Hilton Grand Vacations Inc. · NYSE:HGV
Hilton Grand Vacations — Investor Presentation (April 2017)
38 slides from Hilton Grand Vacations's investor presentation, Apr 3, 2017
Slide 1: Investor Presentation April 2017
Exhibit 99.1 Exhibit Investor © Hilton99.1 Presentation Grand Vacations AprilProprietary 2017
Slide 2: D I historical amended. offs
D I historical amended. offs “seeks,” risks beyond 2017. statement, nor This and should the Proprietary S will our Net and presentation and C Accordingly, be our indebtedness, L Debt there other “approximately,” uncertainties, AThese read considered whether control, I and M /be non-historical Adj. i
Slide 3: Company Overview
Company Overview
Slide 4: T HGV (AVERAGE Capital
T HGV (AVERAGE 12016 Capital H ENumber NApproximate (1) EW Approximate SCORE) PofAmembers R AThird 100 D Third IG(in 14K Party M000s) Party IEXCHANGE N 2011–2016 V89% based A CAdj. Aon TCumulative OPTIONS aEBITDA IO range N OofW vproduct Strong Inventory Growth N E R Net Scost (‘11-‘16) HSpend Owner
Slide 5: C Origination Real First
COrigination Real First •27.6% 5©Deeded Real Operate U Hilton STime Estate T fees YE OGrand timeshare HGV 2016 Buyer Mrevenues Financing and E Club R Vacations • Credit servicing Interest L•I –Loans FClub •EDues Retail, income CProprietary fees &to Y& Resort C high-quality F&B Club Fees L•EIncrement
Slide 6: R E We Initial
RE We Initial ~$25K Follow-on ~60% 10% Point Rental Purchases (e.g., Note: with © Hilton expect Vtransient spa, reloads (1) VOI Eand Purchase NGrand Average, food on VOI to Ancillary1,2 U Purchase generate resort for Eand and LSpend Vacations of nicer Imarketing including Fbeverage) Financing Financ
Slide 7: V A C Resorts HGV A T I O Hilton
V A CResorts HGV A T I OHilton N O WHotels N E RRCI S H&I P Airline I S F LSource: E X I BCompany L E 14,000+ reports Home7 ©Resort Hilton HGV GrandHilton Vacations OtherProprietary Uses Vacation Club Points Hotels Options ~90% Lagoon 47 4,900+ Cruise Exchange, in Hilton Ecosystem Tower
Slide 8: E X Standard GRAND
EX Standard GRAND 8© Hilton C E PWAIKIKIAN hotel Grand T I Oroom Vacations NALV Waikiki, AProprietary C A THawaii IONOFFERINGS
Slide 9: C $ O $12.0b ( $10.0b
C$O $12.0b ($10.0b LOSS VOI $0.0b 2009 1974–2007 (1) Wyndham reports 9© Hilton VOLUME Unless N Industry 2010 $0.0b HGV Sb) $2.0b . IGrand MARKET Spredecessor otherwise 2011 CAGR: 1974 T Sales $6.0b E Vacations 2012 N1975 $8.0b T15% $6.3 noted, $1.6b G2013 Fairfield 1976 R$8.6 Sales Timeshare OPropri
Slide 10: S T 3% venture R 50%
S T 3% 75% 0% venture R50% ONet in NVAC Maui. GOwner MSVO1 ASource: RGrowth K25% E Company T P7.7% 0%OS Q4-07 (0.6%) I TFinancials IOQ4-08 0.0% N I NQ4-09 10 (1.1%) G©Trailing Hilton Q4-10 (1) Starwood 12-Month Grand Q4-11Vacations Q4-12 Vacation SalesQ4-13 Relative Proprietary Ownership Q4-14 to Ca
Slide 11: 8 7 6 5 4 3 2 1 K Strategic Exclusive Exceptional
87654321KStrategic © 11Exclusive Exceptional High-Quality Sophisticated Differentiated, Strong E Hilton Y I NGrowth Net Grand VPriorities Long-Term EOwner Vacation SCustomers Customer Vacations Capital-Efficient T Opportunities MGrowth E Offerings N Relationship Engagement T Proprietary H I GBusines
Slide 12: • E Access Access Loyalty
•EAccess Access Loyalty ~$10B © 12 Exclusive Industry-leading XHilton C Lin toProgram U to Grand annual Hilton’s S~60 convert 100-year I Vmillion Vacations E ~570+M Worldwide sales strong LHGV O rights N Honors &Club commercial G—T site marketing Proprietary toSales use visits points members E the R
Slide 13: E X TUSCANY ELARA
EX TUSCANY ELARA © 13 Hilton C E Las PGrand TRESORT Vegas, I O Vacations N ANevada LOrlando, V AProprietary C WEST AFlorida T I 57th O NSUNRISE O STREET F F E RNew LODGE INGYork, S Park NewCity, YorkUtah
Slide 14: HIGH—Q Homeowners Millennials
HIGH—Q Homeowners Millennials of origination; U(For ALeisure (2) LLoans I2.55% T YTravel ,Over LHOA O Fico Y 30A delinquency Days LScore1 CULoan SIncome TDefault rate O Mfor (Owners ERRate theS year We Boomers asconsider ended of 12/31/16) Past 12/31/16 ourDue 269,000 Days Not Source: Per inmembers
Slide 15: H G Demand Approximately
HG Demand Approximately 6.9 $3,596 2+ 2011 HGV growth Revenue 2016 Source: © 15 Hilton Years Years V2016 VPG Real sales ’(2011–2016) Company SCustomer Growth of Grand of K Estate office Sales Sales E Y300k Vacations D Revenue Inventory reports Supply REngagement I V EProprietary $1,007M R S : Downer
Slide 16: H 00 I Hilton Tours Non-Owner
H00IHilton Tours 0‘300 Non-Owner © 16 G ‘01 200 (000s) H‘02 L 100 Grand Y‘03 Owner E F‘04 Vacations F E‘05 CT‘06 I Proprietary V‘07 E ‘08 C U‘09 S T‘10 OM ‘11E ‘12 R E‘13 NG ‘14 A ‘15 G E‘16 MENTMODEL
Slide 17: M Hilton In Non-Hilton
M Hilton In Non-Hilton 89% 2016 Marketing Affiliated Channels Direct © 17 House AR Hilton 8% Marketing K Grand E Club Mix T26% Marketing IN Direct Vacations Affiliate G 49%C 6% H A11% Proprietary N NHilton E L S Hotel
Slide 18: S O (proven (legal
SO 170+ (proven (legal Contactable (income Capable (wealth Profile 88+ Offer © 18 Hilton P Million million and Hscore) Hilton Iand Grand Sbusiness TQualified model) Unique I affinity) CVacations Arule TIndividuals EProspects compliance) D Proprietary CUSTOMERENGAGEMENTMODEL
Slide 19: S C Hilton 200M+ Hawaii
S CHilton 200M+ Hawaii Japan (1) Source: Note: © Japan A Numbers 127M1 L9M vIn-Market EGrand Population ASouthern NMyrtle Ddenote Vacations STourist T California Beach Rannual A TTravel Proprietary E 17M G visitation 34M IBoard D.C. C DNew I21M 19 S TYork Orlando RIB 58M U T66M Las I OVegas N L O42M
Slide 20: N 99 E Member US
N99E Member 0‘300,000 US © 20 Hilton Japan ‘00 T O‘01 269K W Growth Grand Other ‘02 N E200,000 ‘03 Vacations Int’l R(1999 G‘04 RO100,000 ‘05 – 2016) WProprietary ‘06 T H‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16
Slide 21: I N Hilton Net Source:
I NHilton Net 2%1 9% (1) Source: © Reflects D Owner 2%U Company S(1)% Grand TGrowth 2014-2016 R Y—L Vacations analysis CAGR EA growth DProprietary 21 2011–2016 I N in G members NETOW forNVistana E R G Signature ROWTH Experiences and Hyatt Vacation Ownership
Slide 22: C A Inventory Developed
CA Inventory Developed 26% Just-in-Time Owned Fee-for-Service © 22 Hilton PDeveloped IT 18% Grand ASources -L—E VOI Capital-Efficient - VOI -Vacations VOI inventory Fasinventory FaIinventory Percentage C IProprietary Esourced Nsourced THGV BofU from 2016 in S sells Itransactions projects NContract a
Slide 23: C A P & HGV Club
C A P& HGV Club Return: Proprietary Capital ITResort A • vs. L—E Revenue FFS—higher Management F F I Streams: C I E• N vs. Club T FFS—higher BRevenue & U Resort S I NStreams: EManagement Svs. S Developed—higher MRevenue O D EMargin: L Streams: 26% 26% • Return:Return: Rental • 26% Commissions & 56%
Slide 24: T H 252 Dollars) E C 211
T H 252 Dollars) 319 E C 211 12.5% A P 211 I TROIC AJIT L—E 8635.4% 116 F F 20% IROIC C I 0E2011 CAGR NTM 2012 O (2011–2016) D2013 E L 2014 ALL 1,172 2015 O W1,200 2016 S U S% Total TFFS OD 11% 8% E V1,068 17% E L 31% O1,000 P I39% N905 V58% E829 NT 56% 796 OR657 24Y© 800 R Hilton A 611 P I D688 Gra
Slide 25: K E Y $21 Palmeras $61M
K E Y$21 1,200 Palmeras $61M estimated vs DE v–product $1,540 .V 2016 1E~$1.3B L(Conversion) O –cost 1,880 PM•ofMarBrisa E25% 2,690 N Tapplied 206 Punits A – 5R 2010 290 added TtoN(Conversion) the –E360 •R$5B Sunrise S• HGV Anderson estimated Lodge Estimated 236 Ocean 1gross –270 2012 #–volume Club
Slide 26: D I Hilton Development Less
D IHilton Development Less Concentrated Traditional Dispersed/ Source: © 26 FCapital F ECompany Grand RMajority EMajority Distribution NVacations T analysis I AStructurally New T E Ability Proprietary DStructurally , C ACapital to P IRespond T Larger AIntensive L—E VOI Centers/ F FSmaller Sales I C
Slide 27: I N Hilton HGV (000’s)
I NHilton HGV 51 (000’s) 39 60% 2011 Source: © 27 54 34 Ttotal 2012 E Japan 47R Company 44 Grand growth N2013 Members A TVacations 2014 I (2011–16) O reports N(2011–2016) 2015 A LProprietary G 2016 ROWTHOPPORTUNITIES
Slide 28: S T Hilton Maximize Grow
S THilton Maximize Grow Expand members Consistently across Source: © 28 RA Sales contract the team Company TGrand inventory (NOG) E Customer and Gdeliver member Expand I Vacations Pursue Cexpand reports Pcreate Further R Optimize sales Iproduct, Opportunistic Oour new Proprietary Rwith leverage Ifoo
Slide 29: Financial Strengths
Financial Strengths
Slide 30: K E Real Net
KE Real Net Growing We © 30 Hilton finance rent owner Yestate Bunsold/unused Umembership Grand growth revenues margin S2/3 I Nof Vacations Eour focus driven Sdriven Sowned base inventory Dexpands R by Proprietary drives by I inventory, inventory Vtours Emember and resort R Sand generate sales and cl
Slide 31: K E Y 2014 B U 2015 S I N 2016
K E Y2014 2013 B U 2015 S I N2016 E S S2013 Contract D R 2014 I V Sales E2015 R SDefault Tours 2016 Financing (1) Rate % Club of developed Propensity1 & Resortcontract Management # of Members sales financed ($ millions) (thousands) (excluding Revenue (thousands) 90-day per Member “same 63.6% as 65.3
Slide 32: B U Real Revenue
BU Real Revenue $339 Segment $348 2013 © 32 Hilton SEstate $1,143 $189 2014 I NAdj. ($ Grand E2015 $329 Sales millions) S$307 EBITDA S Vacations S $162 2016 &$1,078 EFinancing GRevenue $305 2013 M ($ $283 Emillions) Proprietary $144 2014 NT Resort ($ $898 S2015 $294 millions) Segment $942 Operations
Slide 33: R E Contribution Real
RE Contribution Real 21% Financing 2016 Rental 20% 44% © 33 15%Hilton SClub I&L Grand Ancillary I&E Estate to NT Segment Vacations B Resort U S IAdjusted NProprietary E S S EBITDA MODEL
Slide 34: R E Total Hilton
RE Total $659 $306 2013 $201 (1) (2) © 34 Hilton See Free V2014 $1,583 $401 Revenues Eappendix cash NGrand 2015 U$402 flow E ,Total Vacations 2016 Afor $1,475 calculated DaAdjusted J2013 reconciliation U S$373 Proprietary T2014 as EEBITDA1 $1,317 D cash 2015 E Bof flow I2016 $527 Adjusted T Cumulati
Slide 35: 2017 Outlook
O UAdjusted FFS 14 parent activities Hilton as T interest L Grand %O174 ofOEBITDA contract Vacations K 191 expense A Share N Dsales Other A 0Proprietary based 0D52% Depreciation Jitems1 Ucompensation S57% T 11 EIncome D11E and EBITDA B Iamortization 16 Segment TD 14A363 Non-inventory R adjusted E390
Slide 36: H I Hilton Year Total
H IHilton Year 2013 Total Net EBITDA Gain Adjusted Cash Free (1) © 36 Non-recourse Sincome Cash Ended on 2014 flow Revenues T Odebt Grand $289 EBITDA R Flow from 2015 128 December Iextinguishment C$349 $1,224 A operations Vacations $201 167 2016 debt L$306 A $356 174 $200 interest D 31, $1,317 $353
Slide 37: L T M one-time Expenses
LTM 515 one-time Expenses 125 Revenues Adjusted Business 143S Expenses Aspin EBITDA Financing Rental L ELines related SAand Club 491 NReal Expenses costs ancillary D537 and SEstate E—- 37 resort G (32) M services © 3Revenues Intersegment Hilton Emanagement (32) N Trevenues A Consumer Grand Sales DJU
Slide 38: Hilton Grand Vacations
GRAND VACATIONS 38 © Hilton Grand Vacations Proprietary HILTON
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