Hilton Grand Vacations Inc

and welcome to the Hilton Grand Vacations fourth quarter 2024 earnings conference call. A telephone replay will be available for seven days following the call. The dial-in number is 844-512-2921 and enter PIN, hash or pound 13751065. At this time, All participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you should require operator assistance, please press star zero. If using a speakerphone, please lift your handset to allow the signal to reach our equipment. I would now like to turn the call over to Mark Melnick, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and welcome to the Hilton Grand Vacations fourth quarter 2024 earnings call. Before we begin, I'd note that we've uploaded slides to our IR website detailing our financing business optimization program, which are available for download at investors.hgv.com. As a reminder, our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated by these forward-looking statements. These statements are effective only as of today. We're going to take no obligation to publicly update or revise these statements. For discussion of some of the factors that could cause actual results to differ, please see the risk factors section of our SEC filings. We'll also be referring to certain non-GAAP financial measures. You can find definitions and components of such non-GAAP numbers, as well as reconciliations of non-GAAP and GAAP financial measures discussed today in our earnings press release and on our website at investors.hgb.com. Our reported results for all periods reflect accounting rules under ASC 606, which we adopted in 2018. Under ASC 606, we're required to defer certain revenues and expenses related to sales made in the period when a project is under construction and then hold off on recognizing those revenues and expenses until the period when construction is completed. For ease of comparability and to simplify our discussion today, our comments on adjusted EBITDA and our real estate results were referred to results excluding the net impact of construction related deferrals and recognitions for all reporting periods. To help you make more meaningful period-to-period comparisons, you can find details of our current and historical deferrals and recognitions in Table T1 of our earnings release, and a complete accounting of our historical deferral and recognition activity can also be found in Excel format on the financial reporting section of our investor relations website. In a moment, our Chief Executive Officer, Mark Wang, will provide highlights from the quarter in addition to an update on our current operations and company strategy. After Mark's comments, our EVP of Finance and Acting CFO, Aaron Day, will go through the financial details for the quarter. Mark and Aaron will then make themselves available for your questions. With that, let me turn the call over to our CEO, Mark Wang. Mark?

Good morning, everyone, and welcome to our fourth quarter earnings call. I want to give a special thank you to our team members across the globe for making 2024 another productive year for HCV. We closed our blue-green acquisition and completed a significant amount of integration work, adding nearly 200,000 members and expanding our portfolio to more than 200 properties. We made substantial progress against our goal of realizing 100 million in cost synergies. We made meaningful organization changes, leveraging the strength of our combined teams to improve sales and marketing execution. We launched HEV Max to our BlueGreen members, providing them with access to more properties and more destinations. And we generated record free cash flow while returning a record amount to shareholders. This was on top of the work we've been doing to continuously enhance the value of HEV ownership for our members. The teams have a lot to be proud of, and while our path in 2024 was not without its challenges, I'm pleased that we finished on a strong note in the fourth quarter. Our new organizational structure and strategic initiatives have been producing further results, and we got off to a great start with the introduction of HEV MAX to our Blue-Green members. As a result, we saw growth in transactions, BPGs, and contract sales even after adjusting for some of the non-recurring impacts we saw during the fourth quarter of both 23 and 24. From a macro perspective, the consumer environment remains consistent with the past few quarters as inflation and elevated interest rates continue to impact spending and sentiment. But we're pleased to see that travel intentions have remained strong And we're optimistic that our operational adjustments and initiatives will help to insulate us from those two broad macro factors. As we look ahead, our 25 guidance reflects the view that these initiatives will further enable growth in contract sales and EBITDA, along with strong recash flow generation as we continue to build on those improvements. And that growth comes despite the addition of 25 million of additional consumer finance interest expense associated with our financing business optimization, which we expect to materially improve our future capital returns. So, while there's more work remaining, I'm pleased with the significant progress we made to regain our momentum, which positions HEV for success in 2025 and beyond. Turning to an overview of the fourth quarter results, Reported contract sales were 837 million, and adjusted EBITDA was 289 million, with margins excluding reimbursements of 23%, which came in ahead of our expectations. Contract sales in the quarter were driven by strong VPG performance, which more than offset a decline in tours. Tour growth was primarily impacted by back-to-back hurricanes that hit the southern U.S. at the start of the quarter, along with our initiatives to improve tour efficiency and the removal of a new buyer channel on the Blue-Green side that we made earlier this year. Controlling for those effects, our channel trends remain consistent with past several quarters. We continue to see strength in our owner tours aided by our launch of HEV Max for Blue-Green owners. New buyer tour growth has been more muted as we continue to improve the efficiency of those channels along with the removal of a third-party channel on the blue-green side. We expect these trends to continue throughout the year, which should drive further improvements in VPG mix. These dynamics played out during the fourth quarter, with VPG of $4,026, over 20% ahead of pro forma 19, and at the best levels since the highs we saw in 22. Geographically, it's worth noting the strong performance out of our APAC region in the fourth quarter. As we lapped the Maui wildfires, we saw high demand for both the remaining inventory at our Okinawa project as well as initial sales launch of our new Kahaku property in Waikiki. Kahaku will be our first Hilton Club offering in Hawaii. And like our other Hilton Club offerings, this boutique luxury property will include exclusive amenities and meticulous attention to every detail, which we think will be very popular with our high-end net worth members. We've already seen strong upgrade activity in Kahaku, which has added benefit of bringing up additional inventory at some of our other highly desired properties in the islands. Looking at our demand indicators, occupancy of 82% was slightly up in the quarter, Our rental arrivals look very strong for the first half, in particular in the first quarter, and our package pipeline also remains robust at over 710,000 packages. We have great partners like Hilton, Bass Pro, and Choice that have access to a huge pool of quality customers to enable us to continue building that pipeline. And as a result, we continue to be optimistic about the leisure travel environment. Turning to our non-real estate business, our member count stood at 724,000 at the end of the quarter, and NOG was 1.1%. HCV max members growth remains well ahead of overall NOG as we continue to see strong owner upgrade demand, with our max member base growing 34% this year to more than 193,000 members. Our rental business is showing good top-line trends, although its profitability is being mapped by seasonality and the addition of the blue-green rental business, which Aaron will speak to shortly. On the cash flow front, we had a record year in adjusted free cash flow generation at $837 million. And we also set a record in the amount of capital returned to our shareholders this year at over $432 million. Building on that momentum, I'm also excited about our financing optimization, which will unlock additional cash flow this year and will allow us to return a record $600 million to shareholders. Erin will provide more details here in a few minutes. Now let me provide an update on our integration and strategic initiatives. Starting with Blue Green, we achieved some significant milestones with our integration over the last year. We officially rolled out HEV MAX in our rebranded Blue-Green Sales Centers in early November and received a strong initial reception from both members and sales teams. We added nearly 5,000 new HEV MAX members in less than two months post-launch, which was a quicker uptake than we saw with the initial launch of MAX in early 2022. There was a lot of anticipation building ahead of the launch, and we're pleased to see that excitement convert into new memberships. Looking at cost synergies related to the integration, we're well on track to achieve our $100 million goal this year, and with a significant amount of headcount and organizational work completed in 24, our integration efforts this year will turn more towards rebranding. In the fourth quarter, We rebranded Blue-Green sales centers ahead of our max launch. On the whole, their sales centers were already in great shape, which enabled us to move very quickly to get them rebranded. On the property side, we have a detailed rebranding plan for approximately 30 Blue-Green properties. We expect a roughly even split of those rebrands to be completed over the next three years with work commencing this spring. On the operational side, we have several initiatives to further improve our tour efficiency and enhance our value proposition of our offerings. We continue to optimize our staffing coverage to better service our tour flow, particularly in some of our regional markets, and we're continuing to evolve our tour scoring models with additional filters and data points to ensure that we're prioritizing our best tours at any given time. We also have several additional value enhancements planned for this year in addition to expanding our ultimate access offerings, which have been incredibly popular with our members. Taken together, the goal of these efforts will be focused on improving TOR quality and TOR outcomes to drive growth in transactions rather than absolute TOR volume growth. Ultimately, those transactions are what will drive improved dividend generation margins and cash flow. Moving to our partner programs, in the fourth quarter, we started introducing our brand into locations within the Bass Pro network. We completed a handful of locations during the quarter, and over the course of 25, we plan on introducing our brands into nearly 125 additional stores. So far, We're very pleased with the results in these first locations, and we're seeing an increase in comparative traffic levels. We're also working with Bass Pro to evolve the in-store presence and deliver an experiential interaction that reflects the value of our brands coming together. The Great Wolf Partnership is also producing solid results, exceeding projected expectations in room nights, call transfer, and member feedback. The rollout remains on schedule with 14 retail locations currently active. Finally, we're pleased to solidify our long-term partnership with Choice Hotels in the fourth quarter. Historically, Choice was a material source of new buyer tours for Bluegreen, and we see further potential to grow lead flow as we expand our existing marketing channels and launch new channels. Overall, we're very pleased with the success of our partnership model, and we continue to scout for new partners that can expand our reach and enhance our owner experience. So in summary, it was a strong end to a busy year for HCV, and I'm optimistic about our momentum coming into 25. We're in the middle innings of our integration work with solid line of sight on the remaining milestones. Our sales teams are excited about selling HEV Max across all our brands, and we have a great set of initiatives that drive another strong year of EBITDA and cash flow generation this coming year. Before I turn it over, I'd like to note that per our 8K earlier this month, our President and CFO, Dan Matthews, has taken a temporary leave of absence for personal reasons, and our EVP of Finance, And acting CFO, Erin Day, is stepping in on today's call. So with that, I'll turn it over to Erin to talk you through the numbers. Erin?