Marriott Vacations Off to Strong 2012 Start

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Marriott Vacations Worldwide Corporation (NYSE: VAC), the world's leading pure-play vacation ownership company recently spun off from Marriott International in late 2011, is off to a strong start as an independent company. At least that's one way to view the global timeshare company after Marriott recently reported its first quarter 2012 financial results.

Marriott said its first-ever quarterly report, for the period ending March 23, 2012, "reaffirmed the company's full-year outlook for 2012 based upon positive trends in important North America metrics to date.'' Among the first quarter 2012 highlights were:

• Marriott's North America segment increased gross contract sales by 18 percent or $130 million.
• Volume per guest (VPG) in the North America segment increased 18 percent year-over-year to $2,942.
• Total gross contract sales increased 6 percent to $154 million.
• Total revenues were $372 million, including $146 million from rentals, resort management and other services and financing.
• Adjusted EBITDA (earnings before interest expense, taxes, depreciation and amortization), as adjusted for organizational and separation related costs totaled $29 million. 
• Real estate inventory balance declined by $27 million in the first quarter.

Marriott reported net income of $9 million, or $0.24 a share, compared to reported net income of $19 million in the first quarter of 2011. First quarter 2012 adjusted net income totaled $10 million, flat to adjusted net income on a pro forma basis for the first quarter of 2011.

"We're pleased to report our first full quarter as a newly independent company shows 2012 is off to a strong start," said Stephen P. Weisz, Marriott Vacations' president and chief executive officer. " Double-digit growth in both VPG and contract sales in North America demonstrated solid marketing and sales execution, We also made significant progress toward improving our margin on the sale of vacation ownership products, or what we call development margin, and are well on our way toward our targeted development margin of over 12 percent for the year. This demonstrates the leverage in our business model and the progress we have made on this key strategic initiative." 

For the first quarter, total revenues were $372 million, including $86 million in cost reimbursements. Total revenues increased $1 million from the 2011 first quarter reflecting higher rental revenues, cost reimbursements and resort management and other services revenues. These increases were partially offset by lower revenue from the sale of vacation ownership products primarily due to revenue reportability and lower financing revenues from lower interest income on a declining notes receivable portfolio.

"Our contract sales growth in North America underscores the strong value proposition of our Marriott Vacation Club Destinations program," Weisz added. "Coupled with our focus on our cost structure, we are confident in the outlook for the balance of 2012. Given our first quarter growth came from North America, our largest and most profitable segment, we believe it is more likely that we will perform toward the higher end of our 2012 guidance range."

Marriott Vacations Worldwide was established as an independent, public company focusing primarily on vacation ownership experiences. Since entering the industry in 1984 as part of Marriott International, Inc., the company earned its position as a leader and innovator in vacation ownership products. Marriott Vacations Worldwide features more than 60 resorts and more than 420,000 owners and members. Its brands include: Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott.