Close

Form 8-K MARRIOTT VACATIONS WORLD For: Aug 08

August 8, 2022 4:21 PM EDT

Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.
0001524358false00015243582022-08-082022-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 8, 2022
_________________________
Marriott Vacations Worldwide Corporation
(Exact name of registrant as specified in its charter)
 _________________________
Delaware 001-35219 45-2598330
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9002 San Marco CourtOrlando,FL32819
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code (407) 206-6000
N/A
(Former name or former address, if changed since last report)
_________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueVACNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02 Results of Operations and Financial Condition
On August 8, 2022, Marriott Vacations Worldwide Corporation (the “Company,” “we” or “our”) issued a press release reporting financial results for the quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
As provided in General Instruction B.2 of Form 8-K, the information contained in Item 2.02 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended, nor shall any such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are being furnished herewith: 
Exhibit NumberDescription
Press release reporting financial results for the quarter ended June 30, 2022
101Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(Registrant)
Dated: August 8, 2022By:/s/ Anthony E. Terry
Name:Anthony E. Terry
Title:Executive Vice President and Chief Financial Officer

1
Exhibit 99.1
mvwbannerforpressrelease.jpg
Neal Goldner
Investor Relations
Marriott Vacations Worldwide Corporation
407.206.6149
Neal.Goldner@mvwc.com

Erica Ettori
Global Communications
Marriott Vacations Worldwide Corporation
407.513.6606
Erica.Ettori@mvwc.com
Marriott Vacations Worldwide (“MVW”) Reports Second Quarter 2022 Financial Results
ORLANDO, Fla. – August 8, 2022 – Marriott Vacations Worldwide Corporation (NYSE: VAC) (the “Company”) reported second quarter 2022 financial results.
Second Quarter 2022 Highlights:
Consolidated Vacation Ownership contract sales were $506 million, a 40% increase compared to the second quarter of 2021, and VPG increased 7% to $4,613.
Net income attributable to common shareholders was $136 million, or $2.97 fully diluted earnings per share.
Adjusted net income attributable to common shareholders was $131 million, or $2.87 adjusted fully diluted earnings per share.
Adjusted EBITDA was $255 million, a 55% increase compared to the second quarter of 2021, as the Company continues to see a strong recovery in the business.
The Company returned $219 million to shareholders, repurchasing more than 1.4 million shares of its common stock for $193 million at an average price per share of $136 and paying a quarterly dividend of $26 million.
Subsequent to the end of the second quarter, the Company repurchased approximately 1.1 million shares of its common stock for $131 million at an average price per share of $124 through the end of July.
Consistent with its strategy to dispose of non-strategic assets, during the second quarter, the Company closed on the sale of its VRI Americas business and its hotel in Puerto Vallarta, Mexico for total cash proceeds in excess of $100 million.
“We had a very strong second quarter, generating $506 million in contract sales, up 40% from the prior year, with contract sales and Adjusted EBITDA up 31% from the second quarter of 2019,” said Stephen P. Weisz, chief executive officer. “We introduced Abound by Marriott VacationsTM during the quarter, an exclusive new program providing more options and access for Owners. With the strong recovery of our operations, as well as cash proceeds from dispositions, we accelerated our return of cash to shareholders, surpassing $500 million this year through the end of July.”


Marriott Vacations Worldwide Reports Second Quarter 2022 Financial Results / 2
Second Quarter 2022 Results
Vacation Ownership
Revenues excluding cost reimbursements increased 28% in the second quarter of 2022 compared to the prior year, reflecting growth in all of the Company's lines of business.
Segment financial results attributable to common shareholders were $277 million in the second quarter of 2022 and Segment margin was 36%. Segment adjusted EBITDA increased 51% to $274 million, with Segment adjusted EBITDA margin of 36%, over 500 basis points higher than the second quarter of 2021.
Exchange & Third-Party Management
Revenues excluding cost reimbursements decreased 4% in the second quarter of 2022 compared to the prior year. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 16% compared to the prior year.
Segment financial results attributable to common shareholders were $46 million in the second quarter of 2022 and Segment margin was 66%. Segment adjusted EBITDA decreased $2 million to $35 million compared to the prior year primarily due to the sale of VRI Americas, with Segment adjusted EBITDA margin of 52%, in line with the second quarter of 2021.
Corporate and Other
General and administrative costs decreased $2 million in the second quarter of 2022 compared to the prior year primarily as a result of lower bonus expense.
Balance Sheet and Liquidity
The Company ended the quarter with approximately $1.2 billion in liquidity, including $324 million of cash and cash equivalents, $106 million of gross notes receivable that were eligible for securitization, and $749 million of available capacity under its revolving corporate credit facility.
At the end of the second quarter of 2022, the Company had $2.7 billion of net corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.
The Company completed its first timeshare receivable securitization of 2022 in the second quarter, issuing $375 million of notes backed by a pool of $383 million of vacation ownership notes receivable from all of the Company's timeshare brands. The overall weighted average interest rate of the notes was 4.59% and the transaction had a gross advance rate of 98%.
Abound by Marriott VacationsTM
During the quarter, the Company introduced Abound by Marriott Vacations, a new Owner benefit and exchange program providing access to over 90 vacation club resorts, including Marriott Vacation Club®, Sheraton® Vacation Club and Westin® Vacation Club, as well as access to more than 8,000 Marriott Bonvoy® hotels, 2,000 vacation homes, and 2,000 unique experiences like cruises, guided and culinary tours, premiere events, outdoor adventures and more with a continued ability to exchange through Interval International, a premier exchange partner.



Marriott Vacations Worldwide Reports Second Quarter 2022 Financial Results / 3
Full Year 2022 Outlook (in millions, except per share amounts)
The Financial Schedules that follow reconcile the non-GAAP financial measures set forth below to the following full year 2022 expected GAAP results for the Company.
The Company is providing guidance as reflected in the chart below for the full year 2022.
Income before income taxes attributable to common shareholders$511to$551
Net income attributable to common shareholders$365to$395
Earnings per share - diluted$8.15to$8.81
Net cash, cash equivalents and restricted cash provided by operating activities$470$500
Contract sales $1,775to$1,875
Adjusted EBITDA$880to$930
Adjusted pretax net income$600to$650
Adjusted net income attributable to common shareholders$425to$465
Adjusted earnings per share - diluted$9.47to$10.35
Adjusted free cash flow$650to$730
Revenue Recognition
In connection with the launch of Abound by Marriott Vacations and the unification of the Company’s Marriott-, Westin-, and Sheraton-branded vacation ownership products, the Company intends to align its revenue recognition on the sale of vacation ownership interests across all of its brands in the third quarter. This will result in the acceleration of revenue and a one-time benefit to Adjusted EBITDA but will have no impact on cash flow. The Company is unable to estimate the impact at this time and its guidance excludes this one-time benefit, which will be provided in connection with the release of its third quarter results.
Non-GAAP Financial Information
Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission.
Second Quarter 2022 Financial Results Conference Call
The Company will hold a conference call on August 9, 2022 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.
About Marriott Vacations Worldwide Corporation
Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. The Company has over 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates exchange networks and membership programs comprised of nearly 3,200 affiliated resorts in over 90 countries and territories, as well as provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with


Marriott Vacations Worldwide Reports Second Quarter 2022 Financial Results / 4
Marriott International, Inc. and Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements
This press release and accompanying schedules contain “forward-looking statements” within the meaning of federal securities laws, including statements about expectations for future growth and projections for full year 2022. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the continuing effects of the COVID-19 pandemic, including quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including its short and longer-term impact on consumer confidence and demand for travel, and the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines against variants of the COVID-19 virus become widely available; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the effects of steps we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts due to the COVID-19 pandemic; political or social strife, and other matters referred to under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission. All forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements.
Financial Schedules Follow



MARRIOTT VACATIONS WORLDWIDE CORPORATION
FINANCIAL SCHEDULES
QUARTER 2, 2022
TABLE OF CONTENTS
 
Summary Financial Information and Adjusted EBITDA by Segment
A-1
Consolidated Statements of Income
A-2
Revenues and Profit by Segment
A-3
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted
A-7
Adjusted EBITDA
A-8
Consolidated Contract Sales to Adjusted Development Profit
A-9
Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA
A-10
Consolidated Balance Sheets
A-11
Consolidated Statements of Cash Flows
A-12
2022 Outlook
Adjusted Net Income Attributable to Common Shareholders, Adjusted Earnings Per Share - Diluted
and Adjusted EBITDA
A-14
Adjusted Free Cash Flow
A-15
Quarterly Operating Metrics
A-16
Non-GAAP Financial Measures
A-17



A-1
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts)
(Unaudited)
SUMMARY FINANCIAL INFORMATION

Three Months EndedChange %Six Months EndedChange %
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Key Measures
Total consolidated contract sales$506 $362 40%$900 $588 53%
VPG$4,613 $4,304 7%$4,653 $4,428 5%
Tours102,857 79,900 29%181,362 125,771 44%
Total active members (000's)(1)
1,596 1,321 21%1,596 1,321 21%
Average revenue per member(1)
$38.79 $46.36 (16%)$83.32 $93.77 (11%)
GAAP Measures
Revenues$1,164 $979 19%$2,216 $1,738 28%
Income (loss) before income taxes and noncontrolling interests$178 $35 NM$268 $(1)NM
Net income (loss) attributable to common shareholders$136 $NM$194 $(22)NM
Earnings (loss) per share - diluted$2.97 $0.15 NM$4.18 $(0.52)NM
Non-GAAP Measures **
Adjusted EBITDA$255 $164 55%$443 $233 90%
Adjusted pretax income$181 $70 154%$301 $47 NM
Adjusted net income attributable to common shareholders $131 $37 252%$212 $17 NM
Adjusted earnings per share - diluted $2.87 $0.85 238%$4.55 $0.40 NM
(1) Includes members at the end of each period for the Interval International exchange network only.

ADJUSTED EBITDA BY SEGMENT
Three Months EndedChange
%
Six Months EndedChange %
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Vacation Ownership$274 $182 51%$473 $250 89%
Exchange & Third-Party Management35 37 (5%)78 78 —%
Segment adjusted EBITDA**309 219 41%551 328 68%
General and administrative(54)(55)1%(108)(95)(14%)
Adjusted EBITDA**$255 $164 55%$443 $233 90%
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
NM - Not meaningful


A-2
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
REVENUES
Sale of vacation ownership products$425 $296 $735 $459 
Management and exchange203 220 425 413 
Rental140 121 273 210 
Financing72 68 143 127 
Cost reimbursements324 274 640 529 
TOTAL REVENUES1,164 979 2,216 1,738 
EXPENSES
Cost of vacation ownership products80 67 140 107 
Marketing and sales214 164 396 273 
Management and exchange102 126 229 243 
Rental87 81 168 163 
Financing23 21 44 42 
General and administrative64 66 125 112 
Depreciation and amortization32 36 65 77 
Litigation charges
Royalty fee29 27 56 52 
Impairment— — 
Cost reimbursements324 274 640 529 
TOTAL EXPENSES957 870 1,868 1,609 
Gains (losses) and other income (expense), net37 (2)41 
Interest expense(30)(44)(57)(87)
Transaction and integration costs(37)(29)(65)(48)
Other
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS178 35 268 (1)
Provision for income taxes(43)(27)(75)(16)
NET INCOME (LOSS)135 193 (17)
Net loss (income) attributable to noncontrolling interests(2)(5)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$136 $$194 $(22)
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic$3.30 $0.15 $4.64 $(0.52)
Diluted$2.97 $0.15 $4.18 $(0.52)
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars.


A-3
MARRIOTT VACATIONS WORLDWIDE CORPORATION
REVENUES AND PROFIT BY SEGMENT
for the three months ended June 30, 2022
(In millions)
(Unaudited)
Reportable SegmentCorporate and OtherTotal
Vacation OwnershipExchange & Third-Party Management
REVENUES
Sales of vacation ownership products$425 $— $— $425 
Management and exchange(1)
Ancillary revenues66 — 67 
Management fee revenues41 11 (1)51 
Exchange and other services revenues33 46 85 
Management and exchange140 58 203 
Rental129 11 — 140 
Financing72 — — 72 
Cost reimbursements(1)
325 (6)324 
TOTAL REVENUES$1,091 $74 $(1)$1,164 
PROFIT
Development$131 $— $— $131 
Management and exchange(1)
80 26 (5)101 
Rental(1)
38 11 53 
Financing49 — — 49 
TOTAL PROFIT298 37 (1)334 
OTHER
General and administrative— — (64)(64)
Depreciation and amortization(22)(7)(3)(32)
Litigation charges(2)— — (2)
Royalty fee(29)— — (29)
Gains (losses) and other income (expense), net32 16 (11)37 
Interest expense— — (30)(30)
Transaction and integration costs(1)— (36)(37)
Other— — 
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS277 46 (145)178 
Provision for income taxes— — (43)(43)
NET INCOME (LOSS)277 46 (188)135 
Net loss attributable to noncontrolling interests(1)
— — 
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$277 $46 $(187)$136 
SEGMENT MARGIN(2)
36%66%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues.


A-4
MARRIOTT VACATIONS WORLDWIDE CORPORATION
REVENUES AND PROFIT BY SEGMENT
for the three months ended June 30, 2021
(In millions)
(Unaudited)
Reportable SegmentCorporate and OtherTotal
Vacation OwnershipExchange & Third-Party Management
REVENUES
Sales of vacation ownership products$296 $— $— $296 
Management and exchange(1)
Ancillary revenues52 — 53 
Management fee revenues39 (5)43 
Exchange and other services revenues32 50 42 124 
Management and exchange123 60 37 220 
Rental110 11 — 121 
Financing68 — — 68 
Cost reimbursements(1)
286 15 (27)274 
TOTAL REVENUES$883 $86 $10 $979 
PROFIT
Development$65 $— $— $65 
Management and exchange(1)
77 25 (8)94 
Rental(1)
15 11 14 40 
Financing47 — — 47 
TOTAL PROFIT204 36 246 
OTHER
General and administrative— — (66)(66)
Depreciation and amortization(23)(9)(4)(36)
Litigation charges(3)— — (3)
Royalty fee(27)— — (27)
Impairment— — (5)(5)
Losses and other expense, net— — (2)(2)
Interest expense— — (44)(44)
Transaction and integration costs(1)— (28)(29)
Other— — 
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS151 27 (143)35 
Provision for income taxes— — (27)(27)
NET INCOME (LOSS)151 27 (170)
Net income attributable to noncontrolling interests(1)
— — (2)(2)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$151 $27 $(172)$
SEGMENT MARGIN(2)
25%38%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues.


A-5
MARRIOTT VACATIONS WORLDWIDE CORPORATION
REVENUES AND PROFIT BY SEGMENT
for the six months ended June 30, 2022
(In millions)
(Unaudited)
Reportable SegmentCorporate and OtherTotal
Vacation OwnershipExchange & Third-Party Management
REVENUES
Sales of vacation ownership products$735 $— $— $735 
Management and exchange(1)
Ancillary revenues120 — 122 
Management fee revenues83 21 (4)100 
Exchange and other services revenues63 99 41 203 
Management and exchange266 122 37 425 
Rental251 22 — 273 
Financing143 — — 143 
Cost reimbursements(1)
652 14 (26)640 
TOTAL REVENUES$2,047 $158 $11 $2,216 
PROFIT
Development$199 $— $— $199 
Management and exchange(1)
152 57 (13)196 
Rental(1)
70 22 13 105 
Financing99 — — 99 
TOTAL PROFIT520 79 — 599 
OTHER
General and administrative— — (125)(125)
Depreciation and amortization(44)(16)(5)(65)
Litigation charges(5)— — (5)
Restructuring— — — — 
Royalty fee(56)— — (56)
Impairment— — — — 
Gains (losses) and other income (expense), net35 16 (10)41 
Interest expense— — (57)(57)
Transaction and integration costs(1)— (64)(65)
Other— — 
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS450 79 (261)268 
Provision for income taxes— — (75)(75)
NET INCOME (LOSS)450 79 (336)193 
Net loss attributable to noncontrolling interests(1)
— — 
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$450 $79 $(335)$194 
SEGMENT MARGIN(2)
32%55%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues.


A-6
MARRIOTT VACATIONS WORLDWIDE CORPORATION
REVENUES AND PROFIT BY SEGMENT
for the six months ended June 30, 2021
(In millions)
(Unaudited)
Reportable SegmentCorporate and OtherTotal
Vacation OwnershipExchange & Third-Party Management
REVENUES
Sales of vacation ownership products$459 $— $— $459 
Management and exchange(1)
Ancillary revenues80 — 81 
Management fee revenues77 14 (11)80 
Exchange and other services revenues60 105 87 252 
Management and exchange217 120 76 413 
Rental187 23 — 210 
Financing127 — — 127 
Cost reimbursements(1)
554 29 (54)529 
TOTAL REVENUES$1,544 $172 $22 $1,738 
PROFIT
Development$79 $— $— $79 
Management and exchange(1)
136 54 (20)170 
Rental(1)
(4)23 28 47 
Financing85 — — 85 
TOTAL PROFIT296 77 381 
OTHER
General and administrative— — (112)(112)
Depreciation and amortization(42)(29)(6)(77)
Litigation charges(6)— — (6)
Restructuring(1)— — 
Royalty fee(52)— — (52)
Impairment— — (5)(5)
Gains and other income, net— — 
Interest expense— — (87)(87)
Transaction and integration costs(1)— (47)(48)
Other— — 
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS195 48 (244)(1)
Provision for income taxes— — (16)(16)
NET INCOME (LOSS)195 48 (260)(17)
Net income attributable to noncontrolling interests(1)
— — (5)(5)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$195 $48 $(265)$(22)
SEGMENT MARGIN(2)
20%34%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues.


A-7
MARRIOTT VACATIONS WORLDWIDE CORPORATION
ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND
ADJUSTED EARNINGS PER SHARE - DILUTED
(In millions, except per share amounts)
(Unaudited)
 Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Net income (loss) attributable to common shareholders$136 $$194 $(22)
Provision for income taxes43 27 75 16 
Income (loss) before income taxes attributable to common shareholders179 33 269 (6)
Certain items:
Litigation charges
(Gains) losses and other (income) expense, net(1)
(37)(41)(4)
Transaction and integration costs37 29 65 48 
Impairment charges— — 
Purchase price adjustments
Other(5)(4)(5)(4)
Adjusted pretax income **181 70 301 47 
Provision for income taxes(50)(33)(89)(30)
Adjusted net income attributable to common shareholders **$131 $37 $212 $17 
Diluted shares(2)
46.543.847.2 43.0 
Adjusted earnings per share - Diluted **$2.87 $0.85 $4.55 $0.40 
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
(1) See further details on A-8.
(2) Diluted shares for the six months ended June 30, 2022 reflects the dilutive impact of the adoption of Accounting Standards Update 2020-06 – “Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (Diluted shares increased by 5 million shares based on the assumed conversion of our 2022 and 2026 Convertible Notes).


A-8
MARRIOTT VACATIONS WORLDWIDE CORPORATION
ADJUSTED EBITDA
(In millions)
(Unaudited)
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2019June 30, 2022June 30, 2021June 30, 2019
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$136 $$49 $194 $(22)$73 
Interest expense30 44 35 57 87 69 
Provision for income taxes43 27 25 75 16 40 
Depreciation and amortization32 36 36 65 77 73 
Share-based compensation12 14 11 20 22 20 
Certain items:
Litigation charges
(Gains) losses and other (income) expense, net
Dispositions(49)— — (49)— — 
Hurricane business interruption net insurance proceeds— — — (3)— (9)
Various tax related matters— — 
Foreign currency translation(2)(6)
Other(3)— (2)
Transaction and integration costs37 29 36 65 48 62 
Impairment charges— — — 26 
Purchase price adjustments
COVID-19 related adjustments— (2)— — (2)— 
Other(5)(2)— (5)(2)
ADJUSTED EBITDA**$255 $164 $195 $443 $233 $361 
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.


A-9
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT
(In millions)
(Unaudited)
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Consolidated contract sales$506 $362 $900 $588 
Less resales contract sales(11)(7)(20)(12)
Consolidated contract sales, net of resales495 355 880 576 
Plus:
Settlement revenue16 13 
Resales revenue
Revenue recognition adjustments:
Reportability(14)(17)(47)(53)
Sales reserve(37)(28)(66)(42)
Other(1)
(32)(23)(56)(38)
Sale of vacation ownership products425 296 735 459 
Less:
Cost of vacation ownership products(80)(67)(140)(107)
Marketing and sales(214)(164)(396)(273)
Development Profit131 65 199 79 
Revenue recognition reportability adjustment11 13 35 39 
Purchase price adjustments
Adjusted development profit **$147 $81 $243 $121 
Development profit margin31.0%22.3%27.1%17.3%
Adjusted development profit margin33.6%26.2%31.3%24.0%
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.





A-10
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions)
(Unaudited)
VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS$277 $151 $450 $195 
Depreciation and amortization22 23 44 42 
Share-based compensation expense
Certain items:
Litigation charges
(Gains) losses and other (income) expense, net:
Dispositions(33)— (33)— 
Hurricane business interruption net insurance proceeds— — (3)— 
Foreign currency translation— — 
Transaction and integration costs
Purchase price adjustments
COVID-19 related restructuring— — — 
Other(3)— (3)— 
SEGMENT ADJUSTED EBITDA **$274 $182 $473 $250 
SEGMENT ADJUSTED EBITDA MARGIN **36%30%34%25%

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS$46 $27 $79 $48 
Depreciation and amortization16 29 
Share-based compensation expense— 
Certain items:
Gain on disposition of VRI Americas(16)— (16)— 
Other(2)— (2)— 
SEGMENT ADJUSTED EBITDA **$35 $37 $78 $78 
SEGMENT ADJUSTED EBITDA MARGIN **52%52%54%55%
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.


A-11
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share data)
Unaudited
June 30, 2022December 31, 2021
ASSETS
Cash and cash equivalents$324 $342 
Restricted cash (including $108 and $139 from VIEs, respectively)
282 461 
Accounts receivable, net (including $12 and $12 from VIEs, respectively)
244 279 
Vacation ownership notes receivable, net (including $1,659 and $1,662 from VIEs, respectively)
2,075 2,045 
Inventory695 719 
Property and equipment, net1,151 1,136 
Goodwill3,117 3,150 
Intangibles, net941 993 
Other (including $71 and $76 from VIEs, respectively)
511 488 
TOTAL ASSETS$9,340 $9,613 
LIABILITIES AND EQUITY
Accounts payable$217 $265 
Advance deposits195 160 
Accrued liabilities (including $2 and $2 from VIEs, respectively)
330 345 
Deferred revenue372 453 
Payroll and benefits liability204 201 
Deferred compensation liability130 142 
Securitized debt, net (including $1,868 and $1,877 from VIEs, respectively)
1,846 1,856 
Debt, net2,748 2,631 
Other210 224 
Deferred taxes342 350 
TOTAL LIABILITIES6,594 6,627 
Contingencies and Commitments
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding
— — 
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,741,585 and 75,519,049 shares issued, respectively
Treasury stock — at cost; 35,377,001 and 33,235,671 shares, respectively
(1,666)(1,356)
Additional paid-in capital3,963 4,072 
Accumulated other comprehensive loss(1)(16)
Retained earnings448 275 
TOTAL MVW SHAREHOLDERS' EQUITY2,745 2,976 
Noncontrolling interests10 
TOTAL EQUITY2,746 2,986 
TOTAL LIABILITIES AND EQUITY$9,340 $9,613 
The abbreviation VIEs above means Variable Interest Entities.



A-12
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
June 30, 2022June 30, 2021
OPERATING ACTIVITIES
Net income (loss)$193 $(17)
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash provided by operating activities:
Depreciation and amortization of intangibles65 77 
Amortization of debt discount and issuance costs10 22 
Vacation ownership notes receivable reserve66 42 
Share-based compensation20 22 
Impairment charges— 
Gains and other income, net(47)(1)
Deferred income taxes29 36 
Net change in assets and liabilities:
Accounts receivable59 60 
Vacation ownership notes receivable originations(483)(320)
Vacation ownership notes receivable collections365 362 
Inventory25 14 
Other assets(63)(66)
Accounts payable, advance deposits and accrued liabilities(9)
Deferred revenue19 48 
Payroll and benefit liabilities35 
Deferred compensation liability11 
Other liabilities— 
Deconsolidation of certain Consolidated Property Owners' Associations(48)(87)
Purchase of vacation ownership units for future transfer to inventory(12)(99)
Other, net
Net cash, cash equivalents and restricted cash provided by operating activities218 148 
INVESTING ACTIVITIES
Acquisition of a business, net of cash and restricted cash acquired— (157)
Proceeds from disposition of subsidiaries, net of cash and restricted cash transferred93 — 
Capital expenditures for property and equipment (excluding inventory)(23)(11)
Issuance of note receivable to VIE(47)— 
Purchase of company owned life insurance(11)(8)
Other, net— 
Net cash, cash equivalents and restricted cash provided by (used in) investing activities15 (176)
Continued


A-13
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In millions)
(Unaudited)
Six Months Ended
June 30, 2022June 30, 2021
FINANCING ACTIVITIES
Borrowings from securitization transactions477 425 
Repayment of debt related to securitization transactions(485)(420)
Proceeds from debt125 1,061 
Repayments of debt(125)(289)
Purchase of convertible note hedges— (100)
Proceeds from issuance of warrants— 70 
Finance lease payment(2)(1)
Payment of debt issuance costs(9)(15)
Repurchase of common stock(312)— 
Payment of dividends(75)— 
Payment of withholding taxes on vesting of restricted stock units(22)(15)
Net cash, cash equivalents and restricted cash (used in) provided by financing activities(428)716 
Effect of changes in exchange rates on cash, cash equivalents and restricted cash(2)— 
Change in cash, cash equivalents and restricted cash(197)688 
Cash, cash equivalents and restricted cash, beginning of period803 992 
Cash, cash equivalents and restricted cash, end of period$606 $1,680 


A-14
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions, except per share amounts)
2022 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK
Fiscal Year
2022 (low)
Fiscal Year
2022 (high)
Net income attributable to common shareholders$365 $395 
Provision for income taxes147 157 
Income before income taxes attributable to common shareholders511 551 
Certain items(1)
88 98 
Adjusted pretax income **600 650 
Provision for income taxes(175)(185)
Adjusted net income attributable to common shareholders **$425 $465 
Earnings per share - Diluted$8.15 $8.81 
Adjusted earnings per share - Diluted **
$9.47 $10.35 
Diluted shares45.4 45.4 

2022 ADJUSTED EBITDA OUTLOOK
Fiscal Year
2022 (low)
Fiscal Year
2022 (high)
Net income attributable to common shareholders$365 $395 
Interest expense114 114 
Provision for income taxes147 157 
Depreciation and amortization126 126 
Share-based compensation40 40 
Certain items(1)
88 98 
Adjusted EBITDA **$880 $930 
(1) Certain items adjustment includes $110 to $120 million of anticipated transaction and integration costs, $20 million of anticipated purchase accounting adjustments, and $5 million of litigation charges, partially offset by $47 million of miscellaneous other adjustments, including the disposition of the VRI Americas business and a hotel in Puerto Vallarta, Mexico in the second quarter of 2022.
** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.


A-15
MARRIOTT VACATIONS WORLDWIDE CORPORATION
2022 ADJUSTED FREE CASH FLOW OUTLOOK
(In millions)
Fiscal Year 2022 (low)Fiscal Year 2022 (high)
Net cash, cash equivalents and restricted cash provided by operating activities$470 $500 
Capital expenditures for property and equipment (excluding inventory)(70)(60)
Borrowings from securitization transactions910 925 
Repayment of debt related to securitizations(785)(800)
Securitized Debt Issuance Costs(12)(12)
Free cash flow **513 553 
Adjustments:
Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1)
65 100 
Certain items(2)
86 94 
Change in restricted cash(14)(17)
Adjusted free cash flow **$650 $730 

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
(1) Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2021 and 2022 year ends.
(2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs.



A-16
MARRIOTT VACATIONS WORLDWIDE CORPORATION
QUARTERLY OPERATING METRICS
(Contract sales in millions)
YearQuarter EndedFull Year
March 31June 30September 30December 31
Vacation Ownership
Consolidated contract sales
2022$394 $506 
2021$226 $362 $380 $406 $1,374 
2020$306 $30 $140 $178 $654 
VPG
2022$4,706 $4,613 
2021$4,644 $4,304 $4,300 $4,305 $4,356 
2020$3,680 $3,717 $3,904 $3,826 $3,767 
Tours
202278,505 102,857 
202145,871 79,900 84,098 89,495 299,364 
202079,131 6,216 33,170 44,161 162,678 
Exchange & Third-Party Management
Total active members (000's)(1)
20221,606 1,596 
20211,479 1,321 1,313 1,296 1,296 
20201,636 1,571 1,536 1,518 1,518 
Average revenue per member(1)
2022$44.33 $38.79 
2021$47.13 $46.36 $42.95 $42.93 $179.48 
2020$41.37 $30.17 $36.76 $36.62 $144.97 
(1) Includes members at the end of each period for the Interval International exchange network only.


A-17
MARRIOTT VACATIONS WORLDWIDE CORPORATION
NON-GAAP FINANCIAL MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by a double asterisk (“**”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common shareholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.
Certain Items Excluded from Non-GAAP Financial Measures
We evaluate non-GAAP financial measures, including those identified by a double asterisk (“**”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other vacation ownership companies.
Adjusted Development Profit and Adjusted Development Profit Margin
We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin.
Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA
EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term loan securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, as itemized in the discussion of Adjusted EBITDA in the preceding pages, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term loan securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to shareholders. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact


A-18
of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other vacation companies.
Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin
We evaluate Adjusted EBITDA margin and Segment adjusted EBITDA margin as indicators of operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment adjusted EBITDA margin represents Segment adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations.
Free Cash Flow and Adjusted Free Cash Flow
We evaluate Free cash flow and Adjusted free cash flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term loan securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted free cash flow, which reflects additional adjustments to Free cash flow for the impact of transaction and integration charges, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free cash flow and Adjusted free cash flow also facilitates management’s comparison of our results with our competitors’ results.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings