Marriott Vacations Worldwide ("MVW") Reports Third Quarter 2021 Financial Results
"Occupancies at our resorts this quarter were very strong despite the Delta variant and contract sales were within 3% of 2019 levels, driving 25% sequential growth in Adjusted EBITDA and exceeding 2019 for the first time since the pandemic began," said
Third Quarter 2021 Highlights and Operational Update:
- Consolidated Vacation Ownership contract sales totaled
$380 million in the third quarter of 2021, with VPG 24% higher than the third quarter of 2019.
- Net income attributable to common shareholders was
$10 million , or$0.23 fully diluted earnings per share.
- Adjusted net income attributable to common shareholders was
$70 million and adjusted fully diluted earnings per share was$1.60 .
- Adjusted EBITDA increased 25% on a sequential basis to
$205 million in the third quarter of 2021, 8% higher than the third quarter of 2019.
- Adjusted EBITDA margin (excluding cost reimbursements) was 27%, the Company's highest quarterly Adjusted EBITDA margin as a stand alone public company.
- Adjusted EBITDA margin (excluding cost reimbursements) was 27%, the Company's highest quarterly Adjusted EBITDA margin as a stand alone public company.
- During the quarter, the Company's Board of Directors authorized a share repurchase program of up to
$250 million and declared a quarterly cash dividend of$0.54 per share of common stock, which was paid inOctober 2021 .
- In September, the Company repaid the remaining
$250 million of its 6.50% Senior Unsecured Notes due 2026 and, subsequent to the end of the quarter, repaid$250 million of its 6.125% Senior Secured Notes due 2025.
- With recovery in the business expected to continue, the Company projects contract sales of
$385 million to$405 million in the fourth quarter of 2021.
Third Quarter 2021 Segment Results
Vacation Ownership
Revenues excluding cost reimbursements increased 123% in the third quarter of 2021 compared to the prior year and increased 8% from the second quarter of 2021 as the business continued to recover. Compared to the second quarter, revenue from the sale of vacation ownership products increased 12% and Development profit margin increased to 28%. Excluding the impact of revenue reportability, Adjusted development profit increased sequentially to
Vacation Ownership segment financial results were
Exchange & Third-Party Management
Revenues excluding cost reimbursements increased 12% in the third quarter of 2021 compared to the prior year.
Exchange & Third-Party Management segment financial results were
Corporate and Other
General and administrative costs increased
Balance Sheet and Liquidity
On
The Company had
In September, the Company repaid the remaining
During the quarter, the Company's Board of Directors authorized a share repurchase program of up to
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.
Third 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 business recovery and contract sales in the fourth quarter, 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 virus, including the Delta variant; 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" contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our periodic filings with the
Financial Schedules Follow
FINANCIAL SCHEDULES QUARTER 3, 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 |
Consolidated Balance Sheets |
A-11 |
Consolidated Statements of Cash Flows |
A-12 |
Quarterly Operating Metrics |
A-13 |
Non-GAAP Financial Measures |
A-14 |
A-1 |
|||||||||||||||||||
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts) (Unaudited) |
|||||||||||||||||||
SUMMARY FINANCIAL INFORMATION |
|||||||||||||||||||
Three Months Ended |
Change % |
Nine Months Ended |
Change % |
||||||||||||||||
September |
September |
September |
September |
||||||||||||||||
|
|||||||||||||||||||
Total consolidated contract sales |
$ |
380 |
$ |
140 |
171% |
$ |
968 |
$ |
476 |
103% |
|||||||||
VPG |
$ |
4,300 |
$ |
3,904 |
10% |
$ |
4,377 |
$ |
3,745 |
17% |
|||||||||
Tours |
84,098 |
33,170 |
154% |
209,869 |
118,517 |
77% |
|||||||||||||
Total active members (000's)(1) |
1,313 |
1,536 |
(15%) |
1,313 |
1,536 |
(15%) |
|||||||||||||
Average revenue per member(1) |
$ |
42.95 |
$ |
36.76 |
17% |
$ |
136.57 |
$ |
108.44 |
26% |
|||||||||
GAAP Measures |
|||||||||||||||||||
Revenues |
$ |
1,052 |
$ |
649 |
62% |
$ |
2,790 |
$ |
2,139 |
30% |
|||||||||
Income (loss) before income taxes and |
$ |
58 |
$ |
(72) |
NM |
$ |
57 |
$ |
(316) |
NM |
|||||||||
Net income (loss) attributable to common |
$ |
10 |
$ |
(62) |
NM |
$ |
(12) |
$ |
(238) |
NM |
|||||||||
Earnings (loss) per share - diluted |
$ |
0.23 |
$ |
(1.51) |
NM |
$ |
(0.28) |
$ |
(5.76) |
NM |
|||||||||
Non-GAAP Measures ** |
|||||||||||||||||||
Adjusted EBITDA |
$ |
205 |
$ |
35 |
NM |
$ |
438 |
$ |
163 |
NM |
|||||||||
Adjusted pretax income (loss) |
$ |
118 |
$ |
(28) |
NM |
$ |
165 |
$ |
(23) |
NM |
|||||||||
Adjusted net income (loss) attributable to |
$ |
70 |
$ |
(33) |
NM |
$ |
87 |
$ |
(16) |
NM |
|||||||||
Adjusted earnings (loss) per share - diluted |
$ |
1.60 |
$ |
(0.81) |
NM |
$ |
2.01 |
$ |
(0.40) |
NM |
(1) Includes members at the end of each period for the |
ADJUSTED EBITDA BY SEGMENT |
|||||||||||||||||||
Three Months Ended |
Change |
Nine Months Ended |
Change |
||||||||||||||||
September |
September |
September |
September |
||||||||||||||||
Vacation Ownership |
$ |
215 |
$ |
28 |
NM |
$ |
465 |
$ |
156 |
NM |
|||||||||
Exchange & Third-Party Management |
35 |
31 |
13% |
113 |
91 |
25% |
|||||||||||||
Segment adjusted EBITDA** |
250 |
59 |
NM |
578 |
247 |
134% |
|||||||||||||
General and administrative |
(45) |
(27) |
NM |
(140) |
(91) |
NM |
|||||||||||||
Consolidated property owners' associations |
— |
3 |
NM |
— |
7 |
NM |
|||||||||||||
Adjusted EBITDA** |
$ |
205 |
$ |
35 |
NM |
$ |
438 |
$ |
163 |
NM |
|||||||||
** 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 |
|||||||||||||||
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) (Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
REVENUES |
|||||||||||||||
Sale of vacation ownership products |
$ |
330 |
$ |
98 |
$ |
789 |
$ |
409 |
|||||||
Management and exchange |
225 |
176 |
638 |
548 |
|||||||||||
Rental |
130 |
56 |
340 |
209 |
|||||||||||
Financing |
69 |
64 |
196 |
206 |
|||||||||||
Cost reimbursements |
298 |
255 |
827 |
767 |
|||||||||||
TOTAL REVENUES |
1,052 |
649 |
2,790 |
2,139 |
|||||||||||
EXPENSES |
|||||||||||||||
Cost of vacation ownership products |
71 |
27 |
178 |
110 |
|||||||||||
Marketing and sales |
166 |
78 |
439 |
297 |
|||||||||||
Management and exchange |
138 |
106 |
381 |
342 |
|||||||||||
Rental |
84 |
74 |
247 |
245 |
|||||||||||
Financing |
22 |
24 |
64 |
85 |
|||||||||||
General and administrative |
54 |
32 |
166 |
121 |
|||||||||||
Depreciation and amortization |
35 |
30 |
112 |
93 |
|||||||||||
Litigation charges |
2 |
2 |
8 |
4 |
|||||||||||
Restructuring |
— |
20 |
— |
20 |
|||||||||||
Royalty fee |
26 |
23 |
78 |
72 |
|||||||||||
Impairment |
— |
2 |
5 |
98 |
|||||||||||
Cost reimbursements |
298 |
255 |
827 |
767 |
|||||||||||
TOTAL EXPENSES |
896 |
673 |
2,505 |
2,254 |
|||||||||||
Losses and other expense, net |
(31) |
— |
(27) |
(42) |
|||||||||||
Interest expense |
(41) |
(37) |
(128) |
(112) |
|||||||||||
Transaction and integration costs |
(27) |
(11) |
(75) |
(47) |
|||||||||||
Other |
1 |
— |
2 |
— |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
58 |
(72) |
57 |
(316) |
|||||||||||
(Provision for) benefit from income taxes |
(47) |
14 |
(63) |
91 |
|||||||||||
NET INCOME (LOSS) |
11 |
(58) |
(6) |
(225) |
|||||||||||
Net income attributable to noncontrolling interests |
(1) |
(4) |
(6) |
(13) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON |
$ |
10 |
$ |
(62) |
$ |
(12) |
$ |
(238) |
|||||||
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO |
|||||||||||||||
Basic |
$ |
0.24 |
$ |
(1.51) |
$ |
(0.28) |
$ |
(5.76) |
|||||||
Diluted |
$ |
0.23 |
$ |
(1.51) |
$ |
(0.28) |
$ |
(5.76) |
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 for the three months ended (In millions) (Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
330 |
$ |
— |
$ |
— |
$ |
330 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
55 |
1 |
— |
56 |
|||||||||||
Management fee revenues |
40 |
10 |
(4) |
46 |
|||||||||||
Exchange and other services revenues |
31 |
48 |
44 |
123 |
|||||||||||
Management and exchange |
126 |
59 |
40 |
225 |
|||||||||||
Rental |
121 |
9 |
— |
130 |
|||||||||||
Financing |
69 |
— |
— |
69 |
|||||||||||
Cost reimbursements(1) |
328 |
9 |
(39) |
298 |
|||||||||||
TOTAL REVENUES |
$ |
974 |
$ |
77 |
$ |
1 |
$ |
1,052 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
93 |
$ |
— |
$ |
— |
$ |
93 |
|||||||
Management and exchange(1) |
71 |
26 |
(10) |
87 |
|||||||||||
Rental(1) |
24 |
9 |
13 |
46 |
|||||||||||
Financing |
47 |
— |
— |
47 |
|||||||||||
TOTAL PROFIT |
235 |
35 |
3 |
273 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(54) |
(54) |
|||||||||||
Depreciation and amortization |
(24) |
(11) |
— |
(35) |
|||||||||||
Litigation charges |
(1) |
— |
(1) |
(2) |
|||||||||||
Restructuring |
1 |
(1) |
— |
— |
|||||||||||
Royalty fee |
(26) |
— |
— |
(26) |
|||||||||||
Losses and other expense, net |
— |
— |
(31) |
(31) |
|||||||||||
Interest expense |
— |
— |
(41) |
(41) |
|||||||||||
Transaction and integration costs |
(1) |
— |
(26) |
(27) |
|||||||||||
Other |
1 |
— |
— |
1 |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
185 |
23 |
(150) |
58 |
|||||||||||
Provision for income taxes |
— |
— |
(47) |
(47) |
|||||||||||
NET INCOME (LOSS) |
185 |
23 |
(197) |
11 |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(1) |
(1) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
185 |
$ |
23 |
$ |
(198) |
$ |
10 |
(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-4 |
|||||||||||||||
|
|||||||||||||||
REVENUES AND PROFIT BY SEGMENT for the three months ended (In millions) (Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
98 |
$ |
— |
$ |
— |
$ |
98 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
17 |
— |
— |
17 |
|||||||||||
Management fee revenues |
37 |
4 |
(5) |
36 |
|||||||||||
Exchange and other services revenues |
28 |
45 |
50 |
123 |
|||||||||||
Management and exchange |
82 |
49 |
45 |
176 |
|||||||||||
Rental |
46 |
10 |
— |
56 |
|||||||||||
Financing |
64 |
— |
— |
64 |
|||||||||||
Cost reimbursements(1) |
281 |
12 |
(38) |
255 |
|||||||||||
TOTAL REVENUES |
$ |
571 |
$ |
71 |
$ |
7 |
$ |
649 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
(7) |
$ |
— |
$ |
— |
$ |
(7) |
|||||||
Management and exchange(1) |
55 |
22 |
(7) |
70 |
|||||||||||
Rental(1) |
(40) |
8 |
14 |
(18) |
|||||||||||
Financing |
40 |
— |
— |
40 |
|||||||||||
TOTAL PROFIT |
48 |
30 |
7 |
85 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(32) |
(32) |
|||||||||||
Depreciation and amortization |
(20) |
(8) |
(2) |
(30) |
|||||||||||
Litigation charges |
(2) |
— |
— |
(2) |
|||||||||||
Restructuring |
(11) |
(3) |
(6) |
(20) |
|||||||||||
Royalty fee |
(23) |
— |
— |
(23) |
|||||||||||
Impairment |
(1) |
(1) |
— |
(2) |
|||||||||||
Gains (losses) and other income (expense), net |
6 |
(5) |
(1) |
— |
|||||||||||
Interest expense |
— |
— |
(37) |
(37) |
|||||||||||
Transaction and integration costs |
— |
— |
(11) |
(11) |
|||||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND |
(3) |
13 |
(82) |
(72) |
|||||||||||
Benefit from income taxes |
— |
— |
14 |
14 |
|||||||||||
NET (LOSS) INCOME |
(3) |
13 |
(68) |
(58) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(4) |
(4) |
|||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO |
$ |
(3) |
$ |
13 |
$ |
(72) |
$ |
(62) |
(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 |
|||||||||||||||
|
|||||||||||||||
REVENUES AND PROFIT BY SEGMENT for the nine months ended (In millions) (Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
789 |
$ |
— |
$ |
— |
$ |
789 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
135 |
2 |
— |
137 |
|||||||||||
Management fee revenues |
117 |
24 |
(15) |
126 |
|||||||||||
Exchange and other services revenues |
91 |
153 |
131 |
375 |
|||||||||||
Management and exchange |
343 |
179 |
116 |
638 |
|||||||||||
Rental |
308 |
32 |
— |
340 |
|||||||||||
Financing |
196 |
— |
— |
196 |
|||||||||||
Cost reimbursements(1) |
882 |
38 |
(93) |
827 |
|||||||||||
TOTAL REVENUES |
$ |
2,518 |
$ |
249 |
$ |
23 |
$ |
2,790 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
172 |
$ |
— |
$ |
— |
$ |
172 |
|||||||
Management and exchange(1) |
207 |
80 |
(30) |
257 |
|||||||||||
Rental(1) |
20 |
32 |
41 |
93 |
|||||||||||
Financing |
132 |
— |
— |
132 |
|||||||||||
TOTAL PROFIT |
531 |
112 |
11 |
654 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(166) |
(166) |
|||||||||||
Depreciation and amortization |
(66) |
(40) |
(6) |
(112) |
|||||||||||
Litigation charges |
(7) |
— |
(1) |
(8) |
|||||||||||
Restructuring |
— |
(1) |
1 |
— |
|||||||||||
Royalty fee |
(78) |
— |
— |
(78) |
|||||||||||
Impairment |
— |
— |
(5) |
(5) |
|||||||||||
Gains and other income, net |
— |
— |
(27) |
(27) |
|||||||||||
Interest expense |
— |
— |
(128) |
(128) |
|||||||||||
Transaction and integration costs |
(2) |
— |
(73) |
(75) |
|||||||||||
Other |
2 |
— |
— |
2 |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
380 |
71 |
(394) |
57 |
|||||||||||
Benefit from income taxes |
— |
— |
(63) |
(63) |
|||||||||||
NET INCOME (LOSS) |
380 |
71 |
(457) |
(6) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(6) |
(6) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
380 |
$ |
71 |
$ |
(463) |
$ |
(12) |
(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 |
|||||||||||||||
|
|||||||||||||||
REVENUES AND PROFIT BY SEGMENT for the nine months ended (In millions) (Unaudited) |
|||||||||||||||
Reportable Segment |
Corporate and |
Total |
|||||||||||||
Vacation |
Exchange & |
||||||||||||||
REVENUES |
|||||||||||||||
Sales of vacation ownership products |
$ |
409 |
$ |
— |
$ |
— |
$ |
409 |
|||||||
Management and exchange(1) |
|||||||||||||||
Ancillary revenues |
69 |
1 |
— |
70 |
|||||||||||
Management fee revenues |
113 |
14 |
(14) |
113 |
|||||||||||
Exchange and other services revenues |
85 |
145 |
135 |
365 |
|||||||||||
Management and exchange |
267 |
160 |
121 |
548 |
|||||||||||
Rental |
180 |
29 |
— |
209 |
|||||||||||
Financing |
204 |
2 |
— |
206 |
|||||||||||
Cost reimbursements(1) |
824 |
45 |
(102) |
767 |
|||||||||||
TOTAL REVENUES |
$ |
1,884 |
$ |
236 |
$ |
19 |
$ |
2,139 |
|||||||
PROFIT |
|||||||||||||||
Development(2) |
$ |
2 |
$ |
— |
$ |
— |
$ |
2 |
|||||||
Management and exchange(1) |
162 |
67 |
(23) |
206 |
|||||||||||
Rental(1) |
(100) |
21 |
43 |
(36) |
|||||||||||
Financing(3) |
120 |
1 |
— |
121 |
|||||||||||
TOTAL PROFIT |
184 |
89 |
20 |
293 |
|||||||||||
OTHER |
|||||||||||||||
General and administrative |
— |
— |
(121) |
(121) |
|||||||||||
Depreciation and amortization |
(61) |
(24) |
(8) |
(93) |
|||||||||||
Litigation charges |
(4) |
— |
— |
(4) |
|||||||||||
Restructuring |
(11) |
(3) |
(6) |
(20) |
|||||||||||
Royalty fee |
(72) |
— |
— |
(72) |
|||||||||||
Impairment |
(6) |
(92) |
— |
(98) |
|||||||||||
Gains (losses) and other income (expense), net |
12 |
(5) |
(49) |
(42) |
|||||||||||
Interest expense |
— |
— |
(112) |
(112) |
|||||||||||
Transaction and integration costs |
(3) |
— |
(44) |
(47) |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND |
39 |
(35) |
(320) |
(316) |
|||||||||||
Benefit from income taxes |
— |
— |
91 |
91 |
|||||||||||
NET INCOME (LOSS) |
39 |
(35) |
(229) |
(225) |
|||||||||||
Net income attributable to noncontrolling interests(1) |
— |
— |
(13) |
(13) |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO |
$ |
39 |
$ |
(35) |
$ |
(242) |
$ |
(238) |
(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 |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
Net income (loss) attributable to common shareholders |
$ |
10 |
$ |
(62) |
$ |
(12) |
$ |
(238) |
|||||||
Provision for (benefit from) income taxes |
47 |
(14) |
63 |
(91) |
|||||||||||
Income (loss) before income taxes attributable to common |
57 |
(76) |
51 |
(329) |
|||||||||||
Certain items:(1) |
|||||||||||||||
Litigation charges |
2 |
2 |
8 |
4 |
|||||||||||
Losses and other expense, net |
31 |
— |
27 |
42 |
|||||||||||
Transaction and integration costs |
27 |
11 |
75 |
47 |
|||||||||||
Impairment charges |
— |
2 |
5 |
98 |
|||||||||||
Purchase price adjustments(2) |
5 |
17 |
7 |
47 |
|||||||||||
COVID-19 related adjustments |
— |
16 |
(2) |
64 |
|||||||||||
Other(3) |
(4) |
— |
(6) |
4 |
|||||||||||
Adjusted pretax income (loss) ** |
118 |
(28) |
165 |
(23) |
|||||||||||
(Provision for) benefit from income taxes |
(48) |
(5) |
(78) |
7 |
|||||||||||
Adjusted net income (loss) attributable to common |
$ |
70 |
$ |
(33) |
$ |
87 |
$ |
(16) |
|||||||
Diluted shares |
43.7 |
41.2 |
43.2 |
41.3 |
|||||||||||
Adjusted earnings (loss) per share - Diluted ** |
$ |
1.60 |
$ |
(0.81) |
$ |
2.01 |
$ |
(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 for the three and nine months ended |
|||||||||||||||
(3) 2021 amounts include eliminating the impact of consolidating property owners' associations. |
A-8 |
|||||||||||||||
|
|||||||||||||||
ADJUSTED EBITDA (In millions) (Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON |
$ |
10 |
$ |
(62) |
$ |
(12) |
$ |
(238) |
|||||||
Interest expense |
41 |
37 |
128 |
112 |
|||||||||||
Provision for (benefit from) income taxes |
47 |
(14) |
63 |
(91) |
|||||||||||
Depreciation and amortization |
35 |
30 |
112 |
93 |
|||||||||||
Share-based compensation |
11 |
11 |
33 |
24 |
|||||||||||
Certain items before income taxes: |
|||||||||||||||
Litigation charges |
2 |
2 |
8 |
4 |
|||||||||||
Losses and other expense, net: |
|||||||||||||||
Dispositions |
— |
(1) |
— |
(1) |
|||||||||||
Hurricane business interruption insurance claims |
— |
— |
— |
(4) |
|||||||||||
Various tax related matters |
(8) |
— |
(6) |
26 |
|||||||||||
Redemption premium from debt repayment |
36 |
— |
36 |
— |
|||||||||||
Foreign currency translation |
2 |
1 |
(4) |
25 |
|||||||||||
Other |
1 |
— |
1 |
(4) |
|||||||||||
Transaction and integration costs |
27 |
11 |
75 |
47 |
|||||||||||
Impairment charges |
— |
2 |
5 |
98 |
|||||||||||
Purchase price adjustments |
5 |
2 |
7 |
4 |
|||||||||||
COVID-19 related adjustments: |
|||||||||||||||
Sales reserve adjustment, net |
— |
— |
— |
37 |
|||||||||||
Accrual for health and welfare costs for furloughed |
— |
(4) |
(2) |
7 |
|||||||||||
Restructuring |
— |
20 |
— |
20 |
|||||||||||
Other(1) |
(4) |
— |
(6) |
4 |
|||||||||||
ADJUSTED EBITDA** |
$ |
205 |
$ |
35 |
$ |
438 |
$ |
163 |
** 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 |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
Consolidated contract sales |
$ |
380 |
$ |
140 |
$ |
968 |
$ |
476 |
|||||||
Less resales contract sales |
(7) |
(1) |
(19) |
(9) |
|||||||||||
Consolidated contract sales, net of resales |
373 |
139 |
949 |
467 |
|||||||||||
Plus: |
|||||||||||||||
Settlement revenue |
8 |
4 |
21 |
12 |
|||||||||||
Resales revenue |
5 |
1 |
8 |
6 |
|||||||||||
Revenue recognition adjustments: |
|||||||||||||||
Reportability |
2 |
(18) |
(51) |
48 |
|||||||||||
Sales reserve |
(31) |
(10) |
(73) |
(90) |
|||||||||||
Other(1) |
(27) |
(18) |
(65) |
(34) |
|||||||||||
Sale of vacation ownership products |
330 |
98 |
789 |
409 |
|||||||||||
Less: |
|||||||||||||||
Cost of vacation ownership products |
(71) |
(27) |
(178) |
(110) |
|||||||||||
Marketing and sales |
(166) |
(78) |
(439) |
(297) |
|||||||||||
Development Profit |
93 |
(7) |
172 |
2 |
|||||||||||
Revenue recognition reportability adjustment |
(1) |
12 |
38 |
(32) |
|||||||||||
Other(2) |
6 |
1 |
9 |
30 |
|||||||||||
Adjusted development profit ** |
$ |
98 |
$ |
6 |
$ |
219 |
$ |
— |
|||||||
Development profit margin(3) |
28.0% |
(7.4%) |
21.8% |
0.5% |
|||||||||||
Adjusted development profit margin(3) |
29.5% |
5.2% |
26.2% |
(0.1%) |
** 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) Primarily includes purchase price adjustments for the three and nine 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 |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO |
$ |
185 |
$ |
(3) |
$ |
380 |
$ |
39 |
|||||||
Depreciation and amortization |
24 |
20 |
66 |
61 |
|||||||||||
Share-based compensation expense |
1 |
2 |
4 |
4 |
|||||||||||
Certain items: |
|||||||||||||||
Litigation charges |
1 |
2 |
7 |
4 |
|||||||||||
Gains and other income, net: |
|||||||||||||||
Dispositions |
— |
(6) |
— |
(6) |
|||||||||||
Hurricane business interruption net insurance proceeds |
— |
— |
— |
(4) |
|||||||||||
Foreign currency translation |
— |
— |
— |
(1) |
|||||||||||
Other |
— |
— |
— |
(1) |
|||||||||||
Transaction and integration costs |
1 |
— |
2 |
3 |
|||||||||||
Impairment charges |
— |
1 |
— |
6 |
|||||||||||
Purchase price adjustments |
5 |
1 |
7 |
3 |
|||||||||||
COVID-19 related adjustments: |
|||||||||||||||
Sales reserve adjustment, net |
— |
— |
— |
37 |
|||||||||||
Restructuring |
(1) |
11 |
— |
11 |
|||||||||||
Other |
(1) |
— |
(1) |
— |
|||||||||||
SEGMENT ADJUSTED EBITDA ** |
$ |
215 |
$ |
28 |
$ |
465 |
$ |
156 |
|||||||
EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September |
September |
September |
September |
||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO |
$ |
23 |
$ |
13 |
$ |
71 |
$ |
(35) |
|||||||
Depreciation and amortization |
11 |
8 |
40 |
24 |
|||||||||||
Share-based compensation expense |
— |
— |
1 |
1 |
|||||||||||
Certain items: |
|||||||||||||||
Losses and other expense, net: |
|||||||||||||||
Dispositions |
— |
5 |
— |
5 |
|||||||||||
Foreign currency translation |
— |
(1) |
— |
2 |
|||||||||||
Other |
— |
1 |
— |
(2) |
|||||||||||
Impairment charges |
— |
1 |
— |
92 |
|||||||||||
Purchase price adjustments |
— |
1 |
— |
1 |
|||||||||||
COVID-19 related adjustments: |
|||||||||||||||
Restructuring |
1 |
3 |
1 |
3 |
|||||||||||
SEGMENT ADJUSTED EBITDA ** |
$ |
35 |
$ |
31 |
$ |
113 |
$ |
91 |
** 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 |
|||||||
|
|||||||
CONSOLIDATED BALANCE SHEETS (In millions, except share and per share data) |
|||||||
Unaudited |
|||||||
|
|
||||||
ASSETS |
|||||||
Cash and cash equivalents |
$ |
448 |
$ |
524 |
|||
Restricted cash (including |
434 |
468 |
|||||
Accounts receivable, net (including |
223 |
276 |
|||||
Vacation ownership notes receivable, net (including |
2,026 |
1,840 |
|||||
Inventory |
741 |
759 |
|||||
Property and equipment, net |
1,077 |
791 |
|||||
|
3,086 |
2,817 |
|||||
Intangibles, net |
1,007 |
952 |
|||||
Other (including |
501 |
471 |
|||||
TOTAL ASSETS |
$ |
9,543 |
$ |
8,898 |
|||
LIABILITIES AND EQUITY |
|||||||
Accounts payable |
$ |
190 |
$ |
209 |
|||
Advance deposits |
166 |
147 |
|||||
Accrued liabilities (including |
375 |
349 |
|||||
Deferred revenue |
540 |
488 |
|||||
Payroll and benefits liability |
201 |
157 |
|||||
Deferred compensation liability |
135 |
127 |
|||||
Securitized debt, net (including |
1,594 |
1,588 |
|||||
Debt, net |
2,795 |
2,680 |
|||||
Other |
218 |
197 |
|||||
Deferred taxes |
325 |
274 |
|||||
TOTAL LIABILITIES |
6,539 |
6,216 |
|||||
Contingencies and Commitments (Note 11) |
|||||||
Preferred stock — |
— |
— |
|||||
Common stock — |
1 |
1 |
|||||
|
(1,282) |
(1,334) |
|||||
Additional paid-in capital |
4,056 |
3,760 |
|||||
Accumulated other comprehensive loss |
(39) |
(48) |
|||||
Retained earnings |
237 |
272 |
|||||
TOTAL MVW SHAREHOLDERS' EQUITY |
2,973 |
2,651 |
|||||
Noncontrolling interests |
31 |
31 |
|||||
TOTAL EQUITY |
3,004 |
2,682 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
9,543 |
$ |
8,898 |
|||
The abbreviation VIEs above means Variable Interest Entities. |
A-12 |
|||||||
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
|||||||
Nine Months Ended |
|||||||
|
|
||||||
OPERATING ACTIVITIES |
|||||||
Net loss |
$ |
(6) |
$ |
(225) |
|||
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash |
|||||||
Depreciation and amortization of intangibles |
112 |
93 |
|||||
Amortization of debt discount and issuance costs |
41 |
16 |
|||||
Vacation ownership notes receivable reserve |
73 |
97 |
|||||
Share-based compensation |
33 |
23 |
|||||
Impairment charges |
5 |
98 |
|||||
Deferred income taxes |
10 |
1 |
|||||
Net change in assets and liabilities: |
|||||||
Accounts receivable |
54 |
24 |
|||||
Vacation ownership notes receivable originations |
(545) |
(265) |
|||||
Vacation ownership notes receivable collections |
532 |
487 |
|||||
Inventory |
59 |
(4) |
|||||
Other assets |
(29) |
57 |
|||||
Accounts payable, advance deposits and accrued liabilities |
(44) |
(231) |
|||||
Deferred revenue |
119 |
57 |
|||||
Payroll and benefit liabilities |
35 |
— |
|||||
Deferred compensation liability |
14 |
8 |
|||||
Other liabilities |
23 |
(11) |
|||||
Deconsolidation of certain Consolidated Property Owners' Associations |
(87) |
— |
|||||
Purchase of vacation ownership units for future transfer to inventory |
(99) |
(61) |
|||||
Other, net |
3 |
(6) |
|||||
Net cash, cash equivalents and restricted cash provided by operating activities |
303 |
158 |
|||||
INVESTING ACTIVITIES |
|||||||
Acquisition of a business, net of cash and restricted cash acquired |
(157) |
— |
|||||
Capital expenditures for property and equipment (excluding inventory) |
(19) |
(36) |
|||||
Purchase of company owned life insurance |
(11) |
(3) |
|||||
Dispositions, net |
— |
15 |
|||||
Net cash, cash equivalents and restricted cash used in investing activities |
(187) |
(24) |
|||||
FINANCING ACTIVITIES |
|||||||
Borrowings from securitization transactions |
425 |
690 |
|||||
Repayment of debt related to securitization transactions |
(602) |
(793) |
|||||
Proceeds from debt |
1,061 |
1,166 |
|||||
Repayments of debt |
(1,039) |
(703) |
|||||
Purchase of convertible note hedges |
(100) |
— |
|||||
Proceeds from issuance of warrants |
70 |
— |
|||||
Finance lease payment |
(2) |
(10) |
|||||
Payment of debt issuance costs |
(17) |
(14) |
|||||
Repurchase of common stock |
(4) |
(82) |
|||||
Payment of dividends |
— |
(45) |
|||||
Payment of withholding taxes on vesting of restricted stock units |
(17) |
(14) |
|||||
Net cash, cash equivalents and restricted cash (used in) provided by financing activities |
(225) |