Marriott Vacations Worldwide (“MVW”) Reports Fourth Quarter and Full Year 2022 Financial Results and Provides 2023 Outlook
Fourth Quarter 2022 Highlights:
- Consolidated Vacation Ownership contract sales were
$454 million , a 12% increase compared to the fourth quarter of 2021, and VPG was$4,088 . The Company estimates that hurricanes negatively impacted contract sales by approximately$13 million in the fourth quarter of 2022. - Net income attributable to common shareholders was
$88 million , or$2.08 fully diluted earnings per share. - Adjusted net income attributable to common shareholders was
$115 million , or$2.74 Adjusted fully diluted earnings per share. The Company estimates that hurricanes negatively impacted Adjusted net income attributable to common shareholders by$5 million , or$0.12 per Adjusted fully diluted earnings per share. - Adjusted EBITDA was
$239 million ; excluding the impact of the Alignment (as defined below), Adjusted EBITDA increased 6% compared to the prior year fourth quarter to$232 million . The Company estimates that hurricanes negatively impacted Adjusted EBITDA by approximately$7 million in the fourth quarter of 2022. - The Company repurchased 1.2 million shares of its common stock for
$173 million during the quarter at an average price per share of$139.90 .
Full Year 2022 Highlights and 2023 Outlook:
- Consolidated Vacation Ownership contract sales were
$1.84 billion , a 34% increase compared to 2021, and VPG increased 1% to$4,421 . The Company estimates that hurricanes negatively impacted contract sales by approximately$14 million in 2022. - Net income attributable to common shareholders was
$391 million , or$8.77 fully diluted earnings per share. - Adjusted net income attributable to common shareholders was
$458 million , or$10.26 Adjusted fully diluted earnings per share. - Adjusted EBITDA was
$966 million ; excluding the impact of the Alignment (as defined below), Adjusted EBITDA was$915 million , an increase of 39% compared to the prior year. The Company estimates that hurricanes negatively impacted Adjusted EBITDA by approximately$8 million in 2022. - During 2022, the Company repurchased 5.1 million shares of its common stock for
$701 million at an average price of$137.83 and paid$99 million in dividends. - The Company expects contract sales in 2023 to grow 5% to 9% compared to the prior year and for Net income attributable to common shareholders to be
$405 million to$440 million , or$9.51 to$10.30 fully diluted earnings per share. - Excluding the impact of the Alignment (as defined below) in 2022, the Company expects Adjusted EBITDA to grow 4% to 9% in 2023 and Adjusted earnings per share - diluted to increase 14% to 23%.
“2022 was a great year for
Fourth Quarter 2022 Results:
In the third quarter of 2022, in connection with the unification of the Company’s Marriott-, Westin-, and Sheraton-branded vacation ownership products under the Abound by
In the tables below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
Consolidated
|
Three Months Ended |
|
Three |
|
Change |
|||||||||||||||||||||||||||
|
As |
|
Impact of |
|
As |
|
|
As Reported |
|
As Adjusted* |
||||||||||||||||||||||
($ in millions) |
|
|
|
|
$ |
|
% |
|
$ |
|
% |
|||||||||||||||||||||
Net income attributable to common shareholders |
$ |
88 |
|
|
$ |
(5 |
) |
|
$ |
83 |
|
|
$ |
61 |
|
|
$ |
27 |
|
45 |
% |
|
$ |
22 |
|
|
35 |
% |
||||
Adjusted net income attributable to common shareholders* |
$ |
115 |
|
|
$ |
(5 |
) |
|
$ |
110 |
|
|
$ |
103 |
|
|
$ |
12 |
|
|
12 |
% |
|
$ |
7 |
|
6 |
% |
||||
Adjusted EBITDA* |
$ |
239 |
|
|
$ |
(7 |
) |
|
$ |
232 |
|
|
$ |
219 |
|
|
$ |
20 |
|
|
10 |
% |
|
$ |
13 |
|
|
6 |
% |
|||
Adjusted EBITDA margin* |
28.7% |
|
|
|
28.2% |
|
27.4% |
|
1.3 pts |
|
0.8 pts |
Vacation Ownership
|
Three Months Ended |
|
Three |
|
Change |
|||||||||||||||||||||||||||
|
As |
|
Impact of |
|
As |
|
|
As Reported |
|
As Adjusted* |
||||||||||||||||||||||
($ in millions) |
|
|
|
|
$ |
|
% |
|
$ |
|
% |
|||||||||||||||||||||
Sale of vacation ownership products |
$ |
439 |
|
|
$ |
(12 |
) |
|
$ |
427 |
|
|
$ |
364 |
|
|
$ |
75 |
|
21 |
% |
|
$ |
63 |
|
18 |
% |
|||||
Development profit |
$ |
162 |
|
|
$ |
(7 |
) |
|
$ |
155 |
|
|
$ |
114 |
|
|
$ |
48 |
|
|
42 |
% |
|
$ |
41 |
|
|
36 |
% |
|||
Segment financial results attributable to common shareholders |
$ |
241 |
|
|
$ |
(5 |
) |
|
$ |
236 |
|
|
$ |
205 |
|
|
$ |
36 |
|
|
17 |
% |
|
$ |
31 |
|
|
14 |
% |
|||
Segment margin |
31.9% |
|
|
|
31.7% |
|
29.3% |
|
2.6 pts |
|
2.4 pts |
|||||||||||||||||||||
Segment Adjusted EBITDA* |
$ |
261 |
|
|
$ |
(7 |
) |
|
$ |
254 |
|
|
$ |
234 |
|
|
$ |
27 |
|
|
12 |
% |
|
$ |
20 |
|
|
8 |
% |
|||
Segment Adjusted EBITDA margin* |
34.6% |
|
|
|
34.2% |
|
33.4% |
|
1.2 pts |
|
0.8 pts |
Exchange & Third-Party Management
Revenues excluding cost reimbursements decreased 7% in the fourth quarter of 2022 compared to the prior year and increased 4% excluding the results of VRI Americas, which was sold in April of 2022.
Segment financial results attributable to common shareholders were
Corporate and Other
General and administrative costs were largely unchanged in the fourth quarter of 2022 compared to the prior year.
Balance Sheet and Liquidity
The Company ended the quarter with approximately
In
At the end of the fourth quarter of 2022, pro-forma for the repayment of the 2025 secured senior notes, the Company had
The Company completed its second timeshare receivable securitization of 2022 in the fourth quarter, issuing
Full Year 2023 Outlook (in millions, except per share amounts)
The Financial Schedules that follow reconcile the non-GAAP financial measures set forth below to the following full year 2023 expected GAAP results for the Company.
The Company is providing guidance for the full year 2023. In the table below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
(In millions, except per share amounts) |
2023 Guidance |
||
Contract sales |
|
to |
|
Net income attributable to common shareholders |
|
to |
|
Earnings per share - diluted |
|
to |
|
Net cash, cash equivalents, and restricted cash provided by operating activities |
|
to |
|
Adjusted EBITDA* |
|
to |
|
Adjusted earnings per share - diluted* |
|
to |
|
Adjusted free cash flow* |
|
to |
|
In calculating diluted earnings per share and Adjusted diluted earnings per share, shares issuable upon conversion of our convertible notes are assumed to be converted into common stock, to the extent dilutive, and net interest expense associated with the convertible notes is added back to the numerator of the diluted earnings per share and Adjusted diluted earnings per share calculations.
Non-GAAP Financial Information
Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the
Fourth Quarter 2022 Financial Results Conference Call
The Company will hold a conference call on
About
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 expectations for future growth and projections for full year 2023. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the continuing effects of the COVID-19 pandemic or future health crises, including quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic or future health crises, including short and longer-term impacts on consumer confidence and demand for travel, and the pace of recovery following the COVID-19 pandemic or future health crises or as effective treatments or vaccines against variants of the COVID-19 pandemic or future health crises become widely available; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price and wage inflation; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the COVID-19 pandemic or future health crises and the ongoing conflict between
Financial Schedules Follow
FINANCIAL SCHEDULES QUARTER 4, 2022
TABLE OF CONTENTS |
|
Summary Financial Information |
A-1 |
Adjusted EBITDA by Segment |
A-2 |
Consolidated Statements of Income |
A-3 |
Revenues and Profit by Segment |
A-5 |
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted |
A-9 |
Adjusted EBITDA |
A-10 |
Consolidated Contract Sales to Adjusted Development Profit |
A-11 |
Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA |
A-13 |
Cash Flow and Adjusted Free Cash Flow |
A-14 |
Consolidated Balance Sheets |
A-15 |
Consolidated Statements of Cash Flows |
A-16 |
2023 Outlook |
|
Adjusted Net Income Attributable to Common Shareholders, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA |
A-18 |
Adjusted Free Cash Flow |
A-19 |
Quarterly Operating Metrics |
A-20 |
Non-GAAP Financial Measures |
A-21 |
A-1
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts) (Unaudited) |
|||||||||||||||||||
|
Quarter Ended |
|
Change % |
|
Fiscal Year Ended |
|
Change % |
||||||||||||
|
December |
|
December |
|
|
December |
|
December |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total consolidated contract sales |
$ |
454 |
|
$ |
406 |
|
12% |
|
$ |
1,837 |
|
$ |
1,374 |
|
34% |
||||
VPG |
$ |
4,088 |
|
|
$ |
4,305 |
|
|
(5%) |
|
$ |
4,421 |
|
|
$ |
4,356 |
|
|
1% |
Tours |
|
105,231 |
|
|
|
89,495 |
|
|
18% |
|
|
390,593 |
|
|
|
299,364 |
|
|
30% |
Total active members (000's)(1) |
|
1,566 |
|
|
|
1,296 |
|
|
21% |
|
|
1,566 |
|
|
|
1,296 |
|
|
21% |
Average revenue per member(1) |
$ |
35.60 |
|
|
$ |
42.93 |
|
|
(17%) |
|
$ |
157.97 |
|
|
$ |
179.48 |
|
|
(12%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Measures |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
1,188 |
|
|
$ |
1,100 |
|
|
8% |
|
$ |
4,656 |
|
|
$ |
3,890 |
|
|
20% |
Income before income taxes and noncontrolling interests |
$ |
145 |
|
|
$ |
70 |
|
|
108% |
|
$ |
582 |
|
|
$ |
127 |
|
|
NM |
Net income attributable to common shareholders |
$ |
88 |
|
|
$ |
61 |
|
|
45% |
|
$ |
391 |
|
|
$ |
49 |
|
|
NM |
Earnings per share - diluted |
$ |
2.08 |
|
|
$ |
1.39 |
|
|
50% |
|
$ |
8.77 |
|
|
$ |
1.13 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Measures* |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
$ |
239 |
|
|
$ |
219 |
|
|
10% |
|
$ |
966 |
|
|
$ |
657 |
|
|
47% |
Adjusted pretax income |
$ |
169 |
|
|
$ |
131 |
|
|
30% |
|
$ |
677 |
|
|
$ |
296 |
|
|
128% |
Adjusted net income attributable to common shareholders |
$ |
115 |
|
|
$ |
103 |
|
|
12% |
|
$ |
458 |
|
|
$ |
190 |
|
|
140% |
Adjusted earnings per share - diluted |
$ |
2.74 |
|
|
$ |
2.38 |
|
|
15% |
|
$ |
10.26 |
|
|
$ |
4.40 |
|
|
133% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Measures, Excluding the Impact of Alignment* |
|
|
|
|
|
|
|
|
|||||||||||
Revenues |
$ |
1,176 |
|
|
$ |
1,100 |
|
|
7% |
|
$ |
4,617 |
|
|
$ |
3,890 |
|
|
19% |
Income before income taxes and noncontrolling interests |
$ |
138 |
|
|
$ |
70 |
|
|
97% |
|
$ |
531 |
|
|
$ |
127 |
|
|
NM |
Net income attributable to common shareholders |
$ |
83 |
|
|
$ |
61 |
|
|
35% |
|
$ |
353 |
|
|
$ |
49 |
|
|
NM |
Earnings per share - diluted |
$ |
1.94 |
|
|
$ |
1.39 |
|
|
40% |
|
$ |
7.94 |
|
|
$ |
1.13 |
|
|
NM |
Adjusted EBITDA |
$ |
232 |
|
|
$ |
219 |
|
|
6% |
|
$ |
915 |
|
|
$ |
657 |
|
|
39% |
Adjusted pretax income |
$ |
162 |
|
|
$ |
131 |
|
|
24% |
|
$ |
626 |
|
|
$ |
296 |
|
|
111% |
Adjusted net income attributable to common shareholders |
$ |
110 |
|
|
$ |
103 |
|
|
6% |
|
$ |
420 |
|
|
$ |
190 |
|
|
121% |
Adjusted earnings per share - diluted |
$ |
2.60 |
|
|
$ |
2.38 |
|
|
9% |
|
$ |
9.42 |
|
|
$ |
4.40 |
|
|
114% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes members at the end of each period for the |
|||||||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||||||
NM = Not meaningful. |
|||||||||||||||||||
|
A-2
(In millions) (Unaudited)
|
|||||||||||||||||||||||||||
|
Quarter Ended |
|
Quarter |
|
Change |
||||||||||||||||||||||
|
As |
|
Impact of Alignment |
|
As |
|
|
As |
|
As |
|||||||||||||||||
|
|
Revenue |
|
Reserve |
|
Combined |
|
|
|
|
|||||||||||||||||
Vacation Ownership |
$ |
261 |
|
|
$ |
(7 |
) |
|
$ |
— |
|
$ |
(7 |
) |
|
$ |
254 |
|
|
$ |
234 |
|
|
12% |
|
8% |
|
Exchange & Third-Party Management |
|
31 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
31 |
|
|
|
31 |
|
|
5% |
|
5% |
Segment Adjusted EBITDA* |
|
292 |
|
|
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
285 |
|
|
|
265 |
|
|
11% |
|
8% |
General and administrative |
|
(53 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(53 |
) |
|
|
(46 |
) |
|
(17%) |
|
(17%) |
Adjusted EBITDA* |
$ |
239 |
|
|
$ |
(7 |
) |
|
$ |
— |
|
|
$ |
(7 |
) |
|
$ |
232 |
|
|
$ |
219 |
|
|
10% |
|
6% |
|
Fiscal Year Ended |
|
Fiscal |
|
Change |
||||||||||||||||||||||
|
As Reported |
|
Impact of Alignment |
|
As Adjusted* |
|
|
As Reported |
|
As Adjusted* |
|||||||||||||||||
|
|
Revenue |
|
Reserve |
|
Combined |
|
|
|
|
|||||||||||||||||
Vacation Ownership |
$ |
1,033 |
|
|
$ |
(46 |
) |
|
$ |
(5 |
) |
|
$ |
(51 |
) |
|
$ |
982 |
|
|
$ |
699 |
|
|
48% |
|
41% |
Exchange & Third-Party Management |
|
148 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
148 |
|
|
|
144 |
|
|
3% |
|
3% |
Segment Adjusted EBITDA* |
|
1,181 |
|
|
|
(46 |
) |
|
|
(5 |
) |
|
|
(51 |
) |
|
|
1,130 |
|
|
|
843 |
|
|
40% |
|
34% |
General and administrative |
|
(215 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(215 |
) |
|
|
(186 |
) |
|
(16%) |
|
(16%) |
Adjusted EBITDA* |
$ |
966 |
|
|
$ |
(46 |
) |
|
$ |
(5 |
) |
|
$ |
(51 |
) |
|
$ |
915 |
|
|
$ |
657 |
|
|
47% |
|
39% |
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|
A-3
(In millions, except per share amounts)
|
|||||||||||||||
|
Quarter Ended |
||||||||||||||
|
|
|
|
||||||||||||
|
As |
|
Impact of |
|
As |
|
|||||||||
REVENUES |
|
|
|
|
|
|
|
||||||||
Sale of vacation ownership products |
$ |
439 |
|
|
$ |
(12 |
) |
|
$ |
427 |
|
|
$ |
364 |
|
Management and exchange |
|
204 |
|
|
|
— |
|
|
|
204 |
|
|
|
217 |
|
Rental |
|
113 |
|
|
|
— |
|
|
|
113 |
|
|
|
146 |
|
Financing |
|
76 |
|
|
|
— |
|
|
|
76 |
|
|
|
72 |
|
Cost reimbursements |
|
356 |
|
|
|
— |
|
|
|
356 |
|
|
|
301 |
|
TOTAL REVENUES |
|
1,188 |
|
|
|
(12 |
) |
|
|
1,176 |
|
|
|
1,100 |
|
EXPENSES |
|
|
|
|
|
|
|
||||||||
Cost of vacation ownership products |
|
73 |
|
|
|
(5 |
) |
|
|
68 |
|
|
|
72 |
|
Marketing and sales |
|
204 |
|
|
|
— |
|
|
|
204 |
|
|
|
178 |
|
Management and exchange |
|
114 |
|
|
|
— |
|
|
|
114 |
|
|
|
140 |
|
Rental |
|
88 |
|
|
|
— |
|
|
|
88 |
|
|
|
97 |
|
Financing |
|
26 |
|
|
|
— |
|
|
|
26 |
|
|
|
24 |
|
General and administrative |
|
62 |
|
|
|
— |
|
|
|
62 |
|
|
|
61 |
|
Depreciation and amortization |
|
34 |
|
|
|
— |
|
|
|
34 |
|
|
|
34 |
|
Litigation charges |
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
2 |
|
Royalty fee |
|
30 |
|
|
|
— |
|
|
|
30 |
|
|
|
28 |
|
Impairment |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
(2 |
) |
Cost reimbursements |
|
356 |
|
|
|
— |
|
|
|
356 |
|
|
|
301 |
|
TOTAL EXPENSES |
|
992 |
|
|
|
(5 |
) |
|
|
987 |
|
|
|
935 |
|
Gains (losses) and other income (expense), net |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
(24 |
) |
Interest expense |
|
(27 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
(36 |
) |
Transaction and integration costs |
|
(26 |
) |
|
|
— |
|
|
|
(26 |
) |
|
|
(35 |
) |
Other |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
145 |
|
|
|
(7 |
) |
|
|
138 |
|
|
|
70 |
|
Provision for income taxes |
|
(57 |
) |
|
|
2 |
|
|
|
(55 |
) |
|
|
(11 |
) |
NET INCOME (LOSS) |
|
88 |
|
|
|
(5 |
) |
|
|
83 |
|
|
|
59 |
|
Net loss attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
88 |
|
|
$ |
(5 |
) |
|
$ |
83 |
|
|
$ |
61 |
|
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
|
|
|
|
|
|
||||||||
Basic shares |
|
38.2 |
|
|
|
— |
|
|
|
38.2 |
|
|
|
42.7 |
|
Basic |
$ |
2.30 |
|
|
$ |
(0.16 |
) |
|
$ |
2.14 |
|
|
$ |
1.42 |
|
Diluted shares(1) |
|
43.0 |
|
|
|
— |
|
|
|
43.0 |
|
|
|
43.6 |
|
Diluted |
$ |
2.08 |
|
|
$ |
(0.14 |
) |
|
$ |
1.94 |
|
|
$ |
1.39 |
|
(1) Diluted shares include 4.2 million shares for the quarter-ended |
|||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars. |
A-4
(In millions, except per share amounts)
|
|||||||||||||||
|
Fiscal Year Ended |
||||||||||||||
|
|
|
|
||||||||||||
|
As |
|
Impact of |
|
As |
|
|||||||||
REVENUES |
|
|
|
|
|
|
|
||||||||
Sale of vacation ownership products |
$ |
1,618 |
|
|
$ |
(39 |
) |
|
$ |
1,579 |
|
|
$ |
1,153 |
|
Management and exchange |
|
827 |
|
|
|
— |
|
|
|
827 |
|
|
|
855 |
|
Rental |
|
551 |
|
|
|
— |
|
|
|
551 |
|
|
|
486 |
|
Financing |
|
293 |
|
|
|
— |
|
|
|
293 |
|
|
|
268 |
|
Cost reimbursements |
|
1,367 |
|
|
|
— |
|
|
|
1,367 |
|
|
|
1,128 |
|
TOTAL REVENUES |
|
4,656 |
|
|
|
(39 |
) |
|
|
4,617 |
|
|
|
3,890 |
|
EXPENSES |
|
|
|
|
|
|
|
||||||||
Cost of vacation ownership products |
|
289 |
|
|
|
(7 |
) |
|
|
282 |
|
|
|
250 |
|
Marketing and sales |
|
807 |
|
|
|
— |
|
|
|
807 |
|
|
|
617 |
|
Management and exchange |
|
444 |
|
|
|
— |
|
|
|
444 |
|
|
|
521 |
|
Rental |
|
382 |
|
|
|
— |
|
|
|
382 |
|
|
|
344 |
|
Financing |
|
75 |
|
|
|
19 |
|
|
|
94 |
|
|
|
88 |
|
General and administrative |
|
249 |
|
|
|
— |
|
|
|
249 |
|
|
|
227 |
|
Depreciation and amortization |
|
132 |
|
|
|
— |
|
|
|
132 |
|
|
|
146 |
|
Litigation charges |
|
11 |
|
|
|
— |
|
|
|
11 |
|
|
|
10 |
|
Royalty fee |
|
114 |
|
|
|
— |
|
|
|
114 |
|
|
|
106 |
|
Impairment |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
3 |
|
Cost reimbursements |
|
1,367 |
|
|
|
— |
|
|
|
1,367 |
|
|
|
1,128 |
|
TOTAL EXPENSES |
|
3,872 |
|
|
|
12 |
|
|
|
3,884 |
|
|
|
3,440 |
|
Gains (losses) and other income (expense), net |
|
40 |
|
|
|
— |
|
|
|
40 |
|
|
|
(51 |
) |
Interest expense |
|
(118 |
) |
|
|
— |
|
|
|
(118 |
) |
|
|
(164 |
) |
Transaction and integration costs |
|
(125 |
) |
|
|
— |
|
|
|
(125 |
) |
|
|
(110 |
) |
Other |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
582 |
|
|
|
(51 |
) |
|
|
531 |
|
|
|
127 |
|
(Provision for) benefit from income taxes |
|
(191 |
) |
|
|
13 |
|
|
|
(178 |
) |
|
|
(74 |
) |
NET INCOME (LOSS) |
|
391 |
|
|
|
(38 |
) |
|
|
353 |
|
|
|
53 |
|
Net income attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
391 |
|
|
$ |
(38 |
) |
|
$ |
353 |
|
|
$ |
49 |
|
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
|
|
|
|
|
|
||||||||
Basic shares |
|
40.4 |
|
|
|
— |
|
|
|
40.4 |
|
|
|
42.5 |
|
Basic |
$ |
9.69 |
|
|
$ |
(0.93 |
) |
|
$ |
8.76 |
|
|
$ |
1.15 |
|
Diluted shares(1) |
|
45.2 |
|
|
|
— |
|
|
|
45.2 |
|
|
|
43.3 |
|
Diluted |
$ |
8.77 |
|
|
$ |
(0.83 |
) |
|
$ |
7.94 |
|
|
$ |
1.13 |
|
(1) Diluted shares include 4.3 million shares for the year-ended |
|||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars. |
A-5
for the three months ended (In millions)
|
|||||||||||||||||||||||||||
|
Reportable Segment |
|
Corporate |
|
Total |
||||||||||||||||||||||
|
Vacation Ownership |
|
Exchange & |
|
|
As |
|
As |
|||||||||||||||||||
|
As |
|
Impact of |
|
As |
|
|
|
|
||||||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales of vacation ownership products |
$ |
439 |
|
|
$ |
(12 |
) |
|
$ |
427 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
439 |
|
|
$ |
427 |
|
Management and exchange(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ancillary revenues |
|
58 |
|
|
|
— |
|
|
|
58 |
|
|
|
1 |
|
|
|
— |
|
|
|
59 |
|
|
|
59 |
|
Management fee revenues |
|
42 |
|
|
|
— |
|
|
|
42 |
|
|
|
6 |
|
|
|
— |
|
|
|
48 |
|
|
|
48 |
|
Exchange and other services revenues |
|
32 |
|
|
|
— |
|
|
|
32 |
|
|
|
42 |
|
|
|
23 |
|
|
|
97 |
|
|
|
97 |
|
Management and exchange |
|
132 |
|
|
|
— |
|
|
|
132 |
|
|
|
49 |
|
|
|
23 |
|
|
|
204 |
|
|
|
204 |
|
Rental |
|
104 |
|
|
|
— |
|
|
|
104 |
|
|
|
9 |
|
|
|
— |
|
|
|
113 |
|
|
|
113 |
|
Financing |
|
76 |
|
|
|
— |
|
|
|
76 |
|
|
|
— |
|
|
|
— |
|
|
|
76 |
|
|
|
76 |
|
Cost reimbursements(1) |
|
362 |
|
|
|
— |
|
|
|
362 |
|
|
|
4 |
|
|
|
(10 |
) |
|
|
356 |
|
|
|
356 |
|
TOTAL REVENUES |
$ |
1,113 |
|
|
$ |
(12 |
) |
|
$ |
1,101 |
|
|
$ |
62 |
|
|
$ |
13 |
|
|
$ |
1,188 |
|
|
$ |
1,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
PROFIT (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Development |
$ |
162 |
|
|
$ |
(7 |
) |
|
$ |
155 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
162 |
|
|
$ |
155 |
|
Management and exchange(1) |
|
70 |
|
|
|
— |
|
|
|
70 |
|
|
|
22 |
|
|
|
(2 |
) |
|
|
90 |
|
|
|
90 |
|
Rental(1) |
|
15 |
|
|
|
— |
|
|
|
15 |
|
|
|
9 |
|
|
|
1 |
|
|
|
25 |
|
|
|
25 |
|
Financing |
|
50 |
|
|
|
— |
|
|
|
50 |
|
|
|
— |
|
|
|
— |
|
|
|
50 |
|
|
|
50 |
|
TOTAL PROFIT (LOSS) |
|
297 |
|
|
|
(7 |
) |
|
|
290 |
|
|
|
31 |
|
|
|
(1 |
) |
|
|
327 |
|
|
|
320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTHER |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(62 |
) |
|
|
(62 |
) |
|
|
(62 |
) |
Depreciation and amortization |
|
(25 |
) |
|
|
— |
|
|
|
(25 |
) |
|
|
(7 |
) |
|
|
(2 |
) |
|
|
(34 |
) |
|
|
(34 |
) |
Litigation charges |
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
Royalty fee |
|
(30 |
) |
|
|
— |
|
|
|
(30 |
) |
|
|
— |
|
|
|
— |
|
|
|
(30 |
) |
|
|
(30 |
) |
Impairment |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Gains and other income, net |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Interest expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
(27 |
) |
|
|
(27 |
) |
Transaction and integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(26 |
) |
|
|
(26 |
) |
|
|
(26 |
) |
Other |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
241 |
|
|
|
(7 |
) |
|
|
234 |
|
|
|
24 |
|
|
|
(120 |
) |
|
|
145 |
|
|
|
138 |
|
Provision for income taxes |
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
|
(57 |
) |
|
|
(57 |
) |
|
|
(55 |
) |
NET INCOME (LOSS) |
|
241 |
|
|
|
(5 |
) |
|
|
236 |
|
|
|
24 |
|
|
|
(177 |
) |
|
|
88 |
|
|
|
83 |
|
Net (income) loss attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
241 |
|
|
$ |
(5 |
) |
|
$ |
236 |
|
|
$ |
24 |
|
|
$ |
(177 |
) |
|
$ |
88 |
|
|
$ |
83 |
|
SEGMENT MARGIN(2) |
32% |
|
|
|
32% |
41% |
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||||||||||||||||||||
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues. |
|||||||||||||||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-6
REVENUES AND PROFIT BY SEGMENT for the three months ended (In millions)
|
|||||||||||||||
|
Reportable Segment |
|
Corporate |
|
Total |
||||||||||
|
Vacation |
|
Exchange & |
|
|
||||||||||
REVENUES |
|
|
|
|
|
|
|
||||||||
Sales of vacation ownership products |
$ |
364 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
364 |
|
Management and exchange(1) |
|
|
|
|
|
|
|
||||||||
Ancillary revenues |
|
53 |
|
|
|
1 |
|
|
|
— |
|
|
|
54 |
|
Management fee revenues |
|
41 |
|
|
|
8 |
|
|
|
(4 |
) |
|
|
45 |
|
Exchange and other services revenues |
|
33 |
|
|
|
45 |
|
|
|
40 |
|
|
|
118 |
|
Management and exchange |
|
127 |
|
|
|
54 |
|
|
|
36 |
|
|
|
217 |
|
Rental |
|
138 |
|
|
|
8 |
|
|
|
— |
|
|
|
146 |
|
Financing |
|
72 |
|
|
|
— |
|
|
|
— |
|
|
|
72 |
|
Cost reimbursements(1) |
|
320 |
|
|
|
9 |
|
|
|
(28 |
) |
|
|
301 |
|
TOTAL REVENUES |
$ |
1,021 |
|
|
$ |
71 |
|
|
$ |
8 |
|
|
$ |
1,100 |
|
|
|
|
|
|
|
|
|
||||||||
PROFIT |
|
|
|
|
|
|
|
||||||||
Development |
$ |
114 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
114 |
|
Management and exchange(1) |
|
63 |
|
|
|
22 |
|
|
|
(8 |
) |
|
|
77 |
|
Rental(1) |
|
32 |
|
|
|
8 |
|
|
|
9 |
|
|
|
49 |
|
Financing |
|
48 |
|
|
|
— |
|
|
|
— |
|
|
|
48 |
|
TOTAL PROFIT |
|
257 |
|
|
|
30 |
|
|
|
1 |
|
|
|
288 |
|
|
|
|
|
|
|
|
|
||||||||
OTHER |
|
|
|
|
|
|
|
||||||||
General and administrative |
|
— |
|
|
|
— |
|
|
|
(61 |
) |
|
|
(61 |
) |
Depreciation and amortization |
|
(23 |
) |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(34 |
) |
Litigation charges |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Royalty fee |
|
(28 |
) |
|
|
— |
|
|
|
— |
|
|
|
(28 |
) |
Impairment |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Gains (losses) and other income (expense), net |
|
1 |
|
|
|
— |
|
|
|
(25 |
) |
|
|
(24 |
) |
Interest expense |
|
— |
|
|
|
— |
|
|
|
(36 |
) |
|
|
(36 |
) |
Transaction and integration costs |
|
— |
|
|
|
— |
|
|
|
(35 |
) |
|
|
(35 |
) |
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
205 |
|
|
|
22 |
|
|
|
(157 |
) |
|
|
70 |
|
Provision for income taxes |
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
(11 |
) |
NET INCOME (LOSS) |
|
205 |
|
|
|
22 |
|
|
|
(168 |
) |
|
|
59 |
|
Net loss attributable to noncontrolling interests(1) |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
205 |
|
|
$ |
22 |
|
|
$ |
(166 |
) |
|
$ |
61 |
|
SEGMENT MARGIN(2) |
29% |
|
33% |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||||||||
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues. |
A-7
REVENUES AND PROFIT BY SEGMENT for the twelve months ended (In millions)
|
|||||||||||||||||||||||||||
|
Reportable Segment |
|
Corporate |
|
Total |
||||||||||||||||||||||
|
Vacation Ownership |
|
Exchange & |
|
|
As |
|
As |
|||||||||||||||||||
|
As |
|
Impact of |
|
As |
|
|
|
|
||||||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales of vacation ownership products |
$ |
1,618 |
|
|
$ |
(39 |
) |
|
$ |
1,579 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,618 |
|
|
$ |
1,579 |
|
Management and exchange(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ancillary revenues |
|
241 |
|
|
|
— |
|
|
|
241 |
|
|
|
4 |
|
|
|
— |
|
|
|
245 |
|
|
|
245 |
|
Management fee revenues |
|
166 |
|
|
|
— |
|
|
|
166 |
|
|
|
34 |
|
|
|
(5 |
) |
|
|
195 |
|
|
|
195 |
|
Exchange and other services revenues |
|
127 |
|
|
|
— |
|
|
|
127 |
|
|
|
188 |
|
|
|
72 |
|
|
|
387 |
|
|
|
387 |
|
Management and exchange |
|
534 |
|
|
|
— |
|
|
|
534 |
|
|
|
226 |
|
|
|
67 |
|
|
|
827 |
|
|
|
827 |
|
Rental |
|
509 |
|
|
|
— |
|
|
|
509 |
|
|
|
42 |
|
|
|
— |
|
|
|
551 |
|
|
|
551 |
|
Financing |
|
293 |
|
|
|
— |
|
|
|
293 |
|
|
|
— |
|
|
|
— |
|
|
|
293 |
|
|
|
293 |
|
Cost reimbursements(1) |
|
1,388 |
|
|
|
— |
|
|
|
1,388 |
|
|
|
23 |
|
|
|
(44 |
) |
|
|
1,367 |
|
|
|
1,367 |
|
TOTAL REVENUES |
$ |
4,342 |
|
|
$ |
(39 |
) |
|
$ |
4,303 |
|
|
$ |
291 |
|
|
$ |
23 |
|
|
$ |
4,656 |
|
|
$ |
4,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
PROFIT (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Development |
$ |
522 |
|
|
$ |
(32 |
) |
|
$ |
490 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
522 |
|
|
$ |
490 |
|
Management and exchange(1) |
|
294 |
|
|
|
— |
|
|
|
294 |
|
|
|
106 |
|
|
|
(17 |
) |
|
|
383 |
|
|
|
383 |
|
Rental(1) |
|
109 |
|
|
|
— |
|
|
|
109 |
|
|
|
42 |
|
|
|
18 |
|
|
|
169 |
|
|
|
169 |
|
Financing |
|
218 |
|
|
|
(19 |
) |
|
|
199 |
|
|
|
— |
|
|
|
— |
|
|
|
218 |
|
|
|
199 |
|
TOTAL PROFIT (LOSS) |
|
1,143 |
|
|
|
(51 |
) |
|
|
1,092 |
|
|
|
148 |
|
|
|
1 |
|
|
|
1,292 |
|
|
|
1,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTHER |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(249 |
) |
|
|
(249 |
) |
|
|
(249 |
) |
Depreciation and amortization |
|
(92 |
) |
|
|
— |
|
|
|
(92 |
) |
|
|
(31 |
) |
|
|
(9 |
) |
|
|
(132 |
) |
|
|
(132 |
) |
Litigation charges |
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(11 |
) |
|
|
(11 |
) |
Royalty fee |
|
(114 |
) |
|
|
— |
|
|
|
(114 |
) |
|
|
— |
|
|
|
— |
|
|
|
(114 |
) |
|
|
(114 |
) |
Impairment |
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
Gains (losses) and other income (expense), net |
|
37 |
|
|
|
— |
|
|
|
37 |
|
|
|
15 |
|
|
|
(12 |
) |
|
|
40 |
|
|
|
40 |
|
Interest expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(118 |
) |
|
|
(118 |
) |
|
|
(118 |
) |
Transaction and integration costs |
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(122 |
) |
|
|
(125 |
) |
|
|
(125 |
) |
Other |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
961 |
|
|
|
(51 |
) |
|
|
910 |
|
|
|
132 |
|
|
|
(511 |
) |
|
|
582 |
|
|
|
531 |
|
Benefit from (provision for) income taxes |
|
— |
|
|
|
13 |
|
|
|
13 |
|
|
|
— |
|
|
|
(191 |
) |
|
|
(191 |
) |
|
|
(178 |
) |
NET INCOME (LOSS) |
|
961 |
|
|
|
(38 |
) |
|
|
923 |
|
|
|
132 |
|
|
|
(702 |
) |
|
|
391 |
|
|
|
353 |
|
Net income attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
961 |
|
|
$ |
(38 |
) |
|
$ |
923 |
|
|
$ |
132 |
|
|
$ |
(702 |
) |
|
$ |
391 |
|
|
$ |
353 |
|
SEGMENT MARGIN(2) |
33% |
|
|
|
32% |
|
49% |
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||||||||||||||||||||
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues. |
|||||||||||||||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-8
REVENUES AND PROFIT BY SEGMENT for the twelve months ended (In millions)
|
|||||||||||||||
|
Reportable Segment |
|
Corporate and |
|
Total |
||||||||||
|
Vacation |
|
Exchange & |
|
|
||||||||||
REVENUES |
|
|
|
|
|
|
|
||||||||
Sales of vacation ownership products |
$ |
1,153 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,153 |
|
Management and exchange(1) |
|
|
|
|
|
|
|
||||||||
Ancillary revenues |
|
188 |
|
|
|
3 |
|
|
|
— |
|
|
|
191 |
|
Management fee revenues |
|
158 |
|
|
|
32 |
|
|
|
(19 |
) |
|
|
171 |
|
Exchange and other services revenues |
|
124 |
|
|
|
198 |
|
|
|
171 |
|
|
|
493 |
|
Management and exchange |
|
470 |
|
|
|
233 |
|
|
|
152 |
|
|
|
855 |
|
Rental |
|
446 |
|
|
|
40 |
|
|
|
— |
|
|
|
486 |
|
Financing |
|
268 |
|
|
|
— |
|
|
|
— |
|
|
|
268 |
|
Cost reimbursements(1) |
|
1,202 |
|
|
|
47 |
|
|
|
(121 |
) |
|
|
1,128 |
|
TOTAL REVENUES |
$ |
3,539 |
|
|
$ |
320 |
|
|
$ |
31 |
|
|
$ |
3,890 |
|
|
|
|
|
|
|
|
|
||||||||
PROFIT |
|
|
|
|
|
|
|
||||||||
Development |
$ |
286 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
286 |
|
Management and exchange(1) |
|
270 |
|
|
|
102 |
|
|
|
(38 |
) |
|
|
334 |
|
Rental(1) |
|
52 |
|
|
|
40 |
|
|
|
50 |
|
|
|
142 |
|
Financing |
|
180 |
|
|
|
— |
|
|
|
— |
|
|
|
180 |
|
TOTAL PROFIT |
|
788 |
|
|
|
142 |
|
|
|
12 |
|
|
|
942 |
|
|
|
|
|
|
|
|
|
||||||||
OTHER |
|
|
|
|
|
|
|
||||||||
General and administrative |
|
— |
|
|
|
— |
|
|
|
(227 |
) |
|
|
(227 |
) |
Depreciation and amortization |
|
(89 |
) |
|
|
(48 |
) |
|
|
(9 |
) |
|
|
(146 |
) |
Litigation charges |
|
(9 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(10 |
) |
Restructuring |
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
— |
|
Royalty fee |
|
(106 |
) |
|
|
— |
|
|
|
— |
|
|
|
(106 |
) |
Impairment |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(3 |
) |
Gains (losses) and other income (expense), net |
|
1 |
|
|
|
— |
|
|
|
(52 |
) |
|
|
(51 |
) |
Interest expense |
|
— |
|
|
|
— |
|
|
|
(164 |
) |
|
|
(164 |
) |
Transaction and integration costs |
|
(2 |
) |
|
|
— |
|
|
|
(108 |
) |
|
|
(110 |
) |
Other |
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS |
|
585 |
|
|
|
93 |
|
|
|
(551 |
) |
|
|
127 |
|
Provision for income taxes |
|
— |
|
|
|
— |
|
|
|
(74 |
) |
|
|
(74 |
) |
NET INCOME (LOSS) |
|
585 |
|
|
|
93 |
|
|
|
(625 |
) |
|
|
53 |
|
Net income attributable to noncontrolling interests(1) |
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
(4 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
585 |
|
|
$ |
93 |
|
|
$ |
(629 |
) |
|
$ |
49 |
|
SEGMENT MARGIN(2) |
25% |
|
34% |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. |
|||||||||||||||
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues. |
A-9
ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED (In millions, except per share amounts)
|
|||||||||||||||
|
Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders |
$ |
88 |
|
|
$ |
61 |
|
|
$ |
391 |
|
|
$ |
49 |
|
Provision for income taxes |
|
57 |
|
|
|
11 |
|
|
|
191 |
|
|
|
74 |
|
Income before income taxes attributable to common shareholders |
|
145 |
|
|
|
72 |
|
|
|
582 |
|
|
|
123 |
|
Certain items: |
|
|
|
|
|
|
|
||||||||
ILG integration |
|
15 |
|
|
$ |
29 |
|
|
$ |
82 |
|
|
$ |
93 |
|
Welk acquisition and integration |
|
4 |
|
|
|
8 |
|
|
|
14 |
|
|
|
16 |
|
|
|
3 |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
Other transformation initiatives |
|
4 |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
Other transaction costs |
|
— |
|
|
|
(2 |
) |
|
|
3 |
|
|
|
1 |
|
Transaction and integration costs |
|
26 |
|
|
|
35 |
|
|
|
125 |
|
|
|
110 |
|
Early redemption of senior unsecured notes |
|
— |
|
|
|
19 |
|
|
|
— |
|
|
|
55 |
|
Gain on disposition of hotel |
|
— |
|
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|
Gain on disposition of VRI Americas |
|
— |
|
|
|
— |
|
|
|
(17 |
) |
|
|
— |
|
Foreign currency translation |
|
— |
|
|
|
4 |
|
|
|
10 |
|
|
|
— |
|
Insurance proceeds |
|
(1 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Change in indemnification asset |
|
1 |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
(7 |
) |
Other |
|
(1 |
) |
|
|
2 |
|
|
|
3 |
|
|
|
3 |
|
(Gains) losses and other (income) expense, net |
|
(1 |
) |
|
|
24 |
|
|
|
(40 |
) |
|
|
51 |
|
Purchase accounting adjustments |
|
(2 |
) |
|
|
3 |
|
|
|
11 |
|
|
|
10 |
|
Litigation charges |
|
4 |
|
|
|
2 |
|
|
|
11 |
|
|
|
10 |
|
Impairment |
|
1 |
|
|
|
(2 |
) |
|
|
2 |
|
|
|
3 |
|
Expiration/forfeiture of deposits on pre-acquisition preview packages |
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Early termination of VRI management contract |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
Eliminate impact of Consolidated Property Owners' Associations |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(8 |
) |
Change in estimate relating to pre-acquisition contingencies |
|
(7 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
Other |
|
3 |
|
|
|
— |
|
|
|
6 |
|
|
|
(3 |
) |
Adjusted pretax income* |
|
169 |
|
|
|
131 |
|
|
|
677 |
|
|
|
296 |
|
Provision for income taxes |
|
(54 |
) |
|
|
(28 |
) |
|
|
(219 |
) |
|
|
(106 |
) |
Adjusted net income attributable to common shareholders* |
$ |
115 |
|
|
$ |
103 |
|
|
$ |
458 |
|
|
$ |
190 |
|
Diluted shares(1) |
|
43.0 |
|
|
|
43.6 |
|
|
|
45.2 |
|
|
|
43.3 |
|
Adjusted earnings per share - Diluted* |
$ |
2.74 |
|
|
$ |
2.38 |
|
|
$ |
10.26 |
|
|
$ |
4.40 |
|
Excluding the Impact of Alignment: |
|
|
|
|
|
|
|
||||||||
Adjusted net income attributable to common shareholders* |
$ |
110 |
|
|
$ |
103 |
|
|
$ |
421 |
|
|
$ |
190 |
|
Adjusted earnings per share - Diluted* |
$ |
2.60 |
|
|
$ |
2.38 |
|
|
$ |
9.42 |
|
|
$ |
4.40 |
|
(1) Diluted shares include 4.2 million and 4.3 million shares for the quarter and year-ended |
|||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-10
ADJUSTED EBITDA (In millions)
|
|||||||||||||||
|
Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
88 |
|
|
$ |
61 |
|
|
$ |
391 |
|
|
$ |
49 |
|
Interest expense |
|
27 |
|
|
|
36 |
|
|
|
118 |
|
|
|
164 |
|
Provision for income taxes |
|
57 |
|
|
|
11 |
|
|
|
191 |
|
|
|
74 |
|
Depreciation and amortization |
|
34 |
|
|
|
34 |
|
|
|
132 |
|
|
|
146 |
|
Share-based compensation |
|
9 |
|
|
|
18 |
|
|
|
39 |
|
|
|
51 |
|
Certain items: |
|
|
|
|
|
|
|
||||||||
ILG integration |
|
15 |
|
|
$ |
29 |
|
|
$ |
82 |
|
|
$ |
93 |
|
Welk acquisition and integration |
|
4 |
|
|
|
8 |
|
|
|
14 |
|
|
|
16 |
|
|
|
3 |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
Other transformation initiatives |
|
4 |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
Other transaction costs |
|
— |
|
|
|
(2 |
) |
|
|
3 |
|
|
|
1 |
|
Transaction and integration costs |
|
26 |
|
|
|
35 |
|
|
|
125 |
|
|
|
110 |
|
Early redemption of senior unsecured notes |
|
— |
|
|
|
19 |
|
|
|
— |
|
|
|
55 |
|
Gain on disposition of hotel |
|
— |
|
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|
Gain on disposition of VRI Americas |
|
— |
|
|
|
— |
|
|
|
(17 |
) |
|
|
— |
|
Foreign currency translation |
|
— |
|
|
|
4 |
|
|
|
10 |
|
|
|
— |
|
Insurance proceeds |
|
(1 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Change in indemnification asset |
|
1 |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
(7 |
) |
Other |
|
(1 |
) |
|
|
2 |
|
|
|
3 |
|
|
|
3 |
|
(Gains) losses and other (income) expense, net |
|
(1 |
) |
|
|
24 |
|
|
|
(40 |
) |
|
|
51 |
|
Purchase accounting adjustments |
|
(2 |
) |
|
|
3 |
|
|
|
11 |
|
|
|
10 |
|
Litigation charges |
|
4 |
|
|
|
2 |
|
|
|
11 |
|
|
|
10 |
|
Impairment |
|
1 |
|
|
|
(2 |
) |
|
|
2 |
|
|
|
3 |
|
Expiration/forfeiture of deposits on pre-acquisition preview packages |
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Early termination of VRI management contract |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
Eliminate impact of Consolidated Property Owners' Associations |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(8 |
) |
Change in estimate relating to pre-acquisition contingencies |
|
(7 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
Other |
|
3 |
|
|
|
— |
|
|
|
6 |
|
|
|
(3 |
) |
ADJUSTED EBITDA* |
$ |
239 |
|
|
$ |
219 |
|
|
$ |
966 |
|
|
$ |
657 |
|
ADJUSTED EBITDA MARGIN* |
29% |
|
27% |
|
29% |
|
24% |
||||||||
|
|
|
|
|
|
|
|
||||||||
Excluding the Impact of Alignment: |
|
|
|
|
|
|
|
||||||||
ADJUSTED EBITDA* |
$ |
232 |
|
|
$ |
219 |
|
|
$ |
915 |
|
|
$ |
657 |
|
ADJUSTED EBITDA MARGIN* |
28% |
|
27% |
|
28% |
|
24% |
||||||||
|
|
|
|
|
|
|
|
||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-11
CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited)
|
|||||||||||||||
|
Quarter Ended |
||||||||||||||
|
|
|
|
||||||||||||
|
As |
|
Impact of |
|
As |
|
|||||||||
Consolidated contract sales |
$ |
454 |
|
|
$ |
— |
|
|
$ |
454 |
|
|
$ |
406 |
|
Less resales contract sales |
|
(10 |
) |
|
|
— |
|
|
|
(10 |
) |
|
|
(7 |
) |
Consolidated contract sales, net of resales |
|
444 |
|
|
|
— |
|
|
|
444 |
|
|
|
399 |
|
Plus: |
|
|
|
|
|
|
|
||||||||
Settlement revenue |
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
|
7 |
|
Resales revenue |
|
7 |
|
|
|
— |
|
|
|
7 |
|
|
|
4 |
|
Revenue recognition adjustments: |
|
|
|
|
|
|
|
||||||||
Reportability |
|
36 |
|
|
|
(12 |
) |
|
|
24 |
|
|
|
7 |
|
Sales reserve |
|
(40 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
(28 |
) |
Other(1) |
|
(18 |
) |
|
|
— |
|
|
|
(18 |
) |
|
|
(25 |
) |
Sale of vacation ownership products |
|
439 |
|
|
|
(12 |
) |
|
|
427 |
|
|
|
364 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Cost of vacation ownership products |
|
(73 |
) |
|
|
5 |
|
|
|
(68 |
) |
|
|
(72 |
) |
Marketing and sales |
|
(204 |
) |
|
|
— |
|
|
|
(204 |
) |
|
|
(178 |
) |
Development Profit (Loss) |
|
162 |
|
|
|
(7 |
) |
|
|
155 |
|
|
|
114 |
|
Revenue recognition reportability adjustment |
|
(27 |
) |
|
|
7 |
|
|
|
(20 |
) |
|
|
(6 |
) |
Purchase accounting adjustments |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
3 |
|
Other |
|
(8 |
) |
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
Adjusted development profit* |
$ |
126 |
|
|
$ |
— |
|
|
$ |
126 |
|
|
$ |
111 |
|
Development profit margin |
36.8% |
|
|
|
36.2 % |
|
31.3 % |
||||||||
Adjusted development profit margin* |
31.5% |
|
|
|
31.5% |
|
31.1% |
||||||||
|
|
|
|
|
|
|
|
||||||||
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. |
|||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-12
CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited)
|
|||||||||||||||
|
Fiscal Year Ended |
||||||||||||||
|
|
|
|
||||||||||||
|
As |
|
Impact of |
|
As |
|
|||||||||
Consolidated contract sales |
$ |
1,837 |
|
|
$ |
— |
|
|
$ |
1,837 |
|
|
$ |
1,374 |
|
Less resales contract sales |
|
(40 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
(26 |
) |
Consolidated contract sales, net of resales |
|
1,797 |
|
|
|
— |
|
|
|
1,797 |
|
|
|
1,348 |
|
Plus: |
|
|
|
|
|
|
|
||||||||
Settlement revenue |
|
36 |
|
|
|
— |
|
|
|
36 |
|
|
|
28 |
|
Resales revenue |
|
20 |
|
|
|
— |
|
|
|
20 |
|
|
|
12 |
|
Revenue recognition adjustments: |
|
|
|
|
|
|
|
||||||||
Reportability |
|
43 |
|
|
|
(58 |
) |
|
|
(15 |
) |
|
|
(44 |
) |
Sales reserve |
|
(170 |
) |
|
|
19 |
|
|
|
(151 |
) |
|
|
(101 |
) |
Other(1) |
|
(108 |
) |
|
|
— |
|
|
|
(108 |
) |
|
|
(90 |
) |
Sale of vacation ownership products |
|
1,618 |
|
|
|
(39 |
) |
|
|
1,579 |
|
|
|
1,153 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Cost of vacation ownership products |
|
(289 |
) |
|
|
7 |
|
|
|
(282 |
) |
|
|
(250 |
) |
Marketing and sales |
|
(807 |
) |
|
|
— |
|
|
|
(807 |
) |
|
|
(617 |
) |
Development Profit (Loss) |
|
522 |
|
|
|
(32 |
) |
|
|
490 |
|
|
|
286 |
|
Revenue recognition reportability adjustment |
|
(35 |
) |
|
|
46 |
|
|
|
11 |
|
|
|
32 |
|
Purchase accounting adjustments |
|
13 |
|
|
|
— |
|
|
|
13 |
|
|
|
12 |
|
Other |
|
(13 |
) |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
Adjusted development profit* |
$ |
487 |
|
|
$ |
14 |
|
|
$ |
501 |
|
|
$ |
330 |
|
Development profit margin |
32.2% |
|
|
|
31.0% |
|
24.8% |
||||||||
Adjusted development profit margin* |
31.0% |
|
|
|
31.5% |
|
27.6% |
||||||||
|
|
|
|
|
|
|
|
||||||||
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. |
|||||||||||||||
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
A-13
(In millions) (Unaudited)
|
|||||||||||||||
|
Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ |
241 |
|
|
$ |
205 |
|
|
$ |
961 |
|
|
$ |
585 |
|
Depreciation and amortization |
|
25 |
|
|
|
23 |
|
|
|
92 |
|
|
|
89 |
|
Share-based compensation expense |
|
2 |
|
|
|
2 |
|
|
|
7 |
|
|
|
6 |
|
Certain items: |
|
|
|
|
|
|
|
||||||||
Transaction and integration costs |
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
2 |
|
Gain on disposition of hotel |
|
— |
|
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|