Interval Leisure Group, Inc.

CIK:0001434620|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
Total Revenues	$ 461	$ 441	$ 944	$ 885
Operating costs and expenses:
Cost of sales	231	231	481	459
Royalty fee expense	11	11	22	21
Selling and marketing expense	81	76	159	145
General and administrative expense	65	58	124	112
Amortization expense of intangibles	5	5	10	10
Depreciation expense	16	15	31	30
Total operating costs and expenses	409	396	827	777
Operating income	52	45	117	108
Other income (expense):
Interest income	1		1
Interest expense	(7)	(7)	(15)	(12)
Gain on bargain purchase		2		2
Other income (expense), net	(5)	(2)		8
Equity in earnings from unconsolidated entities		1	1	3
Total other income (expense), net	(11)	(6)	(13)	1
Earnings before income taxes and noncontrolling interests	41	39	104	109
Income tax provision	(13)	(13)	(33)	(38)
Net income	28	26	71	71
Net income attributable to noncontrolling interests	(1)		(2)	(1)
Net income attributable to common stockholders	$ 27	$ 26	$ 69	$ 70
Earnings per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.21	$ 0.21	$ 0.56	$ 0.56
Diluted (in dollars per share)	$ 0.21	$ 0.20	$ 0.55	$ 0.55
Weighted average number of shares of common stock outstanding (in 000's):
Basic (in shares)	124,241	124,384	124,033	124,191
Diluted (in shares)	125,874	126,141	125,813	125,862
Dividends declared per share of common stock (in dollars per share)	$ 0.175	$ 0.15	$ 0.35	$ 0.30
Service and membership related
Revenues:
Total Revenues	$ 148	$ 119	$ 300	$ 247
Operating costs and expenses:
Cost of sales	67	33	132	68
Vacation ownership products
Revenues:
Total Revenues	121	118	244	223
Operating costs and expenses:
Cost of sales	22	28	61	54
Rental and ancillary services
Revenues:
Total Revenues	104	97	222	204
Operating costs and expenses:
Cost of sales	70	78	142	155
Consumer financing
Revenues:
Total Revenues	23	22	47	43
Operating costs and expenses:
Cost of sales	7	7	15	14
Cost reimbursements
Revenues:
Total Revenues	65	85	131	168
Operating costs and expenses:
Cost of sales	$ 65	$ 85	$ 131	$ 168

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 71	$ 71
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles	10	10
Amortization of debt issuance costs	2	2
Depreciation expense	31	30
Bad debt expense	4	1
Allowance for losses on originated loans	23	15
Allowance for impairment on acquired loans	3	5
Accretion of mortgages receivable	2	3
Non-cash compensation expense	11	12
Deferred income taxes	10	13
Equity in earnings from unconsolidated entities	(1)	(3)
Distributions from investments in unconsolidated entities	2
Gain on bargain purchase of Vistana acquisition		(2)
Changes in operating assets and liabilities:
Accounts receivable	(41)	4
Vacation ownership mortgages receivable (originations)	(171)	(163)
Vacation ownership mortgages receivable (collections)	139	140
Vacation ownership inventory (additions)	(39)	(120)
Vacation ownership inventory (disposals)	53	49
Vacation ownership operating related insurance proceeds	19
Vacation ownership consolidated HOAs related insurance proceeds	23
Prepaid expenses and other current assets	(26)	(20)
Prepaid income taxes and income taxes payable	11	9
Accounts payable and other current liabilities	27	(1)
Deferred income	21	36
Other, net		(9)
Net cash and restricted cash provided by operating activities	184	82
Cash flows from investing activities:
Capital expenditures	(22)	(48)
Purchase of trading investments	4
Net cash used in investing activities	(18)	(48)
Cash flows from financing activities:
Borrowings (payments) on revolving credit facility, net	(15)	71
Payments on securitized debt	(86)	(66)
Purchases of treasury stock		(3)
Dividend payments to stockholders	(43)	(37)
Withholding taxes on vesting of restricted stock units and restricted stock	(9)	(5)
Net cash and restricted cash used in financing activities	(153)	(40)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3)	3
Net increase (decrease) in cash, cash equivalents and restricted cash	10	(3)
Cash, cash equivalents and restricted cash at beginning of period	352	244
Cash, cash equivalents and restricted cash at end of period	362	241
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	21	17
Income taxes paid, net of refunds	$ 12	$ 16

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 143	$ 122
Restricted cash and cash equivalents (including $17 and $19 in variable interest entities, "VIEs," respectively)	215	227
Accounts receivable, net of allowance for doubtful accounts of $13 for both periods	115	121
Vacation ownership mortgages receivable, net of allowance of $5 and $4, respectively (including a net $56 and $61 in VIEs, respectively)	77	79
Vacation ownership inventory	486	496
Prepaid income taxes	36	58
Prepaid expenses	91	64
Other current assets (including $3 and $4 of interest receivables in VIEs, respectively)	30	33
Total current assets	1,193	1,200
Restricted cash and cash equivalents (including $1 in variable interest entities, "VIEs" for both periods)	4	3
Vacation ownership mortgages receivable, net of allowance of $69 and $51, respectively (including a net $423 and $498 in VIEs, respectively)	657	658
Vacation ownership inventory	72	60
Investments in unconsolidated entities	54	55
Property and equipment, net	606	616
Goodwill	564	564
Intangible assets, net	428	440
Other non-current assets	83	91
TOTAL ASSETS	3,661	3,687
LIABILITIES:
Accounts payable, trade	46	46
Current portion of securitized debt from VIEs	128	146
Deferred revenue	177	162
Accrued compensation and benefits	64	72
Accrued expenses and other current liabilities (including a net $1 of interest payables in VIEs for both periods)	256	215
Total current liabilities	671	641
Long-term debt	548	562
Securitized debt from VIEs	361	429
Income taxes payable, non-current	2	11
Other long-term liabilities	118	118
Deferred revenue	82	76
Deferred income taxes	142	133
Total liabilities	1,924	1,970
Redeemable noncontrolling interest	1	1
Commitments and contingencies
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 134,403,465 and 134,053,132 shares, respectively	1	1
Treasury stock— 9,987,627 shares at cost each period	(164)	(164)
Additional paid-in capital	1,281	1,278
Retained earnings	615	597
Accumulated other comprehensive loss	(36)	(33)
Total ILG stockholders' equity	1,697	1,679
Noncontrolling interests	39	37
Total equity	1,736	1,716
TOTAL LIABILITIES AND EQUITY	$ 3,661	$ 3,687