Marriott Vacations Worldwide ("MVW") Reports Second Quarter 2021 Financial Results
"Today, more than ever, people want to vacation to see new places, reunite with family and friends, or just to relax, and the products we offer, with extra square footage in a resort setting, are resonating with them, translating into higher occupancies and strong first time buyer growth," said
On
Second Quarter 2021 Highlights and Operational Update:
- Consolidated Vacation Ownership contract sales totaled
$362 million in the second quarter of 2021, with VPG 30% higher than the second quarter of 2019. - Net income attributable to common shareholders was
$6 million , or$0.15 fully diluted earnings per share. - Adjusted net income attributable to common shareholders was
$37 million and adjusted fully diluted earnings per share was$0.85 . - Adjusted EBITDA more than doubled on a sequential basis to
$164 million in the second quarter of 2021. - The Company completed a securitization of timeshare receivables, issuing
$434 million of notes at an overall average weighted interest rate of 1.5% and a 98% gross advance rate, the lowest interest rate ever achieved by a MVW 144A securitization, generating net proceeds of$425 million . - After the repayment of
$500 million of its 6.5% Senior Notes due 2026 following the end of the quarter, the Company had pro forma liquidity of nearly$1.5 billion , including unrestricted cash and cash equivalents of$780 million . - With recovery in the business expected to continue, the Company projects contract sales of
$380 million to$410 million in the third quarter of 2021, a sequential increase of 9% at the mid-point.
Second Quarter 2021 Segment Results
Vacation Ownership
Revenues excluding cost reimbursements increased 189% in the second quarter of 2021 compared to the prior year and increased 52% from the first quarter of 2021 as the business continued to recover. Compared to the first quarter, revenue from the sale of vacation ownership products increased 82% and Development profit margin increased to 22%. Excluding the impact of revenue reportability, Adjusted development profit more than doubled sequentially to
Vacation Ownership segment financial results were
Exchange & Third-Party Management
Revenues excluding cost reimbursements increased 56% in the second quarter of 2021 compared to the prior year and was largely unchanged compared to the first quarter.
Exchange & Third-Party Management segment financial results were
Corporate and Other
General and administrative costs increased
Balance Sheet and Liquidity
On
In the second quarter of 2021, the Company completed a securitization of timeshare receivables, issuing
The Company had
Non-GAAP Financial Information
Non-GAAP financial measures, such as Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, 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.
Second Quarter 2021 Financial Results Conference Call
The Company will hold a conference call on
About
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 in the third quarter that are not historical facts. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including, without limitation, conditions beyond our control such as the length and severity of the current COVID-19 pandemic and its effect on our operations, its short and longer-term impacts on the demand for travel and consumer confidence, and the availability and distribution of effective vaccines; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; the Company's ability to manage and reduce expenditures in a low revenue environment; volatility in the economy and the credit markets, changes in supply and demand for vacation ownership products, competitive conditions, the availability of additional financing when and if required, and other matters disclosed under the heading "Risk Factors" contained in the Company's most recent Annual Report on Form 10-K filed with the
Financial Schedules Follow |
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FINANCIAL SCHEDULES |
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QUARTER 2, 2021 |
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TABLE OF CONTENTS |
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Summary Financial Information and Adjusted EBITDA by Segment |
A-1 |
Consolidated Statements of Income |
A-2 |
Revenues and Profit by Segment |
A-3 |
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted |
A-7 |
Adjusted EBITDA |
A-8 |
Consolidated Contract Sales to Adjusted Development Profit |
A-9 |
Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA |
A-10 |
Quarterly Operating Metrics |
A-11 |
Non-GAAP Financial Measures |
A-12 |
A-1 |
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(In millions, except VPG, tours, total active members, average revenue per member and per share amounts) |
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(Unaudited) |
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SUMMARY FINANCIAL INFORMATION |
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Three Months Ended |
Change % |
Six Months Ended |
Change % |
||||||||||||||||
|
|
|
|
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Total consolidated contract sales |
$ |
362 |
$ |
30 |
N/M |
$ |
588 |
$ |
336 |
75% |
|||||||||
VPG |
$ |
4,304 |
$ |
3,717 |
16% |
$ |
4,428 |
$ |
3,683 |
20% |
|||||||||
Tours |
79,900 |
6,216 |
N/M |
125,771 |
85,347 |
47% |
|||||||||||||
Total active members (000's)(1) |
1,321 |
1,571 |
(16%) |
1,321 |
1,571 |
(16%) |
|||||||||||||
Average revenue per member(1) |
$ |
46.36 |
$ |
30.17 |
54% |
$ |
93.77 |
$ |
71.74 |
31% |
|||||||||
GAAP Measures |
|||||||||||||||||||
Revenues |
$ |
979 |
$ |
480 |
N/M |
$ |
1,738 |
$ |
1,490 |
17% |
|||||||||
Income (loss) before income taxes and |
$ |
35 |
$ |
(81) |
N/M |
$ |
(1) |
$ |
(244) |
N/M |
|||||||||
Net income (loss) attributable to common |
$ |
6 |
$ |
(70) |
N/M |
$ |
(22) |
$ |
(176) |
88% |
|||||||||
Earnings (loss) per share - diluted |
$ |
0.15 |
$ |
(1.68) |
N/M |
$ |
(0.52) |
$ |
(4.25) |
88% |
|||||||||
Non-GAAP Measures ** |
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Adjusted EBITDA |
$ |
164 |
$ |
(10) |
N/M |
$ |
233 |
$ |
128 |
82% |
|||||||||
Adjusted pretax income (loss) |
$ |
70 |
$ |
(78) |
N/M |
$ |
47 |
$ |
5 |
N/M |
|||||||||
Adjusted net income (loss) attributable to |
$ |
37 |
$ |
(72) |
N/M |
$ |
17 |
$ |
17 |
2% |
|||||||||
Adjusted earnings (loss) per share - diluted |
$ |
0.85 |
$ |
(1.76) |
N/M |
$ |
0.40 |
$ |
0.40 |
—% |
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(1) Includes members at the end of each period for the |
ADJUSTED EBITDA BY SEGMENT |
|||||||||||||||||||
Three Months Ended |
Change % |
Six Months Ended |
Change % |
||||||||||||||||
|
|
|
|
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Vacation Ownership |
$ |
182 |
$ |
(19) |
N/M |
$ |
250 |
$ |
128 |
94% |
|||||||||
Exchange & Third-Party Management |
37 |
19 |
94% |
78 |
60 |
31% |
|||||||||||||
Segment adjusted EBITDA** |
219 |
— |
N/M |
328 |
188 |
74% |
|||||||||||||
General and administrative |
(56) |
(13) |
N/M |
(95) |
(64) |
(49%) |
|||||||||||||
Consolidated property owners' associations |
1 |
3 |
N/M |
— |
4 |
N/M |
|||||||||||||
Adjusted EBITDA** |
$ |
164 |
$ |
(10) |
N/M |
$ |
233 |
$ |
128 |
82% |
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** 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-2 |
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CONSOLIDATED STATEMENTS OF INCOME |
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(In millions, except per share amounts) |
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(Unaudited) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
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|
|
|
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REVENUES |
|||||||||||||||
Sale of vacation ownership products |
$ |
296 |
$ |
53 |
$ |
459 |
$ |
311 |
|||||||
Management and exchange |
220 |
145 |
413 |
372 |
|||||||||||
Rental |
121 |
18 |
210 |
153 |
|||||||||||
Financing |
68 |
70 |
127 |
142 |
|||||||||||
Cost reimbursements |
274 |
194 |
529 |
512 |
|||||||||||
TOTAL REVENUES |
979 |
480 |
1,738 |
1,490 |
|||||||||||
EXPENSES |
|||||||||||||||
Cost of vacation ownership products |
67 |
23 |
107 |
83 |
|||||||||||
Marketing and sales |
164 |
49 |
273 |
219 |
|||||||||||
Management and exchange |
126 |
85 |
243 |
236 |
|||||||||||
Rental |
81 |
73 |
163 |
171 |
|||||||||||
Financing |
21 |
23 |
42 |
61 |
|||||||||||
General and administrative |
66 |
19 |
112 |
89 |
|||||||||||
Depreciation and amortization |
36 |
31 |
77 |
63 |
|||||||||||
Litigation charges |
3 |
— |
6 |
2 |
|||||||||||
Royalty fee |
27 |
23 |
52 |
49 |
|||||||||||
Impairment |
5 |
1 |
5 |
96 |
|||||||||||
Cost reimbursements |
274 |
194 |
529 |
512 |
|||||||||||
TOTAL EXPENSES |
870 |
521 |
1,609 |
1,581 |
|||||||||||
(Losses) gains and other (expense) income, net |
(2) |
14 |
4 |
(42) |
|||||||||||
Interest expense |
(44) |
(42) |
(87) |
(75) |
|||||||||||
Transaction and integration costs |
(29) |
(12) |
(48) |
(36) |
|||||||||||
Other |
1 |
— |
1 |
— |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
35 |
(81) |
(1) |
(244) |
|||||||||||
(Provision for) benefit from income taxes |
(27) |
19 |
(16) |
77 |
|||||||||||
NET INCOME (LOSS) |
8 |
(62) |
(17) |
(167) |
|||||||||||
Net income attributable to noncontrolling interests |
(2) |
(8) |
(5) |
(9) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON |
$ |
6 |
$ |
(70) |
$ |
(22) |
$ |
(176) |
|||||||
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO |
|||||||||||||||
Basic |
$ |
0.15 |
$ |
(1.68) |
$ |
(0.52) |
$ |
(4.25) |
|||||||
Diluted |
$ |
0.15 |
$ |
(1.68) |
$ |
(0.52) |
$ |
(4.25) |
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NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars. |
A-3 |
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REVENUES AND PROFIT BY SEGMENT |
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for the three months ended |
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(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
296 |
$ |
— |
$ |
— |
$ |
296 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
52 |
1 |
— |
53 |
|||||||||||
Management fee revenues |
39 |
9 |
(5) |
43 |
|||||||||||
Exchange and other services revenues |
32 |
50 |
42 |
124 |
|||||||||||
Management and exchange |
123 |
60 |
37 |
220 |
|||||||||||
Rental |
110 |
11 |
— |
121 |
|||||||||||
Financing |
68 |
— |
— |
68 |
|||||||||||
Cost reimbursements(1) |
286 |
15 |
(27) |
274 |
|||||||||||
TOTAL REVENUES |
$ |
883 |
$ |
86 |
$ |
10 |
$ |
979 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
65 |
$ |
— |
$ |
— |
$ |
65 |
|||||||
Management and exchange(1) |
77 |
25 |
(8) |
94 |
|||||||||||
Rental(1) |
15 |
11 |
14 |
40 |
|||||||||||
Financing |
47 |
— |
— |
47 |
|||||||||||
TOTAL PROFIT |
204 |
36 |
6 |
246 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(66) |
(66) |
|||||||||||
Depreciation and amortization |
(23) |
(9) |
(4) |
(36) |
|||||||||||
Litigation charges |
(3) |
— |
— |
(3) |
|||||||||||
Royalty fee |
(27) |
— |
— |
(27) |
|||||||||||
Impairment |
— |
— |
(5) |
(5) |
|||||||||||
Losses and other expense, net |
— |
— |
(2) |
(2) |
|||||||||||
Interest expense |
— |
— |
(44) |
(44) |
|||||||||||
Transaction and integration costs |
(1) |
— |
(28) |
(29) |
|||||||||||
Other |
1 |
— |
— |
1 |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
151 |
27 |
(143) |
35 |
|||||||||||
Provision for income taxes |
— |
— |
(27) |
(27) |
|||||||||||
NET INCOME (LOSS) |
151 |
27 |
(170) |
8 |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(2) |
(2) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
151 |
$ |
27 |
$ |
(172) |
$ |
6 |
|||||||
(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 ("VOI") owners. |
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(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented. |
A-4 |
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REVENUES AND PROFIT BY SEGMENT |
|||||||||||||||
for the three months ended |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
53 |
$ |
— |
$ |
— |
$ |
53 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
6 |
— |
— |
6 |
|||||||||||
Management fee revenues |
38 |
— |
(5) |
33 |
|||||||||||
Exchange and other services revenues |
29 |
39 |
38 |
106 |
|||||||||||
Management and exchange |
73 |
39 |
33 |
145 |
|||||||||||
Rental |
12 |
6 |
— |
18 |
|||||||||||
Financing |
69 |
1 |
— |
70 |
|||||||||||
Cost reimbursements(1) |
198 |
12 |
(16) |
194 |
|||||||||||
TOTAL REVENUES |
$ |
405 |
$ |
58 |
$ |
17 |
$ |
480 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
(19) |
$ |
— |
$ |
— |
$ |
(19) |
|||||||
Management and exchange(1) |
51 |
13 |
(4) |
60 |
|||||||||||
Rental(1) |
(75) |
5 |
15 |
(55) |
|||||||||||
Financing |
46 |
1 |
— |
47 |
|||||||||||
TOTAL PROFIT |
3 |
19 |
11 |
33 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(19) |
(19) |
|||||||||||
Depreciation and amortization |
(20) |
(7) |
(4) |
(31) |
|||||||||||
Royalty fee |
(23) |
— |
— |
(23) |
|||||||||||
Impairment |
(1) |
— |
— |
(1) |
|||||||||||
Gains (losses) and other income (expense), net |
5 |
(1) |
10 |
14 |
|||||||||||
Interest expense |
— |
— |
(42) |
(42) |
|||||||||||
Transaction and integration costs |
— |
— |
(12) |
(12) |
|||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND |
(36) |
11 |
(56) |
(81) |
|||||||||||
Benefit from income taxes |
— |
— |
19 |
19 |
|||||||||||
NET (LOSS) INCOME |
(36) |
11 |
(37) |
(62) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(8) |
(8) |
|||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO |
$ |
(36) |
$ |
11 |
$ |
(45) |
$ |
(70) |
|||||||
(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 ("VOI") owners. |
|||||||||||||||
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented. |
A-5 |
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|
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REVENUES AND PROFIT BY SEGMENT |
|||||||||||||||
for the six months ended |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
459 |
$ |
— |
$ |
— |
$ |
459 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
80 |
1 |
— |
81 |
|||||||||||
Management fee revenues |
77 |
14 |
(11) |
80 |
|||||||||||
Exchange and other services revenues |
60 |
105 |
87 |
252 |
|||||||||||
Management and exchange |
217 |
120 |
76 |
413 |
|||||||||||
Rental |
187 |
23 |
— |
210 |
|||||||||||
Financing |
127 |
— |
— |
127 |
|||||||||||
Cost reimbursements(1) |
554 |
29 |
(54) |
529 |
|||||||||||
TOTAL REVENUES |
$ |
1,544 |
$ |
172 |
$ |
22 |
$ |
1,738 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
79 |
$ |
— |
$ |
— |
$ |
79 |
|||||||
Management and exchange(1) |
136 |
54 |
(20) |
170 |
|||||||||||
Rental(1) |
(4) |
23 |
28 |
47 |
|||||||||||
Financing |
85 |
— |
— |
85 |
|||||||||||
TOTAL PROFIT |
296 |
77 |
8 |
381 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(112) |
(112) |
|||||||||||
Depreciation and amortization |
(42) |
(29) |
(6) |
(77) |
|||||||||||
Litigation charges |
(6) |
— |
— |
(6) |
|||||||||||
Restructuring |
(1) |
— |
1 |
— |
|||||||||||
Royalty fee |
(52) |
— |
— |
(52) |
|||||||||||
Gains and other income, net |
— |
— |
4 |
4 |
|||||||||||
Interest expense |
— |
— |
(87) |
(87) |
|||||||||||
Transaction and integration costs |
(1) |
— |
(47) |
(48) |
|||||||||||
Other |
1 |
— |
— |
1 |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
195 |
48 |
(244) |
(1) |
|||||||||||
Benefit from income taxes |
— |
— |
(16) |
(16) |
|||||||||||
NET INCOME (LOSS) |
195 |
48 |
(260) |
(17) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(5) |
(5) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
195 |
$ |
48 |
$ |
(265) |
$ |
(22) |
|||||||
(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 ("VOI") owners. |
|||||||||||||||
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented. |
A-6 |
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|
|||||||||||||||
REVENUES AND PROFIT BY SEGMENT |
|||||||||||||||
for the six months ended |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
311 |
$ |
— |
$ |
— |
$ |
311 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
52 |
1 |
— |
53 |
|||||||||||
Management fee revenues |
76 |
10 |
(9) |
77 |
|||||||||||
Exchange and other services revenues |
57 |
100 |
85 |
242 |
|||||||||||
Management and exchange |
185 |
111 |
76 |
372 |
|||||||||||
Rental |
134 |
19 |
— |
153 |
|||||||||||
Financing |
140 |
2 |
— |
142 |
|||||||||||
Cost reimbursements(1) |
543 |
33 |
(64) |
512 |
|||||||||||
TOTAL REVENUES |
$ |
1,313 |
$ |
165 |
$ |
12 |
$ |
1,490 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
9 |
$ |
— |
$ |
— |
$ |
9 |
|||||||
Management and exchange(1) |
107 |
45 |
(16) |
136 |
|||||||||||
Rental(1) |
(60) |
13 |
29 |
(18) |
|||||||||||
Financing(3) |
80 |
1 |
— |
81 |
|||||||||||
TOTAL PROFIT |
136 |
59 |
13 |
208 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(89) |
(89) |
|||||||||||
Depreciation and amortization |
(41) |
(16) |
(6) |
(63) |
|||||||||||
Litigation charges |
(2) |
— |
— |
(2) |
|||||||||||
Royalty fee |
(49) |
— |
— |
(49) |
|||||||||||
Impairment |
(5) |
(91) |
— |
(96) |
|||||||||||
Gains and other income, net |
6 |
— |
(48) |
(42) |
|||||||||||
Interest expense |
— |
— |
(75) |
(75) |
|||||||||||
Transaction and integration costs |
(3) |
— |
(33) |
(36) |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
42 |
(48) |
(238) |
(244) |
|||||||||||
Benefit from income taxes |
— |
— |
77 |
77 |
|||||||||||
NET INCOME (LOSS) |
42 |
(48) |
(161) |
(167) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(9) |
(9) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
42 |
$ |
(48) |
$ |
(170) |
$ |
(176) |
|||||||
(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 ("VOI") owners. |
|||||||||||||||
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented. |
|||||||||||||||
(3) Includes a |
A-7 |
|||||||||||||||
|
|||||||||||||||
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 |
||||||||||||||
|
|
|
|
||||||||||||
Net income (loss) attributable to common shareholders |
$ |
6 |
$ |
(70) |
$ |
(22) |
$ |
(176) |
|||||||
Provision for (benefit from) income taxes |
27 |
(19) |
16 |
(77) |
|||||||||||
Income (loss) before income taxes attributable to common |
33 |
(89) |
(6) |
(253) |
|||||||||||
Certain items:(1) |
|||||||||||||||
Litigation charges |
3 |
— |
6 |
2 |
|||||||||||
Losses (gains) and other expense (income), net |
2 |
(14) |
(4) |
42 |
|||||||||||
Transaction and integration costs |
29 |
12 |
48 |
36 |
|||||||||||
Impairment charges |
5 |
1 |
5 |
96 |
|||||||||||
Purchase price adjustments(2) |
2 |
14 |
2 |
30 |
|||||||||||
Other(3) |
(4) |
(2) |
(4) |
52 |
|||||||||||
Adjusted pretax income (loss) ** |
70 |
(78) |
47 |
5 |
|||||||||||
(Provision for) benefit from income taxes |
(33) |
6 |
(30) |
12 |
|||||||||||
Adjusted net income (loss) attributable to common |
$ |
37 |
$ |
(72) |
$ |
17 |
$ |
17 |
|||||||
Diluted shares |
43.8 |
41.2 |
43.0 |
41.4 |
|||||||||||
Adjusted earnings (loss) per share - Diluted ** |
$ |
0.85 |
$ |
(1.76) |
$ |
0.40 |
$ |
0.40 |
|||||||
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use. |
|||||||||||||||
(1) See further details on A-8. |
|||||||||||||||
(2) Includes certain items included in depreciation and amortization. |
|||||||||||||||
(3) 2021 amounts include eliminating the impact of consolidating property owners' associations. |
A-8 |
|||||||||||||||
|
|||||||||||||||
ADJUSTED EBITDA |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON |
$ |
6 |
$ |
(70) |
$ |
(22) |
$ |
(176) |
|||||||
Interest expense |
44 |
42 |
87 |
75 |
|||||||||||
Provision for (benefit from) income taxes |
27 |
(19) |
16 |
(77) |
|||||||||||
Depreciation and amortization |
36 |
31 |
77 |
63 |
|||||||||||
Share-based compensation |
14 |
9 |
22 |
13 |
|||||||||||
Certain items before income taxes: |
|||||||||||||||
Litigation charges |
3 |
— |
6 |
2 |
|||||||||||
Losses (gains) and other expense (income), net: |
|||||||||||||||
Hurricane business interruption insurance claims |
— |
(4) |
— |
(4) |
|||||||||||
Various tax related matters |
2 |
(1) |
2 |
26 |
|||||||||||
Foreign currency translation |
(2) |
(8) |
(6) |
24 |
|||||||||||
Other |
2 |
(1) |
— |
(4) |
|||||||||||
Transaction and integration costs |
29 |
12 |
48 |
36 |
|||||||||||
Impairment charges |
5 |
1 |
5 |
96 |
|||||||||||
Purchase price adjustments |
2 |
— |
2 |
2 |
|||||||||||
COVID-19 related adjustments: |
|||||||||||||||
Sales reserve adjustment, net |
— |
— |
— |
37 |
|||||||||||
Accrual for health and welfare costs for furloughed |
(2) |
— |
(2) |
11 |
|||||||||||
Other(1) |
(2) |
(2) |
(2) |
4 |
|||||||||||
ADJUSTED EBITDA** |
$ |
164 |
$ |
(10) |
$ |
233 |
$ |
128 |
|||||||
** 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) 2021 amounts include eliminating the impact of consolidating property owners' associations. |
A-9 |
|||||||||||||||
|
|||||||||||||||
CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT |
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Consolidated contract sales |
$ |
362 |
$ |
30 |
$ |
588 |
$ |
336 |
|||||||
Less resales contract sales |
(7) |
(1) |
(12) |
(8) |
|||||||||||
Consolidated contract sales, net of resales |
355 |
29 |
576 |
328 |
|||||||||||
Plus: |
|||||||||||||||
Settlement revenue |
8 |
2 |
13 |
8 |
|||||||||||
Resales revenue |
1 |
1 |
3 |
5 |
|||||||||||
Revenue recognition adjustments: |
|||||||||||||||
Reportability |
(17) |
32 |
(53) |
66 |
|||||||||||
Sales reserve |
(28) |
(9) |
(42) |
(80) |
|||||||||||
Other(1) |
(23) |
(2) |
(38) |
(16) |
|||||||||||
Sale of vacation ownership products |
296 |
53 |
459 |
311 |
|||||||||||
Less: |
|||||||||||||||
Cost of vacation ownership products |
(67) |
(23) |
(107) |
(83) |
|||||||||||
Marketing and sales |
(164) |
(49) |
(273) |
(219) |
|||||||||||
Development Profit |
65 |
(19) |
79 |
9 |
|||||||||||
Revenue recognition reportability adjustment |
13 |
(21) |
39 |
(44) |
|||||||||||
Other(2) |
3 |
— |
3 |
29 |
|||||||||||
Adjusted development profit ** |
$ |
81 |
$ |
(40) |
$ |
121 |
$ |
(6) |
|||||||
Development profit margin(3) |
22.3% |
(34.8%) |
17.3% |
3.0% |
|||||||||||
Adjusted development profit margin(3) |
26.2% |
N/M |
24.0% |
(2.1%) |
** 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) Includes purchase price adjustments for the second quarter of 2021, as well as a sales reserve charge related to the COVID-19 pandemic and purchase price adjustments in the six months ended |
(3) Development profit margin represents Development profit divided by Sale of vacation ownership products. Adjusted development profit margin represents Adjusted development profit divided by Sale of vacation ownership products revenue after adjusting for revenue reportability and other charges. |
A-10 |
|||||||||||||||
|
|||||||||||||||
(In millions) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO |
$ |
151 |
$ |
(36) |
$ |
195 |
$ |
42 |
|||||||
Depreciation and amortization |
23 |
20 |
42 |
41 |
|||||||||||
Share-based compensation expense |
2 |
1 |
3 |
2 |
|||||||||||
Certain items: |
|||||||||||||||
Litigation charges |
3 |
— |
6 |
2 |
|||||||||||
Losses (gains) and other expense (income), net: |
|||||||||||||||
Hurricane business interruption net insurance proceeds |
— |
(4) |
— |
(4) |
|||||||||||
Foreign currency translation |
— |
— |
— |
(1) |
|||||||||||
Other |
— |
(1) |
— |
(1) |
|||||||||||
Impairment charges |
— |
1 |
— |
5 |
|||||||||||
Purchase price adjustments |
2 |
— |
2 |
2 |
|||||||||||
Effects of COVID-19: |
|||||||||||||||
Sales reserve adjustment, net |
— |
— |
— |
37 |
|||||||||||
Restructuring |
— |
— |
1 |
— |
|||||||||||
Other |
1 |
— |
1 |
3 |
|||||||||||
SEGMENT ADJUSTED EBITDA ** |
$ |
182 |
$ |
(19) |
$ |
250 |
$ |
128 |
|||||||
EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO |
$ |
27 |
$ |
11 |
$ |
48 |
$ |
(48) |
|||||||
Depreciation and amortization |
9 |
7 |
29 |
16 |
|||||||||||
Share-based compensation expense |
1 |
— |
1 |
1 |
|||||||||||
Certain items: |
|||||||||||||||
Losses (gains) and other expense (income), net: |
|||||||||||||||
Foreign currency translation |
— |
1 |
— |
3 |
|||||||||||
Other |
— |
— |
— |
(3) |
|||||||||||
Impairment charges |
— |
— |
— |
91 |
|||||||||||
SEGMENT ADJUSTED EBITDA ** |
$ |
37 |
$ |
19 |
$ |
78 |
$ |
60 |
|||||||
** 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 |
|||||||||||||||||||||
|
|||||||||||||||||||||
QUARTERLY OPERATING METRICS |
|||||||||||||||||||||
(Contract sales in millions) |
|||||||||||||||||||||
Year |
Quarter Ended |
Full Year |
|||||||||||||||||||
|
|
|
|
||||||||||||||||||
Vacation Ownership |
|||||||||||||||||||||
Consolidated Contract Sales |
|||||||||||||||||||||
2021 |
$ |
226 |
$ |
362 |
|||||||||||||||||
2020 |
$ |
306 |
$ |
30 |
$ |
140 |
$ |
178 |
$ |
654 |
|||||||||||
2019 |
$ |
354 |
$ |
386 |
$ |
390 |
$ |
394 |
$ |
1,524 |
|||||||||||