Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 19, 2015 | Jul. 17, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 19, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | VAC | |
Entity Registrant Name | MARRIOTT VACATIONS WORLDWIDE Corp | |
Entity Central Index Key | 1,524,358 | |
Current Fiscal Year End Date | --01-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,483,443 |
Interim Consolidated Statements
Interim Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |||||
REVENUES | ||||||||
Sale of vacation ownership products | $ 155,370 | $ 152,562 | $ 339,276 | $ 297,412 | ||||
Resort management and other services | 74,063 | 74,821 | 138,480 | 138,367 | ||||
Financing | 28,294 | 29,817 | 57,346 | 60,457 | ||||
Rental | 72,642 | 61,827 | 148,841 | 125,352 | ||||
Cost reimbursements | 92,458 | 90,875 | 193,764 | 190,261 | ||||
TOTAL REVENUES | 422,827 | 409,902 | 877,707 | 811,849 | ||||
EXPENSES | ||||||||
Cost of vacation ownership products | 45,119 | 43,414 | 110,081 | 90,285 | ||||
Marketing and sales | 77,137 | 72,227 | 157,132 | 143,447 | ||||
Resort management and other services | 45,480 | 48,308 | 87,889 | 93,204 | ||||
Financing | 6,085 | 5,438 | 10,990 | 10,542 | ||||
Rental | 61,835 | 54,991 | 121,993 | 111,781 | ||||
General and administrative | 22,892 | 23,153 | 45,669 | 44,981 | ||||
Litigation settlement | 26 | (7,575) | (236) | (7,575) | ||||
Organizational and separation related | 101 | 1,089 | 293 | 1,940 | ||||
Consumer financing interest | 5,248 | 5,737 | 11,269 | 12,362 | ||||
Royalty fee | 13,431 | 13,653 | 26,431 | 27,081 | ||||
Impairment | 834 | 834 | ||||||
Cost reimbursements | 92,458 | 90,875 | 193,764 | 190,261 | ||||
TOTAL EXPENSES | 369,812 | 352,144 | 765,275 | 719,143 | ||||
Gains and other income | 8,625 | 409 | 9,512 | 1,642 | ||||
Interest expense | (3,009) | (2,601) | (5,983) | (4,748) | ||||
Equity in earnings | 85 | 81 | 98 | 118 | ||||
Impairment reversals on equity investment | 2,000 | |||||||
Other | (1,272) | (1,272) | ||||||
INCOME BEFORE INCOME TAXES | 57,444 | 57,647 | 114,787 | 89,718 | ||||
Provision for income taxes | (23,403) | (22,344) | (46,692) | (35,107) | ||||
NET INCOME | $ 34,041 | [1] | $ 35,303 | [2] | $ 68,095 | [1] | $ 54,611 | [2] |
Basic earnings per share | $ 1.07 | [1] | $ 1.03 | [2] | $ 2.12 | [1] | $ 1.58 | [2] |
Shares used in computing basic earnings per share | 31,858 | [1] | 34,292 | [2] | 32,078 | [1] | 34,583 | [2] |
Diluted earnings per share | $ 1.05 | [1] | $ 1 | [2] | $ 2.08 | [1] | $ 1.54 | [2] |
Shares used in computing diluted earnings per share | 32,517 | [1] | 35,239 | [2] | 32,760 | [1] | 35,557 | [2] |
Dividends declared per share of common stock | $ 0.25 | $ 0.50 | ||||||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||||||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
Interim Consolidated Statement3
Interim Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |||||
Statement of Comprehensive Income [Abstract] | ||||||||
Net income | $ 34,041 | [1] | $ 35,303 | [2] | $ 68,095 | [1] | $ 54,611 | [2] |
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustments | 3,245 | (86) | (2,357) | (80) | ||||
Derivative instrument adjustments | 59 | 59 | ||||||
Total other comprehensive income (loss), net of tax | 3,304 | (86) | (2,298) | (80) | ||||
COMPREHENSIVE INCOME | $ 37,345 | $ 35,217 | $ 65,797 | $ 54,531 | ||||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||||||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
Interim Consolidated Balance Sh
Interim Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 250,906 | $ 346,515 |
Restricted cash (including $37,017 and $34,986 from VIEs, respectively) | 65,559 | 109,907 |
Accounts and contracts receivable, net (including $3,429 and $4,992 from VIEs, respectively) | 116,544 | 109,700 |
Vacation ownership notes receivable, net (including $547,158 and $750,680 from VIEs, respectively) | 878,858 | 917,228 |
Inventory | 704,707 | 772,784 |
Property and equipment | 188,714 | 147,379 |
Other | 117,924 | 127,066 |
Total Assets | 2,323,212 | 2,530,579 |
LIABILITIES AND EQUITY | ||
Accounts payable | 80,450 | 114,079 |
Advance deposits | 64,148 | 60,192 |
Accrued liabilities (including $1,576 and $1,088 from VIEs, respectively) | 137,261 | 165,969 |
Deferred revenue | 32,845 | 38,818 |
Payroll and benefits liability | 74,582 | 93,073 |
Liability for Marriott Rewards customer loyalty program | 79,939 | 89,285 |
Deferred compensation liability | 46,534 | 41,677 |
Mandatorily redeemable preferred stock of consolidated subsidiary, net | 38,895 | 38,816 |
Debt, net (including $564,657 and $708,031 from VIEs, respectively) | 561,133 | 703,013 |
Other | 50,053 | 27,071 |
Deferred taxes | 96,748 | 78,883 |
Total Liabilities | $ 1,262,588 | $ 1,450,876 |
Contingencies and Commitments (Note 8) | ||
Preferred stock - $0.01 par value; 2,000,000 shares authorized; none issued or outstanding | ||
Common stock - $0.01 par value; 100,000,000 shares authorized; 36,346,990 and 36,089,513 shares issued, respectively | $ 363 | $ 361 |
Treasury stock - at cost; 4,814,451 and 3,996,725 shares, respectively | (295,466) | (229,229) |
Additional paid-in capital | 1,135,143 | 1,137,785 |
Accumulated other comprehensive income | 14,756 | 17,054 |
Retained earnings | 205,828 | 153,732 |
Total Equity | 1,060,624 | 1,079,703 |
Total Liabilities and Equity | $ 2,323,212 | $ 2,530,579 |
Interim Consolidated Balance S5
Interim Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 |
Restricted cash | $ 65,559 | $ 109,907 |
Accounts and contracts receivable | 116,544 | 109,700 |
Vacation ownership notes receivable | 878,858 | 917,228 |
Accrued liabilities | 137,261 | 165,969 |
Debt, net | $ 561,133 | $ 703,013 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,346,990 | 36,089,513 |
Treasury stock, shares | 4,814,451 | 3,996,725 |
Variable Interest Entity | ||
Restricted cash | $ 37,017 | $ 34,986 |
Accounts and contracts receivable | 3,429 | 4,992 |
Vacation ownership notes receivable | 547,158 | 750,680 |
Accrued liabilities | 1,576 | 1,088 |
Debt, net | $ 564,657 | $ 708,031 |
Interim Consolidated Statement6
Interim Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 19, 2015 | Jun. 20, 2014 | |||
OPERATING ACTIVITIES | ||||
Net income | $ 68,095 | [1] | $ 54,611 | [2] |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 8,558 | 8,922 | ||
Amortization of debt issuance costs | 2,506 | 2,566 | ||
Provision for loan losses | 15,662 | 15,603 | ||
Share-based compensation | 6,588 | 6,180 | ||
Deferred income taxes | 17,850 | (5,299) | ||
Equity method income | (98) | (118) | ||
Gain on disposal of property and equipment, net | (9,512) | (1,642) | ||
Non-cash litigation settlement | (262) | |||
Impairment charges | 834 | |||
Net change in assets and liabilities: | ||||
Accounts and contracts receivable | (6,068) | (11,822) | ||
Notes receivable originations | (112,060) | (103,908) | ||
Notes receivable collections | 132,397 | 137,460 | ||
Inventory | 68,629 | 36,805 | ||
Purchase of operating hotel for future conversion to inventory | (46,614) | |||
Other assets | 8,154 | 26,546 | ||
Accounts payable, advance deposits and accrued liabilities | (66,223) | (55,865) | ||
Deferred revenue | (5,955) | (310) | ||
Payroll and benefit liabilities | (18,382) | (14,832) | ||
Liability for Marriott Rewards customer loyalty program | (9,345) | (14,284) | ||
Deferred compensation liability | 4,858 | 1,882 | ||
Other liabilities | 18,013 | 15,397 | ||
Other, net | 1,874 | (564) | ||
Net cash provided by operating activities | 78,665 | 98,162 | ||
INVESTING ACTIVITIES | ||||
Capital expenditures for property and equipment (excluding inventory) | (15,718) | (3,003) | ||
Decrease in restricted cash | 43,758 | 43,958 | ||
Dispositions, net | 20,346 | 33,169 | ||
Net cash provided by investing activities | 48,386 | 74,124 | ||
FINANCING ACTIVITIES | ||||
Borrowings from securitization transactions | 22,638 | |||
Repayment of debt related to securitization transactions | (143,374) | (130,700) | ||
Proceeds from vacation ownership inventory arrangement | 5,375 | |||
Debt issuance costs | (30) | (140) | ||
Repurchase of common stock | (66,237) | (89,448) | ||
Payment of dividends | (8,085) | |||
Proceeds from stock option exercises | 92 | 968 | ||
Payment of withholding taxes on vesting of restricted stock units | (9,353) | (5,091) | ||
Other | 109 | (254) | ||
Net cash used in financing activities | (221,503) | (202,027) | ||
Effect of changes in exchange rates on cash and cash equivalents | (1,157) | 3 | ||
DECREASE IN CASH AND CASH EQUIVALENTS | (95,609) | (29,738) | ||
CASH AND CASH EQUIVALENTS, beginning of period | 346,515 | 199,511 | ||
CASH AND CASH EQUIVALENTS, end of period | 250,906 | 169,773 | ||
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES | ||||
Non-cash impact on Additional paid-in capital for changes in Deferred tax liabilities distributed to Marriott Vacations Worldwide at Spin-Off | (77) | $ (2,097) | ||
Non-cash issuance of note receivable | (500) | |||
Dividends payable | $ (7,914) | |||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 19, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our Business Marriott Vacations Worldwide Corporation (“Marriott Vacations Worldwide,” “we” or “us,” which includes our consolidated subsidiaries except where the context of the reference is to a single corporate entity) is the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. The Ritz-Carlton Hotel Company, L.L.C. (“The Ritz-Carlton Hotel Company”), a subsidiary of Marriott International, Inc. (“Marriott International”), generally provides on-site management for Ritz-Carlton branded properties. Our business is grouped into three reportable segments: North America, Europe and Asia Pacific. As of June 19, 2015, we operated 59 properties, including one hotel, in the United States and seven other countries and territories. We generate most of our revenues from four primary sources: selling vacation ownership products; managing our resorts; financing consumer purchases; and renting vacation ownership inventory. Our Spin-Off from Marriott International, Inc. On November 21, 2011, the spin-off of Marriott Vacations Worldwide from Marriott International (the “Spin-Off”) was completed. In connection with the Spin-Off, we entered into several agreements that govern the ongoing relationship between Marriott Vacations Worldwide and Marriott International. Principles of Consolidation and Basis of Presentation The interim consolidated financial statements presented herein and discussed below include 100 percent of the assets, liabilities, revenues, expenses and cash flows of Marriott Vacations Worldwide, all entities in which Marriott Vacations Worldwide has a controlling voting interest (“subsidiaries”), and those variable interest entities for which Marriott Vacations Worldwide is the primary beneficiary in accordance with consolidation accounting guidance. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. The interim consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with United States Generally Accepted Accounting Principles (“GAAP”). In order to make this report easier to read, we refer throughout to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Statements of Income,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Interim Consolidated Financial Statements, unless otherwise noted. Unless otherwise specified, each reference to a particular quarter in these Financial Statements means the twelve weeks ended on the date shown in the following table, rather than the corresponding calendar quarter: Fiscal Year Quarter-End Date 2015 Second Quarter June 19, 2015 2015 First Quarter March 27, 2015 2014 Second Quarter June 20, 2014 2014 First Quarter March 28, 2014 In our opinion, our Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position and the results of our operations and cash flows for the periods presented. Interim results may not be indicative of fiscal year performance because of, among other reasons, seasonal and short-term variations. These Financial Statements have not been audited. Amounts as of January 2, 2015 included in these Financial Statements have been derived from the audited consolidated financial statements as of that date. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe our footnote disclosures are adequate to make the information presented not misleading, you should read these Financial Statements in conjunction with the consolidated financial statements and notes to those consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2015. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, cost of vacation ownership products, inventory valuation, property and equipment valuation, loan loss reserves, Marriott Rewards customer loyalty program liability, self-insured medical plan reserves, equity-based compensation, income taxes and loss contingencies. Accordingly, actual amounts may differ from these estimated amounts. We have reclassified certain prior year amounts to conform to our current period presentation. New Accounting Standards Accounting Standards Update No. 2015-02 – “ Consolidation (Topic 810): Amendments to the Consolidation Analysis In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-02, which amends the guidance for evaluating whether to consolidate certain legal entities. Specifically, ASU 2015-02 modifies the method for determining whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. Further, it eliminates the presumption that a general partner should consolidate a limited partnership and impacts the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. Our early adoption of ASU 2015-02 in the first quarter of 2015 did not have a material impact on our Financial Statements. Accounting Standards Update No. 2015-03 – “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability instead of being presented as an asset. The recognition and measurement guidance for debt issuance costs has not changed. ASU 2015-03 requires retrospective application and represents a change in accounting principle. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted for financial statements that have not been previously issued. Our early adoption of ASU 2015-03 in the first quarter of 2015 did not have a material impact on our Financial Statements. In June 2015, the staff of the Securities and Exchange Commission (“SEC”) announced that it would not object to an entity always presenting debt issuance costs related to revolving debt arrangements as an asset, regardless of whether a balance was outstanding, while amortizing the costs ratably over the term of the revolving debt arrangement. As a result, we have applied the SEC staff guidance effective for the second quarter of 2015 and presented costs associated with our revolving debt arrangements as an asset. We have applied these changes retrospectively to all periods presented. Future Adoption of Accounting Standards Accounting Standards Update No. 2014-09 – “ Revenue from Contracts with Customers (Topic 606) In May 2014, the FASB issued ASU 2014-09. ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 19, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 2. INCOME TAXES We file U.S. consolidated federal and state tax returns, as well as consolidated and separate tax filings for non-U.S. jurisdictions. Our total unrecognized tax benefit balance that, if recognized, would impact our effective tax rate was $1.5 million and $1.3 million at June 19, 2015 and January 2, 2015, respectively. We have joined in the Marriott International U.S. federal tax consolidated filing for periods up to the date of the Spin-Off. The U.S. Internal Revenue Service (the “IRS”) has examined Marriott International’s federal income tax returns, and it has settled all issues related to the timeshare business for the tax years through the Spin-Off. Our tax years subsequent to the Spin-Off are subject to examination by relevant tax authorities, and our 2011, 2012 and 2013 returns are currently being audited by the IRS and authorities in other foreign jurisdictions. Although we do not anticipate that a significant impact to our unrecognized tax benefit balance will occur during the next fiscal year, the amount of our liability for unrecognized tax benefits could change as a result of these audits. Pursuant to a Tax Sharing and Indemnification Agreement with Marriott International effective November 21, 2011, as subsequently amended, Marriott International is liable and shall pay the relevant tax authority for all taxes related to our taxable income prior to the Spin-Off. |
VACATION OWNERSHIP NOTES RECEIV
VACATION OWNERSHIP NOTES RECEIVABLE | 6 Months Ended |
Jun. 19, 2015 | |
Receivables [Abstract] | |
VACATION OWNERSHIP NOTES RECEIVABLE | 3. VACATION OWNERSHIP NOTES RECEIVABLE The following table shows the composition of our vacation ownership notes receivable balances, net of reserves: ($ in thousands) June 19, 2015 January 2, 2015 Vacation ownership notes receivable — securitized $ 547,158 $ 750,680 Vacation ownership notes receivable — non-securitized Eligible for securitization (1) 195,947 24,194 Not eligible for securitization (1) 135,753 142,354 Subtotal 331,700 166,548 Total vacation ownership notes receivable $ 878,858 $ 917,228 (1) Refer to Footnote No. 4, “Financial Instruments,” for discussion of eligibility of our vacation ownership notes receivable. The following tables show future principal payments, net of reserves, as well as interest rates for our securitized and non-securitized vacation ownership notes receivable at June 19, 2015: ($ in thousands) Non-Securitized Securitized Notes Receivable Total 2015 $ 51,688 $ 45,612 $ 97,300 2016 59,191 74,860 134,051 2017 50,054 70,933 120,987 2018 35,006 65,869 100,875 2019 22,948 65,478 88,426 Thereafter 112,813 224,406 337,219 Balance at June 19, 2015 $ 331,700 $ 547,158 $ 878,858 Weighted average stated interest rate 12.2% 12.7% 12.5% Range of stated interest rates 0.0% to 19.5% 4.9% to 19.5% 0.0% to 19.5% We reflect interest income associated with vacation ownership notes receivable on our Statements of Income in the Financing revenues caption. The following table summarizes interest income associated with vacation ownership notes receivable: Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 Interest income associated with vacation ownership notes receivable — securitized $ 17,913 $ 19,738 $ 39,987 $ 41,329 Interest income associated with vacation ownership notes receivable — non-securitized 9,014 8,595 14,507 16,136 Total interest income associated with vacation ownership notes receivable $ 26,927 $ 28,333 $ 54,494 $ 57,465 We record an estimate of expected uncollectibility on all notes receivable from vacation ownership purchasers as a reduction of revenues from the sale of vacation ownership products at the time we recognize profit on a vacation ownership product sale. We fully reserve for all defaulted vacation ownership notes receivable in addition to recording a reserve on the estimated uncollectible portion of the remaining vacation ownership notes receivable. For those vacation ownership notes receivable that are not in default, we assess collectibility based on pools of vacation ownership notes receivable because we hold large numbers of homogeneous vacation ownership notes receivable. We use the same criteria to estimate uncollectibility for non-securitized vacation ownership notes receivable and securitized vacation ownership notes receivable because they perform similarly. We estimate uncollectibility for each pool based on historical activity for similar vacation ownership notes receivable. The following table summarizes the activity related to our vacation ownership notes receivable reserve for the twenty-four weeks ended June 19, 2015: ($ in thousands) Non-Securitized Notes Receivable Securitized Total Balance at January 2, 2015 $ 64,752 $ 53,666 $ 118,418 Provision for loan losses 9,469 6,036 15,505 Clean-up calls (1) 5,725 (5,725) — Write-offs (21,361) — (21,361) Defaulted vacation ownership notes receivable repurchase activity (2) 10,993 (10,993) — Balance at June 19, 2015 $ 69,578 $ 42,984 $ 112,562 (1) Refers to our voluntary repurchase of previously securitized non-defaulted vacation ownership notes receivable to retire outstanding vacation ownership notes receivable securitizations. (2) Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation ownership notes receivable reserve was attributable to the transfer of the reserve when we voluntarily repurchased the securitized vacation ownership notes receivable. Although we consider loans to owners to be past due if we do not receive payment within 30 days of the due date, we suspend accrual of interest only on those loans that are over 90 days past due. We consider loans over 150 days past due to be in default. We apply payments we receive for vacation ownership notes receivable on non-accrual status first to interest, then to principal and any remainder to fees. We resume accruing interest when vacation ownership notes receivable are less than 90 days past due. We do not accept payments for vacation ownership notes receivable during the foreclosure process unless the amount is sufficient to pay all past due principal, interest, fees and penalties owed and fully reinstate the note. We write off uncollectible vacation ownership notes receivable against the reserve once we receive title to the vacation ownership products through the foreclosure or deed-in-lieu process or, in Europe or Asia Pacific, when revocation is complete. For both non-securitized and securitized vacation ownership notes receivable, we estimated average remaining default rates of 7.03 percent and 6.95 percent as of June 19, 2015 and January 2, 2015, respectively. A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in our allowance for loan losses of $4.5 million as of June 19, 2015 and $4.7 million as of January 2, 2015. The following table shows our recorded investment in non-accrual vacation ownership notes receivable, which are vacation ownership notes receivable that are 90 days or more past due: ($ in thousands) Non-Securitized Securitized Notes Receivable Total Investment in vacation ownership notes receivable on non-accrual status at June 19, 2015 $ 55,036 $ 7,790 $ 62,826 Investment in vacation ownership notes receivable on non-accrual status at January 2, 2015 $ 60,275 $ 7,172 $ 67,447 Average investment in vacation ownership notes receivable on non-accrual status during the twelve weeks ended June 19, 2015 $ 54,354 $ 9,352 $ 63,706 Average investment in vacation ownership notes receivable on non-accrual status during the twelve weeks ended June 20, 2014 $ 66,397 $ 9,033 $ 75,430 Average investment in vacation ownership notes receivable on non-accrual status during the twenty-four weeks ended June 19, 2015 $ 57,656 $ 7,481 $ 65,137 Average investment in vacation ownership notes receivable on non-accrual status during the twenty-four weeks ended June 20, 2014 $ 67,672 $ 7,915 $ 75,587 The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of June 19, 2015: ($ in thousands) Non-Securitized Securitized Total 31 – 90 days past due $ 10,178 $ 13,860 $ 24,038 91 – 150 days past due 6,128 6,143 12,271 Greater than 150 days past due 48,908 1,647 50,555 Total past due 65,214 21,650 86,864 Current 336,064 568,492 904,556 Total vacation ownership notes receivable $ 401,278 $ 590,142 $ 991,420 The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of January 2, 2015: ($ in thousands) Non-Securitized Securitized Total 31 – 90 days past due $ 8,330 $ 22,544 $ 30,874 91 – 150 days past due 6,101 7,003 13,104 Greater than 150 days past due 54,174 169 54,343 Total past due 68,605 29,716 98,321 Current 162,695 774,630 937,325 Total vacation ownership notes receivable $ 231,300 $ 804,346 $ 1,035,646 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 19, 2015 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS | 4. FINANCIAL INSTRUMENTS The following table shows the carrying values and the estimated fair values of financial assets and liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures regarding the fair value of financial instruments. Considerable judgment is required in interpreting market data to develop estimates of fair value. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts. The table excludes Cash and cash equivalents, Restricted cash, Accounts and contracts receivable, Accounts payable, Advance deposits and Accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. At June 19, 2015 At January 2, 2015 ($ in thousands) Carrying Amount Fair Value (1) Carrying Amount Fair Value (1) Vacation ownership notes receivable Securitized $ 547,158 $ 664,646 $ 750,680 $ 909,391 Non-securitized 331,700 378,973 166,548 172,103 Total financial assets $ 878,858 $ 1,043,619 $ 917,228 $ 1,081,494 Non-recourse debt associated with vacation ownership notes receivable securitizations, gross $ (564,657) $ (570,338) $ (708,031) $ (712,977) Other debt, gross (3,416) (3,416) (3,306) (3,306) Mandatorily redeemable preferred stock of consolidated subsidiary, gross (40,000) (42,924) (40,000) (43,837) Liability for Marriott Rewards customer loyalty program (79,939) (70,926) (89,285) (80,448) Other liabilities (4,184) (4,184) (4,118) (4,118) Total financial liabilities $ (692,196) $ (691,788) $ (844,740) $ (844,686) (1) Fair value of financial instruments has been determined using Level 3 inputs. Vacation Ownership Notes Receivable We estimate the fair value of our securitized vacation ownership notes receivable using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model uses default rates, prepayment rates, coupon rates and loan terms for our securitized vacation ownership notes receivable portfolio as key drivers of risk and relative value, that when applied in combination with pricing parameters, determine the fair value of the underlying vacation ownership notes receivable. Due to factors that impact the general marketability of our non-securitized vacation ownership notes receivable, as well as current market conditions, we bifurcate our vacation ownership notes receivable at each balance sheet date into those eligible and not eligible for securitization using criteria applicable to current securitization transactions in the asset-backed securities (“ABS”) market. Generally, vacation ownership notes receivable are considered not eligible for securitization if any of the following attributes are present: (1) payments are greater than 30 days past due; (2) the first payment has not been received; or (3) the collateral is located in Europe or Asia. In some cases eligibility may also be determined based on the credit score of the borrower, the remaining term of the loans and other similar factors that may reflect investor demand in a securitization transaction or the cost to effectively securitize the vacation ownership notes receivable. The following table shows the bifurcation of our non-securitized vacation ownership notes receivable into those eligible and not eligible for securitization based upon the aforementioned eligibility criteria: At June 19, 2015 At January 2, 2015 ($ in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Vacation ownership notes receivable Eligible for securitization $ 195,947 $ 243,220 $ 24,194 $ 29,749 Not eligible for securitization 135,753 135,753 142,354 142,354 Total non-securitized $ 331,700 $ 378,973 $ 166,548 $ 172,103 We estimate the fair value of the portion of our non-securitized vacation ownership notes receivable that we believe will ultimately be securitized in the same manner as securitized vacation ownership notes receivable. We value the remaining non-securitized vacation ownership notes receivable at their carrying value, rather than using our pricing model. We believe that the carrying value of these particular vacation ownership notes receivable approximates fair value because the stated interest rates of these loans are consistent with current market rates and the reserve for these vacation ownership notes receivable appropriately accounts for risks in default rates, prepayment rates and loan terms. Non-Recourse Debt Associated with Securitized Vacation Ownership Notes Receivable We generate cash flow estimates by modeling all bond tranches for our active vacation ownership notes receivable securitization transactions, with consideration for the collateral specific to each tranche. The key drivers in our analysis include default rates, prepayment rates, bond interest rates and other structural factors, which we use to estimate the projected cash flows. In order to estimate market credit spreads by rating, we obtain indicative credit spreads from investment banks that actively issue and facilitate the market for vacation ownership securities and determine an average credit spread by rating level of the different tranches. We then apply those estimated market spreads to swap rates in order to estimate an underlying discount rate for calculating the fair value of the active bonds payable. Mandatorily Redeemable Preferred Stock of Consolidated Subsidiary We estimate the fair value of the mandatorily redeemable preferred stock of our consolidated subsidiary using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model includes an assessment of our subsidiary’s credit risk and the instrument’s contractual dividend rate. Liability for Marriott Rewards Customer Loyalty Program We determine the carrying value of the future redemption obligation of our liability for the Marriott Rewards customer loyalty program based on statistical formulas that project the timing of future redemption of Marriott Rewards Points based on historical levels, including estimates of the number of Marriott Rewards Points that will eventually be redeemed and the “breakage” for points that will never be redeemed. We estimate the fair value of the future redemption obligation by adjusting the contractual discount rate to an estimate of that of a market participant with similar nonperformance risk. Other Liabilities We estimate the fair value of our other liabilities that are financial instruments using expected future payments discounted at risk-adjusted rates. These liabilities represent guarantee costs and other structured payments. The carrying values of our financial instruments within Other liabilities approximate their fair values. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 6 Months Ended |
Jun. 19, 2015 | |
Text Block [Abstract] | |
ACQUISITIONS AND DISPOSITIONS | 5. ACQUISITIONS AND DISPOSITIONS Kauai, Hawaii During the second quarter of 2015, we completed the sale of the remaining portion of our undeveloped land in Kauai, Hawaii for gross cash proceeds of $20.0 million. We accounted for the sale under the full accrual method in accordance with the authoritative guidance on accounting for sales of real estate and recorded a gain of $8.7 million, which is included in the Gains and other income line on the Statements of Income for the twelve and twenty-four weeks ended June 19, 2015. As a result of this sale, we have completed the transactions, a portion of which was completed in 2014, contemplated by the purchase and sale agreement that we entered into during the second quarter of 2014 providing for the sale of undeveloped and partially developed land, an operating golf course and related assets in Kauai, Hawaii for $60.0 million in gross cash proceeds. Marco Island, Florida During the first quarter of 2015, we sold real property located in Marco Island, Florida, consisting of $3.1 million of vacation ownership inventory, to a third-party developer. We received consideration consisting of $5.4 million of cash and a note receivable of $0.5 million. We did not recognize any gain or loss on this transaction. In accordance with our agreement with the third-party developer, we are obligated to repurchase the completed property from the developer contingent upon the property meeting our brand standards, provided that the third-party developer has not sold the property to another party. In accordance with the authoritative guidance on accounting for sales of real estate, our conditional obligation to repurchase the property constitutes continuing involvement and thus we were unable to account for this transaction as a sale. The property was sold to a variable interest entity for which we are not the primary beneficiary as we do not control the variable interest entity’s development activities and cannot prevent the variable interest entity from selling the property to another party. Accordingly, we have not consolidated the variable interest entity. As of June 19, 2015, our Balance Sheet reflects $6.5 million of Other liabilities that relate to the deferral of gain recognition for this transaction, which will reduce our basis in the asset if we repurchase the property. In addition, the note receivable of $0.5 million and other receivables of $0.2 million are included in the Accounts and contracts receivable line on the Balance Sheet as of June 19, 2015. The cash consideration received for the sale of the real property is included in Proceeds from vacation ownership inventory arrangements on the Cash Flows for the twenty-four weeks ended June 19, 2015. We believe that our maximum exposure to loss as a result of our involvement with this variable interest entity is our interest in the note receivable and the other receivables discussed above as of June 19, 2015. San Diego, California During the first quarter of 2015, we completed the acquisition of an operating hotel located in San Diego, California, for $55.0 million. The acquisition was treated as a business combination and accounted for using the acquisition method of accounting. As consideration for the acquisition, we paid $55.0 million in cash, which was allocated based on the estimated fair value at the date of acquisition as follows: $54.3 million to property and equipment and $0.7 million to other assets. Fair value was calculated using an independent appraisal, which was primarily based on a discounted cash flow model, a Level 3 fair value input. We intend to convert this hotel in the near term into vacation ownership interests for future use in our North America points-based program, Marriott Vacation Club Destinations ™ (“MVCD”). In order to ensure consistency with the expected related future cash flow presentation, $46.6 million of the cash purchase price allocated to property and equipment was included as an operating activity in the Purchase of operating hotel for future conversion to inventory line on the Cash Flows for the twenty-four weeks ended June 19, 2015. The remaining $7.7 million was included as an investing activity in the Capital expenditures for property and equipment line on the Cash Flows for the twenty-four weeks ended June 19, 2015, as it was allocated to assets to be used prior to conversion of the hotel to vacation ownership interests, as well as ancillary and sales center assets to be retained after the conversion. Orlando, Florida During the first quarter of 2014, we disposed of a golf course and adjacent undeveloped land in Orlando, Florida for $24.0 million in gross cash proceeds. As a condition of the sale, we continued to operate the golf course through the end of the first quarter of 2015 at our own risk. We utilized the performance of services method to record a gain of $3.1 million over the period during which we operated the golf course, of which $0 and $0.3 million is included in the Gains and other income line on the Statements of Income for the twelve weeks ended June 19, 2015 and June 20, 2014, respectively, and $0.9 million and $1.5 million is included in the Gains and other income line on the Statements of Income for the twenty-four weeks ended June 19, 2015 and June 20, 2014, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 19, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 6. EARNINGS PER SHARE Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the reporting period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per common share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period. The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic and diluted earnings per share. Twelve Weeks Ended Twenty-Four Weeks Ended (in thousands, except per share amounts) June 19, 2015 (1) June 20, 2014 (2) June 19, 2015 (1) June 20, 2014 (2) Computation of Basic Earnings Per Share Net income $ 34,041 $ 35,303 $ 68,095 $ 54,611 Weighted average shares outstanding 31,858 34,292 32,078 34,583 Basic earnings per share $ 1.07 $ 1.03 $ 2.12 $ 1.58 Computation of Diluted Earnings Per Share Net income $ 34,041 $ 35,303 $ 68,095 $ 54,611 Weighted average shares outstanding 31,858 34,292 32,078 34,583 Effect of dilutive shares outstanding Employee stock options and SARs 460 559 464 570 Restricted stock units 199 388 218 404 Shares for diluted earnings per share 32,517 35,239 32,760 35,557 Diluted earnings per share $ 1.05 $ 1.00 $ 2.08 $ 1.54 (1) The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. (2) The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. In accordance with the applicable accounting guidance for calculating earnings per share, for the twelve and twenty-four week periods ended June 19, 2015 and June 20, 2014, we have not excluded any shares underlying stock options or stock appreciation rights (“SARs”) that may be settled in shares of common stock from our calculation of diluted earnings per share as no exercise prices were greater than the average market prices for the applicable period. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 19, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 7. INVENTORY The following table shows the composition of our inventory balances: ($ in thousands) At June 19, 2015 At January 2, 2015 Finished goods (1) $ 335,329 $ 413,066 Land and infrastructure (2) 363,808 355,198 Real estate inventory 699,137 768,264 Operating supplies and retail inventory 5,570 4,520 $ 704,707 $ 772,784 (1) Represents completed inventory that is either registered for sale as vacation ownership interests, or unregistered and available for sale in its current form. (2) Includes $47.5 million of sales centers that are expected to be converted into vacation ownership products to be sold in the future and $83.2 million of inventory related to estimated future foreclosures at June 19, 2015. We value vacation ownership and residential products at the lower of cost or fair market value less costs to sell, in accordance with applicable accounting guidance, and we record operating supplies at the lower of cost (using the first-in, first-out method) or market value. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 6 Months Ended |
Jun. 19, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND COMMITMENTS | 8. CONTINGENCIES AND COMMITMENTS Guarantees We have historically issued guarantees to certain lenders in connection with the provision of third-party financing for our sale of vacation ownership products for the North America and Asia Pacific segments. The terms of these guarantees generally require us to fund if the purchaser fails to pay under the term of its note payable. Prior to the Spin-Off, Marriott International guaranteed our performance under these arrangements, and following the Spin-Off continues to hold a standby letter of credit related to the Asia Pacific segment guarantee. If Marriott International is required to fund any draws by lenders under this letter of credit it would seek recourse from us. Marriott International no longer guarantees our performance with respect to third-party financing for sales of products in the North America segment. We are entitled to recover any payments we make to third-party lenders under these guarantees through reacquisition and resale of the financed vacation ownership product. Our commitments under these guarantees expire as the underlying notes mature or are repaid. The terms of the underlying notes extend to 2022. The following table shows the maximum potential amount of future fundings for financing guarantees where we are the primary obligor and the carrying amount of the liability for expected future fundings, which is included on our Balance Sheet in the Other caption within Liabilities. ($ in thousands) Maximum Potential Liability for Expected Future Fundings Segment Asia Pacific $ 6,769 $ 66 North America 2,846 196 Total guarantees where we are the primary obligor $ 9,615 $ 262 Commitments and Letters of Credit In addition to the guarantees we describe in the preceding paragraphs, as of June 19, 2015, we had the following commitments outstanding: • We have various contracts for the use of information technology hardware and software that we use in the normal course of business. Our aggregate commitments under these contracts were $31.0 million, of which we expect $10.3 million, $6.6 million, $5.8 million, $2.7 million, $1.5 million and $4.1 million will be paid in 2015, 2016, 2017, 2018, 2019 and thereafter, respectively. • We have commitments of $3.2 million to subsidize vacation ownership associations, which we expect to pay in the second half of 2015. • We have a commitment of $75.5 million to purchase vacation ownership units located in Miami, Florida, contingent upon satisfactory completion of construction and receipt of a certificate of occupancy, for use in our MVCD program. We made a deposit of $3.8 million in connection with this commitment in 2014, and we are committed to make an additional deposit of $3.8 million upon the seller’s receipt of a temporary certificate of occupancy and the remaining payment of $67.9 million upon acquisition of the units, which we expect to occur within one year. We are currently evaluating the use of a capital efficient arrangement to delay the timing of this capital investment. • We have a commitment of $38.5 million to purchase vacation ownership units located on the Big Island of Hawaii, for use in our MVCD program, contingent upon the seller subjecting the units to a condominium regime prior to our purchase. We made a deposit of $1.5 million in connection with this commitment in 2014, and we are committed to make the remaining payment of $37.0 million upon satisfaction of the condition that the seller subject the units to a condominium regime, which we expect to occur within one year. Upon acquisition, we are committed to renovate the units pursuant to a property improvement plan to be agreed upon at a later date, for which an additional $45.0 million to $55.0 million will be required to be funded. We are currently evaluating the use of a capital efficient arrangement to delay the timing of this capital investment. • We have a commitment of $137.1 million to purchase vacation ownership units located in Marco Island, Florida, of which we expect $33.3 million, $50.0 million and $53.8 million will be paid in 2017, 2018 and 2019, respectively. See Footnote No. 5, “Acquisitions and Dispositions,” for additional information on this transaction. • We have a commitment of AUD $84.5 million ($65.8 million) to purchase an operating hotel located in Surfers Paradise, Australia. We made a deposit of AUD $8.5 million ($6.5 million) in connection with this commitment during the second quarter of 2015, and we expect to acquire the operating hotel and pay the remaining AUD $76.0 million ($59.3 million) in the third quarter of 2015. Surety bonds issued as of June 19, 2015 totaled $77.9 million, the majority of which were requested by federal, state or local governments related to our operations. Additionally, as of June 19, 2015, we had $3.3 million of letters of credit outstanding under our $200 million revolving credit facility (the “Revolving Corporate Credit Facility”). Loss Contingencies In December 2012, Jon Benner, an owner of fractional interests at The Ritz-Carlton Club and Residences, San Francisco (the “RCC San Francisco”), filed suit in Superior Court for the State of California, County of San Francisco, against us and certain of our subsidiaries on behalf of a putative class consisting of all owners of fractional interests at the RCC San Francisco who allegedly did not receive proper notice of their payment obligations under California’s Mello-Roos Community Facilities Act of 1982 (the “Mello-Roos Act”). The plaintiff alleged that the disclosures made about bonds issued for the project under this Act and the payment obligations of fractional interest purchasers with respect to such bonds were inadequate, and this and other alleged statutory violations constituted intentional and negligent misrepresentation, fraud and fraudulent concealment. The relief sought included damages in an unspecified amount, rescission of the purchases, restitution and disgorgement of profits. In September 2014, we reached an agreement to settle the Benner action on the basis of a stipulated class, which was approved by the court on March 31, 2015. At June 19, 2015, we had an accrual of $2.9 million related to the settlement. In April 2013, Krishna and Sherrie Narayan and other owners of 12 residential units at the resort formerly known as The Ritz-Carlton Residences, Kapalua Bay (“Kapalua Bay”) filed an amended complaint related to a suit originally filed in Circuit Court for Maui County, Hawaii in June 2012 against us, certain of our subsidiaries, Marriott International, certain of its subsidiaries, and the joint venture in which we have an equity investment that developed and marketed vacation ownership and residential products at Kapalua Bay (the “Joint Venture”). In the original complaint, the plaintiffs alleged that defendants mismanaged funds of the residential owners association (the “Kapalua Bay Association”), created a conflict of interest by permitting their employees to serve on the Kapalua Bay Association’s board, and failed to disclose documents to which the plaintiffs were allegedly entitled. The amended complaint alleges breach of fiduciary duty, violations of the Hawaii Unfair and Deceptive Trade Practices Act and the Hawaii condominium statute, intentional misrepresentation and concealment, unjust enrichment and civil conspiracy. The relief sought in the amended complaint includes injunctive relief, repayment of all sums paid to us and our subsidiaries and Marriott International and its subsidiaries, compensatory and punitive damages, and treble damages under the Hawaii Unfair and Deceptive Trade Practices Act. We dispute the material allegations in the amended complaint and continue to defend against this action vigorously. We filed a motion in the Circuit Court to compel arbitration of plaintiffs’ claims. That motion was denied, but on appeal the Hawaii Intermediate Court of Appeals reversed. The Hawaii Supreme Court, on June 3, 2015, reversed the decision of the Intermediate Court of Appeals and reinstated the action in Circuit Court. Additionally, in 2014, owners of two residential units agreed to release their claims in this action. Given the inherent uncertainties of litigation, we cannot estimate a range of the potential liability, if any, at this time. In June 2013, Earl C. and Patricia A. Charles, owners of a fractional interest at Kapalua Bay, together with owners of 38 other fractional interests at Kapalua Bay, filed an amended complaint in the Circuit Court of the Second Circuit for the State of Hawaii against us, certain of our subsidiaries, Marriott International, certain of its subsidiaries, the Joint Venture, and other entities that have equity investments in the Joint Venture. The plaintiffs allege that the defendants failed to disclose the financial condition of the Joint Venture and the commitment of the defendants to the Joint Venture, and that defendants’ actions constituted fraud and violated the Hawaii Unfair and Deceptive Trade Practices Act, the Hawaii Condominium Property Act and the Hawaii Time Sharing Plans statute. The relief sought includes compensatory and punitive damages, attorneys’ fees, pre-judgment interest, declaratory relief, rescission and treble damages under the Hawaii Unfair and Deceptive Trade Practices Act. The complaint was subsequently further amended to add owners of two additional fractional interests as plaintiffs. The Circuit Court granted our motion to compel arbitration of the claims asserted by the plaintiffs. Plaintiffs appealed that decision to the Hawaii Intermediate Court of Appeals and also initiated arbitration. Following the decision of the Hawaii Supreme Court in the Narayan action, the Maui Circuit Court stayed all arbitration and litigation proceedings in the Charles matter pending the decision of the Intermediate Court of Appeals. We dispute the material allegations in the amended complaint and in the statement of claim filed in the arbitration and intend to defend against this action vigorously. Given the early stages of the action and the inherent uncertainties of litigation and arbitration, we cannot estimate a range of the potential liability, if any, at this time. Additionally, owners of two fractional interests have since agreed to release their claims in this action, and the owners of another fractional interest, who are not parties to the Charles action, have agreed to release similar claims, in each instance for nominal sums. In August 2014, Michael and Marla Flynn, owners of weeks-based Marriott Vacation Club vacation ownership products at two of our resorts in Hawaii, filed a claim with the American Arbitration Association on behalf of a putative class consisting of themselves and all others similarly situated. The claimants alleged that the introduction of the MVCD program caused an actionable decrease in the value of their vacation ownership interests. The relief sought includes compensatory and exemplary damages, restitution, injunctive relief, interest and attorneys’ fees pursuant to applicable timeshare and unfair trade practices acts and common-law theories of breach of contract and breach of an implied covenant of good faith and fair dealing. On March 30, 2015, the arbitrator ruled that the Flynns’ claims are not subject to arbitration, and dismissed the Flynn proceeding. In August 2014, William Sterman, an owner of a weeks-based Marriott Vacation Club vacation ownership product at our resort in Massachusetts, filed a claim with the American Arbitration Association on behalf of a putative class consisting of himself and all others similarly situated. The claims alleged and the relief sought are substantially similar to the claims alleged and the relief sought by the Flynns. On June 15, 2015, the arbitrator granted our motion to dismiss in part and denied it in part, and denied Mr. Sterman’s request to proceed with a class action. On July 7, 2015, the parties filed a stipulation of dismissal with prejudice as to the remaining claim in arbitration, and also filed a joint motion to dismiss our appeal that was pending in the Eleventh Circuit of the decision by the District Court that the arbitrability of Mr. Sterman’s claims must be resolved by an arbitrator. On January 29, 2015, Norman and Carreen Abramson, owners of weeks-based Marriott Vacation Club vacation ownership products at one of our resorts in California and of our points-based Marriott Vacation Club vacation ownership product, filed an action in the United States District Court for the Central District of California on behalf of a putative class consisting of themselves and all others similarly situated. The claims alleged and the relief sought are substantially similar to the claims alleged and the relief sought by the Flynns. On March 30, 2015, we filed a motion to dismiss the Abramson action, which remains pending. On June 30, 2015, Mr. Abramson filed a motion for class certification. On July 10, 2015, we filed a motion requesting that proceedings on the class certification motion be deferred until after resolution of our motion to dismiss and the taking of discovery on Mr. Abramson’s class claims, which motion also remains pending. We dispute the material allegations in the California action and intend to defend against them vigorously. Given the early stages of the action and the inherent uncertainties of litigation, we cannot estimate a range of potential liability, if any, at this time. On May 26, 2015, we and certain of our subsidiaries were named as defendants in an action filed in the Superior Court of San Francisco County, California, by William and Sharon Petrick and certain other present and former owners of fractional interests at the RCC San Francisco. The case is not filed as a putative class action. The plaintiffs allege that the affiliation of the RCC San Francisco with the Marriott Vacation Club, certain alleged sales practices, and other alleged acts of Marriott Vacations Worldwide and the other defendants caused an actionable decrease in the value of their fractional interests. The relief sought includes, among other things, compensatory and punitive damages, rescission, and pre- and post-judgment interest. We dispute the material allegations in the complaint and intend to defend against the action vigorously. Given the early stages of the action and the inherent uncertainties of litigation, we cannot estimate a range of the potential liability, if any, at this time. Other We estimate the cash outflow associated with completing the phases of our existing portfolio of vacation ownership projects currently under development will be approximately $10.2 million, of which $4.4 million is included within liabilities on our Balance Sheet at June 19, 2015. This estimate is based on our current development plans, which remain subject to change, and we expect the phases currently under development will be completed by 2017. During the second quarter of 2014, we agreed to settle a dispute with a service provider relating to services provided to us prior to 2011. In connection with the settlement, we received a one-time payment of $7.6 million from the service provider, which no longer provides services to us. We recorded a gain of $7.6 million as a result of the settlement, which is included in the Litigation settlement line on the Statements of Income for the twelve and twenty-four weeks ended June 20, 2014. |
DEBT
DEBT | 6 Months Ended |
Jun. 19, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT The following table provides detail on our debt balances, net of unamortized debt issuance costs: ($ in thousands) At June 19, 2015 At January 2, 2015 Vacation ownership notes receivable securitizations, gross (1) $ 564,657 $ 708,031 Unamortized debt issuance costs (6,676) (8,090) 557,981 699,941 Other debt, gross 3,416 3,306 Unamortized debt issuance costs (264) (234) 3,152 3,072 $ 561,133 $ 703,013 (1) Interest rates as of June 19, 2015 range from 2.2% to 7.2% with a weighted average interest rate of 2.9%. See Footnote No. 13, “Variable Interest Entities,” for a discussion of the collateral for the non-recourse debt associated with the securitized vacation ownership notes receivable and our non-recourse warehouse credit facility (the “Warehouse Credit Facility”). All of our other debt was, and to the extent currently outstanding is, recourse to us but unsecured. The Warehouse Credit Facility currently terminates on September 15, 2016 and if not renewed, any amounts outstanding thereunder would become due and payable 13 months after termination, at which time all principal and interest collected with respect to the vacation ownership notes receivable held in the Warehouse Credit Facility would be redirected to the lenders to pay down the outstanding debt under the facility. As of June 19, 2015, there were no cash borrowings outstanding under our Warehouse Credit Facility. We generally expect to securitize our vacation ownership notes receivable, including any vacation ownership notes receivable held in the Warehouse Credit Facility, in the ABS market once per year. Although no cash borrowings were outstanding as of June 19, 2015 under our Revolving Corporate Credit Facility, any amounts that are borrowed under that facility, as well as obligations with respect to letters of credit issued pursuant to that facility, are secured by a perfected first priority security interest in substantially all of the assets of the borrower under, and guarantors of, that facility (which include Marriott Vacations Worldwide and each of our direct and indirect, existing and future, domestic subsidiaries, excluding certain bankruptcy remote special purpose subsidiaries), in each case including inventory, subject to certain exceptions. The following table shows scheduled future principal payments for our debt: ($ in thousands) Vacation Ownership (1) Other Debt Total Debt Principal Payments Year 2015 $ 47,346 $ 27 $ 47,373 2016 75,487 56 75,543 2017 71,155 61 71,216 2018 66,742 65 66,807 2019 66,488 70 66,558 Thereafter 237,439 3,137 240,576 Balance at June 19, 2015 $ 564,657 $ 3,416 $ 568,073 (1) The debt associated with our vacation ownership notes receivable securitizations is non-recourse to us. As the contractual terms of the underlying securitized vacation ownership notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may occur earlier than shown above due to prepayments by the vacation ownership notes receivable obligors. We paid cash for interest, net of amounts capitalized, of $12.1 million in the twenty-four weeks ended June 19, 2015 and $13.5 million in the twenty-four weeks ended June 20, 2014, respectively. Debt Associated with Vacation Ownership Notes Receivable Securitizations Each of the transactions in which we have securitized vacation ownership notes receivable contains various triggers relating to the performance of the underlying vacation ownership notes receivable. If a pool of securitized vacation ownership notes receivable fails to perform within the pool’s established parameters (default or delinquency thresholds vary by transaction), transaction provisions effectively redirect the monthly excess spread we would otherwise receive from that pool (attributable to the interests we retained) to accelerate the principal payments to investors (taking into account the subordination of the different tranches to the extent there are multiple tranches) until the performance trigger is cured. During the twenty-four weeks ended June 19, 2015, and as of June 19, 2015, no securitized vacation ownership notes receivable pools were out of compliance with the established parameters. As of June 19, 2015, we had 6 securitized vacation ownership notes receivable pools outstanding. |
MANDATORILY REDEEMABLE PREFERRE
MANDATORILY REDEEMABLE PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY | 6 Months Ended |
Jun. 19, 2015 | |
Text Block [Abstract] | |
MANDATORILY REDEEMABLE PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY | 10. MANDATORILY REDEEMABLE PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY In October 2011, our subsidiary, MVW US Holdings, Inc. (“MVW US Holdings”) issued $40.0 million of its mandatorily redeemable Series A (non-voting) preferred stock to Marriott International as part of Marriott International’s internal reorganization prior to the Spin-Off. Subsequently Marriott International sold all of this preferred stock to third-party investors. Until October 2016, the Series A preferred stock will pay an annual cash dividend equal to the five-year U.S. Treasury Rate as of October 19, 2011, plus a spread of 10.958 percent, for a total annual cash dividend rate of 12 percent. In October 2016, if we do not elect to redeem the preferred stock, the annual cash dividend rate will be reset to the five-year U.S. Treasury Rate in effect on such date plus the same 10.958 percent spread. The Series A preferred stock is mandatorily redeemable by MVW US Holdings upon the tenth anniversary of the date of issuance but can be redeemed at our option after five years (i.e., beginning in October 2016) at par. The Series A preferred stock has an aggregate liquidation preference of $40.0 million plus any accrued and unpaid dividends and an additional premium if liquidation occurs during the first five years after the issuance of the preferred stock. As of June 19, 2015, 1,000 shares of Series A preferred stock were authorized, of which 40 shares were issued and outstanding. The dividends are recorded as a component of Interest expense as the Series A preferred stock is treated as a liability for accounting purposes. The following table provides detail on our mandatorily redeemable preferred stock of consolidated subsidiary balance, net of unamortized debt issuance costs: ($ in thousands) At June 19, At January 2, Mandatorily redeemable preferred stock of consolidated subsidiary, gross $ 40,000 $ 40,000 Unamortized debt issuance costs (1,105) (1,184) $ 38,895 $ 38,816 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 19, 2015 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 11. SHAREHOLDERS’ EQUITY Marriott Vacations Worldwide has 100,000,000 authorized shares of common stock, par value of $0.01 per share. At June 19, 2015, there were 36,346,990 shares of Marriott Vacations Worldwide common stock issued, of which 31,532,539 shares were outstanding and 4,814,451 shares were held as treasury stock. At January 2, 2015, there were 36,089,513 shares of Marriott Vacations Worldwide common stock issued, of which 32,092,788 shares were outstanding and 3,996,725 shares were held as treasury stock. Marriott Vacations Worldwide has 2,000,000 authorized shares of preferred stock, par value of $0.01 per share, none of which were issued or outstanding as of June 19, 2015 or January 2, 2015. The following table details changes in shareholders’ equity during the twenty-four weeks ended June 19, 2015: ($ in thousands) Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Retained Earnings Total Equity Balance at January 2, 2015 $ 361 $ (229,229) $ 1,137,785 $ 17,054 $ 153,732 $ 1,079,703 Net income — — — — 68,095 68,095 Foreign currency translation adjustments — — — (2,357) — (2,357) Derivative instrument adjustments — — — 59 — 59 Amounts related to share-based compensation 2 — (2,565) — — (2,563) Adjustment to reclassification of Marriott International investment to Additional paid-in capital — — (77) — — (77) Repurchase of common stock — (66,237) — — — (66,237) Dividends — — — — (15,999) (15,999) Balance at June 19, 2015 $ 363 $ (295,466) $ 1,135,143 $ 14,756 $ 205,828 $ 1,060,624 Share Repurchase Program In March 2015, pursuant to our existing share repurchase program, we entered into an accelerated share repurchase agreement (“ASR”) with a financial institution to repurchase shares of our common stock. Under the agreement, we paid $30.0 million and received an initial delivery of 327,782 shares on March 20, 2015, and an additional delivery of 42,283 shares on May 20, 2015, upon completion of the program, for a total of 370,065 shares of common stock. Excluding the repurchases under the ASR discussed above, during the twenty-four weeks ended June 19, 2015, we repurchased 447,661 shares of our common stock under our current share repurchase program at an average price of $80.95 per share for a total of $36.2 million. As of June 19, 2015, 2.1 million shares remained available for repurchase under the program. The following table summarizes share repurchase activity under our current share repurchase program: ($ in thousands, except per share amounts) Number of Shares Repurchased Cost of Shares Repurchased Average Price Paid per Share As of January 2, 2015 3,996,725 $ 229,229 $ 57.35 For the twenty-four weeks ended June 19, 2015 817,726 66,237 81.00 As of June 19, 2015 4,814,451 $ 295,466 $ 61.37 Dividends On June 4, 2015, our Board of Directors declared a quarterly dividend of $0.25 per share to be paid on July 2, 2015 to shareholders of record as of June 18, 2015. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 19, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | 12. SHARE-BASED COMPENSATION A total of 6 million shares are authorized for issuance under the Marriott Vacations Worldwide Corporation Stock and Cash Incentive Plan (the “Stock Plan”). As of June 19, 2015, 1.8 million shares were available for grants under the Stock Plan. For share-based awards with service-only vesting conditions, we measure compensation expense related to share-based payment transactions with our employees and non-employee directors at fair value on the grant date. With respect to our employees, we recognize this expense on the Statements of Income over the vesting period during which the employees provide service in exchange for the award; with respect to non-employee directors, we recognize this expense on the grant date. For share-based arrangements with performance vesting conditions, we recognize compensation expense once it is probable that the corresponding performance condition will be achieved. We recorded share-based compensation expense related to award grants to our officers, directors and employees of $4.0 million and $3.9 million for each of the twelve weeks ended June 19, 2015 and June 20, 2014, and $6.6 million and $6.2 million for each of the twenty-four weeks ended June 20, 2015 and June 20, 2014. Our deferred compensation liability related to unvested awards held by our employees totaled $20.3 million and $12.2 million at June 19, 2015 and January 2, 2015, respectively. Restricted Stock Units (“RSUs”) We granted 128,690 RSUs, exclusive of RSUs with performance vesting conditions, to our employees and non-employee directors during the twenty-four weeks ended June 19, 2015. RSUs granted in the twenty-four weeks ended June 19, 2015 had a weighted average grant-date fair value of $78.23. RSUs issued to our employees generally vest over four years in annual installments commencing one year after the date of grant. RSUs issued to our non-employee directors vest in full on the date of grant. During the twenty-four weeks ended June 19, 2015 and June 20, 2014, we granted RSUs with performance vesting conditions to members of management. The number of RSUs earned, if any, is determined following the end of a three-year performance period based upon our cumulative achievement over that period of specific quantitative operating financial measures. The maximum number of RSUs that may be earned under the RSUs with performance-based vesting criteria granted during the twenty-four weeks ended June 19, 2015 and June 20, 2014 was approximately 74,000 and 62,000, respectively. Stock Appreciation Rights (“SARs”) We granted 62,018 SARs to members of management during the twenty-four weeks ended June 19, 2015. These SARs had a weighted average grant-date fair value of $29.75 and a weighted average exercise price of $77.42. SARs generally expire ten years after the date of grant and both vest and may be exercised in cumulative installments of one quarter of the grant at the end of each of the first four years following the date of grant. We use the Black-Scholes model to estimate the fair value of the SARs granted. For SARs granted under the Stock Plan in the twenty-four weeks ended June 19, 2015, the expected stock price volatility was calculated based on the historical volatility from the stock prices of a group of identified peer companies. The average expected life was calculated using the simplified method. The risk-free interest rate was calculated based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The dividend yield assumption listed below is based on the expectation of future payouts. The following table outlines the assumptions used to estimate the fair value of grants during the twenty-four weeks ended June 19, 2015: Expected volatility 42.74 % Dividend yield 1.26 % Risk-free rate 1.74 % Expected term (in years) 6.25 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 19, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | 13. VARIABLE INTEREST ENTITIES In accordance with the applicable accounting guidance for the consolidation of variable interest entities, we analyze our variable interests, including loans, guarantees and equity investments, to determine if an entity in which we have a variable interest is a variable interest entity. Our analysis includes both quantitative and qualitative reviews. We base our quantitative analysis on the forecasted cash flows of the entity, and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. We also use our qualitative analyses to determine if we must consolidate a variable interest entity because we are its primary beneficiary. Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations We periodically securitize, without recourse, through bankruptcy remote special purpose entities, notes receivable originated in connection with the sale of vacation ownership products. These vacation ownership notes receivable securitizations provide funding for us and transfer the economic risks and substantially all the benefits of the loans to third parties. In a vacation ownership notes receivable securitization, various classes of debt securities issued by the special purpose entities are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable. We service the vacation ownership notes receivable. With each vacation ownership notes receivable securitization, we may retain a portion of the securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized vacation ownership notes receivable or, in some cases, overcollateralization and cash reserve accounts. We created these entities to serve as a mechanism for holding assets and related liabilities, and the entities have no equity investment at risk, making them variable interest entities. We continue to service the vacation ownership notes receivable, transfer all proceeds collected to these special purpose entities, and retain rights to receive benefits that are potentially significant to the entities. Accordingly, we concluded that we are the entities’ primary beneficiary and, therefore, consolidate them. The following table shows consolidated assets, which are collateral for the obligations of these variable interest entities, and consolidated liabilities included on our Balance Sheet at June 19, 2015: ($ in thousands) Vacation Ownership Notes Receivable Warehouse Credit Total Consolidated Assets: Vacation ownership notes receivable, net of reserves $ 547,158 $ — $ 547,158 Interest receivable 3,429 — 3,429 Restricted cash 36,879 138 37,017 Total $ 587,466 $ 138 $ 587,604 Consolidated Liabilities: Interest payable $ 1,457 $ 119 $ 1,576 Debt 564,657 — 564,657 Total $ 566,114 $ 119 $ 566,233 The noncontrolling interest balance was zero. The creditors of these entities do not have general recourse to us. The following table shows the interest income and expense recognized as a result of our involvement with these variable interest entities during the twelve weeks ended June 19, 2015: ($ in thousands) Vacation Ownership Warehouse Credit Facility Total Interest income $ 17,913 $ — $ 17,913 Interest expense to investors $ 3,950 $ 321 $ 4,271 Debt issuance cost amortization $ 697 $ 280 $ 977 Administrative expenses $ 45 $ 25 $ 70 The following table shows the interest income and expense recognized as a result of our involvement with these variable interest entities during the twenty-four weeks ended June 19, 2015: ($ in thousands) Vacation Ownership Warehouse Credit Facility Total Interest income $ 39,987 $ — $ 39,987 Interest expense to investors $ 8,656 $ 634 $ 9,290 Debt issuance cost amortization $ 1,414 $ 565 $ 1,979 Administrative expenses $ 152 $ 67 $ 219 The following table shows cash flows between us and the vacation ownership notes receivable securitization variable interest entities during the twenty-four weeks ended June 19, 2015 and June 20, 2014: Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 Cash inflows: Net proceeds from vacation ownership notes receivable securitizations $ — $ 22,638 Principal receipts 86,675 85,863 Interest receipts 41,549 42,236 Reserve release 2,345 1,524 Total 130,569 152,261 Cash outflows: Principal to investors (78,361) (89,979) Voluntary repurchases of defaulted vacation ownership notes receivable (10,993) (13,999) Voluntary clean-up call (54,020) (26,722) Interest to investors (8,233) (10,797) Total (151,607) (141,497) Net Cash Flows $ (21,038) $ 10,764 The following table shows cash flows between us and the Warehouse Credit Facility variable interest entity during the twenty-four weeks ended June 19, 2015 and June 20, 2014: Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 Cash inflows: Total $ — $ — Cash outflows: Interest to investors (569) (758) Funding of restricted cash (138) — Total (707) (758) Net Cash Flows $ (707) $ (758) Under the terms of our vacation ownership notes receivable securitizations, we have the right at our option to repurchase defaulted vacation ownership notes receivable at the outstanding principal balance. The transaction documents typically limit such repurchases to 15 to 20 percent of the transaction’s initial vacation ownership notes receivable principal balance. Our maximum exposure to loss relating to the special purpose entities that purchase, sell and own these vacation ownership notes receivable is the overcollateralization amount (the difference between the loan collateral balance and the balance on the outstanding vacation ownership notes receivable), plus cash reserves and any residual interest in future cash flows from collateral. In addition, we could be required to fund up to an aggregate of $10.0 million upon presentation of demand notes related to certain vacation ownerships notes receivable securitization transactions outstanding at June 19, 2015. Other Variable Interest Entities We have an equity investment in the Joint Venture, a variable interest entity that previously developed and marketed vacation ownership and residential products in Hawaii. We concluded that the Joint Venture is a variable interest entity because the equity investment at risk is not sufficient to permit it to finance its activities without additional support from other venture parties. We determined that we are not the primary beneficiary of the Joint Venture, as power to direct the activities that most significantly impact its economic performance is shared among the variable interest holders and, therefore, we do not consolidate the Joint Venture. In 2009, we fully impaired our equity investment in the Joint Venture and in certain notes receivable due from the Joint Venture and subsequently reduced the carrying value of our investment in those receivables to zero. Following the Joint Venture’s failure to pay promissory notes due in 2010 and 2011, the lenders initiated foreclosure proceedings with respect to unsold interests in the project. A sale was completed following a foreclosure auction, and on June 13, 2013, we received $7.4 million of cash as a partial repayment of our previously fully reserved receivables due from the Joint Venture. The Joint Venture’s obligations with respect to the remaining receivables have been terminated. At June 19, 2015, we had an accrual of $4.0 million for potential future funding obligations, representing our remaining expected exposure to loss related to our involvement with the Joint Venture exclusive of any future costs that may be incurred pursuant to outstanding litigation matters, including those discussed in Footnote No. 8, “Contingencies and Commitments.” |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 19, 2015 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | 14. BUSINESS SEGMENTS We define our reportable segments based on the way in which the chief operating decision maker, currently our chief executive officer, manages the operations of the company for purposes of allocating resources and assessing performance. We operate in three reportable business segments: • In our North America segment, we develop, market, sell and manage vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. We also develop, market and sell vacation ownership and related products under The Ritz-Carlton Destination Club brand, as well as whole ownership residential products under The Ritz-Carlton Residences brand. • In our Europe segment, we are focusing on selling our existing projects and managing existing resorts. We do not have any current plans for new development in this segment. • In our Asia Pacific segment, we develop, market, sell and manage the Marriott Vacation Club, Asia Pacific, a right-to-use points program that we specifically designed to appeal to the vacation preferences of the Asian market, as well as a weeks-based right-to-use product. We evaluate the performance of our segments based primarily on the results of the segment without allocating corporate expenses or income taxes. We do not allocate corporate interest expense, consumer financing interest expense, other financing expenses or general and administrative expenses to our segments. We include interest income specific to segment activities within the appropriate segment. We allocate other gains and losses and equity in earnings or losses from our joint ventures to each of our segments as appropriate. Corporate and other represents that portion of our revenues, equity in earnings or losses, and other gains or losses that are not allocable to our segments. Revenues Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 North America $ 384,489 $ 362,923 $ 776,417 $ 729,252 Europe 26,621 34,749 48,208 59,220 Asia Pacific 11,717 12,230 53,082 23,377 Total segment revenues 422,827 409,902 877,707 811,849 Corporate and other — — — — $ 422,827 $ 409,902 $ 877,707 $ 811,849 Net Income (Loss) Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 North America $ 104,603 $ 101,676 $ 202,339 $ 181,331 Europe 3,006 5,159 3,020 6,561 Asia Pacific (55) 1,493 9,388 2,985 Total segment financial results 107,554 108,328 214,747 190,877 Corporate and other (50,110) (50,681) (99,960) (101,159) Provision for income taxes (23,403) (22,344) (46,692) (35,107) $ 34,041 $ 35,303 $ 68,095 $ 54,611 Assets ($ in thousands) At June 19, 2015 At January 2, 2015 North America $ 1,856,634 $ 1,879,648 Europe 84,450 88,867 Asia Pacific 97,979 85,469 Total segment assets 2,039,063 2,053,984 Corporate and other 284,149 476,595 $ 2,323,212 $ 2,530,579 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 19, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 15. SUBSEQUENT EVENT Acquisition During the third quarter of 2015, we completed the acquisition of 71 rooms at The Mayflower Hotel, Autograph Collection, an operating hotel located in Washington, D.C., for $32.0 million. We intend to include these vacation ownership units in our MVCD program in the near future. |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 19, 2015 | |
Accounting Policies [Abstract] | |
Business Operations | Our Business Marriott Vacations Worldwide Corporation (“Marriott Vacations Worldwide,” “we” or “us,” which includes our consolidated subsidiaries except where the context of the reference is to a single corporate entity) is the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, and we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand. The Ritz-Carlton Hotel Company, L.L.C. (“The Ritz-Carlton Hotel Company”), a subsidiary of Marriott International, Inc. (“Marriott International”), generally provides on-site management for Ritz-Carlton branded properties. Our business is grouped into three reportable segments: North America, Europe and Asia Pacific. As of June 19, 2015, we operated 59 properties, including one hotel, in the United States and seven other countries and territories. We generate most of our revenues from four primary sources: selling vacation ownership products; managing our resorts; financing consumer purchases; and renting vacation ownership inventory. |
Our Spin-Off from Marriott International, Inc. | Our Spin-Off from Marriott International, Inc. On November 21, 2011, the spin-off of Marriott Vacations Worldwide from Marriott International (the “Spin-Off”) was completed. In connection with the Spin-Off, we entered into several agreements that govern the ongoing relationship between Marriott Vacations Worldwide and Marriott International. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The interim consolidated financial statements presented herein and discussed below include 100 percent of the assets, liabilities, revenues, expenses and cash flows of Marriott Vacations Worldwide, all entities in which Marriott Vacations Worldwide has a controlling voting interest (“subsidiaries”), and those variable interest entities for which Marriott Vacations Worldwide is the primary beneficiary in accordance with consolidation accounting guidance. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. The interim consolidated financial statements reflect our financial position, results of operations and cash flows as prepared in conformity with United States Generally Accepted Accounting Principles (“GAAP”). In order to make this report easier to read, we refer throughout to (i) our Interim Consolidated Financial Statements as our “Financial Statements,” (ii) our Interim Consolidated Statements of Income as our “Statements of Income,” (iii) our Interim Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Interim Consolidated Statements of Cash Flows as our “Cash Flows.” In addition, references throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Interim Consolidated Financial Statements, unless otherwise noted. Unless otherwise specified, each reference to a particular quarter in these Financial Statements means the twelve weeks ended on the date shown in the following table, rather than the corresponding calendar quarter: Fiscal Year Quarter-End Date 2015 Second Quarter June 19, 2015 2015 First Quarter March 27, 2015 2014 Second Quarter June 20, 2014 2014 First Quarter March 28, 2014 In our opinion, our Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position and the results of our operations and cash flows for the periods presented. Interim results may not be indicative of fiscal year performance because of, among other reasons, seasonal and short-term variations. These Financial Statements have not been audited. Amounts as of January 2, 2015 included in these Financial Statements have been derived from the audited consolidated financial statements as of that date. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe our footnote disclosures are adequate to make the information presented not misleading, you should read these Financial Statements in conjunction with the consolidated financial statements and notes to those consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2015. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, cost of vacation ownership products, inventory valuation, property and equipment valuation, loan loss reserves, Marriott Rewards customer loyalty program liability, self-insured medical plan reserves, equity-based compensation, income taxes and loss contingencies. Accordingly, actual amounts may differ from these estimated amounts. We have reclassified certain prior year amounts to conform to our current period presentation. |
New Accounting Standards | New Accounting Standards Accounting Standards Update No. 2015-02 – “ Consolidation (Topic 810): Amendments to the Consolidation Analysis In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-02, which amends the guidance for evaluating whether to consolidate certain legal entities. Specifically, ASU 2015-02 modifies the method for determining whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. Further, it eliminates the presumption that a general partner should consolidate a limited partnership and impacts the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. Our early adoption of ASU 2015-02 in the first quarter of 2015 did not have a material impact on our Financial Statements. Accounting Standards Update No. 2015-03 – “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability instead of being presented as an asset. The recognition and measurement guidance for debt issuance costs has not changed. ASU 2015-03 requires retrospective application and represents a change in accounting principle. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted for financial statements that have not been previously issued. Our early adoption of ASU 2015-03 in the first quarter of 2015 did not have a material impact on our Financial Statements. In June 2015, the staff of the Securities and Exchange Commission (“SEC”) announced that it would not object to an entity always presenting debt issuance costs related to revolving debt arrangements as an asset, regardless of whether a balance was outstanding, while amortizing the costs ratably over the term of the revolving debt arrangement. As a result, we have applied the SEC staff guidance effective for the second quarter of 2015 and presented costs associated with our revolving debt arrangements as an asset. We have applied these changes retrospectively to all periods presented. |
Future Adoption of Accounting Standards | Future Adoption of Accounting Standards Accounting Standards Update No. 2014-09 – “ Revenue from Contracts with Customers (Topic 606) In May 2014, the FASB issued ASU 2014-09. ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Accounting Policies [Abstract] | |
Each Reference to Particular Year in These Financial Statements Means Fiscal Year Ended on Date Shown | Unless otherwise specified, each reference to a particular quarter in these Financial Statements means the twelve weeks ended on the date shown in the following table, rather than the corresponding calendar quarter: Fiscal Year Quarter-End Date 2015 Second Quarter June 19, 2015 2015 First Quarter March 27, 2015 2014 Second Quarter June 20, 2014 2014 First Quarter March 28, 2014 |
VACATION OWNERSHIP NOTES RECE24
VACATION OWNERSHIP NOTES RECEIVABLE (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Composition of Vacation Ownership Notes Receivable Balances, Net of Reserves | The following table shows the composition of our vacation ownership notes receivable balances, net of reserves: ($ in thousands) June 19, 2015 January 2, 2015 Vacation ownership notes receivable — securitized $ 547,158 $ 750,680 Vacation ownership notes receivable — non-securitized Eligible for securitization (1) 195,947 24,194 Not eligible for securitization (1) 135,753 142,354 Subtotal 331,700 166,548 Total vacation ownership notes receivable $ 878,858 $ 917,228 (1) Refer to Footnote No. 4, “Financial Instruments,” for discussion of eligibility of our vacation ownership notes receivable. |
Future Principal Payments, Net of Reserves, and Interest Rates of Vacation Ownership Notes Receivable | The following tables show future principal payments, net of reserves, as well as interest rates for our securitized and non-securitized vacation ownership notes receivable at June 19, 2015: ($ in thousands) Non-Securitized Securitized Notes Receivable Total 2015 $ 51,688 $ 45,612 $ 97,300 2016 59,191 74,860 134,051 2017 50,054 70,933 120,987 2018 35,006 65,869 100,875 2019 22,948 65,478 88,426 Thereafter 112,813 224,406 337,219 Balance at June 19, 2015 $ 331,700 $ 547,158 $ 878,858 Weighted average stated interest rate 12.2% 12.7% 12.5% Range of stated interest rates 0.0% to 19.5% 4.9% to 19.5% 0.0% to 19.5% |
Interest Income Associated with Vacation Ownership Notes Receivable | The following table summarizes interest income associated with vacation ownership notes receivable: Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 Interest income associated with vacation ownership notes receivable — securitized $ 17,913 $ 19,738 $ 39,987 $ 41,329 Interest income associated with vacation ownership notes receivable — non-securitized 9,014 8,595 14,507 16,136 Total interest income associated with vacation ownership notes receivable $ 26,927 $ 28,333 $ 54,494 $ 57,465 |
Recorded Investment in Non-accrual Notes Receivable that are 90 Days or More Past Due | The following table shows our recorded investment in non-accrual vacation ownership notes receivable, which are vacation ownership notes receivable that are 90 days or more past due: ($ in thousands) Non-Securitized Securitized Notes Receivable Total Investment in vacation ownership notes receivable on non-accrual status at June 19, 2015 $ 55,036 $ 7,790 $ 62,826 Investment in vacation ownership notes receivable on non-accrual status at January 2, 2015 $ 60,275 $ 7,172 $ 67,447 Average investment in vacation ownership notes receivable on non-accrual status during the twelve weeks ended June 19, 2015 $ 54,354 $ 9,352 $ 63,706 Average investment in vacation ownership notes receivable on non-accrual status during the twelve weeks ended June 20, 2014 $ 66,397 $ 9,033 $ 75,430 Average investment in vacation ownership notes receivable on non-accrual status during the twenty-four weeks ended June 19, 2015 $ 57,656 $ 7,481 $ 65,137 Average investment in vacation ownership notes receivable on non-accrual status during the twenty-four weeks ended June 20, 2014 $ 67,672 $ 7,915 $ 75,587 |
Aging of Recorded Investment in Principal, Before Reserves, in Vacation Ownership Notes Receivable | The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of June 19, 2015: ($ in thousands) Non-Securitized Securitized Total 31 – 90 days past due $ 10,178 $ 13,860 $ 24,038 91 – 150 days past due 6,128 6,143 12,271 Greater than 150 days past due 48,908 1,647 50,555 Total past due 65,214 21,650 86,864 Current 336,064 568,492 904,556 Total vacation ownership notes receivable $ 401,278 $ 590,142 $ 991,420 The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of January 2, 2015: ($ in thousands) Non-Securitized Securitized Total 31 – 90 days past due $ 8,330 $ 22,544 $ 30,874 91 – 150 days past due 6,101 7,003 13,104 Greater than 150 days past due 54,174 169 54,343 Total past due 68,605 29,716 98,321 Current 162,695 774,630 937,325 Total vacation ownership notes receivable $ 231,300 $ 804,346 $ 1,035,646 |
Vacation Ownership | |
Notes Receivable Reserves | The following table summarizes the activity related to our vacation ownership notes receivable reserve for the twenty-four weeks ended June 19, 2015: ($ in thousands) Non-Securitized Notes Receivable Securitized Total Balance at January 2, 2015 $ 64,752 $ 53,666 $ 118,418 Provision for loan losses 9,469 6,036 15,505 Clean-up calls (1) 5,725 (5,725) — Write-offs (21,361) — (21,361) Defaulted vacation ownership notes receivable repurchase activity (2) 10,993 (10,993) — Balance at June 19, 2015 $ 69,578 $ 42,984 $ 112,562 (1) Refers to our voluntary repurchase of previously securitized non-defaulted vacation ownership notes receivable to retire outstanding vacation ownership notes receivable securitizations. (2) Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation ownership notes receivable reserve was attributable to the transfer of the reserve when we voluntarily repurchased the securitized vacation ownership notes receivable. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Carrying Values and Estimated Fair Values of Financial Assets and Liabilities | The following table shows the carrying values and the estimated fair values of financial assets and liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures regarding the fair value of financial instruments. Considerable judgment is required in interpreting market data to develop estimates of fair value. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts. The table excludes Cash and cash equivalents, Restricted cash, Accounts and contracts receivable, Accounts payable, Advance deposits and Accrued liabilities, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. At June 19, 2015 At January 2, 2015 ($ in thousands) Carrying Amount Fair Value (1) Carrying Amount Fair Value (1) Vacation ownership notes receivable Securitized $ 547,158 $ 664,646 $ 750,680 $ 909,391 Non-securitized 331,700 378,973 166,548 172,103 Total financial assets $ 878,858 $ 1,043,619 $ 917,228 $ 1,081,494 Non-recourse debt associated with vacation ownership notes receivable securitizations, gross $ (564,657) $ (570,338) $ (708,031) $ (712,977) Other debt, gross (3,416) (3,416) (3,306) (3,306) Mandatorily redeemable preferred stock of consolidated subsidiary, gross (40,000) (42,924) (40,000) (43,837) Liability for Marriott Rewards customer loyalty program (79,939) (70,926) (89,285) (80,448) Other liabilities (4,184) (4,184) (4,118) (4,118) Total financial liabilities $ (692,196) $ (691,788) $ (844,740) $ (844,686) (1) Fair value of financial instruments has been determined using Level 3 inputs. |
Non-Securitized Vacation Ownership Notes Receivable | |
Carrying Values and Estimated Fair Values of Financial Assets and Liabilities | The following table shows the bifurcation of our non-securitized vacation ownership notes receivable into those eligible and not eligible for securitization based upon the aforementioned eligibility criteria: At June 19, 2015 At January 2, 2015 ($ in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Vacation ownership notes receivable Eligible for securitization $ 195,947 $ 243,220 $ 24,194 $ 29,749 Not eligible for securitization 135,753 135,753 142,354 142,354 Total non-securitized $ 331,700 $ 378,973 $ 166,548 $ 172,103 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of Earnings and Number of Shares Used in Calculation of Basic and Diluted Earnings Per Share | The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period. The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic and diluted earnings per share. Twelve Weeks Ended Twenty-Four Weeks Ended (in thousands, except per share amounts) June 19, 2015 (1) June 20, 2014 (2) June 19, 2015 (1) June 20, 2014 (2) Computation of Basic Earnings Per Share Net income $ 34,041 $ 35,303 $ 68,095 $ 54,611 Weighted average shares outstanding 31,858 34,292 32,078 34,583 Basic earnings per share $ 1.07 $ 1.03 $ 2.12 $ 1.58 Computation of Diluted Earnings Per Share Net income $ 34,041 $ 35,303 $ 68,095 $ 54,611 Weighted average shares outstanding 31,858 34,292 32,078 34,583 Effect of dilutive shares outstanding Employee stock options and SARs 460 559 464 570 Restricted stock units 199 388 218 404 Shares for diluted earnings per share 32,517 35,239 32,760 35,557 Diluted earnings per share $ 1.05 $ 1.00 $ 2.08 $ 1.54 (1) The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. (2) The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Inventory Disclosure [Abstract] | |
Composition of Inventory | The following table shows the composition of our inventory balances: ($ in thousands) At June 19, 2015 At January 2, 2015 Finished goods (1) $ 335,329 $ 413,066 Land and infrastructure (2) 363,808 355,198 Real estate inventory 699,137 768,264 Operating supplies and retail inventory 5,570 4,520 $ 704,707 $ 772,784 (1) Represents completed inventory that is either registered for sale as vacation ownership interests, or unregistered and available for sale in its current form. (2) Includes $47.5 million of sales centers that are expected to be converted into vacation ownership products to be sold in the future and $83.2 million of inventory related to estimated future foreclosures at June 19, 2015. |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum Potential Amount of Future Fundings for Financing Guarantees and Carrying Amount of Liability for Expected Future Fundings | The following table shows the maximum potential amount of future fundings for financing guarantees where we are the primary obligor and the carrying amount of the liability for expected future fundings, which is included on our Balance Sheet in the Other caption within Liabilities. ($ in thousands) Maximum Potential Liability for Expected Future Fundings Segment Asia Pacific $ 6,769 $ 66 North America 2,846 196 Total guarantees where we are the primary obligor $ 9,615 $ 262 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Debt Disclosure [Abstract] | |
Debt Balances, Net of Unamortized Debt Issuance Costs | The following table provides detail on our debt balances, net of unamortized debt issuance costs: ($ in thousands) At June 19, 2015 At January 2, 2015 Vacation ownership notes receivable securitizations, gross (1) $ 564,657 $ 708,031 Unamortized debt issuance costs (6,676) (8,090) 557,981 699,941 Other debt, gross 3,416 3,306 Unamortized debt issuance costs (264) (234) 3,152 3,072 $ 561,133 $ 703,013 (1) Interest rates as of June 19, 2015 range from 2.2% to 7.2% with a weighted average interest rate of 2.9%. |
Scheduled Future Principal Payments for Debt | The following table shows scheduled future principal payments for our debt: ($ in thousands) Vacation Ownership (1) Other Debt Total Debt Principal Payments Year 2015 $ 47,346 $ 27 $ 47,373 2016 75,487 56 75,543 2017 71,155 61 71,216 2018 66,742 65 66,807 2019 66,488 70 66,558 Thereafter 237,439 3,137 240,576 Balance at June 19, 2015 $ 564,657 $ 3,416 $ 568,073 (1) The debt associated with our vacation ownership notes receivable securitizations is non-recourse to us. |
MANDATORILY REDEEMABLE PREFER30
MANDATORILY REDEEMABLE PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Text Block [Abstract] | |
Mandatorily Redeemable Preferred Stock, Net of Unamortized Debt Issuance Costs | The following table provides detail on our mandatorily redeemable preferred stock of consolidated subsidiary balance, net of unamortized debt issuance costs: ($ in thousands) At June 19, At January 2, Mandatorily redeemable preferred stock of consolidated subsidiary, gross $ 40,000 $ 40,000 Unamortized debt issuance costs (1,105) (1,184) $ 38,895 $ 38,816 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Equity [Abstract] | |
Changes in Shareholders' Equity | The following table details changes in shareholders’ equity during the twenty-four weeks ended June 19, 2015: ($ in thousands) Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Retained Earnings Total Equity Balance at January 2, 2015 $ 361 $ (229,229) $ 1,137,785 $ 17,054 $ 153,732 $ 1,079,703 Net income — — — — 68,095 68,095 Foreign currency translation adjustments — — — (2,357) — (2,357) Derivative instrument adjustments — — — 59 — 59 Amounts related to share-based compensation 2 — (2,565) — — (2,563) Adjustment to reclassification of Marriott International investment to Additional paid-in capital — — (77) — — (77) Repurchase of common stock — (66,237) — — — (66,237) Dividends — — — — (15,999) (15,999) Balance at June 19, 2015 $ 363 $ (295,466) $ 1,135,143 $ 14,756 $ 205,828 $ 1,060,624 |
Stock Repurchase Activity under Current Stock Repurchase Program | The following table summarizes share repurchase activity under our current share repurchase program: ($ in thousands, except per share amounts) Number of Shares Repurchased Cost of Shares Repurchased Average Price Paid per Share As of January 2, 2015 3,996,725 $ 229,229 $ 57.35 For the twenty-four weeks ended June 19, 2015 817,726 66,237 81.00 As of June 19, 2015 4,814,451 $ 295,466 $ 61.37 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions Used to Estimate Fair Value of Grants | The following table outlines the assumptions used to estimate the fair value of grants during the twenty-four weeks ended June 19, 2015: Expected volatility 42.74 % Dividend yield 1.26 % Risk-free rate 1.74 % Expected term (in years) 6.25 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Vacation Ownership Notes Receivable Securitizations | |
Cash Flows Between Company and Variable Interest Entities | The following table shows cash flows between us and the vacation ownership notes receivable securitization variable interest entities during the twenty-four weeks ended June 19, 2015 and June 20, 2014: Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 Cash inflows: Net proceeds from vacation ownership notes receivable securitizations $ — $ 22,638 Principal receipts 86,675 85,863 Interest receipts 41,549 42,236 Reserve release 2,345 1,524 Total 130,569 152,261 Cash outflows: Principal to investors (78,361) (89,979) Voluntary repurchases of defaulted vacation ownership notes receivable (10,993) (13,999) Voluntary clean-up call (54,020) (26,722) Interest to investors (8,233) (10,797) Total (151,607) (141,497) Net Cash Flows $ (21,038) $ 10,764 |
Warehouse Credit Facility | |
Cash Flows Between Company and Variable Interest Entities | The following table shows cash flows between us and the Warehouse Credit Facility variable interest entity during the twenty-four weeks ended June 19, 2015 and June 20, 2014: Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 Cash inflows: Total $ — $ — Cash outflows: Interest to investors (569) (758) Funding of restricted cash (138) — Total (707) (758) Net Cash Flows $ (707) $ (758) |
Balance Sheet | |
Classifications of Consolidated Variable Interest Entities | The following table shows consolidated assets, which are collateral for the obligations of these variable interest entities, and consolidated liabilities included on our Balance Sheet at June 19, 2015: ($ in thousands) Vacation Ownership Notes Receivable Warehouse Credit Total Consolidated Assets: Vacation ownership notes receivable, net of reserves $ 547,158 $ — $ 547,158 Interest receivable 3,429 — 3,429 Restricted cash 36,879 138 37,017 Total $ 587,466 $ 138 $ 587,604 Consolidated Liabilities: Interest payable $ 1,457 $ 119 $ 1,576 Debt 564,657 — 564,657 Total $ 566,114 $ 119 $ 566,233 |
Income Statement | |
Classifications of Consolidated Variable Interest Entities | The following table shows the interest income and expense recognized as a result of our involvement with these variable interest entities during the twelve weeks ended June 19, 2015: ($ in thousands) Vacation Ownership Warehouse Credit Facility Total Interest income $ 17,913 $ — $ 17,913 Interest expense to investors $ 3,950 $ 321 $ 4,271 Debt issuance cost amortization $ 697 $ 280 $ 977 Administrative expenses $ 45 $ 25 $ 70 The following table shows the interest income and expense recognized as a result of our involvement with these variable interest entities during the twenty-four weeks ended June 19, 2015: ($ in thousands) Vacation Ownership Warehouse Credit Facility Total Interest income $ 39,987 $ — $ 39,987 Interest expense to investors $ 8,656 $ 634 $ 9,290 Debt issuance cost amortization $ 1,414 $ 565 $ 1,979 Administrative expenses $ 152 $ 67 $ 219 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 19, 2015 | |
Segment Reporting [Abstract] | |
Revenues | Revenues Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 North America $ 384,489 $ 362,923 $ 776,417 $ 729,252 Europe 26,621 34,749 48,208 59,220 Asia Pacific 11,717 12,230 53,082 23,377 Total segment revenues 422,827 409,902 877,707 811,849 Corporate and other — — — — $ 422,827 $ 409,902 $ 877,707 $ 811,849 |
Net Income (Loss) | Net Income (Loss) Twelve Weeks Ended Twenty-Four Weeks Ended ($ in thousands) June 19, 2015 June 20, 2014 June 19, 2015 June 20, 2014 North America $ 104,603 $ 101,676 $ 202,339 $ 181,331 Europe 3,006 5,159 3,020 6,561 Asia Pacific (55) 1,493 9,388 2,985 Total segment financial results 107,554 108,328 214,747 190,877 Corporate and other (50,110) (50,681) (99,960) (101,159) Provision for income taxes (23,403) (22,344) (46,692) (35,107) $ 34,041 $ 35,303 $ 68,095 $ 54,611 |
Assets | Assets ($ in thousands) At June 19, 2015 At January 2, 2015 North America $ 1,856,634 $ 1,879,648 Europe 84,450 88,867 Asia Pacific 97,979 85,469 Total segment assets 2,039,063 2,053,984 Corporate and other 284,149 476,595 $ 2,323,212 $ 2,530,579 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Additional Information (Detail) - Jun. 19, 2015 | PropertyLocationSegmentLine |
Significant Accounting Policies [Line Items] | |
Number of business segments | Segment | 3 |
Number of properties | 59 |
Number of primary sources of revenues generated | Line | 4 |
Percent of the assets, liabilities, revenues, expenses and cash flows discussed | 100.00% |
UNITED STATES | |
Significant Accounting Policies [Line Items] | |
Number of hotel properties | 1 |
Operations located outside the United States | |
Significant Accounting Policies [Line Items] | |
Number of countries and territories in which company operates | Location | 7 |
Each Reference to Particular Ye
Each Reference to Particular Year in Financial Statements Means Fiscal Year Ended on Date Shown (Detail) | 3 Months Ended | |||
Jun. 19, 2015 | Mar. 27, 2015 | Jun. 20, 2014 | Mar. 28, 2014 | |
Accounting Policies [Abstract] | ||||
Quarter-End Date | Jun. 19, 2015 | Mar. 27, 2015 | Jun. 20, 2014 | Mar. 28, 2014 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 19, 2015 | Jan. 02, 2015 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ 1.5 | $ 1.3 |
Income Tax Examination Description | We have joined in the Marriott International U.S. federal tax consolidated filing for periods up to the date of the Spin-Off. The U.S. Internal Revenue Service (the "IRS") has examined Marriott International's federal income tax returns, and it has settled all issues related to the timeshare business for the tax years through the Spin-Off. |
Composition of Vacation Ownersh
Composition of Vacation Ownership Notes Receivable Balances, Net of Reserves (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Vacation ownership notes receivable | $ 878,858 | $ 917,228 | |
Securitized Vacation Ownership Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Vacation ownership notes receivable | 547,158 | 750,680 | |
Eligible for Securitization | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Vacation ownership notes receivable | [1] | 195,947 | 24,194 |
Not Eligible for Securitization | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Vacation ownership notes receivable | [1] | 135,753 | 142,354 |
Non-Securitized Vacation Ownership Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Vacation ownership notes receivable | $ 331,700 | $ 166,548 | |
[1] | Refer to Footnote No. 4, "Financial Instruments," for discussion of eligibility of our vacation ownership notes receivable. |
Future Principal Payments, Net
Future Principal Payments, Net of Reserves, and Interest Rates of Vacation Ownership Notes Receivable (Detail) - Jun. 19, 2015 - USD ($) $ in Thousands | Total |
Future Minimum Payments Receivable [Line Items] | |
2,015 | $ 97,300 |
2,016 | 134,051 |
2,017 | 120,987 |
2,018 | 100,875 |
2,019 | 88,426 |
Thereafter | 337,219 |
Notes receivable | $ 878,858 |
Weighted average stated interest rate | 12.50% |
Range of stated interest rates, minimum | 0.00% |
Range of stated interest rates, maximum | 19.50% |
Non-Securitized Vacation Ownership Notes Receivable | |
Future Minimum Payments Receivable [Line Items] | |
2,015 | $ 51,688 |
2,016 | 59,191 |
2,017 | 50,054 |
2,018 | 35,006 |
2,019 | 22,948 |
Thereafter | 112,813 |
Notes receivable | $ 331,700 |
Weighted average stated interest rate | 12.20% |
Range of stated interest rates, minimum | 0.00% |
Range of stated interest rates, maximum | 19.50% |
Securitized Vacation Ownership Notes Receivable | |
Future Minimum Payments Receivable [Line Items] | |
2,015 | $ 45,612 |
2,016 | 74,860 |
2,017 | 70,933 |
2,018 | 65,869 |
2,019 | 65,478 |
Thereafter | 224,406 |
Notes receivable | $ 547,158 |
Weighted average stated interest rate | 12.70% |
Range of stated interest rates, minimum | 4.90% |
Range of stated interest rates, maximum | 19.50% |
Interest Income Associated With
Interest Income Associated With Vacation Ownership Notes Receivable (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income associated with vacation ownership notes receivable | $ 26,927 | $ 28,333 | $ 54,494 | $ 57,465 |
Securitized Vacation Ownership Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income associated with vacation ownership notes receivable | 17,913 | 19,738 | 39,987 | 41,329 |
Non-Securitized Vacation Ownership Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income associated with vacation ownership notes receivable | $ 9,014 | $ 8,595 | $ 14,507 | $ 16,136 |
Notes Receivable Reserves (Deta
Notes Receivable Reserves (Detail) $ in Thousands | 6 Months Ended | |
Jun. 19, 2015USD ($) | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Beginning Balance | $ 118,418 | |
Provision for loan losses | 15,505 | |
Write-offs | (21,361) | |
Ending Balance | 112,562 | |
Non-Securitized Vacation Ownership Notes Receivable | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Beginning Balance | 64,752 | |
Provision for loan losses | 9,469 | |
Clean-up calls | [1] | 5,725 |
Write-offs | (21,361) | |
Defaulted vacation ownership notes receivable repurchase activity | [2] | 10,993 |
Ending Balance | 69,578 | |
Securitized Vacation Ownership Notes Receivable | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Beginning Balance | 53,666 | |
Provision for loan losses | 6,036 | |
Clean-up calls | [1] | (5,725) |
Defaulted vacation ownership notes receivable repurchase activity | [2] | (10,993) |
Ending Balance | $ 42,984 | |
[1] | Refers to our voluntary repurchase of previously securitized non-defaulted vacation ownership notes receivable to retire outstanding vacation ownership notes receivable securitizations. | |
[2] | Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation ownership notes receivable reserve was attributable to the transfer of the reserve when we voluntarily repurchased the securitized vacation ownership notes receivable. |
Vacation Ownership Notes Rece42
Vacation Ownership Notes Receivable - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 19, 2015 | Jan. 02, 2015 | |
Receivables [Abstract] | ||
Notes receivable estimated average remaining default rates | 7.03% | 6.95% |
Estimated default rate increases that would have resulted an increase in allowance for credit losses | 0.50% | |
Allowance for credit losses that would have been increased | $ 4.5 | $ 4.7 |
Recorded Investment in Non-accr
Recorded Investment in Non-accrual Notes Receivable that are Ninety Days or More Past Due (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | Jan. 02, 2015 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Investment in notes receivable on non-accrual status | $ 62,826 | $ 62,826 | $ 67,447 | ||
Average investment in notes receivable on non-accrual status | 63,706 | $ 75,430 | 65,137 | $ 75,587 | |
Non-Securitized Vacation Ownership Notes Receivable | |||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Investment in notes receivable on non-accrual status | 55,036 | 55,036 | 60,275 | ||
Average investment in notes receivable on non-accrual status | 54,354 | 66,397 | 57,656 | 67,672 | |
Securitized Vacation Ownership Notes Receivable | |||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Investment in notes receivable on non-accrual status | 7,790 | 7,790 | $ 7,172 | ||
Average investment in notes receivable on non-accrual status | $ 9,352 | $ 9,033 | $ 7,481 | $ 7,915 |
Aging of Recorded Investment in
Aging of Recorded Investment in Principal, Before Reserves, in Vacation Ownership Notes Receivable (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
31 - 90 days past due | $ 24,038 | $ 30,874 |
91 - 150 days past due | 12,271 | 13,104 |
Greater than 150 days past due | 50,555 | 54,343 |
Total past due | 86,864 | 98,321 |
Current | 904,556 | 937,325 |
Total vacation ownership notes receivable | 991,420 | 1,035,646 |
Non-Securitized Vacation Ownership Notes Receivable | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
31 - 90 days past due | 10,178 | 8,330 |
91 - 150 days past due | 6,128 | 6,101 |
Greater than 150 days past due | 48,908 | 54,174 |
Total past due | 65,214 | 68,605 |
Current | 336,064 | 162,695 |
Total vacation ownership notes receivable | 401,278 | 231,300 |
Securitized Vacation Ownership Notes Receivable | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
31 - 90 days past due | 13,860 | 22,544 |
91 - 150 days past due | 6,143 | 7,003 |
Greater than 150 days past due | 1,647 | 169 |
Total past due | 21,650 | 29,716 |
Current | 568,492 | 774,630 |
Total vacation ownership notes receivable | $ 590,142 | $ 804,346 |
Carrying Values and Estimated F
Carrying Values and Estimated Fair Values of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | $ 878,858 | $ 917,228 | |
Debt, gross | (568,073) | ||
Mandatorily redeemable preferred stock of consolidated subsidiary, gross | (40,000) | (40,000) | |
Liability for Marriott Rewards customer loyalty program | (79,939) | (89,285) | |
Other liabilities | (50,053) | (27,071) | |
Non-Recourse Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | [1] | (564,657) | |
Other Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | (3,416) | ||
Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 547,158 | 750,680 | |
Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 331,700 | 166,548 | |
Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 878,858 | 917,228 | |
Mandatorily redeemable preferred stock of consolidated subsidiary, gross | (40,000) | (40,000) | |
Liability for Marriott Rewards customer loyalty program | (79,939) | (89,285) | |
Other liabilities | (4,184) | (4,118) | |
Total financial liabilities | (692,196) | (844,740) | |
Carrying Amount | Non-Recourse Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | [2] | (564,657) | (708,031) |
Carrying Amount | Other Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | (3,416) | (3,306) | |
Carrying Amount | Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 547,158 | 750,680 | |
Carrying Amount | Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 331,700 | 166,548 | |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | [3] | 1,043,619 | 1,081,494 |
Mandatorily redeemable preferred stock of consolidated subsidiary, gross | [3] | (42,924) | (43,837) |
Liability for Marriott Rewards customer loyalty program | [3] | (70,926) | (80,448) |
Other liabilities | [3] | (4,184) | (4,118) |
Total financial liabilities | [3] | (691,788) | (844,686) |
Fair Value | Non-Recourse Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | [3] | (570,338) | (712,977) |
Fair Value | Other Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt, gross | [3] | (3,416) | (3,306) |
Fair Value | Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | [3] | 664,646 | 909,391 |
Fair Value | Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | [3] | $ 378,973 | $ 172,103 |
[1] | The debt associated with our vacation ownership notes receivable securitizations is non-recourse to us. | ||
[2] | Interest rates as of June 19, 2015 range from 2.2% to 7.2% with a weighted average interest rate of 2.9%. | ||
[3] | Fair value of financial instruments has been determined using Level 3 inputs. |
Carrying Values and Estimated46
Carrying Values and Estimated Fair Values of Financial Assets and Liabilities - Non-securitized Notes Receivable (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | $ 878,858 | $ 917,228 | |
Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 331,700 | 166,548 | |
Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 878,858 | 917,228 | |
Carrying Amount | Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 331,700 | 166,548 | |
Carrying Amount | Non-Securitized Vacation Ownership Notes Receivable | Eligible for Securitization | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 195,947 | 24,194 | |
Carrying Amount | Non-Securitized Vacation Ownership Notes Receivable | Not Eligible for Securitization | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 135,753 | 142,354 | |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | [1] | 1,043,619 | 1,081,494 |
Fair Value | Non-Securitized Vacation Ownership Notes Receivable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | [1] | 378,973 | 172,103 |
Fair Value | Non-Securitized Vacation Ownership Notes Receivable | Eligible for Securitization | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | 243,220 | 29,749 | |
Fair Value | Non-Securitized Vacation Ownership Notes Receivable | Not Eligible for Securitization | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Vacation ownership notes receivable | $ 135,753 | $ 142,354 | |
[1] | Fair value of financial instruments has been determined using Level 3 inputs. |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 19, 2015 | Mar. 27, 2015 | Jun. 20, 2014 | Mar. 28, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | Jan. 02, 2015 | |
Business Acquisition [Line Items] | |||||||
Other liabilities | $ 50,053,000 | $ 50,053,000 | $ 27,071,000 | ||||
Purchase of operating hotel | 46,614,000 | ||||||
Capital expenditures for property and equipment (excluding inventory) | 15,718,000 | $ 3,003,000 | |||||
HAWAII | |||||||
Business Acquisition [Line Items] | |||||||
Cash from disposal of property | 20,000,000 | ||||||
Purchase and sale agreement, gross cash consideration | $ 60,000,000 | ||||||
Gains and other income | 8,700,000 | ||||||
Marco Island, Florida | |||||||
Business Acquisition [Line Items] | |||||||
Cash from disposal of property | $ 5,400,000 | ||||||
Vacation ownership inventory sold | 3,100,000 | ||||||
Gain (loss) on disposition of business | 0 | ||||||
Other liabilities | 6,500,000 | 6,500,000 | |||||
Other receivables | 200,000 | 200,000 | |||||
Marco Island, Florida | Notes Receivable | |||||||
Business Acquisition [Line Items] | |||||||
Non cash proceeds on sale of property | 500,000 | 500,000 | |||||
San Diego, California | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition of an operating hotel | 55,000,000 | ||||||
Cash paid for acquisition of operating hotel | 55,000,000 | ||||||
Purchase price allocation, property and equipment | 54,300,000 | ||||||
Purchase price allocation, other assets | 700,000 | ||||||
Purchase of operating hotel | 46,600,000 | ||||||
Capital expenditures for property and equipment (excluding inventory) | $ 7,700,000 | ||||||
Orlando, Florida | |||||||
Business Acquisition [Line Items] | |||||||
Cash from disposal of property | $ 24,000,000 | ||||||
Gains and other income | $ 0 | $ 300,000 | 900,000 | $ 1,500,000 | |||
Gain on disposal of golf course and adjacent undeveloped land to be recorded over operating period | $ 3,100,000 |
Reconciliation of Earnings and
Reconciliation of Earnings and Number of Shares Used in Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 19, 2015 | [1] | Jun. 20, 2014 | [2] | Jun. 19, 2015 | [1] | Jun. 20, 2014 | [2] | |
Computation of Basic Earnings Per Share | ||||||||
Net income | $ 34,041 | $ 35,303 | $ 68,095 | $ 54,611 | ||||
Weighted average shares outstanding | 31,858 | 34,292 | 32,078 | 34,583 | ||||
Basic earnings per share | $ 1.07 | $ 1.03 | $ 2.12 | $ 1.58 | ||||
Computation of Diluted Earnings Per Share | ||||||||
Net income | $ 34,041 | $ 35,303 | $ 68,095 | $ 54,611 | ||||
Weighted average shares outstanding | 31,858 | 34,292 | 32,078 | 34,583 | ||||
Effect of dilutive shares outstanding | ||||||||
Employee stock options and SARs | 460 | 559 | 464 | 570 | ||||
Restricted stock units | 199 | 388 | 218 | 404 | ||||
Shares for diluted earnings per share | 32,517 | 35,239 | 32,760 | 35,557 | ||||
Diluted earnings per share | $ 1.05 | $ 1 | $ 2.08 | $ 1.54 | ||||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||||||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
Reconciliation of Earnings an49
Reconciliation of Earnings and Number of Shares Used in Calculation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 6 Months Ended | |
Jun. 19, 2015 | Jun. 20, 2014 | |
Performance Shares | ||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||
Shares excluded from the calculation of diluted earnings per share (in shares) | 180,000 | 228,000 |
Composition of Inventory (Detai
Composition of Inventory (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Inventory Disclosure [Abstract] | |||
Finished goods | [1] | $ 335,329 | $ 413,066 |
Land and infrastructure | [2] | 363,808 | 355,198 |
Real estate inventory | 699,137 | 768,264 | |
Operating supplies and retail inventory | 5,570 | 4,520 | |
Inventory | $ 704,707 | $ 772,784 | |
[1] | Represents completed inventory that is either registered for sale as vacation ownership interests, or unregistered and available for sale in its current form. | ||
[2] | Includes $47.5 million of sales centers that are expected to be converted into vacation ownership products to be sold in the future and $83.2 million of inventory related to estimated future foreclosures at June 19, 2015. |
Composition of Inventory (Paren
Composition of Inventory (Parenthetical) (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Inventory [Line Items] | |||
Land and infrastructure | [1] | $ 363,808 | $ 355,198 |
Vacation Ownership | |||
Inventory [Line Items] | |||
Land and infrastructure | 47,500 | ||
Estimated Future Foreclosures | |||
Inventory [Line Items] | |||
Land and infrastructure | $ 83,200 | ||
[1] | Includes $47.5 million of sales centers that are expected to be converted into vacation ownership products to be sold in the future and $83.2 million of inventory related to estimated future foreclosures at June 19, 2015. |
Contingencies and Commitments -
Contingencies and Commitments - Additional Information (Detail) | Jan. 29, 2015Facility | Aug. 31, 2014Facility | Jun. 30, 2013Plaintiff | Apr. 30, 2013Plaintiff | Jun. 20, 2014USD ($) | Jun. 19, 2015USD ($) | Jun. 20, 2014USD ($) | Jan. 02, 2015Plaintiff | Jun. 19, 2015AUD |
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Commitments to subsidize vacation ownership associations | $ 3,200,000 | ||||||||
Surety bonds issued | 77,900,000 | ||||||||
Letters of credit outstanding | 3,300,000 | ||||||||
Accrued loss contingencies | 2,900,000 | ||||||||
Number of plaintiffs in lawsuits | Plaintiff | 12 | ||||||||
Number of residential units provided full release | Plaintiff | 2 | ||||||||
Amount of cash received from settlement of dispute | $ 7,600,000 | ||||||||
Gain on settlement of dispute | $ 262,000 | ||||||||
Kapalua Bay Settlement | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Number of plaintiffs in lawsuits | Plaintiff | 38 | ||||||||
Extended Term | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Underlying notes extended expiration year | 2,022 | ||||||||
Final Settlement | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Gain on settlement of dispute | $ 7,600,000 | $ 7,600,000 | |||||||
Project Completion Guarantee | Vacation Ownership | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Estimated cash outflow associated with completing all phases of existing portfolio of projects | $ 10,200,000 | ||||||||
Liabilities related to projects | $ 4,400,000 | ||||||||
Project estimated completion year | 2,017 | ||||||||
Revolving Credit Facility | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Revolving credit facility amount | $ 200,000,000 | ||||||||
Commitment to purchase vacation ownership units located in Miami, Florida | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Commitment to purchase vacation ownership units | 75,500,000 | ||||||||
Deposit made | 3,800,000 | ||||||||
Remaining payment contingent upon acquisition of units | 67,900,000 | ||||||||
Additional Payment | 3,800,000 | ||||||||
Commitment to purchase vacation ownership units located in Marco Island, Florida | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Unfunded purchase commitments | 137,100,000 | ||||||||
Commitment to purchase vacation ownership units due in 2017 | 33,300,000 | ||||||||
Commitment to purchase vacation ownership units due in 2018 | 50,000,000 | ||||||||
Commitment to purchase vacation ownership units due in 2019 | 53,800,000 | ||||||||
Commitment to purchase vacation ownership units located on the Big Island of Hawaii | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Commitment to purchase vacation ownership units | 38,500,000 | ||||||||
Deposit made | 1,500,000 | ||||||||
Remaining payment contingent upon acquisition of units | 37,000,000 | ||||||||
Commitment to purchase vacation ownership units located on the Big Island of Hawaii | Minimum | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Unfunded purchase commitments | 45,000,000 | ||||||||
Commitment to purchase vacation ownership units located on the Big Island of Hawaii | Maximum | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Unfunded purchase commitments | 55,000,000 | ||||||||
Purchase Commitment Four | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Commitment to purchase vacation ownership units | 65,800,000 | AUD 84,500,000 | |||||||
Remaining payment contingent upon acquisition of units | 59,300,000 | 76,000,000 | |||||||
Earnest money deposit | 6,500,000 | AUD 8,500,000 | |||||||
Information technology hardware and software | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Contractual Commitments Future Minimum Payments Due | 31,000,000 | ||||||||
Contractual Commitments Future Minimum Payments due in 2015 | 10,300,000 | ||||||||
Contractual Commitments Future Minimum Payments due in 2016 | 6,600,000 | ||||||||
Contractual Commitments Future Minimum Payments due in 2017 | 5,800,000 | ||||||||
Contractual Commitments Future Minimum Payments due in 2018 | 2,700,000 | ||||||||
Contractual Commitments Future Minimum Payments due in 2019 | 1,500,000 | ||||||||
Contractual Commitments Future Minimum Payments due Thereafter | $ 4,100,000 | ||||||||
Resorts in Hawaii | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Number of resort received notices of intent | Facility | 2 | ||||||||
Resorts in California | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
Number of resort received notices of intent | Facility | 1 |
Maximum Potential Amount of Fut
Maximum Potential Amount of Future Fundings for Financing Guarantees and Carrying Amount of Liability for Expected Future Fundings (Detail) - Primary Obligor $ in Thousands | Jun. 19, 2015USD ($) |
Guarantor Obligations [Line Items] | |
Maximum Potential Amount of Future Fundings | $ 9,615 |
Liability for Expected Future Fundings | 262 |
Asia Pacific | |
Guarantor Obligations [Line Items] | |
Maximum Potential Amount of Future Fundings | 6,769 |
Liability for Expected Future Fundings | 66 |
North America | |
Guarantor Obligations [Line Items] | |
Maximum Potential Amount of Future Fundings | 2,846 |
Liability for Expected Future Fundings | $ 196 |
Debt Balances, Net of Unamortiz
Debt Balances, Net of Unamortized Debt Issuance Costs (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 | |
Debt Instrument [Line Items] | |||
Debt, gross | $ 568,073 | ||
Unamortized debt issuance costs | (1,105) | $ (1,184) | |
Debt, net | 561,133 | 703,013 | |
Carrying Amount | |||
Debt Instrument [Line Items] | |||
Debt, net | 561,133 | 703,013 | |
Non-Recourse Debt | |||
Debt Instrument [Line Items] | |||
Debt, gross | [1] | 564,657 | |
Non-Recourse Debt | Carrying Amount | |||
Debt Instrument [Line Items] | |||
Debt, gross | [2] | 564,657 | 708,031 |
Unamortized debt issuance costs | (6,676) | (8,090) | |
Debt, net | 557,981 | 699,941 | |
Other Debt | |||
Debt Instrument [Line Items] | |||
Debt, gross | 3,416 | ||
Other Debt | Carrying Amount | |||
Debt Instrument [Line Items] | |||
Debt, gross | 3,416 | 3,306 | |
Unamortized debt issuance costs | (264) | (234) | |
Debt, net | $ 3,152 | $ 3,072 | |
[1] | The debt associated with our vacation ownership notes receivable securitizations is non-recourse to us. | ||
[2] | Interest rates as of June 19, 2015 range from 2.2% to 7.2% with a weighted average interest rate of 2.9%. |
Debt Balances, Net of Unamort55
Debt Balances, Net of Unamortized Debt Issuance Costs (Parenthetical) (Detail) - Non-Recourse Debt | Jun. 19, 2015 |
Debt Instrument [Line Items] | |
Debt, weighted average interest rate | 2.90% |
Minimum | |
Debt Instrument [Line Items] | |
Debt, stated interest rate | 2.20% |
Maximum | |
Debt Instrument [Line Items] | |
Debt, stated interest rate | 7.20% |
Debt - Additional Information (
Debt - Additional Information (Detail) | 6 Months Ended | |
Jun. 19, 2015USD ($)Loan | Jun. 20, 2014USD ($) | |
Debt Disclosure [Line Items] | ||
Cash paid for interest, net of amounts capitalized | $ 12,100,000 | $ 13,500,000 |
Number of notes receivable pools failed to perform within the established parameters | Loan | 0 | |
Number of notes receivable pools outstanding | Loan | 6 | |
Amendment | ||
Debt Disclosure [Line Items] | ||
Warehouse Credit Facility, debt description | The Warehouse Credit Facility currently terminates on September 15, 2016 and if not renewed, any amounts outstanding thereunder would become due and payable 13 months after termination, at which time all principal and interest collected with respect to the vacation ownership notes receivable held in the Warehouse Credit Facility would be redirected to the lenders to pay down the outstanding debt under the facility. | |
Revolving Credit Facility | ||
Debt Disclosure [Line Items] | ||
Amount borrowed under revolving corporate credit facility | $ 0 | |
Warehouse Credit Facility | Amendment | ||
Debt Disclosure [Line Items] | ||
Amount borrowed under revolving corporate credit facility | $ 0 |
Scheduled Future Principal Paym
Scheduled Future Principal Payments for Debt (Detail) $ in Thousands | Jun. 19, 2015USD ($) | |
Debt Principal Payments Year | ||
2,015 | $ 47,373 | |
2,016 | 75,543 | |
2,017 | 71,216 | |
2,018 | 66,807 | |
2,019 | 66,558 | |
Thereafter | 240,576 | |
Debt, gross | 568,073 | |
Non-Recourse Debt | ||
Debt Principal Payments Year | ||
2,015 | [1] | 47,346 |
2,016 | [1] | 75,487 |
2,017 | [1] | 71,155 |
2,018 | [1] | 66,742 |
2,019 | [1] | 66,488 |
Thereafter | [1] | 237,439 |
Debt, gross | [1] | 564,657 |
Other Debt | ||
Debt Principal Payments Year | ||
2,015 | 27 | |
2,016 | 56 | |
2,017 | 61 | |
2,018 | 65 | |
2,019 | 70 | |
Thereafter | 3,137 | |
Debt, gross | $ 3,416 | |
[1] | The debt associated with our vacation ownership notes receivable securitizations is non-recourse to us. |
Mandatorily Redeemable Prefer58
Mandatorily Redeemable Preferred Stock Of Consolidated Subsidiary - Additional Information (Detail) - Series A Preferred Stock - Non-voting - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Oct. 31, 2011 | Jun. 19, 2015 | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||
Series A preferred stock issued value | $ 40 | |
Preferred stock dividend payment terms | Subsequently Marriott International sold all of this preferred stock to third-party investors. Until October 2016, the Series A preferred stock will pay an annual cash dividend equal to the five-year U.S. Treasury Rate as of October 19, 2011, plus a spread of 10.958 percent, for a total annual cash dividend rate of 12 percent. If we do not elect to redeem the preferred stock in October 2016, the annual cash dividend rate will be reset to the five-year U.S. Treasury Rate in effect on such date plus the same 10.958 percent spread. | |
Series A preferred stock, basic point | 10.958% | |
Series A preferred stock, dividend rate | 12.00% | |
Preferred Stock Redemption Terms | The Series A preferred stock is mandatorily redeemable by MVW US Holdings upon the tenth anniversary of the date of issuance but can be redeemed at our option after five years (i.e., beginning in October 2016) at par. The Series A preferred stock has an aggregate liquidation preference of $40.0 million plus any accrued and unpaid dividends and an additional premium if liquidation occurs during the first five years after the issuance of the preferred stock. | |
Series A preferred stock, aggregate liquidation preference value | $ 40 | |
Series A preferred stock, share authorized | 1,000 | |
Series A preferred stock, share issued | 40 | |
Series A preferred stock, share outstanding | 40 |
Mandatorily Redeemable Prefer59
Mandatorily Redeemable Preferred Stock, Net of Unamortized Debt Issuance Costs (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 |
Equity [Abstract] | ||
Mandatorily redeemable preferred stock of consolidated subsidiary, gross | $ 40,000 | $ 40,000 |
Unamortized debt issuance costs | (1,105) | (1,184) |
Mandatorily redeemable preferred stock of consolidated subsidiary, net | $ 38,895 | $ 38,816 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 04, 2015 | May. 21, 2015 | Mar. 20, 2015 | Jun. 19, 2015 | Jun. 19, 2015 | Jun. 20, 2014 | Jan. 02, 2015 |
Stockholders' Equity [Line Items] | |||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common stock, shares issued | 36,346,990 | 36,346,990 | 36,089,513 | ||||
Common stock, shares outstanding | 31,532,539 | 31,532,539 | 32,092,788 | ||||
Treasury stock, shares | 4,814,451 | 4,814,451 | 3,996,725 | ||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Preferred stock, issued | 0 | 0 | 0 | ||||
Preferred stock, outstanding | 0 | 0 | 0 | ||||
Repurchase of common stock | $ 66,237 | $ 89,448 | |||||
Total cost of shares repurchased | $ 66,237 | ||||||
Shares remained available for repurchase under the program | 2,100,000 | 2,100,000 | |||||
Dividend declared, per share | $ 0.25 | $ 0.25 | $ 0.50 | ||||
Dividend declared, record date | Jun. 18, 2015 | ||||||
Dividend declared, payment date | Jul. 2, 2015 | ||||||
Accelerated Share Repurchase Program | |||||||
Stockholders' Equity [Line Items] | |||||||
Repurchase of common stock | $ 30,000 | ||||||
Number of shares of common stock repurchased | 42,283 | 327,782 | 370,065 | ||||
Excluding ASR | |||||||
Stockholders' Equity [Line Items] | |||||||
Number of shares of common stock repurchased | 447,661 | ||||||
Average price repurchased per share | $ 80.95 | ||||||
Total cost of shares repurchased | $ 36,200 |
Changes in Shareholder's Equity
Changes in Shareholder's Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | $ 1,079,703 | |||||||
Net income | $ 34,041 | [1] | $ 35,303 | [2] | 68,095 | [1] | $ 54,611 | [2] |
Foreign currency translation adjustments | 3,245 | $ (86) | (2,357) | $ (80) | ||||
Derivative instrument adjustments | 59 | 59 | ||||||
Amounts related to share-based compensation | (2,563) | |||||||
Adjustment to reclassification of Marriott International investment to Additional paid-in capital | (77) | |||||||
Repurchase of common stock | (66,237) | |||||||
Dividends | (15,999) | |||||||
Ending Balance | 1,060,624 | 1,060,624 | ||||||
Common Stock | ||||||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | 361 | |||||||
Amounts related to share-based compensation | 2 | |||||||
Ending Balance | 363 | 363 | ||||||
Treasury Stock | ||||||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | (229,229) | |||||||
Repurchase of common stock | (66,237) | |||||||
Ending Balance | (295,466) | (295,466) | ||||||
Additional Paid-In Capital | ||||||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | 1,137,785 | |||||||
Amounts related to share-based compensation | (2,565) | |||||||
Adjustment to reclassification of Marriott International investment to Additional paid-in capital | (77) | |||||||
Ending Balance | 1,135,143 | 1,135,143 | ||||||
Accumulated Other Comprehensive Income | ||||||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | 17,054 | |||||||
Foreign currency translation adjustments | (2,357) | |||||||
Derivative instrument adjustments | 59 | |||||||
Ending Balance | 14,756 | 14,756 | ||||||
Retained (Deficit) Earnings | ||||||||
Stockholders Equity Note [Line Items] | ||||||||
Beginning Balance | 153,732 | |||||||
Net income | 68,095 | |||||||
Dividends | (15,999) | |||||||
Ending Balance | $ 205,828 | $ 205,828 | ||||||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||||||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
Summary of Stock Repurchase Act
Summary of Stock Repurchase Activity (Detail) - 6 months ended Jun. 19, 2015 - USD ($) $ / shares in Units, $ in Thousands | Total |
Stock Repurchase Program [Line Items] | |
Number of Shares Repurchased, As of January 2, 2015 | 3,996,725 |
Number of Shares Repurchased, As of June 19, 2015 | 4,814,451 |
Cost of Shares Repurchased, As of January 2, 2015 | $ 229,229 |
Cost of Shares Repurchased, for the twenty-four weeks ended June 19, 2015 | 66,237 |
Cost of Shares Repurchased, As of June 19, 2015 | $ 295,466 |
Treasury Stock | |
Stock Repurchase Program [Line Items] | |
Number of Shares Repurchased, As of January 2, 2015 | 3,996,725 |
Number of Shares Repurchased, for the twenty-four weeks ended June 19, 2015 | 817,726 |
Number of Shares Repurchased, As of June 19, 2015 | 4,814,451 |
Cost of Shares Repurchased, As of January 2, 2015 | $ 229,229 |
Cost of Shares Repurchased, for the twenty-four weeks ended June 19, 2015 | 66,237 |
Cost of Shares Repurchased, As of June 19, 2015 | $ 295,466 |
Average Price Paid per Share, As of January 2, 2015 | $ 57.35 |
Average Price Paid per Share, for the twenty-four weeks ended June 19, 2015 | 81 |
Average Price Paid per Share, As of June 19, 2015 | $ 61.37 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | Jan. 02, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Deferred compensation costs related to unvested awards | $ 20.3 | $ 20.3 | $ 12.2 | ||
Officers and Key Management Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 4 | $ 3.9 | $ 6.6 | $ 6.2 | |
Marriott Vacations Worldwide Stock and Cash Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance under the plan | 6,000,000 | 6,000,000 | |||
Shares available for grants under the plan | 1,800,000 | 1,800,000 | |||
Restricted stock units | Employees and Non Employee Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, grants in period | 128,690 | ||||
Stock awards granted, weighted average grant date fair value | $ 78.23 | ||||
Restricted stock units | Employee | Employees and Non Employee Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting period | 4 years | ||||
Performance Based Restricted Stock Unit | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, vesting period | 3 years | 3 years | |||
Maximum amount of RSU subject to vesting | 74,000 | 62,000 | |||
Stock Appreciation Rights (SARs) | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, grants in period | 62,018 | ||||
Stock awards granted, weighted average grant date fair value | $ 29.75 | ||||
Stock awards, vesting period | 4 years | ||||
Stock awards, expiration from grant date | 10 years | ||||
Stock awards, weighted average exercise price | $ 77.42 | $ 77.42 |
Assumptions Used to Estimate Fa
Assumptions Used to Estimate Fair Value of Grants (Detail) - 6 months ended Jun. 19, 2015 | Total |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected volatility | 42.74% |
Dividend yield | 1.26% |
Risk-free rate | 1.74% |
Expected term (in years) | 6 years 3 months |
Classifications of Consolidated
Classifications of Consolidated VIE Assets and Liabilities (Detail) $ in Thousands | Jun. 19, 2015USD ($) |
Variable Interest Entity [Line Items] | |
VIE Assets | $ 587,604 |
VIE Liabilities | 566,233 |
Non-Recourse Debt | |
Variable Interest Entity [Line Items] | |
VIE Liabilities | 564,657 |
Vacation Ownership Notes Receivable | |
Variable Interest Entity [Line Items] | |
VIE Assets | 547,158 |
Interest Receivable | |
Variable Interest Entity [Line Items] | |
VIE Assets | 3,429 |
Restricted Cash | |
Variable Interest Entity [Line Items] | |
VIE Assets | 37,017 |
Interest Payable | |
Variable Interest Entity [Line Items] | |
VIE Liabilities | 1,576 |
Vacation Ownership Notes Receivable Securitizations | |
Variable Interest Entity [Line Items] | |
VIE Assets | 587,466 |
VIE Liabilities | 566,114 |
Vacation Ownership Notes Receivable Securitizations | Non-Recourse Debt | |
Variable Interest Entity [Line Items] | |
VIE Liabilities | 564,657 |
Vacation Ownership Notes Receivable Securitizations | Vacation Ownership Notes Receivable | |
Variable Interest Entity [Line Items] | |
VIE Assets | 547,158 |
Vacation Ownership Notes Receivable Securitizations | Interest Receivable | |
Variable Interest Entity [Line Items] | |
VIE Assets | 3,429 |
Vacation Ownership Notes Receivable Securitizations | Restricted Cash | |
Variable Interest Entity [Line Items] | |
VIE Assets | 36,879 |
Vacation Ownership Notes Receivable Securitizations | Interest Payable | |
Variable Interest Entity [Line Items] | |
VIE Liabilities | 1,457 |
Warehouse Credit Facility | |
Variable Interest Entity [Line Items] | |
VIE Assets | 138 |
VIE Liabilities | 119 |
Warehouse Credit Facility | Restricted Cash | |
Variable Interest Entity [Line Items] | |
VIE Assets | 138 |
Warehouse Credit Facility | Interest Payable | |
Variable Interest Entity [Line Items] | |
VIE Liabilities | $ 119 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Detail) - USD ($) | Jun. 13, 2013 | Jun. 19, 2015 | Jan. 02, 2015 |
Variable Interest Entity [Line Items] | |||
Noncontrolling interest | $ 0 | ||
Aggregate funding that could be required above the overcollateralization | 10,000,000 | ||
Vacation ownership notes receivable | $ 878,858,000 | $ 917,228,000 | |
Variable Interest Entity | |||
Variable Interest Entity [Line Items] | |||
Maximum Loss Exposure, Determination Methodology | Our maximum exposure to loss relating to the special purpose entities that purchase, sell and own these vacation ownership notes receivable is the overcollateralization amount (the difference between the loan collateral balance and the balance on the outstanding vacation ownership notes receivable), plus cash reserves and any residual interest in future cash flows from collateral. | ||
Vacation ownership notes receivable | $ 547,158,000 | $ 750,680,000 | |
Variable Interest Entity, Not Primary Beneficiary | Equity Investment And Loan Receivable | |||
Variable Interest Entity [Line Items] | |||
Maximum Loss Exposure, Determination Methodology | We had an accrual of $4.0 million for potential future funding obligations, representing our remaining expected exposure to loss related to our involvement with the Joint Venture exclusive of any future costs that may be incurred pursuant to outstanding litigation matters, including those discussed in Footnote No. 8, "Contingencies and Commitments." | ||
Vacation ownership notes receivable | $ 0 | ||
Notes receivable due from the entity | $ 7,400,000 | ||
Increase in litigation matters cost expected to be incurred in joint venture interest | $ 4,000,000 | ||
Minimum | |||
Variable Interest Entity [Line Items] | |||
Limit to repurchasing defaulted mortgage notes at the outstanding principal balance | 15.00% | ||
Maximum | |||
Variable Interest Entity [Line Items] | |||
Limit to repurchasing defaulted mortgage notes at the outstanding principal balance | 20.00% |
Interest Income and Expense Rec
Interest Income and Expense Recognized as a Result of Our Involvement with Variable Interest Entities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |
Variable Interest Entity [Line Items] | ||||
Interest income | $ 26,927 | $ 28,333 | $ 54,494 | $ 57,465 |
Debt issuance cost amortization | 2,506 | 2,566 | ||
Administrative expenses | 22,892 | $ 23,153 | 45,669 | $ 44,981 |
Variable Interest Entity | ||||
Variable Interest Entity [Line Items] | ||||
Interest income | 17,913 | 39,987 | ||
Interest expense to investors | 4,271 | 9,290 | ||
Debt issuance cost amortization | 977 | 1,979 | ||
Administrative expenses | 70 | 219 | ||
Variable Interest Entity | Vacation Ownership Notes Receivable Securitizations | ||||
Variable Interest Entity [Line Items] | ||||
Interest income | 17,913 | 39,987 | ||
Interest expense to investors | 3,950 | 8,656 | ||
Debt issuance cost amortization | 697 | 1,414 | ||
Administrative expenses | 45 | 152 | ||
Variable Interest Entity | Warehouse Credit Facility | ||||
Variable Interest Entity [Line Items] | ||||
Interest expense to investors | 321 | 634 | ||
Debt issuance cost amortization | 280 | 565 | ||
Administrative expenses | $ 25 | $ 67 |
Cash Flows Between Company and
Cash Flows Between Company and Variable Interest Entities (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 19, 2015 | Jun. 20, 2014 | |
Vacation Ownership Notes Receivable Securitizations | ||
Cash inflows (outflows): | ||
Net proceeds from vacation ownership notes receivable securitizations | $ 22,638 | |
Principal receipts | $ 86,675 | 85,863 |
Interest receipts | 41,549 | 42,236 |
Reserve release | 2,345 | 1,524 |
Total | 130,569 | 152,261 |
Principal to investors | (78,361) | (89,979) |
Voluntary repurchases of defaulted vacation ownership notes receivable | (10,993) | (13,999) |
Voluntary clean-up call | (54,020) | (26,722) |
Interest to investors | (8,233) | (10,797) |
Total | (151,607) | (141,497) |
Net Cash Flows | (21,038) | 10,764 |
Warehouse Credit Facility | ||
Cash inflows (outflows): | ||
Interest to investors | (569) | (758) |
Funding of restricted cash | (138) | |
Total | (707) | (758) |
Net Cash Flows | $ (707) | $ (758) |
Business Segments - Additional
Business Segments - Additional Information (Detail) | 6 Months Ended |
Jun. 19, 2015Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 3 |
Revenues (Detail)
Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 422,827 | $ 409,902 | $ 877,707 | $ 811,849 |
Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 422,827 | 409,902 | 877,707 | 811,849 |
Operating Segments | North America | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 384,489 | 362,923 | 776,417 | 729,252 |
Operating Segments | Europe | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 26,621 | 34,749 | 48,208 | 59,220 |
Operating Segments | Asia Pacific | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 11,717 | $ 12,230 | $ 53,082 | $ 23,377 |
Net Income (Loss) (Detail)
Net Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 19, 2015 | Jun. 20, 2014 | Jun. 19, 2015 | Jun. 20, 2014 | |||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | $ 57,444 | $ 57,647 | $ 114,787 | $ 89,718 | ||||
Provision for income taxes | (23,403) | (22,344) | (46,692) | (35,107) | ||||
Net income (loss) | 34,041 | [1] | 35,303 | [2] | 68,095 | [1] | 54,611 | [2] |
Corporate and Other | ||||||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | (50,110) | (50,681) | (99,960) | (101,159) | ||||
Operating Segments | ||||||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | 107,554 | 108,328 | 214,747 | 190,877 | ||||
Operating Segments | North America | ||||||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | 104,603 | 101,676 | 202,339 | 181,331 | ||||
Operating Segments | Europe | ||||||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | 3,006 | 5,159 | 3,020 | 6,561 | ||||
Operating Segments | Asia Pacific | ||||||||
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items] | ||||||||
Segment financial results | $ (55) | $ 1,493 | $ 9,388 | $ 2,985 | ||||
[1] | The computations of diluted earnings per share exclude approximately 180,000 shares of common stock, the maximum number of shares issuable as of June 19, 2015 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. | |||||||
[2] | The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period. |
Assets (Detail)
Assets (Detail) - USD ($) $ in Thousands | Jun. 19, 2015 | Jan. 02, 2015 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 2,323,212 | $ 2,530,579 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 284,149 | 476,595 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 2,039,063 | 2,053,984 |
Operating Segments | North America | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 1,856,634 | 1,879,648 |
Operating Segments | Europe | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 84,450 | 88,867 |
Operating Segments | Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 97,979 | $ 85,469 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Jul. 23, 2015 - Subsequent Event $ in Millions | USD ($)Room |
Subsequent Event [Line Items] | |
Acquisition of rooms of an operating hotel | $ | $ 32 |
Number of rooms | 71 |
Uncategorized Items - vac-20150
Label | Element | Value |
Gain (Loss) on Disposition of Property Plant Equipment | us-gaap_GainLossOnSaleOfPropertyPlantEquipment | $ 8,625 |
Income (Loss) from Equity Method Investments | us-gaap_IncomeLossFromEquityMethodInvestments | $ 85 |