Marriott Vacations Worldwide Reports Second Quarter 2013 Financial Results

ORLANDO, Fla., July 18, 2013 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported second quarter 2013 financial results and updated certain guidance for the full year 2013.

Second Quarter 2013 highlights include:

  • Adjusted EBITDA (earnings before non-consumer financing interest expense, income taxes, depreciation and amortization), as adjusted for organizational and separation related costs in connection with the company's spin-off from Marriott International, Inc. (the "Spin-Off") and other activity, totaled $48 million, a $20 million increase from the second quarter of 2012, on an adjusted basis.
  • North America segment volume per guest (VPG) increased 8 percent year-over-year to $3,211.
  • Adjusted development margin increased to 17.1 percent in the second quarter of 2013 from 12.8 percent in the second quarter of 2012; North America adjusted development margin increased to 19.5 percent in the second quarter of 2013 from 16.8 percent in the second quarter of 2012.
  • Adjusted fully diluted earnings per share (EPS) in the second quarter were $0.73 compared to $0.33 in the second quarter of 2012.

Second quarter 2013 net income totaled $30 million, or $0.85 per diluted share, compared to net income of $5 million, or $0.15 per diluted share, in the second quarter of 2012. Development margin increased to 23.1 percent in the second quarter of 2013 from 9.3 percent in the second quarter of 2012.

Second quarter 2013 adjusted net income totaled $27 million, a $16 million increase from $11 million of adjusted net income in the second quarter of 2012. Second quarter 2013 adjusted net income reflects a reduction of $5 million of pre-tax income that resulted from the exclusion of $9 million of pre-tax income related to the impact of extended rescission periods in the company's Europe segment, partially offset by the exclusion of $2 million of organizational and separation related costs, $2 million of severance costs and an impairment charge in the company's Europe segment and a nominal net impact related to a joint venture project that was previously included in the company's former Luxury segment. Second quarter 2012 adjusted net income reflects an increase of $8 million of pre-tax income that resulted from the exclusion of $4 million of charges related to organizational and separation related costs, a $3 million decrease in pre-tax income related to the impact of extended rescission periods in the company's Europe segment, charges of $2 million in connection with litigation settlements related to the company's project in San Francisco and $1 million of severance costs, partially offset by $2 million of impairment reversal related to a joint venture project that was previously included in the company's former Luxury segment. In addition, adjusted development margin for both periods is adjusted, as appropriate, for the impact of revenue reportability.

Non-GAAP financial measures, such as adjusted EBITDA, as adjusted, adjusted net income and adjusted development margin are reconciled in the Press Release Schedules that follow. Adjustments, including those relating to the impact of extended rescission periods in the company's Europe segment, are shown and described in further detail on schedules A-1 through A-20.

"Our second quarter continued our trend of strong adjusted EBITDA growth, driven by improved adjusted development margin and better results in our rental and resort management businesses," said Stephen P. Weisz, president and chief executive officer. "More efficient marketing and sales spending was integral to our improvement as we continue to leverage our fixed costs and drive higher development margin. We have increased our adjusted free cash flow guidance by $65 million, driven primarily by lower projected cash income taxes, and, given the positive trends in our business year-to-date, we now expect our adjusted EBITDA to be at the high end of our full year guidance range for 2013."

Second Quarter 2013 Results

Total company contract sales were $157 million, an $11 million, or 7 percent, decrease from $168 million in the second quarter of 2012, driven mainly by $10 million of lower contract sales in the company's Europe and Asia Pacific segments.

For the second quarter ended June 14, 2013, total revenues from the sale of vacation ownership products, excluding $17 million related to the impact of extended rescission periods in the company's Europe segment, were $152 million

Development margin, excluding $9 million related to the impact of extended rescission periods in the company's Europe segment, was $29 million, a $13 million increase from the second quarter of 2012.  This increase was driven by higher reportability year-over-year and lower cost of vacation ownership products and marketing and sales expenses. Reported development margin was $38 million, a $25 million increase from the second quarter of 2012.

Adjusted development margin percentage increased 4.3 percentage points to 17.1 percent in the second quarter of 2013 from 12.8 percent in the second quarter of 2012. The impact of these adjustments is illustrated on schedules A-10 through A-13. Reported development margin increased 13.8 percentage points to 23.1 percent in the second quarter of 2013 from 9.3 percent in the second quarter of 2012.

Rental revenues totaled $65 million, an $11 million, or 18 percent, increase from the second quarter of 2012, reflecting an 11 percent increase in transient keys rented as well as a 7 percent increase in average transient rate driven by stronger consumer demand and a favorable mix of available inventory. Rental revenues net of expenses, were $9 million, $7 million higher than the second quarter of 2012.

Resort management and other services revenues totaled $61 million, a decrease of less than $1 million from the second quarter of 2012. Revenues were impacted by the disposition of a golf course and related assets at one of the company's Ritz-Carlton branded projects late in 2012. Resort management and other services revenues, net of expenses improved $3 million, a 23 percent increase over the second quarter of 2012. Results reflected higher annual fees in connection with the company's Marriott Vacation Club Destinations program and improvements in ancillary operations driven by the disposition of a golf course and related assets at one of the company's Ritz-Carlton branded projects late in 2012.

Adjusted EBITDA, as adjusted for the impact of extended rescission periods in the company's Europe segment, organizational and separation related costs, and other adjustments, was $48 million in the second quarter of 2013, a $20 million increase from Adjusted EBITDA, as adjusted, of $28 million in the second quarter of 2012.

Segment Results

Effective December 29, 2012, the company combined the reporting of the financial results of its former Luxury segment with the North America segment based upon its decision to scale back separate development activity and to aggregate future marketing and sales of inventory in the upscale and luxury tiers. Existing service standards and on-site management remain unaffected by these reporting changes. Prior year amounts have been recast for consistency with current year's presentation.

North America

VPG increased 8 percent to $3,211 in the second quarter of 2013 from $2,968 in the second quarter of 2012, driven by higher pricing and improved closing efficiency. Total North America contract sales were $142 million in the second quarter of 2013, roughly flat to the prior year, due to fewer sales tours quarter over quarter.

Second quarter 2013 North America segment financial results increased 25 percent, or $17 million, to $84 million. The increase was driven by $10 million of higher development margin, $7 million of higher rental revenues net of expenses, $3 million of higher resort management and other services revenues net of expenses and $1 million of higher other revenues net of expenses. These increases were partially offset by $3 million of lower financing revenues and $1 million of higher royalty fees.

Revenues from the sale of vacation ownership products increased $13 million to $136 million in the second quarter, driven mainly by $11 million of higher year-over-year revenue reportability. Development margin was $28 million, a $10 million increase from the second quarter of 2012. This increase was driven by higher revenue reportability year-over-year and lower cost of vacation ownership products and marketing and sales expenses, offset partially by the slightly lower contract sales.

Development margin percentage increased to 20.8 percent in the second quarter of 2013 as compared to 14.7 percent in the prior year quarter. Excluding the impact of revenue reportability, adjusted development margin percentage increased to 19.5 percent in the second quarter of 2013 from 16.8 percent in the second quarter of 2012. The impact of revenue reportability is illustrated on schedule A-12.

Asia Pacific

Asia Pacific contract sales declined $7 million to $8 million in the second quarter of 2013 and total revenues declined $5 million to $16 million, both reflecting the impact of the closure of two under-performing off-site sales centers in the fourth quarter of 2012. Segment financial results were $2 million, remaining flat when compared to the second quarter of 2012.

Europe

As the Europe segment continues to sell through its remaining inventory, second quarter 2013 contract sales declined $3 million to $7 million. Europe segment financial results, excluding $9 million related to the impact of extended rescission periods, were $2 million, up $2 million from break-even results in the second quarter of 2012, after adjusting for the $3 million impact related to extended rescission periods in the prior year comparable period. These results reflect $2 million of higher development margin and $1 million of higher rental revenues net of expenses, offset partially by a $1 million impairment charge related to a leased golf course at one of the company's projects in Spain. Reported segment financial results were $11 million, up $14 million from a loss of $3 million in the second quarter of 2012.

Organizational and Separation Plan

During the second quarter of 2013, the company incurred $3 million of costs in connection with its continued organizational and separation related efforts, of which approximately $1 million was capitalized during the quarter. Total future spending for these efforts is expected to be approximately $16 million to $21 million, with costs being incurred through 2014.

These costs primarily relate to establishing the company's own information technology systems and services, independent accounts payable functions and reorganization of existing human resources and information technology organizations to support the company's standalone public company needs. Once completed, these efforts are expected to generate approximately $15 million to $20 million of annualized savings, of which approximately $2 million are reflected in the company's year-to-date 2013 financial results.

Balance Sheet and Liquidity

On June 14, 2013, cash and cash equivalents totaled $104 million. Since the end of 2012, real estate inventory balances declined $19 million to $862 million, including $425 million of finished goods, $168 million of work-in-process and $269 million of land and infrastructure. The company had $687 million in debt outstanding at the end of the second quarter of 2013, a decrease of $31 million from year-end 2012, including $643 million in non-recourse securitized notes, of which $104 million has been drawn down under the company's warehouse credit facility, and $40 million of mandatorily redeemable preferred stock of a subsidiary. As of June 14, 2013, the company had $196 million in available capacity under its revolving credit facility after taking into account outstanding letters of credit and had $124 million of vacation ownership notes receivable eligible for securitization.

Outlook

For the full year 2013, the Company is increasing its adjusted free cash flow, as adjusted, guidance as a result of lower projected cash income taxes and improved consumer financing activity. In addition, as a result of lower effective income tax rates, primarily in international tax jurisdictions, the Company is increasing its adjusted net income and adjusted fully diluted earnings per share guidance for the full year.


Current Guidance

Previous Guidance

Adjusted free cash flow, as adjusted      

$120 million to $135 million

$55 million to $70 million

Adjusted net income, as adjusted              

$72 million to $78 million

$69 million to $75 million

Adjusted fully diluted earnings per share           

$1.94 to $2.10

$1.87 to $2.03

The Company is also reaffirming the following guidance for full year 2013 as previously provided on April 25, 2013: 

Gross contract sales growth                                          

0 percent to 5 percent

North America contract sales growth                            

5 percent to 10 percent

Adjusted EBITDA, as adjusted                                 

$155 million to $165 million

Adjusted company development margin                      

17.0 percent to 18.0 percent

Schedules A-1 through A-20 reconcile the non-GAAP financial measures set forth above to the company's expected full year 2013 net income of $71 million to $77 million and development margin of 17.5 percent to 18.5 percent, in each case on an as reported basis.

Second Quarter 2013 Earnings Conference Call

The company will hold a conference call at 10:00 a.m. EDT today to discuss these results. Participants may access the call by dialing (877) 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 4625312. The webcast will also be available on the company's website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global pure-play vacation ownership company. In late 2011, Marriott Vacations Worldwide was established as an independent, public company focusing primarily on vacation ownership experiences. Since entering the industry in 1984 as part of Marriott International, Inc., the company earned its position as a leader and innovator in vacation ownership products. The company preserves high standards of excellence in serving its customers, investors and associates while maintaining a long-term relationship with Marriott International. Marriott Vacations Worldwide offers a diverse portfolio of quality products, programs and management expertise with more than 60 resorts and more than 420,000 Owners and Members. Its brands include: Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements about earnings trends, organizational and separation related efforts, 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 our 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 presentation. These statements are made as of July 18, 2013 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.

Press Release Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION

PRESS RELEASE SCHEDULES

QUARTER 2, 2013

TABLE OF CONTENTS

































Consolidated Statements of Operations - 12 Weeks Ended June 14, 2013 and June 15, 2012                                                  

 A-1

















Consolidated Statements of Operations - 24 Weeks Ended June 14, 2013 and June 15, 2012                                                  

 A-2

















North America Segment Financial Results - 12 Weeks Ended June 14, 2013 and June 15, 2012                                                   

 A-3

















North America Segment Financial Results - 24 Weeks Ended June 14, 2013 and June 15, 2012                                                   

 A-4

















Asia Pacific Segment Financial Results - 12 Weeks Ended June 14, 2013 and June 15, 2012                                                            

 A-5

















Asia Pacific Segment Financial Results - 24 Weeks Ended June 14, 2013 and June 15, 2012                                                            

 A-6

















Europe Segment Financial Results - 12 Weeks Ended June 14, 2013 and June 15, 2012                                                            

 A-7

















Europe Segment Financial Results - 24 Weeks Ended June 14, 2013 and June 15, 2012                                                            

 A-8

















Corporate and Other Financial Results - 12 Weeks and 24 Weeks Ended June 14, 2013 and June 15, 2012                                             

 A-9

















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


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 12 Weeks Ended June 14, 2013 and June 15, 2012                                             

 A-10

















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


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 24 Weeks Ended June 14, 2013 and June 15, 2012                                             

 A-11

















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


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 12 Weeks Ended June 14, 2013 and June 15, 2012                                                  

 A-12

















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


    (Adjusted Sale of Vacation Ownership Products Net of Expenses) - 24 Weeks Ended June 14, 2013 and June 15, 2012                                                  

 A-13

















EBITDA and Adjusted EBITDA - 12 Weeks and 24 Weeks Ended June 14, 2013 and June 15, 2012                              

 A-14

















Adjusted Net Income and Adjusted Earnings Per Share - Diluted, Adjusted EBITDA and Adjusted Development Margin - 2013 Outlook                                                                                               

 A-15

















2013 Adjusted Free Cash Flow Outlook                                                                                               

 A-16

















2013 Normalized Adjusted Free Cash Flow Outlook





 A-17

















Non-GAAP Financial Measures                                                                                                   


 A-18

















Interim Consolidated Balance Sheets                                                                                                   

 A-21

















Interim Consolidated Statements of Cash Flows                                                                                                   

 A-22

 

A-1

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

12 Weeks Ended June 14, 2013 and June 15, 2012

(In millions, except per share amounts)




























As Reported




Europe


As Adjusted



As Reported




Europe


As Adjusted







12 Weeks Ended


Other


Rescission


12 Weeks Ended



12 Weeks Ended


Other


Rescission


12 Weeks Ended







June 14, 2013


Charges


Adjustment


June 14, 2013

**


June 15, 2012


Charges


Adjustment


June 15, 2012

**

Revenues



















Sale of vacation ownership products

$                    169


$           -


$                (17)


$                         152



$                         141


$              -


$                    4


$                         145



Resort management and other services

61


-


-


61



62


-


-


62



Financing

32


-


-


32



35


-


-


35



Rental

65


-


-


65



54


-


-


54



Other

9


-


-


9



8


-


-


8



Cost reimbursements

85


-


-


85



83


-


-


83




Total revenues

421


-


(17)


404



383


-


4


387


Expenses



















Cost of vacation ownership products

57


-


(6)


51



50


-


1


51



Marketing and sales

74


(1)


(2)


71



78


(1)


-


77



Resort management and other services

45


-


-


45



49


-


-


49



Financing

6


-


-


6



7


-


-


7



Rental

56


-


-


56



52


-


-


52



Other

3


-


-


3



3


-


-


3



General and administrative

22


-


-


22



20


-


-


20



Organizational and separation related

2


(2)


-


-



4


(4)


-


-



Litigation settlement

-


-


-


-



2


(2)


-


-



Interest

11


-


-


11



14


-


-


14



Royalty fee

15


-


-


15



14


-


-


14



Impairment

1


(1)


-


-



-


-


-


-



Cost reimbursements

85


-


-


85



83


-


-


83




Total expenses

377


(4)


(8)


365



376


(7)


1


370


Impairment reversals on equity investment

-


-


-


-



2


(2)


-


-




Income before income taxes

44


4


(9)


39



9


5


3


17


Provision for income taxes

(14)


(1)


3


(12)



(4)


(2)


-


(6)


Net income

$                      30


$          3


$                  (6)


$                           27



$                             5


$             3


$                    3


$                           11

























Earnings per share - Basic

$                   0.87






$                        0.76



$                        0.16






$                        0.35

























Earnings per share - Diluted

$                   0.85






$                        0.73



$                        0.15






$                        0.33

























Basic Shares

35.4






35.4



34.3






34.3


Diluted Shares

36.6






36.6



36.1






36.1































As Reported









As Reported














12 Weeks Ended









12 Weeks Ended














June 14, 2013









June 15, 2012































Contract Sales

$                     157









$                         168








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


































NOTE:    We have restated 2012 Sale of vacation ownership products and Cost reimbursements revenues, Cost of vacation ownership products, Marketing and sales, and Cost reimbursements expenses, Income before income taxes, Provision for income taxes, Net income, Earnings per share - Basic, and Earnings per share - Diluted to correct prior period misstatements.

 

A-2

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

24 Weeks Ended June 14, 2013 and June 15, 2012

(In millions, except per share amounts)


































As Reported




Europe


As Adjusted



As Reported




Europe


As Adjusted










24 Weeks Ended


Other


Rescission


24 Weeks Ended



24 Weeks Ended


Other


Rescission


24 Weeks Ended










June 14, 2013


Charges


Adjustment


June 14, 2013

**


June 15, 2012


Charges


Adjustment


June 15, 2012

**

Revenues






















Sale of vacation ownership products

$                         310


$              -


$                (18)


$                         292



$                         273


$              -


$                    6


$                         279



Resort management and other services

117


-


-


117



116


-


-


116



Financing

65


-


-


65



71


-


-


71



Rental

128


-


-


128



110


-


-


110



Other 


15


-


-


15



14


-


-


14



Cost reimbursements

176


-


-


176



173


-


-


173




Total revenues

811


-


(18)


793



757


-


6


763


Expenses






















Cost of vacation ownership products

101


-


(6)


95



97


-


2


99



Marketing and sales

148


(2)


(2)


144



152


(1)


-


151



Resort management and other services

87


-


-


87



93


-


-


93



Financing

11


-


-


11



13


-


-


13



Rental

112


-


-


112



100


-


-


100



Other


7


-


-


7



5


-


-


5



General and administrative

43


-


-


43



39


-


-


39



Organizational and separation related


3


(3)


-


-



6


(6)


-


-



Litigation settlement


(1)


1


-


-



2


(2)


-


-



Interest

22


-


-


22



27


-


-


27



Royalty fee

28


-


-


28



27


-


-


27



Impairment

1


(1)


-


-



-


-


-


-



Cost reimbursements

176


-


-


176



173


-


-


173




Total expenses

738


(5)


(8)


725



734


(9)


2


727


Gains and other income 

1


-


-


1



-


-


-


-


Impairment reversals on equity investment

-


-


-


-



2


(2)


-


-




Income before income taxes

74


5


(10)


69



25


7


4


36


Provision for income taxes

(25)


(1)


3


(23)



(12)


(3)


-


(15)


Net income


$                           49


$             4


$                  (7)


$                           46



$                           13


$             4


$                    4


$                           21



























Earnings per share - Basic


$                        1.40






$                        1.32



$                        0.39






$                        0.62



























Earnings per share - Diluted

$                        1.35






$                        1.27



$                        0.37






$                        0.59



























Basic Shares



35.3






35.3



34.2






34.2


Diluted Shares


36.6






36.6



35.9






35.9



































As Reported









As Reported
















24 Weeks Ended









24 Weeks Ended
















June 14, 2013









June 15, 2012

































Contract Sales


$                         313









$                         322








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











































NOTE:    We have restated 2012 Sale of vacation ownership products and Cost reimbursements revenues, Cost of vacation ownership products, Marketing and sales, and Cost reimbursements expenses, Income before income taxes, Provision for income taxes, Net income, Earnings per share - Basic, and Earnings per share - Diluted to correct prior period misstatements.

 

A-3

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA SEGMENT

12 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



















































As Reported




As Adjusted



As Reported




As Adjusted










12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other


12 Weeks Ended










June 14, 2013


Charges


June 14, 2013

**


June 15, 2012


Charges


June 15, 2012

**

Revenues


















Sale of vacation ownership products

$                         136


$              -


$                         136



$                         123


$              -


$                         123



Resort management and other services

52


-


52



53


-


53



Financing

30


-


30



33


-


33



Rental

57


-


57



48


-


48



Other


9


-


9



8


-


8



Cost reimbursements

75


-


75



73


-


73




Total revenues

359


-


359



338


-


338


Expenses


















Cost of vacation ownership products

46


-


46



44


-


44



Marketing and sales

62


-


62



61


(1)


60



Resort management and other services

38


-


38



42


-


42



Rental

48


-


48



46


-


46



Other


3


-


3



3


-


3



Litigation settlement


-


-


-



2


(2)


-



Royalty fee

3


-


3



2


-


2



Cost reimbursements

75


-


75



73


-


73




Total expenses

275


-


275



273


(3)


270


Impairment reversals on equity investment

-


-


-



2


(2)


-




Segment financial results

$                           84


$              -


$                           84



$                           67


$             1


$                           68































As Reported







As Reported














12 Weeks Ended







12 Weeks Ended














June 14, 2013







June 15, 2012



























Contract Sales


$                         142







$                         143






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























NOTE:  We combined the financial results of the former Luxury segment with the North America segment beginning with the first quarter of 2013 and have recast prior year presentation for consistency. As a result of a realignment of our management structure, beginning with the first quarter of 2013 we no longer allocate certain general and administrative expenses to our reportable segments. Prior year reportable segment information has been adjusted to reflect this change. We have restated 2012 Cost reimbursements revenues and expenses to correct a prior period misstatement.

 

A-4

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NORTH AMERICA SEGMENT

24 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



















































As Reported




As Adjusted



As Reported




As Adjusted










24 Weeks Ended


Other


24 Weeks Ended



24 Weeks Ended


Other


24 Weeks Ended










June 14, 2013


Charges


June 14, 2013

**


June 15, 2012


Charges


June 15, 2012

**

Revenues


















Sale of vacation ownership products

$                         262


$              -


$                         262



$                         237


$              -


$                         237



Resort management and other services

102


-


102



102


-


102



Financing

61


-


61



67


-


67



Rental

116


-


116



100


-


100



Other


15


-


15



14


-


14



Cost reimbursements

156


-


156



155


-


155




Total revenues

712


-


712



675


-


675


Expenses


















Cost of vacation ownership products

86


-


86



85


-


85



Marketing and sales

126


-


126



121


(1)


120



Resort management and other services

74


-


74



81


-


81



Rental

99


-


99



88


-


88



Other


7


-


7



5


-


5



Litigation settlement


(1)


1


-



2


(2)


-



Royalty fee

4


-


4



3


-


3



Cost reimbursements

156


-


156



155


-


155




Total expenses

551


1


552



540


(3)


537


Gains and other income

1


-


1



-


-


-


Impairment reversals on equity investment

-


-


-



2


(2)


-




Segment financial results


$                         162


$           (1)


$                         161



$                         137


$             1


$                         138































As Reported







As Reported














24 Weeks Ended







24 Weeks Ended














June 14, 2013







June 15, 2012



























Contract Sales


$                         285







$                         277






 

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























NOTE:  We combined the financial results of the former Luxury segment with the North America segment beginning with the first quarter of 2013 and have recast prior year presentation for consistency. As a result of a realignment of our management structure, beginning with the first quarter of 2013 we no longer allocate certain general and administrative expenses to our reportable segments. Prior year reportable segment information has been adjusted to reflect this change. We have restated 2012 Cost reimbursements revenues and expenses to correct a prior period misstatement.

 

A-5

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ASIA PACIFIC SEGMENT

12 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



















































As Reported




As Adjusted



As Reported




As Adjusted










12 Weeks Ended


Other


12 Weeks Ended



12 Weeks Ended


Other


12 Weeks Ended










June 14, 2013


Charges


June 14, 2013

**


June 15, 2012


Charges


June 15, 2012

**

Revenues


















Sale of vacation ownership products

$                             8


$              -


$                             8



$                           14


$              -


$                           14



Resort management and other services

1


-


1



1


-


1



Financing

1


-


1



1


-


1



Rental

2


-


2



1


-


1



Cost reimbursements     

4


-


4



4


-


4




Total revenues

16


-


16



21


-


21


Expenses


















Cost of vacation ownership products

1


-


1



3


-


3



Marketing and sales

5


-


5



10


-


10



Resort management and other services    

-


-


-



-


-


-



Rental 

3


-


3



1


-


1



Royalty fee

1


-


1



1


-


1



Cost reimbursements

4


-


4



4


-


4




Total expenses

14


-


14



19


-


19




Segment financial results


$                             2


$              -


$                             2



$                             2


$              -


$                             2




















































As Reported







As Reported














12 Weeks Ended







12 Weeks Ended














June 14, 2013







June 15, 2012



























Contract Sales


$                         8







$                       15






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























NOTE:  As a result of a realignment of our management structure, beginning with the first quarter of 2013 we no longer allocate certain general and administrative expenses to our reportable segments. Prior year reportable segment information has been adjusted to reflect this change. We have restated 2012 Cost reimbursements revenues and expenses to correct a prior period misstatement.

 

A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ASIA PACIFIC SEGMENT

24 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



















































As Reported




As Adjusted



As Reported




As Adjusted










24 Weeks Ended


Other


24 Weeks Ended



24 Weeks Ended


Other


24 Weeks Ended










June 14, 2013


Charges


June 14, 2013

**


June 15, 2012


Charges


June 15, 2012

**

Revenues


















Sale of vacation ownership products

$                           16


$              -


$                           16



$                           26


$              -


$                           26



Resort management and other services

2


-


2



2


-


2



Financing

2


-


2



2


-


2



Rental

4


-


4



3


-


3



Cost reimbursements

7


-


7



6


-


6




Total revenues

31


-


31



39


-


39


Expenses


















Cost of vacation ownership products

3


-


3



6


-


6



Marketing and sales

9


-


9



18


-


18



Resort management and other services

1


-


1



1


-


1



Rental

5


-


5



4


-


4



Royalty fee

1


-


1



1


-


1



Cost reimbursements

7


-


7



6


-


6




Total expenses

26


-


26



36


-


36




Segment financial results

$                             5


$              -


$                             5



$                             3


$              -


$                             3




















































As Reported







As Reported














24 Weeks Ended







24 Weeks Ended














June 14, 2013







June 15, 2012



























Contract Sales


$                           17







$                           28






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























NOTE:  As a result of a realignment of our management structure, beginning with the first quarter of 2013 we no longer allocate certain general and administrative expenses to our reportable segments. Prior year reportable segment information has been adjusted to reflect this change. We have restated 2012 Cost reimbursements revenues and expenses to correct a prior period misstatement.

 

A-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

12 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



























































As Reported




Europe


As Adjusted



As Reported




Europe


As Adjusted










12 Weeks Ended


Other


Rescission


12 Weeks Ended



12 Weeks Ended


Other


Rescission


12 Weeks Ended










June 14, 2013


Charges


Adjustment


June 14, 2013

**


June 15, 2012


Charges


Adjustment


June 15, 2012

**

Revenues






















Sale of vacation ownership products

$                           25


$              -


$                (17)


$                             8



$                             4


$              -


$                    4


$                             8



Resort management and other services

8


-


-


8



8


-


-


8



Financing

1


-


-


1



1


-


-


1



Rental

6


-


-


6



5


-


-


5



Cost reimbursements

6


-


-


6



6


-


-


6




Total revenues

46


-


(17)


29



24


-


4


28


Expenses






















Cost of vacation ownership products

9


-


(6)


3



2


-


1


3



Marketing and sales

7


(1)


(2)


4



7


-


-


7



Resort management and other services

7


-


-


7



7


-


-


7



Rental

5


-


-


5



5


-


-


5



Impairment

1


(1)


-


-



-


-


-


-



Cost reimbursements

6


-


-


6



6


-


-


6




Total expenses

35


(2)


(8)


25



27


-


1


28




Segment financial results


$                           11


$             2


$                  (9)


$                             4



$                            (3)


$              -


$                    3


$                              -




























































As Reported









As Reported
















12 Weeks Ended









12 Weeks Ended
















June 14, 2013









June 15, 2012

































Contract Sales


$                             7









$                           10








 

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

























NOTE:  As a result of a realignment of our management structure, beginning with the first quarter of 2013 we no longer allocate certain general and administrative expenses to our reportable segments. Prior year reportable segment information has been adjusted to reflect this change. We have restated 2012 Sale of vacation ownership products and Cost reimbursements revenues, Cost of vacation ownership products, Marketing and sales, and Cost reimbursements expenses, and Segment financial results to correct prior period misstatements.


 

A-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION

EUROPE SEGMENT

24 Weeks Ended June 14, 2013 and June 15, 2012

($ in millions)



























































As Reported




Europe


As Adjusted



As Reported




Europe


As Adjusted










24 Weeks Ended


Other


Rescission


24 Weeks Ended



24 Weeks Ended


Other


Rescission


24 Weeks Ended










June 14, 2013


Charges


Adjustment


June 14, 2013

**


June 15, 2012


Charges


Adjustment


June 15, 2012

**

Revenues






















Sale of vacation ownership products

$                           32


$              -