Marriott Vacations Worldwide Reports Third Quarter 2015 Financial Results

Oct 15, 2015

Marriott Vacations Worldwide Reports Third Quarter 2015 Financial Results 586.4 KB

ORLANDO, Fla., Oct. 15, 2015 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported third quarter 2015 financial results and provided updated guidance for the full year 2015.

Third quarter 2015 highlights:

Adjusted EBITDA totaled $51.7 million.
Adjusted fully diluted earnings per share (EPS) was $0.82, up from $0.81 in the third quarter of 2014.
North America contract sales, excluding residential sales, were $142.8 million.
Company adjusted development margin was 21.2 percent and North America adjusted development margin was 23.1 percent.
Resort management and other services revenues net of expenses totaled $26.4 million, up $3.3 million from the third quarter of 2014.
Rental revenues net of expenses totaled $13.5 million, up $2.5 million from the third quarter of 2014.
During the third quarter of 2015, the company repurchased $39.9 million of its common stock, bringing total 2015 repurchases through the end of the third quarter to $106.1 million.
In August 2015, the company completed a securitization of $264 million of vacation ownership notes receivable at a blended borrowing rate of 2.56 percent, generating gross proceeds of $255 million.

Third quarter 2015 net income was $21.6 million, or $0.67 diluted EPS, compared to net income of $25.6 million, or $0.75 diluted EPS, in the third quarter of 2014. Company development margin was 17.8 percent and North America development margin was 20.0 percent in the third quarter of 2015.

Non-GAAP financial measures such as adjusted EBITDA, adjusted net income, adjusted earnings per share and adjusted development margin are reconciled and adjustments are shown and described in further detail on pages A-1 through A-19 of the Financial Schedules that follow.

"On an overall basis, we are pleased with our third quarter financial results, delivering nearly $52 million of Adjusted EBITDA," said Stephen P. Weisz, president and chief executive officer. "While our development business in the quarter was negatively impacted by a stronger U.S. dollar and unfavorable revenue reportability, our rentals, resort management and financing businesses remained strong. Excluding the impact of revenue reportability in the quarter, Adjusted EBITDA would have been nearly $59 million. Even with the headwinds from the stronger U.S dollar, we expect full year Adjusted EBITDA to be at the high end of our guidance of $222 million to $232 million, demonstrating the strength of our diversified business model."

Third Quarter 2015 Results

Company Results

Total company contract sales, excluding residential sales, were $159.8 million, $7.5 million lower than the third quarter of last year. The decrease was driven by $5.4 million of lower contract sales in the company's North America segment, $1.2 million of lower contract sales in the company's Europe segment and $0.9 million of lower contract sales in the company's Asia Pacific segment.

Adjusted development margin was $31.3 million, a $4.8 million decrease from the third quarter of 2014. Adjusted development margin percentage was 21.2 percent in the third quarter of 2015 compared to 22.6 percent in the third quarter of 2014. Development margin was $24.4 million, a $9.0 million decrease from the third quarter of 2014. Development margin percentage was 17.8 percent in the third quarter of 2015 compared to 21.5 percent in the third quarter of 2014.

Rental revenues totaled $76.0 million, a $10.4 million increase from the third quarter of 2014, reflecting a 6 percent increase in transient keys rented, $4.3 million from revenue associated with operating hotels in San Diego and Surfers Paradise, Australia prior to conversion to timeshare, and higher plus points revenue. Rental revenues, net of expenses, were $13.5 million, a $2.5 million increase from the third quarter of 2014.

Resort management and other services revenues totaled $73.8 million, a $2.8 million increase from the third quarter of 2014. Resort management and other services revenues, net of expenses, were $26.4 million, a $3.3 million, or 14 percent, increase over the third quarter of 2014.

Financing revenues totaled $28.3 million, a $1.3 million decrease from the third quarter of 2014. Financing revenues, net of expenses and consumer financing interest expense, were $17.5 million, a $1.0 million decrease from the third quarter of 2014.

Adjusted EBITDA was $51.7 million in the third quarter of 2015, a $2.3 million, or 4.3 percent, decrease from $54.0 million in the third quarter of 2014. Excluding the impact of unfavorable revenue reportability in both years, Adjusted EBITDA would have been $58.6 million in the third quarter of 2015, a $1.8 million, or 3.2 percent, increase from $56.8 million in the third quarter of 2014.

Segment Results

North America

North America contract sales, excluding residential sales, were $142.8 million in the third quarter of 2015, a decrease of $5.4 million, or 3.6 percent, from the prior year period, driven by a stronger U.S. dollar that negatively impacted sales to Latin American and Japanese customers at certain sales locations by nearly $7 million year-over-year.

VPG decreased 1.4 percent to $3,428 in the third quarter of 2015 from $3,477 in the third quarter of 2014, driven by fewer points purchased per contract, offset partially by higher pricing and improved closing efficiency. Tours decreased 1.3 percent year-over-year.

Third quarter 2015 North America segment financial results were $85.3 million, a decrease of $0.7 million from the third quarter of 2014. The decrease was driven primarily by $9.2 million of lower development margin and $1.1 million of lower financing revenues, offset partially by $3.3 million of higher resort management and other services revenues net of expenses, $3.1 million of higher rental revenues net of expenses, and $3.0 million related to a litigation settlement in the prior year period.

Adjusted development margin was $30.6 million, a $5.6 million decrease from the prior year quarter. Adjusted development margin percentage was 23.1 percent in the third quarter of 2015 compared to 25.5 percent in the third quarter of 2014. Development margin was $24.5 million, a $9.2 million decrease from the third quarter of 2014. Development margin percentage was 20.0 percent in the third quarter of 2015 compared to 24.4 percent in the prior year quarter.

Asia Pacific

Total contract sales in the segment were $6.9 million, a decrease of $0.9 million in the third quarter of 2015. Segment financial results were a loss of $4.1 million, a $5.1 million decrease from the third quarter of 2014, reflecting $4.2 million of transaction costs associated with the purchase of an operating Marriott hotel in Surfers Paradise, Australia. The company plans to convert a portion of this hotel into vacation ownership interests for future use and to sell the remaining downsized hotel to a third party.

Europe

Third quarter 2015 contract sales were $10.1 million, a decrease of $1.2 million from the third quarter of 2014. Segment financial results were $6.2 million, a $0.5 million decrease from the third quarter of 2014 due to lower development margin from lower contract sales and lower rental revenues net of expenses.

Share Repurchase Program

During the third quarter of 2015, the company purchased 479,612 shares of its common stock for a total of nearly $40 million under its share repurchase program. In total for 2015, through the end of the third quarter, the company repurchased approximately $106.1 million of its common stock.

On October 12, 2015, the Board of Directors authorized the company to repurchase up to 2.0 million additional shares of its common stock under its share repurchase program. Combined with the shares not yet purchased under its previous authorization, the company is authorized to purchase up to 3.6 million shares.

Balance Sheet and Liquidity

On September 11, 2015, cash and cash equivalents totaled $321.7 million. Since the beginning of the year, real estate inventory balances declined $52.3 million to $716.0 million, including $351.9 million of finished goods and $364.1 million of land and infrastructure. The company had $780.2 million in gross debt outstanding at the end of the third quarter of 2015, an increase of $68.8 million from year-end 2014, consisting primarily of $776.6 million in gross non-recourse securitized notes. In addition, $40.0 million of gross mandatorily redeemable preferred stock of a subsidiary of the company was outstanding at the end of the third quarter of 2015.

In August 2015, the company completed a securitization of $264 million of vacation ownership notes receivable at a blended borrowing rate of 2.56 percent and an advance rate of 96.5 percent. Approximately $211 million of the vacation ownership notes receivable were purchased on August 13, 2015 by the MVW Owner Trust 2015-1 (the "2015-1 Trust"), and all or a portion of the remaining vacation ownership notes receivable may be purchased by the 2015-1 Trust prior to December 31, 2015. This transaction generated approximately $255 million of gross cash proceeds, of which $51 million will be held in restricted cash until the remaining notes are purchased during the fourth quarter. Approximately $6 million was used to pay transaction expenses and fund required reserves and the remainder will be used for general corporate purposes.

As of September 11, 2015, the company had approximately $197 million in available capacity under its revolving credit facility after taking into account outstanding letters of credit.

Outlook

The company is reaffirming the following guidance for the full year 2015:

Adjusted EBITDA	$222 million to $232 million
Adjusted net income	$108 million to $114 million
Adjusted company development margin	21 percent to 22 percent
Adjusted free cash flow	$175 million to $200 million

The company is providing the following updated guidance for the full year 2015:

	Current Guidance	Previous Guidance
Company contract sales growth (excluding residential)	0 percent to 2 percent	5 percent to 8 percent
Adjusted fully diluted earnings per share	$3.33 to $3.52	$3.29 to $3.48

Pages A-1 through A-19 of the Financial Schedules reconcile the non-GAAP financial measures set forth above to the following full year 2015 expected GAAP results: net income of $112 million to $119 million; fully diluted EPS of $3.46 to $3.68; company development margin of 21.1 percent to 22.1 percent; and net cash provided by operating activities of $165 million to $185 million.

Third Quarter 2015 Earnings Conference Call

The company will hold a conference call at 10:00 a.m. EST today to discuss these results and the updated guidance for full year 2015. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the company's website at www.marriottvacationsworldwide.com.

An audio replay of the conference call will be available for seven days and can be accessed at (877) 660-6853 or (201) 612-7415 for international callers. The conference ID for the recording is 13620306. The webcast will also be available on the company's website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global pure-play vacation ownership company, offering a diverse portfolio of quality products, programs and management expertise with 61 resorts. Its brands include Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott. Since entering the industry in 1984 as part of Marriott International, Inc., the company earned its position as a leader and innovator in vacation ownership products. The company preserves high standards of excellence in serving its customers, investors and associates while maintaining a long-term relationship with Marriott International. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements about future operating results, estimates, and assumptions, and similar statements concerning anticipated future events and expectations that are not historical facts. The company cautions you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including volatility in the economy and the credit markets, supply and demand changes for vacation ownership and residential products, competitive conditions, the availability of capital to finance growth, and other matters referred to under the heading "Risk Factors" contained in the company's most recent Annual Report on Form 10-K filed with the U.S Securities and Exchange Commission (the "SEC") and in subsequent SEC filings, any of which could cause actual results to differ materially from those expressed in or implied in this press release. These statements are made as of October 15, 2015 and the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Financial Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION

FINANCIAL SCHEDULES

QUARTER 3, 2015

TABLE OF CONTENTS

Consolidated Statements of Income - 12 Weeks Ended September 11, 2015 and September 12, 2014

A-1

Consolidated Statements of Income - 36 Weeks Ended September 11, 2015 and September 12, 2014

A-2

North America Segment Financial Results - 12 Weeks Ended September 11, 2015 and September 12, 2014

A-3

North America Segment Financial Results - 36 Weeks Ended September 11, 2015 and September 12, 2014

A-4

Asia Pacific Segment Financial Results - 12 Weeks Ended September 11, 2015 and September 12, 2014

A-5

Asia Pacific Segment Financial Results - 36 Weeks Ended September 11, 2015 and September 12, 2014

A-6

Europe Segment Financial Results - 12 Weeks Ended September 11, 2015 and September 12, 2014

A-7

Europe Segment Financial Results - 36 Weeks Ended September 11, 2015 and September 12, 2014

A-8

Corporate and Other Financial Results - 12 Weeks and 36 Weeks Ended September 11, 2015 and September 12, 2014

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 September 11, 2015 and September 12, 2014

A-10

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

(Adjusted Sale of Vacation Ownership Products Net of Expenses) - 36 Weeks Ended September 11, 2015 and September 12, 2014

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 September 11, 2015 and September 12, 2014

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) - 36 Weeks Ended September 11, 2015 and September 12, 2014

A-13

EBITDA and Adjusted EBITDA - 12 Weeks and 36 Weeks Ended September 11, 2015 and September 12, 2014

A-14

2015 Outlook - Adjusted Net Income and Adjusted Earnings Per Share - Diluted, Adjusted EBITDA and Adjusted Development Margin

A-15

2015 Outlook - Adjusted Free Cash Flow and Normalized Adjusted Free Cash Flow

A-16

Non-GAAP Financial Measures

A-17

Consolidated Balance Sheets

A-20

Consolidated Statements of Cash Flows

A-21

A-1
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
12 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands, except per share amounts)

				As Reported		As Adjusted		As Reported		As Adjusted
				12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
				September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products			$ 136,802	$ -	$ 136,802		$ 155,384	$ -	$ 155,384
	Resort management and other services			73,828	-	73,828		70,981	-	70,981
	Financing			28,294	-	28,294		29,545	-	29,545
	Rental			76,039	-	76,039		65,620	-	65,620
	Cost reimbursements			92,173	-	92,173		91,508	-	91,508
			Total revenues	407,136	-	407,136		413,038	-	413,038
Expenses
	Cost of vacation ownership products			40,776	-	40,776		48,640	-	48,640
	Marketing and sales			71,628	-	71,628		73,380	-	73,380
	Resort management and other services			47,409	-	47,409		47,857	-	47,857
	Financing			5,488	-	5,488		5,434	-	5,434
	Rental			62,567	-	62,567		54,605	-	54,605
	General and administrative			23,214	(1,767)	21,447		21,932	-	21,932
	Litigation settlement			-	-	-		3,225	(3,225)	-
	Organizational and separation related			439	(439)	-		332	(332)	-
	Consumer financing interest			5,289	-	5,289		5,605	-	5,605
	Royalty fee			14,000	-	14,000		14,339	-	14,339
	Impairment			-	-	-		26	(26)	-
	Cost reimbursements			92,173	-	92,173		91,508	-	91,508
			Total expenses	362,983	(2,206)	360,777		366,883	(3,583)	363,300
(Losses) gains and other (expense) income				(20)	20	-		207	(207)	-
Interest expense				(2,839)	-	(2,839)		(2,890)	-	(2,890)
Equity in earnings				50	-	50		38	-	38
Other				(5,181)	5,181	-		-	-	-
			Income before income taxes	36,163	7,407	43,570		43,510	3,376	46,886
Provision for income taxes				(14,608)	(2,491)	(17,099)		(17,862)	(1,299)	(19,161)
Net income				$ 21,555	$ 4,916	$ 26,471		$ 25,648	$ 2,077	$ 27,725

Earnings per share - Basic				$ 0.69		$ 0.84		$ 0.77		$ 0.83

Earnings per share - Diluted				$ 0.67		$ 0.82		$ 0.75		$ 0.81

Basic Shares				31,455		31,455		33,374		33,374
Diluted Shares				32,128		32,128		34,366		34,366

				As Reported				As Reported
				12 Weeks Ended				12 Weeks Ended
				September 11, 2015				September 12, 2014
Contract Sales
		Vacation ownership		$ 159,757				$ 167,245
		Residential products		-				4,488
			Total contract sales	$ 159,757				$ 171,733

** Denotes non-GAAP financial measures. Please see pages A-17 through A-19 for additional information about our reasons for providing these alternative financial measures and limitations on their use.

NOTE: Earnings per share - Basic and Earnings per share - Diluted are calculated using whole dollars. Beginning with the fourth quarter of 2014, we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-2
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
36 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands, except per share amounts)

					As Reported		As Adjusted		As Reported		As Adjusted
					36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
					September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products				$ 476,078	$ (28,420)	$ 447,658		$ 452,796	$ -	$ 452,796
	Resort management and other services				212,308	-	212,308		209,348	-	209,348
	Financing				85,640	-	85,640		90,002	-	90,002
	Rental				224,880	-	224,880		190,972	-	190,972
	Cost reimbursements				285,937	-	285,937		281,769	-	281,769
				Total revenues	1,284,843	(28,420)	1,256,423		1,224,887	-	1,224,887
Expenses
	Cost of vacation ownership products				150,857	(21,583)	129,274		138,925	-	138,925
	Marketing and sales				228,760	(922)	227,838		216,827	(287)	216,540
	Resort management and other services				135,298	-	135,298		141,061	200	141,261
	Financing				16,478	-	16,478		15,976	-	15,976
	Rental				184,560	-	184,560		166,386	-	166,386
	General and administrative				68,883	(1,767)	67,116		66,913	-	66,913
	Litigation settlement				(236)	236	-		(4,350)	4,350	-
	Organizational and separation related				732	(732)	-		2,272	(2,272)	-
	Consumer financing interest				16,558	-	16,558		17,967	-	17,967
	Royalty fee				40,431	-	40,431		41,420	-	41,420
	Impairment				-	-	-		860	(860)	-
	Cost reimbursements				285,937	-	285,937		281,769	-	281,769
				Total expenses	1,128,258	(24,768)	1,103,490		1,086,026	1,131	1,087,157
Gains and other income					9,492	(9,492)	-		1,849	(1,849)	-
Interest expense					(8,822)	-	(8,822)		(7,638)	-	(7,638)
Equity in earnings					148	-	148		156	-	156
Other					(6,453)	6,453	-		-	-	-
				Income before income taxes	150,950	(6,691)	144,259		133,228	(2,980)	130,248
Provision for income taxes					(61,300)	1,288	(60,012)		(52,969)	1,238	(51,731)
Net income					$ 89,650	$ (5,403)	$ 84,247		$ 80,259	$ (1,742)	$ 78,517

Earnings per share - Basic					$ 2.81		$ 2.64		$ 2.35		$ 2.30

Earnings per share - Diluted					$ 2.75		$ 2.59		$ 2.28		$ 2.23

Basic Shares					31,870		31,870		34,180		34,180
Diluted Shares					32,550		32,550		35,161		35,161

					As Reported				As Reported
					36 Weeks Ended				36 Weeks Ended
					September 11, 2015				September 12, 2014
Contract Sales
		Vacation ownership			$ 495,645				$ 487,082
		Residential products			28,420				10,814
			Total contract sales		$ 524,065				$ 497,896

A-3
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA SEGMENT
12 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


					As Reported		As Adjusted		As Reported		As Adjusted
					12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
					September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products				$ 122,908	$ -	$ 122,908		$ 138,179	$ -	$ 138,179
	Resort management and other services				64,437	-	64,437		61,956	-	61,956
	Financing				26,399	-	26,399		27,519	-	27,519
	Rental				65,135	-	65,135		55,216	-	55,216
	Cost reimbursements				83,561	-	83,561		81,031	-	81,031
				Total revenues	362,440	-	362,440		363,901	-	363,901
Expenses
	Cost of vacation ownership products				35,736	-	35,736		41,394	-	41,394
	Marketing and sales				62,652	-	62,652		63,092	-	63,092
	Resort management and other services				39,175	-	39,175		40,021	-	40,021
	Rental				53,742	-	53,742		46,962	-	46,962
	Litigation settlement				-	-	-		2,975	(2,975)	-
	Organizational and separation related				59	(59)	-		120	(120)	-
	Royalty fee				2,228	-	2,228		2,529	-	2,529
	Impairment				-	-	-		26	(26)	-
	Cost reimbursements				83,561	-	83,561		81,031	-	81,031
				Total expenses	277,153	(59)	277,094		278,150	(3,121)	275,029
(Losses) gains and other (expense) income					(4)	4	-		207	(207)	-
Equity in earnings					54	-	54		50	-	50
				Segment financial results	$ 85,337	$ 63	$ 85,400		$ 86,008	$ 2,914	$ 88,922

					As Reported				As Reported
					12 Weeks Ended				12 Weeks Ended
					September 11, 2015				September 12, 2014
Contract Sales
		Vacation ownership			$ 142,787				$ 148,154
		Residential products			-				4,488
			Total contract sales		$ 142,787				$ 152,642

NOTE: Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-4
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA SEGMENT
36 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


					As Reported		As Adjusted		As Reported		As Adjusted
					36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
					September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products				$ 406,784	$ -	$ 406,784		$ 404,111	$ -	$ 404,111
	Resort management and other services				189,206	-	189,206		184,596	-	184,596
	Financing				79,809	-	79,809		83,887	-	83,887
	Rental				202,606	-	202,606		168,943	-	168,943
	Cost reimbursements				260,452	-	260,452		251,616	-	251,616
				Total revenues	1,138,857	-	1,138,857		1,093,153	-	1,093,153
Expenses
	Cost of vacation ownership products				117,071	-	117,071		120,332	-	120,332
	Marketing and sales				199,506	-	199,506		187,501	-	187,501
	Resort management and other services				115,244	-	115,244		119,637	-	119,637
	Rental				163,481	-	163,481		145,984	-	145,984
	Litigation settlement				(370)	370	-		(4,600)	4,600	-
	Organizational and separation related				313	(313)	-		525	(525)	-
	Royalty fee				5,174	-	5,174		6,026	-	6,026
	Impairment				-	-	-		860	(860)	-
	Cost reimbursements				260,452	-	260,452		251,616	-	251,616
				Total expenses	860,871	57	860,928		827,881	3,215	831,096
Gains and other income					9,534	(9,534)	-		1,897	(1,897)	-
Equity in earnings					156	-	156		170	-	170
				Segment financial results	$ 287,676	$ (9,591)	$ 278,085		$ 267,339	$ (5,112)	$ 262,227

					As Reported				As Reported
					36 Weeks Ended				36 Weeks Ended
					September 11, 2015				September 12, 2014
Contract Sales
		Vacation ownership			$ 449,385				$ 433,928
		Residential products			-				10,814
			Total contract sales		$ 449,385				$ 444,742

NOTE: Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-5
MARRIOTT VACATIONS WORLDWIDE CORPORATION
ASIA PACIFIC SEGMENT
12 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


					As Reported		As Adjusted		As Reported		As Adjusted
					12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
					September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products				$ 6,303	$ -	$ 6,303		$ 7,641	$ -	$ 7,641
	Resort management and other services				2,212	-	2,212		891	-	891
	Financing				1,008	-	1,008		1,038	-	1,038
	Rental				2,569	-	2,569		1,573	-	1,573
	Cost reimbursements				609	-	609		703	-	703
				Total revenues	12,701	-	12,701		11,846	-	11,846
Expenses
	Cost of vacation ownership products				1,432	-	1,432		1,959	-	1,959
	Marketing and sales				4,022	-	4,022		4,526	-	4,526
	Resort management and other services				2,264	-	2,264		695	-	695
	Rental				4,129	-	4,129		2,762	-	2,762
	Royalty fee				139	-	139		159	-	159
	Cost reimbursements				609	-	609		703	-	703
				Total expenses	12,595	-	12,595		10,804	-	10,804
Gains and other income					1	(1)	-		-	-	-
Equity in earnings					(4)	-	(4)		(12)	-	(12)
Other					(4,159)	4,159	-		-	-	-
				Segment financial results	$ (4,056)	$ 4,158	$ 102		$ 1,030	$ -	$ 1,030


					As Reported				As Reported
					12 Weeks Ended				12 Weeks Ended
Contract Sales					September 11, 2015				September 12, 2014
		Vacation ownership			$ 6,877				$ 7,784
		Residential products			-				-
			Total contract sales		$ 6,877				$ 7,784

NOTE: Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-6
MARRIOTT VACATIONS WORLDWIDE CORPORATION
ASIA PACIFIC SEGMENT
36 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


					As Reported		As Adjusted		As Reported		As Adjusted
					36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
					September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products				$ 50,156	$ (28,420)	$ 21,736		$ 21,863	$ -	$ 21,863
	Resort management and other services				4,039	-	4,039		2,723	-	2,723
	Financing				3,057	-	3,057		3,142	-	3,142
	Rental				6,424	-	6,424		5,129	-	5,129
	Cost reimbursements				2,107	-	2,107		2,366	-	2,366
				Total revenues	65,783	(28,420)	37,363		35,223	-	35,223
Expenses
	Cost of vacation ownership products				25,231	(21,583)	3,648		5,459	-	5,459
	Marketing and sales				14,011	(922)	13,089		12,547	-	12,547
	Resort management and other services				3,769	-	3,769		2,037	-	2,037
	Rental				9,419	-	9,419		8,294	-	8,294
	Royalty fee				446	-	446		483	-	483
	Cost reimbursements				2,107	-	2,107		2,366	-	2,366
				Total expenses	54,983	(22,505)	32,478		31,186	-	31,186
Losses and other expense					(29)	29	-		(8)	8	-
Equity in earnings					(8)	-	(8)		(14)	-	(14)
Other					(5,431)	5,431	-		-	-	-
				Segment financial results	$ 5,332	$ (455)	$ 4,877		$ 4,015	$ 8	$ 4,023


					As Reported				As Reported
					36 Weeks Ended				36 Weeks Ended
Contract Sales					September 11, 2015				September 12, 2014
		Vacation ownership			$ 23,528				$ 21,744
		Residential products			28,420				-
			Total contract sales		$ 51,948				$ 21,744

NOTE: Asia Pacific segment revenues and expenses for the twelve weeks ended March 28, 2014 have been restated to reclassify a portion of Cost reimbursements from the Asia Pacific segment to the Europe segment to correct certain immaterial prior period errors. Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-7
MARRIOTT VACATIONS WORLDWIDE CORPORATION
EUROPE SEGMENT
12 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


			As Reported		As Adjusted		As Reported		As Adjusted
			12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
			September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products		$ 7,591	$ -	$ 7,591		$ 9,564	$ -	$ 9,564
	Resort management and other services		7,179	-	7,179		8,134	-	8,134
	Financing		887	-	887		988	-	988
	Rental		8,335	-	8,335		8,831	-	8,831
	Cost reimbursements		8,003	-	8,003		9,774	-	9,774
		Total revenues	31,995	-	31,995		37,291	-	37,291
Expenses
	Cost of vacation ownership products		2,070	-	2,070		2,888	-	2,888
	Marketing and sales		4,954	-	4,954		5,762	-	5,762
	Resort management and other services		5,970	-	5,970		7,141	-	7,141
	Rental		4,696	-	4,696		4,881	-	4,881
	Royalty fee		126	-	126		144	-	144
	Cost reimbursements		8,003	-	8,003		9,774	-	9,774
		Total expenses	25,819	-	25,819		30,590	-	30,590
Losses and other expense			(17)	17	-		-	-	-
		Segment financial results	$ 6,159	$ 17	$ 6,176		$ 6,701	$ -	$ 6,701


			As Reported				As Reported
			12 Weeks Ended				12 Weeks Ended
			September 11, 2015				September 12, 2014
Contract Sales			$ 10,093				$ 11,307

NOTE: Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-8 MARRIOTT VACATIONS WORLDWIDE CORPORATION EUROPE SEGMENT 36 Weeks Ended September 11, 2015 and September 12, 2014 (In thousands)


			As Reported		As Adjusted		As Reported		As Adjusted
			36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
			September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Revenues
	Sale of vacation ownership products		$ 19,138	$ -	$ 19,138		$ 26,822	$ -	$ 26,822
	Resort management and other services		19,063	-	19,063		22,029	-	22,029
	Financing		2,774	-	2,774		2,973	-	2,973
	Rental		15,850	-	15,850		16,900	-	16,900
	Cost reimbursements		23,378	-	23,378		27,787	-	27,787
		Total revenues	80,203	-	80,203		96,511	-	96,511
Expenses
	Cost of vacation ownership products		4,155	-	4,155		6,723	-	6,723
	Marketing and sales		15,243	-	15,243		16,779	(287)	16,492
	Resort management and other services		16,285	-	16,285		19,387	200	19,587
	Rental		11,660	-	11,660		12,108	-	12,108
	Royalty fee		290	-	290		426	-	426
	Cost reimbursements		23,378	-	23,378		27,787	-	27,787
		Total expenses	71,011	-	71,011		83,210	(87)	83,123
Losses and other expense			(13)	13	-		(39)	39	-
		Segment financial results	$ 9,179	$ 13	$ 9,192		$ 13,262	$ 126	$ 13,388


			As Reported				As Reported
			36 Weeks Ended				36 Weeks Ended
			September 11, 2015				September 12, 2014
Contract Sales			$ 22,732				$ 31,410

NOTE: Europe segment revenues and expenses for the twelve weeks ended March 28, 2014 have been restated to reclassify a portion of Cost reimbursements from the Asia Pacific segment to the Europe segment to correct certain immaterial prior period errors. Beginning with the fourth quarter of 2014 we have combined results from Other into Resort management and other services and have recast prior year presentation for consistency.

A-9
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CORPORATE AND OTHER
12 Weeks and 36 Weeks Ended September 11, 2015 and September 12, 2014
(In thousands)


			As Reported		As Adjusted		As Reported		As Adjusted
			12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
			September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Expenses
	Cost of vacation ownership products		$ 1,538	$ -	$ 1,538		$ 2,399	$ -	$ 2,399
	Financing		5,488	-	5,488		5,434	-	5,434
	General and administrative		23,214	(1,767)	21,447		21,932	-	21,932
	Litigation settlement		-	-	-		250	(250)	-
	Organizational and separation related		380	(380)	-		212	(212)	-
	Consumer financing interest		5,289	-	5,289		5,605	-	5,605
	Royalty fee		11,507	-	11,507		11,507	-	11,507
		Total expenses	47,416	(2,147)	45,269		47,339	(462)	46,877
Interest expense			(2,839)	-	(2,839)		(2,890)	-	(2,890)
Other			(1,022)	1,022	-		-	-	-
		Financial results	$ (51,277)	$ 3,169	$ (48,108)		$ (50,229)	$ 462	$ (49,767)


			As Reported		As Adjusted		As Reported		As Adjusted
			36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
			September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**
Expenses
	Cost of vacation ownership products		$ 4,400	$ -	$ 4,400		$ 6,411	$ -	$ 6,411
	Financing		16,478	-	16,478		15,976	-	15,976
	General and administrative		68,883	(1,767)	67,116		66,913	-	66,913
	Litigation settlement		134	(134)	-		250	(250)	-
	Organizational and separation related		419	(419)	-		1,747	(1,747)	-
	Consumer financing interest		16,558	-	16,558		17,967	-	17,967
	Royalty fee		34,521	-	34,521		34,485	-	34,485
		Total expenses	141,393	(2,320)	139,073		143,749	(1,997)	141,752
Interest expense			(8,822)	-	(8,822)		(7,638)	-	(7,638)
Other			(1,022)	1,022	-		-	-	-
		Financial results	$ (151,237)	$ 3,342	$ (147,895)		$ (151,389)	$ 1,999	$ (149,390)

NOTE: Corporate and Other consists of results not specifically attributable to an individual segment, including expenses incurred to support our financing operations, non-capitalizable development expenses supporting overall company development, company-wide general and administrative costs, and the fixed royalty fee payable under the license agreements that we entered into with Marriott International in connection with the spin-off, as well as consumer financing interest expense.

A-10
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)

			12 Weeks Ended
			September 11, 2015	September 12, 2014

Contract sales
	Vacation ownership		$ 159,757	$ 167,245
	Residential products		-	4,488
		Total contract sales	159,757	171,733

Revenue recognition adjustments:
	Reportability¹		(11,051)	(4,503)
	Sales Reserve²		(7,600)	(7,310)
	Other³		(4,304)	(4,536)
Sale of vacation ownership products			$ 136,802	$ 155,384

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

² Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.

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


MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES) (In thousands)


				Revenue					Revenue
		As Reported		Recognition	As Adjusted		As Reported		Recognition	As Adjusted
		12 Weeks Ended	Certain	Reportability	12 Weeks Ended		12 Weeks Ended	Certain	Reportability	12 Weeks Ended
		September 11, 2015	Charges	Adjustment	September 11, 2015	**	September 12, 2014	Charges	Adjustment	September 12, 2014	**
Sale of vacation ownership products		$ 136,802	$ -	$ 11,051	$ 147,853		$ 155,384	$ -	$ 4,503	$ 159,887
Less:
	Cost of vacation ownership products	40,776	-	3,137	43,913		48,640	-	1,329	49,969
	Marketing and sales	71,628	-	986	72,614		73,380	-	385	73,765

Development margin		$ 24,398	$ -	$ 6,928	$ 31,326		$ 33,364	$ -	$ 2,789	$ 36,153


	Development margin percentage¹	17.8%			21.2%		21.5%			22.6%

¹ Development margin percentage represents Development margin divided by Sale of vacation ownership products. Development margin percentage is calculated using whole dollars.

A-11
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)

			36 Weeks Ended
			September 11, 2015	September 12, 2014

Contract sales
	Vacation ownership		$ 495,645	$ 487,082
	Residential products		28,420	10,814
		Total contract sales	524,065	497,896

Revenue recognition adjustments:
	Reportability¹		(11,124)	(8,228)
	Sales Reserve²		(23,146)	(23,008)
	Other³		(13,717)	(13,864)
Sale of vacation ownership products			$ 476,078	$ 452,796


¹ Adjustment for lack of required downpayment or contract sales in rescission period.
² Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.
³ Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES) (In thousands)
				Revenue					Revenue
		As Reported		Recognition	As Adjusted		As Reported		Recognition	As Adjusted
		36 Weeks Ended	Certain	Reportability	36 Weeks Ended		36 Weeks Ended	Certain	Reportability	36 Weeks Ended
		September 11, 2015	Charges	Adjustment	September 11, 2015	**	September 12, 2014	Charges	Adjustment	September 12, 2014	**
Sale of vacation ownership products		$ 476,078	$ (28,420)	$ 11,124	$ 458,782		$ 452,796	$ -	$ 8,228	$ 461,024
Less:
	Cost of vacation ownership products	150,857	(21,583)	3,235	132,509		138,925	-	2,545	141,470
	Marketing and sales	228,760	(922)	934	228,772		216,827	(287)	638	217,178

Development margin		$ 96,461	$ (5,915)	$ 6,955	$ 97,501		$ 97,044	$ 287	$ 5,045	$ 102,376


	Development margin percentage¹	20.3%			21.3%		21.4%			22.2%

¹ Development margin percentage represents Development margin divided by Sale of vacation ownership products. Development margin percentage is calculated using whole dollars.

A-12
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)

			12 Weeks Ended
			September 11, 2015	September 12, 2014

Contract sales
	Vacation ownership		$ 142,787	$ 148,154
	Residential products		-	4,488
		Total contract sales	142,787	152,642

Revenue recognition adjustments:
	Reportability¹		(9,849)	(4,104)
	Sales Reserve ²		(5,901)	(5,867)
	Other ³		(4,129)	(4,492)
Sale of vacation ownership products			$ 122,908	$ 138,179


¹ Adjustment for lack of required downpayment or contract sales in rescission period.
² Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.
³ Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

MARRIOTT VACATIONS WORLDWIDE CORPORATION NORTH AMERICA ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES) (In thousands)
				Revenue					Revenue
		As Reported		Recognition	As Adjusted		As Reported		Recognition	As Adjusted
		12 Weeks Ended	Certain	Reportability	12 Weeks Ended		12 Weeks Ended	Certain	Reportability	12 Weeks Ended
		September 11, 2015	Charges	Adjustment	September 11, 2015	**	September 12, 2014	Charges	Adjustment	September 12, 2014	**
Sale of vacation ownership products		$ 122,908	$ -	$ 9,849	$ 132,757		$ 138,179	$ -	$ 4,104	$ 142,283
Less:
	Cost of vacation ownership products	35,736	-	2,808	38,544		41,394	-	1,191	42,585
	Marketing and sales	62,652	-	925	63,577		63,092	-	385	63,477

Development margin		$ 24,520	$ -	$ 6,116	$ 30,636		$ 33,693	$ -	$ 2,528	$ 36,221


	Development margin percentage¹	20.0%			23.1%		24.4%			25.5%

¹ Development margin percentage represents Development margin divided by Sale of vacation ownership products. Development margin percentage is calculated using whole dollars.

A-13
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)

			36 Weeks Ended
			September 11, 2015	September 12, 2014

Contract sales
	Vacation ownership		$ 449,385	$ 433,928
	Residential products		-	10,814
		Total contract sales	449,385	444,742

Revenue recognition adjustments:
	Reportability¹		(11,351)	(8,296)
	Sales Reserve ²		(17,886)	(18,618)
	Other ³		(13,364)	(13,717)
Sale of vacation ownership products			$ 406,784	$ 404,111

¹ Adjustment for lack of required downpayment or contract sales in rescission period.
² Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.
³ Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.

MARRIOTT VACATIONS WORLDWIDE CORPORATION NORTH AMERICA ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES) (In thousands)

				Revenue					Revenue
		As Reported		Recognition	As Adjusted		As Reported		Recognition	As Adjusted
		36 Weeks Ended	Certain	Reportability	36 Weeks Ended		36 Weeks Ended	Certain	Reportability	36 Weeks Ended
		September 11, 2015	Charges	Adjustment	September 11, 2015	**	September 12, 2014	Charges	Adjustment	September 12, 2014	**
Sale of vacation ownership products		$ 406,784	$ -	$ 11,351	$ 418,135		$ 404,111	$ -	$ 8,296	$ 412,407
Less:
	Cost of vacation ownership products	117,071	-	3,235	120,306		120,332	-	2,509	122,841
	Marketing and sales	199,506	-	1,067	200,573		187,501	-	779	188,280

Development margin		$ 90,207	$ -	$ 7,049	$ 97,256		$ 96,278	$ -	$ 5,008	$ 101,286


	Development margin percentage¹	22.2%			23.3%		23.8%			24.6%

¹ Development margin percentage represents Development margin divided by Sale of vacation ownership products. Development margin percentage is calculated using whole dollars.

A-14 MARRIOTT VACATIONS WORLDWIDE CORPORATION EBITDA AND ADJUSTED EBITDA 12 Weeks and 36 Weeks Ended September 11, 2015 and September 12, 2014 (In thousands)

		As Reported		As Adjusted		As Reported		As Adjusted
		12 Weeks Ended	Certain	12 Weeks Ended		12 Weeks Ended	Certain	12 Weeks Ended
		September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**


Net income		$ 21,555	$ 4,916	$ 26,471		$ 25,648	$ 2,077	$ 27,725
Interest expense¹		2,839	-	2,839		2,890	-	2,890
Tax provision		14,608	2,491	17,099		17,862	1,299	19,161
Depreciation and amortization		5,292	-	5,292		4,261	-	4,261
	EBITDA **	$ 44,294	$ 7,407	$ 51,701		$ 50,661	$ 3,376	$ 54,037




		As Reported		As Adjusted		As Reported		As Adjusted
		36 Weeks Ended	Certain	36 Weeks Ended		36 Weeks Ended	Certain	36 Weeks Ended
		September 11, 2015	Charges	September 11, 2015	**	September 12, 2014	Charges	September 12, 2014	**


Net income		$ 89,650	$ (5,403)	$ 84,247		$ 80,259	$ (1,742)	$ 78,517
Interest expense¹		8,822	-	8,822		7,638	-	7,638
Tax provision		61,300	(1,288)	60,012		52,969	(1,238)	51,731
Depreciation and amortization		13,850	-	13,850		13,183	-	13,183
	EBITDA **	$ 173,622	$ (6,691)	$ 166,931		$ 154,049	$ (2,980)	$ 151,069

** Denotes non-GAAP financial measures. Please see pages A-17 through A-19 for additional information about our reasons for providing these alternative financial measures and limitations on their use

¹ Interest expense excludes consumer financing interest expense

A-15 MARRIOTT VACATIONS WORLDWIDE CORPORATION 2015 ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK (In millions, except per share amounts)
		Fiscal Year 2015 (low)	Fiscal Year 2015 (high)
Net income		$ 112	$ 119
	Adjustments to reconcile Net income to Adjusted net income
	Organizational and separation related and other charges¹	11	10
	Gain on dispositions ²	(10)	(10)
	Bulk sales ³	(6)	(6)
	Provision for income taxes on adjustments to net income	1	1
	Adjusted net income**	$ 108	$ 114

	Earnings per share - Diluted ⁴	$ 3.46	$ 3.68
	Adjusted earnings per share - Diluted**^{, 4}	$ 3.33	$ 3.52
	Diluted shares⁴	32.4	32.4

¹ Organizational and separation related and other charges adjustment includes $2.1 million for organizational and separation related efforts, $1.8 million for refurbishment costs at a project in our North America segment, and $6 million to $7 million of non-capitalizable transaction costs.

² Gain on dispositions adjustment includes a $0.9 million gain associated with the sale of a golf course and adjacent undeveloped land and an $8.7 million gain on the sale of undeveloped land in our North America segment.

³ Bulk sales adjustment includes the net $5.9 million of pre-tax income associated with the sale of the 18 units in the Asia Pacific segment.

⁴Earnings per share - Diluted, Adjusted earnings per share - Diluted, and Diluted shares outlook includes the impact of share repurchase activity only through September 11, 2015.



MARRIOTT VACATIONS WORLDWIDE CORPORATION 2015 ADJUSTED EBITDA OUTLOOK (In millions)

		Fiscal Year 2015 (low)	Fiscal Year 2015 (high)
Adjusted net income **		$ 108	$ 114
Interest expense¹		12	12
Tax provision		81	85
Depreciation and amortization		21	21
	Adjusted EBITDA**	$ 222	$ 232



MARRIOTT VACATIONS WORLDWIDE CORPORATION 2015 ADJUSTED DEVELOPMENT MARGIN OUTLOOK

				Total MVW
				Fiscal Year 2015 (low)	Fiscal Year 2015 (high)
Development margin¹				21.1%	22.1%
	Adjustments to reconcile Development margin to Adjusted development margin
		Revenue recognition reportability		(0.1%)	(0.1%)
			Adjusted development margin**^{, 1}	21.0%	22.0%

¹ Development margin represents Development margin dollars divided by Sale of vacation ownership products revenues. Development margin is calculated using whole dollars.

A-16 MARRIOTT VACATIONS WORLDWIDE CORPORATION 2015 ADJUSTED FREE CASH FLOW AND NORMALIZED ADJUSTED FREE CASH FLOW OUTLOOK (In millions)

				Current Guidance
				Low	High	Mid-Point	Adjustments		Normalized
Adjusted net income **				$ 108	$ 114	$ 111	$ -		$ 111
	Adjustments to reconcile Adjusted net income to net cash
	provided by operating activities:
		Adjustments for non-cash items¹		75	78	77	-		77
		Deferred income taxes / income taxes payable		12	16	14	-		14
		Net changes in assets and liabilities:
			Notes receivable originations	(305)	(310)	(308)	-		(308)
			Notes receivable collections	270	274	272	20	⁶	292
			Inventory	55	60	58	(68)	⁷	(10)
			Purchase of operating hotels for future conversion to inventory²	(62)	(62)	(62)	62	²	-
			Liability for Marriott Rewards customer loyalty program	(20)	(20)	(20)	20	⁸	-
			Organizational and separation related and other charges	(5)	(5)	(5)	5	⁹	-
			Other working capital changes	37	40	39	(24)	¹⁰	15
Net cash provided by operating activities				165	185	176	15		191
	Capital expenditures for property and equipment (excluding inventory):
		New sales centers ³		(13)	(12)	(13)	13	³	-
		Organizational and separation related capital expenditures		(3)	(3)	(3)	3	⁹	-
		Other		(24)	(22)	(23)	3	¹¹	(20)
		Investment in operating portion of Surfers Paradise hotel that will be sold ⁴		(47)	(47)	(47)	47	⁴	-
	Decrease in restricted cash			3	4	4	-		4
	Borrowings from securitization transactions			253	257	255	(45)	¹²	210
	Repayment of debt related to securitizations			(255)	(259)	(257)	-		(257)
			Free cash flow**	79	103	92	36		128
Adjustments:
	Organizational and separation related and other charges			8	8	8	(8)	⁹	-
	Proceeds from sale of operating portion of Surfers Paradise hotel⁴			47	47	47	(47)	⁴	-
	Net change in borrowings available from the securitization of eligible vacation			41	42	42	-		42
		ownership notes receivable through the warehouse credit facility ⁵
			Adjusted free cash flow**	$ 175	$ 200	$ 189	$ (19)		$ 170

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

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

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

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

⁵ Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable through the warehouse credit facility between the 2014 and 2015 year ends.

⁶ Represents normalized notes receivable collections.

⁷ Represents adjustment to align real estate inventory spending with real estate inventory costs (i.e., product costs).

⁸ Represents payment for Marriott Rewards Points issued prior to the Spin-off. Liability to be fully paid in 2016.

⁹ Represents costs associated with organizational and separation related efforts.

¹⁰ Represents normalized other working capital changes.

¹¹ Represents normalized capital expenditures for property and equipment.

¹² Represents normalized borrowings from securitization transactions.

A-17

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

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

Adjusted Net Income. We evaluate non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, and Adjusted Development Margin, that exclude certain items and gains (losses) and other income (expense) in the 12 weeks and 36 weeks ended September 11, 2015 and September 12, 2014 because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of certain items and gains (losses) and other income (expense). These non-GAAP financial measures also facilitate our comparison of results from our on-going core operations before certain items and gains (losses) and other income (expense) with results from other vacation ownership companies.

Certain items - 12 weeks and 36 weeks ended September 11, 2015. In our Statement of Income for the 12 weeks ended September 11, 2015, we recorded $7.4 million of net pre-tax items, which included a $4.2 million adjustment for transaction costs in our Asia Pacific segment and a $1.0 million adjustment for transaction costs in our Corporate and Other segment, both recorded under the "Other" caption, a $1.8 million adjustment for refurbishment costs at a project in our North America segment, and $0.4 million of organizational and separation related costs recorded under the "Organizational and separation related" caption. In our Statement of Income for the 36 weeks ended September 11, 2015, we recorded $2.8 million of net pre-tax items, which included a $28.4 million adjustment to exclude the bulk sale of 18 units in our Asia Pacific segment recorded under the "Sale of vacation ownership products" caption, with corresponding adjustments of $21.6 million and $0.9 million to the "Cost of vacation ownership products" and Marketing and sales" captions, respectively, a $5.4 million adjustment for transaction costs in our Asia Pacific segment and a $1.0 million adjustment for transaction costs in our Corporate and Other segment, both recorded under the "Other" caption, a $1.8 million adjustment for refurbishment costs at a project in our North America segment, $0.7 million of organizational and separation related costs recorded under the "Organizational and separation related" caption and less than $0.1 million of net litigation related matters recorded under the "Litigation settlement" caption, and a $0.3 million reversal of an accrual associated with a 2014 golf course disposition recorded under the "Litigation settlement" caption because actual costs were lower than expected.

Certain items - 12 weeks and 36 weeks ended September 12, 2014. In our Statement of Income for the 12 weeks ended September 12, 2014, we recorded $3.6 million of net pre-tax items, which included a $3.0 million accrual for a litigation settlement in our North America segment and a $0.3 million accrual for a litigation settlement in our Corporate and Other segment, both recorded under the "Litigation settlement" caption, $0.3 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, and less than a $0.1 million impairment charge associated with a project in our North America segment recorded under the "Impairment" caption. In our Statement of Income for the 36 weeks ended September 12, 2014, we recorded $1.1 million of net pre-tax income, which included $7.6 million of income associated with the settlement of a dispute with a former service provider in our North America segment recorded under the "Litigation settlement" caption and a $0.2 million reversal of a severance accrual in our Europe segment recorded under the "Resort management and other services" caption because actual costs were lower than expected, partially offset by a $3.0 million accrual for a litigation settlement in our North America segment and a $0.3 million accrual for a litigation settlement in our Corporate and other segment, both recorded under the "Litigation settlement" caption, $2.3 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, a $0.9 million impairment charge associated with a project in our North America segment recorded under the "Impairment" caption and $0.3 million of severance charges in our Europe segment recorded under the "Marketing and sales" caption.

A-18

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

Gains (losses) and other income (expense) - 12 weeks and 36 weeks ended September 11, 2015. In our Statement of Income for the 12 weeks ended September 11, 2015, we recorded net losses and other expense of less than $0.1 million on the "(Losses) gains and other (expense) income" caption. In our Statement of Income for the 36 weeks ended September 11, 2015, we recorded $9.5 million of net gains associated with the sale of undeveloped land and the sale of a golf course and adjacent undeveloped land in our North America segment under the "Gains and other income" caption.

Gains (losses) and other income (expense) - 12 weeks and 36 weeks ended September 12, 2014. In our Statement of Income for the 12 weeks ended September 12, 2014, we recorded a $0.2 million gain associated with the sale of a golf course and adjacent undeveloped land in our North America segment under the "(Losses) gains and other (expense) income" caption. In our Statement of Income for the 36 weeks ended September 12, 2014, we recorded $1.8 million of net gains associated with the sale of a golf course and adjacent undeveloped land, the sale of an undeveloped parcel of land, and the disposition of a project, all of which occurred in our North America segment and were recorded under the "Gains and other income" caption.

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

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). EBITDA is defined as earnings, or net income, before interest expense (excluding consumer financing interest expense), provision for income taxes, depreciation and amortization. For purposes of our EBITDA calculation (which previously adjusted for consumer financing interest expense), we do not adjust for consumer financing interest expense because the associated debt is secured by vacation ownership notes receivable that have been sold to bankruptcy remote special purpose entities and is generally non-recourse to us. Further, we consider consumer financing interest expense to be an operating expense of our business.

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

Adjusted EBITDA. We also evaluate Adjusted EBITDA, which reflects additional adjustments for certain items and gains (losses) and other income (expense), as itemized in the discussion of Adjusted Net Income above. We evaluate Adjusted EBITDA as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of certain items and gains (losses) and other income (expense). Together, EBITDA and Adjusted EBITDA facilitate our comparison of results from our on-going core operations before the impact of certain items and gains (losses) and other income (expense) with results from other vacation ownership companies.

A-19

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

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

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

Normalized Adjusted Free Cash Flow. We also evaluate Normalized Adjusted Free Cash Flow as a liquidity measure that provides useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment, changes in restricted cash, the borrowing and repayment activity related to our securitizations, and adjustments to remove the impact of cash flow items not expected to occur on a regular basis. Adjustments eliminate the impact of excess cash taxes, payments for Marriott Rewards Points issued prior to the Spin-off, payments for organizational and separation related efforts, litigation cash settlements and other working capital changes. We consider Normalized Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including acquisitions and strengthening the balance sheet. Analysis of Normalized Adjusted Free Cash Flow also facilitates management's comparison of our results with our competitors' results.

A-20
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

	(unaudited)
	September 11, 2015	January 2, 2015
ASSETS
Cash and cash equivalents	$ 321,690	$ 346,515
Restricted cash (including $93,803 and $34,986 from VIEs, respectively)	121,752	109,907
Accounts and contracts receivable, net (including $4,211 and $4,992 from VIEs, respectively)	128,321	109,700
Vacation ownership notes receivable, net (including $704,349 and $750,680 from VIEs, respectively)	887,456	917,228
Inventory	721,664	772,784
Property and equipment	247,317	147,379
Other	98,827	127,066
Total Assets	$ 2,527,027	$ 2,530,579

LIABILITIES AND EQUITY
Accounts payable	$ 77,516	$ 114,079
Advance deposits	66,436	60,192
Accrued liabilities (including $1,635 and $1,088 from VIEs, respectively)	150,928	165,969
Deferred revenue	44,499	38,818
Payroll and benefits liability	87,871	93,073
Liability for Marriott Rewards customer loyalty program	73,904	89,285
Deferred compensation liability	48,468	41,677
Mandatorily redeemable preferred stock of consolidated subsidiary, net	38,935	38,816
Debt, net (including $776,648 and $708,031 from VIEs, respectively)	769,716	703,013
Other	38,239	27,071
Deferred taxes	94,544	78,883
Total Liabilities	1,491,056	1,450,876

Preferred stock - $.01 par value; 2,000,000 shares authorized; none issued or outstanding	-	-
Common stock - $.01 par value; 100,000,000 shares authorized; 36,355,412 and 36,089,513 shares
issued, respectively	363	361
Treasury stock - at cost; 5,294,063 and 3,996,725 shares, respectively	(335,339)	(229,229)
Additional paid-in capital	1,138,049	1,137,785
Accumulated other comprehensive income	13,305	17,054
Retained earnings	219,593	153,732
Total Equity	1,035,971	1,079,703

Total Liabilities and Equity	$ 2,527,027	$ 2,530,579

The abbreviation VIEs above means Variable Interest Entities.

A-21
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		36 weeks ended
		September 11, 2015	September 12, 2014
OPERATING ACTIVITIES
Net income		$89,650	$80,259
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation	13,850	13,183
	Amortization of debt issuance costs	3,739	3,762
	Provision for loan losses	22,753	22,725
	Share-based compensation	9,633	9,354
	Deferred income taxes	17,261	29,523
	Equity method income	(148)	(156)
	Gain on disposal of property and equipment, net	(9,492)	(1,849)
	Non-cash litigation settlement	(262)	-
	Impairment charges	-	860
	Net change in assets and liabilities:
	Accounts and contracts receivable	(17,799)	(8,609)
	Notes receivable originations	(189,029)	(169,784)
	Notes receivable collections	192,852	203,728
	Inventory	51,467	61,740
	Purchase of operating hotels for future conversion to inventory	(61,554)	-
	Other assets	26,524	45,650
	Accounts payable, advance deposits and accrued liabilities	(52,380)	(67,160)
	Deferred revenue	5,742	4,228
	Payroll and benefit liabilities	(4,959)	(4,855)
	Liability for Marriott Rewards customer loyalty program	(15,384)	(22,737)
	Deferred compensation liability	6,791	3,340
	Other liabilities	6,236	3,196
	Other, net	5,233	80
Net cash provided by operating activities		100,724	206,478
INVESTING ACTIVITIES
	Capital expenditures for property and equipment (excluding inventory)	(20,873)	(7,753)
	Purchase of operating hotel to be sold	(47,658)	-
	(Increase) decrease in restricted cash	(12,616)	20,656
	Dispositions, net	20,605	33,310
	Net cash (used in) provided by investing activities	(60,542)	46,213
FINANCING ACTIVITIES
	Borrowings from securitization transactions	255,000	22,638
	Repayment of debt related to securitization transactions	(186,383)	(162,680)
	Proceeds from vacation ownership inventory arrangement	5,375	-
	Debt issuance costs	(4,405)	(1,676)
	Repurchase of common stock	(106,110)	(160,155)
	Payment of dividends	(16,003)	-
	Proceeds from stock option exercises	96	1,723
	Excess tax benefits from share-based compensation	68	-
	Payment of withholding taxes on vesting of restricted stock units	(9,615)	(5,130)
	Other	213	-
Net cash used in financing activities		(61,764)	(305,280)
	Effect of changes in exchange rates on cash and cash equivalents	(3,243)	(790)
DECREASE IN CASH AND CASH EQUIVALENTS		(24,825)	(53,379)
CASH AND CASH EQUIVALENTS, beginning of period		346,515	199,511
CASH AND CASH EQUIVALENTS, end of period		$321,690	$146,132

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Marriott Vacations Worldwide Reports Third Quarter 2015 Financial Results

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Marriott Vacations Worldwide Reports Third Quarter 2015 Financial Results