Marriott Vacations Worldwide Reports Fourth Quarter and Full Year 2015 Financial Results and 2016 Outlook

Feb 25, 2016, 08:00 ET from Marriott Vacations Worldwide Corporation

ORLANDO, Fla., Feb. 25, 2016 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported fourth quarter and full year 2015 financial results and provided its outlook for the full year 2016.

"2015 was a solid year for Marriott Vacations Worldwide, as we delivered nearly $236 million of adjusted EBITDA and nearly $229 million of adjusted free cash flow, and returned over $225 million of capital to our shareholders," said Stephen P. Weisz, president and chief executive officer. "We continue to execute against our growth strategy by adding new destinations that provide on-site sales distributions and growing our tour pipeline.  With the recent announcements of our new New York City and Miami Beach locations, we are targeting to open six new sales centers during 2016.  We are excited about the future for our company and are targeting meaningful adjusted EBITDA growth and adjusted free cash flow in 2016."

Fourth quarter 2015 highlights:

  • Adjusted EBITDA totaled $69.0 million, an increase of $20.3 million, or 41.8 percent, year-over-year, with growth coming from all lines of business.
  • Adjusted fully diluted earnings per share (EPS) was $1.11, up over 60 percent from $0.69 in the fourth quarter of 2014.
  • North America contract sales, excluding residential sales, were $182.0 million, down 2.0 percent year-over-year.  Excluding contract sales from the company's Latin American sales channels, North America contract sales were $169.8 million, up 1.4 percent over the fourth quarter of 2014.
  • During the fourth quarter of 2015, the company repurchased nearly 1.6 million shares of its common stock for approximately $95.3 million
  • Subsequent to the end of the fourth quarter, the company entered into a capital efficient transaction with a third party to purchase the 176-room The Strand Hotel in New York City in phases over time, beginning in 2018.  The company also completed the acquisition of The Edgewater Hotel, a 49-room operating hotel located in Miami.  The company intends to sell inventory from these properties as part of its North America points program.

Fourth quarter 2015 net income was $33.1 million, or $1.06 diluted EPS, compared to net income of $0.5 million, or $0.01 diluted EPS, in the fourth quarter of 2014.

Full year 2015 highlights:

  • Adjusted EBITDA totaled $235.9 million, above the high end of the company's guidance range of $222 million to $232 million.  Results reflected an increase of $36.2 million, or 18.1 percent, year-over-year.
  • The company generated adjusted free cash flow of $228.9 million, exceeding its $175 million to $200 million guidance range.  Results exclude the company's decision to accelerate the payment of $66 million of its pre-spin Marriott Rewards liability that was due in February of 2016 for points issued prior to the spin-off.
  • The company repurchased nearly 2.9 million shares of its common stock at an average price of $70.48 per share for a total of $201.4 million.  Including dividends paid during the year, the company returned a total of $225.2 million to its shareholders in 2015. 
  • North America adjusted development margin percentage was 22.9 percent.  Company adjusted development margin percentage was 20.9 percent, slightly below the company's guidance that results would be towards the lower end of its 21 percent to 22 percent range.
  • North America VPG totaled $3,386, in line with 2014; tours increased 2.5 percent year-over-year.
  • Adjusted fully diluted EPS increased 26.3 percent to $3.70 compared to $2.93 in 2014, higher than the company's $3.33 to $3.52 guidance range.

Full year 2015 net income totaled $122.8 million, or $3.82 diluted earnings per share, compared to reported net income of $80.8 million in 2014, or $2.33 diluted earnings per share. North America development margin percentage was 22.9 percent in 2015 compared to 23.4 percent in the prior year. Company development margin percentage in 2015 was 20.8 percent compared to 20.9 percent in 2014. Net cash provided by operating activities was $109.0 million for 2015.

Non-GAAP financial measures, such as adjusted EBITDA, adjusted net income, adjusted earnings per share, adjusted development margin and adjusted free cash flow are reconciled and adjustments are shown and described in further detail on pages A-1 through A-20 of the Financial Schedules that follow.

2016 Outlook:

To facilitate comparisons with the company's competitors and to eliminate the variability among companies in reporting compensation expense, beginning in the first quarter of 2016, adjusted EBITDA will exclude all non-cash share-based compensation expense which was approximately $14 million in 2015 and is expected to be slightly higher in 2016.  The company's outlook for 2016 reflects this adjustment.

  • Adjusted EBITDA of $261 million to $276 million
  • Adjusted fully diluted EPS of $4.23 to $4.56
  • Adjusted Net Income of $126 million to $136 million
  • Company contract sales growth (excluding residential) of 4 percent to 8 percent
  • Adjusted free cash flow of $135 million to $155 million

The non-GAAP financial measures set forth above are reconciled on pages A-1 through A-20 of the Financial Schedules to the following full year 2016 expected GAAP results: net income of $124 million to $134 million; fully diluted EPS of $4.16 to $4.50; and net cash provided by operating activities of $129 million to $142 million.

Fourth Quarter 2015 Results

Company Results

Total company contract sales, excluding residential sales, were $204.2 million, $7.4 million lower than the fourth quarter of last year. The decrease was driven by $3.7 million of lower contract sales in the company's North America segment, $2.1 million of lower contract sales in the company's Europe segment and $1.6 million of lower contract sales in the company's Asia Pacific segment.

Adjusted development margin was $38.1 million, a $5.2 million decrease from the fourth quarter of 2014. Adjusted development margin percentage was 20.1 percent in the fourth quarter of 2015 compared to 21.4 percent in the fourth quarter of 2014. Development margin was $44.0 million, a $5.4 million increase from the fourth quarter of 2014, reflecting the turnaround of unfavorable revenue reportability from the third quarter of 2015. Development margin percentage was 22.1 percent in the fourth quarter of 2015 compared to 19.8 percent in the fourth quarter of 2014.

Excluding the results of operations for the portion of the Surfers Paradise, Australia hotel that the Company intends to sell, adjusted rental revenues totaled $83.5 million, a $10.2 million increase from the fourth quarter of 2014, reflecting a 4 percent increase in transient rate, a 2 percent increase in transient keys rented, $4.4 million from revenue associated with operating hotels prior to conversion to timeshare, and $0.8 million of higher plus points revenue. Adjusted rental revenues, net of expenses, were $13.6 million, an $11.8 million increase from the fourth quarter of 2014, of which $5.9 million relates to lower costs year-over-year associated with the company's pre-spin Marriott Rewards liability.  Rental revenues net of expenses were $12.9 million, an $11.1 million increase from the fourth quarter of 2014.

Excluding the results of operations for the portion of the Surfers Paradise, Australia hotel that the Company intends to sell, adjusted resort management and other services revenues totaled $95.0 million, a $6.1 million increase from the fourth quarter of 2014. Adjusted resort management and other services revenues, net of expenses, were $34.4 million, a $3.7 million increase over the fourth quarter of 2014.  Resort management and other services revenues net of expenses totaled $35.3 million, a $4.6 million increase from the fourth quarter of 2014.

Financing revenues totaled $38.4 million, a $0.5 million decrease from the fourth quarter of 2014. Financing revenues, net of expenses and consumer financing interest expense, were $22.6 million, a $0.3 million increase from the fourth quarter of 2014.

Adjusted EBITDA was $69.0 million in the fourth quarter of 2015, a $20.3 million, or 41.8 percent, increase from $48.7 million in the fourth quarter of 2014.

Segment Results

North America

North America contract sales, excluding residential sales, were $182.0 million in the fourth quarter of 2015, a decrease of $3.7 million, or 2.0 percent, from the prior year period, driven by a stronger U.S. dollar that negatively impacted sales channels to Latin American customers by over $6.1 million year-over-year.  Excluding contract sales from the company's Latin American channels, North America contract sales were $169.8 million, up 1.4 percent.

Tours increased 4.5 percent year-over-year.  VPG decreased 2.9 percent to $3,162 in the fourth quarter of 2015 from $3,255 in the fourth quarter of 2014, driven by lower closing efficiency offset partially by higher pricing. 

Fourth quarter 2015 North America segment financial results were $121.8 million, an increase of $38.5 million from the fourth quarter of 2014. The increase was driven primarily by a $23.8 million non-cash charge in the prior year fourth quarter related to the disposition of partially developed land, an operating golf course, spa and clubhouse and related facilities at the company's former resort in Abaco, Bahamas and settlement of related litigation, $10.8 million of higher rental revenues net of expenses, $4.9 million of higher development margin, and $3.4 million of higher resort management and other services revenues net of expenses, partially offset by $3.5 million of gains in the prior year fourth quarter related primarily to the disposition of undeveloped and partially developed land, an operating golf course and related assets in Kauai, Hawaii.

Adjusted development margin was $37.4 million, a $4.6 million decrease from the prior year quarter. Adjusted development margin percentage was 22.1 percent in the fourth quarter of 2015 compared to 23.5 percent in the fourth quarter of 2014. Development margin was $44.1 million, a $4.9 million increase from the fourth quarter of 2014. Development margin percentage was 24.5 percent in the fourth quarter of 2015 compared to 22.6 percent in the prior year quarter.

Asia Pacific

Total contract sales in the segment were $10.6 million, a decrease of $1.6 million in the fourth quarter of 2015.  Excluding the results of operations for the portion of the Surfers Paradise, Australia hotel that the Company intends to sell, adjusted segment financial results were $2.0 million, a $1.8 million decrease from the fourth quarter of 2014.  Results reflected $2.3 million of lower development margin from lower contract sales and higher marketing and sales costs and $0.4 million of lower adjusted resort management and other services revenues net of expenses, partially offset by $0.9 million of higher adjusted rental revenues net of expenses associated with the portion of the Surfers Paradise, Australia hotel that the company plans to convert into vacation ownership interests for future use.

Europe

Fourth quarter 2015 contract sales were $11.6 million, a decrease of $2.1 million from the fourth quarter of 2014. Segment financial results were $4.7 million, a $2.9 million increase from the fourth quarter of 2014 due to higher development margin from favorable revenue reportability year-over-year and higher resort management and other services revenues net of expenses.

Full Year 2015 Results

For the full year, total company contract sales, excluding residential sales, were $699.9 million, up $1.1 million, or 0.2 percent, from $698.8 million in 2014, driven by $11.7 million of higher contract sales in the company's North America segment, and $0.2 million of higher contract sales in the company's Asia Pacific segment. These increases were partially offset by $10.8 million of lower contract sales in the company's Europe segment. 

North America contract sales, excluding residential sales, were $631.4 million, 1.9 percent higher than 2014.  Excluding contract sales in the company's Latin American channels, North America contract sales were $585.0 million, up $24.9 million, or 4.4 percent, from 2014.  Full year 2015 total company adjusted development margin decreased to 20.9 percent in 2015 from 22.0 percent in 2014.

Adjusted EBITDA in 2015 totaled $235.9 million, $36.2 million, or 18.1 percent, higher than 2014. Full year 2015 adjusted free cash flow was $228.9 million. Adjusted net income in 2015 totaled $118.9 million, an increase of $17.4 million over 2014. Full year 2015 adjusted fully diluted EPS was $3.70, $0.77 higher than 2014.

Share Repurchase Program

During the fourth quarter of 2015, the company repurchased 1.6 million shares of its common stock for a total of nearly $95.3 million under its share repurchase program. In total, the company returned $225.2 million to its shareholders during 2015, through the repurchase of nearly 2.9 million shares for $201.4 million and $23.8 million in dividends paid. Subsequent to the end of 2015, through February 24, 2016, the company repurchased 0.9 million shares for over $45 million.    

On February 11, 2016, the Board of Directors authorized the company to repurchase up to 2.0 million additional shares of its common stock under its share repurchase program.  Combined with the shares not yet purchased under its previous authorization, the company is authorized to purchase approximately 3.1 million additional shares.

Balance Sheet and Liquidity

On January 1, 2016, cash and cash equivalents totaled $177.1 million. Since the beginning of the year, real estate inventory balances declined $104.3 million to $663.9 million, including $332.9 million of finished goods and $331.0 million of land and infrastructure. The company had $688.1 million in gross debt outstanding at the end of 2015, a decrease of $23.2 million from year-end 2014, consisting primarily of $684.6 million in gross non-recourse securitized notes. In addition, $40.0 million of gross mandatorily redeemable preferred stock of a subsidiary of the company was outstanding at the end of 2015.

As of January 1, 2016, the company had approximately $196.7 million in available capacity under its revolving credit facility after taking into account outstanding letters of credit and approximately $110 million of gross vacation ownership notes receivable eligible for securitization in its warehouse credit facility.

Fourth Quarter 2015 Earnings Conference Call

The company will hold a conference call at 10:00 a.m. EST today to discuss these results and the guidance for full year 2016. 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 13628123. The webcast will also be available on the company's website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global pure-play vacation ownership company, offering a diverse portfolio of quality products, programs and management expertise with 63 resorts. Its brands include Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott. Since entering the industry in 1984 as part of Marriott International, Inc., the company earned its position as a leader and innovator in vacation ownership products. The company preserves high standards of excellence in serving its customers, investors and associates while maintaining a long-term relationship with Marriott International. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements about future operating results, estimates, and assumptions, and similar statements concerning anticipated future events and expectations that are not historical facts. The company cautions you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including volatility in the economy and the credit markets, supply and demand changes for vacation ownership and residential products, competitive conditions, the availability of capital to finance growth, and other matters referred to under the heading "Risk Factors" contained in the company's most recent Annual Report on Form 10-K filed with the U.S Securities and Exchange Commission (the "SEC") and in subsequent SEC filings, any of which could cause actual results to differ materially from those expressed in or implied in this press release. These statements are made as of February 25, 2016 and the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Financial Schedules Follow

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

FINANCIAL SCHEDULES

QUARTER 4, 2015

TABLE OF CONTENTS



Consolidated Statements of Income - 16 Weeks Ended January 1, 2016 and January 2, 2015                                                  

 A-1



Consolidated Statements of Income - 52 Weeks Ended January 1, 2016 and January 2, 2015                                        

 A-2



North America Segment Financial Results - 16 Weeks Ended January 1, 2016 and January 2, 2015                                            

 A-3



North America Segment Financial Results - 52 Weeks Ended January 1, 2016 and January 2, 2015                                              

 A-4



Asia Pacific Segment Financial Results - 16 Weeks Ended January 1, 2016 and January 2, 2015                                                            

 A-5



Asia Pacific Segment Financial Results - 52 Weeks Ended January 1, 2016 and January 2, 2015                                                        

 A-6



Europe Segment Financial Results - 16 Weeks Ended January 1, 2016 and January 2, 2015                                                           

 A-7



Europe Segment Financial Results - 52 Weeks Ended January 1, 2016 and January 2, 2015                                                        

 A-8



Corporate and Other Financial Results - 16 Weeks and 52 Weeks Ended January 1, 2016 and January 2, 2015                                       

 A-9



Consolidated Contract Sales to Sale of Vacation Ownership Products and Adjusted Development Margin


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 16 Weeks Ended January 1, 2016 and January 2, 2015                                          

 A-10



Consolidated Contract Sales to Sale of Vacation Ownership Products and Adjusted Development Margin


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 52 Weeks Ended January 1, 2016 and January 2, 2015                                       

 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) - 16 Weeks Ended January 1, 2016 and January 2, 2015                                          

 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) - 52 Weeks Ended January 1, 2016 and January 2, 2015                                                  

 A-13



EBITDA and Adjusted EBITDA - 16 Weeks and 52 Weeks Ended January 1, 2016 and January 2, 2015                              

 A-14



2015 Adjusted Free Cash Flow                 

 A-15



2016 Outlook - Adjusted Net Income, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA                                                                                             

 A-16



2016 Outlook -  Adjusted Free Cash Flow and Normalized Adjusted Free Cash Flow

 A-17



Non-GAAP Financial Measures                                                                                                   

 A-18



Consolidated Balance Sheets                                                                                                   

 A-21



Consolidated Statements of Cash Flows                                                                                                   

 A-22

 

A-1

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

16 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands, except per share amounts)


























As Reported




As Adjusted



As Reported




As Adjusted








16 Weeks Ended


Certain


16 Weeks Ended



16 Weeks Ended


Certain


16 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues
















Sale of vacation ownership products

$                  199,251


$              -


$                  199,251



$                  194,692


$              -


$                  194,692



Resort management and other services

99,921


(4,889)


95,032



88,935


-


88,935



Financing

38,393


-


38,393



38,907


-


38,907



Rental

88,117


(4,604)


83,513



73,335


-


73,335



Cost reimbursements

119,938


-


119,938



115,026


-


115,026







Total revenues

545,620


(9,493)


536,127



510,895


-


510,895


Expenses
















Cost of vacation ownership products

53,442


-


53,442



57,519


-


57,519



Marketing and sales

101,839


-


101,839



98,583


(65)


98,518



Resort management and other services

64,597


(3,990)


60,607



58,197


-


58,197



Financing

7,716


-


7,716



8,172


-


8,172



Rental

75,169


(5,249)


69,920



71,534


-


71,534



General and administrative

34,080


-


34,080



31,649


-


31,649



Organizational and separation related

442


(442)


-



1,166


(1,166)


-



Litigation settlement

4


(4)


-



23,844


(23,844)


-



Consumer financing interest

8,100


-


8,100



8,497


-


8,497



Royalty fee

18,551


-


18,551



18,550


-


18,550



Impairment

324


(324)


-



521


(521)


-



Cost reimbursements

119,938


-


119,938



115,026


-


115,026







Total expenses

484,202


(10,009)


474,193



493,258


(25,596)


467,662


Gains and other income

65


(65)


-



3,322


(3,322)


-


Interest expense

(3,988)


-


(3,988)



(4,054)


-


(4,054)


Equity in earnings

39


-


39



(82)


-


(82)


Impairment charges on equity investment

-


-


-



540


(540)


-


Other




(1,987)


1,987


-



-


-


-







Income before income taxes

55,547


2,438


57,985



17,363


21,734


39,097


Provision for income taxes

(22,398)


(922)


(23,320)



(16,866)


748


(16,118)


Net income

$                    33,149


$      1,516


$                    34,665



$                         497


$    22,482


$                    22,979





















Earnings per share - Basic

$                        1.08




$                        1.13



$                        0.02




$                        0.71





















Earnings per share - Diluted

$                        1.06




$                        1.11



$                        0.01




$                        0.69





















Basic Shares

30,623




30,623



32,507




32,507


Diluted Shares

31,297




31,297



33,427




33,427



























As Reported







As Reported












16 Weeks Ended







16 Weeks Ended












January 1, 2016







January 2, 2015






Contract Sales
















Vacation ownership

$                  204,239







$                  211,683








Residential products

-







3,700










Total contract sales

$                  204,239







$                  215,383







**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use. 





















NOTE:  Earnings per share - Basic and Earnings per share - Diluted are calculated using whole dollars.

 

A-2

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands, except per share amounts)






























As Reported




As Adjusted



As Reported




As Adjusted










52 Weeks Ended


Certain


52 Weeks Ended



52 Weeks Ended


Certain


52 Weeks Ended










January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues


















Sale of vacation ownership products 

$                  675,329


$   (28,420)


$                  646,909



$                  647,488


$              -


$                  647,488



Resort management and other services 

312,229


(4,889)


307,340



298,283


-


298,283



Financing  


124,033


-


124,033



128,909


-


128,909



Rental  


312,997


(4,604)


308,393



264,307


-


264,307



Cost reimbursements 


405,875


-


405,875



396,795


-


396,795







Total revenues 


1,830,463


(37,913)


1,792,550



1,735,782


-


1,735,782


Expenses


















Cost of vacation ownership products 

204,299


(21,583)


182,716



196,444


-


196,444



Marketing and sales 


330,599


(922)


329,677



315,410


(352)


315,058



Resort management and other services  

199,895


(3,990)


195,905



199,258


200


199,458



Financing  


24,194


-


24,194



24,148


-


24,148



Rental  


259,729


(5,249)


254,480



237,920


-


237,920



General and administrative  

102,963


(1,767)


101,196



98,562


-


98,562



Organizational and separation related



1,174


(1,174)


-



3,438


(3,438)


-



Litigation settlement



(232)


232


-



19,494


(19,494)


-



Consumer financing interest



24,658


-


24,658



26,464


-


26,464



Royalty fee 


58,982


-


58,982



59,970


-


59,970



Impairment 


324


(324)


-



1,381


(1,381)


-



Cost reimbursements 


405,875


-


405,875



396,795


-


396,795







Total expenses 


1,612,460


(34,777)


1,577,683



1,579,284


(24,465)


1,554,819


Gains and other income   

9,557


(9,557)


-



5,171


(5,171)


-


Interest expense



(12,810)


-


(12,810)



(11,692)


-


(11,692)


Equity in earnings



187


-


187



74


-


74


Impairment charges on equity investment  

-


-


-



540


(540)


-


Other






(8,440)


8,440


-



-


-


-







Income before income taxes 

206,497


(4,253)


202,244



150,591


18,754


169,345


Provision for income taxes   


(83,698)


366


(83,332)



(69,835)


1,986


(67,849)


Net income                                                          



$                  122,799


$     (3,887)


$                  118,912



$                    80,756


$    20,740


$                  101,496























Earnings per share - Basic   



$                        3.90




$                        3.78



$                        2.40




$                        3.01























Earnings per share - Diluted 



$                        3.82




$                        3.70



$                        2.33




$                        2.93























Basic Shares



31,487




31,487



33,665




33,665


Diluted Shares



32,168




32,168



34,636




34,636































As Reported







As Reported














52 Weeks Ended







52 Weeks Ended














January 1, 2016







January 2, 2015






Contract Sales


















Vacation ownership



$                  699,884







$                  698,765








Residential products 



28,420







14,514










Total contract sales


$                  728,304







$                  713,279








**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use. 






















NOTE:  Earnings per share - Basic and Earnings per share - Diluted are calculated using whole dollars.

 

A-3

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA SEGMENT

16 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)



















































As Reported




As Adjusted



As Reported




As Adjusted










16 Weeks Ended


Certain


16 Weeks Ended



16 Weeks Ended


Certain


16 Weeks Ended










January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues


















Sale of vacation ownership products

$                  179,990


$              -


$                  179,990



$                  173,670


$              -


$                  173,670



Resort management and other services

83,390


-


83,390



78,131


-


78,131



Financing


35,929


-


35,929



36,224


-


36,224



Rental


74,742


-


74,742



65,725


-


65,725



Cost reimbursements


109,015


-


109,015



102,654


-


102,654







Total revenues

483,066


-


483,066



456,404


-


456,404


Expenses


















Cost of vacation ownership products

47,129


-


47,129



49,680


-


49,680



Marketing and sales


88,754


-


88,754



84,801


-


84,801



Resort management and other services

50,989


-


50,989



49,127


-


49,127



Rental


61,562


-


61,562



63,387


-


63,387



Organizational and separation related

219


(219)


-



369


(369)


-



Litigation settlement

-


-


-



23,844


(23,844)


-



Royalty fee


2,797


-


2,797



2,799


-


2,799



Impairment


324


(324)


-



521


(521)


-



Cost reimbursements

109,015


-


109,015



102,654


-


102,654







Total expenses

360,789


(543)


360,246



377,182


(24,734)


352,448


Gains and other income

66


(66)


-



3,453


(3,453)


-


Equity in earnings


44


-


44



35


-


35


Impairment charges on equity investment

-


-


-



540


(540)


-


Other






(622)


622


-



-


-


-







Segment financial results

$                  121,765


$      1,099


$                  122,864



$                    83,250


$    20,741


$                  103,991































As Reported







As Reported














16 Weeks Ended







16 Weeks Ended














January 1, 2016







January 2, 2015






Contract Sales


















Vacation ownership

$                  182,018







$                  185,760








Residential products

-







3,700










Total contract sales

$                  182,018







$                  189,460







**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use. 

 

A-4

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA SEGMENT

52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)



















































As Reported




As Adjusted



As Reported




As Adjusted










52 Weeks Ended


Certain


52 Weeks Ended



52 Weeks Ended


Certain


52 Weeks Ended










January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues


















Sale of vacation ownership products

$                  586,774


$              -


$                  586,774



$                  577,781


$              -


$                  577,781



Resort management and other services

272,596


-


272,596



262,727


-


262,727



Financing


115,738


-


115,738



120,111


-


120,111



Rental


277,348


-


277,348



234,668


-


234,668



Cost reimbursements


369,467


-


369,467



354,270


-


354,270







Total revenues

1,621,923


-


1,621,923



1,549,557


-


1,549,557


Expenses


















Cost of vacation ownership products

164,200


-


164,200



170,012


-


170,012



Marketing and sales


288,260


-


288,260



272,302


-


272,302



Resort management and other services

166,233


-


166,233



168,764


-


168,764



Rental


225,043


-


225,043



209,371


-


209,371



Organizational and separation related


532


(532)


-



894


(894)


-



Litigation settlement



(370)


370


-



19,244


(19,244)


-



Royalty fee


7,971


-


7,971



8,825


-


8,825



Impairment


324


(324)


-



1,381


(1,381)


-



Cost reimbursements


369,467


-


369,467



354,270


-


354,270







Total expenses

1,221,660


(486)


1,221,174



1,205,063


(21,519)


1,183,544


Gains and other income


9,600


(9,600)


-



5,350


(5,350)


-


Equity in losses


200


-


200



205


-


205


Impairment charges on equity investment

-


-


-



540


(540)


-


Other





(622)


622


-



-


-


-







Segment financial results

$                  409,441


$    (8,492)


$                  400,949



$                  350,589


$    15,629


$                  366,218































As Reported







As Reported














52 Weeks Ended







52 Weeks Ended














January 1, 2016







January 2, 2015






Contract Sales


















Vacation ownership

$                  631,403







$                  619,688








Residential products

-







14,514










Total contract sales

$                  631,403







$                  634,202







**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 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

16 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)













































As Reported




As Adjusted



As Reported




As Adjusted








16 Weeks Ended


Certain


16 Weeks Ended



16 Weeks Ended


Certain


16 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues
















Sale of vacation ownership products

$                      9,436


$              -


$                      9,436



$                    12,782


$              -


$                    12,782



Resort management and other services

7,951


(4,889)


3,062



1,714


-


1,714



Financing

1,289


-


1,289



1,356


-


1,356



Rental

8,546


(4,604)


3,942



2,513


-


2,513



Cost reimbursements

953


-


953



954


-


954







Total revenues

28,175


(9,493)


18,682



19,319


-


19,319


Expenses
















Cost of vacation ownership products

1,646


-


1,646



2,859


-


2,859



Marketing and sales

6,354


-


6,354



6,160


29


6,189



Resort management and other services

6,925


(3,990)


2,935



1,138


-


1,138



Rental

9,836


(5,249)


4,587



4,094


-


4,094



Royalty fee

238


-


238



203


-


203



Cost reimbursements

953


-


953



954


-


954







Total expenses

25,952


(9,239)


16,713



15,408


29


15,437


Losses and other expense

-


-


-



(1)


1


-


Equity in losses

(5)


-


(5)



(117)


-


(117)


Other




(287)


287


-



-


-


-







Segment financial results

$                      1,931


$           33


$                      1,964



$                      3,793


$         (28)


$                      3,765














































As Reported







As Reported












16 Weeks Ended







16 Weeks Ended






Contract Sales

January 1, 2016







January 2, 2015



























Vacation ownership

$                    10,577







$                    12,162








Residential products

-







-









Total contract sales

$                    10,577







$                    12,162







**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use. 

 

A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ASIA PACIFIC SEGMENT

52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)













































As Reported




As Adjusted



As Reported




As Adjusted








52 Weeks Ended


Certain


52 Weeks Ended



52 Weeks Ended


Certain


52 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues
















Sale of vacation ownership products

$                    59,592


$   (28,420)


$                    31,172



$                    34,645


$              -


$                    34,645



Resort management and other services

11,990


(4,889)


7,101



4,437


-


4,437



Financing

4,346


-


4,346



4,498


-


4,498



Rental

14,970


(4,604)


10,366



7,642


-


7,642



Cost reimbursements

3,060


-


3,060



3,320


-


3,320







Total revenues

93,958


(37,913)


56,045



54,542


-


54,542


Expenses
















Cost of vacation ownership products

26,877


(21,583)


5,294



8,318


-


8,318



Marketing and sales

20,365


(922)


19,443



18,707


29


18,736



Resort management and other services

10,694


(3,990)


6,704



3,175


-


3,175



Rental

19,255


(5,249)


14,006



12,388


-


12,388



Royalty fee

684


-


684



686


-


686



Cost reimbursements

3,060


-


3,060



3,320


-


3,320







Total expenses

80,935


(31,744)


49,191



46,594


29


46,623


Losses and other expense

(29)


29


-



(9)


9


-


Equity in losses

(13)


-


(13)



(131)


-


(131)


Other




(5,718)


5,718


-



-


-


-







Segment financial results

$                      7,263


$        (422)


$                      6,841



$                      7,808


$         (20)


$                      7,788














































As Reported







As Reported












52 Weeks Ended







52 Weeks Ended












January 1, 2016







January 2, 2015



























Vacation ownership

$                    34,105







$                    33,906








Residential products

28,420







-









Total contract sales

$                    62,525







$                    33,906







**  Denotes non-GAAP financial measures.  Please see pages 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 March 28, 2014 have been restated to reclassify a portion of Cost reimbursements from the Asia Pacific segment to the Europe segment to correct certain immaterial prior period errors.  

 

A-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

16 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)













































As Reported




As Adjusted



As Reported




As Adjusted








16 Weeks Ended


Certain


16 Weeks Ended



16 Weeks Ended


Certain


16 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues
















Sale of vacation ownership products

$                      9,825


$              -


$                      9,825



$                      8,240


$              -


$                      8,240



Resort management and other services

8,580


-


8,580



9,090


-


9,090



Financing

1,175


-


1,175



1,327


-


1,327



Rental

4,829


-


4,829



5,097


-


5,097



Cost reimbursements

9,970


-


9,970



11,418


-


11,418







Total revenues

34,379


-


34,379



35,172


-


35,172


Expenses
















Cost of vacation ownership products

2,354


-


2,354



1,988


-


1,988



Marketing and sales

6,731


-


6,731



7,622


(94)


7,528



Resort management and other services

6,683


-


6,683



7,932


-


7,932



Rental

3,771


-


3,771



4,053


-


4,053



Royalty fee

174


-


174



205


-


205



Cost reimbursements

9,970


-


9,970



11,418


-


11,418







Total expenses

29,683


-


29,683



33,218


(94)


33,124


Losses and other expense

(1)


1


-



(137)


137


-







Segment financial results

$                      4,695


$             1


$                      4,696



$                      1,817


$         231


$                      2,048














































As Reported







As Reported












16 Weeks Ended







16 Weeks Ended












January 1, 2016







January 2, 2015

























Contract Sales

$                    11,644







$                    13,761







**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use. 

 

A-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)













































As Reported




As Adjusted



As Reported




As Adjusted








52 Weeks Ended


Certain


52 Weeks Ended



52 Weeks Ended


Certain


52 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Revenues
















Sale of vacation ownership products

$                    28,963


$              -


$                    28,963



$                    35,062


$              -


$                    35,062



Resort management and other services

27,643


-


27,643



31,119


-


31,119



Financing

3,949


-


3,949



4,300


-


4,300



Rental

20,679


-


20,679



21,997


-


21,997



Cost reimbursements

33,348


-


33,348



39,205


-


39,205







Total revenues

114,582


-


114,582



131,683


-


131,683


Expenses
















Cost of vacation ownership products

6,509


-


6,509



8,711


-


8,711



Marketing and sales

21,974


-


21,974



24,401


(381)


24,020



Resort management and other services

22,968


-


22,968



27,319


200


27,519



Rental

15,431


-


15,431



16,161


-


16,161



Royalty fee

464


-


464



631


-


631



Cost reimbursements

33,348


-


33,348



39,205


-


39,205







Total expenses

100,694


-


100,694



116,428


(181)


116,247


Losses and other expense

(14)


14


-



(176)


176


-







Segment financial results

$                    13,874


$           14


$                    13,888



$                    15,079


$         357


$                    15,436














































As Reported







As Reported












52 Weeks Ended







52 Weeks Ended












January 1, 2016







January 2, 2015

























Contract Sales

$                    34,376







$                    45,171







**  Denotes non-GAAP financial measures.  Please see pages 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 March 28, 2014 have been restated to reclassify a portion of Cost reimbursements from the Asia Pacific segment to the Europe segment to correct certain immaterial prior period errors.  

 

A-9

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CORPORATE AND OTHER

16 Weeks and 52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)













































As Reported




As Adjusted



As Reported




As Adjusted








16 Weeks Ended


Certain


16 Weeks Ended



16 Weeks Ended


Certain


16 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Expenses
















Cost of vacation ownership products

$                      2,313


$            -


$                      2,313



$                      2,992


$            -


$                      2,992



Financing

7,716


-


7,716



8,172


-


8,172



General and administrative

34,080


-


34,080



31,649


-


31,649



Organizational and separation related

223


(223)


-



797


(797)


-



Litigation settlement

4


(4)


-



-


-


-



Consumer financing interest

8,100




8,100



8,497




8,497



Royalty fee

15,342


-


15,342



15,343


-


15,343







Total expenses

$                    67,778


$      (227)


$                    67,551



$                    67,450


$      (797)


$                    66,653


Gains and other income

-


-


-



7


(7)


-


Interest expense

(3,988)


-


(3,988)



(4,054)


-


(4,054)


Other




(1,078)


1,078


-



-


-


-







Financial results

$                   (72,844)


$     1,305


$                   (71,539)



$                   (71,497)


$        790


$                   (70,707)














































As Reported




As Adjusted



As Reported




As Adjusted








52 Weeks Ended


Certain


52 Weeks Ended



52 Weeks Ended


Certain


52 Weeks Ended








January 1, 2016


Items


January 1, 2016

**


January 2, 2015


Items


January 2, 2015

**

Expenses
















Cost of vacation ownership products

$                      6,713


$            -


$                      6,713



$                      9,403


$            -


$                      9,403



Financing

24,194


-


24,194



24,148


-


24,148



General and administrative

102,963


(1,767)


101,196



98,562


-


98,562



Organizational and separation related

642


(642)


-



2,544


(2,544)


-



Litigation settlement

138


(138)


-



250


(250)


-



Consumer financing interest

24,658


-


24,658



26,464


-


26,464



Royalty fee

49,863


-


49,863



49,828


-


49,828







Total expenses

$                  209,171


$   (2,547)


$                  206,624



$                  211,199


$   (2,794)


$                  208,405


Gains and other income

-


-


-



6


(6)


-


Interest expense

(12,810)


-


(12,810)



(11,692)


-


(11,692)


Other




(2,100)


2,100


-



-


-


-







Financial results

$                 (224,081)


$     4,647


$                 (219,434)



$                 (222,885)


$     2,788


$                 (220,097)



**  Denotes non-GAAP financial measures.  Please see pages 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 incurred to support our financing operations, non-capitalizable development expenses supporting  overall company development, company-wide general and administrative costs, and the fixed royalty fee payable under the license agreements that we entered into with Marriott International in connection with the spin-off, as well as consumer financing interest expense.

 

A-10

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS

(In thousands)












16 Weeks Ended



16 Weeks Ended




January 1, 2016



January 2, 2015








Contract sales






Vacation ownership

$                 204,239



$                 211,683


Residential products

-



3,700



Total contract sales

204,239



215,383








Revenue recognition adjustments:






Reportability1

9,472



(7,274)


Sales Reserve2

(9,853)



(8,265)


Other3

(4,607)



(5,152)

Sale of vacation ownership products

$                 199,251



$                 194,692


1  Adjustment for lack of required downpayment or contract sales in rescission period.

 Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.

3  Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)

(In thousands)

























Revenue









Revenue






As Reported




Recognition


As Adjusted



As Reported




Recognition


As Adjusted




16 Weeks Ended


Certain


Reportability


16 Weeks Ended



16 Weeks Ended


Certain


Reportability


16 Weeks Ended




January 1, 2016


Items


Adjustment


January 1, 2016

**


January 2, 2015


Items


Adjustment


January 2, 2015

**

Sale of vacation ownership products

$                  199,251


$            -


$             (9,472)


$                  189,779



$                  194,692


$            -


$                7,274


$                  201,966


Less:



















Cost of vacation ownership products 

53,442


-


(2,612)


50,830



57,519


-


1,972


59,491



Marketing and sales

101,839


-


(962)


100,877



98,583


(65)


649


99,167





















Development margin

$                    43,970


$            -


$              (5,898)


$                    38,072



$                    38,590


$          65


$                4,653


$                    43,308








































   Development margin percentage1

22.1%






20.1%



19.8%






21.4%



**  Denotes non-GAAP financial measures.  Please see pages 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 thousands)




52 Weeks Ended



52 Weeks Ended



January 1, 2016



January 2, 2015







Contract sales






Vacation ownership

$                      699,884



$                      698,765


Residential products                            

28,420



14,514


     Total contract sales

728,304



713,279







Revenue recognition adjustments:






Reportability1

(1,652)



(15,502)


Sales Reserve2

(32,999)



(31,273)


Other3

(18,324)



(19,016)

Sale of vacation ownership products

$                      675,329



$                      647,488


1  Adjustment for lack of required downpayment or contract sales in rescission period.

 Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.

3  Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)

(In thousands)


























Revenue









Revenue






As Reported




Recognition


As Adjusted



As Reported




Recognition


As Adjusted




52 Weeks Ended


Certain


Reportability


52 Weeks Ended



52 Weeks Ended


Certain


Reportability


52 Weeks Ended




January 1, 2016


Items


Adjustment


January 1, 2016

**


January 2, 2015


Items


Adjustment


January 2, 2015

**

Sale of vacation ownership products

$                  675,329


$   (28,420)


$               1,652


$                  648,561



$                  647,488


$            -


$              15,502


$                  662,990


Less:



















Cost of vacation ownership products 

204,299


(21,583)


623


183,339



196,444


-


4,517


200,961



Marketing and sales

330,599


(922)


(28)


329,649



315,410


(352)


1,287


316,345





















Development margin

$                  140,431


$     (5,915)


$                1,057


$                  135,573



$                  135,634


$        352


$                9,698


$                  145,684








































   Development margin percentage1

20.8%






20.9%



20.9%






22.0%



**  Denotes non-GAAP financial measures.  Please see pages 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-12

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS

(In thousands)





16 Weeks Ended



16 Weeks Ended




January 1, 2016



January 2, 2015








Contract sales






Vacation ownership

$                      182,018



$                      185,760


Residential products                            

-



3,700



Total contract sales

182,018



189,460








Revenue recognition adjustments:






Reportability1

10,510



(4,615)


Sales Reserve 2

(8,191)



(6,135)


Other 3

(4,347)



(5,040)

Sale of vacation ownership products

$                      179,990



$                      173,670


1  Adjustment for lack of required downpayment or contract sales in rescission period.

 Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.

Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)

(In thousands)


























Revenue









Revenue






As Reported




Recognition


As Adjusted



As Reported




Recognition


As Adjusted




16 Weeks Ended


Certain


Reportability


16 Weeks Ended



16 Weeks Ended


Certain


Reportability


16 Weeks Ended




January 1, 2016


Items


Adjustment


January 1, 2016

**


January 2, 2015


Items


Adjustment


January 2, 2015

**

Sale of vacation ownership products

$               179,990


$          -


$        (10,510)


$                       169,480



$               173,670


$          -


$            4,615


$               178,285


Less:



















Cost of vacation ownership products 

47,129


-


(2,828)


44,301



49,680


-


1,395


51,075



Marketing and sales

88,754


-


(993)


87,761



84,801


-


430


85,231





















Development margin

$                 44,107


$          -


$          (6,689)


$                         37,418



$                 39,189


$          -


$            2,790


$                 41,979








































   Development margin percentage1

24.5%






22.1%



22.6%






23.5%



**  Denotes non-GAAP financial measures.  Please see pages 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 thousands)





52 Weeks Ended



52 Weeks Ended




January 1, 2016



January 2, 2015








Contract sales






Vacation ownership

$                            631,403



$              619,688


Residential products                            

-



14,514



Total contract sales

631,403



634,202








Revenue recognition adjustments:






Reportability1

(841)



(12,911)


Sales Reserve 2

(26,077)



(24,753)


Other 3

(17,711)



(18,757)

Sale of vacation ownership products

$                            586,774



$              577,781


1  Adjustment for lack of required downpayment or contract sales in rescission period.

 Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.

Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)

(In thousands)



























Revenue









Revenue






As Reported




Recognition


As Adjusted



As Reported




Recognition


As Adjusted




52 Weeks Ended


Certain


Reportability


52 Weeks Ended



52 Weeks Ended


Certain


Reportability


52 Weeks Ended




January 1, 2016


Items


Adjustment


January 1, 2016

**


January 2, 2015


Items


Adjustment


January 2, 2015

**

Sale of vacation ownership products

$               586,774


$          -


$               841


$                       587,615



$               577,781


$          -


$          12,911


$               590,692


Less:



















Cost of vacation ownership products 

164,200


-


407


164,607



170,012


-


3,904


173,916



Marketing and sales

288,260


-


74


288,334



272,302


-


1,209


273,511





















Development margin

$               134,314


$          -


$               360


$                       134,674



$               135,467


$          -


$            7,798


$               143,265








































   Development margin percentage1

22.9%






22.9%



23.4%






24.3%



**  Denotes non-GAAP financial measures.  Please see pages 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

16 Weeks and 52 Weeks Ended January 1, 2016 and January 2, 2015

(In thousands)


























As Reported




As Adjusted


As Reported




As Adjusted









16 Weeks Ended


Certain


16 Weeks Ended


16 Weeks Ended


Certain


16 Weeks Ended









January 1, 2016


Items


January 1, 2016

**

January 2, 2015


Items


January 2, 2015

**







































Net income

$                         33,149


$         1,516


$                         34,665


$                              497


$       22,482


$                         22,979



Interest expense1

3,988


-


3,988


4,054


-


4,054



Tax provision

22,398


922


23,320


16,866


(748)


16,118



Depreciation and amortization

8,367


(1,341)


7,026


5,499


-


5,499








EBITDA **

$                         67,902


$         1,097


$                         68,999


$                         26,916


$       21,734


$                         48,650





















































































As Reported




As Adjusted


As Reported




As Adjusted









52 Weeks Ended


Certain


52 Weeks Ended


52 Weeks Ended


Certain


52 Weeks Ended









January 1, 2016


Items


January 1, 2016

**

January 2, 2015


Items


January 2, 2015

**







































Net income

$                       122,799


$       (3,887)


$                       118,912


$                         80,756


$       20,740


$                       101,496



Interest expense1

12,810


-


12,810


11,692


-


11,692



Tax provision

83,698


(366)


83,332


69,835


(1,986)


67,849



Depreciation and amortization

22,217


(1,341)


20,876


18,682


-


18,682








EBITDA **

$                       241,524


$       (5,594)


$                       235,930


$                       180,965


$       18,754


$                       199,719








**  Denotes non-GAAP financial measures.  Please see pages 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.

 

A - 15

MARRIOTT VACATIONS WORLDWIDE CORPORATION

2015 ADJUSTED FREE CASH FLOW

(In thousands)





2015

Adjusted net income **                                                                 

$ 118,912


Adjustments to reconcile Adjusted net income to net cash 



provided by operating activities:                                                                    




Adjustments for non-cash items1

74,246



Deferred income taxes / income taxes payable

28,067



Net changes in assets and liabilities:





Notes receivable originations

(311,195)




Notes receivable collections

270,170




Inventory

72,158




Purchase of operating hotels for future conversion to inventory 2

(61,554)




Liability for Marriott Rewards customer loyalty program

(89,251)




Organizational and separation related and other charges

(3,964)




Other working capital changes

11,445

Net cash provided by operating activities                                                                    

109,034


Capital expenditures for property and equipment (excluding inventory):




New sales centers 3

(11,752)



Organizational and separation related capital expenditures

(3,798)



Other

(20,185)



Investment in operating portion of Surfers Paradise hotel that will be sold 4

(47,658)


Decrease in restricted cash

37,681


Borrowings from securitization transactions                                                                     

255,000


Repayment of debt related to securitizations                                                                     

(278,427)




Free cash flow**                                                                    

39,895

Adjustments:



Organizational and separation related and other charges

7,762


Proceeds from sale of operating portion of Surfers Paradise hotel 4

47,658


Accelerated payment of liability for Marriott Rewards customer loyalty program 5

66,000


Net change in borrowings available from the securitization of eligible vacation 




ownership notes receivable through the warehouse credit facility 6

67,541




Adjusted free cash flow**                                                                    

$ 228,856


**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use.







1  Includes depreciation, amortization of debt issuance costs, provision for loan losses, and share-based compensation.

2  Represents adjustment for the investment in operating hotels prior to future conversion to inventory.

3  Represents incremental investment in new sales centers, mainly to support new sales distributions.

4  Represents the estimated investment in, as well as the estimated proceeds from the subsequent sale of, the operating portion of the Surfers Paradise hotel.

5  Represents the portion of the Q1 2016 liability for Marriott Rewards customer loyalty program payment that was accelerated in to Q4 2015.

6  Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable through the warehouse credit facility between the 2014 and 2015 year ends.   

 

A-16


MARRIOTT VACATIONS WORLDWIDE CORPORATION


2016 ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK


(In millions, except per share amounts)




Fiscal Year 2016 (low)


Fiscal Year 2016 (high)

Net income

$                  124


$                  134


Adjustments to reconcile Net income to Adjusted net income






Certain items1

3


3



Gain / (loss) on dispositions 2

-


-



Provision for income taxes on adjustments to net income

(1)


(1)



            Adjusted net income**

$                  126


$                  136








Earnings per share - Diluted 3

$                4.16


$                 4.50


Adjusted earnings per share - Diluted**, 3

$                 4.23


$                 4.56


Diluted shares3

29.8


29.8


**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

1   Certain items adjustment includes approximately $3 million of non-capitalizable transaction costs.

2   Gain / (loss) on dispositions adjustment includes the estimated net impact to pre-tax income associated with dispositions in the North America segment and Asia Pacific segment.

3   Earnings per share - Diluted, Adjusted earnings per share - Diluted, and Diluted shares outlook includes the impact of share repurchase activity only through February 24, 2016.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

2016 ADJUSTED EBITDA OUTLOOK

(In millions)





Fiscal Year 2016 (low)


Fiscal Year 2016 (high)

Adjusted net income **

$                                126


$                                  136

Interest expense1

8


8

Tax provision

90


95

Depreciation and amortization

22


22

Non-cash share-based compensation 2

15


15


Adjusted EBITDA**

$                                261


$                                  276


**  Denotes non-GAAP financial measures.  Please see pages 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.

2   Beginning with the first quarter of 2016 our Adjusted EBITDA will exclude non-cash share-based compensation expense, and prior period presentation will be recast for consistency.  Please see page A - 19 for additional information.

 

A-17

MARRIOTT VACATIONS WORLDWIDE CORPORATION

2016 ADJUSTED FREE CASH FLOW AND NORMALIZED ADJUSTED FREE CASH FLOW OUTLOOK

(In millions)






Current Guidance












Low


High



Mid-Point



Adjustments



Normalized


Adjusted net income **

$                    126


$                    136



$                    131



$                       -



$                    131



Adjustments to reconcile Adjusted net income to net cash















provided by operating activities:
















Adjustments for non-cash items1

80


82



81



-



81




Deferred income taxes / income taxes payable

41


41



41



-



41




Net changes in assets and liabilities:

















Notes receivable originations

(348)


(361)



(355)



-



(355)





Notes receivable collections

236


237



237



-



237





Inventory

(11)


(5)



(8)



8

4


-





Other working capital changes

5


12



9



8

5


17


Net cash provided by operating activities

129


142



136



16



152



Capital expenditures for property and equipment (excluding inventory):
















New sales centers 2

(18)


(18)



(18)



18

2


-




Other

(18)


(18)



(18)



(2)

6


(20)



Decrease in restricted cash

(3)


(3)



(3)



3

7


-



Borrowings from securitization transactions

292


294



293



-



293



Repayment of debt related to securitizations

(234)


(233)



(234)



-



(234)





Free cash flow**

148


164



156



35



191


Adjustments:















Net change in borrowings available from the securitization of eligible vacation

(13)


(9)



(11)



-



(11)




ownership notes receivable through the warehouse credit facility 3

















Adjusted free cash flow**

$                    135


$                    155



$                    145



$                      35



$                    180




















**  Denotes non-GAAP financial measures.  Please see pages A-18 through A-20 for additional information about our reasons for providing these alternative financial measures and limitations on their use.




















1  Includes depreciation, amortization of debt issuance costs, provision for loan losses, and share-based compensation.

2  Represents the incremental investment in new sales centers.

3  Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable through the warehouse credit facility between the 2015 and 2016 year ends.   

4  Represents adjustment to align real estate inventory spending with real estate inventory costs (i.e., product costs). 

5  Represents normalized other working capital changes.

6  Represents normalized capital expenditures for property and equipment.

7  Represents normalized restricted cash activity.

 

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 financial schedules reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by a double asterisk ("**") on the preceding pages).  Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income, earnings per share or any other comparable operating measure prescribed by GAAP.  In addition, these non-GAAP financial measures may be calculated and / or presented differently than measures with the same or similar names that are reported by other companies, and as a result, the non-GAAP financial measures we report may not be comparable to those reported by others.
















Adjusted Net Income.   We evaluate non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, and Adjusted Development Margin, that exclude certain items and gains (losses) and other income (expense) in the 16 weeks and 52 weeks ended January 1, 2016 and January 2, 2015 because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of certain items and gains (losses) and other income (expense).  These non-GAAP financial measures also facilitate our comparison of results from our on-going core operations before certain items and gains (losses) and other income (expense) with results from other vacation ownership companies.
















        Certain items - 16 weeks and 52 weeks ended January 1, 2016.  In our Statement of Income for the 16 weeks ended January 1, 2016, we recorded $2.5 million of net pre-tax items, which included nearly $2.0 million of adjustments for transaction costs ($1.3 million in our Corporate and Other segment, nearly $0.4 million in our North America segment, and $0.3 million in our Asia Pacific segment) recorded under the "Other" caption, more than $0.4 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, and a more than $0.3 million impairment associated with a project in our North America segment recorded under the "Impairment" caption, partially offset by nearly $0.3 million of net adjustments to exclude the results of operations from the portion of the Surfers Paradise, Australia hotel that will be sold, comprised of $4.9 million of Resort management and other services revenue and $4.6 million of Rental revenue, with corresponding adjustments of $4.0 million and $5.2 million to the respective expenses. In our Statement of Income for the 52 weeks ended January 1, 2016, we recorded $5.3 million of net pre-tax items, which included more than $8.4 million of adjustments for transaction costs ($5.7 million in our Asia Pacific segment, nearly $2.4 million in our Corporate and Other segment, and nearly $0.4 million in our North America segment) recorded under the "Other" caption, a $1.8 million adjustment for refurbishment costs at a project in our North America segment, nearly $1.2 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, a more than $0.3 million impairment associated with a project in our North America segment recorded under the "Impairment" caption, and less than $0.1 million of net litigation related matters recorded under the "Litigation settlement" caption, partially offset by $5.9 million of net adjustments to exclude the bulk sale of 18 units in our Asia Pacific segment, comprised of $28.4 million of "Sale of vacation ownership products" revenue, with corresponding adjustments of $21.6 million and $0.9 million to the "Cost of vacation ownership products" and Marketing and sales" captions, respectively, nearly $0.3 million of net adjustments to exclude the results of operations from the portion of the Surfers Paradise, Australia hotel that will be sold, comprised of $4.9 million of Resort management and other services revenue and $4.6 million of Rental revenue, with corresponding adjustments of $4.0 million and $5.2 million to the respective expenses, and a $0.3 million reversal of an accrual associated with a 2014 golf course disposition recorded under the "Litigation settlement" caption because actual costs were lower than expected. 
















      Certain items - 16 weeks and 52 weeks ended January 2, 2015.  In our Statement of Income for the 16 weeks ended January 2, 2015, we recorded $25.1 million of net pre-tax charges which consisted of a $23.8 million non-cash loss associated with the disposition of partially developed land, an operating golf course, spa and clubhouse and related facilities at a former resort in our North America segment and settlement of related litigation under the "Litigation settlement" caption,  $1.2 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, $0.5 million of non-cash impairment charges associated with projects in our North America segment recorded under the "Impairment" caption, and less than $0.1 million of severance charges in our Europe segment recorded under the "Marketing and sales" caption, partially offset by a $0.5 million reduction to the 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.  In our Statement of Income for the 52 weeks ended January 2, 2015, we recorded $23.9 million of net pre-tax charges which consisted of a $23.8 million non-cash loss associated with the disposition of partially developed land, an operating golf course, spa and clubhouse and related facilities at a former resort in our North America segment and settlement of related litigation, a $3.0 million accrual for a litigation settlement in our North America segment and a $0.3 million accrual for a litigation settlement in our Corporate and other segment, all of which were recorded under the "Litigation settlement" caption, $3.4 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, $1.4 million of non-cash impairment charges associated with projects in our North America segment recorded under the "Impairment" caption and $0.4 million of severance charges in our Europe segment recorded under the "Marketing and sales" caption, partially offset by $7.6 million of income associated with the settlement of a dispute with a former service provider in our North America segment recorded under the "Litigation settlement" caption, a $0.5 million reduction to the 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 and a $0.2 million reversal of a severance accrual in our Europe segment recorded under the "Resort management and other services" caption because actual costs were lower than expected.  

 

A-19

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES



















      Gains (losses) and other income (expense) - 16 weeks and 52 weeks ended January 1, 2016.   In our Statement of Income for the 16 weeks ended January 1, 2016, we recorded net gains and other income of less than $0.1 million on the "Gains and other income" caption.  In our Statement of Income for the 52 weeks ended January1, 2016, we recorded $9.6 million of net gains, of which $9.5 million was associated with the sale of undeveloped land and the sale of a golf course and adjacent undeveloped land in our North America segment under the "Gains and other income" caption.



















      Gains (losses) and other income (expense) - 16 weeks and 52 weeks ended January 2, 2015.   In our Statement of Income for the 16 weeks ended January 2, 2015, we recorded $3.3 million of net gains primarily associated with the sale of undeveloped and partially developed land, an operating golf course and related assets in our North America segment under the "Gains (losses) and other income (expense)" caption.  In our Statement of Income for the 52 weeks ended January 2, 2015, we recorded $5.2 million of net gains primarily associated with the sale of undeveloped and partially developed land, an operating golf course and related assets, the sale of a golf course and adjacent undeveloped land, the sale of an undeveloped parcel of land, and the disposition of a project, all of which occurred in our North America segment and were recorded under the "Gains and other income" caption.  



















Adjusted Development Margin (Adjusted Sale of Vacation Ownership Products Net of Expenses).  We evaluate Adjusted Development Margin (Adjusted Sale of Vacation Ownership Products Net of Expenses) as an indicator of operating performance.  Adjusted Development Margin adjusts Sale of vacation ownership products revenues for the impact of revenue reportability, includes corresponding adjustments to Cost of vacation ownership products expense and Marketing and sales expense associated with the change in revenues from the Sale of vacation ownership products, and includes adjustments for certain items as itemized in the discussion of Adjusted Net Income above.  We evaluate Adjusted Development Margin because it allows for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development Margin.



















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.



















We consider EBITDA to be an indicator of operating performance, and we use it to measure our ability to service debt, fund capital expenditures and expand our business. We also use it, as do analysts, lenders, investors and others, because it excludes certain items that can vary widely across different industries or among companies within the same industry.  For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings.  Accordingly, the impact of interest expense on earnings can vary significantly among companies.  The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate.  As a result, effective tax rates and provision for income taxes can vary considerably among companies.  EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets.  These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. 




Adjusted EBITDA.  We also evaluate Adjusted EBITDA, which reflects additional adjustments for certain items and gains (losses) and other income (expense), as itemized in the discussion of Adjusted Net Income above.  In addition, beginning with the first quarter of 2016, we will exclude non-cash share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. 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 these items.  Together, EBITDA and Adjusted EBITDA facilitate our comparison of results from our on-going core operations before the impact of these items with results from other vacation ownership companies. 

 

A-20

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES





































Free Cash Flow.  We also evaluate Free Cash Flow as a liquidity measure that provides useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment, changes in restricted cash, and the borrowing and repayment activity related to our securitizations.  We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including acquisitions and strengthening the balance sheet.  Analysis of Free Cash Flow also facilitates management's comparison of our results with our competitors' results.  



















Adjusted Free Cash Flow.  We also evaluate Adjusted Free Cash Flow, which reflects additional adjustments for organizational and separation related, litigation, and other cash items, as referred to in the discussion of Adjusted Net Income above.  We evaluate Adjusted Free Cash Flow as a liquidity measure that provides useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment, changes in restricted cash, and the borrowing and repayment activity related to our securitizations, excluding the impact of organizational and separation related, litigation, and other cash charges.  We consider Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including acquisitions and strengthening the balance sheet.  Analysis of Adjusted Free Cash Flow also facilitates management's comparison of our results with our competitors' results.  



















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

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)




January 1, 2016


January 2, 2015

ASSETS




Cash and cash equivalents

$             177,061


$             346,515

Restricted cash (including $26,884 and $34,986 from VIEs, respectively)

71,451


109,907

Accounts and contracts receivable, net (including $4,893 and $4,992 from VIEs, respectively)

131,850


109,700

Vacation ownership notes receivable, net (including $669,179 and $750,680 from VIEs, respectively)

920,631


917,228

Inventory

669,243


772,784

Property and equipment

288,803


147,379

Other 

135,987


127,066

      Total Assets

$          2,395,026


$          2,530,579






LIABILITIES AND EQUITY




Accounts payable

$             139,120


$             114,079

Advance deposits

69,064


60,192

Accrued liabilities (including $669 and $1,088 from VIEs, respectively)

164,791


165,969

Deferred revenue

35,276


38,818

Payroll and benefits liability

104,331


93,073

Liability for Marriott Rewards customer loyalty program

35


89,285

Deferred compensation liability

51,031


41,677

Mandatorily redeemable preferred stock of consolidated subsidiary, net

38,989


38,816

Debt, net (including $684,604 and $708,031 from VIEs, respectively)

678,793


703,013

Other

32,945


27,071

Deferred taxes

104,384


78,883

      Total Liabilities

1,418,759


1,450,876






Preferred stock - $.01 par value; 2,000,000 shares authorized; none issued or outstanding

-


-

Common stock - $.01 par value; 100,000,000 shares authorized; 36,393,800 and 36,089,513 shares issued, respectively

364


361

Treasury stock - at cost; 6,844,256 and 3,996,725 shares, respectively

(429,990)


(229,229)

Additional paid-in capital

1,150,731


1,137,785

Accumulated other comprehensive income

11,381


17,054

Retained earnings

243,781


153,732

      Total Equity

976,267


1,079,703






      Total Liabilities and Equity

$          2,395,026


$          2,530,579






The abbreviation VIEs above means Variable Interest Entities.




 

                 A-22

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


 

52 weeks ended


January 1, 2016


January 2, 2015

 OPERATING ACTIVITIES 




 Net income 

$122,799


$80,756

 Adjustments to reconcile net income to net cash provided by operating activities: 





 Depreciation 

22,217


18,682


 Amortization of debt issuance costs 

5,586


5,462


 Provision for loan losses 

33,083


30,534


 Share-based compensation 

14,142


13,376


 Employee stock purchase plan 

560


-


 Gain on disposal of property and equipment, net 

(9,557)


(5,171)


 Non-cash litigation settlement 

(262)


23,778


 Deferred income taxes 

28,162


18,876


 Equity method income 

(187)


(74)


 Impairment charges 

324


1,381


 Impairment reversals on equity investment 

-


(540)


 Net change in assets and liabilities: 





Accounts and contracts receivable

(24,188)


(1,143)


Notes receivable originations

(311,195)


(267,917)


Notes receivable collections

270,170


287,240


Inventory

72,158


82,690


Purchase of operating hotels for future conversion to inventory

(61,554)


-


Other assets

(10,648)


8,659


Accounts payable, advance deposits and accrued liabilities

23,419


(10,824)


Liability for Marriott Rewards customer loyalty program

(89,251)


(25,022)


Deferred revenue

(3,334)


18,119


Payroll and benefit liabilities

11,380


8,973


Deferred compensation liability

9,354


4,568


Other liabilities

1,060


(2,558)


 Other, net 

4,796


1,566





                    Net cash provided by operating activities 

109,034


291,411

 INVESTING ACTIVITIES 





 Capital expenditures for property and equipment (excluding inventory) 

(35,735)


(15,202)


 Purchase of operating hotel to be sold 

(47,658)


-


 Decrease (increase) in restricted cash 

37,681


(24,019)


 Dispositions, net 

20,644


82,347






           Net cash (used in) provided by investing activities

(25,068)


43,126

 FINANCING ACTIVITIES 





 Borrowings from securitization transactions 

255,000


262,638


 Repayment of debt related to securitization transactions 

(278,427)


(229,434)


 Proceeds from vacation ownership inventory arrangement 

5,375


-


 Debt issuance costs 

(5,335)


(6,498)


 Repurchase of common stock 

(201,380)


(203,595)


 Payment of dividends 

(23,793)


(8,179)


 Proceeds from stock option exercises 

97


2,977


 Excess tax benefits from share-based compensation 

9,380


4,519


 Payment of withholding taxes on vesting of restricted stock units 

(10,894)


(8,078)


 Other 

230


-





                 Net cash used in financing activities 

(249,747)


(185,650)






 Effect of changes in exchange rates on cash and cash equivalents 

(3,673)


(1,883)





 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 

(169,454)


147,004





 CASH AND CASH EQUIVALENTS, beginning of period 

346,515


199,511





 CASH AND CASH EQUIVALENTS, end of period 

$177,061


$346,515

 

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SOURCE Marriott Vacations Worldwide Corporation