ILG, Inc. Hosts Investor Day Today in New York City

ILG, Inc. (Nasdaq: ILG) today reaffirms its 2017 guidance in conjunction with its 2017 Investor Day meeting today in New York City.

“We continue to successfully execute on our organic initiatives and the integration of Vistana. We are stronger than ever with the scale, financial strength, and product portfolio to drive sustainable long-term value for shareholders”

During the meeting, ILG’s senior management team addressed the Company’s strategic focus and capital allocation framework, as well as provided in-depth overviews of its two business segments, Exchange & Rental and Vacation Ownership.

“We continue to successfully execute on our organic initiatives and the integration of Vistana. We are stronger than ever with the scale, financial strength, and product portfolio to drive sustainable long-term value for shareholders,” said Craig Nash, chairman, president and CEO of ILG.

At the meeting, the Company reaffirmed its 2017 guidance ranges, including the following financial metrics:

  • Revenue (excluding cost reimbursements): $1,390 – $1,490M
  • Adjusted EBTIDA: $345 – $365M
  • Inventory Spend: $215 – $230M
  • Capex: $120 – $125M
  • Free Cash Flow: $110 – $140M

Additionally, the Company provided its 2020 targets on the following financial metrics and (2017-2020 CAGR):

  • Consolidated Timeshare Contract Sales: $680-$800M (12% – 19%)
  • Revenue (excluding cost reimbursements): $1,745 – $1,865 (7-9%)
  • Adjusted EBTIDA: $480 – $520M (11%-14%)
  • Inventory Spend & Capex: $200 – $230M
  • Free Cash Flow: $260 – $290M
  • ROIC: 24% – 26%

A link to the Investor Day webcast is available on ILG’s Investor Relations website at www.iilg.com. Presentation materials will be available at the same website.

PRESENTATION OF FINANCIAL INFORMATION

ILG management believes that the presentation of non-generally accepted accounting principles (non-GAAP) financial measures, including, among others, EBITDA, adjusted EBITDA, free cash flow and ROIC, serves to enhance the understanding of ILG’s performance. These non-GAAP financial measures should be considered in addition to and not as substitutes for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles (GAAP). In addition, adjusted EBITDA (with certain different adjustments) is used to calculate compliance with certain financial covenants in ILG’s credit agreement and indenture. Management believes that these non-GAAP measures improve the transparency of our disclosures, provide meaningful presentations of our results from our business operations excluding the impact of certain items not related to our core business operations and improve the period to period comparability of results from business operations. These measures may also be useful in comparing our results to those of other companies; however, our calculations may differ from the calculations of these measures used by other companies. More information about the non-GAAP financial measures, including reconciliations of historical GAAP results to the non-GAAP measures, is available in the financial tables that accompany this press release.

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this release, including statements regarding our future financial performance, our business prospects and strategy, anticipated financial position, liquidity, capital needs and other similar matters constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of the management of ILG and are subject to significant risks and uncertainties outside of ILG’s control.

Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) adverse trends in economic conditions generally or in the vacation ownership, vacation rental and travel industries, or adverse events or trends in key vacation destinations, (2) lack of available financing for, or insolvency or consolidation of developers, including availability of receivables financing for our business, (3) adverse changes to, or interruptions in, relationships with third parties, (4) our ability to compete effectively and successfully and to add new products and services, (5) our ability to market VOIs successfully and efficiently, (6) our ability to source sufficient inventory to support VOI sales and risks related to development of inventory in accordance with applicable brand standards, (7) the occurrence of a termination event under the master license agreement with Starwood or Hyatt, (8) actions of Starwood, Hyatt or any successor that affect the reputation of the licensed marks, the offerings of or access to these brands and programs, (8) decreased demand from prospective purchasers of vacation interests, (9) travel related health concerns, (10) significant increase in defaults on our vacation ownership mortgage receivables; (11) the restrictive covenants in our revolving credit facility and indenture and our ability to refinance our debt on acceptable terms; (12) our ability to successfully manage and integrate acquisitions, including Vistana, (13) impairment of ILG’s assets or other adverse changes to estimates and assumptions underlying our financial results, (14) our ability to expand successfully in international markets and manage risks specific to international operations (15) fluctuations in currency exchange rates, (16) the ability of managed homeowners associations to collect sufficient maintenance fees, (17) business interruptions in connection with technology systems, and (18) regulatory changes.

ABOUT ILG

ILG (Nasdaq: ILG) is a leading provider of professionally delivered vacation experiences and the exclusive global licensee for the Hyatt®, Westin® and Sheraton® brands in vacation ownership. The company offers its owners, members, and guests access to an array of benefits and services, as well as world-class destinations through its international portfolio of resorts and clubs. ILG’s operating businesses include Aqua-Aston Hospitality, Hyatt Vacation Ownership, Interval International, Trading Places International, Vacation Resorts International, VRI Europe, and Vistana Signature Experiences. Through its subsidiaries, ILG independently owns and manages the Hyatt Residence Club program and uses the Hyatt Vacation Ownership name and other Hyatt® marks under license from affiliates of Hyatt Hotels Corporation. In addition, ILG’s Vistana Signature Experiences, Inc. is the exclusive provider of vacation ownership for the Westin and Sheraton brands and uses related trademarks under license from Starwood Hotels & Resorts Worldwide, LLC. Headquartered in Miami, Florida, ILG has offices in 15 countries and more than 10,000 associates. For more information, visit www.iilg.com.

RECONCILIATIONS OF NON-GAAP MEASURES
2017 OUTLOOK
Current Guidance
Low High
(Dollars In millions)
Adjusted EBITDA $ 345 $ 365
Non-cash compensation expense (22 ) (22 )
Other non-operating income, net 10 10
Acquisition related and restructuring costs (5 ) (5 )
Asset impairments (2 ) (2 )
Impact of purchase accounting 7 7
Depreciation and amortization (77 ) (77 )
Interest, net (27 ) (27 )
Income tax provision (88 ) (95 )
Net income attributable to common stockholders $ 141 $ 154
Current Guidance
Low High
(Dollars In millions)
Operating activities before inventory spend $ 295 $ 300
Inventory spend (230 ) (215 )
Net cash provided by operating activities 65 85
Repayments on securitizations (170 ) (165 )
Proceeds from securitizations, net of debt issuance costs 322 322
Net changes in financing-related restricted cash 13 13
Net securitization activities 165 170
Capital expenditures (125 ) (120 )
Acquisition-related and restructuring payments 5 5
Free cash flow $ 110 $ 140
Net cash used in investing activities $ (125 ) $ (120 )

Net cash provided by financing activities

$ 53 $ 78

2020 TARGETS

Current Guidance
Low High
(Dollars in millions)
Adjusted EBITDA $ 480 $ 520
Non-cash compensation expense (24 ) (24 )
Depreciation and amortization (86 ) (86 )
Interest, net (24 ) (24 )
Income tax provision (132 ) (147 )
Net income attributable to common stockholders $ 214 $ 239
Current Guidance
Low High
(Dollars in millions)
Operating activities before inventory spend $ 409 $ 409
Inventory spend (155 ) (132 )
Net cash provided by operating activities 254 277
Repayments on securitizations (245 ) (222 )
Proceeds from securitizations, net of debt issuance costs 326 303
Net securitization activities 81 81
Capital expenditures (75 ) (68 )
Free cash flow $ 260 $ 290
Net cash used in investing activities $ (75 ) $ (68 )

Net cash used in financing activities

$ (101 ) $ (101 )
2017 OUTLOOK

2020 TARGETS

Current Guidance Current Guidance
Low High Low High

(Dollars in millions)

Pre-tax ROIC (excludes Goodwill)
(+) Total Assets 3,536 3,536 3,830 3,927
(-) Cash 160 160 419 428
(+) Assumed minimum cash balance 50 50 50 50
(-) Non-Interest-Bearing current liabilities 400 400 400 400
(-) Non Recourse Debt 598 598 825 881
(-) Goodwill 558 558 558 558
Invested Capital 1,870 1,870 1,678 1,710
Adjusted EBITDA 345 365 480 520
Depreciation & Amortization 76 76 86 86
Consumer Financing Interest Expense (12) (12) (17) (18)
Net Operating Profit Before Tax 281 301 411 452
ROIC 15.0% 16.1% 24.5% 26.4%

Contacts

ILG, Inc.
Investor Contact:
Lily Arteaga, 305-925-7302
Investor Relations
Lily.Arteaga@iilg.com
Or
Media Contact:
Christine Boesch, 305-925-7267
Corporate Communications
Chris.boesch@iilg.com