Marriott Vacations Worldwide (“MVW”) Reports Second Quarter 2022 Financial Results
ORLANDO, Fla. – August 8, 2022 – Marriott Vacations Worldwide Corporation (NYSE: VAC) (the “Company”) reported second quarter 2022 financial results.
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
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 VacationsTM
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||to||$500|
|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|
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.
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Marriott Vacations Worldwide Corporation
Marriott Vacations Worldwide Corporation