(State or other jurisdiction | (Commission | (IRS Employer | ||||||||||||
of incorporation) | File Number) | Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Exhibit Number | Description | |||||||
Press release reporting financial results for the quarter ended September 30, 2022 | ||||||||
101 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
MARRIOTT VACATIONS WORLDWIDE CORPORATION | ||||||||
(Registrant) | ||||||||
Dated: October 31, 2022 | By: | /s/ Anthony E. Terry | ||||||
Name: | Anthony E. Terry | |||||||
Title: | Executive Vice President and Chief Financial Officer |
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% |
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) |
(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 | $— |
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 |
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. | |||||||||||||||||||||||||||||||||||
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. | ||
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. |
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. |
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. |
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. | |||||||||||||||||||||||
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 | — | 1,026 | 19 | (34) | 1,011 | 1,011 | ||||||||||||||||||||||||||||||||||
TOTAL REVENUES | $ | 3,229 | $ | (27) | $ | 3,202 | $ | 229 | $ | 10 | $ | 3,468 | $ | 3,441 | |||||||||||||||||||||||||||
PROFIT | |||||||||||||||||||||||||||||||||||||||||
Development | $ | 360 | $ | (25) | $ | 335 | $ | — | $ | — | $ | 360 | $ | 335 | |||||||||||||||||||||||||||
Management and exchange(1) | 224 | — | 224 | 84 | (15) | 293 | 293 | ||||||||||||||||||||||||||||||||||
Rental(1) | 94 | — | 94 | 33 | 17 | 144 | 144 | ||||||||||||||||||||||||||||||||||
Financing | 168 | (19) | 149 | — | — | 168 | 149 | ||||||||||||||||||||||||||||||||||
TOTAL PROFIT | 846 | (44) | 802 | 117 | 2 | 965 | 921 | ||||||||||||||||||||||||||||||||||
OTHER | |||||||||||||||||||||||||||||||||||||||||
General and administrative | — | — | — | — | (187) | (187) | (187) | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | (67) | — | (67) | (24) | (7) | (98) | (98) | ||||||||||||||||||||||||||||||||||
Litigation charges | (7) | — | (7) | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||
Royalty fee | (84) | — | (84) | — | — | (84) | (84) | ||||||||||||||||||||||||||||||||||
Impairment | (1) | — | (1) | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
Gains (losses) and other income (expense), net | 36 | — | 36 | 15 | (12) | 39 | 39 | ||||||||||||||||||||||||||||||||||
Interest expense | — | — | — | — | (91) | (91) | (91) | ||||||||||||||||||||||||||||||||||
Transaction and integration costs | (3) | — | (3) | — | (96) | (99) | (99) | ||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS | 720 | (44) | 676 | 108 | (391) | 437 | 393 | ||||||||||||||||||||||||||||||||||
Provision for income taxes | — | 11 | 11 | — | (134) | (134) | (123) | ||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) | 720 | (33) | 687 | 108 | (525) | 303 | 270 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests(1) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 720 | $ | (33) | $ | 687 | $ | 108 | $ | (525) | $ | 303 | $ | 270 | |||||||||||||||||||||||||||
SEGMENT MARGIN(2) | 33% | 32% | 52% | ||||||||||||||||||||||||||||||||||||||
(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. |
Reportable Segment | Corporate and Other | Total | |||||||||||||||||||||
Vacation Ownership | Exchange & Third-Party Management | ||||||||||||||||||||||
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 | $ | 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) | |||||||||||||||||||
Losses and other expense, net | — | — | (27) | (27) | |||||||||||||||||||
Interest expense | — | — | (128) | (128) | |||||||||||||||||||
Transaction and integration costs | (2) | — | (73) | (75) | |||||||||||||||||||
Other | 2 | — | — | 2 | |||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS | 380 | 71 | (394) | 57 | |||||||||||||||||||
Provision for 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 COMMON SHAREHOLDERS | $ | 380 | $ | 71 | $ | (463) | $ | (12) | |||||||||||||||
SEGMENT MARGIN(2) | 23% | 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. | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 109 | $ | 10 | $ | 303 | $ | (12) | |||||||||||||||
Provision for income taxes | 59 | 47 | 134 | 63 | |||||||||||||||||||
Income before income taxes attributable to common shareholders | 168 | 57 | 437 | 51 | |||||||||||||||||||
Certain items: | |||||||||||||||||||||||
Litigation charges | 2 | 2 | 7 | 8 | |||||||||||||||||||
Losses (gains) and other expense (income), net(1) | 2 | 31 | (39) | 27 | |||||||||||||||||||
Transaction and integration costs | 34 | 27 | 99 | 75 | |||||||||||||||||||
Impairment charges | 1 | — | 1 | 5 | |||||||||||||||||||
Purchase accounting adjustments | 5 | 5 | 13 | 7 | |||||||||||||||||||
COVID-19 related adjustments | — | — | — | (2) | |||||||||||||||||||
Other | (5) | (4) | (10) | (6) | |||||||||||||||||||
Adjusted pretax income* | 207 | 118 | 508 | 165 | |||||||||||||||||||
Provision for income taxes | (76) | (48) | (165) | (78) | |||||||||||||||||||
Adjusted net income attributable to common shareholders* | $ | 131 | $ | 70 | $ | 343 | $ | 87 | |||||||||||||||
Diluted shares(2) | 43.4 | 43.7 | 45.9 | 43.2 | |||||||||||||||||||
Adjusted earnings per share - Diluted* | $ | 3.02 | $ | 1.60 | $ | 7.53 | $ | 2.01 | |||||||||||||||
Excluding the Impact of Alignment: | |||||||||||||||||||||||
Adjusted net income attributable to common shareholders* | $ | 98 | $ | 70 | $ | 310 | $ | 87 | |||||||||||||||
Adjusted earnings per share - Diluted* | $ | 2.28 | $ | 1.60 | $ | 6.83 | $ | 2.01 | |||||||||||||||
(2) Diluted shares for the nine months ended September 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.” | |||||||||||||||||||||||
* 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. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 109 | $ | 10 | $ | 303 | $ | (12) | |||||||||||||||
Interest expense | 34 | 41 | 91 | 128 | |||||||||||||||||||
Provision for income taxes | 59 | 47 | 134 | 63 | |||||||||||||||||||
Depreciation and amortization | 33 | 35 | 98 | 112 | |||||||||||||||||||
Share-based compensation | 10 | 11 | 30 | 33 | |||||||||||||||||||
Certain items: | |||||||||||||||||||||||
Litigation charges | 2 | 2 | 7 | 8 | |||||||||||||||||||
Losses (gains) and other expense (income), net | |||||||||||||||||||||||
Dispositions | (1) | — | (50) | — | |||||||||||||||||||
Hurricane business interruption net insurance proceeds | — | — | (3) | — | |||||||||||||||||||
Various non-income related tax matters | (1) | (8) | 2 | (6) | |||||||||||||||||||
Redemption premium from debt repayment | — | 36 | — | 36 | |||||||||||||||||||
Foreign currency translation | 3 | 2 | 10 | (4) | |||||||||||||||||||
Other | 1 | 1 | 2 | 1 | |||||||||||||||||||
Transaction and integration costs | 34 | 27 | 99 | 75 | |||||||||||||||||||
Impairment charges | 1 | — | 1 | 5 | |||||||||||||||||||
Purchase accounting adjustments | 5 | 5 | 13 | 7 | |||||||||||||||||||
COVID-19 related adjustments | — | — | — | (2) | |||||||||||||||||||
Other | (5) | (4) | (10) | (6) | |||||||||||||||||||
ADJUSTED EBITDA* | $ | 284 | $ | 205 | $ | 727 | $ | 438 | |||||||||||||||
ADJUSTED EBITDA MARGIN* | 32% | 27% | 30% | 22% | |||||||||||||||||||
Excluding the Impact of Alignment: | |||||||||||||||||||||||
ADJUSTED EBITDA* | $ | 240 | $ | 205 | $ | 683 | $ | 438 | |||||||||||||||
ADJUSTED EBITDA MARGIN* | 28% | 27% | 28% | 22% | |||||||||||||||||||
* 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. | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||
As Reported | Impact of Alignment | As Adjusted* | |||||||||||||||||||||
Consolidated contract sales | $ | 483 | $ | — | $ | 483 | $ | 380 | |||||||||||||||
Less resales contract sales | (10) | — | (10) | (7) | |||||||||||||||||||
Consolidated contract sales, net of resales | 473 | — | 473 | 373 | |||||||||||||||||||
Plus: | |||||||||||||||||||||||
Settlement revenue | 10 | — | 10 | 8 | |||||||||||||||||||
Resales revenue | 5 | — | 5 | 5 | |||||||||||||||||||
Revenue recognition adjustments: | |||||||||||||||||||||||
Reportability | 54 | (46) | 8 | 2 | |||||||||||||||||||
Sales reserve | (64) | 19 | (45) | (31) | |||||||||||||||||||
Other(1) | (34) | — | (34) | (27) | |||||||||||||||||||
Sale of vacation ownership products | 444 | (27) | 417 | 330 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Cost of vacation ownership products | (76) | 2 | (74) | (71) | |||||||||||||||||||
Marketing and sales | (207) | — | (207) | (166) | |||||||||||||||||||
Development Profit | 161 | (25) | 136 | 93 | |||||||||||||||||||
Revenue recognition reportability adjustment | (43) | 39 | (4) | (1) | |||||||||||||||||||
Purchase accounting adjustments | 5 | — | 5 | 6 | |||||||||||||||||||
Other | (5) | — | (5) | — | |||||||||||||||||||
Adjusted development profit* | $ | 118 | $ | 14 | $ | 132 | $ | 98 | |||||||||||||||
Development profit margin | 36.1% | 32.6% | 28.0% | ||||||||||||||||||||
Adjusted development profit margin* | 29.9% | 32.0% | 29.5% | ||||||||||||||||||||
(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. | |||||||||||||||||||||||
* 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. |
Nine Months Ended | |||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||
As Reported | Impact of Alignment | As Adjusted* | |||||||||||||||||||||
Consolidated contract sales | $ | 1,383 | $ | — | $ | 1,383 | $ | 968 | |||||||||||||||
Less resales contract sales | (30) | — | (30) | (19) | |||||||||||||||||||
Consolidated contract sales, net of resales | 1,353 | — | 1,353 | 949 | |||||||||||||||||||
Plus: | |||||||||||||||||||||||
Settlement revenue | 26 | — | 26 | 21 | |||||||||||||||||||
Resales revenue | 13 | — | 13 | 8 | |||||||||||||||||||
Revenue recognition adjustments: | |||||||||||||||||||||||
Reportability | 7 | (46) | (39) | (51) | |||||||||||||||||||
Sales reserve | (130) | 19 | (111) | (73) | |||||||||||||||||||
Other(1) | (90) | — | (90) | (65) | |||||||||||||||||||
Sale of vacation ownership products | 1,179 | (27) | 1,152 | 789 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Cost of vacation ownership products | (216) | 2 | (214) | (178) | |||||||||||||||||||
Marketing and sales | (603) | — | (603) | (439) | |||||||||||||||||||
Development Profit | 360 | (25) | 335 | 172 | |||||||||||||||||||
Revenue recognition reportability adjustment | (8) | 39 | 31 | 38 | |||||||||||||||||||
Purchase accounting adjustments | 14 | — | 14 | 9 | |||||||||||||||||||
Other | (5) | — | (5) | — | |||||||||||||||||||
Adjusted development profit* | $ | 361 | $ | 14 | $ | 375 | $ | 219 | |||||||||||||||
Development profit margin | 30.5% | 29.1% | 21.8% | ||||||||||||||||||||
Adjusted development profit margin* | 30.8% | 31.6% | 26.2% | ||||||||||||||||||||
(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. | |||||||||||||||||||||||
* 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. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 270 | $ | 185 | $ | 720 | $ | 380 | |||||||||||||||
Depreciation and amortization | 23 | 24 | 67 | 66 | |||||||||||||||||||
Share-based compensation expense | 2 | 1 | 5 | 4 | |||||||||||||||||||
Certain items: | |||||||||||||||||||||||
Litigation charges | 2 | 1 | 7 | 7 | |||||||||||||||||||
(Gains) losses and other (income) expense, net: | |||||||||||||||||||||||
Dispositions | — | — | (33) | — | |||||||||||||||||||
Hurricane business interruption net insurance proceeds | — | — | (3) | — | |||||||||||||||||||
Foreign currency translation | (1) | — | — | — | |||||||||||||||||||
Transaction and integration costs | 2 | 1 | 3 | 2 | |||||||||||||||||||
Impairment charges | 1 | — | 1 | — | |||||||||||||||||||
Purchase accounting adjustments | 5 | 5 | 13 | 7 | |||||||||||||||||||
COVID-19 related restructuring | — | (1) | — | — | |||||||||||||||||||
Other | (5) | (1) | (8) | (1) | |||||||||||||||||||
SEGMENT ADJUSTED EBITDA* | $ | 299 | $ | 215 | $ | 772 | $ | 465 | |||||||||||||||
SEGMENT ADJUSTED EBITDA MARGIN* | 37% | 33% | 35% | 28% | |||||||||||||||||||
Excluding the Impact of Alignment: | |||||||||||||||||||||||
SEGMENT ADJUSTED EBITDA* | $ | 255 | $ | 215 | $ | 728 | $ | 465 | |||||||||||||||
SEGMENT ADJUSTED EBITDA MARGIN* | 33% | 33% | 34% | 28% | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 29 | $ | 23 | $ | 108 | $ | 71 | |||||||||||||||
Depreciation and amortization | 8 | 11 | 24 | 40 | |||||||||||||||||||
Share-based compensation expense | 1 | — | 2 | 1 | |||||||||||||||||||
Certain items: | |||||||||||||||||||||||
Gain on disposition of VRI Americas | (1) | — | (17) | — | |||||||||||||||||||
Foreign currency translation | 2 | — | 2 | — | |||||||||||||||||||
COVID-19 related restructuring | — | 1 | — | 1 | |||||||||||||||||||
Other | — | — | (2) | — | |||||||||||||||||||
SEGMENT ADJUSTED EBITDA* | $ | 39 | $ | 35 | $ | 117 | $ | 113 | |||||||||||||||
SEGMENT ADJUSTED EBITDA MARGIN* | 58% | 53% | 55% | 54% | |||||||||||||||||||
* 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. | |||||||||||||||||||||||
Unaudited | |||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 294 | $ | 342 | |||||||
Restricted cash (including $67 and $139 from VIEs, respectively) | 249 | 461 | |||||||||
Accounts receivable, net (including $12 and $12 from VIEs, respectively) | 248 | 279 | |||||||||
Vacation ownership notes receivable, net (including $1,662 and $1,662 from VIEs, respectively) | 2,142 | 2,045 | |||||||||
Inventory | 668 | 719 | |||||||||
Property and equipment, net | 1,136 | 1,136 | |||||||||
Goodwill | 3,117 | 3,150 | |||||||||
Intangibles, net | 924 | 993 | |||||||||
Other (including $68 and $76 from VIEs, respectively) | 459 | 488 | |||||||||
TOTAL ASSETS | $ | 9,237 | $ | 9,613 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Accounts payable | $ | 221 | $ | 265 | |||||||
Advance deposits | 178 | 160 | |||||||||
Accrued liabilities (including $2 and $2 from VIEs, respectively) | 342 | 345 | |||||||||
Deferred revenue | 346 | 453 | |||||||||
Payroll and benefits liability | 248 | 201 | |||||||||
Deferred compensation liability | 130 | 142 | |||||||||
Securitized debt, net (including $1,830 and $1,877 from VIEs, respectively) | 1,809 | 1,856 | |||||||||
Debt, net | 2,749 | 2,631 | |||||||||
Other | 212 | 224 | |||||||||
Deferred taxes | 374 | 350 | |||||||||
TOTAL LIABILITIES | 6,609 | 6,627 | |||||||||
Contingencies and Commitments | |||||||||||
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding | — | — | |||||||||
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,744,121 and 75,519,049 shares issued, respectively | 1 | 1 | |||||||||
Treasury stock — at cost; 37,036,447 and 33,235,671 shares, respectively | (1,882) | (1,356) | |||||||||
Additional paid-in capital | 3,968 | 4,072 | |||||||||
Accumulated other comprehensive loss | 6 | (16) | |||||||||
Retained earnings | 533 | 275 | |||||||||
TOTAL MVW SHAREHOLDERS' EQUITY | 2,626 | 2,976 | |||||||||
Noncontrolling interests | 2 | 10 | |||||||||
TOTAL EQUITY | 2,628 | 2,986 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 9,237 | $ | 9,613 | |||||||
The abbreviation VIEs above means Variable Interest Entities. |
Nine Months Ended | |||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||
OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | 303 | $ | (6) | |||||||
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash provided by operating activities: | |||||||||||
Depreciation and amortization of intangibles | 98 | 112 | |||||||||
Amortization of debt discount and issuance costs | 20 | 41 | |||||||||
Vacation ownership notes receivable reserve | 130 | 73 | |||||||||
Share-based compensation | 30 | 33 | |||||||||
Impairment charges | 1 | 5 | |||||||||
Gains and other income, net | (48) | — | |||||||||
Deferred income taxes | 64 | 10 | |||||||||
Net change in assets and liabilities: | |||||||||||
Accounts and contracts receivable | 6 | 54 | |||||||||
Vacation ownership notes receivable originations | (728) | (545) | |||||||||
Vacation ownership notes receivable collections | 469 | 532 | |||||||||
Inventory | 74 | 59 | |||||||||
Other assets | (21) | (29) | |||||||||
Accounts payable, advance deposits and accrued liabilities | (28) | (44) | |||||||||
Deferred revenue | (5) | 119 | |||||||||
Payroll and benefit liabilities | 52 | 35 | |||||||||
Deferred compensation liability | 8 | 14 | |||||||||
Other liabilities | 7 | 23 | |||||||||
Deconsolidation of certain Consolidated Property Owners' Associations | (48) | (87) | |||||||||
Purchase of vacation ownership units for future transfer to inventory | (12) | (99) | |||||||||
Other, net | 8 | 3 | |||||||||
Net cash, cash equivalents and restricted cash provided by operating activities | 380 | 303 | |||||||||
INVESTING ACTIVITIES | |||||||||||
Acquisition of a business, net of cash and restricted cash acquired | — | (157) | |||||||||
Proceeds from disposition of subsidiaries, net of cash and restricted cash transferred | 94 | — | |||||||||
Capital expenditures for property and equipment (excluding inventory) | (36) | (19) | |||||||||
Issuance of note receivable to VIE | (47) | — | |||||||||
Proceeds from collection of note receivable from VIE | 47 | — | |||||||||
Purchase of company owned life insurance | (14) | (11) | |||||||||
Other, net | 5 | — | |||||||||
Net cash, cash equivalents and restricted cash provided by (used in) investing activities | 49 | (187) |
Nine Months Ended | |||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||
FINANCING ACTIVITIES | |||||||||||
Borrowings from securitization transactions | 609 | 425 | |||||||||
Repayment of debt related to securitization transactions | (655) | (602) | |||||||||
Proceeds from debt | 505 | 1,061 | |||||||||
Repayments of debt | (505) | (1,039) | |||||||||
Purchase of convertible note hedges | — | (100) | |||||||||
Proceeds from issuance of warrants | — | 70 | |||||||||
Finance lease payment | (3) | (2) | |||||||||
Payment of debt issuance costs | (10) | (17) | |||||||||
Repurchase of common stock | (528) | (4) | |||||||||
Payment of dividends | (75) | — | |||||||||
Payment of withholding taxes on vesting of restricted stock units | (23) | (17) | |||||||||
Net cash, cash equivalents and restricted cash used in financing activities | (685) | (225) | |||||||||
Effect of changes in exchange rates on cash, cash equivalents and restricted cash | (4) | (1) | |||||||||
Change in cash, cash equivalents and restricted cash | (260) | (110) | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 803 | 992 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 543 | $ | 882 | |||||||
Fiscal Year 2022 (low) | Fiscal Year 2022 (high) | ||||||||||
Net income attributable to common shareholders | $ | 390 | $ | 400 | |||||||
Provision for income taxes | 174 | 179 | |||||||||
Income before income taxes attributable to common shareholders | 564 | 579 | |||||||||
Certain items(1) | 96 | 106 | |||||||||
Adjusted pretax income* | 660 | 685 | |||||||||
Provision for income taxes | (205) | (210) | |||||||||
Adjusted net income attributable to common shareholders* | $ | 455 | $ | 475 | |||||||
Earnings per share - Diluted | $ | 8.76 | $ | 8.98 | |||||||
Adjusted earnings per share - Diluted* | $ | 10.20 | $ | 10.64 | |||||||
Diluted shares | 45.0 | 45.0 |
Fiscal Year 2022 (low) | Fiscal Year 2022 (high) | ||||||||||
Net income attributable to common shareholders | $ | 390 | $ | 400 | |||||||
Interest expense | 123 | 123 | |||||||||
Provision for income taxes | 174 | 179 | |||||||||
Depreciation and amortization | 128 | 128 | |||||||||
Share-based compensation | 39 | 39 | |||||||||
Certain items(1) | 96 | 106 | |||||||||
Adjusted EBITDA* | $ | 950 | $ | 975 |
(1) Certain items adjustment includes $120 to $130 million of anticipated transaction and integration costs, $17 million of anticipated purchase accounting adjustments, and $7 million of litigation charges, partially offset by $48 million of miscellaneous other adjustments, including the disposition of the VRI Americas business and a hotel in Puerto Vallarta, Mexico in the second quarter of 2022. | ||
* 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. |
Fiscal Year 2022 (low) | Fiscal Year 2022 (high) | |||||||||||||
Net cash, cash equivalents and restricted cash provided by operating activities | $ | 575 | $ | 590 | ||||||||||
Capital expenditures for property and equipment (excluding inventory) | (55) | (45) | ||||||||||||
Borrowings from securitization transactions | 870 | 890 | ||||||||||||
Repayment of debt related to securitizations | (958) | (973) | ||||||||||||
Securitized Debt Issuance Costs | (12) | (12) | ||||||||||||
Free cash flow* | 420 | 450 | ||||||||||||
Adjustments: | ||||||||||||||
Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1) | 164 | 197 | ||||||||||||
Certain items(2) | 96 | 103 | ||||||||||||
Change in restricted cash | (10) | (20) | ||||||||||||
Adjusted free cash flow* | $ | 670 | $ | 730 |
(1) Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2021 and 2022 year ends. | ||
(2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs. | ||
* 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. |
Year | Quarter Ended | Full Year | |||||||||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||||||||||||||||||||
Vacation Ownership | |||||||||||||||||||||||||||||||||||
Consolidated contract sales | |||||||||||||||||||||||||||||||||||
2022 | $ | 394 | $ | 506 | $ | 483 | |||||||||||||||||||||||||||||
2021 | $ | 226 | $ | 362 | $ | 380 | $ | 406 | $ | 1,374 | |||||||||||||||||||||||||
2020 | $ | 306 | $ | 30 | $ | 140 | $ | 178 | $ | 654 | |||||||||||||||||||||||||
VPG | |||||||||||||||||||||||||||||||||||
2022 | $ | 4,706 | $ | 4,613 | $ | 4,353 | |||||||||||||||||||||||||||||
2021 | $ | 4,644 | $ | 4,304 | $ | 4,300 | $ | 4,305 | $ | 4,356 | |||||||||||||||||||||||||
2020 | $ | 3,680 | $ | 3,717 | $ | 3,904 | $ | 3,826 | $ | 3,767 | |||||||||||||||||||||||||
Tours | |||||||||||||||||||||||||||||||||||
2022 | 78,505 | 102,857 | 104,000 | ||||||||||||||||||||||||||||||||
2021 | 45,871 | 79,900 | 84,098 | 89,495 | 299,364 | ||||||||||||||||||||||||||||||
2020 | 79,131 | 6,216 | 33,170 | 44,161 | 162,678 | ||||||||||||||||||||||||||||||
Exchange & Third-Party Management | |||||||||||||||||||||||||||||||||||
Total active members (000's)(1) | |||||||||||||||||||||||||||||||||||
2022 | 1,606 | 1,596 | 1,591 | ||||||||||||||||||||||||||||||||
2021 | 1,479 | 1,321 | 1,313 | 1,296 | 1,296 | ||||||||||||||||||||||||||||||
2020 | 1,636 | 1,571 | 1,536 | 1,518 | 1,518 | ||||||||||||||||||||||||||||||
Average revenue per member(1) | |||||||||||||||||||||||||||||||||||
2022 | $ | 44.33 | $ | 38.79 | $ | 38.91 | |||||||||||||||||||||||||||||
2021 | $ | 47.13 | $ | 46.36 | $ | 42.95 | $ | 42.93 | $ | 179.48 | |||||||||||||||||||||||||
2020 | $ | 41.37 | $ | 30.17 | $ | 36.76 | $ | 36.62 | $ | 144.97 | |||||||||||||||||||||||||
(1) Includes members at the end of each period for the Interval International exchange network only. |