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

Aug 8, 2022

Q2 2022 Earnings Release 464.7 KB

ORLANDO, Fla., Aug. 8, 2022 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) (the "Company") reported second quarter 2022 financial results.

Second Quarter 2022 Highlights:

Consolidated Vacation Ownership contract sales were $506 million, a 40% increase compared to the second quarter of 2021, and VPG increased 7% to $4,613.
Net income attributable to common shareholders was $136 million, or $2.97 fully diluted earnings per share.
Adjusted net income attributable to common shareholders was $131 million, or $2.87 adjusted fully diluted earnings per share.
Adjusted EBITDA was $255 million, a 55% increase compared to the second quarter of 2021, as the Company continues to see a strong recovery in the business.
The Company returned $219 million to shareholders, repurchasing more than 1.4 million shares of its common stock for $193 million at an average price per share of $136 and paying a quarterly dividend of $26 million.
- Subsequent to the end of the second quarter, the Company repurchased approximately 1.1 million shares of its common stock for $131 million at an average price per share of $124 through the end of July.
Consistent with its strategy to dispose of non-strategic assets, during the second quarter, the Company closed on the sale of its VRI Americas business and its hotel in Puerto Vallarta, Mexico for total cash proceeds in excess of $100 million.

"We had a very strong second quarter, generating $506 million in contract sales, up 40% from the prior year, with contract sales and Adjusted EBITDA up 31% from the second quarter of 2019," said Stephen P. Weisz, chief executive officer. "We introduced Abound by Marriott Vacations^TM during the quarter, an exclusive new program providing more options and access for Owners. With the strong recovery of our operations, as well as cash proceeds from dispositions, we accelerated our return of cash to shareholders, surpassing $500 million this year through the end of July."

Second Quarter 2022 Results

Vacation Ownership

Revenues excluding cost reimbursements increased 28% in the second quarter of 2022 compared to the prior year, reflecting growth in all of the Company's lines of business.

Segment financial results attributable to common shareholders were $277 million in the second quarter of 2022 and Segment margin was 36%. Segment adjusted EBITDA increased 51% to $274 million, with Segment adjusted EBITDA margin of 36%, over 500 basis points higher than the second quarter of 2021.

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 4% in the second quarter of 2022 compared to the prior year. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 16% compared to the prior year.

Segment financial results attributable to common shareholders were $46 million in the second quarter of 2022 and Segment margin was 66%. Segment adjusted EBITDA decreased $2 million to $35 million compared to the prior year primarily due to the sale of VRI Americas, with Segment adjusted EBITDA margin of 52%, in line with the second quarter of 2021.

Corporate and Other

General and administrative costs decreased $2 million in the second quarter of 2022 compared to the prior year primarily as a result of lower bonus expense.

Balance Sheet and Liquidity

The Company ended the quarter with approximately $1.2 billion in liquidity, including $324 million of cash and cash equivalents, $106 million of gross notes receivable that were eligible for securitization, and $749 million of available capacity under its revolving corporate credit facility.

At the end of the second quarter of 2022, the Company had $2.7 billion of net corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.

The Company completed its first timeshare receivable securitization of 2022 in the second quarter, issuing $375 million of notes backed by a pool of $383 million of vacation ownership notes receivable from all of the Company's timeshare brands. The overall weighted average interest rate of the notes was 4.59% and the transaction had a gross advance rate of 98%.

Abound by Marriott Vacations^™

During the quarter, the Company introduced Abound by Marriott Vacations, a new Owner benefit and exchange program providing access to over 90 vacation club resorts, including Marriott Vacation Club^®, Sheraton^® Vacation Club and Westin^® Vacation Club, as well as access to more than 8,000 Marriott Bonvoy^® hotels, 2,000 vacation homes, and 2,000 unique experiences like cruises, guided and culinary tours, premiere events, outdoor adventures and more with a continued ability to exchange through Interval International, a premier exchange partner.

Full Year 2022 Outlook (in millions, except per share amounts)

The Financial Schedules that follow reconcile the non-GAAP financial measures set forth below to the following full year 2022 expected GAAP results for the Company.

The Company is providing guidance as reflected in the chart below for the full year 2022.

Income before income taxes attributable to common shareholders	$511	to	$551
Net income attributable to common shareholders	$365	to	$395
Earnings per share - diluted	$8.15	to	$8.81
Net cash, cash equivalents and restricted cash provided by operating activities	$470		$500

Contract sales	$1,775	to	$1,875
Adjusted EBITDA	$880	to	$930
Adjusted pretax net income	$600	to	$650
Adjusted net income attributable to common shareholders	$425	to	$465
Adjusted earnings per share - diluted	$9.47	to	$10.35
Adjusted free cash flow	$650	to	$730

Revenue Recognition

In connection with the launch of Abound by Marriott Vacations and the unification of the Company's Marriott-, Westin-, and Sheraton-branded vacation ownership products, the Company intends to align its revenue recognition on the sale of vacation ownership interests across all of its brands in the third quarter. This will result in the acceleration of revenue and a one-time benefit to Adjusted EBITDA but will have no impact on cash flow. The Company is unable to estimate the impact at this time and its guidance excludes this one-time benefit, which will be provided in connection with the release of its third quarter results.

Non-GAAP Financial Information

Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission.

Second Quarter 2022 Financial Results Conference Call

The Company will hold a conference call on August 9, 2022 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company's website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. The Company has over 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates exchange networks and membership programs comprised of nearly 3,200 affiliated resorts in over 90 countries and territories, as well as provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements

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

Financial Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION
FINANCIAL SCHEDULES
QUARTER 2, 2022

TABLE OF CONTENTS

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

A-1

MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts)
(Unaudited)


SUMMARY FINANCIAL INFORMATION

	Three Months Ended		Change %	Six Months Ended		Change %
	June 30, 2022	June 30, 2021	Change %	June 30, 2022	June 30, 2021	Change %
Key Measures
Total consolidated contract sales	$ 506	$ 362	40 %	$ 900	$ 588	53 %
VPG	$ 4,613	$ 4,304	7 %	$ 4,653	$ 4,428	5 %
Tours	102,857	79,900	29 %	181,362	125,771	44 %
Total active members (000's)⁽¹⁾	1,596	1,321	21 %	1,596	1,321	21 %
Average revenue per member⁽¹⁾	$ 38.79	$ 46.36	(16 %)	$ 83.32	$ 93.77	(11 %)

GAAP Measures
Revenues	$ 1,164	$ 979	19 %	$ 2,216	$ 1,738	28 %
Income (loss) before income taxes and noncontrolling interests	$ 178	$ 35	NM	$ 268	$ (1)	NM
Net income (loss) attributable to common shareholders	$ 136	$ 6	NM	$ 194	$ (22)	NM
Earnings (loss) per share - diluted	$ 2.97	$ 0.15	NM	$ 4.18	$ (0.52)	NM

Non-GAAP Measures **
Adjusted EBITDA	$ 255	$ 164	55 %	$ 443	$ 233	90 %
Adjusted pretax income	$ 181	$ 70	154 %	$ 301	$ 47	NM
Adjusted net income attributable to common shareholders	$ 131	$ 37	252 %	$ 212	$ 17	NM
Adjusted earnings per share - diluted	$ 2.87	$ 0.85	238 %	$ 4.55	$ 0.40	NM

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

ADJUSTED EBITDA BY SEGMENT

	Three Months Ended		Change %	Six Months Ended		Change %
	June 30, 2022	June 30, 2021	Change %	June 30, 2022	June 30, 2021	Change %
Vacation Ownership	$ 274	$ 182	51 %	$ 473	$ 250	89 %
Exchange & Third-Party Management	35	37	(5 %)	78	78	— %
Segment adjusted EBITDA**	309	219	41 %	551	328	68 %
General and administrative	(54)	(55)	1 %	(108)	(95)	(14 %)
Adjusted EBITDA**	$ 255	$ 164	55 %	$ 443	$ 233	90 %

** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
NM - Not meaningful

A-2

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)

	Three Months Ended		Six Months Ended
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
REVENUES
Sale of vacation ownership products	$ 425	$ 296	$ 735	$ 459
Management and exchange	203	220	425	413
Rental	140	121	273	210
Financing	72	68	143	127
Cost reimbursements	324	274	640	529
TOTAL REVENUES	1,164	979	2,216	1,738
EXPENSES
Cost of vacation ownership products	80	67	140	107
Marketing and sales	214	164	396	273
Management and exchange	102	126	229	243
Rental	87	81	168	163
Financing	23	21	44	42
General and administrative	64	66	125	112
Depreciation and amortization	32	36	65	77
Litigation charges	2	3	5	6
Royalty fee	29	27	56	52
Impairment	—	5	—	5
Cost reimbursements	324	274	640	529
TOTAL EXPENSES	957	870	1,868	1,609
Gains (losses) and other income (expense), net	37	(2)	41	4
Interest expense	(30)	(44)	(57)	(87)
Transaction and integration costs	(37)	(29)	(65)	(48)
Other	1	1	1	1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS	178	35	268	(1)
Provision for income taxes	(43)	(27)	(75)	(16)
NET INCOME (LOSS)	135	8	193	(17)
Net loss (income) attributable to noncontrolling interests	1	(2)	1	(5)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS	$ 136	$ 6	$ 194	$ (22)

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS
Basic	$ 3.30	$ 0.15	$ 4.64	$ (0.52)
Diluted	$ 2.97	$ 0.15	$ 4.18	$ (0.52)

NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars.

A-3

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT
for the three months ended June 30, 2022
(In millions)
(Unaudited)

	Reportable Segment		Corporate and Other	Total
	Vacation Ownership	Exchange & Third-Party Management	Corporate and Other	Total
REVENUES
Sales of vacation ownership products	$ 425	$ —	$ —	$ 425
Management and exchange⁽¹⁾
Ancillary revenues	66	1	—	67
Management fee revenues	41	11	(1)	51
Exchange and other services revenues	33	46	6	85
Management and exchange	140	58	5	203
Rental	129	11	—	140
Financing	72	—	—	72
Cost reimbursements⁽¹⁾	325	5	(6)	324
TOTAL REVENUES	$ 1,091	$ 74	$ (1)	$ 1,164

PROFIT
Development	$ 131	$ —	$ —	$ 131
Management and exchange⁽¹⁾	80	26	(5)	101
Rental⁽¹⁾	38	11	4	53
Financing	49	—	—	49
TOTAL PROFIT	298	37	(1)	334

OTHER
General and administrative	—	—	(64)	(64)
Depreciation and amortization	(22)	(7)	(3)	(32)
Litigation charges	(2)	—	—	(2)
Royalty fee	(29)	—	—	(29)
Gains (losses) and other income (expense), net	32	16	(11)	37
Interest expense	—	—	(30)	(30)
Transaction and integration costs	(1)	—	(36)	(37)
Other	1	—	—	1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS	277	46	(145)	178
Provision for income taxes	—	—	(43)	(43)
NET INCOME (LOSS)	277	46	(188)	135
Net loss attributable to noncontrolling interests⁽¹⁾	—	—	1	1
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS	$ 277	$ 46	$ (187)	$ 136
SEGMENT MARGIN⁽²⁾	36 %	66 %

⁽¹⁾Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
⁽²⁾Segment margin represents the applicable segment's net income or loss attributable to common shareholders divided by the applicable segment's total revenues less cost reimbursement revenues.

A-4

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT
for the three months ended June 30, 2021
(In millions)
(Unaudited)

	Reportable Segment		Corporate and Other	Total
	Vacation Ownership	Exchange & Third-Party Management	Corporate and Other	Total
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	$ 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
NONCONTROLLING INTERESTS	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
COMMON SHAREHOLDERS	$ 151	$ 27	$ (172)	$ 6
SEGMENT MARGIN⁽²⁾	25 %	38 %

⁽¹⁾Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
⁽²⁾ Segment margin represents the applicable segment's net income or loss attributable to common shareholders divided by the applicable segment's total revenues less cost reimbursement revenues.

A-5

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT
for the six months ended June 30, 2022
(In millions)
(Unaudited)

	Reportable Segment		Corporate and Other	Total
	Vacation Ownership	Exchange & Third-Party Management	Corporate and Other	Total
REVENUES
Sales of vacation ownership products	$ 735	$ —	$ —	$ 735
Management and exchange⁽¹⁾
Ancillary revenues	120	2	—	122
Management fee revenues	83	21	(4)	100
Exchange and other services revenues	63	99	41	203
Management and exchange	266	122	37	425
Rental	251	22	—	273
Financing	143	—	—	143
Cost reimbursements⁽¹⁾	652	14	(26)	640
TOTAL REVENUES	$ 2,047	$ 158	$ 11	$ 2,216

PROFIT
Development	$ 199	$ —	$ —	$ 199
Management and exchange⁽¹⁾	152	57	(13)	196
Rental⁽¹⁾	70	22	13	105
Financing	99	—	—	99
TOTAL PROFIT	520	79	—	599

OTHER
General and administrative	—	—	(125)	(125)
Depreciation and amortization	(44)	(16)	(5)	(65)
Litigation charges	(5)	—	—	(5)
Restructuring	—	—	—	—
Royalty fee	(56)	—	—	(56)
Impairment	—	—	—	—
Gains (losses) and other income (expense), net	35	16	(10)	41
Interest expense	—	—	(57)	(57)
Transaction and integration costs	(1)	—	(64)	(65)
Other	1	—	—	1
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS	450	79	(261)	268
Provision for income taxes	—	—	(75)	(75)
NET INCOME (LOSS)	450	79	(336)	193
Net loss attributable to noncontrolling interests⁽¹⁾	—	—	1	1
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS	$ 450	$ 79	$ (335)	$ 194
SEGMENT MARGIN⁽²⁾	32 %	55 %

⁽¹⁾Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
⁽²⁾ Segment margin represents the applicable segment's net income or loss attributable to common shareholders divided by the applicable segment's total revenues less cost reimbursement revenues.

A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT
for the six months ended June 30, 2021
(In millions)
(Unaudited)

	Reportable Segment		Corporate and Other	Total
	Vacation Ownership	Exchange & Third-Party Management	Corporate and Other	Total
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	$ 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)
Impairment	—	—	(5)	(5)
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
NONCONTROLLING INTERESTS	195	48	(244)	(1)
Provision for income taxes	—	—	(16)	(16)
NET INCOME (LOSS)	195	48	(260)	(17)
Net income attributable to noncontrolling interests⁽¹⁾	—	—	(5)	(5)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS	$ 195	$ 48	$ (265)	$ (22)
SEGMENT MARGIN⁽²⁾	20 %	34 %

⁽¹⁾Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
⁽²⁾ Segment margin represents the applicable segment's net income or loss attributable to common shareholders divided by the applicable segment's total revenues less cost reimbursement revenues.

A-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND
ADJUSTED EARNINGS PER SHARE - DILUTED
(In millions, except per share amounts)
(Unaudited)

	Three Months Ended		Six Months Ended
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Net income (loss) attributable to common shareholders	$ 136	$ 6	$ 194	$ (22)
Provision for income taxes	43	27	75	16
Income (loss) before income taxes attributable to common shareholders	179	33	269	(6)
Certain items:
Litigation charges	2	3	5	6
(Gains) losses and other (income) expense, net⁽¹⁾	(37)	2	(41)	(4)
Transaction and integration costs	37	29	65	48
Impairment charges	—	5	—	5
Purchase price adjustments	5	2	8	2
Other	(5)	(4)	(5)	(4)
Adjusted pretax income **	181	70	301	47
Provision for income taxes	(50)	(33)	(89)	(30)
Adjusted net income attributable to common shareholders **	$ 131	$ 37	$ 212	$ 17
Diluted shares⁽²⁾	46.5	43.8	47.2	43.0
Adjusted earnings per share - Diluted **	$ 2.87	$ 0.85	$ 4.55	$ 0.40

** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
⁽¹⁾See further details on A-8.
⁽²⁾ Diluted shares for the six months ended June 30, 2022 reflects the dilutive impact of the adoption of Accounting Standards Update 2020- 06 – "Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" (Diluted shares increased by 5 million shares based on the assumed conversion of our 2022 and 2026 Convertible Notes).

A-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED EBITDA
(In millions)
(Unaudited)

	Three Months Ended			Six Months Ended
	June 30, 2022	June 30, 2021	June 30, 2019	June 30, 2022	June 30, 2021	June 30, 2019
NET INCOME (LOSS) ATTRIBUTABLE
TO COMMON SHAREHOLDERS	$ 136	$ 6	$ 49	$ 194	$ (22)	$ 73
Interest expense	30	44	35	57	87	69
Provision for income taxes	43	27	25	75	16	40
Depreciation and amortization	32	36	36	65	77	73
Share-based compensation	12	14	11	20	22	20
Certain items:
Litigation charges	2	3	1	5	6	2
(Gains) losses and other (income) expense, net
Dispositions	(49)	—	—	(49)	—	—
Hurricane business interruption net insurance proceeds	—	—	—	(3)	—	(9)
Various tax related matters	3	2	—	3	2	—
Foreign currency translation	8	(2)	1	7	(6)	1
Other	1	2	(3)	1	—	(2)
Transaction and integration costs	37	29	36	65	48	62
Impairment charges	—	5	—	—	5	26
Purchase price adjustments	5	2	4	8	2	5
COVID-19 related adjustments	—	(2)	—	—	(2)	—
Other	(5)	(2)	—	(5)	(2)	1
ADJUSTED EBITDA**	$ 255	$ 164	$ 195	$ 443	$ 233	$ 361

** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-9

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT
(In millions)
(Unaudited)

	Three Months Ended		Six Months Ended
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Consolidated contract sales	$ 506	$ 362	$ 900	$ 588
Less resales contract sales	(11)	(7)	(20)	(12)
Consolidated contract sales, net of resales	495	355	880	576
Plus:
Settlement revenue	9	8	16	13
Resales revenue	4	1	8	3
Revenue recognition adjustments:
Reportability	(14)	(17)	(47)	(53)
Sales reserve	(37)	(28)	(66)	(42)
Other⁽¹⁾	(32)	(23)	(56)	(38)
Sale of vacation ownership products	425	296	735	459
Less:
Cost of vacation ownership products	(80)	(67)	(140)	(107)
Marketing and sales	(214)	(164)	(396)	(273)
Development Profit	131	65	199	79
Revenue recognition reportability adjustment	11	13	35	39
Purchase price adjustments	5	3	9	3
Adjusted development profit **	$ 147	$ 81	$ 243	$ 121
Development profit margin	31.0 %	22.3 %	27.1 %	17.3 %
Adjusted development profit margin	33.6 %	26.2 %	31.3 %	24.0 %

** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.

A-10

MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions)
(Unaudited)

VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA

	Three Months Ended	Six Months Ended

Press Release

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