Business Segments

3 Months Ended

Mar. 22, 2013

Business Segments

13. BUSINESS SEGMENTS

We define our reportable segments based on the way in which the chief operating decision maker, currently our chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance. We operate in three reportable business segments:

• In our North America segment, we develop, market, sell and manage vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. We also develop, market and sell vacation ownership and related products under the Ritz-Carlton Destination Club brand, as well as whole ownership residential products under the Ritz-Carlton Residences brand.

• In our Europe segment, we develop, market, sell and manage vacation ownership products in several locations in Europe.

• In our Asia Pacific segment, we develop, market, sell and manage Marriott Vacation Club, Asia Pacific, a right-to-use points program we introduced in 2006 that we specifically designed to appeal to vacation preferences of the Asian market, as well as a weeks-based right-to-use product.

Effective December 29, 2012, we have combined the reporting of the financial results of the former Luxury segment with the North America segment based upon our scaling back of separate development activity and the aggregation of future marketing and sales of both upscale tier and luxury tier inventory. Existing service standards and on-site management remain unaffected by our reporting changes. Prior year amounts have been recast for consistency with current year’s presentation.

We evaluate the performance of our segments based primarily on the results of the segment without allocating corporate expenses or income taxes. We do not allocate corporate interest expense or other financing expenses to our segments. During the 2013 first quarter, we reviewed the allocation of general and administrative expenses to our reportable segments as a result of the realignment of our management structure. Based on this review, we determined to no longer allocate certain general and administrative expenses to our reportable segments. This change, which was effective December 29, 2012, had no impact on our Financial Statements for any prior period. Prior period reportable segment information has been adjusted to reflect the change in reportable segment reporting.

We include interest income specific to segment activities within the appropriate segment. We allocate other gains and losses and equity in earnings or losses from our joint ventures to each of our segments. Corporate and other represents that portion of our revenues, equity in earnings or losses, and other gains or losses that are not allocable to our segments.

Revenues

	Twelve Weeks Ended
($ in millions)	March 22, 2013		March 23, 2012
North America	$	353	$	337
Europe		21		21
Asia Pacific		15		18
Total segment revenues		389		376
Corporate and other		—		—
	$	389	$	376

Net Income

	Twelve Weeks Ended
($ in millions)	March 22, 2013			March 23, 2012
North America	$	78		$	70
Europe		—			—
Asia Pacific		3			1
Total segment financial results		81			71
Corporate and other		(52	)		(54	)
Provision for income taxes		(11	)		(8	)
	$	18		$	9

Assets

	At Period-End
($ in millions)	March 22, 2013		December 28, 2012
North America	$	2,192	$	2,223
Europe		113		113
Asia Pacific		86		85
Total segment assets		2,391		2,421
Corporate and other		178		183
	$	2,569	$	2,604