Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | ILG, Inc. | |
Entity Central Index Key | 1,434,620 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 133,522,270 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Service and membership related | $ 119 | $ 108 | $ 340 | $ 327 |
Sales of vacation ownership products, net | 96 | 7 | 154 | 21 |
Rental and ancillary services | 92 | 20 | 181 | 66 |
Consumer financing | 23 | 1 | 37 | 4 |
Cost reimbursements | 88 | 38 | 189 | 114 |
Total revenues | 418 | 174 | 901 | 532 |
Operating costs and expenses: | ||||
Cost of service and membership related sales | 30 | 26 | 82 | 77 |
Cost of vacation ownership product sales | 31 | 1 | 56 | 13 |
Cost of sales of rental and ancillary services | 67 | 9 | 123 | 31 |
Cost of consumer financing | 4 | 7 | ||
Cost reimbursements | 88 | 38 | 189 | 114 |
Royalty fee expense | 9 | 1 | 16 | 3 |
Selling and marketing expense | 66 | 18 | 125 | 55 |
General and administrative expense | 56 | 40 | 148 | 111 |
Amortization expense of intangibles | 6 | 4 | 14 | 10 |
Depreciation expense | 14 | 4 | 28 | 13 |
Total operating costs and expenses | 371 | 141 | 788 | 427 |
Operating income | 47 | 33 | 113 | 105 |
Other income (expense): | ||||
Interest income | 1 | 1 | ||
Interest expense | (6) | (6) | (18) | (15) |
Gain on bargain purchase | (9) | 188 | ||
Other income (loss), net | (4) | 3 | (2) | 3 |
Equity in earnings from unconsolidated entities | 2 | 1 | 4 | 4 |
Total other income (expense), net | (17) | (2) | 173 | (7) |
Earnings before income taxes and noncontrolling interests | 30 | 31 | 286 | 98 |
Income tax (provision) benefit | 2 | (11) | (46) | (35) |
Net income | 32 | 20 | 240 | 63 |
Net income attributable to noncontrolling interests | (1) | (2) | (2) | |
Net income attributable to common stockholders | $ 32 | $ 19 | $ 238 | $ 61 |
Earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.26 | $ 0.33 | $ 2.55 | $ 1.06 |
Diluted (in dollars per share) | $ 0.25 | $ 0.33 | $ 2.53 | $ 1.05 |
Weighted average number of shares of common stock outstanding (in 000's): | ||||
Basic (in shares) | 124,762 | 57,477 | 93,157 | 57,369 |
Diluted (in shares) | 125,763 | 58,055 | 93,858 | 57,948 |
Dividends declared per share of common stock (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.36 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 32 | $ 20 | $ 240 | $ 63 |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments | (6) | (7) | (20) | (7) |
Total comprehensive income, net of tax | 26 | 13 | 220 | 56 |
Less: Net income attributable to noncontrolling interests, net of tax | (1) | (2) | (2) | |
Less: Other comprehensive loss attributable to noncontrolling interests | 1 | 1 | 4 | 1 |
Total comprehensive loss (income) attributable to noncontrolling interests | 1 | 2 | (1) | |
Comprehensive income attributable to common stockholders | $ 27 | $ 13 | $ 222 | $ 55 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS $ in Millions | Sep. 30, 2016USD ($) |
ASSETS | |
Cash and cash equivalents | $ 158 |
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | 102 |
Accounts receivable, net of allowance of $0.4 and $0.2, respectively | 92 |
Vacation ownership mortgages receivable, net of allowance of $1 and $0, respectively (including a net $59 and $0 in VIEs, respectively) | 86 |
Vacation ownership inventory | 342 |
Deferred membership costs | 8 |
Prepaid expenses and other current assets (including $3 and $0 of interest receivables in VIEs, respectively) | 66 |
Total current assets | 854 |
Restricted cash and cash equivalents (including $2 and $0 in VIEs, respectively) | 4 |
Vacation ownership mortgages receivable, net of allowance of $14 and $2, respectively (including a net $408 and $0 in VIEs, respectively) | 650 |
Investments in unconsolidated entities | 59 |
Property and equipment, net | 568 |
Goodwill | 559 |
Intangible assets, net | 466 |
Deferred membership costs | 9 |
Deferred income taxes | 5 |
Other non-current assets | 58 |
TOTAL ASSETS | 3,232 |
LIABILITIES: | |
Accounts payable, trade | 60 |
Current portion of securitized debt from VIEs | 123 |
Deferred revenue | 142 |
Income taxes payable | 3 |
Accrued compensation and benefits | 72 |
Member deposits | 7 |
Accrued expenses and other current liabilities (including a net $1 and $0 of interest payables in VIEs, respectively) | 216 |
Total current liabilities | 623 |
Long-term debt | 415 |
Securitized debt from VIEs | 344 |
Income taxes payable, non-current | 5 |
Other long-term liabilities | 50 |
Deferred revenue | 83 |
Deferred income taxes | 124 |
Total liabilities | 1,644 |
Redeemable noncontrolling interest | 1 |
Commitments and contingencies | |
STOCKHOLDERS' EQUITY: | |
Preferred stock—authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding | |
Common stock—authorized 300,000,000 shares; $0.01 par value; issued 133,522,339 and 59,853,933 shares, respectively | 1 |
Treasury stock— 8,810,081 and 2,363,324 shares at cost, respectively | (135) |
Additional paid-in capital | 1,257 |
Retained earnings | 480 |
Accumulated other comprehensive loss | (45) |
Total ILG stockholders' equity | 1,558 |
Noncontrolling interests | 29 |
Total equity | 1,587 |
TOTAL LIABILITIES AND EQUITY | $ 3,232 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | $ 102 | $ 17 |
Accounts receivable, allowance | 0.4 | 0.2 |
Vacation ownership mortgages receivable, allowance | 1 | 0 |
Vacation ownership mortgages receivable, net of allowance of $1 and $0, respectively (including a net $59 and $0 in VIEs, respectively) | 86 | 6 |
Prepaid expenses and other current assets (including $3 and $0 of interest receivables in VIEs, respectively) | 66 | 26 |
Restricted cash and cash equivalents (including $2 and $0 in VIEs, respectively) | 4 | |
Vacation ownership mortgages receivable, allowance | 14 | 2 |
Vacation ownership mortgages receivable, net of allowance of $14 and $2, respectively (including a net $408 and $0 in VIEs, respectively) | 650 | 26 |
Accrued expenses and other current liabilities (including a net $1 and $0 of interest payables in VIEs, respectively) | $ 216 | $ 56 |
Preferred stock, authorized shares | 25,000,000 | 25,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, authorized shares | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued shares | 133,522,339 | 59,853,933 |
Treasury stock, shares | 8,810,081 | 2,363,324 |
Series A Preferred Stock [Member] | ||
Preferred stock, authorized shares | 100,000 | 100,000 |
VIEs | ||
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | $ 33 | $ 0 |
Vacation ownership mortgages receivable, net of allowance of $1 and $0, respectively (including a net $59 and $0 in VIEs, respectively) | 59 | 0 |
Prepaid expenses and other current assets (including $3 and $0 of interest receivables in VIEs, respectively) | 3 | 0 |
Restricted cash and cash equivalents (including $2 and $0 in VIEs, respectively) | 2 | 0 |
Vacation ownership mortgages receivable, net of allowance of $14 and $2, respectively (including a net $408 and $0 in VIEs, respectively) | 408 | 0 |
Accrued expenses and other current liabilities (including a net $1 and $0 of interest payables in VIEs, respectively) | $ 1 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - 9 months ended Sep. 30, 2016 - USD ($) $ in Millions | Noncontrolling Interest [Member] | Parent [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 33 | $ 432 | $ 1 | $ (35) | $ 214 | $ 281 | $ (29) | $ 465 |
Balance (in shares) at Dec. 31, 2015 | 59,853,933 | 2,363,324 | 57,500,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 2 | 238 | 238 | $ 240 | ||||
Other comprehensive loss, net of tax | (4) | (16) | (16) | (20) | ||||
Non-cash compensation expense | 14 | 14 | 14 | |||||
Dividends paid to noncontrolling interest | (2) | (2) | ||||||
Issuance of common stock upon vesting of RSUs, net of withholding taxes | (1) | (1) | (1) | |||||
Issuance of common stock upon vesting of RSUs, net of withholding taxes (in shares) | 622,268 | |||||||
Fair value of restricted stock awards attributable to precombination services converted in connection with the Vistana acquisition | 2 | 2 | 2 | |||||
Issuance of restricted stock for converted shares in connection with the acquisition of Vistana (in shares) | 674,169 | |||||||
Issuance of common stock in connection with the Vistana acquisition | 1,029 | 1,029 | 1,029 | |||||
Issuance of common stock in connection with the Vistana acquisition (in shares) | 72,371,969 | |||||||
Change in excess tax benefits from stock-based awards | (2) | (2) | (2) | |||||
Dividends declared on common stock | (38) | 1 | (39) | (38) | ||||
Treasury stock purchases | (100) | $ (100) | (100) | |||||
Treasury stock purchases (in shares) | 6,446,757 | |||||||
Balance at Sep. 30, 2016 | $ 29 | $ 1,558 | $ 1 | $ (135) | $ 1,257 | $ 480 | $ (45) | $ 1,587 |
Balance (in shares) at Sep. 30, 2016 | 133,522,339 | 8,810,081 | 124,700,000 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 240 | $ 63 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization expense of intangibles | 14 | 10 |
Depreciation expense | 28 | 13 |
Provision for loan losses | 12 | 2 |
Non-cash compensation expense | 13 | 10 |
Deferred income taxes | (26) | 1 |
Equity in earnings from unconsolidated entities | (4) | (4) |
Gain on bargain purchase of Vistana acquisition | (188) | |
Changes in operating assets and liabilities: | ||
Restricted cash | (2) | 4 |
Accounts receivable | (6) | (8) |
Vacation ownership mortgages receivable | (12) | 2 |
Vacation ownership inventory | (63) | 5 |
Prepaid expenses and other current assets | 4 | 8 |
Prepaid income taxes and income taxes payable | 13 | 15 |
Accounts payable and other current liabilities | 50 | 5 |
Deferred income | (3) | 4 |
Other, net | 4 | 5 |
Net cash provided by operating activities | 74 | 135 |
Cash flows from investing activities: | ||
Acquisitions net of cash acquired | (77) | |
Investment in unconsolidated entity | (5) | |
Capital expenditures | (42) | (13) |
Purchases of trading investments | (2) | |
Investment in financing receivables | (2) | (1) |
Net cash used in investing activities | (128) | (14) |
Cash flows from financing activities: | ||
Proceeds from issuance of senior notes | 350 | |
Payments on revolving credit facility, net | (413) | |
Payments of debt issuance costs | (7) | (7) |
Proceeds from securitized debt | 375 | |
Payments on securitized debt | (56) | |
Increase in restricted cash | (26) | |
Payment to former Vistana owner for subsidiary financing obligation | (24) | |
Purchases of treasury stock | (100) | |
Dividend payments to stockholders | (37) | (21) |
Dividend payments to noncontrolling interest | (2) | (3) |
Withholding taxes on vesting of restricted stock units | (2) | (4) |
Excess tax benefits from stock-based awards | 2 | |
Net cash provided by (used) in financing activities | 121 | (96) |
Effect of exchange rate changes on cash and cash equivalents | (2) | (5) |
Net increase in cash and cash equivalents | 65 | 20 |
Cash and cash equivalents at beginning of period | 93 | 81 |
Cash and cash equivalents at end of period | 158 | 101 |
Supplemental disclosures of cash flow information: | ||
Issuance of stock in connection with Vistana acquisition | 1,031 | |
Interest, net of amounts capitalized | 14 | 5 |
Income taxes, net of refunds | $ 60 | $ 19 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION Organization ILG, Inc., (formerly known as Interval Leisure Group, Inc.), is a leading provider of professionally delivered vacation experiences and the exclusive global licensee for the Hyatt ® , Westin ® and Sheraton ® brands in vacation ownership. We operate in the following two segments: Exchange and Rental, and Vacation Ownership (VO). Exchange and Rental offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rentals, working with resort developers and operating vacation rental properties. The Exchange and Rental operating segment consists of Interval International (referred to as Interval), the Vistana Signature Network, the Hyatt Residence Club, the Trading Places International (known as TPI) operated exchange business, and Aqua-Aston Holdings, Inc. (referred to as Aqua-Aston). Vacation Ownership engages in sales, marketing, and financing of vacation ownership interests (VOIs); the management of vacation ownership resorts; and related services to owners and associations. The Vacation Ownership operating segment consists of the VOI sales and financing business of Vistana Signature Experiences (Vistana) and Hyatt Vacation Ownership (HVO) as well as the management related lines of business of Vistana, HVO, Vacation Resorts International (or VRI), TPI, and VRI Europe. ILG was incorporated as a Delaware corporation in May 2008 in connection with a plan by IAC/InterActiveCorp, or IAC, to separate into five publicly traded companies, referred to as the "spin-off." ILG commenced trading on The NASDAQ Stock Market in August 2008 under the symbol "IILG" and now trades under “ILG.” On May 11, 2016, we acquired the vacation ownership business of Starwood Hotels & Resorts Worldwide, or Starwood, known as Vistana. At closing, Starwood spun-off Vistana to its stockholders immediately prior to the merger of Vistana with and into a wholly owned subsidiary of ILG. In the merger, ILG issued approximately 72.4 million shares of ILG common stock to the holders who received Vistana common stock in the spin-off. Additionally, ILG directly purchased certain Mexican entities and a note receivable for total consideration of $123 million, which is subject to post-closing adjustment. In connection with the acquisition, Vistana entered into an exclusive, 80 - year global license agreement with Starwood for the use of the Westin® and Sheraton® brands in vacation ownership. Also, Vistana has the non-exclusive license for the existing St. Regis® and The Luxury Collection® vacation ownership properties and an affiliation with the Starwood Preferred Guest program. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of ILG’s management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not indicative of the results that may be expected for a full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10‑K. Seasonality Revenue at ILG is influenced by the seasonal nature of travel. Within our Exchange and Rental segment, our vacation exchange businesses recognize exchange and Getaway revenue based on confirmation of the vacation, with the first quarter generally experiencing higher revenue and the fourth quarter generally experiencing lower revenue. Our vacation rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue as a result of increased leisure travel to our Hawaii-based managed properties during these periods, and the second and fourth quarters generally generating lower revenue. Within our Vacation Ownership segment, our sales and financing business experiences a modest impact from seasonality, with higher sales volumes during the traditional vacation periods. Our vacation ownership management businesses by and large do not experience significant seasonality. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2015 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2016 other than the following additional policies adopted as part of our acquisition of Vistana in the second quarter of 2016: Revenue recognition Vacation Ownership If construction of the vacation ownership product is not complete, we determine the portion of revenues to recognize based upon the percentage of completion method, which includes judgments and estimates, including total project costs to complete. Revenue deferred under the percentage of completion calculations is included in deferred revenues on the condensed consolidated balance sheet as of September 30, 2016, and associated direct selling costs are deferred as prepaid expenses within prepaid expenses and other current assets. Vacation Ownership Inventory and Cost of Sales Our inventory consists of completed vacation ownership products and vacation ownership products under construction. We carry our inventory at the lower of cost or fair value, less expected costs to sell, which can result in impairment charges and/or recoveries of previous impairments. Real Estate—Time Sharing Activities , which defines a specific application of the relative sales value method for reducing vacation ownership inventory and recording cost of sales. Also, pursuant to the guidance for accounting for real estate time-sharing transactions, we do not reduce inventory for the cost of vacation ownership products related to anticipated credit losses (accordingly, no adjustment is made when inventory is reacquired upon default of originated receivables). These standards provide for changes in estimates within the relative sales value calculations to be accounted for as real estate inventory true-ups, which we refer to as cost of sales true-ups, and are recorded in cost of vacation ownership product sales to retrospectively adjust the margin previously recorded subject to those estimates. These cost of sales true-ups could result in material adjustments to cost of vacation ownership product sales in a given period. Costs Incurred to Sell Vacation Ownership Products We capitalize and defer direct costs attributable to the sale of vacation ownership products until the sales are recognized, in accordance with the guidelines of ASC Topic 978, Real Estate—Time Sharing Activities . All such capitalized costs are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets, and are subsequently reflected in sales and marketing expense when recognized. If a contract is cancelled, we charge the unrecoverable direct selling costs to expense. In accordance with ASC 978, indirect sales and marketing costs are expensed as incurred. Vacation Ownership Mortgages Receivable and Allowance for Loan Losses The collection activity associated with our securitized vacation ownership notes receivable determines the amount of our monthly repayments against our securitized debt. Collection activity includes contractual payments due and prepayments. In addition, defaulted loans are generally removed from the securitized pool and are substituted or repurchased, while upgraded loans are repurchased, for debt repayment purposes. The securitized debt is non-recourse without a specific repayment schedule. As the amount of each principal payment is contingent on the cash flows from underlying vacation ownership mortgages receivable in a given period, we have not disclosed future contractual debt repayments. Additionally, our vacation ownership mortgages receivable securitization agreements allow us to receive the net excess cash flows (spread between the collections on the notes and payments for third party obligations as defined in the securitization agreements) from the VIEs provided we do not meet certain triggers related to default levels and collateralization of the securitized pool, as discussed in Note 10. Accounting Estimates ILG’s management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying condensed consolidated financial statements primarily include: · the recovery of long‑lived assets as well as goodwill and other intangible assets; · purchase price allocations of business combinations; · loan loss reserves for vacation ownership mortgages receivable; · accounting for acquired vacation ownership mortgages receivable; · revenue recognition pertaining to sales of vacation ownership products pursuant to the percentage of completion method; · cost of vacation ownership product sales; · the accounting for income taxes including deferred income taxes and related valuation allowances; · the determination of deferred revenue and membership costs; · and the determination of stock‑based compensation. In the opinion of ILG’s management, the assumptions underlying the historical condensed consolidated financial statements of ILG and its subsidiaries are reasonable. Earnings per Share Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units (“RSUs”) and restricted stock using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include less than 0.1 million RSUs and shares of restricted stock, and 0.4 million RSUs for the three months ended September 30, 2016 and 2015, respectively, and 0.4 million RSUs and shares of restricted stock, and 0.5 million RSUs and stock options for the nine months ended September 30, 2016 and 2015, respectively, as the effect of their inclusion would have been antidilutive to earnings per share. In connection with the 2008 spin-off of ILG from IAC, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2016 and 2015, there were no stock options outstanding. The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Basic weighted average shares of common stock outstanding Net effect of common stock equivalents assumed to be vested related to RSUs and restricted stock Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees — — — Diluted weighted average shares of common stock outstanding Earnings per share for the three and nine months ended September 30, 2016 and 2015 are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income attributable to common stockholders $ $ $ $ Weighted average number of shares of common stock outstanding: Basic Diluted Earnings per share attributable to common stockholders: Basic $ $ $ $ Diluted $ $ $ $ Recent Accounting Pronouncements With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2015 Annual Report on Form 10‑K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement. In October 2016, the FASB issued ASU 2016-17, “Consolidation (Topic 810),” to amend the existing guidance issued with ASU 2015-02. This ASU is being issued to amend the consolidation guidance on how a reporting entity, that is the single decision maker of a VIE, should treat indirect interests in the entity held through related parties that are under common control with the reporting entity, when determining whether it is the primary beneficiary of that VIE. The update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Entities that already have adopted the amendments in ASU 2015-02 are required to apply the amendments in this ASU, retrospectively beginning with the fiscal year in which the amendments in ASU 2015-02 initially were applied. We are currently assessing the future impact of this accounting standard update on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”) as part of the Board’s initiative to reduce complexity in accounting standards. This ASU eliminates an exception in ASC 740, which prohibits the immediate recognition of income tax consequences of intra-entity asset transfers other than inventory. Under ASU 2016-16, entities will be required to recognize the immediate current and deferred income tax effects of intra-entity asset transfers, which often involve a subsidiary of a company transferring intellectual property to another subsidiary. For public entities, the new guidance will be effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. This ASU’s amendments should be applied on a modified retrospective basis, recognizing the effects in retained earnings as of the beginning of the year of adoption. We are currently assessing the future impact of this accounting standard update on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230).” This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under existing guidance. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied using a retrospective transition method to each period presented. We are currently assessing the future impact of this accounting standard update on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326).” This ASU amends the Board’s guidance on the impairment of financial instruments. The ASU adds to GAAP an impairment model (known as the current expected credit losses model) that is based on an expected losses model rather than an incurred losses model. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The ASU is also intended to reduce the complexity of GAAP by decreasing the number of impairment models that entities use to account for debt instruments. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We do not anticipate the adoption of this guidance will have a material impact on our consolidated financial statements as we currently apply an expected losses model against our outstanding vacation ownership mortgages receivable. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2016-12”). The purpose of ASU 2016-12 is to address certain issues identified to improve Topic 606 by enhancing guidance on assessing collectability, presentation of sales taxes and other similar taxes collected from customers, noncash consideration and completed contracts and contract modifications at transition. The amendments in this Update affect the guidance in ASU 2014-09, which is not yet effective. The amendments are effective for fiscal years beginning after December 15, 2017 (and interim periods within that period). Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Given the complexities of this new revenue recognition standard (Topic 606), we are unable to determine, at this time, whether adoption of this standard and its associated ASUs will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact to our consolidated financial statements. In March 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The purpose of ASU 2016-10 is to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance (while retaining the related principles for those areas). Also, in March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” (“ASU 2016-08”). The amendments in ASU 2016-08 serve to clarify the implementation guidance on principal vs. agent considerations. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer to promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in these two ASUs are effective for fiscal years beginning after December 15, 2017 (and interim periods within that period). Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Given the complexities of this new revenue recognition standard (Topic 606), we are unable to determine, at this time, whether adoption of this standard and its associated ASUs will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact to our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718)” (“ASU 2016-03”), to simplify the current accounting for Stock Compensation. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new guidance will be effective for public entities for annual periods beginning after December 15, 2016 and interim periods therein. Early adoption of ASU 2016‑09 as of its issuance is permitted. We are currently assessing the future impact of adopting the new stock compensation standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323)” (“ASU 2016-07”). The amendments in this ASU require, among other items, that an equity method investor add the cost of acquiring an additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting, as well as eliminates certain other existing requirements. ASU 2016-07 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that would result in adoption of the equity method and earlier application is permitted. We are currently assessing the future impact of this accounting standard update on our consolidated financial statements. Adopted Accounting Pronouncements In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805).” The purpose of the ASU is to simplify the accounting for measurement-period adjustments related to business combinations. ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period, in the reporting period in which the adjustment amounts are determined. The amendments in this update are effective for fiscal years beginning after December 31, 2015, including interim periods within the fiscal year and should be applied prospectively. The adoption of this guidance did not have a material impact on our consolidated financial statements other than the impact of an adjustment in the third quarter of 2016 to the gain on bargain purchase associated with the Vistana acquisition in the second quarter of 2016. This impact is summarized as follows: As Reported Recasted for Subsequent Quarter Gain on Bargain Purchase Adjustment Three Months Ended Six Months Ended Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2016 June 30, 2016 June 30, 2016 June 30, 2016 Net income attributable to common stockholders $ $ $ $ EPS - Basic $ $ $ $ EPS - Diluted $ $ $ $ In April 2015, the FASB issued ASU 2015-05, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”). The FASB amended its guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The guidance also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead, entities will account for these arrangements as licenses of intangible assets. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”). The amendments in this topic are intended to improve and simplify targeted areas of the consolidation guidance. 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 ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). The adoption of this guidance did not have a material impact on our consolidated financial statements. In January 2015, the FASB issued ASU 2015‑01, “Income Statement—Extraordinary and Unusual Items (Subtopic 225‑20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015‑01”). ASU 2015‑01 eliminates from generally accepted accounting principles (GAAP) the concept of extraordinary items as part of the FASB’s initiative to reduce complexity in accounting standards (the Simplification Initiative). Existing guidance requires a reporting entity to separately classify, present and disclose extraordinary events and transactions if the event or transaction meets both of the following criteria for extraordinary item classification: unusual nature and infrequency of occurrence. Under ASU 2015‑01, the concept of extraordinary item is eliminated from the ASC Master Glossary and replaced with definitions for infrequency of occurrence and unusual nature. The presentation and existing disclosure guidance for items that are unusual in nature or occur infrequently are retained and expanded to include items that are both unusual in nature and occur infrequently. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). A reporting entity may apply the amendments in the ASU prospectively and also may apply the amendments retrospectively to all prior periods presented in the financial statements. The adoption of this guidance did not have a material impact on our consolidated financial statements. In June 2014, the FASB issued ASU 2014‑12, “Compensation—Stock Compensation (Topic 718): Accounting for Share‑Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014‑12”). ASU 2014‑12 clarifies that entities should treat performance targets that can be met after the requisite service period of a share‑based payment award as performance conditions that affect vesting. No new disclosures are required under ASU 2014‑12. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within that period). In addition, all entities will have the option of applying the guidance either prospectively or retrospectively. The adoption of this guidance, on a prospective basis, did not have a material impact on our consolidated financial statements. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2016 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | NOTE 3—BUSINESS COMBINATION On May 11, 2016, we completed the acquisition of Vistana from wholly‑owned subsidiaries of Starwood Hotels & Resorts Worldwide, Inc. as discussed in Note 1 to these condensed consolidated financial statements. The Vistana acquisition is recorded on our condensed consolidated balance sheet as of May 11, 2016 based upon estimated fair values as of such date. The results of operations related to this business are included in our condensed consolidated statements of income beginning on May 12, 2016 and within our Exchange and Rental and Vacation Ownership segments for segment reporting purposes on the basis of its respective business activities. Purchase Price Allocation The following table presents the preliminary allocation of total purchase price consideration to the assets acquired and liabilities assumed, based on their estimated fair values as of their respective acquisition dates (in millions): Preliminary PPA Adjustments to PPA (3) Revised Preliminary PPA Cash $ $ - $ Vacation ownership inventory - Vacation ownership mortgages receivable - Other current assets Intangibles - Property plant and equipment Other non-current assets - Deferred revenue - Securitized debt - Other current liabilities (2) Other non-current liabilities Gain on bargain purchase (1) Net assets acquired $ $ — $ (1) Gain on bargain purchase represents the excess of the fair value of the net tangible and intangible assets acquired over the purchase price. This gain of $188 million is presented within Other income (expense), net, in our condensed consolidated statement of income for the nine months ended September 30, 2016, and includes a negative adjustment of $9 million in the third quarter period. The existence of a gain on bargain purchase pertaining to this transaction is principally related to the decrease in our stock price leading up to the acquisition date. (2) Includes a $24 million accrual pertaining to a dividend declared by a subsidiary of Vistana to Starwood prior to our acquisition date which was settled subsequent to the acquisition closing. (3) Represents adjustments to the preliminary purchase price allocation first presented in our June 30, 2016 Form 10-Q resulting from our ongoing activities, including our reassessment of assets acquired and liabilities assumed, with respect to finalizing our purchase price allocation for this acquisition. The purchase price allocated to the fair value of identifiable intangible assets associated with the Vistana acquisition is as follows (in millions): Fair Value Useful Life (years) Resort management contracts $ Customer relationships Other < 1 Total $ In connection with the Vistana acquisition we recorded identifiable intangible assets of $241 million, all of which were definite-lived intangible assets, related to Vistana’s membership base in their Vistana Signature Network (described in table above as customer relationships) and their resort management contracts. The amortization period, as of the respective acquisition date, for the definite-lived resort management contracts and customer relationships intangible assets noted in the table above is 26 and 22 years, respectively. The valuation of the assets acquired and liabilities assumed in connection with this acquisition was based on fair values at the acquisition date. The assets purchased and liabilities assumed for the Vistana acquisition have been reflected in the accompanying condensed consolidated balance sheet as of September 30, 2016. However, given the circumstances of this acquisition which closed in the middle of the second quarter, as well as the size and complexity of the transaction, the entire purchase price allocation disclosed herein (as well as the related gain on bargain purchase) is considered provisional at this time and subject to adjustment to reflect new information obtained about factors and circumstances that existed as of the acquisition date that if known would have affected the measurement of the amounts recognized as of that date, while the measurement period remains open. Results of operations Revenue and earnings before income taxes and noncontrolling interests related to the Vistana acquisition was recognized in our condensed consolidated statements of income totaling $239 million and $12 million for the three months ended September 30, 2016 and $361 million and $22 million for nine months ended September 30, 2016. Transaction costs, consisting primarily of professional fees, directly related to this acquisition and expensed as incurred totaled $3 million and $18 million for the three and nine months ended September 30, 2016, respectively, and are classified within the general and administrative expense line item in our condensed consolidated statements of income included herein. Pro forma financial information (unaudited) The following unaudited pro forma financial information presents the consolidated results of ILG and Vistana as if the acquisition had occurred on January 1, 2015. The pro forma results presented below for the three and nine months ended September 30, 2016 and 2015 are based on the historical financial statements of ILG and Vistana, adjusted to reflect the purchase method of accounting, with ILG as accounting acquirer. The pro forma information is not necessarily indicative of the consolidated results of operations that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company. It does not reflect cost savings expected to be realized from the elimination of certain expenses and from synergies expected to be created or the costs to achieve such cost savings or synergies, if any. Income taxes do not reflect the amounts that would have resulted had ILG and Vistana filed consolidated income tax returns during the periods presented. Pro forma adjustments reflect non-recurring adjustments in 2015 of $188 million pertaining to the gain on bargain purchase discussed above and a $11 million and $4 million reduction in revenue for the three and nine months ended September 30, 2015, respectively, related to the remeasurement of deferred revenue balances as part of purchase accounting. Additionally, net income for the three and nine months ended September 30, 2015 were adjusted for other non-recurring items such as the remeasurement of deferred expenses. Pro forma adjustments are tax-effected at ILG's estimated statutory tax rate of 37.2% for the 2015 periods and 35% for the 2016 periods, with the exception of the $188 million gain which is not subject to income taxation. Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2015 2016 2015 2016 Revenue $ $ $ $ Net income attributable to common stockholders $ $ $ $ Earnings per share: Basic $ $ $ $ Diluted $ $ $ $ |
RESTRICTED CASH
RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2016 | |
RESTRICTED CASH | |
RESTRICTED CASH | NOTE 4—RESTRICTED CASH Restricted cash consists of the following (in millions): September 30, December 31, 2016 2015 Escrow deposits on vacation ownership products $ $ Securitization VIEs — Other Total restricted cash $ $ Restricted cash associated with escrow deposits on vacation ownership products represents amounts that are held in escrow until statutory requirements for release are satisfied, at which time that cash is no longer restricted. Restricted cash of securitization VIEs represents cash held in accounts related to vacation ownership mortgages receivable securitizations, which is generally used to pay down securitized vacation ownership debt in the period following the quarter in which the cash is received. As of September 30, 2016, this balance also includes $19 million of cash collateral pending transfer of additional vacation ownership mortgages receivable into the September 2016 securitized pool, as described in Note 13. |
VACATION OWNERSHIP MORTGAGES RE
VACATION OWNERSHIP MORTGAGES RECEIVABLE | 9 Months Ended |
Sep. 30, 2016 | |
VACATION OWNERSHIP MORTGAGES RECEIVABLE | |
VACATION OWNERSHIP MORTGAGES RECEIVABLE | NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE Vacation ownership mortgages receivable is comprised of various mortgage loans related to our financing of vacation ownership interval sales. As part of our acquisitions of HVO and Vistana, we acquired existing portfolios of vacation ownership mortgages receivable. These loans are accounted for using the expected cash flows method of recognizing discount accretion based on the acquired loans’ expected cash flows pursuant to ASC 310-30, “Loans acquired with deteriorated credit quality.” At acquisition, we recorded these acquired loans at fair value, including a credit discount or premium, as applicable, which is accreted as an adjustment to yield over the loans’ estimate life. Originated loans as of September 30, 2016 and December 31, 2015 represent vacation ownership mortgages receivable originated by ILG, or more specifically our Vacation Ownership segment, subsequent to the acquisitions of HVO and Vistana on October 1, 2014 and May 11, 2016, respectively. Vacation ownership mortgages receivable carrying amounts as of September 30, 2016 and December 31, 2015 were as follows (in millions): September 30, December 31, 2016 2015 Securitized Unsecuritized (2) Total Securitized Unsecuritized (2) Total Acquired vacation ownership mortgages receivable (1) $ $ $ $ — $ $ Originated vacation ownership mortgages receivable (1) — Less allowance for loan losses on originated loans — Net vacation ownership mortgages receivable $ $ $ $ — $ $ (1) At various interest rates with varying payment terms through 2030 for acquired receivables and through 2030 for originated receivables (2) As of September 30, 2016, $13 million of unsecuritized vacation ownership receivables were not eligible for securitization. Additionally, as part of the September 2016 securitization described in Note 13, approximately $19 million of currently unsecuritized receivables may be added in the future to the September 2016 securitized pool and thereby releasing the same amount from restricted cash. The fair value of our acquired loans as of the respective acquisition dates were determined by use of a discounted cash flow approach which calculates a present value of expected future cash flows based on scheduled principal and interest payments over the term of the respective loans, while considering anticipated defaults and early repayments determined based on historical experience. Consequently, the fair value of these acquired loans recorded on our consolidated balance sheet as of the acquisition date includes an estimate for future loan losses which becomes the historical cost basis for that existing portfolio going forward. As of September 30, 2016 and December 31, 2015, the contractual outstanding balance of the acquired loans, which represents contractually-owed future principal amounts, was $529 million and $26 million, respectively. The change as of September 30, 2016 from year-end reflects the acquired loans pertaining to the Vistana acquisition. The table below (in millions) presents a rollforward from December 31, 2015 of the accretable yield (interest income) expected to be earned related to our acquired loans, as well as the amount of non-accretable difference at the end of the period. Nonaccretable difference represents estimated contractually required payments in excess of estimated cash flows expected to be collected. The accretable yield represents the excess of estimated cash flows expected to be collected over the carrying amount of the acquired loans. Nine Months Ended Accretable Yield September 30, 2016 Balance, beginning of period $ Vistana acquired accretable yield Accretion Reclassification between nonaccretable difference Balance, end of period $ Nonaccretable difference, end of period balance $ The accretable yield is recognized into interest income (within consolidated revenue) over the estimated life of the acquired loans using the level yield method. The accretable yield may change in future periods due to changes in the anticipated remaining life of the acquired loans, which may alter the amount of future interest income expected to be collected, and changes in expected future principal and interest cash collections which impacts the nonaccretable difference. Vacation ownership mortgages receivable as of September 30, 2016 are scheduled to mature as follows (in millions): Vacation Ownership Mortgages Receivable Acquired Originated Twelve month period ending September 30, Securitized Loans Unsecuritized Loans Securitized Loans Unsecuritized Loans Total 2017 $ $ $ — $ $ 2018 2019 2020 2021 2022 and thereafter Total Plus: net premium on acquired loans (1) — — Less: allowance for losses — — Net vacation ownership mortgages receivable $ $ $ $ $ Weighted average stated interest rate as of September 30, 2016 13.3% 13.3% 13.3% 13.3% Range of stated interest rates as of September 30, 2016 7.75% to 15.9% 10.9% to 16.9% (1) The difference between the contractual principal amount of acquired loans of $529 million and the net carrying amount of $612 million as of September 30, 2016 is related to the application of ASC 310-30. Collectability We assess our vacation ownership mortgages receivable portfolio of loans for collectability on an aggregate basis. Estimates of uncollectability pertaining to our originated loans are recorded as provisions in the vacation ownership mortgages receivable allowance for losses. For originated loans, we record an estimate of uncollectability as a reduction of sales of vacation ownership intervals in the accompanying condensed consolidated statements of income at the time revenue is recognized on a vacation ownership interval sale. We evaluate our originated loan portfolio collectively as they are largely homogeneous, smaller-balance, vacation ownership mortgages receivable. We use a technique referred to as static pool analysis, which tracks uncollectibles over the entire life of those mortgages receivable, as the basis for determining our general reserve requirements on our vacation ownership mortgages receivable. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio, including defaults, aging, and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. As of September 30, 2016, allowance for losses of $15 million for uncollectability was recorded to the vacation ownership mortgages receivable allowance for losses related solely to our originated loans. Our acquired loans are remeasured at period end based on expected future cash flows which uses an estimated measure of anticipated defaults. We consider the loan loss provision on our originated loans and estimates of defaults used in the remeasurements of our acquired loans to be adequate and based on the economic environment and our assessment of the future collectability of the outstanding loans. We use the origination of the notes by brand (Westin, Sheraton, Hyatt and other) and the FICO scores of the buyers as the primary credit quality indicators to calculate the loan loss reserve for our originated vacation ownership mortgages receivable, as we believe there is a relationship between the default behavior of borrowers and the brand associated with the vacation ownership property they have acquired, supplemented by the FICO scores of the buyers. In addition to quantitatively calculating the loan loss reserve based on our static pool analysis, we supplement the process by evaluating certain qualitative data, including the aging of the respective receivables, current default trends by brand and origination year and various macroeconomic indicators. At September 30, 2016, the weighted average FICO score within our consolidated loan pools was 711 based upon the outstanding loan balance at time of origination. The average estimated rate for all future defaults for our consolidated outstanding pool of loans as of September 30, 2016 was 10.0%. Balances of our vacation ownership mortgages receivable by brand and by FICO score (at time of loan origination) were as follows (in millions): As of September 30, 2016 700+ 600-699 <600 No Score (1) Total Westin $ $ $ $ $ Sheraton Hyatt Other - Vacation ownership mortgages receivable, gross $ $ $ $ $ (1) Mortgages receivable with no FICO score primarily relate to non-U.S. resident borrowers. On an ongoing basis, we monitor credit quality of our vacation ownership mortgages receivable portfolio based on payment activity as follows: · Current —The consumer’s note is in good standing as payments and reporting are current per the terms contractually stipulated in the agreement. · Delinquent —We consider a vacation ownership mortgage receivable to be delinquent based on the contractual terms of each individual financing agreement. · Non‑performing —Our vacation ownership mortgages receivable are generally considered non‑performing if interest or principal is more than 30 days past due. All non‑performing loans are placed on non‑accrual status and we do not resume interest accrual until the receivable becomes contractually current. We apply payments we receive for vacation ownership notes receivable on non‑performing status first to interest, then to principal, and any remainder to fees. In the event of a default, we generally have the right to recover the mortgaged VOIs and consider loans to be in default upon reaching 120 days outstanding. Our aged analysis of delinquent vacation ownership mortgages receivable and the gross balance of vacation ownership mortgages receivable greater than 120 days past‑due as of September 30, 2016 and December 31, 2015 for our originated loans is as follows (in millions): Delinquent Defaulted (1) Receivables Current 30-59 Days 60-89 Days 90-119 Days ≥ 120 Total Delinquent & Defaulted Originated Loans September 30, 2016 $ $ $ $ — $ — $ — $ December 31, 2015 $ $ $ — $ — $ — $ — $ — (1) Mortgages receivable equal to or greater than 120 days are considered defaulted and have been fully reserved in our loan loss reserve for originated loans. |
VACATION OWNERSHIP INVENTORY
VACATION OWNERSHIP INVENTORY | 9 Months Ended |
Sep. 30, 2016 | |
VACATION OWNERSHIP INVENTORY | |
VACATION OWNERSHIP INVENTORY | NOTE 6—VACATION OWNERSHIP INVENTORY Vacation ownership inventory primarily consists of unsold vacation ownership intervals that are available for sale in their current form and vacation ownership projects under construction. In connection with the acquisition of Vistana on May 11, 2016, we acquired $221 million in unsold vacation ownership inventory stated at fair value. As of September 30, 2016 and December 31, 2015, vacation ownership inventory is comprised of the following (in millions): September 30, December 31, 2016 2015 Completed unsold vacation ownership interests $ $ Vacation ownership products construction in process — Other — Total inventory $ $ The change in inventory balances as of September 30, 2016 compared to December 31, 2016 principally pertains to the acquisition of Vistana on May 11, 2016. |
INVESTMENTS IN UNCONSOLIDATED E
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | NOTE 7—INVESTMENTS IN UNCONSOLIDATED ENTITIES Our investments in unconsolidated entities, recorded under the equity method of accounting in accordance with guidance in ASC 323, “Investments—Equity Method and Joint Ventures,” primarily consists of an ownership interest in Maui Timeshare Venture, LLC, a joint venture to develop and operate a vacation ownership resort in the state of Hawaii and Vistana’s Harborside at Atlantis joint venture, which performs sales, marketing and management services for a vacation ownership resort in the Bahamas. These joint ventures were acquired in connection with our acquisitions of HVO and Vistana and were recorded at fair value on the respective acquisition dates. Our equity income from investments in unconsolidated entities, recorded in equity in earnings from unconsolidated entities in the accompanying condensed consolidated statement of income, was $2 and $1 million for the three months ended September 30, 2016 and 2015, respectively and $4 million each period, for the nine months ended September 30, 2016 and 2015, respectively. The ownership percentages of the Maui Timeshare Venture and Harborside investments are 33% and 50%, respectively, and ownership percentages of the other investments range from 25% to 50%. The carrying value of our investments in unconsolidated entities as of September 30, 2016 and December 31, 2015 were as follows (in millions): September 30, December 31, 2016 2015 Maui Timeshare Venture, LLC $ $ Harborside at Atlantis joint venture — Other Total $ $ The change from December 31, 2015 principally represents the equity interest acquired in Harborside at Atlantis in connection with the Vistana acquisition in the second quarter and, within Other, an investment made in the first quarter in a fee-for-service, real-estate brokerage firm that specializes in reselling resort timeshare properties on behalf of independent homeowners’ associations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 8—PROPERTY AND EQUIPMENT Property and equipment, net is as follows (in millions): September 30, December 31, 2016 2015 Computer equipment $ $ Capitalized software (including internally developed software) Land, buildings and leasehold improvements Land held for development — Furniture, fixtures and other equipment Construction projects in progress — Other projects in progress Less: accumulated depreciation and amortization Total property and equipment, net $ $ |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 9—GOODWILL AND OTHER INTANGIBLE ASSETS Pursuant to FASB guidance as codified within ASC 350, “Intangibles—Goodwill and Other,” goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. ILG is comprised of two operating and reportable segments: Exchange and Rental, and Vacation Ownership, each of which contain two reporting units as follows: OPERATING SEGMENTS Exchange and Rental Vacation Ownership Exchange reporting unit VO management reporting unit Rental reporting unit VO sales and financing reporting unit The following tables present the balance of goodwill by reporting unit, including the changes in carrying amount of goodwill as of September 30, 2016 and December 31, 2015 (in millions): Foreign Balance as of Currency Goodwill Balance as of January 1, 2016 Additions Deductions Translation Impairment September 30, 2016 Exchange $ $ — $ — $ — $ — $ Rental — — — — VO management — — — VO sales and financing — — — — Total $ $ — $ — $ $ — $ Foreign Balance as of Currency Goodwill Balance as of January 1, 2015 Additions Deductions Translation Impairment December 31, 2015 Exchange $ $ — $ — $ — $ — $ Rental — — — — VO management — — — VO sales and financing — — — — Total $ $ — $ — $ $ — $ Other Intangible Assets The balance of other intangible assets, net as of September 30, 2016 and December 31, 2015 is as follows (in millions): September 30, December 31, 2016 2015 Intangible assets with indefinite lives $ $ Intangible assets with definite lives, net Total intangible assets, net $ $ The $10 million change in our indefinite-lived intangible assets during the nine months ended September 30, 2016 reflects the associated foreign currency translation of intangible assets carried on the books of an ILG entity whose functional currency is not the US dollar. At September 30, 2016 and December 31, 2015, intangible assets with indefinite lives relate to the following (in millions): September 30, December 31, 2016 2015 Resort management contracts $ $ Trade names and trademarks Total $ $ At September 30, 2016, intangible assets with definite lives relate to the following (in millions): Cost Accumulated Amortization Net Customer relationships $ $ $ Purchase agreements — Resort management contracts Technology — Other Total $ $ $ At December 31, 2015, intangible assets with definite lives relate to the following (in millions): Cost Accumulated Amortization Net Customer relationships $ $ $ Purchase agreements — Resort management contracts Technology — Other Total $ $ $ In accordance with our policy on the recoverability of long-lived assets, we review the carrying value of all long-lived assets, primarily property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of a long-lived asset (asset group) may be impaired. For the nine months ended September 30, 2016 and the year ended December 31, 2015, we did not identify any events or changes in circumstances indicating that the carrying value of a long lived asset (or asset group) may be impaired; accordingly, a recoverability test was not warranted. Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $6 million and $4 million for the three months ended September 30, 2016 and 2015, respectively, and $14 million and $10 million for the nine months ended September 30, 2016 and 2015, respectively. Based on September 30, 2016 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in millions): Twelve month period ending September 30, 2017 $ 2018 2019 2020 2021 2022 and thereafter $ |
CONSOLIDATED VARIABLE INTEREST
CONSOLIDATED VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2016 | |
CONSOLIDATED VARIABLE INTEREST ENTITIES | |
CONSOLIDATED VARIABLE INTEREST ENTITIES | NOTE 10—CONSOLIDATED VARIABLE INTEREST ENTITIES We have variable interests in the entities associated with Vistana’s three outstanding securitization transactions. As these securitizations consist of similar, homogenous loans, they have been aggregated for disclosure purposes. We applied the variable interest model and determined we are the primary beneficiary of these VIEs and, accordingly, these VIEs are consolidated in our results. In making that determination, we evaluated the activities that significantly impact the economics of the VIEs, including the management of the securitized vacation ownership mortgages receivable and any related non-performing loans. We are the servicer of the securitized vacation ownership mortgages receivable. We also have the option, subject to certain limitations, to repurchase or replace vacation ownership mortgages receivable that are in default at their outstanding principal amounts. Historically, Vistana has been able to resell the vacation ownership products underlying the vacation ownership mortgages repurchased or replaced under these provisions without incurring significant losses. We also hold the risk of potential loss (or gain), as we are the last to be paid out by proceeds of the VIEs under the terms of the agreements. As such, we hold both the power to direct the activities of the VIEs and obligation to absorb the losses (or benefits) from the VIEs. The securitization agreements are without recourse to us, except for breaches of representations and warranties with material adverse effect to the holders. We have the right to substitute loans for, or repurchase, defaulted loans at our option, subject to certain limitations. Based on industry practice and Vistana’s past practices, we currently expect that we will exercise this option. The following table shows assets which are collateral for the related obligations of the variable interest entities, included in our consolidated balance sheets (in millions): Vacation Ownership Notes Receivable Securitization (1) September 30, 2016 Assets Restricted cash $ Interest receivable Vacation ownership mortgages receivable, net Total $ Liabilities Interest payable $ Securitized debt Total $ (1) The creditors of these entities do not have general recourse to us. Upon transfer of vacation ownership mortgage receivable, net to the VIEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the VIE creditors. The VIEs utilize trusts which have ownership of cash balances that also have restrictions, the amounts of which are reported in our restricted cash. Our interests in trust assets are subordinate to the interests of third-party investors and, as such, may not be realized by us if needed to absorb deficiencies in cash flows that are allocated to the investors in the trusts' debt. Unless we exceed certain triggers related to default levels and collateralization of the securitized pool, we are contractually entitled to receive the excess cash flows (spread between the collections on the mortgages and payment of third party obligations and debt service on the trusts’ debt defined in the securitization agreements) from the VIEs. Such activity totaled $8 million since our May 11, 2016 acquisition of Vistana through September 30, 2016. The net cash flows generated by the VIEs are used to repay our securitized debt from VIEs and, excluding any restricted cash balances, are reflected in the operating activities section of our combined statements of cash flows. The repayment of our securitized debt from VIEs is reflected in the financing activities section of our combined statements of cash flows. Refer to Note 13 of these condensed consolidated financial statements for additional discussion on our securitized debt from VIEs. |
ACCRUED LIABILITIES AND OTHER C
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | |
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | NOTE 11 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table summarizes the general components of accrued expenses and other current liabilities (in millions): September 30, December 31, 2016 2015 General accrued expenses $ $ Accrued other taxes Customer deposits Accrued membership related Accrued construction costs — Accrued expenses and other current liabilities $ $ |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2016 | |
DEFERRED REVENUE | |
DEFERRED REVENUE | NOTE 12 — DEFERRED REVENUE The following table summarized the general components of deferred revenue (in millions): September 30, December 31, 2016 2015 (in millions) Deferred membership-related revenue $ $ Deferred sales of vacation ownership products — Other Total $ $ Deferred membership-related revenue primarily relates to membership fees from our Exchange and Rental segment, which are deferred and recognized over the terms of the applicable memberships, typically ranging from one to five years, on a straight-line basis. Deferred sales of vacation ownership products primarily relate to sales associated with incomplete phases or buildings that are being recognized under the percentage-of-completion method. The increase in deferred sales of vacation ownership products relates to deferred revenue acquired in connection with our Vistana acquisition or generated thereafter, which primarily pertains to a property in Hawaii that is currently under construction. The related sales are deferred under the percentage of completion method. Other deferred revenue pertains to annual maintenance fees collected that are not yet earned. |
SECURITIZED VACATION OWNERSHIP
SECURITIZED VACATION OWNERSHIP DEBT | 9 Months Ended |
Sep. 30, 2016 | |
SECURITIZED VACATION OWNERSHIP DEBT | |
SECURITIZED VACATION OWNERSHIP DEBT | NOTE 13 — SECURITIZED VACATION OWNERSHIP DEBT As discussed in Note 10, the VIEs associated with the securitization of our VOI mortgages receivable acquired in connection with the Vistana acquisition are consolidated in our financial statements. Securitized vacation ownership debt consisted of the following (in millions): September 30, 2016 2011 securitization, interest rates ranging from 3.67% to 4.82%, maturing 2025 $ 2012 securitization, interest rates ranging from 2.00% to 2.76%, maturing 2023 2016 securitization, interest rates ranging from 2.54% to 2.74%, maturing 2024 Unamortized debt issuance costs (2016 securitization) Total securitized vacation ownership debt, net of debt issuance costs $ On September 20, 2016, we completed a term securitization transaction involving the issuance of $375 million of asset-backed notes. An indirect wholly-owned subsidiary of Vistana issued $346 million of Class A notes and $29 million of Class B notes. The notes are backed by vacation ownership loans and have coupons of 2.54% and 2.74%, respectively, for an overall weighted average coupon of 2.56%. The advance rate for this transaction was 96.5%. Of the $375 million in proceeds from the transaction, $19 million is being held in escrow until the associated VIE purchases up to $19 million of additional loans by March 15, 2017 with any unused cash returned to the investors. Approximately $33 million was used to repay the outstanding balance on Vistana’s 2010 securitization and the remainder was used to pay transaction expenses, fund required reserves, pay down a portion of the borrowings outstanding under our $600 million revolving credit facility and for general corporate purposes. During the three and nine months ended September 30, 2016, interest expense associated with securitized vacation ownership debt totaled $1 million in both periods, and is reflected within consumer financing expenses in our consolidated statements of income. The securitized debt is non-recourse with no contractual minimum repayment amounts throughout its term. The amount of each principal payment is contingent on the cash flows from the underlying vacation ownership notes in a given period. Refer to Note 5—Vacation Ownership Mortgages Receivable for the stated maturities of our securitized vacation ownership notes receivable, which provide an indication of the potential repayment pattern before the impact of any prepayments or defaults. As of September 30, 2016, total unamortized debt issuance costs pertaining to the 2016 securitization were $5 million, which is presented as a reduction of securitized debt from VIEs in the accompanying condensed consolidated balance sheet. Unamortized debt issuance costs pertaining to our securitized debt are amortized to interest expense using the effective interest method through the estimated life of the respective debt instruments. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2016 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE 14—LONG-TERM DEBT Long‑term debt is as follows (in millions): September 30, December 31, 2016 2015 Revolving credit facility (interest rate of 2.28% at September 30, 2016 and 2.68% at December 31, 2015) $ $ 5.625% senior notes Unamortized debt issuance costs (revolving credit facility) Unamortized debt issuance costs (senior notes) Total long-term debt, net of debt issuance costs $ $ Credit Facility In April 2014, we entered into the first amendment to the June 21, 2012 amended and restated credit agreement (the “Amended Credit Agreement”) which increased the revolving credit facility from $500 million to $600 million, extended the maturity of the credit facility to April 8, 2019 and provided for certain other amendments to covenants. The terms related to interest rates and commitment fees remained unchanged. In November 2014, we entered into a second amendment which primarily provides for a second letter of credit issuer and certain other amendments to covenants. Under this amendment, the financial covenants, interest rates, commitment fees and other significant terms remain unchanged. On April 10, 2015, we entered into a third amendment which changed the leverage-based financial covenant from a maximum consolidated total leverage to EBITDA ratio of 3.5 to 1.0 to a maximum consolidated secured leverage to EBITDA ratio of 3.25 to 1.0. In addition, the amendment adds an incurrence test allowing a maximum consolidated total leverage to EBITDA ratio of 4.5 to 1.0 on a pro forma basis in certain circumstances in which we make acquisitions or investments, incur additional indebtedness or make restricted payments. Also, the amendment added a new pricing level to the pricing grid applicable when the consolidated total leverage to EBITDA ratio equals or exceeds 3.5 to 1.0. This pricing level is either LIBOR plus 2.5% or the base rate plus 1.5% and requires a commitment fee on undrawn amounts of 0.4% per annum. There were no other material changes under this amendment. On May 5, 2015, we entered into a fourth amendment to the Amended Credit Agreement which changed the definition of change of control to remove the provision that certain changes in the composition of the board of directors would constitute a change of control and therefore be a default under the credit agreement. The amendment also included clarifying language regarding provisions that relate to our 5.625% senior notes due in 2023. There were no other material changes under this amendment. Additionally, on May 17, 2016, we entered into a fifth amendment to the Amended Credit Agreement which extended the maturity of the credit facility through May 17, 2021, and modified requirements with respect to assignments by lenders in connection with the acquisition of Vistana in May of 2016. There were no other material changes under this amendment. As of September 30, 2016, there was $75 million outstanding. Any principal amounts outstanding under the revolving credit facility are due at maturity. As of September 30, 2016, the interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranged from 1.25% to 2.5%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranged from 0.25% to 1.5%, in each case based on our consolidated total leverage ratio. As of September 30, 2016, the applicable margin was 2.00% per annum for LIBOR revolving loans and 1.00% per annum for Base Rate loans. As of September 30, 2016, the Amended Credit Agreement has a commitment fee on undrawn amounts that ranged from 0.25% to 0.40% per annum based on our leverage ratio and as of September 30, 2016 the commitment fee was 0.275%. Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are unconditionally guaranteed by ILG and certain of its subsidiaries. Borrowings are further secured by (1) 100% of the voting equity securities of ILG’s U.S. subsidiaries and 65% of the equity in our first‑tier foreign subsidiaries and (2) substantially all of our domestic tangible and intangible property. Senior Notes On April 10, 2015, we completed a private offering of $350 million in aggregate principal amount of our 5.625% senior notes due in 2023. The net proceeds from the offering, after deducting offering related expenses, were $343 million. We used the proceeds to repay indebtedness outstanding on our revolving credit facility. In June 2016, we completed an exchange offer to exchange these unregistered notes with registered notes that otherwise have the same terms. As of September 30, 2016, total unamortized debt issuance costs relating to these senior notes were $6 million, which are presented as a direct deduction from the principal amount. Interest on the senior notes is paid semi-annually in arrears on April 15 and October 15 of each year and the senior notes are fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries that are required to guarantee the Amended Credit Facility. Additionally, the voting stock of the issuer and the subsidiary guarantors is 100% owned by ILG. The senior notes are redeemable from April 15, 2018 at a redemption price starting at 104.219% which declines over time. Restrictions and Covenants The senior notes and Amended Credit Agreement have various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person. The indenture governing the senior notes restricts our ability to issue additional debt in the event we are not in compliance with the minimum fixed charge coverage ratio of 2.0 to 1.0 and limits restricted payments and investments unless we are in compliance with the minimum fixed charge coverage ratio and the amount is within a bucket that grows with our consolidated net income. We are in compliance with this covenant as of September 30, 2016. In addition, the Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated secured leverage ratio of consolidated secured debt, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined. We are also required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense. As of September 30, 2016, the maximum consolidated secured leverage ratio was 3.25x and the minimum consolidated interest coverage ratio was 3.0x. As of September 30, 2016, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants, and our consolidated secured leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 0.24 and 13.15, respectively. Interest Expense and Debt Issuance Costs Interest expense for the three months ended September 30, 2016 and 2015 was $6 million and $6 million respectively, and for the nine months ended September 30, 2016 and 2015 was $18 million and $15 million, respectively. Interest expense for these periods is net of negligible capitalized interest relating to internally-developed software. As of September 30, 2016, total unamortized debt issuance costs were $10 million, net of $5 million of accumulated amortization, incurred in connection with the issuance and various amendments to our Amended Credit Agreement, the issuance of our senior notes in April 2015 and the exchange for registered notes in June 2016. As of December 31, 2015, total unamortized debt issuance costs were $9 million, net of $4 million of accumulated amortization. Unamortized debt issuance costs are presented as a reduction of long-term debt in the accompanying condensed consolidated balance sheets, pursuant to ASC 2015-03. Unamortized debt issuance costs are amortized to interest expense through the maturity date of our respective debt instruments using the effective interest method for those costs related to our senior notes, and on a straight-line basis for costs related to our Amended Credit Agreement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 15—FAIR VALUE MEASUREMENTS In accordance with ASC Topic 820, “Fair Value Measurement,” (“ASC 820”) the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities that are either recorded or disclosed at fair value are measured using a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1—Observable inputs that reflect quoted prices in active markets Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable Level 3—Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions Fair Value of Financial Instruments The estimated fair value of financial instruments below has been determined using available market information and appropriate valuation methodologies, as applicable. There have been no changes in the methods and significant assumptions used to estimate the fair value of financial instruments during the nine months ended September 30, 2016. Our financial instruments are detailed in the following table. September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Amount Value Amount Value (In millions) Cash and cash equivalents $ $ $ $ Restricted cash and cash equivalents Financing receivables Vacation ownership mortgages receivable Investments in marketable securities Securitized debt — — Revolving credit facility (1) Senior notes (1) (1) As of September 30, 2016, the carrying value of our revolving credit facility and senior notes include $4 million and $6 million of debt issuance costs, respectively, which are presented as a direct reduction of the corresponding liability. The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying condensed consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high‑quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1). The financing receivables as of September 30, 2016 are presented in our consolidated balance sheet within other non‑current assets and principally pertains to a convertible secured loan to CLC that matures October of 2019 with interest payable monthly. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion. The carrying value of this financing receivable approximates fair value through inputs inherent to the originating value of this loan, such as interest rates and ongoing credit risk accounted for through non‑recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan is comparable to market. Interest is recognized within our “Interest income” line item in our condensed consolidated statement of income for the three and nine months ended September 30, 2016. We estimate the fair value of vacation ownership mortgages 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 incorporates default rates, prepayment rates, coupon rates and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified inputs used in the valuation of our vacation ownership mortgages receivable as Level 3. The primary sensitivity in these assumptions relates to forecasted defaults and projected prepayments which could cause the estimated fair value to vary. Investments in marketable securities consist of marketable securities (mutual funds) related to deferred compensation plans which are funded in a Rabbi trust as of September 30, 2016 and classified as other noncurrent assets in the accompanying condensed consolidated balance sheets. This deferred compensation plan was created in connection with the HVO acquisition and funded following both the HVO and Vistana acquisitions. Participants in the deferred compensation plan unilaterally determine how their compensation deferrals are invested within the confines of the Rabbi trust which holds the marketable securities. Consequently, management has designated these marketable securities as trading investments, as allowed by applicable accounting guidance, even though there is no intent by ILG to actively buy or sell securities with the objective of generating profits on short‑term differences in market prices. These marketable securities are recorded at a fair value of $14 million as of September 30, 2016 based on quoted market prices in active markets for identical assets (Level 1). Minimal unrealized trading gains for the three months and nine months ended September 30, 2016 were recorded, with an accompanying offsetting adjustment to employee compensation expense, and are each included within general and administrative expenses in the accompanying condensed consolidated statement of income. See Note 17 for further discussion in regards to this deferred compensation plan. Our non-public, securitized debt fair value is determined based upon discounted cash flows for the debt using Level 3 inputs such as rates deemed reasonable for the type of debt, prevailing market conditions and the length of maturity for the debt. Borrowings under our senior notes (issued April 2015) and revolving credit facility are carried at historical cost and adjusted for principal payments. The fair value of our senior notes was estimated at September 30, 2016 using an input of quoted prices from an inactive market due to the infrequency at which trades occur on our senior notes (Level 2). The carrying value of the outstanding balance under our revolving credit facility, exclusive of debt issuance costs, approximates fair value as of September 30, 2016 and December 31, 2015 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2). |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
EQUITY | |
EQUITY | NOTE 16—EQUITY ILG has 300 million authorized shares of common stock, par value of $0.01 per share. At September 30, 2016, there were 133.5 million shares of ILG common stock issued, of which 124.7 million are outstanding with 8.8 million shares held as treasury stock. At December 31, 2015, there were 59.9 million shares of ILG common stock issued, of which 57.5 million were outstanding with 2.4 million shares held as treasury stock. ILG has 25 million authorized shares of preferred stock, par value of $0.01 per share, none of which are issued or outstanding as of September 30, 2016 and December 31, 2015. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences and dividends. In connection with the acquisition of Vistana in May 2016, we issued 72.4 million shares of ILG common stock to the holders who received Vistana common stock in the spin-off from its former parent. Dividend Declared In February, May and August of 2016, our Board of Directors declared a quarterly dividend payment of $0.12 per share paid in March, June and September of 2016, respectively, amounting to $7 million, $16 million, and $15 million, respectively. In November 2016, our Board of Directors declared a $0.12 per share dividend payable December 20, 2016 to shareholders of record on December 6, 2016. Stockholder Rights Plan In June 2009, ILG’s Board of Directors approved the creation of a Series A Junior Participating Preferred Stock, adopted a stockholders rights plan and declared a dividend of one right for each outstanding share of common stock held by our stockholders of record as of the close of business on June 22, 2009. The rights attach to any additional shares of common stock issued after June 22, 2009. These rights, which trade with the shares of our common stock, currently are not exercisable. Under the rights plan, these rights will be exercisable if a person or group acquires or commences a tender or exchange offer for 15% or more of our common stock. The rights plan provides certain exceptions for acquisitions by Liberty Interactive Corporation (formerly known as Liberty Media Corporation) in accordance with an agreement entered into with ILG in connection with its spin‑off from IAC/InterActiveCorp (IAC). If the rights become exercisable, each right will permit its holder, other than the “acquiring person,” to purchase from us shares of common stock at a 50% discount to the then prevailing market price. As a result, the rights will cause substantial dilution to a person or group that becomes an “acquiring person” on terms not approved by our Board of Directors. Share Repurchase Program In May 2016, our Board of Directors increased the then remaining share repurchase authorization to a total of $100 million. During the nine months ended September 30, 2016, we repurchased 6.4 million shares of common stock for $100 million, including commissions. As of September 30, 2016, there was no remaining availability for future repurchases of our common stock under this authorization. Acquired shares of our common stock are held as treasury shares carried at cost on our condensed consolidated financial statements. In November 2016, the Board authorized repurchases of up to $50 million of ILG common stock. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice. Accumulated Other Comprehensive Loss Entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the three months and nine months ended September 30, 2016, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments, as disclosed in our accompanying condensed consolidated statements of comprehensive income. Noncontrolling Interests Noncontrolling Interest—VRI Europe In connection with the VRI Europe transaction on November 4, 2013, CLC was issued a noncontrolling interest in VRI Europe representing 24.5% of the business, which was determined based on the purchase price paid by ILG for its 75.5% ownership interest as of the acquisition date. As of September 30, 2016 and December 31, 2015, this noncontrolling interest amounts to $27 million and $31 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity. The change from December 31, 2015 to September 30, 2016 relates to the recognition of the noncontrolling interest holder’s proportional share of VRI Europe’s earnings, as well as the translation effect on the foreign currency based amount. The parties have agreed not to transfer their interests in VRI Europe or CLC’s related development business for a period of five years from the acquisition. In addition, they have agreed to certain rights of first refusal, and customary drag along and tag along rights, including a right by CLC to drag along ILG’s VRI Europe shares in connection with a sale of the entire CLC resort business subject to achieving minimum returns and a preemptive right by ILG. As of September 30, 2016, there have been no changes in ILG’s ownership interest in VRI Europe. Additionally, in connection with this arrangement, ILG and CLC entered into a loan agreement whereby ILG made available to CLC a convertible secured loan facility of $15 million that matures in October of 2019 with interest payable monthly. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion, which would allow for settlement of the loan in CLC’s shares of VRI Europe for contractually determined equivalent value. ILG has the right to exercise this share option at any time prior to maturity of the loan; however, the equivalent value for these shares would be measured at a 20% premium to its acquisition date value. We have determined the value of this embedded derivative is not material to warrant bifurcating from the host instrument (loan) at this time. Noncontrolling Interest—Hyatt Vacation Ownership In connection with the HVO acquisition on October 1, 2014, ILG assumed a noncontrolling interest in a joint venture entity, which we fully consolidate, formed for the purpose of developing and selling VOIs. The fair value of the noncontrolling interest at acquisition was determined based on the noncontrolling party’s ownership interest applied against the fair value allocated to the respective joint venture entity. As of September 30, 2016 and December 31, 2015, this noncontrolling interest amounted to $1 million and $2 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity. |
BENEFIT PLANS
BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2016 | |
BENEFIT PLANS | |
BENEFIT PLANS | NOTE 17—BENEFIT PLANS Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre‑tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant’s eligible earnings, with Vistana employees also receiving a 100% match for the first 1% of the participant’s eligible earnings, subject to Internal Revenue Service (“IRS”) restrictions. Net matching contributions for the ILG plan were $2 million and $1 million for the three months ended September 30, 2016 and 2015, respectively and $4 million and $2 million for the nine months ended September 30, 2016 and 2015, respectively. Matching contributions were invested in the same manner as each participant’s voluntary contributions in the investment options provided under the plan. Effective August 20, 2008, a deferred compensation plan (the “Director Plan”) was established to provide non‑employee directors of ILG an option to defer director fees on a tax‑deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 59,124 share units were outstanding at September 30, 2016. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share. Effective October 1, 2014, a non-qualified deferred compensation plan (the “DCP”) was established to allow eligible employees of ILG an option to defer compensation on a tax-deferred basis. The initial establishment of the DCP was intended to receive a transfer of deferred compensation liabilities in connection with the acquisition of HVO and, the DCP was amended in 2016 in connection with the receipt of a transfer of deferred compensation plan liabilities and assets in connection with the acquisition of Vistana. Participants in the DCP currently include only certain HVO and Vistana employees that participated in similar plans prior to the acquisitions by ILG of HVO and Vistana, respectively. These participants make an election prior to the first of each year to defer an amount of compensation payable for services to be rendered beginning in the next calendar year, and also select when such deferred amounts will be distributed in the future. Participants are fully vested in all amounts held in their individual accounts. Participants have only an unsecured claim against ILG for the future payment of the deferred amounts, although payment is indirectly secured through a fully funded Rabbi trust. The Rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the Rabbi trust are not available for general corporate purposes. Amounts in the Rabbi trust are invested in mutual funds, as selected by participants, which are designated as trading securities and carried at fair value. Subsequent to the acquisitions of HVO and Vistana, there were net transfers of $11 million and $2 million, respectively, into the Rabbi trust, related to participants that became ILG employees in connection with the respective acquisitions. As of September 30, 2016, the fair value of the investments in the Rabbi trust was $14 million which is recorded in other non-current assets with the corresponding deferred compensation liability recorded in other long-term liabilities in the condensed consolidated balance sheet. We recorded unrealized gains of $1 million, for each of the three and nine month periods ended September 30, 2016, to general and administrative expense related to the investment gains, and a charge to compensation expense also within general and administrative expense related to the increase in deferred compensation liabilities to reflect the DCP liability. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 18—STOCK‑BASED COMPENSATION On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan and stopped granting awards under the ILG 2008 Stock and Annual Incentive Plan (“2008 Incentive Plan”). Both plans provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock‑based awards. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. Each RSU is subject to service‑based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e., portions of the award vest at different times during the vesting period) or to cliff vesting (i.e., all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria. ILG recognizes non‑cash compensation expense for all RSUs held by ILG’s employees. For RSUs to be settled in stock, the accounting charge is measured at the grant date as the fair value of ILG common stock and expensed as non‑cash compensation over the vesting term using the straight‑line basis for service awards and the accelerated basis for performance‑based awards with graded vesting. Certain cliff vesting awards contain performance criteria which are tied to anticipated future results of operations in determining the fair value of the award, while other cliff vesting awards with performance criteria are tied to the achievement of certain market conditions. This value is recognized as expense over the service period, net of estimated forfeitures, using the straight‑line recognition method. The expense associated with RSU awards to be settled in cash is initially measured at fair value at the grant date and expensed ratably over the vesting term, recording a liability subject to mark‑to‑market adjustments for changes in the price of the respective common stock, as compensation expense. Shares underlying RSUs are not issued or outstanding until vested. In relation to our quarterly dividend, unvested RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on our shares of common stock. Such additional RSUs are forfeitable and will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two‑class method of determining earnings per share. Under the ILG 2013 Stock and Incentive Compensation Plan, the maximum aggregate number of shares of common stock reserved for issuance as of adoption is 4.1 million shares, less one share for every share granted under any prior plan after December 31, 2012. In August 2016, the 2013 Stock and Incentive Compensation Plan was amended to increase the plan balance by 4.0 million shares. As of September 30, 2016, 4.0 million shares were available for future issuance under the 2013 Stock and Incentive Compensation Plan. During the first nine months of 2016 and 2015, the Compensation Committee granted 862,000 and 423,000 RSUs, respectively, vesting over one to four years, to certain officers, board of directors and employees of ILG and its subsidiaries. Of these RSUs granted in 2016 and 2015, approximately 142,000 and 105,000, respectively, cliff vest in three years and approximately 105,000 and 54,000, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined adjusted EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document. For the 2016 and 2015 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a per unit grant date fair value of $13.13 for 2016 and $40.71 for 2015 for these performance based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups approved by the Compensation Committee, over the remaining performance period. The expected volatility of ILG’s common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk‑free interest rate assumption was based on observed interest rates consistent with the approximate three – year performance measurement period. Additionally, on May 11, 2016, in connection with the acquisition of Vistana, all of the unvested equity grants held by Vistana’s employees under Starwood plans were converted to grants under the ILG 2013 Stock and Incentive Plan based on a conversion factor using relative stock prices at closing. A total of 713,000 shares of restricted stock and 11,000 RSUs were issued in this conversion with a fair value of $10 million, of which $2 million and $8 million were attributed to pre-acquisition and post-acquisition services, respectively. The converted awards generally have the same terms and conditions as the original Starwood awards and vest through the first quarter of 2019. In connection with the acquisition effective May 12, 2016, certain ILG and Vistana executive officers were awarded a total of 595,000 RSUs, with 375,000 cliff vesting in three years, and 220,000 vesting over three years as follows, 30%, 30% and 40%. All of these RSUs granted are subject to performance criteria of which 168,000 could result between 0% and 200% of these awards being earned based on defined adjusted EBITDA targets and 75,000 could result between 0% and 140% of these awards being earned based on revenue targets, over the respective performance period, as specified in the award documents. Of the aggregate estimated value of the awards, $5 million is being amortized to expense on a straight-line basis, and $3 million is being amortized to expense on an accelerated basis, over the applicable vesting period of the awards. Non‑cash compensation expense related to RSUs and restricted stock for the three months ended September 30, 2016 and 2015 was $5 million and $3 million, respectively and $13 million and $10 million for the nine months ended September 30, 2016 and 2015, respectively. At September 30, 2016, there was approximately $30 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs and restricted stock, which is currently expected to be recognized over a weighted average period of approximately 2 years. The amount of stock‑based compensation expense recognized in the condensed consolidated statements of income is reduced by estimated forfeitures, as the amount recorded is based on awards ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods for any changes to the estimated forfeiture rate from that previously estimated. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is at least equal to the portion of the grant‑date value of the award tranche that is actually vested at that date. Non‑cash stock‑based compensation expense related to equity awards is included in the following line items in the accompanying condensed consolidated statements of income for the three months ended September 30, 2016 and 2015 (in millions): Three Months Nine Months Ended Ended September 30, September 30, 2016 2015 2016 2015 Cost of sales $ $ — $ $ Selling and marketing expense — — General and administrative expense Non-cash compensation expense $ $ $ $ The following table summarizes RSU activity during the nine months ended September 30, 2016: Weighted-Average Grant Date Shares Fair Value (In millions) Non-vested RSUs at January 1, 2016 $ Granted Vested Non-vested RSUs at September 30, 2016 $ |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
INCOME TAXES | |
INCOME TAXES | NOTE 19—INCOME TAXES ILG calculates its interim income tax provision in accordance with ASC 740, “Income Taxes.” At the end of each interim period, ILG makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year‑to‑date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or the liabilities for uncertain tax positions is recognized in the interim period in which the change occurs. The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or ILG’s tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax expense in the quarter in which the change occurs. A valuation allowance for deferred tax assets is provided when it is more likely than not that certain deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. We consider the history of taxable income in recent years, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies to make this assessment. For the three and nine months ended September 30, 2016, ILG recorded an income tax benefit and provision for continuing operations of $2 million and $46 million, respectively, which represent effective tax rates of (7.4)% and 16.3% for the respective periods. The negative effective tax rate for the quarter was a result of recognizing an income tax benefit in an interim period with pre-tax income. This income tax benefit is a result of a decrease in the estimated annual effective tax rate and the effect of this change on prior quarters. The decrease in the estimated annual effective tax rate from the prior quarter was primarily due to a change in the projected proportion of income earned and taxed in various jurisdictions and the projected utilization of certain income tax credits that were previously not expected to be realized. For the nine months ended September 30, 2016, the tax rate was lower than the federal statutory rate of 35% due principally to the nontaxable gain on bargain purchase recorded during the period in connection with the acquisition of Vistana and included in the computation of the annual expected effective tax rate as a non-discrete permanent item. This gain on bargain purchase is not subject to income taxation. For the three and nine months ended September 30, 2015, ILG recorded income tax provisions for continuing operations of $11 million and $35 million, respectively, which represent effective tax rates of 35.3% and 35.8% for the respective periods. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. As of September 30, 2016, there were no material changes to ILG’s unrecognized tax benefits and related interest. In connection with the acquisition of Vistana, Starwood and ILG entered into a Tax Matters Agreement, discussed further below. Under the Tax Matters Agreement, Starwood indemnifies ILG for all consolidated tax liabilities and related interest and penalties for the pre-close period. Accordingly, any unrecognized tax benefits for Vistana related to the pre-close period that are the obligation of its former parent have not been recorded. ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. ILG files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. As of September 30, 2016, no open tax years are currently under examination by the IRS. During the second quarter, ILG was notified by the State of Florida that the consolidated state tax return for all open tax years will be examined. As of the end of the current quarter, in Florida our tax years ended December 31, 2013 through December 31, 2015 are open. No other tax years are currently under examination in any material state and local jurisdictions. Vistana, by virtue of previously filed consolidated tax returns with Starwood, is under audit by the IRS for several pre-close periods. Vistana is also under audit in Mexico for the tax year ended December 31, 2012. Under the Tax Matters Agreement, Starwood indemnifies ILG for all income tax liabilities and related interest and penalties for the pre-close period. On September 15, 2016, the U.K. Finance Act 2016 was enacted, which among other changes, further reduced the U.K. corporate income tax rate to 17% effective April 1, 2020. The impact of this further rate reduction was recorded in the current reporting period and was not significant. This reduced our U.K. net deferred tax liability and decreased income tax expense, favorably impacting our effective tax rate. Going forward, the lower U.K. corporate tax rate will continue to decrease income tax expense and favorably impact our effective tax rate. In connection with the Vistana transaction, Starwood and ILG entered into a Tax Matters Agreement that generally governs the parties' respective rights, responsibilities, and obligations with respect to taxes, including both taxes arising in the ordinary course of business as well as taxes, if any, incurred as a result of any failure of the Vistana reorganization, spin-off, Merger and certain related transactions consummated in connection with Starwood's internal restructuring to qualify for their intended U.S. federal income tax treatment. In addition to allocating responsibility for these taxes between the parties, the Tax Matters Agreement sets forth the respective obligations of the parties with respect to the filing of tax returns, the administration of tax contests and assistance and cooperation on tax matters. The Tax Matters Agreement also generally prohibits ILG, Vistana and any subsidiary of Vistana from taking certain actions that could cause the failure of the Vistana reorganization, spin-off, Merger and certain related transactions consummated in connection with Starwood's internal restructuring from qualifying for their intended tax treatment. Additional details can be found in the Tax Matters Agreement which was included as an exhibit to Form 8-K filed on May 12, 2016. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 20—SEGMENT INFORMATION Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. ILG is comprised of two operating and reportable segments: Exchange and Rental, and Vacation Ownership. Our Exchange and Rental segment offers access to vacation accommodations and other travel‑related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and managing vacation properties. Our Vacation Ownership segment engages in the management, sales, marketing, financing, rental and ancillary services, and development of VOIs as well as related services to owners and associations. ILG provides certain corporate functions that benefit the organization as a whole. Such corporate functions include corporate services relating to oversight, corporate development, finance and accounting, legal, treasury, tax, internal audit, human resources, and certain IT functions. Costs relating to such corporate functions that are not directly cross‑charged to individual businesses are being allocated to our two operating and reportable segments based on a pre‑determined measure of profitability relative to total ILG. All such allocations relate only to general and administrative expenses. The condensed consolidated statements of income are not impacted by this cross‑segment allocation. Information on reportable segments and reconciliation to consolidated operating income is as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Exchange and Rental: Transaction revenue $ $ $ $ Membership fee revenue Ancillary member revenue Total member revenue Club rental revenue Other revenue Rental management revenue Cost reimbursement revenue Total revenue Cost of service and membership related sales Cost of sales of rental and ancillary services Cost reimbursements Total cost of sales Royalty fee expense — Selling and marketing expense General and administrative expense Amortization expense of intangibles Depreciation expense Segment operating income $ $ $ $ Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Vacation Ownership: Resort operations revenue $ $ $ $ Management fee revenue Sales of vacation ownership products, net Consumer financing revenue Cost reimbursement revenue Total revenue Cost of service and membership related Cost of sales of vacation ownership products Cost of rental and ancillary services Cost of consumer financing — — Cost reimbursements Total cost of sales Royalty fee expense — Selling and marketing expense General and administrative expense Amortization expense of intangibles Depreciation expense — Segment operating income $ $ $ $ Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Consolidated: Revenue $ $ $ $ Cost of sales Operating expenses Operating income $ $ $ $ Selected financial information by reporting segment is presented below (in millions). September 30, December 31, 2016 2015 Total Assets: Exchange and Rental $ $ Vacation Ownership Total $ $ Geographic Information We conduct operations through offices in the U.S. and 14 other countries. For the nine months ended September 30, 2016 and 2015 revenue is sourced from over 100 countries worldwide. Other than the United States and Europe, revenue sourced from any individual country or geographic region did not exceed 10% of consolidated revenue for the three and nine months ended September 30, 2016 and 2015. Geographic information on revenue, based on sourcing, and long‑lived assets, based on physical location, is presented in the table below (in millions). Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue: United States $ $ $ $ Europe All other countries (1) Total $ $ $ $ (1) Includes countries within the following continents: Africa, Asia, Australia, North America and South America. September 30, December 31, 2016 2015 Long-lived assets (excluding goodwill and intangible assets): United States $ $ Mexico — Europe Total $ $ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 21—COMMITMENTS AND CONTINGENCIES Contingencies In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 19 for a discussion of income tax contingencies. Purchase Obligations and Other Commitments Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our condensed consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At September 30, 2016, guarantees, surety bonds and letters of credit totaled $101 million, with the highest annual amount of $71 million occurring in year one. The total includes a guarantee by us of up to $37 million of the construction loan for the Maui project. This amount represents the maximum exposure under guarantee related to this construction loan from a legal perspective; however, our reasonable expectation of our exposure under this guarantee based on the agreements among guarantors is proportionally reduced by our ownership percentage in the Maui project to $6 million as of September 30, 2016. Additionally, the total also includes maximum exposure under guarantees of $35 million primarily relating to our vacation rental business’s hotel and resort management agreements, including those with guaranteed dollar amounts, and accommodation leases supporting the rental management activities that are entered into on behalf of the property owners for which either party generally may terminate such leases upon 60 to 90 days prior written notice to the other party. In addition, certain of our rental management agreements provide that owners receive specified percentages of the rental revenue generated under its management or in limited instances, guaranteed dollar amounts. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either retains the balance (if any) as its fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2016, future amounts are not expected to be significant either individually or in the aggregate. Our operating and purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services, marketing related benefits and membership fulfillment benefits. Certain of our vacation rental businesses also enter into agreements, as principal, for services purchased on behalf of property owners for which we are subsequently reimbursed. As such, we are the primary obligor and may be liable for unreimbursed costs. As of September 30, 2016, amounts pending reimbursements are not significant. Letters of Credit Additionally, as of September 30, 2016, our letters of credit totaled $11 million and were principally related to our Vacation Ownership sales and financing activities. More specifically, these letters of credit provide alternate assurance on amounts required to be held in escrow which enable our developer entities to access purchaser deposits prior to closings, as well as provide a guarantee of maintenance fees owed by our developer entities during subsidy periods at a particular vacation ownership resort, among other items. Vacation Ownership Development Commitments With respect to vacation ownership projects under development, we estimate the cost associated with completing the phases of our vacation ownership projects currently in presales and accounted for under the percentage of completion method is approximately $39 million at September 30, 2016. 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 in 2016 and 2017. |
SUPPLEMENTAL GUARANTOR INFORMAT
SUPPLEMENTAL GUARANTOR INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL GUARANTOR INFORMATION | |
SUPPLEMENTAL GUARANTOR INFORMATION | NOTE 22— SUPPLEMENTAL GUARANTOR INFORMATION The senior notes are guaranteed by ILG and certain other subsidiaries for which 100% of the voting securities are owned directly or indirectly by ILG (collectively, the “Guarantor Subsidiaries”). These guarantees are full and unconditional and joint and several. The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The indenture governing the senior notes contains covenants that, among other things, limit the ability of Interval Acquisition Corp. (the “Issuer”) and the Guarantor Subsidiaries to pay dividends to us or make distributions, loans or advances to us. The following tables present condensed consolidating financial information as of September 30, 2016 and December 31, 2015 and for the three and/or nine months ended September 30, 2016 and 2015 for ILG on a stand‑alone basis, the Issuer on a stand‑alone basis, the combined Guarantor Subsidiaries of ILG (collectively, the “Guarantor Subsidiaries”), the combined non-guarantor subsidiaries of ILG (collectively, the “Non-Guarantor Subsidiaries”) and ILG on a consolidated basis (in millions). Balance Sheet as of September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Current assets $ $ $ $ $ - $ Property and equipment, net - - - Goodwill and intangible assets, net - - Investments in subsidiaries - - Other assets - - - Total assets $ $ $ $ $ $ Current liabilities $ $ $ $ $ - $ Other long-term liabilities - - - Long term debt - - Intercompany liabilities (receivables) / equity - - Redeemable noncontrolling interest - - - - ILG stockholders' equity Noncontrolling interests - - - Total liabilities and equity $ $ $ $ $ $ Balance Sheet as of December 31, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Current assets $ $ - $ $ $ - $ Property and equipment, net - - - Goodwill and intangible assets, net - - Investments in subsidiaries - - Other assets - - - Total assets $ $ $ $ $ $ Current liabilities $ $ $ $ $ - $ Other long-term liabilities - - - Long term debt - - Intercompany liabilities (receivables) / equity - - Redeemable noncontrolling interest - - - - ILG stockholders' equity Noncontrolling interests - - - Total liabilities and equity $ $ $ $ $ $ Statement of Income for the Three Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - Other income (expense), net Income tax (provision) benefit - - - Equity in earnings from unconsolidated entities - - - - Net income Net loss (income) attributable to noncontrolling interests - - - - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Three Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ $ Operating expenses - Interest (expense) income, net - - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - Net income Net loss (income) attributable to noncontrolling interests - - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Nine Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - - Net income Net loss (income) attributable to noncontrolling interests - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Nine Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - - Net income Net income (loss) attributable to noncontrolling interests - - - - Net income attributable to common stockholders $ $ $ $ $ $ (1) Includes equity in net income of wholly-owned subsidiaries. Statement of Cash Flows for the Nine Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries ILG Consolidated Cash flows provided by (used in) operating activities $ $ $ $ $ Cash flows used in investing activities - Cash flows provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents - - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - $ $ $ Statement of Cash Flows for the Nine Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries ILG Consolidated Cash flows provided by (used in) operating activities $ $ $ $ $ Cash flows used in investing activities - - Cash flows provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents - - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - $ $ $ |
SIGNIFICANT ACCOUNTING POLICI30
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Revenue recognition | Revenue recognition Vacation Ownership If construction of the vacation ownership product is not complete, we determine the portion of revenues to recognize based upon the percentage of completion method, which includes judgments and estimates, including total project costs to complete. Revenue deferred under the percentage of completion calculations is included in deferred revenues on the condensed consolidated balance sheet as of September 30, 2016, and associated direct selling costs are deferred as prepaid expenses within prepaid expenses and other current assets. |
Costs Incurred to Sell Vacation Ownership Products | Costs Incurred to Sell Vacation Ownership Products We capitalize and defer direct costs attributable to the sale of vacation ownership products until the sales are recognized, in accordance with the guidelines of ASC Topic 978, Real Estate—Time Sharing Activities . All such capitalized costs are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets, and are subsequently reflected in sales and marketing expense when recognized. If a contract is cancelled, we charge the unrecoverable direct selling costs to expense. In accordance with ASC 978, indirect sales and marketing costs are expensed as incurred. |
Accounting Estimates | Accounting Estimates ILG’s management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying condensed consolidated financial statements primarily include: · the recovery of long‑lived assets as well as goodwill and other intangible assets; · purchase price allocations of business combinations; · loan loss reserves for vacation ownership mortgages receivable; · accounting for acquired vacation ownership mortgages receivable; · revenue recognition pertaining to sales of vacation ownership products pursuant to the percentage of completion method; · cost of vacation ownership product sales; · the accounting for income taxes including deferred income taxes and related valuation allowances; · the determination of deferred revenue and membership costs; · and the determination of stock‑based compensation. In the opinion of ILG’s management, the assumptions underlying the historical condensed consolidated financial statements of ILG and its subsidiaries are reasonable. |
Earnings per Share | Earnings per Share Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units (“RSUs”) and restricted stock using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include less than 0.1 million RSUs and shares of restricted stock, and 0.4 million RSUs for the three months ended September 30, 2016 and 2015, respectively, and 0.4 million RSUs and shares of restricted stock, and 0.5 million RSUs and stock options for the nine months ended September 30, 2016 and 2015, respectively, as the effect of their inclusion would have been antidilutive to earnings per share. In connection with the 2008 spin-off of ILG from IAC, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2016 and 2015, there were no stock options outstanding. The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Basic weighted average shares of common stock outstanding Net effect of common stock equivalents assumed to be vested related to RSUs and restricted stock Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees — — — Diluted weighted average shares of common stock outstanding Earnings per share for the three and nine months ended September 30, 2016 and 2015 are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income attributable to common stockholders $ $ $ $ Weighted average number of shares of common stock outstanding: Basic Diluted Earnings per share attributable to common stockholders: Basic $ $ $ $ Diluted $ $ $ $ |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of computation of weighted average common and common equivalent shares | The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Basic weighted average shares of common stock outstanding Net effect of common stock equivalents assumed to be vested related to RSUs and restricted stock Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees — — — Diluted weighted average shares of common stock outstanding |
Schedule of earnings per share | Earnings per share for the three and nine months ended September 30, 2016 and 2015 are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income attributable to common stockholders $ $ $ $ Weighted average number of shares of common stock outstanding: Basic Diluted Earnings per share attributable to common stockholders: Basic $ $ $ $ Diluted $ $ $ $ |
Schedule of Adopted Accounting Pronouncement | As Reported Recasted for Subsequent Quarter Gain on Bargain Purchase Adjustment Three Months Ended Six Months Ended Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2016 June 30, 2016 June 30, 2016 June 30, 2016 Net income attributable to common stockholders $ $ $ $ EPS - Basic $ $ $ $ EPS - Diluted $ $ $ $ |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
BUSINESS COMBINATION | |
Schedule of allocation of total acquisition cost to the assets acquired and liabilities assumed, based on their estimated fair values | The following table presents the preliminary allocation of total purchase price consideration to the assets acquired and liabilities assumed, based on their estimated fair values as of their respective acquisition dates (in millions): Preliminary PPA Adjustments to PPA (3) Revised Preliminary PPA Cash $ $ - $ Vacation ownership inventory - Vacation ownership mortgages receivable - Other current assets Intangibles - Property plant and equipment Other non-current assets - Deferred revenue - Securitized debt - Other current liabilities (2) Other non-current liabilities Gain on bargain purchase (1) Net assets acquired $ $ — $ (1) Gain on bargain purchase represents the excess of the fair value of the net tangible and intangible assets acquired over the purchase price. This gain of $188 million is presented within Other income (expense), net, in our condensed consolidated statement of income for the nine months ended September 30, 2016, and includes a negative adjustment of $9 million in the third quarter period. The existence of a gain on bargain purchase pertaining to this transaction is principally related to the decrease in our stock price leading up to the acquisition date. (2) Includes a $24 million accrual pertaining to a dividend declared by a subsidiary of Vistana to Starwood prior to our acquisition date which was settled subsequent to the acquisition closing. (3) Represents adjustments to the preliminary purchase price allocation first presented in our June 30, 2016 Form 10-Q resulting from our ongoing activities, including our reassessment of assets acquired and liabilities assumed, with respect to finalizing our purchase price allocation for this acquisition. |
Schedule of purchase price allocated to the fair value of goodwill and identifiable intangible assets | The purchase price allocated to the fair value of identifiable intangible assets associated with the Vistana acquisition is as follows (in millions): Fair Value Useful Life (years) Resort management contracts $ Customer relationships Other < 1 Total $ |
Schedule of unaudited pro forma financial information | Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2015 2016 2015 2016 Revenue $ $ $ $ Net income attributable to common stockholders $ $ $ $ Earnings per share: Basic $ $ $ $ Diluted $ $ $ $ |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
RESTRICTED CASH | |
Schedule of restricted cash | Restricted cash consists of the following (in millions): September 30, December 31, 2016 2015 Escrow deposits on vacation ownership products $ $ Securitization VIEs — Other Total restricted cash $ $ |
VACATION OWNERSHIP MORTGAGES 34
VACATION OWNERSHIP MORTGAGES RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
VACATION OWNERSHIP MORTGAGES RECEIVABLE | |
Schedule of mortgages receivable | Vacation ownership mortgages receivable carrying amounts as of September 30, 2016 and December 31, 2015 were as follows (in millions): September 30, December 31, 2016 2015 Securitized Unsecuritized (2) Total Securitized Unsecuritized (2) Total Acquired vacation ownership mortgages receivable (1) $ $ $ $ — $ $ Originated vacation ownership mortgages receivable (1) — Less allowance for loan losses on originated loans — Net vacation ownership mortgages receivable $ $ $ $ — $ $ (1) At various interest rates with varying payment terms through 2030 for acquired receivables and through 2030 for originated receivables (2) As of September 30, 2016, $13 million of unsecuritized vacation ownership receivables were not eligible for securitization. Additionally, as part of the September 2016 securitization described in Note 13, approximately $19 million of currently unsecuritized receivables may be added in the future to the September 2016 securitized pool and thereby releasing the same amount from restricted cash. |
Schedule of changes in accretable yield | Nine Months Ended Accretable Yield September 30, 2016 Balance, beginning of period $ Vistana acquired accretable yield Accretion Reclassification between nonaccretable difference Balance, end of period $ Nonaccretable difference, end of period balance $ |
Schedule to mature mortgages receivables | Vacation ownership mortgages receivable as of September 30, 2016 are scheduled to mature as follows (in millions): Vacation Ownership Mortgages Receivable Acquired Originated Twelve month period ending September 30, Securitized Loans Unsecuritized Loans Securitized Loans Unsecuritized Loans Total 2017 $ $ $ — $ $ 2018 2019 2020 2021 2022 and thereafter Total Plus: net premium on acquired loans (1) — — Less: allowance for losses — — Net vacation ownership mortgages receivable $ $ $ $ $ Weighted average stated interest rate as of September 30, 2016 13.3% 13.3% 13.3% 13.3% Range of stated interest rates as of September 30, 2016 7.75% to 15.9% 10.9% to 16.9% (1) The difference between the contractual principal amount of acquired loans of $529 million and the net carrying amount of $612 million as of September 30, 2016 is related to the application of ASC 310-30. |
Schedule of vacation ownership notes receivable by brand and by FICO score | Balances of our vacation ownership mortgages receivable by brand and by FICO score (at time of loan origination) were as follows (in millions): As of September 30, 2016 700+ 600-699 <600 No Score (1) Total Westin $ $ $ $ $ Sheraton Hyatt Other - Vacation ownership mortgages receivable, gross $ $ $ $ $ (1) Mortgages receivable with no FICO score primarily relate to non-U.S. resident borrowers. |
Schedule of past-due and nonaccrual status of mortgages receivable | Our aged analysis of delinquent vacation ownership mortgages receivable and the gross balance of vacation ownership mortgages receivable greater than 120 days past‑due as of September 30, 2016 and December 31, 2015 for our originated loans is as follows (in millions): Delinquent Defaulted (1) Receivables Current 30-59 Days 60-89 Days 90-119 Days ≥ 120 Total Delinquent & Defaulted Originated Loans September 30, 2016 $ $ $ $ — $ — $ — $ December 31, 2015 $ $ $ — $ — $ — $ — $ — Mortgages receivable equal to or greater than 120 days are considered defaulted and have been fully reserved in our loan loss reserve for originated loans. |
VACATION OWNERSHIP INVENTORY (T
VACATION OWNERSHIP INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
VACATION OWNERSHIP INVENTORY | |
Schedule of ownership inventory | As of September 30, 2016 and December 31, 2015, vacation ownership inventory is comprised of the following (in millions): September 30, December 31, 2016 2015 Completed unsold vacation ownership interests $ $ Vacation ownership products construction in process — Other — Total inventory $ $ |
INVESTMENTS IN UNCONSOLIDATED36
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | |
Schedule of carrying value of our investments in unconsolidated entities | The carrying value of our investments in unconsolidated entities as of September 30, 2016 and December 31, 2015 were as follows (in millions): September 30, December 31, 2016 2015 Maui Timeshare Venture, LLC $ $ Harborside at Atlantis joint venture — Other Total $ $ |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and equipment, net | Property and equipment, net is as follows (in millions): September 30, December 31, 2016 2015 Computer equipment $ $ Capitalized software (including internally developed software) Land, buildings and leasehold improvements Land held for development — Furniture, fixtures and other equipment Construction projects in progress — Other projects in progress Less: accumulated depreciation and amortization Total property and equipment, net $ $ |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of balance of goodwill by reporting unit | The following tables present the balance of goodwill by reporting unit, including the changes in carrying amount of goodwill as of September 30, 2016 and December 31, 2015 (in millions): Foreign Balance as of Currency Goodwill Balance as of January 1, 2016 Additions Deductions Translation Impairment September 30, 2016 Exchange $ $ — $ — $ — $ — $ Rental — — — — VO management — — — VO sales and financing — — — — Total $ $ — $ — $ $ — $ Foreign Balance as of Currency Goodwill Balance as of January 1, 2015 Additions Deductions Translation Impairment December 31, 2015 Exchange $ $ — $ — $ — $ — $ Rental — — — — VO management — — — VO sales and financing — — — — Total $ $ — $ — $ $ — $ |
Schedule of balance of intangible assets, net | The balance of other intangible assets, net as of September 30, 2016 and December 31, 2015 is as follows (in millions): September 30, December 31, 2016 2015 Intangible assets with indefinite lives $ $ Intangible assets with definite lives, net Total intangible assets, net $ $ |
Schedule of intangible assets with indefinite lives | At September 30, 2016 and December 31, 2015, intangible assets with indefinite lives relate to the following (in millions): September 30, December 31, 2016 2015 Resort management contracts $ $ Trade names and trademarks Total $ $ |
Schedule of intangible assets with definite lives | At September 30, 2016, intangible assets with definite lives relate to the following (in millions): Cost Accumulated Amortization Net Customer relationships $ $ $ Purchase agreements — Resort management contracts Technology — Other Total $ $ $ At December 31, 2015, intangible assets with definite lives relate to the following (in millions): Cost Accumulated Amortization Net Customer relationships $ $ $ Purchase agreements — Resort management contracts Technology — Other Total $ $ $ |
Schedule of amortization expense of intangible assets with definite lives | Based on September 30, 2016 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in millions): Twelve month period ending September 30, 2017 $ 2018 2019 2020 2021 2022 and thereafter $ |
CONSOLIDATED VARIABLE INTERES39
CONSOLIDATED VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
CONSOLIDATED VARIABLE INTEREST ENTITIES | |
Schedule of vacation ownership notes receivable securitization | The following table shows assets which are collateral for the related obligations of the variable interest entities, included in our consolidated balance sheets (in millions): Vacation Ownership Notes Receivable Securitization (1) September 30, 2016 Assets Restricted cash $ Interest receivable Vacation ownership mortgages receivable, net Total $ Liabilities Interest payable $ Securitized debt Total $ (1) The creditors of these entities do not have general recourse to us. |
ACCRUED LIABILITIES AND OTHER40
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES | |
Schedule of general components of accrued liabilities | The following table summarizes the general components of accrued expenses and other current liabilities (in millions): September 30, December 31, 2016 2015 General accrued expenses $ $ Accrued other taxes Customer deposits Accrued membership related Accrued construction costs — Accrued expenses and other current liabilities $ $ |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DEFERRED REVENUE | |
Schedule of general components of deferred revenue | The following table summarized the general components of deferred revenue (in millions): September 30, December 31, 2016 2015 (in millions) Deferred membership-related revenue $ $ Deferred sales of vacation ownership products — Other Total $ $ |
SECURITIZED VACATION OWNERSHI42
SECURITIZED VACATION OWNERSHIP DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SECURITIZED VACATION OWNERSHIP DEBT | |
Schedule of securitized vacation ownership debt | Securitized vacation ownership debt consisted of the following (in millions): September 30, 2016 2011 securitization, interest rates ranging from 3.67% to 4.82%, maturing 2025 $ 2012 securitization, interest rates ranging from 2.00% to 2.76%, maturing 2023 2016 securitization, interest rates ranging from 2.54% to 2.74%, maturing 2024 Unamortized debt issuance costs (2016 securitization) Total securitized vacation ownership debt, net of debt issuance costs $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
LONG-TERM DEBT | |
Schedule of Long-term debt | Long‑term debt is as follows (in millions): September 30, December 31, 2016 2015 Revolving credit facility (interest rate of 2.28% at September 30, 2016 and 2.68% at December 31, 2015) $ $ 5.625% senior notes Unamortized debt issuance costs (revolving credit facility) Unamortized debt issuance costs (senior notes) Total long-term debt, net of debt issuance costs $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of estimated fair value of financial instruments | September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Amount Value Amount Value (In millions) Cash and cash equivalents $ $ $ $ Restricted cash and cash equivalents Financing receivables Vacation ownership mortgages receivable Investments in marketable securities Securitized debt — — Revolving credit facility (1) Senior notes (1) (1) As of September 30, 2016, the carrying value of our revolving credit facility and senior notes include $4 million and $6 million of debt issuance costs, respectively, which are presented as a direct reduction of the corresponding liability. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
STOCK-BASED COMPENSATION | |
Schedule of allocation of recognized compensation cost | Non‑cash stock‑based compensation expense related to equity awards is included in the following line items in the accompanying condensed consolidated statements of income for the three months ended September 30, 2016 and 2015 (in millions): Three Months Nine Months Ended Ended September 30, September 30, 2016 2015 2016 2015 Cost of sales $ $ — $ $ Selling and marketing expense — — General and administrative expense Non-cash compensation expense $ $ $ $ |
Schedule of RSU award activity | Weighted-Average Grant Date Shares Fair Value (In millions) Non-vested RSUs at January 1, 2016 $ Granted Vested Non-vested RSUs at September 30, 2016 $ |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
Schedule of information on reportable segments and reconciliation to consolidated operating income | Information on reportable segments and reconciliation to consolidated operating income is as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Exchange and Rental: Transaction revenue $ $ $ $ Membership fee revenue Ancillary member revenue Total member revenue Club rental revenue Other revenue Rental management revenue Cost reimbursement revenue Total revenue Cost of service and membership related sales Cost of sales of rental and ancillary services Cost reimbursements Total cost of sales Royalty fee expense — Selling and marketing expense General and administrative expense Amortization expense of intangibles Depreciation expense Segment operating income $ $ $ $ Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Vacation Ownership: Resort operations revenue $ $ $ $ Management fee revenue Sales of vacation ownership products, net Consumer financing revenue Cost reimbursement revenue Total revenue Cost of service and membership related Cost of sales of vacation ownership products Cost of rental and ancillary services Cost of consumer financing — — Cost reimbursements Total cost of sales Royalty fee expense — Selling and marketing expense General and administrative expense Amortization expense of intangibles Depreciation expense — Segment operating income $ $ $ $ Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Consolidated: Revenue $ $ $ $ Cost of sales Operating expenses Operating income $ $ $ $ |
Schedule of financial information by reportable segment | Selected financial information by reporting segment is presented below (in millions). September 30, December 31, 2016 2015 Total Assets: Exchange and Rental $ $ Vacation Ownership Total $ $ |
Schedule of geographic information on revenue, based on sourcing, and long-lived assets, based on physical location | Geographic information on revenue, based on sourcing, and long‑lived assets, based on physical location, is presented in the table below (in millions). Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue: United States $ $ $ $ Europe All other countries (1) Total $ $ $ $ (1) Includes countries within the following continents: Africa, Asia, Australia, North America and South America. September 30, December 31, 2016 2015 Long-lived assets (excluding goodwill and intangible assets): United States $ $ Mexico — Europe Total $ $ |
SUPPLEMENTAL GUARANTOR INFORM47
SUPPLEMENTAL GUARANTOR INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL GUARANTOR INFORMATION | |
Schedule of condensed consolidating balance sheet | Balance Sheet as of September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Current assets $ $ $ $ $ - $ Property and equipment, net - - - Goodwill and intangible assets, net - - Investments in subsidiaries - - Other assets - - - Total assets $ $ $ $ $ $ Current liabilities $ $ $ $ $ - $ Other long-term liabilities - - - Long term debt - - Intercompany liabilities (receivables) / equity - - Redeemable noncontrolling interest - - - - ILG stockholders' equity Noncontrolling interests - - - Total liabilities and equity $ $ $ $ $ $ Balance Sheet as of December 31, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Current assets $ $ - $ $ $ - $ Property and equipment, net - - - Goodwill and intangible assets, net - - Investments in subsidiaries - - Other assets - - - Total assets $ $ $ $ $ $ Current liabilities $ $ $ $ $ - $ Other long-term liabilities - - - Long term debt - - Intercompany liabilities (receivables) / equity - - Redeemable noncontrolling interest - - - - ILG stockholders' equity Noncontrolling interests - - - Total liabilities and equity $ $ $ $ $ $ |
Schedule of condensed consolidating statement of income | Statement of Income for the Three Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - Other income (expense), net Income tax (provision) benefit - - - Equity in earnings from unconsolidated entities - - - - Net income Net loss (income) attributable to noncontrolling interests - - - - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Three Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ $ Operating expenses - Interest (expense) income, net - - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - Net income Net loss (income) attributable to noncontrolling interests - - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Nine Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - - Net income Net loss (income) attributable to noncontrolling interests - - - Net income attributable to common stockholders $ $ $ $ $ $ Statement of Income for the Nine Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries Total Eliminations ILG Consolidated Revenue $ - $ - $ $ $ - $ Operating expenses - - Interest (expense) income, net - - - Other income, net (1) Income tax (provision) benefit - Equity in earnings from unconsolidated entities - - - - Net income Net income (loss) attributable to noncontrolling interests - - - - Net income attributable to common stockholders $ $ $ $ $ $ (1) Includes equity in net income of wholly-owned subsidiaries. |
Schedule of condensed consolidating statement of cash flows | Statement of Cash Flows for the Nine Months Ended September 30, 2016 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries ILG Consolidated Cash flows provided by (used in) operating activities $ $ $ $ $ Cash flows used in investing activities - Cash flows provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents - - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - $ $ $ Statement of Cash Flows for the Nine Months Ended September 30, 2015 ILG Interval Acquisition Corp. Guarantor Subsidiaries Non-Guarantor Subsidiaries ILG Consolidated Cash flows provided by (used in) operating activities $ $ $ $ $ Cash flows used in investing activities - - Cash flows provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents - - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - $ $ $ |
ORGANIZATION AND BASIS OF PRE48
ORGANIZATION AND BASIS OF PRESENTATION (Details) shares in Millions, $ in Millions | May 11, 2016USD ($)shares | May 31, 2008company | Sep. 30, 2016item |
Organization | |||
Number of operating segments | item | 2 | ||
Number of publicly traded companies formed upon spin-off | company | 5 | ||
Vistana | |||
Organization | |||
Common stock issued (in shares) | shares | 72.4 | ||
Aggregate purchase price in cash | $ | $ 123 | ||
Global license agreement term | 80 years |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES - Earnings per Share Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Securities not included in the computations of diluted earnings per share | ||||
Securities excluded from computation of diluted earnings per share (in shares) | 0.4 | 0.4 | 0.5 | |
Maximum [Member] | ||||
Securities not included in the computations of diluted earnings per share | ||||
Securities excluded from computation of diluted earnings per share (in shares) | 0.1 | |||
Employee and Nonemployee Stock Options [Member] | ||||
Securities not included in the computations of diluted earnings per share | ||||
Outstanding stock options (in shares) | 0 | 0 | 0 | 0 |
SIGNIFICANT ACCOUNTING POLICI50
SIGNIFICANT ACCOUNTING POLICIES - Earnings per Share Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Basic weighted average shares of common stock outstanding | 124,762 | 57,477 | 93,157 | 57,369 |
Diluted weighted average shares of common stock outstanding | 125,763 | 58,055 | 93,858 | 57,948 |
Net income attributable to common stockholders | $ 32,000 | $ 19,000 | $ 238,000 | $ 61,000 |
Weighted average number of shares of common stock outstanding (in 000's): | ||||
Basic (in shares) | 124,762 | 57,477 | 93,157 | 57,369 |
Diluted (in shares) | 125,763 | 58,055 | 93,858 | 57,948 |
Earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.26 | $ 0.33 | $ 2.55 | $ 1.06 |
Diluted (in dollars per share) | $ 0.25 | $ 0.33 | $ 2.53 | $ 1.05 |
As Reported | Vistana | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net income attributable to common stockholders | $ 183,375 | $ 205,554 | ||
Earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 1.89 | $ 2.66 | ||
Diluted (in dollars per share) | $ 1.87 | $ 2.64 | ||
Correction Adjustment | Vistana | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net income attributable to common stockholders | $ 175,985 | $ 198,164 | ||
Earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 1.81 | $ 2.56 | ||
Diluted (in dollars per share) | $ 1.80 | $ 2.54 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net effect of common stock equivalents (in shares) | 1,001 | 578 | 701 | 578 |
Employee and Nonemployee Stock Options [Member] | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net effect of common stock equivalents (in shares) | 1 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ / shares in Units, $ in Millions | May 11, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Allocation of total acquisition cost to the assets acquired and liabilities assumed | ||||||
Dividend payments to noncontrolling interest | $ 2 | $ 3 | ||||
Vistana | ||||||
Allocation of total acquisition cost to the assets acquired and liabilities assumed | ||||||
Cash | $ 45 | $ 45 | $ 45 | 45 | ||
Vacation ownership inventory | 221 | 221 | 221 | 221 | ||
Vacation ownership mortgages receivable | 712 | 712 | 712 | 712 | ||
Other current assets | 143 | 141 | 141 | 141 | ||
Intangible assets | 241 | 241 | 241 | 241 | ||
Property plant and equipment | 465 | 463 | 463 | 463 | ||
Other non-current assets | 24 | 24 | 24 | 24 | ||
Deferred revenue | (60) | (60) | (60) | (60) | ||
Securitized debt | (154) | (154) | (154) | (154) | ||
Other current liabilities | (187) | (181) | (181) | (181) | ||
Other noncurrent liabilities | (98) | (109) | (109) | (109) | ||
Gain on bargain purchase | (197) | (188) | (188) | (188) | ||
Net assets acquired | 1,155 | 1,155 | 1,155 | 1,155 | ||
Dividend payments to noncontrolling interest | 24 | |||||
Adjustments to PPA | ||||||
Other current assets | (2) | |||||
Property plant and equipment | (2) | |||||
Other current liabilities | 6 | |||||
Other non-current liabilities | (11) | |||||
Gain on bargain purchase | $ 9 | |||||
Revenue | 239 | 361 | ||||
Earnings before income taxes and noncontrolling interests | $ 12 | $ 22 | ||||
Proforma adjustment on deferred revenue | $ 11 | $ 4 | ||||
Pro forma financial information (unaudited) | ||||||
Percentage of statutory tax rate applicable to pro forma net Income or Loss | 35.00% | 37.20% | 35.00% | 37.20% | ||
Revenue | $ 427 | $ 395 | $ 1,272 | $ 1,224 | ||
Net income attributable to common stockholders | $ 30 | $ 15 | $ 86 | $ 266 | ||
Earnings per share: | ||||||
Basic | $ 0.24 | $ 0.12 | $ 0.67 | $ 2.05 | ||
Diluted | $ 0.24 | $ 0.11 | $ 0.67 | $ 2.04 | ||
Vistana | General and Administrative Expense [Member] | ||||||
Adjustments to PPA | ||||||
Acquisition related costs | $ 3 | $ 18 | ||||
Vistana | Resort Management Contracts [Member] | ||||||
Allocation of total acquisition cost to the assets acquired and liabilities assumed | ||||||
Intangible assets | $ 150 | |||||
Adjustments to PPA | ||||||
Useful life | 26 years | |||||
Vistana | Customer relationships | ||||||
Allocation of total acquisition cost to the assets acquired and liabilities assumed | ||||||
Intangible assets | $ 90 | |||||
Adjustments to PPA | ||||||
Useful life | 22 years | |||||
Vistana | Other Intangible Assets [Member] | ||||||
Allocation of total acquisition cost to the assets acquired and liabilities assumed | ||||||
Intangible assets | $ 1 | |||||
Vistana | Other Intangible Assets [Member] | Maximum [Member] | ||||||
Adjustments to PPA | ||||||
Useful life | 1 year |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Restricted cash | ||
Escrow deposits on vacation ownership products | $ 57 | $ 2 |
Securitization VIEs | 35 | |
Other | 14 | 15 |
Total restricted cash | 106 | $ 17 |
Cash collateral | $ 19 |
VACATION OWNERSHIP MORTGAGES 53
VACATION OWNERSHIP MORTGAGES RECEIVABLE - Carrying amounts and Accretable yield (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | $ 751 | |
Less: allowance for loan losses on originated loans | (15) | |
Net vacation ownership mortgages receivable | 736 | $ 32 |
Cash collateral | 19 | |
Accretable yield expected to be collected over the carrying amount | ||
Balance, beginning of period | 12 | |
Vistana acquired accretable yield | 271 | |
Accretion | (33) | |
Reclassification between nonaccretable difference | (11) | |
Balance, end of period | 239 | |
Nonaccretable difference, end of period balance | 18 | |
Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 612 | 23 |
Expected remaining principal payment | 529 | 26 |
Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 139 | 11 |
Less: allowance for loan losses on originated loans | (15) | (2) |
Securitized | ||
Vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | 468 | |
Securitized | Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 458 | |
Net vacation ownership mortgages receivable | 458 | |
Securitized | Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 11 | |
Less: allowance for loan losses on originated loans | (1) | |
Net vacation ownership mortgages receivable | 10 | |
Unsecuritized | ||
Vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | 268 | 32 |
Unsecuritized vacation ownership receivables not eligible for securitization | 13 | |
Cash collateral | 19 | |
Unsecuritized | Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 154 | 23 |
Net vacation ownership mortgages receivable | 154 | |
Unsecuritized | Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 128 | 11 |
Less: allowance for loan losses on originated loans | (14) | $ (2) |
Net vacation ownership mortgages receivable | $ 114 |
VACATION OWNERSHIP MORTGAGES 54
VACATION OWNERSHIP MORTGAGES RECEIVABLE - Schedule of maturities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | $ 76 | |
2,018 | 72 | |
2,019 | 70 | |
2,020 | 71 | |
2,021 | 71 | |
2022 and thereafter | 308 | |
Total | 751 | |
Plus: net premium on acquired loans | 83 | |
Less: allowance for losses | (15) | |
Net vacation ownership mortgages receivable | 736 | $ 32 |
Acquired vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | 612 | 23 |
Net carrying amount | 612 | |
Originated vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | 139 | 11 |
Less: allowance for losses | (15) | (2) |
Receivables Acquired with Deteriorated Credit Quality | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | 668 | |
Securitized | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | 468 | |
Securitized | Acquired vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 50 | |
2,018 | 49 | |
2,019 | 48 | |
2,020 | 47 | |
2,021 | 45 | |
2022 and thereafter | 150 | |
Total | 458 | |
Plus: net premium on acquired loans | 69 | |
Net vacation ownership mortgages receivable | $ 458 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Interest rate on vacation ownership mortgage receivables, minimum | 7.75% | |
Securitized | Originated vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
2,018 | $ 1 | |
2,019 | 1 | |
2,020 | 1 | |
2,021 | 1 | |
2022 and thereafter | 7 | |
Total | 11 | |
Less: allowance for losses | (1) | |
Net vacation ownership mortgages receivable | $ 10 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Interest rate on vacation ownership mortgage receivables, minimum | 10.90% | |
Securitized | Receivables Acquired with Deteriorated Credit Quality | Acquired vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | $ 389 | |
Securitized | Receivables Acquired with Deteriorated Credit Quality | Originated vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | 11 | |
Unsecuritized | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | 268 | 32 |
Unsecuritized | Acquired vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 16 | |
2,018 | 14 | |
2,019 | 13 | |
2,020 | 14 | |
2,021 | 14 | |
2022 and thereafter | 69 | |
Total | 154 | 23 |
Plus: net premium on acquired loans | 14 | |
Net vacation ownership mortgages receivable | $ 154 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Interest rate on vacation ownership mortgage receivables, maximum | 15.90% | |
Unsecuritized | Originated vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | $ 10 | |
2,018 | 8 | |
2,019 | 8 | |
2,020 | 9 | |
2,021 | 11 | |
2022 and thereafter | 82 | |
Total | 128 | 11 |
Less: allowance for losses | (14) | $ (2) |
Net vacation ownership mortgages receivable | $ 114 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Interest rate on vacation ownership mortgage receivables, maximum | 16.90% | |
Unsecuritized | Receivables Acquired with Deteriorated Credit Quality | Acquired vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | $ 140 | |
Unsecuritized | Receivables Acquired with Deteriorated Credit Quality | Originated vacation | ||
Schedule of maturities for vacation ownership mortgages receivable | ||
Total | $ 128 |
VACATION OWNERSHIP MORTGAGES 55
VACATION OWNERSHIP MORTGAGES RECEIVABLE - Collectabiltity (Details) $ in Millions | Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Allowance for losses | $ 15 | |
Weighted average FICO score within originated loan pool | item | 711 | |
Vacation ownership mortgages receivable, gross | $ 751 | |
Average estimated rate of default for all outstanding loans | 10.00% | |
Receivables | $ 86 | $ 6 |
Greater than 700 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 379 | |
600 to 699 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 256 | |
Less than 600 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 19 | |
No Score | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 97 | |
Westin | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 308 | |
Westin | Greater than 700 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 185 | |
Westin | 600 to 699 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 91 | |
Westin | Less than 600 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 4 | |
Westin | No Score | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 28 | |
Sheraton | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 395 | |
Sheraton | Greater than 700 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 168 | |
Sheraton | 600 to 699 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 150 | |
Sheraton | Less than 600 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 13 | |
Sheraton | No Score | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 64 | |
Hyatt | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 37 | |
Hyatt | Greater than 700 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 20 | |
Hyatt | 600 to 699 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 14 | |
Hyatt | Less than 600 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 2 | |
Hyatt | No Score | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 1 | |
Other | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 11 | |
Other | Greater than 700 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 6 | |
Other | 600 to 699 | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 1 | |
Other | No Score | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 4 | |
Acquired vacation | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Vacation ownership mortgages receivable, gross | 612 | 23 |
Originated vacation | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Allowance for losses | 15 | 2 |
Vacation ownership mortgages receivable, gross | 139 | 11 |
Receivables | 139 | 11 |
Receivables Past Due | 1 | |
Originated vacation | Current | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Receivables current | 138 | $ 11 |
Originated vacation | 30-59 Days | ||
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Receivables Past Due | $ 1 |
VACATION OWNERSHIP INVENTORY (D
VACATION OWNERSHIP INVENTORY (Details) - USD ($) $ in Millions | Sep. 30, 2016 | May 11, 2016 | Dec. 31, 2015 |
VACATION OWNERSHIP INVENTORY | |||
Completed unsold vacation ownership interests | $ 124 | $ 46 | |
Vacation ownership products construction in process | 218 | ||
Other | 1 | ||
Total inventory | $ 342 | $ 47 | |
Vistana | |||
VACATION OWNERSHIP INVENTORY | |||
Completed unsold vacation ownership interests | $ 221 |
INVESTMENTS IN UNCONSOLIDATED57
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Carrying value of our investments in unconsolidated entities | |||||
Equity income from investments in unconsolidated entities | $ 2,000 | $ 1,000 | $ 4,000 | $ 4,000 | |
Carrying value of investments in unconsolidated entities | $ 59 | $ 59 | $ 38 | ||
Maui Timeshare Venture, LLC | |||||
Carrying value of our investments in unconsolidated entities | |||||
Ownership percentages of investments in unconsolidated entities | 33.00% | 33.00% | |||
Carrying value of investments in unconsolidated entities | $ 41,000 | $ 41,000 | 37,000 | ||
Harborside Investments | |||||
Carrying value of our investments in unconsolidated entities | |||||
Ownership percentages of investments in unconsolidated entities | 50.00% | 50.00% | |||
Carrying value of investments in unconsolidated entities | $ 13,000 | $ 13,000 | |||
Other | |||||
Carrying value of our investments in unconsolidated entities | |||||
Carrying value of investments in unconsolidated entities | $ 5,000 | $ 5,000 | $ 1,000 | ||
Other | Minimum [Member] | |||||
Carrying value of our investments in unconsolidated entities | |||||
Ownership percentages of investments in unconsolidated entities | 25.00% | 25.00% | |||
Other | Maximum [Member] | |||||
Carrying value of our investments in unconsolidated entities | |||||
Ownership percentages of investments in unconsolidated entities | 50.00% | 50.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
PROPERTY AND EQUIPMENT | ||
Less: accumulated depreciation and amortization | $ (154) | $ (127) |
Total property and equipment, net | 568 | 91 |
Computer Equipment [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 35 | 23 |
Software and Software Development Costs [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 136 | 108 |
Land, Buildings and Leasehold Improvements [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 357 | 51 |
Land held for development | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 56 | |
Furniture and Other Equipment [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 44 | 17 |
Construction in Progress [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 48 | |
Other projects in progress | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 46 | $ 19 |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Goodwill | ||
Number of reporting units | item | 2 | |
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | $ 561 | $ 562 |
Foreign Currency Translation | (2) | (1) |
Balance at the end of the period | 559 | 561 |
Exchange reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 496 | 496 |
Balance at the end of the period | 496 | 496 |
Rental reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 20 | 20 |
Balance at the end of the period | 20 | 20 |
VO management reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 38 | 39 |
Foreign Currency Translation | (2) | (1) |
Balance at the end of the period | 36 | 38 |
VO sales and financing reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 7 | 7 |
Balance at the end of the period | $ 7 | $ 7 |
GOODWILL AND OTHER INTANGIBLE60
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles assets, net (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 117 | $ 127 |
Intangible assets with definite lives, net | 349 | 123 |
Total intangible assets, net | 466 | 250 |
Change in indefinite-lived intangible assets | 10 | |
Resort Management Contracts [Member] | ||
Intangibles assets, net | ||
Intangible assets with indefinite lives | 73 | 83 |
Trade names | ||
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 44 | $ 44 |
GOODWILL AND OTHER INTANGIBLE61
GOODWILL AND OTHER INTANGIBLE ASSETS - Itangible assets with definite lives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other intangible assets | |||||
Cost | $ 659 | $ 659 | $ 420 | ||
Accumulated Amortization | (310) | (310) | (297) | ||
Net | 349 | 349 | 123 | ||
Amortization expense for intangible assets | 6 | $ 4 | 14 | $ 10 | |
Amortization of intangible assets | |||||
2,017 | 22 | 22 | |||
2,018 | 20 | 20 | |||
2,019 | 20 | 20 | |||
2,020 | 20 | 20 | |||
2,021 | 19 | 19 | |||
2022 and thereafter | 248 | 248 | |||
Net | 349 | 349 | 123 | ||
Customer relationships | |||||
Other intangible assets | |||||
Cost | 258 | 258 | 168 | ||
Accumulated Amortization | (134) | (134) | (132) | ||
Net | 124 | 124 | 36 | ||
Amortization of intangible assets | |||||
Net | 124 | 124 | 36 | ||
Purchase Agreements [Member] | |||||
Other intangible assets | |||||
Cost | 76 | 76 | 76 | ||
Accumulated Amortization | (76) | (76) | (76) | ||
Resort Management Contracts [Member] | |||||
Other intangible assets | |||||
Cost | 277 | 277 | 129 | ||
Accumulated Amortization | (55) | (55) | (46) | ||
Net | 222 | 222 | 83 | ||
Amortization of intangible assets | |||||
Net | 222 | 222 | 83 | ||
Technology | |||||
Other intangible assets | |||||
Cost | 25 | 25 | 25 | ||
Accumulated Amortization | (25) | (25) | (25) | ||
Other Intangible Assets [Member] | |||||
Other intangible assets | |||||
Cost | 23 | 23 | 22 | ||
Accumulated Amortization | (20) | (20) | (18) | ||
Net | 3 | 3 | 4 | ||
Amortization of intangible assets | |||||
Net | $ 3 | $ 3 | $ 4 |
CONSOLIDATED VARIABLE INTERES62
CONSOLIDATED VARIABLE INTEREST ENTITIES (Details) $ in Millions | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Assets | |||
Restricted cash and cash equivalents | $ 102 | $ 102 | $ 17 |
Vistana's outstanding securitization transactions | |||
Consolidated variable interest entities | |||
Number of outstanding securitization transactions | item | 3 | ||
Excess cash flows | 8 | ||
Assets | |||
Restricted cash and cash equivalents | 35 | $ 35 | |
Interest receivable | 3 | 3 | |
Vacation ownership notes receivable, net | 467 | 467 | |
Total | 505 | 505 | |
Liabilities | |||
Interest payable | 1 | 1 | |
Securitized debt | 467 | 467 | |
Total | $ 468 | $ 468 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
General accrued expenses | $ 70 | $ 18 |
Accrued other taxes | 15 | 5 |
Customer deposits | 68 | 13 |
Accrued membership related | 26 | 20 |
Accrued construction costs | 37 | |
Accrued expenses and other current liabilities | $ 216 | $ 56 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Deferred membership-related revenue | $ 174 | $ 169 |
Deferred sales of vacation ownership products | 45 | |
Other | 6 | 4 |
Total | $ 225 | $ 173 |
Minimum [Member] | ||
Membership period | 1 year | |
Maximum [Member] | ||
Membership period | 5 years |
SECURITIZED VACATION OWNERSHI65
SECURITIZED VACATION OWNERSHIP DEBT (Details) - USD ($) $ in Millions | Sep. 20, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Apr. 30, 2014 | Jun. 21, 2012 |
Securitized vacation ownership debt | ||||||||
Total securitized vacation ownership debt | $ 415 | $ 415 | $ 416 | |||||
Unamortized debt issuance costs | (5) | (5) | ||||||
Escrow Deposit | 57 | 57 | $ 2 | |||||
Interest expense | $ 6 | $ 6 | $ 18 | $ 15 | ||||
Revolving Credit Facility [Member] | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 2.28% | 2.28% | 2.68% | |||||
Unamortized debt issuance costs | $ (4) | $ (4) | $ (3) | |||||
Maximum borrowing capacity | $ 600 | $ 500 | ||||||
Vistana's outstanding securitization transactions | ||||||||
Securitized vacation ownership debt | ||||||||
Total securitized vacation ownership debt | 467 | 467 | ||||||
Unamortized debt issuance costs | (5) | (5) | ||||||
Securitisation of asset backed notes | $ 375 | |||||||
overall weighted average coupon rate (in percentage) | 2.56% | |||||||
Advance rate | 96.50% | |||||||
Escrow Deposit | $ 19 | |||||||
Vistana's outstanding securitization transactions | Revolving Credit Facility [Member] | ||||||||
Securitized vacation ownership debt | ||||||||
Maximum borrowing capacity | 600 | |||||||
Vistana's outstanding securitization transactions | 2010 securitization, interest rates ranging from 3.65% to 4.75%, maturing 2021 | ||||||||
Securitized vacation ownership debt | ||||||||
Repayment of outstanding balance | 33 | |||||||
Vistana's outstanding securitization transactions | 2011 securitization, interest rates ranging from 3.67% to 4.82%, maturing 2025 | ||||||||
Securitized vacation ownership debt | ||||||||
Aggregate carrying amount | 48 | 48 | ||||||
Vistana's outstanding securitization transactions | 2012 securitization, interest rates ranging from 2.00% to 2.76%, maturing 2023 | ||||||||
Securitized vacation ownership debt | ||||||||
Aggregate carrying amount | 49 | 49 | ||||||
Vistana's outstanding securitization transactions | 2016 securitization, interest rates ranging from 2.54% to 2.74%, maturing 2024 | ||||||||
Securitized vacation ownership debt | ||||||||
Aggregate carrying amount | 375 | 375 | ||||||
Unamortized debt issuance costs | $ (5) | $ (5) | ||||||
Vistana's outstanding securitization transactions | Class A notes | ||||||||
Securitized vacation ownership debt | ||||||||
Securitisation of asset backed notes | 346 | |||||||
Vistana's outstanding securitization transactions | Class B notes | ||||||||
Securitized vacation ownership debt | ||||||||
Securitisation of asset backed notes | 29 | |||||||
Vistana's outstanding securitization transactions | Minimum [Member] | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 2.54% | 2.54% | ||||||
Vistana's outstanding securitization transactions | Minimum [Member] | 2011 securitization, interest rates ranging from 3.67% to 4.82%, maturing 2025 | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 3.67% | 3.67% | ||||||
Vistana's outstanding securitization transactions | Minimum [Member] | 2012 securitization, interest rates ranging from 2.00% to 2.76%, maturing 2023 | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 2.00% | 2.00% | ||||||
Vistana's outstanding securitization transactions | Maximum [Member] | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 2.74% | 2.74% | ||||||
Additional loans | $ 19 | |||||||
Interest expense | $ 1 | $ 1 | ||||||
Vistana's outstanding securitization transactions | Maximum [Member] | 2011 securitization, interest rates ranging from 3.67% to 4.82%, maturing 2025 | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 4.82% | 4.82% | ||||||
Vistana's outstanding securitization transactions | Maximum [Member] | 2012 securitization, interest rates ranging from 2.00% to 2.76%, maturing 2023 | ||||||||
Securitized vacation ownership debt | ||||||||
Stated interest rate (as a percent) | 2.76% | 2.76% |
LONG-TERM DEBT - Long term debt
LONG-TERM DEBT - Long term debt table (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Apr. 10, 2015 |
LONG-TERM DEBT | |||
Unamortized debt issuance costs | $ (5) | ||
Total long-term debt, net of unamortized debt issuance costs | 415 | $ 416 | |
5.625% Senior Notes | |||
LONG-TERM DEBT | |||
5.625% senior notes | 350 | 350 | $ 350 |
Unamortized debt issuance costs | $ (6) | $ (6) | |
Stated interest rate (as a percent) | 5.625% | 5.625% | 5.625% |
Revolving Credit Facility [Member] | |||
LONG-TERM DEBT | |||
Revolving credit facility | $ 75 | $ 75 | |
Unamortized debt issuance costs | $ (4) | $ (3) | |
Stated interest rate (as a percent) | 2.28% | 2.68% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) $ in Millions | Apr. 10, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | May 05, 2015 | Apr. 30, 2014USD ($) | Jun. 21, 2012USD ($) |
Senior Secured Credit Facility and Covenants | |||||||||
Total unamortized debt issuance costs | $ 10 | $ 10 | $ 9 | ||||||
Accumulated amortization on debt issuance costs | 5 | 5 | 4 | ||||||
Interest expense | 6 | $ 6 | 18 | $ 15 | |||||
Unamortized debt issuance costs | 5 | $ 5 | |||||||
Minimum fixed charge coverage ratio | 2 | ||||||||
5.625% Senior Notes | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
5.625% senior notes | $ 350 | $ 350 | $ 350 | $ 350 | |||||
Proceeds from issuance of senior notes | $ 343 | ||||||||
Stated interest rate (as a percent) | 5.625% | 5.625% | 5.625% | 5.625% | |||||
Unamortized debt issuance costs | $ 6 | $ 6 | $ 6 | ||||||
Redemption price ( as a percent) | 104.219% | ||||||||
Issuer and subsidiary guarantors | 5.625% Senior Notes | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Ownership interest ( as a percent) | 100.00% | 100.00% | |||||||
Revolving Credit Facility [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Principal amount | $ 600 | $ 500 | |||||||
Amount outstanding | $ 75 | $ 75 | $ 75 | ||||||
Commitment fee (as a percent) | 0.275% | ||||||||
Percentage of voting equity securities of the Borrower and its U.S. subsidiaries by which credit facility is secured | 100.00% | ||||||||
Percentage of equity in the first-tier foreign subsidiaries of the Borrower by which credit facility is secured | 65.00% | ||||||||
Stated interest rate (as a percent) | 2.28% | 2.28% | 2.68% | ||||||
Unamortized debt issuance costs | $ 4 | $ 4 | $ 3 | ||||||
Revolving Credit Facility [Member] | Scenario, Actual [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 0.24 | ||||||||
Consolidated interest coverage ratio | 13.15 | ||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.25% | ||||||||
Revolving Credit Facility [Member] | Minimum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated interest coverage ratio | 3 | ||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.40% | ||||||||
Revolving Credit Facility [Member] | Maximum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.25 | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | Base Rate | ||||||||
Applicable margin (as a percent) | 1.00% | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 0.25% | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 1.50% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | LIBOR | ||||||||
Applicable margin (as a percent) | 2.00% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 1.25% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 2.50% | ||||||||
Third Amendment To Credit Agreement | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.40% | ||||||||
Third Amendment To Credit Agreement | Scenario, Actual [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.5 | ||||||||
Third Amendment To Credit Agreement | Maximum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.25 | ||||||||
Third Amendment To Credit Agreement | Maximum [Member] | Pro Forma | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 4.50 | ||||||||
Third Amendment To Credit Agreement | Base Rate [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | Base Rate | ||||||||
Applicable margin (as a percent) | 1.50% | ||||||||
Third Amendment To Credit Agreement | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | LIBOR | ||||||||
Applicable margin (as a percent) | 2.50% | ||||||||
Fourth Amendment To Credit Agreement Member | 5.625% Senior Notes | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Stated interest rate (as a percent) | 5.625% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Apr. 10, 2015 | |
Fair Value of Financial Instruments | ||||
Restricted cash and cash equivalents | $ 102,000 | $ 17,000 | ||
Debt issuance costs | 5,000 | |||
5.625% Senior Notes | ||||
Fair Value of Financial Instruments | ||||
Senior notes | (350,000) | (350,000) | $ (350,000) | |
Debt issuance costs | 6,000 | 6,000 | ||
Revolving Credit Facility [Member] | ||||
Fair Value of Financial Instruments | ||||
Revolving credit facility | (75,000) | (75,000) | ||
Debt issuance costs | 4,000 | 3,000 | ||
HVO | ||||
Fair Value of Financial Instruments | ||||
Investments in marketable securities | 14,000 | |||
Reported Value Measurement [Member] | ||||
Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 158 | 93 | ||
Restricted cash and cash equivalents | 106 | 17 | ||
Financing receivables | 19,000 | 16,000 | ||
Vacation ownership mortgages receivable | 736,000 | 32,000 | ||
Investments in marketable securities | 14,000 | 11,000 | ||
Securitized debt | 467,000 | |||
Revolving credit facility | [1] | (71,000) | (72,000) | |
Senior notes | [1] | (344,000) | (344,000) | |
Reported Value Measurement [Member] | 5.625% Senior Notes | ||||
Fair Value of Financial Instruments | ||||
Debt issuance costs | 6,000 | |||
Reported Value Measurement [Member] | Revolving Credit Facility [Member] | ||||
Fair Value of Financial Instruments | ||||
Debt issuance costs | 4,000 | |||
Estimate of Fair Value Measurement [Member] | ||||
Fair Value of Financial Instruments | ||||
Cash and cash equivalents | 158 | 93 | ||
Restricted cash and cash equivalents | 106 | 17 | ||
Financing receivables | 19,000 | 16,000 | ||
Vacation ownership mortgages receivable | 749,000 | 34,000 | ||
Investments in marketable securities | 14,000 | 11,000 | ||
Securitized debt | 473,000 | |||
Revolving credit facility | [1] | (75,000) | (75,000) | |
Senior notes | [1] | $ (363,000) | $ (348,000) | |
[1] | As of September 30, 2016, the carrying value of our revolving credit facility and senior notes include $4 million and $6 million of debt issuance costs, respectively, which are presented as a direct reduction of the corresponding liability. |
EQUITY (Details)
EQUITY (Details) $ / shares in Units, $ in Millions | May 11, 2016shares | Nov. 04, 2013USD ($) | Nov. 30, 2016USD ($)$ / shares | Sep. 30, 2016USD ($)$ / sharesshares | Aug. 31, 2016$ / shares | Jun. 30, 2016USD ($) | May 31, 2016USD ($)$ / shares | Feb. 29, 2016USD ($)$ / shares | Jun. 30, 2009shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015$ / shares | Sep. 30, 2016USD ($)item$ / sharesshares | Sep. 30, 2015$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2015USD ($)$ / sharesshares |
Equity | |||||||||||||||
Authorized shares of common stock | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | |||||||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Shares of common stock issued | 133,522,339 | 133,522,339 | 133,522,339 | 59,853,933 | |||||||||||
Shares of common stock outstanding | 124,700,000 | 124,700,000 | 124,700,000 | 57,500,000 | |||||||||||
Shares held as treasury stock | 8,810,081 | 8,810,081 | 8,810,081 | 2,363,324 | |||||||||||
Authorized shares of preferred stock | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | |||||||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Preferred stock, issued shares | 0 | 0 | 0 | 0 | |||||||||||
Preferred stock, outstanding shares | 0 | 0 | 0 | 0 | |||||||||||
Minimum number of series to issue preferred stock | item | 1 | ||||||||||||||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.36 | ||||||||
Cash dividend paid | $ | $ 15 | $ 16 | $ 7 | ||||||||||||
Stockholder Rights Plan | |||||||||||||||
Rights per common stock share declared as dividend | 1 | ||||||||||||||
Minimum percentage of common stock to be acquired before rights become exercisable | 15.00% | ||||||||||||||
Percentage of discount on prevailing market price of common stock | 50.00% | ||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Common stock repurchased | $ | $ 100 | ||||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ | 29 | $ 29 | $ 29 | $ 33 | |||||||||||
Share Repurchase Program | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Number of shares of common stock repurchased | 6,400,000 | ||||||||||||||
Common stock repurchased | $ | $ 100 | ||||||||||||||
Remaining availability for future repurchases of common stock | $ | $ 100 | ||||||||||||||
ILG | Share Repurchase Program | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Remaining availability for future repurchases of common stock | $ | $ 50 | ||||||||||||||
World Resorts and Hotels [Member] | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Premium upon exercise of share options to settle loan (as a percent) | 20.00% | ||||||||||||||
World Resorts and Hotels [Member] | Convertible Debt [Member] | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Convertible secured loan available, subject to certain conditions being met | $ | $ 15 | ||||||||||||||
World Resorts and Hotels [Member] | Vacation Resorts International Europe Limited [Member] | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Equity of VRIE issued as consideration for acquisition (as a percent) | 24.50% | ||||||||||||||
Ownership interest ( as a percent) | 75.50% | ||||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ | 27 | 27 | 27 | 31 | |||||||||||
Period from acquisition during which parties have agreed not to transfer their interests | 5 years | ||||||||||||||
HVO | |||||||||||||||
Equity and Share Repurchase Program | |||||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ | $ 1 | $ 1 | $ 1 | $ 2 | |||||||||||
Vistana | |||||||||||||||
Equity | |||||||||||||||
Common stock issued (in shares) | 72,400,000 | ||||||||||||||
Subsequent Event | |||||||||||||||
Equity | |||||||||||||||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.12 |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ in Millions | Oct. 01, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | |||||
Employee contribution as maximum percentage of pre-tax earnings | 50.00% | ||||
Employer contribution against each dollar contributed by employee (as a percent) | 50.00% | ||||
Net matching contributions | $ 2 | $ 1 | $ 4 | $ 2 | |
Deferred compensation plan | |||||
Vesting percentage under deferred compensation plan | 100.00% | ||||
Shares of common stock reserved for issuance pursuant to deferred compensation plan | 100,000 | 100,000 | |||
Shares outstanding under the deferred compensation plan | 59,124 | 59,124 | |||
Fair value of investments in the Rabbi Trust | $ 14 | ||||
Unrealized Gain on Investments | $ 1 | $ 1 | |||
Maximum [Member] | |||||
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | |||||
Employer's maximum contribution of participant's eligible earnings (as a percent) | 3.00% | ||||
HVO | |||||
Deferred compensation plan | |||||
Net transfer into deferred compensation plan | 11 | ||||
Vistana | |||||
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | |||||
Employer contribution against each dollar contributed by employee (as a percent) | 100.00% | ||||
Employer's maximum contribution of participant's eligible earnings (as a percent) | 1.00% | ||||
Deferred compensation plan | |||||
Net transfer into deferred compensation plan | $ 2 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions | May 12, 2016USD ($)shares | May 11, 2016USD ($)shares | Mar. 21, 2013shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016USD ($)item$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Aug. 31, 2016shares |
STOCK-BASED COMPENSATION | ||||||||||
Per unit grant date fair value (in dollars per unit) | $ / shares | $ 13.34 | |||||||||
Fair value | $ | $ 2 | |||||||||
Non-cash compensation expense | $ | $ 5 | $ 3 | 13 | $ 10 | ||||||
Unrecognized compensation expense | ||||||||||
Unrecognized compensation cost, net of estimated forfeitures | $ | $ 30 | $ 30 | ||||||||
Weighted average period for recognition of unrecognized compensation expense | 2 years | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 862,000 | 423,000 | ||||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting period | 1 year | 1 year | ||||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting period | 4 years | 4 years | ||||||||
Restricted Stock Units (RSUs) [Member] | Cliff vesting | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 142,000 | 105,000 | ||||||||
Award vesting period | 3 years | 3 years | ||||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 105,000 | 54,000 | ||||||||
Per unit grant date fair value (in dollars per unit) | $ / shares | $ 13.13 | $ 40.71 | ||||||||
Number of peer groups for estimating total shareholder return ranking | item | 2 | |||||||||
The estimated performance period to be considered for historical average volatility rate | 3 years | |||||||||
The performance measurement period to be considered for risk free interest rate assumption | 3 years | |||||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | Minimum [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 0.00% | 0.00% | ||||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | Maximum [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 200.00% | 200.00% | ||||||||
Stock and Incentive Compensation Plan 2013 [Member] | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Number of shares of common stock reserved for issuance | 4,100,000 | 4,000,000 | 4,000,000 | |||||||
Reduction from common stock reserved for issuance for every share granted under prior plan | 1 | |||||||||
Remaining shares available for future issuance | 4,000,000 | |||||||||
Non-cash compensation expense | $ | $ 5 | $ 3 | $ 13 | $ 10 | ||||||
Stock and Incentive Compensation Plan 2013 [Member] | Vistana | Vistana Employees | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Fair value | $ | $ 10 | |||||||||
Fair Value, pre-acquisition services | $ | 2 | |||||||||
Fair Value, post-acquisition services | $ | $ 8 | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Vistana | Vistana Employees | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Shares issued in conversion | 11,000 | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 595,000 | |||||||||
Non-cash compensation expense | $ | $ 5 | |||||||||
Expense on accelerated basis | $ | $ 3 | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Cliff vesting | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 375,000 | |||||||||
Award vesting period | 3 years | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 220,000 | |||||||||
Award vesting period | 3 years | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Adjusted EBITDA Target | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 168,000 | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Adjusted EBITDA Target | Minimum [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 0.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Adjusted EBITDA Target | Maximum [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 200.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Revenue Target | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
New awards granted (in shares) | 75,000 | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Revenue Target | Minimum [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting percent | 0.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Revenue Target | Maximum [Member] | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting percent | 140.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Period One | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting percent | 30.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Period Two | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting percent | 30.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member] | Period Three | Vistana | Executive Officers | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Award vesting percent | 40.00% | |||||||||
Stock and Incentive Compensation Plan 2013 [Member] | Restricted stock | Vistana | Vistana Employees | ||||||||||
STOCK-BASED COMPENSATION | ||||||||||
Shares issued in conversion | 713,000 |
STOCK-BASED COMPENSATION - Non-
STOCK-BASED COMPENSATION - Non-cash stock-based compensation expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | $ 5 | $ 3 | $ 13 | $ 10 |
Cost of Sales [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | 1 | 1 | 1 | |
Selling and Marketing Expense [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | 1 | 1 | ||
General and Administrative Expense [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | $ 4 | $ 3 | $ 11 | $ 8 |
STOCK-BASED COMPENSATION - RSU
STOCK-BASED COMPENSATION - RSU activity (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 2 |
Granted (in shares) | shares | 2 |
Vested (in shares) | shares | (1) |
Outstanding at the end of the period (in shares) | shares | 3 |
Weighted-Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 22.98 |
Granted (in dollars per share) | $ / shares | 13.34 |
Vested (in dollars per share) | $ / shares | 20.58 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 16.76 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of total income tax provision | ||||
Income tax (provision) benefit | $ 2 | $ (11) | $ (46) | $ (35) |
Effective tax rate (as a percent) | (7.40%) | 35.30% | 16.30% | 35.80% |
Federal statutory rate (as a percent) | 35.00% | 35.00% | ||
ILG | ||||
Reconciliation of total income tax provision | ||||
Income tax (provision) benefit | $ 8 | $ (29) | $ 1 |
SEGMENT INFORMATION - Reportabl
SEGMENT INFORMATION - Reportable segments(Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
SEGMENT INFORMATION | |||||
Number of operating segments which are also reportable segments | item | 2 | ||||
Sales of vacation ownership products, net | $ 96 | $ 7 | $ 154 | $ 21 | |
Consumer financing revenue | 23 | 1 | 37 | 4 | |
Cost reimbursement revenue | 88 | 38 | 189 | 114 | |
Total revenues | 418 | 174 | 901 | 532 | |
Cost of service and membership related sales | 30 | 26 | 82 | 77 | |
Cost of sales of vacation ownership products | 31 | 1 | 56 | 13 | |
Cost of rental and ancillary services | 67 | 9 | 123 | 31 | |
Cost of consumer financing | 4 | 7 | |||
Cost reimbursements | 88 | 38 | 189 | 114 | |
Total cost of sales | 220 | 74 | 457 | 235 | |
Royalty fee expense | 9 | 1 | 16 | 3 | |
Selling and marketing expense | 66 | 18 | 125 | 55 | |
General and administrative expense | 56 | 40 | 148 | 111 | |
Amortization expense of intangibles | 6 | 4 | 14 | 10 | |
Depreciation expense | 14 | 4 | 28 | 13 | |
Operating expenses | 151 | 67 | 331 | 192 | |
Operating income | 47 | 33 | 113 | 105 | |
Total assets | |||||
Total assets | 3,232 | 3,232 | $ 1,279 | ||
Exchange and Rental | |||||
SEGMENT INFORMATION | |||||
Transaction Revenue | 47 | 47 | 155 | 151 | |
Membership fee revenue | 35 | 31 | 99 | 94 | |
Ancillary member revenue | 1 | 2 | 4 | 5 | |
Total member revenue | 83 | 80 | 258 | 250 | |
Club rental revenue | 24 | 2 | 42 | 7 | |
Other revenue | 6 | 5 | 18 | 18 | |
Rental management revenue | 13 | 14 | 36 | 39 | |
Cost reimbursement revenue | 25 | 24 | 71 | 71 | |
Total revenues | 151 | 125 | 425 | 385 | |
Cost of service and membership related sales | 19 | 16 | 51 | 51 | |
Cost of sales of vacation ownership products | 20 | 7 | 51 | 25 | |
Cost reimbursements | 25 | 24 | 71 | 71 | |
Total cost of sales | 64 | 47 | 173 | 147 | |
Royalty fee expense | 1 | 1 | 1 | ||
Selling and marketing expense | 13 | 14 | 42 | 45 | |
General and administrative expense | 30 | 27 | 87 | 79 | |
Amortization expense of intangibles | 3 | 2 | 8 | 6 | |
Depreciation expense | 5 | 4 | 14 | 12 | |
Operating income | 36 | 30 | 100 | 95 | |
Total assets | |||||
Total assets | 1,004 | 1,004 | 905 | ||
Vacation Ownership | |||||
SEGMENT INFORMATION | |||||
Resort operations revenue | 53 | 5 | 86 | 12 | |
Management fee revenue | 32 | 22 | 81 | 67 | |
Sales of vacation ownership products, net | 96 | 7 | 154 | 21 | |
Consumer financing revenue | 23 | 1 | 37 | 4 | |
Cost reimbursement revenue | 63 | 14 | 118 | 43 | |
Total revenues | 267 | 49 | 476 | 147 | |
Cost of service and membership related sales | 11 | 10 | 31 | 26 | |
Cost of sales of vacation ownership products | 31 | 1 | 56 | 13 | |
Cost of rental and ancillary services | 47 | 2 | 72 | 6 | |
Cost of consumer financing | 4 | 7 | |||
Cost reimbursements | 63 | 14 | 118 | 43 | |
Total cost of sales | 156 | 27 | 284 | 88 | |
Royalty fee expense | 9 | 15 | 2 | ||
Selling and marketing expense | 53 | 4 | 83 | 10 | |
General and administrative expense | 26 | 13 | 61 | 32 | |
Amortization expense of intangibles | 3 | 2 | 6 | 4 | |
Depreciation expense | 9 | 14 | 1 | ||
Operating income | 11 | $ 3 | 13 | $ 10 | |
Total assets | |||||
Total assets | 2,228 | 2,228 | 374 | ||
ILG | |||||
Total assets | |||||
Total assets | $ 606 | $ 606 | $ 540 |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Dec. 31, 2015USD ($) | ||
Geographic Information | ||||||
Number of other countries in which entity operates | item | 14 | 14 | 14 | 14 | ||
Revenue: | ||||||
Revenue | $ 418 | $ 174 | $ 901 | $ 532 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 568 | $ 568 | $ 91 | |||
Minimum [Member] | ||||||
Geographic Information | ||||||
Number of countries from which revenue is sourced | item | 100 | 100 | ||||
UNITED STATES | ||||||
Revenue: | ||||||
Revenue | 354 | 145 | $ 760 | $ 441 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 460 | 460 | 87 | |||
Mexico | ||||||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 104 | 104 | ||||
Europe [Member] | ||||||
Revenue: | ||||||
Revenue | 16 | 16 | 50 | 51 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 4 | 4 | $ 4 | |||
All Other Countries [Member] | ||||||
Revenue: | ||||||
Revenue | [1] | $ 48 | $ 13 | $ 91 | $ 40 | |
[1] | Includes countries within the following continents: Africa, Asia, Australia, North America and South America. |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Guarantees and commitments (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Commitments and guarantees | |
Letter of credit outstanding amount | $ 11 |
Vacation ownership projects under development | |
Commitments and guarantees | |
Cost associated with completing the vacation ownership projects under percentage of completion method | 39 |
Guarantees Surety Bonds Letters of Credit [Member] | |
Commitments and guarantees | |
Guarantees and commitments amount | 101 |
Amount of guarantees and commitments, year one | 71 |
Indirect Guarantee of Indebtedness [Member] | |
Commitments and guarantees | |
Guarantees and commitments amount | 35 |
Reasonable expectation of guarantees and commitments amount | $ 6 |
Indirect Guarantee of Indebtedness [Member] | Minimum [Member] | |
Commitments and guarantees | |
Notice period for termination of lease | 60 days |
Indirect Guarantee of Indebtedness [Member] | Maximum [Member] | |
Commitments and guarantees | |
Notice period for termination of lease | 90 days |
Guarantees construction loan | |
Commitments and guarantees | |
Guarantees and commitments amount | $ 37 |
SUPPLEMENTAL GUARANTOR INFORM78
SUPPLEMENTAL GUARANTOR INFORMATION - Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Balance Sheet | ||
Current assets | $ 854 | $ 258 |
Property and equipment, net | 568 | 91 |
Goodwill and intangible assets, net | 1,025 | 811 |
Other assets | 785 | 119 |
TOTAL ASSETS | 3,232 | 1,279 |
Current liabilities | 623 | 212 |
Other long term liabilities | 262 | 185 |
Long-term debt | 759 | 416 |
Redeemable noncontrolling interest | 1 | 1 |
ILG stockholders' equity | 1,558 | 432 |
Noncontrolling interests | 29 | 33 |
TOTAL LIABILITIES AND EQUITY | 3,232 | 1,279 |
Total Eliminations | ||
Balance Sheet | ||
Investments in subsidiaries | (2,287) | (1,996) |
TOTAL ASSETS | (2,287) | (1,996) |
ILG stockholders' equity | (2,287) | (1,996) |
TOTAL LIABILITIES AND EQUITY | (2,287) | (1,996) |
ILG | ||
Balance Sheet | ||
Current assets | 2 | 1 |
Investments in subsidiaries | 604 | 539 |
TOTAL ASSETS | 606 | 540 |
Current liabilities | 2 | 1 |
Intercompany liabilities (receivables)/equity | (954) | 107 |
ILG stockholders' equity | 1,558 | 432 |
TOTAL LIABILITIES AND EQUITY | 606 | 540 |
Interval Acquisition Corp | ||
Balance Sheet | ||
Current assets | 1 | |
Goodwill and intangible assets, net | 267 | 268 |
Investments in subsidiaries | 1,295 | 1,321 |
TOTAL ASSETS | 1,563 | 1,589 |
Current liabilities | 9 | 5 |
Long-term debt | 415 | 416 |
Intercompany liabilities (receivables)/equity | 535 | 629 |
ILG stockholders' equity | 604 | 539 |
TOTAL LIABILITIES AND EQUITY | 1,563 | 1,589 |
Guarantor Subsidiaries | ||
Balance Sheet | ||
Current assets | 560 | 148 |
Property and equipment, net | 409 | 65 |
Goodwill and intangible assets, net | 656 | 427 |
Investments in subsidiaries | 388 | 136 |
Other assets | 307 | 103 |
TOTAL ASSETS | 2,320 | 879 |
Current liabilities | 426 | 175 |
Other long term liabilities | 233 | 163 |
Long-term debt | (12) | (8) |
Intercompany liabilities (receivables)/equity | 375 | (775) |
Redeemable noncontrolling interest | 1 | 1 |
ILG stockholders' equity | 1,295 | 1,321 |
Noncontrolling interests | 2 | 2 |
TOTAL LIABILITIES AND EQUITY | 2,320 | 879 |
Non-Guarantor Subsidiaries | ||
Balance Sheet | ||
Current assets | 291 | 109 |
Property and equipment, net | 159 | 26 |
Goodwill and intangible assets, net | 102 | 116 |
Other assets | 478 | 16 |
TOTAL ASSETS | 1,030 | 267 |
Current liabilities | 186 | 31 |
Other long term liabilities | 29 | 22 |
Long-term debt | 356 | 8 |
Intercompany liabilities (receivables)/equity | 44 | 39 |
ILG stockholders' equity | 388 | 136 |
Noncontrolling interests | 27 | 31 |
TOTAL LIABILITIES AND EQUITY | $ 1,030 | $ 267 |
SUPPLEMENTAL GUARANTOR INFORM79
SUPPLEMENTAL GUARANTOR INFORMATION - Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Income | ||||
Revenue | $ 418 | $ 174 | $ 901 | $ 532 |
Operating expenses | (371) | (141) | (788) | (427) |
Interest (expense) income, net | (6) | (6) | (17) | (14) |
Other income (expense), net | (13) | 3 | 186 | 3 |
Income tax benefit (provision) | 2 | (11) | (46) | (35) |
Equity in earnings from unconsolidated entities | 2 | 1 | 4 | 4 |
Net income | 32 | 20 | 240 | 63 |
Net income attributable to noncontrolling interests | (1) | (2) | (2) | |
Net income attributable to common stockholders | 32 | 19 | 238 | 61 |
Total Eliminations | ||||
Statement of Income | ||||
Other income (expense), net | (81) | (47) | (198) | (145) |
Net income | (81) | (47) | (198) | (145) |
Net income attributable to common stockholders | (81) | (47) | (198) | (145) |
ILG | ||||
Statement of Income | ||||
Operating expenses | (2) | (1) | (4) | (3) |
Other income (expense), net | 26 | 20 | 271 | 63 |
Income tax benefit (provision) | 8 | (29) | 1 | |
Net income | 32 | 19 | 238 | 61 |
Net income attributable to common stockholders | 32 | 19 | 238 | 61 |
Interval Acquisition Corp | ||||
Statement of Income | ||||
Interest (expense) income, net | (7) | (6) | (20) | (15) |
Other income (expense), net | 42 | 23 | 100 | 72 |
Income tax benefit (provision) | 3 | 3 | 6 | |
Net income | 35 | 20 | 83 | 63 |
Net income attributable to common stockholders | 35 | 20 | 83 | 63 |
Guarantor Subsidiaries | ||||
Statement of Income | ||||
Revenue | 350 | 148 | 762 | 452 |
Operating expenses | (310) | (117) | (669) | (359) |
Interest (expense) income, net | 2 | 4 | 1 | |
Other income (expense), net | 4 | 3 | 15 | 10 |
Income tax benefit (provision) | (6) | (11) | (17) | (35) |
Equity in earnings from unconsolidated entities | 2 | 1 | 4 | 4 |
Net income | 42 | 24 | 99 | 73 |
Net income attributable to noncontrolling interests | 1 | |||
Net income attributable to common stockholders | 42 | 24 | 100 | 73 |
Non-Guarantor Subsidiaries | ||||
Statement of Income | ||||
Revenue | 68 | 26 | 139 | 80 |
Operating expenses | (59) | (23) | (115) | (65) |
Interest (expense) income, net | (1) | (1) | ||
Other income (expense), net | (4) | 4 | (2) | 3 |
Income tax benefit (provision) | (3) | (3) | (7) | |
Net income | 4 | 4 | 18 | 11 |
Net income attributable to noncontrolling interests | (1) | (3) | (2) | |
Net income attributable to common stockholders | $ 4 | $ 3 | $ 15 | $ 9 |
SUPPLEMENTAL GUARANTOR INFORM80
SUPPLEMENTAL GUARANTOR INFORMATION - Statement of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Cash Flows | ||
Cash flows provided by (used in) operating activities | $ 74 | $ 135 |
Cash flows provided by (used in) investing activities | (128) | (14) |
Cash flows provided by (used in) financing activities | 121 | (96) |
Effect of exchange rate changes on cash and cash equivalents | (2) | (5) |
Cash and cash equivalents at beginning of period | 93 | 81 |
Cash and cash equivalents at end of period | 158 | 101 |
ILG | ||
Statement of Cash Flows | ||
Cash flows provided by (used in) operating activities | (33) | (2) |
Cash flows provided by (used in) investing activities | 1,221 | |
Cash flows provided by (used in) financing activities | (1,188) | 2 |
Interval Acquisition Corp | ||
Statement of Cash Flows | ||
Cash flows provided by (used in) operating activities | (11) | 1 |
Cash flows provided by (used in) financing activities | 11 | (1) |
Guarantor Subsidiaries | ||
Statement of Cash Flows | ||
Cash flows provided by (used in) operating activities | 470 | 115 |
Cash flows provided by (used in) investing activities | (1,350) | (13) |
Cash flows provided by (used in) financing activities | 920 | (95) |
Cash and cash equivalents at beginning of period | 14 | 17 |
Cash and cash equivalents at end of period | 54 | 24 |
Non-Guarantor Subsidiaries | ||
Statement of Cash Flows | ||
Cash flows provided by (used in) operating activities | (352) | 21 |
Cash flows provided by (used in) investing activities | 1 | (1) |
Cash flows provided by (used in) financing activities | 378 | (2) |
Effect of exchange rate changes on cash and cash equivalents | (2) | (5) |
Cash and cash equivalents at beginning of period | 79 | 64 |
Cash and cash equivalents at end of period | $ 104 | $ 77 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
Revenue | $ 418 | $ 174 | $ 901 | $ 532 | |||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 220 | 74 | 457 | 235 | |||
Selling and marketing expense | 66 | 18 | 125 | 55 | |||
General and administrative expense | 56 | 40 | 148 | 111 | |||
Amortization expense of intangibles | 6 | 4 | 14 | 10 | |||
Depreciation expense | 14 | 4 | 28 | 13 | |||
Operating income | 47 | 33 | 113 | 105 | |||
Other income (expense): | |||||||
Interest income | 1 | 1 | |||||
Interest expense | (6) | (6) | (18) | (15) | |||
Other income (expense), net | (13) | 3 | 186 | 3 | |||
Other income (expense), net | (4) | 3 | (2) | 3 | |||
Equity in earnings from unconsolidated entities | 2 | 1 | 4 | 4 | |||
Total other income (expense), net | (17) | (2) | 173 | (7) | |||
Earnings before income taxes and noncontrolling interests | 30 | 31 | 286 | 98 | |||
Income tax (provision) benefit | 2 | (11) | (46) | (35) | |||
Net income | 32 | 20 | 240 | 63 | |||
Net income attributable to noncontrolling interests | (1) | (2) | (2) | ||||
Net income attributable to common stockholders | $ 32 | $ 19 | $ 238 | $ 61 | |||
Earnings per share attributable to common stockholders: | |||||||
Basic (in dollars per share) | $ 0.26 | $ 0.33 | $ 2.55 | $ 1.06 | |||
Diluted (in dollars per share) | $ 0.25 | $ 0.33 | $ 2.53 | $ 1.05 | |||
Weighted average number of shares of common stock outstanding (in 000's): | |||||||
Basic (in shares) | 124,762 | 57,477 | 93,157 | 57,369 | |||
Diluted (in shares) | 125,763 | 58,055 | 93,858 | 57,948 | |||
Dividends declared per share of common stock (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.36 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 32 | $ 20 | $ 240 | $ 63 |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments | (6) | (7) | (20) | (7) |
Total comprehensive income, net of tax | 26 | 13 | 220 | 56 |
Less: Net income attributable to noncontrolling interests, net of tax | (1) | (2) | (2) | |
Less: Other comprehensive loss attributable to noncontrolling interests | 1 | 1 | 4 | 1 |
Total comprehensive loss (income) attributable to noncontrolling interests | 1 | 2 | (1) | |
Comprehensive income attributable to common stockholders | $ 27 | $ 13 | $ 222 | $ 55 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Cash and cash equivalents | $ 158 | $ 93 | $ 101 | $ 81 |
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | 102 | 17 | ||
Accounts receivable, net of allowance of $00 and $193, respectively | 92 | 48 | ||
Vacation ownership mortgages receivable, net of allowance of $1 and $0, respectively (including a net $59 and $0 in VIEs, respectively) | 86 | 6 | ||
Vacation ownership inventory | 342 | 47 | ||
Deferred membership costs | 8 | 8 | ||
Prepaid income taxes | 13 | |||
Prepaid expenses and other current assets (including $3 and $0 of interest receivables in VIEs, respectively) | 66 | 26 | ||
Total current assets | 854 | 258 | ||
Vacation ownership mortgages receivable, net | 650 | 26 | ||
Investments in unconsolidated entities | 59 | 38 | ||
Property and equipment, net | 568 | 91 | ||
Goodwill | 559 | 561 | $ 562 | |
Intangible assets, net | 466 | 250 | ||
Deferred membership costs | 9 | 10 | ||
Deferred income taxes | 5 | |||
Other non-current assets | 58 | 45 | ||
TOTAL ASSETS | 3,232 | 1,279 | ||
LIABILITIES: | ||||
Accounts payable, trade | 60 | 36 | ||
Deferred revenue | 142 | 86 | ||
Accrued compensation and benefits | 72 | 26 | ||
Member deposits | 7 | 8 | ||
Accrued expenses and other current liabilities (including a net $1 and $0 of interest payables in VIEs, respectively) | 216 | 56 | ||
Total current liabilities | 623 | 212 | ||
Long-term debt | 415 | 416 | ||
Other long-term liabilities | 50 | 19 | ||
Deferred revenue | 83 | 87 | ||
Deferred income taxes | 124 | 79 | ||
Total liabilities | 1,644 | 813 | ||
Redeemable noncontrolling interest | 1 | 1 | ||
Commitments and contingencies | ||||
STOCKHOLDERS' EQUITY: | ||||
Preferred stock—authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding | ||||
Common stock—authorized 300,000,000 shares; $0.01 par value; issued 133,522,339 and 59,853,933 shares, respectively | 1 | 1 | ||
Treasury stock— 8,810,081 and 2,363,324 shares at cost, respectively | (135) | (35) | ||
Additional paid-in capital | 1,257 | 214 | ||
Retained earnings | 480 | 281 | ||
Accumulated other comprehensive loss | (45) | (29) | ||
Total ILG stockholders' equity | 1,558 | 432 | ||
Noncontrolling interests | 29 | 33 | ||
Total equity | 1,587 | 465 | ||
TOTAL LIABILITIES AND EQUITY | $ 3,232 | $ 1,279 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance | $ 0.4 | $ 0.2 | |
Preferred stock, authorized shares | 25,000,000 | 25,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, issued shares | 0 | 0 | |
Preferred stock, outstanding shares | 0 | 0 | |
Common stock, authorized shares | 300,000,000 | 300,000,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, issued shares | 133,522,339 | 59,853,933 | |
Treasury stock, shares | 8,810,081 | 2,363,324 | |
Series A Preferred Stock [Member] | |||
Preferred stock, authorized shares | 100,000 | 100,000 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - 9 months ended Sep. 30, 2016 - USD ($) $ in Millions | Noncontrolling Interest [Member] | Parent [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 33 | $ 432 | $ 1 | $ (35) | $ 214 | $ 281 | $ (29) | $ 465 |
Balance (in shares) at Dec. 31, 2015 | 59,853,933 | 2,363,324 | 57,500,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 2 | 238 | 238 | $ 240 | ||||
Other comprehensive income, net of tax | (4) | (16) | (16) | (20) | ||||
Non-cash compensation expense | 14 | 14 | 14 | |||||
Dividends paid to noncontrolling interest | (2) | (2) | ||||||
Issuance of common stock upon vesting of RSUs, net of withholding taxes | (1) | (1) | (1) | |||||
Issuance of common stock upon vesting of RSUs, net of withholding taxes (in shares) | 622,268 | |||||||
Dividends declared on common stock | (38) | 1 | (39) | (38) | ||||
Balance at Sep. 30, 2016 | $ 29 | $ 1,558 | $ 1 | $ (135) | $ 1,257 | $ 480 | $ (45) | $ 1,587 |
Balance (in shares) at Sep. 30, 2016 | 133,522,339 | 8,810,081 | 124,700,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 240 | $ 63 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization expense of intangibles | 14 | 10 |
Depreciation expense | 28 | 13 |
Provision for loan losses | 12 | 2 |
Non-cash compensation expense | 13 | 10 |
Deferred income taxes | (26) | 1 |
Equity in earnings from unconsolidated entities | (4) | (4) |
Changes in operating assets and liabilities: | ||
Restricted cash | (2) | 4 |
Accounts receivable | (6) | (8) |
Vacation ownership mortgages receivable | (12) | 2 |
Vacation ownership inventory | (63) | 5 |
Prepaid expenses and other current assets | 4 | 8 |
Prepaid income taxes and income taxes payable | 13 | 15 |
Accounts payable and other current liabilities | 50 | 5 |
Deferred income | (3) | 4 |
Other, net | 4 | 5 |
Net cash provided by operating activities | 74 | 135 |
Cash flows from investing activities: | ||
Investment in financing receivables | (2) | (1) |
Net cash used in investing activities | (128) | (14) |
Cash flows from financing activities: | ||
Proceeds from issuance of senior notes | 350 | |
Payments of debt issuance costs | (7) | (7) |
Purchases of treasury stock | (100) | |
Dividend payments to noncontrolling interest | (2) | (3) |
Withholding taxes on vesting of restricted stock units | (2) | (4) |
Excess tax benefits from stock-based awards | 2 | |
Net cash provided by (used) in financing activities | 121 | (96) |
Effect of exchange rate changes on cash and cash equivalents | (2) | (5) |
Net increase in cash and cash equivalents | 65 | 20 |
Cash and cash equivalents at beginning of period | 93 | 81 |
Cash and cash equivalents at end of period | $ 158 | $ 101 |
ORGANIZATION AND BASIS OF PRE87
ORGANIZATION AND BASIS OF PRESENTATION (Details)_10K | Nov. 04, 2013 | May 31, 2008company | Sep. 30, 2016item |
ORGANIZATION AND BASIS OF PRESENTATION | |||
Number of operating segments | item | 2 | ||
Organization | |||
Number of publicly traded companies formed upon spin-off | company | 5 | ||
World Resorts and Hotels [Member] | Vacation Resorts International Europe Limited [Member] | |||
Organization | |||
Equity of VRIE issued as consideration for acquisition (as a percent) | 24.50% |
SIGNIFICANT ACCOUNTING POLICI88
SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Adopted Accounting Pronouncements | ||
Other non-current assets | $ 58 | $ 45 |
SIGNIFICANT ACCOUNTING POLICI89
SIGNIFICANT ACCOUNTING POLICIES (Details 5) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Stock-Based Compensation | |
Gross excess tax benefits from stock-based compensation | $ 2 |
SIGNIFICANT ACCOUNTING POLICI90
SIGNIFICANT ACCOUNTING POLICIES (Details 6) - shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Securities not included in the computations of diluted earnings per share | |||
Securities excluded from computation of diluted earnings per share (in shares) | 0.4 | 0.4 | 0.5 |
Employee and Nonemployee Stock Options [Member] | |||
Securities not included in the computations of diluted earnings per share | |||
Outstanding stock options (in shares) | 0 | 0 | 0 |
SIGNIFICANT ACCOUNTING POLICI91
SIGNIFICANT ACCOUNTING POLICIES (Details 7) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Basic weighted average shares of common stock outstanding | 124,762 | 57,477 | 93,157 | 57,369 |
Diluted weighted average shares of common stock outstanding | 125,763 | 58,055 | 93,858 | 57,948 |
Restricted Stock Units (RSUs) [Member] | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net effect of common stock equivalents (in shares) | 1,001 | 578 | 701 | 578 |
Employee and Nonemployee Stock Options [Member] | ||||
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share | ||||
Net effect of common stock equivalents (in shares) | 1 |
SIGNIFICANT ACCOUNTING POLICI92
SIGNIFICANT ACCOUNTING POLICIES (Details 8) - Revolving Credit Facility [Member] | 9 Months Ended |
Sep. 30, 2016 | |
London Interbank Offered Rate (LIBOR) [Member] | |
Certain Risks and Concentrations | |
Reference rate | LIBOR |
Applicable margin (as a percent) | 2.00% |
Base Rate [Member] | |
Certain Risks and Concentrations | |
Reference rate | Base Rate |
Applicable margin (as a percent) | 1.00% |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Certain Risks and Concentrations | |
Applicable margin (as a percent) | 1.25% |
Minimum [Member] | Base Rate [Member] | |
Certain Risks and Concentrations | |
Applicable margin (as a percent) | 0.25% |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Certain Risks and Concentrations | |
Applicable margin (as a percent) | 2.50% |
Maximum [Member] | Base Rate [Member] | |
Certain Risks and Concentrations | |
Applicable margin (as a percent) | 1.50% |
GOODWILL AND OTHER INTANGIBLE93
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Q3 $ in Millions | 9 Months Ended | ||
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Number of reporting units | item | 2 | ||
Goodwill | $ | $ 559 | $ 561 | $ 562 |
GOODWILL AND OTHER INTANGIBLE94
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) Q3 - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | $ 561 | $ 562 |
Foreign Currency Translation | (2) | (1) |
Balance at the end of the period | $ 559 | $ 561 |
GOODWILL AND OTHER INTANGIBLE95
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) Q3 - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 117 | $ 127 |
Intangible assets with definite lives, net | 349 | 123 |
Total intangible assets, net | 466 | 250 |
Change in indefinite-lived intangible assets | 10 | |
Resort Management Contracts [Member] | ||
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 73 | $ 83 |
GOODWILL AND OTHER INTANGIBLE96
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 4) Q3 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other intangible assets | |||||
Cost | $ 659 | $ 659 | $ 420 | ||
Accumulated Amortization | (310) | (310) | (297) | ||
Net | 349 | 349 | 123 | ||
Amortization expense for intangible assets | 6 | $ 4 | 14 | $ 10 | |
Amortization of intangible assets | |||||
2,017 | 22 | 22 | |||
2,018 | 20 | 20 | |||
2,019 | 20 | 20 | |||
2,020 | 20 | 20 | |||
2,021 | 19 | 19 | |||
2022 and thereafter | 248 | 248 | |||
Net | 349 | 349 | 123 | ||
Purchase Agreements [Member] | |||||
Other intangible assets | |||||
Cost | 76 | 76 | 76 | ||
Accumulated Amortization | (76) | (76) | (76) | ||
Resort Management Contracts [Member] | |||||
Other intangible assets | |||||
Cost | 277 | 277 | 129 | ||
Accumulated Amortization | (55) | (55) | (46) | ||
Net | 222 | 222 | 83 | ||
Amortization of intangible assets | |||||
Net | 222 | 222 | 83 | ||
Other Intangible Assets [Member] | |||||
Other intangible assets | |||||
Cost | 23 | 23 | 22 | ||
Accumulated Amortization | (20) | (20) | (18) | ||
Net | 3 | 3 | 4 | ||
Amortization of intangible assets | |||||
Net | $ 3 | $ 3 | $ 4 |
GOODWILL AND OTHER INTANGIBLE97
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Number of reporting units | item | 2 | |
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | $ 561 | $ 562 |
Foreign Currency Translation | (2) | (1) |
Balance at the end of the period | 559 | 561 |
Exchange reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 496 | 496 |
Balance at the end of the period | 496 | 496 |
Rental reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 20 | 20 |
Balance at the end of the period | 20 | 20 |
VO management reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 38 | 39 |
Foreign Currency Translation | (2) | (1) |
Balance at the end of the period | 36 | 38 |
VO sales and financing reporting unit | ||
Changes in carrying amount of goodwill | ||
Balance at the beginning of the period | 7 | 7 |
Balance at the end of the period | $ 7 | $ 7 |
GOODWILL AND OTHER INTANGIBLE98
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business acquisition | |||
Goodwill | $ 559 | $ 561 | $ 562 |
Exchange reporting unit | |||
Business acquisition | |||
Goodwill | 496 | 496 | 496 |
Rental reporting unit | |||
Business acquisition | |||
Goodwill | 20 | 20 | 20 |
VO management reporting unit | |||
Business acquisition | |||
Goodwill | 36 | 38 | 39 |
VO sales and financing reporting unit | |||
Business acquisition | |||
Goodwill | $ 7 | $ 7 | $ 7 |
GOODWILL AND OTHER INTANGIBLE99
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Number of reporting units | item | 2 | ||
Goodwill Impairment Tests | |||
Goodwill | $ | $ 559 | $ 561 | $ 562 |
GOODWILL AND OTHER INTANGIBL100
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 4) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 117 | $ 127 |
Intangible assets with definite lives, net | 349 | 123 |
Total intangible assets, net | 466 | 250 |
Change in indefinite-lived intangible assets | 10 | |
Resort Management Contracts [Member] | ||
Intangibles assets, net | ||
Intangible assets with indefinite lives | 73 | 83 |
Trade names | ||
Intangibles assets, net | ||
Intangible assets with indefinite lives | $ 44 | $ 44 |
GOODWILL AND OTHER INTANGIBL101
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 5) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other intangible assets | |||||
Cost | $ 659 | $ 659 | $ 420 | ||
Accumulated Amortization | (310) | (310) | (297) | ||
Net | 349 | 349 | 123 | ||
Amortization expense for intangible assets | 6 | $ 4 | 14 | $ 10 | |
Amortization of intangible assets | |||||
2,017 | 22 | 22 | |||
2,018 | 20 | 20 | |||
2,019 | 20 | 20 | |||
2,020 | 20 | 20 | |||
2,021 | 19 | 19 | |||
2022 and thereafter | 248 | 248 | |||
Net | 349 | 349 | 123 | ||
Customer relationships | |||||
Other intangible assets | |||||
Cost | 258 | 258 | 168 | ||
Accumulated Amortization | (134) | (134) | (132) | ||
Net | 124 | 124 | 36 | ||
Amortization of intangible assets | |||||
Net | 124 | 124 | 36 | ||
Purchase Agreements [Member] | |||||
Other intangible assets | |||||
Cost | 76 | 76 | 76 | ||
Accumulated Amortization | (76) | (76) | (76) | ||
Resort Management Contracts [Member] | |||||
Other intangible assets | |||||
Cost | 277 | 277 | 129 | ||
Accumulated Amortization | (55) | (55) | (46) | ||
Net | 222 | 222 | 83 | ||
Amortization of intangible assets | |||||
Net | 222 | 222 | 83 | ||
Technology | |||||
Other intangible assets | |||||
Cost | 25 | 25 | 25 | ||
Accumulated Amortization | (25) | (25) | (25) | ||
Other Intangible Assets [Member] | |||||
Other intangible assets | |||||
Cost | 23 | 23 | 22 | ||
Accumulated Amortization | (20) | (20) | (18) | ||
Net | 3 | 3 | 4 | ||
Amortization of intangible assets | |||||
Net | $ 3 | $ 3 | $ 4 |
VACATION OWNERSHIP MORTGAGES102
VACATION OWNERSHIP MORTGAGES RECEIVABLE (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | $ 751 | |
Less: allowance for loan losses on originated loans | (15) | |
Net vacation ownership mortgages receivable | 736 | $ 32 |
Accretable yield expected to be collected over the carrying amount | ||
Balance, beginning of period | 12 | |
Accretion | (33) | |
Reclassification between nonaccretable difference | (11) | |
Balance, end of period | 239 | |
Nonaccretable difference, end of period balance | 18 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 76 | |
2,018 | 72 | |
2,019 | 70 | |
2,020 | 71 | |
2,021 | 71 | |
2022 and thereafter | $ 308 | |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Weighted average FICO score within originated loan pool | item | 711 | |
Average estimated rate of default for all outstanding loans | 10.00% | |
Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | $ 612 | 23 |
Expected remaining principal payment | 529 | 26 |
Schedule of maturities for vacation ownership mortgages receivable | ||
Net carrying amount | 612 | |
Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 139 | 11 |
Less: allowance for loan losses on originated loans | (15) | (2) |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Receivables Past Due | 1 | |
Securitized | ||
Vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | 468 | |
Securitized | Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 458 | |
Net vacation ownership mortgages receivable | 458 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 50 | |
2,018 | 49 | |
2,019 | 48 | |
2,020 | 47 | |
2,021 | 45 | |
2022 and thereafter | $ 150 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Interest rate on vacation ownership mortgage receivables, minimum | 7.75% | |
Securitized | Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | $ 11 | |
Less: allowance for loan losses on originated loans | (1) | |
Net vacation ownership mortgages receivable | 10 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,018 | 1 | |
2,019 | 1 | |
2,020 | 1 | |
2,021 | 1 | |
2022 and thereafter | $ 7 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Interest rate on vacation ownership mortgage receivables, minimum | 10.90% | |
Unsecuritized | ||
Vacation ownership mortgages receivable | ||
Net vacation ownership mortgages receivable | $ 268 | 32 |
Unsecuritized vacation ownership receivables not eligible for securitization | 13 | |
Unsecuritized | Acquired vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | 154 | 23 |
Net vacation ownership mortgages receivable | 154 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 16 | |
2,018 | 14 | |
2,019 | 13 | |
2,020 | 14 | |
2,021 | 14 | |
2022 and thereafter | $ 69 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Interest rate on vacation ownership mortgage receivables, maximum | 15.90% | |
Unsecuritized | Originated vacation | ||
Vacation ownership mortgages receivable | ||
Vacation ownership mortgages receivable | $ 128 | 11 |
Less: allowance for loan losses on originated loans | (14) | $ (2) |
Net vacation ownership mortgages receivable | 114 | |
Schedule of maturities for vacation ownership mortgages receivable | ||
2,017 | 10 | |
2,018 | 8 | |
2,019 | 8 | |
2,020 | 9 | |
2,021 | 11 | |
2022 and thereafter | $ 82 | |
Weighted-average interest rate on vacation ownership mortgage receivables | 13.30% | |
Allowance for Vacation Ownership Mortgage Receivable Losses | ||
Interest rate on vacation ownership mortgage receivables, maximum | 16.90% |
EQUITY (Details)103
EQUITY (Details) $ / shares in Units, $ in Millions | Nov. 04, 2013USD ($) | Sep. 30, 2016USD ($)$ / sharesshares | Aug. 31, 2016$ / shares | Jun. 30, 2016USD ($) | May 31, 2016$ / shares | Feb. 29, 2016USD ($)$ / shares | Jun. 30, 2009shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015$ / shares | Sep. 30, 2016USD ($)item$ / sharesshares | Sep. 30, 2015$ / shares | Mar. 31, 2016$ / shares | Dec. 31, 2015USD ($)$ / sharesshares |
Noncontrolling Interest | |||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ | $ 29 | $ 29 | $ 29 | $ 33 | |||||||||
Equity and Share Repurchase Program | |||||||||||||
Common stock repurchased | $ | $ 100 | ||||||||||||
Stockholder Rights Plan | |||||||||||||
Rights per common stock share declared as dividend | 1 | ||||||||||||
Minimum percentage of common stock to be acquired before rights become exercisable | 15.00% | ||||||||||||
Percentage of discount on prevailing market price of common stock | 50.00% | ||||||||||||
Authorized shares of common stock | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | |||||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Shares of common stock issued | 133,522,339 | 133,522,339 | 133,522,339 | 59,853,933 | |||||||||
Shares of common stock outstanding | 124,700,000 | 124,700,000 | 124,700,000 | 57,500,000 | |||||||||
Shares held as treasury stock | 8,810,081 | 8,810,081 | 8,810,081 | 2,363,324 | |||||||||
Authorized shares of preferred stock | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | |||||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, issued shares | 0 | 0 | 0 | 0 | |||||||||
Preferred stock, outstanding shares | 0 | 0 | 0 | 0 | |||||||||
Minimum number of series to issue preferred stock | item | 1 | ||||||||||||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.36 | ||||||
Cash dividend paid | $ | $ 15 | $ 16 | $ 7 | ||||||||||
World Resorts and Hotels [Member] | Convertible Debt [Member] | |||||||||||||
Noncontrolling Interest | |||||||||||||
Convertible secured loan available, subject to certain conditions being met | $ | $ 15 | ||||||||||||
World Resorts and Hotels [Member] | Vacation Resorts International Europe Limited [Member] | |||||||||||||
Noncontrolling Interest | |||||||||||||
Equity of VRIE issued as consideration for acquisition (as a percent) | 24.50% | ||||||||||||
Ownership interest ( as a percent) | 75.50% | ||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ | $ 27 | $ 27 | $ 27 | $ 31 | |||||||||
Period from acquisition during which parties have agreed not to transfer their interests | 5 years |
EQUITY (Details 2)
EQUITY (Details 2) $ in Millions | Sep. 30, 2016USD ($) |
Changes during the period in redeemable noncontrolling interest | |
Balance, beginning of period | $ 1 |
Balance, end of period | $ 1 |
PROPERTY AND EQUIPMENT (Deta105
PROPERTY AND EQUIPMENT (Details). - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
PROPERTY AND EQUIPMENT | ||
Less: accumulated depreciation and amortization | $ (154) | $ (127) |
Total property and equipment, net | 568 | 91 |
Computer Equipment [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 35 | 23 |
Software and Software Development Costs [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 136 | 108 |
Land, Buildings and Leasehold Improvements [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 357 | 51 |
Furniture and Other Equipment [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 44 | $ 17 |
Construction in Progress [Member] | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 48 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Apr. 10, 2015 |
LONG-TERM DEBT | |||
Unamortized debt issuance costs | $ (5) | ||
Total securitized vacation ownership debt | $ 415 | $ 416 | |
5.625% Senior Notes | |||
LONG-TERM DEBT | |||
Stated interest rate (as a percent) | 5.625% | 5.625% | 5.625% |
5.625% senior notes | $ 350 | $ 350 | $ 350 |
Unamortized debt issuance costs | (6) | (6) | |
Revolving Credit Facility [Member] | |||
LONG-TERM DEBT | |||
Revolving credit facility | $ 75 | $ 75 | |
Stated interest rate (as a percent) | 2.28% | 2.68% | |
Unamortized debt issuance costs | $ (4) | $ (3) |
LONG-TERM DEBT (Details 2)
LONG-TERM DEBT (Details 2) $ in Millions | Apr. 10, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | May 05, 2015 | Apr. 30, 2014USD ($) | Jun. 21, 2012USD ($) |
Senior Secured Credit Facility and Covenants | |||||||||
Interest expense | $ 6 | $ 6 | $ 18 | $ 15 | |||||
Unamortized debt issuance costs | (5) | $ (5) | |||||||
Minimum fixed charge coverage ratio | 2 | ||||||||
Total unamortized debt issuance costs | 10 | $ 10 | $ 9 | ||||||
Accumulated amortization on debt issuance costs | 5 | 5 | 4 | ||||||
Revolving Credit Facility [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Principal amount | $ 600 | $ 500 | |||||||
Amount outstanding | 75 | $ 75 | 75 | ||||||
Commitment fee (as a percent) | 0.275% | ||||||||
Percentage of voting equity securities of the Borrower and its U.S. subsidiaries by which credit facility is secured | 100.00% | ||||||||
Percentage of equity in the first-tier foreign subsidiaries of the Borrower by which credit facility is secured | 65.00% | ||||||||
Unamortized debt issuance costs | $ (4) | $ (4) | $ (3) | ||||||
Stated interest rate (as a percent) | 2.28% | 2.28% | 2.68% | ||||||
Revolving Credit Facility [Member] | Scenario, Actual [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 0.24 | ||||||||
Consolidated interest coverage ratio | 13.15 | ||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.25% | ||||||||
Revolving Credit Facility [Member] | Minimum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated interest coverage ratio | 3 | ||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.40% | ||||||||
Revolving Credit Facility [Member] | Maximum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.25 | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | Base Rate | ||||||||
Applicable margin (as a percent) | 1.00% | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 0.25% | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 1.50% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | LIBOR | ||||||||
Applicable margin (as a percent) | 2.00% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 1.25% | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Applicable margin (as a percent) | 2.50% | ||||||||
Third Amendment To Credit Agreement | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Commitment fee (as a percent) | 0.40% | ||||||||
Third Amendment To Credit Agreement | Scenario, Actual [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.5 | ||||||||
Third Amendment To Credit Agreement | Maximum [Member] | Scenario, Financial Covenant [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 3.25 | ||||||||
Third Amendment To Credit Agreement | Maximum [Member] | Pro Forma | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Consolidated leverage ratio of debt over EBITDA | 4.50 | ||||||||
Third Amendment To Credit Agreement | Base Rate [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | Base Rate | ||||||||
Applicable margin (as a percent) | 1.50% | ||||||||
Third Amendment To Credit Agreement | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Reference rate | LIBOR | ||||||||
Applicable margin (as a percent) | 2.50% | ||||||||
5.625% Senior Notes | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Aggregate principle amount of debt | $ 350 | $ 350 | $ 350 | $ 350 | |||||
Proceeds from issuance of senior notes | $ 343 | ||||||||
Unamortized debt issuance costs | $ (6) | $ (6) | $ (6) | ||||||
Redemption price ( as a percent) | 104.219% | ||||||||
Stated interest rate (as a percent) | 5.625% | 5.625% | 5.625% | 5.625% | |||||
5.625% Senior Notes | Issuer and subsidiary guarantors | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Ownership interest ( as a percent) | 100.00% | 100.00% | |||||||
5.625% Senior Notes | Fourth Amendment To Credit Agreement Member | |||||||||
Senior Secured Credit Facility and Covenants | |||||||||
Stated interest rate (as a percent) | 5.625% |
FAIR VALUE MEASUREMENTS (Det108
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Apr. 10, 2015 | Apr. 30, 2014 | Jun. 21, 2012 | |
Fair Value of Financial Instruments | ||||||
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | $ 102,000 | $ 17,000 | ||||
Unamortized debt issuance costs | (5,000) | |||||
Revolving Credit Facility [Member] | ||||||
Fair Value of Financial Instruments | ||||||
Revolving credit facility | (75,000) | (75,000) | ||||
Unamortized debt issuance costs | (4,000) | (3,000) | ||||
Maximum borrowing capacity | $ 600,000 | $ 500,000 | ||||
Reported Value Measurement [Member] | ||||||
Fair Value of Financial Instruments | ||||||
Cash and cash equivalents | 158 | 93 | ||||
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | 106 | 17 | ||||
Vacation ownership mortgages receivable | 736,000 | 32,000 | ||||
Investments in marketable securities | 14,000 | 11,000 | ||||
Revolving credit facility | [1] | (71,000) | (72,000) | |||
Senior notes | [1] | (344,000) | (344,000) | |||
Reported Value Measurement [Member] | Revolving Credit Facility [Member] | ||||||
Fair Value of Financial Instruments | ||||||
Unamortized debt issuance costs | (4,000) | |||||
Estimate of Fair Value Measurement [Member] | ||||||
Fair Value of Financial Instruments | ||||||
Cash and cash equivalents | 158 | 93 | ||||
Restricted cash and cash equivalents (including $33 and $0 in variable interest entities, "VIEs," respectively) | 106 | 17 | ||||
Vacation ownership mortgages receivable | 749,000 | 34,000 | ||||
Investments in marketable securities | 14,000 | 11,000 | ||||
Revolving credit facility | [1] | (75,000) | (75,000) | |||
Senior notes | [1] | (363,000) | (348,000) | |||
5.625% Senior Notes | ||||||
Fair Value of Financial Instruments | ||||||
Senior notes | (350,000) | (350,000) | $ (350,000) | |||
Unamortized debt issuance costs | (6,000) | $ (6,000) | ||||
5.625% Senior Notes | Reported Value Measurement [Member] | ||||||
Fair Value of Financial Instruments | ||||||
Unamortized debt issuance costs | $ (6,000) | |||||
[1] | As of September 30, 2016, the carrying value of our revolving credit facility and senior notes include $4 million and $6 million of debt issuance costs, respectively, which are presented as a direct reduction of the corresponding liability. |
FAIR VALUE MEASUREMENTS (Det109
FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Millions | Sep. 30, 2016 | Apr. 30, 2014 | Jun. 21, 2012 |
HVO | |||
Contingent consideration related to business acquisition | |||
Investments in marketable securities | $ 14 | ||
Revolving Credit Facility [Member] | |||
Contingent consideration related to business acquisition | |||
Maximum borrowing capacity | $ 600 | $ 500 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
SEGMENT INFORMATION | |||||
Number of operating segments which are also reportable segments | item | 2 | ||||
SEGMENT INFORMATION | |||||
Cost reimbursement revenue | $ 88 | $ 38 | $ 189 | $ 114 | |
Total revenues | 418 | 174 | 901 | 532 | |
Cost of sales | 220 | 74 | 457 | 235 | |
Selling and marketing expense | 66 | 18 | 125 | 55 | |
General and administrative expense | 56 | 40 | 148 | 111 | |
Amortization expense of intangibles | 6 | 4 | 14 | 10 | |
Depreciation expense | 14 | 4 | 28 | 13 | |
Operating expenses | 151 | 67 | 331 | 192 | |
Operating income | 47 | $ 33 | 113 | $ 105 | |
Total assets | |||||
Total assets | 3,232 | 3,232 | $ 1,279 | ||
ILG | |||||
Total assets | |||||
Total assets | $ 606 | $ 606 | $ 540 |
EQUITY (Details 2 )
EQUITY (Details 2 ) $ in Millions | Sep. 30, 2016USD ($) |
Changes during the period in redeemable noncontrolling interest | |
Balance, beginning of period | $ 1 |
Balance, end of period | $ 1 |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($)item | Dec. 31, 2015USD ($) | ||
Geographic Information | ||||||
Number of other countries in which entity operates | item | 14 | 14 | 14 | 14 | ||
Revenue: | ||||||
Revenue | $ 418 | $ 174 | $ 901 | $ 532 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 568 | $ 568 | $ 91 | |||
Minimum [Member] | ||||||
Geographic Information | ||||||
Number of countries from which revenue is sourced | item | 100 | 100 | ||||
UNITED STATES | ||||||
Revenue: | ||||||
Revenue | 354 | 145 | $ 760 | $ 441 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 460 | 460 | 87 | |||
Europe [Member] | ||||||
Revenue: | ||||||
Revenue | 16 | 16 | 50 | 51 | ||
Long-lived assets (excluding goodwill and intangible assets): | ||||||
Total long-lived assets | 4 | 4 | $ 4 | |||
All Other Countries [Member] | ||||||
Revenue: | ||||||
Revenue | [1] | $ 48 | $ 13 | $ 91 | $ 40 | |
[1] | Includes countries within the following continents: Africa, Asia, Australia, North America and South America. |
BENEFIT PLANS (Details)113
BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | ||||
Employee contribution as maximum percentage of pre-tax earnings | 50.00% | |||
Employer contribution against each dollar contributed by employee (as a percent) | 50.00% | |||
Net matching contributions | $ 2 | $ 1 | $ 4 | $ 2 |
Deferred compensation plan | ||||
Vesting percentage under deferred compensation plan | 100.00% | |||
Shares of common stock reserved for issuance pursuant to deferred compensation plan | 100,000 | 100,000 | ||
HVO | ||||
Deferred compensation plan | ||||
Investments in marketable securities | $ 14 | $ 14 | ||
Maximum [Member] | ||||
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans | ||||
Employer's maximum contribution of participant's eligible earnings (as a percent) | 3.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ / shares in Units, $ in Millions | Mar. 21, 2013shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016USD ($)item$ / sharesshares | Sep. 30, 2015USD ($)$ / shares | Aug. 31, 2016shares |
STOCK-BASED COMPENSATION | ||||||||
Awards granted (in shares) | 2,000,000 | |||||||
Per unit grant date fair value (in dollars per unit) | $ / shares | $ 13.34 | |||||||
Non-cash compensation expense | $ | $ 5 | $ 3 | $ 13 | $ 10 | ||||
Unrecognized compensation expense | ||||||||
Unrecognized compensation cost, net of estimated forfeitures | $ | $ 30 | $ 30 | ||||||
Weighted average period for recognition of unrecognized compensation expense | 2 years | |||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Award vesting period | 1 year | 1 year | ||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Award vesting period | 4 years | 4 years | ||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Per unit grant date fair value (in dollars per unit) | $ / shares | $ 13.13 | $ 40.71 | ||||||
Number of peer groups for estimating total shareholder return ranking | item | 2 | |||||||
The estimated performance period to be considered for historical average volatility rate | 3 years | |||||||
The performance measurement period to be considered for risk free interest rate assumption | 3 years | |||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | Minimum [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 0.00% | 0.00% | ||||||
Restricted Stock Units (RSUs) [Member] | Vesting Based on Performance [Member] | Maximum [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Percentage of target shares which can be earned by the participants (as a percent) | 200.00% | 200.00% | ||||||
Stock and Incentive Compensation Plan 2013 [Member] | ||||||||
STOCK-BASED COMPENSATION | ||||||||
Number of shares of common stock reserved for issuance | 4,100,000 | 4,000,000 | 4,000,000 | |||||
Reduction from common stock reserved for issuance for every share granted under prior plan | 1 | |||||||
Remaining shares available for future issuance | 4,000,000 | |||||||
Non-cash compensation expense | $ | $ 5 | $ 3 | $ 13 | $ 10 |
STOCK-BASED COMPENSATION (De115
STOCK-BASED COMPENSATION (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | $ 5 | $ 3 | $ 13 | $ 10 |
Cost of Sales [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | 1 | 1 | 1 | |
Selling and Marketing Expense [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | 1 | 1 | ||
General and Administrative Expense [Member] | ||||
Non-cash stock-based compensation expense | ||||
Non-cash compensation expense before income taxes | $ 4 | $ 3 | $ 11 | $ 8 |
STOCK-BASED COMPENSATION (De116
STOCK-BASED COMPENSATION (Details 3) shares in Millions | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 2 |
Granted (in shares) | shares | 2 |
Vested (in shares) | shares | (1) |
Outstanding at the end of the period (in shares) | shares | 3 |
Weighted-Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 22.98 |
Granted (in dollars per share) | $ / shares | 13.34 |
Vested (in dollars per share) | $ / shares | 20.58 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 16.76 |
INCOME TAXES (Details)117
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings from continuing operations before income taxes and noncontrolling interest | ||||
Earnings before income taxes and noncontrolling interests | $ 30 | $ 31 | $ 286 | $ 98 |
Components of provision for income taxes | ||||
Income tax provision | (2) | $ 11 | 46 | 35 |
ILG | ||||
Components of provision for income taxes | ||||
Income tax provision | $ (8) | $ 29 | $ (1) |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of total income tax provision | ||||
Income tax provision | $ (2) | $ 11 | $ 46 | $ 35 |
Federal statutory rate (as a percent) | 35.00% | 35.00% | ||
Reconciliation of total income tax provision (as a percent) | ||||
Income tax provision at the federal statutory rate of 35% (as a percent) | 35.00% | 35.00% | ||
Income tax provision (as a percent) | (7.40%) | 35.30% | 16.30% | 35.80% |
ILG | ||||
Reconciliation of total income tax provision | ||||
Income tax provision | $ (8) | $ 29 | $ (1) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Commitments and guarantees | |
Letter of credit outstanding amount | $ 11 |
Guarantees Surety Bonds Letters of Credit [Member] | |
Commitments and guarantees | |
Guarantees and commitments amount | 101 |
Amount of guarantees and commitments, year one | 71 |
Indirect Guarantee of Indebtedness [Member] | |
Commitments and guarantees | |
Guarantees and commitments amount | $ 35 |
Indirect Guarantee of Indebtedness [Member] | Minimum [Member] | |
Commitments and guarantees | |
Notice period for termination of lease | 60 days |
Indirect Guarantee of Indebtedness [Member] | Maximum [Member] | |
Commitments and guarantees | |
Notice period for termination of lease | 90 days |
Guarantees construction loan | |
Commitments and guarantees | |
Guarantees and commitments amount | $ 37 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash paid during the period for: | ||
Interest, net of amounts capitalized | $ 14 | $ 5 |
Income taxes, net of refunds | $ 60 | $ 19 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
RELATED PARTY TRANSACTIONS | ||
Interest income | $ 1 | $ 1 |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
QUARTERLY RESULTS (UNAUDITED) | ||||
Revenue | $ 418 | $ 174 | $ 901 | $ 532 |
Operating income | 47 | 33 | 113 | 105 |
Net income attributable to common stockholders | $ 32 | $ 19 | $ 238 | $ 61 |
Earnings per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.26 | $ 0.33 | $ 2.55 | $ 1.06 |
Diluted (in dollars per share) | $ 0.25 | $ 0.33 | $ 2.53 | $ 1.05 |
ILG | ||||
QUARTERLY RESULTS (UNAUDITED) | ||||
Net income attributable to common stockholders | $ 32 | $ 19 | $ 238 | $ 61 |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - Vistana shares in Millions, $ in Millions | May 11, 2016USD ($)shares |
SUBSEQUENT EVENTS | |
Common stock issued (in shares) | shares | 72.4 |
Aggregate purchase price in cash | $ | $ 123 |
Global license agreement term | 80 years |