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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Diamond Resorts International, Inc. | NYSE:DRII | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 30.22 | 0 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2016
|
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
46-1750895
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
|
|
10600 West Charleston Boulevard
Las Vegas, Nevada
|
|
89135
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
|
|
(702) 684-8000
|
||
(Registrant's telephone number including area code)
|
||
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(Unaudited)
|
|
(Restated)
|
||||
Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
228,841
|
|
|
$
|
290,510
|
|
Cash in escrow and restricted cash
|
|
76,555
|
|
|
98,295
|
|
||
Vacation Interests notes receivable, net of allowance of $173,040 and $165,331, respectively
|
|
672,828
|
|
|
622,607
|
|
||
Due from related parties, net
|
|
32,686
|
|
|
42,435
|
|
||
Other receivables, net
|
|
31,848
|
|
|
55,786
|
|
||
Income tax receivable
|
|
6,577
|
|
|
147
|
|
||
Deferred tax asset
|
|
992
|
|
|
1,104
|
|
||
Prepaid expenses and other assets, net
|
|
158,494
|
|
|
76,454
|
|
||
Unsold Vacation Interests, net
|
|
405,557
|
|
|
382,441
|
|
||
Property and equipment, net
|
|
105,975
|
|
|
95,361
|
|
||
Assets held for sale
|
|
8,931
|
|
|
1,672
|
|
||
Goodwill
|
|
127,874
|
|
|
104,521
|
|
||
Other intangible assets, net
|
|
239,848
|
|
|
222,190
|
|
||
Total assets
|
|
$
|
2,097,006
|
|
|
$
|
1,993,523
|
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
25,000
|
|
|
$
|
15,144
|
|
Due to related parties, net
|
|
100,264
|
|
|
54,778
|
|
||
Accrued liabilities
|
|
229,043
|
|
|
221,919
|
|
||
Income taxes payable
|
|
457
|
|
|
360
|
|
||
Deferred income taxes
|
|
117,587
|
|
|
102,036
|
|
||
Deferred revenues
|
|
106,871
|
|
|
119,720
|
|
||
Senior Credit Facility, net of unamortized original issue discount of $4,360 and $4,735, respectively, and debt issuance cost of $10,858 and $11,515, respectively
|
|
559,448
|
|
|
558,416
|
|
||
Securitization notes and Funding Facilities, net of unamortized original issue discount of $83 and $103, respectively, and debt issuance costs of $11,026 and $12,678, respectively
|
|
597,326
|
|
|
630,080
|
|
||
Derivative liabilities
|
|
90
|
|
|
146
|
|
||
Notes payable
|
|
8,612
|
|
|
4,750
|
|
||
Total liabilities
|
|
1,744,698
|
|
|
1,707,349
|
|
||
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
||||
Common stock $0.01 par value per share; authorized - 250,000,000 shares, issued - 69,742,698 shares and 71,928,002 shares, respectively
|
|
697
|
|
|
719
|
|
||
Preferred Stock $0.01 par value per share; authorized - 5,000,000 shares
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
329,913
|
|
|
381,475
|
|
||
Retained earnings (accumulated deficit)
|
|
42,858
|
|
|
(15,812
|
)
|
||
Accumulated other comprehensive loss
|
|
(21,160
|
)
|
|
(20,151
|
)
|
||
Subtotal
|
|
352,308
|
|
|
346,231
|
|
||
Less: Treasury stock at cost - zero and 2,222,383 shares, respectively
|
|
—
|
|
|
(60,057
|
)
|
||
Total stockholders' equity
|
|
352,308
|
|
|
286,174
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,097,006
|
|
|
$
|
1,993,523
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
(Restated) |
|
2016
|
|
2015
(Restated) |
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Management and member services
|
|
$
|
46,141
|
|
|
$
|
42,039
|
|
|
$
|
92,237
|
|
|
$
|
82,678
|
|
Consolidated resort operations
|
|
4,729
|
|
|
4,125
|
|
|
9,204
|
|
|
7,334
|
|
||||
Vacation Interests sales, net of provision of $30,632, $20,811, $52,191 and $34,907, respectively
|
|
155,317
|
|
|
150,281
|
|
|
300,765
|
|
|
272,847
|
|
||||
Interest
|
|
21,626
|
|
|
18,799
|
|
|
44,139
|
|
|
37,601
|
|
||||
Other
|
|
17,905
|
|
|
16,258
|
|
|
33,169
|
|
|
28,562
|
|
||||
Total revenues
|
|
245,718
|
|
|
231,502
|
|
|
479,514
|
|
|
429,022
|
|
||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Management and member services
|
|
7,750
|
|
|
8,316
|
|
|
15,395
|
|
|
16,397
|
|
||||
Consolidated resort operations
|
|
4,195
|
|
|
4,048
|
|
|
7,977
|
|
|
7,749
|
|
||||
Vacation Interests cost of sales
|
|
15,742
|
|
|
9,414
|
|
|
26,983
|
|
|
13,124
|
|
||||
Advertising, sales and marketing
|
|
94,015
|
|
|
84,878
|
|
|
180,740
|
|
|
153,391
|
|
||||
Vacation Interests carrying cost, net
|
|
7,341
|
|
|
9,373
|
|
|
12,455
|
|
|
19,741
|
|
||||
Loan portfolio
|
|
2,398
|
|
|
2,181
|
|
|
6,279
|
|
|
4,918
|
|
||||
Other operating
|
|
7,590
|
|
|
7,338
|
|
|
13,586
|
|
|
12,349
|
|
||||
General and administrative
|
|
37,236
|
|
|
23,531
|
|
|
64,960
|
|
|
55,787
|
|
||||
Depreciation and amortization
|
|
10,833
|
|
|
8,457
|
|
|
21,393
|
|
|
17,097
|
|
||||
Interest expense
|
|
14,940
|
|
|
11,521
|
|
|
30,006
|
|
|
23,125
|
|
||||
Impairments and other write-offs
|
|
—
|
|
|
7
|
|
|
—
|
|
|
12
|
|
||||
(Gain) loss on disposal of assets
|
|
(83
|
)
|
|
72
|
|
|
(401
|
)
|
|
38
|
|
||||
Total costs and expenses
|
|
201,957
|
|
|
169,136
|
|
|
379,373
|
|
|
323,728
|
|
||||
Income before provision for income taxes
|
|
43,761
|
|
|
62,366
|
|
|
100,141
|
|
|
105,294
|
|
||||
Provision for income taxes
|
|
18,269
|
|
|
26,726
|
|
|
41,471
|
|
|
45,284
|
|
||||
Net income
|
|
25,492
|
|
|
35,640
|
|
|
58,670
|
|
|
60,010
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments, net of tax of $0
|
|
(1,140
|
)
|
|
1,994
|
|
|
(992
|
)
|
|
(1,168
|
)
|
||||
Post-retirement benefit plan
|
|
—
|
|
|
43
|
|
|
—
|
|
|
86
|
|
||||
Other
|
|
(1
|
)
|
|
12
|
|
|
(17
|
)
|
|
(6
|
)
|
||||
Total other comprehensive (loss) income, net of tax
|
|
(1,141
|
)
|
|
2,049
|
|
|
(1,009
|
)
|
|
(1,088
|
)
|
||||
Comprehensive income
|
|
$
|
24,351
|
|
|
$
|
37,689
|
|
|
$
|
57,661
|
|
|
$
|
58,922
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.37
|
|
|
$
|
0.49
|
|
|
$
|
0.84
|
|
|
$
|
0.81
|
|
Diluted
|
|
$
|
0.35
|
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
|
$
|
0.79
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
69,585
|
|
|
73,052
|
|
|
69,589
|
|
|
73,769
|
|
||||
Diluted
|
|
71,920
|
|
|
75,759
|
|
|
71,731
|
|
|
76,430
|
|
|
|
Common Stock
Shares Outstanding
|
|
Common Stock
Par
Value
|
|
Additional Paid-in Capital
|
|
Retained Earnings (Accumulated Deficit)
(Restated)
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Less: Treasury Stock
at Cost
|
|
Total Stockholders' Equity
(Restated)
|
|||||||||||||
Balance at January 1, 2016 (Restated)
|
|
69,705,619
|
|
|
$
|
719
|
|
|
$
|
381,475
|
|
|
$
|
(15,812
|
)
|
|
$
|
(20,151
|
)
|
|
$
|
(60,057
|
)
|
|
$
|
286,174
|
|
Exercise of stock options
|
|
14,000
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
||||||
Stock-based compensation
|
|
23,079
|
|
|
—
|
|
|
8,277
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,277
|
|
||||||
Retirement of treasury stock
|
|
|
|
(22
|
)
|
|
(60,035
|
)
|
|
—
|
|
|
—
|
|
|
60,057
|
|
|
—
|
|
|||||||
Net income for the six months ended June 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,670
|
|
|
—
|
|
|
—
|
|
|
58,670
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Currency translation adjustment, net of tax of $0
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(992
|
)
|
|
—
|
|
|
(992
|
)
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
||||||
Balance at June 30, 2016
|
|
69,742,698
|
|
|
$
|
697
|
|
|
$
|
329,913
|
|
|
$
|
42,858
|
|
|
$
|
(21,160
|
)
|
|
$
|
—
|
|
|
$
|
352,308
|
|
DIAMOND RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—
Continued
For the six months ended June 30, 2016 and 2015 (Restated - Note 3)
(In thousands)
(Unaudited)
|
||||||||
|
|
2016
|
|
2015
(Restated) |
||||
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
||||
Property and equipment capital expenditures
|
|
$
|
(13,181
|
)
|
|
$
|
(10,917
|
)
|
Purchase of intangible assets in connection with the HM&C Master Agreement
|
|
—
|
|
|
(8,993
|
)
|
||
Purchase of assets in connection with the Intrawest Acquisition
|
|
(84,613
|
)
|
|
—
|
|
||
Investment in joint venture in Asia
|
|
—
|
|
|
(1,500
|
)
|
||
Proceeds from sale of assets
|
|
901
|
|
|
238
|
|
||
Net cash used in investing activities
|
|
(96,893
|
)
|
|
(21,172
|
)
|
||
Financing activities:
|
|
|
|
|
||||
Changes in restricted cash
|
|
21,710
|
|
|
903
|
|
||
Proceeds from issuance of securitization notes and Funding Facilities
|
|
141,177
|
|
|
153,490
|
|
||
Payments on Senior Credit Facility
|
|
—
|
|
|
(18,109
|
)
|
||
Payments on securitization notes and Funding Facilities
|
|
(175,675
|
)
|
|
(126,276
|
)
|
||
Payments on notes payable
|
|
(7,318
|
)
|
|
(6,849
|
)
|
||
Payment of debt issuance costs
|
|
(2,208
|
)
|
|
(2,350
|
)
|
||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
375
|
|
||
Common stock repurchased under the Stock Repurchase Program
|
|
—
|
|
|
(74,126
|
)
|
||
Proceeds from exercise of stock options
|
|
196
|
|
|
2,205
|
|
||
Payments for derivative instrument
|
|
—
|
|
|
(316
|
)
|
||
Net cash used in financing activities
|
|
(22,118
|
)
|
|
(71,053
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(61,117
|
)
|
|
(6,263
|
)
|
||
Effect of changes in exchange rates on cash and cash equivalents
|
|
(552
|
)
|
|
(3
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
290,510
|
|
|
255,042
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
228,841
|
|
|
$
|
248,776
|
|
DIAMOND RESORTS INTERNATIIONAL, INC, AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—
Continued
For the six months ended June 30, 2016 and 2015 (Restated - Note 3)
(In thousands)
(Unaudited)
|
||||||||
|
|
2016
|
|
2015
(Restated) |
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
||||
Cash interest paid on corporate indebtedness
|
|
$
|
16,145
|
|
|
$
|
12,163
|
|
Cash interest paid on securitization notes and Funding Facilities
|
|
$
|
9,810
|
|
|
$
|
8,092
|
|
Cash paid for taxes, net of cash tax refunds
|
|
$
|
20,229
|
|
|
$
|
486
|
|
|
|
|
|
|
||||
Purchase of assets in connection with the Intrawest Acquisition:
|
|
|
|
|
||||
Fair value of assets acquired
|
|
$
|
80,382
|
|
|
$
|
—
|
|
Goodwill acquired
|
|
22,857
|
|
|
—
|
|
||
Cash paid
|
|
(84,613
|
)
|
|
—
|
|
||
Deferred tax liability
|
|
(4,419
|
)
|
|
—
|
|
||
Liabilities assumed
|
|
$
|
14,207
|
|
|
$
|
—
|
|
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
||||
Insurance premiums financed through issuance of notes payable
|
|
$
|
11,180
|
|
|
$
|
8,492
|
|
Unsold Vacation Interests reclassified to assets held for sale
|
|
$
|
7,910
|
|
|
$
|
—
|
|
Unsold Vacation Interests, net reclassified to property and equipment, net
|
|
$
|
5,769
|
|
|
$
|
—
|
|
Assets to be disposed but not actively marketed (prepaid expenses and other assets) reclassified to assets held for sale
|
|
$
|
232
|
|
|
$
|
—
|
|
Assets held for sale reclassified to property and equipment
|
|
$
|
45
|
|
|
$
|
—
|
|
Assets held for sale reclassified to unsold Vacation Interests, net
|
|
$
|
—
|
|
|
$
|
12,982
|
|
Note 1
|
— Background, Business and Basis of Presentation
|
|
|
December 31, 2015
|
||||||||||
|
|
As originally reported
|
|
Impact of Restatement
|
|
As restated
|
||||||
Unsold Vacation Interests, net
|
|
$
|
358,278
|
|
|
$
|
24,163
|
|
|
$
|
382,441
|
|
Income tax receivable
|
|
147
|
|
|
—
|
|
|
147
|
|
|||
Deferred tax asset
|
|
577
|
|
|
527
|
|
|
1,104
|
|
|||
Total assets
|
|
$
|
1,968,833
|
|
|
$
|
24,690
|
|
|
$
|
1,993,523
|
|
|
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
$
|
221,662
|
|
|
$
|
257
|
|
|
$
|
221,919
|
|
Income tax payable
|
|
346
|
|
|
14
|
|
|
360
|
|
|||
Deferred income taxes
|
|
92,829
|
|
|
9,207
|
|
|
102,036
|
|
|||
Total liabilities
|
|
1,697,871
|
|
|
9,478
|
|
|
1,707,349
|
|
|||
Accumulated deficit
|
|
(31,024
|
)
|
|
15,212
|
|
|
(15,812
|
)
|
|||
Total stockholders' equity
|
|
270,962
|
|
|
15,212
|
|
|
286,174
|
|
|||
Total liabilities and stockholders' equity
|
|
$
|
1,968,833
|
|
|
$
|
24,690
|
|
|
$
|
1,993,523
|
|
|
|
Three Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||
|
|
As originally reported
|
|
Impact of Restatement
|
|
As restated
|
|
As originally reported
|
|
Impact of Restatement
|
|
As restated
|
||||||||||||
Vacation Interests cost of
sales
|
|
$
|
7,451
|
|
|
$
|
1,963
|
|
|
$
|
9,414
|
|
|
$
|
8,589
|
|
|
$
|
4,535
|
|
|
$
|
13,124
|
|
Total costs and expenses
|
|
167,173
|
|
|
1,963
|
|
|
169,136
|
|
|
319,193
|
|
|
4,535
|
|
|
323,728
|
|
||||||
Income before provision for income taxes
|
|
64,329
|
|
|
(1,963
|
)
|
|
62,366
|
|
|
109,829
|
|
|
(4,535
|
)
|
|
105,294
|
|
||||||
Provision for income taxes
|
|
27,459
|
|
|
(733
|
)
|
|
26,726
|
|
|
46,984
|
|
|
(1,700
|
)
|
|
45,284
|
|
||||||
Net income (loss)
|
|
$
|
36,870
|
|
|
$
|
(1,230
|
)
|
|
$
|
35,640
|
|
|
$
|
62,845
|
|
|
$
|
(2,835
|
)
|
|
$
|
60,010
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
0.50
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.49
|
|
|
$
|
0.85
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.81
|
|
Diluted
|
|
$
|
0.49
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.79
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Securitization notes and Funding Facilities collection and reserve cash
|
|
$
|
44,654
|
|
|
$
|
50,943
|
|
Escrow
|
|
12,113
|
|
|
13,423
|
|
||
Deposits related to Vacation Interests notes receivable servicing agreements
|
|
11,035
|
|
|
10,680
|
|
||
Collected on behalf of HOAs
|
|
3,203
|
|
|
18,626
|
|
||
Bonds and deposits
|
|
847
|
|
|
883
|
|
||
Other
|
|
4,703
|
|
|
3,740
|
|
||
Total cash in escrow and restricted cash
|
|
$
|
76,555
|
|
|
$
|
98,295
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Vacation Interests notes receivable - collateralized against securitization notes and Funding Facilities
|
|
$
|
676,162
|
|
|
$
|
688,777
|
|
Vacation Interests notes receivable - other
|
|
150,188
|
|
|
81,014
|
|
||
Total Vacation Interests notes receivable
|
|
$
|
826,350
|
|
|
$
|
769,791
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Vacation Interests notes receivable, originated
|
|
$
|
784,685
|
|
|
$
|
744,532
|
|
Vacation Interests notes receivable, purchased
|
|
41,665
|
|
|
25,259
|
|
||
Vacation Interests notes receivable, gross
|
|
826,350
|
|
|
769,791
|
|
||
Allowance for loan losses
|
|
(173,040
|
)
|
|
(165,331
|
)
|
||
Deferred profit on Vacation Interests transactions
|
|
(1,367
|
)
|
|
(1,780
|
)
|
||
Deferred loan and contract origination costs, net
|
|
15,415
|
|
|
15,546
|
|
||
Inventory value of defaulted Vacation Interests notes receivable that were previously purchased
|
|
6,816
|
|
|
4,152
|
|
||
Premium on Vacation Interests notes receivable, net
|
|
—
|
|
|
229
|
|
||
Discount on Vacation Interests notes receivable, net
|
|
(1,346
|
)
|
|
—
|
|
||
Vacation Interests notes receivable, net
|
|
$
|
672,828
|
|
|
$
|
622,607
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance, beginning of period
|
|
$
|
168,998
|
|
|
$
|
135,701
|
|
|
$
|
165,331
|
|
|
$
|
130,639
|
|
Provision for uncollectible Vacation Interests sales (a)
|
|
30,774
|
|
|
20,874
|
|
|
52,660
|
|
|
34,836
|
|
||||
Write-offs, net
|
|
(26,732
|
)
|
|
(10,745
|
)
|
|
(44,951
|
)
|
|
(19,645
|
)
|
||||
Balance, end of period
|
|
$
|
173,040
|
|
|
$
|
145,830
|
|
|
$
|
173,040
|
|
|
$
|
145,830
|
|
(a) The provision for uncollectible Vacation Interests sales shows activity in the allowance for expected losses associated with Vacation Interests notes receivable and is exclusive of ASC 978 adjustments related to deferred revenue.
|
As of June 30, 2016
|
||||||||||||||||||||||||||||
FICO Credit Scores
|
|
Current
|
|
31-60
|
|
61-90
|
|
91-120
|
|
121-150
|
|
151-180
|
|
Total
|
||||||||||||||
>799
|
|
$
|
77,510
|
|
|
$
|
929
|
|
|
$
|
592
|
|
|
$
|
390
|
|
|
$
|
461
|
|
|
$
|
709
|
|
|
$
|
80,591
|
|
700-799
|
|
424,623
|
|
|
7,040
|
|
|
4,473
|
|
|
5,254
|
|
|
4,671
|
|
|
5,192
|
|
|
451,253
|
|
|||||||
600-699
|
|
227,181
|
|
|
9,927
|
|
|
4,765
|
|
|
3,485
|
|
|
3,879
|
|
|
4,193
|
|
|
253,430
|
|
|||||||
<600
|
|
19,337
|
|
|
1,866
|
|
|
756
|
|
|
527
|
|
|
528
|
|
|
681
|
|
|
23,695
|
|
|||||||
No FICO Credit Scores
|
|
15,599
|
|
|
796
|
|
|
330
|
|
|
200
|
|
|
206
|
|
|
250
|
|
|
17,381
|
|
|||||||
|
|
$
|
764,250
|
|
|
$
|
20,558
|
|
|
$
|
10,916
|
|
|
$
|
9,856
|
|
|
$
|
9,745
|
|
|
$
|
11,025
|
|
|
$
|
826,350
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
FICO Credit Scores
|
|
Current
|
|
31-60
|
|
61-90
|
|
91-120
|
|
121-150
|
|
151-180
|
|
Total
|
||||||||||||||
>799
|
|
$
|
75,647
|
|
|
$
|
751
|
|
|
$
|
193
|
|
|
$
|
338
|
|
|
$
|
204
|
|
|
$
|
287
|
|
|
$
|
77,420
|
|
700-799
|
|
397,264
|
|
|
7,589
|
|
|
3,497
|
|
|
2,938
|
|
|
1,879
|
|
|
2,533
|
|
|
415,700
|
|
|||||||
600-699
|
|
213,818
|
|
|
8,444
|
|
|
3,653
|
|
|
3,893
|
|
|
2,841
|
|
|
2,100
|
|
|
234,749
|
|
|||||||
<600
|
|
19,393
|
|
|
1,700
|
|
|
881
|
|
|
333
|
|
|
533
|
|
|
465
|
|
|
23,305
|
|
|||||||
No FICO Credit Scores
|
|
16,677
|
|
|
674
|
|
|
490
|
|
|
320
|
|
|
286
|
|
|
170
|
|
|
18,617
|
|
|||||||
|
|
$
|
722,799
|
|
|
$
|
19,158
|
|
|
$
|
8,714
|
|
|
$
|
7,822
|
|
|
$
|
5,743
|
|
|
$
|
5,555
|
|
|
$
|
769,791
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Amounts due from HOAs and Diamond Collections
|
|
$
|
32,594
|
|
|
$
|
42,393
|
|
Amounts due from other
|
|
92
|
|
|
42
|
|
||
Total due from related parties, net
|
|
$
|
32,686
|
|
|
$
|
42,435
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Amounts due to HOAs and Diamond Collections
|
|
$
|
100,181
|
|
|
$
|
54,686
|
|
Amounts due to other
|
|
83
|
|
|
92
|
|
||
Total due to related parties, net
|
|
$
|
100,264
|
|
|
$
|
54,778
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Receivables related to sampler packages, net
|
|
$
|
15,239
|
|
|
$
|
14,723
|
|
Interest receivable associated with Vacation Interests notes receivable
|
|
7,827
|
|
|
7,919
|
|
||
Rental receivables and other resort management-related receivables, net
|
|
3,055
|
|
|
2,737
|
|
||
Club dues receivable, net
|
|
1,561
|
|
|
25,028
|
|
||
Insurance claims receivable
|
|
1,322
|
|
|
1,262
|
|
||
Other receivables
|
|
2,844
|
|
|
4,117
|
|
||
Total other receivables, net of allowances of $8,100 and $12,300, respectively
|
|
$
|
31,848
|
|
|
$
|
55,786
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Unamortized maintenance fees
|
|
$
|
59,143
|
|
|
$
|
—
|
|
Vacation Interests purchases in transit
|
|
37,653
|
|
|
29,323
|
|
||
Deferred commissions
|
|
17,020
|
|
|
17,109
|
|
||
Prepaid member benefits and affinity programs
|
|
7,566
|
|
|
2,689
|
|
||
Other inventory or consumables
|
|
5,729
|
|
|
4,767
|
|
||
Prepaid insurance
|
|
3,869
|
|
|
2,670
|
|
||
Prepaid sales and marketing costs
|
|
3,513
|
|
|
2,601
|
|
||
Debt issuance costs, net
|
|
3,350
|
|
|
2,545
|
|
||
Deposits and advances
|
|
2,663
|
|
|
2,635
|
|
||
Prepaid maintenance fees
|
|
2,323
|
|
|
3,843
|
|
||
Other
|
|
15,665
|
|
|
8,272
|
|
||
Total prepaid expenses and other assets, net
|
|
$
|
158,494
|
|
|
$
|
76,454
|
|
|
|
June 30, 2016
|
|
December 31, 2015
(as Restated)
|
||||
Completed unsold Vacation Interests, net
|
|
$
|
367,850
|
|
|
$
|
322,945
|
|
Undeveloped land
|
|
36,085
|
|
|
35,974
|
|
||
Vacation Interests construction in progress
|
|
1,622
|
|
|
23,522
|
|
||
Unsold Vacation Interests, net
|
|
$
|
405,557
|
|
|
$
|
382,441
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
(Restated) |
|
2016
|
|
2015
(Restated) |
||||||||
Balance, beginning of period
|
|
$
|
389,845
|
|
|
$
|
314,515
|
|
|
$
|
382,441
|
|
|
$
|
295,333
|
|
Vacation Interests cost of sales
|
|
(15,742
|
)
|
|
(9,414
|
)
|
|
(26,983
|
)
|
|
(13,124
|
)
|
||||
Inventory recovery
|
|
27,444
|
|
|
18,913
|
|
|
27,780
|
|
|
18,777
|
|
||||
Purchases and adjustments in connection with business combinations
|
|
308
|
|
|
—
|
|
|
17,000
|
|
|
—
|
|
||||
Open market and bulk purchases
|
|
1,239
|
|
|
9,104
|
|
|
4,553
|
|
|
14,866
|
|
||||
Capitalized legal, title and trust fees
|
|
5,193
|
|
|
4,419
|
|
|
7,755
|
|
|
7,677
|
|
||||
Construction in progress
|
|
2,009
|
|
|
5,898
|
|
|
3,078
|
|
|
7,806
|
|
||||
Transfer of construction in progress to property and equipment, net
|
|
(67
|
)
|
|
—
|
|
|
(5,769
|
)
|
|
—
|
|
||||
Loan default recoveries related to business combinations
|
|
5,208
|
|
|
563
|
|
|
5,881
|
|
|
2,176
|
|
||||
Transfers (to) from assets held for sale
|
|
(7,910
|
)
|
|
(177
|
)
|
|
(7,910
|
)
|
|
12,982
|
|
||||
Effect of foreign currency translation
|
|
(1,819
|
)
|
|
2,472
|
|
|
(2,054
|
)
|
|
(464
|
)
|
||||
Other
|
|
(151
|
)
|
|
336
|
|
|
(215
|
)
|
|
600
|
|
||||
Balance, end of period
|
|
$
|
405,557
|
|
|
$
|
346,629
|
|
|
$
|
405,557
|
|
|
$
|
346,629
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Land and improvements
|
|
$
|
21,022
|
|
|
$
|
20,219
|
|
Buildings and leasehold improvements
|
|
69,477
|
|
|
60,281
|
|
||
Furniture and office equipment
|
|
23,983
|
|
|
21,845
|
|
||
Computer software
|
|
53,101
|
|
|
46,231
|
|
||
Computer equipment
|
|
20,764
|
|
|
19,146
|
|
||
Construction in progress
|
|
1,796
|
|
|
2,522
|
|
||
Property and equipment, gross
|
|
190,143
|
|
|
170,244
|
|
||
Less: Accumulated depreciation
|
|
(84,168
|
)
|
|
(74,883
|
)
|
||
Property and equipment, net
|
|
$
|
105,975
|
|
|
$
|
95,361
|
|
|
|
Hospitality and Management Services
|
|
Vacation Interests Sales and Financing
|
|
Total
|
||||||
Balance as of December 31, 2015:
|
|
|
|
|
|
|
||||||
Island One Acquisition - July 2013
|
|
$
|
30,165
|
|
|
$
|
467
|
|
|
$
|
30,632
|
|
HM&C Acquisition - January 2015
|
|
10
|
|
|
—
|
|
|
10
|
|
|||
Gold Key Acquisition - October 2015
|
|
13,777
|
|
|
60,102
|
|
|
73,879
|
|
|||
Balance as of December 31, 2015
|
|
43,952
|
|
|
60,569
|
|
|
104,521
|
|
|||
Changes to goodwill during the six months ended June 30, 2016:
|
|
|
|
|
|
|
||||||
Adjustment to Gold Key Acquisition based on appraisal
|
|
1,480
|
|
|
(984
|
)
|
|
496
|
|
|||
Intrawest Acquisition - January 2016
|
|
5,832
|
|
|
17,025
|
|
|
22,857
|
|
|||
Total changes to goodwill during the six months ended
June 30, 2016
|
|
7,312
|
|
|
16,041
|
|
|
23,353
|
|
|||
Balance as of June 30, 2016:
|
|
|
|
|
|
|
||||||
Island One Acquisition - July 2013
|
|
30,165
|
|
|
467
|
|
|
30,632
|
|
|||
HM&C Acquisition - January 2015
|
|
10
|
|
|
—
|
|
|
10
|
|
|||
Gold Key Acquisition - October 2015
|
|
15,257
|
|
|
59,118
|
|
|
74,375
|
|
|||
Intrawest Acquisition - January 2016
|
|
5,832
|
|
|
17,025
|
|
|
22,857
|
|
|||
Balance as of June 30, 2016
|
|
$
|
51,264
|
|
|
$
|
76,610
|
|
|
$
|
127,874
|
|
|
|
Gross Carrying
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Management contracts
|
|
$
|
244,581
|
|
|
$
|
(64,884
|
)
|
|
$
|
179,697
|
|
Member relationships and the Clubs
|
|
56,730
|
|
|
(40,102
|
)
|
|
16,628
|
|
|||
Rights to develop inventory
|
|
20,700
|
|
|
(859
|
)
|
|
19,841
|
|
|||
Rental agreements
|
|
16,000
|
|
|
(2,833
|
)
|
|
13,167
|
|
|||
Marketing easement rights
|
|
8,717
|
|
|
(654
|
)
|
|
8,063
|
|
|||
Distributor relationships and other
|
|
5,063
|
|
|
(2,611
|
)
|
|
2,452
|
|
|||
Total other intangible assets
|
|
$
|
351,791
|
|
|
$
|
(111,943
|
)
|
|
$
|
239,848
|
|
|
|
Gross Carrying
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Management contracts
|
|
$
|
226,515
|
|
|
$
|
(58,278
|
)
|
|
$
|
168,237
|
|
Member relationships and the Clubs
|
|
55,866
|
|
|
(39,298
|
)
|
|
16,568
|
|
|||
Rental agreements
|
|
15,800
|
|
|
(823
|
)
|
|
14,977
|
|
|||
Rights to develop inventory
|
|
11,600
|
|
|
(173
|
)
|
|
11,427
|
|
|||
Marketing easement rights
|
|
8,717
|
|
|
(436
|
)
|
|
8,281
|
|
|||
Distributor relationships and other
|
|
5,096
|
|
|
(2,396
|
)
|
|
2,700
|
|
|||
Total other intangible assets
|
|
$
|
323,594
|
|
|
$
|
(101,404
|
)
|
|
$
|
222,190
|
|
|
|
Weighted Average Useful Life in Years
|
|
Based on Preliminary Appraisal as of January 29, 2016
|
|
Adjustments Recorded through June 30, 2016
|
|
Based on Updated Appraisal as of June 30, 2016
|
||||||
Management contracts
|
|
20
|
|
$
|
16,700
|
|
|
$
|
2,300
|
|
|
$
|
19,000
|
|
Rights to develop inventory
|
|
14
|
|
9,600
|
|
|
(300
|
)
|
|
9,300
|
|
|||
Member relationships
|
|
6
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|||
|
|
|
|
$
|
27,300
|
|
|
$
|
2,000
|
|
|
$
|
29,300
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Unsold units and certain resorts in Europe
|
|
$
|
8,931
|
|
|
$
|
1,518
|
|
A unit at Cabo Azul Resort in Mexico
|
|
—
|
|
|
154
|
|
||
Total assets held for sale
|
|
$
|
8,931
|
|
|
$
|
1,672
|
|
|
|
June 30, 2016
|
|
December 31, 2015
(Restated)
|
||||
Liability for unrecognized tax benefit
|
|
$
|
91,250
|
|
|
$
|
76,001
|
|
Accrued payroll and related
|
|
25,376
|
|
|
37,154
|
|
||
Accrued marketing expenses
|
|
22,966
|
|
|
24,885
|
|
||
Accrued other taxes
|
|
17,244
|
|
|
15,525
|
|
||
Accrued commissions
|
|
16,206
|
|
|
22,774
|
|
||
Gold Key inventory recovery agreement
|
|
10,071
|
|
|
12,371
|
|
||
Accrued professional fees
|
|
8,467
|
|
|
4,336
|
|
||
Accrued insurance
|
|
7,681
|
|
|
7,795
|
|
||
Intrawest inventory repurchase obligation
|
|
7,400
|
|
|
—
|
|
||
Accrued escrow liability
|
|
3,832
|
|
|
3,784
|
|
||
Accrued operating lease liabilities
|
|
2,950
|
|
|
3,309
|
|
||
Accrued exchange company fees
|
|
1,555
|
|
|
2,131
|
|
||
Other
|
|
14,045
|
|
|
11,854
|
|
||
Total accrued liabilities
|
|
$
|
229,043
|
|
|
$
|
221,919
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|||
Deferred sampler package revenue
|
|
$
|
67,521
|
|
|
$
|
66,285
|
|
Club deferred revenue
|
|
24,518
|
|
|
43,890
|
|
||
Guest deposits
|
|
8,573
|
|
|
6,631
|
|
||
Other
|
|
6,259
|
|
|
2,914
|
|
||
Total deferred revenues
|
|
$
|
106,871
|
|
|
$
|
119,720
|
|
•
|
Level 1: Quoted prices for identical instruments in active markets.
|
•
|
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.
|
•
|
Level 3: Unobservable inputs used when little or no market data is available.
|
|
|
As of June 30, 2016
|
|
As of December 31, 2015
|
||||||||||||
|
|
Carrying
Value
|
|
Total Estimated Fair Value
|
|
Carrying Value
|
|
Total Estimated Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
$
|
90
|
|
|
$
|
90
|
|
|
$
|
146
|
|
|
$
|
146
|
|
Total Liabilities
|
|
$
|
90
|
|
|
$
|
90
|
|
|
$
|
146
|
|
|
$
|
146
|
|
|
|
Carrying Value
|
|
Total Estimated Fair Value
|
|
Estimated Fair Value (Level 2)
|
|
Estimated Fair Value (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Vacation Interests notes receivable, net
|
|
$
|
672,828
|
|
|
$
|
672,828
|
|
|
$
|
—
|
|
|
$
|
672,828
|
|
Total assets
|
|
$
|
672,828
|
|
|
$
|
672,828
|
|
|
$
|
—
|
|
|
$
|
672,828
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility, net
|
|
$
|
559,448
|
|
|
$
|
570,307
|
|
|
$
|
570,307
|
|
|
$
|
—
|
|
Securitization notes and Funding Facilities, net
|
|
597,326
|
|
|
607,761
|
|
|
607,761
|
|
|
—
|
|
||||
Notes payable
|
|
8,612
|
|
|
8,612
|
|
|
8,612
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
1,165,386
|
|
|
$
|
1,186,680
|
|
|
$
|
1,186,680
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Value
|
|
Total Estimated Fair Value
|
|
Estimated Fair Value (Level 2)
|
|
Estimated Fair Value (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Vacation Interests notes receivable, net
|
|
$
|
622,607
|
|
|
$
|
622,607
|
|
|
$
|
—
|
|
|
$
|
622,607
|
|
Total assets
|
|
$
|
622,607
|
|
|
$
|
622,607
|
|
|
$
|
—
|
|
|
$
|
622,607
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Senior Credit Facility, net
|
|
$
|
558,416
|
|
|
$
|
569,931
|
|
|
$
|
569,931
|
|
|
$
|
—
|
|
Securitization notes and Funding Facilities, net
|
|
630,080
|
|
|
638,420
|
|
|
638,420
|
|
|
—
|
|
||||
Notes payable
|
|
4,750
|
|
|
4,750
|
|
|
4,750
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
1,193,246
|
|
|
$
|
1,213,101
|
|
|
$
|
1,213,101
|
|
|
$
|
—
|
|
|
|
Options
(In thousands)
|
|
Weighted-Average Exercise Price
(Per Share) |
|
Weighted-Average Remaining Contractual Term
(Years)
|
|
Aggregate Intrinsic Value
(In thousands)
|
|||||
Outstanding at January 1, 2016
|
|
8,766
|
|
|
$
|
17.20
|
|
|
7.9
|
|
$
|
72,840
|
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(14
|
)
|
|
$
|
14.00
|
|
|
|
|
|
||
Forfeited or expired
|
|
(9
|
)
|
|
$
|
14.00
|
|
|
|
|
|
||
Outstanding at June 30, 2016
|
|
8,743
|
|
|
$
|
17.21
|
|
|
7.4
|
|
$
|
111,482
|
|
Exercisable at June 30, 2016
|
|
6,838
|
|
|
$
|
15.53
|
|
|
7.1
|
|
$
|
98,682
|
|
|
|
Options
(In thousands)
|
|
Weighted-Average Exercise Price
(Per Share)
|
|||
Unvested at January 1, 2016
|
|
2,547
|
|
|
$
|
23.51
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(633
|
)
|
|
24.43
|
|
|
Forfeited or expired
|
|
(9
|
)
|
|
14.00
|
|
|
Unvested at June 30, 2016
|
|
1,905
|
|
|
$
|
23.15
|
|
|
|
Restricted Stock
|
|
Restricted Stock Units
|
|
Deferred Stock
|
|||||||||||||||
|
|
Shares
(In thousands)
|
|
Weighted Average Grant Price (Per share)
|
|
Units
(In thousands)
|
|
Weighted Average Grant Price (Per share)
|
|
Units
(In thousands)
|
|
Weighted Average Grant Price (Per share)
|
|||||||||
Unvested at January 1, 2016
|
|
160
|
|
|
$
|
30.58
|
|
|
78
|
|
|
$
|
32.69
|
|
|
—
|
|
|
$
|
32.72
|
|
Granted
|
|
17
|
|
|
$
|
22.11
|
|
|
—
|
|
|
$
|
—
|
|
|
17
|
|
|
$
|
22.11
|
|
Vested/Converted to common stock
|
|
(39
|
)
|
|
$
|
30.44
|
|
|
(8
|
)
|
|
$
|
32.69
|
|
|
(17
|
)
|
|
$
|
22.11
|
|
Forfeited or expired
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Unvested at June 30, 2016
|
|
138
|
|
|
$
|
29.58
|
|
|
70
|
|
|
$
|
32.69
|
|
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Company employee grants
|
|
$
|
3,773
|
|
|
$
|
3,782
|
|
|
$
|
7,580
|
|
|
$
|
7,002
|
|
Non-employee director grants
|
|
355
|
|
|
640
|
|
|
697
|
|
|
715
|
|
||||
Total
|
|
$
|
4,128
|
|
|
$
|
4,422
|
|
|
$
|
8,277
|
|
|
$
|
7,717
|
|
|
|
Three Months Ended June 30, 2016
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||||
|
|
Hospitality and
Management
Services
|
|
Vacation
Interests Sales
and Financing
|
|
Corporate and
Other
|
|
Total
|
|
Hospitality and
Management
Services
|
|
Vacation
Interests Sales
and Financing
|
|
Corporate and
Other
|
|
Total
|
||||||||||||||||
Management and member services
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
381
|
|
|
$
|
345
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
345
|
|
Advertising, sales and marketing
|
|
—
|
|
|
734
|
|
|
—
|
|
|
734
|
|
|
—
|
|
|
547
|
|
|
—
|
|
|
547
|
|
||||||||
Vacation Interests carrying cost, net
|
|
—
|
|
|
69
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||||||
Loan portfolio
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
2,834
|
|
|
2,834
|
|
|
—
|
|
|
—
|
|
|
3,366
|
|
|
3,366
|
|
||||||||
Total
|
|
$
|
381
|
|
|
$
|
913
|
|
|
$
|
2,834
|
|
|
$
|
4,128
|
|
|
$
|
345
|
|
|
$
|
711
|
|
|
$
|
3,366
|
|
|
$
|
4,422
|
|
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||||
|
|
Hospitality and
Management Services |
|
Vacation
Interests Sales and Financing |
|
Corporate and
Other |
|
Total
|
|
Hospitality and
Management Services |
|
Vacation
Interests Sales and Financing |
|
Corporate and
Other |
|
Total
|
||||||||||||||||
Management and member services
|
|
$
|
774
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
774
|
|
|
$
|
625
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
625
|
|
Advertising, sales and marketing
|
|
—
|
|
|
1,484
|
|
|
—
|
|
|
1,484
|
|
|
—
|
|
|
916
|
|
|
—
|
|
|
916
|
|
||||||||
Vacation Interests carrying cost, net
|
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
115
|
|
||||||||
Loan portfolio
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
181
|
|
||||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
5,655
|
|
|
5,655
|
|
|
—
|
|
|
—
|
|
|
5,880
|
|
|
5,880
|
|
||||||||
Total
|
|
$
|
774
|
|
|
$
|
1,848
|
|
|
$
|
5,655
|
|
|
$
|
8,277
|
|
|
$
|
625
|
|
|
$
|
1,212
|
|
|
$
|
5,880
|
|
|
$
|
7,717
|
|
|
|
Options
|
|
Restricted Stock
|
|
Restricted Stock Units
|
|
Deferred Stock
|
|
Total
|
||||||||||
Unrecognized stock-based compensation expense
|
|
$
|
13,068
|
|
|
$
|
3,653
|
|
|
$
|
1,772
|
|
|
$
|
345
|
|
|
$
|
18,838
|
|
Weighted-average remaining amortization period (in years)
|
|
0.9
|
|
|
1.8
|
|
|
2.4
|
|
|
0.9
|
|
|
1.2
|
|
|
|
Cumulative Translation Adjustment
|
|
Other
|
|
Total
|
||||||
Balance, December 31, 2015
|
|
$
|
(20,182
|
)
|
|
$
|
31
|
|
|
$
|
(20,151
|
)
|
Period change
|
|
(992
|
)
|
|
(17
|
)
|
|
(1,009
|
)
|
|||
Balance, June 30, 2016
|
|
$
|
(21,174
|
)
|
|
$
|
14
|
|
|
$
|
(21,160
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
(Restated) |
|
2016
|
|
2015
(Restated) |
||||||||
Computation of Basic Net Income Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
25,492
|
|
|
$
|
35,640
|
|
|
$
|
58,670
|
|
|
$
|
60,010
|
|
Weighted average shares outstanding
|
|
69,585
|
|
|
73,052
|
|
|
69,589
|
|
|
73,769
|
|
||||
Basic net income per share
|
|
$
|
0.37
|
|
|
$
|
0.49
|
|
|
$
|
0.84
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computation of Diluted Net Income Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
25,492
|
|
|
$
|
35,640
|
|
|
$
|
58,670
|
|
|
$
|
60,010
|
|
Weighted average shares outstanding
|
|
69,585
|
|
|
73,052
|
|
|
69,589
|
|
|
73,769
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock, RSUs and deferred stock (a)
|
|
17
|
|
|
32
|
|
|
17
|
|
|
28
|
|
||||
Options to purchase common stock
|
|
2,318
|
|
|
2,675
|
|
|
2,125
|
|
|
2,633
|
|
||||
Shares for diluted net income per share
|
|
71,920
|
|
|
75,759
|
|
|
71,731
|
|
|
76,430
|
|
||||
Diluted net income per share
|
|
$
|
0.35
|
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
|
$
|
0.79
|
|
|
|
Based on Preliminary Appraisal as of October 16, 2015
|
|
Adjustments Recorded through June 30, 2016
|
|
Based on Updated Appraisal as of June 30, 2016
|
||||||
Consideration:
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
167,500
|
|
|
$
|
397
|
|
|
$
|
167,897
|
|
Fair value of total consideration transferred
|
|
$
|
167,500
|
|
|
$
|
397
|
|
|
$
|
167,897
|
|
|
|
|
|
|
|
|
||||||
Recognized amounts of identifiable assets acquired and liabilities assumed as of October 16, 2015:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
66
|
|
Restricted cash
|
|
47
|
|
|
—
|
|
|
47
|
|
|||
Due from related parties, net
|
|
766
|
|
|
—
|
|
|
766
|
|
|||
Other receivables, net
|
|
69
|
|
|
—
|
|
|
69
|
|
|||
Prepaid expenses and other assets, net
|
|
15,904
|
|
|
—
|
|
|
15,904
|
|
|||
Unsold Vacation Interests
|
|
26,481
|
|
|
(11
|
)
|
|
26,470
|
|
|||
Property and equipment
|
|
15,329
|
|
|
(11
|
)
|
|
15,318
|
|
|||
Other intangible assets
|
|
53,060
|
|
|
(400
|
)
|
|
52,660
|
|
|||
Total assets
|
|
111,722
|
|
|
(422
|
)
|
|
111,300
|
|
|||
Liabilities assumed
|
|
18,101
|
|
|
(323
|
)
|
|
17,778
|
|
|||
Total identifiable net assets
|
|
$
|
93,621
|
|
|
$
|
(99
|
)
|
|
$
|
93,522
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
$
|
73,879
|
|
|
$
|
496
|
|
|
$
|
74,375
|
|
|
|
Weighted Average Useful Life in Years
|
|
Based on Preliminary Appraisal as of October 16, 2015
|
|
Adjustments Recorded through June 30, 2016
|
|
Based on Updated Appraisal as of June 30, 2016
|
||||||
Management contracts
|
|
20
|
|
$
|
25,300
|
|
|
$
|
(400
|
)
|
|
$
|
24,900
|
|
Rental agreements
|
|
4
|
|
15,800
|
|
|
200
|
|
|
16,000
|
|
|||
Rights to develop inventory
|
|
14
|
|
11,600
|
|
|
(200
|
)
|
|
11,400
|
|
|||
Member relationships
|
|
6
|
|
360
|
|
|
—
|
|
|
360
|
|
|||
|
|
|
|
$
|
53,060
|
|
|
$
|
(400
|
)
|
|
$
|
52,660
|
|
|
|
Based on Preliminary Appraisal as of January 29, 2016
|
|
Adjustments Recorded through June 30, 2016
|
|
Based on Updated Appraisal as of June 30, 2016
|
||||||
Consideration:
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
84,613
|
|
|
$
|
—
|
|
|
$
|
84,613
|
|
Fair value of total consideration transferred
|
|
$
|
84,613
|
|
|
$
|
—
|
|
|
$
|
84,613
|
|
|
|
|
|
|
|
|
||||||
Recognized amounts of identifiable assets acquired and liabilities assumed as of January 29, 2016:
|
|
|
|
|
|
|
||||||
Vacation Interests notes receivable, net
|
|
$
|
22,114
|
|
|
$
|
—
|
|
|
$
|
22,114
|
|
Income tax receivable
|
|
138
|
|
|
—
|
|
|
138
|
|
|||
Other receivables, net
|
|
873
|
|
|
(563
|
)
|
|
310
|
|
|||
Prepaid expenses and other assets, net
|
|
4,291
|
|
|
5,236
|
|
|
9,527
|
|
|||
Unsold Vacation Interests
|
|
16,703
|
|
|
308
|
|
|
17,011
|
|
|||
Property and equipment
|
|
1,930
|
|
|
52
|
|
|
1,982
|
|
|||
Other intangible assets
|
|
27,300
|
|
|
2,000
|
|
|
29,300
|
|
|||
Total assets
|
|
73,349
|
|
|
7,033
|
|
|
80,382
|
|
|||
Deferred tax liability
|
|
4,419
|
|
|
—
|
|
|
4,419
|
|
|||
Liabilities assumed
|
|
8,403
|
|
|
5,804
|
|
|
14,207
|
|
|||
Total identifiable net assets
|
|
$
|
60,527
|
|
|
$
|
1,229
|
|
|
$
|
61,756
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
$
|
24,086
|
|
|
$
|
(1,229
|
)
|
|
$
|
22,857
|
|
|
|
Weighted Average Useful Life in Years
|
|
Based on Preliminary Appraisal as of January 29, 2016
|
|
Adjustments Recorded through June 30, 2016
|
|
Based on Updated Appraisal as of June 30, 2016
|
||||||
Management contracts
|
|
20
|
|
$
|
16,700
|
|
|
$
|
2,300
|
|
|
$
|
19,000
|
|
Rights to develop inventory
|
|
14
|
|
9,600
|
|
|
(300
|
)
|
|
9,300
|
|
|||
Member relationships
|
|
6
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|||
|
|
|
|
$
|
27,300
|
|
|
$
|
2,000
|
|
|
$
|
29,300
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
(Restated) |
|
2016
|
|
2015
(Restated) |
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hospitality and management services
|
|
$
|
53,649
|
|
|
$
|
48,575
|
|
|
$
|
106,059
|
|
|
$
|
94,317
|
|
Vacation Interests sales and financing
|
|
191,665
|
|
|
182,548
|
|
|
372,726
|
|
|
333,940
|
|
||||
Corporate and other
|
|
404
|
|
|
379
|
|
|
729
|
|
|
765
|
|
||||
Total revenues
|
|
$
|
245,718
|
|
|
$
|
231,502
|
|
|
$
|
479,514
|
|
|
$
|
429,022
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before provision for income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Hospitality and management services
|
|
$
|
41,244
|
|
|
$
|
35,885
|
|
|
$
|
81,781
|
|
|
$
|
69,511
|
|
Vacation Interests sales and financing
|
|
60,150
|
|
|
65,485
|
|
|
123,852
|
|
|
122,954
|
|
||||
Corporate and other
|
|
(57,633
|
)
|
|
(39,004
|
)
|
|
(105,492
|
)
|
|
(87,171
|
)
|
||||
Income before provision for income taxes
|
|
$
|
43,761
|
|
|
$
|
62,366
|
|
|
$
|
100,141
|
|
|
$
|
105,294
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Vacation Interests sales and financing
|
|
$
|
21,222
|
|
|
$
|
18,420
|
|
|
$
|
43,410
|
|
|
$
|
36,836
|
|
Corporate and other
|
|
404
|
|
|
379
|
|
|
729
|
|
|
765
|
|
||||
Total interest revenue
|
|
$
|
21,626
|
|
|
$
|
18,799
|
|
|
$
|
44,139
|
|
|
$
|
37,601
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Expense:
|
|
|
|
|
|
|
|
|
||||||||
Vacation Interests sales and financing
|
|
$
|
4,889
|
|
|
$
|
4,205
|
|
|
$
|
9,737
|
|
|
$
|
8,123
|
|
Corporate and other
|
|
10,051
|
|
|
7,316
|
|
|
20,269
|
|
|
15,002
|
|
||||
Total interest expense
|
|
$
|
14,940
|
|
|
$
|
11,521
|
|
|
$
|
30,006
|
|
|
$
|
23,125
|
|
•
|
risks associated with the Pending Merger by affiliates of Apollo, including uncertainty as to whether the conditions to closing the transaction will be satisfied; the impact of the transaction on our business, financial and operating results and relationships with our employees, suppliers and customers (in particular, HOAs and prospective purchasers of vacation ownership interests); factors affecting the feasibility and timing of the transaction, including, without limitation, required third-party consents and regulatory approvals; the parties’ ability to close the transaction; and the impact on our business and the price of our common stock if the transaction were not consummated; See
"—Overview—Significant 2016 Developments—Exploration of Strategic Alternatives and the Pending Merger"
for the definition of and further detail on the Pending Merger.
|
•
|
risks related to the Restatement, including, without limitation, potential inquiries from the SEC and/or the New York Stock Exchange, the potential adverse effect on the price of our common stock and possible claims by our stockholders or otherwise;
|
•
|
adverse trends or disruptions in economic conditions generally or in the vacation ownership, vacation rental and travel industries;
|
•
|
adverse changes to, or interruptions in, relationships with our affiliates and other third parties, including termination of our hospitality management contracts;
|
•
|
our ability to maintain an optimal inventory of VOIs for sale overall, as well as in
eight
multi-resort trusts and
1
single-resort trust (collectively, the "Diamond Collections");
|
•
|
our use of structures for development of new inventory in a manner consistent with our asset-light model, including the risk in these structures that we will not control development activities or the timing of inventory delivery and the risk that the third parties do not fulfill their obligations to us;
|
•
|
our ability to sell, securitize or borrow against our consumer loans;
|
•
|
changes in the default rates of our consumer loan portfolio;
|
•
|
decreased demand from prospective purchasers of VOIs;
|
•
|
adverse events, including weather-related and other natural disasters and crises, or trends in vacation destinations and regions where the resorts in our network are located;
|
•
|
changes in our senior management;
|
•
|
our ability to comply with current or future regulations applicable to the vacation ownership industry or any actions by regulatory authorities;
|
•
|
the effects of our indebtedness and our compliance with the terms thereof;
|
•
|
changes in the interest rate environment and their effects on our outstanding indebtedness;
|
•
|
our ability to successfully implement our growth strategy, including our strategy to selectively pursue complementary strategic transactions;
|
•
|
risks associated with acquisitions, including difficulty in integrating operations and personnel, disruption of ongoing business and increased expenses;
|
•
|
our ability to compete effectively; and
|
•
|
other risks and uncertainties discussed in "
Item 1A. Risk Factors
" included in our Annual Report on Form 10-K/A for the year ended
December 31, 2015
(the "
2015
Form 10-K/A") and "
Item 1A. Risk Factors
" of this Quarterly Report.
|
|
|
Three Months Ended June 30, 2016
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||||
|
|
Hospitality
and
Management
Services
|
|
Vacation
Interests Sales and Financing
|
|
Corporate
and Other
|
|
Total
|
|
Hospitality
and
Management
Services
|
|
Vacation
Interests Sales and
Financing
(Restated)
|
|
Corporate
and Other
|
|
Total
(Restated)
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
|
|
(Unaudited)
|
||||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Management and member services
|
|
$
|
46,141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,141
|
|
|
$
|
42,039
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,039
|
|
Consolidated resort operations
|
|
4,729
|
|
|
—
|
|
|
—
|
|
|
4,729
|
|
|
4,125
|
|
|
—
|
|
|
—
|
|
|
4,125
|
|
||||||||
Vacation Interests sales, net of provision $0, $30,632, $0, $30,632, $0, $20,811, $0 and $20,811, respectively
|
|
—
|
|
|
155,317
|
|
|
—
|
|
|
155,317
|
|
|
—
|
|
|
150,281
|
|
|
—
|
|
|
150,281
|
|
||||||||
Interest
|
|
—
|
|
|
21,222
|
|
|
404
|
|
|
21,626
|
|
|
—
|
|
|
18,420
|
|
|
379
|
|
|
18,799
|
|
||||||||
Other
|
|
2,779
|
|
|
15,126
|
|
|
—
|
|
|
17,905
|
|
|
2,411
|
|
|
13,847
|
|
|
—
|
|
|
16,258
|
|
||||||||
Total revenues
|
|
53,649
|
|
|
191,665
|
|
|
404
|
|
|
245,718
|
|
|
48,575
|
|
|
182,548
|
|
|
379
|
|
|
231,502
|
|
||||||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Management and member services
|
|
7,750
|
|
|
—
|
|
|
—
|
|
|
7,750
|
|
|
8,316
|
|
|
—
|
|
|
—
|
|
|
8,316
|
|
||||||||
Consolidated resort operations
|
|
4,195
|
|
|
—
|
|
|
—
|
|
|
4,195
|
|
|
4,048
|
|
|
—
|
|
|
—
|
|
|
4,048
|
|
||||||||
Vacation Interests cost of sales
|
|
—
|
|
|
15,742
|
|
|
—
|
|
|
15,742
|
|
|
—
|
|
|
9,414
|
|
|
—
|
|
|
9,414
|
|
||||||||
Advertising, sales and marketing
|
|
—
|
|
|
94,015
|
|
|
—
|
|
|
94,015
|
|
|
—
|
|
|
84,878
|
|
|
—
|
|
|
84,878
|
|
||||||||
Vacation Interests carrying cost, net
|
|
—
|
|
|
7,341
|
|
|
—
|
|
|
7,341
|
|
|
—
|
|
|
9,373
|
|
|
—
|
|
|
9,373
|
|
||||||||
Loan portfolio
|
|
437
|
|
|
1,961
|
|
|
—
|
|
|
2,398
|
|
|
326
|
|
|
1,855
|
|
|
—
|
|
|
2,181
|
|
||||||||
Other operating
|
|
23
|
|
|
7,567
|
|
|
—
|
|
|
7,590
|
|
|
—
|
|
|
7,338
|
|
|
—
|
|
|
7,338
|
|
||||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
37,236
|
|
|
37,236
|
|
|
—
|
|
|
—
|
|
|
23,531
|
|
|
23,531
|
|
||||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
10,833
|
|
|
10,833
|
|
|
—
|
|
|
—
|
|
|
8,457
|
|
|
8,457
|
|
||||||||
Interest expense
|
|
—
|
|
|
4,889
|
|
|
10,051
|
|
|
14,940
|
|
|
—
|
|
|
4,205
|
|
|
7,316
|
|
|
11,521
|
|
||||||||
Impairments and other write-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||
(Gain) loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
||||||||
Total costs and expenses
|
|
12,405
|
|
|
131,515
|
|
|
58,037
|
|
|
201,957
|
|
|
12,690
|
|
|
117,063
|
|
|
39,383
|
|
|
169,136
|
|
||||||||
Income (loss) before provision for income taxes
|
|
41,244
|
|
|
60,150
|
|
|
(57,633
|
)
|
|
43,761
|
|
|
35,885
|
|
|
65,485
|
|
|
(39,004
|
)
|
|
62,366
|
|
||||||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
18,269
|
|
|
18,269
|
|
|
—
|
|
|
—
|
|
|
26,726
|
|
|
26,726
|
|
||||||||
Net income (loss)
|
|
$
|
41,244
|
|
|
$
|
60,150
|
|
|
$
|
(75,902
|
)
|
|
$
|
25,492
|
|
|
$
|
35,885
|
|
|
$
|
65,485
|
|
|
$
|
(65,730
|
)
|
|
$
|
35,640
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
General and administrative expense
|
|
$
|
37,236
|
|
|
$
|
23,531
|
|
Less: Non-cash stock-based compensation
|
|
(2,834
|
)
|
|
(3,366
|
)
|
||
General and administrative expense excluding non-cash stock-based compensation
|
|
$
|
34,402
|
|
|
$
|
20,165
|
|
|
|
|
|
|
||||
General and administrative expense as a percentage of total revenue
|
|
15.2
|
%
|
|
10.2
|
%
|
||
General and administrative expense excluding non-cash stock-based compensation as a percentage of total revenue
|
|
14.0
|
%
|
|
8.7
|
%
|
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||||
|
|
Hospitality
and
Management
Services
|
|
Vacation
Interests Sales and Financing
|
|
Corporate
and Other
|
|
Total
|
|
Hospitality
and
Management
Services
|
|
Vacation
Interests Sales and
Financing
(Restated)
|
|
Corporate
and Other
|
|
Total
(Restated)
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
|
|
(Unaudited)
|
||||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Management and member services
|
|
$
|
92,237
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92,237
|
|
|
$
|
82,678
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,678
|
|
Consolidated resort operations
|
|
9,204
|
|
|
—
|
|
|
—
|
|
|
9,204
|
|
|
7,334
|
|
|
—
|
|
|
—
|
|
|
7,334
|
|
||||||||
Vacation Interests sales, net of provision $0, $52,191, $0, $52,191, $0, $34,907, $0 and $34,907, respectively
|
|
—
|
|
|
300,765
|
|
|
—
|
|
|
300,765
|
|
|
—
|
|
|
272,847
|
|
|
—
|
|
|
272,847
|
|
||||||||
Interest
|
|
—
|
|
|
43,410
|
|
|
729
|
|
|
44,139
|
|
|
—
|
|
|
36,836
|
|
|
765
|
|
|
37,601
|
|
||||||||
Other
|
|
4,618
|
|
|
28,551
|
|
|
—
|
|
|
33,169
|
|
|
4,305
|
|
|
24,257
|
|
|
—
|
|
|
28,562
|
|
||||||||
Total revenues
|
|
106,059
|
|
|
372,726
|
|
|
729
|
|
|
479,514
|
|
|
94,317
|
|
|
333,940
|
|
|
765
|
|
|
429,022
|
|
||||||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Management and member services
|
|
15,395
|
|
|
—
|
|
|
—
|
|
|
15,395
|
|
|
16,397
|
|
|
—
|
|
|
—
|
|
|
16,397
|
|
||||||||
Consolidated resort operations
|
|
7,977
|
|
|
—
|
|
|
—
|
|
|
7,977
|
|
|
7,749
|
|
|
—
|
|
|
—
|
|
|
7,749
|
|
||||||||
Vacation Interests cost of sales
|
|
—
|
|
|
26,983
|
|
|
—
|
|
|
26,983
|
|
|
—
|
|
|
13,124
|
|
|
—
|
|
|
13,124
|
|
||||||||
Advertising, sales and marketing
|
|
—
|
|
|
180,740
|
|
|
—
|
|
|
180,740
|
|
|
—
|
|
|
153,391
|
|
|
—
|
|
|
153,391
|
|
||||||||
Vacation Interests carrying cost, net
|
|
—
|
|
|
12,455
|
|
|
—
|
|
|
12,455
|
|
|
—
|
|
|
19,741
|
|
|
—
|
|
|
19,741
|
|
||||||||
Loan portfolio
|
|
868
|
|
|
5,411
|
|
|
—
|
|
|
6,279
|
|
|
660
|
|
|
4,258
|
|
|
—
|
|
|
4,918
|
|
||||||||
Other operating
|
|
38
|
|
|
13,548
|
|
|
—
|
|
|
13,586
|
|
|
—
|
|
|
12,349
|
|
|
—
|
|
|
12,349
|
|
||||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
64,960
|
|
|
64,960
|
|
|
—
|
|
|
—
|
|
|
55,787
|
|
|
55,787
|
|
||||||||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
21,393
|
|
|
21,393
|
|
|
—
|
|
|
—
|
|
|
17,097
|
|
|
17,097
|
|
||||||||
Interest expense
|
|
—
|
|
|
9,737
|
|
|
20,269
|
|
|
30,006
|
|
|
—
|
|
|
8,123
|
|
|
15,002
|
|
|
23,125
|
|
||||||||
Impairments and other write-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||||
(Gain) loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
(401
|
)
|
|
(401
|
)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
||||||||
Total costs and expenses
|
|
24,278
|
|
|
248,874
|
|
|
106,221
|
|
|
379,373
|
|
|
24,806
|
|
|
210,986
|
|
|
87,936
|
|
|
323,728
|
|
||||||||
Income (loss) before provision for income taxes
|
|
81,781
|
|
|
123,852
|
|
|
(105,492
|
)
|
|
100,141
|
|
|
69,511
|
|
|
122,954
|
|
|
(87,171
|
)
|
|
105,294
|
|
||||||||
Provision for income taxes
|
|
—
|
|
|
—
|
|
|
41,471
|
|
|
41,471
|
|
|
—
|
|
|
—
|
|
|
45,284
|
|
|
45,284
|
|
||||||||
Net income (loss)
|
|
$
|
81,781
|
|
|
$
|
123,852
|
|
|
$
|
(146,963
|
)
|
|
$
|
58,670
|
|
|
$
|
69,511
|
|
|
$
|
122,954
|
|
|
$
|
(132,455
|
)
|
|
$
|
60,010
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
General and administrative expense
|
|
$
|
64,960
|
|
|
$
|
55,787
|
|
Less: Non-cash stock-based compensation
|
|
(5,655
|
)
|
|
(5,880
|
)
|
||
General and administrative expense excluding non-cash stock-based compensation
|
|
$
|
59,305
|
|
|
$
|
49,907
|
|
|
|
|
|
|
||||
General and administrative expense as a percentage of total revenue
|
|
13.5
|
%
|
|
13.0
|
%
|
||
General and administrative expense excluding non-cash stock-based compensation
|
|
12.4
|
%
|
|
11.6
|
%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||
|
|
Principal
Balance |
|
Weighted
Average Interest Rate |
|
Maturity
|
|
Gross Amount of Vacation Interests notes receivable as Collateral
|
|
Borrowing / Funding Availability
|
|
Principal
Balance |
||||||||
Senior Credit Facility
|
|
$
|
574,666
|
|
|
5.5%
|
|
5/9/2021
|
|
$
|
—
|
|
|
$
|
25,000
|
|
|
$
|
574,666
|
|
Original issue discount and debt issuance costs related to Senior Credit Facility
(except the revolving line of credit)
|
|
(15,218
|
)
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(16,250
|
)
|
||||
Notes payable-insurance policies
|
|
8,612
|
|
|
2.5%
|
|
Various
|
|
—
|
|
|
—
|
|
|
4,586
|
|
||||
Notes payable-other
|
|
—
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
164
|
|
||||
Total Corporate Indebtedness
|
|
568,060
|
|
|
|
|
|
|
—
|
|
|
25,000
|
|
|
563,166
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diamond Resorts Owner Trust 2015-2 (1)
|
|
124,986
|
|
|
3.1%
|
|
5/22/2028
|
|
132,493
|
|
|
—
|
|
|
172,583
|
|
||||
Diamond Resorts Owner Trust 2014-1 (1)
|
|
111,997
|
|
|
2.6%
|
|
5/20/2027
|
|
121,736
|
|
|
—
|
|
|
140,256
|
|
||||
Diamond Resorts Owner Trust 2015-1 (1)
|
|
88,796
|
|
|
2.8%
|
|
7/20/2027
|
|
95,889
|
|
|
—
|
|
|
126,776
|
|
||||
Diamond Resorts Owner Trust 2013-2 (1)
|
|
69,471
|
|
|
2.3%
|
|
5/20/2026
|
|
77,190
|
|
|
—
|
|
|
84,659
|
|
||||
Credit Suisse Conduit Facility (1)
|
|
65,694
|
|
|
3.2%
|
|
4/10/2017
|
|
75,976
|
|
|
134,306
|
|
(2)
|
22,538
|
|
||||
Capital One Conduit Facility
|
|
63,757
|
|
|
2.7%
|
|
5/12/2020
|
|
73,503
|
|
|
36,243
|
|
(2)
|
—
|
|
||||
DRI Quorum Facility and Island One
Quorum Funding Facility (1)
|
|
42,945
|
|
|
4.4%
|
|
Various
|
|
49,526
|
|
|
57,055
|
|
(2)
|
45,411
|
|
||||
Diamond Resorts Owner Trust 2013-1 (1)
|
|
26,213
|
|
|
2.0%
|
|
1/20/2025
|
|
29,126
|
|
|
—
|
|
|
30,681
|
|
||||
Diamond Resorts Owner Trust 2011-1 (1)
|
|
10,127
|
|
|
4.0%
|
|
3/20/2023
|
|
10,806
|
|
|
—
|
|
|
12,073
|
|
||||
Diamond Resorts Tempus Owner Trust 2013 (1)
|
|
4,449
|
|
|
6.0%
|
|
12/20/2023
|
|
9,917
|
|
|
—
|
|
|
7,884
|
|
||||
Original issue discount and debt issuance costs related to securitization notes and Funding Facilities
|
|
(11,109
|
)
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(12,781
|
)
|
||||
Total Securitization Notes and Funding Facilities
|
|
597,326
|
|
|
|
|
|
|
676,162
|
|
|
227,604
|
|
|
630,080
|
|
||||
Total
|
|
$
|
1,165,386
|
|
|
|
|
|
|
$
|
676,162
|
|
|
$
|
252,604
|
|
|
$
|
1,193,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Non-recourse indebtedness
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(2) Borrowing / funding availability is calculated as the difference between the maximum commitment amount and the outstanding principal balance;
however, the actual availability is dependent on the amount of eligible loans that serve as the collateral for such borrowings.
|
•
|
Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect cash requirements for income taxes;
|
•
|
Adjusted EBITDA does not reflect interest expense for our corporate indebtedness;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced, and Adjusted EBITDA does not reflect any cash requirements for these replacements;
|
•
|
we make expenditures to replenish VOI inventory (principally pursuant to our IRAAs and in connection with our strategic acquisitions), and Adjusted EBITDA does not reflect our cash requirements for these expenditures or certain costs of carrying such inventory (which are capitalized); and
|
•
|
other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
(Restated)
|
|
2016
|
|
2015
(Restated)
|
|
LTM
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Net cash provided by operating activities
|
|
$
|
15,875
|
|
|
$
|
40,902
|
|
|
$
|
57,894
|
|
|
$
|
85,962
|
|
|
$
|
147,826
|
|
Provision for income taxes (restated)
|
|
18,269
|
|
|
26,726
|
|
|
41,471
|
|
|
45,284
|
|
|
94,951
|
|
|||||
Provision for uncollectible Vacation Interests sales revenue (a)
|
|
(30,632
|
)
|
|
(20,811
|
)
|
|
(52,191
|
)
|
|
(34,907
|
)
|
|
(98,056
|
)
|
|||||
Amortization of capitalized financing costs and original issue discounts (a)
|
|
(2,152
|
)
|
|
(1,399
|
)
|
|
(4,179
|
)
|
|
(2,801
|
)
|
|
(7,611
|
)
|
|||||
Deferred income taxes (b) (restated)
|
|
(3,093
|
)
|
|
(12,014
|
)
|
|
(11,207
|
)
|
|
(21,907
|
)
|
|
(31,770
|
)
|
|||||
Excess tax benefits from stock-based compensation (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
375
|
|
|
547
|
|
|||||
Loss on foreign currency (d)
|
|
(1,267
|
)
|
|
(100
|
)
|
|
(1,616
|
)
|
|
(198
|
)
|
|
(2,628
|
)
|
|||||
Gain on Vacation Interests notes receivable purchase (a)
|
|
54
|
|
|
183
|
|
|
161
|
|
|
279
|
|
|
397
|
|
|||||
Unrealized gain (loss) on derivative instruments (e)
|
|
187
|
|
|
153
|
|
|
56
|
|
|
(105
|
)
|
|
(301
|
)
|
|||||
Unrealized (loss) gain on post-retirement benefit plan (f)
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(86
|
)
|
|
86
|
|
|||||
Loss on investment in joint venture (a)
|
|
(223
|
)
|
|
—
|
|
|
(346
|
)
|
|
—
|
|
|
(468
|
)
|
|||||
Corporate interest expense (g)
|
|
10,051
|
|
|
7,316
|
|
|
20,269
|
|
|
15,002
|
|
|
36,848
|
|
|||||
Change in operating assets and liabilities excluding acquisitions (h) (restated)
|
|
65,714
|
|
|
44,835
|
|
|
107,403
|
|
|
64,423
|
|
|
202,990
|
|
|||||
Vacation Interests cost of sales (i)
|
|
15,742
|
|
|
9,414
|
|
|
26,983
|
|
|
13,124
|
|
|
51,578
|
|
|||||
Adjusted EBITDA - Consolidated
|
|
$
|
88,525
|
|
|
$
|
95,162
|
|
|
$
|
184,698
|
|
|
$
|
164,445
|
|
|
$
|
394,389
|
|
(a)
|
Represents non-cash charge or gain.
|
(b)
|
Represents the deferred income tax liability, primarily related to current favorable tax law regarding recognition of income from financed Vacation Interests sales and the utilization of our NOLs.
|
(c)
|
Represents the amount of excess tax benefit that arises when stock-based compensation recognized on our tax return exceeds stock-based compensation recognized in our condensed consolidated statements of income and comprehensive income.
|
(d)
|
Represents net realized loss on foreign exchange transactions settled at unfavorable exchange rates and unrealized net loss resulting from the devaluation of foreign currency-denominated assets and liabilities.
|
(e)
|
Represents the effects of the changes in mark-to-market valuations of derivative liabilities.
|
(f)
|
Represents unrealized (loss) gain on our post-retirement benefit plan related to a collective labor agreement entered into with the employees of our two resorts in St. Maarten.
|
(g)
|
Represents corporate interest expense; does not include interest expense related to non-recourse indebtedness that is secured by our VOI consumer loans.
|
(h)
|
Represents the net change in operating assets and liabilities excluding acquisitions, as computed directly from the statements of cash flows. Vacation Interests cost of sales is included in the net changes in unsold Vacation Interests, net, as presented in the statements of cash flows.
|
(i)
|
We record Vacation Interests cost of sales using the relative sales value method in accordance with ASC 978, which requires us to make significant estimates which are subject to significant uncertainty. In determining the appropriate amount of costs using the relative sales value method, we rely on complex, multi-year financial models that incorporate a variety of estimated inputs. These models are reviewed on a quarterly basis, and the relevant estimates used in the models are revised based upon historical results and management's new estimates. In addition, see Note 3
for detailed financial information with respect to the Restatement.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
(Restated)
|
|
2016
|
|
2015
(Restated)
|
|
LTM
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Net income (restated)
|
|
$
|
25,492
|
|
|
$
|
35,640
|
|
|
$
|
58,670
|
|
|
$
|
60,010
|
|
|
$
|
142,546
|
|
Plus: Corporate interest expense (a)
|
|
10,051
|
|
|
7,316
|
|
|
20,269
|
|
|
15,002
|
|
|
36,848
|
|
|||||
Provision for income taxes (restated)
|
|
18,269
|
|
|
26,726
|
|
|
41,471
|
|
|
45,284
|
|
|
94,951
|
|
|||||
Depreciation and amortization (b)
|
|
10,833
|
|
|
8,457
|
|
|
21,393
|
|
|
17,097
|
|
|
38,817
|
|
|||||
Vacation Interests cost of sales (c) (restated)
|
|
15,742
|
|
|
9,414
|
|
|
26,983
|
|
|
13,124
|
|
|
51,578
|
|
|||||
Impairments and other non-cash write-offs (b)
|
|
—
|
|
|
7
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|||||
(Gain) loss on disposal of assets (b)
|
|
(83
|
)
|
|
72
|
|
|
(401
|
)
|
|
38
|
|
|
(447
|
)
|
|||||
Amortization of loan origination costs (b)
|
|
4,052
|
|
|
3,087
|
|
|
7,975
|
|
|
6,129
|
|
|
14,481
|
|
|||||
Amortization of net portfolio premium (b)
|
|
41
|
|
|
21
|
|
|
61
|
|
|
32
|
|
|
107
|
|
|||||
Stock-based compensation (d)
|
|
4,128
|
|
|
4,422
|
|
|
8,277
|
|
|
7,717
|
|
|
15,508
|
|
|||||
Adjusted EBITDA - Consolidated
|
|
$
|
88,525
|
|
|
$
|
95,162
|
|
|
$
|
184,698
|
|
|
$
|
164,445
|
|
|
$
|
394,389
|
|
(a)
|
Represents corporate interest expense; does not include interest expense related to non-recourse indebtedness that is secured by our VOI consumer loans.
|
(b)
|
These items represent non-cash charges/gains.
|
(c)
|
We record Vacation Interests cost of sales using the relative sales value method in accordance with ASC 978, which requires us to make significant estimates which are subject to significant uncertainty. In determining the appropriate amount of costs using the relative sales value method, we rely on complex, multi-year financial models that incorporate a variety of estimated inputs. These models are reviewed on a regular basis, and the relevant estimates used in the models are revised based upon historical results and management's new estimates. In addition, see Note 3
for detailed financial information with respect to the Restatement.
|
(d)
|
Represents the non-cash charge related to stock-based compensation expense.
|
|
Amount of Increase/(decrease) to Vacation Interests sales, net
(in thousands)
|
|
Percentage of Increase/(decrease) to Vacation Interests sales, net
|
|||
Default rates by FICO band - 100 basis point increase
|
$
|
(14,825
|
)
|
|
(9.3
|
)%
|
Default rates by FICO band - 100 basis point decrease
|
$
|
14,825
|
|
|
9.3
|
%
|
|
Amount of increase/(decrease) to Vacation Interests cost of sales
(in thousands)
|
|
Percentage increase/ (decrease) to Vacation Interests cost of sales
|
|||
Estimated future retail price per point - 1% increase
|
$
|
(1,849
|
)
|
|
(11.2
|
)%
|
Estimated future retail price per point - 1% decrease
|
$
|
1,849
|
|
|
11.2
|
%
|
Estimated cost per point - 1% increase
|
$
|
3,691
|
|
|
22.4
|
%
|
Estimated cost per point - 1% decrease
|
$
|
(3,691
|
)
|
|
(22.4
|
)%
|
•
|
uncertainties as to the timing of receipt of required regulatory approvals and of the completion of the tender offer and the merger;
|
•
|
the possibility that the tender offer will fail to meet the minimum condition or that various other conditions to the completion of the tender offer and the merger set forth in the Merger Agreement may not be satisfied or waived;
|
•
|
the risk that the entities affiliated with the Apollo Funds party to the Merger Agreement will not perform their obligations under the Merger Agreement; and
|
•
|
the possibility that the Pending Merger may otherwise be delayed or may not be completed at all.
|
•
|
exposure to local economic conditions;
|
•
|
potential adverse changes in the diplomatic relations of foreign countries with the U.S.;
|
•
|
hostility from local populations;
|
•
|
restrictions and taxes on the withdrawal of foreign investment and earnings;
|
•
|
the imposition of government policies and regulations against business and real estate ownership by foreigners;
|
•
|
foreign investment restrictions or requirements;
|
•
|
limitations on our ability to legally enforce our contractual rights in foreign countries;
|
•
|
regulations restricting the sale of VOIs, as described in “Business - Governmental Regulation;”
|
•
|
conditions that negatively shape public perception of travel, including travel-related accidents and outbreaks of pandemic or contagious diseases, such as Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virus;
|
•
|
foreign exchange restrictions and the impact of exchange rates on our business;
|
•
|
conflicts between local laws and U.S. laws;
|
•
|
withholding and other taxes on remittances and other payments by our subsidiaries; and
|
•
|
changes in and application of foreign taxation structures, including value added taxes.
|
Exhibit
|
Description
|
2.1
|
Agreement and Plan of Merger, dated as of June 29, 2016, by and among Diamond Resorts International, Inc., Dakota Parent, Inc. and Dakota Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on June 29, 2016).
|
10.1
|
Loan Agreement, dated as of May 11, 2016, by and among Diamond Resorts / CO Borrower 2016, LLC, Diamond Resorts/CO Seller 2016, LLC, Diamond Resorts Corporation, Diamond Resorts Holdings, LLC, Diamond Resorts International, Inc., Capital One, National Association and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on May 17, 2016).
|
10.2
|
Collateral and Servicing Agreement, dated as of May 11, 2016, by and among Diamond Resorts / CO Borrower 2016, LLC, Diamond Resorts Financial Services, Inc., Wells Fargo Bank, National Association and Capital One, National Association (incorporated by reference to Exhibit 10.2 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on May 17, 2016).
|
10.3
|
Second Amendment to Agreement for the Purchase and Sale of Property, dated as of June 30, 2016, by and between Hawaii Funding LLC, Diamond Resorts Kona Development, LLC and Diamond Resorts International, Inc. (incorporated by reference to Exhibit 10.1 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on July 6, 2016).
|
10.4
|
Employment Agreement, dated June 1, 2016, by and between Diamond Resorts Centralized Services Company and Brian Garavuso.
|
10.5
|
Second Amendment to Amended and Restated Loan Sale and Servicing Agreement, dated as of June 10, 2016, among DRI Quorum 2010 LLC, as seller, Diamond Resorts Financial Services, Inc., as servicer, Wells Fargo Bank, National Association, as back-up servicer, and Quorum Federal Credit Union, a federally chartered credit union, as Buyer.
|
10.6
|
Letter Agreement dated August 4, 2016 between Diamond Resorts International, Inc., Diamond Resorts Corporation and Stephen J. Cloobeck relating to use of company aircraft.
|
10.7
|
Third Amendment to Agreement for the Purchase and Sale of Property, effective as of July 28, 2016, by and between Hawaii Funding LLC, Diamond Resorts Kona Development, LLC and Diamond Resorts International, Inc. (incorporated by reference to Exhibit 10.1 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on August 4, 2016).
|
10.8
|
Limited Waiver, Consent and First Amendment to Collateral and Servicing Agreement, dated as of July 29, 2016, by and among Diamond Resorts/CO Borrower 2016, LLC, Diamond Resorts Financial Services, Inc., Diamond Resorts/CO Seller 2016, LLC, Diamond Resorts Corporation, Diamond Resorts Holdings, LLC, Diamond Resorts International, Inc., Wells Fargo Bank, National Association and Capital One, National Association (incorporated by reference to Exhibit 10.2 to Diamond Resorts International, Inc.'s Current Report on Form 8-K filed on August 4, 2016).
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act as of 1934, as amended.
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from Diamond Resorts International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income and Comprehensive Income; (iii) the Condensed Consolidated Statement of Stockholders' Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) Notes to the Condensed Consolidated Financial Statements, filed herewith.
|
|
|
|
|
|
DIAMOND RESORTS INTERNATIONAL, INC.
|
|
|
|
|
Date:
|
August 8, 2016
|
By:
|
/s/ DAVID F. PALMER
|
|
|
|
David F. Palmer
|
|
|
|
President and Chief Executive Officer
(principal executive officer)
|
|
|
|
|
Date
|
August 8, 2016
|
By:
|
/s/ C. ALAN BENTLEY
|
|
|
|
C. Alan Bentley
|
|
|
|
Executive Vice President and Chief Financial Officer (principal financial officer)
|
|
|
|
|
1 Year DIAMOND RESORTS INTERNATIONAL, I Chart |
1 Month DIAMOND RESORTS INTERNATIONAL, I Chart |
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