $ 84 | $ 76 | $ 403 | $ 311 | $ 293 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Provision for Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 62 | $ 94 | $ 87 |
State | 15 | 11 | 8 |
Foreign | 8 | 8 | 7 |
Total current | 85 | 113 | 102 |
Deferred: | |||
Federal | 17 | (137) | 21 |
State | 4 | 8 | 2 |
Foreign | (1) | 0 | 0 |
Total deferred | 20 | (129) | 23 |
Total provision for income taxes | $ 105 | $ (16) | $ 125 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax provision | $ 85 | $ 109 | $ 102 |
State and local income taxes, net of U.S. federal tax benefit | 19 | 12 | 10 |
Foreign income tax expense | 6 | 7 | 7 |
U.S. benefit of foreign taxes | (6) | (7) | (7) |
Valuation allowance changes | 2 | 0 | 0 |
Non-deductible transactions costs | 0 | 0 | 5 |
Interest on installment sales, net of U.S. federal tax benefit | 3 | 3 | 7 |
Interest on installment sales adjustment | 0 | (5) | 0 |
U.S. tax reform: one-time repatriation tax | (1) | 1 | 0 |
U.S. tax reform: remeasurement of deferred tax | (3) | (132) | 0 |
U.S. tax reform: remeasurement of long-term interest liability on installment sales, net of federal tax benefit at 21% | 0 | (2) | 0 |
Other | 0 | (2) | 1 |
Total provision for income taxes | $ 105 | $ (16) | $ 125 |
Income Taxes - Schedule of Co_3
Income Taxes - Schedule of Compositions of Net Deferred Tax Balances (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Deferred income tax assets | $ 1 | $ 1 |
Deferred income tax liabilities | (255) | (250) |
Net deferred taxes | $ (254) | $ (249) |
Income Taxes - Schedule of Ef_2
Income Taxes - Schedule of Effects of Temporary Differences and Carryforwards of Our Net Deferred Tax Liability (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Compensation | $ 11 | $ 9 |
Domestic tax credit carryforwards | 2 | 0 |
Other reserves | 57 | 42 |
Deferred tax assets, Gross | 70 | 51 |
Valuation allowance | (2) | 0 |
Deferred tax assets | 68 | 51 |
Deferred tax liabilities: | ||
Property and equipment | (46) | (54) |
Amortizable intangible assets | (10) | (10) |
Deferred income | (266) | (236) |
Deferred tax liabilities | (322) | (300) |
Net deferred taxes | $ (254) | $ (249) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share-based compensation expense | $ 16 | $ 15 | $ 8 |
Total tax benefit recognized related to share-based compensation | 4 | $ 4 | $ 3 |
Unrecognized compensation costs for unvested awards | $ 20 | ||
Unrecognized compensation costs, weighted average period for recognition | 2 years | ||
Shares of common stock available for future issuance | 7,509,691 | ||
Performance Shares | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 92,578 | 0 | 0 |
Weighted average grant date fair value per share | $ 42.94 | ||
Award vesting period | 3 years | ||
Performance Shares | Adjusted E B I T D A | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 64,809 | ||
Weighted average grant date fair value per share | $ 42.94 | ||
Award vesting percentage | 70.00% | ||
Performance Shares | Vacation Ownership Interests Sale | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting percentage | 30.00% |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 378,069 | 534,329 | 331,227 |
Weighted average grant date fair value per share | $ 42.63 | $ 29.23 | $ 18.68 |
Fair value of shares vested (in millions) | $ 13 | $ 11 | $ 4 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Activity of RSUs (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares Outstanding, beginning of period | 839,800 | ||
Number of Shares, Granted | 378,069 | 534,329 | 331,227 |
Number of Shares, Vested | (413,440) | ||
Number of Shares, Forfeited | (61,047) | ||
Number of Shares Outstanding, end of period | 743,382 | 839,800 | |
Weighted Average Grant Date Fair Value Outstanding, beginning of period | $ 25.29 | ||
Weighted Average Grant Date Fair Value, Granted | 42.63 | $ 29.23 | $ 18.68 |
Weighted Average Grant Date Fair Value, Vested | 23.80 | ||
Weighted Average Grant Date Fair Value, Forfeited | 32.91 | ||
Weighted Average Grant Date Fair Value Outstanding, end of period | $ 34.31 | $ 25.29 |
Share-Based Compensation - In_2
Share-Based Compensation - Information on Option Grants (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of options granted | 312,141 | 669,658 | 148,929 |
Weighted average exercise price per share | $ 46.48 | $ 28.30 | $ 18.69 |
Weighted average grant date fair value per share | $ 14.78 | $ 8.66 | $ 5.21 |
Share-Based Compensation - Opti
Share-Based Compensation - Options Assumptions (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected volatility | 26.60% | 26.30% | 32.00% |
Dividend yield | 0.00% | 1.40% | |
Risk-free rate | 2.70% | 2.30% | 1.40% |
Expected term (in years) | 6 years | 6 years | 6 years |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Options Activity (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Outstanding, beginning of period | 874,574 | ||
Number of Shares, Granted | 312,141 | 669,658 | 148,929 |
Number of Shares, Exercised | (3,792) | ||
Number of Shares, Forfeited, canceled or expired | (76,251) | ||
Number of Shares, Outstanding, end of period | 1,106,672 | 874,574 | |
Number of Shares, Exercisable, end of period | 378,137 | ||
Weighted Average Exercise Price Per Share, Outstanding, beginning of period | $ 25.96 | ||
Weighted Average Exercise Price Per Share, Granted | 46.48 | $ 28.30 | $ 18.69 |
Weighted Average Exercise Price Per Share, Exercised | 28.30 | ||
Weighted Average Exercise Price Per Share, Forfeited, canceled or expired | 34.60 | ||
Weighted Average Exercise Price Per Share, Outstanding, end of period | 31.14 | $ 25.96 | |
Weighted Average Exercise Price Per Share, Exercisable, end of period | $ 24.14 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule Of Performance Stock Unit Grants (Details) - Performance Shares - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 92,578 | 0 | 0 |
Weighted average grant date fair value per share | $ 42.94 | ||
Adjusted E B I T D A | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 64,809 | ||
Weighted average grant date fair value per share | $ 42.94 | ||
Fair value of shares vested (in millions) | $ 0 | ||
Contract Sales | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares granted | 27,769 | ||
Weighted average grant date fair value per share | $ 42.94 | ||
Fair value of shares vested (in millions) | $ 0 |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Performance Stock Units Activity (Details) - Performance Shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Granted | 92,578 | 0 | 0 |
Weighted average grant date fair value per share | $ 42.94 | ||
Adjusted E B I T D A | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares Outstanding, beginning of period | 0 | ||
Number of Shares, Granted | 64,809 | ||
Number of Shares, Vested | 0 | ||
Number of Shares, Forfeited | (7,508) | ||
Number of Shares Outstanding, end of period | 57,301 | 0 | |
Weighted Average Grant Date Fair Value Outstanding, beginning of period | $ 0 | ||
Weighted average grant date fair value per share | 42.94 | ||
Weighted Average Grant Date Fair Value, Vested | 0 | ||
Weighted Average Grant Date Fair Value, Forfeited | 46.62 | ||
Weighted Average Grant Date Fair Value Outstanding, end of period | $ 42.46 | $ 0 | |
Contract Sales | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares Outstanding, beginning of period | 0 | ||
Number of Shares, Granted | 27,769 | ||
Number of Shares, Vested | 0 | ||
Number of Shares, Forfeited | (3,217) | ||
Number of Shares Outstanding, end of period | 24,552 | 0 | |
Weighted Average Grant Date Fair Value Outstanding, beginning of period | $ 0 | ||
Weighted average grant date fair value per share | 42.94 | ||
Weighted Average Grant Date Fair Value, Vested | 0 | ||
Weighted Average Grant Date Fair Value, Forfeited | 46.62 | ||
Weighted Average Grant Date Fair Value Outstanding, end of period | $ 42.46 | $ 0 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | Jan. 03, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 97,209,889 | 98,934,352 | 99,000,000 | |
Weighted average shares outstanding, diluted | 97,898,242 | 99,621,199 | 99,000,000 | |
Stock Compensation Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 384,860 | 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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Numerator: | ||||||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 298,124,983 | [1] | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] |
Denominator: | ||||||||||||||
Weighted average shares outstanding, Basic | 97,209,889 | 98,934,352 | 99,000,000 | |||||||||||
Basic EPS | $ 1.25 | $ 0.42 | $ 1.10 | $ 0.31 | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.07 | [3] | $ 3.30 | [3] | $ 1.70 | [3] |
Denominator: | ||||||||||||||
Weighted average shares outstanding, diluted | 97,898,242 | 99,621,199 | 99,000,000 | |||||||||||
Diluted EPS | $ 1.24 | $ 0.42 | $ 1.10 | $ 0.30 | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.05 | [3] | $ 3.28 | [3] | $ 1.70 | [3] |
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion | |||||||||||||
[3] | For the year ended December 31, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations Inc.’s shareholders on January 3, 2017. See Note 19: Earnings Per Share for further discussion. |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Parenthetical) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Earnings Per Share [Abstract] | ||||||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 298,124,983 | [1] | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] |
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 14, 2018 | Mar. 13, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Related Party Transaction [Line Items] | |||||||||
Equity in earnings from unconsolidated affiliates | $ 1 | ||||||||
Prepaid expenses | $ 18 | $ 18 | 18 | ||||||
Blackstone | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 8 | ||||||||
Hilton Honors Points | Other Assets | |||||||||
Related Party Transaction [Line Items] | |||||||||
Prepaid expenses | $ 58 | ||||||||
Common Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Issuance of common stock, shares | [1] | 99,000,000 | |||||||
Blackstone | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sale restricted period | 2 years | ||||||||
Stockholders agreement amendment date | Oct. 24, 2016 | ||||||||
Stock repurchase through exercise of options | 2,500,000 | ||||||||
Shares issued price per share | $ 44.75 | ||||||||
Underwriting Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Sale of stock completion date | Mar. 19, 2018 | ||||||||
Underwriting Agreement | Common Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Shares issued price per share | $ 44.75 | ||||||||
Issuance of common stock, shares | 22,250,000 | ||||||||
Stock price per share | $ 0.01 | ||||||||
Maximum | Blackstone | |||||||||
Related Party Transaction [Line Items] | |||||||||
Sale of stock (in shares) | 24,750,000 | ||||||||
Number of shares grant to repurchase | 4,340,000 | ||||||||
BRE Ace Holdings | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity in earnings from unconsolidated affiliates | 0 | 1 | |||||||
Due from related parties | 29 | $ 29 | $ 29 | ||||||
1776 Holding, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash contributed to an equity method investment | $ 5 | $ 5 | |||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | |||||||
1776 Holding, LLC | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity in earnings from unconsolidated affiliates | $ (1) | ||||||||
Certain Hilton Wholly Owned Hotels | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, expenses from transactions with related party | $ 27 | ||||||||
[1] | Parent 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 information |
Related Party Transactions - Su
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
BRE Ace Holdings | ||||
Related Party Transaction [Line Items] | ||||
Commission and other fees | $ 132 | $ 79 | $ 0 | |
Blackstone | ||||
Related Party Transaction [Line Items] | ||||
Commission and other fees | $ 135 | $ 177 |
Related Party Transactions - _2
Related Party Transactions - Summary of Amounts Included in Consolidated Statement of Operations (Details) - Hilton $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Related party interest expense | $ 2 |
Allocated General And Administrative | |
Related Party Transaction [Line Items] | |
Related party transaction, expenses from transactions with related party | 27 |
General And Administrative, Shared Services | |
Related Party Transaction [Line Items] | |
Related party transaction, expenses from transactions with related party | 12 |
General And Administrative, Defined Contribution Plan | |
Related Party Transaction [Line Items] | |
Related party transaction, expenses from transactions with related party | 7 |
General And Administrative, Insurance | |
Related Party Transaction [Line Items] | |
Related party transaction, expenses from transactions with related party | 2 |
License Fee Expense | |
Related Party Transaction [Line Items] | |
Related party transaction, expenses from transactions with related party | $ 80 |
Related Party Transactions - Co
Related Party Transactions - Components of Net Transfers to Parent in the Consolidated Statements of Stockholders' Equity (Deficit) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Net transfers to Parent | $ (567) |
Cash Pooling And General Financing Activities | |
Related Party Transaction [Line Items] | |
Net transfers to Parent | (715) |
Corporate Allocations | |
Related Party Transaction [Line Items] | |
Net transfers to Parent | 53 |
Income Taxes | |
Related Party Transaction [Line Items] | |
Net transfers to Parent | $ 95 |
Business Segments - Additional
Business Segments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
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 | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ 1,999 | $ 1,711 | $ 1,583 |
Real Estate and Financing Segment | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 1,462 | ||
Resort Operations and Club Management Segment | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 390 | ||
Operating segments | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 1,884 | 1,606 | 1,482 |
Operating segments | Real Estate and Financing Segment | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 1,462 | 1,239 | 1,143 |
Operating segments | Resort Operations and Club Management Segment | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 422 | 367 | 339 |
Segment Reconciling Items | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 147 | 135 | 126 |
Intersegment eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ (32) | $ (30) | $ (25) |
Business Segments - Schedule _2
Business Segments - Schedule of Segment Revenues Reconciled to Consolidated Amounts (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ 1,999,000,000 | $ 1,711,000,000 | $ 1,583,000,000 |
Intersegment eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | (32,000,000) | (30,000,000) | (25,000,000) |
Intersegment eliminations | Maximum | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Rental expense for model units | 1,000,000 | 1,000,000 | 0 |
Intersegment eliminations | Billing and Collection Services | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 0 | 0 | (2,000,000) |
Intersegment eliminations | Promotional Allowances | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ (31,000,000) | $ (29,000,000) | $ (23,000,000) |
Business Segments - Schedule _3
Business Segments - Schedule of Adjusted EBITDA Reconciled to Net Income (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
General and administrative | $ (117,000,000) | $ (104,000,000) | $ (92,000,000) | |||||||||||
Depreciation and amortization | (36,000,000) | (29,000,000) | (24,000,000) | |||||||||||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | |||||||||||
Allocated Parent interest expense | (26,000,000) | |||||||||||||
Other loss, net | (1,000,000) | (1,000,000) | ||||||||||||
Equity in earnings from unconsolidated affiliates | 1,000,000 | |||||||||||||
Income tax (expense) benefit | (105,000,000) | 16,000,000 | (125,000,000) | |||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | 298,124,983 | [1] | 326,777,744 | [1] | 167,618,659 | [1],[2] |
Operating segments | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 692,000,000 | 563,000,000 | 525,000,000 | |||||||||||
Operating segments | Real Estate and Financing Segment | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 447,000,000 | 359,000,000 | 336,000,000 | |||||||||||
Operating segments | Resort Operations and Club Management Segment | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
Segment Adjusted EBITDA | 245,000,000 | 204,000,000 | 189,000,000 | |||||||||||
Segment Reconciling Items | ||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||
General and administrative | (117,000,000) | (104,000,000) | (92,000,000) | |||||||||||
Depreciation and amortization | (36,000,000) | (29,000,000) | (24,000,000) | |||||||||||
License fee expense | (98,000,000) | (87,000,000) | (80,000,000) | |||||||||||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | |||||||||||
Allocated Parent interest expense | (26,000,000) | |||||||||||||
Other loss, net | (1,000,000) | (1,000,000) | ||||||||||||
Equity in earnings from unconsolidated affiliates | 1,000,000 | |||||||||||||
Income tax (expense) benefit | (105,000,000) | 16,000,000 | (125,000,000) | |||||||||||
Other adjustment items | $ (7,000,000) | $ (6,000,000) | $ (6,000,000) | |||||||||||
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion |
Business Segments - Schedule _4
Business Segments - Schedule of Adjusted EBITDA Reconciled to Net Income (Parenthetical) (Details) | Mar. 31, 2018 | Dec. 31, 2017 |
BRE Ace Holdings | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equity method investment, ownership percentage | 25.00% | |
1776 Holding, LLC | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equity method investment, ownership percentage | 50.00% | 50.00% |
Business Segments - Schedule _5
Business Segments - Schedule of Assets Reconciled to Consolidated Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 2,753 | $ 2,384 |
Operating segments | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 2,673 | 2,333 |
Operating segments | Real Estate and Financing Segment | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 2,501 | 2,255 |
Operating segments | Resort Operations and Club Management Segment | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 172 | 78 |
Corporate | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 80 | $ 51 |
Business Segments - Schedule _6
Business Segments - Schedule of Capital Expenditures for Property and Equipment Reconciled to Consolidated Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | $ 44 | $ 35 | $ 26 |
Operating segments | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 36 | 30 | 20 |
Operating segments | Real Estate and Financing Segment | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 36 | 28 | 19 |
Operating segments | Resort Operations and Club Management Segment | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | 2 | 1 | |
Corporate | |||
Segment Reporting Capital Expenditure For Property And Equipment Reconciling Item [Line Items] | |||
Total capital expenditures for property and equipment | $ 8 | $ 5 | $ 6 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Long-term Purchase Commitment [Line Items] | ||
Reasonably estimable of possible losses | $ 0 | |
Inventories | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment | $ 607,000,000 | |
Purchase commitment, period (in years) | 6 years | |
Purchase commitment, purchases made | $ 18,000,000 | $ 12,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Remaining Purchase Obligations (Details) - Inventories $ in Millions | Dec. 31, 2018USD ($) |
Long-term Purchase Commitment [Line Items] | |
2,019 | $ 237 |
2,020 | 160 |
2,021 | 78 |
2,022 | 51 |
2,023 | 47 |
Thereafter | 34 |
Total | $ 607 |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Significant Noncash Transactions [Line Items] | |||
Cash paid for interest | $ 49 | $ 42 | $ 37 |
Cash paid for income taxes | 153 | 57 | |
Cumulative non-cash adjustment,revenue | 38 | ||
Transfer from property and equipment to inventory | 3 | $ 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] | |||
Non-cash financing activity adjustment to equity related to the write-off of expenses | $ 3 | ||
Transfer of net inventory for conversion into timeshare units | 72 | ||
Transfer of net property and equipment for conversion into timeshare units | $ 138 |
Condensed Consolidating Guara_3
Condensed Consolidating Guarantor Financial Information - Narrative (Details) - Hilton Grand Vacations Inc. - Senior Unsecured Notes | 1 Months Ended |
Nov. 30, 2016 | |
Hilton Grand Vacations Borrower LLC and Hilton Grand Vacations Borrower Inc. | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentages | 100.00% |
Domestic Subsidiaries | |
Condensed Financial Statements Captions [Line Items] | |
Ownership percentages | 100.00% |
Condensed Consolidating Guara_4
Condensed Consolidating Guarantor Financial Information - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 108 | $ 246 | ||
Restricted cash | 72 | 51 | ||
Accounts receivable, net | 153 | 112 | ||
Timeshare financing receivables, net | 1,120 | 1,071 | ||
Inventory | 527 | 509 | ||
Property and equipment, net | 559 | 238 | ||
Investments in unconsolidated affiliates | 38 | 41 | ||
Intangible assets, net | 81 | 72 | ||
Other assets | 95 | 44 | ||
Investments in subsidiaries | 0 | 0 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 2,753 | 2,384 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 324 | 339 | ||
Advanced deposits | 101 | 104 | ||
Debt, net | 604 | 482 | ||
Non-recourse debt, net | 759 | 583 | ||
Deferred revenues | 95 | 109 | ||
Deferred income tax liabilities | 254 | 249 | ||
Deferred income tax liabilities | (1) | (1) | ||
Total equity | 616 | 518 | $ 167 | $ (106) |
TOTAL LIABILITIES AND EQUITY | 2,753 | 2,384 | ||
Eliminations | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Accounts receivable, net | (21) | (6) | ||
Timeshare financing receivables, net | 0 | 0 | ||
Inventory | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Investments in unconsolidated affiliates | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 0 | (1) | ||
Investments in subsidiaries | (2,099) | (1,598) | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | (2,120) | (1,605) | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | (21) | (7) | ||
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 | (2,099) | (1,598) | ||
TOTAL LIABILITIES AND EQUITY | (2,120) | (1,605) | ||
Parent | ||||
ASSETS | ||||
Cash and cash equivalents | 4 | 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 | ||
Investments in unconsolidated affiliates | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investments in subsidiaries | 612 | 518 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 616 | 518 | ||
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 | 616 | 518 | ||
TOTAL LIABILITIES AND EQUITY | 616 | 518 | ||
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 | ||
Investments in unconsolidated affiliates | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 6 | 2 | ||
Investments in subsidiaries | 1,210 | 999 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 1,216 | 1,001 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 0 | 1 | ||
Advanced deposits | 0 | 0 | ||
Debt, net | 604 | 482 | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Total equity | 612 | 518 | ||
TOTAL LIABILITIES AND EQUITY | 1,216 | 1,001 | ||
Guarantors | ||||
ASSETS | ||||
Cash and cash equivalents | 89 | 230 | ||
Restricted cash | 45 | 29 | ||
Accounts receivable, net | 157 | 113 | ||
Timeshare financing receivables, net | 209 | 457 | ||
Inventory | 502 | 509 | ||
Property and equipment, net | 553 | 232 | ||
Investments in unconsolidated affiliates | 38 | 41 | ||
Intangible assets, net | 81 | 72 | ||
Other assets | 41 | 36 | ||
Investments in subsidiaries | 277 | 81 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 1,992 | 1,800 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 332 | 338 | ||
Advanced deposits | 101 | 104 | ||
Debt, net | 0 | 0 | ||
Non-recourse debt, net | 0 | 0 | ||
Deferred revenues | 95 | 109 | ||
Deferred income tax liabilities | 254 | 250 | ||
Total equity | 1,210 | 999 | ||
TOTAL LIABILITIES AND EQUITY | 1,992 | 1,800 | ||
Non-Guarantors | ||||
ASSETS | ||||
Cash and cash equivalents | 15 | 16 | ||
Restricted cash | 27 | 22 | ||
Accounts receivable, net | 17 | 5 | ||
Timeshare financing receivables, net | 911 | 614 | ||
Inventory | 25 | 0 | ||
Property and equipment, net | 6 | 6 | ||
Investments in unconsolidated affiliates | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 48 | 7 | ||
Investments in subsidiaries | 0 | 0 | ||
TOTAL ASSETS (variable interest entities - $647 and $471) | 1,049 | 670 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable, accrued expenses and other | 13 | 7 | ||
Advanced deposits | 0 | 0 | ||
Debt, net | 0 | 0 | ||
Non-recourse debt, net | 759 | 583 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | (1) | (1) | ||
Total equity | 277 | 81 | ||
TOTAL LIABILITIES AND EQUITY | $ 1,049 | $ 670 |
Condensed Consolidating Guara_5
Condensed Consolidating Guarantor Financial Information - Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenues | ||||||||||||||
Total revenues | $ 642,000,000 | $ 427,000,000 | $ 563,000,000 | $ 367,000,000 | $ 447,000,000 | $ 426,000,000 | $ 439,000,000 | $ 399,000,000 | $ 1,999,000,000 | $ 1,711,000,000 | $ 1,583,000,000 | |||
Expenses | ||||||||||||||
General and administrative | 117,000,000 | 104,000,000 | 92,000,000 | |||||||||||
Depreciation and amortization | 36,000,000 | 29,000,000 | 24,000,000 | |||||||||||
Total operating expenses | 473,000,000 | 364,000,000 | 408,000,000 | 320,000,000 | 360,000,000 | 350,000,000 | 348,000,000 | 316,000,000 | 1,565,000,000 | 1,374,000,000 | 1,260,000,000 | |||
Allocated Parent interest expense | (26,000,000) | |||||||||||||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | |||||||||||
Equity in earnings from unconsolidated affiliates | 1,000,000 | |||||||||||||
Other loss, net | (1,000,000) | (1,000,000) | ||||||||||||
Income before income taxes | 161,000,000 | 56,000,000 | 146,000,000 | 40,000,000 | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 403,000,000 | 311,000,000 | 293,000,000 | |||
Income tax benefit (expense) | (105,000,000) | 16,000,000 | (125,000,000) | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 298,000,000 | 327,000,000 | 168,000,000 | |||||||||||
Equity in earnings from subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | 298,124,983 | [1] | 326,777,744 | [1] | 167,618,659 | [1],[2] |
Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | (19,000,000) | (11,000,000) | (9,000,000) | |||||||||||
Expenses | ||||||||||||||
General and administrative | 0 | 0 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
Total operating expenses | (19,000,000) | (11,000,000) | (9,000,000) | |||||||||||
Allocated Parent interest expense | 0 | |||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Equity in earnings from unconsolidated affiliates | 0 | |||||||||||||
Other loss, net | 0 | 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 from subsidiaries | (687,000,000) | (741,000,000) | (427,000,000) | |||||||||||
Net income | (687,000,000) | (741,000,000) | (427,000,000) | |||||||||||
Sales, marketing, license and other fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 570,000,000 | 544,000,000 | 499,000,000 | |||||||||||
Sales, marketing, license and other fees | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | (12,000,000) | (4,000,000) | (4,000,000) | |||||||||||
Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 158,000,000 | 147,000,000 | 134,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 49,000,000 | 43,000,000 | 32,000,000 | |||||||||||
Financing | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | (7,000,000) | (7,000,000) | (5,000,000) | |||||||||||
Expenses | ||||||||||||||
Expenses | (7,000,000) | (7,000,000) | (5,000,000) | |||||||||||
Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 172,000,000 | 158,000,000 | 143,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 47,000,000 | 43,000,000 | 36,000,000 | |||||||||||
Resort and Club Management | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Rental and Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 218,000,000 | 179,000,000 | 173,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 133,000,000 | 122,000,000 | 113,000,000 | |||||||||||
Rental and Ancillary Services | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 147,000,000 | 135,000,000 | 126,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 147,000,000 | 135,000,000 | 126,000,000 | |||||||||||
Cost Reimbursements | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 210,000,000 | 148,000,000 | 152,000,000 | |||||||||||
Cost of VOI Sales | Eliminations | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 728,000,000 | 663,000,000 | 605,000,000 | |||||||||||
Sales and Marketing | Eliminations | ||||||||||||||
Expenses | ||||||||||||||
Expenses | (12,000,000) | (4,000,000) | (4,000,000) | |||||||||||
License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 98,000,000 | 87,000,000 | 80,000,000 | |||||||||||
License Fee Expense | Eliminations | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 734,000,000 | 548,000,000 | 508,000,000 | |||||||||||
Sales of VOIs, Net | Eliminations | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Parent | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
General and administrative | 0 | 0 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
Total operating expenses | 0 | 0 | 0 | |||||||||||
Allocated Parent interest expense | (17,000,000) | |||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Equity in earnings from unconsolidated affiliates | 0 | |||||||||||||
Other loss, net | 0 | 0 | ||||||||||||
Income before income taxes | 0 | 0 | (17,000,000) | |||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 0 | 0 | (17,000,000) | |||||||||||
Equity in earnings from subsidiaries | 298,000,000 | 327,000,000 | 185,000,000 | |||||||||||
Net income | 298,000,000 | 327,000,000 | 168,000,000 | |||||||||||
Parent | Sales, marketing, license and other fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Parent | Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Rental and Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Parent | Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Issuers | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
General and administrative | 0 | 0 | 1,000,000 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
Total operating expenses | 0 | 0 | 1,000,000 | |||||||||||
Allocated Parent interest expense | 0 | |||||||||||||
Interest expense | (30,000,000) | (27,000,000) | (3,000,000) | |||||||||||
Equity in earnings from unconsolidated affiliates | 0 | |||||||||||||
Other loss, net | 0 | 0 | ||||||||||||
Income before income taxes | (30,000,000) | (27,000,000) | (4,000,000) | |||||||||||
Income tax benefit (expense) | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | (30,000,000) | (27,000,000) | (4,000,000) | |||||||||||
Equity in earnings from subsidiaries | 328,000,000 | 354,000,000 | 189,000,000 | |||||||||||
Net income | 298,000,000 | 327,000,000 | 185,000,000 | |||||||||||
Issuers | Sales, marketing, license and other fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Issuers | Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Rental and Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Issuers | Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 0 | 0 | |||||||||||
Guarantors | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 1,895,000,000 | 1,598,000,000 | 1,506,000,000 | |||||||||||
Expenses | ||||||||||||||
General and administrative | 116,000,000 | 101,000,000 | 91,000,000 | |||||||||||
Depreciation and amortization | 36,000,000 | 29,000,000 | 24,000,000 | |||||||||||
Total operating expenses | 1,522,000,000 | 1,323,000,000 | 1,235,000,000 | |||||||||||
Allocated Parent interest expense | (9,000,000) | |||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Equity in earnings from unconsolidated affiliates | 1,000,000 | |||||||||||||
Other loss, net | (1,000,000) | (1,000,000) | ||||||||||||
Income before income taxes | 372,000,000 | 276,000,000 | 261,000,000 | |||||||||||
Income tax benefit (expense) | (105,000,000) | 18,000,000 | (125,000,000) | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 267,000,000 | 294,000,000 | 136,000,000 | |||||||||||
Equity in earnings from subsidiaries | 61,000,000 | 60,000,000 | 53,000,000 | |||||||||||
Net income | 328,000,000 | 354,000,000 | 189,000,000 | |||||||||||
Guarantors | Sales, marketing, license and other fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 578,000,000 | 545,000,000 | 501,000,000 | |||||||||||
Guarantors | Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 70,000,000 | 71,000,000 | 73,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 19,000,000 | 19,000,000 | 18,000,000 | |||||||||||
Guarantors | Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 172,000,000 | 156,000,000 | 143,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 47,000,000 | 41,000,000 | 36,000,000 | |||||||||||
Guarantors | Rental and Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 216,000,000 | 177,000,000 | 171,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 130,000,000 | 120,000,000 | 108,000,000 | |||||||||||
Guarantors | Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 143,000,000 | 131,000,000 | 123,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 143,000,000 | 131,000,000 | 123,000,000 | |||||||||||
Guarantors | Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 208,000,000 | 145,000,000 | 150,000,000 | |||||||||||
Guarantors | Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 725,000,000 | 650,000,000 | 605,000,000 | |||||||||||
Guarantors | License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 98,000,000 | 87,000,000 | 80,000,000 | |||||||||||
Guarantors | Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 716,000,000 | 518,000,000 | 495,000,000 | |||||||||||
Non-Guarantors | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 123,000,000 | 124,000,000 | 86,000,000 | |||||||||||
Expenses | ||||||||||||||
General and administrative | 1,000,000 | 3,000,000 | 0 | |||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||
Total operating expenses | 62,000,000 | 62,000,000 | 33,000,000 | |||||||||||
Allocated Parent interest expense | 0 | |||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Equity in earnings from unconsolidated affiliates | 0 | |||||||||||||
Other loss, net | 0 | 0 | ||||||||||||
Income before income taxes | 61,000,000 | 62,000,000 | 53,000,000 | |||||||||||
Income tax benefit (expense) | 0 | (2,000,000) | 0 | |||||||||||
Income (loss) before equity in earnings (loss) from subsidiaries | 61,000,000 | 60,000,000 | 53,000,000 | |||||||||||
Equity in earnings from subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | 61,000,000 | 60,000,000 | 53,000,000 | |||||||||||
Non-Guarantors | Sales, marketing, license and other fees | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 4,000,000 | 3,000,000 | 2,000,000 | |||||||||||
Non-Guarantors | Financing | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 95,000,000 | 83,000,000 | 66,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 37,000,000 | 31,000,000 | 19,000,000 | |||||||||||
Non-Guarantors | Resort and Club Management | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 0 | 2,000,000 | 0 | |||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 2,000,000 | 0 | |||||||||||
Non-Guarantors | Rental and Ancillary Services | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 3,000,000 | 2,000,000 | 5,000,000 | |||||||||||
Non-Guarantors | Cost Reimbursements | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | 4,000,000 | 4,000,000 | 3,000,000 | |||||||||||
Expenses | ||||||||||||||
Expenses | 4,000,000 | 4,000,000 | 3,000,000 | |||||||||||
Non-Guarantors | Cost of VOI Sales | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 2,000,000 | 3,000,000 | 2,000,000 | |||||||||||
Non-Guarantors | Sales and Marketing | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 15,000,000 | 17,000,000 | 4,000,000 | |||||||||||
Non-Guarantors | License Fee Expense | ||||||||||||||
Expenses | ||||||||||||||
Expenses | 0 | 0 | 0 | |||||||||||
Non-Guarantors | Sales of VOIs, Net | ||||||||||||||
Revenues | ||||||||||||||
Total revenues | $ 18,000,000 | $ 30,000,000 | $ 13,000,000 | |||||||||||
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion |
Condensed Consolidating Guara_6
Condensed Consolidating Guarantor Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Operating Activities | ||||
Net cash provided by (used in) operating activities | $ (159) | $ 356 | $ 182 | |
Investing Activities | ||||
Capital expenditures for property and equipment | (44) | (35) | (26) | |
Software capitalization costs | (19) | (12) | (8) | |
Return of investment from unconsolidated affiliates | 11 | |||
Investment in unconsolidated affiliates | (10) | (40) | ||
Net cash used in investing activities | (62) | (87) | (34) | |
Financing Activities | ||||
Issuance of debt | 530 | 200 | ||
Issuance of non-recourse debt | 663 | 350 | 300 | |
Repurchase and retirement of common stock | (183) | |||
Repayment of debt | (408) | (10) | ||
Repayment of non-recourse debt | (485) | (459) | (110) | |
Debt issuance costs | (12) | (5) | (10) | |
Allocated debt activity | [1] | 111 | ||
Net transfers (to) from Parent | (567) | |||
Payment of withholding taxes on vesting of restricted stock units | (4) | |||
Capital contributions | 3 | |||
Intercompany transfers | 0 | 0 | 0 | |
Net cash provided by (used in) financing activities | 104 | (123) | (76) | |
Proceeds from stock option exercises | 1 | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (117) | 146 | 72 | |
Cash, cash equivalents and restricted cash, beginning of period | 297 | 151 | 79 | |
Cash, cash equivalents and restricted cash, end of period | 180 | 297 | 151 | |
Eliminations | ||||
Operating Activities | ||||
Net cash provided by (used in) operating activities | (3) | (8) | (67) | |
Investing Activities | ||||
Capital expenditures for property and equipment | 0 | 0 | 0 | |
Software capitalization costs | 0 | 0 | 0 | |
Return of investment from unconsolidated affiliates | 0 | |||
Investment in unconsolidated affiliates | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | 0 | |
Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Issuance of non-recourse debt | 0 | 0 | 0 | |
Repurchase and retirement of common stock | 0 | |||
Repayment of debt | 0 | 0 | ||
Repayment of non-recourse debt | 0 | 0 | 0 | |
Debt issuance costs | 0 | 0 | 0 | |
Allocated debt activity | [1] | 0 | ||
Net transfers (to) from Parent | 0 | |||
Payment of withholding taxes on vesting of restricted stock units | 0 | |||
Capital contributions | 0 | |||
Intercompany transfers | 3 | 8 | 67 | |
Net cash provided by (used in) financing activities | 3 | 8 | 67 | |
Proceeds from stock option exercises | 0 | |||
Net (decrease) 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 | |
Return of investment from unconsolidated affiliates | 0 | |||
Investment in unconsolidated affiliates | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | 0 | |
Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Issuance of non-recourse debt | 0 | 0 | 0 | |
Repurchase and retirement of common stock | 0 | |||
Repayment of debt | 0 | 0 | ||
Repayment of non-recourse debt | 0 | 0 | 0 | |
Debt issuance costs | 0 | 0 | 0 | |
Allocated debt activity | [1] | 111 | ||
Net transfers (to) from Parent | (567) | |||
Payment of withholding taxes on vesting of restricted stock units | 0 | |||
Capital contributions | 0 | |||
Intercompany transfers | 4 | 0 | 456 | |
Net cash provided by (used in) financing activities | 4 | 0 | 0 | |
Proceeds from stock option exercises | 0 | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | 4 | 0 | 0 | |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 | 0 | |
Cash, cash equivalents and restricted cash, end of period | 4 | 0 | 0 | |
Issuers | ||||
Operating Activities | ||||
Net cash provided by (used in) operating activities | (28) | (27) | 4 | |
Investing Activities | ||||
Capital expenditures for property and equipment | 0 | 0 | 0 | |
Software capitalization costs | 0 | 0 | 0 | |
Return of investment from unconsolidated affiliates | 0 | |||
Investment in unconsolidated affiliates | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | 0 | |
Financing Activities | ||||
Issuance of debt | 530 | 200 | ||
Issuance of non-recourse debt | 0 | 0 | 0 | |
Repurchase and retirement of common stock | (183) | |||
Repayment of debt | (408) | (10) | ||
Repayment of non-recourse debt | 0 | 0 | 0 | |
Debt issuance costs | (7) | 0 | (4) | |
Allocated debt activity | [1] | 0 | ||
Net transfers (to) from Parent | 0 | |||
Payment of withholding taxes on vesting of restricted stock units | (4) | |||
Capital contributions | 3 | |||
Intercompany transfers | 97 | 37 | (200) | |
Net cash provided by (used in) financing activities | 28 | 27 | (4) | |
Proceeds from stock option exercises | 0 | |||
Net (decrease) 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 | 163 | 156 | 432 | |
Investing Activities | ||||
Capital expenditures for property and equipment | (37) | (33) | (26) | |
Software capitalization costs | (19) | (12) | (8) | |
Return of investment from unconsolidated affiliates | 11 | |||
Investment in unconsolidated affiliates | (10) | (40) | ||
Net cash used in investing activities | (55) | (85) | (34) | |
Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Issuance of non-recourse debt | 0 | 0 | 0 | |
Repurchase and retirement of common stock | 0 | |||
Repayment of debt | 0 | 0 | ||
Repayment of non-recourse debt | 0 | 0 | 0 | |
Debt issuance costs | 0 | 0 | (3) | |
Allocated debt activity | [1] | 0 | ||
Net transfers (to) from Parent | 0 | |||
Payment of withholding taxes on vesting of restricted stock units | 0 | |||
Capital contributions | 0 | |||
Intercompany transfers | (233) | 59 | (329) | |
Net cash provided by (used in) financing activities | (233) | 60 | (332) | |
Proceeds from stock option exercises | 1 | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (125) | 131 | 66 | |
Cash, cash equivalents and restricted cash, beginning of period | 259 | 128 | 62 | |
Cash, cash equivalents and restricted cash, end of period | 134 | 259 | 128 | |
Non-Guarantors | ||||
Operating Activities | ||||
Net cash provided by (used in) operating activities | (291) | 235 | (187) | |
Investing Activities | ||||
Capital expenditures for property and equipment | (7) | (2) | 0 | |
Software capitalization costs | 0 | 0 | 0 | |
Return of investment from unconsolidated affiliates | 0 | |||
Investment in unconsolidated affiliates | 0 | 0 | ||
Net cash used in investing activities | (7) | (2) | 0 | |
Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Issuance of non-recourse debt | 663 | 350 | 300 | |
Repurchase and retirement of common stock | 0 | |||
Repayment of debt | 0 | 0 | ||
Repayment of non-recourse debt | (485) | (459) | (110) | |
Debt issuance costs | (5) | (5) | (3) | |
Allocated debt activity | [1] | 0 | ||
Net transfers (to) from Parent | 0 | |||
Payment of withholding taxes on vesting of restricted stock units | 0 | |||
Capital contributions | 0 | |||
Intercompany transfers | 129 | (104) | 6 | |
Net cash provided by (used in) financing activities | 302 | (218) | 193 | |
Proceeds from stock option exercises | 0 | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | 4 | 15 | 6 | |
Cash, cash equivalents and restricted cash, beginning of period | 38 | 23 | 17 | |
Cash, cash equivalents and restricted cash, end of period | $ 42 | $ 38 | $ 23 | |
[1] | Amounts represent activities with Hilton. |
Selected Quarterly Financial _3
Selected Quarterly Financial Information - Schedule of Selected Quarterly Financial Information (unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||
Total revenues | $ 642,000,000 | $ 427,000,000 | $ 563,000,000 | $ 367,000,000 | $ 447,000,000 | $ 426,000,000 | $ 439,000,000 | $ 399,000,000 | $ 1,999,000,000 | $ 1,711,000,000 | $ 1,583,000,000 | |||
Total operating expenses | 473,000,000 | 364,000,000 | 408,000,000 | 320,000,000 | 360,000,000 | 350,000,000 | 348,000,000 | 316,000,000 | 1,565,000,000 | 1,374,000,000 | 1,260,000,000 | |||
Income before income taxes | 161,000,000 | 56,000,000 | 146,000,000 | 40,000,000 | 80,000,000 | 71,000,000 | 84,000,000 | 76,000,000 | 403,000,000 | 311,000,000 | 293,000,000 | |||
Net income | $ 120,000,000 | $ 41,000,000 | $ 107,000,000 | $ 30,000,000 | $ 183,000,000 | $ 43,000,000 | $ 51,000,000 | $ 50,000,000 | $ 298,124,983 | [1] | $ 326,777,744 | [1] | $ 167,618,659 | [1],[2] |
Basic | $ 1.25 | $ 0.42 | $ 1.10 | $ 0.31 | $ 1.85 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.07 | [3] | $ 3.30 | [3] | $ 1.70 | [3] |
Diluted | $ 1.24 | $ 0.42 | $ 1.10 | $ 0.30 | $ 1.83 | $ 0.43 | $ 0.51 | $ 0.51 | $ 3.05 | [3] | $ 3.28 | [3] | $ 1.70 | [3] |
[1] | Net income for years ended December 31, 2018, 2017, and 2016 was $298,124,983; $326,777,744 and $167,618,659, respectively. | |||||||||||||
[2] | Net income earned prior to October 24, 2016, is included in Additional paid-in-capital instead of Accumulated retained earnings since the accumulated of retained earnings began as of the date of issuance of the Company’s common stock to Park Hotels & Resorts Inc. See Note 1: Organization for further discussion | |||||||||||||
[3] | For the year ended December 31, 2016, basic and diluted earnings per share was calculated based on shares distributed to Hilton Grand Vacations Inc.’s shareholders on January 3, 2017. See Note 19: Earnings Per Share for further discussion. |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | 1 Months Ended | 12 Months Ended |
Jan. 31, 2019USD ($) | Dec. 31, 2018Installment | |
Subsequent Event [Line Items] | ||
Number of equal annual installment | Installment | 4 | |
Promissory note payment start date | 2028-01 | |
Subsequent Event | Time Share | Hawaii | ||
Subsequent Event [Line Items] | ||
Payments to acquire land | $ 60 | |
Promissory notes payable to acquire land, Amount | 23 | |
Contractual interest expense on issuance of promissory notes | 27 | |
Subsequent Event | Time Share | Barbados | ||
Subsequent Event [Line Items] | ||
Purchase of operating property for future conversion | $ 9 |