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

Oct 31, 2022

ORLANDO, Fla., Oct. 31, 2022 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) (the "Company") reported third quarter 2022 financial results.

In the third quarter of 2022, in connection with the unification of the Company's Marriott-, Westin-, and Sheraton-branded vacation ownership products under the Abound by Marriott Vacations program, the Company aligned its contract terms for the sale of vacation ownership products, resulting in the prospective acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology on vacation ownership notes receivable for these brands, resulting in a decrease in the reserve for the acquired notes offset by an increase in the reserve for the originated notes. Together, these changes are hereinafter referred to as the "Alignment." As a result of the Alignment, the Company reported an additional $33 million of Net income attributable to common shareholders and an additional $44 million of Adjusted EBITDA during the quarter. The tables and financial schedules below illustrate the impact of the Alignment on the Company's reported results.

Third Quarter 2022 Highlights:

  • Consolidated Vacation Ownership contract sales were $483 million, a 27% increase compared to the third quarter of 2021, and VPG increased 1% to $4,353.
     
  • Net income attributable to common shareholders was $109 million, or $2.53 fully diluted earnings per share; excluding the impact of the Alignment, net income attributable to common shareholders was $76 million, or $1.79 fully diluted earnings per share.
     
  • Adjusted net income attributable to common shareholders was $131 million, or $3.02 adjusted fully diluted earnings per share; excluding the impact of the Alignment, adjusted net income attributable to common shareholders was $98 million, or $2.28 adjusted fully diluted earnings per share.
     
  • Adjusted EBITDA was $284 million; excluding the impact of the Alignment, Adjusted EBITDA was $240 million, an increase of 17% compared to the prior year.
     
  • The Company repurchased nearly 1.7 million shares of its common stock for $216 million during the quarter at an average price per share of $129.

"Despite the challenging macroeconomic backdrop, we had a very strong third quarter, growing contract sales by 27% compared to the prior year driven by strong tour growth," said Stephen P. Weisz, chief executive officer. "With continued growth in our business, we've returned more than $600 million in cash to shareholders this year through a combination of share repurchases and dividends."

Third Quarter 2022 Results

The tables below illustrate the impact of the Alignment on the Company's reported results. In the tables below "*" denotes non-GAAP financial measures and "NM" is not meaningful. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.

Consolidated

     

Three Months Ended September 30, 2022

  

Three Months

Ended

 September 30,

2021

  

Change
     

As

Reported

  

Impact of Alignment

  

As

Adjusted*

    

As

Reported

  

As

Adjusted*

($ in millions)

      

Revenue

  

Reserve

  

Combined

      

$

  

%

  

$

  

%

Net income attributable to common shareholders

    

$        109

  

$      (29)

  

$         (4)

  

$         (33)

  

$           76

  

$           10

  

$ 99

  

NM

  

$ 66

  

NM

Adjusted net income attributable to common shareholders*

    

$        131

  

$      (29)

  

$         (4)

  

$         (33)

  

$           98

  

$           70

  

$ 61

  

87 %

  

$ 28

  

41 %

Adjusted EBITDA*

    

$        284

  

$      (39)

  

$        (5)

  

$         (44)

  

$         240

  

$         205

  

$ 79

  

38 %

  

$ 35

  

17 %

 

Vacation Ownership

   

Three Months Ended September 30, 2022

  

Three Months

Ended

 September 30,

2021

  

Change
   

As

Reported

  

Impact of Alignment

  

As

Adjusted*

    

As

Reported

  

As

Adjusted*

($ in millions)

    

Revenue

  

Reserve

  

Combined

      

$

  

%

  

$

  

%

Sale of vacation ownership products

  

$         444

  

$      (46)

  

$        19

  

$         (27)

  

$         417

  

$         330

  

$  114

  

34 %

  

$   87

  

26 %

Development profit

  

$         161

  

$      (39)

  

$        14

  

$         (25)

  

$         136

  

$           93

  

$    68

  

73 %

  

$   43

  

47 %

Financing profit

  

$           69

  

$       —

  

$       (19)

  

$         (19)

  

$           50

  

$           47

  

$    22

  

47 %

  

$     3

  

6 %

Segment financial results attributable to common shareholders

  

$         270

  

$      (29)

  

$         (4)

  

$         (33)

  

$         237

  

$         185

  

$    85

  

46 %

  

$   52

  

29 %

Segment margin

  

33.5 %

              

30.6 %

  

28.6 %

  

4.9 pts

  

2.0 pts

Segment Adjusted EBITDA*

  

$         299

  

$      (39)

  

$         (5)

  

$         (44)

  

$         255

  

$         215

  

$    84

  

39 %

  

$   40

  

19 %

Segment Adjusted EBITDA margin*

  

37.1 %

              

32.7 %

  

33.2 %

  

3.9 pts

  

(0.5 pts)

 

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 3% in the third quarter of 2022 compared to the prior year and increased 11% excluding the sale of VRI Americas in April of 2022. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 9% compared to the prior year as the new accounts Interval International added earlier this year continue to ramp up.

Segment financial results attributable to common shareholders were $29 million in the third quarter of 2022 and Segment margin was 44%. Segment Adjusted EBITDA increased $4 million to $39 million compared to the prior year, with Segment Adjusted EBITDA margin increasing 500 basis points compared to the third quarter of 2021 to 58%.

Corporate and Other

General and administrative costs increased $8 million in the third quarter of 2022 compared to the prior year primarily as a result of higher compensation and transformational initiative spending, including procurement and artificial intelligence capabilities.

Balance Sheet and Liquidity

The Company ended the quarter with approximately $1.0 billion in liquidity, including $294 million of cash and cash equivalents, $142 million of gross notes receivable that were eligible for securitization, and $519 million of available capacity under its revolving corporate credit facility.

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

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

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

The Company is providing updated guidance, which includes the impact of the Alignment as reflected in the chart below, for the full year 2022. In the table below "*" denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.

(in millions, except per share amounts)

  

2022 Guidance

  

Impact of
Alignment

Income before income taxes attributable to common shareholders

  

$564

to

$579

  

$50

Net income attributable to common shareholders

  

$390

to

$400

  

$37

Earnings per share - diluted

  

$8.76

to

$8.98

  

$0.82

Net cash, cash equivalents and restricted cash provided

            

by operating activities 

  

$575

to

$590

  

$—

Contract sales

  

$1,820

to

$1,860

  

$—

Adjusted EBITDA*

  

$950

to

$975

  

$50

Adjusted pretax net income*

  

$660

to

$685

  

$50

Adjusted net income attributable to common shareholders*

  

$455

to

$475

  

$37

Adjusted earnings per share - diluted*

  

$10.20

to

$10.64

  

$0.82

Adjusted free cash flow*

  

$670

to

$730

  

$—

Non-GAAP Financial Information

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

Third Quarter 2022 Financial Results Conference Call

The Company will hold a conference call on November 1, 2022 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company's website.

About Marriott Vacations Worldwide Corporation

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

Note on forward-looking statements

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

Financial Schedules Follow

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

  

FINANCIAL SCHEDULES

  

QUARTER 3, 2022

  
   

TABLE OF CONTENTS 

  
   

Summary Financial Information

  

A-1

  

Adjusted EBITDA by Segment

  

A-2

  

Consolidated Statements of Income

  

A-3

  

Revenues and Profit by Segment

  

A-5

  

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

  

A-9

  

Adjusted EBITDA

  

A-10

  

Consolidated Contract Sales to Adjusted Development Profit

 

A-11

  

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

  

A-13

  

Consolidated Balance Sheets

  

A-14

  

Consolidated Statements of Cash Flows

  

A-15

  

2022 Outlook

      

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

      

and Adjusted EBITDA

  

A-17

  

Adjusted Free Cash Flow

  

A-18

  

Quarterly Operating Metrics

  

A-19

  

Non-GAAP Financial Measures

  

A-20

  

 

A-1
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
 

SUMMARY FINANCIAL INFORMATION

(In millions, except VPG, tours, total active members, average revenue per member and per share amounts)

(Unaudited)
 
   

Three Months Ended

  

Change %

  

Nine Months Ended

  

Change %
   

September 30,

2022

  

September 30,

2021

    

September 30,

2022

  

September 30,

2021

  

Key Measures

                        

Total consolidated contract sales

  

$         483

  

$         380

  

27 %

  

$      1,383

  

$          968

  

43 %

VPG

  

$      4,353

  

$      4,300

  

1 %

  

$      4,544

  

$       4,377

  

4 %

Tours

  

104,000

  

84,098

  

24 %

  

285,362

  

209,869

  

36 %

Total active members (000's)(1)

  

1,591

  

1,313

  

21 %

  

1,591

  

1,313

  

21 %

Average revenue per member(1)

  

$      38.91

  

$      42.95

  

(9 %)

  

$    122.30

  

$     136.57

  

(10 %)
                         

GAAP Measures

                        

Revenues

  

$      1,252

  

$      1,052

  

19 %

  

$      3,468

  

$      2,790

  

24 %

Income before income taxes and noncontrolling interests

  

$         169

  

$           58

  

NM

  

$         437

  

$           57

  

NM

Net income (loss) attributable to common shareholders

  

$         109

  

$           10

  

NM

  

$         303

  

$          (12)

  

NM

Earnings (loss) per share - diluted

  

$        2.53

  

$        0.23

  

NM

  

$        6.68

  

$       (0.28)

  

NM
                         

Non-GAAP Measures*

                        

Adjusted EBITDA

  

$         284

  

$         205

  

38 %

  

$         727

  

$         438

  

66 %

Adjusted pretax income

  

$         207

  

$         118

  

74 %

  

$         508

  

$         165

  

NM

Adjusted net income attributable to common shareholders

 

$         131

  

$           70

  

87 %

  

$         343

  

$           87

  

NM

Adjusted earnings per share - diluted

 

$        3.02

  

$        1.60

  

89 %

  

$        7.53

  

$        2.01

  

NM
                         

Financial Measures, Excluding the Impact of Alignment*

                

Revenues

  

$      1,225

  

$      1,052

  

16 %

  

$      3,441

  

$      2,790

  

23 %

Income before income taxes and noncontrolling interests

  

$         125

  

$           58

  

NM

  

$         393

  

$           57

  

NM

Net income (loss) attributable to common shareholders

  

$           76

  

$           10

  

NM

  

$         270

  

$          (12)

  

NM

Earnings (loss) per share - diluted

  

$        1.79

  

$        0.23

  

NM

  

$        5.99

  

$       (0.28)

  

NM

Adjusted EBITDA

  

$         240

  

$         205

  

17 %

  

$         683

  

$         438

  

56 %

Adjusted pretax income

  

$         163

  

$         118

  

38 %

  

$         464

  

$         165

  

NM

Adjusted net income attributable to common shareholders

  

$           98

  

$           70

  

41 %

  

$         310

  

$           87

  

NM

Adjusted earnings per share - diluted

  

$        2.28

  

$        1.60

  

43 %

  

$        6.83

  

$        2.01

  

NM
 

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

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

NM = Not meaningful.
 

 

A-2
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
 

ADJUSTED EBITDA BY SEGMENT

(In millions)

(Unaudited)
 
   

Three Months Ended September 30, 2022

  

Three Months

Ended

September 30,

2021

  

Change
   

As
Reported

  

Impact of Alignment

  

As

Adjusted*

    

As

Reported

  

As

Adjusted*
     

Revenue

  

Reserve

  

Combined

        

Vacation Ownership

  

$        299

  

$     (39)

  

$       (5)

  

$           (44)

  

$        255

  

$         215

  

39 %

  

19 %

Exchange & Third-Party Management

  

39

  

—

  

—

  

—

  

39

  

35

  

7 %

  

7 %

Segment Adjusted EBITDA*

  

338

  

(39)

  

(5)

  

(44)

  

294

  

250

  

35 %

  

17 %

General and administrative

  

(54)

  

—

  

—

  

—

  

(54)

  

(45)

  

(17 %)

  

(17 %)

Adjusted EBITDA*

  

$        284

  

$     (39)

  

$       (5)

  

$           (44)

  

$        240

  

$         205

  

38 %

  

17 %
     
     
   

Nine Months Ended September 30, 2022

  

Nine Months

Ended

September 30,

2021

  

Change
   

As

Reported

  

Impact of Alignment

  

As

Adjusted*

    

As

Reported

  

As

Adjusted*
     

Revenue

  

Reserve

  

Combined

        

Vacation Ownership

  

$        772

  

$     (39)

  

$       (5)

  

$           (44)

  

$        728

  

$         465

  

66 %

  

57 %

Exchange & Third-Party Management

  

117

  

—

  

—

  

—

  

117

  

113

  

2 %

  

2 %

Segment Adjusted EBITDA*

  

889

  

(39)

  

(5)

  

(44)

  

845

  

578

  

54 %

  

46 %

General and administrative

  

(162)

  

—

  

—

  

—

  

(162)

  

(140)

  

(15 %)

  

(15 %)

Adjusted EBITDA*

  

$        727

  

$     (39)

  

$       (5)

  

$           (44)

  

$        683

  

$         438

  

66 %

  

56 %
 

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

 

A-3
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
 

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)
 
   

Three Months Ended
   

September 30, 2022

  

September 30,

2021
   

As

Reported

  

Impact of

Alignment

  

As

Adjusted*

  

REVENUES

                

Sale of vacation ownership products

  

$               444

  

$               (27)

  

$               417

  

$               330

Management and exchange

  

198

  

—

  

198

  

225

Rental

  

165

  

—

  

165

  

130

Financing

  

74

  

—

  

74

  

69

Cost reimbursements

  

371

  

—

  

371

  

298

TOTAL REVENUES

  

1,252

  

(27)

  

1,225

  

1,052

EXPENSES

                

Cost of vacation ownership products

  

76

  

(2)

  

74

  

71

Marketing and sales

  

207

  

—

  

207

  

166

Management and exchange

  

101

  

—

  

101

  

138

Rental

  

126

  

—

  

126

  

84

Financing

  

5

  

19

  

24

  

22

General and administrative

  

62

  

—

  

62

  

54

Depreciation and amortization

  

33

  

—

  

33

  

35

Litigation charges

  

2

  

—

  

2

  

2

Royalty fee

  

28

  

—

  

28

  

26

Impairment

  

1

  

—

  

1

  

—

Cost reimbursements

  

371

  

—

  

371

  

298

TOTAL EXPENSES

  

1,012

  

17

  

1,029

  

896

Losses and other expense, net

  

(2)

  

—

  

(2)

  

(31)

Interest expense

  

(34)

  

—

  

(34)

  

(41)

Transaction and integration costs

  

(34)

  

—

  

(34)

  

(27)

Other

  

(1)

  

—

  

(1)

  

1

INCOME BEFORE INCOME TAXES AND

               

NONCONTROLLING INTERESTS

  

169

  

(44)

  

125

  

58

Provision for income taxes

  

(59)

  

11

  

(48)

  

(47)

NET INCOME (LOSS)

  

110

  

(33)

  

77

  

11

Net income attributable to noncontrolling interests

  

(1)

  

—

  

(1)

  

(1)

NET INCOME (LOSS) ATTRIBUTABLE TO

    

COMMON SHAREHOLDERS

  

$               109

  

$               (33)

  

$                 76

  

$                 10
                 

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO

                

COMMON SHAREHOLDERS

                

Basic

  

$              2.76

  

$            (0.80)

  

$              1.96

  

$              0.24

Diluted

  

$              2.53

  

$            (0.74)

  

$              1.79

  

$              0.23
               

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

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

 

A-4
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
 

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)
 
   

Nine Months Ended
   

September 30, 2022

  

September 30,

2021
   

As

Reported

  

Impact of

Alignment

  

As

Adjusted*

  

REVENUES

                

Sale of vacation ownership products

  

$            1,179

  

$               (27)

  

$            1,152

  

$               789

Management and exchange

  

623

  

—

  

623

  

638

Rental

  

438

  

—

  

438

  

340

Financing

  

217

  

—

  

217

  

196

Cost reimbursements

  

1,011

  

—

  

1,011

  

827

TOTAL REVENUES

  

3,468

  

(27)

  

3,441

  

2,790

EXPENSES

                

Cost of vacation ownership products

  

216

  

(2)

  

214

  

178

Marketing and sales

  

603

  

—

  

603

  

439

Management and exchange

  

330

  

—

  

330

  

381

Rental

  

294

  

—

  

294

  

247

Financing

  

49

  

19

  

68

  

64

General and administrative

  

187

  

—

  

187

  

166

Depreciation and amortization

  

98

  

—

  

98

  

112

Litigation charges

  

7

  

—

  

7

  

8

Royalty fee

  

84

  

—

  

84

  

78

Impairment

  

1

  

—

  

1

  

5

Cost reimbursements

  

1,011

  

—

  

1,011

  

827

TOTAL EXPENSES

  

2,880

  

17

  

2,897

  

2,505

Gains (losses) and other income (expense), net

  

39

  

—

  

39

  

(27)

Interest expense

  

(91)

  

—

  

(91)

  

(128)

Transaction and integration costs

  

(99)

  

—

  

(99)

  

(75)

Other

  

—

  

—

  

—

  

2

INCOME BEFORE INCOME TAXES AND

                

NONCONTROLLING INTERESTS

  

437

  

(44)

  

393

  

57

Provision for income taxes

  

(134)

  

11

  

(123)

  

(63)

NET INCOME (LOSS)

  

303

  

(33)

  

270

  

(6)

Net income attributable to noncontrolling interests

  

—

  

—

  

—

  

(6)

NET INCOME (LOSS) ATTRIBUTABLE TO

    

COMMON SHAREHOLDERS

  

$               303

  

$                (33)

  

$               270

  

$               (12)
                 

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO

                

COMMON SHAREHOLDERS

                

Basic

  

$              7.39

  

$            (0.78)

  

$              6.61

  

$            (0.28)

Diluted

  

$              6.68

  

$            (0.69)

  

$              5.99

  

$            (0.28)
               

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

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

 

A-5
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT

for the three months ended September 30, 2022

(In millions)

(Unaudited)
 
   

Reportable Segment

  

Corporate

and

Other

  

Total
   

Vacation Ownership

  

Exchange &

Third-Party

Management

    

As

Reported

  

As

Adjusted*
   

As

Reported

  

Impact of

Alignment

  

As

Adjusted*

        

REVENUES

                            

Sales of vacation ownership products

  

$      444

  

$         (27)

  

$       417

  

$               —

  

$           —

  

$      444

  

$      417

Management and exchange(1)

                            

Ancillary revenues

  

63

  

—

  

63

  

1

  

—

  

64

  

64

Management fee revenues

  

41

  

—

  

41

  

7

  

(1)

  

47

  

47

Exchange and other services revenues

  

32

  

—

  

32

  

47

  

8

  

87

  

87

Management and exchange

  

136

  

—

  

136

  

55

  

7

  

198

  

198

Rental

  

154

  

—

  

154

  

11

  

—

  

165

  

165

Financing

  

74

  

—

  

74

  

—

  

—

  

74

  

74

Cost reimbursements(1)

  

374

  

—

  

374

  

5

  

(8)

  

371

  

371

TOTAL REVENUES

  

$   1,182

  

$         (27)

  

$    1,155

  

$               71

  

$           (1)

  

$   1,252

  

$   1,225
                             

PROFIT

                            

Development

  

$      161

  

$         (25)

  

$       136

  

$               —

  

$           —

  

$      161

  

$      136

Management and exchange(1)

  

72

  

—

  

72

  

27

  

(2)

  

97

  

97

Rental(1)

  

24

  

—

  

24

  

11

  

4

  

39

  

39

Financing

  

69

  

(19)

  

50

  

—

  

—

  

69

  

50

TOTAL PROFIT

  

326

  

(44)

  

282

  

38

  

2

  

366

  

322
                             

OTHER

                            

General and administrative

  

—

  

—

  

—

  

—

  

(62)

  

(62)

  

(62)

Depreciation and amortization

  

(23)

  

—

  

(23)

  

(8)

  

(2)

  

(33)

  

(33)

Litigation charges

  

(2)

  

—

  

(2)

  

—

  

—

  

(2)

  

(2)

Royalty fee

  

(28)

  

—

  

(28)

  

—

  

—

  

(28)

  

(28)

Impairment

  

(1)

  

—

  

(1)

  

—

  

—

  

(1)

  

(1)

Gains (losses) and other income (expense), net

  

1

  

—

  

1

  

(1)

  

(2)

  

(2)

  

(2)

Interest expense

  

—

  

—

  

—

  

—

  

(34)

  

(34)

  

(34)

Transaction and integration costs

  

(2)

  

—

  

(2)

  

—

  

(32)

  

(34)

  

(34)

Other

  

(1)

  

—

  

(1)

  

—

  

—

  

(1)

  

(1)

INCOME (LOSS) BEFORE INCOME

                            

TAXES AND NONCONTROLLING

                            

INTERESTS

  

270

  

(44)

  

226

  

29

  

(130)

  

169

  

125

Provision for income taxes

  

—

  

11

  

11

  

—

  

(59)

  

(59)

  

(48)

NET INCOME (LOSS)

  

270

  

(33)

  

237

  

29

  

(189)

  

110

  

77

Net income attributable to noncontrolling interests(1)

  

—

  

—

  

—

  

—

  

(1)

  

(1)

  

(1)

NET INCOME (LOSS)

    

ATTRIBUTABLE TO COMMON

    

SHAREHOLDERS

  

$      270

  

$         (33)

  

$       237

  

$               29

  

$      (190)

  

$      109

  

$        76

SEGMENT MARGIN(2)

  

34 %

      

31 %

  

44 %

            
                           

(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.

* 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-6
 

MARRIOTT VACATIONS WORLDWIDE CORPORATION
 

REVENUES AND PROFIT BY SEGMENT

for the three months ended September 30, 2021

(In millions)

(Unaudited)
 
   

Reportable Segment

  

Corporate and

Other

  

Total
   

Vacation

Ownership

  

Exchange &

Third-Party

Management

    

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

  

$                  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

                

NONCONTROLLING INTERESTS

  

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 COMMON

    

SHAREHOLDERS

  

$               185

  

$                  23

  

$               (198)

  

$                 10

SEGMENT MARGIN(2)

  

29 %

  

35 %

        
               

(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

REVENUES AND PROFIT BY SEGMENT

for the nine months ended September 30, 2022

(In millions)

(Unaudited)
 
   

Reportable Segment

  

Corporate

and

Other

  

Total
   

Vacation Ownership

  

Exchange &

Third-Party

Management

    

As

Reported

  

As

Adjusted*
   

As

Reported

  

Impact of

Alignment

  

As

Adjusted*

        

REVENUES

                            

Sales of vacation ownership products

  

$   1,179

  

$         (27)

  

$    1,152

  

$               —

  

$           —

  

$   1,179

  

$   1,152

Management and exchange(1)

                            

Ancillary revenues

  

183

  

—

  

183

  

3

  

—

  

186

  

186

Management fee revenues

  

124

  

—

  

124

  

28

  

(5)

  

147

  

147

Exchange and other services revenues

  

95

  

—

  

95

  

146

  

49

  

290

  

290

Management and exchange

  

402

  

—

  

402

  

177

  

44

  

623

  

623

Rental

  

405

  

—

  

405

  

33

  

—

  

438

  

438

Financing

  

217

  

—

  

217

  

—

  

—

  

217

  

217

Cost reimbursements(1)

  

1,026