VAC - Earnings call transcript Q1 2019 | Marriott Vacations Worldwide Corporation

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Operator

Greetings and welcome to Marriott Vacations Worldwide First Quarter 2019 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Mr. Neal Goldner, Vice President, Investor Relations. Thank you.

begin. may You

Neal Goldner

and John and to federal quarter facts uncertainties Rob today the securities SEC Vacations Officer. Officer could Marriott Steve are in Chief President Thank today and from comments. everyone Financial earnings considered are welcome that our conference first Administrative and Executive Chief XXXX comments to President our do and numerous described those by not subject as joined Executive historical risks These call. in Worldwide filings, laws. cause statements Vice Weisz, to our and need you, statements I future and to Geller, expressed are remind I by under of differ implied am forward-looking which many or results materially

in call, will the effective call this morning, updated as unfold. that comments information. we actual will be release to are our with press not we issued events along make the Forward-looking references this non-GAAP on financial only and today statements Throughout

now the reconciliation find Steve of our release press pleasure President the in attached schedules the can financial Vacations It measures Marriott turn to and of our You well ir.mvwc.com. is at Worldwide. Relations to page to as website call Investor of over as non-GAAP CEO my Weisz, a

Steve Weisz

our nearly On new excluding basis with I totaled $XXX earnings Neal. quarter from pleased synergies Thanks, year comparable joining EBITDA a for results with started ownership driven Good for more combined morning, Hyatt for Europe, expectations. everyone grew am legacy Adjusted extremely call. the first we offset and you first quarter with the and DRI million. Consolidated and related our the by thank segment how our have financial on contract basis, primarily of partially MVW as sale by EBITDA adjusted the including Vistana as combined of grew a impact X% the acquisition. businesses. XX% sales to well X% vacation growth the

As growth and expect MVW to deliver well. we sales the we year started mentioned we year strong legacy off our throughout in the last quarter, business

We offset in during of business the will be Marriott also we strategies expanded across employed the Vacation Hyatt continue half to expect our the Ownership Vistana s year timeshare implement and the growth as businesses first by portfolio.

in to and We businesses quarter. has we continued occur current of growth Vistana expect growth Hyatt year. this accelerate and quarter move starting the latter as the We some the the to towards the of saw first through part into it

declined legacy programs have sales including over despite which time nearly schedule but in tours strong owner the tour last XX% X% X% basis North buyer Vacation MVW on the also the VPG in during contributions pipeline our legacy quarter, tours report was VPG driven X% at for package as time first X% and over well to Vacation $X,XXX, Ownership flow compared year-over-year Looking Shifting MVW arrival a at date a first-time quarter America sales increase continued tours. remainder Vacation time the buyer contract to grew first and the X% strong remains The distributions. same growth ILG to the a remains same the higher business newer than in year. pleased tours, XXXX grew Encore owner more America the year year-over-year. combined increase increase as our just business, from tour up in typically last than Ownership the time activated first North of legacy buyer tours. in lower I our linkage Ownership tour business, am flow X% a our that growing by package the and in

to efficiency VPG flow X%, in program some decline made closing a changes to the result integration. in in X% part of due tour slight a as due down was increased the While quarter

example, FICO XXX. scores we program below financing buyers Vistana with a modified legacy for significantly For

contract sales, We rest quarter. significantly generated modified VPG are these to the delinquency continue that of the the this the cash previously program rate higher estimate on portfolio. for alone a higher program the the sales payment. While accounted those average roughly incremental for significantly the We decline that sales requiring program buyers change of third were a in in down than

in negatively best While we line, company longer is the the this change of the impacting believe top interest term.

VPG on Vistana’s by efficient grow best to achieved time more to on work as and levels channels. we our Vacation and continue profitable in marketing practices focused the to over contract will those We sales Marriott closer Club

progress made across We messaging help the incentive across good brands. the qualifications income and have programs to already ensure consistent sales very aligning pricing, our system

the flow branded and We expanding tour the building early are opportunities on-core in the by are focused the growing our on pipeline tour package in tour properties the Marriott been package flow lodging Marriott as also transfer created. the program package call as well marketing And production. our growth while we that’s integration with and across quarter pipeline tour International, excited in process, linkage still

last good first arrangements three linkage from I to future these and in properties as tour able we to fact nearly for to grow we year signs legacy new pleased say In packages performance all into am quarter, compared the by brands. for Vistana XX% Starwood quarter, that in added the the same the brands were time

to We future is center sales our its this will growth. property to significant re-branding are San towards with portfolio our This property Marriott be also along we a our wonderful sales Club be a contract new onsite month. about very addition Vacation new is excited contributor and that expected Francisco Pulse

continued well from of includes further expand the many property. just volumes improvements from brands. mainly we this business continued in contribution mentioned to across from Our guidance the profitable existing It initiatives growth contract have as also new anticipated I an sales the from reflects as programs tour as

what do program to I with call major this car a In fact a tour And company. flow. transfer to an can we incremental looking agreement just into to arrangement forward drive recently completed rental enter am

second call marketing this digital However, we as launch our In with most mentioned our marketing environment. of promotions pilot forward to have us I the which expect Western International. looking tap to program, and make and channel our previously branded Marriott tour transfer are the quarter our offers ability users is allow we program Marriott will will to marriott.com expect into what to Similar to we to attractive locations. traditional higher flow Sheridan drive to

other and in opportunities similar see platforms. also media digital advertising social We

piloting some have to pleased programs am begun say have and positive signs. recently We very see began I to various we

only and contract sales, us tour to also flow will We cost with incremental programs do are and these optimistic not continue provide in manner. but a ramp so up with efficient

XXXX, Looking on focusing ahead have brands. various to we the for enhancements begun product

develop customers. time to form across Marriott and product out It be Specifically, Western an take we for integrated roll the that our and Sheridan will new brands owners are proposition leveraged value working can to overall and enhancing hard this the for. finalize product

we potential the and to as are forward the However, will look about updating future in it excited very this you we evolves. provide work

results interest fourth Exchange disposition VRI For our our year-over-year quarter Third-Party interest in & of were impacted of the by the negatively of in – XXXX. Europe our Management segment

still our provided disposition while us As recall, focus. capital strategic may overall to this with great maintaining you recycle opportunity a

a expected the as of the active impact prior quarter and with addition, decline agreements members in line compared certain reflecting last also the our In as non-renewal of saw in in we year. discussion to quarter,

adding ahead, course our benefits the business, new members vacation exchange of average strategy network. exchange and resorts member, these identifying traditional includes expanding for properties beyond revenue the Looking businesses to ownership and to diversifying per increasing and

let me integration Now, continuing let me efforts. now shift – shift towards continuing towards our our

As operational combination, a I business. to also opportunity change the efficiencies as from way the processes view the we but a a to once chance gain mentioned lifetime only a we do this not align and in make past, transformational integration to in

in savings continue to years next total there. to within planning The opportunities we working $XXX additional are million the target this to and X We identify stop exceed excess of target. annual to are teams run-rate

say to achieved of run-rate million. realized pleased end we to-date, $XX am savings of relates quarter roughly have it as savings of As the first I to that

While there million roughly $XX in-the-year end of $XX work year run-rate equating the by continue lot $XX of million remaining, target of of is million to we to over still savings. a savings to the

say a say Before year contract to to and opportunities occurring full full very am growth business that our reaffirming $XXX the about the XXXX. John, from further year let projecting combined all excited full we provides same basis to line we Last to our let our hand and pleased I touch given expectations time. With with call first XX% strong our at are first year guidance over many growth am top X% that projected growth very I that, our still expanded call and our proud I are that performance, quarter outlook. over turn upon we of for me between walk out details am sales me John the to the even with to $XXX quarter changes quarter, EBITDA on nearly results. adjusted for significant I we million. through business the the financial laid on million

John Geller

pleased in and our Steve good the quarter with have year first morning expectations. how generating strong all I am everyone. you, with very we Thank line results begun

combines this MVW’s earnings additional the last release, first ILG’s legacy EBITDA first business combined XXXX. our highlight in how quarter XXXX basis, million year. results XXXX results legacy comparable Total included that did year have X% results prior supplemental increase we represents to with On quarter in company the from presentation. As totaled adjusted quarter to we information better our a financial of including $XXX to current the XXXX a performed, be financial

While are EBITDA. highlight line items expectations, were in adjusted our two that it’s our these impacted important in to with unfavorably year-over-year growth results

for as do reportability know EBITDA. adjust calculating not adjusted of we the First, impact when you revenue

$XX the a was reportability of in this have revenue strong will in million sales occurred, first recognized last year. volume the However later be when second contract higher result will sales unfavorably Remember, closed as as but reported quarter, in timing as quarter the adjusted EBITDA matter when contracts a simply $XX of revenue the which million half of be the than close. revenue impacted first by quarter, roughly is the

for EBITDA was both of Adjusting disposition Second, have would the million VRI year year-over-year. basis $X by grown Europe. the negatively combined impacted items, in quarter XX% to related on of year-over-year the adjusted prior a those of profit growth

On related our combined combined basis segment. in EBITDA adjusted reportability, to Adjusting Now, quarter. a for legacy Segment the $XX our of of In to this the million first million increase first increased year-over-year. a the would totaled million represents million let’s including adjusted turn on $XX $XXX first segment to contract development on X% Ownership a increase combined basis, Vacation increased unfavorable revenue basis or sales in MVW. consolidated XX%. a EBITDA X% have quarter business, XX% $XXX an

to total $XX combined up a on margin year development million was the in quarter the Our prior basis. X% first

and $X other on partially outstanding revenue over adjusting percentage expense improvement funds. combined first a expense revenue million revenue million offset our $X Adjusted These an a financing debt higher on charges primarily million However, basis. revenues due adjusted development consumer last the combined of from inventory higher or a our of roughly $XX growing was a on an lower point increased quarter XXXX. combined balance, in net basis and $X to Financing for development reflect of XX% a XX.X% reportability due by a costs. year increased combined in XXX in of slightly margin higher to results XX% on of interest increase balance notes In $XX basis our increase basis. expenses XX% business, million margin receivable million, to interest reflecting basis, cost primarily was financing

rental our and remained a $XX on XX%. XXX, strong portfolio receivable rental our the average revenues to rental who score million other basis expenses by on lows net increased results rate a in of increase services and combined continues near X% were higher X% financing plus driven a delinquency financed nearly increased transient These million. of X% the combined and driven buyers revenues to very results X% to of million basis increased activity. historic combined notes In $XX basis managing were well. were in revenues. over revenues rates with and point In perform business on $X remained while for higher FICO These fees Our and higher for quarter. propensity us $XXX The net and at business X% resorts management our million club in a to by portfolio increased expenses quarter revenues resort

as $XX down of in adjusted to segment, contracts being Management in fees. by than Third-Party the the related basis year-over-year supply related resulting and with revenue on million from down X% remainder demand VRI combined & membership to of half the Europe a December combined inventory expected basis disposition Exchange XXXX. non-renewal EBITDA period in Roughly the the the and transaction the prior per customer quarter lower remaining to certain on of the including year Turning a was the quarter decline compared was largely million driven Average member $X challenges. to expected of impact

As Steve to the businesses will these we revenue continue mentioned, to we new year incremental for progresses. identify work as update and you streams

the nearly savings of the partially $XX G&A equipment the $X the achieve a combined This in parcels, we comprehensive Turning begun $XX on target ILG declined do combined remain phases determine offset to acquisition, of of existing savings a direction ownership resorts the year our review to on synergy business to strategic other and and and normal cost savings ownership I primarily as want a synergy million across assets. operating of million other costs best vacation by inflationary future to quarter by vacation have in XXXX. million non-core that achieved driven increases. spending, undeveloped includes for highlight and basis, million to property business. of year-over-year and $XX of hotels We for the the timing technology our result

supply. demand. certain that impairments. to carrying This to assets create effective focus the markets enable you reduce sales non-cash could review a inventory high customer us in incremental in have result impact markets key in excess value we review future which might spend of this of evaluate the cost locations could areas will in where The a have As refocus will expect turn on effort result of material in holdings of opportunities to be

few for entered associated area, regard Orlando, this improvements quarter, first over the this $XX future and in at million. with land contract end an a do continues subsequent to XXX should location the expect years. significant flows work MVW resort this into existing sell roughly in of we next generate Florida that While the effort we cash units for the of to In development

As we units common to when area book at a result, the assets is the the fact non-cash first that million the primarily attributable build impairment of of quarter. in the value a incurred $XX we recorded XXX the resort. include The impairment existing cost

these may Marriott excluded subsequent you similar cash and when we recall As free XXXX, flow. from a EBITDA undertook impact from in International effort to will be our of from adjusted the efforts adjusted spin-off

the cash the at totaled million. quarter sheet, cash and end balance of $XXX to Moving equivalents the

receivable approximately notes had also million under capacity we of vacation million eligible $XXX credit $XXX securitization. available million for facility. ownership our in We gross had revolving $XXX roughly Further

synergy leverage $X.X securitized From billion, assuming for a perspective, debt were end the our corporate last receivable. quarter totaled with $X.X billion associated total non-recourse target million net than Our savings, outstanding at and companies the X.X our adjusted the end at total quarters combined of to our to this slightly X EBITDA notes quarter of X.X be times, the combined excludes of the times. debt would the higher X ratio including of $XXX times longer-term

for expect the to we brands quarter, a Legacy-ILG from the both ahead first term are securitization, we Legacy-MVW and second notes include which will Looking targeting time.

towards prior of more continues closing roughly than given expect month, $XXX excess to expect this the cost volumes favorable market and later spread funds year we work and While conditions transaction. million of our current note be

capital paid per of $XX.XX. dividends an X.X of average price million $XX And the $XXX share shares also repurchased in of first return our we million. million Regarding at we quarter, for

the began as and in turning mentioned, XXXX, line for with strong year Steve outlook Now to expectations. the we our

XXXX With look continued primarily changes move as on the align we we are on our procedures and progress progress full-year first we to synergy and positive you quarter guidance. updating making the behind throughout marketing the our our sales reaffirming us, I and efforts, to our arena the year. are forward in policies

up open appreciate the we Q&A. And As interest Vacations that, Rob? with call Worldwide. your always, will for we Marriott in

Operator

Thank you. we’ll At session. a this Instructions]. conducting [Operator question-and-answer be time,

Our with your with Research. first Jared Wolfe Please from Shojaian question comes proceed question.

Steve Weisz

Good morning, Jared.

Jared Shojaian

Thanks Hey – for my question. morning. taking good

know the still working and through you’re I the early to it’s So, guidance year integration. updating be in

a even shouldn’t expecting. why more expected your you But as it’s quarter about So, with probably reason line have think change. what really in you you people were talk said today, I the expectations was

sounds expecting. into had and what you the second quarter also it end shift the the of You were the quarter reportability better got like than

full-year you what and the is, versus So, today about months are I couple question guess you’re a feeling guidance ago? more my confident optimistic thinking of

Steve Weisz

this to of the first guess, I we what – part year. we the Steve, as guess optimistic is feel I equally did

As the how might out, has the we seen the year that you we that’s when that in play if us first been nothing for. embarking would results thought are less it we There looking the And employing that that you we the anything strategies about just causes feel thoughtful optimistic. we imagine, that any gave delivering were to we’ve are you. guidance gave on and reaffirms we’re certainly quarter

Jared Shojaian

And thank X%, – sales then contract that. ILG which ILG think drove about I and about intentional you were the down programs, you. your Legacy talked Great,

impact may something I think this, by that. think confused a little of about I’m of by I a programs, you but have was some I the those missed said driven third intentional

as Legacy like excluding guess, would of and sales give some of intentional VPG? looked maybe I a business is you us another have can way to contract the sense ILG on So, those it decisions, asking what

Steve Weisz

call to brand change scores or sub-XXX one they was VPG clarify, FICO using. the Yes, the the drop X Sheraton that attributable about we of were a made to I that in for it said in X-point just third points

– to pricing, as gone we the this fixing are, have as working to corner. and experienced continue you in pricing absolutely we’ve to by and a cost such that’s have approach programs that will first we some – and of and performance. – runs align as and force transfer. expanding turn qualifications increase impact marketing But transitioning force our in as the quarter. other have what cost you grids we MVW on with by quarter through sales The attributable the channels VPGs and short-term things sales when incentives high – to And terms aligning sales harmonizing, that’s expect legacy eliminating should We their policies lower and call you believe expanding benefit

have some In give fact that. will seen we some in the evidence Vistana you of I sense businesses.

for So turned it April. were March have Vistana some down February, in in X.X% X.X% sales instance continued around about then in improvement and contract and we and grew in seen

So we corner, there think you which we just are switch and but no unfortunately switch turning everything magic light is flip changes. can the the

our And what take to to new have a just make been as of very to try encouraged training. done go You as And we see. such everybody adjust normal. are changes the to has to we you experience for takes by time have we a through it a subset while that

Jared Shojaian

Great, that’s helpful. jump Thank queue. you. I in the back will

Steve Weisz

you. Thank

Operator

with with question your proceed next Our Dobson from Please comes Nomura. Brian question.

Steve Weisz

Brian. Hi

Brian Dobson

good Hey, morning.

ILG back the sales you or continuing guidance a back the you do guess in year, do is the take questioning, more that your of sales an muted portion cadence when contemplate half point? guidance line it your them of of on comes legacy contract contract to sales guess from I in acceleration that So the I half unit, your does for

Steve Weisz

half be that year better the the second than will of year. first impact of materially No, the we half the believe in

Brian Dobson

consumer, And what I terms in your consumer slightly road after relationship the is product of what? more are then of you going to middle new it great. or a in offerings, guess existing Alright, consumer

Steve Weisz

done already understanding of brands, have each the we a work Well, fair propositions. on of the value amount

not customers, We are I not it’s brands. lower Hyatt the a are resorts Western a slightly And that’s there looking thing certainly mid-market nuances say at is that the are similar some terribly not Marriott demographics etcetera. brands but the offering. to Sheridan, between material will thing, that’s for more the only And the you and

minor would say tweaks focused nothing here I but So on that substance would I some of any is there maybe be Brian.

Brian Dobson

Sheridan? with that then guess time you that Marriott medium-term perhaps contemplating you with spoken in And think look stronger, brand Okay. brand have do share their Sheridan, you re-branding that I are your and to about will offering revamp efforts the for

Steve Weisz

that Well, properties re-branding no intentions certainly ownership the flag Sheridan have of vacation our today. we carry

terms restore argue of have to – think would some talked try its brand. they its Regarding Marriott, fair it’s has of cluster. that about that. Marriott time to we in course a yes, I we a amount to of brand and what And languished know are over lost has that best that doing repositioning doing started I

we We that’s value Ownership by of on we and that enhance Vacation brand nothing are think encouraged will name but resorts. do the the

Brian Dobson

Great. Thank you very much.

Steve Weisz

you. Thank

Operator

comes question Please with next question. from your Jefferies. David with Our proceed Katz

Steve Weisz

David. Hi

David Katz

Hi, good are everyone. How morning you?

Steve Weisz

you? Great, how are

David Katz

are be wind end in good, obviously trying have that I to end around look low? have quarter-out the at what I like Very what even to always you range happen going the to range and which to quarter-in, blocks to – business process am or the to the the to fluidity we it process lower some are guidance up just and businesses, so trying would integrated can we order the the you at wanted of would mention higher have blocks and rate above versus the would ask to to of what of the get build the would not the

Steve Weisz

EBITDA year about are guidance? You current talking

David Katz

Yes.

Steve Weisz

it to Purely relates as synergies?

David Katz

mean… No, I

Steve Weisz

growth More hit of first there acceleration of generally. the is in on Vistana timeshare lot I Legacy and Yes. here Steve of in I terms think a mean foremost, businesses. stuff the

the as last to turn corner there of So, about, talked couple over started he kind months. of the we here

that because to in of we’re $XX the a getting that are I’ve the the the you side, more and will the the us we’ve about as can the in $XX towards traction changes synergies but million long in the of rate, to the we synergy on And ownership a end end vacation underway, outperform overall made, of year. higher changes when our year tied continue financial HR of going on that’s come range a terms additional we get million think Clearly, lot towards good if model. go so, to till as of get way are think or later the in won’t past major system year, reporting at really some place I the into the towards to trending talked done and system about business

to continue in our and we get So, hard synergies outperform to place. work own those expectations and even try

David Katz

it. Got Thank you very much.

John Geller

Alright.

Operator

Our next question is from Patrick with Humphrey. your Scholes Please with SunTrust proceed Robinson question.

Steve Weisz

Hi, Patrick.

Patrick Scholes

Hi, good morning.

Steve Weisz

morning. Good

John Geller

Good morning.

Patrick Scholes

here. Couple of questions

First on at performing would Legacy-ILG below you say above acquisition? Vistana, standards your this for point, or underwriting has at been the it initial that

Steve Weisz

of I mean, it’s that in would material. think all – in We XXXX, in at size acquisition, I bit. not But I all the the half our about about when – talked –at all this and February. call things complexity considered, it underperformed that I fairness, a the we of the say at, think think last overall you

was. think performing we I So, it’s it above what thought

happy that that a business – diligence. we to going this not everything seen you we have you’re size, previously can’t in imagine opportunities additional might We of through you have as due I’m when report had see found some

terms other going our think we and kind there advantage take that thinking and how our life can forward. that in forward there about think bake we stuff guidance into we some So, of are we of going of

Patrick Scholes

a I’m – expect the a Marriott consumers briefly can let’s mentioned little a look get I you like, pilot that say, – thank pop-up color when what online, hypothetically booking see? digital question, would program. Okay, to considering maybe bit reservation, next wonder I I would pilot get a my ad, you. what more on Then

Steve Weisz

the going we and you going that’s are on exactly is presented midst to marriott.com, of cetera then you chose reservation I’m you promotion, should that in take the in ultimately and [ph]. things are the be do look, opportunity that we’ll is couple as or of take into getting to Without offer et pilot are of would one might door obviously you of executions going to a the booking particulars, a that the how a down concept different will to be that we to advantage of then honest, that lodging package an the path value result which of booking but

that’s the says, about the today, version same concept. think like this and electronic you it’s thing, opt would more where hey, – you is – transfer does – this the really out. agent opt of what way, So call than but in an It’s what which either a no or

Patrick Scholes

Okay, good.

seeing interest, the hairs Looking I When then EPS your I’m and And question splitting bit. if bit of a forward little here up last you guidance to sort little into implies that. share back share a or I couple in like thinking repurchases, raised looks and I that to this am than just of sense a assumptions more depreciation changes your raise about was Any repurchases. correctly? apologize

John Geller

till of share the the just No. the that repurchases done quarter. had end we It’s really

– couple – be could it’s So, a of

Patrick Scholes

Rounding.

John Geller

your terms numbers. in yes, Rounding, with

Patrick Scholes

Thank thank it. okay, that’s Okay, you. you,

John Geller

Patrick, you, yes. Thank

Steve Weisz

you. Thank

Operator

comes Wolfe next Research. Our with proceed question from Please Jared with your Shojaian question.

Steve Weisz

again. Hi,

Jared Shojaian

taking Hi, follow-up. for my thanks

$XXX about what were the million aren’t potential you So, proceeds business last insurance repurchase talking also quarter sure XXXX. interruption would be. of in stock million to available you to $XXX But ILG capacity

if also wondering and if positively you an things some I’m still question, you you about two-part the insurance have So, than more proceeds XXX on the expected? perhaps feel update or XXX good book to maybe

John Geller

No.

that. working the we through are of terms BI still In

that I second think expect quarter. to here we resolve the in

the are in meaningful under the claim. BI come getting ILG we still to But end. expect legacy amount towards a We

we are cash didn’t our overall there. guidance the – change of flow, terms we In free

reiterated at But some other we we we nothing return item about to has to it obviously is changed is about will return. interruption that We strategy in. for have invest that capital shareholders, continue to ILG, our overall should notwithstanding whatever the positive if and capital business be net on how a would think there look

Jared Shojaian

this you goods then since than line here think which opportunity is, me that your percent look then legacy your way my owners. sold, has the owners, to Marriott year multi-year is been what means I And run actually points I still inventory, of from is do as off, still base of spin believe point inventory can item statement And at today long positive owners you. continues, the every versus inventory spending [indiscernible] your repurchase owner historically you remind are number I your Thank of how Okay. lower a the a cost am sorry, owners? question on cash weeks flow just

Steve Weisz

Yes.

our is XX% me close. I Let legacy XXXX, I legacy we going MVC on it’s points. MVC XX% half – first go John of our this of owners. points be Around selling The that question, still of since will take MVC weeks second owners, Keep mind have part. swag, the been owners think let owners, directionally but but the legacy of are a nothing back in the are to

So whatever have percentage back. time anymore to mentioned program it years, buy would life you expect years because whatever people exit and shift and [indiscernible] has we that XX years, reason the XX over XX had product owned as to you our that decided that for it is the for event of

Florida turn sell around happens So inventory. then that take and our it we We based land to trust put when that and into those we points. then

– the percentage cadence to what finally When it’s doing will that imagine. drop becomes, time. over just that hard that number continue So to

they had We that well. implied point up out also an and Vistana you the to as that we businesses very, opportunity very modest program see will began We imagine. in as might as have buyback a

the the product on let inventory balance question the inventory the cost part was how will on the about long sheet works. John of first take of versus replacement which I whether Now, thing

John Geller

Yes.

different separately So have at now are and of the we products different brands this point because have to that managing. you take trust you kind

a we So Marriott had trust, inventory bit have vacation of in little there. larger ownership excess the on

is there to a the of bit So little there always benefit. get ability

that different has trust The trust Mexico Within Sheridan the Vistana inventory certain need our is product like Western a in flex the more. tourist little product trust has going we trusts down have, bit to here the other years. like near-term. in But multiple

do. balance years there still X So to next year what are said, I over the continue say at, will any only on efficient we I some more strive think We opportunities is year – looking we where right. the X here have or our always this. And to always to that’s is sheet. get the as is time And caveat given but in that we

been on not spending have managing think efficient and successful a very we on So over I inventory. basis capital

like approach of we that are off to the selling to new every what shelf. expect replace kind deal We

less to But for are We get spending the burn capital deal it efficiently. done it down. it we right can’t

it do will on We balance sheet.

on have still efficient the kind for We past capital done get them to full of that the but able and year.

will more as update continue of little of getting the couple a we here probably So we further years to road. and bit benefit of get down a

Steve Weisz

opportunity other thing think an to plan let just that well. Day have maybe as kind we in going regard here, an business me give which And fall. the we of some will one into visibility the then And multiyear forward a I add to on helpful do Investor more here you in basis

Jared Shojaian

the how second reportability Thank much for quarter much. One sense line? about should and will very as then us the we benefit to reportability the how you on Great. third quarter think fourth quarter really and for one give cadence a last me,

Steve Weisz

Sure.

quarter-to-quarter, little it it’s a cadence of your more of right of a revenue shoulder year in last be this you bit actually the and terms similar for think year first the when we typically about quarter reportability, has most should Christmas. because Thanksgiving between season when to think saw it you unfavorable So what in December,

reported Exiting month. strong absolute in get the that So, an the sales is on is and first not contract get a quarter, Those basis the are quarter. sales month. March very strongest your first closed

of benefit the the that. holidays break all getting starting, and are spring Easter sometimes You

when June another typically quarter, you stronger typically the going is than of second strong quarter, month think the growth March. into you and those but stronger So, and second have

influx, continue will to with get much have because turnaround see so third probably you you got you are going will a reportability fourth So, lesser a in to bit little some reportability now to a a you the then start slower, and in comparable to starts to review. the the September big the second quarter. is when negative extent quarter year-over-year favorable get quarter

year tried the guidance, fourth from the revenue we timing the at in kind it reasons the on So, quarter of a you of We to what be it’s revenue as the quarterly little away at end of our growth it stay one have reportability, quarter, look great and from for that got some results. the happens and always And can saw depending has on because obviously when the end happens last times giving quarter it’s of reportability just to the at in I model same year, issues. harder full bit, year. yes of nothing in year, previous the we last changed guess

Jared Shojaian

Great, that’s very Thank very you helpful. much.

Steve Weisz

Thank you.

John Geller

you. Thank

Operator

of reached turn end call to would gentlemen, this Steve we question-and-answer session. the At and I time closing like Weisz to comments. have for Ladies the back the

Steve Weisz

your will execute sales to with am am many and you that planned identified on for and shareholders the Thank XXXX how call have opportunities updating changes I started result EBITDA you beyond. but year we coming excited contract years next from on come. that performance, Rob. enjoy And very for even on us more growth excited our Thanks, for transformational fronts progress your ahead your the families, with the we many am lie in about I have to and and everyone strong the I to to time look adjusted and confident in these our finally performance vacation. today forward quarters. in robust the

Operator

This concludes today’s conference.

your lines You thank and for we at this disconnect time may your participation. you

Marriott Vacations Worldwide (VAC) 7 May 192019 Q1 Earnings call transcript