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

VAC

ORLANDO, Fla., Aug. 8, 2022 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) (the "Company") reported second quarter 2022 financial results.

Marriott Vacations Worldwide Corporation. (PRNewsFoto/Marriott Vacations Worldwide)

Second Quarter 2022 Highlights:

  • Consolidated Vacation Ownership contract sales were $506 million, a 40% increase compared to the second quarter of 2021, and VPG increased 7% to $4,613.
  • Net income attributable to common shareholders was $136 million, or $2.97 fully diluted earnings per share.
  • Adjusted net income attributable to common shareholders was $131 million, or $2.87 adjusted fully diluted earnings per share.
  • Adjusted EBITDA was $255 million, a 55% increase compared to the second quarter of 2021, as the Company continues to see a strong recovery in the business.
  • The Company returned $219 million to shareholders, repurchasing more than 1.4 million shares of its common stock for $193 million at an average price per share of $136 and paying a quarterly dividend of $26 million.

    • Subsequent to the end of the second quarter, the Company repurchased approximately 1.1 million shares of its common stock for $131 million at an average price per share of $124 through the end of July.
  • Consistent with its strategy to dispose of non-strategic assets, during the second quarter, the Company closed on the sale of its VRI Americas business and its hotel in Puerto Vallarta, Mexico for total cash proceeds in excess of $100 million.

"We had a very strong second quarter, generating $506 million in contract sales, up 40% from the prior year, with contract sales and Adjusted EBITDA up 31% from the second quarter of 2019," said Stephen P. Weisz, chief executive officer. "We introduced Abound by Marriott VacationsTM during the quarter, an exclusive new program providing more options and access for Owners. With the strong recovery of our operations, as well as cash proceeds from dispositions, we accelerated our return of cash to shareholders, surpassing $500 million this year through the end of July."

Second Quarter 2022 Results

Vacation Ownership

Revenues excluding cost reimbursements increased 28% in the second quarter of 2022 compared to the prior year, reflecting growth in all of the Company's lines of business.

Segment financial results attributable to common shareholders were $277 million in the second quarter of 2022 and Segment margin was 36%. Segment adjusted EBITDA increased 51% to $274 million, with Segment adjusted EBITDA margin of 36%, over 500 basis points higher than the second quarter of 2021.

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 4% in the second quarter of 2022 compared to the prior year. Interval International active members increased 21% to 1.6 million and Average revenue per member decreased 16% compared to the prior year.

Segment financial results attributable to common shareholders were $46 million in the second quarter of 2022 and Segment margin was 66%. Segment adjusted EBITDA decreased $2 million to $35 million compared to the prior year primarily due to the sale of VRI Americas, with Segment adjusted EBITDA margin of 52%, in line with the second quarter of 2021.

Corporate and Other

General and administrative costs decreased $2 million in the second quarter of 2022 compared to the prior year primarily as a result of lower bonus expense.

Balance Sheet and Liquidity

The Company ended the quarter with approximately $1.2 billion in liquidity, including $324 million of cash and cash equivalents, $106 million of gross notes receivable that were eligible for securitization, and $749 million of available capacity under its revolving corporate credit facility.

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

The Company completed its first timeshare receivable securitization of 2022 in the second quarter, issuing $375 million of notes backed by a pool of $383 million of vacation ownership notes receivable from all of the Company's timeshare brands. The overall weighted average interest rate of the notes was 4.59% and the transaction had a gross advance rate of 98%.

Abound by Marriott Vacations

During the quarter, the Company introduced Abound by Marriott Vacations, a new Owner benefit and exchange program providing access to over 90 vacation club resorts, including Marriott Vacation Club®, Sheraton® Vacation Club and Westin® Vacation Club, as well as access to more than 8,000 Marriott Bonvoy® hotels, 2,000 vacation homes, and 2,000 unique experiences like cruises, guided and culinary tours, premiere events, outdoor adventures and more with a continued ability to exchange through Interval International, a premier exchange partner.

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

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

The Company is providing guidance as reflected in the chart below for the full year 2022.

Income before income taxes attributable to common shareholders

$511

to

$551


Net income attributable to common shareholders

$365

to

$395


Earnings per share - diluted

$8.15

to

$8.81


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

$470


$500







Contract sales

$1,775

to

$1,875


Adjusted EBITDA

$880

to

$930


Adjusted pretax net income

$600

to

$650


Adjusted net income attributable to common shareholders

$425

to

$465


Adjusted earnings per share - diluted

$9.47

to

$10.35


Adjusted free cash flow

$650

to

$730


Revenue Recognition

In connection with the launch of Abound by Marriott Vacations and the unification of the Company's Marriott-, Westin-, and Sheraton-branded vacation ownership products, the Company intends to align its revenue recognition on the sale of vacation ownership interests across all of its brands in the third quarter. This will result in the acceleration of revenue and a one-time benefit to Adjusted EBITDA but will have no impact on cash flow. The Company is unable to estimate the impact at this time and its guidance excludes this one-time benefit, which will be provided in connection with the release of its third quarter results.

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.

Second Quarter 2022 Financial Results Conference Call

The Company will hold a conference call on August 9, 2022 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company's website.

About Marriott Vacations Worldwide Corporation

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

Note on forward-looking statements

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

Financial Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION



FINANCIAL SCHEDULES



QUARTER 2, 2022






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



2022 Outlook




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




and Adjusted EBITDA

A-14



Adjusted Free Cash Flow

A-15



Quarterly Operating Metrics

A-16



Non-GAAP Financial Measures

A-17



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
%


Six Months Ended


Change
%



June 30,
2022


June 30,
2021



June 30,
2022


June 30,
2021


Key Measures













Total consolidated contract sales


$ 506


$ 362


40 %


$ 900


$ 588


53 %

VPG


$ 4,613


$ 4,304


7 %


$ 4,653


$ 4,428


5 %

Tours


102,857


79,900


29 %


181,362


125,771


44 %

Total active members (000's)(1)


1,596


1,321


21 %


1,596


1,321


21 %

Average revenue per member(1)


$ 38.79


$ 46.36


(16 %)


$ 83.32


$ 93.77


(11 %)














GAAP Measures













Revenues


$ 1,164


$ 979


19 %


$ 2,216


$ 1,738


28 %

Income (loss) before income taxes and noncontrolling interests


$ 178


$ 35


NM


$ 268


$ (1)


NM

Net income (loss) attributable to common shareholders


$ 136


$ 6


NM


$ 194


$ (22)


NM

Earnings (loss) per share - diluted


$ 2.97


$ 0.15


NM


$ 4.18


$ (0.52)


NM














Non-GAAP Measures **













Adjusted EBITDA


$ 255


$ 164


55 %


$ 443


$ 233


90 %

Adjusted pretax income


$ 181


$ 70


154 %


$ 301


$ 47


NM

Adjusted net income attributable to common shareholders


$ 131


$ 37


252 %


$ 212


$ 17


NM

Adjusted earnings per share - diluted


$ 2.87


$ 0.85


238 %


$ 4.55


$ 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

%


Six Months Ended


Change
%



June 30,
2022


June 30,
2021



June 30,
2022


June 30,
2021


Vacation Ownership


$ 274


$ 182


51 %


$ 473


$ 250


89 %

Exchange & Third-Party Management


35


37


(5 %)


78


78


— %

Segment adjusted EBITDA**


309


219


41 %


551


328


68 %

General and administrative


(54)


(55)


1 %


(108)


(95)


(14 %)

Adjusted EBITDA**


$ 255


$ 164


55 %


$ 443


$ 233


90 %














** 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


Six Months Ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

REVENUES









Sale of vacation ownership products


$ 425


$ 296


$ 735


$ 459

Management and exchange


203


220


425


413

Rental


140


121


273


210

Financing


72


68


143


127

Cost reimbursements


324


274


640


529

TOTAL REVENUES


1,164


979


2,216


1,738

EXPENSES









Cost of vacation ownership products


80


67


140


107

Marketing and sales


214


164


396


273

Management and exchange


102


126


229


243

Rental


87


81


168


163

Financing


23


21


44


42

General and administrative


64


66


125


112

Depreciation and amortization


32


36


65


77

Litigation charges


2


3


5


6

Royalty fee


29


27


56


52

Impairment



5



5

Cost reimbursements


324


274


640


529

TOTAL EXPENSES


957


870


1,868


1,609

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


37


(2)


41


4

Interest expense


(30)


(44)


(57)


(87)

Transaction and integration costs


(37)


(29)


(65)


(48)

Other


1


1


1


1

INCOME (LOSS) BEFORE INCOME TAXES AND









NONCONTROLLING INTERESTS


178


35


268


(1)

Provision for income taxes


(43)


(27)


(75)


(16)

NET INCOME (LOSS)


135


8


193


(17)

Net loss (income) attributable to noncontrolling interests


1


(2)


1


(5)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON



SHAREHOLDERS


$ 136


$ 6


$ 194


$ (22)










EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO









COMMON SHAREHOLDERS









Basic


$ 3.30


$ 0.15


$ 4.64


$ (0.52)

Diluted


$ 2.97


$ 0.15


$ 4.18


$ (0.52)










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 June 30, 2022

(In millions)

(Unaudited)




Reportable Segment


Corporate and
Other


Total



Vacation
Ownership


Exchange &
Third-Party
Management



REVENUES









Sales of vacation ownership products


$ 425


$ —


$ —


$ 425

Management and exchange(1)









Ancillary revenues


66


1



67

Management fee revenues


41


11


(1)


51

Exchange and other services revenues


33


46


6


85

Management and exchange


140


58


5


203

Rental


129


11



140

Financing


72




72

Cost reimbursements(1)


325


5


(6)


324

TOTAL REVENUES


$ 1,091


$ 74


$ (1)


$ 1,164










PROFIT









Development


$ 131


$ —


$ —


$ 131

Management and exchange(1)


80


26


(5)


101

Rental(1)


38


11


4


53

Financing


49




49

TOTAL PROFIT


298


37


(1)


334










OTHER









General and administrative




(64)


(64)

Depreciation and amortization


(22)


(7)


(3)


(32)

Litigation charges


(2)




(2)

Royalty fee


(29)




(29)

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


32


16


(11)


37

Interest expense




(30)


(30)

Transaction and integration costs


(1)



(36)


(37)

Other


1




1

INCOME (LOSS) BEFORE INCOME TAXES AND









NONCONTROLLING INTERESTS


277


46


(145)


178

Provision for income taxes




(43)


(43)

NET INCOME (LOSS)


277


46


(188)


135

Net loss attributable to noncontrolling interests(1)




1


1

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON



SHAREHOLDERS


$ 277


$ 46


$ (187)


$ 136

SEGMENT MARGIN(2)


36 %


66 %














(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-4


MARRIOTT VACATIONS WORLDWIDE CORPORATION


REVENUES AND PROFIT BY SEGMENT

for the three months ended June 30, 2021

(In millions)

(Unaudited)




Reportable Segment


Corporate and
Other


Total



Vacation
Ownership


Exchange &
Third-Party
Management



REVENUES









Sales of vacation ownership products


$ 296


$ —


$ —


$ 296

Management and exchange(1)









Ancillary revenues


52


1



53

Management fee revenues


39


9


(5)


43

Exchange and other services revenues


32


50


42


124

Management and exchange


123


60


37


220

Rental


110


11



121

Financing


68




68

Cost reimbursements(1)


286


15


(27)


274

TOTAL REVENUES


$ 883


$ 86


$ 10


$ 979










PROFIT









Development


$ 65


$ —


$ —


$ 65

Management and exchange(1)


77


25


(8)


94

Rental(1)


15


11


14


40

Financing


47




47

TOTAL PROFIT


204


36


6


246










OTHER









General and administrative




(66)


(66)

Depreciation and amortization


(23)


(9)


(4)


(36)

Litigation charges


(3)




(3)

Royalty fee


(27)




(27)

Impairment




(5)


(5)

Losses and other expense, net




(2)


(2)

Interest expense




(44)


(44)

Transaction and integration costs


(1)



(28)


(29)

Other


1




1

INCOME (LOSS) BEFORE INCOME TAXES AND









NONCONTROLLING INTERESTS


151


27


(143)


35

Provision for income taxes




(27)


(27)

NET INCOME (LOSS)


151


27


(170)


8

Net income attributable to noncontrolling interests(1)




(2)


(2)

NET INCOME (LOSS) ATTRIBUTABLE TO









COMMON SHAREHOLDERS


$ 151


$ 27


$ (172)


$ 6

SEGMENT MARGIN(2)


25 %


38 %














(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-5


MARRIOTT VACATIONS WORLDWIDE CORPORATION


REVENUES AND PROFIT BY SEGMENT

for the six months ended June 30, 2022

(In millions)

(Unaudited)




Reportable Segment


Corporate and
Other


Total



Vacation
Ownership


Exchange &
Third-Party
Management



REVENUES









Sales of vacation ownership products


$ 735


$ —


$ —


$ 735

Management and exchange(1)









Ancillary revenues


120


2



122

Management fee revenues


83


21


(4)


100

Exchange and other services revenues


63


99


41


203

Management and exchange


266


122


37


425

Rental


251


22



273

Financing


143




143

Cost reimbursements(1)


652


14


(26)


640

TOTAL REVENUES


$ 2,047


$ 158


$ 11


$ 2,216










PROFIT









Development


$ 199


$ —


$ —


$ 199

Management and exchange(1)


152


57


(13)


196

Rental(1)


70


22


13


105

Financing


99




99

TOTAL PROFIT


520


79



599










OTHER









General and administrative




(125)


(125)

Depreciation and amortization


(44)


(16)


(5)


(65)

Litigation charges


(5)




(5)

Restructuring





Royalty fee


(56)




(56)

Impairment





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


35


16


(10)


41

Interest expense




(57)


(57)

Transaction and integration costs


(1)



(64)


(65)

Other


1




1

INCOME (LOSS) BEFORE INCOME TAXES AND









NONCONTROLLING INTERESTS


450


79


(261)


268

Provision for income taxes




(75)


(75)

NET INCOME (LOSS)


450


79


(336)


193

Net loss attributable to noncontrolling interests(1)




1


1

NET INCOME (LOSS) ATTRIBUTABLE TO



COMMON SHAREHOLDERS


$ 450


$ 79


$ (335)


$ 194

SEGMENT MARGIN(2)


32 %


55 %














(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-6


MARRIOTT VACATIONS WORLDWIDE CORPORATION


REVENUES AND PROFIT BY SEGMENT

for the six months ended June 30, 2021

(In millions)

(Unaudited)




Reportable Segment


Corporate and
Other


Total



Vacation
Ownership


Exchange &
Third-Party
Management



REVENUES









Sales of vacation ownership products


$ 459


$ —


$ —


$ 459

Management and exchange(1)









Ancillary revenues


80


1



81

Management fee revenues


77


14


(11)


80

Exchange and other services revenues


60


105


87


252

Management and exchange


217


120


76


413

Rental


187


23



210

Financing


127




127

Cost reimbursements(1)


554


29


(54)


529

TOTAL REVENUES


$ 1,544


$ 172


$ 22


$ 1,738










PROFIT









Development


$ 79


$ —


$ —


$ 79

Management and exchange(1)


136


54


(20)


170

Rental(1)


(4)


23


28


47

Financing


85




85

TOTAL PROFIT


296


77


8


381










OTHER









General and administrative




(112)


(112)

Depreciation and amortization


(42)


(29)


(6)


(77)

Litigation charges


(6)




(6)

Restructuring


(1)



1


Royalty fee


(52)




(52)

Impairment




(5)


(5)

Gains and other income, net




4


4

Interest expense




(87)


(87)

Transaction and integration costs


(1)



(47)


(48)

Other


1




1

INCOME (LOSS) BEFORE INCOME TAXES AND









NONCONTROLLING INTERESTS


195


48


(244)


(1)

Provision for income taxes




(16)


(16)

NET INCOME (LOSS)


195


48


(260)


(17)

Net income attributable to noncontrolling interests(1)




(5)


(5)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON



SHAREHOLDERS


$ 195


$ 48


$ (265)


$ (22)

SEGMENT MARGIN(2)


20 %


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-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


Six Months Ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

Net income (loss) attributable to common shareholders


$ 136


$ 6


$ 194


$ (22)

Provision for income taxes


43


27


75


16

Income (loss) before income taxes attributable to common shareholders


179


33


269


(6)

Certain items:









Litigation charges


2


3


5


6

(Gains) losses and other (income) expense, net(1)


(37)


2


(41)


(4)

Transaction and integration costs


37


29


65


48

Impairment charges



5



5

Purchase price adjustments


5


2


8


2

Other


(5)


(4)


(5)


(4)

Adjusted pretax income **


181


70


301


47

Provision for income taxes


(50)


(33)


(89)


(30)

Adjusted net income attributable to common shareholders **


$ 131


$ 37


$ 212


$ 17

Diluted shares(2)


46.5


43.8


47.2


43.0

Adjusted earnings per share - Diluted **


$ 2.87


$ 0.85


$ 4.55


$ 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) Diluted shares for the six months ended June 30, 2022 reflects the dilutive impact of the adoption of Accounting Standards Update 2020-
06 – "Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own
Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" (Diluted shares increased by
5 million shares based on the assumed conversion of our 2022 and 2026 Convertible Notes).

A-8


MARRIOTT VACATIONS WORLDWIDE CORPORATION


ADJUSTED EBITDA

(In millions)

(Unaudited)




Three Months Ended


Six Months Ended



June 30,
2022


June 30,
2021


June 30,
2019


June 30,
2022


June 30,
2021


June 30,
2019

NET INCOME (LOSS) ATTRIBUTABLE













TO COMMON SHAREHOLDERS


$ 136


$ 6


$ 49


$ 194


$ (22)


$ 73

Interest expense


30


44


35


57


87


69

Provision for income taxes


43


27


25


75


16


40

Depreciation and amortization


32


36


36


65


77


73

Share-based compensation


12


14


11


20


22


20

Certain items:













Litigation charges


2


3


1


5


6


2

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













Dispositions


(49)




(49)



Hurricane business interruption net insurance proceeds





(3)



(9)

Various tax related matters


3


2



3


2


Foreign currency translation


8


(2)


1


7


(6)


1

Other


1


2


(3)


1



(2)

Transaction and integration costs


37


29


36


65


48


62

Impairment charges



5




5


26

Purchase price adjustments


5


2


4


8


2


5

COVID-19 related adjustments



(2)




(2)


Other


(5)


(2)



(5)


(2)


1

ADJUSTED EBITDA**


$ 255


$ 164


$ 195


$ 443


$ 233


$ 361














** 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


CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT

(In millions)

(Unaudited)




Three Months Ended


Six Months Ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

Consolidated contract sales


$ 506


$ 362


$ 900


$ 588

Less resales contract sales


(11)


(7)


(20)


(12)

Consolidated contract sales, net of resales


495


355


880


576

Plus:









Settlement revenue


9


8


16


13

Resales revenue


4


1


8


3

Revenue recognition adjustments:









Reportability


(14)


(17)


(47)


(53)

Sales reserve


(37)


(28)


(66)


(42)

Other(1)


(32)


(23)


(56)


(38)

Sale of vacation ownership products


425


296


735


459

Less:









Cost of vacation ownership products


(80)


(67)


(140)


(107)

Marketing and sales


(214)


(164)


(396)


(273)

Development Profit


131


65


199


79

Revenue recognition reportability adjustment


11


13


35


39

Purchase price adjustments


5


3


9


3

Adjusted development profit **


$ 147


$ 81


$ 243


$ 121

Development profit margin


31.0 %


22.3 %


27.1 %


17.3 %

Adjusted development profit margin


33.6 %


26.2 %


31.3 %


24.0 %


** 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.

A-10


MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions)

(Unaudited)


VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA




Three Months Ended


Six Months Ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO









COMMON SHAREHOLDERS


$ 277


$ 151


$ 450


$ 195

Depreciation and amortization


22


23


44


42

Share-based compensation expense


2


2


3


3

Certain items:









Litigation charges


2


3


5


6

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









Dispositions


(33)



(33)


Hurricane business interruption net insurance
proceeds




(3)


Foreign currency translation


1



1


Transaction and integration costs


1


1


1


1

Purchase price adjustments


5


2


8


2

COVID-19 related restructuring





1

Other


(3)



(3)


SEGMENT ADJUSTED EBITDA **


$ 274


$ 182


$ 473


$ 250

SEGMENT ADJUSTED EBITDA MARGIN **


36 %


30 %


34 %


25 %

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA




Three Months Ended


Six Months Ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO









COMMON SHAREHOLDERS


$ 46


$ 27


$ 79


$ 48

Depreciation and amortization


7


9


16


29

Share-based compensation expense



1


1


1

Certain items:









Gain on disposition of VRI Americas


(16)



(16)


Other


(2)



(2)


SEGMENT ADJUSTED EBITDA **


$ 35


$ 37


$ 78


$ 78

SEGMENT ADJUSTED EBITDA MARGIN **


52 %


52 %


54 %


55 %










** 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





June 30, 2022


December 31, 2021

ASSETS





Cash and cash equivalents


$ 324


$ 342

Restricted cash (including $108 and $139 from VIEs, respectively)


282


461

Accounts receivable, net (including $12 and $12 from VIEs, respectively)


244


279

Vacation ownership notes receivable, net (including $1,659 and $1,662 from VIEs,





respectively)


2,075


2,045

Inventory


695


719

Property and equipment, net


1,151


1,136

Goodwill


3,117


3,150

Intangibles, net


941


993

Other (including $71 and $76 from VIEs, respectively)


511


488

TOTAL ASSETS


$ 9,340


$ 9,613






LIABILITIES AND EQUITY





Accounts payable


$ 217


$ 265

Advance deposits


195


160

Accrued liabilities (including $2 and $2 from VIEs, respectively)


330


345

Deferred revenue


372


453

Payroll and benefits liability


204


201

Deferred compensation liability


130


142

Securitized debt, net (including $1,868 and $1,877 from VIEs, respectively)


1,846


1,856

Debt, net


2,748


2,631

Other


210


224

Deferred taxes


342


350

TOTAL LIABILITIES


6,594


6,627

Contingencies and Commitments





Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or





outstanding



Common stock — $0.01 par value; 100,000,000 shares authorized; 75,741,585 and





75,519,049 shares issued, respectively


1


1

Treasury stock — at cost; 35,377,001 and 33,235,671 shares, respectively


(1,666)


(1,356)

Additional paid-in capital


3,963


4,072

Accumulated other comprehensive loss


(1)


(16)

Retained earnings


448


275

TOTAL MVW SHAREHOLDERS' EQUITY


2,745


2,976

Noncontrolling interests


1


10

TOTAL EQUITY


2,746


2,986

TOTAL LIABILITIES AND EQUITY


$ 9,340


$ 9,613






The abbreviation VIEs above means Variable Interest Entities.

A-12


MARRIOTT VACATIONS WORLDWIDE CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)




Six Months Ended



June 30, 2022


June 30, 2021

OPERATING ACTIVITIES





Net income (loss)


$ 193


$ (17)

Adjustments to reconcile net income (loss) to net cash, cash equivalents and





restricted cash provided by operating activities:





Depreciation and amortization of intangibles


65


77

Amortization of debt discount and issuance costs


10


22

Vacation ownership notes receivable reserve


66


42

Share-based compensation


20


22

Impairment charges



5

Gains and other income, net


(47)


(1)

Deferred income taxes


29


36

Net change in assets and liabilities:





Accounts receivable


59


60

Vacation ownership notes receivable originations


(483)


(320)

Vacation ownership notes receivable collections


365


362

Inventory


25


14

Other assets


(63)


(66)

Accounts payable, advance deposits and accrued liabilities


8


(9)

Deferred revenue


19


48

Payroll and benefit liabilities


7


35

Deferred compensation liability


4


11

Other liabilities



4

Deconsolidation of certain Consolidated Property Owners' Associations


(48)


(87)

Purchase of vacation ownership units for future transfer to inventory


(12)


(99)

Other, net


1


9

Net cash, cash equivalents and restricted cash provided by operating



activities


218


148

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


93


Capital expenditures for property and equipment (excluding inventory)


(23)


(11)

Issuance of note receivable to VIE


(47)


Purchase of company owned life insurance


(11)


(8)

Other, net


3


Net cash, cash equivalents and restricted cash provided by (used in)



investing activities


15


(176)

A-13


MARRIOTT VACATIONS WORLDWIDE CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In millions)

(Unaudited)




Six Months Ended



June 30, 2022


June 30, 2021

FINANCING ACTIVITIES





Borrowings from securitization transactions


477


425

Repayment of debt related to securitization transactions


(485)


(420)

Proceeds from debt


125


1,061

Repayments of debt


(125)


(289)

Purchase of convertible note hedges



(100)

Proceeds from issuance of warrants



70

Finance lease payment


(2)


(1)

Payment of debt issuance costs


(9)


(15)

Repurchase of common stock


(312)


Payment of dividends


(75)


Payment of withholding taxes on vesting of restricted stock units


(22)


(15)

Net cash, cash equivalents and restricted cash (used in) provided by



financing activities


(428)


716

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


(2)


Change in cash, cash equivalents and restricted cash


(197)


688

Cash, cash equivalents and restricted cash, beginning of period


803


992

Cash, cash equivalents and restricted cash, end of period


$ 606


$ 1,680

A-14


MARRIOTT VACATIONS WORLDWIDE CORPORATION

(In millions, except per share amounts)


2022 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED

EARNINGS PER SHARE - DILUTED OUTLOOK




Fiscal Year

2022 (low)


Fiscal Year

2022 (high)

Net income attributable to common shareholders


$ 365


$ 395

Provision for income taxes


147


157

Income before income taxes attributable to common shareholders


511


551

Certain items(1)


88


98

Adjusted pretax income **


600


650

Provision for income taxes


(175)


(185)

Adjusted net income attributable to common shareholders **


$ 425


$ 465

Earnings per share - Diluted


$ 8.15


$ 8.81

Adjusted earnings per share - Diluted **


$ 9.47


$ 10.35

Diluted shares


45.4


45.4

2022 ADJUSTED EBITDA OUTLOOK




Fiscal Year

2022 (low)


Fiscal Year

2022 (high)

Net income attributable to common shareholders


$ 365


$ 395

Interest expense


114


114

Provision for income taxes


147


157

Depreciation and amortization


126


126

Share-based compensation


40


40

Certain items(1)


88


98

Adjusted EBITDA **


$ 880


$ 930


(1) Certain items adjustment includes $110 to $120 million of anticipated transaction and integration costs, $20 million of
anticipated purchase accounting adjustments, and $5 million of litigation charges, partially offset by $47 million of
miscellaneous other adjustments, including the disposition of the VRI Americas business and a hotel in Puerto Vallarta,
Mexico in the second quarter of 2022.


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

A-15


MARRIOTT VACATIONS WORLDWIDE CORPORATION


2022 ADJUSTED FREE CASH FLOW OUTLOOK

(In millions)




Fiscal Year 2022
(low)


Fiscal Year 2022
(high)

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


$ 470


$ 500

Capital expenditures for property and equipment (excluding inventory)


(70)


(60)

Borrowings from securitization transactions


910


925

Repayment of debt related to securitizations


(785)


(800)

Securitized Debt Issuance Costs


(12)


(12)

Free cash flow **


513


553

Adjustments:





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


65


100

Certain items(2)


86


94

Change in restricted cash


(14)


(17)

Adjusted free cash flow **


$ 650


$ 730


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


(2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs.

A-16


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









2021


$ 226


$ 362


$ 380


$ 406


$ 1,374



2020


$ 306


$ 30


$ 140


$ 178


$ 654














VPG















2022


$ 4,706


$ 4,613









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









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









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









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-17

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 Non-GAAP Financial Measures

We evaluate non-GAAP financial measures, including those identified by a double 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 vacation ownership 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 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, expand our business, and return cash to shareholders. 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.

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 loan 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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SOURCE Marriott Vacations Worldwide Corporation