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Marriott Vacations Worldwide Reports First Quarter 2024 Financial Results

Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW,” the “Company,” “we” or “our”) reported first quarter 2024 financial results.

First Quarter 2024 Highlights

  • Consolidated Vacation Ownership contract sales were $428 million, a 1% decrease compared to the first quarter of 2023. Excluding Maui, contract sales increased 3% compared to the prior year.
  • Net income attributable to common stockholders was $47 million compared to $87 million in the prior year, and fully diluted earnings per share was $1.22.
  • Adjusted net income attributable to common stockholders was $71 million compared to $109 million in the prior year, and adjusted fully diluted earnings per share was $1.80.
  • Adjusted EBITDA decreased 8% compared to the prior year to $187 million.
  • The Company repurchased 280 thousand shares of its common stock for $24 million and paid two quarterly dividends totaling $54 million.
  • The Company reaffirms its full-year contract sales and Adjusted EBITDA guidance.

“It was great to see so many of our owners and guests spending time with their families at our resorts during the first quarter making memories that will last a lifetime,” said John Geller, president and chief executive officer. “Reservations for the upcoming summer months are up over last year both domestically and internationally and travel demand for Maui is close to pre-wildfire levels, setting us up to grow contract sales 6 to 9% this year.”

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.

Vacation Ownership

 

Three Months Ended

 

 

 

(In millions, except volume per guest (“VPG”) and tours)

 March 31, 2024

 

March 31, 2023

 

Change

 

Revenues excluding cost reimbursement

$

730

 

 

$

729

 

 

—%

 

Total consolidated contract sales

$

428

 

 

$

434

 

 

(1%)

 

VPG

$

4,129

 

 

$

4,358

 

 

(5%)

 

Tours

 

96,579

 

 

 

92,890

 

 

4%

 

Segment financial results attributable to common stockholders

$

182

 

 

$

205

 

 

(11%)

 

Segment Adjusted EBITDA*

$

213

 

 

$

229

 

 

(7%)

 

Segment Adjusted EBITDA margin*

29%

 

31%

 

(200 bpts)

 

Contract sales declined primarily due to the impact of the Maui wildfires. Excluding Maui, contract sales increased 3%. Segment Adjusted EBITDA declined as higher Management and exchange and Rental profit were more than offset by lower Development and Financing profit.

Exchange & Third-Party Management

Three Months Ended

 

 

 

(In millions, except total active Interval International members and average revenue per member)

March 31, 2024

 

March 31, 2023

 

Change

 

Revenues excluding cost reimbursement

$

63

 

 

$

66

 

 

(6%)

 

Total active Interval International members (000's)(1)

 

1,566

 

 

 

1,568

 

 

—%

 

Average revenue per Interval International member

$

41.74

 

 

$

42.07

 

 

(1%)

 

Segment financial results attributable to common stockholders

$

25

 

 

$

28

 

 

(13%)

 

Segment Adjusted EBITDA*

$

32

 

 

$

37

 

 

(14%)

 

Segment Adjusted EBITDA margin*

51%

 

56%

 

(500 bpts)

 

 

 

 

 

 

 

 

(1) Includes members at the end of each period.

Revenues excluding cost reimbursements decreased year-over-year, driven primarily by lower exchange volumes and reduced management fees at Aqua-Aston. Segment Adjusted EBITDA declined year-over-year due to lower revenue.

Corporate and Other

General and administrative costs decreased $5 million in the first quarter of 2024 compared to the prior year.

Balance Sheet and Liquidity

The Company ended the quarter with $855 million in liquidity, including $237 million of cash and cash equivalents and $557 million of available capacity under its revolving corporate credit facility.

The Company had $3.1 billion of corporate debt and $2.2 billion of non-recourse debt related to its securitized notes receivable at the end of the first quarter.

During the quarter, the Company completed its first securitization of the year, raising $430 million at a blended interest rate of 5.48%, approximately 100 basis points below its November 2023 securitization.

In April, the Company refinanced its 2025 Term Loan, extending its maturity to 2031. The interest rate of the new term loan is SOFR plus 2.25%.

Full Year 2024 Outlook

The Company provides full year 2024 guidance as reflected in the chart below. The Financial schedules that follow reconcile the following full year 2024 expected GAAP results for the Company to the non-GAAP financial measures set forth below.

(in millions, except per share amounts)

2024 Guidance

Contract sales

$1,880

to

$1,930

Net income attributable to common stockholders

$265

to

$300

Earnings per share - diluted

$6.74

to

$7.57

Net cash, cash equivalents and restricted cash provided by operating activities

$235

to

$276

Adjusted EBITDA*

$760

to

$800

Adjusted earnings per share - diluted*

$7.45

to

$8.16

Adjusted free cash flow*

$400

to

$450

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.

First Quarter 2024 Financial Results Conference Call

The Company will hold a conference call on May 7, 2024 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has approximately 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 an exchange network 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.

The Company routinely posts important information, including news releases, announcements and other statements about its business and results of operations, that may be deemed material to investors on the Investor Relations section of the Company’s website, www.marriottvacationsworldwide.com. The Company uses its website as a means of disclosing material, nonpublic information and for complying with the Company’s disclosure obligations under Regulation FD. Investors should monitor the Investor Relations section of the Company’s website in addition to following the Company’s press releases, filings with the SEC, public conference calls and webcasts.

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 full year 2024 outlook for contract sales, results of operations, and cash flows. 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: a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza, and elsewhere in the world 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 changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs; political or social strife; and other matters referred to under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and which may be updated in our future 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 1, 2024

 

TABLE OF CONTENTS

 

Summary Financial Information and Adjusted EBITDA by Segment

A-1

Interim Consolidated Statements of Income

A-2

Revenues and Profit by Segment

A-3

to

A-4

Consolidated Contract Sales to Adjusted Development Profit

A-5

Adjusted Net Income Attributable to Common Stockholders

Adjusted Earnings Per Share - Diluted

A-6

Adjusted EBITDA

A-7

Segment Adjusted EBITDA

 

Vacation Ownership

A-8

Exchange & Third-Party Management

 

Interim Balance Sheet Items and Summary Cash Flow

A-9

2024 Outlook

 

 

 

Adjusted Net Income Attributable to Common Stockholders

 

Adjusted Earnings Per Share - Diluted

A-10

Adjusted EBITDA

 

Adjusted Free Cash Flow

A-11

Quarterly Operating Metrics

A-12

Non-GAAP Financial Measures

A-13

A-1

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

SUMMARY FINANCIAL INFORMATION

(In millions, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

 

March 31, 2024

 

March 31, 2023

 

Change %

GAAP Measures

 

 

 

 

 

Revenues

$

1,195

 

$

1,169

 

2%

Income before income taxes and noncontrolling interests

$

81

 

 

$

128

 

 

(37%)

Net income attributable to common stockholders

$

47

 

 

$

87

 

 

(46%)

Diluted shares

 

42.2

 

 

 

44.4

 

 

(5%)

Earnings per share - diluted

$

1.22

 

 

$

2.06

 

 

(41%)

 

 

 

 

 

 

Non-GAAP Measures*

 

 

 

 

 

Adjusted EBITDA

$

187

 

 

$

203

 

 

(8%)

Adjusted pretax income

$

102

 

 

$

130

 

 

(21%)

Adjusted net income attributable to common stockholders

$

71

 

 

$

109

 

 

(34%)

Adjusted earnings per share - diluted

$

1.80

 

 

$

2.54

 

 

(29%)

 

 

 

 

 

 

* 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.

ADJUSTED EBITDA BY SEGMENT

(In millions)

(Unaudited)

 

 

Three Months Ended

 

 

 

March 31, 2024

 

March 31, 2023

 

Change %

Vacation Ownership

$

213

 

 

$

229

 

 

(7%)

Exchange & Third-Party Management

 

32

 

 

 

37

 

 

(14%)

Segment Adjusted EBITDA*

 

245

 

 

 

266

 

 

(8%)

General and administrative

 

(63

)

 

 

(68

)

 

8%

Other

 

5

 

 

 

5

 

 

(13%)

Adjusted EBITDA*

$

187

 

 

$

203

 

 

(8%)

* 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-2

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

INTERIM CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

REVENUES

 

 

 

Sale of vacation ownership products

$

352

 

 

$

375

 

Management and exchange

 

211

 

 

 

200

 

Rental

 

158

 

 

 

151

 

Financing

 

83

 

 

 

78

 

Cost reimbursements

 

391

 

 

 

365

 

TOTAL REVENUES

 

1,195

 

 

 

1,169

 

EXPENSES

 

 

 

Cost of vacation ownership products

 

53

 

 

 

58

 

Marketing and sales

 

223

 

 

 

210

 

Management and exchange

 

116

 

 

 

107

 

Rental

 

107

 

 

 

113

 

Financing

 

34

 

 

 

26

 

General and administrative

 

63

 

 

 

68

 

Depreciation and amortization

 

38

 

 

 

32

 

Litigation charges

 

3

 

 

 

3

 

Restructuring

 

2

 

 

 

 

Royalty fee

 

28

 

 

 

29

 

Impairment

 

 

 

 

4

 

Cost reimbursements

 

391

 

 

 

365

 

TOTAL EXPENSES

 

1,058

 

 

 

1,015

 

Gains and other income, net

 

 

 

 

21

 

Interest expense, net

 

(40

)

 

 

(34

)

Transaction and integration costs

 

(15

)

 

 

(13

)

Other

 

(1

)

 

 

 

INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS

 

81

 

 

 

128

 

Provision for income taxes

 

(35

)

 

 

(41

)

NET INCOME

 

46

 

 

 

87

 

Net loss attributable to noncontrolling interests

 

1

 

 

 

 

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

47

 

 

$

87

 

 

 

 

 

EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

 

 

Basic shares

 

35.5

 

 

 

37.4

 

Basic

$

1.32

 

 

$

2.32

 

Diluted shares

 

42.2

 

 

 

44.4

 

Diluted

$

1.22

 

 

$

2.06

 

A-3

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

REVENUES AND PROFIT BY SEGMENT

for the three months ended March 31, 2024

(In millions)

(Unaudited)

 

 

Reportable Segment

 

 

 

 

 

Vacation

Ownership

 

Exchange &

Third-Party

Management

 

Corporate

and Other

 

Total

REVENUES

 

 

 

 

 

 

 

Sales of vacation ownership products

$

352

 

 

$

 

 

$

 

 

$

352

 

Management and exchange(1)

 

 

 

 

 

 

 

Ancillary revenues

 

65

 

 

 

1

 

 

 

 

 

 

66

 

Management fee revenues

 

52

 

 

 

5

 

 

 

(1

)

 

 

56

 

Exchange and other services revenues

 

31

 

 

 

46

 

 

 

12

 

 

 

89

 

Management and exchange

 

148

 

 

 

52

 

 

 

11

 

 

 

211

 

Rental

 

147

 

 

 

11

 

 

 

 

 

 

158

 

Financing

 

83

 

 

 

 

 

 

 

 

 

83

 

Cost reimbursements(1)

 

400

 

 

 

2

 

 

 

(11

)

 

 

391

 

TOTAL REVENUES

$

1,130

 

 

$

65

 

 

$

 

 

$

1,195

 

 

 

 

 

 

 

 

 

PROFIT

 

 

 

 

 

 

 

Development

$

76

 

 

$

 

 

$

 

 

$

76

 

Management and exchange(1)

 

77

 

 

 

21

 

 

 

(3

)

 

 

95

 

Rental(1)

 

37

 

 

 

11

 

 

 

3

 

 

 

51

 

Financing

 

49

 

 

 

 

 

 

 

 

 

49

 

TOTAL PROFIT

 

239

 

 

 

32

 

 

 

 

 

 

271

 

 

 

 

 

 

 

 

 

OTHER

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

(63

)

 

 

(63

)

Depreciation and amortization

 

(25

)

 

 

(7

)

 

 

(6

)

 

 

(38

)

Litigation charges

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Restructuring

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Royalty fee

 

(28

)

 

 

 

 

 

 

 

 

(28

)

Interest expense, net

 

 

 

 

 

 

 

(40

)

 

 

(40

)

Transaction and integration costs

 

 

 

 

 

 

 

(15

)

 

 

(15

)

Other

 

(1

)

 

 

 

 

 

 

 

 

(1

)

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS

 

182

 

 

 

25

 

 

 

(126

)

 

 

81

 

Provision for income taxes

 

 

 

 

 

 

 

(35

)

 

 

(35

)

NET INCOME (LOSS)

 

182

 

 

 

25

 

 

 

(161

)

 

 

46

 

Net loss attributable to noncontrolling interests(1)

 

 

 

 

 

 

 

1

 

 

 

1

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

182

 

 

$

25

 

 

$

(160

)

 

$

47

 

SEGMENT MARGIN(2)

25%

 

39%

 

 

 

 

 

 

 

 

 

 

 

 

(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 stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues.

A-4

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

REVENUES AND PROFIT BY SEGMENT

for the three months ended March 31, 2023

(In millions)

(Unaudited)

 

 

Reportable Segment

 

 

 

Vacation

Ownership

 

Exchange &

Third-Party

Management

 

Corporate

and Other

 

Total

REVENUES

 

 

 

 

 

 

 

Sales of vacation ownership products

$

375

 

 

$

 

 

$

 

 

$

375

 

Management and exchange(1)

 

 

 

 

 

 

 

Ancillary revenues

 

61

 

 

 

1

 

 

 

 

 

 

62

 

Management fee revenues

 

45

 

 

 

8

 

 

 

(1

)

 

 

52

 

Exchange and other services revenues

 

29

 

 

 

47

 

 

 

10

 

 

 

86

 

Management and exchange

 

135

 

 

 

56

 

 

 

9

 

 

 

200

 

Rental

 

141

 

 

 

10

 

 

 

 

 

 

151

 

Financing

 

78

 

 

 

 

 

 

 

 

 

78

 

Cost reimbursements(1)

 

368

 

 

 

5

 

 

 

(8

)

 

 

365

 

TOTAL REVENUES

$

1,097

 

 

$

71

 

 

$

1

 

 

$

1,169

 

 

 

 

 

 

 

 

 

PROFIT

 

 

 

 

 

 

 

Development

$

107

 

 

$

 

 

$

 

 

$

107

 

Management and exchange(1)

 

71

 

 

 

26

 

 

 

(4

)

 

 

93

 

Rental(1)

 

25

 

 

 

10

 

 

 

3

 

 

 

38

 

Financing

 

52

 

 

 

 

 

 

 

 

 

52

 

TOTAL PROFIT

 

255

 

 

 

36

 

 

 

(1

)

 

 

290

 

 

 

 

 

 

 

 

 

OTHER

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

(68

)

 

 

(68

)

Depreciation and amortization

 

(23

)

 

 

(8

)

 

 

(1

)

 

 

(32

)

Litigation charges

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Royalty fee

 

(29

)

 

 

 

 

 

 

 

 

(29

)

Impairment

 

(4

)

 

 

 

 

 

 

 

 

(4

)

Gains and other income, net

 

9

 

 

 

 

 

 

12

 

 

 

21

 

Interest expense, net

 

 

 

 

 

 

 

(34

)

 

 

(34

)

Transaction and integration costs

 

 

 

 

 

 

 

(13

)

 

 

(13

)

INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS

 

205

 

 

 

28

 

 

 

(105

)

 

 

128

 

Provision for income taxes

 

 

 

 

 

 

 

(41

)

 

 

(41

)

NET INCOME (LOSS)

 

205

 

 

 

28

 

 

 

(146

)

 

 

87

 

Net income attributable to noncontrolling interests(1)

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

205

 

 

$

28

 

 

$

(146

)

 

$

87

 

SEGMENT MARGIN(2)

28%

 

42%

 

 

 

 

 

 

 

 

 

 

 

 

(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 stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues.

A-5

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT

(In millions)

(Unaudited)

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

Consolidated contract sales

$

428

 

 

$

434

 

Less resales contract sales

 

(12

)

 

 

(11

)

Consolidated contract sales, net of resales

 

416

 

 

 

423

 

Plus:

 

 

 

Settlement revenue

 

8

 

 

 

8

 

Resales revenue

 

5

 

 

 

6

 

Revenue recognition adjustments:

 

 

 

Reportability

 

(9

)

 

 

 

Sales reserve

 

(46

)

 

 

(38

)

Other(1)

 

(22

)

 

 

(24

)

Sale of vacation ownership products

 

352

 

 

 

375

 

Less:

 

 

 

Cost of vacation ownership products

 

(53

)

 

 

(58

)

Marketing and sales

 

(223

)

 

 

(210

)

Development Profit

 

76

 

 

 

107

 

Revenue recognition reportability adjustment

 

7

 

 

 

 

Purchase accounting adjustments

 

1

 

 

 

2

 

Adjusted development profit*

$

84

 

 

$

109

 

Development profit margin

21.5%

 

28.5%

Adjusted development profit margin*

23.3%

 

29.2%

 

 

 

 

(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.

A-6

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND

ADJUSTED EARNINGS PER SHARE - DILUTED

(In millions, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

Net income attributable to common stockholders

$

47

 

 

$

87

 

Provision for income taxes

 

35

 

 

 

41

 

Income before income taxes attributable to common stockholders

 

82

 

 

 

128

 

Certain items:

 

 

 

ILG integration

 

 

 

 

9

 

Welk acquisition and integration

 

15

 

 

 

4

 

Transaction and integration costs

 

15

 

 

 

13

 

Early redemption of senior secured notes

 

 

 

 

10

 

Foreign currency translation

 

2

 

 

 

(2

)

Insurance proceeds

 

 

 

 

(2

)

Change in indemnification asset

 

(2

)

 

 

(23

)

Other

 

 

 

 

(4

)

Gains and other income, net

 

 

 

 

(21

)

Purchase accounting adjustments

 

1

 

 

 

2

 

Litigation charges

 

3

 

 

 

3

 

Restructuring charges

 

2

 

 

 

 

Impairment charges

 

 

 

 

4

 

Other

 

(1

)

 

 

1

 

Adjusted pretax income*

 

102

 

 

 

130

 

Provision for income taxes

 

(31

)

 

 

(21

)

Adjusted net income attributable to common stockholders*

$

71

 

 

$

109

 

 

 

 

 

Diluted shares

 

42.2

 

 

 

44.4

 

Adjusted earnings per share - Diluted*

$

1.80

 

 

$

2.54

 

 

 

 

 

* 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.

A-7

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

ADJUSTED EBITDA

(In millions)

(Unaudited)

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

47

 

 

$

87

 

Interest expense, net

 

40

 

 

 

34

 

Provision for income taxes

 

35

 

 

 

41

 

Depreciation and amortization

 

38

 

 

 

32

 

Share-based compensation

 

7

 

 

 

7

 

Certain items:

 

 

 

ILG integration

 

 

 

 

9

 

Welk acquisition and integration

 

15

 

 

 

4

 

Transaction and integration costs

 

15

 

 

 

13

 

Early redemption of senior secured notes

 

 

 

 

10

 

Foreign currency translation

 

2

 

 

 

(2

)

Insurance proceeds

 

 

 

 

(2

)

Change in indemnification asset

 

(2

)

 

 

(23

)

Other

 

 

 

 

(4

)

Gains and other income, net

 

 

 

 

(21

)

Purchase accounting adjustments

 

1

 

 

 

2

 

Litigation charges

 

3

 

 

 

3

 

Restructuring charges

 

2

 

 

 

 

Impairment charges

 

 

 

 

4

 

Other

 

(1

)

 

 

1

 

ADJUSTED EBITDA*

$

187

 

 

$

203

 

ADJUSTED EBITDA MARGIN*

23%

 

25%

 

 

 

 

* 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

(In millions)

(Unaudited)

 

VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

182

 

 

$

205

 

Depreciation and amortization

 

25

 

 

 

23

 

Share-based compensation

 

2

 

 

 

1

 

Certain items:

 

 

 

Insurance proceeds

 

 

 

 

(2

)

Change in indemnification asset

 

 

 

 

(3

)

Other

 

 

 

 

(4

)

Gains and other income, net

 

 

 

 

(9

)

Purchase accounting adjustments

 

1

 

 

 

2

 

Litigation charges

 

3

 

 

 

3

 

Impairment charges

 

 

 

 

4

 

SEGMENT ADJUSTED EBITDA*

$

213

 

 

$

229

 

SEGMENT ADJUSTED EBITDA MARGIN*

29%

 

31%

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

25

 

 

$

28

 

Depreciation and amortization

 

7

 

 

 

8

 

Share-based compensation

 

 

 

 

1

 

SEGMENT ADJUSTED EBITDA*

$

32

 

 

$

37

 

SEGMENT ADJUSTED EBITDA MARGIN*

51%

 

56%

 

 

 

 

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

A-9

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions)

(Unaudited)

 

INTERIM BALANCE SHEET ITEMS

 

 

March 31, 2024

 

December 31, 2023

Cash and cash equivalents

$

237

 

$

248

Vacation ownership notes receivable, net

$

2,336

 

 

$

2,343

 

Inventory

$

637

 

 

$

634

 

Property and equipment, net

$

1,299

 

 

$

1,260

 

Goodwill

$

3,117

 

 

$

3,117

 

Intangibles, net

$

839

 

 

$

854

 

Debt, net

$

3,111

 

 

$

3,049

 

Stockholders’ equity

$

2,379

 

 

$

2,382

 

SUMMARY CASH FLOW

 

 

Three Months Ended

CASH FLOW

March 31, 2024

 

March 31, 2023

Cash, cash equivalents, and restricted cash provided by (used in):

 

 

 

Operating activities

$

3

 

 

$

(50

)

Investing activities

 

(69

)

 

 

(37

)

Financing activities

 

43

 

 

 

(194

)

Effect of changes in exchange rates on cash, cash equivalents, and restricted cash

 

(1

)

 

 

1

 

Net change in cash, cash equivalents, and restricted cash

$

(24

)

 

$

(280

)

A-10

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions, except per share amounts)

 

2024 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND

ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK

 

 

Fiscal Year 2024

 

Low

 

High

Net income attributable to common stockholders

$

265

 

 

$

300

 

Provision for income taxes

 

119

 

 

 

134

 

Income before income taxes attributable to common stockholders

 

384

 

 

 

434

 

Certain items(1)

 

33

 

 

 

28

 

Adjusted pretax income*

 

417

 

 

 

462

 

Provision for income taxes

 

(122

)

 

 

(137

)

Adjusted net income attributable to common stockholders*

$

295

 

 

$

325

 

Earnings per share - Diluted(2)(3)

$

6.74

 

 

$

7.57

 

Adjusted earnings per share - Diluted(2)(3)*

$

7.45

 

 

$

8.16

 

Diluted shares(2)

 

42.1

 

 

 

42.1

2024 ADJUSTED EBITDA OUTLOOK

 

 

Fiscal Year 2024

 

Low

 

High

Net income attributable to common stockholders

$

265

 

$

300

Interest expense

 

163

 

 

 

158

 

Provision for income taxes

 

119

 

 

 

134

 

Depreciation and amortization

 

143

 

 

 

143

 

Share-based compensation

 

37

 

 

 

37

 

Certain items(1)

 

33

 

 

 

28

 

Adjusted EBITDA*

$

760

 

 

$

800

 

(1) Certain items adjustment includes $15 million to $20 million of anticipated transaction and integration costs and $13 million of litigation and other charges.

(2) Includes 6.8 million shares from the assumed conversion of our convertible notes.

(3) Includes an add back of $19 million of interest expense related to our convertible notes, net of tax for purposes of calculating net income in 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-11

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

2024 ADJUSTED FREE CASH FLOW OUTLOOK

(In millions)

 

 

 

Fiscal Year 2024

 

 

Low

 

High

Net cash, cash equivalents and restricted cash provided by operating activities

 

$

235

 

 

$

276

 

Capital expenditures for property and equipment (excluding inventory)

 

 

(65

)

 

 

(85

)

Borrowings from securitizations, net of repayments

 

 

105

 

 

 

120

 

Securitized debt issuance costs

 

 

(11

)

 

 

(12

)

Free cash flow*

 

 

264

 

 

 

299

 

Adjustments:

 

 

 

 

Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1)

 

 

110

 

 

 

125

 

Certain items(2)

 

 

26

 

 

 

22

 

Change in restricted cash

 

 

 

 

 

4

 

Adjusted free cash flow*

 

$

400

 

 

$

450

 

(1) Represents the anticipated net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2023 and 2024 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-12

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION

 

QUARTERLY OPERATING METRICS

(Contract sales in millions)

 

 

 

 

Quarter Ended

 

 

 

Year

 

March 31

 

June 30

 

September 30

 

December 31

 

Full Year

Vacation Ownership

 

 

 

 

 

 

 

 

 

 

 

Consolidated contract sales

 

2024

 

$

428

 

 

 

 

 

 

 

 

 

 

2023

 

$

434

 

 

$

453

 

 

$

438

 

 

$

447

 

 

$

1,772

 

 

2022

 

$

394

 

 

$

506

 

 

$

483

 

 

$

454

 

 

$

1,837

 

 

 

 

 

 

 

 

 

 

 

 

 

VPG

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

$

4,129

 

 

 

 

 

 

 

 

 

 

2023

 

$

4,358

 

 

$

3,968

 

 

$

4,055

 

 

$

4,002

 

 

$

4,088

 

 

2022

 

$

4,706

 

 

$

4,613

 

 

$

4,353

 

 

$

4,088

 

 

$

4,421

 

 

 

 

 

 

 

 

 

 

 

 

 

Tours

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

96,579

 

 

 

 

 

 

 

 

 

 

2023

 

 

92,890

 

 

 

106,746

 

 

 

100,609

 

 

 

105,580

 

 

 

405,825

 

 

2022

 

 

78,505

 

 

 

102,857

 

 

 

104,000

 

 

 

105,231

 

 

 

390,593

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange & Third-Party Management

 

 

 

 

 

 

 

 

Total active Interval International members (000's)(1)

 

2024

 

 

1,566

 

 

 

 

 

 

 

 

 

 

2023

 

 

1,568

 

 

 

1,566

 

 

 

1,571

 

 

 

1,564

 

 

 

1,564

 

 

2022

 

 

1,606

 

 

 

1,596

 

 

 

1,591

 

 

 

1,566

 

 

 

1,566

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per Interval International member

 

2024

 

$

41.74

 

 

 

 

 

 

 

 

 

 

2023

 

$

42.07

 

 

$

39.30

 

 

$

39.15

 

 

$

36.16

 

 

$

156.65

 

 

2022

 

$

44.33

 

$

38.79

 

$

38.91

 

$

35.60

 

$

157.97

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes members at the end of each period.

A-13

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 stockholders, 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 stockholders, before interest expense, net (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 stockholders. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this 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.

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