Marriott Vacations Worldwide ("MVW") Reports First Quarter 2022 Financial Results

News provided by

Marriott Vacations Worldwide Corporation

May 05, 2022, 16:30 ET

ORLANDO, Fla., May 5, 2022 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE:  VAC) (the "Company") reported first quarter 2022 financial results.

"Our start to 2022 was very strong, with first quarter adjusted EBITDA totaling $188 million and contract sales of $394 million, both exceeding pre-pandemic levels," said Stephen P. Weisz, chief executive officer. "Vacations continue to play an infinitely more meaningful role in people's lives, and with our resilient business model and portfolio of leading brands, we are well positioned for growth."

First Quarter 2022 Highlights:

  • Consolidated Vacation Ownership contract sales totaled $394 million in the first quarter of 2022; VPG remained strong at $4,706, slightly higher than the prior year quarter and up 9% sequentially.

  • Net income attributable to common shareholders was $58 million, or $1.23 fully diluted earnings per share.

  • Adjusted net income attributable to common shareholders was $81 million and adjusted fully diluted earnings per share was $1.70.

  • Adjusted EBITDA was $188 million in the first quarter of 2022, 13% higher than 2019, as the Company continues to see a strong recovery in the business.

  • During the first quarter of 2022, the Company returned approximately $168 million to shareholders, repurchasing nearly 765,000 shares of its common stock for $119 million at an average price per share of $156.50 and paying two quarterly dividends totaling $49 million.

  • The Company amended its revolving corporate credit facility, increasing its borrowing capacity to $750 million and extending the maturity date to March 31, 2027.

  • Subsequent to the end of the quarter, the Company closed on the sale of its VRI Americas business.

Vacation Ownership

Revenues excluding cost reimbursements increased 60% in the first quarter of 2022 compared to the prior year, reflecting improved performance from all of the Company's lines of business.  

Segment financial results were $173 million in the first quarter of 2022 and Segment margin was 27%.  Segment adjusted EBITDA increased $131 million to $199 million, with Segment adjusted EBITDA margin of 32%, over 1,400 basis points higher than the first quarter of 2021.

Exchange & Third-Party Management

Revenues excluding cost reimbursements increased 5% in the first quarter of 2022 compared to the prior year. Interval International active members increased 9% to 1.6 million and Average revenue per member decreased 6% compared to the prior year.

Segment financial results were $33 million in the first quarter of 2022 and Segment margin was 45%.  Segment adjusted EBITDA was $43 million, an increase of $2 million compared to the prior year, with Segment adjusted EBITDA margin of 57%, roughly in line with the first quarter of 2021.

Corporate and Other

General and administrative costs increased $15 million in the first quarter of 2022 compared to the prior year as a result of higher salary costs due to reduced work week programs in the prior year, higher bonus expense, and a decrease in credits related to incentives under the CARES Act. 

Balance Sheet and Liquidity

The Company ended the quarter with approximately $1.2 billion in liquidity, including $354 million of cash and cash equivalents, $120 million of gross notes receivable that were eligible for securitization, and $748 million of available capacity under its revolving corporate credit facility.

At the end of the first 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.

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 re-affirming guidance as reflected in the chart below for the full year 2022.



Income before income taxes attributable to common shareholders

$443

to

$483

Net income attributable to common shareholders

$317

to

$347

Earnings per share - diluted(1)

$6.85

to

$7.49

Net cash, cash equivalents and restricted cash provided by operating activities

$300

to

$309

Contract sales


$1,675

to

$1,775

Adjusted EBITDA

$860

to

$920

Adjusted pretax net income

$585

to

$645

Adjusted net income attributable to common shareholders

$424

to

$469

Adjusted earnings per share - diluted(1)

$9.13

to

$10.09

Adjusted free cash flow

$560

to

$640

(1) Earnings per share - diluted and Adjusted earnings per share - diluted  increased from the previous guidance of $6.52

to $7.14 and $8.72 to $9.65, respectively, primarily from the impact of additional share repurchase activity through
May 4, 2022.

Non-GAAP Financial Information

Non-GAAP financial measures, such as Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted EBITDA margin, Segment adjusted EBITDA margin, Adjusted pretax net income, Adjusted fully diluted earnings or loss per share, Adjusted development profit, Adjusted development profit margin, and other adjusted financial measures, are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow.

First Quarter 2022 Financial Results Conference Call

The Company will hold a conference call on May 6, 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 nations, 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 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 2022, that are not historical facts. 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 the COVID-19 pandemic, including reduced demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, 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 the demand for travel and on consumer confidence; the impact of the availability and distribution of effective vaccines on the demand for travel and consumer confidence; the effectiveness of available vaccines against variants of the COVID-19 virus; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; 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 discussed in our periodic filings with the U.S. Securities and Exchange Commission (the "SEC"), any of which could cause actual results to differ materially from those expressed or implied herein. These statements 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.

Financial Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION

FINANCIAL SCHEDULES

QUARTER 1, 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 (Loss) Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted

A-5

Adjusted EBITDA

A-6

Consolidated Contract Sales to Adjusted Development Profit

A-7

Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA

A-8

Consolidated Balance Sheets

A-9

Consolidated Statements of Cash Flows

A-10

2022 Outlook

     Adjusted Net Income Attributable to Common Shareholders, Adjusted Earnings Per Share - Diluted

     and Adjusted EBITDA

A-11

     Adjusted Free Cash Flow

A-12

Quarterly Operating Metrics

A-13

Non-GAAP Financial Measures

A-14

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

%





March 31, 2022

March 31, 2021





Key Measures









     Total consolidated contract sales

$                   394

$                   226

75%




     VPG

$                4,706

$                4,644

1%




     Tours

78,505

45,871

71%




     Total active members (000's)(1)

1,606

1,479

9%




     Average revenue per member(1)

$                44.33

$                47.13

(6%)















GAAP Measures









     Revenues

$                1,052

$                   759

39%




     Income (loss) before income taxes and noncontrolling interests

$                     90

$                    (36)

NM 




     Net income (loss) attributable to common shareholders

$                     58

$                    (28)

NM 




     Earnings (loss) per share - diluted

$                  1.23

$                 (0.68)

NM 















Non-GAAP Measures **









     Adjusted EBITDA

$                   188

$                     69

NM 




     Adjusted pretax income (loss)

$                   120

$                    (23)

NM 




     Adjusted net income (loss) attributable to common shareholders

$                     81

$                    (20)

NM 




     Adjusted earnings (loss) per share - diluted

$                  1.70

$                 (0.49)

NM 















(1) Includes members at the end of each period for the Interval International exchange network only.

ADJUSTED EBITDA BY SEGMENT

 





Three Months Ended

Change

%





March 31, 2022

March 31, 2021





Vacation Ownership

$                   199

$                     68

NM 




Exchange & Third-Party Management

43

41

4%




     Segment adjusted EBITDA**

242

109

NM 




General and administrative

(54)

(40)

(35%)




Consolidated property owners' associations(1)

—

—

NM 




     Adjusted EBITDA**

$                   188

$                     69

NM 















(1) Prior year amounts eliminated to conform with our current year presentation.




** 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 Ended


March 31, 2022

March 31, 2021

REVENUES



     Sale of vacation ownership products

$                        310

$                        163

     Management and exchange

222

193

     Rental

133

89

     Financing

71

59

     Cost reimbursements

316

255

          TOTAL REVENUES

1,052

759

EXPENSES



     Cost of vacation ownership products

60

40

     Marketing and sales

182

109

     Management and exchange

127

117

     Rental

81

82

     Financing

21

21

     General and administrative

61

46

     Depreciation and amortization

33

41

     Litigation charges

3

3

     Royalty fee

27

25

     Cost reimbursements

316

255

          TOTAL EXPENSES

911

739

     Gains and other income, net

4

6

     Interest expense

(27)

(43)

     Transaction and integration costs

(28)

(19)

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING



INTERESTS

90

(36)

(Provision for) benefit from income taxes

(32)

11

NET INCOME (LOSS)

58

(25)

Net income attributable to noncontrolling interests

—

(3)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$                          58

$                        (28)





EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON



SHAREHOLDERS



     Basic

$                       1.36

$                     (0.68)

     Diluted

$                       1.23

$                     (0.68)





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 March 31, 2022

(In millions)

(Unaudited)



Reportable Segment

Corporate

and Other

Total


Vacation

Ownership

Exchange &

Third-Party

Management

REVENUES







     Sales of vacation ownership products

$                310

$                  —

$                  —

$                310

     Management and exchange(1)







          Ancillary revenues

54

1

—

55

          Management fee revenues

42

10

(3)

49

          Exchange and other services revenues

30

53

35

118

               Management and exchange

126

64

32

222

     Rental

122

11

—

133

     Financing

71

—

—

71

     Cost reimbursements(1)

327

9

(20)

316

TOTAL REVENUES

$                956

$                  84

$                  12

$             1,052









PROFIT







     Development

$                  68

$                  —

$                  —

$                  68

     Management and exchange(1)

72

31

(8)

95

     Rental(1)

32

11

9

52

     Financing

50

—

—

50

TOTAL PROFIT

222

42

1

265









OTHER







General and administrative

—

—

(61)

(61)

Depreciation and amortization

(22)

(9)

(2)

(33)

Litigation charges

(3)

—

—

(3)

Royalty fee

(27)

—

—

(27)

Gains and other income, net

3

—

1

4

Interest expense

—

—

(27)

(27)

Transaction and integration costs

—

—

(28)

(28)

INCOME (LOSS) BEFORE INCOME TAXES AND

NONCONTROLLING INTERESTS

173

33

(116)

90

Provision for income taxes

—

—

(32)

(32)

NET INCOME (LOSS)

173

33

(148)

58

Net income attributable to noncontrolling interests(1)

—

—

—

—

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON

SHAREHOLDERS

$                173

$                  33

$              (148)

$                  58

SEGMENT MARGIN(2)

27%

45%












(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant

accounting guidance, which represents the portion related to individual or third-party vacation ownership interest owners.

(2) Segment margin represents the applicable segment's Net income (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 March 31, 2021

(In millions)

(Unaudited)



Reportable Segment

Corporate and

Other

Total


Vacation

Ownership

Exchange &

Third-Party

Management

REVENUES







     Sales of vacation ownership products

$                163

$                  —

$                  —

$                163

     Management and exchange(1)







          Ancillary revenues

28

—

—

28

          Management fee revenues

38

5

(6)

37

          Exchange and other services revenues

28

55

45

128

               Management and exchange

94

60

39

193

     Rental

77

12

—

89

     Financing

59

—

—

59

     Cost reimbursements(1)

268

14

(27)

255

TOTAL REVENUES

$                661

$                  86

$                  12

$                759









PROFIT







     Development

$                  14

$                  —

$                  —

$                  14

     Management and exchange(1)

59

29

(12)

76

     Rental(1)

(19)

12

14

7

     Financing

38

—

—

38

TOTAL PROFIT

92

41

2

135









OTHER







General and administrative

—

—

(46)

(46)

Depreciation and amortization

(19)

(20)

(2)

(41)

Litigation charges

(3)

—

—

(3)

Restructuring

(1)

—

1

—

Royalty fee

(25)

—

—

(25)

Gains and other income, net

—

—

6

6

Interest expense

—

—

(43)

(43)

Transaction and integration costs

—

—

(19)

(19)

INCOME (LOSS) BEFORE INCOME TAXES AND

NONCONTROLLING INTERESTS

44

21

(101)

(36)

Benefit from income taxes

—

—

11

11

NET INCOME (LOSS)

44

21

(90)

(25)

Net income attributable to noncontrolling interests(1)

—

—

(3)

(3)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON

SHAREHOLDERS

$                  44

$                  21

$                 (93)

$                 (28)

SEGMENT MARGIN(2)

11%

29%












(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant 

accounting guidance, which represents the portion related to individual or third-party vacation ownership interest owners.

(2) Segment margin represents the applicable segment's Net income (loss) attributable to common shareholders divided by the applicable

segment's total revenues less cost reimbursement revenues.

A-5

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS AND

ADJUSTED EARNINGS PER SHARE - DILUTED

(In millions, except per share amounts)

(Unaudited)


Three Months Ended

March 31, 2022

March 31, 2021

Net income (loss) attributable to common shareholders

$                          58

$                        (28)

     Provision for (benefit from) income taxes

32

(11)

Income (loss) before income taxes attributable to common shareholders

90

(39)

Certain items:(1)


     Litigation charges

3

3

     Gains and other income, net

(4)

(6)

     Transaction and integration costs

28

19

     Purchase price adjustments

3

—

Adjusted pretax income (loss) **

120

(23)

     (Provision for) benefit from income taxes

(39)

3

Adjusted net income (loss) attributable to common shareholders**

$                          81

$                        (20)

Diluted shares(2)

47.9

41.4

Adjusted earnings (loss) per share - Diluted **

$                       1.70

$                     (0.49)




** 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-6.

(2) Diluted shares for the three months ended March 31, 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" (5 million shares assumed converted from our 2022 and 2026 Convertible Notes).




A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED EBITDA

(In millions)

(Unaudited)



Three Months Ended


March 31, 2022

March 31, 2021

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$                          58

$                        (28)

Interest expense

27

43

Provision for (benefit from) income taxes

32

(11)

Depreciation and amortization

33

41

Share-based compensation

8

8

Certain items before income taxes:



     Litigation charges

3

3

     Gains and other income, net



          Hurricane business interruption insurance claims

(3)

—

          Foreign currency translation

(1)

(4)

          Other

—

(2)

     Transaction and integration costs

28

19

     Purchase price adjustments

3

—

ADJUSTED EBITDA**

$                        188

$                          69





** 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-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT

(In millions)

(Unaudited)


Three Months Ended

March 31, 2022

March 31, 2021

Consolidated contract sales

$                        394

$                        226

     Less resales contract sales

(9)

(5)

Consolidated contract sales, net of resales

385

221

Plus:


     Settlement revenue

7

5

     Resales revenue

4

2

Revenue recognition adjustments:


     Reportability

(33)

(36)

     Sales reserve

(29)

(14)

     Other(1)

(24)

(15)

Sale of vacation ownership products

310

163

Less:


     Cost of vacation ownership products

(60)

(40)

     Marketing and sales

(182)

(109)

Development Profit

68

14

     Revenue recognition reportability adjustment

24

26

     Other(2)

4

—

Adjusted development profit **

$                          96

$                          40

     Development profit margin

21.8%

8.4%

     Adjusted development profit margin

28.3%

20.5%

** 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.

(2) Primarily includes purchase price adjustments for the three months ended March 31, 2022.

A-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions)

(Unaudited)

VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA



Three Months Ended


March 31, 2022

March 31, 2021

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON



SHAREHOLDERS

$                        173

$                          44

     Depreciation and amortization

22

19

     Share-based compensation expense

1

1

     Certain items:



          Litigation charges

3

3

          Gains and other income, net:



               Hurricane business interruption net insurance proceeds

(3)

—

          Purchase price adjustments

3

—

          COVID-19 related restructuring

—

1

SEGMENT ADJUSTED EBITDA **

$                        199

$                          68

SEGMENT ADJUSTED EBITDA MARGIN **

32%

17%

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA



Three Months Ended


March 31, 2022

March 31, 2021

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON



SHAREHOLDERS

$                          33

$                          21

     Depreciation and amortization

9

20

     Share-based compensation expense

1

—

SEGMENT ADJUSTED EBITDA **

$                          43

$                          41

SEGMENT ADJUSTED EBITDA MARGIN **

57%

57%





** 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 BALANCE SHEETS

(In millions, except share and per share data)


Unaudited


March 31, 2022

December 31, 2021

ASSETS


Cash and cash equivalents

$                          354

$                         342

Restricted cash (including $78 and $139 from VIEs, respectively)

296

461

Accounts receivable, net (including $12 and $12 from VIEs, respectively)

234

279

Vacation ownership notes receivable, net (including $1,661 and $1,662 from VIEs,


respectively)

2,030

2,045

Inventory

693

719

Property and equipment, net

1,162

1,136

Goodwill

3,142

3,150

Intangibles, net

978

993

Other (including $74 and $76 from VIEs, respectively)

614

488

          TOTAL ASSETS

$                       9,503

$                      9,613




LIABILITIES AND EQUITY


Accounts payable

$                          212

$                         265

Advance deposits

194

160

Accrued liabilities (including $2 and $2 from VIEs, respectively)

347

345

Deferred revenue

507

453

Payroll and benefits liability

214

201

Deferred compensation liability

136

142

Securitized debt, net (including $1,799 and $1,877 from VIEs, respectively)

1,779

1,856

Debt, net

2,751

2,631

Other

206

224

Deferred taxes

333

350

     TOTAL LIABILITIES

6,679

6,627

Contingencies and Commitments (Note 11)


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; 75,721,548 and


75,519,049 shares issued, respectively

1

1

Treasury stock — at cost; 33,971,376 and 33,235,671 shares, respectively

(1,474)

(1,356)

Additional paid-in capital

3,945

4,072

Accumulated other comprehensive loss

4

(16)

Retained earnings

338

275

     TOTAL MVW SHAREHOLDERS' EQUITY

2,814

2,976

Noncontrolling interests

10

10

          TOTAL EQUITY

2,824

2,986

          TOTAL LIABILITIES AND EQUITY

$                       9,503

$                      9,613

The abbreviation VIEs above means Variable Interest Entities.

A-10

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Three Months Ended


March 31, 2022

March 31, 2021

OPERATING ACTIVITIES



Net income (loss)

$                    58

$                   (25)

     Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash



     provided by (used in) operating activities:



     Depreciation and amortization of intangibles

33

41

     Amortization of debt discount and issuance costs

5

11

     Vacation ownership notes receivable reserve

29

14

     Share-based compensation

8

8

     Deferred income taxes

18

15

     Net change in assets and liabilities:



          Accounts receivable

45

51

          Vacation ownership notes receivable originations

(205)

(108)

          Vacation ownership notes receivable collections

188

165

          Inventory

28

(26)

          Other assets

(134)

(138)

          Accounts payable, advance deposits and accrued liabilities

12

(30)

          Deferred revenue

54

102

          Payroll and benefit liabilities

13

31

          Deferred compensation liability

(7)

(2)

          Other liabilities

(3)

5

     Deconsolidation of certain Consolidated Property Owners' Associations

—

(71)

     Purchase of vacation ownership units for future transfer to inventory

(12)

(99)

     Other, net

(1)

(4)

               Net cash, cash equivalents and restricted cash provided by (used in) operating activities

129

(60)

INVESTING ACTIVITIES



     Capital expenditures for property and equipment (excluding inventory)

(9)

(7)

     Purchase of company owned life insurance

(4)

(1)

     Dispositions, net

3

—

               Net cash, cash equivalents and restricted cash used in investing activities

(10)

(8)

FINANCING ACTIVITIES



     Borrowings from securitization transactions

102

—

     Repayment of debt related to securitization transactions

(178)

(159)

     Proceeds from debt

30

561

     Repayments of debt

(30)

(100)

     Purchase of convertible note hedges

—

(100)

     Proceeds from issuance of warrants

—

70

     Finance lease payment

(2)

—

     Payment of debt issuance costs

(4)

(2)

     Repurchase of common stock

(119)

—

     Payment of dividends

(49)

—

     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

(272)

255

     Effect of changes in exchange rates on cash, cash equivalents and restricted cash

—

(1)

Change in cash, cash equivalents and restricted cash

(153)

186

Cash, cash equivalents and restricted cash, beginning of period

803

992

Cash, cash equivalents and restricted cash, end of period

$                  650

$               1,178

A-11

MARRIOTT VACATIONS WORLDWIDE CORPORATION

2022 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED

EARNINGS PER SHARE - DILUTED OUTLOOK

(In millions, except per share amounts)



Fiscal Year

2022 (low)

Fiscal Year

2022 (high)

Net income attributable to common shareholders

$                     317

$                     347

     Provision for income taxes

126

136

Income before income taxes attributable to common shareholders

443

483

     Certain items(1)

142

162

Adjusted pretax income **

585

645

     Provision for income taxes

(161)

(176)

Adjusted net income attributable to common shareholders **

$                     424

$                     469

Earnings per share - Diluted(2)


$                    6.85

$                    7.49

Adjusted earnings per share - Diluted(2) ** 

$                    9.13

$                  10.09

Diluted shares(2)

47.0

47.0

(1) Certain items adjustment includes $120 to $140 million of anticipated transaction and integration costs and

$22 million of anticipated purchase accounting adjustments.

(2) Earnings per share - Diluted and Adjusted earnings per share - Diluted increased from the previous guidance of

$6.52 to $7.14 and $8.72 to $9.65, respectively, primarily from the impact of additional share repurchase

activity through May 4, 2022.

2022 ADJUSTED EBITDA OUTLOOK

(In millions)



Fiscal Year

2022 (low)

Fiscal Year

2022 (high)

Net income attributable to common shareholders

$                     317

$                     347

Interest expense

107

107

Provision for income taxes

126

136

Depreciation and amortization

127

127

Share-based compensation

41

41

Certain items(1)

142

162

          Adjusted EBITDA **

$                     860

$                     920

(1) Certain items adjustment includes $120 to $140 million of anticipated transaction and

integration costs and $22 million of anticipated purchase accounting adjustments.

** 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-12

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

$                         300

$                         309

     Capital expenditures for property and equipment (excluding inventory)

(75)

(85)

     Borrowings from securitization transactions

859

894

     Repayment of debt related to securitizations

(684)

(699)

          Free cash flow **

400

419

Adjustments:



     Net change in borrowings available from the securitization of eligible



     vacation ownership notes receivable(1)

82

128

     Certain items(2)

92

108

     Change in restricted cash

(14)

(15)

          Adjusted free cash flow **

$                         560

$                         640

** 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 includes the after-tax impact of anticipated transaction and integration costs.

A-13

MARRIOTT VACATIONS WORLDWIDE CORPORATION

QUARTERLY OPERATING METRICS

(Contract sales in millions)


Year

Quarter Ended

Full Year


March 31

June 30

September 30

December 31

Vacation Ownership










     Consolidated contract sales











2022

$              394








2021

$              226

$               362

$              380

$              406

$           1,374

2020

$              306

$                 30

$              140

$              178

$              654












     VPG











2022

$           4,706








2021

$           4,644

$           4,304

$           4,300

$           4,305

$           4,356

2020

$           3,680

$           3,717

$           3,904

$           3,826

$           3,767












     Tours











2022

78,505








2021

45,871

79,900

84,098

89,495

299,364

2020

79,131

6,216

33,170

44,161

162,678












Exchange & Third-Party Management









     Total active members (000's)(1)











2022

1,606








2021

1,479

1,321

1,313

1,296

1,296

2020

1,636

1,571

1,536

1,518

1,518












     Average revenue per member(1)











2022

$           44.33








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-14

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 Adjusted Net Income or Loss Attributable to Common Shareholders, Adjusted EBITDA, Adjusted Development Profit, and Adjusted Development Profit Margin.

We evaluate non-GAAP financial measures, including Adjusted pretax income or loss, Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted EBITDA margin, Segment adjusted EBITDA, Segment adjusted EBITDA margin, Adjusted development profit, and Adjusted development profit margin, that exclude certain items in the three months ended March 31, 2022 and March 31, 2021, 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 (Adjusted Sale of Vacation Ownership Products Net of Expenses) 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 itemized on A-6, 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 and expand our business. 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 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.

SOURCE Marriott Vacations Worldwide Corporation

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