ORLANDO, Fla., July 23, 2015 /PRNewswire/ -- Marriott
Vacations Worldwide Corporation (NYSE: VAC) today reported second
quarter 2015 financial results and provided updated guidance for
the full year 2015.
Second quarter 2015 highlights:
- Adjusted fully diluted earnings per share (EPS) increased to
$0.91, up 4.6 percent from
$0.87 in the second quarter of
2014.
- Adjusted EBITDA totaled $57.7
million, an increase of $1.0
million, or 2 percent, year-over-year.
- North America contract sales
were $150.6 million, up 3.4 percent
year-over-year.
- North America tours increased
1.2 percent year-over-year.
- North America volume per guest
(VPG) increased 0.6 percent year-over-year to $3,404.
- Company adjusted development margin was 21.0 percent and
North America adjusted development
margin was 23.0 percent.
- The company completed the sale of its undeveloped land in
Kauai, Hawaii, for gross cash
proceeds of $20 million.
- During the second quarter of 2015, the company repurchased
$15 million of its common stock,
bringing total 2015 repurchases through the end of the second
quarter to $66.2 million.
- Subsequent to the end of the second quarter, the company
purchased 71 units in The Mayflower Hotel, Autograph Collection in
Washington, D.C.
Second quarter 2015 net income was $34.0
million, or $1.05 diluted EPS,
compared to net income of $35.3
million, or $1.00 diluted EPS,
in the second quarter of 2014. Company development margin was 21.3
percent and North America
development margin was 23.6 percent in the second quarter of
2015.
Non-GAAP financial measures such as adjusted EBITDA, adjusted
net income, adjusted earnings per share and adjusted development
margin are reconciled and adjustments are shown and described in
further detail on pages A-1 through A-19 of the Financial Schedules
that follow.
"We're pleased with our solid second quarter financial results,
delivering nearly $58 million of
Adjusted EBITDA," said Stephen P.
Weisz, president and chief executive officer. "Our North
America contract sales grew 3.4 percent on continued growth in tour
volumes and slightly higher VPG and our company development margin
remained in line with our full year expectations. With a strong
first half of the year behind us, we are reaffirming Adjusted
EBITDA guidance of $222 million to $232
million for full year 2015."
Second Quarter 2015 Results
Company Results
Total company contract sales were $165.9
million, $1.3 million higher
than the second quarter of last year. The increase was driven by
$5.0 million of higher contract sales
in the company's North America
segment and $0.7 million of higher
contract sales in the company's Asia
Pacific segment, partially offset by $4.3 million of lower contract sales in the
company's Europe segment.
Adjusted development margin was $32.3
million, a $4.4 million
decrease from the second quarter of 2014. Adjusted development
margin percentage was 21.0 percent in the second quarter of 2015
compared to 24.2 percent in the second quarter of 2014. Development
margin was $33.1 million, a
$3.8 million decrease from the second
quarter of 2014. Development margin percentage was 21.3 percent in
the second quarter of 2015 compared to 24.2 percent in the second
quarter of 2014.
Rental revenues totaled $72.6
million, a $10.8 million
increase from the second quarter of 2014, reflecting a 4 percent
increase in transient rate and a 6 percent increase in transient
keys rented. Rental revenues, net of expenses, were $10.8 million, a $4.0
million increase from the second quarter of 2014.
Resort management and other services revenues totaled
$74.1 million, a $0.8 million decrease from the second quarter of
2014. Resort management and other services revenues, net of
expenses, were $28.6 million, a
$2.1 million, or 8 percent, increase
over the second quarter of 2014.
Financing revenues totaled $28.3
million, a $1.5 million
decrease from the second quarter of 2014. Financing revenues, net
of expenses and consumer financing interest expense, were
$17.0 million, a $1.7 million decrease from the second quarter of
2014.
Adjusted EBITDA was $57.7 million
in the second quarter of 2015, a $1.0
million, or 1.7 percent, increase from $56.7 million in the second quarter of 2014.
Segment Results
North America
VPG increased 0.6 percent to $3,404 in the second quarter of 2015 from
$3,383 in the second quarter of 2014,
driven by improved closing efficiency and higher pricing, offset
partially by fewer points purchased per contract. North America contract sales were $150.6 million in the second quarter of 2015, an
increase of $5.0 million, or 3.4
percent, over the prior year period.
Second quarter 2015 North America segment financial results were
$104.6 million, an increase of
$2.9 million from the second quarter
of 2014. The increase was driven primarily by $8.2 million of higher gains mainly associated
with the disposition of the company's property in Kauai, Hawaii, $4.2
million of higher rental revenues net of expenses,
$2.1 million of higher resort
management and other services revenues net of expenses and
$0.8 million related to an impairment
charge in the prior year period. These increases were offset
partially by $7.5 million of lower
litigation settlements due mainly to the settlement of a dispute
with a former service provider in the prior year period,
$2.0 million of lower development
margin, $2.0 million from the
reversal of a charge in the prior year period related to the
company's interest in an equity method investment in a joint
venture project and $1.5 million of
lower financing revenues.
Adjusted development margin was $32.3
million, a $3.0 million
decrease from the prior year quarter. Adjusted development margin
percentage was 23.0 percent in the second quarter of 2015 compared
to 26.3 percent in the second quarter of 2014. Development margin
was $33.5 million, a $2.0 million decrease from the second quarter of
2014. Development margin percentage was 23.6 percent in the second
quarter of 2015 compared to 26.3 percent in the prior year
quarter.
Asia Pacific
Total contract sales in the segment were $8.0 million, an increase of $0.7 million in the second quarter of 2015.
Segment financial results were a loss of $0.1 million, a $1.5
million decrease from the second quarter of 2014, reflecting
$1.3 million of transaction costs
associated with the company's future new resort and sales
distribution in Australia.
Europe
Second quarter 2015 contract sales were $7.3 million, a decrease of $4.3 million from the second quarter of 2014.
Segment financial results were $3.0
million, a $2.2 million
decrease from the second quarter of 2014 due to lower development
margin from lower contract sales.
Share Repurchase Program
In total for 2015, through the end of the second quarter, the
company repurchased approximately $66.2
million of its common stock.
Balance Sheet and Liquidity
On June 19, 2015, cash and cash
equivalents totaled $250.9 million.
Since the beginning of the year, real estate inventory balances
declined $69.1 million to
$699.1 million, including
$335.3 million of finished goods and
$363.8 million of land and
infrastructure. The company had $568.1
million in gross debt outstanding at the end of the second
quarter of 2015, a decrease of $143.3
million from year-end 2014, consisting primarily of
$564.7 million in gross non-recourse
securitized notes. In addition, $40.0
million of gross mandatorily redeemable preferred stock of a
subsidiary of the company was outstanding at the end of the second
quarter of 2015.
As of June 19, 2015, the company
had approximately $197 million in
available capacity under its revolving credit facility after taking
into account outstanding letters of credit, and approximately
$207 million of gross vacation
ownership notes receivable eligible for securitization into its
warehouse credit facility.
Outlook
The company is providing the following updated guidance for the
full year 2015:
|
Current
Guidance
|
Previous
Guidance
|
Adjusted free cash
flow
|
$175 million to $200
million
|
$145 million to $170
million
|
|
|
|
The company is
reaffirming the following guidance for the full year
2015:
|
|
|
|
|
Current
Guidance
|
|
Adjusted
EBITDA
|
$222 million to $232
million
|
|
Company contract
sales growth (excluding residential)
|
5 percent to 8
percent
|
|
Adjusted company
development margin
|
21 percent to 22
percent
|
|
Adjusted net
income
|
$108 million to $114
million
|
|
Adjusted fully
diluted earnings per share
|
$3.29 to
$3.48
|
|
Pages A-1 through A-19 of the Financial Schedules reconcile the
non-GAAP financial measures set forth above to the following full
year 2015 expected GAAP results: net income of $114 million to $121 million; fully diluted EPS
of $3.49 to $3.70; company
development margin of 21.1 percent to 22.1 percent; and net cash
provided by operating activities of $170
million to $185 million.
Second Quarter 2015 Earnings Conference Call
The company will hold a conference call at 10:00 a.m. EST today to discuss these results and
the updated guidance for full year 2015. Participants may access
the call by dialing (877) 407-8289 or (201) 689-8341 for
international callers. A live webcast of the call will also be
available in the Investor Relations section of the company's
website at www.marriottvacationsworldwide.com.
An audio replay of the conference call will be available for
seven days and can be accessed at (877) 660-6853 or (201) 612-7415
for international callers. The conference ID for the recording
is 13613029. The webcast will also be available on the
company's website.
About Marriott Vacations Worldwide Corporation
Marriott Vacations Worldwide Corporation is a leading global
pure-play vacation ownership company, offering a diverse portfolio
of quality products, programs and management expertise with 60
resorts. Its brands include Marriott Vacation Club, The
Ritz-Carlton Destination Club and Grand Residences by Marriott.
Since entering the industry in 1984 as part of Marriott
International, Inc., the company earned its position as a leader
and innovator in vacation ownership products. The company preserves
high standards of excellence in serving its customers, investors
and associates while maintaining a long-term relationship with
Marriott International. For more information, please visit
www.marriottvacationsworldwide.com.
Note on forward-looking statements: This press release
and accompanying schedules contain "forward-looking statements"
within the meaning of federal securities laws, including statements
about future operating results, estimates, and assumptions, and
similar statements concerning anticipated future events and
expectations that are not historical facts. The company cautions
you that these statements are not guarantees of future performance
and are subject to numerous risks and uncertainties, including
volatility in the economy and the credit markets, supply and demand
changes for vacation ownership and residential products,
competitive conditions, the availability of capital to finance
growth, and other matters referred to under the heading "Risk
Factors" contained in the company's most recent Annual Report on
Form 10-K filed with the U.S Securities and Exchange Commission
(the "SEC") and in subsequent SEC filings, any of which could cause
actual results to differ materially from those expressed in or
implied in this press release. These statements are made as of
July 23, 2015 and the company
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
Financial Schedules Follow
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
FINANCIAL
SCHEDULES
|
QUARTER 2,
2015
|
TABLE OF
CONTENTS
|
|
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|
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|
|
Consolidated
Statements of Income - 12 Weeks Ended June 19, 2015 and June 20,
2014
|
A-1
|
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|
|
Consolidated
Statements of Income - 24 Weeks Ended June 19, 2015 and June 20,
2014
|
A-2
|
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|
|
|
|
|
North America Segment
Financial Results - 12 Weeks Ended June 19, 2015 and June 20,
2014
|
A-3
|
|
|
|
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|
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|
|
North America Segment
Financial Results - 24 Weeks Ended June 19, 2015 and June 20,
2014
|
A-4
|
|
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|
Asia Pacific Segment
Financial Results - 12 Weeks Ended June 19, 2015 and June 20,
2014
|
A-5
|
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|
Asia Pacific Segment
Financial Results - 24 Weeks Ended June 19, 2015 and June 20,
2014
|
A-6
|
|
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|
|
Europe Segment
Financial Results - 12 Weeks Ended June 19, 2015 and June 20,
2014
|
A-7
|
|
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|
|
Europe Segment
Financial Results - 24 Weeks Ended June 19, 2015 and June 20,
2014
|
A-8
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Corporate and Other
Financial Results - 12 Weeks and 24 Weeks Ended June 19, 2015 and
June 20, 2014
|
A-9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Contract
Sales to Sale of Vacation Ownership Products and Adjusted
Development Margin
|
|
(Adjusted Sale of Vacation Ownership Products Net of Expenses) - 12
Weeks Ended June 19, 2015 and June 20, 2014
|
A-10
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Consolidated Contract
Sales to Sale of Vacation Ownership Products and Adjusted
Development Margin
|
|
(Adjusted Sale of Vacation Ownership Products Net of Expenses) - 24
Weeks Ended June 19, 2015 and June 20, 2014
|
A-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Contract Sales to Sale of Vacation Ownership Products and Adjusted
Development Margin
|
|
(Adjusted Sale of Vacation Ownership Products Net of Expenses) - 12
Weeks Ended June 19, 2015 and June 20, 2014
|
A-12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Contract Sales to Sale of Vacation Ownership Products and Adjusted
Development Margin
|
|
(Adjusted Sale of Vacation Ownership Products Net of Expenses) - 24
Weeks Ended June 19, 2015 and June 20, 2014
|
A-13
|
|
|
|
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|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA - 12 Weeks and 24 Weeks Ended June 19, 2015 and June 20,
2014
|
A-14
|
|
|
|
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|
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|
|
|
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|
|
|
|
|
|
2015 Outlook -
Adjusted Net Income and Adjusted Earnings Per Share - Diluted,
Adjusted EBITDA and Adjusted Development Margin
|
A-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Outlook -
Adjusted Free Cash Flow and Normalized Adjusted Free Cash
Flow
|
|
A-16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
A-17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheets
|
|
A-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
A-21
|
A-1
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
STATEMENTS OF INCOME
|
12 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
155,370
|
|
$
-
|
|
$
155,370
|
|
|
$
152,562
|
|
$
-
|
|
$
152,562
|
|
|
Resort management and
other services
|
74,063
|
|
-
|
|
74,063
|
|
|
74,821
|
|
-
|
|
74,821
|
|
|
Financing
|
28,294
|
|
-
|
|
28,294
|
|
|
29,817
|
|
-
|
|
29,817
|
|
|
Rental
|
|
72,642
|
|
-
|
|
72,642
|
|
|
61,827
|
|
-
|
|
61,827
|
|
|
Cost
reimbursements
|
92,458
|
|
-
|
|
92,458
|
|
|
90,875
|
|
-
|
|
90,875
|
|
|
|
|
Total
revenues
|
422,827
|
|
-
|
|
422,827
|
|
|
409,902
|
|
-
|
|
409,902
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
45,119
|
|
-
|
|
45,119
|
|
|
43,414
|
|
-
|
|
43,414
|
|
|
Marketing and
sales
|
77,137
|
|
-
|
|
77,137
|
|
|
72,227
|
|
(287)
|
|
71,940
|
|
|
Resort management and
other services
|
45,480
|
|
-
|
|
45,480
|
|
|
48,308
|
|
-
|
|
48,308
|
|
|
Financing
|
6,085
|
|
-
|
|
6,085
|
|
|
5,438
|
|
-
|
|
5,438
|
|
|
Rental
|
61,835
|
|
-
|
|
61,835
|
|
|
54,991
|
|
-
|
|
54,991
|
|
|
General and
administrative
|
22,892
|
|
-
|
|
22,892
|
|
|
23,153
|
|
-
|
|
23,153
|
|
|
Organizational and
separation related
|
101
|
|
(101)
|
|
-
|
|
|
1,089
|
|
(1,089)
|
|
-
|
|
|
Litigation
settlement
|
26
|
|
(26)
|
|
-
|
|
|
(7,575)
|
|
7,575
|
|
-
|
|
|
Consumer financing
interest
|
5,248
|
|
-
|
|
5,248
|
|
|
5,737
|
|
-
|
|
5,737
|
|
|
Royalty
fee
|
13,431
|
|
-
|
|
13,431
|
|
|
13,653
|
|
-
|
|
13,653
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
834
|
|
(834)
|
|
-
|
|
|
Cost
reimbursements
|
92,458
|
|
-
|
|
92,458
|
|
|
90,875
|
|
-
|
|
90,875
|
|
|
|
|
Total
expenses
|
369,812
|
|
(127)
|
|
369,685
|
|
|
352,144
|
|
5,365
|
|
357,509
|
|
Gains and other
income
|
8,625
|
|
(8,625)
|
|
-
|
|
|
409
|
|
(409)
|
|
-
|
|
Interest
Expense
|
(3,009)
|
|
-
|
|
(3,009)
|
|
|
(2,601)
|
|
-
|
|
(2,601)
|
|
Equity in
earnings
|
85
|
|
-
|
|
85
|
|
|
81
|
|
-
|
|
81
|
|
Impairment reversals
on equity investment
|
-
|
|
-
|
|
-
|
|
|
2,000
|
|
(2,000)
|
|
-
|
|
Other
|
|
|
(1,272)
|
|
1,272
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
Income before income
taxes
|
57,444
|
|
(7,226)
|
|
50,218
|
|
|
57,647
|
|
(7,774)
|
|
49,873
|
|
Provision for income
taxes
|
(23,403)
|
|
2,804
|
|
(20,599)
|
|
|
(22,344)
|
|
3,158
|
|
(19,186)
|
|
Net income
|
$
34,041
|
|
$ (4,422)
|
|
$
29,619
|
|
|
$
35,303
|
|
$ (4,616)
|
|
$
30,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
$
1.07
|
|
|
|
$
0.93
|
|
|
$
1.03
|
|
|
|
$
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
1.05
|
|
|
|
$
0.91
|
|
|
$
1.00
|
|
|
|
$
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
31,858
|
|
|
|
31,858
|
|
|
34,292
|
|
|
|
34,292
|
|
Diluted
Shares
|
|
32,517
|
|
|
|
32,517
|
|
|
35,239
|
|
|
|
35,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
$
165,938
|
|
|
|
|
|
|
$
164,589
|
|
|
|
|
|
|
|
Residential
products
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
165,938
|
|
|
|
|
|
|
$
164,589
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
NOTE: Earnings
per share - Basic and Earnings per share - Diluted are calculated
using whole dollars. Beginning with the fourth quarter of
2014, we have combined results from Other into Resort management
and other services and have recast prior year presentation for
consistency.
|
A-2
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
STATEMENTS OF INCOME
|
24 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
339,276
|
|
$(28,420)
|
|
$
310,856
|
|
|
$
297,412
|
|
$
-
|
|
$
297,412
|
|
|
Resort management and
other services
|
138,480
|
|
-
|
|
138,480
|
|
|
138,367
|
|
-
|
|
138,367
|
|
|
Financing
|
57,346
|
|
-
|
|
57,346
|
|
|
60,457
|
|
-
|
|
60,457
|
|
|
Rental
|
|
148,841
|
|
-
|
|
148,841
|
|
|
125,352
|
|
-
|
|
125,352
|
|
|
Cost
reimbursements
|
193,764
|
|
-
|
|
193,764
|
|
|
190,261
|
|
-
|
|
190,261
|
|
|
|
|
Total
revenues
|
877,707
|
|
(28,420)
|
|
849,287
|
|
|
811,849
|
|
-
|
|
811,849
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
110,081
|
|
(21,583)
|
|
88,498
|
|
|
90,285
|
|
-
|
|
90,285
|
|
|
Marketing and
sales
|
157,132
|
|
(922)
|
|
156,210
|
|
|
143,447
|
|
(287)
|
|
143,160
|
|
|
Resort management and
other services
|
87,889
|
|
-
|
|
87,889
|
|
|
93,204
|
|
200
|
|
93,404
|
|
|
Financing
|
10,990
|
|
-
|
|
10,990
|
|
|
10,542
|
|
-
|
|
10,542
|
|
|
Rental
|
121,993
|
|
-
|
|
121,993
|
|
|
111,781
|
|
-
|
|
111,781
|
|
|
General and
administrative
|
45,669
|
|
-
|
|
45,669
|
|
|
44,981
|
|
-
|
|
44,981
|
|
|
Organizational and
separation related
|
293
|
|
(293)
|
|
-
|
|
|
1,940
|
|
(1,940)
|
|
-
|
|
|
Litigation
settlement
|
(236)
|
|
236
|
|
-
|
|
|
(7,575)
|
|
7,575
|
|
-
|
|
|
Consumer financing
interest
|
11,269
|
|
-
|
|
11,269
|
|
|
12,362
|
|
-
|
|
12,362
|
|
|
Royalty
fee
|
26,431
|
|
-
|
|
26,431
|
|
|
27,081
|
|
-
|
|
27,081
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
834
|
|
(834)
|
|
-
|
|
|
Cost
reimbursements
|
193,764
|
|
-
|
|
193,764
|
|
|
190,261
|
|
-
|
|
190,261
|
|
|
|
|
Total
expenses
|
765,275
|
|
(22,562)
|
|
742,713
|
|
|
719,143
|
|
4,714
|
|
723,857
|
|
Gains and other
income
|
9,512
|
|
(9,512)
|
|
-
|
|
|
1,642
|
|
(1,642)
|
|
-
|
|
Interest
Expense
|
(5,983)
|
|
-
|
|
(5,983)
|
|
|
(4,748)
|
|
-
|
|
(4,748)
|
|
Equity in
earnings
|
98
|
|
-
|
|
98
|
|
|
118
|
|
-
|
|
118
|
|
Other
|
|
|
|
(1,272)
|
|
1,272
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
Income before income
taxes
|
114,787
|
|
(14,098)
|
|
100,689
|
|
|
89,718
|
|
(6,356)
|
|
83,362
|
|
Provision for income
taxes
|
(46,692)
|
|
3,779
|
|
(42,913)
|
|
|
(35,107)
|
|
2,537
|
|
(32,570)
|
|
Net income
|
|
$
68,095
|
|
$(10,319)
|
|
$
57,776
|
|
|
$
54,611
|
|
$ (3,819)
|
|
$
50,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
$
2.12
|
|
|
|
$
1.80
|
|
|
$
1.58
|
|
|
|
$
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
$
2.08
|
|
|
|
$
1.76
|
|
|
$
1.54
|
|
|
|
$
1.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
|
32,078
|
|
|
|
32,078
|
|
|
34,583
|
|
|
|
34,583
|
|
Diluted
Shares
|
|
32,760
|
|
|
|
32,760
|
|
|
35,557
|
|
|
|
35,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
$
335,888
|
|
|
|
|
|
|
$
319,837
|
|
|
|
|
|
|
|
Residential
products
|
28,420
|
|
|
|
|
|
|
6,326
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
364,308
|
|
|
|
|
|
|
$
326,163
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Earnings
per share - Basic and Earnings per share - Diluted are calculated
using whole dollars. Beginning with the fourth quarter of
2014, we have combined results from Other into Resort management
and other services and have recast prior year presentation for
consistency.
|
A-3
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
SEGMENT
|
12 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
142,148
|
|
$
-
|
|
$
142,148
|
|
|
$
134,590
|
|
$
-
|
|
$
134,590
|
|
|
Resort management and
other services
|
66,194
|
|
-
|
|
66,194
|
|
|
65,480
|
|
-
|
|
65,480
|
|
|
Financing
|
26,354
|
|
-
|
|
26,354
|
|
|
27,807
|
|
-
|
|
27,807
|
|
|
Rental
|
65,756
|
|
-
|
|
65,756
|
|
|
54,404
|
|
-
|
|
54,404
|
|
|
Cost
reimbursements
|
84,037
|
|
-
|
|
84,037
|
|
|
80,642
|
|
-
|
|
80,642
|
|
|
|
|
Total
revenues
|
384,489
|
|
-
|
|
384,489
|
|
|
362,923
|
|
-
|
|
362,923
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
40,834
|
|
-
|
|
40,834
|
|
|
37,433
|
|
-
|
|
37,433
|
|
|
Marketing and
sales
|
67,837
|
|
-
|
|
67,837
|
|
|
61,722
|
|
-
|
|
61,722
|
|
|
Resort management and
other services
|
39,101
|
|
-
|
|
39,101
|
|
|
40,527
|
|
-
|
|
40,527
|
|
|
Rental
|
55,128
|
|
-
|
|
55,128
|
|
|
47,985
|
|
-
|
|
47,985
|
|
|
Organizational and
separation related
|
115
|
|
(115)
|
|
-
|
|
|
388
|
|
(388)
|
|
-
|
|
|
Litigation
settlement
|
(108)
|
|
108
|
|
-
|
|
|
(7,575)
|
|
7,575
|
|
-
|
|
|
Royalty
fee
|
1,686
|
|
-
|
|
1,686
|
|
|
1,820
|
|
-
|
|
1,820
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
834
|
|
(834)
|
|
-
|
|
|
Cost
reimbursements
|
84,037
|
|
-
|
|
84,037
|
|
|
80,642
|
|
-
|
|
80,642
|
|
|
|
|
Total
expenses
|
288,630
|
|
(7)
|
|
288,623
|
|
|
263,776
|
|
6,353
|
|
270,129
|
|
Gains and other
income
|
8,658
|
|
(8,658)
|
|
-
|
|
|
448
|
|
(448)
|
|
-
|
|
Equity in
earnings
|
86
|
|
-
|
|
86
|
|
|
81
|
|
-
|
|
81
|
|
Impairment reversals
on equity investment
|
-
|
|
-
|
|
-
|
|
|
2,000
|
|
(2,000)
|
|
-
|
|
|
|
|
Segment financial
results
|
$
104,603
|
|
$ (8,651)
|
|
$
95,952
|
|
|
$
101,676
|
|
$ (8,801)
|
|
$
92,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
$
150,605
|
|
|
|
|
|
|
$
145,597
|
|
|
|
|
|
|
|
Residential
products
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
150,605
|
|
|
|
|
|
|
$
145,597
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Beginning
with the fourth quarter of 2014 we have combined results from Other
into Resort management and other services and have recast prior
year presentation for consistency.
|
A-4
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
SEGMENT
|
24 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
283,876
|
|
$
-
|
|
$
283,876
|
|
|
$
265,932
|
|
$
-
|
|
$
265,932
|
|
|
Resort management and
other services
|
124,769
|
|
-
|
|
124,769
|
|
|
122,640
|
|
-
|
|
122,640
|
|
|
Financing
|
53,410
|
|
-
|
|
53,410
|
|
|
56,368
|
|
-
|
|
56,368
|
|
|
Rental
|
137,471
|
|
-
|
|
137,471
|
|
|
113,727
|
|
-
|
|
113,727
|
|
|
Cost
reimbursements
|
176,891
|
|
-
|
|
176,891
|
|
|
170,585
|
|
-
|
|
170,585
|
|
|
|
|
Total
revenues
|
776,417
|
|
-
|
|
776,417
|
|
|
729,252
|
|
-
|
|
729,252
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
81,335
|
|
-
|
|
81,335
|
|
|
78,938
|
|
-
|
|
78,938
|
|
|
Marketing and
sales
|
136,854
|
|
-
|
|
136,854
|
|
|
124,409
|
|
-
|
|
124,409
|
|
|
Resort management and
other services
|
76,069
|
|
-
|
|
76,069
|
|
|
79,616
|
|
-
|
|
79,616
|
|
|
Rental
|
109,739
|
|
-
|
|
109,739
|
|
|
99,022
|
|
-
|
|
99,022
|
|
|
Organizational and
separation related
|
254
|
|
(254)
|
|
-
|
|
|
405
|
|
(405)
|
|
-
|
|
|
Litigation
settlement
|
(370)
|
|
370
|
|
-
|
|
|
(7,575)
|
|
7,575
|
|
-
|
|
|
Royalty
fee
|
2,946
|
|
-
|
|
2,946
|
|
|
3,497
|
|
-
|
|
3,497
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
834
|
|
(834)
|
|
-
|
|
|
Cost
reimbursements
|
176,891
|
|
-
|
|
176,891
|
|
|
170,585
|
|
-
|
|
170,585
|
|
|
|
|
Total
expenses
|
583,718
|
|
116
|
|
583,834
|
|
|
549,731
|
|
6,336
|
|
556,067
|
|
Gains and other
income
|
9,538
|
|
(9,538)
|
|
-
|
|
|
1,690
|
|
(1,690)
|
|
-
|
|
Equity in
earnings
|
102
|
|
-
|
|
102
|
|
|
120
|
|
-
|
|
120
|
|
|
|
|
Segment financial
results
|
$
202,339
|
|
$ (9,654)
|
|
$
192,685
|
|
|
$
181,331
|
|
$ (8,026)
|
|
$
173,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
$
306,598
|
|
|
|
|
|
|
$
285,774
|
|
|
|
|
|
|
|
Residential
products
|
-
|
|
|
|
|
|
|
6,326
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
306,598
|
|
|
|
|
|
|
$
292,100
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Beginning
with the fourth quarter of 2014 we have combined results from Other
into Resort management and other services and have recast prior
year presentation for consistency.
|
A-5
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
ASIA PACIFIC
SEGMENT
|
12 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
7,575
|
|
$
-
|
|
$
7,575
|
|
|
$
7,954
|
|
$
-
|
|
$
7,954
|
|
|
Resort management and
other services
|
964
|
|
-
|
|
964
|
|
|
926
|
|
-
|
|
926
|
|
|
Financing
|
1,043
|
|
-
|
|
1,043
|
|
|
1,047
|
|
-
|
|
1,047
|
|
|
Rental
|
1,503
|
|
-
|
|
1,503
|
|
|
1,581
|
|
-
|
|
1,581
|
|
|
Cost
reimbursements
|
632
|
|
-
|
|
632
|
|
|
722
|
|
-
|
|
722
|
|
|
|
|
Total
revenues
|
11,717
|
|
-
|
|
11,717
|
|
|
12,230
|
|
-
|
|
12,230
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
1,803
|
|
-
|
|
1,803
|
|
|
2,047
|
|
-
|
|
2,047
|
|
|
Marketing and
sales
|
4,432
|
|
-
|
|
4,432
|
|
|
4,243
|
|
-
|
|
4,243
|
|
|
Resort management and
other services
|
655
|
|
-
|
|
655
|
|
|
642
|
|
-
|
|
642
|
|
|
Rental
|
2,794
|
|
-
|
|
2,794
|
|
|
2,936
|
|
-
|
|
2,936
|
|
|
Royalty
fee
|
150
|
|
-
|
|
150
|
|
|
147
|
|
-
|
|
147
|
|
|
Cost
reimbursements
|
632
|
|
-
|
|
632
|
|
|
722
|
|
-
|
|
722
|
|
|
|
|
Total
expenses
|
10,466
|
|
-
|
|
10,466
|
|
|
10,737
|
|
-
|
|
10,737
|
|
Gains and other
income
|
(33)
|
|
33
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
Equity in
losses
|
(1)
|
|
-
|
|
(1)
|
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
|
|
(1,272)
|
|
1,272
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
Segment financial
results
|
$
(55)
|
|
$ 1,305
|
|
$
1,250
|
|
|
$
1,493
|
|
$
-
|
|
$
1,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
$
7,992
|
|
|
|
|
|
|
$
7,337
|
|
|
|
|
|
|
|
Residential
products
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
7,992
|
|
|
|
|
|
|
$
7,337
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
NOTE:
Beginning with the fourth quarter of 2014 we have combined results
from Other into Resort management and other services and have
recast prior year presentation for consistency.
|
A-6
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
ASIA PACIFIC
SEGMENT
|
24 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
43,853
|
|
$(28,420)
|
|
$
15,433
|
|
|
$
14,222
|
|
$
-
|
|
$
14,222
|
|
|
Resort management and
other services
|
1,827
|
|
-
|
|
1,827
|
|
|
1,832
|
|
-
|
|
1,832
|
|
|
Financing
|
2,049
|
|
-
|
|
2,049
|
|
|
2,104
|
|
-
|
|
2,104
|
|
|
Rental
|
3,855
|
|
-
|
|
3,855
|
|
|
3,556
|
|
-
|
|
3,556
|
|
|
Cost
reimbursements
|
1,498
|
|
-
|
|
1,498
|
|
|
1,663
|
|
-
|
|
1,663
|
|
|
|
|
Total
revenues
|
53,082
|
|
(28,420)
|
|
24,662
|
|
|
23,377
|
|
-
|
|
23,377
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
23,799
|
|
(21,583)
|
|
2,216
|
|
|
3,500
|
|
-
|
|
3,500
|
|
|
Marketing and
sales
|
9,989
|
|
(922)
|
|
9,067
|
|
|
8,021
|
|
-
|
|
8,021
|
|
|
Resort management and
other services
|
1,505
|
|
-
|
|
1,505
|
|
|
1,342
|
|
-
|
|
1,342
|
|
|
Rental
|
5,290
|
|
-
|
|
5,290
|
|
|
5,532
|
|
-
|
|
5,532
|
|
|
Royalty
fee
|
307
|
|
-
|
|
307
|
|
|
324
|
|
-
|
|
324
|
|
|
Cost
reimbursements
|
1,498
|
|
-
|
|
1,498
|
|
|
1,663
|
|
-
|
|
1,663
|
|
|
|
|
Total
expenses
|
42,388
|
|
(22,505)
|
|
19,883
|
|
|
20,382
|
|
-
|
|
20,382
|
|
Gains and other
income
|
(30)
|
|
30
|
|
-
|
|
|
(8)
|
|
8
|
|
-
|
|
Equity in
losses
|
(4)
|
|
-
|
|
(4)
|
|
|
(2)
|
|
-
|
|
(2)
|
|
Other
|
|
|
|
|
(1,272)
|
|
1,272
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
Segment financial
results
|
$
9,388
|
|
$ (4,613)
|
|
$
4,775
|
|
|
$
2,985
|
|
$
8
|
|
$
2,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
16,651
|
|
|
|
|
|
|
13,960
|
|
|
|
|
|
|
|
Residential
products
|
28,420
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Total contract
sales
|
$
45,071
|
|
|
|
|
|
|
$
13,960
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
NOTE:
Asia Pacific segment revenues and expenses for the twelve weeks
ended March 28, 2014 have been restated to reclassify a portion of
Cost reimbursements from the Asia Pacific segment to the Europe
segment to correct certain immaterial prior period errors.
Beginning with the fourth quarter of 2014 we have combined results
from Other into Resort management and other services and have
recast prior year presentation for consistency.
|
A-7
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
EUROPE
SEGMENT
|
12 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
5,647
|
|
$
-
|
|
$
5,647
|
|
|
$
10,018
|
|
$
-
|
|
$
10,018
|
|
|
Resort management and
other services
|
6,905
|
|
-
|
|
6,905
|
|
|
8,415
|
|
-
|
|
8,415
|
|
|
Financing
|
897
|
|
-
|
|
897
|
|
|
963
|
|
-
|
|
963
|
|
|
Rental
|
|
5,383
|
|
-
|
|
5,383
|
|
|
5,842
|
|
-
|
|
5,842
|
|
|
Cost
reimbursements
|
7,789
|
|
-
|
|
7,789
|
|
|
9,511
|
|
-
|
|
9,511
|
|
|
|
|
Total
revenues
|
26,621
|
|
-
|
|
26,621
|
|
|
34,749
|
|
-
|
|
34,749
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
1,233
|
|
-
|
|
1,233
|
|
|
2,389
|
|
-
|
|
2,389
|
|
|
Marketing and
sales
|
4,868
|
|
-
|
|
4,868
|
|
|
6,262
|
|
(287)
|
|
5,975
|
|
|
Resort management and
other services
|
5,724
|
|
-
|
|
5,724
|
|
|
7,139
|
|
-
|
|
7,139
|
|
|
Rental
|
3,913
|
|
-
|
|
3,913
|
|
|
4,070
|
|
-
|
|
4,070
|
|
|
Royalty
fee
|
88
|
|
-
|
|
88
|
|
|
180
|
|
-
|
|
180
|
|
|
Cost
reimbursements
|
7,789
|
|
-
|
|
7,789
|
|
|
9,511
|
|
-
|
|
9,511
|
|
|
|
|
Total
expenses
|
23,615
|
|
-
|
|
23,615
|
|
|
29,551
|
|
(287)
|
|
29,264
|
|
Gains and other
income
|
-
|
|
-
|
|
-
|
|
|
(39)
|
|
39
|
|
-
|
|
|
|
|
Segment financial
results
|
$
3,006
|
|
$
-
|
|
$
3,006
|
|
|
$
5,159
|
|
$ 326
|
|
$
5,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
7,341
|
|
|
|
|
|
|
$
11,655
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
NOTE: Beginning with the fourth
quarter of 2014 we have combined results from Other into Resort
management and other services and have recast prior year
presentation for consistency.
|
A-8
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
EUROPE
SEGMENT
|
24 Weeks Ended
June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
11,547
|
|
$
-
|
|
$
11,547
|
|
|
$
17,258
|
|
$
-
|
|
$
17,258
|
|
|
Resort management and
other services
|
11,884
|
|
-
|
|
11,884
|
|
|
13,895
|
|
-
|
|
13,895
|
|
|
Financing
|
1,887
|
|
-
|
|
1,887
|
|
|
1,985
|
|
-
|
|
1,985
|
|
|
Rental
|
7,515
|
|
-
|
|
7,515
|
|
|
8,069
|
|
-
|
|
8,069
|
|
|
Cost
reimbursements
|
15,375
|
|
-
|
|
15,375
|
|
|
18,013
|
|
-
|
|
18,013
|
|
|
|
|
Total
revenues
|
48,208
|
|
-
|
|
48,208
|
|
|
59,220
|
|
-
|
|
59,220
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
2,085
|
|
-
|
|
2,085
|
|
|
3,835
|
|
-
|
|
3,835
|
|
|
Marketing and
sales
|
10,289
|
|
-
|
|
10,289
|
|
|
11,017
|
|
(287)
|
|
10,730
|
|
|
Resort management and
other services
|
10,315
|
|
-
|
|
10,315
|
|
|
12,246
|
|
200
|
|
12,446
|
|
|
Rental
|
6,964
|
|
-
|
|
6,964
|
|
|
7,227
|
|
-
|
|
7,227
|
|
|
Royalty
fee
|
164
|
|
-
|
|
164
|
|
|
282
|
|
-
|
|
282
|
|
|
Cost
reimbursements
|
15,375
|
|
-
|
|
15,375
|
|
|
18,013
|
|
-
|
|
18,013
|
|
|
|
|
Total
expenses
|
45,192
|
|
-
|
|
45,192
|
|
|
52,620
|
|
(87)
|
|
52,533
|
|
Gains and other
income
|
4
|
|
(4)
|
|
-
|
|
|
(39)
|
|
39
|
|
-
|
|
|
|
|
Segment financial
results
|
$
3,020
|
|
$ (4)
|
|
$
3,016
|
|
|
$
6,561
|
|
$ 126
|
|
$
6,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
12,639
|
|
|
|
|
|
|
$
20,103
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE:
Europe segment revenues and expenses for the twelve weeks ended
March 28, 2014 have been restated to reclassify a portion of Cost
reimbursements from the Asia Pacific segment to the Europe segment
to correct certain immaterial prior period errors. Beginning
with the fourth quarter of 2014 we have combined results from Other
into Resort management and other services and have recast prior
year presentation for consistency.
|
A-9
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CORPORATE AND
OTHER
|
12 Weeks and 24
Weeks Ended June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
$
1,249
|
|
$
-
|
|
$
1,249
|
|
|
$
1,545
|
|
$
-
|
|
$
1,545
|
|
|
Financing
|
6,085
|
|
-
|
|
6,085
|
|
|
5,438
|
|
-
|
|
5,438
|
|
|
General and
administrative
|
22,892
|
|
-
|
|
22,892
|
|
|
23,153
|
|
-
|
|
23,153
|
|
|
Organizational and
separation related
|
(14)
|
|
14
|
|
-
|
|
|
701
|
|
(701)
|
|
-
|
|
|
Litigation
settlement
|
134
|
|
(134)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Consumer financing
interest
|
5,248
|
|
-
|
|
5,248
|
|
|
5,737
|
|
-
|
|
5,737
|
|
|
Royalty
fee
|
11,507
|
|
-
|
|
11,507
|
|
|
11,506
|
|
-
|
|
11,506
|
|
|
|
|
Total
expenses
|
$
47,101
|
|
$ (120)
|
|
$
46,981
|
|
|
$
48,080
|
|
$ (701)
|
|
$
47,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
$
2,862
|
|
$
-
|
|
$
2,862
|
|
|
$
4,012
|
|
$
-
|
|
$
4,012
|
|
|
Financing
|
10,990
|
|
-
|
|
10,990
|
|
|
10,542
|
|
-
|
|
10,542
|
|
|
General and
administrative
|
45,669
|
|
-
|
|
45,669
|
|
|
44,981
|
|
-
|
|
44,981
|
|
|
Organizational and
separation related
|
39
|
|
(39)
|
|
-
|
|
|
1,535
|
|
(1,535)
|
|
-
|
|
|
Litigation
settlement
|
134
|
|
(134)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Consumer financing
interest
|
11,269
|
|
-
|
|
11,269
|
|
|
12,362
|
|
-
|
|
12,362
|
|
|
Royalty
fee
|
23,014
|
|
-
|
|
23,014
|
|
|
22,978
|
|
-
|
|
22,978
|
|
|
|
|
Total
expenses
|
$
93,977
|
|
$ (173)
|
|
$
93,804
|
|
|
$
96,410
|
|
$ (1,535)
|
|
$
94,875
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Corporate
and Other consists of results not specifically attributable to an
individual segment, including expenses incurred to support our
financing operations, non-capitalizable development expenses
supporting overall company development, company-wide general
and administrative costs, and the fixed royalty fee payable under
the license agreements that we entered into with Marriott
International in connection with the spin-off, as well as consumer
financing interest expense.
|
A-10
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
(In
thousands)
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
June 19,
2015
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
165,938
|
|
|
$
164,589
|
|
Residential
products
|
|
-
|
|
|
-
|
|
|
Total contract
sales
|
|
165,938
|
|
|
164,589
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
1,440
|
|
|
829
|
|
Sales
Reserve2
|
|
(7,179)
|
|
|
(8,047)
|
|
Other3
|
|
(4,829)
|
|
|
(4,809)
|
Sale of vacation
ownership products
|
|
$
155,370
|
|
|
$
152,562
|
|
1
Adjustment for lack of required downpayment or contract sales
in rescission period.
|
2
Represents allowance for bad debts for our financed vacation
ownership product sales, which we also refer to as sales
reserve.
|
3
Adjustment for sales incentives that will not be recognized
as Sale of vacation ownership products revenue.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
June 19,
2015
|
|
Items
|
|
Adjustment
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
Adjustment
|
|
June 20,
2014
|
**
|
Sale of vacation
ownership products
|
$
155,370
|
|
$
-
|
|
$
(1,440)
|
|
$
153,930
|
|
|
$
152,562
|
|
$
-
|
|
$
(829)
|
|
$
151,733
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
45,119
|
|
-
|
|
(464)
|
|
44,655
|
|
|
43,414
|
|
-
|
|
(198)
|
|
43,216
|
|
|
Marketing and
sales
|
77,137
|
|
-
|
|
(157)
|
|
76,980
|
|
|
72,227
|
|
(287)
|
|
(121)
|
|
71,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
$
33,114
|
|
$
-
|
|
$
(819)
|
|
$
32,295
|
|
|
$
36,921
|
|
$ 287
|
|
$
(510)
|
|
$
36,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
21.3%
|
|
|
|
|
|
21.0%
|
|
|
24.2%
|
|
|
|
|
|
24.2%
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Development margin
percentage represents Development margin divided by Sale of
vacation ownership products. Development margin percentage is
calculated using whole dollars.
|
A-11
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
June 19,
2015
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
335,888
|
|
|
$
319,837
|
|
Residential
products
|
|
28,420
|
|
|
6,326
|
|
|
Total contract
sales
|
|
364,308
|
|
|
326,163
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
(73)
|
|
|
(3,725)
|
|
Sales
Reserve2
|
|
(15,546)
|
|
|
(15,698)
|
|
Other3
|
|
(9,413)
|
|
|
(9,328)
|
Sale of vacation
ownership products
|
|
$
339,276
|
|
|
$
297,412
|
|
1
Adjustment for lack of required downpayment or contract sales
in rescission period.
|
2
Represents allowance for bad debts for our financed vacation
ownership product sales, which we also refer to as sales
reserve.
|
3
Adjustment for sales incentives that will not be recognized
as Sale of vacation ownership products revenue.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
June 19,
2015
|
|
Items
|
|
Adjustment
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
Adjustment
|
|
June 20,
2014
|
**
|
Sale of vacation
ownership products
|
$
339,276
|
|
$ (28,420)
|
|
$
73
|
|
$
310,929
|
|
|
$
297,412
|
|
$
-
|
|
$
3,725
|
|
$
301,137
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
110,081
|
|
(21,583)
|
|
98
|
|
88,596
|
|
|
90,285
|
|
-
|
|
1,216
|
|
91,501
|
|
|
Marketing and
sales
|
157,132
|
|
(922)
|
|
(52)
|
|
156,158
|
|
|
143,447
|
|
(287)
|
|
253
|
|
143,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
$
72,063
|
|
$ (5,915)
|
|
$
27
|
|
$
66,175
|
|
|
$
63,680
|
|
$ 287
|
|
$
2,256
|
|
$
66,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
21.2%
|
|
|
|
|
|
21.3%
|
|
|
21.4%
|
|
|
|
|
|
22.0%
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Development margin
percentage represents Development margin divided by Sale of
vacation ownership products. Development margin percentage is
calculated using whole dollars.
|
A-12
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
June 19,
2015
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
150,605
|
|
|
$
145,597
|
|
Residential
products
|
|
-
|
|
|
-
|
|
|
Total contract
sales
|
|
150,605
|
|
|
145,597
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
1,942
|
|
|
208
|
|
Sales Reserve
2
|
|
(5,651)
|
|
|
(6,424)
|
|
Other
3
|
|
(4,748)
|
|
|
(4,791)
|
Sale of vacation
ownership products
|
|
$
142,148
|
|
|
$
134,590
|
|
1
Adjustment for lack of required downpayment or contract sales in
rescission period.
|
2
Represents allowance for bad debts for our financed vacation
ownership product sales, which we also refer to as sales
reserve.
|
3
Adjustment for sales incentives that will not be recognized
as Sale of vacation ownership products revenue.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
June 19,
2015
|
|
Items
|
|
Adjustment
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
Adjustment
|
|
June 20,
2014
|
**
|
Sale of vacation
ownership products
|
$
142,148
|
|
$
-
|
|
$
(1,942)
|
|
$
140,206
|
|
|
$
134,590
|
|
$
-
|
|
$
(208)
|
|
$
134,382
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
40,834
|
|
-
|
|
(553)
|
|
40,281
|
|
|
37,433
|
|
-
|
|
(58)
|
|
37,375
|
|
|
Marketing and
sales
|
67,837
|
|
-
|
|
(182)
|
|
67,655
|
|
|
61,722
|
|
-
|
|
(20)
|
|
61,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
$
33,477
|
|
$
-
|
|
$
(1,207)
|
|
$
32,270
|
|
|
$
35,435
|
|
$
-
|
|
$
(130)
|
|
$
35,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
23.6%
|
|
|
|
|
|
23.0%
|
|
|
26.3%
|
|
|
|
|
|
26.3%
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Development margin
percentage represents Development margin divided by Sale of
vacation ownership products. Development margin percentage is
calculated using whole dollars.
|
A-13
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
June 19,
2015
|
|
|
June 20,
2014
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
306,598
|
|
|
$
285,774
|
|
Residential
products
|
|
-
|
|
|
6,326
|
|
|
Total contract
sales
|
|
306,598
|
|
|
292,100
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
(1,502)
|
|
|
(4,192)
|
|
Sales Reserve
2
|
|
(11,985)
|
|
|
(12,751)
|
|
Other
3
|
|
(9,235)
|
|
|
(9,225)
|
Sale of vacation
ownership products
|
|
$
283,876
|
|
|
$
265,932
|
|
1
Adjustment for lack of required downpayment or contract sales in
rescission period.
|
2
Represents allowance for bad debts for our financed vacation
ownership product sales, which we also refer to as sales
reserve.
|
3
Adjustment for sales incentives that will not be recognized
as Sale of vacation ownership products revenue.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
Adjustment
|
|
June 19,
2015
|
**
|
|
June 20,
2014
|
|
Items
|
|
Adjustment
|
|
June 20,
2014
|
**
|
Sale of vacation
ownership products
|
$
283,876
|
|
$
-
|
|
$
1,502
|
|
$
285,378
|
|
|
$
265,932
|
|
$
-
|
|
$ 4,192
|
|
$
270,124
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
81,335
|
|
-
|
|
427
|
|
81,762
|
|
|
78,938
|
|
-
|
|
1,318
|
|
80,256
|
|
|
Marketing and
sales
|
136,854
|
|
-
|
|
142
|
|
136,996
|
|
|
124,409
|
|
-
|
|
394
|
|
124,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
$
65,687
|
|
$
-
|
|
$
933
|
|
$
66,620
|
|
|
$
62,585
|
|
$
-
|
|
$ 2,480
|
|
$
65,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
23.1%
|
|
|
|
|
|
23.3%
|
|
|
23.5%
|
|
|
|
|
|
24.1%
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Development margin
percentage represents Development margin divided by Sale of
vacation ownership products. Development margin percentage is
calculated using whole dollars.
|
A-14
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
EBITDA AND
ADJUSTED EBITDA
|
12 Weeks and 24
Weeks Ended June 19, 2015 and June 20, 2014
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
34,041
|
|
$ (4,422)
|
|
$
29,619
|
|
$
35,303
|
|
$ (4,616)
|
|
$
30,687
|
|
Interest expense
1
|
3,009
|
|
-
|
|
3,009
|
|
2,601
|
|
-
|
|
2,601
|
|
Tax
provision
|
23,403
|
|
(2,804)
|
|
20,599
|
|
22,344
|
|
(3,158)
|
|
19,186
|
|
Depreciation and
amortization
|
4,493
|
|
-
|
|
4,493
|
|
4,264
|
|
-
|
|
4,264
|
|
|
|
|
EBITDA **
|
$
64,946
|
|
$ (7,226)
|
|
$
57,720
|
|
$
64,512
|
|
$ (7,774)
|
|
$
56,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
June 19,
2015
|
|
Items
|
|
June 19,
2015
|
**
|
June 20,
2014
|
|
Items
|
|
June 20,
2014
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
68,095
|
|
$(10,319)
|
|
$
57,776
|
|
$
54,611
|
|
$ (3,819)
|
|
$
50,792
|
|
Interest expense
1
|
5,983
|
|
-
|
|
5,983
|
|
4,748
|
|
-
|
|
4,748
|
|
Tax
provision
|
46,692
|
|
(3,779)
|
|
42,913
|
|
35,107
|
|
(2,537)
|
|
32,570
|
|
Depreciation and
amortization
|
8,558
|
|
-
|
|
8,558
|
|
8,922
|
|
-
|
|
8,922
|
|
|
|
|
EBITDA **
|
$
129,328
|
|
$(14,098)
|
|
$
115,230
|
|
$
103,388
|
|
$ (6,356)
|
|
$
97,032
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
1
Interest expense excludes consumer financing interest
expense.
|
A-15
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2015 ADJUSTED NET
INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED
OUTLOOK
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2015
(low)
|
|
Fiscal Year 2015
(high)
|
Net income
|
|
|
$
114
|
|
$
121
|
|
Adjustments to
reconcile Net income to Adjusted net income
|
|
|
|
|
|
|
Organizational and
separation related and other charges1
|
|
7
|
|
6
|
|
|
Gain on dispositions
2
|
|
(10)
|
|
(10)
|
|
|
Bulk sales
3
|
|
(6)
|
|
(6)
|
|
|
Provision for income
taxes on adjustments to net income
|
3
|
|
3
|
|
|
|
Adjusted net
income**
|
|
$
108
|
|
$
114
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted 4
|
|
$
3.49
|
|
$
3.70
|
|
Adjusted earnings per
share - Diluted**, 4
|
|
$
3.29
|
|
$
3.48
|
|
Diluted
shares4
|
|
32.7
|
|
32.7
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
1 Organizational and
separation related and other charges adjustment includes $1.8
million for organizational and separation related efforts and $4
million to $5 million of non-capitalizable transaction costs in our
Asia Pacific and North America segments.
|
2 Gain on dispositions
adjustment includes a $0.9 million gain associated with the sale of
a golf course and adjacent undeveloped land and an $8.7 million
gain on the sale of undeveloped land in our North America
segment.
|
3 Bulk sales
adjustment includes the net $5.9 million of pre-tax income
associated with the sale of the 18 units in the Asia Pacific
segment.
|
4 Earnings
per share - Diluted, Adjusted earnings per share - Diluted, and
Diluted shares outlook includes the impact of share repurchase
activity only through June 19, 2015.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2015 ADJUSTED
EBITDA OUTLOOK
|
(In
millions)
|
|
|
|
|
|
|
|
Fiscal Year 2015
(low)
|
|
Fiscal Year 2015
(high)
|
Adjusted net income
**
|
|
$
108
|
|
$
114
|
Interest
expense1
|
|
12
|
|
12
|
Tax
provision
|
|
81
|
|
85
|
Depreciation and
amortization
|
|
21
|
|
21
|
|
Adjusted
EBITDA**
|
|
$
222
|
|
$
232
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
1 Interest expense excludes
consumer financing interest expense.
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2015 ADJUSTED
DEVELOPMENT MARGIN OUTLOOK
|
|
|
|
|
|
Total
MVW
|
|
|
|
|
|
Fiscal Year 2015
(low)
|
|
Fiscal Year 2015
(high)
|
Development
margin1
|
|
21.1%
|
|
22.1%
|
|
Adjustments to
reconcile Development margin to Adjusted development
margin
|
|
|
|
|
|
Revenue recognition
reportability
|
|
(0.1%)
|
|
(0.1%)
|
|
|
|
Adjusted development
margin**, 1
|
|
21.0%
|
|
22.0%
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
1 Development margin
represents Development margin dollars divided by Sale of vacation
ownership products revenues. Development margin is calculated
using whole dollars.
|
A-16
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2015 ADJUSTED FREE
CASH FLOW AND NORMALIZED ADJUSTED FREE CASH FLOW
OUTLOOK
|
(In
millions)
|
|
|
|
|
|
|
|
Current
Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
Mid-Point
|
|
|
Adjustments
|
|
|
Normalized
|
|
|
Adjusted net income
**
|
|
$ 108
|
|
$ 114
|
|
|
$
111
|
|
|
$
-
|
|
|
$
111
|
|
|
|
Adjustments to
reconcile Adjusted net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
non-cash items1
|
|
73
|
|
75
|
|
|
74
|
|
|
-
|
|
|
74
|
|
|
|
|
Deferred income taxes
/ income taxes payable
|
|
18
|
|
20
|
|
|
19
|
|
|
-
|
|
|
19
|
|
|
|
|
Net changes in assets
and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable
originations
|
|
(293)
|
|
(299)
|
|
|
(296)
|
|
|
-
|
|
|
(296)
|
|
|
|
|
|
Notes receivable
collections
|
|
269
|
|
275
|
|
|
272
|
|
|
-
|
|
|
272
|
|
|
|
|
|
Inventory
|
|
47
|
|
52
|
|
|
50
|
|
|
(60)
|
6
|
|
(10)
|
|
|
|
|
|
Purchase of operating
hotel for future conversion to inventory2
|
|
(47)
|
|
(47)
|
|
|
(47)
|
|
|
47
|
2
|
|
-
|
|
|
|
|
|
Liability for
Marriott Rewards customer loyalty program
|
|
(21)
|
|
(21)
|
|
|
(21)
|
|
|
21
|
7
|
|
-
|
|
|
|
|
|
Organizational and
separation related and other charges
|
|
(5)
|
|
(5)
|
|
|
(5)
|
|
|
5
|
8
|
|
-
|
|
|
|
|
|
Other working capital
changes
|
|
21
|
|
21
|
|
|
21
|
|
|
(6)
|
9
|
|
15
|
|
|
Net cash provided by
operating activities
|
|
170
|
|
185
|
|
|
178
|
|
|
7
|
|
|
185
|
|
|
|
Capital expenditures
for property and equipment (excluding inventory):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New sales centers
3
|
|
(20)
|
|
(18)
|
|
|
(19)
|
|
|
19
|
3
|
|
-
|
|
|
|
|
Organizational and
separation related capital expenditures
|
|
(4)
|
|
(4)
|
|
|
(4)
|
|
|
4
|
8
|
|
-
|
|
|
|
|
Other
|
|
(24)
|
|
(23)
|
|
|
(24)
|
|
|
4
|
10
|
|
(20)
|
|
|
|
|
Investment in
operating portion of Surfers Paradise hotel that will be sold
4
|
|
(45)
|
|
(45)
|
|
|
(45)
|
|
|
45
|
4
|
|
-
|
|
|
|
Decrease in
restricted cash
|
|
1
|
|
5
|
|
|
3
|
|
|
-
|
|
|
3
|
|
|
|
Borrowings from
securitization transactions
|
|
251
|
|
258
|
|
|
255
|
|
|
(45)
|
11
|
|
210
|
|
|
|
Repayment of debt
related to securitizations
|
|
(244)
|
|
(250)
|
|
|
(247)
|
|
|
-
|
|
|
(247)
|
|
|
|
|
|
Free cash
flow**
|
|
85
|
|
108
|
|
|
97
|
|
|
34
|
|
|
131
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organizational and
separation related and other charges
|
|
9
|
|
9
|
|
|
9
|
|
|
(9)
|
7
|
|
-
|
|
|
|
Proceeds from sale of
operating portion of Surfers Paradise hotel4
|
|
45
|
|
45
|
|
|
45
|
|
|
(45)
|
4
|
|
-
|
|
|
|
Net change in
borrowings available from the securitization of eligible vacation
ownership notes receivable through the
warehouse credit facility 5
|
|
36
|
|
38
|
|
|
37
|
|
|
-
|
|
|
37
|
|
|
|
|
|
Adjusted free cash
flow**
|
|
$ 175
|
|
$ 200
|
|
|
$
188
|
|
|
$
(20)
|
|
|
$
168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-17 through
A-19 for additional information about our reasons for providing
these alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Includes depreciation, amortization of debt issuance costs,
provision for loan losses, and share-based compensation.
|
2
Represents adjustment for investment in an operating hotel prior to
future conversion to inventory.
|
3
Represents incremental investment in new sales centers, mainly to
support new sales distributions.
|
4
Represents the estimated investment in, as well as the estimated
proceeds from the subsequent sale of, the operating portion of the
Surfers Paradise hotel.
|
5
Represents the net change in borrowings available from the
securitization of eligible vacation ownership notes receivable
through the warehouse credit facility between the 2014 and 2015
year ends.
|
6
Represents adjustment to align real estate inventory spending with
real estate inventory costs (i.e., product costs).
|
7
Represents payment for Marriott Rewards Points issued prior to the
Spin-off. Liability to be fully paid in 2016.
|
8
Represents costs associated with organizational and separation
related efforts.
|
9
Represents normalized other working capital changes.
|
10
Represents normalized capital expenditures for property and
equipment.
|
11
Represents normalized borrowings from securitization
transactions.
|
A-17
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In our press release
and schedules, and on the related conference call, we report
certain financial measures that are not prescribed or authorized by
United States generally accepted accounting principles
("GAAP"). We discuss our reasons for reporting these non-GAAP
financial measures below, and the financial schedules reconcile the
most directly comparable GAAP financial measure to each non-GAAP
financial measure that we report (identified by a double asterisk
("**") on the preceding pages). Although we evaluate and
present these non-GAAP financial measures for the reasons described
below, please be aware that these non-GAAP financial measures have
limitations and should not be considered in isolation or as a
substitute for revenues, net income, earnings per share or any
other comparable operating measure prescribed by GAAP. In
addition, these non-GAAP financial measures may be calculated and /
or presented differently than measures with the same or similar
names that are reported by other companies, and as a result, the
non-GAAP financial measures we report may not be comparable to
those reported by others.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income. We evaluate non-GAAP financial measures,
including Adjusted Net Income, Adjusted EBITDA, and Adjusted
Development Margin, that exclude certain items and net gains in the
12 weeks and 24 weeks ended June 19, 2015 and June 20, 2014 because
these non-GAAP financial measures allow for period-over-period
comparisons of our on-going core operations before the impact of
certain items and gains. These non-GAAP financial measures
also facilitate our comparison of results from our on-going core
operations before certain items and gains with results from other
vacation ownership companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain items - 12
weeks and 24 weeks ended June 19, 2015. In our Statement
of Income for the 12 weeks ended June 19, 2015, we recorded $1.4
million of net pre-tax items, which included a $1.3 million
adjustment for transaction costs associated with a commitment to
purchase an operating hotel in our Asia Pacific segment recorded
under the "Other transaction related" caption, $0.1 million of
organizational and separation related costs recorded under the
"Organizational and separation related" caption and less than $0.1
million of net litigation related matters recorded under the
"Litigation settlement" caption. In our Statement of Income for the
24 weeks ended June 19, 2015, we recorded $4.6 million of net
pre-tax items, which included a $28.4 million adjustment to exclude
the bulk sale of 18 units in our Asia Pacific segment recorded
under the "Sale of vacation ownership products" caption, with
corresponding adjustments of $21.6 million and $0.9 million to the
"Cost of vacation ownership products" and Marketing and sales"
captions, respectively, a $1.3 million adjustment for transaction
costs associated with a commitment to purchase an operating hotel
in our Asia Pacific segment recorded under the "Other transaction
related" caption, $0.3 million of organizational and separation
related costs recorded under the "Organizational and separation
related" caption and less than $0.1 million of net litigation
related matters recorded under the "Litigation settlement" caption,
partially offset by a $0.3 million reversal of an accrual
associated with a 2014 golf course disposition recorded under the
"Litigation settlement" caption because actual costs were lower
than expected.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain items - 12
weeks and 24 weeks ended June 20, 2014. In our Statement
of Income for the 12 weeks ended June 20, 2014, we recorded $7.4
million of net pre-tax income, which included $7.6 million of
income associated with the settlement of a dispute with a former
service provider in our North America segment recorded under the
"Litigation settlement" caption and the reversal of a $2.0 million
reserve for remaining costs we expect to incur in connection with
our interest in an equity method investment in a joint venture
project in our North America segment recorded under the "Impairment
reversals on equity investment" caption, partially offset by $1.1
million of organizational and separation related costs recorded
under the "Organizational and separation related" caption, a $0.8
million impairment charge associated with a project in our North
America segment recorded under the "Impairment" caption and $0.3
million of severance charges in our Europe segment recorded under
the "Marketing and sales" caption. In our Statement of Income
for the 24 weeks ended June 20, 2014, we recorded $4.7 million of
net pre-tax income, which included $7.6 million of income
associated with the settlement of a dispute with a former service
provider in our North America segment recorded under the
"Litigation settlement" caption and a $0.2 million reversal of a
severance accrual in our Europe segment recorded under the "Resort
management and other services" caption because actual costs were
lower than expected, partially offset by $1.9 million of
organizational and separation related costs recorded under the
"Organizational and separation related" caption, a $0.8 million
impairment charge associated with a project in our North America
segment recorded under the "Impairment" caption and $0.3 million of
severance charges in our Europe segment recorded under the
"Marketing and sales" caption.
|
A-18
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains - 12
weeks and 24 weeks ended June 19, 2015. In our
Statement of Income for the 12 weeks ended June 19, 2015, we
recorded an $8.7 million gain associated with the sale of
undeveloped land in our North America segment under the "Gains and
other income" caption. In our Statement of Income for the 24
weeks ended June 19, 2015, we recorded $9.5 million of net gains
associated with the sale of undeveloped land and the sale of a golf
course and adjacent undeveloped land in our North America segment
under the "Gains and other income" caption.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains - 12
weeks and 24 weeks ended June 20, 2014. In our
Statement of Income for the 12 weeks ended June 20, 2014, we
recorded $0.4 million of net gains associated with the sale of a
golf course and adjacent undeveloped land, the sale of an
undeveloped parcel of land, and the disposition of a project, all
of which occurred in our North America segment and were recorded
under the "Gains and other income" caption. In our Statement
of Income for the 24 weeks ended June 20, 2014, we recorded $1.6
million of net gains associated with the sale of a golf course and
adjacent undeveloped land, the sale of an undeveloped parcel of
land, and the disposition of a project, all of which occurred in
our North America segment and were recorded under the "Gains and
other income" caption.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Development Margin (Adjusted Sale of Vacation Ownership Products
Net of Expenses). We evaluate Adjusted Development Margin
(Adjusted Sale of Vacation Ownership Products Net of Expenses) as
an indicator of operating performance. Adjusted Development
Margin adjusts Sale of vacation ownership products revenues for the
impact of revenue reportability, includes corresponding adjustments
to Cost of vacation ownership products expense and Marketing and
sales expense associated with the change in revenues from the Sale
of vacation ownership products, and includes adjustments for
certain items as itemized in the discussion of Adjusted Net Income
above. We evaluate Adjusted Development Margin because it
allows for period-over-period comparisons of our on-going core
operations before the impact of revenue reportability and certain
items to our Development Margin.
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|
Earnings Before
Interest, Taxes, Depreciation and Amortization
("EBITDA"). EBITDA is defined as earnings, or net income,
before interest expense (excluding consumer financing interest
expense), provision for income taxes, depreciation and
amortization. For purposes of our EBITDA calculation (which
previously adjusted for consumer financing interest expense), we do
not adjust for consumer financing interest expense because the
associated debt is secured by vacation ownership notes receivable
that have been sold to bankruptcy remote special purpose entities
and is generally non-recourse to us. Further, we consider
consumer financing interest expense to be an operating expense of
our business.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We consider EBITDA to
be an indicator of operating performance, and we use it to measure
our ability to service debt, fund capital expenditures and expand
our business. We also use it, as do analysts, lenders, investors
and others, because it excludes certain items that can vary widely
across different industries or among companies within the same
industry. For example, interest expense can be dependent on a
company's capital structure, debt levels and credit ratings.
Accordingly, the impact of interest expense on earnings can vary
significantly among companies. The tax positions of companies
can also vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
jurisdictions in which they operate. As a result, effective
tax rates and provision for income taxes can vary considerably
among companies. EBITDA also excludes depreciation and
amortization because companies utilize productive assets of
different ages and use different methods of both acquiring and
depreciating productive assets. These differences can result
in considerable variability in the relative costs of productive
assets and the depreciation and amortization expense among
companies.
|
|
Adjusted
EBITDA. We also evaluate Adjusted EBITDA, which reflects
additional adjustments for certain items and gains, as itemized in
the discussion of Adjusted Net Income above. We evaluate
Adjusted EBITDA as an indicator of operating performance because it
allows for period-over-period comparisons of our on-going core
operations before the impact of certain items and gains.
Together, EBITDA and Adjusted EBITDA facilitate our comparison of
results from our on-going core operations before the impact of
certain items and gains with results from other vacation ownership
companies.
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A-19
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow. We also evaluate Free Cash Flow as a liquidity
measure that provides useful information to management and
investors about the amount of cash provided by operating activities
after capital expenditures for property and equipment, changes in
restricted cash, and the borrowing and repayment activity related
to our securitizations. We consider Free Cash Flow to be a
liquidity measure that provides useful information to management
and investors about the amount of cash generated by the business
that can be used for strategic opportunities, including
acquisitions and strengthening the balance sheet. Analysis of
Free Cash Flow also facilitates management's comparison of our
results with our competitors' results.
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|
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|
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|
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|
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|
|
Adjusted Free Cash
Flow. We also evaluate Adjusted Free Cash Flow, which
reflects additional adjustments for organizational and separation
related, litigation, and other cash items, as referred to in the
discussion of Adjusted Net Income above. We evaluate Adjusted
Free Cash Flow as a liquidity measure that provides useful
information to management and investors about the amount of cash
provided by operating activities after capital expenditures for
property and equipment, changes in restricted cash, and the
borrowing and repayment activity related to our securitizations,
excluding the impact of organizational and separation related,
litigation, and other cash charges. We consider Adjusted Free
Cash Flow to be a liquidity measure that provides useful
information to management and investors about the amount of cash
generated by the business that can be used for strategic
opportunities, including acquisitions and strengthening the balance
sheet. Analysis of Adjusted Free Cash Flow also facilitates
management's comparison of our results with our competitors'
results.
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|
|
Normalized
Adjusted Free Cash Flow. We also evaluate Normalized
Adjusted Free Cash Flow as a liquidity measure that provides useful
information to management and investors about the amount of cash
provided by operating activities after capital expenditures for
property and equipment, changes in restricted cash, the borrowing
and repayment activity related to our securitizations, and
adjustments to remove the impact of cash flow items not expected to
occur on a regular basis. Adjustments eliminate the impact of
excess cash taxes, payments for Marriott Rewards Points issued
prior to the Spin-off, payments for organizational and separation
related efforts, litigation cash settlements and other working
capital changes. We consider Normalized Adjusted Free Cash
Flow to be a liquidity measure that provides useful information to
management and investors about the amount of cash generated by the
business that can be used for strategic opportunities, including
acquisitions and strengthening the balance sheet. Analysis of
Normalized Adjusted Free Cash Flow also facilitates management's
comparison of our results with our competitors'
results.
|
A-20
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
INTERIM
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
(unaudited)
|
|
|
|
June 19,
2015
|
|
January 2,
2015
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
250,906
|
|
$
346,515
|
Restricted cash
(including $37,017 and $34,986 from VIEs, respectively)
|
65,559
|
|
109,907
|
Accounts and
contracts receivable (including $3,429 and $4,992 from VIEs,
respectively)
|
116,544
|
|
109,700
|
Vacation ownership
notes receivable (including $547,158 and $750,680 from VIEs,
respectively)
|
878,858
|
|
917,228
|
Inventory
|
704,707
|
|
772,784
|
Property and
equipment
|
188,714
|
|
147,379
|
Other
|
117,924
|
|
127,066
|
Total
Assets
|
$
2,323,212
|
|
$
2,530,579
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Accounts
payable
|
$
80,450
|
|
$
114,079
|
Advance
deposits
|
64,148
|
|
60,192
|
Accrued liabilities
(including $1,576 and $1,088 from VIEs, respectively)
|
137,261
|
|
165,969
|
Deferred
revenue
|
32,845
|
|
38,818
|
Payroll and benefits
liability
|
74,582
|
|
93,073
|
Liability for
Marriott Rewards customer loyalty program
|
79,939
|
|
89,285
|
Deferred compensation
liability
|
46,534
|
|
41,677
|
Mandatorily
redeemable preferred stock of consolidated subsidiary
|
38,895
|
|
38,816
|
Debt (including
$564,657 and $708,031 from VIEs, respectively)
|
561,133
|
|
703,013
|
Other
|
50,053
|
|
27,071
|
Deferred
taxes
|
96,748
|
|
78,883
|
Total
Liabilities
|
1,262,588
|
|
1,450,876
|
|
|
|
|
Preferred stock -
$.01 par value; 2,000,000 shares authorized; none issued or
outstanding
|
-
|
|
-
|
Common stock - $.01
par value; 100,000,000 shares authorized; 36,346,990 and 36,089,513
shares issued, respectively
|
363
|
|
361
|
Treasury stock - at
cost; 4,814,451 and 3,996,725 shares, respectively
|
(295,466)
|
|
(229,229)
|
Additional paid-in
capital
|
1,135,143
|
|
1,137,785
|
Accumulated other
comprehensive income
|
14,756
|
|
17,054
|
Retained
earnings
|
205,828
|
|
153,732
|
Total
Equity
|
1,060,624
|
|
1,079,703
|
|
|
|
|
Total Liabilities and
Equity
|
$
2,323,212
|
|
$
2,530,579
|
|
|
|
|
The abbreviation VIEs
above means Variable Interest Entities.
|
|
|
|
A-21
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
24 weeks
ended
|
|
|
|
June 19,
2015
|
|
June 20,
2014
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net
income
|
|
$68,095
|
|
$54,611
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
|
8,558
|
|
8,922
|
|
Amortization of
debt issuance costs
|
|
2,506
|
|
2,566
|
|
Provision for
loan losses
|
|
15,662
|
|
15,603
|
|
Share-based
compensation
|
|
6,588
|
|
6,180
|
|
Deferred income
taxes
|
|
17,850
|
|
(5,299)
|
|
Equity method
income
|
|
(98)
|
|
(118)
|
|
Gain on
disposal of property and equipment, net
|
|
(9,512)
|
|
(1,642)
|
|
Non-cash
litigation settlement
|
|
(262)
|
|
-
|
|
Impairment
charges
|
|
-
|
|
834
|
|
Impairment
charges on equity investment
|
|
-
|
|
-
|
|
Net change in
assets and liabilities:
|
|
|
|
|
|
Accounts and
contracts receivable
|
|
(6,068)
|
|
(11,822)
|
|
Notes receivable
originations
|
|
(112,060)
|
|
(103,908)
|
|
Notes receivable
collections
|
|
132,397
|
|
137,460
|
|
Inventory
|
|
68,629
|
|
36,805
|
|
Purchase of operating
hotel for future conversion to inventory
|
|
(46,614)
|
|
-
|
|
Other
assets
|
|
8,154
|
|
26,546
|
|
Accounts payable,
advance deposits and accrued liabilities
|
|
(66,223)
|
|
(55,865)
|
|
Liability for
Marriott Rewards customer loyalty program
|
|
(9,345)
|
|
(14,284)
|
|
Deferred
revenue
|
|
(5,955)
|
|
(310)
|
|
Payroll and benefit
liabilities
|
|
(18,382)
|
|
(14,832)
|
|
Deferred compensation
liability
|
|
4,858
|
|
1,882
|
|
Other
liabilities
|
|
18,013
|
|
15,397
|
|
Other,
net
|
|
1,874
|
|
(564)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
78,665
|
|
98,162
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
Capital
expenditures for property and equipment (excluding
inventory)
|
|
(15,718)
|
|
(3,003)
|
|
Decrease in
restricted cash
|
|
43,758
|
|
43,958
|
|
Dispositions,
net
|
|
20,346
|
|
33,169
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
48,386
|
|
74,124
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Borrowings from
securitization transactions
|
|
-
|
|
22,638
|
|
Repayment of
debt related to securitization transactions
|
|
(143,374)
|
|
(130,954)
|
|
Debt issuance
costs
|
|
(30)
|
|
(140)
|
|
Proceeds from
vacation ownership inventory arrangement
|
|
5,375
|
|
-
|
|
Repurchase of
common stock
|
|
(66,237)
|
|
(89,448)
|
|
Payment of
dividends
|
|
(8,085)
|
|
-
|
|
Proceeds from
stock option exercises
|
|
92
|
|
968
|
|
Payment of
withholding taxes on vesting of restricted stock
units
|
|
(9,353)
|
|
(5,091)
|
|
Other
|
|
109
|
|
-
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
(221,503)
|
|
(202,027)
|
|
|
|
|
|
|
|
Effect of
changes in exchange rates on cash and cash
equivalents
|
|
(1,157)
|
|
3
|
|
|
|
|
|
|
DECREASE IN
CASH AND CASH EQUIVALENTS
|
|
(95,609)
|
|
(29,738)
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
346,515
|
|
199,511
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$250,906
|
|
$169,773
|
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SOURCE Marriott Vacations Worldwide Corporation