Marriott Vacations Worldwide Reports First Quarter 2012 Financial Results

ORLANDO, Fla., May 3, 2012 /PRNewswire/ -- Today, Marriott Vacations Worldwide Corporation (NYSE: VAC), the leading global pure-play vacation ownership company, reported first quarter 2012 financial results and reaffirmed the company's full-year outlook for 2012 based upon positive trends in important North America metrics to date.

First Quarter 2012 highlights include:

  • North America segment gross contract sales increased 18 percent to $130 million.
  • Volume per guest (VPG) in the North America segment increased 18 percent year-over-year to $2,942.
  • Total gross contract sales increased 6 percent to $154 million.
  • Total revenues were $372 million, including $146 million from rentals, resort management and other services and financing.
  • Adjusted EBITDA (earnings before interest expense, taxes, depreciation and amortization), as adjusted for organizational and separation related costs totaled $29 million
  • Real estate inventory balance declined by $27 million in the first quarter.
  • Adjusted fully diluted earnings per share (EPS) in the first quarter was $0.27.

First quarter 2012 reported net income totaled $9 million, or $0.24 a share, compared to reported net income of $19 million in the first quarter of 2011. First quarter 2012 adjusted net income totaled $10 million, flat to adjusted net income on a pro forma basis for the first quarter of 2011. Adjustments are shown on schedule A-1 and described in further detail on schedule A-11. First quarter 2012 adjusted results exclude $2 million of pre-tax organizational and separation related costs. First quarter 2011 adjusted results include $17 million of pre-tax pro forma adjustments to reflect the company's position as if it were a standalone, public company since the beginning of 2011 rather than from the actual spin-off date in November 2011, as well as $2 million of legal related charges and severance costs.

"We're pleased to report our first full quarter as a newly independent company shows 2012 is off to a strong start. Double-digit growth in both VPG and contract sales in North America demonstrated solid marketing and sales execution," said Stephen P. Weisz, president and chief executive officer. "We also made significant progress toward improving our margin on the sale of vacation ownership products, or what we call development margin, and are well on our way toward our targeted development margin of over 12 percent for the year. This demonstrates the leverage in our business model and the progress we have made on this key strategic initiative." 

Weisz continued, "Our contract sales growth in North America underscores the strong value proposition of our Marriott Vacation Club Destinations program. Coupled with our focus on our cost structure, we are confident in the outlook for the balance of 2012. Given our first quarter growth came from North America, our largest and most profitable segment, we believe it is more likely that we will perform toward the higher end of our 2012 guidance range."

First Quarter 2012 Results

For the first quarter, which ended March 23, 2012, total revenues were $372 million, including $86 million in cost reimbursements. Total revenues increased $1 million from the 2011 first quarter reflecting higher rental revenues, cost reimbursements and resort management and other services revenues. These increases were partially offset by lower revenue from the sale of vacation ownership products primarily due to revenue reportability and lower financing revenues from lower interest income on a declining notes receivable portfolio.

While company-owned gross contract sales increased $13 million in the first quarter, revenue from the sale of vacation ownership products of $134 million declined 6 percent from the prior year quarter due to $20 million of revenue reportability and $2 million of higher notes receivable reserve activity resulting primarily from higher contract sales volumes. The $20 million of revenue reportability was driven by $9 million of favorable revenue reportability in the first quarter of 2011, due to year-end 2010 sales associated with the launch of the company's Marriott Vacation Club Destinations program that were recognized during the first quarter of 2011, and $11 million of unfavorable revenue reportability in the current year quarter from strong contract sales growth that resulted in an increase in contract sales in rescission periods at the end of the quarter. The impact of revenue reportability on the first quarter results for both 2012 and 2011 is illustrated on schedules A-7 (total company) and A-8 (North America) attached.

Total gross contract sales, excluding the impact of contract cancellation allowances and reversals, totaled $154 million, a 6 percent increase from $145 million in gross contract sales in the first quarter of 2011, driven by an 18 percent increase in contract sales in the North America segment, partially offset by lower contract sales in the Europe, Luxury and Asia Pacific segments. Revenues from the sale of vacation ownership products, net of expenses, were $12 million, $5 million lower than the first quarter of 2011 on an adjusted basis and $3 million lower than the first quarter of 2011 on an as reported basis, primarily from the impact of revenue reportability. 

Rental revenues totaled $56 million, a 14 percent increase from the first quarter of 2011, reflecting higher demand for rental inventory with transient keys rented up 4 percent company-wide. Combined with higher revenues from Plus Points, one time use points provided as incentives, the company generated $8 million of rental revenue net of expenses, a $6 million increase from the first quarter of 2011.  

Resort management and other services revenues totaled $54 million, a 6 percent increase over the 2011 period, reflecting higher management fees, higher annual club dues in connection with the company's Marriott Vacation Club Destinations program and higher ancillary revenues from food and beverage and golf operations. The company generated $10 million of resort management and other services revenues, net of expenses, a $3 million increase from the first quarter of 2011. 

Adjusted net income of $10 million was flat in the first quarter of 2012 compared to adjusted net income on a pro forma basis of $10 million in the first quarter of 2011.   

Adjusted EBITDA, as adjusted for organizational and separation related costs, was $29 million in the first quarter of 2012, an increase of $1 million from Adjusted EBITDA on an as adjusted pro forma basis of $28 million in the 2011 quarter. First quarter 2012 reported net income totaled $9 million compared to reported net income of $19 million in the first quarter of 2011.   

Segment Results

North America

Total North America contract sales increased $20 million, or 18 percent, to $130 million. VPG increased 18 percent to $2,942 in the first quarter of 2012 from $2,493 in the first quarter of 2011, driven by across the board improvements in closing efficiency, price and volume per contract.

First quarter 2012 North America segment results increased $6 million to $72 million from $66 million in adjusted segment results on a pro forma basis in the first quarter of 2011. The increase was primarily driven by $5 million of higher rental revenues net of expenses, $4 million of higher resort management and other services revenues net of expenses and $1 million of higher other revenues net of expenses.  These increases were partially offset by $4 million of lower financing revenues net of expenses from a declining notes receivable portfolio. North America segment reported financial results increased to $72 million in the first quarter of 2012, $4 million higher than the first quarter of 2011.

Asia Pacific

Asia Pacific contract sales declined $2 million to $13 million. Total revenues in this segment declined $2 million to $18 million reflecting lower revenues from the sale of vacation ownership products. As a result, first quarter 2012 segment results were $1 million, $2 million lower than the first quarter of 2011.

Luxury and Europe

As inventory in the Luxury and Europe segments continues to decline, consistent with the strategy stated for these segments, first quarter 2012 gross contract sales declined to $11 million. Adjusted segment results for Luxury and Europe declined $1 million to a loss of $4 million in the first quarter of 2012.  Luxury and Europe combined segment reported financial results improved $1 million to a loss of $4 million in the first quarter of 2012. 

Balance Sheet and Liquidity

On March 23, 2012, cash and cash equivalents totaled $77 million. During the 2012 first quarter, real estate inventory balances declined $27 million to $926 million, including $519 million of finished goods, $115 million of work-in-process and $292 million of land and infrastructure. The company had $774 million in corporate level debt outstanding at quarter-end, a decline of $76 million from year-end 2011, including $662 million in non-recourse securitized notes receivable and $109 million drawn on its $300 million warehouse credit facility. In addition, the company had $195 million in available capacity under its revolving credit facility. Given the amount of cash on hand, the company did not draw down on its warehouse credit facility during the quarter and had $79 million of notes that were eligible for securitization on March 23, 2012.

Outlook

For the full year 2012, the company is reaffirming its guidance previously provided on March 15, 2012 as follows:

  • Total gross contract sales growth of 4 percent to 8 percent
  • Adjusted EBITDA of $115 million to $125 million
  • Net income of $37 million to $43 million
  • Fully diluted earnings per share of $1.03 to $1.17
  • Adjusted Free Cash Flow of $85 million to $100 million

See schedule A-11 for a reconciliation of Adjusted EBITDA, Adjusted free cash flow and other non-GAAP financial measures.

First Quarter 2012 Earnings Conference Call

The company will hold a conference call at 10:00 AM EDT today to discuss these results. Participants may access the call by dialing (866) 225-8754 or (480) 629-9866 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 (800) 406-7325 or (303) 590-3030 for international callers. The replay passcode is 4532362. The webcast will also be available on the company's website for 90 days following the call.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is the leading global pure-play vacation ownership company. Through a spin-off 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 more than 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 earnings trends, estimates, and assumptions, and similar statements concerning anticipated future events and expectations that are not historical facts. We caution 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 Information Statement filed as an exhibit to our Annual Report  on Form 10-K for the year ended December 30, 2011 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 presentation. These statements are made as of May 3, 2012 and we undertake 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 1, 2012

TABLE OF CONTENTS

 

Consolidated Statements of Operations - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-1


North America Segment Financial Results - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-2


Luxury Segment Financial Results - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-3


Europe Segment Financial Results - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-4


Asia Pacific Segment Financial Results - 12 Weeks Ended March 23, 2012 and March 25, 2011  

 A-5


Corporate and Other Financial Results - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-6


Consolidated Gross Company-Owned Contract Sales to Sales of Vacation Ownership Products and Consolidated Adjusted Sales of

    Vacation Ownership Products Net of Expenses - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-7


North America Gross Company-Owned Contract Sales to Sales of Vacation Ownership Products and North America Adjusted Sales of

    Vacation Ownership Products Net of Expenses - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-8


EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA - 12 Weeks Ended March 23, 2012 and March 25, 2011

 A-9


EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow - 2012 Outlook 

 A-10


Non-GAAP Financial Measures

 A-11


Interim Consolidated Balance Sheets

 A-13

  

A-1


MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

12 Weeks Ended March 23, 2012 and March 25, 2011

(In millions, except per share amounts)
















As Adjusted




As Reported




As Adjusted



As Reported






Pro-Forma




12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended




March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Revenues

















Sales of vacation ownership products

$ 134


$ -


$ 134



$ 143


$ -


$ -


$ 143



Resort management and other services

54


-


54



51


-


-


51



Financing

36


-


36



41


-


-


41



Rental

56


-


56



49


-


-


49



Other

6


-


6



6


-


-


6



Cost reimbursements

86


-


86



81


-


-


81



Total revenues

372


-


372



371


-


-


371


Expenses

















Costs of vacation ownership products

48


-


48



55


(1)


-


54



Marketing and sales

74


-


74



73


(1)


-


72



Resort management and other services

44


-


44



44


-


-


44



Financing

6


-


6



6


-


-


6



Rental

48


-


48



47


-


-


47



Other

2


-


2



1


-


-


1



General and administrative

21


(2)


19



19


-


-


19



Interest

13


-


13



12


-


3


15



Royalty fee

13


-


13



-


-


14


14



Cost reimbursements

86


-


86



81


-


-


81



Total expenses

355


(2)


353



338


(2)


17


353



Income before income taxes

17


2


19



33


2


(17)


18


Provision for income taxes

(8)


(1)


(9)



(14)


(1)


7


(8)


Net income

$ 9


$ 1


$ 10



$ 19


$ 1


$ (10)


$ 10




































Earnings per share - Basic

$ 0.25




$ 0.28




























Earnings per share - Diluted

$ 0.24




$ 0.27




























Basic Shares

34.0




34.0











Diluted Shares

35.7




35.7















































As Reported







As Reported






Gross Contract Sales




12 Weeks Ended







12 Weeks Ended


Cancellation




12 Weeks Ended




March 23, 2012







March 25, 2011


Allowance




March 25, 2011



















Contract Sales

















Company-Owned

















Vacation ownership

$ 154







$ 141


$ -




$ 141



Subtotal

154







141


-




141



Cancellation reversal

-







1


(1)




-




154







142


(1)




141



Joint Venture

















Vacation ownership

-







4


-




4



Total joint venture contract sales

-







4


-




4


Total contract sales

$ 154







$ 146


$ (1)




$ 145




































 


** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 

A-2


MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA SEGMENT

12 Weeks Ended March 23, 2012 and March , 2011

($ in millions)

















As Adjusted





As Reported




As Adjusted



As Reported






Pro-Forma





12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended





March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Revenues



















Sales of vacation ownership products 

$                         111


$              -


$                         111



$                         112


$                       -


$                  -


$                                    112



Resort management and other services

42




42



39






39



Financing 


33




33



37






37



Rental 


51




51



44






44



Other 


6




6



6






6



Cost reimbursements 

65




65



61






61




Total revenues 

308


-


308



299


-


-


299


Expenses



















Costs of vacation ownership products 

40


-


40



43






43



Marketing and sales 

58


-


58



55






55



Resort management and other services

32




32



33






33



Rental 


37




37



35






35



Other 


2




2



3






3



General and administrative 

1


-


1



1






1



Royalty fee 


1




1



-




2


2



Cost reimbursements 

65




65



61






61




Total expenses

236


-


236



231


-


2


233




Segment financial results

$                           72


$              -


$                           72



$                           68


$                       -


$                (2)


$                                      66























As Reported







As Reported






Gross Contract Sales





12 Weeks Ended







12 Weeks Ended


Cancellation




12 Weeks Ended





March 23, 2012







March 25, 2011


Allowance




March 25, 2011




















Contract Sales


















Company-Owned

















      Vacation ownership

$                         130







$                         110


$                       -




$                                    110


Total company-owned contract sales

$                         130







$                         110


$                       -




$                                    110






































 

**  Denotes non-GAAP financial measures.  Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 

 

A-3


MARRIOTT VACATIONS WORLDWIDE CORPORATION

LUXURY SEGMENT

12 Weeks Ended March 23, 2012 and March 25, 2011

($ in millions)

















As Adjusted





As Reported




As Adjusted



As Reported






Pro-Forma





12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended





March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Revenues

















Sales of vacation ownership products

$                                      3


$                       -


$                                        3



$                                              6


$                       -


$                       -


$                                        6



Resort management and other services 

7




7



7






7



Financing 

1




1



2






2



Rental 

1




1



1






1



Cost reimbursements

14




14



13






13




Total revenues

26


-


26



29


-


-


29


Expenses

















Costs of vacation ownership products

1




1



4


(1)




3



Marketing and sales 

2




2



3


(1)




2



Resort management and other services 

7




7



7






7



Rental 

5




5



6






6



General and administrative 

1




1



2






2



Cost reimbursements 

14




14



13






13




Total expenses

30


-


30



35


(2)


-


33




Segment financial results

$                                    (4)


$                       -


$                                      (4)



$                                            (6)


$                      2


$                       -


$                                      (4)









































As Reported







As Reported






Gross Contract Sales





12 Weeks Ended







12 Weeks Ended


Cancellation




12 Weeks Ended





March 23, 2012







March 25, 2011


Allowance




March 25, 2011




















Contract Sales

















Company-Owned


















Vacation ownership 

$                                      4







$                                              6


$                       -




$                                        6




     Subtotal 

4







6


-




6



Cancellation reversal 

-







1


(1)




-




     Total company-owned contract sales

4







7


(1)




6



Joint Venture


















Vacation ownership 

-







4






4


                      Total joint venture contract sales

-







4


-




4


Total contract sales 

$                                      4







$                                            11


$                     (1)




$                                      10




















 

**  Denotes non-GAAP financial measures.  Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 

 

A-4


MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

12 Weeks Ended March 23, 2012 and March 25, 2011

($ in millions)

 


















As Adjusted






As Reported




As Adjusted



As Reported






Pro-Forma






12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended






March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Revenues

















Sales of vacation ownership products

$                                      8


$                       -


$                                        8



$                                            10


$                       -


$                       -


$                                      10



Resort management and other services

4




4



5






5



Financing 

1




1



1






1



Rental 

2




2



2






2



Cost reimbursements 

5




5



5






5





Total revenues 

20


-


20



23


-


-


23


Expenses

















Costs of vacation ownership products

2




2



3






3



Marketing and sales 

6




6



6






6



Resort management and other services 

4




4



4






4



Rental 

3




3



4






4



Cost reimbursements 

5




5



5






5





Total expenses 

20


-


20



22


-


-


22





Segment financial results

$                                       -


$                       -


$                                        -



$                                              1


$                       -


$                       -


$                                        1












































As Reported







As Reported






Gross Contract Sales






12 Weeks Ended







12 Weeks Ended


Cancellation




12 Weeks Ended






March 23, 2012







March 25, 2011


Allowance




March 25, 2011





















Contract Sales

















Company-Owned


















Vacation ownership 

$                                      7







$                                            10


$                       -




$                                      10


Total company-owned contract sales

$                                      7







$                                            10


$                       -




$                                      10









































 

** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 

A-5


MARRIOTT VACATIONS WORLDWIDE CORPORATION

ASIA PACIFIC SEGMENT

12 Weeks Ended March 23, 2012 and March 25, 2011

($ in million)

 


















As Adjusted






As Reported




As Adjusted



As Reported






Pro-Forma






12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended






March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Revenues

















Sales of vacation ownership products 

$                           12


$             -


$                           12



$                           15


$                       -


$                  -


$                                      15



Resort management and other services 

1




1



-






-



Financing

1




1



1






1



Rental 

2




2



2






2



Cost reimbursements 

2




2



2






2





Total revenues

18


-


18



20


-


-


20


Expenses

















Costs of vacation ownership products 

3




3



4






4



Marketing and sales

8




8



9






9



Resort management and other services 

1




1



-






-



Rental

3




3



2






2



Cost reimbursements 

2




2



2






2





Total expenses 

17


-


17



17


-


-


17





Segment financial results

$                             1


$              -


$                             1



$                             3


$                       -


$                  -


$                                        3












































As Reported







As Reported






Gross Contract Sales






12 Weeks Ended







12 Weeks Ended


Cancellation




12 Weeks Ended






March 23, 2012







March 25, 2011


Allowance




March 25, 2011





















Contract Sales

















Company-Owned


















Vacation ownership 

$                           13







$                           15


$                       -




$                                      15


Total company-owned contract sales 

$                           13







$                           15


$                       -




$                                      15









































 

** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 

A-6


MARRIOTT VACATIONS WORLDWIDE CORPORATION

CORPORATE AND OTHER

12 Weeks Ended March 23, 2012 and March 25, 2011

($ in millions)

 

















As Adjusted





As Reported




As Adjusted



As Reported






Pro-Forma





12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other




12 Weeks Ended





March 23, 2012


Charges


March 23, 2012

**


March 25, 2011


Charges


Pro-Forma


March 25, 2011

**

Expenses

















Costs of vacation ownership products

$                             2


$              -


$                             2



$                             1


$              -


$                  -


$                             1



Financing 

6




6



6






6



Other 

-




-



(2)






(2)



General and administrative

19


(2)


17



16






16



Interest 

13




13



12




3


15



Royalty fee 

12




12



-




12


12




Total expenses 

52


(2)


50



33


-


15


48




Financial results

$                          (52)


$             2


$                          (50)



$                          (33)


$              -


$              (15)


$                          (48)





















**  Denotes non-GAAP financial measures.  Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


NOTE: Corporate and Other captures information not specifically identifiable 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, interest expense and the fixed royalty fee payable under our license agreements with Marriott International, Inc.



A-7


MARRIOTT VACATIONS WORLDWIDE CORPORATION
NON-GAAP FINANCIAL MEASURES
CONSOLIDATED GROSS COMPANY-OWNED CONTRACT SALES TO SALES OF VACATION OWNERSHIP PRODUCTS
($ in millions)




 12 Weeks Ended




March 23, 



March 25,




2012



2011

Gross company-owned contract sales (1)






Vacation ownership

$                    154



$                    141


Residential products

-



-



Subtotal

154



141


Cancellation reversal

-



-



Total company-owned contract sales

154



141

Revenue recognition adjustments:






Reportability (2)

(11)



9


Sales Reserve (3)

(9)



(7)

Sales of vacation ownership products

$                    134



$                    143


(1)   Gross company-owned contract sales excludes sales generated under a marketing sales arrangement with a joint venture and cancellation (allowances) reversals.

(2)   Adjustment for lack of required downpayment, contract sales in rescission period, or percentage completion accounting on company-owned contract sales.

(3)   Represents additional reserve for current year vacation ownership product sales.

 



MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

CONSOLIDATED ADJUSTED SALES OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES

($ in millions)

























Revenue









Revenue








As Reported


Recognition


As Adjusted



As Reported




Recognition


As Adjusted






12 Weeks Ended


Reportability


12 Weeks Ended



12 Weeks Ended


Other


Reportability


12 Weeks Ended






March 23, 2012


Adjustment


March 23, 2012

**


March 25, 2011


Charges


Adjustment


March 25, 2011

**


Sales of vacation ownership products

$              134


$              11


$            145



$              143


$           -


$             (9)


$                 134



Less:


















Costs of vacation ownership products 

48


4


52



55


(1)


(3)


51




Marketing and sales

74


1


75



73


(1)


(1)


71




















Sales of vacation ownership products net of expenses

$                12


$                6


$               18



$               15


$          2


$             (5)


$                        12











































Development margin (1)

9.2%




12.7%



11.0%






9.7%




**  Denotes non-GAAP financial measures.  Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


(1)   Development margin represents Sales of vacation ownership products net of expenses divided by Sales of vacation ownership products.  Development margin is calculated using whole dollars.

 


 

A-8


MARRIOTT VACATIONS WORLDWIDE CORPORATION
NON-GAAP FINANCIAL MEASURES
NORTH AMERICA GROSS COMPANY-OWNED CONTRACTS SALES TO SALES OF VACATION OWNERSHIP PRODUCTS
($ in millions)




 12 Weeks Ended




March 23, 


March 25,




2012


2011

Gross company-owned contract sales (1)





Vacation ownership

$                    130


$                    110


Residential products

-


-



Subtotal

130


110

Revenue recognition adjustments:





Reportability (2)

(11)


7


Sales Reserve (3)

(8)


(5)

Sales of vacation ownerhip products

$                    111


$                    112


(1)   Gross company-owned contract sales excludes sales generated under a marketing sales arrangement with a joint venture.

(2)  Adjustment for lack of required downpayment, contract sales in rescission period, or percentage completion accounting on company-owned contract sales.

(3)   Represents additional reserve for current year vacation ownership product sales.

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

NORTH AMERICA ADJUSTED SALES OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES

($ in millions)

























Revenue







Revenue










As Reported


Recognition


As Adjusted



As Reported


Recognition


As Adjusted








12 Weeks Ended


Reportability


12 Weeks Ended



12 Weeks Ended


Reportability


12 Weeks Ended








March 23, 2012


Adjustment


March 23, 2012

**


March 25, 2011


Adjustment


March 25, 2011

**




Sales of vacation ownership products

$                      111


$                 11


$                      122



$                      112


$                 (7)


$                      105





Less:




















Costs of vacation ownership products 

40


4


44



43


(3)


40






Marketing and sales

58


1


59



55


(1)


54
























Sales of vacation ownership products net of expenses

$                        13


$                   6


$                        19



$                        14


$                 (3)


$                        11













































Development margin (1)

11.8%




15.7%



13.6%




11.0%






**  Denotes non-GAAP financial measures.  Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


(1) Development margin represents Sales of vacation ownership products net of expenses divided by Sales of vacation ownership products.  Development margin is calculated using whole dollars.


 

A-9


MARRIOTT VACATIONS WORLDWIDE CORPORATION
NON-GAAP FINANCIAL MEASURES
EBITDA, ADJUSTED EBITDA and  PRO FORMA ADJUSTED EBITDA
12 Weeks Ended March 23, 2012 and March 25, 2011
($ in millions)





As Adjusted





As Reported




As Adjusted


As Reported






Pro-Forma





12 Weeks Ended


Other


12 Weeks Ended


12 Weeks Ended


Other




12 Weeks Ended





March 23, 2012


Charges


March 23, 2012

**

March 25, 2011


Charges


Pro-Forma


March 25, 2011

**




































Net income

$           9


$            1


$                         10


$                         19


$            1


$             (10)


$                         10



Interest expense

13


-


13


12


-


3


15



Tax provision

8


1


9


14


1


(7)


8



Depreciation and amortization

7


-


7


8






8




EBITDA **

37


2


39


53


2


(14)


41



Consumer financing interest expense

(10)




(10)


(12)




(1)


(13)




Adjusted EBITDA**

$                         27


$            2


$                         29


$                         41


$            2


$             (15)


$                         28




















 

** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for additional information about our reasons for providing these alternative financial measures and limitations on their use.


 


A-10




MARRIOTT VACATIONS WORLDWIDE CORPORATION
NON-GAAP FINANCIAL MESAURES
2012 EBITDA and ADJUSTED EBITDA OUTLOOK
($ in million)



Fiscal Year 2012 (low)


Fiscal Year 2012 (high)









Net income


$                       37