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8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 15, 2015

 

 

Marriott Vacations Worldwide Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-35219   45-2598330

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

6649 Westwood Blvd., Orlando, FL   32821
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (407) 206-6000

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01 Regulation FD Disclosure.

Marriott Vacations Worldwide Corporation is furnishing the slides to be provided during a presentation to members of the investment community on May 15, 2015 as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including the presentation slides furnished as Exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit 99.1 Slide Presentation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
(Registrant)

Date: May 15, 2015

 By:

/s/ John E. Geller, Jr.

Name: John E. Geller, Jr.
Title: Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

 

Exhibit
No.

   

Description

99.1    Slide Presentation.
EX-99.1
May 2015
MVW
INVESTOR
DAY
Exhibit 99.1

2
Foreword:
A Balanced Approach
Jeff Hansen
Vice President
Investor Relations

3
Forward-Looking Statements
This
presentation
contains
“forward-looking
statements”
within
the
meaning
of
federal
securities
laws,
including
statements
about
future
operating
results,
performance
and
targets,
earnings
trends,
estimates,
and assumptions, and similar statements concerning anticipated future events and expectations that are
not historical facts. We caution you that these statements are not guarantees of future performance and
are subject to numerous risks and uncertainties, including volatility in the economy and the credit
markets, supply and demand changes for vacation ownership and residential products, competitive
conditions, the availability of capital to finance growth, and other matters referred to under the heading
“Risk Factors”
contained in our most recent annual report on Form 10-K filed with the U.S. Securities and
Exchange Commission (the “SEC”) and in subsequent SEC filings, any of which could cause actual
results to differ materially from those expressed in or implied in this presentation. These statements are
made as of May 15, 2015 and we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
The
“forward-looking
statements”
in
this
presentation
also
include
statements
regarding
our
2018
performance
given
various
growth
scenarios.
We
caution
you
that
these
statements
are
provided
for
illustration and discussion purposes only and are not predictions or forecasts of, or management’s
guidance regarding, our future operating results.
Throughout this presentation we report certain financial measures, each identified with a double asterisk
(“**”), that are not prescribed or authorized by United States Generally Accepted Accounting Principles
(“GAAP”). We discuss our reasons for reporting these non-GAAP measures and reconcile each to the
most directly comparable GAAP measure in the Appendix to this presentation and in materials available
on the investor page of our website at ir.mvwc.com.

Why Are We Here?
4
28% of respondents completely understand our story
Source: MVW 2014 Perception Analysis conducted by Ipreo
No Unclear Aspects

Why Are We Here?
5
However, that leaves 72% of our investor community requiring further clarity
Requires More Clarity
Source: MVW 2014 Perception Analysis conducted by Ipreo

Your Feedback
6
Recent survey results provided areas we realize need additional focus
Areas of Focus
Asset Light Model
Inventory Strategy
Development
M&A Strategy
Sales Strategy
Capital Allocation
Source: MVW 2014 Perception Analysis conducted by Ipreo

7
Prologue
Steve Weisz
President and
Chief Executive Officer

8
Long-term license to operate under
the Marriott and The Ritz-Carlton
brands
Over 400,000 Owners with over
500,000
weeks
equivalents
owned
59 vacation properties in the United
States and seven other countries
and territories
Marriott Vacations Worldwide
Corporation (NYSE:VAC) is an
industry leader in the upscale and
luxury vacation ownership segments
Marriott’s Mai Khao Beach, Phuket, Thailand
We Are

9
Deliver Unforgettable Experiences
That Make Vacation Dreams
Come True!
Statement
Marriott’s Frenchman’s Cove, St. Thomas, U.S. Virgin Islands

10
Sell vacation ownership products
Earn revenue from diverse sources
•
Nearly half of revenues derived
from lines of business other than
sales of vacation ownership
products
•
Rent vacation ownership units
•
Finance consumer purchases of
our vacation ownership products
•
Manage resorts and provide
services for Owners and Members
We Do
Marriott’s Shadow Ridge, Palm Desert, California

11
Park City
Vail
Breckenridge
Aspen
Lake Tahoe
San Francisco
Las Vegas
Phoenix
Newport Coast
Palm Desert
Bangkok
Phuket
Kauai
Oahu
Maui
Aruba
St. Kitts
St. Thomas
Marco Island
Panama City Beach
Orlando
The Palm Beaches
Fort Lauderdale
Branson
Williamsburg
Absecon
Boston
London
Marbella
Estepona
Paris
Myrtle Beach
Hilton Head Island
Mallorca
Miami
Global Destinations

Global Destinations
12
Planned New Resorts
Big Island
South Beach
San Diego
NOTE: We have not yet closed on commitments to acquire inventory at future dates in South Beach and Big Island of Hawaii.

Long and Distinguished History
More than 30 years of industry leading experience
13
4 Resorts
1984
100,000
Owners
1997
Asia Pacific
Launch
2001
Introduction of
North America
Points-Based Product
2010
2011
Over
400,000 Owners
59 Resorts
2014

Spin Related Accomplishments
In our first three years as an independent public company:
Separated from Marriott International
•
Established independent IT systems
•
Optimized our infrastructure based on our size
•
Built up new public company and standalone capabilities
Improved investment community understanding of our business
14
Marriott’s Mountain Valley Lodge, Breckenridge, Colorado

2011 Strategies
15
Almost threefold improvement since 2011
Improve Adjusted Development Margin**
Dispose of Excess Land and Inventory
Grow Adjusted EBITDA**
Reduce Inventory Balances
28%
CAGR
**  See Appendix for non-GAAP financial measures.
0%
5%
10%
15%
20%
25%
30%
2011
2012
2013
2014
MVW
North America
$0
$50
$100
$150
$200
$250
2011
2012
2013
2014
1.0
1.5
2.0
2.5
3.0
3.5
$200
$300
$400
$500
$600
$700
2011
2012
2013
2014
Finished Goods
WIP
Years On Hand
$120M Completed
$50-80M Remaining
Approximately $200 million of cash flow in excess of real estate spending since 2011

Our Commitment to Our Associates
•
World class associate engagement
•
More than 40% of new hires come from
referrals from existing associates
•
Average associate tenure is seven years
16
Impressive Accomplishments
Marriott’s Cypress Harbour, Orlando, Florida

Our Spirit To Serve
•
A longstanding commitment to the communities in which we live
and work
17
Impressive Accomplishments

•
The Stevie Awards (The American Business Awards)
•
“10 Best Travel Companies To Work For”
(Forbes
2014)
•
TripAdvisor’s Travelers’
Choice Awards (2014 U.S., Thailand,
and France)
18
Impressive Accomplishments

19
Howard Nusbaum
President & CEO,
American Resort
Development Association
•
Update from ARDA World
•
State of the industry
•
Why do people buy timeshare?

20

The Changing Owner
21

A Solid Foundation
22

Contributing to Our Economy
23

Comforts of a Kitchen
24

Space and Privacy
25

Why Buy
•
Save money on future
vacations
•
Resort location
•
Overall flexibility
•
Makes vacations a
certainty
•
Certainty of quality
accommodations
•
Resort location
•
Overall flexibility
•
Save money on future
vacation costs
•
Certainty of quality
accommodations
•
Exchange
Why Continue to Own
AIF Insights
26

Owner Attitude about Timeshare
27
Home away from home
Place to spend with people important in my life
Makes me look forward to vacations
More space for family and friends
Makes vacation planning easier

Thank You
28

Evolving and growing points product
Expanding fee-based revenue streams
Strong and disciplined marketing and
sales approach
New destinations and sales distributions
Strong long-term financial results
Strong rental program
Outline for Growth
Marriott’s Ko Olina Beach Resort,
Kapolei, Oahu, Hawaii
29

30
Chapter 1:
Our Product Value
Lee Cunningham
Executive Vice President and
Chief Operating Officer

31
Four primary revenue streams
Our Business
Rentals and recurring revenue streams
Marriott Vacation Club Destinations –
points
based ownership product
Marriott’s OceanWatch,
Myrtle Beach, South Carolina

32
Broader appeal to customers
Marriott’s Summit Watch, Park City, Utah
Flexible customized usage options
Unique points program
Marriott Vacation Club Destinations Program

33
Satisfied Owners
The First Choice Index measures how frequently our Owners are able to receive their first choice when making a reservation to stay
at one of our resorts, or are satisfied with the alternatives that are offered if their first choice is not available.
First Choice Index (North America)

•
5 times more product offerings since 2011
•
Regional, luxury & river cruises
and Owner cruises
•
Custom-built, Owner-exclusive
group tours
•
City Explorer packages
•
Luxury residences
•
Adventure travel
•
Golf packages
•
Premier events
•
Yacht charters
•
In-market activities
•
Airline reservations
34
Growth of Explorer Collection
Major Product Enhancements
2011 Explorer
Usage
41M Points
2014 Explorer Usage
112M Points
2015 Explorer Usage
125M Points

35
Growth in Points Program Participation
24% Overall CAGR
69% CAGR
74,800
177,500
46% CAGR
11% CAGR
Hybrid Owners
Legacy Owners Enrolled
Pure Points Owners
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2011
YTD 2015

36
Capital Efficiency of Points Program
Consumers buy portfolio rather than location
Efficient development planning and
inventory management
Ability to sell indefinitely at sales galleries
Marriott’s Ocean Pointe, Palm Beach Shores, Florida

37
Nick Rossi
Senior Vice President
Global Inventory and
Rental Management
Tony Terry
Senior Vice President
Global Operational
Finance
John Albert
Vice President
Resort Operations

38
2014 Owner Usage Comparison
(North America)
Legacy Week Usage
Points Usage
65%
35%
Occupy
Rental Availability/Other
71%
29%
Occupy
Rental Availability/Other

39
Rental Margin
minus
equals

40
Satisfied Owners & Guests
Guest Satisfaction Survey (North America)
88%
88%
89%
88%
89%
91%
87%
88%
89%
90%
91%
92%
2009
2010
2011
2012
2013
2014

Guest Satisfaction
41
Service Index Scores (North America)
91%
91%
92%
93%
90%
91%
92%
93%
94%
2011
2012
2013
2014
Service Index is the weighted average score for the following questions: friendliness of front desk associate; time front desk associate
took; knowledge of front desk associate and all associates questions; friendliness; level of knowledge; helped with questions; and
understood individual needs.

Guest Satisfaction
42
Product Index Scores (North America)
88%
89%
90%
90%
87%
88%
89%
90%
91%
2011
2012
2013
2014
Product Index is the weighted average score for the following questions: everything in working order; condition of furnishings and
decor; well maintained facilities; landscaping; fitness center/exercise room; and the pool(s).

Guest Satisfaction
43
Experience Index Scores (North America)
82%
83%
85%
86%
81%
82%
83%
84%
85%
86%
87%
2011
2012
2013
2014
Experience
Index
is
the
weighted
average
score
for
the
following
questions:
variety
of
resort
activities;
availability
of
resort
activities;
and
activity
center/kids’
area.

The
experience
(resort
operations)
60%
Fixed
costs
(property
taxes,
insurance,
and
utilities)
20%
Asset
protection
(property
refurbishment/reserve)
20%
Total
100%
Annual Cost of Ownership
44
Marriott’s Desert Springs Villas II, Palm Desert, California
Typical management fee earned
10%

Ancillary revenue derived from owner activity onsite
Management fee –
typically 10 percent of annual resort operating
costs (including property tax and reserves) and trust operating costs
Exchange company (club dues) provides services to points owners to
utilize their options
45
Recurring Fees
Marriott’s Village d’lle-de-France, Paris, France

46
46
A Balanced Approach
Development Margin
Management Revenue
Exchange Revenue
Development Margin (++)
Development Margin (+)
Exchange Revenue
Development Margin (+)
Management Fee Revenue
Owner Reload
First Time Buyer

47
Chapter 2:
Why Vacation Ownership?
Brian Miller
Executive Vice President
Chief Sales and Marketing Officer

•
World class brands
•
Effective prospect targeting and preparation
•
Highly efficient direct sales model
•
Experienced leadership team
48
Our Formula for Success
Marriott’s Shadow Ridge, Palm Desert, California

49
Contract Sales
Global
North America
Gross contract sales excludes residential and joint venture sales.
$526
$582
$608
$620
$653
$687
$679
$699
$450
$500
$550
$600
$650
$700
$750
2011
2012
2013
2014

Volume Per Guest North America
50
Volume Per Guest (VPG) is calculated by dividing contract sales (excluding sales that are not attributed to a tour at a sales location)
by the number of sales tours.
$2,504
$2,963
$3,200
$3,386
$2,400
$2,600
$2,800
$3,000
$3,200
$3,400
2011
2012
2013
2014

51
Adjusted Marketing and Sales Costs**
Global
North America (Vacation Ownership)
52.7%
48.4%
46.6%
46.3%
54.7%
51.3%
48.5%
47.7%
25%
30%
35%
40%
45%
50%
55%
2011
2012
2013
2014
** Adjusted for certain charges and the impact of revenue reportability. See Appendix for non-GAAP financial measures.

52
Segmentation and Targeting
The “Average”
Buyer
51 years of age
$155,000 average household income
Married
Children in household
College educated
But no one is average
Marketing

70% of Our Tours are Already Staying at Our Resorts
This allows for:
•
Enhanced targeting and prioritization
•
Pre-arrival touch points
•
Personalized services
53
Resort Experience
and Marketing Process
Marriott’s Marbella Beach Resort, Marbella, Spain

Percent of
Marketing Channel
Contract Sales
Cost Percent
In house
49%
9%
Central marketing previews
9%
19%
Trial memberships
13%
6%
Hotel marketing/off property contact
13%
18%
Direct/site events/other
16%
11%
Total
100%
11%
54
Cost Effective Marketing Channel Mix*
*Full year 2014.
Cost percent is the marketing expense for each marketing channel as a percent of each marketing channel’s contract
sales, and excludes G&A, allocations and sales related costs.

Owner Reload Penetration
North America
55
1%
2%
3%
4%
5%
6%
0%
4.6%
4.3%
4.3%
3.3%
4.6%
4.9%
5.4%
5.3%
5.2%
Launch
of
Points
2006
2007
2008
2009
2010
2011
2012
2013
2014
Reload Percentage

Proprietary disciplined sales process
Gallery experience with private presentation areas
World-class, centralized training
Technology to customize the presentation
Multiple levels of ownership
56
Our Sales Model
Marriott’s Newport Coast
®
Villas,
Newport Coast, California

What Our Owners Say
57

58
John Ruble
Vice President Global
Sales Operations –
Talent Development

How We Sell…
60
Yes to me
Yes to our brand
Yes to our vacation choices
Yes to vacation ownership
Yes to a personal vacation
plan
Yes we can afford it
Yes to today
Left Brain “Logic”

How We Sell…
61
Left Brain “Logic”
Right Brain “Emotions”
Yes to me
Yes to our brand
Yes to our vacation choices
Yes to vacation ownership
Yes to a personal vacation
plan
Yes we can afford it
Yes to today

Emotional Selling
62

Rent vs. Own
63
Owning Your Vacations
A villa lets your family spread out

“Right Brain”
Emotions
64

65
An Emotional Story

Emotional Value –
Mercedes Benz
66

What is Value?
What Justifies the Price Difference?
A Patek Philippe
“Complications”
watch
sells for $79,000
The Timex “Easy Reader”
sells on Amazon for
$28.22
67

What is Value?
What Justifies the Price Difference?
A first-class seat from
Orlando to Maui on
United Airlines is $5,091
A coach seat on the same
plane, located 10 feet
away, is $1,488
68

How Our Customers Want to Buy…
69

What was deemed essential in deciding whether
or not to buy?
•
“Having the Sales Executive spend time getting to know us…”
•
“…
to understand our current and future travel needs…”
•
“…
customizing / personalizing the presentation to meet those needs.”
From the Voice of Our Customers:
Marriott’s
Newport
Coast
®
Villas,
Newport
Coast,
California
70

Your Vacation Plan
71
5 year vacation plan using 3,500 Vacation Club points

72
Looking Ahead
New markets for distribution
Increased first time buyer activity
Optimize margins
Marriott’s Newport Coast
®
Villas,
Newport Coast, California

New Markets
•
•
•
73
New Markets for Distribution
New Distributions
$75 million –
$100 million total annual
stabilized contract sales
Marriott’s Marbella Beach Resort, Marbella, Spain
South Beach
Big Island, Hawaii
San Diego

74
Chapter 3:
Growth
Lani Kane-Hanan
Executive Vice President and
Chief Growth and Inventory Officer

•
Add new profitable sales distributions and attractive destinations
•
Maintain an efficient balance sheet
•
Minimize development spending
•
Optimize product cost
75
Growth Strategy
Marriott’s Grand Chateau
®
, Las Vegas, Nevada
Satisfy Customer Demand

Customer Insights are a Primary Driver of MVW’s
Target Market Strategy
•
Owner usage patterns
Marriott Rewards, Explorer, Exchange
•
Owner and prospect surveys
•
“Tour-no sale”
feedback
76
How Do We Know…
Where to Grow
Marriott’s Grande Vista, Orlando, Florida

Recent Insights
•
•
•
•
77
Target Markets
New York City, New York
Destination cities
Hawaii, Caribbean, Florida beach
Mexico
Selected destinations in Asia Pacific

78
Opening Planned 2017
Developer's conceptual rendering; features and amenities are
proposed and subject to change.
Marriott’s Crystal Shores, Marco Island, Florida
Two-tower, 152 unit, expansion of
existing Marriott’s Crystal Shores
resort
Expansion of on-site sales gallery
with incremental 2017 volume
Added amenities including an
additional pool, fitness center,
food & beverage outlet, and
parking garage
Balance sheet impact –
asset light
Plans include:

79
Opening Planned 2016
On-site sales gallery with
incremental 2016
volume
Conversion of Declan Suites
Hotel to 264 timeshare units
Near the Gaslamp Quarter
Balance sheet impact –
self developed
The Declan Suites, San Diego, California
Plans include:

80
South Beach, Miami Beach,  Florida
Waikoloa Beach Marriott Resort and Spa,
Waikoloa Beach, Big Island, Hawaii
Projects

81
Plans include:
Opening Planned 2016
South Beach, Miami Beach, Florida
We have not yet closed on the commitment to acquire this inventory.
Local sales gallery with incremental
2016 volume
182 timeshare units
Amenities include a pool bar and on-
site restaurant
Pursuing an asset light structure

82
Plans include:
Opening Planned 2017
Waikoloa Beach Marriott Resort and Spa,
Waikoloa Beach, Big Island, Hawaii
We have not yet closed on the commitment to acquire this inventory.
Conversion of 246 hotel units into
112 timeshare units
On-site sales gallery with
incremental 2016 volume
Pursuing an asset light structure
Co-located hotel to be managed
by Marriott International

83
Plans include:
•
Purchase of 329 unit Surfers Paradise
Marriott Resort & Spa
•
Flagship presence on the Gold Coast
•
Conversion of 8 dedicated floors into
88 timeshare units
•
Co-located hotel to be managed by
Marriott International
•
On-site sales gallery with incremental
2016 volume
•
Planned sale of hotel portion in the
next 12 –
18 months
Opening Planned 2016
Surfers Paradise, Australia
We have not yet closed on the commitment to acquire this inventory.

84
84
Planned New Locations and Distributions
Planned
Marco
Island
San
Diego
South
Beach
Waikoloa
Surfers
Paradise
Status
Under
contract
Owned
Under
contract
Under
contract
Under
contract
Deal structure
Asset      
light
Self
developed
Pursuing
asset light
Pursuing
asset light
Self          
developed
Initial Phase Opening
2017
2016
2016
2017
2016
New sales distribution
2017
2016
2016
2016
2016
$100 million –
$125 million of total annual
stabilized distribution volume

Inventory Requirements for Growth
Additional Distribution and Incremental Sales Volume
Consumes Larger Amounts of Inventory:
85
Inventory
Registration
(6-9 Months)
Negotiation, Planning &
Design, Construction
(12-18 Months)
Inventory investment requires lead time to cover:
At minimum, years of inventory-on-hand will match the 6 to 9 month
inventory registration period
Repurchasing asset light inventory reduces required lead time and
years of inventory-on-hand

New Asset Light
Inventory
Developed Land
& Infrastructure
Asset Light
Repurchases
Inventory Balance
86
Future Annual Sales
20-30% supported by asset
light repurchases at
favorable product cost
70-80% supported by mix
of new asset light inventory
and developed land &
infrastructure
Incremental sales volume
supported by new
destinations with sales
distributions
Targeted Mix
15%
30%
45%
0.5
3.0
Product
Cost
Inventory Lead Time  (Years)
Target Mix Average
: Maintain 30% Product Cost

Balanced Approach
87
Risk
Sales Growth
Customer Satisfaction
Shareholders
Cost

88
Chapter 4:
Financial Performance
John Geller
Executive Vice President
and Chief Financial Officer

89
Structure Established for Long-Term
Sustainability and Growth
Improve Adjusted Development Margin**
Grow Adjusted EBITDA**
Reduce Inventory Balances
28% CAGR
**  See Appendix for non-GAAP financial measures.
0%
5%
10%
15%
20%
25%
2011
2012
2013
2014
$0
$50
$100
$150
$200
$250
2011
2012
2013
2014
$200
$300
$400
$500
$600
$700
2011
2012
2013
2014
Finished Goods
WIP
Years On Hand
1.0
1.5
2.0
2.5
3.0
3.5

Diversified Businesses
90
2014 Revenues**
$1,339 Million**
Development
$648M (48%)
Rentals
$264M (20%)
Resort Management
$298M (22%)
Financing
$129M (10%)
2014 Margins**
Development
$136M (40%)
Rentals
$26M (8%)
Resort Management
$99M (29%)
Financing
$79M (23%)
$340 Million**
**
Revenues
exclude
cost
reimbursements
of
$397
million.
All
margin
dollars
represent
revenues,
net
of
related
expenses.
In
addition,
financing margin is net of consumer financing interest expense. See Appendix for non-GAAP financial measures.

91
91
Key Takeaways From Today
•
2018 performance, given two growth scenarios
•
Annualized contract sales growth scenarios of 5% and 10%
•
Development margin of 21%
•
Balanced growth
•
Inter-related businesses
Marriott’s Phuket Beach Club, Phuket, Thailand

Timeshare Contract Sales Growth¹
1
Excludes residential contract sales.
92
Vacation Ownership Contract Sales
1
2015E: 5% to 8% Growth
•
Higher VPG
•
Increased tour flow
2018: Growth Scenarios
of 5% and 10%
Annualized Growth
•
Modest long-term “same store”
growth from continued
improvement in VPG and
tour volume
•
New sales distributions
2014: $699M
2015E:
$735M –
$755M
2018:
$850M / $1,005M

Note: Development margin represents sale of vacation ownership products revenues, net of expenses (sale of vacation ownership products revenues less the cost of
vacation ownership products expenses and marketing and sales expenses). Development margin percentage represents Development margin divided by sale of
vacation
ownership
products
revenues.
Development
margin
and
development
margin
percentage
for
2015E
and
2018
exclude
the
impact
of
residential sales.
Development Margin Growth
93
Development Margin
Development Margin Percentage:
•
2015E of 21% to 22% 
•
2018 of 21% on average
Development Margin Dollars:
•
Growth scenarios:
•
Annualized contract sales
growth of 5% and 10%
2014: $136M
2015E:
$148M –
$156M
2018:
$164M / $193M

94
Resort Management –
Management Fees
94
•
Strong and growing recurring
revenue stream
•
Typically calculated as a percentage
of costs to operate a resort
•
Increase with new development,
larger owner base, and inflation
•
2018: Growth scenarios of 5%
and 10% annualized contract
sales growth
2014: $74M
2015E:
$77M –
$79M
2018:
$90M / $92M

96
Resort Management –
Exchange Company Revenues
95
•
Strong and growing recurring
revenue stream
•
Increases with new
development
•
2018: Growth scenarios of
5% and 10% annualized
contract sales growth
2014: $44M
2015E:
$47M –
$49M
2018:
$57M / $60M

96
Resort Management –
Ancillary Margins
Note:  Ancillary margin represents ancillary revenues, net of expenses.
2014: $7M
2015E:
$15M –
$17M
2018:
$18M / $20M
•
Amenities enhance resort
experience for our owners
•
Growth includes the benefit
from dispositions of under-
performing assets and other
operational efficiencies

98
•
Strong and growing recurring
revenue streams
•
Improved ancillary margins
97
Resort Management
and Other Services Margin
Note:  Resort management and other services margin represents resort management and other services revenues, net of expenses.
2014: $99M
2015E:
$111M –
$113M
2018:
$131M / $137M

Financing –
98
Provide financing for vacation
ownership purchases
Service loans internally
Securitize loans in the ABS market
Leverage corporate warehouse facility
How We Make Money

99
Key Financing Characteristics
(North America)
Marriott’s Kauai Lagoons, Lihue, Kauai, Hawaii
•
Average loan size of
$20,000 –
$25,000
•
Average down payment
of 10% –
15%
•
Average loan coupon of 12.5%
•
Average term of 10 years
•
Monthly payments of
$300 –
$400
•
Average FICO score of 730
•
Financing propensity of
42%
in 2014

•
Securitized over $4 billion in
vacation ownership notes
receivable since 2000
•
Strong notes receivable
portfolio
•
Second best performing asset
class behind automobiles
•
Advance rates of
~95% on
recent securitizations
•
Average cost of funds on
outstanding securitizations
of
3.1% as of end of 2014
100
Established Securitization Platform
North America Loan
Originations By Credit Score
< 600
2%
600
-
649
9%
650-
699
20%
700-749
24%
> 749
45%

101
•
Financing margins begin to
stabilize in 2015
•
Securitization market assumed
to remain strong with excess
spreads close to historic
high levels
•
Assumptions:
•
5% and 10% annualized
contract sales growth
scenarios
•
45% financing propensity
(North America)
101
Financing Margin
Note: Financing margin represents financing revenues, net of financing expenses and consumer financing interest expense.
2014: $79M
2018:
$79M / $85M
2015E:
$75M –
$76M

102
•
Significant improvement in rental
margins since spin-off
•
4% –
6% annualized topline growth
through 2018
•
Variety of rental inventory sources
•
Declining inventory costs:
•
Unsold maintenance fees
(benefit from sale of
luxury inventory)
•
Low to mid double digit
margin target
102
Rental Margin Growth
Note: Rental margin represents rental revenues, net of expenses.
2014: $26M
2015E:
$32M –
$34M
2018:
$48M / $50M

103
•
General & administrative costs:
•
Inflationary growth
•
Costs to support new
development
•
Royalty fees:
•
Variable –
Aligned with
contract sales growth and
mix of sales
•
Fixed –
Increases by
half of GDP deflator
(every five years)
103
2014: $140M
2015E:
$144M –
$147M
2018:
$152M / $155M
Other Expenses —
Including G&A and Royalty Fees, net of Depreciation

2015E 
$148 –
156
111 –
113
32 –
34
75 –
76
(144 –
147)
$222 -
232
104
104
Adjusted EBITDA**
**  See Appendix for non-GAAP financial measures.
Development
Resort Management
Rentals
Financing
Other Expenses
Adjusted EBITDA**
2014 
$136
99
26
79
(140)
$200
2018
5% Scenario
$164
131
48
79
(152)
$270
2018
10% Scenario 
$193
137
50
85
(155)
$310
(in millions)

105
105
Return on Invested Capital**
Targeting Meaningful ROIC Improvement
15%
26% –
30%
18% –
20%
**  See Appendix for non-GAAP financial measures.
0%
5%
10%
15%
20%
25%
30%
2014
2015E
2018

106
106
Sources of Cash:
Adjusted cash flow from operations**
Borrowings from securitization transactions
Repayment of debt related to securitizations
Subtotal
Uses of Cash:
Inventory spending
1
Marriott Rewards loyalty program
Other, including other capex
2
Subtotal –
Uses of Cash
Adjusted Free Cash Flow**
2014 
$415
263
(230)
448
(100)
(25)
(39)
(164)
$284
Adjusted Free Cash Flow**
2015E
$401 –
404
300 –
306
(241 –
247)
460 –
463
(260 –
248)
(26 –
22)
(29 –
23)
(315 –
293)
$145 –
170
1
Inventory spending includes investment in vacation ownership inventory and new sales centers.
2
Other capex includes ancillary and corporate capital expenditures, changes in restricted cash and organizational and separation-related efforts.
**  See Appendix for non-GAAP financial measures.
Cumulative 2015E to 2018
High
$1,714
1,142
(884)
1,972
(1,042)
(89)
(66)
(1,197)
$775
Low
$1,569
1,048
(867)
1,750
(861)
(89)
(100)
(1,050)
$700 
(in millions)

107
107
Adjusted free cash flow**
Additional leverage (excess debt capacity)
Further inventory optimization
Disposition proceeds
Adjusted free cash flow available for shareholders**
Low
$700
270
125
50
$1,145
Strong Cash Flow Potential
High
$775
465
150
80
$1,470
Cumulative 2015E to 2018
**  See Appendix for non-GAAP financial measures.
(in millions)

108
108
Balanced Capital Allocation Approach
•
Continued growth through new resort locations with
on-site sales distributions
•
Pursue new business opportunities
•
Return excess capital to shareholders
•
Share repurchase program
•
Quarterly cash dividends
Marriott’s Kauai Beach Club, Lihue, Kauai, Hawaii

MVW
INVESTOR
DAY
May 2015

Question and Answer Session
110
John Geller
Executive Vice President
and Chief Financial Officer
Steve Weisz
President and
Chief Executive Officer
Brian Miller
Executive Vice President
Chief Sales and
Marketing Officer
Lani Kane-Hanan
Executive Vice President
and Chief Growth and
Inventory Officer
Lee Cunningham
Executive Vice President
and Chief Operating Officer

111
Final Thoughts
Steve Weisz
President and
Chief Executive Officer

112
A-1
Appendix

113
A-2
Non-GAAP Financial Measures
In this presentation 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 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.
charges incurred in the 52 weeks ended January 2, 2015, the 53 weeks ended January 3, 2014 and the 52 weeks ended December 28, 2012 and December 30, 2011, (2) exclude
non-cash impairment charges in the 52 weeks ended December 30, 2011, (3) exclude gains on dispositions in the 52 weeks ended January 2, 2015 and December 28, 2012, (4)
include pro forma adjustments for the 52 weeks ended December 30, 2011 to reflect results as if we were a standalone public company throughout each period, and (5) exclude
adjustments related to the extension of rescission periods in our Europe segment discussed below (“Europe Rescission Adjustments”) in the 53 weeks ended January 3, 2014 and the
52 weeks ended December 28, 2012 and December 30, 2011, because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations
before the impact of certain charges, non-cash impairment charges, gains and Europe Rescission Adjustments, and reflect results as if we were a standalone public company
throughout each period. These adjustments are itemized below and on the following pages for fiscal years 2011 through 2014; to the extent certain charges, non-cash impairment
charges or gains occur in fiscal years 2015 through 2018, similar adjustments would be made. These non-GAAP financial measures also facilitate our comparison of results from our
on-going core operations before certain charges, non-cash impairment charges, gains and Europe Rescission Adjustments with results from other vacation ownership companies.
included a $24 million non-cash loss associated with the disposition of partially developed land, an operating golf course, spa and clubhouse and related facilities at a former resort in
our North America segment and settlement of related litigation under the "Litigation settlement" caption, $3 million of organizational and separation related costs recorded under the
"Organizational and separation related" caption, a $3 million litigation settlement in our North America segment recorded under the "Litigation settlement" caption, and a $1 million
impairment charge associated with a project in our North America segment recorded under the "Impairment" caption, partially offset by $8 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.
$12 million of organizational and separation related costs recorded under the "Organizational and separation related" caption, an $8 million increase in our accrual for remaining costs
we expected to incur in connection with our interest in an equity method investment in a joint venture project in our North America segment recorded under the "Impairment (charges)
reversals on equity investment" caption, $5 million for a litigation settlement in our Europe segment recorded under the "Litigation settlement" caption, $2 million of severance costs in
our Europe segment recorded under the "Marketing and sales" caption, and a $1 million pre-tax non-cash impairment charge related to a leased golf course at a project in our Europe
segment recorded under the "Impairment" caption, partially offset by a $7 million gain for cash received in payment of fully reserved receivables in connection with an equity method
investment in a joint venture project in our North America segment recorded under the "Impairment (charges) reversals on equity investment" caption, and a $1 million reversal of a
previously recorded litigation settlement related to a project in our North America segment, based upon an agreement to settle the matter for an amount less than our accrual, recorded
under the "Litigation settlement" caption.
Adjusted
Net
Income.
We
evaluate
non-GAAP
financial
measures
including
Adjusted
Net
Income,
Adjusted
EBITDA
and
Adjusted
Development
Margin,
that
(1)
exclude
certain
Certain
Charges
-
52
weeks
ended
January
2,
2015.
In
our
Statement
of
Income
for
the
52
weeks
ended
January
2,
2015,we
recorded
$23
million
of
net
pre-tax
charges,
which
Certain
Charges
-
53
weeks
ended
January
3,
2014.
In
our
Statement
of
Income
for
the
53
weeks
ended
January
3,
2014,we
recorded
$20
million
of
pre-tax
charges,
which  included

114
A-3
Non-GAAP Financial Measures
Certain
Charges
-
52
weeks
ended
December
28,
2012.
In
our
Statement
of
Income
for
the
52
weeks
ended
December
28,
2012,
we
recorded
$62
million
of
pre-tax
charges,which
included $41 million for litigation settlement charges in our North America segment recorded under the "Litigation settlement" caption, $16 million of organizational and separation
related costs recorded under the "Organizational and separation related" caption, $4 million related to closing off-site sales locations in our Asia Pacific segment recorded under the
"Marketing and sales" caption, $1 million
of severance in our Europe segment recorded under the "Marketing and sales" caption, $1 million of severance in our North America
segment
recorded
under
the
"Marketing
and
sales"
caption,
and
$1
million
of
costs
associated
with
removing
the
Ritz-Carlton
brand
from
one
of
our
properties
in our
North America
segment
recorded
under
the
"Resort
management
and
other
services"
caption,
partially
offset
by
the
reversal
of
$2
million
of
a
previously
recorded
impairment charge
recorded
in
our
North America
segment
under
the
"Impairment
reversals
on
equity
investment"
caption
related
to
an
equity
investment
in
a
joint
venture
project
because
the
actual costs
incurred
to
suspend our
marketing
and
sales
operations
at
the
project
were
lower
than
previously
estimated.
Certain
Charges
-
52
weeks
ended
December
30,
2011.
In
our
Statement
of
Operations
for
the
52
weeks
ended
December
30,
2011,
we
recorded
$18
million
of
pre-tax
charges
comprised
of
$5
million
of
severance
costs
($3
million
recorded
under
the
"Marketing
and
sales"
caption
and
$2
million
recorded
under
the
"General
and
administrative"
caption),
$4
million
of
spin-off
related
charges
recorded
under
the
"General
and
administrative"
caption,
$3
million
of
costs
related
to
ADA
compliance
and
Hurricane
Irene
damage
at
a
resort
in
the
Bahamas
recorded
under
the
"Cost
of
vacation
ownership
products"
caption,
$3
million
for
litigation
settlement
charges
in
our
North
America
segment
recorded
under
the
"Litigation
settlement"
caption,
and
$3
million
of
legal
related
charges
recorded
under
the
"Marketing
and
sales"
caption.
Non-cash
Impairment
Charges
-
52
weeks
ended
December
30,
2011.
In
preparation
for
the
spin-off
from
Marriott
International,
management
assessed
the
intended
use
of
excess
undeveloped
land
and
built
inventory
and
the
current
market
conditions
for
those
assets.
During
2011,
management
approved
a
plan
to
accelerate
cash
flow
through
the
monetization
of
certain
excess
undeveloped
land
in
the
United
States,
Mexico,
and
the
Bahamas
and
to
accelerate
sales
of
excess
built
former
Luxury
segment
fractional
and
residential
inventory.
As
a
result,
in
accordance
with
the
guidance
for
accounting
for
the
impairment
or
disposal
of
long-lived
assets,
because
the
nominal
cash
flows
from
the
planned
land
sales
and
the
estimated
fair
values
of
the
land
and
excess
built
former
Luxury
segment
inventory
were
less
than
their
respective
carrying
values,
we
recorded
a
pre-tax
non-cash
impairment
charge
of
$324
million
in
our
Statement
of
Operations
for
the
36
weeks
ended
September
9,
2011
under
the
“Impairment”
caption.
Additionally,
in
our
Statement
of
Operations
for
the
36
weeks
ended
September
9,
2011
recorded
under
the
"Impairment
reversals
on
equity
investment"
caption,
we
reversed
nearly
$4
million
of
a
more
than
$16
million
funding
liability
we
originally
recorded
in
2009
related
to
a
former
Luxury
segment
vacation
ownership
joint
venture
project,
based
on
facts
and
circumstances
surrounding
the
project,
including
favorable
resolution
of
certain
construction
related
claims
and
contingent
obligations
to
refund
certain
deposits
relating
to
sales
that
have
subsequently
closed.
Gains on dispositions:
52
weeks
ended
January
2,
2015.
In
our
Statement
of
Income
for
the
52
weeks
ended
January
2,
2015,
we
recorded
$5
million
of
gains,
which
included
a
$3
million
gain
associated
with
the
sale
of
undeveloped
and
partially
developed
land,
an
operating
golf
course
and
related
assets
in
our
North
America
segment
and
a
$2
million
gain
associated
with
the
sale
of
a
golf
course
and
adjacent
undeveloped
land
in
our
North
America
segment,
both
recorded
under
the
"Gains
and
other
income"
caption.
52
weeks
ended
December
28,
2012.
In
our
Statement
of
Income
for
the
52
weeks
ended
December
28,
2012,
we
recorded
a
net
$8
million
gain
associated
with
the
sale
of
the
golf
course,
clubhouse
and
spa
formerly
known
as
The
Ritz-Carlton
Golf
Club
and
Spa,
Jupiter
in
our
North
America
segment
under
the
"Gains
and
other
income"
caption.
Pro
Forma
Adjustments
-
52
weeks
ended
December
30,
2011.
In
our
Statement
of
Operations
for
the
52
weeks
ended
December
30,
2011,
we
included
$71
million
of
pre-tax
pro
forma
adjustments
comprised
of
$58
million
of
royalty
fees,
$3
million
of
consumer
financing
interest
expense
and
$10
million
of
non-consumer
financing
interest
expense,
which
included
$4
million
of
dividends
on
mandatorily
redeemable
preferred
stock
of
a
consolidated
subsidiary.

115
A-4
Non-GAAP Financial Measures
Europe
Rescission
Adjustments.
In
the
second
quarter
of
2013,
during
the
course
of
an
internal
review
of
certain
sales
documentation
processes
related
to
the
sale
of
certain vacation
ownership interests in properties associated with our Europe segment, we determined that the documentation we provided for certain sales of vacation ownership products was not strictly
compliant.
As
a
result,
in
accordance
with
applicable
European
regulation,
the
period
of
time
during
which
purchasers
of
such
interests
may
rescind
their
purchases
was
extended.
We
record
revenues
from
the
sale
of
vacation
ownership
products
once
the
rescission
period
has
ended.
Originally,
we
recorded
revenues
from
these
sales
of
vacation
ownership
products
based
on
the
rescission
periods
in
effect
assuming
compliant
documentation
had
been
provided
to
the
purchasers,
rather
than
the
extended
periods.
As
a
result,
we
recognized
revenue
in
incorrect
periods
between
fiscal
years
2010
and
2013
and
misstated
revenues
in
our
previously
filed
consolidated
financial
statements.
We
provided
compliant
documentation
to
purchasers
for
whom
the
extended
rescission
period
had
not
yet
expired.
As
compliant
documentation
was
subsequently
provided
as
part
of
the
corrective
actions
we
took,
the
extended
rescission
period
for
most
of
the
purchases
at
issue
ended
during
the
second
quarter
of
2013.
To
better
reflect
our
on-going
core
operations
and
allow
for
period-over-period comparisons,
we have excluded the impact associated with the extended rescission periods in our adjusted financial measures.
53
weeks
ended
January
3,
2014.
In
our
Statement
of
Income
for
the
53
weeks
ended
January
3,
2014,
we
recorded
after-tax
Europe
Rescission Adjustments
of
$10
million, which included a $21 million pre-tax increase in Sale of vacation ownership products revenues, pre-tax increases of $7 million and $2 million in Cost of vacation
ownership products expense and Marketing and sales expense, respectively, associated with the change in revenues from the Sale of vacation ownership products,
and a $2 million increase in the Provision for income taxes associated with the change in Income before income taxes.
52
weeks
ended
December
28,
2012.
In
our
Statement
of
Income
for
the
52
weeks
ended
December
28,
2012,
we
recorded
after-tax
Europe
Rescission
Adjustments of $6 million, which included a $9 million pre-tax decrease in Sale of vacation ownership products revenues, and pre-tax decreases of $2 million and $1
million
in
Cost
of
vacation
ownership
products
expense
and
Marketing
and
sales
expense,
respectively,
associated
with
the
change
in
revenues
from
the
Sale
of
vacation ownership products.
52
weeks
ended
December
30,
2011.
In
our
Statement
of
Operations
for
the
52
weeks
ended
December
30,
2011
we
recorded
after-tax
Europe
Rescission
Adjustments of $2 million which included a $7 million pre-tax decrease in Sale of vacation ownership products revenues, pre-tax decreases of $3 million and $1
million
to
Cost
of
vacation
ownership
products
expense
and
Marketing
and
sales
expense,
respectively,
associated
with
the
change
in
revenues
from
the
Sale
of
vacation ownership products, and a Benefit for income taxes adjustment of $1 million associated with the change in Loss before income taxes.
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
charges
and
Europe
Rescission
Adjustments
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, certain
charges and Europe
Rescission Adjustments
to
our
Development
Margin.

116
A-5
Non-GAAP Financial Measures
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, 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. 
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 charges, gains and Europe Rescission Adjustments.  Together, EBITDA and Adjusted EBITDA facilitate our comparison of results
from our on-going core operations before the impact of certain charges, gains and Europe Rescission Adjustments with results from other vacation ownership companies. 
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.
charges, 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.
Adjusted
EBITDA.
We
also
evaluate
Adjusted
EBITDA,
which
reflects
additional
adjustments
for
certain
charges,
gains
and
Europe
Rescission
Adjustments,
as
itemized
in
the
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
Adjusted
Free
Cash
Flow.
We
also
evaluate
Adjusted
Free
Cash
Flow,
which
reflects
additional
adjustments
for
organizational
and
separation
related,
litigation,
and
other
cash

117
A-6
Non-GAAP Financial Measures
(In millions)
2014
Total revenues
1,736
$        
Less: cost reimbursements
(397)
             
Total revenues excluding cost reimbursements**
1,339
$        
** Denotes non-GAAP financial measures.
(In millions)
2014
2015E
2015 to 2018 
Cumulative  (Low)
2015 to 2018 
Cumulative  (High)
Cash flow from operations
291
$           
$135 - $152
644
$                       
623
$                        
Add:
Real estate inventory spending ¹
99
                
240 - 230
836
                         
1,002
                       
Liability for Marriott Rewards customer loyalty program
25
                
26 - 22
89
                           
89
                            
Adjusted cash flow from operations**
415
$           
$401 - $404
1,569
$                    
1,714
$                     
**
Denotes non-GAAP financial measures.
1
  2015E Real estate inventory spending includes $47 million for the purchase of an operating hotel for future conversion to inventory.
additional leverage, further inventory optimization, and additional disposition proceeds.  We evaluate Adjusted Free Cash Flow Available for Shareholders as a liquidity
measure that provides useful information to management and investors about the amount of cash available to grow the business and return capital to shareholders after
taking into account Adjusted Free Cash Flow adjusted for excess debt capacity, additional development capital efficiency, and disposition proceeds.  We consider Adjusted
Free Cash Flow Available to Shareholders to be a liquidity measure that provides useful information to management and investors about the amount of cash available for
strategic opportunities, including acquisitions and strengthening the balance sheet, as well as returning capital to shareholders.
Adjusted
Free
Cash
Flow
Available
for
Shareholders.
We
also
evaluate
Adjusted
Free
Cash
Flow
Available
for
Shareholders,
which
reflects
additional
adjustments
for
exclude the impact of real estate inventory spending and repayment of the liability for Marriott Rewards customer loyalty program.  We consider Adjusted Cash Flow from
Operations to be a meaningful indicator or our operating performance and evaluate it as a liquidity measure that provides useful information to management and investors
about the amount of cash we expect to generate from the business prior to securitizing vacation ownership notes receivables that will be available for non-securitized debt
service requirements, incremental investments, capital returns to shareholders, and other purposes. 
Adjusted
Cash
Flow
from
Operations.
We
also
evaluate
Adjusted
Cash
Flow
from
Operations,
which
reflects
adjustments
to
Cash
Flow
from
Operations
that
adjustments for the impact of non-recourse securitized debt and excess cash balances.  In our ROIC calculation, we reduce average net assets by the non-recourse
securitized debt as well as cash balances in excess of $75 million, and we reduce Adjusted EBITDA, less depreciation and amortization, by the associated consumer
financing interest expense.  We consider ROIC to be a meaningful indicator of our operating performance, and we evaluate ROIC because it provides useful information
about how effectively we use the money we invest in our business.
Return
on
Invested
Capital
(“ROIC”).
We
calculate
ROIC
as
Adjusted
EBITDA,
less
depreciation
and
amortization,
divided
by
average
net
assets
after
making
we participate in reimburse to us, and relates, predominantly, to payroll costs where we are the employer.  As we record cost reimbursements based upon costs incurred with no
added markup, this revenue and related expense has no impact on net income attributable to us because cost reimbursements revenue net of reimbursed costs expense is zero.
We consider total revenues excluding cost reimbursements to be a meaningful metric as it represents that portion of revenue that impacts net income attributable to us.
Total
Revenues
Excluding
Cost
Reimbursements.
Cost
reimbursements
revenue
includes
direct
and
indirect
costs
that
property
owners'
associations
and
joint
ventures

118
A-7
Non-GAAP Financial Measures
2014 and 2013 Adjusted Net Income and Adjusted EBITDA
(In millions)
As Reported
As Adjusted
As Reported
Europe
As Adjusted
52 Weeks Ended
Certain
52 Weeks Ended
53 Weeks Ended
Certain
Rescission
53 Weeks Ended
January 2, 2015
Charges
January 2, 2015
**
January 3, 2014
Charges
Adjustment
January 3, 2014
**
Revenues
Sale of vacation ownership products                             $                           
648
-
$          
648
$                         
672
$                         
-
$          
(21)
$           
651
$                       
Resort management and other services                           
298
-
298
290
-
-
290
Financing                                                        
129
-
129
141
-
-
141
Rental                                                           
264
-
264
262
-
-
262
Cost reimbursements                                             
397
-
397
385
-
-
385
Total revenues                                                  
1,736
-
1,736
1,750
-
(21)
1,729
Expenses
Cost of vacation ownership products                            
197
-
197
214
-
(7)
207
Marketing and sales                                             
315
-
315
316
(2)
(2)
312
Resort management and other services                           
199
-
199
206
-
-
206
Financing                                                        
24
-
24
25
-
-
25
Rental                                                           
238
-
238
251
-
-
251
General and administrative                                     
99
-
99
99
-
-
99
Organizational and separation related
3
(3)
-
12
(12)
-
-
Litigation settlement
19
(19)
-
4
(4)
-
-
Consumer financing interest
26
-
26
31
-
-
31
Royalty fee                                                     
60
-
60
62
-
-
62
Impairment                                                       
1
(1)
-
1
(1)
-
-
Cost reimbursements                                             
397
-
397
385
-
-
385
Total expenses                                                  
1,578
(23)
1,555
1,606
(19)
(9)
1,578
Gains and other income                                          
5
(5)
-
1
-
-
1
Equity in earnings
-
-
-
-
-
-
-
Interest expense
(12)
-
(12)
(13)
-
-
(13)
Impairment reversals on equity investment                      
-
-
-
(1)
1
-
-
Income before income taxes                                     
151
18
169
131
20
(12)
139
Provision for income taxes                                     
(70)
2
(68)
(51)
(5)
2
(54)
Net income                                                      
81
$                              
20
$        
101
$                         
80
$                           
15
$        
(10)
$           
85
$                         
As Reported
As Adjusted
As Reported
Europe
As Adjusted
52 Weeks Ended
Certain
52 Weeks Ended
53 Weeks Ended
Certain
Rescission
53 Weeks Ended
January 2, 2015
Charges
January 2, 2015
**
January 3, 2014
Charges
Adjustment
January 3, 2014
**
Net income                                                      
81
$                              
20
$        
101
$                         
80
$                           
15
$        
(10)
$           
85
$                         
Interest expense
1
12
-
12
13
-
-
13
Tax provision                                 
70
(2)
68
51
5
(2)
54
Depreciation and amortization                                  
19
-
19
23
-
-
23
EBITDA **                                                       
182
18
$        
200
$                         
167
$                         
20
$        
(12)
$           
175
$                       
**  Denotes non-GAAP financial measures. 
1
Interest expense excludes consumer financing interest expense.
NOTE:
Beginning
with
the
fourth
quarter
of
2014
we
have
combined
results
from
Resort
management
and
other
services
with
results
from
Other,
report
those
combined
results
in
Resort
management and other services, and have recast prior year presentation for consistency.
$

119
A-8
Non-GAAP Financial Measures
2012 and 2011 Adjusted Net Income and Adjusted EBITDA
(In millions)
As Reported
Europe
As Adjusted
As Reported
Europe
As Adjusted
52 Weeks Ended
Certain
Rescission
52 Weeks Ended
52 Weeks Ended
Certain
Rescission
52 Weeks Ended
December 28, 2012
Charges
Adjustment
December 28, 2012
**
December 30, 2011
Charges
Pro Forma
Adjustment
December 30, 2011
**
Revenues
Sale of vacation ownership products         
618
$                             
-
$           
9
$                
627
$                          
627
$                          
-
$           
-
$              
7
$                
634
$                        
Resort management and other services      
283
-
-
283
267
-
-
-
267
Financing                                                           
151
-
-
151
169
-
-
-
169
Rental                                                                 
225
-
-
225
212
-
-
-
212
Cost reimbursements                                     
362
-
-
362
349
-
-
-
349
Total revenues                              
1,639
-
9
1,648
1,624
-
-
7
1,631
Expenses
Cost of vacation ownership products        
203
-
2
205
239
(3)
-
3
239
Marketing and sales                                      
329
(6)
1
324
341
(6)
-
1
336
Resort management and other services      
213
(1)
-
212
211
-
-
-
211
Financing                                                           
26
-
-
26
28
-
-
-
28
Rental                                                                 
225
-
-
225
220
-
-
-
220
General and administrative                           
86
-
-
86
81
(6)
-
-
75
Organizational and separation related
16
(16)
-
-
-
-
-
-
-
Litigation settlement
41
(41)
-
-
3
(3)
-
-
-
Consumer financing interest
41
-
-
41
47
-
3
-
50
Royalty fee                                                       
61
-
-
61
4
-
58
-
62
Impairment                                                         
-
-
-
-
324
(324)
-
-
-
Cost reimbursements                                     
362
-
-
362
349
-
-
-
349
Total expenses                              
1,603
(64)
3
1,542
1,847
(342)
61
4
1,570
Gains and other income                                     
9
(8)
-
1
2
-
-
-
2
Equity in earnings
1
-
-
1
-
-
-
-
-
Interest expense
(17)
-
-
(17)
-
-
(10)
-
(10)
Impairment reversals on equity investment   
2
(2)
-
-
4
(4)
-
-
-
Income before income taxes        
31
54
6
91
(217)
338
(71)
3
53
Provision for income taxes                                
(24)
(20)
-
(44)
45
(96)
27
(1)
(25)
Net income                                                          
7
$                                 
34
$         
6
$                
47
$                            
(172)
$                         
242
$       
(44)
$         
2
$                
28
$                          
As Reported
Europe
As Adjusted
As Reported
Europe
As Adjusted
52 Weeks Ended
Certain
Rescission
52 Weeks Ended
52 Weeks Ended
Certain
Rescission
52 Weeks Ended
December 28, 2012
Charges
Adjustment
December 28, 2012
**
December 30, 2011
Charges
Pro Forma
Adjustment
December 30, 2011
**
Net income                                                          
7
$                                 
34
$         
6
$                
47
$                            
(172)
$                         
242
$       
(44)
$         
2
$                
28
$                          
Interest expense¹                                 
17
-
-
17
-
-
10
-
10
Tax provision                                 
24
20
-
44
(45)
96
(27)
1
25
Depreciation and amortization                          
30
-
-
30
33
-
-
-
33
EBITDA **                                    
78
$                               
54
$         
6
$                
138
$                          
(184)
$                         
338
$       
(61)
$         
3
$                
96
$                          
**  Denotes non-GAAP financial measures. 
1
  Interest expense excludes consumer financing interest expense.
NOTE:  Beginning with the fourth quarter of 2014 we have combined results from Resort management and other services with results from Other, report those combined results in Resort management and other services, and have
recast prior year presentation for consistency.  In the 2013 second quarter, we restated 2012 and 2011 Sale of vacation ownership products revenue, Cost of vacation ownership products and Marketing and sales expenses,
Income before income taxes, Provision for income taxes and Net income to correct prior period misstatements.

120
A-9
Non-GAAP Financial Measures
2014, 2013, 2012 and 2011 Adjusted Development Margin
(Adjusted Sale of Vacation Ownership Products Net of Expenses)
52 Weeks Ended
53 Weeks Ended
52 Weeks Ended
52 Weeks Ended
(In millions)
January 2, 2015
January 3, 2014
December 28, 2012
December 30, 2011
Contract sales
Vacation ownership
699
$                       
679
$                       
687
$                       
653
$                       
Residential products                           
14
15
1
5
Total contract sales
713
694
688
658
Revenue recognition adjustments:
Reportability¹
(15)
9
(6)
25
Europe rescission adjustment²
-
21
(9)
(7)
Sales Reserve
3
(32)
(36)
(42)
(36)
Other
4
(18)
(16)
(13)
(13)
Sale of vacation ownership products
648
$                       
672
$                       
618
$                       
627
$                       
1
Adjustment for lack of required downpayment or contract sales in rescission period.
2
Adjustment to eliminate the impact of extended rescission periods in our Europe segment.
3 
Represents allowance for bad debts for our financed vacation ownership product sales, which we also refer to as sales reserve.
4
Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue.
CONSOLIDATED ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)
Revenue
Revenue
As Reported
Europe
Recognition
As Adjusted
As Reported
Europe
Recognition
As Adjusted
(In millions)
52 Weeks Ended
Certain
Rescission
Reportability
52 Weeks Ended
53 Weeks Ended
Certain
Rescission
Reportability
53 Weeks Ended
January 2, 2015
Charges
Adjustment
Adjustment
January 2, 2015
**
January 3, 2014
Charges
Adjustment
Adjustment
January 3, 2014
**
Sale of vacation ownership products
648
$                        
-
$          
-
$                
15
$             
663
$                        
672
$                        
-
$                             
(21)
$                         
(9)
$              
642
$                        
Less:
Cost of vacation ownership products
197
-
-
4
201
30.3%
214
-
(7)
(3)
204
31.7%
Marketing and sales
315
-
-
1
316
47.7%
316
(2)
(2)
(1)
311
48.5%
Development margin
136
$                        
-
$          
-
$                
10
$             
146
$                        
142
$                        
2
$                            
(12)
$                         
(5)
$              
127
$                        
Development margin percentage
1
20.9%
22.0%
21.2%
19.8%
Revenue
Revenue
As Reported
Europe
Recognition
As Adjusted
As Reported
Europe
Recognition
As Adjusted
52 Weeks Ended
Certain
Rescission
Reportability
52 Weeks Ended
52 Weeks Ended
Certain
Rescission
Reportability
52 Weeks Ended
December 28, 2012
Charges
Adjustment
Adjustment
December 28, 2012
**
December 30, 2011
Charges
Adjustment
Adjustment
December 30, 2011
**
Sale of vacation ownership products
618
$                        
-
$          
9
$               
6
$               
633
$                        
627
$                        
-
$                             
7
$                            
(25)
$           
609
$                        
Less:
Cost of vacation ownership products
203
-
2
2
207
32.6%
239
(3)
3
(9)
230
37.9%
Marketing and sales
329
(6)
1
-
324
51.3%
341
(6)
1
(3)
333
54.7%
Development margin
86
$                          
6
$          
6
$               
4
$               
102
$                        
47
$                          
9
$                            
3
$                            
(13)
$           
46
$                          
Development margin percentage
1
14.0%
16.1%
7.6%
7.4%
**  Denotes non-GAAP financial measures.
1
Development margin percentage represents Development margin divided by Sale of vacation ownership products.  Development margin percentage is calculated using whole dollars.
CONSOLIDATED CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
NOTE:   In the 2013 second quarter, we restated 2012 and 2011 Sale of vacation ownership products revenue, Cost of vacation ownership products and Marketing and sales expenses, Income before income taxes, Provision for income taxes and Net
income to correct prior period misstatements.

121
A-10
Non-GAAP Financial Measures
2014, 2013, 2012 and 2011 Adjusted Development Margin –
North America
(Adjusted Sale of Vacation Ownership Products Net of Expenses)
52 Weeks Ended
53 Weeks Ended
52 Weeks Ended
52 Weeks Ended
(In millions)
January 2, 2015
January 3, 2014
December 28, 2012
December 30, 2011
Contract sales
Vacation ownership
620
$                       
608
$                       
582
$                       
526
$                       
Residential products                           
14
15
1
5
Total contract sales
634
623
583
531
Revenue recognition adjustments:
Reportability
1
(13)
5
(4)
27
Sales Reserve
2
(25)
(29)
(34)
(29)
Other
3
(18)
(16)
(13)
(13)
Sale of vacation ownership products
578
$                       
583
$                       
532
$                       
516
$                       
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.
NORTH AMERICA ADJUSTED DEVELOPMENT MARGIN (ADJUSTED SALE OF VACATION OWNERSHIP PRODUCTS NET OF EXPENSES)
Revenue
Revenue
As Reported
Recognition
As Adjusted
As Reported
Recognition
As Adjusted
(In millions)
52 Weeks Ended
Certain
Reportability
52 Weeks Ended
53 Weeks Ended
Certain
Reportability
53 Weeks Ended
January 2, 2015
Charges
Adjustment
January 2, 2015
**
January 3, 2014
Charges
Adjustment
January 3, 2014
**
Sale of vacation ownership products
578
$                        
-
$          
13
$             
591
$                        
583
$                        
-
$                             
(5)
$                           
578
$                        
Less:
Cost of vacation ownership products
170
-
4
174
29.4%
184
-
(2)
182
31.6%
Marketing and sales
272
-
1
273
46.3%
270
-
-
270
46.6%
Development margin
136
$                        
-
$          
8
$               
144
$                        
129
$                        
-
$                             
(3)
$                           
126
$                        
Development margin percentage
1
23.4%
24.3%
22.1%
21.8%
Revenue
Revenue
As Reported
Recognition
As Adjusted
As Reported
Recognition
As Adjusted
52 Weeks Ended
Certain
Reportability
52 Weeks Ended
52 Weeks Ended
Certain
Reportability
52 Weeks Ended
December 28, 2012
Charges
Adjustment
December 28, 2012
**
December 30, 2011
Charges
Adjustment
December 30, 2011
**
Sale of vacation ownership products
532
$                        
-
$          
4
$               
536
$                        
516
$                        
-
$                             
(27)
$                         
489
$                        
Less:
Cost of vacation ownership products
176
-
1
177
33.0%
205
(3)
(11)
191
39.0%
Marketing and sales
260
(1)
-
259
48.4%
263
(3)
(2)
258
52.7%
Development margin
96
$                          
1
$          
3
$               
100
$                        
$                         48
6
$                            
(14)
$                         
38
$                          
Development margin percentage
1
18.2%
18.6%
9.4%
8.3%
**  Denotes non-GAAP financial measures.
1
Development margin percentage represents Development margin divided by Sale of vacation ownership products.  Development margin percentage is calculated using whole dollars.
NOTE:   We combined the financial results of the former Luxury segment with the North America segment beginning with the first quarter of 2013 and have recast prior year presentation for consistency.
NORTH AMERICA CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS

122
A-11
Non-GAAP Financial Measures
2015E and 2018 Scenarios –
Net Income, Adjusted EBITDA, and Adjusted
Development Margin
(In millions)
Fiscal Year
2015 (low)
Fiscal Year
2015 (high)
Fiscal Year 2018
(5% scenario)
Fiscal Year 2018
(10% scenario)
Net income
118
$                  
124
$                  
149
$                       
174
$                       
Adjustments to reconcile Net income to Adjusted net income
Organizational and separation related and other charges¹
2
                        
2
                        
-
                         
-
                         
Gain on dispositions ²
(10)
                     
(10)
                     
-
                         
-
                         
Bulk sales ³
(6)
                       
(6)
                       
-
                         
-
                         
Provision for income taxes on adjustments to net income                                       
4
                        
4
                        
-
                         
-
                         
Adjusted net income**
108
$                  
114
$                  
149
$                       
174
$                       
(In millions)
Fiscal Year
2015 (low)
Fiscal Year
2015 (high)
Fiscal Year 2018
(5% scenario)
Fiscal Year 2018
(10% scenario)
Adjusted net income **                                                                   
108
$                  
114
$                  
149
$                       
174
$                       
Interest expense¹                                 
13
                      
13
                      
-
                         
-
                         
Tax provision                                                                    
79
                      
83
                      
95
                           
110
                         
Depreciation and amortization                                                                    
22
                      
22
                      
26
                           
26
                           
Adjusted EBITDA**                                                                    
222
$                  
232
$                  
270
$                       
310
$                       
Fiscal Year
2015 (low)
Fiscal Year
2015 (high)
Fiscal Year 2018
(5% scenario)
Fiscal Year 2018
(10% scenario)
Development margin¹
21.1%
22.1%
21.0%
21.0%
Adjustments to reconcile Development margin to Adjusted development margin
Revenue recognition reportability
(0.1%)
(0.1%)
0.0%
0.0%
Adjusted development margin**
, 1
21.0%
22.0%
21.0%
21.0%
1
   Organizational and separation related and other charges adjustment includes $1.9 million for organizational and separation related efforts in 2015; to the extent similar charges occur in fiscal years 2016 through
2018, similar adjustments would be made.
2015 ADJUSTED NET INCOME OUTLOOK AND 2018 ADJUSTED NET INCOME SCENARIOS
**  Denotes non-GAAP financial measures. 
2
   Gain on dispositions adjustment includes a $0.9 million gain associated with the sale of a golf course and adjacent undeveloped land as well as an estimated gain on the sale of undeveloped and partially developed
land, an operating golf course, spa and clubhouse and related assets, both in our North America segment in 2015; to the extent gains occur in fiscal years 2016 through 2018, similar adjustments would be made.
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 in 2015; to the extent similar bulk sales occur in fiscal years 2016
through 2018, similar adjustments would be made.
2015 ADJUSTED EBITDA OUTLOOK AND 2018 ADJUSTED EBITDA SCENARIOS
**  Denotes non-GAAP financial measures.
1
   Interest expense excludes consumer financing interest expense.
2015 ADJUSTED DEVELOPMENT MARGIN OUTLOOK AND 2018 ADJUSTED DEVELOPMENT MARGIN SCENARIO
Total MVW
Total MVW
**  Denotes non-GAAP financial measures. 
1
   Development margin represents Development margin dollars divided by Sale of vacation ownership products revenues.  Development margin is calculated using whole dollars.

123
A-12
Non-GAAP Financial Measures
2012, 2013, 2014, 2015E and 2018 Scenarios -
Adjusted Free Cash Flow
(In millions)
2012
2013
2014
Low
High
Low
High
Adjusted net income **                                         
47
$              
85
$              
101
$           
108
$           
114
$           
514
$                 
569
$                 
Adjustments to reconcile Adjusted net income to net cash
provided by operating activities:                              
Adjustments for non-cash items1
88
78
68
73
75
Deferred income taxes / income taxes payable
(28)
20
(8)
15
17
Net changes in assets and liabilities:
Notes receivable originations
(262)
(260)
(268)
(284)
(290)
Notes receivable collections
311
310
287
268
272
Inventory
68
34
82
30
34
86
2
Purchase of operating hotel for future conversion to inventory
2
-
-
-
(47)
(47)
(47)
(47)
Liability for Marriott Rewards customer loyalty program
(64)
(45)
(25)
(26)
(22)
(89)
(89)
Organizational and separation related, litigation and other charges
(57)
(46)
4
(2)
(2)
(2)
(2)
Other working capital changes
60
(14)
50
-
1
Other
3
182
190
Net cash provided by operating activities                      
163
162
291
135
152
644
623
Capital expenditures for property and equipment (excluding inventory):
New sales centers
4
-
-
(1)
(20)
(18)
(25)
(40)
Organizational and separation related capital expenditures
(2)
(6)
(3)
(5)
(5)
(5)
(5)
Other
(15)
(16)
(11)
(32)
(30)
(105)
(72)
Change in restricted cash
12
(17)
(24)
1
5
3
4
Borrowings from securitization transactions                    
238
361
263
300
306
1,048
1,142
Repayment of debt related to securitizations                   
(411)
(361)
(230)
(241)
(247)
(867)
(884)
Free cash flow**                                                
(15)
123
285
138
163
693
768
Adjustments:
Organizational and separation related, litigation and other charges
38
52
(1)
7
7
7
7
Adjusted free cash flow**                                      
23
$              
175
$           
284
$           
145
$           
170
$           
700
$                 
775
$                 
1
Includes depreciation, amortization of debt issuance costs, provision for loan losses, and share-based compensation.
2
Represents investment in an operating hotel prior to future conversion to inventory.
3
4
Represents
cumulative
cashflow
activity
for
2015
through
2018
for
Adjustments
for
non-cash
items,
Deferred
income
taxes
/
income
taxes
payable,
Notes
receivable
originations
/
collections,
and
Other
working
capital
changes.
2015E to 2018 Cumulative
NOTE:   We now include borrowings from securitization transactions and repayment of debt related to securitizations in our free cash flow.  As a result, free cash flow as presented in this schedule is equivalent to the non-GAAP financial
measure adjusted free cash flow presented prior to the fourth quarter of 2013, and adjusted free cash flow presented in this schedule is equivalent to the non-GAAP financial measure adjusted free cash flow, as adjusted presented prior to the
fourth quarter of 2013.  In our 2012 Adjusted free cash flow presentation we included Borrowings available from the securitization of sellable vacation ownership notes receivable through the Warehouse Credit Facility.  Starting with our
2013 Adjusted free cash flow, we no longer include Borrowings available from the securitization of sellable vacation ownership notes receivable through the Warehouse Credit Facility, and have recast our 2012 Adjusted free cash flow
presentation for consistency.
2015E
**  Denotes non-GAAP financial measures. 
Represents
incremental
investment
in
new
sales
centers,
mainly
to
support
new
sales
distributions.

124
A-13
Non-GAAP Financial Measures
2014, 2015E and 2018 Scenarios -
Return on Invested Capital (ROIC)
(In millions)
2013
2014
2015E
2018 -
(Low)
2018 -
(High)
Total Assets
2,632
$     
2,540
$     
Less:  Cash balance
(200)
(347)
Add:  Assumed minimum cash balance
75
75
Adjusted total assets
2,507
2,268
2,287
2,281
2,428
Less: Current liabilities
(462)
(472)
(479)
(442)
(514)
Subtotal
2,045
1,796
1,808
1,839
1,914
Less: Bonds payable
(674)
(708)
(767)
(892)
(969)
Net assets
1,371
1,088
1,041
947
945
Average net assets
1,230
$     
A
1,065
$              
A
945
$                 
A
931
$                 
A
Adjusted EBITDA**
200
$        
$222 -
$232
270
$                 
310
$                 
Less:  Depreciation and amortization
(19)
(22)
(27)
(27)
Adjusted EBITA**, net
181
$        
B
$200 -
$210
B
244
$                 
B
283
$                 
B
ROIC**
14.7%
A / B
18.7% -
19.7%
A / B
25.8%
A / B
30.4%
A / B
**Denotes non-GAAP financial measures.