ORLANDO, Fla., November 8, 2021 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported third quarter 2021 financial results.
"Occupancies at our resorts this quarter were very strong despite the Delta variant and contract sales were within 3% of 2019 levels, driving 25% sequential growth in Adjusted EBITDA and exceeding 2019 for the first time since the pandemic began," said Stephen P. Weisz, chief executive officer. "First time buyers represented more than 30% of contract sales in the third quarter, which is important for the long-term health of the system. The fourth quarter has started well with October contract sales above 2019 levels and reservations on the books for the first half of next year are already strong."
Third Quarter 2021 Highlights and Operational Update:
- Consolidated Vacation Ownership contract sales totaled $380 million in the third quarter of 2021, with VPG 24% higher than the third quarter of 2019.
- Net income attributable to common shareholders was $10 million, or $0.23 fully diluted earnings per share.
- Adjusted net income attributable to common shareholders was $70 million and adjusted fully diluted earnings per share was $1.60.
- Adjusted EBITDA increased 25% on a sequential basis to $205 million in the third quarter of 2021, 8% higher than the third quarter of 2019.
- Adjusted EBITDA margin (excluding cost reimbursements) was 27%, the Company's highest quarterly Adjusted EBITDA margin as a stand alone public company.
- During the quarter, the Company's Board of Directors authorized a share repurchase program of up to $250 million and declared a quarterly cash dividend of $0.54 per share of common stock, which was paid in October 2021.
- In September, the Company repaid the remaining $250 million of its 6.50% Senior Unsecured Notes due 2026 and, subsequent to the end of the quarter, repaid $250 million of its 6.125% Senior Secured Notes due 2025.
- With recovery in the business expected to continue, the Company projects contract sales of $385 million to $405 million in the fourth quarter of 2021.
Third Quarter 2021 Segment Results
Vacation Ownership
Revenues excluding cost reimbursements increased 123% in the third quarter of 2021 compared to the prior year and increased 8% from the second quarter of 2021 as the business continued to recover. Compared to the second quarter, revenue from the sale of vacation ownership products increased 12% and Development profit margin increased to 28%. Excluding the impact of revenue reportability, Adjusted development profit increased sequentially to $98 million, with Adjusted development profit margin increasing nearly 335 basis points to 30%.
Vacation Ownership segment financial results were $185 million in the third quarter of 2021 and segment Adjusted EBITDA increased 18% on a sequential basis to $215 million, with Adjusted EBITDA margin nearly 360 basis points higher than third quarter 2019.
Exchange & Third-Party Management
Revenues excluding cost reimbursements increased 12% in the third quarter of 2021 compared to the prior year. Interval International active members declined 1% compared to the second quarter of 2021 to 1.3 million and Average revenue per member declined 7% sequentially.
Exchange & Third-Party Management segment financial results were $23 million in the third quarter of 2021 and segment Adjusted EBITDA declined $2 million sequentially to $35 million, with Adjusted EBITDA margin approximately 240 basis points higher than 2019.
Corporate and Other
General and administrative costs increased $22 million in the third quarter of 2021 compared to the prior year as a result of higher salary and wages costs as the prior year quarter benefited from savings related to programs implemented in response to the impact of the COVID-19 pandemic, higher bonus expense, and a decrease in credits related to incentives under the CARES Act.
Balance Sheet and Liquidity
On September 30, 2021, cash and cash equivalents totaled $448 million.
The Company had $4.4 billion in debt outstanding, net of unamortized debt issuance costs, at the end of the third quarter of 2021. This included $2.8 billion of corporate debt and $1.6 billion of non-recourse debt related to its securitized notes receivable.
In September, the Company repaid the remaining $250 million of its 6.50% Senior Unsecured Notes due 2026 and, subsequent to the end of the quarter, repaid $250 million of its 6.125% Senior Secured Notes due 2025. Pro forma, the Company ended the quarter with more than $1.0 billion of liquidity.
During the quarter, the Company's Board of Directors authorized a share repurchase program of up to $250 million and declared a quarterly cash dividend of $0.54 per share of common stock, which was paid in October 2021.
Non-GAAP Financial Information
Non-GAAP financial measures, such as Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted fully diluted earnings or loss per share, Adjusted development profit, Adjusted development profit margin, and other adjusted financial measures, are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow.
Third Quarter 2021 Financial Results Conference Call
The Company will hold a conference call on November 8, 2021 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 nearly 120 resorts and approximately 700,000 Owners and Members in a diverse portfolio that includes seven vacation ownership brands. It also includes exchange networks and membership programs comprised of 3,200 resorts in over 90 nations, as well as management of more than 150 other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.
Note on forward-looking statements
This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements about expectations for business recovery and contract sales in the fourth quarter, that are not historical facts. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the effects of the COVID-19 pandemic, including reduced demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including its short and longer-term impact on the demand for travel and on consumer confidence; the impact of the availability and distribution of effective vaccines on the demand for travel and consumer confidence; the effectiveness of available vaccines against variants of the virus, including the Delta variant; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; competitive conditions; the availability of capital to finance growth; the effects of steps we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts due to the COVID-19 pandemic; political or social strife, and other matters referred to under the heading "Risk Factors" contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our periodic filings with the U.S. Securities and Exchange Commission (the "SEC"), any of which could cause actual results to differ materially from those expressed or implied herein. 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. These statements are made as of the date of issuance 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.
Financial Schedules Follow
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
FINANCIAL SCHEDULES
QUARTER 3, 2021
|
|
|
TABLE OF CONTENTS
|
|
|
Summary Financial Information and Adjusted EBITDA by Segment
|
A-1
|
|
Consolidated Statements of Income
|
A-2
|
|
Revenues and Profit by Segment
|
A-3
|
|
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share - Diluted
|
A-7
|
|
Adjusted EBITDA
|
A-8
|
|
Consolidated Contract Sales to Adjusted Development Profit
|
A-9
|
|
Vacation Ownership and Exchange & Third-Party Management Segment Adjusted EBITDA
|
A-10
|
|
Consolidated Balance Sheets
|
A-11
|
|
Consolidated Statements of Cash Flows
|
A-12
|
|
Quarterly Operating Metrics
|
A-13
|
|
Non-GAAP Financial Measures
|
A-14
|
|
A-1
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
(In millions, except VPG, tours, total active members, average revenue per member and per share amounts)
(Unaudited)
|
|
|
SUMMARY FINANCIAL INFORMATION
|
|
|
Three Months Ended
|
|
Change
%
|
|
Nine Months Ended
|
|
Change
%
|
|
September
30, 2021
|
|
September
30, 2020
|
|
|
September
30, 2021
|
|
September
30, 2020
|
|
|
Key Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated contract sales
|
$
|
380
|
|
$
|
140
|
|
171%
|
|
$
|
968
|
|
$
|
476
|
|
103%
|
|
VPG
|
$
|
4,300
|
|
$
|
3,904
|
|
10%
|
|
$
|
4,377
|
|
$
|
3,745
|
|
17%
|
|
Tours
|
84,098
|
|
33,170
|
|
154%
|
|
209,869
|
|
118,517
|
|
77%
|
|
Total active members (000's)(1)
|
1,313
|
|
1,536
|
|
(15%)
|
|
1,313
|
|
1,536
|
|
(15%)
|
|
Average revenue per member(1)
|
$
|
42.95
|
|
$
|
36.76
|
|
17%
|
|
$
|
136.57
|
|
$
|
108.44
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,052
|
|
$
|
649
|
|
62%
|
|
$
|
2,790
|
|
$
|
2,139
|
|
30%
|
|
Income (loss) before income taxes and
noncontrolling interests
|
$
|
58
|
|
$
|
(72)
|
|
NM
|
|
$
|
57
|
|
$
|
(316)
|
|
NM
|
|
Net income (loss) attributable to common
shareholders
|
$
|
10
|
|
$
|
(62)
|
|
NM
|
|
$
|
(12)
|
|
$
|
(238)
|
|
NM
|
|
Earnings (loss) per share - diluted
|
$
|
0.23
|
|
$
|
(1.51)
|
|
NM
|
|
$
|
(0.28)
|
|
$
|
(5.76)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures **
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
205
|
|
$
|
35
|
|
NM
|
|
$
|
438
|
|
$
|
163
|
|
NM
|
|
Adjusted pretax income (loss)
|
$
|
118
|
|
$
|
(28)
|
|
NM
|
|
$
|
165
|
|
$
|
(23)
|
|
NM
|
|
Adjusted net income (loss) attributable to
common shareholders
|
$
|
70
|
|
$
|
(33)
|
|
NM
|
|
$
|
87
|
|
$
|
(16)
|
|
NM
|
|
Adjusted earnings (loss) per share - diluted
|
$
|
1.60
|
|
$
|
(0.81)
|
|
NM
|
|
$
|
2.01
|
|
$
|
(0.40)
|
|
NM
|
|
|
(1) Includes members at the end of each period for the Interval International exchange network only.
|
|
ADJUSTED EBITDA BY SEGMENT
|
|
|
Three Months Ended
|
|
Change
%
|
|
Nine Months Ended
|
|
Change
%
|
|
September
30, 2021
|
|
September
30, 2020
|
|
|
September
30, 2021
|
|
September
30, 2020
|
|
|
Vacation Ownership
|
$
|
215
|
|
$
|
28
|
|
NM
|
|
$
|
465
|
|
$
|
156
|
|
NM
|
|
Exchange & Third-Party Management
|
35
|
|
31
|
|
13%
|
|
113
|
|
91
|
|
25%
|
|
Segment adjusted EBITDA**
|
250
|
|
59
|
|
NM
|
|
578
|
|
247
|
|
134%
|
|
General and administrative
|
(45)
|
|
(27)
|
|
NM
|
|
(140)
|
|
(91)
|
|
NM
|
|
Consolidated property owners' associations
|
—
|
|
3
|
|
NM
|
|
—
|
|
7
|
|
NM
|
|
Adjusted EBITDA**
|
$
|
205
|
|
$
|
35
|
|
NM
|
|
$
|
438
|
|
$
|
163
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
|
|
NM - Not meaningful
|
|
A-2
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Sale of vacation ownership products
|
$
|
330
|
|
$
|
98
|
|
$
|
789
|
|
$
|
409
|
|
Management and exchange
|
225
|
|
176
|
|
638
|
|
548
|
|
Rental
|
130
|
|
56
|
|
340
|
|
209
|
|
Financing
|
69
|
|
64
|
|
196
|
|
206
|
|
Cost reimbursements
|
298
|
|
255
|
|
827
|
|
767
|
|
TOTAL REVENUES
|
1,052
|
|
649
|
|
2,790
|
|
2,139
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Cost of vacation ownership products
|
71
|
|
27
|
|
178
|
|
110
|
|
Marketing and sales
|
166
|
|
78
|
|
439
|
|
297
|
|
Management and exchange
|
138
|
|
106
|
|
381
|
|
342
|
|
Rental
|
84
|
|
74
|
|
247
|
|
245
|
|
Financing
|
22
|
|
24
|
|
64
|
|
85
|
|
General and administrative
|
54
|
|
32
|
|
166
|
|
121
|
|
Depreciation and amortization
|
35
|
|
30
|
|
112
|
|
93
|
|
Litigation charges
|
2
|
|
2
|
|
8
|
|
4
|
|
Restructuring
|
—
|
|
20
|
|
—
|
|
20
|
|
Royalty fee
|
26
|
|
23
|
|
78
|
|
72
|
|
Impairment
|
—
|
|
2
|
|
5
|
|
98
|
|
Cost reimbursements
|
298
|
|
255
|
|
827
|
|
767
|
|
TOTAL EXPENSES
|
896
|
|
673
|
|
2,505
|
|
2,254
|
|
Losses and other expense, net
|
(31)
|
|
—
|
|
(27)
|
|
(42)
|
|
Interest expense
|
(41)
|
|
(37)
|
|
(128)
|
|
(112)
|
|
Transaction and integration costs
|
(27)
|
|
(11)
|
|
(75)
|
|
(47)
|
|
Other
|
1
|
|
—
|
|
2
|
|
—
|
|
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
|
58
|
|
(72)
|
|
57
|
|
(316)
|
|
(Provision for) benefit from income taxes
|
(47)
|
|
14
|
|
(63)
|
|
91
|
|
NET INCOME (LOSS)
|
11
|
|
(58)
|
|
(6)
|
|
(225)
|
|
Net income attributable to noncontrolling interests
|
(1)
|
|
(4)
|
|
(6)
|
|
(13)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS
|
$
|
10
|
|
$
|
(62)
|
|
$
|
(12)
|
|
$
|
(238)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.24
|
|
$
|
(1.51)
|
|
$
|
(0.28)
|
|
$
|
(5.76)
|
|
Diluted
|
$
|
0.23
|
|
$
|
(1.51)
|
|
$
|
(0.28)
|
|
$
|
(5.76)
|
|
|
|
|
|
|
|
|
|
NOTE: Earnings (loss) per share - Basic and Earnings (loss) per share - Diluted are calculated using whole dollars.
|
|
A-3
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
REVENUES AND PROFIT BY SEGMENT
for the three months ended September 30, 2021
(In millions)
(Unaudited)
|
|
|
Reportable Segment
|
|
Corporate and
Other
|
|
Total
|
|
Vacation
Ownership
|
|
Exchange &
Third-Party
Management
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Sales of vacation ownership products
|
$
|
330
|
|
$
|
—
|
|
$
|
—
|
|
$
|
330
|
|
Management and exchange(1)
|
|
|
|
|
|
|
|
|
Ancillary revenues
|
55
|
|
1
|
|
—
|
|
56
|
|
Management fee revenues
|
40
|
|
10
|
|
(4)
|
|
46
|
|
Exchange and other services revenues
|
31
|
|
48
|
|
44
|
|
123
|
|
Management and exchange
|
126
|
|
59
|
|
40
|
|
225
|
|
Rental
|
121
|
|
9
|
|
—
|
|
130
|
|
Financing
|
69
|
|
—
|
|
—
|
|
69
|
|
Cost reimbursements(1)
|
328
|
|
9
|
|
(39)
|
|
298
|
|
TOTAL REVENUES
|
$
|
974
|
|
$
|
77
|
|
$
|
1
|
|
$
|
1,052
|
|
|
|
|
|
|
|
|
|
PROFIT
|
|
|
|
|
|
|
|
|
Development(2)
|
$
|
93
|
|
$
|
—
|
|
$
|
—
|
|
$
|
93
|
|
Management and exchange(1)
|
71
|
|
26
|
|
(10)
|
|
87
|
|
Rental(1)
|
24
|
|
9
|
|
13
|
|
46
|
|
Financing
|
47
|
|
—
|
|
—
|
|
47
|
|
TOTAL PROFIT
|
235
|
|
35
|
|
3
|
|
273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
|
|
|
|
|
|
|
|
|
General and administrative
|
—
|
|
—
|
|
(54)
|
|
(54)
|
|
Depreciation and amortization
|
(24)
|
|
(11)
|
|
—
|
|
(35)
|
|
Litigation charges
|
(1)
|
|
—
|
|
(1)
|
|
(2)
|
|
Restructuring
|
1
|
|
(1)
|
|
—
|
|
—
|
|
Royalty fee
|
(26)
|
|
—
|
|
—
|
|
(26)
|
|
Losses and other expense, net
|
—
|
|
—
|
|
(31)
|
|
(31)
|
|
Interest expense
|
—
|
|
—
|
|
(41)
|
|
(41)
|
|
Transaction and integration costs
|
(1)
|
|
—
|
|
(26)
|
|
(27)
|
|
Other
|
1
|
|
—
|
|
—
|
|
1
|
|
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
|
185
|
|
23
|
|
(150)
|
|
58
|
|
Provision for income taxes
|
—
|
|
—
|
|
(47)
|
|
(47)
|
|
NET INCOME (LOSS)
|
185
|
|
23
|
|
(197)
|
|
11
|
|
Net income attributable to noncontrolling interests(1)
|
—
|
|
—
|
|
(1)
|
|
(1)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
185
|
|
$
|
23
|
|
$
|
(198)
|
|
$
|
10
|
|
|
|
|
|
|
|
|
|
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest ("VOI") owners.
|
|
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented.
|
|
A-4
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
REVENUES AND PROFIT BY SEGMENT
for the three months ended September 30, 2020
(In millions)
(Unaudited)
|
|
|
Reportable Segment
|
|
Corporate and
Other
|
|
Total
|
|
Vacation
Ownership
|
|
Exchange &
Third-Party
Management
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Sales of vacation ownership products
|
$
|
98
|
|
$
|
—
|
|
$
|
—
|
|
$
|
98
|
|
Management and exchange(1)
|
|
|
|
|
|
|
|
|
Ancillary revenues
|
17
|
|
—
|
|
—
|
|
17
|
|
Management fee revenues
|
37
|
|
4
|
|
(5)
|
|
36
|
|
Exchange and other services revenues
|
28
|
|
45
|
|
50
|
|
123
|
|
Management and exchange
|
82
|
|
49
|
|
45
|
|
176
|
|
Rental
|
46
|
|
10
|
|
—
|
|
56
|
|
Financing
|
64
|
|
—
|
|
—
|
|
64
|
|
Cost reimbursements(1)
|
281
|
|
12
|
|
(38)
|
|
255
|
|
TOTAL REVENUES
|
$
|
571
|
|
$
|
71
|
|
$
|
7
|
|
$
|
649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT
|
|
|
|
|
|
|
|
|
Development(2)
|
$
|
(7)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(7)
|
|
Management and exchange(1)
|
55
|
|
22
|
|
(7)
|
|
70
|
|
Rental(1)
|
(40)
|
|
8
|
|
14
|
|
(18)
|
|
Financing
|
40
|
|
—
|
|
—
|
|
40
|
|
TOTAL PROFIT
|
48
|
|
30
|
|
7
|
|
85
|
|
|
|
|
|
|
|
|
|
OTHER
|
|
|
|
|
|
|
|
|
General and administrative
|
—
|
|
—
|
|
(32)
|
|
(32)
|
|
Depreciation and amortization
|
(20)
|
|
(8)
|
|
(2)
|
|
(30)
|
|
Litigation charges
|
(2)
|
|
—
|
|
—
|
|
(2)
|
|
Restructuring
|
(11)
|
|
(3)
|
|
(6)
|
|
(20)
|
|
Royalty fee
|
(23)
|
|
—
|
|
—
|
|
(23)
|
|
Impairment
|
(1)
|
|
(1)
|
|
—
|
|
(2)
|
|
Gains (losses) and other income (expense), net
|
6
|
|
(5)
|
|
(1)
|
|
—
|
|
Interest expense
|
—
|
|
—
|
|
(37)
|
|
(37)
|
|
Transaction and integration costs
|
—
|
|
—
|
|
(11)
|
|
(11)
|
|
(LOSS)INCOME BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
|
(3)
|
|
13
|
|
(82)
|
|
(72)
|
|
Benefit from income taxes
|
—
|
|
—
|
|
14
|
|
14
|
|
NET (LOSS) INCOME
|
(3)
|
|
13
|
|
(68)
|
|
(58)
|
|
Net income attributable to noncontrolling interests(1)
|
—
|
|
—
|
|
(4)
|
|
(4)
|
|
NET (LOSS) INCOMEATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
(3)
|
|
$
|
13
|
|
$
|
(72)
|
|
$
|
(62)
|
|
|
|
|
|
|
|
|
|
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest ("VOI") owners.
|
|
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented.
|
|
A-5
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
REVENUES AND PROFIT BY SEGMENT
for the nine months ended September 30, 2021
(In millions)
(Unaudited)
|
|
|
Reportable Segment
|
|
Corporate and
Other
|
|
Total
|
|
Vacation
Ownership
|
|
Exchange &
Third-Party
Management
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Sales of vacation ownership products
|
$
|
789
|
|
$
|
—
|
|
$
|
—
|
|
$
|
789
|
|
Management and exchange(1)
|
|
|
|
|
|
|
|
|
Ancillary revenues
|
135
|
|
2
|
|
—
|
|
137
|
|
Management fee revenues
|
117
|
|
24
|
|
(15)
|
|
126
|
|
Exchange and other services revenues
|
91
|
|
153
|
|
131
|
|
375
|
|
Management and exchange
|
343
|
|
179
|
|
116
|
|
638
|
|
Rental
|
308
|
|
32
|
|
—
|
|
340
|
|
Financing
|
196
|
|
—
|
|
—
|
|
196
|
|
Cost reimbursements(1)
|
882
|
|
38
|
|
(93)
|
|
827
|
|
TOTAL REVENUES
|
$
|
2,518
|
|
$
|
249
|
|
$
|
23
|
|
$
|
2,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT
|
|
|
|
|
|
|
|
|
Development(2)
|
$
|
172
|
|
$
|
—
|
|
$
|
—
|
|
$
|
172
|
|
Management and exchange(1)
|
207
|
|
80
|
|
(30)
|
|
257
|
|
Rental(1)
|
20
|
|
32
|
|
41
|
|
93
|
|
Financing
|
132
|
|
—
|
|
—
|
|
132
|
|
TOTAL PROFIT
|
531
|
|
112
|
|
11
|
|
654
|
|
|
|
|
|
|
|
|
|
OTHER
|
|
|
|
|
|
|
|
|
General and administrative
|
—
|
|
—
|
|
(166)
|
|
(166)
|
|
Depreciation and amortization
|
(66)
|
|
(40)
|
|
(6)
|
|
(112)
|
|
Litigation charges
|
(7)
|
|
—
|
|
(1)
|
|
(8)
|
|
Restructuring
|
—
|
|
(1)
|
|
1
|
|
—
|
|
Royalty fee
|
(78)
|
|
—
|
|
—
|
|
(78)
|
|
Impairment
|
—
|
|
—
|
|
(5)
|
|
(5)
|
|
Gains and other income, net
|
—
|
|
—
|
|
(27)
|
|
(27)
|
|
Interest expense
|
—
|
|
—
|
|
(128)
|
|
(128)
|
|
Transaction and integration costs
|
(2)
|
|
—
|
|
(73)
|
|
(75)
|
|
Other
|
2
|
|
—
|
|
—
|
|
2
|
|
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
|
380
|
|
71
|
|
(394)
|
|
57
|
|
Benefit from income taxes
|
—
|
|
—
|
|
(63)
|
|
(63)
|
|
NET INCOME (LOSS)
|
380
|
|
71
|
|
(457)
|
|
(6)
|
|
Net income attributable to noncontrolling interests(1)
|
—
|
|
—
|
|
(6)
|
|
(6)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
380
|
|
$
|
71
|
|
$
|
(463)
|
|
$
|
(12)
|
|
|
|
|
|
|
|
|
|
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest ("VOI") owners.
|
|
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented.
|
|
A-6
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
REVENUES AND PROFIT BY SEGMENT
for the nine months ended September 30, 2020
(In millions)
(Unaudited)
|
|
|
Reportable Segment
|
|
Corporate and
Other
|
|
Total
|
|
Vacation
Ownership
|
|
Exchange &
Third-Party
Management
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Sales of vacation ownership products
|
$
|
409
|
|
$
|
—
|
|
$
|
—
|
|
$
|
409
|
|
Management and exchange(1)
|
|
|
|
|
|
|
|
|
Ancillary revenues
|
69
|
|
1
|
|
—
|
|
70
|
|
Management fee revenues
|
113
|
|
14
|
|
(14)
|
|
113
|
|
Exchange and other services revenues
|
85
|
|
145
|
|
135
|
|
365
|
|
Management and exchange
|
267
|
|
160
|
|
121
|
|
548
|
|
Rental
|
180
|
|
29
|
|
—
|
|
209
|
|
Financing
|
204
|
|
2
|
|
—
|
|
206
|
|
Cost reimbursements(1)
|
824
|
|
45
|
|
(102)
|
|
767
|
|
TOTAL REVENUES
|
$
|
1,884
|
|
$
|
236
|
|
$
|
19
|
|
$
|
2,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT
|
|
|
|
|
|
|
|
|
Development(2)
|
$
|
2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2
|
|
Management and exchange(1)
|
162
|
|
67
|
|
(23)
|
|
206
|
|
Rental(1)
|
(100)
|
|
21
|
|
43
|
|
(36)
|
|
Financing(3)
|
120
|
|
1
|
|
—
|
|
121
|
|
TOTAL PROFIT
|
184
|
|
89
|
|
20
|
|
293
|
|
|
|
|
|
|
|
|
|
OTHER
|
|
|
|
|
|
|
|
|
General and administrative
|
—
|
|
—
|
|
(121)
|
|
(121)
|
|
Depreciation and amortization
|
(61)
|
|
(24)
|
|
(8)
|
|
(93)
|
|
Litigation charges
|
(4)
|
|
—
|
|
—
|
|
(4)
|
|
Restructuring
|
(11)
|
|
(3)
|
|
(6)
|
|
(20)
|
|
Royalty fee
|
(72)
|
|
—
|
|
—
|
|
(72)
|
|
Impairment
|
(6)
|
|
(92)
|
|
—
|
|
(98)
|
|
Gains (losses) and other income (expense), net
|
12
|
|
(5)
|
|
(49)
|
|
(42)
|
|
Interest expense
|
—
|
|
—
|
|
(112)
|
|
(112)
|
|
Transaction and integration costs
|
(3)
|
|
—
|
|
(44)
|
|
(47)
|
|
INCOME (LOSS) BEFORE INCOME TAXES AND
NONCONTROLLING INTERESTS
|
39
|
|
(35)
|
|
(320)
|
|
(316)
|
|
Benefit from income taxes
|
—
|
|
—
|
|
91
|
|
91
|
|
NET INCOME (LOSS)
|
39
|
|
(35)
|
|
(229)
|
|
(225)
|
|
Net income attributable to noncontrolling interests(1)
|
—
|
|
—
|
|
(13)
|
|
(13)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
39
|
|
$
|
(35)
|
|
$
|
(242)
|
|
$
|
(238)
|
|
|
|
|
|
|
|
|
|
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners' associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest ("VOI") owners.
|
|
(2) The Company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the Company now refers to this financial measure as Development profit. While the calculation remains unchanged, the Company believes the revised term better depicts the financial results being presented.
|
|
(3) Includes a $10 million impact related to increased bad debt expense recorded in the nine months ended September 30, 2020 related to the COVID-19 pandemic.
|
|
A-7
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND
ADJUSTED EARNINGS PER SHARE - DILUTED
(In millions, except per share amounts)
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
Net income (loss) attributable to common shareholders
|
$
|
10
|
|
$
|
(62)
|
|
$
|
(12)
|
|
$
|
(238)
|
|
Provision for (benefit from) income taxes
|
47
|
|
(14)
|
|
63
|
|
(91)
|
|
Income (loss) before income taxes attributable to common
shareholders
|
57
|
|
(76)
|
|
51
|
|
(329)
|
|
Certain items:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation charges
|
2
|
|
2
|
|
8
|
|
4
|
|
Losses and other expense, net
|
31
|
|
—
|
|
27
|
|
42
|
|
Transaction and integration costs
|
27
|
|
11
|
|
75
|
|
47
|
|
Impairment charges
|
—
|
|
2
|
|
5
|
|
98
|
|
Purchase price adjustments(2)
|
5
|
|
17
|
|
7
|
|
47
|
|
COVID-19 related adjustments
|
—
|
|
16
|
|
(2)
|
|
64
|
|
Other(3)
|
(4)
|
|
—
|
|
(6)
|
|
4
|
|
Adjusted pretax income (loss) **
|
118
|
|
(28)
|
|
165
|
|
(23)
|
|
(Provision for) benefit from income taxes
|
(48)
|
|
(5)
|
|
(78)
|
|
7
|
|
Adjusted net income (loss) attributable to common
shareholders**
|
$
|
70
|
|
$
|
(33)
|
|
$
|
87
|
|
$
|
(16)
|
|
Diluted shares
|
43.7
|
|
41.2
|
|
43.2
|
|
41.3
|
|
Adjusted earnings (loss) per share - Diluted **
|
$
|
1.60
|
|
$
|
(0.81)
|
|
$
|
2.01
|
|
$
|
(0.40)
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
|
|
(1) See further details on A-8.
|
|
(2) Includes certain items included in depreciation and amortization for the three and nine months ended September 30, 2020.
|
|
(3) 2021 amounts include eliminating the impact of consolidating property owners' associations.
|
|
A-8
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
ADJUSTED EBITDA
(In millions)
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS
|
$
|
10
|
|
|
$
|
(62)
|
|
|
$
|
(12)
|
|
|
$
|
(238)
|
|
|
Interest expense
|
41
|
|
|
37
|
|
|
128
|
|
|
112
|
|
|
Provision for (benefit from) income taxes
|
47
|
|
|
(14)
|
|
|
63
|
|
|
(91)
|
|
|
Depreciation and amortization
|
35
|
|
|
30
|
|
|
112
|
|
|
93
|
|
|
Share-based compensation
|
11
|
|
|
11
|
|
|
33
|
|
|
24
|
|
|
Certain items before income taxes:
|
|
|
|
|
|
|
|
|
Litigation charges
|
2
|
|
|
2
|
|
|
8
|
|
|
4
|
|
|
Losses and other expense, net:
|
|
|
|
|
|
|
|
|
Dispositions
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
Hurricane business interruption insurance claims
|
—
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
Various tax related matters
|
(8)
|
|
|
—
|
|
|
(6)
|
|
|
26
|
|
|
Redemption premium from debt repayment
|
36
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
Foreign currency translation
|
2
|
|
|
1
|
|
|
(4)
|
|
|
25
|
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
|
(4)
|
|
|
Transaction and integration costs
|
27
|
|
|
11
|
|
|
75
|
|
|
47
|
|
|
Impairment charges
|
—
|
|
|
2
|
|
|
5
|
|
|
98
|
|
|
Purchase price adjustments
|
5
|
|
|
2
|
|
|
7
|
|
|
4
|
|
|
COVID-19 related adjustments:
|
|
|
|
|
|
|
|
|
Sales reserve adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
Accrual for health and welfare costs for furloughed
associates
|
—
|
|
|
(4)
|
|
|
(2)
|
|
|
7
|
|
|
Restructuring
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
Other(1)
|
(4)
|
|
|
—
|
|
|
(6)
|
|
|
4
|
|
|
ADJUSTED EBITDA**
|
$
|
205
|
|
|
$
|
35
|
|
|
$
|
438
|
|
|
$
|
163
|
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
|
|
(1) 2021 amounts include eliminating the impact of consolidating property owners' associations.
|
|
A-9
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT
(In millions)
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
Consolidated contract sales
|
$
|
380
|
|
$
|
140
|
|
$
|
968
|
|
$
|
476
|
|
Less resales contract sales
|
(7)
|
|
(1)
|
|
(19)
|
|
(9)
|
|
Consolidated contract sales, net of resales
|
373
|
|
139
|
|
949
|
|
467
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Settlement revenue
|
8
|
|
4
|
|
21
|
|
12
|
|
Resales revenue
|
5
|
|
1
|
|
8
|
|
6
|
|
Revenue recognition adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportability
|
2
|
|
(18)
|
|
(51)
|
|
48
|
|
Sales reserve
|
(31)
|
|
(10)
|
|
(73)
|
|
(90)
|
|
Other(1)
|
(27)
|
|
(18)
|
|
(65)
|
|
(34)
|
|
Sale of vacation ownership products
|
330
|
|
98
|
|
789
|
|
409
|
|
Less:
|
|
|
|
|
|
|
|
|
Cost of vacation ownership products
|
(71)
|
|
(27)
|
|
(178)
|
|
(110)
|
|
Marketing and sales
|
(166)
|
|
(78)
|
|
(439)
|
|
(297)
|
|
Development Profit
|
93
|
|
(7)
|
|
172
|
|
2
|
|
Revenue recognition reportability adjustment
|
(1)
|
|
12
|
|
38
|
|
(32)
|
|
Other(2)
|
6
|
|
1
|
|
9
|
|
30
|
|
Adjusted development profit **
|
$
|
98
|
|
$
|
6
|
|
$
|
219
|
|
$
|
—
|
|
Development profit margin(3)
|
28.0%
|
|
(7.4%)
|
|
21.8%
|
|
0.5%
|
|
Adjusted development profit margin(3)
|
29.5%
|
|
5.2%
|
|
26.2%
|
|
(0.1%)
|
|
|
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
|
|
(1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.
|
|
(2) Primarily includes purchase price adjustments for the three and nine months ended September 30, 2021, as well as a sales reserve charge related to the COVID-19 pandemic and purchase price adjustments for the three and nine months ended September 30, 2020.
|
|
(3) Development profit margin represents Development profit divided by Sale of vacation ownership products. Adjusted development profit margin represents Adjusted development profit divided by Sale of vacation ownership products revenue after adjusting for revenue reportability and other charges.
|
|
A-10
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
(In millions)
(Unaudited)
|
|
|
VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
185
|
|
$
|
(3)
|
|
$
|
380
|
|
$
|
39
|
|
Depreciation and amortization
|
24
|
|
20
|
|
66
|
|
61
|
|
Share-based compensation expense
|
1
|
|
2
|
|
4
|
|
4
|
|
Certain items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation charges
|
1
|
|
2
|
|
7
|
|
4
|
|
Gains and other income, net:
|
|
|
|
|
|
|
|
|
Dispositions
|
—
|
|
(6)
|
|
—
|
|
(6)
|
|
Hurricane business interruption net insurance proceeds
|
—
|
|
—
|
|
—
|
|
(4)
|
|
Foreign currency translation
|
—
|
|
—
|
|
—
|
|
(1)
|
|
Other
|
—
|
|
—
|
|
—
|
|
(1)
|
|
Transaction and integration costs
|
1
|
|
—
|
|
2
|
|
3
|
|
Impairment charges
|
—
|
|
1
|
|
—
|
|
6
|
|
Purchase price adjustments
|
5
|
|
1
|
|
7
|
|
3
|
|
COVID-19 related adjustments:
|
|
|
|
|
|
|
|
|
Sales reserve adjustment, net
|
—
|
|
—
|
|
—
|
|
37
|
|
Restructuring
|
(1)
|
|
11
|
|
—
|
|
11
|
|
Other
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
SEGMENT ADJUSTED EBITDA **
|
$
|
215
|
|
$
|
28
|
|
$
|
465
|
|
$
|
156
|
|
|
EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September
30, 2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO
COMMON SHAREHOLDERS
|
$
|
23
|
|
$
|
13
|
|
$
|
71
|
|
$
|
(35)
|
|
Depreciation and amortization
|
11
|
|
8
|
|
40
|
|
24
|
|
Share-based compensation expense
|
—
|
|
—
|
|
1
|
|
1
|
|
Certain items:
|
|
|
|
|
|
|
|
|
Losses and other expense, net:
|
|
|
|
|
|
|
|
|
Dispositions
|
—
|
|
5
|
|
—
|
|
5
|
|
Foreign currency translation
|
—
|
|
(1)
|
|
—
|
|
2
|
|
Other
|
—
|
|
1
|
|
—
|
|
(2)
|
|
Impairment charges
|
—
|
|
1
|
|
—
|
|
92
|
|
Purchase price adjustments
|
—
|
|
1
|
|
—
|
|
1
|
|
COVID-19 related adjustments:
|
|
|
|
|
|
|
|
|
Restructuring
|
1
|
|
3
|
|
1
|
|
3
|
|
SEGMENT ADJUSTED EBITDA **
|
$
|
35
|
|
$
|
31
|
|
$
|
113
|
|
$
|
91
|
|
|
|
|
|
|
|
|
|
** Denotes non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information about our reasons for providing these alternative financial measures and limitations on their use.
|
|
A-11
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share data)
|
|
|
Unaudited
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
ASSETS
|
|
|
|
|
Cash and cash equivalents
|
$
|
448
|
|
$
|
524
|
|
Restricted cash (including $69 and $68 from VIEs, respectively)
|
434
|
|
468
|
|
Accounts receivable, net (including $10 and $11 from VIEs, respectively)
|
223
|
|
276
|
|
Vacation ownership notes receivable, net (including $1,486 and $1,493 from
VIEs, respectively)
|
2,026
|
|
1,840
|
|
Inventory
|
741
|
|
759
|
|
Property and equipment, net
|
1,077
|
|
791
|
|
Goodwill
|
3,086
|
|
2,817
|
|
Intangibles, net
|
1,007
|
|
952
|
|
Other (including $70 and $54 from VIEs, respectively)
|
501
|
|
471
|
|
TOTAL ASSETS
|
$
|
9,543
|
|
$
|
8,898
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Accounts payable
|
$
|
190
|
|
$
|
209
|
|
Advance deposits
|
166
|
|
147
|
|
Accrued liabilities (including $2 and $1 from VIEs, respectively)
|
375
|
|
349
|
|
Deferred revenue
|
540
|
|
488
|
|
Payroll and benefits liability
|
201
|
|
157
|
|
Deferred compensation liability
|
135
|
|
127
|
|
Securitized debt, net (including $1,611 and $1,604 from VIEs, respectively)
|
1,594
|
|
1,588
|
|
Debt, net
|
2,795
|
|
2,680
|
|
Other
|
218
|
|
197
|
|
Deferred taxes
|
325
|
|
274
|
|
TOTAL LIABILITIES
|
6,539
|
|
6,216
|
|
Contingencies and Commitments (Note 11)
|
|
|
|
|
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued
or outstanding
|
—
|
|
—
|
|
Common stock — $0.01 par value; 100,000,000 shares authorized;
75,491,621 and 75,279,061 shares issued, respectively
|
1
|
|
1
|
|
Treasury stock — at cost; 32,776,162 and 34,184,813 shares, respectively
|
(1,282)
|
|
(1,334)
|
|
Additional paid-in capital
|
4,056
|
|
3,760
|
|
Accumulated other comprehensive loss
|
(39)
|
|
(48)
|
|
Retained earnings
|
237
|
|
272
|
|
TOTAL MVW SHAREHOLDERS' EQUITY
|
2,973
|
|
2,651
|
|
Noncontrolling interests
|
31
|
|
31
|
|
TOTAL EQUITY
|
3,004
|
|
2,682
|
|
TOTAL LIABILITIES AND EQUITY
|
$
|
9,543
|
|
$
|
8,898
|
|
|
The abbreviation VIEs above means Variable Interest Entities.
|
|
A-12
|
|
|
MARRIOTT VACATIONS WORLDWIDE CORPORATION
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
|
|
Nine Months Ended
|
|
September 30,
2021
|
|
September 30,
2020
|
|
OPERATING ACTIVITIES
|
|
|
|
|
Net loss
|
$
|
(6)
|
|
$
|
(225)
|
|
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash
used by operating activities:
|
|
|
|
|
Depreciation and amortization of intangibles
|
112
|
|
93
|
|
Amortization of debt discount and issuance costs
|
41
|
|
16
|
|
Vacation ownership notes receivable reserve
|
73
|
|
97
|
|
Share-based compensation
|
33
|
|
23
|
|
Impairment charges
|
5
|
|
98
|
|
Deferred income taxes
|
10
|
|
1
|
|
Net change in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
54
|
|
24
|
|
Vacation ownership notes receivable originations
|
(545)
|
|
(265)
|
|
Vacation ownership notes receivable collections
|
532
|
|
487
|
|
Inventory
|
59
|
|
(4)
|
|
Other assets
|
(29)
|
|
57
|
|
Accounts payable, advance deposits and accrued liabilities
|
(44)
|
|
(231)
|
|
Deferred revenue
|
119
|
|
57
|
|
Payroll and benefit liabilities
|
35
|
|
—
|
|
Deferred compensation liability
|
14
|
|
8
|
|
Other liabilities
|
23
|
|
(11)
|
|
Deconsolidation of certain Consolidated Property Owners' Associations
|
(87)
|
|
—
|
|
Purchase of vacation ownership units for future transfer to inventory
|
(99)
|
|
(61)
|
|
Other, net
|
3
|
|
(6)
|
|
Net cash, cash equivalents and restricted cash provided by operating activities
|
303
|
|
158
|
|
INVESTING ACTIVITIES
|
|
|
|
|
Acquisition of a business, net of cash and restricted cash acquired
|
(157)
|
|
—
|
|
Capital expenditures for property and equipment (excluding inventory)
|
(19)
|
|
(36)
|
|
Purchase of company owned life insurance
|
(11)
|
|
(3)
|
|
Dispositions, net
|
—
|
|
15
|
|
Net cash, cash equivalents and restricted cash used in investing activities
|
(187)
|
|
(24)
|
|
FINANCING ACTIVITIES
|
|
|
|
|
Borrowings from securitization transactions
|
425
|
|
690
|
|
Repayment of debt related to securitization transactions
|
(602)
|
|
(793)
|
|
Proceeds from debt
|
1,061
|
|
1,166
|
|
Repayments of debt
|
(1,039)
|
|
(703)
|
|
Purchase of convertible note hedges
|
(100)
|
|
—
|
|
Proceeds from issuance of warrants
|
70
|
|
—
|
|
Finance lease payment
|
(2)
|
|
(10)
|
|
Payment of debt issuance costs
|
(17)
|
|
(14)
|
|
Repurchase of common stock
|
(4)
|
|
(82)
|
|
Payment of dividends
|
—
|
|
(45)
|
|
Payment of withholding taxes on vesting of restricted stock units
|
(17)
|
|
(14)
|
|
Net cash, cash equivalents and restricted cash (used in) provided by financing activities
|
(225)
|
|
195
|
|
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
|
(1)
|
|
(2)
|
|
Change in cash, cash equivalents and restricted cash
|
(110)
|
|
327
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
992
|
|
701
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
882
|
|
$
|
1,028
|
|
A-13
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
$
|
226
|
|
$
|
362
|
|
$
|
380
|
|
|
|
|
|
2020
|
|
$
|
306
|
|
$
|
30
|
|
$
|
140
|
|
$
|
178
|
|
$
|
654
|
|
2019
|
|
$
|
354
|
|
$
|
386
|
|
$
|
390
|
|
$
|
394
|
|
$
|
1,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VPG
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
$
|
4,644
|
|
$
|
4,304
|
|
$
|
4,300
|
|
|
|
|
|
2020
|
|
$
|
3,680
|
|
$
|
3,717
|
|
$
|
3,904
|
|
$
|
3,826
|
|
$
|
3,767
|
|
2019
|
|
$
|
3,350
|
|
$
|
3,299
|
|
$
|
3,461
|
|
$
|
3,499
|
|
$
|
3,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tours
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
45,871
|
|
79,900
|
|
84,098
|
|
|
|
|
|
2020
|
|
79,131
|
|
6,216
|
|
33,170
|
|
44,161
|
|
162,678
|
|
2019
|
|
99,957
|
|
111,241
|
|
107,401
|
|
108,272
|
|
426,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange & Third-Party Management
|
|
|
|
|
|
|
|
|
|
|
|
Total active members (000's)(1)
|
2021
|
|
1,479
|
|
1,321
|
|
1,313
|
|
|
|
|
|
2020
|
|
1,636
|
|
1,571
|
|
1,536
|
|
1,518
|
|
1,518
|
|
2019
|
|
1,694
|
|
1,691
|
|
1,701
|
|
1,670
|
|
1,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average revenue per member(1)
|
2021
|
|
$
|
47.13
|
|
$
|
46.36
|
|
$
|
42.95
|
|
|
|
|
|
2020
|
|
$
|
41.37
|
|
$
|
30.17
|
|
$
|
36.76
|
|
$
|
36.62
|
|
$
|
144.97
|
|
2019
|
|
$
|
46.24
|
|
$
|
43.23
|
|
$
|
40.89
|
|
$
|
38.38
|
|
$
|
168.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes members at the end of each period for the Interval International exchange network only.
|
A-14
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 a double 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 Adjusted Net Income or Loss Attributable to Common Shareholders, Adjusted EBITDA, Adjusted Development Profit and Adjusted Development Profit Margin.
We evaluate non-GAAP financial measures, including Adjusted pretax income or loss, Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted development profit and Adjusted development profit margin, that exclude certain items in the three and nine months ended September 30, 2021 and September 30, 2020, 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 vacation ownership companies.
Adjusted Development Profit (Adjusted Sale of Vacation Ownership Products Net of Expenses) 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 and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, includes 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 itemized on A-8, as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe it provides useful information to investors because it allows 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 loan securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, as itemized in the discussion of Adjusted EBITDA in the preceding pages, 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 loan 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 and expand our business. 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 provision 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 vacation companies.
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SOURCE Marriott Vacations Worldwide Corporation
