MARRIOTT VACATIONS WORLDWIDE CORPORATION ORLANDO, Fla., Feb. 23, 2017 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported fourth quarter and full year 2016 financial results and provided its outlook for the full year 2017.
Fourth quarter 2016 highlights:
-- Net income was $49.8 million, or $1.80 fully diluted earnings per share
(EPS), compared to net income of $33.1 million, or $1.06 fully diluted
EPS, in the fourth quarter of 2015, an increase of 50.3 percent and 69.8
percent, respectively.
-- Adjusted net income was $50.8 million, compared to adjusted net income
of $34.7 million in the fourth quarter of 2015, an increase of 46.4
percent. Adjusted fully diluted EPS was $1.83, compared to adjusted
fully diluted EPS of $1.11 in the fourth quarter of 2015, an increase of
64.9 percent.
-- Adjusted EBITDA totaled $95.0 million, an increase of $21.5 million, or
29.3 percent, year-over-year, with growth coming from all lines of
business.
-- The company estimates that Hurricane Matthew negatively impacted
Adjusted EBITDA by approximately $3.6 million in the fourth quarter.
Adjusting for that impact, Adjusted EBITDA would have totaled nearly
$99 million in the fourth quarter, an increase of 34.1 percent.
-- Total company vacation ownership contract sales, excluding residential
sales, were $234.3 million, an increase of $30.1 million, or 14.7
percent, compared to the prior year period. Contract sales in our key
North America and Asia Pacific segments increased over the prior year by
$32.6 million, or 16.9 percent.
-- The company estimates that Hurricane Matthew negatively impacted
contract sales by $8.1 million in the fourth quarter. Adjusting for
that impact, contract sales would have grown by nearly 19 percent
over 2015.
-- North America VPG totaled $3,563, a 12.7 percent increase from the
fourth quarter of 2015; tours increased 3.4 percent year-over-year.
-- The company estimates that Hurricane Matthew negatively impacted
tour growth by approximately 3.9 percentage points. Adjusting for
that impact, tours would have increased 7.3 percent over 2015.
-- Company development margin percentage was 24.3 percent compared to 22.1
percent in the fourth quarter of 2015. Company adjusted development
margin percentage was 22.3 percent compared to 20.1 percent in the
fourth quarter of 2015.
Full Year 2016 highlights:
-- Net income was $137.3 million, or $4.83 fully diluted EPS, compared to
net income of $122.8 million, or $3.82 fully diluted EPS, in 2015, an
increase of 11.8 percent and 26.4 percent, respectively.
-- Adjusted net income was $134.3 million, compared to adjusted net income
of $118.9 million in 2015, an increase of 13.0 percent. Adjusted fully
diluted EPS was $4.73 compared to adjusted fully diluted EPS of $3.70 in
2015, an increase of 27.8 percent.
-- Adjusted EBITDA totaled $261.4 million, an increase of $11.3 million, or
4.5 percent, year-over-year.
-- Adjusting for the impact of Hurricane Matthew, Adjusted EBITDA would
have totaled $265.0 million for the full year.
-- Total company vacation ownership contract sales, excluding residential
sales, were $723.6 million, an increase of $23.8 million, or 3.4
percent, compared to the prior year period. Contract sales in our key
North America and Asia Pacific segments were $27.0 million, an increase
of 4.0 percent, compared to the prior year period.
-- Adjusting for the impact of Hurricane Matthew, total company
contract sales would have increased by an additional $8.1 million,
for a total of approximately 4.5 percent, for the full year.
-- North America VPG totaled $3,462, a 2.2 percent increase from 2015;
tours increased 2.3 percent year-over-year.
-- The company generated net cash provided by operating activities of
$140.2 million and adjusted free cash flow of $158.9 million, delivering
at the high end of the company's previous guidance range, despite the
impact from Hurricane Matthew.
-- The company returned a total of $212.0 million to its shareholders
through repurchases of its common stock and quarterly dividends.
Non-GAAP financial measures, such as adjusted net income, adjusted EBITDA, adjusted fully diluted earnings per share, adjusted development margin and adjusted free cash flow are reconciled and adjustments are shown and described in further detail on pages A-1 through A-12 of the Financial Schedules that follow.
"I am extraordinarily pleased with how we finished 2016. In the fourth quarter, contract sales grew nearly 15 percent, driving $95 million of Adjusted EBITDA, our strongest quarter as a public company," said Stephen P. Weisz, president and chief executive officer. "We continue to execute our growth strategy as our same store marketing initiatives continue to build a strong tour pipeline, and we opened our sixth new sales center for 2016 at our Miami Beach location in the last week of December. Subsequent to the end of the year, we opened our additional New York sales location, adding to our momentum and giving us confidence that we will achieve 2017 contract sales growth of 9 to 15 percent, net income of $139 million to $148 million, and Adjusted EBITDA of $276 million to $291 million for the full year."
2017 Outlook:
The company is providing guidance for the full year 2017 on the non-GAAP financial measures provided below. Pages A-1 through A-12 of the Financial Schedules reconcile the non-GAAP financial measures set forth below to the following full year 2017 expected GAAP results:
Net income $139 million to $148 million
Fully diluted EPS $4.97 to $5.29
Net cash provided by operating activities $110 million to $125 million
Adjusted net income $139 million to $148 million
Adjusted fully diluted EPS $4.97 to $5.29
Adjusted EBITDA $276 million to $291 million
Adjusted free cash flow $160 million to $180 million
Contract sales growth 9 percent to 15 percent
Fourth Quarter 2016 Results
Company Results
Fourth quarter 2016 company net income was $49.8 million, a $16.7 million increase from the fourth quarter of 2015. These results were driven by $9.8 million of higher development margin, $6.4 million of higher resort management and other services revenues net of expenses, $1.8 million of lower acquisition related transaction costs, $1.7 million of higher financing revenues net of expenses and consumer financing interest expense, $1.4 million of lower interest expense, $0.9 million of higher rental revenues net of expenses, and $2.7 million of lower general and administrative costs stemming from lower bonus payouts and cost containment initiatives.
Total company vacation ownership contract sales were $234.3 million, $30.1 million, or 14.7 percent, higher than the fourth quarter of 2015. These results were driven by $27.0 million of higher contract sales in the company's North America segment and $5.6 million of higher contract sales in the company's Asia Pacific segment, partially offset by $2.5 million of lower contract sales in the company's Europe segment as it continues to sell through the remaining developer inventory. The company estimates that Hurricane Matthew negatively impacted contract sales by approximately $8.1 million in the fourth quarter. Adjusting for that impact, contract sales would have grown by nearly 19 percent over 2015.
Development margin was $53.8 million, a $9.8 million increase from the fourth quarter of 2015. Development margin percentage was 24.3 percent compared to 22.1 percent in the prior year quarter. The increase in development margin reflected $8.1 million from lower product costs, $6.6 million from higher contract sales volumes net of expenses, and $0.5 million related to the timing of revenue reportability year-over-year, partially offset by $2.4 million from higher sales reserve activity mainly associated with a 5.4 percentage point increase in financing propensity, $2.0 million related mainly to higher usage of plus points for sales incentives, and $1.4 million of higher marketing and sales costs primarily from ramp-up costs associated with the company's new sales distributions. Adjusted development margin percentage, which excludes the impact of revenue reportability year-over-year, was 22.3 percent in the fourth quarter of 2016 compared to 20.1 percent in the fourth quarter of 2015.
Rental revenues totaled $82.9 million, a $5.2 million decrease from the fourth quarter of 2015. Rental revenues net of expenses were $13.8 million, a $0.9 million, or 6.9 percent, increase from the fourth quarter of 2015.
Resort management and other services revenues totaled $93.0 million, a $2.4 million decrease from the fourth quarter of 2015. Resort management and other services revenues, net of expenses, totaled $42.3 million, a $6.4 million, or 18.0 percent, increase from the fourth quarter of 2015.
Financing revenues totaled $39.2 million, a $0.8 million increase from the fourth quarter of 2015. Financing revenues, net of expenses and consumer financing interest expense, were $24.3 million, a $1.7 million, or 7.7 percent, increase from the fourth quarter of 2015.
Net income was $49.8 million, compared to net income of $33.1 million in the fourth quarter of 2015, an increase of $16.7 million, or 50.3 percent. Adjusted EBITDA was $95.0 million in the fourth quarter of 2016, a $21.5 million, or 29.3 percent, increase from $73.5 million in the fourth quarter of 2015. The company estimates that Hurricane Matthew negatively impacted Adjusted EBITDA by approximately $3.6 million in the fourth quarter. Adjusting for that impact, Adjusted EBITDA would have totaled nearly $99 million in the fourth quarter.
Segment Results
North America
North America vacation ownership contract sales were $209.1 million in the fourth quarter of 2016, an increase of $27.0 million, or 14.9 percent, from the prior year period, reflecting higher sales from existing sales centers driven by the success of our new marketing programs, as well as the continued ramp-up of new sales centers. VPG increased $402, or 12.7 percent, to $3,563 in the fourth quarter of 2016 from the fourth quarter of 2015. Total tours in the fourth quarter of 2016 increased 3.4 percent, driven by an 8.3 percent increase in first time buyer tours. Tours were negatively impacted by 3.9 percentage points due to Hurricane Matthew. Adjusting for this impact, tours would have improved almost 7.3 percent in the fourth quarter.
Fourth quarter 2016 North America segment financial results were $141.2 million, an increase of $18.8 million from the fourth quarter of 2015. The increase was driven primarily by $9.4 million of higher development margin, $7.1 million of higher resort management and other services revenues net of expenses, $1.0 million of higher financing revenues, $0.7 million of higher rental revenues net of expenses, and $0.4 million of lower acquisition related transaction costs.
Development margin was $53.6 million, a $9.4 million increase from the fourth quarter of 2015. Development margin percentage was 26.9 percent compared to 24.5 percent in the prior year quarter. The increase in development margin reflected $7.8 million from lower product costs, and $6.2 million from higher contract sales volumes net of expenses, partially offset by $2.2 million related mainly to higher usage of plus points for sales incentives, $2.1 million from higher sales reserve activity mainly associated with a 5.0 percentage point increase in financing propensity, and $0.7 million of higher marketing and sales costs primarily from ramp-up costs associated with the company's new sales distributions. Adjusted development margin percentage, which excludes the impact of revenue reportability, was 24.8 percent in the fourth quarter of 2016 compared to 22.1 percent in the fourth quarter of 2015.
Asia Pacific
Total vacation ownership contract sales in the segment were $16.1 million, an increase of $5.6 million, or 52.5 percent, from the fourth quarter of 2015, due primarily to the opening of a new sales location in Surfers Paradise, Australia in the second quarter of 2016. Segment financial results were $1.8 million, relatively flat to the fourth quarter of 2015.
Europe
Fourth quarter 2016 contract sales were $9.1 million, a decrease of $2.5 million from the fourth quarter of 2015. Segment financial results were $5.0 million, a $0.3 million increase from the fourth quarter of 2015, driven by $0.5 million of higher development margin.
Full Year 2016 Results
Full year 2016 net income totaled $137.3 million, or $4.83 diluted earnings per share, compared to net income of $122.8 million in 2015, or $3.82 diluted earnings per share. Total company contract sales, excluding residential sales, were $723.6 million, up $23.8 million, or 3.4 percent, from $699.9 million in 2015, driven by $13.9 million, or 2.2 percent, higher contract sales in the company's North America segment, and $13.1 million, or 38.3 percent, higher contract sales in the company's Asia Pacific segment. These increases were partially offset by $3.2 million of lower contract sales in the company's Europe segment.
Full year total company development margin decreased to 20.3 percent in 2016 from 20.8 percent in 2015. Full year total company adjusted development margin decreased to 20.7 percent in 2016 from 20.9 percent in 2015.
Share Repurchase Program and Dividends
During 2016, the company returned $212.0 million to its shareholders, through the repurchase of more than 2.8 million shares for $177.8 million and $34.2 million in dividends paid.
Fiscal Year Change
On December 8, 2016, the Board of Directors approved a change in the company's financial reporting year end to a calendar year end beginning with its 2017 fiscal year. The 2017 fiscal year began on December 31, 2016 (the day after the end of the 2016 fiscal year) and will end on December 31, 2017. Subsequent fiscal years will begin on January 1 and end on December 31. The company's financial quarters will be the three-month periods ending March 31, June 30, September 30, and December 31, except that the period ending March 31, 2017 will also include December 31, 2016. The company believes these changes will allow for the simplification of transaction and reporting processes to support future growth. Historical results will not be restated.
Historically (including for the 2016 fiscal year), the company's fiscal year was a 52 or 53 week fiscal year that ended on the Friday nearest to December 31, and quarterly results were for twelve-week periods for the first, second, and third quarters and for a sixteen-week period (or in some cases a seventeen-week period) for the fourth quarter.
Balance Sheet and Liquidity
On December 30, 2016, cash and cash equivalents totaled $147.1 million. Since the beginning of the year, real estate inventory balances increased $44.2 million to $708.2 million, including $338.0 million of finished goods, $39.5 million of work-in-progress and $330.7 million of land and infrastructure. The company had $746.4 million in gross debt outstanding at the end of 2016, an increase of $58.3 million from year-end 2015, consisting primarily of $738.4 million in gross non-recourse securitized notes.
As of December 30, 2016, the company had approximately $197 million in available capacity under its revolving credit facility after taking into account outstanding letters of credit and approximately $103 million of gross vacation ownership notes receivable eligible for securitization in its warehouse credit facility.
Fourth Quarter 2016 Earnings Conference Call
The company will hold a conference call at 10:00 a.m. EST today to discuss these results and the guidance for full year 2017. 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 13654437. 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 over 60 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 February 23, 2017 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 4, 2016
TABLE OF CONTENTS
Consolidated Statements of Income -16 Weeks and 52 Weeks Ended December 30, 2016 and
January 1, 2016 A-1
Adjusted Net Income, Adjusted Earnings Per Share -Diluted, EBITDA and Adjusted EBITDA
-16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016 A-2
North America Segment Financial Results -16 Weeks and 52 Weeks Ended December 30, 2016
and January 1, 2016 A-3
Asia Pacific Segment Financial Results -16 Weeks and 52 Weeks Ended December 30, 2016
and January 1, 2016 A-4
Europe Segment Financial Results -16 Weeks and 52 Weeks Ended December 30, 2016 and
January 1, 2016 A-5
Corporate and Other Financial Results -16 Weeks and 52 Weeks Ended December 30, 2016
and January 1, 2016 A-6
Consolidated Contract Sales to Sale of Vacation Ownership Products and Adjusted Development Margin
(Adjusted Sale of Vacation Ownership Products Net of Expenses) -16 Weeks and 52 Weeks
Ended December 30, 2016 and January 1, 2016 A-7
North America Contract Sales to Sale of Vacation Ownership Products and Adjusted Development Margin
(Adjusted Sale of Vacation Ownership Products Net of Expenses) -16 Weeks and 52 Weeks
Ended December 30, 2016 and January 1, 2016 A-8
2016 Adjusted Free Cash Flow A-9
2017 Outlook -Adjusted Net Income, Adjusted Earnings Per Share -Diluted, Adjusted
EBITDA and Adjusted Free Cash Flow A-10
Non-GAAP Financial Measures A-11
Consolidated Balance Sheets A-13
Consolidated Statements of Cash Flows A-14
A-1
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands, except per share amounts)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Revenues
Sale of vacation
ownership products $221,672 $199,251 $637,503 $675,329
Resort management and
other services 92,955 95,374 303,570 295,547
Financing 39,182 38,393 126,126 124,033
Rental 82,938 88,117 312,071 312,997
Cost reimbursements 127,992 119,938 431,965 405,875
Total
revenues 564,739 541,073 1,811,235 1,813,781
------- ------- --------- ---------
Expenses
Cost of vacation
ownership products 50,944 53,442 155,093 204,299
Marketing and sales 116,947 101,839 353,295 330,599
Resort management and
other services 50,616 59,479 174,311 180,072
Financing 7,032 7,716 21,380 24,194
Rental 69,094 75,169 260,752 259,729
General and
administrative 31,962 34,651 104,833 106,104
Organizational and
separation related - 442 - 1,174
Litigation settlement - 4 (303) (232)
Consumer financing
interest 7,845 8,100 23,685 24,658
Royalty fee 18,946 18,551 60,953 58,982
Impairment - 324 - 324
Cost reimbursements 127,992 119,938 431,965 405,875
Total
expenses 481,378 479,655 1,585,964 1,595,778
------- ------- --------- ---------
Gains and other income 72 65 11,201 9,557
Interest expense (2,581) (3,988) (8,912) (12,810)
Other (104) (1,948) (4,632) (8,253)
Income
before
income
taxes 80,748 55,547 222,928 206,497
Provision for income taxes (30,924) (22,398) (85,580) (83,698)
Net income $49,824 $33,149 $137,348 $122,799
======= ======= ======== ========
Earnings per share - Basic $1.83 $1.08 $4.93 $3.90
===== ===== ===== =====
Earnings per share - Diluted $1.80 $1.06 $4.83 $3.82
===== ===== ===== =====
Basic Shares 27,152 30,623 27,882 31,487
Diluted Shares 27,742 31,297 28,422 32,168
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract Sales
Vacation ownership $234,317 $204,239 $723,634 $699,884
Residential products - - - 28,420
--- --- --- ------
Total
contract
sales $234,317 $204,239 $723,634 $728,304
======== ======== ======== ========
NOTE: Earnings per share -Basic
and Earnings per share -Diluted
are calculated using whole
dollars. In the fourth quarter of
2016, we reclassified certain
revenues and expenses to correct
immaterial presentation errors
within the following line items:
Resort management and other
services revenues, Resort
management and other services
expenses and General and
administrative expenses. We have
recast prior year presentation for
consistency.
A-2
MARRIOTT VACATIONS WORLDWIDE CORPORATION
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands, except per share amounts)
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Net income $49,824 $33,149 $137,348 $122,799
Less certain items:
Transaction costs 168 1,987 4,881 8,440
Hurricane Matthew
related expenses 1,442 - 1,442 -
Refurbishment costs - - - 1,767
Operating results
from the sold
portion of the
Surfers Paradise,
Australia property - (1,595) (275) (1,595)
Litigation
settlement - 4 (303) (232)
Gains and other
income (72) (65) (11,201) (9,557)
Impairments - 324 - 324
Asia Pacific bulk
sale - - - (5,915)
Organizational and
separation related - 442 - 1,174
--- --- --- -----
Certain
items
before
depreciation
and
provision
for income
taxes (1) 1,538 1,097 (5,456) (5,594)
Depreciation on the
sold portion of
the Surfers
Paradise,
Australia property - 1,341 469 1,341
Provision for
income taxes on
certain items (606) (922) 1,962 366
Adjusted net
income ** $50,756 $34,665 $134,323 $118,912
======= ======= ======== ========
Earnings per share - Diluted $1.80 $1.06 $4.83 $3.82
===== ===== ===== =====
Adjusted earnings per share - Diluted ** $1.83 $1.11 $4.73 $3.70
===== ===== ===== =====
Diluted Shares 27,742 31,297 28,422 32,168
EBITDA AND ADJUSTED EBITDA
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Net income $49,824 $33,149 $137,348 $122,799
Interest expense (2) 2,581 3,988 8,912 12,810
Tax provision 30,924 22,398 85,580 83,698
Depreciation and amortization 6,188 8,367 21,044 22,217
EBITDA ** 89,517 67,902 252,884 241,524
------ ------ ------- -------
Non-cash share-based compensation (3) 3,954 4,509 13,949 14,142
Certain items before depreciation and provision for
income taxes (1) 1,538 1,097 (5,456) (5,594)
Adjusted EBITDA ** $95,009 $73,508 $261,377 $250,072
======= ======= ======== ========
** Denotes non-GAAP financial
measures. Please see pages A-11
and A-12 for additional
information about our reasons for
providing these alternative
financial measures and limitations
on their use.
(1) Please see pages A-11 and A-
12 for additional information
regarding these items. The certain
items adjustments for the Adjusted
EBITDA reconciliations exclude
depreciation and the provision for
income taxes on certain items
included in the Adjusted Net Income
reconciliations.
(2) Interest expense excludes
consumer financing interest
expense.
3 Beginning with the first quarter
of 2016, non-cash share-based
compensation expense is excluded
from our Adjusted EBITDA, and prior
period presentation has been recast
for consistency. Please see pages
A-11 and A-12 for additional
information.
A-3
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA SEGMENT
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Revenues
Sale of vacation ownership
products $198,964 $179,990 $572,305 $586,774
Resort management and other
services 83,776 79,870 268,766 258,761
Financing 36,947 35,929 118,646 115,738
Rental 74,484 74,742 276,008 277,348
Cost reimbursements 116,402 109,015 394,592 369,467
Total revenues 510,573 479,546 1,630,317 1,608,088
------- ------- --------- ---------
Expenses
Cost of vacation ownership
products 44,203 47,129 134,079 164,200
Marketing and sales 101,211 88,754 304,099 288,260
Resort management and other
services 43,714 46,898 145,036 149,257
Rental 60,601 61,562 225,281 225,043
Organizational and
separation related - 219 - 532
Litigation settlement - - (303) (370)
Royalty fee 3,114 2,797 9,867 7,971
Impairment - 324 - 324
Cost reimbursements 116,402 109,015 394,592 369,467
Total expenses 369,245 356,698 1,212,651 1,204,684
------- ------- --------- ---------
(Losses) gains and other (expense) income (37) 66 12,260 9,600
Other (123) (578) (4,191) (422)
Segment
financial
results $141,168 $122,336 $425,735 $412,582
======== ======== ======== ========
Segment financial results $141,168 $122,336 $425,735 $412,582
Less certain items:
Transaction costs 189 622 4,449 622
Litigation settlement - - (303) (370)
Losses (gains) and other
expense (income) 37 (66) (12,260) (9,600)
Impairment - 324 - 324
Organizational and
separation related - 219 - 532
Certain items 226 1,099 (8,114) (8,492)
Adjusted
segment
financial
results ** $141,394 $123,435 $417,621 $404,090
======== ======== ======== ========
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract Sales
Vacation ownership $209,063 $182,018 $645,277 $631,403
-------- -------- -------- --------
Total contract
sales $209,063 $182,018 $645,277 $631,403
======== ======== ======== ========
** Denotes non-GAAP financial
measures. Please see pages A-11
and A-12 for additional
information about our reasons for
providing these alternative
financial measures and
limitations on their use.
NOTE: In the fourth quarter of
2016, we reclassified certain
revenues and expenses to correct
immaterial presentation errors
within the following line items:
Segment Resort management and
other services revenues, Segment
Resort management and other
services expenses and Corporate
General and administrative
expenses. We have recast prior
year presentation for
consistency.
A-4
MARRIOTT VACATIONS WORLDWIDE CORPORATION
ASIA PACIFIC SEGMENT
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Revenues
Sale of vacation
ownership products $14,019 $9,436 $40,664 $59,592
Resort management and
other services 1,679 7,840 10,514 11,664
Financing 1,281 1,289 4,187 4,346
Rental 3,698 8,546 16,471 14,970
Cost reimbursements 1,211 953 3,461 3,060
Total
revenues 21,888 28,064 75,297 93,632
------ ------ ------ ------
Expenses
Cost of vacation
ownership products 2,588 1,646 7,606 26,877
Marketing and sales 9,982 6,354 30,054 20,365
Resort management and
other services 1,509 6,814 10,055 10,368
Rental 4,579 9,836 20,463 19,255
Royalty fee 360 238 924 684
Cost reimbursements 1,211 953 3,461 3,060
Total
expenses 20,229 25,841 72,563 80,609
------ ------ ------ ------
Gains (losses) and other income (expense) 130 - (878) (29)
Other 19 (292) (230) (5,731)
Segment
financial
results $1,808 $1,931 $1,626 $7,263
====== ====== ====== ======
Segment financial results $1,808 $1,931 $1,626 $7,263
Less certain items:
Transaction costs (21) 287 221 5,718
Operating results from
the sold portion of
the Surfers Paradise,
Australia property - (254) 194 (254)
(Gains) losses and
other (income) expense (130) - 878 29
Asia Pacific bulk sale - - - (5,915)
Certain items (151) 33 1,293 (422)
---- --- ----- ----
Adjusted
segment
financial
results
** $1,657 $1,964 $2,919 $6,841
====== ====== ====== ======
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract Sales
Vacation ownership $16,134 $10,577 $47,183 $34,105
Residential products - - - 28,420
--- --- --- ------
Total
contract
sales $16,134 $10,577 $47,183 $62,525
======= ======= ======= =======
** Denotes non-GAAP financial
measures. Please see pages A-
11 and A-12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
NOTE: In the fourth quarter of
2016, we reclassified certain
revenues and expenses to
correct immaterial presentation
errors within the following
line items: Segment Resort
management and other services
revenues and Segment Resort
management and other services
expenses. We have recast prior
year presentation for
consistency.
A-5
MARRIOTT VACATIONS WORLDWIDE CORPORATION
EUROPE SEGMENT
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Revenues
Sale of vacation
ownership products $8,689 $9,825 $24,534 $28,963
Resort management and
other services 7,500 7,664 24,290 25,122
Financing 954 1,175 3,293 3,949
Rental 4,756 4,829 19,592 20,679
Cost reimbursements 10,379 9,970 33,912 33,348
Total
revenues 32,278 33,463 105,621 112,061
------ ------ ------- -------
Expenses
Cost of vacation
ownership products 1,731 2,354 5,889 6,509
Marketing and sales 5,754 6,731 19,142 21,974
Resort management and
other services 5,393 5,767 19,220 20,447
Rental 3,914 3,771 15,008 15,431
Royalty fee 119 174 383 464
Cost reimbursements 10,379 9,970 33,912 33,348
Total
expenses 27,290 28,767 93,554 98,173
------ ------ ------ ------
Losses and other expense - (1) - (14)
Segment
financial
results $4,988 $4,695 $12,067 $13,874
====== ====== ======= =======
Segment financial results $4,988 $4,695 $12,067 $13,874
Less certain items:
Losses and other
expense - 1 - 14
Certain items - 1 - 14
--- --- --- ---
Adjusted
segment
financial
results
** $4,988 $4,696 $12,067 $13,888
====== ====== ======= =======
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract Sales
Vacation ownership $9,120 $11,644 $31,174 $34,376
Residential products - - - -
--- --- --- ---
Total
contract
sales $9,120 $11,644 $31,174 $34,376
====== ======= ======= =======
** Denotes non-GAAP financial
measures. Please see pages A-
11 and A-12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
NOTE: In the fourth quarter of
2016, we reclassified certain
revenues and expenses to
correct immaterial presentation
errors within the following
line items: Segment Resort
management and other services
revenues and Segment Resort
management and other services
expenses. We have recast prior
year presentation for
consistency.
A-6
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CORPORATE AND OTHER
16 Weeks and 52 Weeks Ended December 30, 2016 and January 1, 2016
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Expenses
Cost of vacation
ownership products $2,422 $2,313 $7,519 $6,713
Financing 7,032 7,716 21,380 24,194
General and
administrative 31,962 34,651 104,833 106,104
Organizational and
separation related - 223 - 642
Litigation settlement - 4 - 138
Consumer financing
interest 7,845 8,100 23,685 24,658
Royalty fee 15,353 15,342 49,779 49,863
Total
expenses 64,614 68,349 207,196 212,312
------ ------ ------- -------
Losses and other expense (21) - (181) -
Interest expense (2,581) (3,988) (8,912) (12,810)
Other - (1,078) (211) (2,100)
Financial
results $(67,216) $(73,415) $(216,500) $(227,222)
======== ======== ========= =========
Financial results $(67,216) $(73,415) $(216,500) $(227,222)
Less certain items:
Transaction costs - 1,078 211 2,100
Hurricane Matthew
related expenses 1,442 - 1,442 -
Refurbishment costs - - - 1,767
Litigation settlement - 4 - 138
Losses and other
expense 21 - 181 -
Organizational and
separation related - 223 - 642
Certain items 1,463 1,305 1,834 4,647
----- ----- ----- -----
Adjusted
financial
results
** $(65,753) $(72,110) $(214,666) $(222,575)
======== ======== ========= =========
** Denotes non-GAAP financial
measures. Please see pages A-11 and
A-12 for additional information about
our reasons for providing these
alternative financial measures and
limitations on their use.
NOTE: In the fourth quarter of 2016, we
reclassified certain revenues and
expenses to correct immaterial
presentation errors within the
following line items: Segment Resort
management and other services revenues,
Segment Resort management and other
services expenses and Corporate General
and administrative expenses. We have
recast prior year presentation for
consistency.
A-7
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract sales
Vacation
ownership $234,317 $204,239 $723,634 $699,884
Residential
products - - - 28,420
Total
contract
sales 234,317 204,239 723,634 728,304
------- ------- ------- -------
Revenue recognition adjustments:
Reportability(1) 9,482 9,472 (7,547) (1,652)
Sales reserve
(2) (14,827) (9,853) (48,274) (32,999)
Other
(3) (7,300) (4,607) (30,310) (18,324)
Sale of vacation ownership products $221,672 $199,251 $637,503 $675,329
======== ======== ======== ========
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)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Sale of vacation ownership products $221,672 $199,251 $637,503 $675,329
Less:
Cost of vacation
ownership products 50,944 53,442 155,093 204,299
Marketing and
sales 116,947 101,839 353,295 330,599
Development margin 53,781 43,970 129,115 140,431
Certain
items (1) - - - (5,915)
Revenue recognition
reportability
adjustment (6,429) (5,898) 4,614 1,057
Adjusted development margin** $47,352 $38,072 $133,729 $135,573
======= ======= ======== ========
Development
margin
percentage(2) 24.3% 22.1% 20.3% 20.8%
Adjusted development
margin percentage 22.3% 20.1% 20.7% 20.9%
** Denotes non-GAAP financial
measures. Please see pages A-
11 and A-12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
(1) Certain items adjustment
in the 52 weeks ended January
1, 2016, represents $5.9
million of development margin
from the disposition of units
in Macau as whole ownership
residential units rather than
through our Marriott Vacation
Club, Asia Pacific points
program.
(2) Development margin
percentage represents
Development margin divided by
Sale of vacation ownership
products.
A-8
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NORTH AMERICA CONTRACT SALES TO SALE OF VACATION OWNERSHIP PRODUCTS
(In thousands)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Contract sales
Vacation
ownership $209,063 $182,018 $645,277 $631,403
Total
contract
sales 209,063 182,018 645,277 631,403
------- ------- ------- -------
Revenue recognition adjustments:
Reportability(1) 9,529 10,510 (3,453) (841)
Sales reserve
(2) (12,338) (8,191) (39,298) (26,077)
Other
(3) (7,290) (4,347) (30,221) (17,711)
Sale of vacation ownership products $198,964 $179,990 $572,305 $586,774
======== ======== ======== ========
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)
16 Weeks Ended 52 Weeks Ended
-------------- --------------
December 30, 2016 January 1, 2016 December 30, 2016 January 1, 2016
----------------- --------------- ----------------- ---------------
Sale of vacation ownership products $198,964 $179,990 $572,305 $586,774
Less:
Cost of vacation
ownership products 44,203 47,129 134,079 164,200
Marketing and
sales 101,211 88,754 304,099 288,260
Development margin 53,550 44,107 134,127 134,314
Revenue recognition
reportability
adjustment (6,476) (6,689) 1,887 360
Adjusted development margin** $47,074 $37,418 $136,014 $134,674
======= ======= ======== ========
Development
margin
percentage(1) 26.9% 24.5% 23.4% 22.9%
Adjusted development
margin percentage 24.8% 22.1% 23.6% 22.9%
** Denotes non-GAAP financial
measures. Please see pages A-
11 and A-12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
(1) Development margin
percentage represents
Development margin divided by
Sale of vacation ownership
products.
A - 9
MARRIOTT VACATIONS WORLDWIDE CORPORATION
2016 CASH FLOW AND ADJUSTED FREE CASH FLOW
(In thousands)
Cash Flow 2016
----
Cash provided by (used in);
Operating activities $140,172
Investing activities 39,021
Financing activities (204,952)
Effect of change in
exchange rates on
cash and cash
equivalents (4,200)
Decrease in cash
and cash
equivalents $(29,959)
========
Adjusted Free Cash Flow
Net cash provided by operating activities $140,172
Capital expenditures
for property and
equipment (excluding
inventory):
New sales
centers (1) (18,077)
Other (16,693)
Decrease in
restricted cash 4,838
Borrowings from
securitization
transactions 376,622
Repayment of debt related
to securitizations (322,864)
Free cash
flow** 163,998
Adjustment:
Net change in borrowings
available from the
securitization of
eligible vacation
ownership notes
receivable through the
warehouse credit facility
(2)
(5,107)
------
Adjusted
free cash
flow** $158,891
========
** Denotes non-GAAP financial
measures. Please see pages A-
11 and 12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
(1) Represents incremental
investment in new sales centers,
mainly to support new sales
distributions.
(2) Represents the net change in
borrowings available from the
securitization of eligible
vacation ownership notes
receivable through the warehouse
credit facility between the 2015
and 2016 year ends.
A-10
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions, except per share amounts)
2017 ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK
Fiscal Year Fiscal Year
2017 (low) 2017 (high)
--------- ----------
Net income $139 $148
Adjustments to
reconcile Net
income to
Adjusted net
income - -
Adjusted
net
income** $139 $148
==== ====
Earnings per
share -
Diluted (1) $4.97 $5.29
Adjusted
earnings per
share -
Diluted**, 1 $4.97 $5.29
Diluted
shares(1) 28.0 28.0
1 Earnings per share -
Diluted, Adjusted earnings
per share -Diluted, and
Diluted shares outlook
includes the impact of share
repurchase activity only
through February 23, 2017.
_________________________________________________________________________________
2017 ADJUSTED EBITDA OUTLOOK
Fiscal Year Fiscal Year
2017 (low) 2017 (high)
--------- ----------
Net income $139 $148
Interest
expense(1) 7 7
Tax
provision 90 96
Depreciation
and
amortization 23 23
--- ---
EBITDA
** 259 274
Non-cash
share-
based
compensation 17 17
Adjusted
EBITDA** $276 $291
(1) Interest expense
excludes consumer
financing interest
expense.
_________________________________________________________________________________
2017 ADJUSTED FREE CASH FLOW OUTLOOK
Fiscal Year Fiscal Year
2017 (low) 2017 (high)
--------- ----------
Net cash provided by operating activities $110 $125
Capital expenditures
for property and
equipment
(excluding
inventory):
New sales centers
(1) (11) (9)
Other (27) (25)
Increase in
restricted cash (12) (11)
Borrowings from
securitization
transactions 330 340
Repayment of debt
related to
securitizations (250) (260)
------------
Free cash flow** 140 160
Adjustments:
Net change in
borrowings
available from the
securitization of
eligible vacation
ownership notes
receivable through
the warehouse
credit facility (2) 20 20
Adjusted free cash
flow** $160 $180
==== ====
(1) Represents the incremental
investment in new sales centers.
(2) Represents the net change in
borrowings available from the
securitization of eligible
vacation ownership notes
receivable through the warehouse
credit facility between the 2016
and 2017 year ends.
** Denotes non-GAAP financial
measures. Please see pages A-
11 and A-12 for additional
information about our reasons
for providing these alternative
financial measures and
limitations on their use.
A-11
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 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
Adjusted Net Income. We evaluate non-GAAP financial measures, including Adjusted
Net Income, Adjusted EBITDA, and Adjusted Development Margin, that exclude certain
items in the 12 weeks and 52 weeks Ended December 30, 2016 and January 1, 2016
because these non-GAAP financial measures allow for period-over-period
comparisons of our on-going core operations before the impact of these items.
These non-GAAP financial measures also facilitate our comparison of results from
our on-going core operations before these items with results from other vacation
ownership companies.
Certain items - 16 Weeks and 52 Weeks Ended December 30, 2016. In our Statement of
Income for the 16 weeks ended December 30, 2016, we recorded $1.5 million of net pre-
tax items, which included $1.4 million of Hurricane Matthew related expenses, $0.2
million of transaction costs associated with acquisitions, and $0.1 million of gains
and other income not associated with our on-going core operations. In our Statement
of Income for the 52 weeks Ended December 30, 2016, we recorded $5.0 million of net
pre-tax items, which included $11.2 million of gains and other income not associated
with our on-going core operations, $4.9 million of transaction costs associated with
acquisitions, $1.4 million of Hurricane Matthew related expenses, $0.2 million of
losses (including $0.5 million of depreciation) from the operations of the property
we acquired in Australia in 2015 that we sold in the second quarter of 2016, and a
Certain items - 16 Weeks and 52 Weeks Ended January 1, 2016. In our Statement of
Income for the 16 weeks ended January 1, 2016, we recorded $2.4 million of net pre-
tax items, which included $2.0 million of transaction costs associated with
acquisitions, $0.4 million of organizational and separation related costs, $0.3
million of income (net of $1.3 million of depreciation) from the operations of the
property we acquired in Australia in 2015 that we sold in the second quarter of 2016,
a $0.3 million impairment associated with a project in our North America segment, and
$0.1 million of gains and other income not associated with our on-going core
operations. In our Statement of Income for the 52 weeks Ended January 1, 2016, we
recorded $4.3 million of net pre-tax items, which included $9.6 million of gains and
other income not associated with our on-going core operations, $8.4 million of
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.
A-12
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
NON-GAAP FINANCIAL MEASURES
Earnings Before Interest Expense,
Taxes, Depreciation and Amortization
("EBITDA") and Adjusted 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 and Adjusted
EBITDA calculations, 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 and
Adjusted EBITDA to be indicators of
operating performance, which we use to
measure our ability to service debt,
fund capital expenditures and expand
our business. We also use EBITDA and
Adjusted EBITDA, as do analysts,
lenders, investors and others, because
these measures exclude 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 and Adjusted EBITDA
also exclude 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 reflects additional adjustments
for certain items, as itemized in the
discussion of Adjusted Net Income
above, including, beginning with the
first quarter of 2016, the exclusion
of non-cash share-based compensation
expense to address considerable
variability among companies in
recording compensation expense because
companies use share-based payment
awards differently, both in the type
and quantity of awards granted. Prior
period presentation has been recast
for consistency. 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 the excluded items.
Together, EBITDA and Adjusted EBITDA
facilitate our comparison of results
from our on-going core operations
before the impact of these items with
results from other vacation ownership
companies.
Free Cash Flow and Adjusted Free Cash
Flow. We evaluate Free Cash Flow and
Adjusted Free Cash Flow as liquidity
measures that provide 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, which cash can be
used for strategic opportunities,
including acquisitions and
strengthening the balance sheet.
Adjusted Free Cash Flow, which
reflects additional adjustments to
Free Cash Flow for the impact of
organizational and separation related,
litigation, and other cash charges,
allows for period-over-period
comparisons of the cash generated by
our business before the impact of
these items. Analysis of Free Cash
Flow and Adjusted Free Cash Flow also
facilitates management's comparison of
our results with our competitors'
results.
A-13
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 30, 2016 January 1, 2016
----------------- ---------------
ASSETS
Cash and cash equivalents $147,102 $177,061
Restricted cash (including
$27,525 and $26,884 from
VIEs, respectively) 66,000 71,451
Accounts and contracts
receivable, net (including
$4,865 and $4,893 from
VIEs, respectively) 161,733 131,850
Vacation ownership notes
receivable, net (including
$717,543 and $669,179 from
VIEs, respectively) 972,311 920,631
Inventory 712,536 669,243
Property and equipment 202,802 288,803
Other 128,935 140,679
Total Assets $2,391,419 $2,399,718
========== ==========
LIABILITIES AND EQUITY
Accounts payable $124,439 $139,120
Advance deposits 55,542 49,128
Accrued liabilities
(including $584 and $669
from VIEs, respectively) 147,469 163,632
Deferred revenue 95,495 78,196
Payroll and benefits
liability 95,516 104,331
Deferred compensation
liability 62,874 51,031
Mandatorily redeemable
preferred stock of
consolidated subsidiary,
net - 38,989
Debt, net (including
$738,362 and $684,604 from
VIEs, respectively) 737,224 678,793
Other 15,873 11,155
Deferred taxes 149,168 109,076
------- -------
Total Liabilities 1,483,600 1,423,451
--------- ---------
Preferred stock -$.01 par
value; 2,000,000 shares
authorized; none issued or
outstanding - -
Common stock -$.01 par
value; 100,000,000 shares
authorized; 36,633,868 and
36,393,800 shares issued,
respectively 366 364
Treasury stock -at cost;
9,643,562 and 6,844,256
shares, respectively (606,631) (429,990)
Additional paid-in capital 1,162,283 1,150,731
Accumulated other
comprehensive income 5,460 11,381
Retained earnings 346,341 243,781
------- -------
Total Equity 907,819 976,267
Total Liabilities and Equity $2,391,419 $2,399,718
========== ==========
The abbreviation VIEs above
means Variable Interest
Entities.
A-14
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
52 Weeks Ended
--------------
December 30, 2016 January 1, 2016
----------------- ---------------
OPERATING ACTIVITIES
Net income $137,348 $122,799
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 21,044 22,217
Amortization of debt issuance costs 6,509 5,586
Provision for loan losses 47,292 33,083
Share-based compensation 13,949 14,142
Employee stock purchase plan 1,317 560
Deferred income taxes 38,834 28,162
Gain on disposal of property and
equipment, net (11,201) (9,557)
Non-cash litigation settlement (303) (262)
Impairment charges - 324
Net change in assets and liabilities:
Accounts and contracts receivable (30,055) (24,189)
Notes receivable originations (356,859) (311,195)
Notes receivable collections 253,622 270,170
Inventory 4,301 72,158
Purchase of operating properties for
future conversion to inventory - (61,554)
Other assets 11,092 (10,648)
Accounts payable, advance deposits and
accrued liabilities (19,905) 23,461
Deferred revenue 17,664 (5,289)
Payroll and benefit liabilities (6,933) 11,380
Liability for Marriott Rewards customer
loyalty program (37) (89,251)
Deferred compensation liability 11,843 9,354
Other liabilities 1,863 2,974
Other, net (1,213) 4,609
Net cash provided by operating
activities 140,172 109,034
------- -------
INVESTING ACTIVITIES
Capital expenditures for property and
equipment (excluding inventory) (34,770) (35,735)
Purchase of operating property to be sold - (47,658)
Decrease in restricted cash 4,838 37,681
Dispositions, net 68,953 20,644
Net cash provided by (used in) investing
activities 39,021 (25,068)
------
FINANCING ACTIVITIES
Borrowings from securitization
transactions 376,622 255,000
Repayment of debt related to
securitization transactions (322,864) (278,427)
Borrowings from Revolving Corporate
Credit Facility 85,000 -
Repayment of Revolving Corporate Credit
Facility (85,000) -
Proceeds from vacation ownership
inventory arrangement - 5,375
Debt issuance costs (4,065) (5,335)
Repurchase of common stock (177,830) (201,380)
Redemption of mandatorily redeemable
preferred stock of consolidated
subsidiary (40,000) -
Payment of dividends (34,195) (23,793)
Proceeds from stock option exercises 7 97
Excess tax benefits from share-based
compensation 1,207 9,380
Payment of withholding taxes on vesting
of restricted stock units (4,021) (10,894)
Other 187 230
Net cash used in financing
activities (204,952) (249,747)
-------- --------
Effect of changes in exchange rates on
cash and cash equivalents (4,200) (3,673)
DECREASE IN CASH AND CASH
EQUIVALENTS (29,959) (169,454)
CASH AND CASH EQUIVALENTS,
beginning of period 177,061 346,515
CASH AND CASH EQUIVALENTS, end of
period $147,102 $177,061
======== ========
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/marriott-vacations-worldwide-reports-fourth-quarter-and-full-year-2016-financial-results-and-2017-outlook-300412106.html
SOURCE Marriott Vacations Worldwide
