we believe that the visibility into our long-term supply allows us to efficiently manage inventory to meet predicted sales , reduce capital investments , minimize our exposure to the cyclicality of the real estate market and mitigate the risks of entering into new markets . 44 we sell our vacation ownership products under the hilton grand vacations brand primarily through our distribution network of both in-market and off-site sales centers . our products are currently marketed for sale throughout the united states and the asia-pacific region . we operate sales distribution centers in major markets and popular leisure destinations with year-round demand and a history of being a friendly environment for vacation ownership . we have sales distribution centers in las vegas , orlando , oahu , japan , new york , myrtle beach , waikoloa , washington d.c. , hilton head , park city , chicago , korea and carlsba d . our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach . we use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products and have an affinity with hilton and are frequent leisure travelers . tour flow quality impacts key metrics such as close rate and vpg , defined in “ key business and financial metric s and terms used by management— real estate sales metrics . ” additionally , the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables . for the year ended december 31 , 2019 , 54 percent of our contract sales were to our existing owners . we provide financing for members purchasing our developed and acquired inventory and generate interest income . our timeshare financing receivables are collateralized by the underlying vois and are generally structured as 10-year , fully-amortizing loans that bear a fixed interest rate typically ranging from 9 percent to 18 percent per annum . financing propensity was 66.2 percent and 65.8 percent for the year ended december 31 , 2019 and 2018 , respectively . we calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period . the interest rate on our loans is determined by , among other factors , the amount of the down payment , the borrower 's credit profile and the loan term . the weighted-average fico score for new loans to u.s. and canadian borrowers at the time of origination were as follows : replace_table_token_2_th prepayment is permitted without penalty . when a member defaults , we ultimately return their voi to inventory for resale and that member no longer participates in our club . historical default rates , which represent annual defaults as a percentage of each year 's beginning gross timeshare financing receivables balance , were as follows : replace_table_token_3_th ( 1 ) a loan is considered to be in default if it is equal to or greater than 121 days past due as of the prior month end . some of our timeshare financing receivables have been pledged as collateral in our securitization transactions , which have in the past and may in the future provide funding for our business activities . in these securitization transactions , special purpose entities are established to issue various classes of debt securities which are generally collateralized by a single pool of assets , consisting of timeshare financing receivables that we service and related cash deposits . for additional information see note 5 : timeshare financing receivables in our audited consolidated financial statements included in item 8 of this annual report on form 10-k. in addition , we earn fees from servicing the loans provided by third-party developers of our fee-for-service projects to purchasers of their vois and from our securitized timeshare financing receivables . 45 resort operations and club management we enter into management agreements with the hoas of the voi owners for timeshare resorts developed by us or a third party . each of the hoas is governed by a board of directors comprised of owner and developer representatives that are charged with ensuring the resorts are well-maintained and financially stable . our management services include day-to-day operations of the resorts , maintenance of the resorts , preparation of reports , budgets and projections and employee training and oversight . our hoa management agreements provide for a cost-plus management fee , which means we generally earn a fee equal to 10 percent to 15 percent of the costs to operate the applicable resort . the fees we earn are highly predictable due to the relatively fixed nature of resort operating expenses and our management fees are unaffected by changes in rental rate or occupancy . we are reimbursed for the costs incurred to perform our services , principally related to personnel providing on-site services . the initial term of our management agreements typically ranges from three to five years and the agreements are subject to periodic renewal for one to three year periods . many of these agreements renew automatically unless either party provides advance notice of termination before the expiration of the term . we also manage and operate the points-based hilton grand vacations club and hilton club exchange programs , which provide exclusive exchange , leisure travel and reservation services to our club members . when owners purchase a voi , they are generally enrolled in the club and given an annual allotment of points that allow the member to exchange their annual usage rights in the voi that they own for a number of vacation and travel options . in addition to an annual membership fee , club members pay incremental fees depending on exchanges they choose within the club system . we rent unsold voi inventory , third-party inventory and inventory made available due to ownership exchanges through our club programs . story_separator_special_tag ebitda and adjusted ebitda are not recognized terms under u.s. gaap and should not be considered as alternatives to net income ( loss ) or other measures of financial performance or liquidity derived in accordance with u.s. gaap . in addition , our definitions of ebitda and adjusted ebitda may not be comparable to similarly titled measures of other companies . we believe that ebitda and adjusted ebitda provide useful information to investors about us and our financial condition and results of operations for the following reasons : ( i ) ebitda and adjusted ebitda are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions ; and ( ii ) ebitda and adjusted ebitda are frequently used by securities analysts , investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry . ebitda and adjusted ebitda have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income ( loss ) , cash flow or other methods of analyzing our results as reported under u.s. gaap . some of these limitations are : ebitda and adjusted ebitda do not reflect changes in , or cash requirements for , our working capital needs ; ebitda and adjusted ebitda do not reflect our interest expense ( excluding interest expense on non-recourse debt ) , or the cash requirements necessary to service interest or principal payments on our indebtedness ; ebitda and adjusted ebitda do not reflect our tax expense or the cash requirements to pay our taxes ; ebitda and adjusted ebitda do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments ; ebitda and adjusted ebitda do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations ; 50 ebitda and adjusted ebitda do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized ; and ebitda and adjusted ebitda may be calculated differently from other companies in our industry limiting their usefulness as comparative measures . because of these limitations , ebitda and adjusted ebitda should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations . free cash flow and adjusted free cash flow free cash flow represents cash from operating activities less non-inventory capital spending . adjusted free cash flow represents free cash flow less non-recourse debt activities , net . we consider free cash flow and adjusted free cash flow to be liquidity measures not recognized under u.s. gaap that provides useful information to both management and investors about the amount of cash generated by operating activities that can be used for investing and financing activities , including strategic opportunities and debt service . we do not believe these non-gaap measures to be a representation of how we will use excess cash . results of operations year ended december 31 , 2019 compared with year ended december 31 , 2018 the following discussion and analysis of our financial condition and results of operations is for the year ended december 31 , 2019 compared with the year ended december 31 , 2018. for a discussion and analysis of our financial condition and results of operations for the year ended december 31 , 2018 compared to december 31 , 2017 , see part ii , item 7 , “ management 's discussion and analysis of financial condition and results of operations ” included in the 2018 annual report on form 10-k , filed with the securities and exchange commission on february 28 , 2019 , which is available on the sec website at www.sec.gov . segment results the following table presents our revenues by segment for the year ended december 31 2019 fiscal year compared the year ended december 31 , 2018. we do not include equity in earnings from unconsolidated affiliates in our measures of segment revenues . replace_table_token_4_th ( 1 ) refer to note 21 : business segments in our audited consolidated financial statements included in item 8 of this annual report on form 10-k for details on the intersegment eliminations . 51 we evaluate our business segment operating performance using segment adjusted ebitda , as described in note 21 : business segments in our audited consolidated financial statements included in item 8 of this annual report on form 10-k. for a discussion of our definition of ebitda and adjusted ebitda , how management uses them to manage our business and material limitations on their usefulness , refer to “ —key business and financial metrics and terms used by management—ebitda and adjusted ebitda . ” the following table reconciles net income , our most comparable u.s. gaap financial measure , to ebitda and adjusted ebitda : replace_table_token_5_th ( 1 ) fluctuation in terms of percentage change is not meaningful . ( 2 ) for the year ended december 31 , 2019 , this amount includes costs associated with restructuring and other non-cash and on-time charges . for the years ended december 31 , 2018 and 2017 , these amounts include costs associated with the spin-off of $ 11 million and $ 8 million , respectively . the following table reconciles our segment adjusted ebitda to adjusted ebitda . replace_table_token_6_th ( 1 ) includes intersegment transactions , share-based compensation , depreciation and other adjustments attributable to the segments . ( 2 ) adjusts for segment related share-based compensation , depreciation and other adjustment items , such as spin related costs and restructuring costs . 52 real estate sales and financing in accordance with accounting standards codification ( “ asc ” ) topic 606 , “ revenue from contracts with customers ” ( “ asc 606 ” ) , revenue and the related costs to fulfill

sources and uses of our cash the following table summarizes our net cash flows and key metrics related to our liquidity : replace_table_token_15_th operating activities cash flow ( used in ) provided by operating activities is primarily generated from ( i ) sales and financing of vois and ( ii ) net cash generated from managing our resorts , club operations and providing related ancillary services . cash flows used in operating activities primarily include spending for the acquisition of inventory , development of new phases of existing resorts and funding our working capital needs . our cash flows provided by operations generally vary due to the following factors related to the sale of our vois ; the degree to which our owners finance their purchase and our owners ' repayment of timeshare financing receivables ; the timing of management and sales and marketing services provided ; and cash outlays for real estate to be converted to inventory in the future . additionally , cash flow provided by operations will also vary depending upon our sales mix of vois ; over time , we generally receive more cash from the sale of an owned voi as compared to that from a fee-for-service sale . the change in net cash flows provided by ( used in ) operating activities for the year ended december 31 , 2019 compared to the same period in 2018 was primarily due to ( i ) a reduction in the purchase and development of real estate for future conversion to inventory and ( ii ) favorable cash tax payments primarily due to non-recurring 2018 payment of 2017 hurricane irma deferral combined with reduction in 2019 payments due to 2018 overpayment and a favorable 2019 irs ruling resulting in a reduction of taxes .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```sources and uses of our cash the following table summarizes our net cash flows and key metrics related to our liquidity : replace_table_token_15_th operating activities cash flow ( used in ) provided by operating activities is primarily generated from ( i ) sales and financing of vois and ( ii ) net cash generated from managing our resorts , club operations and providing related ancillary services . cash flows used in operating activities primarily include spending for the acquisition of inventory , development of new phases of existing resorts and funding our working capital needs . our cash flows provided by operations generally vary due to the following factors related to the sale of our vois ; the degree to which our owners finance their purchase and our owners ' repayment of timeshare financing receivables ; the timing of management and sales and marketing services provided ; and cash outlays for real estate to be converted to inventory in the future . additionally , cash flow provided by operations will also vary depending upon our sales mix of vois ; over time , we generally receive more cash from the sale of an owned voi as compared to that from a fee-for-service sale . the change in net cash flows provided by ( used in ) operating activities for the year ended december 31 , 2019 compared to the same period in 2018 was primarily due to ( i ) a reduction in the purchase and development of real estate for future conversion to inventory and ( ii ) favorable cash tax payments primarily due to non-recurring 2018 payment of 2017 hurricane irma deferral combined with reduction in 2019 payments due to 2018 overpayment and a favorable 2019 irs ruling resulting in a reduction of taxes .
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 Suspicious Activity Report : we believe that the visibility into our long-term supply allows us to efficiently manage inventory to meet predicted sales , reduce capital investments , minimize our exposure to the cyclicality of the real estate market and mitigate the risks of entering into new markets . 44 we sell our vacation ownership products under the hilton grand vacations brand primarily through our distribution network of both in-market and off-site sales centers . our products are currently marketed for sale throughout the united states and the asia-pacific region . we operate sales distribution centers in major markets and popular leisure destinations with year-round demand and a history of being a friendly environment for vacation ownership . we have sales distribution centers in las vegas , orlando , oahu , japan , new york , myrtle beach , waikoloa , washington d.c. , hilton head , park city , chicago , korea and carlsba d . our marketing and sales activities are based on targeted direct marketing and a highly personalized sales approach . we use targeted direct marketing to reach potential members who are identified as having the financial ability to pay for our products and have an affinity with hilton and are frequent leisure travelers . tour flow quality impacts key metrics such as close rate and vpg , defined in “ key business and financial metric s and terms used by management— real estate sales metrics . ” additionally , the quality of tour flow impacts sales revenue and the collectability of our timeshare financing receivables . for the year ended december 31 , 2019 , 54 percent of our contract sales were to our existing owners . we provide financing for members purchasing our developed and acquired inventory and generate interest income . our timeshare financing receivables are collateralized by the underlying vois and are generally structured as 10-year , fully-amortizing loans that bear a fixed interest rate typically ranging from 9 percent to 18 percent per annum . financing propensity was 66.2 percent and 65.8 percent for the year ended december 31 , 2019 and 2018 , respectively . we calculate financing propensity as contract sales volume of financed contracts originated in the period divided by contract sales volume of all contracts originated in the period . the interest rate on our loans is determined by , among other factors , the amount of the down payment , the borrower 's credit profile and the loan term . the weighted-average fico score for new loans to u.s. and canadian borrowers at the time of origination were as follows : replace_table_token_2_th prepayment is permitted without penalty . when a member defaults , we ultimately return their voi to inventory for resale and that member no longer participates in our club . historical default rates , which represent annual defaults as a percentage of each year 's beginning gross timeshare financing receivables balance , were as follows : replace_table_token_3_th ( 1 ) a loan is considered to be in default if it is equal to or greater than 121 days past due as of the prior month end . some of our timeshare financing receivables have been pledged as collateral in our securitization transactions , which have in the past and may in the future provide funding for our business activities . in these securitization transactions , special purpose entities are established to issue various classes of debt securities which are generally collateralized by a single pool of assets , consisting of timeshare financing receivables that we service and related cash deposits . for additional information see note 5 : timeshare financing receivables in our audited consolidated financial statements included in item 8 of this annual report on form 10-k. in addition , we earn fees from servicing the loans provided by third-party developers of our fee-for-service projects to purchasers of their vois and from our securitized timeshare financing receivables . 45 resort operations and club management we enter into management agreements with the hoas of the voi owners for timeshare resorts developed by us or a third party . each of the hoas is governed by a board of directors comprised of owner and developer representatives that are charged with ensuring the resorts are well-maintained and financially stable . our management services include day-to-day operations of the resorts , maintenance of the resorts , preparation of reports , budgets and projections and employee training and oversight . our hoa management agreements provide for a cost-plus management fee , which means we generally earn a fee equal to 10 percent to 15 percent of the costs to operate the applicable resort . the fees we earn are highly predictable due to the relatively fixed nature of resort operating expenses and our management fees are unaffected by changes in rental rate or occupancy . we are reimbursed for the costs incurred to perform our services , principally related to personnel providing on-site services . the initial term of our management agreements typically ranges from three to five years and the agreements are subject to periodic renewal for one to three year periods . many of these agreements renew automatically unless either party provides advance notice of termination before the expiration of the term . we also manage and operate the points-based hilton grand vacations club and hilton club exchange programs , which provide exclusive exchange , leisure travel and reservation services to our club members . when owners purchase a voi , they are generally enrolled in the club and given an annual allotment of points that allow the member to exchange their annual usage rights in the voi that they own for a number of vacation and travel options . in addition to an annual membership fee , club members pay incremental fees depending on exchanges they choose within the club system . we rent unsold voi inventory , third-party inventory and inventory made available due to ownership exchanges through our club programs . story_separator_special_tag ebitda and adjusted ebitda are not recognized terms under u.s. gaap and should not be considered as alternatives to net income ( loss ) or other measures of financial performance or liquidity derived in accordance with u.s. gaap . in addition , our definitions of ebitda and adjusted ebitda may not be comparable to similarly titled measures of other companies . we believe that ebitda and adjusted ebitda provide useful information to investors about us and our financial condition and results of operations for the following reasons : ( i ) ebitda and adjusted ebitda are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions ; and ( ii ) ebitda and adjusted ebitda are frequently used by securities analysts , investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry . ebitda and adjusted ebitda have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income ( loss ) , cash flow or other methods of analyzing our results as reported under u.s. gaap . some of these limitations are : ebitda and adjusted ebitda do not reflect changes in , or cash requirements for , our working capital needs ; ebitda and adjusted ebitda do not reflect our interest expense ( excluding interest expense on non-recourse debt ) , or the cash requirements necessary to service interest or principal payments on our indebtedness ; ebitda and adjusted ebitda do not reflect our tax expense or the cash requirements to pay our taxes ; ebitda and adjusted ebitda do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments ; ebitda and adjusted ebitda do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations ; 50 ebitda and adjusted ebitda do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized ; and ebitda and adjusted ebitda may be calculated differently from other companies in our industry limiting their usefulness as comparative measures . because of these limitations , ebitda and adjusted ebitda should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations . free cash flow and adjusted free cash flow free cash flow represents cash from operating activities less non-inventory capital spending . adjusted free cash flow represents free cash flow less non-recourse debt activities , net . we consider free cash flow and adjusted free cash flow to be liquidity measures not recognized under u.s. gaap that provides useful information to both management and investors about the amount of cash generated by operating activities that can be used for investing and financing activities , including strategic opportunities and debt service . we do not believe these non-gaap measures to be a representation of how we will use excess cash . results of operations year ended december 31 , 2019 compared with year ended december 31 , 2018 the following discussion and analysis of our financial condition and results of operations is for the year ended december 31 , 2019 compared with the year ended december 31 , 2018. for a discussion and analysis of our financial condition and results of operations for the year ended december 31 , 2018 compared to december 31 , 2017 , see part ii , item 7 , “ management 's discussion and analysis of financial condition and results of operations ” included in the 2018 annual report on form 10-k , filed with the securities and exchange commission on february 28 , 2019 , which is available on the sec website at www.sec.gov . segment results the following table presents our revenues by segment for the year ended december 31 2019 fiscal year compared the year ended december 31 , 2018. we do not include equity in earnings from unconsolidated affiliates in our measures of segment revenues . replace_table_token_4_th ( 1 ) refer to note 21 : business segments in our audited consolidated financial statements included in item 8 of this annual report on form 10-k for details on the intersegment eliminations . 51 we evaluate our business segment operating performance using segment adjusted ebitda , as described in note 21 : business segments in our audited consolidated financial statements included in item 8 of this annual report on form 10-k. for a discussion of our definition of ebitda and adjusted ebitda , how management uses them to manage our business and material limitations on their usefulness , refer to “ —key business and financial metrics and terms used by management—ebitda and adjusted ebitda . ” the following table reconciles net income , our most comparable u.s. gaap financial measure , to ebitda and adjusted ebitda : replace_table_token_5_th ( 1 ) fluctuation in terms of percentage change is not meaningful . ( 2 ) for the year ended december 31 , 2019 , this amount includes costs associated with restructuring and other non-cash and on-time charges . for the years ended december 31 , 2018 and 2017 , these amounts include costs associated with the spin-off of $ 11 million and $ 8 million , respectively . the following table reconciles our segment adjusted ebitda to adjusted ebitda . replace_table_token_6_th ( 1 ) includes intersegment transactions , share-based compensation , depreciation and other adjustments attributable to the segments . ( 2 ) adjusts for segment related share-based compensation , depreciation and other adjustment items , such as spin related costs and restructuring costs . 52 real estate sales and financing in accordance with accounting standards codification ( “ asc ” ) topic 606 , “ revenue from contracts with customers ” ( “ asc 606 ” ) , revenue and the related costs to fulfill

