Marriott Vacations Worldwide Corporation (NYSE: VAC) (the
“Company”) reported second quarter 2023 financial results.
Second Quarter 2023
Highlights
- Consolidated Vacation Ownership contract sales were $453
million, a 10% decrease compared to the second quarter of 2022, and
VPG was $3,968.
- Net income attributable to common shareholders was $90 million
compared to $136 million in the prior year, and fully diluted
earnings per share decreased 27% to $2.17.
- Adjusted net income attributable to common shareholders was $90
million compared to $131 million in the prior year, and adjusted
fully diluted earnings per share decreased 24% to $2.19.
- Adjusted EBITDA decreased 13% compared to the prior year to
$222 million.
- The Company repurchased 621,000 shares of its common stock for
$82 million during the quarter and paid a quarterly dividend of $26
million. The Board of Directors also increased the Company’s share
repurchase authorization during the quarter to $600 million.
- The Company updated its full year outlook.
“Occupancy was nearly 90% in the second quarter reflecting the
continued high demand for vacation experiences from our Owners,
members and guests. However, with the tough comparison from last
year, as well as the continued transition to the Abound by Marriott
Vacations program and the integration of our Hyatt and legacy-Welk
businesses, contract sales declined 10% in the quarter, though we
still expect to grow contract sales for the full year and generate
significant cash flow from operations,” said John Geller, president
and chief executive officer. “While the changes to our programs
impacted our near-term results, I am confident these are the right
strategic changes that will position us for long-term growth.”
Vacation Ownership Revenues excluding cost reimbursements
decreased 2% in the second quarter of 2023 compared to the prior
year. The decline was driven by a 10% year-over-year reduction in
consolidated contract sales resulting from 14% lower VPG, partially
offset by 4% higher tours. While the Company expected VPGs to
decline due to the tough comparison to the prior year, we saw
larger declines at the legacy-Vistana sites due to the continued
transition associated with the launch of Abound by Marriott
Vacations. In addition, VPG was impacted by the continued alignment
of the Hyatt and Legacy-Welk business models and sales
processes.
Segment financial results attributable to common shareholders
were $224 million in the second quarter of 2023 compared to $277
million in the prior year and Segment margin was 30%. Development
profit declined $12 million year-over-year primarily due to lower
contract sales and higher sales reserve while Development profit
margin was 31%. Rental profit was down $19 million primarily due to
lower rental occupancy and higher unsold inventory costs. As a
result, Segment Adjusted EBITDA was $245 million compared to $274
million in the prior year while Segment Adjusted EBITDA margin
remained strong at more than 32%.
Exchange & Third-Party Management Revenues excluding cost
reimbursements decreased 11% in the second quarter of 2023 compared
to the prior year and decreased 4% excluding the sale of VRI
Americas in April of 2022. Interval International active members
decreased 2% compared to the prior year to 1.6 million but were
in-line with first quarter of 2023, and Average revenue per member
increased 1% year-over-year.
Segment financial results attributable to common shareholders
were $24 million in the second quarter of 2023, Segment margin was
40% and Segment Adjusted EBITDA was $32 million. Excluding the VRI
Americas business, Segment Adjusted EBITDA declined $3 million
compared to the prior year due to lower management fees at
Aqua-Aston and Adjusted EBITDA margin was 52%.
Corporate and Other General and administrative costs were
largely unchanged in the second quarter of 2023 compared to the
prior year primarily as a result of new product development
initiatives and higher wage and benefit costs offset by lower
variable compensation.
Balance Sheet and Liquidity The Company ended the quarter
with approximately $1.0 billion in liquidity, including $242
million of cash and cash equivalents, $59 million of gross notes
receivable that were eligible for securitization, and $684 million
of available capacity under its revolving corporate credit
facility.
At the end of the second quarter of 2023, the Company had $3.0
billion of corporate debt and $2.0 billion of non-recourse debt
related to its securitized notes receivable.
Full Year 2023 Outlook The Company is updating its full
year 2023 outlook as reflected in the chart below. The Financial
Schedules that follow reconcile the non-GAAP financial measures set
forth below to the following full year 2023 expected GAAP results
for the Company.
In the table below “*” 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.
(in millions, except per share
amounts)
2023 Guidance
Contract sales
$1,840
to
$1,900
Net income attributable to common
shareholders
$355
to
$375
Earnings per share - diluted
$8.51
to
$8.96
Net cash, cash equivalents and restricted
cash provided by operating activities
$360
to
$395
Adjusted EBITDA*
$880
to
$910
Adjusted earnings per share - diluted*
$9.76
to
$10.22
Adjusted free cash flow*
$540
to
$600
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 2023 Financial Results Conference Call The
Company will hold a conference call on August 3, 2023 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 an exchange network and membership
programs comprised of more than 3,200 affiliated resorts in over 90
countries and territories, and 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
International, Inc. and an affiliate of 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 contract sales, cash flows, future growth and
projections for full year 2023. 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 effects of a future health crisis, including its short
and longer-term impacts on consumer confidence and demand for
travel, and the pace of recovery following a health crisis;
variations in demand for vacation ownership and exchange products
and services; worker absenteeism; price and wage inflation; global
supply chain disruptions; volatility in the international and
national economy and credit markets; impact of the current or a
future banking crisis; the ongoing war 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 impact of rising
interest rates; political or social strife; difficulties associated
with implementing new or maintaining existing technology; changes
in privacy laws 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 future 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, 2023
TABLE OF CONTENTS
Summary Financial Information
A-1
Interim Consolidated Statements of
Income
A-2
Revenues and Profit by Segment
A-3
Consolidated Contract Sales to Adjusted
Development Profit
A-7
Adjusted Net Income Attributable to Common
Shareholders and Adjusted Earnings Per Share - Diluted
A-8
Adjusted EBITDA
A-9
Segment Adjusted EBITDA - Vacation
Ownership and Exchange & Third-Party Management
A-10
Interim Consolidated Balance Sheets
A-11
Interim Consolidated Statements of Cash
Flows
A-12
2023 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 Ended
Change %
Six Months Ended
Change %
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Key Measures
Total consolidated contract sales
$
453
$
506
(10%)
$
887
$
900
(1%)
VPG
$
3,968
$
4,613
(14%)
$
4,150
$
4,653
(11%)
Tours
106,746
102,857
4%
199,636
181,362
10%
Total active Interval International
members (000's)(1)
1,566
1,596
(2%)
1,566
1,596
(2%)
Average revenue per Interval International
member
$
39.30
$
38.79
1%
$
81.35
$
83.32
(2%)
GAAP Measures
Revenues
$
1,178
$
1,164
1%
$
2,347
$
2,216
6%
Income before income taxes and
noncontrolling interests
$
140
$
178
(22%)
$
268
$
268
—%
Net income attributable to common
shareholders
$
90
$
136
(34%)
$
177
$
194
9%
Diluted shares
43.8
46.5
(6%)
44.1
47.2
(7%)
Earnings per share - diluted
$
2.17
$
2.97
(27%)
$
4.23
$
4.18
1%
Non-GAAP Measures*
Adjusted EBITDA
$
222
$
255
(13%)
$
425
$
443
(4%)
Adjusted pretax income
$
140
$
181
(22%)
$
270
$
301
(10%)
Adjusted net income attributable to common
shareholders
$
90
$
131
(31%)
$
199
$
212
(6%)
Adjusted earnings per share - diluted
$
2.19
$
2.87
(24%)
$
4.73
$
4.55
4%
Segment Adjusted EBITDA*
Vacation Ownership Segment
$
245
$
274
(11%)
$
474
$
473
NM
Exchange & Third-Party Management
Segment
$
32
$
35
(10%)
$
69
$
78
(12%)
(1) Includes members at the end of each
period.
* 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
INTERIM CONSOLIDATED
STATEMENTS OF INCOME
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
REVENUES
Sale of vacation ownership products
$
391
$
425
$
766
$
735
Management and exchange
206
203
406
425
Rental
146
140
297
273
Financing
80
72
158
143
Cost reimbursements
355
324
720
640
TOTAL REVENUES
1,178
1,164
2,347
2,216
EXPENSES
Cost of vacation ownership products
66
80
124
140
Marketing and sales
206
214
416
396
Management and exchange
110
102
217
229
Rental
112
87
225
168
Financing
25
23
51
44
General and administrative
64
64
132
125
Depreciation and amortization
34
32
66
65
Litigation charges
2
2
5
5
Royalty fee
29
29
58
56
Impairment
—
—
4
—
Cost reimbursements
355
324
720
640
TOTAL EXPENSES
1,003
957
2,018
1,868
Gains and other income, net
10
37
31
41
Interest expense, net
(36
)
(30
)
(70
)
(57
)
Transaction and integration costs
(10
)
(37
)
(23
)
(65
)
Other
1
1
1
1
INCOME BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
140
178
268
268
Provision for income taxes
(50
)
(43
)
(91
)
(75
)
NET INCOME
90
135
177
193
Net loss attributable to noncontrolling
interests
—
1
—
1
NET INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
90
$
136
$
177
$
194
EARNINGS PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS
Basic shares
36.9
41.3
37.1
41.9
Basic
$
2.46
$
3.30
$
4.78
$
4.64
Diluted shares
43.8
46.5
44.1
47.2
Diluted
$
2.17
$
2.97
$
4.23
$
4.18
A-3
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
REVENUES AND PROFIT BY
SEGMENT
for the three months ended June
30, 2023
(In millions)
(Unaudited)
Reportable Segment
Vacation
Ownership
Exchange &
Third-Party
Management
Corporate
and Other
Total
REVENUES
Sales of vacation ownership products
$
391
$
—
$
—
$
391
Management and exchange(1)
Ancillary revenues
70
1
—
71
Management fee revenues
45
5
(1
)
49
Exchange and other services revenues
32
45
9
86
Management and exchange
147
51
8
206
Rental
135
11
—
146
Financing
80
—
—
80
Cost reimbursements(1)
359
3
(7
)
355
TOTAL REVENUES
$
1,112
$
65
$
1
$
1,178
PROFIT
Development
$
119
$
—
$
—
$
119
Management and exchange(1)
78
21
(3
)
96
Rental(1)
19
11
4
34
Financing
55
—
—
55
TOTAL PROFIT
271
32
1
304
OTHER
General and administrative
—
—
(64
)
(64
)
Depreciation and amortization
(23
)
(8
)
(3
)
(34
)
Litigation charges
(3
)
—
1
(2
)
Royalty fee
(29
)
—
—
(29
)
Gains and other income, net
7
—
3
10
Interest expense, net
—
—
(36
)
(36
)
Transaction and integration costs
—
—
(10
)
(10
)
Other
1
—
—
1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
224
24
(108
)
140
Provision for income taxes
—
—
(50
)
(50
)
NET INCOME (LOSS)
224
24
(158
)
90
Net income attributable to noncontrolling
interests(1)
—
—
—
—
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
$
224
$
24
$
(158
)
$
90
SEGMENT MARGIN(2)
30%
40%
(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, 2022
(In millions)
(Unaudited)
Reportable Segment
Vacation
Ownership
Exchange &
Third-Party
Management
Corporate
and Other
Total
REVENUES
Sales of vacation ownership products
$
425
$
—
$
—
$
425
Management and exchange(1)
Ancillary revenues
66
1
—
67
Management fee revenues
41
11
(1
)
51
Exchange and other services revenues
33
46
6
85
Management and exchange
140
58
5
203
Rental
129
11
—
140
Financing
72
—
—
72
Cost reimbursements(1)
325
5
(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
4
53
Financing
49
—
—
49
TOTAL PROFIT
298
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),
net
32
16
(11
)
37
Interest expense, net
—
—
(30
)
(30
)
Transaction and integration costs
(1
)
—
(36
)
(37
)
Other
1
—
—
1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
277
46
(145
)
178
Provision for income taxes
—
—
(43
)
(43
)
NET INCOME (LOSS)
277
46
(188
)
135
Net loss attributable to noncontrolling
interests(1)
—
—
1
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-5
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
REVENUES AND PROFIT BY
SEGMENT
for the six months ended June 30,
2023
(In millions)
(Unaudited)
Reportable Segment
Vacation
Ownership
Exchange &
Third-Party
Management
Corporate
and Other
Total
REVENUES
Sales of vacation ownership products
$
766
$
—
$
—
$
766
Management and exchange(1)
Ancillary revenues
131
2
—
133
Management fee revenues
90
13
(2
)
101
Exchange and other services revenues
61
92
19
172
Management and exchange
282
107
17
406
Rental
276
21
—
297
Financing
158
—
—
158
Cost reimbursements(1)
727
8
(15
)
720
TOTAL REVENUES
$
2,209
$
136
$
2
$
2,347
PROFIT
Development
$
226
$
—
$
—
$
226
Management and exchange(1)
149
47
(7
)
189
Rental(1)
44
21
7
72
Financing
107
—
—
107
TOTAL PROFIT
526
68
—
594
OTHER
General and administrative
—
—
(132
)
(132
)
Depreciation and amortization
(46
)
(16
)
(4
)
(66
)
Litigation charges
(6
)
—
1
(5
)
Royalty fee
(58
)
—
—
(58
)
Impairment
(4
)
—
—
(4
)
Gains and other income, net
16
—
15
31
Interest expense, net
—
—
(70
)
(70
)
Transaction and integration costs
—
—
(23
)
(23
)
Other
1
—
—
1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
429
52
(213
)
268
Provision for income taxes
—
—
(91
)
(91
)
NET INCOME (LOSS)
429
52
(304
)
177
Net income attributable to noncontrolling
interests(1)
—
—
—
—
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
$
429
$
52
$
(304
)
$
177
SEGMENT MARGIN(2)
29%
41%
(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,
2022
(In millions)
(Unaudited)
Reportable Segment
Vacation
Ownership
Exchange &
Third-Party
Management
Corporate
and Other
Total
REVENUES
Sales of vacation ownership products
$
735
$
—
$
—
$
735
Management and exchange(1)
Ancillary revenues
120
2
—
122
Management fee revenues
83
21
(4
)
100
Exchange and other services revenues
63
99
41
203
Management and exchange
266
122
37
425
Rental
251
22
—
273
Financing
143
—
—
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
Financing
99
—
—
99
TOTAL PROFIT
520
79
—
599
OTHER
General and administrative
—
—
(125
)
(125
)
Depreciation and amortization
(44
)
(16
)
(5
)
(65
)
Litigation charges
(5
)
—
—
(5
)
Royalty fee
(56
)
—
—
(56
)
Losses and other expense, net
35
16
(10
)
41
Interest expense, net
—
—
(57
)
(57
)
Transaction and integration costs
(1
)
—
(64
)
(65
)
Other
1
—
—
1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
450
79
(261
)
268
Provision for income taxes
—
—
(75
)
(75
)
NET INCOME (LOSS)
450
79
(336
)
193
Net loss attributable to noncontrolling
interests(1)
—
—
1
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-7
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
CONSOLIDATED CONTRACT SALES TO
ADJUSTED DEVELOPMENT PROFIT
(In millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Consolidated contract sales
$
453
$
506
$
887
$
900
Less resales contract sales
(10
)
(11
)
(21
)
(20
)
Consolidated contract sales, net of
resales
443
495
866
880
Plus:
Settlement revenue
9
9
17
16
Resales revenue
6
4
12
8
Revenue recognition adjustments:
Reportability
5
(14
)
5
(47
)
Sales reserve
(45
)
(37
)
(83
)
(66
)
Other(1)
(27
)
(32
)
(51
)
(56
)
Sale of vacation ownership products
391
425
766
735
Less:
Cost of vacation ownership products
(66
)
(80
)
(124
)
(140
)
Marketing and sales
(206
)
(214
)
(416
)
(396
)
Development profit
119
131
226
199
Revenue recognition reportability
adjustment
(3
)
11
(3
)
35
Purchase accounting adjustments
2
5
4
9
Adjusted development profit*
$
118
$
147
$
227
$
243
Development profit margin
30.8%
31.0%
29.6%
27.1%
Adjusted development profit margin*
30.4%
33.6%
29.8%
31.3%
(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.
* 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-8
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 Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net income attributable to common
shareholders
$
90
$
136
$
177
$
194
Provision for income taxes
50
43
91
75
Income before income taxes attributable to
common shareholders
140
179
268
269
Certain items:
ILG integration
6
33
$
15
$
58
Welk acquisition and integration
4
2
8
5
Other transaction costs
—
2
—
2
Transaction and integration costs
10
37
23
65
Early redemption of senior secured
notes
—
—
10
—
Gain on disposition of hotel/land
(7
)
(33
)
(7
)
(33
)
Gain on disposition of VRI Americas
—
(16
)
—
(16
)
Foreign currency translation
(2
)
8
(4
)
7
Insurance proceeds
—
(2
)
(2
)
(5
)
Change in indemnification asset
(1
)
3
(24
)
3
Other
—
3
(4
)
3
Gains and other income, net
(10
)
(37
)
(31
)
(41
)
Purchase accounting adjustments
1
5
3
8
Litigation charges
2
2
5
5
Impairment
—
—
4
—
Early termination of VRI management
contract
—
(2
)
—
(2
)
Change in estimate relating to
pre-acquisition contingencies
—
(3
)
—
(3
)
Other
(3
)
—
(2
)
—
Adjusted pretax income*
140
181
270
301
Provision for income taxes
(50
)
(50
)
(71
)
(89
)
Adjusted net income attributable to common
shareholders*
$
90
$
131
$
199
$
212
Diluted shares
43.8
46.5
44.1
47.2
Adjusted earnings per share - Diluted*
$
2.19
$
2.87
$
4.73
$
4.55
* 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-9
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
ADJUSTED EBITDA
(In millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
NET INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
90
$
136
$
177
$
194
Interest expense, net
36
30
70
57
Provision for income taxes
50
43
91
75
Depreciation and amortization
34
32
66
65
Share-based compensation
12
12
19
20
Certain items:
ILG integration
6
33
15
58
Welk acquisition and integration
4
2
8
5
Other transaction costs
—
2
—
2
Transaction and integration costs
10
37
23
65
Early redemption of senior secured
notes
—
—
10
—
Gain on disposition of hotel/land
(7
)
(33
)
(7
)
(33
)
Gain on disposition of VRI Americas
—
(16
)
—
(16
)
Foreign currency translation
(2
)
8
(4
)
7
Insurance proceeds
—
(2
)
(2
)
(5
)
Change in indemnification asset
(1
)
3
(24
)
3
Other
—
3
(4
)
3
Gains and other income, net
(10
)
(37
)
(31
)
(41
)
Purchase accounting adjustments
1
5
3
8
Litigation charges
2
2
5
5
Impairment
—
—
4
—
Early termination of VRI management
contract
—
(2
)
—
(2
)
Change in estimate relating to
pre-acquisition contingencies
—
(3
)
—
(3
)
Other
(3
)
—
(2
)
—
ADJUSTED EBITDA*
$
222
$
255
$
425
$
443
ADJUSTED EBITDA MARGIN*
27%
30%
26%
28%
* 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-10
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
(In millions)
(Unaudited)
VACATION OWNERSHIP SEGMENT
ADJUSTED EBITDA
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE
TO COMMON SHAREHOLDERS
$
224
$
277
$
429
$
450
Depreciation and amortization
23
22
46
44
Share-based compensation
3
2
4
3
Certain items:
Transaction and integration costs
—
1
—
1
Gain on disposition of hotel/land
(7
)
(33
)
(7
)
(33
)
Foreign currency translation
—
1
—
1
Insurance proceeds
—
—
(2
)
(3
)
Change in indemnification asset
—
—
(3
)
—
Other
—
—
(4
)
—
Gains and other income, net
(7
)
(32
)
(16
)
(35
)
Purchase accounting adjustments
1
5
3
8
Litigation charges
3
2
6
5
Impairment
—
—
4
—
Change in estimate relating to
pre-acquisition contingencies
—
(3
)
—
(3
)
Other
(2
)
—
(2
)
—
SEGMENT ADJUSTED EBITDA*
$
245
$
274
$
474
$
473
SEGMENT ADJUSTED EBITDA MARGIN*
32%
36%
32%
34%
EXCHANGE & THIRD-PARTY
MANAGEMENT SEGMENT ADJUSTED EBITDA
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE
TO COMMON SHAREHOLDERS
$
24
$
46
$
52
$
79
Depreciation and amortization
8
7
16
16
Share-based compensation
—
—
1
1
Certain items:
Gain on disposition of VRI Americas
—
(16
)
—
(16
)
Early termination of VRI management
contract
—
(2
)
—
(2
)
SEGMENT ADJUSTED EBITDA*
$
32
$
35
$
69
$
78
SEGMENT ADJUSTED EBITDA MARGIN*
52%
52%
54%
54%
* 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
INTERIM CONSOLIDATED BALANCE
SHEETS
(In millions, except share and
per share data)
Unaudited
June 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
242
$
524
Restricted cash (including $78 and $85
from VIEs, respectively)
238
330
Accounts receivable, net (including $14
and $13 from VIEs, respectively)
313
292
Vacation ownership notes receivable, net
(including $1,863 and $1,792 from VIEs, respectively)
2,272
2,198
Inventory
660
660
Property and equipment, net
1,221
1,139
Goodwill
3,117
3,117
Intangibles, net
884
911
Other (including $87 and $76 from VIEs,
respectively)
535
468
TOTAL ASSETS
$
9,482
$
9,639
LIABILITIES AND EQUITY
Accounts payable
$
209
$
356
Advance deposits
175
158
Accrued liabilities (including $3 and $5
from VIEs, respectively)
322
369
Deferred revenue
417
344
Payroll and benefits liability
174
251
Deferred compensation liability
154
139
Securitized debt, net (including $2,052
and $1,982 from VIEs, respectively)
2,028
1,938
Debt, net
3,001
3,088
Other
180
167
Deferred taxes
344
331
TOTAL LIABILITIES
7,004
7,141
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; 75,806,578 and 75,744,524 shares
issued, respectively
1
1
Treasury stock — at cost; 39,337,085 and
38,263,442 shares, respectively
(2,213
)
(2,054
)
Additional paid-in capital
3,947
3,941
Accumulated other comprehensive income
23
15
Retained earnings
718
593
TOTAL MVW SHAREHOLDERS' EQUITY
2,476
2,496
Noncontrolling interests
2
2
TOTAL EQUITY
2,478
2,498
TOTAL LIABILITIES AND EQUITY
$
9,482
$
9,639
The abbreviation VIEs above means Variable
Interest Entities.
A-12
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
June 30, 2023
June 30, 2022
OPERATING ACTIVITIES
Net income
$
177
$
193
Adjustments to reconcile net income to net
cash, cash equivalents and restricted cash provided by operating
activities:
Depreciation and amortization of
intangibles
66
65
Amortization of debt discount and issuance
costs
12
10
Vacation ownership notes receivable
reserve
79
66
Share-based compensation
19
20
Impairment charges
2
—
Gains and other income, net
(7
)
(47
)
Deferred income taxes
10
29
Net change in assets and liabilities:
Accounts and contracts receivable
(31
)
59
Vacation ownership notes receivable
originations
(470
)
(483
)
Vacation ownership notes receivable
collections
308
365
Inventory
46
25
Other assets
(61
)
(63
)
Accounts payable, advance deposits and
accrued liabilities
(129
)
8
Deferred revenue
69
19
Payroll and benefit liabilities
(78
)
7
Deferred compensation liability
7
4
Other liabilities
12
—
Deconsolidation of certain Consolidated
Property Owners' Associations
—
(48
)
Purchase of vacation ownership units for
future transfer to inventory
—
(12
)
Other, net
(4
)
1
Net cash, cash equivalents and restricted
cash provided by operating activities
27
218
INVESTING ACTIVITIES
Proceeds from disposition of subsidiaries,
net of cash and restricted cash transferred
—
93
Capital expenditures for property and
equipment (excluding inventory)
(63
)
(23
)
Issuance of note receivable to VIE
—
(47
)
Purchase of company owned life
insurance
(4
)
(11
)
Other dispositions, net
14
3
Net cash, cash equivalents and restricted
cash (used in) provided by investing activities
(53
)
15
Continued
A-13
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)
(In millions)
(Unaudited)
Six Months Ended
June 30, 2023
June 30, 2022
FINANCING ACTIVITIES
Borrowings from securitization
transactions
743
477
Repayment of debt related to
securitization transactions
(651
)
(485
)
Proceeds from debt
515
125
Repayments of debt
(706
)
(125
)
Finance lease incentive
10
—
Finance lease payment
(2
)
(2
)
Payment of debt issuance costs
(6
)
(9
)
Repurchase of common stock
(162
)
(312
)
Payment of dividends
(80
)
(75
)
Payment of withholding taxes on vesting of
restricted stock units
(10
)
(22
)
Net cash, cash equivalents and restricted
cash used in financing activities
(349
)
(428
)
Effect of changes in exchange rates on
cash, cash equivalents and restricted cash
1
(2
)
Change in cash, cash equivalents and
restricted cash
(374
)
(197
)
Cash, cash equivalents and restricted
cash, beginning of period
854
803
Cash, cash equivalents and restricted
cash, end of period
$
480
$
606
A-14
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
(In millions, except per share
amounts)
2023 ADJUSTED NET INCOME
ATTRIBUTABLE TO COMMON SHAREHOLDERS AND
ADJUSTED EARNINGS PER SHARE -
DILUTED OUTLOOK
Fiscal Year 2023
(Low)
Fiscal Year 2023
(High)
Net income attributable to common
shareholders
$
355
$
375
Provision for income taxes
163
173
Income before income taxes attributable to
common shareholders
518
548
Certain items(1)
45
45
Adjusted pretax income*
563
593
Provision for income taxes
(153
)
(163
)
Adjusted net income attributable to common
shareholders*
$
410
$
430
Earnings per share - Diluted(2)
$
8.51
$
8.96
Adjusted earnings per share -
Diluted(2)*
$
9.76
$
10.22
Diluted shares(2)
43.9
43.9
2023 ADJUSTED EBITDA
OUTLOOK
Fiscal Year 2023
(Low)
Fiscal Year 2023
(High)
Net income attributable to common
shareholders
$
355
$
375
Interest expense
145
145
Provision for income taxes
163
173
Depreciation and amortization
135
135
Share-based compensation
37
37
Certain items(1)
45
45
Adjusted EBITDA*
$
880
$
910
(1) Certain items adjustment includes $50
million of anticipated transaction and integration costs, $14
million of anticipated purchase accounting adjustments, $10 million
of anticipated litigation charges, and $4 million of impairments,
partially offset by $31 million of gains and other income, net, and
$2 million of other adjustments.
(2) We expect 6.5 million shares to be
included in diluted shares, reflecting the assumed conversion of
our convertible notes and an add back of $18 million for interest
expense to the numerator of the diluted earnings per share
calculation.
* 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
2023 ADJUSTED FREE CASH FLOW
OUTLOOK
(In millions)
Fiscal Year 2023
(Low)
Fiscal Year 2023
(High)
Net cash, cash equivalents and restricted
cash provided by operating activities
$
360
$
395
Capital expenditures for property and
equipment (excluding inventory)
(110
)
(125
)
Borrowings from securitizations, net of
repayments
90
130
Securitized debt issuance costs
(12
)
(12
)
Free cash flow*
328
388
Adjustments:
Net change in borrowings available from
the securitization of eligible vacation ownership notes
receivable(1)
120
120
Certain items(2)
92
92
Adjusted free cash flow*
$
540
$
600
(1) Represents the net change in
borrowings available from the securitization of eligible vacation
ownership notes receivable between the 2022 and 2023 year ends.
(2) Certain items adjustment consists
primarily of the after-tax impact of anticipated transaction and
integration costs.
* 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-16
MARRIOTT VACATIONS WORLDWIDE
CORPORATION
QUARTERLY OPERATING
METRICS
(Contract sales in millions)
Year
Quarter Ended
March 31
June 30
September 30
December 31
Full Year
Vacation Ownership
Consolidated contract sales
2023
$
434
$
453
2022
$
394
$
506
$
483
$
454
$
1,837
2021
$
226
$
362
$
380
$
406
$
1,374
VPG
2023
$
4,358
$
3,968
2022
$
4,706
$
4,613
$
4,353
$
4,088
$
4,421
2021
$
4,644
$
4,304
$
4,300
$
4,305
$
4,356
Tours
2023
92,890
106,746
2022
78,505
102,857
104,000
105,231
390,593
2021
45,871
79,900
84,098
89,495
299,364
Exchange & Third-Party
Management
Total active Interval International
members (000's)(1)
2023
1,568
1,566
2022
1,606
1,596
1,591
1,566
1,566
2021
1,479
1,321
1,313
1,296
1,296
Average revenue per Interval International
member
2023
$
42.07
$
39.30
2022
$
44.33
$
38.79
$
38.91
$
35.60
$
157.97
2021
$
47.13
$
46.36
$
42.95
$
42.93
$
179.48
(1) Includes members at the end of each
period.
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 an 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 an 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
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, net (excluding consumer financing interest
expense associated with term securitization transactions), income
taxes, depreciation and amortization. Adjusted EBITDA reflects
additional adjustments for certain items 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 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 provisions 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 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
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 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230731093164/en/
Neal Goldner Investor Relations 407-206-6149
neal.goldner@mvwc.com
Cameron Klaus Global Communications 407-513-6066
cameron.klaus@mvwc.com
Marriott Vacations World... (NYSE:VAC)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Marriott Vacations World... (NYSE:VAC)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024