Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Interval Leisure Group, Inc. | ' |
Entity Central Index Key | '0001434620 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 57,358,142 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF INCOME | ' | ' | ' | ' |
Revenue | $119,156 | $117,195 | $379,020 | $362,602 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 41,991 | 41,741 | 131,788 | 127,793 |
Gross profit | 77,165 | 75,454 | 247,232 | 234,809 |
Selling and marketing expense | 12,951 | 13,282 | 40,958 | 41,323 |
General and administrative expense | 27,387 | 26,626 | 81,917 | 79,032 |
Amortization expense of intangibles | 1,950 | 6,669 | 5,858 | 21,001 |
Depreciation expense | 3,499 | 3,311 | 10,859 | 9,839 |
Operating income | 31,378 | 25,566 | 107,640 | 83,614 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 60 | 535 | 282 | 1,538 |
Interest expense | -1,295 | -6,485 | -4,559 | -23,874 |
Other income (expense), net | -65 | -915 | 893 | -2,408 |
Loss on extinguishment of debt | ' | -17,925 | ' | -18,527 |
Total other expense, net | -1,300 | -24,790 | -3,384 | -43,271 |
Earnings before income taxes and noncontrolling interest | 30,078 | 776 | 104,256 | 40,343 |
Income tax provision | -12,973 | -624 | -41,571 | -14,911 |
Net income | 17,105 | 152 | 62,685 | 25,432 |
Net income attributable to noncontrolling interest | -4 | -3 | -10 | -6 |
Net income attributable to common stockholders | $17,101 | $149 | $62,675 | $25,426 |
Earnings per share attributable to common stockholders: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.30 | $0 | $1.10 | $0.45 |
Diluted (in dollars per share) | $0.29 | $0 | $1.09 | $0.45 |
Weighted average number of shares of common stock outstanding: | ' | ' | ' | ' |
Basic (in shares) | 57,353 | 56,714 | 57,199 | 56,448 |
Diluted (in shares) | 57,986 | 57,364 | 57,738 | 57,120 |
Dividends declared per share of common stock (in dollars per share) | $0.11 | $0.10 | $0.22 | $0.30 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net income attributable to common stockholders | $17,101 | $149 | $62,675 | $25,426 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | 1,666 | 2,392 | -1,524 | 3,501 |
Total other comprehensive income (loss), net of tax | 1,666 | 2,392 | -1,524 | 3,501 |
Comprehensive income | $18,767 | $2,541 | $61,151 | $28,927 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $103,563 | $101,162 |
Restricted cash and cash equivalents | 5,828 | 7,348 |
Accounts receivable, net of allowance of $340 and $409, respectively | 35,854 | 31,964 |
Deferred income taxes | 16,535 | 16,107 |
Deferred membership costs | 9,957 | 12,349 |
Prepaid income taxes | 9,435 | 12,973 |
Prepaid expenses and other current assets | 20,655 | 27,592 |
Total current assets | 201,827 | 209,495 |
Property and equipment, net | 53,130 | 53,348 |
Goodwill | 505,774 | 505,774 |
Intangible assets, net | 93,270 | 98,678 |
Deferred membership costs | 11,196 | 11,058 |
Deferred income taxes | 4,566 | 4,571 |
Other non-current assets | 11,852 | 23,996 |
TOTAL ASSETS | 881,615 | 906,920 |
LIABILITIES: | ' | ' |
Accounts payable, trade | 10,963 | 11,086 |
Deferred revenue | 95,228 | 93,367 |
Interest payable | 157 | 386 |
Accrued compensation and benefits | 18,153 | 16,526 |
Member deposits | 9,549 | 9,463 |
Accrued expenses and other current liabilities | 38,766 | 44,575 |
Total current liabilities | 172,816 | 175,403 |
Long-term debt | 190,000 | 260,000 |
Other long-term liabilities | 1,068 | 1,493 |
Deferred revenue | 103,218 | 111,273 |
Deferred income taxes | 87,373 | 86,259 |
Total liabilities | 554,475 | 634,428 |
Redeemable noncontrolling interest | 435 | 426 |
Commitments and contingencies | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred stock-authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding | ' | ' |
Common stock-authorized 300,000,000 shares; $.01 par value; issued 59,052,950 and 58,553,265 shares, respectively | 591 | 586 |
Treasury stock-1,697,360 shares at cost | -20,913 | -20,913 |
Additional paid-in capital | 188,576 | 182,131 |
Retained earnings | 170,873 | 121,160 |
Accumulated other comprehensive loss | -12,422 | -10,898 |
Total stockholders' equity | 326,705 | 272,066 |
TOTAL LIABILITIES AND EQUITY | $881,615 | $906,920 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance (in dollars) | $340 | $409 |
Preferred stock, authorized shares | 25,000,000 | 25,000,000 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, authorized shares | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, issued shares | 59,052,950 | 58,553,265 |
Treasury stock, shares | 1,697,360 | 1,697,360 |
Series A Junior Participating Preferred Stock | ' | ' |
Preferred stock, authorized shares | 100,000 | 100,000 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Dec. 31, 2012 | $272,066 | $586 | ($20,913) | $182,131 | $121,160 | ($10,898) |
Balance (in shares) at Dec. 31, 2012 | 56,900,000 | 58,553,265 | 1,697,360 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income attributable to common stockholders | 62,675 | ' | ' | ' | 62,675 | ' |
Other comprehensive loss, net of tax | -1,524 | ' | ' | ' | ' | -1,524 |
Non-cash compensation expense | 7,753 | ' | ' | 7,753 | ' | ' |
Issuance of common stock upon exercise of stock options | 403 | ' | ' | 403 | ' | ' |
Issuance of common stock upon exercise of stock options (in shares) | ' | 29,544 | ' | ' | ' | ' |
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes | -4,478 | 5 | ' | -4,483 | ' | ' |
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes (in shares) | ' | 470,141 | ' | ' | ' | ' |
Change in excess tax benefits from stock-based awards | 2,598 | ' | ' | 2,598 | ' | ' |
Deferred stock compensation expense | -171 | ' | ' | -171 | ' | ' |
Dividends declared on common stock | -12,617 | ' | ' | 345 | -12,962 | ' |
Balance at Sep. 30, 2013 | $326,705 | $591 | ($20,913) | $188,576 | $170,873 | ($12,422) |
Balance (in shares) at Sep. 30, 2013 | 57,400,000 | 59,052,950 | 1,697,360 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $62,685 | $25,432 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization expense of intangibles | 5,858 | 21,001 |
Amortization of debt issuance costs | 587 | 1,180 |
Depreciation expense | 10,859 | 9,839 |
Accretion of original issue discount | ' | 1,840 |
Non-cash compensation expense | 7,753 | 8,733 |
Non-cash interest expense | 277 | 338 |
Non-cash interest income | ' | -651 |
Deferred income taxes | 656 | 1,370 |
Excess tax benefits from stock-based awards | -2,602 | -3,014 |
Loss (gain) on disposal of property and equipment | 163 | -256 |
Loss on extinguishment of debt | ' | 18,527 |
Change in fair value of contingent consideration | 485 | -670 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -4,189 | -2,803 |
Prepaid expenses and other current assets | 6,863 | 2,845 |
Prepaid income taxes and income taxes payable | 5,824 | -11,272 |
Accounts payable and other current liabilities | -3,761 | -14,942 |
Deferred revenue | -3,852 | 3,942 |
Other, net | 1,696 | 2,683 |
Net cash provided by operating activities | 89,302 | 64,122 |
Cash flows from investing activities: | ' | ' |
Acquisition, net of cash acquired | ' | -39,963 |
Acquisition of assets | -1,952 | ' |
Capital expenditures | -9,338 | -10,425 |
Proceeds from disposal of property and equipment | 7 | 230 |
Investment in financing receivables | ' | -9,480 |
Payments received on financing receivables | 9,876 | 16,989 |
Net cash used in investing activities | -1,407 | -42,649 |
Cash flows from financing activities: | ' | ' |
Principal payments on term loan | ' | -56,000 |
Redemption of senior notes | ' | -300,000 |
Payments on revolving credit facility | -70,000 | ' |
Borrowings on revolving credit facility | ' | 290,000 |
Payments of debt issuance costs | ' | -3,912 |
Dividend payments | -12,617 | -16,996 |
Withholding taxes on vesting of restricted stock units | -4,478 | -6,174 |
Proceeds from the exercise of stock options | 399 | 634 |
Excess tax benefits from stock-based awards | 2,602 | 3,014 |
Net cash used in financing activities | -84,094 | -89,434 |
Effect of exchange rate changes on cash and cash equivalents | -1,400 | 4,401 |
Net increase (decrease) in cash and cash equivalents | 2,401 | -63,560 |
Cash and cash equivalents at beginning of period | 101,162 | 195,517 |
Cash and cash equivalents at end of period | 103,563 | 131,957 |
Cash paid during the period for: | ' | ' |
Interest, net of amounts capitalized | 4,068 | 29,528 |
Income taxes, net of refunds | $35,091 | $24,813 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
ORGANIZATION AND BASIS OF PRESENTATION | ' |
ORGANIZATION AND BASIS OF PRESENTATION | ' |
NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION | |
Company Overview | |
Interval Leisure Group, Inc., or ILG, is a leading global provider of membership and leisure services to the vacation industry. ILG consists of two operating segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and rental services to both vacation property owners and vacationers. | |
On February 28, 2012, we acquired all of the equity of Vacation Resorts International, or VRI, a non-developer provider of resort and homeowners association management services to the shared ownership industry. VRI was consolidated into our financial statements as of the acquisition date with its assets and results of operations primarily included in our Management and Rental operating segment. | |
The Membership and Exchange operating segment consists of Interval International Inc.'s businesses, referred to as Interval, and the membership and exchange related line of business of Trading Places International, or TPI, and VRI. The Management and Rental operating segment consists of Aston Hotels & Resorts, LLC and Maui Condo and Home, LLC, referred to as Aston, and the management and rental related line of business of VRI and TPI. | |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of ILG's management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not indicative of the results that may be expected for a full year. | |
The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2012 Annual Report on Form 10-K. | |
Seasonality | |
Revenue at ILG is influenced by the seasonal nature of travel. The Membership and Exchange businesses recognize exchange and Getaway revenue based on confirmation of the vacation, with the first quarter generally experiencing higher revenue and the fourth quarter generally experiencing lower revenue. The Management and Rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue and the second and fourth quarters generally generating lower revenue. The timeshare and homeowners' association management part of this business does not experience significant seasonality. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2013. | ||||||||||||||
Accounting Estimates | ||||||||||||||
ILG's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. | ||||||||||||||
Significant estimates underlying the accompanying consolidated financial statements include: the recovery of long-lived assets as well as goodwill and other intangible assets; purchase price allocations of business combinations; the determination of deferred income taxes including related valuation allowances; the determination of deferred revenue and membership costs; and the determination of stock-based compensation. In the opinion of ILG's management, the assumptions underlying the historical consolidated financial statements of ILG and its subsidiaries are reasonable. | ||||||||||||||
Earnings per Share | ||||||||||||||
Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.8 million stock options and RSUs for the three and nine months ended September 30, 2013, respectively, and 0.9 million and 1.0 million stock options and RSUs for the three and nine months ended September 30, 2012, respectively, as the effect of their inclusion would have been antidilutive to earnings per share. | ||||||||||||||
In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2013 and 2012, 0.9 million of stock options remained outstanding. | ||||||||||||||
The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Basic weighted average shares of common stock outstanding | 57,353 | 56,714 | 57,199 | 56,448 | ||||||||||
Net effect of common stock equivalents assumed to be vested related to RSUs | 627 | 636 | 532 | 657 | ||||||||||
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees | 6 | 14 | 7 | 15 | ||||||||||
Diluted weighted average shares of common stock outstanding | 57,986 | 57,364 | 57,738 | 57,120 | ||||||||||
Recent Accounting Pronouncements | ||||||||||||||
With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2012 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement. | ||||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, ("OIS")) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-10)"). ASU 2013-10 ratified the Task Force's consensus to allow the Fed Funds effective swap rate to serve as a benchmark interest rate in the United States, which was previously defined in ASC 815 as either (1) a rate on direct obligations of the U.S. Department of the Treasury (UST) or (2) the LIBOR swap rate. ASU 2013-10 does not add to the disclosure requirements in ASC 815-10-50; however, in order to comply with the required disclosures related to fair value in ASC 820 a separate process for determining the fair value hierarchy of derivatives when the OIS rate is an input may be required. The ASU is required to be applied prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. We do not currently anticipate the adoption of this guidance, as of the effective date, will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
In March 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment ("CTA") upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-05"). ASU 2013-05 applies to the release of the CTA into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
Adopted Accounting Pronouncements | ||||||||||||||
In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 adds new disclosure requirements for items reclassified out of accumulated other comprehensive income/loss ("AOCI"), including (1) disaggregating and separately presenting changes in AOCI balances by component and (2) presenting significant items reclassified out of AOCI either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. It does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2012 (and interim periods within those years), and shall be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"). ASU 2013-01 clarifies the offsetting disclosure requirements in ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with ASC 815, "Derivatives and Hedging," including bifurcated embedded derivatives. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those years. Retrospective application is required for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements" ("ASU 2012-04"). ASU 2012-04 makes certain technical corrections, clarifications and conforming fair value amendments to the FASB Accounting Standard Codification (the "Codification") that affects various Codification topics. The amendments in this ASU are effective upon issuance, except for amendments that are subject to transition guidance, which became effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||
NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||
Pursuant to FASB guidance as codified within ASC 350, "Intangibles—Goodwill and Other," goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. ILG determined our Membership and Exchange and Management and Rental operating segments are individual reporting units which are also individual reportable segments of ILG pursuant to ASC 280, Segment Reporting ("ASC 280"). ILG tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment based on either a qualitative assessment or a two-step impairment test, as more fully described in Note 2 of our 2012 Annual Report on Form 10-K. When performing the two-step impairment test, if the carrying amount of a reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded. | |||||||||||
As of October 1, 2012, we reviewed the carrying value of goodwill and other intangible assets of each of our two reporting units. Goodwill assigned to the Membership and Exchange and Management and Rental reporting units as of that date was $483.5 million and $22.3 million, respectively. We performed a qualitative assessment on both our reporting units and concluded that it was more-likely-than-not that the fair value exceeded its carrying value and, therefore, a two-step impairment test was not necessary. As of September 30, 2013, we did not identify any triggering events which required an interim impairment test subsequent to our annual impairment test on October 1, 2012. | |||||||||||
The balance of goodwill and other intangible assets, net is as follows (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Goodwill | $ | 505,774 | $ | 505,774 | |||||||
Intangible assets with indefinite lives | 40,916 | 40,916 | |||||||||
Intangible assets with definite lives, net | 52,354 | 57,762 | |||||||||
Total goodwill and other intangible assets, net | $ | 599,044 | $ | 604,452 | |||||||
There were no changes in the carrying amount of goodwill for the nine months ended September 30, 2013. Goodwill related to the Membership and Exchange and Management and Rental reportable segments (each a reporting unit) was $483.5 million and $22.3 million, respectively, as of September 30, 2013 and December 31, 2012. | |||||||||||
Other Intangible Assets | |||||||||||
Intangible assets with indefinite lives relate principally to trade names and trademarks. At September 30, 2013, intangible assets with definite lives relate to the following (in thousands): | |||||||||||
Cost | Accumulated | Net | |||||||||
Amortization | |||||||||||
Customer relationships | $ | 129,500 | $ | (129,500 | ) | $ | — | ||||
Purchase agreements | 75,879 | (74,848 | ) | 1,031 | |||||||
Resort management contracts | 73,116 | (25,695 | ) | 47,421 | |||||||
Technology | 25,076 | (25,071 | ) | 5 | |||||||
Other | 17,826 | (13,929 | ) | 3,897 | |||||||
Total | $ | 321,397 | $ | (269,043 | ) | $ | 52,354 | ||||
At December 31, 2012, intangible assets with definite lives relate to the following (in thousands): | |||||||||||
Cost | Accumulated | Net | |||||||||
Amortization | |||||||||||
Customer relationships | $ | 129,500 | $ | (129,500 | ) | $ | — | ||||
Purchase agreements | 75,879 | (74,491 | ) | 1,388 | |||||||
Resort management contracts | 72,666 | (21,225 | ) | 51,441 | |||||||
Technology | 25,076 | (24,988 | ) | 88 | |||||||
Other | 17,826 | (12,981 | ) | 4,845 | |||||||
Total | $ | 320,947 | $ | (263,185 | ) | $ | 57,762 | ||||
Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $2.0 million and $6.7 million for the three months ended September 30, 2013 and 2012, respectively, and $5.9 million and $21.0 million for the nine months ended September 30, 2013 and 2012, respectively. Based on September 30, 2013 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands): | |||||||||||
Twelve month period ending September 30, | |||||||||||
2014 | $ | 7,734 | |||||||||
2015 | 7,591 | ||||||||||
2016 | 6,610 | ||||||||||
2017 | 6,176 | ||||||||||
2018 | 5,487 | ||||||||||
2019 and thereafter | 18,756 | ||||||||||
$ | 52,354 | ||||||||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
PROPERTY AND EQUIPMENT | ' | |||||||
NOTE 4—PROPERTY AND EQUIPMENT | ||||||||
Property and equipment, net is as follows (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Computer equipment | $ | 19,987 | $ | 18,269 | ||||
Capitalized software | 82,547 | 78,036 | ||||||
Land, buildings and leasehold improvements | 25,517 | 23,781 | ||||||
Furniture and other equipment | 13,575 | 12,419 | ||||||
Projects in progress | 5,906 | 6,372 | ||||||
147,532 | 138,877 | |||||||
Less: accumulated depreciation and amortization | (94,402 | ) | (85,529 | ) | ||||
Total property and equipment, net | $ | 53,130 | $ | 53,348 | ||||
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
LONG-TERM DEBT | ' | |||||||
LONG-TERM DEBT | ' | |||||||
NOTE 5—LONG-TERM DEBT | ||||||||
Long-term debt is as follows (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Revolving credit facility (interest rate of 1.69% at September 30, 2013 and 1.97% at December 31, 2012) | $ | 190,000 | $ | 260,000 | ||||
Total long-term debt | $ | 190,000 | $ | 260,000 | ||||
Credit Facility | ||||||||
On June 21, 2012, we entered into an amended and restated credit agreement (the "Amended Credit Agreement") which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on our consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of September 30, 2013, there was $190 million outstanding on the revolving credit facility. Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of September 30, 2013, the applicable margin was 1.50% per annum for LIBOR revolving loans and 0.50% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio and as of September 30, 2013, the commitment fee was 0.275%. | ||||||||
Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are unconditionally guaranteed by ILG and certain of its subsidiaries. Borrowings are further secured by (1) 100% of the voting equity securities of ILG's U.S. subsidiaries and 65% of the equity in our first-tier foreign subsidiaries and (2) substantially all of our domestic tangible and intangible property. | ||||||||
Restrictions and Covenants | ||||||||
The Amended Credit Agreement has various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person. | ||||||||
The Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Amended Credit Agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of September 30, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 1.00 and 33.30, respectively. | ||||||||
Debt Issuance Costs | ||||||||
In connection with entering into the Amended Credit Agreement, we incurred $3.9 million of lender and third-party debt issuance costs. As of September 30, 2013 and December 31, 2012, total unamortized debt issuance costs on outstanding debt were $2.9 million, net of $0.6 million of accumulated amortization, and $3.5 million, net of $0.4 million of accumulated amortization, respectively, which were included in "Other non-current assets" in our consolidated balance sheets. Debt issuance costs are amortized to "Interest expense" on a straight-line basis for our Amended Credit Agreement. | ||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
NOTE 6—FAIR VALUE MEASUREMENTS | ||||||||||||||
In accordance with ASC Topic 820, "Fair Value Measurement," ("ASC 820") the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: | ||||||||||||||
Level 1—Observable inputs that reflect quoted prices in active markets | ||||||||||||||
Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable | ||||||||||||||
Level 3—Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions | ||||||||||||||
As part of an acquisition in November 2010, we are obligated to pay contingent consideration in an amount ranging from zero up to a total of $5.0 million to the former owners during the three year period subsequent to the acquisition should the company meet certain earnings targets. In our determination of the fair value of this contingent consideration, we utilize a probability-weighted income approach, which includes certain significant inputs not observable in the market, such as a discount rate of 18.5% as well as actual and estimated probability-weighted cash flows pertaining to the periods subject to the contingent consideration. We believe these inputs represent Level 3 measurements within the fair value hierarchy. | ||||||||||||||
As of September 30, 2013, the fair value of the remaining contingent consideration was $1.9 million, an increase of $0.7 million from December 31, 2012, of which $0.5 million is due to revisions to the estimated earnings used in our calculation of the fair value of the contingent consideration and $0.2 million is due to the accretion of interest. The revision to estimated earnings and the accretion of interest have been reflected in "General and administrative expense" and "Interest expense", respectively, in our consolidated statement of income for the nine months ended September 30, 2013. The total contingent consideration of $1.9 million is included in "Accrued expenses and other current liabilities" in our consolidated balance sheet as of September 30, 2013. | ||||||||||||||
As a measure of sensitivity, a downward and upward change of 10% to all of the aforementioned Level 3 inputs would have resulted in a change ranging from zero to $0.1 million (favorable) to the estimated contingent consideration liability as of September 30, 2013. There have been no transfers of inputs used in measuring fair value between the three tiers within the fair value hierarchy since December 31, 2012. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The estimated fair value of financial instruments below has been determined using available market information and appropriate valuation methodologies, as applicable. There have been no changes in the methods and significant assumptions used to estimate the fair value of financial instruments during the three and nine months ended September 30, 2013. Our financial instruments include guarantees, letters of credit and surety bonds. | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||
Amount | Amount | |||||||||||||
(In thousands) | ||||||||||||||
Cash and cash equivalents | $ | 103,563 | $ | 103,563 | $ | 101,162 | $ | 101,162 | ||||||
Restricted cash and cash equivalents | $ | 5,828 | $ | 5,828 | $ | 7,348 | $ | 7,348 | ||||||
Financing receivable | $ | — | $ | — | $ | 9,876 | $ | 9,876 | ||||||
Total debt | $ | (190,000 | ) | $ | (190,000 | ) | $ | (260,000 | ) | $ | (260,000 | ) | ||
Guarantees, surety bonds and letters of credit | N/A | $ | (23,051 | ) | N/A | $ | (36,747 | ) | ||||||
The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high-quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1). As of December 31, 2012, the financing receivable was presented in our consolidated balance sheets within "Other non-current assets" and pertained to a secured real estate related loan issued to a third party in 2012 with an original maturity in 2015. During the first quarter 2013, the loan was repaid in full at 100% of the original principal amount plus accrued interest. The carrying value at December 31, 2012 of this financing receivable approximated fair value through inputs inherent to the originating value of the loan, such as interest rates and ongoing credit risk accounted for through non-recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan was comparable to market rate. Interest was recognized within our "Interest income" line item in our consolidated statements of income for the nine months ended September 30, 2013 and 2012. | ||||||||||||||
The carrying value of the outstanding balance under our $500 million revolving credit facility approximates fair value as of September 30, 2013 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2). | ||||||||||||||
The guarantees, surety bonds, and letters of credit represent liabilities that are carried on our balance sheet only when a future related contingent event becomes probable and reasonably estimable. These commitments are in place to facilitate our commercial operations. The related fair value of these liabilities is estimated at the minimum expected cash flows contractually required to satisfy the related liabilities in the future upon occurrence of the applicable contingent events (Level 2). | ||||||||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
STOCKHOLDERS' EQUITY | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 7—STOCKHOLDERS' EQUITY | |
ILG has 300 million authorized shares of common stock, par value of $.01 per share. At September 30, 2013, there were 59.1 million shares of ILG common stock issued, of which 57.4 million are outstanding with 1.7 million shares held as treasury stock. At December 31, 2012, there were 58.6 million shares of ILG common stock issued, of which 56.9 million were outstanding with 1.7 million shares held as treasury stock. | |
ILG has 25 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding as of September 30, 2013 and December 31, 2012. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences, and dividends. | |
Dividends Declared | |
In May and August 2013, our Board of Directors declared quarterly dividend payments of $0.11 per share paid in June and September 2013, respectively, of $6.3 million each. | |
In November 2013, our Board of Directors declared a $0.11 per share dividend payable December 18, 2013 to shareholders of record on December 4, 2013. | |
Stockholder Rights Plan | |
In June 2009, ILG's Board of Directors approved the creation of a Series A Junior Participating Preferred Stock, adopted a stockholders rights plan and declared a dividend of one right for each outstanding share of common stock held by our stockholders of record as of the close of business on June 22, 2009. The rights attach to any additional shares of common stock issued after June 22, 2009. These rights, which trade with the shares of our common stock, currently are not exercisable. Under the rights plan, these rights will be exercisable if a person or group acquires or commences a tender or exchange offer for 15% or more of our common stock. The rights plan provides certain exceptions for acquisitions by Liberty Interactive Corporation (formerly known as Liberty Media Corporation) in accordance with an agreement entered into with ILG in connection with its spin-off from IAC/InterActiveCorp (IAC). If the rights become exercisable, each right will permit its holder, other than the "acquiring person," to purchase from us shares of common stock at a 50% discount to the then prevailing market price. As a result, the rights will cause substantial dilution to a person or group that becomes an "acquiring person" on terms not approved by our Board of Directors. | |
Share Repurchase Program | |
Effective August 3, 2011, ILG's Board of Directors authorized a share repurchase program for up to $25.0 million, excluding commissions, of our outstanding common stock. Acquired shares of our common stock are held as treasury shares carried at cost on our consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice. | |
There were no repurchases of common stock during the year ended December 31, 2012 and the nine months ended September 30, 2013. As of September 30, 2013, the remaining availability for future repurchases of our common stock was $4.1 million. | |
Accumulated Other Comprehensive Loss | |
Pursuant to final guidance issued by the FASB in February of 2013, entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL for ILG, including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the nine months ended September 30, 2013, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments as disclosed in our accompanying consolidated statements of comprehensive income. | |
BENEFIT_PLANS
BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2013 | |
BENEFIT PLANS | ' |
BENEFIT PLANS | ' |
NOTE 8—BENEFIT PLANS | |
Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre-tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant's eligible earnings, subject to Internal Revenue Service ("IRS") restrictions. Matching contributions for the ILG plan were approximately $0.4 million and $1.2 million for the three and nine months ended September 30, 2013, respectively, and approximately $0.4 million and $1.1 million for the three and nine months ended September 30, 2012, respectively. Matching contributions were invested in the same manner as each participant's voluntary contributions in the investment options provided under the plan. | |
Effective August 20, 2008, a deferred compensation plan (the "Director Plan") was established to provide non-employee directors of ILG an option to defer director fees on a tax-deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 41,180 share units were outstanding at September 30, 2013. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share. | |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
NOTE 9—STOCK-BASED COMPENSATION | ||||||||||||||
On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan to replace the ILG 2008 Stock and Annual Incentive Plan. Both plans provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. Each RSU is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e. portions of the award vest at different times during the vesting period) or to cliff vesting (i.e., all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria. | ||||||||||||||
ILG recognizes non-cash compensation expense for all RSUs held by ILG's employees. For RSUs to be settled in stock, the accounting charge is measured at the grant date as the fair value of ILG common stock and expensed as non-cash compensation over the vesting term using the straight-line basis for service awards and the accelerated basis for performance-based awards with graded vesting. Certain cliff vesting awards contain performance criteria which are tied to anticipated future results of operations in determining the fair value of the award, while other cliff vesting awards with performance criteria are tied to the achievement of certain market conditions. This value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line recognition method. The expense associated with RSU awards to be settled in cash is initially measured at fair value at the grant date and expensed ratably over the vesting term, recording a liability subject to mark-to-market adjustments for changes in the price of the respective common stock, as compensation expense. | ||||||||||||||
Shares underlying RSUs are not issued or outstanding until vested. In relation to our quarterly dividend, unvested RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on our shares of common stock. Such additional RSUs are forfeitable and will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two-class method of determining earnings per share. | ||||||||||||||
Under the ILG 2013 Stock and Incentive Compensation Plan, the maximum aggregate number of shares of common stock reserved for issuance as of adoption is 4.1 million shares, less one share for every share granted under any prior plan after December 31, 2012. As of September 30, 2013, ILG has 3.3 million shares available for future issuance under the 2013 Stock and Incentive Compensation Plan. | ||||||||||||||
During the first quarter of 2013 and 2012, the Compensation Committee granted approximately 657,000 and 586,000 RSUs, respectively, vesting over three to four years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2013 and 2012, approximately 300,000 and 130,000 cliff vest in three years and approximately 58,000 and 73,000 of these RSUs, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document. | ||||||||||||||
For the 2013 and 2012 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a $29.61 for 2013 and $17.34 for 2012 per unit grant date fair value for these performance based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups approved by the Compensation Committee, over the remaining performance period. The expected volatility of ILG's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period. | ||||||||||||||
Non-cash compensation expense related to RSUs for the three months ended September 30, 2013 and 2012 was $2.6 million, respectively. For the nine months ended September 30, 2013 and 2012, non-cash compensation expense related to RSUs was $7.8 million and $8.7 million, respectively. At September 30, 2013, there was approximately $17.3 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs, which is currently expected to be recognized over a weighted average period of approximately 1.9 years. | ||||||||||||||
The amount of stock-based compensation expense recognized in the consolidated statements of income is reduced by estimated forfeitures, as the amount recorded is based on awards ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods for any changes to the estimated forfeiture rate from that previously estimated. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is at least equal to the portion of the grant-date value of the award tranche that is actually vested at that date. | ||||||||||||||
Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost of sales | $ | 160 | $ | 155 | $ | 519 | $ | 471 | ||||||
Selling and marketing expense | 292 | 257 | 906 | 787 | ||||||||||
General and administrative expense | 2,157 | 2,152 | 6,328 | 7,475 | ||||||||||
Non-cash compensation expense | $ | 2,609 | $ | 2,564 | $ | 7,753 | $ | 8,733 | ||||||
The following table summarizes RSU activity during the nine months ended September 30, 2013: | ||||||||||||||
Shares | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
(In thousands) | ||||||||||||||
Non-vested RSUs at January 1 | 1,569 | $ | 13.29 | |||||||||||
Granted | 707 | 20.75 | ||||||||||||
Vested | (688 | ) | 11.63 | |||||||||||
Forfeited | (13 | ) | 18.1 | |||||||||||
Non-vested RSUs at September 30 | 1,575 | $ | 17.29 | |||||||||||
In connection with the acquisition of Aston by ILG in 2007, a member of Aston's management purchased a noncontrolling interest in Aston and, additionally, was granted non-voting restricted common equity. This award was granted on May 31, 2007 and was initially measured at fair value, which was amortized over the vesting period. This award vests ratably over four and a half years, or earlier based upon the occurrence of certain prescribed events. These shares are subject to a put right by the holder and a call right by ILG, which became exercisable for the first time in the first quarter of 2013 for a period of 60 days subsequent to the filing of our 2012 Annual Report on Form 10-K and is exercisable annually thereafter. | ||||||||||||||
The value of these shares upon exercise of the put or call is equal to their fair market value, determined by negotiation or arbitration, reduced by the accreted value of the preferred interest that was taken by ILG upon the purchase of Aston. The initial value of the preferred interest was equal to the acquisition price of Aston. The preferred interest accretes at a 10% annual rate. Upon exercise of the put or call, the consideration payable can be denominated in ILG shares, cash or a combination thereof at ILG's option. An additional put right by the holder and call right by ILG would require, upon exercise, the purchase of these non-voting common shares by ILG immediately prior to a registered public offering by Aston, at the public offering price. As of September 30, 2013, the estimated redemption value of this redeemable interest is lower than the current carrying value on our consolidated balance sheet. Consequently, pursuant to the applicable accounting guidance, no adjustment to the balance of this noncontrolling interest was recorded for the nine months ended September 30, 2013. | ||||||||||||||
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
INCOME TAXES | ' |
INCOME TAXES | ' |
NOTE 10—INCOME TAXES | |
ILG calculates its interim income tax provision in accordance with ASC 740, "Income Taxes." At the end of each interim period, ILG makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of a change in enacted tax laws or rates, tax status, or judgment on the realizability of a beginning-of-the-year deferred tax asset in future years is recognized in the interim period in which the change occurs. | |
The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or ILG's tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter. | |
A valuation allowance for deferred tax assets is provided when it is more likely than not that certain deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. We consider the history of taxable income in recent years, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies to make this assessment. | |
For the three and nine months ended September 30, 2013, ILG recorded an income tax provision for continuing operations of $13.0 million and $41.6 million, respectively, which represents effective tax rates of 43.1% and 39.9% for the respective periods. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. During the three months ended September 30, 2013, the effective tax rate increased due to income taxes associated with the effect of changes in tax laws in certain states and other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K, as discussed further below, that were enacted during the third quarter of 2013. During the nine months ended September 30, 2013, the effective tax rate increased due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the effect of changes in tax laws in certain states and in the U.K. that were enacted during the third quarter of 2013. However, this increase was partially offset by the U.S. tax consequences of foreign operations and the decrease during the first quarter of 2013 in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes. | |
For the three and nine months ended September 30, 2012, ILG recorded an income tax provision for continuing operations of $0.6 million and $14.9 million, respectively, which represents effective tax rates of 80.5% and 37.0% for the respective periods. The higher effective tax rate for the three months ended September 30, 2012 was primarily attributable to reduced income before income taxes, driven by the loss on the extinguishment of debt related to the redemption of the Interval Senior Notes, which magnified the impact of other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K., as discussed further below, that were enacted during the third quarter of 2012. For the nine months ended September 30, 2012, the tax rate was higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. During the nine months ended September 30, 2012, the effective tax rate decreased due to other income tax items, the most significant of which related to the tax impact of ILG's redemption of the Interval Senior Notes offset by the effect of changes in tax laws in the U.K., that were enacted during the third quarter of 2012. | |
As of September 30, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.7 million and $0.7 million, respectively, of which $1.2 million and $0.7 million, if recognized, would favorably affect the effective tax rate. There were no material increases or decreases in unrecognized tax benefits for the three months ended September 30, 2013. During the nine months ended September 30, 2013, the unrecognized tax benefits increased by a net amount of approximately $1.0 million, primarily attributable to an increase recorded during the first quarter of 2013 of approximately $1.1 million related to state income tax items offset by approximately $0.2 million recorded during the first quarter of 2013 related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the first quarter of 2013. | |
ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three and nine months ended September 30, 2013. During the nine months ended September 30, 2013, interest and penalties decreased by approximately $0.2 million during the first quarter of 2013 as a result of the expiration of the statute of limitations related to foreign taxes. As of September 30, 2013, ILG had accrued $0.4 million for interest and penalties. | |
ILG believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.3 million within twelve months of the current reporting date due primarily to binding technical advice expected to be issued by state taxing authorities on state income tax items and the expiration of the statute of limitations related to foreign taxes. An estimate of other changes in unrecognized tax benefits cannot be made, but is not expected to be significant. | |
ILG has routinely been under audit by federal, state, local and foreign taxing authorities. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by ILG are recorded in the period they become known. Under the Tax Sharing Agreement, IAC indemnifies ILG for all consolidated tax liabilities and related interest and penalties for the pre-spin period. | |
The IRS has completed its review of IAC's consolidated tax returns for the years ended December 31, 2001 through 2009, which includes our operations from September 24, 2002, our date of acquisition by IAC, until the spin-off in August 2008. On August 28, 2013, the Joint Committee of Taxation completed its review and approved the audit settlement. Various IAC consolidated tax returns that include our operations, filed with state and local jurisdictions, are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2006. No other open tax years are currently under examination by the IRS or any state and local jurisdictions. | |
During 2012, the U.K. Finance Act of 2012 was enacted, which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. During the third quarter of 2013, the U.K. Finance Act of 2013 was enacted which further reduced the U.K. corporate income tax rate to 21%, effective April 1, 2014 and 20%, effective April 1, 2015. The impact of the U.K. rate reduction to 21% and 20% has been reflected in the current reporting period. It reduced our U.K. net deferred tax asset and increased income tax expense by approximately $0.6 million. The change in the corporate tax rate initially negatively impacts income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate. | |
Subsequent to September 30, 2013, we received the expected favorable binding technical advice issued by a state taxing authority on state income tax items. This advice will allow us to decrease our unrecognized tax benefits by approximately $1.1 million in the fourth quarter of 2013, and additionally will lower state income taxes and favorably impact our effective tax rate in the fourth quarter of 2013 and going forward. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
NOTE 11—SEGMENT INFORMATION | ||||||||||||||
Segment Information | ||||||||||||||
Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. ILG consists of two operating segments which are also reportable segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others mostly through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and vacation rental services to both vacation property owners and vacationers. | ||||||||||||||
Information on reportable segments and reconciliation to consolidated operating income is as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Membership and Exchange | ||||||||||||||
Revenue | $ | 86,615 | $ | 86,092 | $ | 284,227 | $ | 276,725 | ||||||
Cost of sales | 20,442 | 20,538 | 68,679 | 68,384 | ||||||||||
Gross profit | 66,173 | 65,554 | 215,548 | 208,341 | ||||||||||
Selling and marketing expense | 11,919 | 12,345 | 37,973 | 38,472 | ||||||||||
General and administrative expense | 21,519 | 21,819 | 64,211 | 65,960 | ||||||||||
Amortization expense of intangibles | 337 | 4,968 | 1,011 | 15,808 | ||||||||||
Depreciation expense | 3,186 | 3,011 | 9,872 | 9,025 | ||||||||||
Segment operating income | $ | 29,212 | $ | 23,411 | $ | 102,481 | $ | 79,076 | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Management and Rental | ||||||||||||||
Management fee revenue | $ | 16,209 | $ | 15,117 | $ | 47,825 | $ | 41,165 | ||||||
Pass-through revenue | 16,332 | 15,986 | 46,968 | 44,712 | ||||||||||
Total revenue | 32,541 | 31,103 | 94,793 | 85,877 | ||||||||||
Cost of sales | 21,549 | 21,203 | 63,109 | 59,409 | ||||||||||
Gross profit | 10,992 | 9,900 | 31,684 | 26,468 | ||||||||||
Selling and marketing expense | 1,032 | 937 | 2,985 | 2,851 | ||||||||||
General and administrative expense | 5,868 | 4,807 | 17,706 | 13,072 | ||||||||||
Amortization expense of intangibles | 1,613 | 1,701 | 4,847 | 5,193 | ||||||||||
Depreciation expense | 313 | 300 | 987 | 814 | ||||||||||
Segment operating income | $ | 2,166 | $ | 2,155 | $ | 5,159 | $ | 4,538 | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Consolidated | ||||||||||||||
Revenue | $ | 119,156 | $ | 117,195 | $ | 379,020 | $ | 362,602 | ||||||
Cost of sales | 41,991 | 41,741 | 131,788 | 127,793 | ||||||||||
Gross profit | 77,165 | 75,454 | 247,232 | 234,809 | ||||||||||
Direct segment operating expenses | 45,787 | 49,888 | 139,592 | 151,195 | ||||||||||
Operating income | $ | 31,378 | $ | 25,566 | $ | 107,640 | $ | 83,614 | ||||||
Selected financial information by reportable segment is presented below (in thousands): | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Total Assets: | ||||||||||||||
Membership and Exchange | $ | 766,890 | $ | 789,451 | ||||||||||
Management and Rental | 114,725 | 117,469 | ||||||||||||
Total | $ | 881,615 | $ | 906,920 | ||||||||||
Geographic Information | ||||||||||||||
We conduct operations through offices in the U.S. and 16 other countries. For the nine months ended September 30, 2013, revenue is sourced from over 100 countries worldwide. Other than the United States, revenue sourced from any individual country or geographic region did not exceed 10% of consolidated revenue for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands). Amounts in the proceeding table representing revenue sourced from the United States versus all other countries for the three and nine months ended September 30, 2012 have been reclassified to conform to current period presentation. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenue: | ||||||||||||||
United States | $ | 98,252 | $ | 96,710 | $ | 310,722 | $ | 294,408 | ||||||
All other countries(a) | 20,904 | 20,485 | 68,298 | 68,194 | ||||||||||
Total | $ | 119,156 | $ | 117,195 | $ | 379,020 | $ | 362,602 | ||||||
(a) | ||||||||||||||
Includes countries within the following continents: Africa, Asia, Australia, Europe, North America and South America. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Long-lived assets (excluding goodwill and other intangible assets): | ||||||||||||||
United States | $ | 51,002 | $ | 51,059 | ||||||||||
All other countries | 2,128 | 2,289 | ||||||||||||
Total | $ | 53,130 | $ | 53,348 | ||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 12—COMMITMENTS AND CONTINGENCIES | |
In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 10 for a discussion of income tax contingencies. | |
Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At September 30, 2013, guarantees, surety bonds and letters of credit totaled $23.1 million, with the highest annual amount of $12.7 million occurring in year one. The total includes maximum exposure under guarantees of $19.8 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the management activities of Aston, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other party. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the revenue generated under its management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2013, future amounts are not expected to be significant, individually or in the aggregate. | |
The purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services and membership fulfillment benefits. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of September 30, 2013, amounts pending reimbursements are not significant. | |
European Union Value Added Tax Matter | |
In 2009, the European Court of Justice issued a judgment related to Value Added Tax ("VAT") in Europe against an unrelated party. The judgment affects companies who transact within the European Union ("EU"), specifically providers of vacation interest exchange services, and altered the manner in which the Membership and Exchange segment accounts for VAT on its revenues as well as to which EU country VAT is owed. As of September 30, 2013 and December 31, 2012, ILG had an accrual of $2.9 million and $4.5 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change of $1.6 million in the accrual from December 31, 2012 primarily relates to a decrease in the change in estimate primarily to update the periods for which the accrued VAT liabilities are due and to refine the VAT accrual calculation for certain other countries, including $0.5 million in payments, and the effect of foreign currency remeasurements. The change in estimate resulted in favorable adjustments to our consolidated statements of income for the three and nine months ended September 30, 2013. Because of the uncertainty surrounding the ultimate outcome and settlement of these VAT liabilities, it is reasonably possible that future costs to settle these VAT liabilities may range from $2.9 million up to approximately $4.2 million based on quarter-end exchange rates. ILG believes that the $2.9 million accrual at September 30, 2013 is our best estimate of probable future obligations for the settlement of these VAT liabilities. The difference between the probable and reasonably possible amounts is primarily attributable to the assessment of certain potential penalties. | |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2013 | |
SUBSEQUENT EVENT | ' |
SUBSEQUENT EVENT | ' |
NOTE 13—SUBSEQUENT EVENT | |
In August 2013, Interval Leisure Group and its subsidiary, VRI Europe Limited, entered into a definitive agreement with CLC World Resorts and Hotels (CLC). On November 4, 2013, VRI Europe Limited purchased the European shared ownership resort management business of CLC, for approximately £56 million (or approximately $90 million) in cash (subject to adjustment for working capital, actual 2013 results and other specified items) and issuance to CLC of shares totaling 24.5% of VRI Europe Limited. In connection with this arrangement, ILG has agreed to issue a convertible secured loan for approximately $15 million to CLC which matures in five years with interest payable monthly. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
Accounting Estimates | ' | |||||||||||||
Accounting Estimates | ||||||||||||||
ILG's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. | ||||||||||||||
Significant estimates underlying the accompanying consolidated financial statements include: the recovery of long-lived assets as well as goodwill and other intangible assets; purchase price allocations of business combinations; the determination of deferred income taxes including related valuation allowances; the determination of deferred revenue and membership costs; and the determination of stock-based compensation. In the opinion of ILG's management, the assumptions underlying the historical consolidated financial statements of ILG and its subsidiaries are reasonable. | ||||||||||||||
Earnings per Share | ' | |||||||||||||
Earnings per Share | ||||||||||||||
Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.8 million stock options and RSUs for the three and nine months ended September 30, 2013, respectively, and 0.9 million and 1.0 million stock options and RSUs for the three and nine months ended September 30, 2012, respectively, as the effect of their inclusion would have been antidilutive to earnings per share. | ||||||||||||||
In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2013 and 2012, 0.9 million of stock options remained outstanding. | ||||||||||||||
The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Basic weighted average shares of common stock outstanding | 57,353 | 56,714 | 57,199 | 56,448 | ||||||||||
Net effect of common stock equivalents assumed to be vested related to RSUs | 627 | 636 | 532 | 657 | ||||||||||
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees | 6 | 14 | 7 | 15 | ||||||||||
Diluted weighted average shares of common stock outstanding | 57,986 | 57,364 | 57,738 | 57,120 | ||||||||||
Recent Accounting Pronouncements/Adopted Accounting Pronouncements | ' | |||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2012 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement. | ||||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, ("OIS")) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-10)"). ASU 2013-10 ratified the Task Force's consensus to allow the Fed Funds effective swap rate to serve as a benchmark interest rate in the United States, which was previously defined in ASC 815 as either (1) a rate on direct obligations of the U.S. Department of the Treasury (UST) or (2) the LIBOR swap rate. ASU 2013-10 does not add to the disclosure requirements in ASC 815-10-50; however, in order to comply with the required disclosures related to fair value in ASC 820 a separate process for determining the fair value hierarchy of derivatives when the OIS rate is an input may be required. The ASU is required to be applied prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. We do not currently anticipate the adoption of this guidance, as of the effective date, will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
In March 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment ("CTA") upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-05"). ASU 2013-05 applies to the release of the CTA into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements. | ||||||||||||||
Adopted Accounting Pronouncements | ||||||||||||||
In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 adds new disclosure requirements for items reclassified out of accumulated other comprehensive income/loss ("AOCI"), including (1) disaggregating and separately presenting changes in AOCI balances by component and (2) presenting significant items reclassified out of AOCI either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. It does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2012 (and interim periods within those years), and shall be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"). ASU 2013-01 clarifies the offsetting disclosure requirements in ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with ASC 815, "Derivatives and Hedging," including bifurcated embedded derivatives. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those years. Retrospective application is required for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements" ("ASU 2012-04"). ASU 2012-04 makes certain technical corrections, clarifications and conforming fair value amendments to the FASB Accounting Standard Codification (the "Codification") that affects various Codification topics. The amendments in this ASU are effective upon issuance, except for amendments that are subject to transition guidance, which became effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. | ||||||||||||||
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
Schedule of computation of weighted average common and common equivalent shares | ' | |||||||||||||
The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Basic weighted average shares of common stock outstanding | 57,353 | 56,714 | 57,199 | 56,448 | ||||||||||
Net effect of common stock equivalents assumed to be vested related to RSUs | 627 | 636 | 532 | 657 | ||||||||||
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees | 6 | 14 | 7 | 15 | ||||||||||
Diluted weighted average shares of common stock outstanding | 57,986 | 57,364 | 57,738 | 57,120 | ||||||||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||
Schedule of balance of goodwill and other intangible assets, net | ' | ||||||||||
The balance of goodwill and other intangible assets, net is as follows (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Goodwill | $ | 505,774 | $ | 505,774 | |||||||
Intangible assets with indefinite lives | 40,916 | 40,916 | |||||||||
Intangible assets with definite lives, net | 52,354 | 57,762 | |||||||||
Total goodwill and other intangible assets, net | $ | 599,044 | $ | 604,452 | |||||||
Schedule of intangible assets with definite lives | ' | ||||||||||
At September 30, 2013, intangible assets with definite lives relate to the following (in thousands): | |||||||||||
Cost | Accumulated | Net | |||||||||
Amortization | |||||||||||
Customer relationships | $ | 129,500 | $ | (129,500 | ) | $ | — | ||||
Purchase agreements | 75,879 | (74,848 | ) | 1,031 | |||||||
Resort management contracts | 73,116 | (25,695 | ) | 47,421 | |||||||
Technology | 25,076 | (25,071 | ) | 5 | |||||||
Other | 17,826 | (13,929 | ) | 3,897 | |||||||
Total | $ | 321,397 | $ | (269,043 | ) | $ | 52,354 | ||||
At December 31, 2012, intangible assets with definite lives relate to the following (in thousands): | |||||||||||
Cost | Accumulated | Net | |||||||||
Amortization | |||||||||||
Customer relationships | $ | 129,500 | $ | (129,500 | ) | $ | — | ||||
Purchase agreements | 75,879 | (74,491 | ) | 1,388 | |||||||
Resort management contracts | 72,666 | (21,225 | ) | 51,441 | |||||||
Technology | 25,076 | (24,988 | ) | 88 | |||||||
Other | 17,826 | (12,981 | ) | 4,845 | |||||||
Total | $ | 320,947 | $ | (263,185 | ) | $ | 57,762 | ||||
Schedule of amortization expense of intangible assets with definite lives | ' | ||||||||||
Based on September 30, 2013 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands): | |||||||||||
Twelve month period ending September 30, | |||||||||||
2014 | $ | 7,734 | |||||||||
2015 | 7,591 | ||||||||||
2016 | 6,610 | ||||||||||
2017 | 6,176 | ||||||||||
2018 | 5,487 | ||||||||||
2019 and thereafter | 18,756 | ||||||||||
$ | 52,354 | ||||||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
Schedule of Property and equipment, net | ' | |||||||
Property and equipment, net is as follows (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Computer equipment | $ | 19,987 | $ | 18,269 | ||||
Capitalized software | 82,547 | 78,036 | ||||||
Land, buildings and leasehold improvements | 25,517 | 23,781 | ||||||
Furniture and other equipment | 13,575 | 12,419 | ||||||
Projects in progress | 5,906 | 6,372 | ||||||
147,532 | 138,877 | |||||||
Less: accumulated depreciation and amortization | (94,402 | ) | (85,529 | ) | ||||
Total property and equipment, net | $ | 53,130 | $ | 53,348 | ||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
LONG-TERM DEBT | ' | |||||||
Schedule of Long-term debt | ' | |||||||
Long-term debt is as follows (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Revolving credit facility (interest rate of 1.69% at September 30, 2013 and 1.97% at December 31, 2012) | $ | 190,000 | $ | 260,000 | ||||
Total long-term debt | $ | 190,000 | $ | 260,000 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
Schedule of estimated fair value of financial instruments | ' | |||||||||||||
30-Sep-13 | 31-Dec-12 | |||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||
Amount | Amount | |||||||||||||
(In thousands) | ||||||||||||||
Cash and cash equivalents | $ | 103,563 | $ | 103,563 | $ | 101,162 | $ | 101,162 | ||||||
Restricted cash and cash equivalents | $ | 5,828 | $ | 5,828 | $ | 7,348 | $ | 7,348 | ||||||
Financing receivable | $ | — | $ | — | $ | 9,876 | $ | 9,876 | ||||||
Total debt | $ | (190,000 | ) | $ | (190,000 | ) | $ | (260,000 | ) | $ | (260,000 | ) | ||
Guarantees, surety bonds and letters of credit | N/A | $ | (23,051 | ) | N/A | $ | (36,747 | ) | ||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
Schedule of allocation of recognized compensation cost | ' | |||||||||||||
Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost of sales | $ | 160 | $ | 155 | $ | 519 | $ | 471 | ||||||
Selling and marketing expense | 292 | 257 | 906 | 787 | ||||||||||
General and administrative expense | 2,157 | 2,152 | 6,328 | 7,475 | ||||||||||
Non-cash compensation expense | $ | 2,609 | $ | 2,564 | $ | 7,753 | $ | 8,733 | ||||||
Schedule of RSU award activity | ' | |||||||||||||
Shares | Weighted-Average | |||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
(In thousands) | ||||||||||||||
Non-vested RSUs at January 1 | 1,569 | $ | 13.29 | |||||||||||
Granted | 707 | 20.75 | ||||||||||||
Vested | (688 | ) | 11.63 | |||||||||||
Forfeited | (13 | ) | 18.1 | |||||||||||
Non-vested RSUs at September 30 | 1,575 | $ | 17.29 | |||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
Schedule of information on reportable segments and reconciliation to consolidated operating income | ' | |||||||||||||
Information on reportable segments and reconciliation to consolidated operating income is as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Membership and Exchange | ||||||||||||||
Revenue | $ | 86,615 | $ | 86,092 | $ | 284,227 | $ | 276,725 | ||||||
Cost of sales | 20,442 | 20,538 | 68,679 | 68,384 | ||||||||||
Gross profit | 66,173 | 65,554 | 215,548 | 208,341 | ||||||||||
Selling and marketing expense | 11,919 | 12,345 | 37,973 | 38,472 | ||||||||||
General and administrative expense | 21,519 | 21,819 | 64,211 | 65,960 | ||||||||||
Amortization expense of intangibles | 337 | 4,968 | 1,011 | 15,808 | ||||||||||
Depreciation expense | 3,186 | 3,011 | 9,872 | 9,025 | ||||||||||
Segment operating income | $ | 29,212 | $ | 23,411 | $ | 102,481 | $ | 79,076 | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Management and Rental | ||||||||||||||
Management fee revenue | $ | 16,209 | $ | 15,117 | $ | 47,825 | $ | 41,165 | ||||||
Pass-through revenue | 16,332 | 15,986 | 46,968 | 44,712 | ||||||||||
Total revenue | 32,541 | 31,103 | 94,793 | 85,877 | ||||||||||
Cost of sales | 21,549 | 21,203 | 63,109 | 59,409 | ||||||||||
Gross profit | 10,992 | 9,900 | 31,684 | 26,468 | ||||||||||
Selling and marketing expense | 1,032 | 937 | 2,985 | 2,851 | ||||||||||
General and administrative expense | 5,868 | 4,807 | 17,706 | 13,072 | ||||||||||
Amortization expense of intangibles | 1,613 | 1,701 | 4,847 | 5,193 | ||||||||||
Depreciation expense | 313 | 300 | 987 | 814 | ||||||||||
Segment operating income | $ | 2,166 | $ | 2,155 | $ | 5,159 | $ | 4,538 | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Consolidated | ||||||||||||||
Revenue | $ | 119,156 | $ | 117,195 | $ | 379,020 | $ | 362,602 | ||||||
Cost of sales | 41,991 | 41,741 | 131,788 | 127,793 | ||||||||||
Gross profit | 77,165 | 75,454 | 247,232 | 234,809 | ||||||||||
Direct segment operating expenses | 45,787 | 49,888 | 139,592 | 151,195 | ||||||||||
Operating income | $ | 31,378 | $ | 25,566 | $ | 107,640 | $ | 83,614 | ||||||
Schedule of financial information by reportable segment | ' | |||||||||||||
Selected financial information by reportable segment is presented below (in thousands): | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Total Assets: | ||||||||||||||
Membership and Exchange | $ | 766,890 | $ | 789,451 | ||||||||||
Management and Rental | 114,725 | 117,469 | ||||||||||||
Total | $ | 881,615 | $ | 906,920 | ||||||||||
Schedule of geographic information on revenue, based on sourcing, and long-lived assets, based on physical location | ' | |||||||||||||
Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands). | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenue: | ||||||||||||||
United States | $ | 98,252 | $ | 96,710 | $ | 310,722 | $ | 294,408 | ||||||
All other countries(a) | 20,904 | 20,485 | 68,298 | 68,194 | ||||||||||
Total | $ | 119,156 | $ | 117,195 | $ | 379,020 | $ | 362,602 | ||||||
(a) | ||||||||||||||
Includes countries within the following continents: Africa, Asia, Australia, Europe, North America and South America. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Long-lived assets (excluding goodwill and other intangible assets): | ||||||||||||||
United States | $ | 51,002 | $ | 51,059 | ||||||||||
All other countries | 2,128 | 2,289 | ||||||||||||
Total | $ | 53,130 | $ | 53,348 | ||||||||||
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 9 Months Ended |
Sep. 30, 2013 | |
item | |
ORGANIZATION AND BASIS OF PRESENTATION | ' |
Number of operating segments | 2 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Securities not included in the computations of diluted earnings per share | ' | ' | ' | ' |
Securities excluded from computation of diluted earnings per share (in shares) | 0.8 | 0.9 | 0.8 | 1 |
Stock options | ' | ' | ' | ' |
Securities not included in the computations of diluted earnings per share | ' | ' | ' | ' |
Outstanding stock options (in shares) | 0.9 | 0.9 | 0.9 | 0.9 |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ' | ' | ' | ' |
Basic weighted average shares of common stock outstanding | 57,353 | 56,714 | 57,199 | 56,448 |
Diluted weighted average shares of common stock outstanding | 57,986 | 57,364 | 57,738 | 57,120 |
RSUs | ' | ' | ' | ' |
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ' | ' | ' | ' |
Net effect of common stock equivalents (in shares) | 627 | 636 | 532 | 657 |
Stock options | ' | ' | ' | ' |
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ' | ' | ' | ' |
Net effect of common stock equivalents (in shares) | 6 | 14 | 7 | 15 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 9 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 01, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 01, 2012 | |
item | Membership and Exchange | Membership and Exchange | Membership and Exchange | Management and Rental | Management and Rental | Management and Rental | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reporting units | 2 | ' | ' | ' | ' | ' | ' | ' |
Goodwill | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $505,774,000 | $505,774,000 | $483,500,000 | $483,500,000 | $483,500,000 | $22,300,000 | $22,300,000 | $22,300,000 |
Intangible assets with indefinite lives | 40,916,000 | 40,916,000 | ' | ' | ' | ' | ' | ' |
Intangible assets with definite lives, net | 52,354,000 | 57,762,000 | ' | ' | ' | ' | ' | ' |
Total goodwill and other intangible assets, net | 599,044,000 | 604,452,000 | ' | ' | ' | ' | ' | ' |
Changes in the carrying amount of goodwill | $0 | ' | ' | ' | ' | ' | ' | ' |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | $321,397 | ' | $321,397 | ' | $320,947 |
Accumulated Amortization | -269,043 | ' | -269,043 | ' | -263,185 |
Net | 52,354 | ' | 52,354 | ' | 57,762 |
Amortization expense for intangible assets | 1,950 | 6,669 | 5,858 | 21,001 | ' |
Amortization of intangible assets | ' | ' | ' | ' | ' |
2014 | 7,734 | ' | 7,734 | ' | ' |
2015 | 7,591 | ' | 7,591 | ' | ' |
2016 | 6,610 | ' | 6,610 | ' | ' |
2017 | 6,176 | ' | 6,176 | ' | ' |
2018 | 5,487 | ' | 5,487 | ' | ' |
2019 and thereafter | 18,756 | ' | 18,756 | ' | ' |
Net | 52,354 | ' | 52,354 | ' | 57,762 |
Customer relationships | ' | ' | ' | ' | ' |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | 129,500 | ' | 129,500 | ' | 129,500 |
Accumulated Amortization | -129,500 | ' | -129,500 | ' | -129,500 |
Purchase agreements | ' | ' | ' | ' | ' |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | 75,879 | ' | 75,879 | ' | 75,879 |
Accumulated Amortization | -74,848 | ' | -74,848 | ' | -74,491 |
Net | 1,031 | ' | 1,031 | ' | 1,388 |
Amortization of intangible assets | ' | ' | ' | ' | ' |
Net | 1,031 | ' | 1,031 | ' | 1,388 |
Resort management contracts | ' | ' | ' | ' | ' |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | 73,116 | ' | 73,116 | ' | 72,666 |
Accumulated Amortization | -25,695 | ' | -25,695 | ' | -21,225 |
Net | 47,421 | ' | 47,421 | ' | 51,441 |
Amortization of intangible assets | ' | ' | ' | ' | ' |
Net | 47,421 | ' | 47,421 | ' | 51,441 |
Technology | ' | ' | ' | ' | ' |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | 25,076 | ' | 25,076 | ' | 25,076 |
Accumulated Amortization | -25,071 | ' | -25,071 | ' | -24,988 |
Net | 5 | ' | 5 | ' | 88 |
Amortization of intangible assets | ' | ' | ' | ' | ' |
Net | 5 | ' | 5 | ' | 88 |
Other | ' | ' | ' | ' | ' |
Other intangible assets | ' | ' | ' | ' | ' |
Cost | 17,826 | ' | 17,826 | ' | 17,826 |
Accumulated Amortization | -13,929 | ' | -13,929 | ' | -12,981 |
Net | 3,897 | ' | 3,897 | ' | 4,845 |
Amortization of intangible assets | ' | ' | ' | ' | ' |
Net | $3,897 | ' | $3,897 | ' | $4,845 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | $147,532 | $138,877 |
Less: accumulated depreciation and amortization | -94,402 | -85,529 |
Total property and equipment, net | 53,130 | 53,348 |
Computer equipment | ' | ' |
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | 19,987 | 18,269 |
Capitalized software | ' | ' |
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | 82,547 | 78,036 |
Land, buildings and leasehold improvements | ' | ' |
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | 25,517 | 23,781 |
Furniture and other equipment | ' | ' |
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | 13,575 | 12,419 |
Projects in progress | ' | ' |
PROPERTY AND EQUIPMENT | ' | ' |
Property and equipment, gross | $5,906 | $6,372 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (Revolving credit facility, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Revolving credit facility | ' | ' |
LONG-TERM DEBT | ' | ' |
Stated interest rate (as a percent) | 1.69% | 1.97% |
Total long-term debt | $190,000 | $260,000 |
LONGTERM_DEBT_Details_2
LONG-TERM DEBT (Details 2) (USD $) | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 21, 2012 | |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Total unamortized debt issuance costs | ' | $2,900,000 | $3,500,000 | ' |
Accumulated amortization on debt issuance costs | ' | 600,000 | 400,000 | ' |
Revolving credit facility | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Principal amount | ' | 500,000,000 | ' | 500,000,000 |
Maximum borrowing capacity subject to certain conditions | ' | ' | ' | 700,000,000 |
Amount outstanding | ' | 190,000,000 | 260,000,000 | ' |
Commitment fee (as a percent) | ' | 0.28% | ' | ' |
Percentage of voting equity securities of the Borrower and its U.S. subsidiaries by which credit facility is secured | ' | 100.00% | ' | ' |
Percentage of equity in the first-tier foreign subsidiaries of the Borrower by which credit facility is secured | ' | 65.00% | ' | ' |
Lender and third - party debt issuance costs incurred | $3,900,000 | ' | ' | ' |
Revolving credit facility | Actual | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Consolidated leverage ratio of debt over EBITDA | ' | 1 | ' | ' |
Consolidated interest coverage ratio | ' | 33.3 | ' | ' |
Revolving credit facility | Minimum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Commitment fee (as a percent) | ' | 0.25% | ' | ' |
Revolving credit facility | Minimum | Financial covenant | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Consolidated interest coverage ratio | ' | 3 | ' | ' |
Revolving credit facility | Maximum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Commitment fee (as a percent) | ' | 0.38% | ' | ' |
Revolving credit facility | Maximum | Through December 31, 2013 | Financial covenant | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Consolidated leverage ratio of debt over EBITDA | ' | 3.5 | ' | ' |
Revolving credit facility | Maximum | After December 31, 2013 | Financial covenant | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Consolidated leverage ratio of debt over EBITDA | ' | 3.25 | ' | ' |
Revolving credit facility | Base rate | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Reference rate | ' | 'Base Rate | ' | ' |
Applicable margin (as a percent) | ' | 0.50% | ' | ' |
Revolving credit facility | Base rate | Minimum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Applicable margin (as a percent) | ' | 0.25% | ' | ' |
Revolving credit facility | Base rate | Maximum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Applicable margin (as a percent) | ' | 1.25% | ' | ' |
Revolving credit facility | LIBOR | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Reference rate | ' | 'LIBOR | ' | ' |
Applicable margin (as a percent) | ' | 1.50% | ' | ' |
Revolving credit facility | LIBOR | Minimum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Applicable margin (as a percent) | ' | 1.25% | ' | ' |
Revolving credit facility | LIBOR | Maximum | ' | ' | ' | ' |
Senior Secured Credit Facility and Covenants | ' | ' | ' | ' |
Applicable margin (as a percent) | ' | 2.25% | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 1 Months Ended | 9 Months Ended | ||||
In Millions, unless otherwise specified | Nov. 30, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Level 3 | Level 3 | Level 3 | Level 3 | |||
Contingent consideration | Contingent consideration | Contingent consideration | Contingent consideration | |||
Minimum | Maximum | Accrued expenses and other current liabilities | ||||
Contingent consideration related to business acquisition | ' | ' | ' | ' | ' | ' |
Contingent consideration payment, low end of range | $0 | ' | ' | ' | ' | ' |
Contingent consideration payment, high end of range | 5 | ' | ' | ' | ' | ' |
Period for payment of contingent consideration | '3 years | ' | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 18.50% | ' | ' | ' |
Fair value of contingent consideration | ' | ' | ' | ' | ' | 1.9 |
Net change in fair value of the contingent consideration | ' | ' | 0.7 | ' | ' | ' |
Increase in fair value of contingent consideration due to revisions to estimated earnings | ' | ' | 0.5 | ' | ' | ' |
Increase in fair value of contingent consideration due to accretion of interest | ' | ' | 0.2 | ' | ' | ' |
Percentage of downward and upward change to inputs that would not result in a change to the estimated contingent consideration | ' | ' | 10.00% | ' | ' | ' |
Favorable change in estimated consideration | ' | ' | ' | 0 | 0.1 | ' |
Asset transfers in/out of Level 1, Level 2 or Level 3 | ' | 0 | ' | ' | ' | ' |
Liability transfers in/out of Level 1, Level 2 or Level 3 | ' | $0 | ' | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | 3 Months Ended | ||||||||
Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 21, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Revolving credit facility | Revolving credit facility | Carrying Amount | Carrying Amount | Fair Value | Fair Value | ||||
Fair Value of Financial Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | $103,563,000 | $101,162,000 | $103,563,000 | $101,162,000 |
Restricted cash and cash equivalents | ' | 5,828,000 | 7,348,000 | ' | ' | 5,828,000 | 7,348,000 | 5,828,000 | 7,348,000 |
Financing receivable | ' | ' | ' | ' | ' | ' | 9,876,000 | ' | 9,876,000 |
Total debt | ' | ' | ' | ' | ' | -190,000,000 | -260,000,000 | -190,000,000 | -260,000,000 |
Guarantees, surety bonds and letters of credit | ' | ' | ' | ' | ' | ' | ' | -23,051,000 | -36,747,000 |
Percentage of principal amount that was repaid on outstanding financing receivables | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | $500,000,000 | $500,000,000 | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Jun. 30, 2013 | 31-May-13 | Aug. 31, 2011 | Jun. 30, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
item | ||||||||||||
STOCKHOLDERS' EQUITY | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized shares of common stock | ' | 300,000,000 | ' | ' | ' | ' | ' | 300,000,000 | ' | 300,000,000 | ' | 300,000,000 |
Par value of common stock (in dollars per share) | ' | $0.01 | ' | ' | ' | ' | ' | $0.01 | ' | $0.01 | ' | $0.01 |
Shares of common stock issued | ' | 59,052,950 | ' | ' | ' | ' | ' | 59,052,950 | ' | 59,052,950 | ' | 58,553,265 |
Shares of common stock outstanding | ' | 57,400,000 | ' | ' | ' | ' | ' | 57,400,000 | ' | 57,400,000 | ' | 56,900,000 |
Shares held as treasury stock | ' | 1,697,360 | ' | ' | ' | ' | ' | 1,697,360 | ' | 1,697,360 | ' | 1,697,360 |
Authorized shares of preferred stock | ' | 25,000,000 | ' | ' | ' | ' | ' | 25,000,000 | ' | 25,000,000 | ' | 25,000,000 |
Par value of preferred stock (in dollars per share) | ' | $0.01 | ' | ' | ' | ' | ' | $0.01 | ' | $0.01 | ' | $0.01 |
Preferred stock, issued shares | ' | 0 | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | 0 |
Preferred stock, outstanding shares | ' | 0 | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | 0 |
Minimum number of series to issue preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Dividends declared per common share (in dollars per share) | $0.11 | ' | $0.11 | ' | $0.11 | ' | ' | $0.11 | $0.10 | $0.22 | $0.30 | ' |
Cash dividend paid | ' | $6,300,000 | ' | $6,300,000 | ' | ' | ' | ' | ' | $12,617,000 | $16,996,000 | ' |
Stockholder Rights Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rights per common stock share declared as dividend | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Minimum percentage of common stock to be acquired before rights become exercisable | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' |
Percentage of discount on prevailing market price of common stock | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' |
Share Repurchase Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount authorized under share repurchase program | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' |
Number of shares of common stock repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 |
Remaining availability for future repurchases of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,100,000 | ' | ' |
BENEFIT_PLANS_Details
BENEFIT PLANS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | ' | ' | ' | ' |
Employee contribution as maximum percentage of pre-tax earnings | ' | ' | 50.00% | ' |
Employer contribution against each dollar contributed by employee (as a percent) | ' | ' | 50.00% | ' |
Matching contributions | $0.40 | $0.40 | $1.20 | $1.10 |
Director Plan | ' | ' | ' | ' |
Vesting percentage under deferred compensation plan | ' | ' | 100.00% | ' |
Shares of common stock reserved for issuance pursuant to deferred compensation plan | 100,000 | ' | 100,000 | ' |
Shares outstanding under the deferred compensation plan | 41,180 | ' | 41,180 | ' |
Maximum | ' | ' | ' | ' |
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | ' | ' | ' | ' |
Employer's maximum contribution of participant's eligible earnings (as a percent) | ' | ' | 3.00% | ' |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | 21-May-13 | Sep. 30, 2013 | |
RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | RSUs | 2013 Stock and Incentive Compensation Plan | 2013 Stock and Incentive Compensation Plan | |||||
Minimum | Minimum | Maximum | Maximum | Performance-based | Performance-based | Performance-based | Performance-based | Performance-based | Performance-based | Performance-based | Performance-based | |||||||||||||
item | Minimum | Minimum | Maximum | Maximum | ||||||||||||||||||||
STOCK-BASED COMPENSATION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock reserved for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | ' |
Reduction from common stock reserved for issuance for every share granted under prior plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' |
Remaining shares available for future issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,300,000 |
Awards granted (in shares) | ' | ' | ' | ' | ' | 657,000 | ' | 586,000 | 707,000 | ' | ' | ' | ' | ' | 58,000 | 73,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '3 years | '4 years | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares granted expected to cliff vest | ' | ' | ' | ' | ' | 300,000 | ' | 130,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of target shares which can be earned by the participants (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% | 200.00% | 200.00% | ' | ' |
Per unit grant date fair value (in dollars per unit) | ' | ' | ' | ' | ' | ' | ' | ' | $20.75 | ' | ' | ' | ' | ' | ' | ' | $29.61 | $17.34 | ' | ' | ' | ' | ' | ' |
Number of peer groups for estimating total shareholder return ranking | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' |
Non-cash compensation expense | $2,609,000 | $2,564,000 | $7,753,000 | $8,733,000 | $2,600,000 | ' | $2,600,000 | ' | $7,800,000 | $8,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost, net of estimated forfeitures | ' | ' | ' | ' | $17,300,000 | ' | ' | ' | $17,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period for recognition of unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | '1 year 10 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash compensation expense | $2,609 | $2,564 | $7,753 | $8,733 |
Cost of sales | ' | ' | ' | ' |
Non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash compensation expense | 160 | 155 | 519 | 471 |
Selling and marketing expense | ' | ' | ' | ' |
Non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash compensation expense | 292 | 257 | 906 | 787 |
General and administrative expenses | ' | ' | ' | ' |
Non-cash stock-based compensation expense | ' | ' | ' | ' |
Non-cash compensation expense | $2,157 | $2,152 | $6,328 | $7,475 |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 3) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||
31-May-07 | Mar. 31, 2013 | 31-May-07 | Mar. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Mar. 31, 2013 | Mar. 31, 2012 | |
Aston | Aston | Aston | Non-vested RSUs | Non-vested RSUs | Non-vested RSUs | Non-vested RSUs | Non-vested RSUs | |
Maximum | Maximum | Maximum | ||||||
Shares | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | ' | 1,569,000 | ' | 1,569,000 | ' | ' |
Granted (in shares) | ' | ' | ' | 657,000 | 586,000 | 707,000 | ' | ' |
Vested (in shares) | ' | ' | ' | ' | ' | -688,000 | ' | ' |
Forfeited (in shares) | ' | ' | ' | ' | ' | -13,000 | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | ' | ' | 1,575,000 | ' | ' |
Weighted-Average Grant Date Fair Value | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | ' | $13.29 | ' | $13.29 | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | $20.75 | ' | ' |
Vested (in dollars per share) | ' | ' | ' | ' | ' | $11.63 | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | ' | ' | $18.10 | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | $17.29 | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | '4 years 6 months | ' | ' | ' | '4 years | '4 years |
Exercisable period of shares subsequent to the filing of entity's annual report on Form 10-K | ' | '60 days | ' | ' | ' | ' | ' | ' |
Preferred interest accretion rate (as a percent) | 10.00% | ' | ' | ' | ' | ' | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
INCOME TAXES | ' | ' | ' | ' | ' | ' |
Income tax provision for continuing operations | $12,973,000 | ' | $624,000 | $41,571,000 | $14,911,000 | ' |
Effective tax rate (as a percent) | 43.10% | ' | 80.50% | 39.90% | 37.00% | ' |
Federal statutory rate (as a percent) | 35.00% | ' | 35.00% | 35.00% | 35.00% | ' |
Unrecognized tax benefits | 1,700,000 | ' | ' | 1,700,000 | ' | 700,000 |
Unrecognized tax benefits that would favorably affect the effective tax rate, if recognized | 1,200,000 | ' | ' | 1,200,000 | ' | 700,000 |
Net increase in unrecognized tax benefits | 0 | ' | ' | 1,000,000 | ' | ' |
Increase in unrecognized tax benefits for state income tax items | ' | 1,100,000 | ' | 0 | ' | ' |
Decrease in unrecognized tax benefits due to expiration of statute of limitations related to foreign taxes | ' | 200,000 | ' | ' | ' | ' |
Accruals for interest | 0 | ' | ' | 0 | ' | ' |
Decrease in interest and penalties | ' | ' | ' | 200,000 | ' | ' |
Accrued interest and penalties | 400,000 | ' | ' | 400,000 | ' | ' |
Estimated decrease in unrecognized tax benefits within next twelve months | $1,300,000 | ' | ' | $1,300,000 | ' | ' |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 3 Months Ended | 1 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Oct. 31, 2013 | Apr. 30, 2013 | Apr. 30, 2012 | Apr. 30, 2015 | Apr. 30, 2014 |
State taxing authority | U.K. Finance Act of 2012 | U.K. Finance Act of 2012 | U.K. Finance Act of 2013 | U.K. Finance Act of 2013 | ||
Income Taxes | ' | ' | ' | ' | ' | ' |
U.K. corporate income tax rate (as a percent) | ' | ' | 23.00% | 24.00% | 20.00% | 21.00% |
Decrease in U.K. deferred tax asset | $0.60 | ' | ' | ' | ' | ' |
Decrease in unrecognized tax benefits for state income tax items | ' | $1.10 | ' | ' | ' | ' |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | |||||
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Number of operating segments which are also reportable segments | ' | ' | 2 | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Revenue | $119,156 | $117,195 | $379,020 | $362,602 | ' |
Cost of sales | 41,991 | 41,741 | 131,788 | 127,793 | ' |
Gross profit | 77,165 | 75,454 | 247,232 | 234,809 | ' |
Selling and marketing expense | 12,951 | 13,282 | 40,958 | 41,323 | ' |
General and administrative expense | 27,387 | 26,626 | 81,917 | 79,032 | ' |
Amortization expense of intangibles | 1,950 | 6,669 | 5,858 | 21,001 | ' |
Depreciation expense | 3,499 | 3,311 | 10,859 | 9,839 | ' |
Direct segment operating expenses | 45,787 | 49,888 | 139,592 | 151,195 | ' |
Operating income | 31,378 | 25,566 | 107,640 | 83,614 | ' |
Total assets | ' | ' | ' | ' | ' |
Total assets | 881,615 | ' | 881,615 | ' | 906,920 |
Membership and Exchange | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Revenue | 86,615 | 86,092 | 284,227 | 276,725 | ' |
Cost of sales | 20,442 | 20,538 | 68,679 | 68,384 | ' |
Gross profit | 66,173 | 65,554 | 215,548 | 208,341 | ' |
Selling and marketing expense | 11,919 | 12,345 | 37,973 | 38,472 | ' |
General and administrative expense | 21,519 | 21,819 | 64,211 | 65,960 | ' |
Amortization expense of intangibles | 337 | 4,968 | 1,011 | 15,808 | ' |
Depreciation expense | 3,186 | 3,011 | 9,872 | 9,025 | ' |
Operating income | 29,212 | 23,411 | 102,481 | 79,076 | ' |
Total assets | ' | ' | ' | ' | ' |
Total assets | 766,890 | ' | 766,890 | ' | 789,451 |
Management and Rental | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Management fee revenue | 16,209 | 15,117 | 47,825 | 41,165 | ' |
Pass-through revenue | 16,332 | 15,986 | 46,968 | 44,712 | ' |
Revenue | 32,541 | 31,103 | 94,793 | 85,877 | ' |
Cost of sales | 21,549 | 21,203 | 63,109 | 59,409 | ' |
Gross profit | 10,992 | 9,900 | 31,684 | 26,468 | ' |
Selling and marketing expense | 1,032 | 937 | 2,985 | 2,851 | ' |
General and administrative expense | 5,868 | 4,807 | 17,706 | 13,072 | ' |
Amortization expense of intangibles | 1,613 | 1,701 | 4,847 | 5,193 | ' |
Depreciation expense | 313 | 300 | 987 | 814 | ' |
Operating income | 2,166 | 2,155 | 5,159 | 4,538 | ' |
Total assets | ' | ' | ' | ' | ' |
Total assets | $114,725 | ' | $114,725 | ' | $117,469 |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | item | ||||
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Number of operating segments which are also reportable segments | ' | ' | 2 | ' | ' |
Geographic Information | ' | ' | ' | ' | ' |
Number of other countries in which entity operates | 16 | ' | 16 | ' | ' |
Revenue: | ' | ' | ' | ' | ' |
Revenue | $119,156 | $117,195 | $379,020 | $362,602 | ' |
Long-lived assets (excluding goodwill and other intangible assets): | ' | ' | ' | ' | ' |
Total long-lived assets | 53,130 | ' | 53,130 | ' | 53,348 |
Minimum | ' | ' | ' | ' | ' |
Geographic Information | ' | ' | ' | ' | ' |
Number of countries from which revenue is sourced | ' | ' | 100 | ' | ' |
United States | ' | ' | ' | ' | ' |
Revenue: | ' | ' | ' | ' | ' |
Revenue | 98,252 | 96,710 | 310,722 | 294,408 | ' |
Long-lived assets (excluding goodwill and other intangible assets): | ' | ' | ' | ' | ' |
Total long-lived assets | 51,002 | ' | 51,002 | ' | 51,059 |
All other countries | ' | ' | ' | ' | ' |
Revenue: | ' | ' | ' | ' | ' |
Revenue | 20,904 | 20,485 | 68,298 | 68,194 | ' |
Long-lived assets (excluding goodwill and other intangible assets): | ' | ' | ' | ' | ' |
Total long-lived assets | $2,128 | ' | $2,128 | ' | $2,289 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Guarantees, surety bonds and letters of credit | ' |
Commitments and guarantees | ' |
Guarantees and commitments amount | $23.10 |
Amount of guarantees and commitments, year one | 12.7 |
Guarantees | ' |
Commitments and guarantees | ' |
Guarantees and commitments amount | $19.80 |
Notice period for termination of lease | '60 days |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details 2) (European Union Value Added Tax Matter, USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
European Union Value Added Tax Matter | ' | ' |
COMMITMENTS AND CONTINGENCIES | ' | ' |
Accrual of VAT liability | $2.90 | $4.50 |
Change in estimate of VAT liability | 1.6 | ' |
Payment of VAT | 0.5 | ' |
Possible future costs to settle VAT liabilities, lower range | 2.9 | ' |
Possible future costs to settle VAT liabilities, higher range | $4.20 | ' |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (Definitive agreement with CLC) | 1 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Aug. 31, 2013 | Nov. 04, 2013 | Nov. 04, 2013 |
Convertible secured loan | Subsequent event | Subsequent event | |
USD ($) | VRI Europe Limited | VRI Europe Limited | |
USD ($) | GBP (£) | ||
Subsequent events | ' | ' | ' |
Cash paid as consideration for acquisition | ' | $90 | £ 56 |
Shares of VRIE issued as consideration for acquisition (as a percent) | ' | 24.50% | 24.50% |
Convertible secured loan to be issued | $15 | ' | ' |
Convertible secured loan maturity period | '5 years | ' | ' |