Marriott Vacations Worldwide Reports Full Year and Fourth Quarter 2011 Financial Results

Mar 15, 2012, 08:02 ET from Marriott Vacations Worldwide Corporation

ORLANDO, Fla., March 15, 2012 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported full year and fourth quarter 2011 financial results and the company's outlook for 2012.

Highlights include:

  • Marriott Vacations Worldwide Corporation launched as the leading global pure-play vacation ownership company through a spin-off from Marriott International, Inc. on November 21, 2011.
  • 2011 total revenues were $1.6 billion, including $648 million from rentals, resort management, financing and other sources.
  • Revenues from the sale of vacation ownership products totaled $634 million. Total gross contract sales for 2011 were $676 million.
  • Volume per guest (VPG) in the North America segment increased 4 percent to $2,504 over 2010.
  • During 2011, total cash balances increased $84 million, reaching $110 million at the end of 2011, while total debt declined by $172 million.
  • In line with the company's goal to improve return on investment, the company generated $18 million of cash proceeds from the disposal of excess land previously held for development and completed inventory in the Luxury segment.
  • On a pro forma basis, Adjusted EBITDA (earnings before interest expense, taxes, and depreciation) totaled $96 million in 2011. Adjusted net income on a pro forma basis was $20 million in 2011.
  • Adjusted EBITDA in 2012 is expected to total $115 million to $125 million.
  • Net income for 2012 is expected to total $37 million to $43 million.

Full year 2011 reported net loss totaled $178 million compared to reported net income of $67 million in 2010. Full year 2011 adjusted net income on a pro forma basis totaled $20 million, a 17 percent decline from $24 million in 2010. Adjusted results on a pro forma basis for 2011 exclude $338 million of pre-tax non-cash impairment and other charges, consisting of $320 million of pre-tax impairment charges recorded in the third quarter of 2011 prior to the company's spin-off from Marriott International and $18 million of other charges. In addition, results include $71 million of pro forma adjustments to reflect the company's position as if it were a standalone public company for both years presented. These adjustments are shown on schedule A-1 and described in further detail on schedule A-15. These pre-tax non-cash impairment and other charges and pro forma adjustments were offset by $69 million of related income taxes.

Adjusted results on a pro forma basis for 2010 exclude $14 million of pre-tax non-cash impairment and other charges, consisting of $4 million of pre-tax impairment charges and $10 million of other charges.  In addition, results include $79 million of pro forma adjustments to reflect the company's position as if it were a standalone public company since the beginning of 2010. These adjustments are shown on schedule A-1 and described in further detail on schedule A-15. These pre-tax pro forma adjustments and non-cash impairment and other charges were offset by $22 million of related income taxes.

"2011 was a transformational year as Marriott Vacations Worldwide became a separate public company. We drove revenue growth, improved VPG, and monetized excess assets," said Stephen P. Weisz, president and chief executive officer. "Our business model, which focuses on recurring revenue streams well beyond the initial sale, generated significant cash flow in 2011. Our business model also provides us with financial flexibility as we look ahead to 2012."

Weisz continued, "We are focused on growing our vacation ownership business, providing unparalleled customer experiences, and continuing to rationalize our cost structure. Our 2012 full year outlook is supported by the strong performance we have experienced so far with contract sales and VPG up year-over-year, a positive trend for our business. In 2012, we are also focused on gaining efficiencies in both our sales and marketing functions, as well as at the corporate level, to drive margin improvement. As a result, we expect total contract sales growth of 4 to 8 percent, resulting in net income of $37 million to $43 million, and Adjusted EBITDA to increase to $115 million to $125 million in 2012."

Full Year 2011 Results

For the year ended December 30, 2011, total revenues were $1.6 billion, including $331 million in cost reimbursements. Total revenues increased $29 million, or 2 percent, from 2010 reflecting higher rental revenues, cost reimbursements, and resort management and other services revenues, partially offset by lower financing revenues from lower interest income on a declining notes receivable portfolio.

Rental revenues totaled $212 million, a 13 percent increase from 2010, reflecting higher demand for rental inventory, particularly in the North America segment where transient keys rented increased 2 percent. Combined with higher revenues from Plus Points, one time use points provided as purchase incentives, the company was successful in generating $12 million of rental revenue net of expenses in the company's North America segment.

Resort management and other services revenues totaled $238 million, a 5 percent increase from 2010, reflecting higher management fees, higher fees in connection with the company's Marriott Vacation Club Destinations program, and higher ancillary revenues from food and beverage and golf operations.

Revenue from the sale of vacation ownership products of $634 million was in line with the prior year.  Total gross contract sales, excluding the impact of contract cancellation allowances and reversals, totaled $676 million, a 4 percent decline from 2010, driven by lower contract sales in the North America, Luxury and Europe segments, partially offset by slightly higher sales in the Asia Pacific segment.

Adjusted net income on a pro forma basis declined $4 million to $20 million in 2011, reflecting the impact of $19 million of lower gains in 2011 from the sale of excess inventory and land, $21 million of lower financing revenues net of expenses from a declining notes receivable portfolio, and $10 million associated with a higher tax provision. These declines were partially offset by $10 million of higher revenues from the sale of vacation ownership products net of expenses, $11 million of lower interest expense from declining debt balances, $8 million of lower equity in losses, $6 million of lower general and administrative costs from lower management bonuses and continued cost savings efforts, $5 million of higher resort management and other services revenues net of expenses, $5 million of higher other revenues net of expenses, and $2 million of lower royalty fees from lower contract sales.

Adjusted EBITDA on a pro forma basis was $96 million in 2011, an increase of $2 million from $94 million in 2010.

Segment Results

North America

Total North America contract sales declined $16 million, however the launch of the points program in mid-2010 makes year-over-year comparisons difficult, as the company was still selling its weeks-based product in the first half of 2010. First half 2011 contract sales declined by $19 million year-over-year as sales efforts were focused on educating and enrolling existing owners in the program and selling additional points to augment their current ownership. Second half 2011 contract sales increased by $3 million year-over-year driven by an increase in the minimum purchase price requirements for existing owners that make additional purchases, as well as incentives provided to all customers to encourage larger purchases.  In aggregate, full year 2011 VPG increased 4 percent to $2,504.

North America adjusted segment results on a pro forma basis declined $18 million to $257 million in 2011 due primarily to $19 million of lower financing revenues, $7 million of lower revenue from the sale of vacation ownership products net of expenses, and $5 million of lower rental revenues net of expenses, partially offset by $8 million of additional resort management and other services revenue net of expenses, $2 million of lower royalty fees from lower contract sales and $2 million of higher other revenue net of expenses. North America segment reported financial results declined to $263 million in 2011 from $280 million in 2010.

Asia Pacific

Asia Pacific contract sales increased $2 million in 2011 over 2010. Total revenues in this segment were lower by $4 million in 2011 versus 2010 due primarily to reduced rental revenues occurring after the sale of an operating hotel in late 2010. Adjusted segment results on a pro forma basis were $2 million in 2011, down from $23 million in 2010, due almost entirely to the $21 million gain on the sale of the hotel included in 2010 results. Asia Pacific segment reported financial results declined to $3 million in 2011 from $29 million in 2010.

Luxury and Europe

As inventory in the Luxury and Europe segments continues to decline, consistent with the strategy stated for these segments, gross contract sales for the full year 2011 declined 14 percent from 2010 levels to $92 million. However, adjusted segment results on a pro forma basis for Luxury and Europe improved by a combined $26 million to $4 million in 2011 from a loss of $22 million in 2010 due primarily to $16 million of higher revenue from the sale of vacation ownership products net of expenses, $8 million of equity losses in 2010, $4 million of higher rental revenues net of expenses, and a $2 million gain in 2011 related to the sale of excess land and luxury inventory. This was partially offset by a combined $4 million of losses in resort management and other services, financing, and other revenues net of expenses. Luxury and Europe combined segment reported financial results were a loss of $118 million in 2011 compared to a loss of $32 million in 2010.  2011 results reflect the impairment charge recorded during the year.

Fourth Quarter 2011 Results

For the quarter ended December 30, 2011, total revenues increased slightly year-over-year to $484 million, including $96 million in cost reimbursements. Higher rental revenues resulting from higher demand for rental inventory were partially offset by lower revenue from the sale of vacation ownership products and lower financing revenues from lower interest income on a declining notes receivable portfolio.

Revenue from the sale of vacation ownership products of $192 million declined 4 percent from the prior year fourth quarter. Total gross contract sales declined 5 percent to $192 million in the fourth quarter of 2011 compared to the 2010 period, driven by lower sales in the Luxury and North America segments.

Adjusted net income on a pro forma basis in the fourth quarter of 2011 totaled $3 million, down from $12 million in 2010. Adjusted results on a pro forma basis for the fourth quarter of 2011 exclude $10 million of pre-tax charges and include $18 million of pro forma adjustments as shown on schedule A-2 and described in further detail on schedule A-15. These pre-tax non-cash impairment and other charges and pro forma adjustments were offset by $3 million of related income taxes.

Adjusted net income on a pro forma basis in the fourth quarter of 2010 excludes $13 million of pre-tax non-cash impairment and other charges and includes $23 million of pro forma adjustments as shown on schedule A-2 and described in further detail on schedule A-15. These pre-tax non-cash impairment and other charges and pro forma adjustments were offset by $4 million of related income taxes.

Adjusted net income on a pro forma basis declined $9 million to $3 million in the 2011 fourth quarter, reflecting the impact of $19 million in lower gains in 2011 from the sale of excess inventory and land, $6 million of lower financing revenues net of expenses from a declining notes receivable portfolio, and $4 million associated with a higher tax provision. These declines were partially offset by $8 million of higher rental revenues net of expenses from higher demand for rental inventory, $8 million of lower general and administrative costs from lower management bonuses and continued cost savings efforts, $3 million of higher other revenues net of expenses and $2 million associated with lower interest expense from declining debt balances.

Reported net income for the fourth quarter of 2011 totaled $8 million compared to $18 million in 2010.

Segment Results

North America

In the North America segment, total contract sales declined $3 million from the fourth quarter 2010 to $148 million. Total VPG increased 6 percent to $2,385. With the shift in focus to new buyers, site-based contract sales to new buyers increased 19 percent and site-based sales to existing owners declined 3 percent. North America adjusted segment results on a pro forma basis were down $12 million to $68 million in 2011 due primarily to $16 million of lower revenue from the sale of ownership products net of expenses, and $6 million of lower financing revenues net of expenses, partially offset by $5 million of additional rental revenue net of expenses, $2 million of higher resort management and other services net of expenses, $2 million of higher other revenues net of expenses and $1 million of lower general and administrative costs. North America reported segment financial results declined to $70 million in 2011 from $81 million in 2010.

Asia Pacific

Asia Pacific contract sales declined $1 million, from $22 million in 2010 to $21 million in 2011. Adjusted segment results on a pro forma basis for Asia Pacific declined $20 million due primarily to the $21 million gain on the sale of an operating hotel in the segment in the fourth quarter of 2010. Asia Pacific reported segment financial results declined to $1 million in 2011 from $21 million in 2010.

Luxury and Europe

Gross contract sales in the combined Luxury and Europe segments declined $5 million, from $28 million in 2010 to $23 million in 2011. The combined adjusted segment results on a pro forma basis for Luxury and Europe increased $18 million to $11 million from a loss of $7 million in 2010 due primarily to $16 million of increased revenue from the sale of ownership products net of expenses, $3 million in additional rental revenue net of expenses, and $2 million in gains related to the sale of excess land and luxury inventory, primarily offset by $2 million of lower revenues from resort management and other services net of expenses, and $1 million of lower other revenues net of expenses. Luxury and Europe combined reported segment financial results increased to $5 million in 2011 from a loss of $17 million in 2010.

Balance Sheet and Liquidity

At December 30, 2011, cash and cash equivalents totaled $110 million. Inventory totaled approximately $1 billion at the end of 2011, including $448 million of finished goods, $215 million of work-in-process, and $290 million of land and infrastructure. The company had approximately $850 million in corporate level debt outstanding at year-end, including $729 million in non-recourse securitized notes receivable and $118 million drawn on its $300 million warehouse credit facility. In addition, the company had $200 million in available capacity under its revolving credit facility.

Outlook

For the full year 2012, the company is providing the following guidance:

  • 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-14 for a reconciliation of non-GAAP financial measures.

Fourth Quarter and Full Year 2011 Earnings Conference Call

The Company will hold a conference call at 10:00 AM EDT today to discuss the 2011 results as well as the 2012 outlook. Participants may access the call by dialing (877) 941-0844 or (480) 629-9835 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 4512595. 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 a separate, public company focusing primarily on vacation ownership experiences. Since entering the industry in 1984 as part of Marriott International, Inc., the company earned its position as a leader and innovator in vacation ownership products. The company preserves high standards of excellence in serving its customers, investors and associates while maintaining a long-term relationship with Marriott International. Marriott Vacations Worldwide offers a diverse portfolio of quality products, programs and management expertise with more than 60 resorts and approximately 420,000 Owners and Members. Its brands include: Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements about 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 Registration Statement on Form 10 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 March 15, 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 4, 2011

TABLE OF CONTENTS

Consolidated Statements of Operations - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-1

Consolidated Statements of Operations - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-2

North America Segment Financial Results - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-3

North America Segment Financial Results - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-4

Luxury Segment Financial Results - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-5

Luxury Segment Financial Results - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-6

Europe Segment Financial Results - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-7

Europe Segment Financial Results - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-8

Asia Pacific Segment Financial Results - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-9

Asia Pacific Segment Financial Results - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-10

Corporate and Other Financial Results - 52 Weeks Ended December 30, 2011 and December 31, 2010

A-11

Corporate and Other Financial Results - 16 Weeks Ended December 30, 2011 and December 31, 2010

A-12

EBITDA, Adjusted EBITDA and Pro-Forma Adjusted EBITDA - 52 Weeks Ended December 30, 2011 and December 31, 2010            

A-13

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

A-14

Non-GAAP Financial Measures

A-15

A-1

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

52 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash 

As Adjusted

Non-cash 

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

52 Weeks Ended

and Other

52 Weeks Ended

52 Weeks Ended

and Other

52 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                            634

$                   -

$                -

$                               634

$                              635

$                   -

$                -

$                               635

Resort management and other services

238

238

227

227

Financing

169

169

188

188

Rental

212

212

187

187

Other

29

29

29

29

Cost reimbursements

331

331

318

318

Total revenues

1,613

-

-

1,613

1,584

-

-

1,584

Expenses

Costs of vacation ownership products

245

(6)

239

247

(2)

245

Marketing and sales

342

(6)

336

344

(3)

341

Resort management and other services

198

198

196

(4)

192

Financing

28

28

26

26

Rental

220

220

194

194

Other

13

13

18

18

General and administrative

81

(6)

75

82

(1)

81

Interest

47

13

60

56

15

71

Royalty fee

4

58

62

-

64

64

Impairment

324

(324)

-

15

(15)

-

Cost reimbursements

331

331

318

318

Total expenses

1,833

(342)

71

1,562

1,496

(25)

79

1,550

Gains and other income

2

2

21

21

Equity in losses

-

-

(8)

(8)

Impairment reversals on equity investment

4

(4)

-

11

(11)

-

(Loss) income before income taxes

(214)

338

(71)

53

112

14

(79)

47

Benefit (provision) for income taxes

36

(96)

27

(33)

(45)

(6)

28

(23)

Net (loss) income

$                           (178)

$               242

$            (44)

$                                 20

$                                67

$                   8

$            (51)

$                                 24

(Losses) Earnings per share - Basic

$                          (5.29)

$                             2.00

(Losses) Earnings per share - Diluted

$                          (5.29)

$                             2.00

Basic Shares

33.7

33.7

Diluted Shares

33.7

33.7

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

52 Weeks Ended

Cancellation

52 Weeks Ended

52 Weeks Ended

Cancellation

52 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                            680

$                 (4)

$                -

$                               676

$                              685

$                 20

$                -

$                               705

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-2

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

16 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash

As Adjusted

Non-cash

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

16 Weeks Ended

and Other

16 Weeks Ended

16 Weeks Ended

and Other

16 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                            192

$                  -

$                -

$                               192

$                            199

$                   -

$                -

$                               199

Resort management and other services

73

73

73

73

Financing

50

50

55

55

Rental

64

64

49

49

Other

9

9

8

8

Cost reimbursements

96

96

95

95

Total revenues

484

-

-

484

479

-

-

479

Expenses

Costs of vacation ownership products

68

68

75

(1)

74

Marketing and sales

107

(4)

103

106

(2)

104

Resort management and other services

60

60

61

(1)

60

Financing

9

9

8

8

Rental

71

71

64

64

Other

4

4

6

6

General and administrative

25

(6)

19

27

27

Interest

15

3

18

16

4

20

Royalty fee

4

15

19

-

19

19

Impairment

-

-

20

(20)

-

Cost reimbursements

96

96

95

95

Total expenses

459

(10)

18

467

478

(24)

23

477

Gains and other income

2

2

21

21

Equity in earnings

-

-

1

1

Impairment reversals on equity investment

-

-

11

(11)

-

Income before income taxes

27

10

(18)

19

34

13

(23)

24

Provision for income taxes

(19)

(4)

7

(16)

(16)

(5)

9

(12)

Net income

$                                8

$                  6

$            (11)

$                                   3

$                              18

$                   8

$            (14)

$                                 12

Earnings per share - Basic

$                           0.24

$                           0.54

Earnings per share - Diluted

$                           0.23

$                           0.54

Basic Shares

33.7

33.7

Diluted Shares

34.7

33.7

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

16 Weeks Ended

Cancellation

16 Weeks Ended

16 Weeks Ended

Cancellation

16 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                            192

$                  -

$                -

$                               192

$                            196

$                   5

$                -

$                               201

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-3

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICAN SEGMENT

52 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash

As Adjusted

Non-cash

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

52 Weeks Ended

and Other

52 Weeks Ended

52 Weeks Ended

and Other

52 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                            484

$                  -

$                -

$                               484

$                            492

$                   -

$                -

$                               492

Resort management and other services

180

180

175

175

Financing

153

153

172

172

Rental

180

180

152

152

Other

28

28

27

27

Cost reimbursements

247

247

233

233

Total revenues

1,272

-

-

1,272

1,251

-

-

1,251

Expenses

Costs of vacation ownership products

190

(1)

189

191

191

Marketing and sales

248

(2)

246

247

(2)

245

Resort management and other services

142

142

149

(4)

145

Rental

168

168

135

135

Other

11

11

12

12

General and administrative

3

3

4

4

Royalty fee

-

9

9

-

11

11

Cost reimbursements

247

247

233

233

Total expenses

1,009

(3)

9

1,015

971

(6)

11

976

Segment financial results

$                            263

$                  3

$              (9)

$                               257

$                            280

$                   6

$            (11)

$                               275

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

52 Weeks Ended

Cancellation

52 Weeks Ended

52 Weeks Ended

Cancellation

52 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                            514

$                  -

$                -

$                               514

$                            530

$                   -

$                -

$                               530

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-4

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICAN SEGMENT

16 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash

As Adjusted

Non-cash

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

16 Weeks Ended

and Other

16 Weeks Ended

16 Weeks Ended

and Other

16 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                            137

$                   -

$                -

$                               137

$                            155

$                   -

$                -

$                               155

Resort management and other services

55

55

56

56

Financing

45

45

51

51

Rental

56

56

41

41

Other

9

9

7

7

Cost reimbursements

71

71

68

68

Total revenues

373

-

-

373

378

-

-

378

Expenses

Costs of vacation ownership products

52

52

55

55

Marketing and sales

77

(1)

76

76

(1)

75

Resort management and other services

42

42

46

(1)

45

Rental

57

57

47

47

Other

3

3

3

3

General and administrative

1

1

2

2

Royalty fee

-

3

3

-

3

3

Cost reimbursements

71

71

68

68

Total expenses

303

(1)

3

305

297

(2)

3

298

Segment financial results

$                              70

$                   1

$              (3)

$                                 68

$                              81

$                   2

$              (3)

$                                 80

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

16 Weeks Ended

Cancellation

16 Weeks Ended

16 Weeks Ended

Cancellation

16 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                            148

$                   -

$                -

$                               148

$                            151

$                   -

$                -

$                               151

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-5

MARRIOTT VACATIONS WORLDWIDE CORPORATION

LUXURY SEGMENT

52 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash 

As Adjusted

Non-cash 

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

52 Weeks Ended

and Other

52 Weeks Ended

52 Weeks Ended

and Other

52 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                              32

$                   -

$                -

$                                 32

$                              20

$                   -

$                -

$                                 20

Resort management and other services

24

24

20

20

Financing

7

7

8

8

Rental

4

4

2

2

Other

1

1

1

1

Cost reimbursements

46

46

52

52

Total revenues

114

-

-

114

103

-

-

103

Expenses

Costs of vacation ownership products

18

(5)

13

11

(2)

9

Marketing and sales

15

(1)

14

23

(1)

22

Resort management and other services

28

28

23

23

Rental

22

22

21

21

Other

1

1

-

-

General and administrative

3

3

3

3

Royalty fee

-

1

1

-

1

1

Impairment

117

(117)

-

20

(20)

-

Cost reimbursements

46

46

52

52

Total expenses

250

(123)

1

128

153

(23)

1

131

Gains and other income

2

2

-

-

Equity in losses

-

-

(8)

(8)

Impairment reversals on equity investment

4

(4)

-

11

(11)

-

Segment financial results

$                           (130)

$               119

$              (1)

$                               (12)

$                             (47)

$                 12

$              (1)

$                               (36)

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

52 Weeks Ended

Cancellation

52 Weeks Ended

52 Weeks Ended

Cancellation

52 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                              39

$                 (4)

$                -

$                                 35

$                              24

$                 20

$                -

$                                 44

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION

LUXURY SEGMENT

16 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash 

As Adjusted

Non-cash 

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

16 Weeks Ended

and Other

16 Weeks Ended

16 Weeks Ended

and Other

16 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                              20

$                   -

$                -

$                                 20

$                                4

$                   -

$                -

$                                   4

Resort management and other services

7

7

7

7

Financing

2

2

2

2

Rental

1

1

-

-

Other

-

-

1

1

Cost reimbursements

13

13

16

16

Total revenues

43

-

-

43

30

-

-

30

Expenses

Costs of vacation ownership products

7

7

5

(1)

4

Marketing and sales

4

4

7

(1)

6

Resort management and other services

8

8

6

6

Rental

6

6

8

8

General and administrative

1

1

1

1

Royalty fee

-

1

1

-

1

1

Impairment

4

(4)

-

20

(20)

-

Cost reimbursements

13

13

16

16

Total expenses

43

(4)

1

40

63

(22)

1

42

Gains and other income

2

2

-

-

Impairment reversals on equity investment

-

-

11

(11)

-

Segment financial results

$                                2

$                   4

$              (1)

$                                   5

$                             (22)

$                 11

$              (1)

$                               (12)

Total Contract Sales

Gross Contract Sales

Total Contract Sales

Gross Contract Sales

16 Weeks Ended

Cancellation

16 Weeks Ended

16 Weeks Ended

Cancellation

16 Weeks Ended

December 30, 2011

Allowance

Pro-Forma

December 30, 2011

December 31, 2010

Allowance

Pro-Forma

December 31, 2010

Contract sales

$                                4

$                   -

$                -

$                                   4

$                                4

$                   5

$                -

$                                   9

**  Denotes non-GAAP financial measures.  Please see pages A-15 and A-16 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

52 Weeks Ended December 30, 2011 and December 31, 2010

($ in millions, except per share amounts)

Non-cash 

As Adjusted

Non-cash 

As Adjusted

As Reported

Impairment

Pro-Forma

As Reported

Impairment

Pro-Forma

52 Weeks Ended

and Other

52 Weeks Ended

52 Weeks Ended

and Other

52 Weeks Ended

December 30, 2011

Charges

Pro-Forma

December 30, 2011

**

December 31, 2010

Charges

Pro-Forma

December 31, 2010

**

Revenues

Sales of vacation ownership products, net

$                              51

$                   -

$                -

$                                 51

$                              58

$                   -

$                -

$                                 58

Resort management and other services

31

31

29

29

Financing

5

5

5

5

Rental

21

21

17

17

Other

-

-

1

1

Cost reimbursements

27

27

24

24

Total revenues

135

-

-

135

134

-

-

134

Expenses

Costs of vacation ownership products

13

13

19

19

Marketing and sales

34

(3)

31

32

32

Resort management and other services

26

26

24

24

Rental

19

19

18

18

Other

1

1

1

1