RLANDO, Fla., Oct. 31, 2022 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) (the "Company") reported third quarter 2022 financial results.
Marriott Vacations Worldwide Corporation. (PRNewsFoto/Marriott Vacations Worldwide)
In the third quarter of 2022, in connection with the unification of the Company's Marriott-, Westin-, and Sheraton-branded vacation ownership products under the Abound by Marriott Vacations program, the Company aligned its contract terms for the sale of vacation ownership products, resulting in the prospective acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology on vacation ownership notes receivable for these brands, resulting in a decrease in the reserve for the acquired notes offset by an increase in the reserve for the originated notes. Together, these changes are hereinafter referred to as the "Alignment." As a result of the Alignment, the Company reported an additional $33 million of Net income attributable to common shareholders and an additional $44 million of Adjusted EBITDA during the quarter. The tables and financial schedules below illustrate the impact of the Alignment on the Company's reported results.
Third Quarter 2022 Highlights:
Consolidated Vacation Ownership contract sales were $483 million, a 27% increase compared to the third quarter of 2021, and VPG increased 1% to $4,353.
Net income attributable to common shareholders was $109 million, or $2.53 fully diluted earnings per share; excluding the impact of the Alignment, net income attributable to common shareholders was $76 million, or $1.79 fully diluted earnings per share.
Adjusted net income attributable to common shareholders was $131 million, or $3.02 adjusted fully diluted earnings per share; excluding the impact of the Alignment, adjusted net income attributable to common shareholders was $98 million, or $2.28 adjusted fully diluted earnings per share.
Adjusted EBITDA was $284 million; excluding the impact of the Alignment, Adjusted EBITDA was $240 million, an increase of 17% compared to the prior year.
The Company repurchased nearly 1.7 million shares of its common stock for $216 million during the quarter at an average price per share of $129.
"Despite the challenging macroeconomic backdrop, we had a very strong third quarter, growing contract sales by 27% compared to the prior year driven by strong tour growth," said Stephen P. Weisz, chief executive officer. "With continued growth in our business, we've returned more than $600 million in cash to shareholders this year through a combination of share repurchases and dividends."
Third Quarter 2022 Results
The tables below illustrate the impact of the Alignment on the Company's reported results. In the tables below "*" denotes non-GAAP financial measures and "NM" is not meaningful. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
Consolidated
Three Months Ended September 30, 2022
Three Months
Ended
September 30,
2021
Change
As
Reported
Impact of Alignment
As
Adjusted*
As
Reported
As
Adjusted*
($ in millions)
Revenue
Reserve
Combined
$
%
$
%
Net income attributable to common shareholders
$ 109
$ (29)
$ (4)
$ (33)
$ 76
$ 10
$ 99
NM
$ 66
NM
Adjusted net income attributable to common shareholders*
$ 131
$ (29)
$ (4)
$ (33)
$ 98
$ 70
$ 61
87 %
$ 28
41 %
Adjusted EBITDA*
$ 284
$ (39)
$ (5)
$ (44)
$ 240
$ 205
$ 79
38 %
$ 35
17 %
Vacation Ownership
Three Months Ended September 30, 2022
Three Months
Ended
September 30,
2021
Change
As
Reported
Impact of Alignment
As
Adjusted*
As
Reported
As
Adjusted*
($ in millions)
Revenue
Reserve
Combined
$
%
$
%
Sale of vacation ownership products
$ 444
$ (46)
$ 19
$ (27)
$ 417
$ 330
$ 114
34 %
$ 87
26 %
Development profit
$ 161
$ (39)
$ 14
$ (25)
$ 136
$ 93
$ 68
73 %
$ 43
47 %
Financing profit
$ 69
$ —
$ (19)
$ (19)
$ 50
$ 47
$ 22
47 %
$ 3
6 %
Segment financial results attributable to common shareholders
$ 270
$ (29)
$ (4)
$ (33)
$ 237
$ 185
$ 85
46 %
$ 52
29 %
Segment margin
33.5 %
30.6 %
28.6 %
4.9 pts
2.0 pts
Segment Adjusted EBITDA*
$ 299
$ (39)
$ (5)
$ (44)
$ 255
$ 215
$ 84
39 %
$ 40
19 %
Segment Adjusted EBITDA margin*
37.1 %
32.7 %
33.2 %
3.9 pts
(0.5 pts)
Exchange & Third-Party Management
Revenues excluding cost reimbursements decreased 3% in the third quarter of 2022 compared to the prior year and increased 11% excluding the sale of VRI Americas in April of 2022. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 9% compared to the prior year as the new accounts Interval International added earlier this year continue to ramp up.
Segment financial results attributable to common shareholders were $29 million in the third quarter of 2022 and Segment margin was 44%. Segment Adjusted EBITDA increased $4 million to $39 million compared to the prior year, with Segment Adjusted EBITDA margin increasing 500 basis points compared to the third quarter of 2021 to 58%.
Corporate and Other
General and administrative costs increased $8 million in the third quarter of 2022 compared to the prior year primarily as a result of higher compensation and transformational initiative spending, including procurement and artificial intelligence capabilities.
Balance Sheet and Liquidity
The Company ended the quarter with approximately $1.0 billion in liquidity, including $294 million of cash and cash equivalents, $142 million of gross notes receivable that were eligible for securitization, and $519 million of available capacity under its revolving corporate credit facility.
At the end of the third quarter of 2022, the Company had $2.7 billion of 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 providing updated guidance, which includes the impact of the Alignment as reflected in the chart below, for the full year 2022. 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)
2022 Guidance
Impact of
Alignment
Income before income taxes attributable to common shareholders
$564
to
$579
$50
Net income attributable to common shareholders
$390
to
$400
$37
Earnings per share - diluted
$8.76
to
$8.98
$0.82
Net cash, cash equivalents and restricted cash provided
by operating activities
$575
to
$590
$—
Contract sales
$1,820
to
$1,860
$—
Adjusted EBITDA*
$950
to
$975
$50
Adjusted pretax net income*
$660
to
$685
$50
Adjusted net income attributable to common shareholders*
$455
to
$475
$37
Adjusted earnings per share - diluted*
$10.20
to
$10.64
$0.82
Adjusted free cash flow*
$670
to
$730
$—
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.
Third Quarter 2022 Financial Results Conference Call
The Company will hold a conference call on November 1, 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, 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 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 or future health crises, including quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic or future health crises, including short and longer-term impacts on consumer confidence and demand for travel, and the pace of recovery following the COVID-19 pandemic or future health crises or as effective treatments or vaccines against variants of the COVID-19 virus or future health crises 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 3, 2022
TABLE OF CONTENTS
Summary Financial Information
A-1
Adjusted EBITDA by Segment
A-2
Consolidated Statements of Income
A-3
Revenues and Profit by Segment
A-5
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted
A-9
Adjusted EBITDA
A-10
Consolidated Contract Sales to Adjusted Development Profit
A-11
Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA
A-13
Consolidated Balance Sheets
A-14
Consolidated Statements of Cash Flows
A-15
2022 Outlook
Adjusted Net Income Attributable to Common Shareholders, Adjusted Earnings Per Share - Diluted
and Adjusted EBITDA
A-17
Adjusted Free Cash Flow
A-18
Quarterly Operating Metrics
A-19
Non-GAAP Financial Measures
A-20
A-1
MARRIOTT VACATIONS WORLDWIDE CORPORATION
SUMMARY FINANCIAL INFORMATION
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts)
(Unaudited)
Three Months Ended
Change %
Nine Months Ended
Change %
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Key Measures
Total consolidated contract sales
$ 483
$ 380
27 %
$ 1,383
$ 968
43 %
VPG
$ 4,353
$ 4,300
1 %
$ 4,544
$ 4,377
4 %
Tours
104,000
84,098
24 %
285,362
209,869
36 %
Total active members (000's)(1)
1,591
1,313
21 %
1,591
1,313
21 %
Average revenue per member(1)
$ 38.91
$ 42.95
(9 %)
$ 122.30
$ 136.57
(10 %)
GAAP Measures
Revenues
$ 1,252
$ 1,052
19 %
$ 3,468
$ 2,790
24 %
Income before income taxes and noncontrolling interests
$ 169
$ 58
NM
$ 437
$ 57
NM
Net income (loss) attributable to common shareholders
$ 109
$ 10
NM
$ 303
$ (12)
NM
Earnings (loss) per share - diluted
$ 2.53
$ 0.23
NM
$ 6.68
$ (0.28)
NM
Non-GAAP Measures*
Adjusted EBITDA
$ 284
$ 205
38 %
$ 727
$ 438
66 %
Adjusted pretax income
$ 207
$ 118
74 %
$ 508
$ 165
NM
Adjusted net income attributable to common shareholders
$ 131
$ 70
87 %
$ 343
$ 87
NM
Adjusted earnings per share - diluted
$ 3.02
$ 1.60
89 %
$ 7.53
$ 2.01
NM
Financial Measures, Excluding the Impact of Alignment*
Revenues
$ 1,225
$ 1,052
16 %
$ 3,441
$ 2,790
23 %
Income before income taxes and noncontrolling interests
$ 125
$ 58
NM
$ 393
$ 57
NM
Net income (loss) attributable to common shareholders
$ 76
$ 10
NM
$ 270
$ (12)
NM
Earnings (loss) per share - diluted
$ 1.79
$ 0.23
NM
$ 5.99
$ (0.28)
NM
Adjusted EBITDA
$ 240
$ 205
17 %
$ 683
$ 438
56 %
Adjusted pretax income
$ 163
$ 118
38 %
$ 464
$ 165
NM
Adjusted net income attributable to common shareholders
$ 98
$ 70
41 %
$ 310
$ 87
NM
Adjusted earnings per share - diluted
$ 2.28
$ 1.60
43 %
$ 6.83
$ 2.01
NM
(1)Includes members at the end of each period for the Interval International exchange network only.
* 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
ADJUSTED EBITDA BY SEGMENT
(In millions)
(Unaudited)
Three Months Ended September 30, 2022
Three Months
Ended
September 30,
2021
Change
As
Reported
Impact of Alignment
As
Adjusted*
As
Reported
As
Adjusted*
Revenue
Reserve
Combined
Vacation Ownership
$ 299
$ (39)
$ (5)
$ (44)
$ 255
$ 215
39 %
19 %
Exchange & Third-Party Management
39
—
—
—
39
35
7 %
7 %
Segment Adjusted EBITDA*
338
(39)
(5)
(44)
294
250
35 %
17 %
General and administrative
(54)
—
—
—
(54)
(45)
(17 %)
(17 %)
Adjusted EBITDA*
$ 284
$ (39)
$ (5)
$ (44)
$ 240
$ 205
38 %
17 %
Nine Months Ended September 30, 2022
Nine Months
Ended
September 30,
2021
Change
As
Reported
Impact of Alignment
As
Adjusted*
As
Reported
As
Adjusted*
Revenue
Reserve
Combined
Vacation Ownership
$ 772
$ (39)
$ (5)
$ (44)
$ 728
$ 465
66 %
57 %
Exchange & Third-Party Management
117
—
—
—
117
113
2 %
2 %
Segment Adjusted EBITDA*
889
(39)
(5)
(44)
845
578
54 %
46 %
General and administrative
(162)
—
—
—
(162)
(140)
(15 %)
(15 %)
Adjusted EBITDA*
$ 727
$ (39)
$ (5)
$ (44)
$ 683
$ 438
66 %
56 %
* 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-3
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, 2022
September 30,
2021
As
Reported
Impact of
Alignment
As
Adjusted*
REVENUES
Sale of vacation ownership products
$ 444
$ (27)
$ 417
$ 330
Management and exchange
198
—
198
225
Rental
165
—
165
130
Financing
74
—
74
69
Cost reimbursements
371
—
371
298
TOTAL REVENUES
1,252
(27)
1,225
1,052
EXPENSES
Cost of vacation ownership products
76
(2)
74
71
Marketing and sales
207
—
207
166
Management and exchange
101
—
101
138
Rental
126
—
126
84
Financing
5
19
24
22
General and administrative
62
—
62
54
Depreciation and amortization
33
—
33
35
Litigation charges
2
—
2
2
Royalty fee
28
—
28
26
Impairment
1
—
1
—
Cost reimbursements
371
—
371
298
TOTAL EXPENSES
1,012
17
1,029
896
Losses and other expense, net
(2)
—
(2)
(31)
Interest expense
(34)
—
(34)
(41)
Transaction and integration costs
(34)
—
(34)
(27)
Other
(1)
—
(1)
1
INCOME BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
169
(44)
125
58
Provision for income taxes
(59)
11
(48)
(47)
NET INCOME (LOSS)
110
(33)
77
11
Net income attributable to noncontrolling interests
(1)
—
(1)
(1)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
$ 109
$ (33)
$ 76
$ 10
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS
Basic
$ 2.76
$ (0.80)
$ 1.96
$ 0.24
Diluted
$ 2.53
$ (0.74)
$ 1.79
$ 0.23
* 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.
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars.
A-4
MARRIOTT VACATIONS WORLDWIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30, 2022
September 30,
2021
As
Reported
Impact of
Alignment
As
Adjusted*
REVENUES
Sale of vacation ownership products
$ 1,179
$ (27)
$ 1,152
$ 789
Management and exchange
623
—
623
638
Rental
438
—
438
340
Financing
217
—
217
196
Cost reimbursements
1,011
—
1,011
827
TOTAL REVENUES
3,468
(27)
3,441
2,790
EXPENSES
Cost of vacation ownership products
216
(2)
214
178
Marketing and sales
603
—
603
439
Management and exchange
330
—
330
381
Rental
294
—
294
247
Financing
49
19
68
64
General and administrative
187
—
187
166
Depreciation and amortization
98
—
98
112
Litigation charges
7
—
7
8
Royalty fee
84
—
84
78
Impairment
1
—
1
5
Cost reimbursements
1,011
—
1,011
827
TOTAL EXPENSES
2,880
17
2,897
2,505
Gains (losses) and other income (expense), net
39
—
39
(27)
Interest expense
(91)
—
(91)
(128)
Transaction and integration costs
(99)
—
(99)
(75)
Other
—
—
—
2
INCOME BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
437
(44)
393
57
Provision for income taxes
(134)
11
(123)
(63)
NET INCOME (LOSS)
303
(33)
270
(6)
Net income attributable to noncontrolling interests
—
—
—
(6)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
$ 303
$ (33)
$ 270
$ (12)
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS
Basic
$ 7.39
$ (0.78)
$ 6.61
$ (0.28)
Diluted
$ 6.68
$ (0.69)
$ 5.99
$ (0.28)
* 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.
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars.
A-5
MARRIOTT VACATIONS WORLDWIDE CORPORATION
REVENUES AND PROFIT BY SEGMENT
for the three months ended September 30, 2022
(In millions)
(Unaudited)
Reportable Segment
Corporate
and
Other
Total
Vacation Ownership
Exchange &
Third-Party
Management
As
Reported
As
Adjusted*
As
Reported
Impact of
Alignment
As
Adjusted*
REVENUES
Sales of vacation ownership products
$ 444
$ (27)
$ 417
$ —
$ —
$ 444<
