SEC Filing | Marriott Vacations Worldwide

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vac-20230222

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 8-K

_________________________

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 22, 2023

_________________________

Marriott Vacations Worldwide Corporation

(Exact name of registrant as specified in its charter)

_________________________

Delaware

001-35219

45-2598330

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

9002 San Marco Court

Orlando

32819

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (407) 206-6000

N/A

(Former name or former address, if changed since last report)

_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	VAC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On February 22, 2023, Marriott Vacations Worldwide Corporation (the “Company,” “we” or “our”) issued a press release reporting financial results for the quarter and fiscal year ended December 31, 2022. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

As provided in General Instruction B.2 of Form 8-K, the information contained in Item 2.02 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended, nor shall any such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(d) The following exhibits are being furnished herewith:


Exhibit Number						Description
99.1						Press release reporting financial results for the quarter and fiscal year ended December 31, 2022
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		MARRIOTT VACATIONS WORLDWIDE CORPORATION
		(Registrant)

Dated:	February 22, 2023	By:	/s/ Anthony E. Terry
		Name:	Anthony E. Terry
		Title:	Executive Vice President and Chief Financial Officer

Document

Exhibit 99.1


									Neal Goldner Investor Relations 407-206-6149 neal.goldner@mvwc.com

									Cameron Klaus Global Communications 407-513-6066 cameron.klaus@mvwc.com

Marriott Vacations Worldwide (“MVW”) Reports Fourth Quarter

and Full Year 2022 Financial Results and Provides 2023 Outlook

ORLANDO, Fla. – February 22, 2023 – Marriott Vacations Worldwide Corporation (NYSE: VAC) (the “Company”) reported financial results for the fourth quarter and full year 2022 and provided guidance for full year 2023.

Fourth Quarter 2022 Highlights:

•Consolidated Vacation Ownership contract sales were $454 million, a 12% increase compared to the fourth quarter of 2021, and VPG was $4,088. The Company estimates that hurricanes negatively impacted contract sales by approximately $13 million in the fourth quarter of 2022.

•Net income attributable to common shareholders was $88 million, or $2.08 fully diluted earnings per share.

•Adjusted net income attributable to common shareholders was $115 million, or $2.74 Adjusted fully diluted earnings per share. The Company estimates that hurricanes negatively impacted Adjusted net income attributable to common shareholders by $5 million, or $0.12 per Adjusted fully diluted earnings per share.

•Adjusted EBITDA was $239 million; excluding the impact of the Alignment (as defined below), Adjusted EBITDA increased 6% compared to the prior year fourth quarter to $232 million. The Company estimates that hurricanes negatively impacted Adjusted EBITDA by approximately $7 million in the fourth quarter of 2022.

•The Company repurchased 1.2 million shares of its common stock for $173 million during the quarter at an average price per share of $139.90.

Full Year 2022 Highlights and 2023 Outlook:

•Consolidated Vacation Ownership contract sales were $1.84 billion, a 34% increase compared to 2021, and VPG increased 1% to $4,421. The Company estimates that hurricanes negatively impacted contract sales by approximately $14 million in 2022.

•Net income attributable to common shareholders was $391 million, or $8.77 fully diluted earnings per share.

•Adjusted net income attributable to common shareholders was $458 million, or $10.26 Adjusted fully diluted earnings per share.

•Adjusted EBITDA was $966 million; excluding the impact of the Alignment (as defined below), Adjusted EBITDA was $915 million, an increase of 39% compared to the prior year. The Company estimates that hurricanes negatively impacted Adjusted EBITDA by approximately $8 million in 2022.


						marriottvacationsworldwide.com

Marriott Vacations Worldwide Reports Fourth Quarter 2022 Financial Results / 2

•During 2022, the Company repurchased 5.1 million shares of its common stock for $701 million at an average price of $137.83 and paid $99 million in dividends.

•The Company expects contract sales in 2023 to grow 5% to 9% compared to the prior year and for Net income attributable to common shareholders to be $405 million to $440 million, or $9.51 to $10.30 fully diluted earnings per share.

•Excluding the impact of the Alignment (as defined below) in 2022, the Company expects Adjusted EBITDA to grow 4% to 9% in 2023 and Adjusted earnings per share - diluted to increase 14% to 23%.

“2022 was a great year for Marriott Vacations Worldwide. We generated over $1.8 billion of contract sales, a new high for our Company, and returned more than $800 million in cash to shareholders. We also launched Abound by Marriott Vacations, added over 20,000 new owners in our Vacation Ownership business and grew active Interval International members by 21%,” said John Geller, president & chief executive officer. “Looking forward, we expect occupancies in North America and Europe to remain strong this year and for Asia-Pacific to continue to improve. We also expect to grow contract sales this year by 5% to 9% compared to the prior year and for Adjusted Free Cash Flow to be between $600 million and $670 million, illustrating the continued demand for leisure travel and the strength of our business model.”

Fourth Quarter 2022 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 acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology for these brands, resulting in an adjustment to its notes receivable reserve in the third quarter. Together, these changes are herein referred to as the “Alignment.” As a result of the Alignment, the Company reported an additional $5 million of Net income attributable to common shareholders and an additional $7 million of Adjusted EBITDA during the fourth quarter. The tables and financial schedules below illustrate the impact of the Alignment on the Company’s reported results.

In the tables 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.

Consolidated


	Three Months Ended December 31, 2022				Three Months Ended December 31, 2021	Change
	As Reported		Impact of Alignment					As Adjusted*			As Reported			As Adjusted*
($ in millions)											$		%	$		%
Net income attributable to common shareholders	$	88	$	(5)		$	83		$	61	$	27	45%	$	22	35%
Adjusted net income attributable to common shareholders*	$	115	$	(5)		$	110		$	103	$	12	12%	$	7	6%
Adjusted EBITDA*	$	239	$	(7)		$	232		$	219	$	20	10%	$	13	6%
Adjusted EBITDA margin*	28.7%					28.2%			27.4%		1.3 pts			0.8 pts

Marriott Vacations Worldwide Reports Fourth Quarter 2022 Financial Results / 3

Vacation Ownership


	Three Months Ended December 31, 2022					Three Months Ended December 31, 2021	Change
	As Reported		Impact of Alignment		As Adjusted*		As Reported				As Adjusted*
($ in millions)							$		%		$		%
Sale of vacation ownership products	$	439	$	(12)			$	427	$	364	$	75	21%	$	63	18%
Development profit	$	162	$	(7)			$	155	$	114	$	48	42%	$	41	36%

Segment financial results attributable to common shareholders	$	241	$	(5)			$	236	$	205	$	36	17%	$	31	14%
Segment margin	31.9%						31.7%		29.3%		2.6 pts			2.4 pts
Segment Adjusted EBITDA*	$	261	$	(7)			$	254	$	234	$	27	12%	$	20	8%
Segment Adjusted EBITDA margin*	34.6%						34.2%		33.4%		1.2 pts			0.8 pts

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 7% in the fourth quarter of 2022 compared to the prior year and increased 4% excluding the results of VRI Americas, which was sold in April of 2022. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 17% compared to the prior year as the new accounts at Interval International that were added at the beginning of the year continued to ramp up.

Segment financial results attributable to common shareholders were $24 million in the fourth quarter of 2022, Segment margin was 41% and Segment Adjusted EBITDA was $31 million. Excluding the VRI Americas business, Segment Adjusted EBITDA increased 11% compared to the prior year and Segment Adjusted EBITDA margin increased to 55%.

Corporate and Other

General and administrative costs were largely unchanged in the fourth quarter of 2022 compared to the prior year.

Balance Sheet and Liquidity

The Company ended the quarter with approximately $1.3 billion in liquidity, including $524 million of cash and cash equivalents, $72 million of gross notes receivable that were eligible for securitization, and $749 million of available capacity under its revolving corporate credit facility.

In December 2022, the Company issued $575 million of 3.25% convertible notes due 2027 with an initial conversion price of $189.65. The Company used the proceeds from the offering to redeem $250 million of 6.125% secured notes due 2025 (which was paid in January), repurchase $55 million of its own shares, repay the outstanding balance on its revolving credit facility (which was used to redeem $230 million of convertible notes that matured in September 2022) and pay transaction expenses and other fees. In addition, to reduce the potential economic dilution to the Company's earnings per share upon conversion of the notes, the Company used a portion of the proceeds to enter into privately negotiated bond hedge and warrant transactions, with such warrant transactions at an initial strike price of $286.26 per share, which represented a premium of 100% over the last reported sale price of the Company's common stock on December 5, 2022.

Marriott Vacations Worldwide Reports Fourth Quarter 2022 Financial Results / 4

At the end of the fourth quarter of 2022, pro-forma for the repayment of the 2025 secured senior notes, the Company had $2.8 billion of corporate debt and $1.9 billion of non-recourse debt related to its securitized notes receivable.

The Company completed its second timeshare receivable securitization of 2022 in the fourth quarter, issuing $280 million of notes backed by a pool of $286 million of vacation ownership notes receivable from all of the Company's timeshare brands. The overall weighted average interest rate of the notes was 6.58%, without giving effect to the Company’s retention of the Class D Notes, and the transaction had a gross advance rate of 98%.

Full Year 2023 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 2023 expected GAAP results for the Company.

The Company is providing guidance for the full year 2023. 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)	2023 Guidance


Contract sales	$1,930	to	$2,000
Net income attributable to common shareholders	$405	to	$440
Earnings per share - diluted	$9.51	to	$10.30
Net cash, cash equivalents, and restricted cash provided by operating activities	$365	to	$415

Adjusted EBITDA*	$950	to	$1,000


Adjusted earnings per share - diluted*	$10.75	to	$11.54
Adjusted free cash flow*	$600	to	$670

In calculating diluted earnings per share and Adjusted diluted earnings per share, shares issuable upon conversion of our convertible notes are assumed to be converted into common stock, to the extent dilutive, and net interest expense associated with the convertible notes is added back to the numerator of the diluted earnings per share and Adjusted diluted earnings per share calculations.

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.

Fourth Quarter 2022 Financial Results Conference Call

The Company will hold a conference call on February 23, 2023 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.

Marriott Vacations Worldwide Reports Fourth Quarter 2022 Financial Results / 5

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 more than 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 an affiliate of 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 2023. 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 pandemic or future health crises become widely available; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price and wage inflation; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the COVID-19 pandemic or future health crises 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 impact of rising interest rates; political or social strife, difficulties associated with implementing new or maintaining existing technology; changes in privacy laws 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 4, 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
Cash Flow and Adjusted Free Cash Flow			A-14
Consolidated Balance Sheets			A-15
Consolidated Statements of Cash Flows			A-16

2023 Outlook
Adjusted Net Income Attributable to Common Shareholders, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA			A-18
Adjusted Free Cash Flow			A-19
Quarterly Operating Metrics			A-20

Non-GAAP Financial Measures			A-21

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)


	Quarter Ended				Change %	Fiscal Year Ended				Change %
	December 31, 2022		December 31, 2021			December 31, 2022		December 31, 2021
Key Measures
Total consolidated contract sales	$	454	$	406	12%	$	1,837	$	1,374	34%
VPG	$	4,088	$	4,305	(5%)	$	4,421	$	4,356	1%
Tours	105,231		89,495		18%	390,593		299,364		30%
Total active members (000's)(1)	1,566		1,296		21%	1,566		1,296		21%
Average revenue per member(1)	$	35.60	$	42.93	(17%)	$	157.97	$	179.48	(12%)

GAAP Measures
Revenues	$	1,188	$	1,100	8%	$	4,656	$	3,890	20%
Income before income taxes and noncontrolling interests	$	145	$	70	108%	$	582	$	127	NM
Net income attributable to common shareholders	$	88	$	61	45%	$	391	$	49	NM
Earnings per share - diluted	$	2.08	$	1.39	50%	$	8.77	$	1.13	NM

Non-GAAP Measures*
Adjusted EBITDA	$	239	$	219	10%	$	966	$	657	47%
Adjusted pretax income	$	169	$	131	30%	$	677	$	296	128%
Adjusted net income attributable to common shareholders	$	115	$	103	12%	$	458	$	190	140%
Adjusted earnings per share - diluted	$	2.74	$	2.38	15%	$	10.26	$	4.40	133%

Financial Measures, Excluding the Impact of Alignment*
Revenues	$	1,176	$	1,100	7%	$	4,617	$	3,890	19%
Income before income taxes and noncontrolling interests	$	138	$	70	97%	$	531	$	127	NM
Net income attributable to common shareholders	$	83	$	61	35%	$	353	$	49	NM
Earnings per share - diluted	$	1.94	$	1.39	40%	$	7.94	$	1.13	NM
Adjusted EBITDA	$	232	$	219	6%	$	915	$	657	39%
Adjusted pretax income	$	162	$	131	24%	$	626	$	296	111%
Adjusted net income attributable to common shareholders	$	110	$	103	6%	$	420	$	190	121%
Adjusted earnings per share - diluted	$	2.60	$	2.38	9%	$	9.42	$	4.40	114%

(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)


	Quarter Ended December 31, 2022										Quarter Ended December 31, 2021		Change
	As Reported		Impact of Alignment						As Adjusted*				As Reported	As Adjusted*
			Revenue		Reserve		Combined
Vacation Ownership	$	261	$	(7)	$	—	$	(7)	$	254	$	234	12%	8%
Exchange & Third-Party Management	31		—		—		—		31		31		5%	5%
Segment Adjusted EBITDA*	292		(7)		—		(7)		285		265		11%	8%
General and administrative	(53)		—		—		—		(53)		(46)		(17%)	(17%)
Adjusted EBITDA*	$	239	$	(7)	$	—	$	(7)	$	232	$	219	10%	6%


	Fiscal Year Ended December 31, 2022										Fiscal Year Ended December 31, 2021		Change
	As Reported		Impact of Alignment						As Adjusted*				As Reported	As Adjusted*
			Revenue		Reserve		Combined
Vacation Ownership	$	1,033	$	(46)	$	(5)	$	(51)	$	982	$	699	48%	41%
Exchange & Third-Party Management	148		—		—		—		148		144		3%	3%
Segment Adjusted EBITDA*	1,181		(46)		(5)		(51)		1,130		843		40%	34%
General and administrative	(215)		—		—		—		(215)		(186)		(16%)	(16%)
Adjusted EBITDA*	$	966	$	(46)	$	(5)	$	(51)	$	915	$	657	47%	39%


* 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)


	Quarter Ended
	December 31, 2022						December 31, 2021
	As Reported		Impact of Alignment		As Adjusted*
REVENUES
Sale of vacation ownership products	$	439	$	(12)	$	427	$	364
Management and exchange	204		—		204		217
Rental	113		—		113		146
Financing	76		—		76		72
Cost reimbursements	356		—		356		301
TOTAL REVENUES	1,188		(12)		1,176		1,100
EXPENSES
Cost of vacation ownership products	73		(5)		68		72
Marketing and sales	204		—		204		178
Management and exchange	114		—		114		140
Rental	88		—		88		97
Financing	26		—		26		24
General and administrative	62		—		62		61
Depreciation and amortization	34		—		34		34
Litigation charges	4		—		4		2

Royalty fee	30		—		30		28
Impairment	1		—		1		(2)
Cost reimbursements	356		—		356		301
TOTAL EXPENSES	992		(5)		987		935
Gains (losses) and other income (expense), net	1		—		1		(24)
Interest expense	(27)		—		(27)		(36)
Transaction and integration costs	(26)		—		(26)		(35)
Other	1		—		1		—
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	145		(7)		138		70
Provision for income taxes	(57)		2		(55)		(11)
NET INCOME (LOSS)	88		(5)		83		59
Net loss attributable to noncontrolling interests	—		—		—		2
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	88	$	(5)	$	83	$	61

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic shares	38.2		—		38.2		42.7
Basic	$	2.30	$	(0.16)	$	2.14	$	1.42
Diluted shares(1)	43.0		—		43.0		43.6
Diluted	$	2.08	$	(0.14)	$	1.94	$	1.39


(1) Diluted shares include 4.2 million shares for the quarter-ended December 31, 2022 related to our convertible notes, reflecting the impact of the adoption of Accounting Standards Update 2020-06 in 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.

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)


	Fiscal Year Ended
	December 31, 2022						December 31, 2021
	As Reported		Impact of Alignment		As Adjusted*
REVENUES
Sale of vacation ownership products	$	1,618	$	(39)	$	1,579	$	1,153
Management and exchange	827		—		827		855
Rental	551		—		551		486
Financing	293		—		293		268
Cost reimbursements	1,367		—		1,367		1,128
TOTAL REVENUES	4,656		(39)		4,617		3,890
EXPENSES
Cost of vacation ownership products	289		(7)		282		250
Marketing and sales	807		—		807		617
Management and exchange	444		—		444		521
Rental	382		—		382		344
Financing	75		19		94		88
General and administrative	249		—		249		227
Depreciation and amortization	132		—		132		146
Litigation charges	11		—		11		10

Royalty fee	114		—		114		106
Impairment	2		—		2		3
Cost reimbursements	1,367		—		1,367		1,128
TOTAL EXPENSES	3,872		12		3,884		3,440
Gains (losses) and other income (expense), net	40		—		40		(51)
Interest expense	(118)		—		(118)		(164)
Transaction and integration costs	(125)		—		(125)		(110)
Other	1		—		1		2
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	582		(51)		531		127
(Provision for) benefit from income taxes	(191)		13		(178)		(74)
NET INCOME (LOSS)	391		(38)		353		53
Net income attributable to noncontrolling interests	—		—		—		(4)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	391	$	(38)	$	353	$	49

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic shares	40.4		—		40.4		42.5
Basic	$	9.69	$	(0.93)	$	8.76	$	1.15
Diluted shares(1)	45.2		—		45.2		43.3
Diluted	$	8.77	$	(0.83)	$	7.94	$	1.13

(1) Diluted shares include 4.3 million shares for the year-ended December 31, 2022 related to our convertible notes, reflecting the impact of the adoption of Accounting Standards Update 2020-06 in 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.

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 December 31, 2022

(In millions)


	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	$	439	$	(12)	$	427		$	—	$	—	$	439	$	427
Management and exchange(1)
Ancillary revenues	58		—		58			1		—		59		59
Management fee revenues	42		—		42			6		—		48		48
Exchange and other services revenues	32		—		32			42		23		97		97
Management and exchange	132		—		132			49		23		204		204
Rental	104		—		104			9		—		113		113
Financing	76		—		76			—		—		76		76
Cost reimbursements(1)	362		—		362			4		(10)		356		356
TOTAL REVENUES	$	1,113	$	(12)	$	1,101		$	62	$	13	$	1,188	$	1,176

PROFIT (LOSS)
Development	$	162	$	(7)	$	155		$	—	$	—	$	162	$	155
Management and exchange(1)	70		—		70			22		(2)		90		90
Rental(1)	15		—		15			9		1		25		25
Financing	50		—		50			—		—		50		50
TOTAL PROFIT (LOSS)	297		(7)		290			31		(1)		327		320

OTHER
General and administrative	—		—		—			—		(62)		(62)		(62)
Depreciation and amortization	(25)		—		(25)			(7)		(2)		(34)		(34)
Litigation charges	(2)		—		(2)			—		(2)		(4)		(4)

Royalty fee	(30)		—		(30)			—		—		(30)		(30)
Impairment	(1)		—		(1)			—		—		(1)		(1)
Gains and other income, net	1		—		1			—		—		1		1
Interest expense	—		—		—			—		(27)		(27)		(27)
Transaction and integration costs	—		—		—			—		(26)		(26)		(26)
Other	1		—		1			—		—		1		1
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	241		(7)		234			24		(120)		145		138
Provision for income taxes	—		2		2			—		(57)		(57)		(55)
NET INCOME (LOSS)	241		(5)		236			24		(177)		88		83
Net (income) loss attributable to noncontrolling interests	—		—		—			—		—		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	241	$	(5)	$	236		$	24	$	(177)	$	88	$	83
SEGMENT MARGIN(2)	32%				32%		—	41%

(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 December 31, 2021

(In millions)


	Reportable Segment				Corporate and Other		Total
	Vacation Ownership		Exchange & Third-Party Management
REVENUES
Sales of vacation ownership products	$	364	$	—	$	—	$	364
Management and exchange(1)
Ancillary revenues	53		1		—		54
Management fee revenues	41		8		(4)		45
Exchange and other services revenues	33		45		40		118
Management and exchange	127		54		36		217
Rental	138		8		—		146
Financing	72		—		—		72
Cost reimbursements(1)	320		9		(28)		301
TOTAL REVENUES	$	1,021	$	71	$	8	$	1,100

PROFIT
Development	$	114	$	—	$	—	$	114
Management and exchange(1)	63		22		(8)		77
Rental(1)	32		8		9		49
Financing	48		—		—		48
TOTAL PROFIT	257		30		1		288

OTHER
General and administrative	—		—		(61)		(61)
Depreciation and amortization	(23)		(8)		(3)		(34)
Litigation charges	(2)		—		—		(2)

Royalty fee	(28)		—		—		(28)
Impairment	—		—		2		2
Gains (losses) and other income (expense), net	1		—		(25)		(24)
Interest expense	—		—		(36)		(36)
Transaction and integration costs	—		—		(35)		(35)

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	205		22		(157)		70
Provision for income taxes	—		—		(11)		(11)
NET INCOME (LOSS)	205		22		(168)		59
Net loss attributable to noncontrolling interests(1)	—		—		2		2
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	205	$	22	$	(166)	$	61
SEGMENT MARGIN(2)	29%		33%

(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 twelve months ended December 31, 2022

(In millions)


	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	$	1,618	$	(39)	$	1,579	$	—	$	—	$	1,618	$	1,579
Management and exchange(1)
Ancillary revenues	241		—		241		4		—		245		245
Management fee revenues	166		—		166		34		(5)		195		195
Exchange and other services revenues	127		—		127		188		72		387		387
Management and exchange	534		—		534		226		67		827		827
Rental	509		—		509		42		—		551		551
Financing	293		—		293		—		—		293		293
Cost reimbursements(1)	1,388		—		1,388		23		(44)		1,367		1,367
TOTAL REVENUES	$	4,342	$	(39)	$	4,303	$	291	$	23	$	4,656	$	4,617

PROFIT (LOSS)
Development	$	522	$	(32)	$	490	$	—	$	—	$	522	$	490
Management and exchange(1)	294		—		294		106		(17)		383		383
Rental(1)	109		—		109		42		18		169		169
Financing	218		(19)		199		—		—		218		199
TOTAL PROFIT (LOSS)	1,143		(51)		1,092		148		1		1,292		1,241

OTHER
General and administrative	—		—		—		—		(249)		(249)		(249)
Depreciation and amortization	(92)		—		(92)		(31)		(9)		(132)		(132)
Litigation charges	(9)		—		(9)		—		(2)		(11)		(11)

Royalty fee	(114)		—		(114)		—		—		(114)		(114)
Impairment	(2)		—		(2)		—		—		(2)		(2)
Gains (losses) and other income (expense), net	37		—		37		15		(12)		40		40
Interest expense	—		—		—		—		(118)		(118)		(118)
Transaction and integration costs	(3)		—		(3)		—		(122)		(125)		(125)
Other	1		—		1		—		—		1		1
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	961		(51)		910		132		(511)		582		531
Benefit from (provision for) income taxes	—		13		13		—		(191)		(191)		(178)
NET INCOME (LOSS)	961		(38)		923		132		(702)		391		353
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	961	$	(38)	$	923	$	132	$	(702)	$	391	$	353
SEGMENT MARGIN(2)	33%				32%		49%

(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-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION

REVENUES AND PROFIT BY SEGMENT

for the twelve months ended December 31, 2021

(In millions)


	Reportable Segment				Corporate and Other		Total
	Vacation Ownership		Exchange & Third-Party Management
REVENUES
Sales of vacation ownership products	$	1,153	$	—	$	—	$	1,153
Management and exchange(1)
Ancillary revenues	188		3		—		191
Management fee revenues	158		32		(19)		171
Exchange and other services revenues	124		198		171		493
Management and exchange	470		233		152		855
Rental	446		40		—		486
Financing	268		—		—		268
Cost reimbursements(1)	1,202		47		(121)		1,128
TOTAL REVENUES	$	3,539	$	320	$	31	$	3,890

PROFIT
Development	$	286	$	—	$	—	$	286
Management and exchange(1)	270		102		(38)		334
Rental(1)	52		40		50		142
Financing	180		—		—		180
TOTAL PROFIT	788		142		12		942

OTHER
General and administrative	—		—		(227)		(227)
Depreciation and amortization	(89)		(48)		(9)		(146)
Litigation charges	(9)		—		(1)		(10)
Restructuring	—		(1)		1		—
Royalty fee	(106)		—		—		(106)
Impairment	—		—		(3)		(3)
Gains (losses) and other income (expense), net	1		—		(52)		(51)
Interest expense	—		—		(164)		(164)
Transaction and integration costs	(2)		—		(108)		(110)
Other	2		—		—		2
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	585		93		(551)		127
Provision for income taxes	—		—		(74)		(74)
NET INCOME (LOSS)	585		93		(625)		53
Net income attributable to noncontrolling interests(1)	—		—		(4)		(4)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	585	$	93	$	(629)	$	49
SEGMENT MARGIN(2)	25%		34%

(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.

(2) Segment margin represents the applicable segment’s net income or loss attributable to common shareholders divided by the applicable segment’s total revenues less cost reimbursement revenues.

A-9

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND

ADJUSTED EARNINGS PER SHARE - DILUTED

(In millions, except per share amounts)


	Quarter Ended				Fiscal Year Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Net income attributable to common shareholders	$	88	$	61	$	391	$	49
Provision for income taxes	57		11		191		74
Income before income taxes attributable to common shareholders	145		72		582		123
Certain items:
ILG integration	15		$	29	$	82	$	93
Welk acquisition and integration	4		8		14		16
I/T transformation	3		—		16		—
Other transformation initiatives	4		—		10		—
Other transaction costs	—		(2)		3		1
Transaction and integration costs	26		35		125		110
Early redemption of senior unsecured notes	—		19		—		55
Gain on disposition of hotel	—		—		(33)		—
Gain on disposition of VRI Americas	—		—		(17)		—
Foreign currency translation	—		4		10		—
Insurance proceeds	(1)		—		(6)		—
Change in indemnification asset	1		(1)		3		(7)
Other	(1)		2		3		3
(Gains) losses and other (income) expense, net	(1)		24		(40)		51
Purchase accounting adjustments	(2)		3		11		10
Litigation charges	4		2		11		10
Impairment	1		(2)		2		3
Expiration/forfeiture of deposits on pre-acquisition preview packages	—		—		(6)		—
Early termination of VRI management contract	—		—		(2)		—
Eliminate impact of Consolidated Property Owners' Associations	—		(3)		—		(8)
Change in estimate relating to pre-acquisition contingencies	(7)		—		(12)		—
Other	3		—		6		(3)
Adjusted pretax income*	169		131		677		296
Provision for income taxes	(54)		(28)		(219)		(106)
Adjusted net income attributable to common shareholders*	$	115	$	103	$	458	$	190

Diluted shares(1)	43.0		43.6		45.2		43.3
Adjusted earnings per share - Diluted*	$	2.74	$	2.38	$	10.26	$	4.40

Excluding the Impact of Alignment:
Adjusted net income attributable to common shareholders*	$	110	$	103	$	421	$	190
Adjusted earnings per share - Diluted*	$	2.60	$	2.38	$	9.42	$	4.40




(1) Diluted shares include 4.2 million and 4.3 million shares for the quarter and year-ended December 31, 2022, respectively, related to our convertible notes, reflecting the impact of the adoption of Accounting Standards Update 2020-06 in 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.

A-10

MARRIOTT VACATIONS WORLDWIDE CORPORATION

ADJUSTED EBITDA

(In millions)


	Quarter Ended				Fiscal Year Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	88	$	61	$	391	$	49
Interest expense	27		36		118		164
Provision for income taxes	57		11		191		74
Depreciation and amortization	34		34		132		146

Share-based compensation	9		18		39		51
Certain items:
ILG integration	15		$	29	$	82	$	93
Welk acquisition and integration	4		8		14		16
I/T transformation	3		—		16		—
Other transformation initiatives	4		—		10		—
Other transaction costs	—		(2)		3		1
Transaction and integration costs	26		35		125		110
Early redemption of senior unsecured notes	—		19		—		55
Gain on disposition of hotel	—		—		(33)		—
Gain on disposition of VRI Americas	—		—		(17)		—
Foreign currency translation	—		4		10		—
Insurance proceeds	(1)		—		(6)		—
Change in indemnification asset	1		(1)		3		(7)
Other	(1)		2		3		3
(Gains) losses and other (income) expense, net	(1)		24		(40)		51
Purchase accounting adjustments	(2)		3		11		10
Litigation charges	4		2		11		10
Impairment	1		(2)		2		3
Expiration/forfeiture of deposits on pre-acquisition preview packages	—		—		(6)		—
Early termination of VRI management contract	—		—		(2)		—
Eliminate impact of Consolidated Property Owners' Associations	—		(3)		—		(8)
Change in estimate relating to pre-acquisition contingencies	(7)		—		(12)		—
Other	3		—		6		(3)
ADJUSTED EBITDA*	$	239	$	219	$	966	$	657
ADJUSTED EBITDA MARGIN*	29%		27%		29%		24%

Excluding the Impact of Alignment:
ADJUSTED EBITDA*	$	232	$	219	$	915	$	657
ADJUSTED EBITDA MARGIN*	28%		27%		28%		24%



* 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

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT

(In millions)

(Unaudited)


	Quarter Ended
	December 31, 2022						December 31, 2021
	As Reported		Impact of Alignment		As Adjusted*
Consolidated contract sales	$	454	$	—	$	454	$	406
Less resales contract sales	(10)		—		(10)		(7)
Consolidated contract sales, net of resales	444		—		444		399
Plus:
Settlement revenue	10		—		10		7
Resales revenue	7		—		7		4
Revenue recognition adjustments:
Reportability	36		(12)		24		7
Sales reserve	(40)		—		(40)		(28)
Other(1)	(18)		—		(18)		(25)
Sale of vacation ownership products	439		(12)		427		364
Less:
Cost of vacation ownership products	(73)		5		(68)		(72)
Marketing and sales	(204)		—		(204)		(178)
Development Profit (Loss)	162		(7)		155		114
Revenue recognition reportability adjustment	(27)		7		(20)		(6)
Purchase accounting adjustments	(1)		—		(1)		3
Other	(8)		—		(8)		—
Adjusted development profit*	$	126	$	—	$	126	$	111
Development profit margin	36.8%				36.2%		31.3%
Adjusted development profit margin*	31.5%				31.5%		31.1%

(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.

A-12

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT

(In millions)

(Unaudited)


	Fiscal Year Ended
	December 31, 2022						December 31, 2021
	As Reported		Impact of Alignment		As Adjusted*
Consolidated contract sales	$	1,837	$	—	$	1,837	$	1,374
Less resales contract sales	(40)		—		(40)		(26)
Consolidated contract sales, net of resales	1,797		—		1,797		1,348
Plus:
Settlement revenue	36		—		36		28
Resales revenue	20		—		20		12
Revenue recognition adjustments:
Reportability	43		(58)		(15)		(44)
Sales reserve	(170)		19		(151)		(101)
Other(1)	(108)		—		(108)		(90)
Sale of vacation ownership products	1,618		(39)		1,579		1,153
Less:
Cost of vacation ownership products	(289)		7		(282)		(250)
Marketing and sales	(807)		—		(807)		(617)
Development Profit (Loss)	522		(32)		490		286
Revenue recognition reportability adjustment	(35)		46		11		32
Purchase accounting adjustments	13		—		13		12
Other	(13)		—		(13)		—
Adjusted development profit*	$	487	$	14	$	501	$	330
Development profit margin	32.2%				31.0%		24.8%
Adjusted development profit margin*	31.0%				31.5%		27.6%

(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.

A-13

MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions)

(Unaudited)

VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA


	Quarter Ended				Fiscal Year Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	241	$	205	$	961	$	585
Depreciation and amortization	25		23		92		89

Share-based compensation expense	2		2		7		6
Certain items:





Transaction and integration costs	—		—		3		2

Gain on disposition of hotel	—		—		(33)		—


Insurance proceeds	(1)		—		(4)		—

Other	—		(1)		—		(1)
Gains and other income, net	(1)		(1)		(37)		(1)
Purchase accounting adjustments	(2)		3		11		10
Litigation charges	2		2		9		9
Impairment	1		—		2		—
Expiration/forfeiture of deposits on pre-acquisition preview packages	—		—		(6)		—


Change in estimate relating to pre-acquisition contingencies	(7)		—		(12)		—
Other	—		—		3		(1)
SEGMENT ADJUSTED EBITDA*	$	261	$	234	$	1,033	$	699
SEGMENT ADJUSTED EBITDA MARGIN*	35%		33%		35%		30%

Excluding the Impact of Alignment:
SEGMENT ADJUSTED EBITDA*	$	254	$	234	$	982	$	699
SEGMENT ADJUSTED EBITDA MARGIN*	34%		33%		34%		30%

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA



	Quarter Ended				Fiscal Year Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	24	$	22	$	132	$	93
Depreciation and amortization	7		8		31		48

Share-based compensation expense	—		1		2		2
Certain items:
Gain on disposition of VRI Americas	—		—		(17)		—
Foreign currency translation	—		—		2		—



COVID-19 related restructuring	—		—		—		1
Other	—		—		(2)		—
SEGMENT ADJUSTED EBITDA*	$	31	$	31	$	148	$	144
SEGMENT ADJUSTED EBITDA MARGIN*	55%		49%		55%		53%

* 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-14

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CASH FLOW AND ADJUSTED FREE CASH FLOW

(In millions)


CASH FLOW	2022
Cash, cash equivalents and restricted cash provided by (used in):
Operating activities	$	522
Investing activities	16
Financing activities	(486)
Effect of changes in exchange rates on cash, cash equivalents, and restricted cash	(1)
Net change in cash, cash equivalents and restricted cash	$	51

ADJUSTED FREE CASH FLOW
Net cash, cash equivalents and restricted cash provided by operating activities	$	522
Capital expenditures for property and equipment (excluding inventory)	(65)
Borrowings from securitization transactions	1,031
Repayment of debt related to securitizations	(945)
Securitized debt issuance costs	(10)
Free cash flow*	533
Adjustments:
Decrease in restricted cash	131
Transaction and integration costs(1)	93
Capital expenditures(2)	24
Litigation charges(3)	7
Insurance proceeds(4)	(4)
Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(5)	(40)
Adjusted free cash flow*	$	744


			(1) Represents adjustment to exclude the after-tax impact of transaction and integration costs in connection with the ILG Acquisition and Welk Acquisition.

			(2) Represents adjustment to exclude capital expenditures, primarily related to our new global corporate headquarters in Orlando, FL.

			(3) Represents adjustment to exclude the after-tax impact of litigation charges.

			(4) Represents adjustment to exclude the after-tax impact of insurance proceeds.

			(5) Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2021 and 2022 year ends.

			* 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-15

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED BALANCE SHEETS

FISCAL YEAR-END 2022 AND 2021

(In millions, except share and per share data)


	2022		2021
ASSETS
Cash and cash equivalents	$	524	$	342
Restricted cash (including $85 and $139 from VIEs, respectively)	330		461
Accounts receivable, net (including $13 and $12 from VIEs, respectively)	292		279
Vacation ownership notes receivable, net (including $1,792 and $1,662 from VIEs, respectively)	2,198		2,045
Inventory	660		719
Property and equipment, net	1,139		1,136
Goodwill	3,117		3,150
Intangibles, net	911		993
Other (including $76 and $76 from VIEs, respectively)	468		488
TOTAL ASSETS	$	9,639	$	9,613

LIABILITIES AND EQUITY
Accounts payable	$	356	$	265
Advance deposits	158		160
Accrued liabilities (including $5 and $2 from VIEs, respectively)	369		345
Deferred revenue	344		453
Payroll and benefits liability	251		201
Deferred compensation liability	139		142
Securitized debt, net (including $1,982 and $1,877 from VIEs, respectively)	1,938		1,856
Debt, net	3,088		2,631
Other	167		224
Deferred taxes	331		350
TOTAL LIABILITIES	7,141		6,627

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; 75,744,524 and 75,519,049 shares issued, respectively	1		1
Treasury stock — at cost; 38,263,442 and 33,235,671 shares, respectively	(2,054)		(1,356)
Additional paid-in capital	3,941		4,072
Accumulated other comprehensive income (loss)	15		(16)
Retained earnings	593		275
TOTAL MVW SHAREHOLDERS' EQUITY	2,496		2,976
Noncontrolling interests	2		10
TOTAL EQUITY	2,498		2,986
TOTAL LIABILITIES AND EQUITY	$	9,639	$	9,613

The abbreviation VIEs above means Variable Interest Entities.

A-16

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

FISCAL YEARS 2022 AND 2021

(In millions)


	2022		2021
OPERATING ACTIVITIES
Net income	$	391	$	53
Adjustments to reconcile net income to net cash, cash equivalents, and restricted cash provided by operating activities:
Depreciation and amortization of intangibles	132		146
Amortization of debt discount and issuance costs	25		56
Vacation ownership notes receivable reserve	150		101
Share-based compensation	39		51
Impairment charges	—		3

Gains and other income, net	(48)		—
Deferred income taxes	87		34
Net change in assets and liabilities, net of the effects of acquisition:
Accounts and contracts receivable	(45)		—
Vacation ownership notes receivable originations	(980)		(750)
Vacation ownership notes receivable collections	642		686
Inventory	104		61
Other assets	(49)		(46)
Accounts payable, advance deposits and accrued liabilities	112		42
Deferred revenue	(9)		88
Payroll and benefit liabilities	53		35
Deferred compensation liability	13		22
Other liabilities	(38)		27
Deconsolidation of certain Consolidated Property Owners' Associations	(48)		(168)
Purchase of vacation ownership units for future transfer to inventory	(12)		(98)
Other, net	3		—
Net cash, cash equivalents, and restricted cash provided by operating activities	522		343
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)	(65)		(47)
Issuance of note receivable to VIE	(47)		—
Proceeds from collection of note receivable from VIE	47		—
Purchase of company owned life insurance	(18)		(14)
Dispositions, net	3		3
Other, net	2		2
Net cash, cash equivalents, and restricted cash provided by (used in) investing activities	16		(213)

Continued

A-17

MARRIOTT VACATIONS WORLDWIDE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FISCAL YEARS 2022 AND 2021

(In millions)


	2022		2021
FINANCING ACTIVITIES
Borrowings from securitization transactions	1,031		957
Repayment of debt related to securitization transactions	(945)		(868)
Proceeds from debt	1,266		1,111
Repayments of debt	(935)		(1,339)
Purchase of convertible note hedges	(107)		(100)
Proceeds from issuance of warrants	43		70
Payment of debt issuance costs	(15)		(22)
Finance lease payments	(4)		(5)
Repurchase of common stock	(701)		(78)
Payment of dividends	(99)		(23)
Payment of withholding taxes on vesting of restricted stock units	(23)		(20)
Other, net	3		—
Net cash, cash equivalents, and restricted cash used in financing activities	(486)		(317)
Effect of changes in exchange rates on cash, cash equivalents, and restricted cash	(1)		(2)
Change in cash, cash equivalents, and restricted cash	51		(189)
Cash, cash equivalents, and restricted cash, beginning of year	803		992
Cash, cash equivalents, and restricted cash, end of year	$	854	$	803

A-18

MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions, except per share amounts)

2023 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK


	Fiscal Year 2023 (low)		Fiscal Year 2023 (high)
Net income attributable to common shareholders	$	405	$	440
Provision for income taxes	165		180
Income before income taxes attributable to common shareholders	570		620
Certain items(1)	75		75
Adjusted pretax income*	645		695
Provision for income taxes	(185)		(200)
Adjusted net income attributable to common shareholders*	$	460	$	495
Earnings per share - Diluted(2)	$	9.51	$	10.30
Adjusted earnings per share - Diluted(2)*	$	10.75	$	11.54
Diluted shares(2)	44.5		44.5

2023 ADJUSTED EBITDA OUTLOOK


	Fiscal Year 2023 (low)		Fiscal Year 2023 (high)
Net income attributable to common shareholders	$	405	$	440
Interest expense	140		140
Provision for income taxes	165		180
Depreciation and amortization	125		125
Share-based compensation	40		40
Certain items(1)	75		75
Adjusted EBITDA*	$	950	$	1,000


(1) Certain items adjustment includes $50 million of anticipated transaction and integration costs, $20 million of anticipated purchase accounting adjustments, and $5 million of anticipated litigation charges.

(2) We expect 6.5 million shares to be included in diluted shares related to our convertible notes and an add back of $18 million for interest expense to the numerator of the diluted earnings per share calculation.

* 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-19

MARRIOTT VACATIONS WORLDWIDE CORPORATION

2023 ADJUSTED FREE CASH FLOW OUTLOOK

(In millions)


	Fiscal Year 2023 (low)		Fiscal Year 2023 (high)
Net cash, cash equivalents and restricted cash provided by operating activities	$	365	$	415
Capital expenditures for property and equipment (excluding inventory)	(80)		(90)
Borrowings from securitization transactions	950		1,000
Repayment of debt related to securitizations	(810)		(830)
Securitized Debt Issuance Costs	(15)		(15)
Free cash flow*	410		480
Adjustments:
Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1)	120		120
Certain items(2)	85		85
Change in restricted cash	(15)		(15)
Adjusted free cash flow*	$	600	$	670


			(1) Represents the net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2022 and 2023 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.

A-20

MARRIOTT VACATIONS WORLDWIDE CORPORATION

QUARTERLY OPERATING METRICS

(Contract sales in millions)


	Year	Quarter Ended								Full Year
		March 31		June 30		September 30		December 31
Vacation Ownership
Consolidated contract sales
	2022	$	394	$	506	$	483	$	454	$	1,837
	2021	$	226	$	362	$	380	$	406	$	1,374
	2020	$	306	$	30	$	140	$	178	$	654










VPG
	2022	$	4,706	$	4,613	$	4,353	$	4,088	$	4,421
	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		105,231		390,593
	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		1,566		1,566
	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	$	35.60	$	157.97
	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.

A-21

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by an asterisk (“*”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common shareholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.

Certain Items Excluded from Non-GAAP Financial Measures

We evaluate non-GAAP financial measures, including those identified by an asterisk (“*”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other companies.

Adjusted Development Profit and Adjusted Development Profit Margin

We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin.

Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to shareholders. We also use Adjusted EBITDA, as do analysts, lenders, investors, and others, because this

A-22

measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other companies.

Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin

We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin as indicators of operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations.

Free Cash Flow and Adjusted Free Cash Flow

We evaluate Free Cash Flow and Adjusted Free Cash Flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted Free Cash Flow, which reflects additional adjustments to Free Cash Flow for the impact of transaction and integration charges, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free Cash Flow and Adjusted Free Cash Flow also facilitates management’s comparison of our results with our competitors’ results.

Results As Adjusted

In our press release and schedules we provide As Adjusted results for comparison. The As Adjusted results exclude any impacts to the Company’s reported results on a GAAP basis due to the Alignment. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the impact of the Alignment. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any impact from the Alignment.