ORLANDO, Fla., July 24, 2014 /PRNewswire/ -- Marriott Vacations
Worldwide Corporation (NYSE: VAC) today reported second quarter
2014 financial results and provided updated guidance for the full
year 2014.
Highlights for the second quarter of 2014 include:
- Adjusted EBITDA totaled $57
million, an increase of $9
million, or 20 percent, year-over-year.
- Company adjusted development margin was 24.2 percent and
North America adjusted development
margin was 26.3 percent, an increase of 710 and 680 basis points,
respectively, year-over-year.
- North America volume per guest
(VPG) increased 5.3 percent year-over-year to $3,383.
- Adjusted fully diluted earnings per share (EPS) were
$0.87 compared to $0.73 in the second quarter of 2013.
- The company disposed of a parcel of undeveloped land on Singer
Island, Florida for gross cash
proceeds of $11 million.
- In the second quarter of 2014, the company repurchased 936,060
shares of its common stock under its share repurchase program for
approximately $52 million. Through
July 22, 2014, the company has
repurchased a total of nearly 2.5 million shares for a total of
$134 million since the launch of the
program in the fourth quarter of 2013.
Second quarter 2014 net income totaled $36 million, or $1.00 per diluted share, compared to net income
of $30 million, or $0.85 per diluted share, in the second quarter of
2013. Company development margin increased to 24.2 percent in the
second quarter of 2014 from 23.1 percent in the second quarter of
2013; North America development
margin for the second quarter increased to 26.3 percent from 20.8
percent last year.
Second quarter 2014 adjusted net income totaled $31 million, a $4
million increase compared to the second quarter of 2013.
Second quarter adjusted net income excludes the pre-tax impact of
the following:
- Second quarter 2014: $8 million
of income in the company's North
America segment associated with the settlement of a dispute
with a former service provider, the reversal of a $2 million reserve associated with the company's
interest in an equity method investment in a joint venture project
in its North America segment,
$1 million of organizational and
separation related costs, $1 million
related to a gain from the sale of a golf course and adjacent
undeveloped land and a $1 million
non-cash impairment charge.
- Second quarter 2013: $9 million
related to the impact of extended rescission periods in the
company's Europe segment, a
$7 million increase in an accrual for
expected remaining costs associated with the company's interest in
an equity method investment in a joint venture project in its
North America segment offset by a
$7 million gain for cash received in
payment of fully reserved receivables associated with that same
project, $2 million of organizational
and separation related costs, and $2
million of severance costs and an impairment charge in the
company's Europe segment. In
addition, adjusted development margin for both periods is adjusted
for the impact of revenue reportability, as necessary.
Non-GAAP financial measures, such as adjusted EBITDA, adjusted
net income, adjusted earnings per share and adjusted development
margin, are reconciled in the Press Release Schedules that follow.
Adjustments are shown and described in further detail on schedules
A-1 through A-20. The company now reports consumer financing
interest expense separately from all other interest expense. As a
result, adjusted EBITDA as used in this release is equivalent to
the non-GAAP financial measure adjusted EBITDA, as adjusted,
presented prior to the third quarter of 2013.
"Our second quarter results were strong across the board, with
continued growth in VPG, development margin and adjusted EBITDA, as
well as improving trends in our tour production," said Stephen P. Weisz, president and chief executive
officer. "Adjusted development margin in our key North America segment improved to 26.3
percent, and total company development margin improved to 24.2
percent. After two quarters of solid performance, we are increasing
our full year 2014 guidance for adjusted free cash flow, as well as
total company and North America
adjusted development margin, and raising the lower end of our full
year adjusted EBITDA guidance."
Second Quarter 2014 Results
Total company contract sales were $164
million, a $7 million increase
from $157 million in the second
quarter of 2013, driven by $4 million
of higher contract sales in the company's North America segment and $4 million of higher contract sales in the
company's Europe segment, offset
by $1 million of lower contract sales
in the company's Asia Pacific
segment.
Adjusted development margin was $37
million, a $12 million
increase from the second quarter of 2013. Adjusted
development margin percentage increased 7.1 percentage points to
24.2 percent in the second quarter of 2014 from 17.1 percent in the
second quarter of 2013. The adjustments are illustrated on schedule
A-10. Development margin was $37
million, a $1 million decrease
from the second quarter of 2013, as the prior year period benefited
from the impact of extended rescission periods in the company's
Europe segment. Development
margin percentage increased 1.1 percentage points to 24.2 percent
in the second quarter of 2014 from 23.1 percent in the second
quarter of 2013.
Rental revenues totaled $62
million, a $3 million decrease
from the second quarter of 2013. These results reflect a 2 percent
increase in transient keys rented as well as a 3 percent increase
in average transient rate, offset by $5
million of lower plus points revenue. Rental revenues, net
of expenses, were $7 million, a
$2 million decrease from the second
quarter of 2013.
Resort management and other services revenues totaled
$70 million, a $6 million increase from the second quarter of
2013. Resort management and other services revenues, net of
expenses, were $24 million, a
$6 million increase over the second
quarter of 2013.
Adjusted EBITDA was $57 million in
the second quarter of 2014, a $9
million increase from $48
million in the second quarter of 2013.
Segment Results
North America
VPG increased 5.3 percent to $3,383 in the second quarter of 2014 from
$3,211 in the second quarter of 2013,
driven mainly by higher pricing. North
America vacation ownership contract sales were $146 million in the second quarter of 2014, an
increase of $5 million over the prior
year period.
Second quarter 2014 North America segment financial results were
$101 million, an increase of
$17 million, or 20 percent,
year-over-year. The increase was primarily driven by $8 million of higher development margin,
$8 million from the settlement of a
dispute with a former service provider, $5
million of higher resort management and other services
revenues net of expenses, the reversal of a $2 million charge related to the company's
interest in an equity method investment in a joint venture project
and $2 million of lower royalty fees.
These increases were partially offset by $3
million of lower rental revenues net of expenses,
$3 million of lower financing
revenues, $1 million of lower other
revenues net of expenses and $1
million of organizational and separation related
charges.
Development margin was $36
million, an $8 million
increase from the second quarter of 2013. Development margin
percentage increased to 26.3 percent in the second quarter of 2014
as compared to 20.8 percent in the prior year quarter. Excluding
the impact of revenue reportability, adjusted development margin
was $36 million, an $11 million increase from the prior year quarter.
Adjusted development margin percentage increased to 26.3 percent in
the second quarter of 2014 from 19.5 percent in the second quarter
of 2013. The impact of revenue reportability is illustrated on
schedule A-12.
Asia Pacific
Asia Pacific contract sales
declined $1 million to $7 million in the second quarter of 2014. Segment
financial results were $2 million,
flat to the second quarter of 2013.
Europe
Second quarter 2014 contract sales improved $4 million to $11 million. Segment financial
results were $6 million, $5 million below the second quarter of 2013.
Adjusting for the $9 million
impact related to extended rescission periods in the prior year
comparable period, segment financial results increased $4 million.
Organizational and Separation Plan
During the second quarter of 2014, the company incurred
$1 million of costs in connection
with its continued organizational and separation related efforts.
Remaining spending for these efforts of approximately $4 million to $6 million is expected to be
incurred by the end of 2014.
These costs primarily relate to establishing the company's own
information technology systems and services, independent accounts
payable functions and the reorganization of existing human
resources and information technology organizations to support the
company's stand-alone public company needs. Once completed, these
efforts are expected to generate approximately $15 million to $20 million of annualized savings,
of which approximately $12 million
has been realized cumulatively to date, including roughly
$2 million reflected in the company's
2014 financial results.
Dispositions
As part of its strategy to dispose of excess land and inventory,
the company completed the sale of a parcel of undeveloped land on
Singer Island, Florida in
May 2014, resulting in $11 million of gross cash proceeds and an
estimated gain of less than $1
million.
Share Repurchase Program
During the second quarter of 2014, the company repurchased
936,060 shares of its common stock at an average price of
$55.56 per share for a total of
approximately $52 million. Through
July 22, 2014, the company has
repurchased a total of nearly 2.5 million shares of its common
stock for a total of $134 million
since the launch of the program on October
20, 2013.
Balance Sheet and Liquidity
On June 20, 2014, cash and cash
equivalents totaled $170 million.
Since the end of 2013, real estate inventory balances declined
$44 million to $820 million, including $446 million of finished goods, $40 million of work-in-process and $334 million of land and infrastructure. The
company had $570 million in debt
outstanding at the end of the second quarter of 2014, a decrease of
$108 million from year-end 2013,
including $566 million in
non-recourse securitized notes. In addition, $40 million of mandatorily redeemable preferred
stock of a subsidiary of the company was outstanding at the end of
the second quarter of 2014.
In June, the company completed a securitization of a pool of
approximately $23.8 million of
primarily highly-seasoned vacation ownership notes receivable that
the company had previously classified as not being eligible for
securitization, at a weighted average interest rate of 6.25 percent
and an advance rate of 95 percent. This transaction generated
approximately $22.5 million of net
cash proceeds to the company after transaction costs and cash
reserves, which are available for general corporate purposes.
As of June 20, 2014, the company
had $197 million in available
capacity under its revolving credit facility after taking into
account outstanding letters of credit and had approximately
$170 million of gross vacation
ownership notes receivable eligible for securitization.
Outlook
For the full year 2014, the company is updating guidance as
reflected in the chart below.
|
Current
Guidance
|
Previous
Guidance
|
Adjusted free cash
flow
|
$190 million to $205
million
|
$145 million to $160
million
|
Adjusted fully
diluted earnings per share
|
$2.64 to
$2.82
|
$2.42 to
$2.68
|
Adjusted
EBITDA
|
$190 million to $200
million
|
$185 million to $200
million
|
Adjusted net
income
|
$93 million to $99
million
|
$87 million to $96
million
|
Adjusted development
margin:
|
|
|
Company
|
21.0 percent to 22.0
percent
|
20.0 percent to 21.0
percent
|
North
America
|
23.0 percent to 24.0
percent
|
22.0 percent to 23.0
percent
|
Contract sales growth
(excluding residential):
|
|
|
Company
|
1 percent to 3
percent
|
5 percent to 8
percent
|
North
America
|
flat to 2
percent
|
4 percent to 7
percent
|
Schedules A-1 through A-20 reconcile the non-GAAP financial
measures set forth above to the following full year 2014 expected
GAAP results: reported net income of $95
million to $101 million; reported company development margin
of 20.5 percent to 21.5 percent; reported North America development margin of 22.8
percent to 23.8 percent; and net cash provided by operating
activities of $189 million to $201
million.
Second Quarter 2014 Earnings Conference Call
The company will hold a conference call at 10:00 a.m. EDT today to discuss these results.
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 13586548. 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. In late 2011, Marriott
Vacations Worldwide was established as an independent, public
company focusing primarily on vacation ownership experiences. 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. Marriott Vacations Worldwide offers a diverse
portfolio of quality products, programs and management expertise
with more than 60 resorts and approximately 420,000 Owners and
Members. Its brands include: Marriott Vacation Club, The
Ritz-Carlton Destination Club and Grand Residences by Marriott. 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, organizational and separation
related efforts, 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 24, 2014 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
|
PRESS RELEASE
SCHEDULES
|
QUARTER 2,
2014
|
TABLE OF
CONTENTS
|
|
|
|
Consolidated
Statements of Operations - 12 Weeks Ended June 20, 2014 and June
14, 2013
|
A-1
|
|
Consolidated
Statements of Operations - 24 Weeks Ended June 20, 2014 and June
14, 2013
|
A-2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Segment
Financial Results - 12 Weeks Ended June 20, 2014 and June 14,
2013
|
A-3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Segment
Financial Results - 24 Weeks Ended June 20, 2014 and June 14,
2013
|
A-4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific Segment
Financial Results - 12 Weeks Ended June 20, 2014 and June 14,
2013
|
A-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific Segment
Financial Results - 24 Weeks Ended June 20, 2014 and June 14,
2013
|
A-6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe Segment
Financial Results - 12 Weeks Ended June 20, 2014 and June 14,
2013
|
A-7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe Segment
Financial Results - 24 Weeks Ended June 20, 2014 and June 14,
2013
|
A-8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
Financial Results - 12 Weeks and 24 Weeks Ended June 20, 2014 and
June 14, 2013
|
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 20, 2014 and June 14, 2013
|
A-10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 20, 2014 and June 14, 2013
|
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 20, 2014 and June 14, 2013
|
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 20, 2014 and June 14, 2013
|
A-13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA - 12 Weeks and 24 Weeks Ended June 20, 2014 and June 14,
2013
|
A-14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
and Adjusted Earnings Per Share - Diluted, Adjusted EBITDA and
Adjusted Development Margin - 2014 Outlook
|
A-15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Adjusted Free
Cash Flow Outlook
|
A-16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Normalized
Adjusted Free Cash Flow Outlook
|
|
|
|
|
A-17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
A-18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Consolidated
Balance Sheets
|
A-21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Consolidated
Statements of Cash Flows
|
A-22
|
A-1
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
12 Weeks Ended
June 20, 2014 and June 14, 2013
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
152
|
|
$
-
|
|
$
152
|
|
|
$
169
|
|
$
-
|
|
$
(17)
|
|
$
152
|
|
|
Resort management and
other services
|
70
|
|
-
|
|
70
|
|
|
64
|
|
-
|
|
-
|
|
64
|
|
|
Financing
|
29
|
|
-
|
|
29
|
|
|
32
|
|
-
|
|
-
|
|
32
|
|
|
Rental
|
62
|
|
-
|
|
62
|
|
|
65
|
|
-
|
|
-
|
|
65
|
|
|
Other
|
|
6
|
|
-
|
|
6
|
|
|
6
|
|
-
|
|
-
|
|
6
|
|
|
Cost
reimbursements
|
91
|
|
-
|
|
91
|
|
|
85
|
|
-
|
|
-
|
|
85
|
|
|
|
Total
revenues
|
410
|
|
-
|
|
410
|
|
|
421
|
|
-
|
|
(17)
|
|
404
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
43
|
|
-
|
|
43
|
|
|
57
|
|
-
|
|
(6)
|
|
51
|
|
|
Marketing and
sales
|
72
|
|
-
|
|
72
|
|
|
74
|
|
(1)
|
|
(2)
|
|
71
|
|
|
Resort management and
other services
|
46
|
|
-
|
|
46
|
|
|
46
|
|
-
|
|
-
|
|
46
|
|
|
Financing
|
6
|
|
-
|
|
6
|
|
|
6
|
|
-
|
|
-
|
|
6
|
|
|
Rental
|
55
|
|
-
|
|
55
|
|
|
56
|
|
-
|
|
-
|
|
56
|
|
|
Other
|
|
3
|
|
-
|
|
3
|
|
|
2
|
|
-
|
|
-
|
|
2
|
|
|
General and
administrative
|
23
|
|
-
|
|
23
|
|
|
22
|
|
-
|
|
-
|
|
22
|
|
|
Organizational and
separation related
|
|
1
|
|
(1)
|
|
-
|
|
|
2
|
|
(2)
|
|
-
|
|
-
|
|
|
Litigation
settlement
|
|
(8)
|
|
8
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Consumer Financing
Interest
|
|
5
|
|
-
|
|
5
|
|
|
7
|
|
-
|
|
-
|
|
7
|
|
|
Royalty
fee
|
14
|
|
-
|
|
14
|
|
|
15
|
|
-
|
|
-
|
|
15
|
|
|
Impairment
|
1
|
|
(1)
|
|
-
|
|
|
1
|
|
(1)
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
91
|
|
-
|
|
91
|
|
|
85
|
|
-
|
|
-
|
|
85
|
|
|
|
Total
expenses
|
352
|
|
6
|
|
358
|
|
|
373
|
|
(4)
|
|
(8)
|
|
361
|
|
Gains and other
income
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Interest
Expense
|
|
3
|
|
-
|
|
3
|
|
|
4
|
|
-
|
|
-
|
|
4
|
|
Impairment reversals
on equity investment
|
2
|
|
(2)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Income before income
taxes
|
|
58
|
|
(9)
|
|
49
|
|
|
44
|
|
4
|
|
(9)
|
|
39
|
|
Provision for income
taxes
|
(22)
|
|
4
|
|
(18)
|
|
|
(14)
|
|
(1)
|
|
3
|
|
(12)
|
|
Net income
|
|
$
36
|
|
$
(5)
|
|
$
31
|
|
|
$
30
|
|
$
3
|
|
$
(6)
|
|
$
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
|
$
1.03
|
|
|
|
$
0.89
|
|
|
$
0.87
|
|
|
|
|
|
$
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
|
$
1.00
|
|
|
|
$
0.87
|
|
|
$
0.85
|
|
|
|
|
|
$
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
|
34.3
|
|
|
|
34.3
|
|
|
35.4
|
|
|
|
|
|
35.4
|
|
Diluted
Shares
|
|
35.2
|
|
|
|
35.2
|
|
|
36.6
|
|
|
|
|
|
36.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
Contract
Sales
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
164
|
|
|
|
|
|
|
$
156
|
|
|
|
|
|
|
|
|
Residential
products
|
|
-
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
Total contract
sales
|
|
$
164
|
|
|
|
|
|
|
$
157
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
NOTE: We now report
in Resort management and other services certain external exchange
company results previously included in Other and have recast prior
year presentation for consistency.
|
A-2
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
24 Weeks Ended
June 20, 2014 and June 14, 2013
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
297
|
|
$
-
|
|
$
297
|
|
|
$
310
|
|
$
-
|
|
$
(18)
|
|
$
292
|
|
|
Resort management and
other services
|
130
|
|
-
|
|
130
|
|
|
123
|
|
-
|
|
-
|
|
123
|
|
|
Financing
|
60
|
|
-
|
|
60
|
|
|
65
|
|
-
|
|
-
|
|
65
|
|
|
Rental
|
126
|
|
-
|
|
126
|
|
|
128
|
|
-
|
|
-
|
|
128
|
|
|
Other
|
|
8
|
|
-
|
|
8
|
|
|
9
|
|
-
|
|
-
|
|
9
|
|
|
Cost
reimbursements
|
191
|
|
-
|
|
191
|
|
|
176
|
|
-
|
|
-
|
|
176
|
|
|
|
Total
revenues
|
812
|
|
-
|
|
812
|
|
|
811
|
|
-
|
|
(18)
|
|
793
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
90
|
|
-
|
|
90
|
|
|
101
|
|
-
|
|
(6)
|
|
95
|
|
|
Marketing and
sales
|
143
|
|
-
|
|
143
|
|
|
148
|
|
(2)
|
|
(2)
|
|
144
|
|
|
Resort management and
other services
|
88
|
|
-
|
|
88
|
|
|
89
|
|
-
|
|
-
|
|
89
|
|
|
Financing
|
11
|
|
-
|
|
11
|
|
|
11
|
|
-
|
|
-
|
|
11
|
|
|
Rental
|
112
|
|
-
|
|
112
|
|
|
112
|
|
-
|
|
-
|
|
112
|
|
|
Other
|
|
5
|
|
-
|
|
5
|
|
|
5
|
|
-
|
|
-
|
|
5
|
|
|
General and
administrative
|
45
|
|
-
|
|
45
|
|
|
43
|
|
-
|
|
-
|
|
43
|
|
|
Organizational and
separation related
|
|
2
|
|
(2)
|
|
-
|
|
|
3
|
|
(3)
|
|
-
|
|
-
|
|
|
Litigation
settlement
|
|
(8)
|
|
8
|
|
-
|
|
|
(1)
|
|
1
|
|
-
|
|
-
|
|
|
Consumer Financing
Interest
|
|
12
|
|
-
|
|
12
|
|
|
15
|
|
-
|
|
-
|
|
15
|
|
|
Royalty
fee
|
27
|
|
-
|
|
27
|
|
|
28
|
|
-
|
|
-
|
|
28
|
|
|
Impairment
|
1
|
|
(1)
|
|
-
|
|
|
1
|
|
(1)
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
191
|
|
-
|
|
191
|
|
|
176
|
|
-
|
|
-
|
|
176
|
|
|
|
Total
expenses
|
719
|
|
5
|
|
724
|
|
|
731
|
|
(5)
|
|
(8)
|
|
718
|
|
Gains and other
income
|
2
|
|
(2)
|
|
-
|
|
|
1
|
|
-
|
|
-
|
|
1
|
|
Interest
Expense
|
|
5
|
|
-
|
|
5
|
|
|
7
|
|
-
|
|
-
|
|
7
|
|
Impairment reversals
on equity investment
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Income before income
taxes
|
90
|
|
(7)
|
|
83
|
|
|
74
|
|
5
|
|
(10)
|
|
69
|
|
Provision for income
taxes
|
(35)
|
|
3
|
|
(32)
|
|
|
(25)
|
|
(1)
|
|
3
|
|
(23)
|
|
Net income
|
|
$
55
|
|
$
(4)
|
|
$
51
|
|
|
$
49
|
|
$
4
|
|
$
(7)
|
|
$
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Basic
|
|
$
1.58
|
|
|
|
$
1.47
|
|
|
$
1.40
|
|
|
|
|
|
$
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted
|
|
$
1.54
|
|
|
|
$
1.43
|
|
|
$
1.35
|
|
|
|
|
|
$
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
|
34.6
|
|
|
|
34.6
|
|
|
35.3
|
|
|
|
|
|
35.3
|
|
Diluted
Shares
|
|
35.6
|
|
|
|
35.6
|
|
|
36.6
|
|
|
|
|
|
36.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
Contract
Sales
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
320
|
|
|
|
|
|
|
$
312
|
|
|
|
|
|
|
|
|
Residential
products
|
|
6
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
Total contract
sales
|
|
$
326
|
|
|
|
|
|
|
$
313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
NOTE: We have
restated 2013 first quarter Sale of vacation ownership products
revenue, Income before income taxes, Net income, Earnings per share
- Basic, and Earnings per share - Diluted to correct prior period
misstatements. Earnings per share - Basic and Earnings per share -
Diluted are calculated using whole dollars. We now report in Resort
management and other services certain external exchange company
results previously included in Other and have recast prior year
presentation for consistency.
|
A-3
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
SEGMENT
|
12 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
135
|
|
$
-
|
|
$
135
|
|
|
$
136
|
|
$
-
|
|
$
136
|
|
|
Resort management and
other services
|
60
|
|
-
|
|
60
|
|
|
55
|
|
-
|
|
55
|
|
|
Financing
|
27
|
|
-
|
|
27
|
|
|
30
|
|
-
|
|
30
|
|
|
Rental
|
|
54
|
|
-
|
|
54
|
|
|
57
|
|
-
|
|
57
|
|
|
Other
|
|
6
|
|
-
|
|
6
|
|
|
6
|
|
-
|
|
6
|
|
|
Cost
reimbursements
|
81
|
|
-
|
|
81
|
|
|
75
|
|
-
|
|
75
|
|
|
|
Total
revenues
|
363
|
|
-
|
|
363
|
|
|
359
|
|
-
|
|
359
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
37
|
|
-
|
|
37
|
|
|
46
|
|
-
|
|
46
|
|
|
Marketing and
sales
|
62
|
|
-
|
|
62
|
|
|
62
|
|
-
|
|
62
|
|
|
Resort management and
other services
|
39
|
|
-
|
|
39
|
|
|
39
|
|
-
|
|
39
|
|
|
Rental
|
48
|
|
-
|
|
48
|
|
|
48
|
|
-
|
|
48
|
|
|
Other
|
|
3
|
|
-
|
|
3
|
|
|
2
|
|
-
|
|
2
|
|
|
Organizational and
separation related
|
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Litigation
settlement
|
|
(8)
|
|
8
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Royalty
fee
|
1
|
|
-
|
|
1
|
|
|
3
|
|
-
|
|
3
|
|
|
Impairment
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
81
|
|
-
|
|
81
|
|
|
75
|
|
-
|
|
75
|
|
|
|
Total
expenses
|
265
|
|
6
|
|
271
|
|
|
275
|
|
-
|
|
275
|
|
Gains and other
income
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
Impairment reversals
on equity investment
|
2
|
|
(2)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
Segment financial
results
|
$
101
|
|
$
(9)
|
|
$
92
|
|
|
$
84
|
|
$
-
|
|
$
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
146
|
|
|
|
|
|
|
$
141
|
|
|
|
|
|
|
Residential
products
|
|
-
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
Total contract
sales
|
|
$
146
|
|
|
|
|
|
|
$
142
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: We now report
in Resort management and other services certain external exchange
company results previously included in Other and have recast prior
year presentation for consistency.
|
A-4
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
SEGMENT
|
24 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
266
|
|
$
-
|
|
$
266
|
|
|
$
262
|
|
$
-
|
|
$
262
|
|
|
Resort management and
other services
|
114
|
|
-
|
|
114
|
|
|
108
|
|
-
|
|
108
|
|
|
Financing
|
56
|
|
-
|
|
56
|
|
|
61
|
|
-
|
|
61
|
|
|
Rental
|
|
114
|
|
-
|
|
114
|
|
|
116
|
|
-
|
|
116
|
|
|
Other
|
|
8
|
|
-
|
|
8
|
|
|
9
|
|
-
|
|
9
|
|
|
Cost
reimbursements
|
171
|
|
-
|
|
171
|
|
|
156
|
|
-
|
|
156
|
|
|
|
Total
revenues
|
729
|
|
-
|
|
729
|
|
|
712
|
|
-
|
|
712
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
79
|
|
-
|
|
79
|
|
|
86
|
|
-
|
|
86
|
|
|
Marketing and
sales
|
124
|
|
-
|
|
124
|
|
|
126
|
|
-
|
|
126
|
|
|
Resort management and
other services
|
75
|
|
-
|
|
75
|
|
|
76
|
|
-
|
|
76
|
|
|
Rental
|
99
|
|
-
|
|
99
|
|
|
99
|
|
-
|
|
99
|
|
|
Other
|
|
5
|
|
-
|
|
5
|
|
|
5
|
|
-
|
|
5
|
|
|
Organizational and
separation related
|
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Litigation
settlement
|
|
(8)
|
|
8
|
|
-
|
|
|
(1)
|
|
1
|
|
-
|
|
|
Royalty
fee
|
3
|
|
-
|
|
3
|
|
|
4
|
|
-
|
|
4
|
|
|
Impairment
|
1
|
|
(1)
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
171
|
|
-
|
|
171
|
|
|
156
|
|
-
|
|
156
|
|
|
|
Total
expenses
|
550
|
|
6
|
|
556
|
|
|
551
|
|
1
|
|
552
|
|
Gains and other
income
|
2
|
|
(2)
|
|
-
|
|
|
1
|
|
-
|
|
1
|
|
Impairment reversals
on equity investment
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
|
Segment financial
results
|
|
$
181
|
|
$
(8)
|
|
$
173
|
|
|
$
162
|
|
$
(1)
|
|
$
161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Contract
Sales
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
ownership
|
|
$
286
|
|
|
|
|
|
|
$
284
|
|
|
|
|
|
|
Residential
products
|
|
6
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
Total contract
sales
|
|
$
292
|
|
|
|
|
|
|
$
285
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: We now report
in Resort management and other services certain external exchange
company results previously included in Other and have recast prior
year presentation for consistency.
|
A-5
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
ASIA PACIFIC
SEGMENT
|
12 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
8
|
|
$
-
|
|
$
8
|
|
|
$
8
|
|
$
-
|
|
$
8
|
|
|
Resort management and
other services
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
1
|
|
|
Financing
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
1
|
|
|
Rental
|
|
2
|
|
-
|
|
2
|
|
|
2
|
|
-
|
|
2
|
|
|
Cost
reimbursements
|
-
|
|
-
|
|
-
|
|
|
2
|
|
-
|
|
2
|
|
|
|
Total
revenues
|
12
|
|
-
|
|
12
|
|
|
14
|
|
-
|
|
14
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
2
|
|
-
|
|
2
|
|
|
1
|
|
-
|
|
1
|
|
|
Marketing and
sales
|
4
|
|
-
|
|
4
|
|
|
5
|
|
-
|
|
5
|
|
|
Resort management and
other services
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
Rental
|
3
|
|
-
|
|
3
|
|
|
3
|
|
-
|
|
3
|
|
|
Royalty
fee
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
1
|
|
|
Cost
reimbursements
|
-
|
|
-
|
|
-
|
|
|
2
|
|
-
|
|
2
|
|
|
|
Total
expenses
|
10
|
|
-
|
|
10
|
|
|
12
|
|
-
|
|
12
|
|
|
|
Segment financial
results
|
$
2
|
|
$
-
|
|
$
2
|
|
|
$
2
|
|
$
-
|
|
$
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
7
|
|
|
|
|
|
|
$
8
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 June 14,
2013 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.
|
A-6
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
ASIA PACIFIC
SEGMENT
|
24 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
14
|
|
$
-
|
|
$
14
|
|
|
$
16
|
|
$
-
|
|
$
16
|
|
|
Resort management and
other services
|
2
|
|
-
|
|
2
|
|
|
2
|
|
-
|
|
2
|
|
|
Financing
|
2
|
|
-
|
|
2
|
|
|
2
|
|
-
|
|
2
|
|
|
Rental
|
|
4
|
|
-
|
|
4
|
|
|
4
|
|
-
|
|
4
|
|
|
Cost
reimbursements
|
2
|
|
-
|
|
2
|
|
|
4
|
|
-
|
|
4
|
|
|
|
Total
revenues
|
24
|
|
-
|
|
24
|
|
|
28
|
|
-
|
|
28
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
3
|
|
-
|
|
3
|
|
|
3
|
|
-
|
|
3
|
|
|
Marketing and
sales
|
8
|
|
-
|
|
8
|
|
|
9
|
|
-
|
|
9
|
|
|
Resort management and
other services
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
1
|
|
|
Rental
|
6
|
|
-
|
|
6
|
|
|
5
|
|
-
|
|
5
|
|
|
Royalty
fee
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
1
|
|
|
Cost
reimbursements
|
2
|
|
-
|
|
2
|
|
|
4
|
|
-
|
|
4
|
|
|
|
Total
expenses
|
21
|
|
-
|
|
21
|
|
|
23
|
|
-
|
|
23
|
|
|
|
Segment financial
results
|
|
$
3
|
|
$
-
|
|
$
3
|
|
|
$
5
|
|
$
-
|
|
$
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
14
|
|
|
|
|
|
|
$
17
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 twenty four weeks ended June
20, 2014 (related to the twelve weeks ended March 28, 2014) and
June 14, 2013 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.
|
A-7
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
EUROPE
SEGMENT
|
12 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
9
|
|
$
-
|
|
$
9
|
|
|
$
25
|
|
$
-
|
|
$
(17)
|
|
$
8
|
|
|
Resort management and
other services
|
9
|
|
-
|
|
9
|
|
|
8
|
|
-
|
|
-
|
|
8
|
|
|
Financing
|
1
|
|
-
|
|
1
|
|
|
1
|
|
-
|
|
-
|
|
1
|
|
|
Rental
|
6
|
|
-
|
|
6
|
|
|
6
|
|
-
|
|
-
|
|
6
|
|
|
Cost
reimbursements
|
10
|
|
-
|
|
10
|
|
|
8
|
|
-
|
|
-
|
|
8
|
|
|
|
Total
revenues
|
35
|
|
-
|
|
35
|
|
|
48
|
|
-
|
|
(17)
|
|
31
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
2
|
|
-
|
|
2
|
|
|
9
|
|
-
|
|
(6)
|
|
3
|
|
|
Marketing and
sales
|
6
|
|
-
|
|
6
|
|
|
7
|
|
(1)
|
|
(2)
|
|
4
|
|
|
Resort management and
other services
|
7
|
|
-
|
|
7
|
|
|
7
|
|
-
|
|
-
|
|
7
|
|
|
Rental
|
4
|
|
-
|
|
4
|
|
|
5
|
|
-
|
|
-
|
|
5
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
1
|
|
(1)
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
10
|
|
-
|
|
10
|
|
|
8
|
|
-
|
|
-
|
|
8
|
|
|
|
Total
expenses
|
29
|
|
-
|
|
29
|
|
|
37
|
|
(2)
|
|
(8)
|
|
27
|
|
|
|
Segment financial
results
|
|
$
6
|
|
$
-
|
|
$
6
|
|
|
$
11
|
|
$
2
|
|
$
(9)
|
|
$
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
11
|
|
|
|
|
|
|
$
7
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 June 14, 2013 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.
|
A-8
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
EUROPE
SEGMENT
|
24 Weeks Ended
June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of vacation
ownership products
|
$
17
|
|
$
-
|
|
$
17
|
|
|
$
32
|
|
$
-
|
|
$
(18)
|
|
$
14
|
|
|
Resort management and
other services
|
14
|
|
-
|
|
14
|
|
|
13
|
|
-
|
|
-
|
|
13
|
|
|
Financing
|
2
|
|
-
|
|
2
|
|
|
2
|
|
-
|
|
-
|
|
2
|
|
|
Rental
|
8
|
|
-
|
|
8
|
|
|
8
|
|
-
|
|
-
|
|
8
|
|
|
Cost
reimbursements
|
18
|
|
-
|
|
18
|
|
|
16
|
|
-
|
|
-
|
|
16
|
|
|
|
Total
revenues
|
59
|
|
-
|
|
59
|
|
|
71
|
|
-
|
|
(18)
|
|
53
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
4
|
|
-
|
|
4
|
|
|
9
|
|
-
|
|
(6)
|
|
3
|
|
|
Marketing and
sales
|
11
|
|
-
|
|
11
|
|
|
13
|
|
(2)
|
|
(2)
|
|
9
|
|
|
Resort management and
other services
|
12
|
|
-
|
|
12
|
|
|
12
|
|
-
|
|
-
|
|
12
|
|
|
Rental
|
7
|
|
-
|
|
7
|
|
|
8
|
|
-
|
|
-
|
|
8
|
|
|
Impairment
|
-
|
|
-
|
|
-
|
|
|
1
|
|
(1)
|
|
-
|
|
-
|
|
|
Cost
reimbursements
|
18
|
|
-
|
|
18
|
|
|
16
|
|
-
|
|
-
|
|
16
|
|
|
|
Total
expenses
|
52
|
|
-
|
|
52
|
|
|
59
|
|
(3)
|
|
(8)
|
|
48
|
|
|
|
Segment financial
results
|
|
$
7
|
|
$
-
|
|
$
7
|
|
|
$
12
|
|
$
3
|
|
$
(10)
|
|
$
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
|
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
$
20
|
|
|
|
|
|
|
$
11
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 twenty four weeks ended June 20, 2014
(related to the twelve weeks ended March 28, 2014) and June 14,
2013 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. In addition,
Europe segment first quarter Sale of vacation ownership products
revenue and Segment financial results have been restated to correct
prior period misstatements.
|
A-9
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CORPORATE AND
OTHER
|
12 Weeks and 24
Weeks Ended June 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
$
2
|
|
$
-
|
|
$
2
|
|
|
$
1
|
|
$
-
|
|
$
1
|
|
|
Financing
|
6
|
|
-
|
|
6
|
|
|
6
|
|
-
|
|
6
|
|
|
General and
administrative
|
23
|
|
-
|
|
23
|
|
|
22
|
|
-
|
|
22
|
|
|
Organizational and
separation related
|
|
-
|
|
-
|
|
-
|
|
|
2
|
|
(2)
|
|
-
|
|
|
Royalty
fee
|
|
12
|
|
-
|
|
12
|
|
|
11
|
|
-
|
|
11
|
|
|
|
Total
expenses
|
$
48
|
|
$
-
|
|
$
48
|
|
|
$
49
|
|
$
(2)
|
|
$
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
June 14,
2013
|
**
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
$
4
|
|
$
-
|
|
$
4
|
|
|
$
3
|
|
$
-
|
|
$
3
|
|
|
Financing
|
11
|
|
-
|
|
11
|
|
|
11
|
|
-
|
|
11
|
|
|
General and
administrative
|
45
|
|
-
|
|
45
|
|
|
43
|
|
-
|
|
43
|
|
|
Organizational and
separation related
|
|
1
|
|
(1)
|
|
-
|
|
|
3
|
|
(3)
|
|
-
|
|
|
Consumer Financing
Interest
|
|
12
|
|
-
|
|
12
|
|
|
15
|
|
-
|
|
15
|
|
|
Royalty
fee
|
|
23
|
|
-
|
|
23
|
|
|
23
|
|
-
|
|
23
|
|
|
|
Total
expenses
|
$
96
|
|
$
(1)
|
|
$
95
|
|
|
$
98
|
|
$
(3)
|
|
$
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 in support of 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, Inc. in connection with the spin-off, as well as
consumer financing interest expense. Beginning with the fourth
quarter of 2013 we no longer report Interest expense in Corporate
and Other and have recast prior year information for
consistency.
|
A-10
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
($ in
millions)
|
|
|
|
12 Weeks
Ended
|
|
|
|
June 20,
2014
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
Contract
sales
|
|
|
$
164
|
|
|
$
157
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
-
|
|
|
8
|
|
Europe rescission
adjustment2
|
|
-
|
|
|
17
|
|
Sales
Reserve3
|
|
(8)
|
|
|
(9)
|
|
Other4
|
|
(4)
|
|
|
(4)
|
Sale of vacation
ownership products
|
|
$
152
|
|
|
$
169
|
1
Adjustment for lack of required downpayment or contract sales in
rescission period.
|
2
Adjustment to eliminate the impact of extended rescission periods
in our Europe segment. Please see schedule A-19 for
additional information.
|
3 Represents allowance for bad
debts for our financed vacation ownership product sales, which we
also refer to as sales reserve.
|
4
Adjustment represents sales incentives for plus points that will
ultimately be recognized upon usage or expiration as rental
revenues rather than revenues from the Sale of vacation ownership
products.
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
Recognition
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
Reportability
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
Adjustment
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Sale of vacation
ownership products
|
|
$
152
|
|
$
-
|
|
$
-
|
|
$
152
|
|
|
$
169
|
|
$
-
|
|
$
(17)
|
|
$
(8)
|
|
$
144
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
|
43
|
|
-
|
|
-
|
|
43
|
|
|
57
|
|
-
|
|
(6)
|
|
(3)
|
|
48
|
|
|
Marketing and
sales
|
|
72
|
|
-
|
|
-
|
|
72
|
|
|
74
|
|
(1)
|
|
(2)
|
|
-
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
|
$
37
|
|
$
-
|
|
$
-
|
|
$
37
|
|
|
$
38
|
|
$
1
|
|
$
(9)
|
|
$
(5)
|
|
$
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
|
24.2%
|
|
|
|
|
|
24.2%
|
|
|
23.1%
|
|
|
|
|
|
|
|
17.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
$ 326
|
|
|
$ 313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
Reportability1
|
|
(4)
|
|
|
5
|
|
Europe rescission
adjustment2
|
|
-
|
|
|
18
|
|
Sales
Reserve3
|
|
(16)
|
|
|
(18)
|
|
Other4
|
|
(9)
|
|
|
(8)
|
Sale of vacation
ownership products
|
|
$ 297
|
|
|
$ 310
|
1
Adjustment for lack of required downpayment or contract sales in
rescission period.
|
2
Adjustment to eliminate the impact of extended rescission periods
in our Europe segment. Please see schedule A-19 for additional
information.
|
3
Represents allowance for bad debts for our financed vacation
ownership product sales, which we also refer to as sales
reserve.
|
4
Adjustment represents sales incentives for plus points that will
ultimately be recognized upon usage or expiration as rental
revenues rather than revenues from the Sale of vacation ownership
products.
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
CONSOLIDATED
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
Recognition
|
|
As
Adjusted
|
|
|
As
Reported
|
|
|
|
Europe
|
|
Recognition
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
Reportability
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
Adjustment
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Sale of vacation
ownership products
|
|
|
$
297
|
|
$
-
|
|
$
4
|
|
$
301
|
|
|
$
310
|
|
$
-
|
|
$
(18)
|
|
$
(5)
|
|
$
287
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
|
90
|
|
-
|
|
1
|
|
91
|
|
|
101
|
|
-
|
|
(6)
|
|
(2)
|
|
93
|
|
|
Marketing and
sales
|
|
143
|
|
-
|
|
-
|
|
143
|
|
|
148
|
|
(2)
|
|
(2)
|
|
-
|
|
144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
|
$
64
|
|
$
-
|
|
$
3
|
|
$
67
|
|
|
$
61
|
|
$
2
|
|
$
(10)
|
|
$
(3)
|
|
$
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
|
21.4%
|
|
|
|
|
|
22.0%
|
|
|
19.8%
|
|
|
|
|
|
|
|
17.4%
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: We have
restated 2013 first quarter Sale of vacation ownership products,
Development margin and Development margin percentage to correct
prior period misstatements.
|
A-12
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
CONTRACT SALES TO SALE OF VACATION OWNERSHIP
PRODUCTS
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
$ 146
|
|
|
$ 142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
|
Reportability1
|
|
-
|
|
|
5
|
|
|
Sales Reserve
2
|
|
(7)
|
|
|
(7)
|
|
|
Other
3
|
|
(4)
|
|
|
(4)
|
Sale of vacation
ownership products
|
|
$ 135
|
|
|
$ 136
|
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 represents sales incentives for plus points that will
ultimately be recognized upon usage or expiration as rental
revenues rather than revenues from the Sale of vacation ownership
products.
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 20,
2014
|
|
Charges
|
|
Adjustment
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Sale of vacation
ownership products
|
|
$
135
|
|
$
-
|
|
$
-
|
|
$
135
|
|
|
$
136
|
|
$
-
|
|
$
(5)
|
|
$
131
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
|
37
|
|
-
|
|
-
|
|
37
|
|
|
46
|
|
-
|
|
(2)
|
|
44
|
|
|
Marketing and
sales
|
62
|
|
-
|
|
-
|
|
62
|
|
|
62
|
|
-
|
|
-
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
|
$
36
|
|
$
-
|
|
$
-
|
|
$
36
|
|
|
$
28
|
|
$
-
|
|
$
(3)
|
|
$
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
|
|
26.3%
|
|
|
|
|
|
26.3%
|
|
|
20.8%
|
|
|
|
|
|
19.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
|
June 14,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
sales
|
|
$ 292
|
|
|
$ 285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognition
adjustments:
|
|
|
|
|
|
|
Reportability1
|
|
(4)
|
|
|
-
|
|
Sales Reserve
2
|
|
(13)
|
|
|
(15)
|
|
Other
3
|
|
(9)
|
|
|
(8)
|
Sale of vacation
ownership products
|
|
$ 266
|
|
|
$ 262
|
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 represents sales incentives for plus points that will
ultimately be recognized upon usage or expiration as rental
revenues rather than revenues from the Sale of vacation ownership
products.
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NORTH AMERICA
ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP
PRODUCTS NET OF EXPENSES)
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 20,
2014
|
|
Charges
|
|
Adjustment
|
|
June 20,
2014
|
**
|
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
Sale of vacation
ownership products
|
|
|
$
266
|
|
$
-
|
|
$
4
|
|
$
270
|
|
|
$
262
|
|
$
-
|
|
$
-
|
|
$
262
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of vacation
ownership products
|
|
79
|
|
-
|
|
1
|
|
80
|
|
|
86
|
|
-
|
|
-
|
|
86
|
|
|
Marketing and
sales
|
124
|
|
-
|
|
-
|
|
124
|
|
|
126
|
|
-
|
|
-
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
margin
|
|
$
63
|
|
$
-
|
|
$
3
|
|
$
66
|
|
|
$
50
|
|
$
-
|
|
$
-
|
|
$
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development margin
percentage1
|
|
23.5%
|
|
|
|
|
|
24.1%
|
|
|
19.1%
|
|
|
|
|
|
19.1%
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 20, 2014 and June 14, 2013
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
Certain
|
|
12 Weeks
Ended
|
|
12 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
36
|
|
$
(5)
|
|
$
31
|
|
$
30
|
|
$
3
|
|
$
(6)
|
|
$
27
|
|
Interest
expense
|
3
|
|
-
|
|
3
|
|
4
|
|
-
|
|
-
|
|
4
|
|
Tax
provision
|
22
|
|
(4)
|
|
18
|
|
14
|
|
1
|
|
(3)
|
|
12
|
|
Depreciation and
amortization
|
5
|
|
-
|
|
5
|
|
5
|
|
-
|
|
-
|
|
5
|
|
|
EBITDA **
|
$
66
|
|
$
(9)
|
|
$
57
|
|
$
53
|
|
$
4
|
|
$
(9)
|
|
$
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
As
Adjusted
|
|
As
Reported
|
|
|
|
Europe
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
Certain
|
|
24 Weeks
Ended
|
|
24 Weeks
Ended
|
|
Certain
|
|
Rescission
|
|
24 Weeks
Ended
|
|
|
|
|
|
|
|
|
June 20,
2014
|
|
Charges
|
|
June 20,
2014
|
**
|
June 14,
2013
|
|
Charges
|
|
Adjustment
|
|
June 14,
2013
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
55
|
|
$
(4)
|
|
$
51
|
|
$
49
|
|
$
4
|
|
$
(7)
|
|
$
46
|
|
Interest
expense
|
5
|
|
-
|
|
5
|
|
7
|
|
-
|
|
-
|
|
7
|
|
Tax
provision
|
35
|
|
(3)
|
|
32
|
|
25
|
|
1
|
|
(3)
|
|
23
|
|
Depreciation and
amortization
|
9
|
|
-
|
|
9
|
|
11
|
|
-
|
|
-
|
|
11
|
|
|
EBITDA **
|
$
104
|
|
$
(7)
|
|
$
97
|
|
$
92
|
|
$
5
|
|
$
(10)
|
|
$
87
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: We now report
consumer financing interest expense separately from all other
interest expense. As a result, adjusted EBITDA as presented in
these schedules is equivalent to the non-GAAP financial measure
adjusted EBITDA, as adjusted presented prior to the third quarter
of 2013. In addition, we have restated 2013 first quarter Net
income to correct prior period misstatements.
|
A-15
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
|
2014 ADJUSTED NET
INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED
OUTLOOK
|
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014
(low)
|
|
Fiscal Year 2014
(high)
|
|
Net income
|
|
|
$ 95
|
|
$ 101
|
|
|
Adjustments to
reconcile Net income to Adjusted net income
|
|
|
|
|
|
|
|
Organizational and
separation related and other charges1
|
|
(1)
|
|
(1)
|
|
|
|
Gain on disposition
2
|
|
(2)
|
|
(2)
|
|
|
|
Provision for income
taxes on adjustments to net income
|
1
|
|
1
|
|
|
|
|
Adjusted net
income**
|
|
$ 93
|
|
$ 99
|
|
|
|
|
|
|
|
|
Earnings per share -
Diluted 3
|
|
$ 2.72
|
|
$ 2.90
|
|
|
Adjusted earnings per
share - Diluted**, 3
|
|
$ 2.64
|
|
$ 2.82
|
|
|
Diluted
shares3
|
|
35.1
|
|
35.1
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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 $5 million for organizational and separation related
efforts, $1 million for an impairment charge in our North America
segment, and $1 million for restructuring / severance costs in our
Europe segment, offset by $8 million associated with the settlement
of a dispute with a former service provider in our North America
segment.
|
2 Gain on
disposition adjustment includes the gain on the sale of a golf
course and adjacent undeveloped land in our North America
segment.
|
3 Earnings
per share - Diluted, Adjusted earnings per share - Diluted, and
Diluted shares outlook includes the impact of share repurchase
activity only through July 22, 2014.
|
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2014 ADJUSTED
EBITDA OUTLOOK
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014
(low)
|
|
Fiscal Year 2014
(high)
|
Adjusted net income
**
|
|
$ 93
|
|
$ 99
|
Interest
expense1
|
|
12
|
|
12
|
Tax
provision
|
|
66
|
|
70
|
Depreciation and
amortization
|
|
19
|
|
19
|
|
Adjusted
EBITDA**
|
|
$ 190
|
|
$ 200
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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
|
2014 ADJUSTED
DEVELOPMENT MARGIN OUTLOOK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
MVW
|
|
|
North
America
|
|
|
|
|
|
|
Fiscal Year 2014
(low)
|
|
Fiscal Year 2014
(high)
|
|
|
Fiscal Year 2014
(low)
|
|
Fiscal Year 2014
(high)
|
Development
margin1
|
|
20.5%
|
|
21.5%
|
|
|
22.8%
|
|
23.8%
|
|
Adjustments to
reconcile Development margin to Adjusted development
margin
|
|
|
|
|
|
|
|
|
|
|
Other
charges2
|
|
0.1%
|
|
0.1%
|
|
|
0.0%
|
|
0.0%
|
|
|
Revenue recognition
reportability
|
|
0.4%
|
|
0.4%
|
|
|
0.2%
|
|
0.2%
|
|
|
|
Adjusted development
margin**, 1
|
|
21.0%
|
|
22.0%
|
|
|
23.0%
|
|
24.0%
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 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.
|
2 Other
charges adjustment includes $1 million for restructuring /
severance costs in our Europe segment recorded under the "Marketing
and sales" caption.
|
A - 16
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2014 ADJUSTED FREE
CASH FLOW OUTLOOK
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014
(low)
|
|
Fiscal Year 2014
(high)
|
|
Adjusted net income
**
|
$
93
|
|
$
99
|
|
|
Adjustments to
reconcile Adjusted net income to net cash
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
Adjustments for
non-cash items1
|
68
|
|
69
|
|
|
|
Deferred income taxes
/ income taxes payable
|
10
|
|
12
|
|
|
|
Net changes in assets
and liabilities:
|
|
|
|
|
|
|
|
Notes receivable
originations
|
(273)
|
|
(270)
|
|
|
|
|
Notes receivable
collections
|
285
|
|
287
|
|
|
|
|
Inventory
|
|
34
|
|
36
|
|
|
|
|
Liability for
Marriott Rewards customer loyalty program
|
(32)
|
|
(31)
|
|
|
|
|
Organizational and
separation related and other charges
|
1
|
|
1
|
|
|
|
|
Other working capital
changes
|
3
|
|
(2)
|
|
Net cash provided by
operating activities
|
189
|
|
201
|
|
|
Capital expenditures
for property and equipment (excluding inventory)
|
|
|
|
|
|
|
Organizational and
separation related capital expenditures
|
(3)
|
|
(3)
|
|
|
|
Other
|
|
(23)
|
|
(23)
|
|
|
Increase in
restricted cash
|
-
|
|
-
|
|
|
Borrowings from
securitization
transactions
|
245
|
|
250
|
|
|
Repayment of debt
related to securitizations
|
(220)
|
|
(222)
|
|
|
|
|
Free cash
flow**
|
188
|
|
203
|
|
Add:
|
|
|
|
|
|
|
|
|
Organizational and
separation related and other charges
|
2
|
|
2
|
|
|
|
|
Adjusted free cash
flow**
|
$
190
|
|
$
205
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
|
|
|
|
|
|
|
|
1Includes
depreciation, amortization of debt issuance costs, provision for
loan losses, impairment activity, and share-based
compensation.
|
|
NOTE: We now include
borrowings from securitization transactions and repayment of debt
related to securitizations in our free cash flow. As a result, free
cash flow as presented in this schedule is equivalent to the
non-GAAP financial measure adjusted free cash flow presented prior
to the fourth quarter of 2013, and adjusted free cash flow
presented in this schedule is equivalent to the non-GAAP financial
measure adjusted free cash flow, as adjusted presented prior to the
fourth quarter of 2013.
|
A-17
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
2014 NORMALIZED
ADJUSTED FREE CASH FLOW OUTLOOK
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Guidance
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
Mid-Point
|
|
Adjustments
|
|
Normalized
|
|
Adjusted net income
**
|
|
$ 93
|
|
$ 99
|
|
$
96
|
|
$
-
|
|
$
96
|
|
|
Adjustments to
reconcile Adjusted net income to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
non-cash items1
|
|
68
|
|
69
|
|
69
|
|
-
|
|
69
|
|
|
|
Deferred income taxes
/ income taxes payable
|
|
10
|
|
12
|
|
11
|
|
(1)
|
2
|
10
|
|
|
|
Net changes in assets
and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable
originations
|
|
(273)
|
|
(270)
|
|
(272)
|
|
-
|
|
(272)
|
|
|
|
|
Notes receivable
collections
|
|
285
|
|
287
|
|
286
|
|
-
|
|
286
|
|
|
|
|
Inventory
|
|
|
34
|
|
36
|
|
35
|
|
(35)
|
3
|
-
|
|
|
|
|
Liability for
Marriott Rewards customer loyalty program
|
|
(32)
|
|
(31)
|
|
(32)
|
|
32
|
4
|
-
|
|
|
|
|
Organizational and
separation related and other charges
|
|
|
1
|
|
1
|
|
1
|
|
(1)
|
5
|
-
|
|
|
|
|
Other working capital
changes
|
|
3
|
|
(2)
|
|
1
|
|
(11)
|
6
|
(10)
|
|
Net cash provided by
operating activities
|
|
189
|
|
201
|
|
195
|
|
(16)
|
|
179
|
|
|
Capital expenditures
for property and equipment (excluding inventory)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organizational and
separation related capital expenditures
|
|
(3)
|
|
(3)
|
|
(3)
|
|
3
|
5
|
-
|
|
|
|
Other
|
|
|
(23)
|
|
(23)
|
|
(23)
|
|
5
|
7
|
(18)
|
|
|
Increase in
restricted cash
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Borrowings from
securitization transactions
|
|
245
|
|
250
|
|
248
|
|
(35)
|
8
|
213
|
|
|
Repayment of debt
related to securitizations
|
(220)
|
|
(222)
|
|
(221)
|
|
-
|
|
(221)
|
|
|
|
|
Free cash
flow**
|
|
188
|
|
203
|
|
196
|
|
(43)
|
|
153
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organizational and
separation related and other charges
|
|
|
2
|
|
2
|
|
2
|
|
(2)
|
|
-
|
|
|
|
|
Adjusted free cash
flow**
|
|
$ 190
|
|
$ 205
|
|
$
198
|
|
$
(45)
|
|
$
153
|
** Denotes non-GAAP
financial measures. Please see schedules A-18 through A-20 for
additional information about our reasons for providing these
alternative financial measures and limitations on their
use.
|
|
NOTE: We now include
borrowings from securitization transactions and repayment of debt
related to securitizations in our free cash flow. As a result, free
cash flow as presented in this schedule is equivalent to the
non-GAAP financial measure adjusted free cash flow presented prior
to the fourth quarter of 2013, and adjusted free cash flow
presented in this schedule is equivalent to the non-GAAP financial
measure adjusted free cash flow, as adjusted presented prior to the
fourth quarter of 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Includes
depreciation, amortization of debt issuance costs, provision for
loan losses, impairment activity, and share-based
compensation.
|
|
2
Represents cash taxes slightly lower than tax provision.
|
|
3
Represents adjustment to align real estate inventory spending with
real estate inventory costs (i.e., product costs).
|
|
4
Represents payment for Marriott Rewards Points issued prior to the
Spin-off. Liability to be fully paid in 2016.
|
|
5
Represents costs associated with organizational and separation
related efforts (efforts projected to be completed in 2014),
impairment activity, and restructuring / severance costs in our
Europe segment, offset by the settlement of a dispute with a former
service provider.
|
|
6
Represents normalized other working capital changes.
|
|
7
Represents normalized capital expenditures for property and
equipment.
|
|
8
Represents normalized borrowings from securitization
transactions.
|
|
A-18
|
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 press release 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.
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Adjusted Net
Income. We evaluate non-GAAP financial measures
including Adjusted Net Income, Adjusted EBITDA, and Adjusted
Development Margin, that exclude certain charges incurred in the 12
weeks and 24 weeks ended June 20, 2014 and June 14, 2013, exclude
the gain on the disposition of a golf course and adjacent
undeveloped land in the 12 weeks and 24 weeks ended June 20, 2014,
and exclude adjustments related to the extension of rescission
periods in our Europe segment ("Europe Rescission Adjustments") in
the 12 weeks and 24 weeks ended June 14, 2013, because these
non-GAAP financial measures allow for period-over-period
comparisons of our on-going core operations before the impact of
certain charges, gains and Europe Rescission Adjustments.
These non-GAAP financial measures also facilitate our comparison of
results from our on-going core operations before certain charges,
gains and Europe Rescission Adjustments with results from other
vacation ownership companies.
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Certain
Charges - 12 weeks and 24 weeks ended June 20, 2014. In
our Statement of Operations for the 12 weeks ended June 20, 2014,
we recorded $8 million of net pre-tax income, which included $8
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
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 million of organizational and separation related costs
recorded under the "Organizational and separation related" caption
and a $1 million impairment charge associated with a project in our
North America segment recorded under the "Impairment"
caption. In our Statement of Operations for the 24 weeks
ended June 20, 2014, we recorded $5 million of net pre-tax income,
which included $8 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,
partially offset by $2 million of organizational and separation
related costs recorded under the "Organizational and separation
related" caption and a $1 million impairment charge associated with
a project in our North America segment recorded under the
"Impairment" caption.
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Certain Charges - 12 weeks
and 24 weeks ended June 14, 2013. In our Statement of
Operations for the 12 weeks ended June 14, 2013, we recorded $4
million of net pre-tax charges, which included a $7 million
increase in our accrual 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, $2 million
of organizational and separation related costs recorded under the
"Organizational and separation related" caption, $1 million of
severance costs in our Europe segment recorded under the "Marketing
and sales" caption, and a $1 million pre-tax non-cash impairment
charge related to a leased golf course at a project in our Europe
segment recorded under the "Impairment" caption, partially offset
by a $7 million gain for cash received in payment of fully reserved
receivables in connection with an equity method investment in a
joint venture project in our North America segment recorded under
the "Impairment reversals on equity investment" caption. In
our Statement of Operations for the 24 weeks ended June 14, 2013,
we recorded $5 million of net pre-tax charges, which included a $7
million increase in our accrual 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, $3 million of organizational and separation related costs
recorded under the "Organizational and separation related" caption,
$2 million of severance costs in our Europe segment recorded under
the "Marketing and sales" caption, and a $1 million pre-tax
non-cash impairment charge related to a leased golf course at a
project in our Europe segment recorded under the "Impairment"
caption, partially offset by a $7 million gain for cash received in
payment of fully reserved receivables in connection with an equity
method investment in a joint venture project in our North America
segment recorded under the "Impairment reversals on equity
investment" caption, and a $1 million reversal of a previously
recorded litigation settlement related to a project in our North
America segment, based upon an agreement to settle the matter for
an amount less than our accrual, recorded under the "Litigation
settlement" caption.
|
A-19
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NON-GAAP FINANCIAL
MEASURES
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Gain on the
disposition of a golf course and adjacent undeveloped land - 12
weeks and 24 weeks ended June 20, 2014. In our
Statement of Operations for the 12 weeks ended June 20, 2014, we
recorded a net $1 million gain associated with the sale of a golf
course and adjacent undeveloped land in our North America segment
under the "Gains and other income" caption. In our Statement
of Operations for the 24 weeks ended June 20, 2014, we recorded a
net $2 million gain associated with the sale of a golf course and
adjacent undeveloped land in our North America segment under the
"Gains and other income" caption.
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Europe
Rescission Adjustments - 12 weeks and 24 weeks ended June 14,
2013. In the second quarter of 2013, during the
course of an internal review of certain sales documentation
processes related to the sale of certain vacation ownership
interests in properties associated with our Europe segment, we
determined that the documentation we provided for certain sales of
vacation ownership products was not strictly compliant. As a
result, in accordance with applicable European regulation, the
period of time during which purchasers of such interests may
rescind their purchases was extended. We record revenues from
the sale of vacation ownership products once the rescission period
has ended. Originally, we recorded revenues from these sales
of vacation ownership products based on the rescission periods in
effect assuming compliant documentation had been provided to the
purchasers, rather than the extended periods. As a result, we
recognized revenue in incorrect periods between fiscal years 2010
and 2013 and misstated revenues in our previously filed
consolidated financial statements. We provided compliant
documentation to purchasers for whom the extended rescission period
had not yet expired. As compliant documentation was
subsequently provided as part of the corrective actions we took,
the extended rescission period for most of the purchases at issue
ended during the second quarter of 2013. To better reflect
our on-going core operations and allow for period-over-period
comparisons, we have excluded the impact associated with the
extended rescission periods in our adjusted financial
measures.
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12
weeks ended June 14, 2013. In our Statement of Operations
for the 12 weeks ended June 14, 2013, we recorded after-tax Europe
Rescission Adjustments of $6 million, which included a $17 million
pre-tax increase in Sale of vacation ownership products revenues,
pre-tax increases of $6 million and $2 million in Cost of vacation
ownership products expense and Marketing and sales expense,
respectively, associated with the change in revenues from the Sale
of vacation ownership products, and a $3 million increase in the
Provision for income taxes associated with the change in Income
before income taxes.
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24
weeks ended June 14, 2013. In our Statement of Operations
for the 24 weeks ended June 14, 2013, we recorded after-tax Europe
Rescission Adjustments of $7 million, which included an $18 million
pre-tax increase in Sale of vacation ownership products revenues,
pre-tax increases of $6 million and $2 million in Cost of vacation
ownership products expense and Marketing and sales expense,
respectively, associated with the change in revenues from the Sale
of vacation ownership products, and a $3 million increase in the
Provision for income taxes associated with the change in Income
before income taxes.
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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 charges and Europe Rescission Adjustments 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, certain charges and
Europe Rescission Adjustments to our Development Margin.
|
A-20
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
NON-GAAP FINANCIAL
MEASURES
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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. Beginning with the third quarter of 2013, we
report consumer financing interest expense separately from all
other interest expense. As a result, adjusted EBITDA as
presented in these schedules is equivalent to the non-GAAP
financial measure adjusted EBITDA, as adjusted presented prior to
the third quarter of 2013.
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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.
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Adjusted
EBITDA. We also evaluate Adjusted EBITDA, which reflects
additional adjustments for certain charges, gains and Europe
Rescission Adjustments, 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 charges, gains and Europe Rescission Adjustments.
Together, EBITDA and Adjusted EBITDA facilitate our comparison of
results from our on-going core operations before the impact of
certain charges, gains and Europe Rescission Adjustments with
results from other vacation ownership companies.
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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. We now include
borrowings from securitization transactions and repayment of debt
related to securitizations in our free cash flow. As a result, free
cash flow as presented in this schedule is equivalent to the
non-GAAP financial measure adjusted free cash flow presented prior
to the fourth quarter of 2013, and adjusted free cash flow
presented in this schedule is equivalent to the non-GAAP financial
measure adjusted free cash flow, as adjusted presented prior to the
fourth quarter of 2013.
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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 charges, 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-21
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
INTERIM
CONSOLIDATED BALANCE SHEETS
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
January
3,
|
|
|
June 20,
2014
|
|
2014
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
170
|
|
$
200
|
Restricted cash
(including $21 and $34 from VIEs, respectively)
|
42
|
|
86
|
Accounts and
contracts receivable (including $4 and $5 from VIEs,
respectively)
|
121
|
|
109
|
Vacation ownership
notes receivable (including $621 and $719 from VIEs,
respectively)
|
920
|
|
970
|
Inventory
|
826
|
|
870
|
Property and
equipment
|
215
|
|
254
|
Other
|
116
|
|
143
|
Total
Assets
|
$
2,410
|
|
$ 2,632
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Accounts
payable
|
$
75
|
|
$
129
|
Advance
deposits
|
55
|
|
48
|
Accrued liabilities
(including $0 and $1 from VIEs, respectively)
|
168
|
|
185
|
Deferred
revenue
|
19
|
|
19
|
Payroll and benefits
liability
|
67
|
|
82
|
Liability for
Marriott Rewards customer loyalty program
|
100
|
|
114
|
Deferred compensation
liability
|
39
|
|
37
|
Mandatorily
redeemable preferred stock of consolidated subsidiary
|
40
|
|
40
|
Debt (including $566
and $674 from VIEs, respectively)
|
570
|
|
678
|
Other
|
45
|
|
31
|
Deferred
taxes
|
58
|
|
60
|
Total
Liabilities
|
1,236
|
|
1,423
|
|
|
|
|
|
Preferred stock -
$.01 par value; 2,000,000 shares authorized; none issued or
outstanding
|
-
|
|
-
|
Common stock - $.01
par value; 100,000,000 shares authorized; 35,878,433 and 35,637,765
shares issued,
respectively
|
-
|
|
-
|
|
Treasury stock - at
cost; 2,175,224and 505,023 shares, respectively
|
(115)
|
|
(26)
|
Additional paid-in
capital
|
1,129
|
|
1,130
|
Accumulated other
comprehensive income
|
23
|
|
23
|
Retained
earnings
|
137
|
|
82
|
Total
Equity
|
1,174
|
|
1,209
|
|
|
|
|
|
Total Liabilities and
Equity
|
$
2,410
|
|
$ 2,632
|
|
|
|
|
|
The abbreviation VIEs
above means Variable Interest Entities.
|
|
|
|
A-22
|
MARRIOTT VACATIONS
WORLDWIDE CORPORATION
|
INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
|
24 weeks
ended
|
|
|
|
June 20,
2014
|
|
June 14,
2013
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net
income
|
|
$55
|
|
$49
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
|
9
|
|
11
|
|
Amortization of
debt issuance costs
|
|
3
|
|
3
|
|
Provision for
loan losses
|
|
15
|
|
18
|
|
Share-based
compensation
|
|
6
|
|
6
|
|
Gain on
disposal of property and equipment, net
|
|
(2)
|
|
(1)
|
|
Deferred income
taxes
|
|
(5)
|
|
(1)
|
|
Impairment
charges
|
|
1
|
|
1
|
|
Net change in
assets and liabilities:
|
|
|
|
|
|
Accounts and
contracts receivable
|
|
(12)
|
|
(1)
|
|
Notes receivable
originations
|
|
(104)
|
|
(100)
|
|
Notes receivable
collections
|
|
137
|
|
148
|
|
Inventory
|
|
37
|
|
22
|
|
Other
assets
|
|
27
|
|
-
|
|
Accounts payable,
advance deposits and accrued liabilities
|
|
(56)
|
|
(83)
|
|
Liability for
Marriott Rewards customer loyalty program
|
|
(14)
|
|
(25)
|
|
Deferred
revenue
|
|
-
|
|
(10)
|
|
Payroll and benefit
liabilities
|
|
(15)
|
|
(7)
|
|
Deferred compensation
liability
|
|
2
|
|
(8)
|
|
Other
liabilities
|
|
15
|
|
12
|
|
Other,
net
|
|
(1)
|
|
-
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
98
|
|
34
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
Capital
expenditures for property and equipment (excluding
inventory)
|
|
(3)
|
|
(7)
|
|
Decrease in
restricted cash
|
|
44
|
|
4
|
|
Dispositions,
net
|
|
33
|
|
3
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
74
|
|
-
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Borrowings from
securitization transactions
|
|
23
|
|
111
|
|
Repayment of
debt related to securitization transactions
|
|
(131)
|
|
(142)
|
|
Borrowings on
Revolving Corporate Credit Facility
|
|
-
|
|
25
|
|
Repayment of
Revolving Corporate Credit Facility
|
|
-
|
|
(25)
|
|
Purchase of
treasury stock
|
|
(89)
|
|
2
|
|
Proceeds from
stock option exercises
|
|
1
|
|
-
|
|
Payment of
withholding taxes on vesting of restricted stock
units
|
|
(6)
|
|
(4)
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
(202)
|
|
(33)
|
|
|
|
|
|
|
|
Effect of
changes in exchange rates on cash and cash
equivalents
|
|
-
|
|
-
|
|
|
|
|
|
|
(DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
|
(30)
|
|
1
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
200
|
|
103
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$170
|
|
$104
|
Logo -
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SOURCE Marriott Vacations Worldwide Corporation