Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Marriott Vacations Worldwide Reports Fourth Quarter and Full Year 2023 Financial Results By: Marriott Vacations Worldwide Corporation via Business Wire February 21, 2024 at 16:34 PM EST Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW” or the “Company”) reported financial results for the fourth quarter and full year 2023 and provided guidance for full year 2024. “After a challenging year, we ended the year on a very positive note, growing contract sales by 4% in the fourth quarter on a year-over-year basis with VPG in-line with the prior year, after adjusting for the estimated impact of the Maui wildfires,” said John Geller, President and Chief Executive Officer. “The transition to Abound by Marriott Vacations is behind us. Moving forward, we continue to look for ways to leverage technology to grow our revenues while driving efficiencies and cost savings across the organization.” Fourth Quarter 2023 Highlights Consolidated Vacation Ownership contract sales declined 2% year-over-year to $447 million driven by 2% lower volume per guest (“VPG”). The Company estimates that excluding the impact of the Maui wildfires, contract sales would have grown 4%, tours would have increased 4% and VPG would have been unchanged compared to the prior year. Net income attributable to common stockholders was $35 million and fully diluted earnings per share was $0.93. Adjusted net income attributable to common stockholders was $75 million and adjusted fully diluted earnings per share was $1.88. Adjusted EBITDA was $186 million. The Company repurchased 431,000 shares of its common stock for $38 million during the quarter and increased its quarterly dividend to $0.76 per share, which was paid in January. For the year, the Company repurchased 6% of its shares outstanding for $286 million and paid $106 million in dividends. Fourth Quarter 2023 Results On August 8, 2023, a wildfire devastated the area of West Maui. While the Company operates four vacation ownership resorts and sales centers in the area, it did not sustain any physical damage to these resorts and sales centers. However, the Company estimates the Maui wildfires negatively impacted its fourth quarter contract sales by approximately $25 million, Net income attributable to common stockholders by $17 million and Adjusted EBITDA by $24 million. In the third quarter of 2022, the Company aligned its contract terms for the sale of its Marriott-, Westin-, and Sheraton-branded vacation ownership products, resulting in the acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology for vacation ownership notes receivable for these brands, resulting in a decrease in the reserve for the acquired notes offset by an increase in the reserve for the originated notes. Together, these changes are referred to as the “Alignment.” The tables below illustrate the comparison of the reported results from the fourth quarter of 2023, as well as adjusted results that reflect the estimated impact of the Maui fires, to the results from the fourth quarter of 2022, including the impact of the Alignment on the Company’s reported results for that time period. In the tables below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. Consolidated Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Net income attributable to common stockholders $ 35 $ 17 $ 52 $ 88 $ (5 ) $ 83 Adjusted net income attributable to common stockholders* $ 75 $ 17 $ 92 $ 115 $ (5 ) $ 110 Adjusted EBITDA* $ 186 $ 24 $ 210 $ 239 $ (7 ) $ 232 Vacation Ownership Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions, except VPG) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 25 $ 472 $ 454 $ — $ 454 VPG $ 4,002 $ 88 $ 4,090 $ 4,088 $ — $ 4,088 Tours 105,580 4,028 109,608 105,231 — 105,231 Sale of vacation ownership products $ 375 $ 24 $ 399 $ 439 $ (12 ) $ 427 Development profit $ 120 $ 18 $ 138 $ 162 $ (7 ) $ 155 Management and exchange profit $ 75 $ 2 $ 77 $ 70 $ — $ 70 Rental profit $ 15 $ 2 $ 17 $ 15 $ — $ 15 Financing profit $ 51 $ — $ 51 $ 50 $ — $ 50 Other $ (3 ) $ 3 $ — $ 1 $ — $ 1 Segment financial results attributable to common stockholders $ 199 $ 25 $ 224 $ 241 $ (5 ) $ 236 Segment margin 27.3% 29.7% 31.9% 31.7% Segment Adjusted EBITDA* $ 236 $ 25 $ 261 $ 261 $ (7 ) $ 254 Segment Adjusted EBITDA margin* 32.5% 34.7% 34.6% 34.2% Revenues excluding cost reimbursements decreased 3% in the fourth quarter of 2023 compared to the prior year. The decline was driven by a 2% year-over-year reduction in consolidated contract sales resulting from the Maui wildfires, as well as a $24 million prior year reportability benefit. Adjusted for the estimated $25 million impact of the Maui wildfires, consolidated contract sales would have increased 4% year-over-year. Segment financial results attributable to common stockholders declined $42 million to $199 million in the fourth quarter of 2023 and Segment Adjusted EBITDA declined $25 million to $236 million. Adjusting for the $25 million estimated impact from the Maui wildfires in the current year and $7 million Alignment benefit in the prior year, Segment Adjusted EBITDA would have increased 3% to $261 million. Exchange & Third-Party Management Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Management and exchange profit $ 22 $ (1 ) $ 21 $ 22 $ — $ 22 Segment financial results attributable to common stockholders $ 18 $ (1 ) $ 17 $ 24 $ — $ 24 Segment margin 31.1% 28.3% 41.3% 41.3% Segment Adjusted EBITDA* $ 31 $ (1 ) $ 30 $ 31 $ — $ 31 Segment Adjusted EBITDA margin* 52.2% 49.3% 54.9% 54.9% Revenues excluding cost reimbursements decreased 2% in the fourth quarter of 2023 compared to the prior year driven by lower member transactions. Interval International ended the year with 1.6 million active members, in-line with the prior year, and Average revenue per member increased 2% year-over-year in the fourth quarter. Segment financial results attributable to common stockholders were $18 million in the fourth quarter of 2023, Segment margin was 31% and Segment Adjusted EBITDA was $31 million. Adjusted for the estimated impact from the Maui wildfires, Segment Adjusted EBITDA would have decreased $1 million to $30 million. Corporate and Other General and administrative costs increased $22 million in the fourth quarter of 2023 compared to the prior year primarily due to higher IT spending to drive our digital and data initiatives. Balance Sheet and Liquidity The Company ended the year with $929 million in liquidity, including $248 million of cash and cash equivalents, $60 million of gross notes receivable that were eligible for securitization, and $621 million of available capacity under its revolving corporate credit facility. At the end of 2023, the Company had $3.0 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable. Full Year 2024 Outlook The Company is providing guidance for the full year 2024 as reflected in the chart below. The Financial Schedules that follow reconcile the following full year 2024 expected GAAP results for the Company to the non-GAAP financial measures set forth below. In the table below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. (in millions, except per share amounts) 2024 Guidance Contract sales $1,880 to $1,930 Net income attributable to common stockholders $285 to $320 Earnings per share - diluted $7.17 to $8.00 Net cash, cash equivalents, and restricted cash provided by operating activities $265 to $295 Adjusted EBITDA* $760 to $800 Adjusted earnings per share - diluted* $7.65 to $8.35 Adjusted free cash flow* $400 to $450 Non-GAAP Financial Information Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission. Fourth Quarter 2023 Financial Results Conference Call The Company will hold a conference call on February 22, 2024 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website. About Marriott Vacations Worldwide Corporation Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has approximately 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates an exchange network and membership programs comprised of more than 3,200 affiliated resorts in over 90 countries and territories, and provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com. 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 leveraging technology to enhance core operations and other benefits to the organization and full year 2024 outlook for contract sales, results of operations and cash flows. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza, and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs; political or social strife; and other matters referred to under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission. All forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements. Financial Schedules Follow MARRIOTT VACATIONS WORLDWIDE CORPORATION FINANCIAL SCHEDULES QUARTER 4, 2023 TABLE OF CONTENTS Summary Financial Information A-1 Adjusted EBITDA by Segment A-2 Consolidated Statements of Income A-3 to A-4 Revenues and Profit by Segment A-5 to A-6 Consolidated Contract Sales to Adjusted Development Profit A-7 to A-8 Adjusted Net Income Attributable to Common Stockholders and Adjusted Earnings Per Share - Diluted A-9 Adjusted EBITDA A-10 Segment Adjusted EBITDA Vacation Ownership A-11 Exchange & Third-Party Management Balance Sheet Items and Summary Cash Flow A-12 2024 Outlook Adjusted Net Income Attributable to Common Stockholders, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA A-13 Adjusted Free Cash Flow A-14 Quarterly Operating Metrics A-15 Non-GAAP Financial Measures A-16 to A-17 A-1 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except VPG, tours, total active Interval International members, average revenue per member, and per share amounts) (Unaudited) SUMMARY FINANCIAL INFORMATION Quarter Ended Change % Fiscal Year Ended Change % December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Key Measures Total consolidated contract sales $ 447 $ 454 (2%) $ 1,772 $ 1,837 (4%) VPG $ 4,002 $ 4,088 (2%) $ 4,088 $ 4,421 (8%) Tours 105,580 105,231 0% 405,825 390,593 4% Total active Interval International members (000's)(1) 1,564 1,566 0% 1,564 1,566 0% Average revenue per Interval International member $ 36.16 $ 35.60 2% $ 156.65 $ 157.97 (1%) GAAP Measures Revenues $ 1,194 $ 1,188 0% $ 4,727 $ 4,656 2% Income before income taxes and noncontrolling interests $ 64 $ 145 (55%) $ 398 $ 582 (31%) Net income attributable to common stockholders $ 35 $ 88 (60%) $ 254 $ 391 (35%) Diluted shares 42.5 43.0 (1%) 43.5 45.2 (4%) Earnings per share - diluted $ 0.93 $ 2.08 (55%) $ 6.28 $ 8.77 (28%) Non-GAAP Measures* Adjusted EBITDA $ 186 $ 239 (22%) $ 761 $ 966 (21%) Adjusted pretax income $ 105 $ 169 (38%) $ 450 $ 677 (34%) Adjusted net income attributable to common stockholders $ 75 $ 115 (35%) $ 322 $ 458 (30%) Adjusted earnings per share - diluted $ 1.88 $ 2.74 (31%) $ 7.83 $ 10.26 (24%) (1) Includes members at the end of each period. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-2 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA BY SEGMENT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 236 $ 261 $ (7 ) $ 254 Exchange & Third-Party Management 31 31 — 31 Segment Adjusted EBITDA* 267 292 (7 ) 285 General and administrative (84 ) (62 ) — (62 ) Other 3 9 — 9 Adjusted EBITDA* $ 186 $ 239 $ (7 ) $ 232 Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 883 $ 1,033 $ (51 ) $ 982 Exchange & Third-Party Management 130 148 — 148 Segment Adjusted EBITDA* 1,013 1,181 (51 ) 1,130 General and administrative (273 ) (249 ) — (249 ) Other 21 34 — 34 Adjusted EBITDA* $ 761 $ 966 $ (51 ) $ 915 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-3 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 375 $ 439 $ (12 ) $ 427 Management and exchange 202 204 — 204 Rental 136 113 — 113 Financing 83 76 — 76 Cost reimbursements 398 356 — 356 TOTAL REVENUES 1,194 1,188 (12 ) 1,176 EXPENSES Cost of vacation ownership products 50 73 (5 ) 68 Marketing and sales 205 204 — 204 Management and exchange 110 114 — 114 Rental 108 88 — 88 Financing 32 26 — 26 General and administrative 84 62 — 62 Depreciation and amortization 36 34 — 34 Litigation charges 6 4 — 4 Restructuring 6 — — — Royalty fee 29 30 — 30 Impairment 28 1 — 1 Cost reimbursements 398 356 — 356 TOTAL EXPENSES 1,092 992 (5 ) 987 Gains and other income, net 13 1 — 1 Interest expense, net (39 ) (27 ) — (27 ) Transaction and integration costs (9 ) (26 ) — (26 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 64 145 (7 ) 138 (Provision for) benefit from income taxes (31 ) (57 ) 2 (55 ) NET INCOME (LOSS) 33 88 (5 ) 83 Net income attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ (5 ) $ 83 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 35.6 38.2 — 38.2 Basic $ 0.98 $ 2.30 $ (0.16 ) $ 2.14 Diluted shares 42.5 43.0 — 43.0 Diluted $ 0.93 $ 2.08 $ (0.14 ) $ 1.94 * 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-4 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 1,460 $ 1,618 $ (39 ) $ 1,579 Management and exchange 813 827 — 827 Rental 571 551 — 551 Financing 322 293 — 293 Cost reimbursements 1,561 1,367 — 1,367 TOTAL REVENUES 4,727 4,656 (39 ) 4,617 EXPENSES Cost of vacation ownership products 224 289 (7 ) 282 Marketing and sales 823 807 — 807 Management and exchange 442 444 — 444 Rental 452 382 — 382 Financing 113 75 19 94 General and administrative 273 249 — 249 Depreciation and amortization 135 132 — 132 Litigation charges 13 11 — 11 Restructuring 6 — — — Royalty fee 117 114 — 114 Impairment 32 2 — 2 Cost reimbursements 1,561 1,367 — 1,367 TOTAL EXPENSES 4,191 3,872 12 3,884 Gains and other income, net 47 40 — 40 Interest expense, net (145 ) (118 ) — (118 ) Transaction and integration costs (37 ) (125 ) — (125 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 398 582 (51 ) 531 (Provision for) benefit from income taxes (146 ) (191 ) 13 (178 ) NET INCOME (LOSS) 252 391 (38 ) 353 Net loss attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 254 $ 391 $ (38 ) $ 353 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 36.5 40.4 — 40.4 Basic $ 6.96 $ 9.69 $ (0.93 ) $ 8.76 Diluted shares 43.5 45.2 — 45.2 Diluted $ 6.28 $ 8.77 $ (0.83 ) $ 7.94 * 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-5 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2023 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management REVENUES Sales of vacation ownership products $ 375 $ — $ — $ 375 Management and exchange(1) Ancillary 59 2 — 61 Management fee 46 6 (1 ) 51 Exchange and other services 38 41 11 90 Management and exchange 143 49 10 202 Rental 127 9 — 136 Financing 83 — — 83 Cost reimbursements(1) 405 4 (11 ) 398 TOTAL REVENUES $ 1,133 $ 62 $ (1 ) $ 1,194 PROFIT Development $ 120 $ — $ — $ 120 Management and exchange(1) 75 22 (5 ) 92 Rental(1) 15 9 4 28 Financing 51 — — 51 TOTAL PROFIT 261 31 (1 ) 291 OTHER General and administrative — — (84 ) (84 ) Depreciation and amortization (24 ) (8 ) (4 ) (36 ) Litigation charges (4 ) (1 ) (1 ) (6 ) Restructuring — — (6 ) (6 ) Royalty fee (29 ) — — (29 ) Impairment (8 ) (4 ) (16 ) (28 ) Gains and other income, net 6 — 7 13 Interest expense, net — — (39 ) (39 ) Transaction and integration costs — — (9 ) (9 ) Other (3 ) — — (3 ) INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 199 18 (153 ) 64 Provision for income taxes — — (31 ) (31 ) NET INCOME (LOSS) 199 18 (184 ) 33 Net income attributable to noncontrolling interests(1) — — 2 2 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 18 $ (182 ) $ 35 SEGMENT MARGIN(2) 27% 31% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. A-6 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2022 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management As Reported As Adjusted* As Reported Impact of Alignment As Adjusted* REVENUES Sales of vacation ownership products $ 439 $ (12 ) $ 427 $ — $ — $ 439 $ 427 Management and exchange(1) Ancillary 58 — 58 1 — 59 59 Management fee 42 — 42 6 — 48 48 Exchange and other services 32 — 32 42 23 97 97 Management and exchange 132 — 132 49 23 204 204 Rental 104 — 104 9 — 113 113 Financing 76 — 76 — — 76 76 Cost reimbursements(1) 362 — 362 4 (10 ) 356 356 TOTAL REVENUES $ 1,113 $ (12 ) $ 1,101 $ 62 $ 13 $ 1,188 $ 1,176 PROFIT Development $ 162 $ (7 ) $ 155 $ — $ — $ 162 $ 155 Management and exchange(1) 70 — 70 22 (2 ) 90 90 Rental(1) 15 — 15 9 1 25 25 Financing 50 — 50 — — 50 50 TOTAL PROFIT 297 (7 ) 290 31 (1 ) 327 320 OTHER General and administrative — — — — (62 ) (62 ) (62 ) Depreciation and amortization (25 ) — (25 ) (7 ) (2 ) (34 ) (34 ) Litigation charges (2 ) — (2 ) — (2 ) (4 ) (4 ) Royalty fee (30 ) — (30 ) — — (30 ) (30 ) Impairment (1 ) — (1 ) — — (1 ) (1 ) Gains and other income, net 1 — 1 — — 1 1 Interest expense, net — — — — (27 ) (27 ) (27 ) Transaction and integration costs — — — — (26 ) (26 ) (26 ) Other 1 — 1 — — 1 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 241 (7 ) 234 24 (120 ) 145 138 Benefit from (provision for) income taxes — 2 2 — (57 ) (57 ) (55 ) NET INCOME (LOSS) 241 (5 ) 236 24 (177 ) 88 83 Net income attributable to noncontrolling interests(1) — — — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 241 $ (5 ) $ 236 $ 24 $ (177 ) $ 88 $ 83 SEGMENT MARGIN(2) 32% 32% 41% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-7 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 454 $ — $ 454 Less resales contract sales (10 ) (10 ) — (10 ) Consolidated contract sales, net of resales 437 444 — 444 Plus: Settlement revenue 10 10 — 10 Resales revenue 4 7 — 7 Revenue recognition adjustments: Reportability (2 ) 36 (12 ) 24 Sales reserve (47 ) (40 ) — (40 ) Other(1) (27 ) (18 ) — (18 ) Sale of vacation ownership products 375 439 (12 ) 427 Less: Cost of vacation ownership products (50 ) (73 ) 5 (68 ) Marketing and sales (205 ) (204 ) — (204 ) Development Profit 120 162 (7 ) 155 Revenue recognition reportability adjustment 1 (27 ) 7 (20 ) Purchase accounting adjustments 3 (1 ) — (1 ) Other — (8 ) — (8 ) Adjusted development profit* $ 124 $ 126 $ — $ 126 Development profit margin 32.0% 36.8% 36.2% Adjusted development profit margin* 33.1% 31.5% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-8 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 1,772 $ 1,837 $ — $ 1,837 Less resales contract sales (42 ) (40 ) — (40 ) Consolidated contract sales, net of resales 1,730 1,797 — 1,797 Plus: Settlement revenue 39 36 — 36 Resales revenue 22 20 — 20 Revenue recognition adjustments: Reportability 3 43 (58 ) (15 ) Sales reserve (232 ) (170 ) 19 (151 ) Other(1) (102 ) (108 ) — (108 ) Sale of vacation ownership products 1,460 1,618 (39 ) 1,579 Less: Cost of vacation ownership products (224 ) (289 ) 7 (282 ) Marketing and sales (823 ) (807 ) — (807 ) Development Profit 413 522 (32 ) 490 Revenue recognition reportability adjustment (2 ) (35 ) 46 11 Purchase accounting adjustments 9 13 — 13 Other — (13 ) — (13 ) Adjusted development profit* $ 420 $ 487 $ 14 $ 501 Development profit margin 28.3% 32.2% 31.0% Adjusted development profit margin* 28.8% 31.0% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-9 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED (In millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income attributable to common stockholders $ 35 $ 88 $ 254 $ 391 Provision for income taxes 31 57 146 191 Income before income taxes attributable to common stockholders 66 145 400 582 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 Adjusted pretax income* 105 169 450 677 Provision for income taxes (30 ) (54 ) (128 ) (219 ) Adjusted net income attributable to common stockholders* $ 75 $ 115 $ 322 $ 458 Diluted shares 42.5 43.0 43.5 45.2 Adjusted earnings per share - Diluted* $ 1.88 $ 2.74 $ 7.83 $ 10.26 Excluding the Impact of Alignment: Adjusted net income attributable to common stockholders* $ 75 $ 110 $ 322 $ 420 Adjusted earnings per share - Diluted* $ 1.88 $ 2.60 $ 7.83 $ 9.42 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-10 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA (In millions) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ 254 $ 391 Interest expense, net 39 27 145 118 Provision for income taxes 31 57 146 191 Depreciation and amortization 36 34 135 132 Share-based compensation 6 9 31 39 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 ADJUSTED EBITDA* $ 186 $ 239 $ 761 $ 966 ADJUSTED EBITDA MARGIN* 23% 29% 24% 29% Excluding the Impact of Alignment ADJUSTED EBITDA* $ 186 $ 232 $ 761 $ 915 ADJUSTED EBITDA MARGIN* 23% 28% 24% 28% * 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 (In millions) (Unaudited) VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 241 $ 777 $ 961 Depreciation and amortization 24 25 93 92 Share-based compensation 2 2 8 7 Certain items: Transaction and integration costs — — — 3 Gain on disposition of hotel, land, and other — — (7 ) (33 ) Insurance proceeds (6 ) (1 ) (9 ) (4 ) Change in indemnification asset — — (9 ) — Other — — (4 ) — Gains and other income, net (6 ) (1 ) (29 ) (37 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 4 2 12 9 Impairment charges 8 1 12 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 3 — 2 3 SEGMENT ADJUSTED EBITDA* $ 236 $ 261 $ 883 $ 1,033 SEGMENT ADJUSTED EBITDA MARGIN* 32% 35% 31% 35% Excluding the Impact of Alignment SEGMENT ADJUSTED EBITDA* $ 236 $ 254 $ 883 $ 982 SEGMENT ADJUSTED EBITDA MARGIN* 32% 34% 31% 34% EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 18 $ 24 $ 93 $ 132 Depreciation and amortization 8 7 31 31 Share-based compensation 1 — 2 2 Certain items: Gain on disposition of hotel, land, and other — — (1 ) — Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation — — — 2 Litigation charges 1 — 1 — Impairment charges 4 — 4 — Early termination of VRI management contract — — — (2 ) Other (1 ) — — — SEGMENT ADJUSTED EBITDA* $ 31 $ 31 $ 130 $ 148 SEGMENT ADJUSTED EBITDA MARGIN* 52% 55% 52% 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-12 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (unaudited) BALANCE SHEET ITEMS Fiscal Year 2023 2022 Cash and cash equivalents $ 248 $ 524 Vacation ownership notes receivable, net $ 2,343 $ 2,198 Inventory $ 634 $ 660 Property and equipment, net $ 1,260 $ 1,139 Goodwill $ 3,117 $ 3,117 Intangibles, net $ 854 $ 911 Debt, net $ 3,049 $ 3,088 Stockholders’ equity $ 2,382 $ 2,496 SUMMARY CASH FLOW Fiscal Year CASH FLOW 2023 2022 Cash, cash equivalents, and restricted cash provided by (used in): Operating activities $ 232 $ 522 Investing activities (112 ) 16 Financing activities (401 ) (486 ) Effect of changes in exchange rates on cash, cash equivalents, and restricted cash 1 (1 ) Net change in cash, cash equivalents, and restricted cash $ (280 ) $ 51 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-13 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except per share amounts) 2024 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Provision for income taxes 119 134 Income before income taxes attributable to common stockholders 404 454 Certain items(1) 29 24 Adjusted pretax income* 433 478 Provision for income taxes (128 ) (143 ) Adjusted net income attributable to common stockholders* $ 305 $ 335 Earnings per share - Diluted(2)(3) $ 7.17 $ 8.00 Adjusted earnings per share - Diluted(2)(3)* $ 7.65 $ 8.35 Diluted shares(2) 42.3 42.3 2024 ADJUSTED EBITDA OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Interest expense 161 156 Provision for income taxes 119 134 Depreciation and amortization 128 128 Share-based compensation 38 38 Certain items(1) 29 24 Adjusted EBITDA* $ 760 $ 800 (1) Certain items adjustment includes $10 million to $15 million of anticipated transaction and integration costs, $12 million of anticipated litigation charges and $2 million of anticipated purchase accounting adjustments. (2) Includes 6.5 million shares from the assumed conversion of our convertible notes. (3) Includes an add back of $19 million of interest expense related to our convertible notes, net of tax for purposes of calculating net income in the diluted earnings per share calculation. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-14 MARRIOTT VACATIONS WORLDWIDE CORPORATION 2024 ADJUSTED FREE CASH FLOW OUTLOOK (In millions) Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net cash, cash equivalents and restricted cash provided by operating activities $ 265 $ 295 Capital expenditures for property and equipment (excluding inventory) (65 ) (85 ) Borrowings from securitizations, net of repayments 166 195 Securitized debt issuance costs (14 ) (15 ) Free cash flow* 352 390 Adjustments: Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1) 25 40 Certain items(2) 23 20 Adjusted free cash flow* $ 400 $ 450 (1) Represents the anticipated net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2023 and 2024 year ends. (2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs and litigation charges. * 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 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 2023 $ 434 $ 453 $ 438 $ 447 $ 1,772 2022 $ 394 $ 506 $ 483 $ 454 $ 1,837 2021 $ 226 $ 362 $ 380 $ 406 $ 1,374 VPG 2023 $ 4,358 $ 3,968 $ 4,055 $ 4,002 $ 4,088 2022 $ 4,706 $ 4,613 $ 4,353 $ 4,088 $ 4,421 2021 $ 4,644 $ 4,304 $ 4,300 $ 4,305 $ 4,356 Tours 2023 92,890 106,746 100,609 105,580 405,825 2022 78,505 102,857 104,000 105,231 390,593 2021 45,871 79,900 84,098 89,495 299,364 Exchange & Third-Party Management Total active Interval International members (000's)(1) 2023 1,568 1,566 1,571 1,564 1,564 2022 1,606 1,596 1,591 1,566 1,566 2021 1,479 1,321 1,313 1,296 1,296 Average revenue per Interval International member 2023 $ 42.07 $ 39.30 $ 39.15 $ 36.16 $ 156.65 2022 $ 44.33 $ 38.79 $ 38.91 $ 35.60 $ 157.97 2021 $ 47.13 $ 46.36 $ 42.95 $ 42.93 $ 179.48 (1) Includes members at the end of each period. A-16 MARRIOTT VACATIONS WORLDWIDE CORPORATION NON-GAAP FINANCIAL MEASURES In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by an asterisk (“*”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common stockholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. Certain Items Excluded from Non-GAAP Financial Measures We evaluate non-GAAP financial measures, including those identified by an asterisk (“*”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other companies. Adjusted Development Profit and Adjusted Development Profit Margin We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin. Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other companies. Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin as indicators of operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations. Free Cash Flow and Adjusted Free Cash Flow We evaluate Free Cash Flow and Adjusted Free Cash Flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted Free Cash Flow, which reflects additional adjustments to Free Cash Flow for the impact of transaction and integration charges, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free Cash Flow and Adjusted Free Cash Flow also facilitates management’s comparison of our results with our competitors’ results. Results As Adjusted for the Estimated Impact of the Maui Fires In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2023 for comparison purposes. The As Adjusted results reflect the estimated impact of the Maui fires on the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the estimated impact of the Maui fires. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any estimated impact from the Maui fires. Results As Adjusted for the Impact of the Alignment In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2022 for comparison purposes. The As Adjusted results exclude any impacts to the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures, due to the Alignment. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the impact of the Alignment. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any impact from the Alignment. View source version on businesswire.com: https://www.businesswire.com/news/home/20240219343110/en/Contacts Neal Goldner Investor Relations 407-206-6149 neal.goldner@mvwc.com Cameron Klaus Global Communications 407-513-6066 cameron.klaus@mvwc.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Marriott Vacations Worldwide Reports Fourth Quarter and Full Year 2023 Financial Results By: Marriott Vacations Worldwide Corporation via Business Wire February 21, 2024 at 16:34 PM EST Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW” or the “Company”) reported financial results for the fourth quarter and full year 2023 and provided guidance for full year 2024. “After a challenging year, we ended the year on a very positive note, growing contract sales by 4% in the fourth quarter on a year-over-year basis with VPG in-line with the prior year, after adjusting for the estimated impact of the Maui wildfires,” said John Geller, President and Chief Executive Officer. “The transition to Abound by Marriott Vacations is behind us. Moving forward, we continue to look for ways to leverage technology to grow our revenues while driving efficiencies and cost savings across the organization.” Fourth Quarter 2023 Highlights Consolidated Vacation Ownership contract sales declined 2% year-over-year to $447 million driven by 2% lower volume per guest (“VPG”). The Company estimates that excluding the impact of the Maui wildfires, contract sales would have grown 4%, tours would have increased 4% and VPG would have been unchanged compared to the prior year. Net income attributable to common stockholders was $35 million and fully diluted earnings per share was $0.93. Adjusted net income attributable to common stockholders was $75 million and adjusted fully diluted earnings per share was $1.88. Adjusted EBITDA was $186 million. The Company repurchased 431,000 shares of its common stock for $38 million during the quarter and increased its quarterly dividend to $0.76 per share, which was paid in January. For the year, the Company repurchased 6% of its shares outstanding for $286 million and paid $106 million in dividends. Fourth Quarter 2023 Results On August 8, 2023, a wildfire devastated the area of West Maui. While the Company operates four vacation ownership resorts and sales centers in the area, it did not sustain any physical damage to these resorts and sales centers. However, the Company estimates the Maui wildfires negatively impacted its fourth quarter contract sales by approximately $25 million, Net income attributable to common stockholders by $17 million and Adjusted EBITDA by $24 million. In the third quarter of 2022, the Company aligned its contract terms for the sale of its Marriott-, Westin-, and Sheraton-branded vacation ownership products, resulting in the acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology for vacation ownership notes receivable for these brands, resulting in a decrease in the reserve for the acquired notes offset by an increase in the reserve for the originated notes. Together, these changes are referred to as the “Alignment.” The tables below illustrate the comparison of the reported results from the fourth quarter of 2023, as well as adjusted results that reflect the estimated impact of the Maui fires, to the results from the fourth quarter of 2022, including the impact of the Alignment on the Company’s reported results for that time period. In the tables below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. Consolidated Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Net income attributable to common stockholders $ 35 $ 17 $ 52 $ 88 $ (5 ) $ 83 Adjusted net income attributable to common stockholders* $ 75 $ 17 $ 92 $ 115 $ (5 ) $ 110 Adjusted EBITDA* $ 186 $ 24 $ 210 $ 239 $ (7 ) $ 232 Vacation Ownership Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions, except VPG) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 25 $ 472 $ 454 $ — $ 454 VPG $ 4,002 $ 88 $ 4,090 $ 4,088 $ — $ 4,088 Tours 105,580 4,028 109,608 105,231 — 105,231 Sale of vacation ownership products $ 375 $ 24 $ 399 $ 439 $ (12 ) $ 427 Development profit $ 120 $ 18 $ 138 $ 162 $ (7 ) $ 155 Management and exchange profit $ 75 $ 2 $ 77 $ 70 $ — $ 70 Rental profit $ 15 $ 2 $ 17 $ 15 $ — $ 15 Financing profit $ 51 $ — $ 51 $ 50 $ — $ 50 Other $ (3 ) $ 3 $ — $ 1 $ — $ 1 Segment financial results attributable to common stockholders $ 199 $ 25 $ 224 $ 241 $ (5 ) $ 236 Segment margin 27.3% 29.7% 31.9% 31.7% Segment Adjusted EBITDA* $ 236 $ 25 $ 261 $ 261 $ (7 ) $ 254 Segment Adjusted EBITDA margin* 32.5% 34.7% 34.6% 34.2% Revenues excluding cost reimbursements decreased 3% in the fourth quarter of 2023 compared to the prior year. The decline was driven by a 2% year-over-year reduction in consolidated contract sales resulting from the Maui wildfires, as well as a $24 million prior year reportability benefit. Adjusted for the estimated $25 million impact of the Maui wildfires, consolidated contract sales would have increased 4% year-over-year. Segment financial results attributable to common stockholders declined $42 million to $199 million in the fourth quarter of 2023 and Segment Adjusted EBITDA declined $25 million to $236 million. Adjusting for the $25 million estimated impact from the Maui wildfires in the current year and $7 million Alignment benefit in the prior year, Segment Adjusted EBITDA would have increased 3% to $261 million. Exchange & Third-Party Management Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Management and exchange profit $ 22 $ (1 ) $ 21 $ 22 $ — $ 22 Segment financial results attributable to common stockholders $ 18 $ (1 ) $ 17 $ 24 $ — $ 24 Segment margin 31.1% 28.3% 41.3% 41.3% Segment Adjusted EBITDA* $ 31 $ (1 ) $ 30 $ 31 $ — $ 31 Segment Adjusted EBITDA margin* 52.2% 49.3% 54.9% 54.9% Revenues excluding cost reimbursements decreased 2% in the fourth quarter of 2023 compared to the prior year driven by lower member transactions. Interval International ended the year with 1.6 million active members, in-line with the prior year, and Average revenue per member increased 2% year-over-year in the fourth quarter. Segment financial results attributable to common stockholders were $18 million in the fourth quarter of 2023, Segment margin was 31% and Segment Adjusted EBITDA was $31 million. Adjusted for the estimated impact from the Maui wildfires, Segment Adjusted EBITDA would have decreased $1 million to $30 million. Corporate and Other General and administrative costs increased $22 million in the fourth quarter of 2023 compared to the prior year primarily due to higher IT spending to drive our digital and data initiatives. Balance Sheet and Liquidity The Company ended the year with $929 million in liquidity, including $248 million of cash and cash equivalents, $60 million of gross notes receivable that were eligible for securitization, and $621 million of available capacity under its revolving corporate credit facility. At the end of 2023, the Company had $3.0 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable. Full Year 2024 Outlook The Company is providing guidance for the full year 2024 as reflected in the chart below. The Financial Schedules that follow reconcile the following full year 2024 expected GAAP results for the Company to the non-GAAP financial measures set forth below. In the table below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. (in millions, except per share amounts) 2024 Guidance Contract sales $1,880 to $1,930 Net income attributable to common stockholders $285 to $320 Earnings per share - diluted $7.17 to $8.00 Net cash, cash equivalents, and restricted cash provided by operating activities $265 to $295 Adjusted EBITDA* $760 to $800 Adjusted earnings per share - diluted* $7.65 to $8.35 Adjusted free cash flow* $400 to $450 Non-GAAP Financial Information Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission. Fourth Quarter 2023 Financial Results Conference Call The Company will hold a conference call on February 22, 2024 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website. About Marriott Vacations Worldwide Corporation Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has approximately 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates an exchange network and membership programs comprised of more than 3,200 affiliated resorts in over 90 countries and territories, and provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com. 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 leveraging technology to enhance core operations and other benefits to the organization and full year 2024 outlook for contract sales, results of operations and cash flows. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza, and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs; political or social strife; and other matters referred to under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission. All forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements. Financial Schedules Follow MARRIOTT VACATIONS WORLDWIDE CORPORATION FINANCIAL SCHEDULES QUARTER 4, 2023 TABLE OF CONTENTS Summary Financial Information A-1 Adjusted EBITDA by Segment A-2 Consolidated Statements of Income A-3 to A-4 Revenues and Profit by Segment A-5 to A-6 Consolidated Contract Sales to Adjusted Development Profit A-7 to A-8 Adjusted Net Income Attributable to Common Stockholders and Adjusted Earnings Per Share - Diluted A-9 Adjusted EBITDA A-10 Segment Adjusted EBITDA Vacation Ownership A-11 Exchange & Third-Party Management Balance Sheet Items and Summary Cash Flow A-12 2024 Outlook Adjusted Net Income Attributable to Common Stockholders, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA A-13 Adjusted Free Cash Flow A-14 Quarterly Operating Metrics A-15 Non-GAAP Financial Measures A-16 to A-17 A-1 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except VPG, tours, total active Interval International members, average revenue per member, and per share amounts) (Unaudited) SUMMARY FINANCIAL INFORMATION Quarter Ended Change % Fiscal Year Ended Change % December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Key Measures Total consolidated contract sales $ 447 $ 454 (2%) $ 1,772 $ 1,837 (4%) VPG $ 4,002 $ 4,088 (2%) $ 4,088 $ 4,421 (8%) Tours 105,580 105,231 0% 405,825 390,593 4% Total active Interval International members (000's)(1) 1,564 1,566 0% 1,564 1,566 0% Average revenue per Interval International member $ 36.16 $ 35.60 2% $ 156.65 $ 157.97 (1%) GAAP Measures Revenues $ 1,194 $ 1,188 0% $ 4,727 $ 4,656 2% Income before income taxes and noncontrolling interests $ 64 $ 145 (55%) $ 398 $ 582 (31%) Net income attributable to common stockholders $ 35 $ 88 (60%) $ 254 $ 391 (35%) Diluted shares 42.5 43.0 (1%) 43.5 45.2 (4%) Earnings per share - diluted $ 0.93 $ 2.08 (55%) $ 6.28 $ 8.77 (28%) Non-GAAP Measures* Adjusted EBITDA $ 186 $ 239 (22%) $ 761 $ 966 (21%) Adjusted pretax income $ 105 $ 169 (38%) $ 450 $ 677 (34%) Adjusted net income attributable to common stockholders $ 75 $ 115 (35%) $ 322 $ 458 (30%) Adjusted earnings per share - diluted $ 1.88 $ 2.74 (31%) $ 7.83 $ 10.26 (24%) (1) Includes members at the end of each period. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-2 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA BY SEGMENT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 236 $ 261 $ (7 ) $ 254 Exchange & Third-Party Management 31 31 — 31 Segment Adjusted EBITDA* 267 292 (7 ) 285 General and administrative (84 ) (62 ) — (62 ) Other 3 9 — 9 Adjusted EBITDA* $ 186 $ 239 $ (7 ) $ 232 Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 883 $ 1,033 $ (51 ) $ 982 Exchange & Third-Party Management 130 148 — 148 Segment Adjusted EBITDA* 1,013 1,181 (51 ) 1,130 General and administrative (273 ) (249 ) — (249 ) Other 21 34 — 34 Adjusted EBITDA* $ 761 $ 966 $ (51 ) $ 915 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-3 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 375 $ 439 $ (12 ) $ 427 Management and exchange 202 204 — 204 Rental 136 113 — 113 Financing 83 76 — 76 Cost reimbursements 398 356 — 356 TOTAL REVENUES 1,194 1,188 (12 ) 1,176 EXPENSES Cost of vacation ownership products 50 73 (5 ) 68 Marketing and sales 205 204 — 204 Management and exchange 110 114 — 114 Rental 108 88 — 88 Financing 32 26 — 26 General and administrative 84 62 — 62 Depreciation and amortization 36 34 — 34 Litigation charges 6 4 — 4 Restructuring 6 — — — Royalty fee 29 30 — 30 Impairment 28 1 — 1 Cost reimbursements 398 356 — 356 TOTAL EXPENSES 1,092 992 (5 ) 987 Gains and other income, net 13 1 — 1 Interest expense, net (39 ) (27 ) — (27 ) Transaction and integration costs (9 ) (26 ) — (26 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 64 145 (7 ) 138 (Provision for) benefit from income taxes (31 ) (57 ) 2 (55 ) NET INCOME (LOSS) 33 88 (5 ) 83 Net income attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ (5 ) $ 83 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 35.6 38.2 — 38.2 Basic $ 0.98 $ 2.30 $ (0.16 ) $ 2.14 Diluted shares 42.5 43.0 — 43.0 Diluted $ 0.93 $ 2.08 $ (0.14 ) $ 1.94 * 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-4 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 1,460 $ 1,618 $ (39 ) $ 1,579 Management and exchange 813 827 — 827 Rental 571 551 — 551 Financing 322 293 — 293 Cost reimbursements 1,561 1,367 — 1,367 TOTAL REVENUES 4,727 4,656 (39 ) 4,617 EXPENSES Cost of vacation ownership products 224 289 (7 ) 282 Marketing and sales 823 807 — 807 Management and exchange 442 444 — 444 Rental 452 382 — 382 Financing 113 75 19 94 General and administrative 273 249 — 249 Depreciation and amortization 135 132 — 132 Litigation charges 13 11 — 11 Restructuring 6 — — — Royalty fee 117 114 — 114 Impairment 32 2 — 2 Cost reimbursements 1,561 1,367 — 1,367 TOTAL EXPENSES 4,191 3,872 12 3,884 Gains and other income, net 47 40 — 40 Interest expense, net (145 ) (118 ) — (118 ) Transaction and integration costs (37 ) (125 ) — (125 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 398 582 (51 ) 531 (Provision for) benefit from income taxes (146 ) (191 ) 13 (178 ) NET INCOME (LOSS) 252 391 (38 ) 353 Net loss attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 254 $ 391 $ (38 ) $ 353 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 36.5 40.4 — 40.4 Basic $ 6.96 $ 9.69 $ (0.93 ) $ 8.76 Diluted shares 43.5 45.2 — 45.2 Diluted $ 6.28 $ 8.77 $ (0.83 ) $ 7.94 * 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-5 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2023 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management REVENUES Sales of vacation ownership products $ 375 $ — $ — $ 375 Management and exchange(1) Ancillary 59 2 — 61 Management fee 46 6 (1 ) 51 Exchange and other services 38 41 11 90 Management and exchange 143 49 10 202 Rental 127 9 — 136 Financing 83 — — 83 Cost reimbursements(1) 405 4 (11 ) 398 TOTAL REVENUES $ 1,133 $ 62 $ (1 ) $ 1,194 PROFIT Development $ 120 $ — $ — $ 120 Management and exchange(1) 75 22 (5 ) 92 Rental(1) 15 9 4 28 Financing 51 — — 51 TOTAL PROFIT 261 31 (1 ) 291 OTHER General and administrative — — (84 ) (84 ) Depreciation and amortization (24 ) (8 ) (4 ) (36 ) Litigation charges (4 ) (1 ) (1 ) (6 ) Restructuring — — (6 ) (6 ) Royalty fee (29 ) — — (29 ) Impairment (8 ) (4 ) (16 ) (28 ) Gains and other income, net 6 — 7 13 Interest expense, net — — (39 ) (39 ) Transaction and integration costs — — (9 ) (9 ) Other (3 ) — — (3 ) INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 199 18 (153 ) 64 Provision for income taxes — — (31 ) (31 ) NET INCOME (LOSS) 199 18 (184 ) 33 Net income attributable to noncontrolling interests(1) — — 2 2 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 18 $ (182 ) $ 35 SEGMENT MARGIN(2) 27% 31% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. A-6 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2022 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management As Reported As Adjusted* As Reported Impact of Alignment As Adjusted* REVENUES Sales of vacation ownership products $ 439 $ (12 ) $ 427 $ — $ — $ 439 $ 427 Management and exchange(1) Ancillary 58 — 58 1 — 59 59 Management fee 42 — 42 6 — 48 48 Exchange and other services 32 — 32 42 23 97 97 Management and exchange 132 — 132 49 23 204 204 Rental 104 — 104 9 — 113 113 Financing 76 — 76 — — 76 76 Cost reimbursements(1) 362 — 362 4 (10 ) 356 356 TOTAL REVENUES $ 1,113 $ (12 ) $ 1,101 $ 62 $ 13 $ 1,188 $ 1,176 PROFIT Development $ 162 $ (7 ) $ 155 $ — $ — $ 162 $ 155 Management and exchange(1) 70 — 70 22 (2 ) 90 90 Rental(1) 15 — 15 9 1 25 25 Financing 50 — 50 — — 50 50 TOTAL PROFIT 297 (7 ) 290 31 (1 ) 327 320 OTHER General and administrative — — — — (62 ) (62 ) (62 ) Depreciation and amortization (25 ) — (25 ) (7 ) (2 ) (34 ) (34 ) Litigation charges (2 ) — (2 ) — (2 ) (4 ) (4 ) Royalty fee (30 ) — (30 ) — — (30 ) (30 ) Impairment (1 ) — (1 ) — — (1 ) (1 ) Gains and other income, net 1 — 1 — — 1 1 Interest expense, net — — — — (27 ) (27 ) (27 ) Transaction and integration costs — — — — (26 ) (26 ) (26 ) Other 1 — 1 — — 1 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 241 (7 ) 234 24 (120 ) 145 138 Benefit from (provision for) income taxes — 2 2 — (57 ) (57 ) (55 ) NET INCOME (LOSS) 241 (5 ) 236 24 (177 ) 88 83 Net income attributable to noncontrolling interests(1) — — — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 241 $ (5 ) $ 236 $ 24 $ (177 ) $ 88 $ 83 SEGMENT MARGIN(2) 32% 32% 41% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-7 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 454 $ — $ 454 Less resales contract sales (10 ) (10 ) — (10 ) Consolidated contract sales, net of resales 437 444 — 444 Plus: Settlement revenue 10 10 — 10 Resales revenue 4 7 — 7 Revenue recognition adjustments: Reportability (2 ) 36 (12 ) 24 Sales reserve (47 ) (40 ) — (40 ) Other(1) (27 ) (18 ) — (18 ) Sale of vacation ownership products 375 439 (12 ) 427 Less: Cost of vacation ownership products (50 ) (73 ) 5 (68 ) Marketing and sales (205 ) (204 ) — (204 ) Development Profit 120 162 (7 ) 155 Revenue recognition reportability adjustment 1 (27 ) 7 (20 ) Purchase accounting adjustments 3 (1 ) — (1 ) Other — (8 ) — (8 ) Adjusted development profit* $ 124 $ 126 $ — $ 126 Development profit margin 32.0% 36.8% 36.2% Adjusted development profit margin* 33.1% 31.5% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-8 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 1,772 $ 1,837 $ — $ 1,837 Less resales contract sales (42 ) (40 ) — (40 ) Consolidated contract sales, net of resales 1,730 1,797 — 1,797 Plus: Settlement revenue 39 36 — 36 Resales revenue 22 20 — 20 Revenue recognition adjustments: Reportability 3 43 (58 ) (15 ) Sales reserve (232 ) (170 ) 19 (151 ) Other(1) (102 ) (108 ) — (108 ) Sale of vacation ownership products 1,460 1,618 (39 ) 1,579 Less: Cost of vacation ownership products (224 ) (289 ) 7 (282 ) Marketing and sales (823 ) (807 ) — (807 ) Development Profit 413 522 (32 ) 490 Revenue recognition reportability adjustment (2 ) (35 ) 46 11 Purchase accounting adjustments 9 13 — 13 Other — (13 ) — (13 ) Adjusted development profit* $ 420 $ 487 $ 14 $ 501 Development profit margin 28.3% 32.2% 31.0% Adjusted development profit margin* 28.8% 31.0% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-9 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED (In millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income attributable to common stockholders $ 35 $ 88 $ 254 $ 391 Provision for income taxes 31 57 146 191 Income before income taxes attributable to common stockholders 66 145 400 582 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 Adjusted pretax income* 105 169 450 677 Provision for income taxes (30 ) (54 ) (128 ) (219 ) Adjusted net income attributable to common stockholders* $ 75 $ 115 $ 322 $ 458 Diluted shares 42.5 43.0 43.5 45.2 Adjusted earnings per share - Diluted* $ 1.88 $ 2.74 $ 7.83 $ 10.26 Excluding the Impact of Alignment: Adjusted net income attributable to common stockholders* $ 75 $ 110 $ 322 $ 420 Adjusted earnings per share - Diluted* $ 1.88 $ 2.60 $ 7.83 $ 9.42 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-10 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA (In millions) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ 254 $ 391 Interest expense, net 39 27 145 118 Provision for income taxes 31 57 146 191 Depreciation and amortization 36 34 135 132 Share-based compensation 6 9 31 39 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 ADJUSTED EBITDA* $ 186 $ 239 $ 761 $ 966 ADJUSTED EBITDA MARGIN* 23% 29% 24% 29% Excluding the Impact of Alignment ADJUSTED EBITDA* $ 186 $ 232 $ 761 $ 915 ADJUSTED EBITDA MARGIN* 23% 28% 24% 28% * 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 (In millions) (Unaudited) VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 241 $ 777 $ 961 Depreciation and amortization 24 25 93 92 Share-based compensation 2 2 8 7 Certain items: Transaction and integration costs — — — 3 Gain on disposition of hotel, land, and other — — (7 ) (33 ) Insurance proceeds (6 ) (1 ) (9 ) (4 ) Change in indemnification asset — — (9 ) — Other — — (4 ) — Gains and other income, net (6 ) (1 ) (29 ) (37 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 4 2 12 9 Impairment charges 8 1 12 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 3 — 2 3 SEGMENT ADJUSTED EBITDA* $ 236 $ 261 $ 883 $ 1,033 SEGMENT ADJUSTED EBITDA MARGIN* 32% 35% 31% 35% Excluding the Impact of Alignment SEGMENT ADJUSTED EBITDA* $ 236 $ 254 $ 883 $ 982 SEGMENT ADJUSTED EBITDA MARGIN* 32% 34% 31% 34% EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 18 $ 24 $ 93 $ 132 Depreciation and amortization 8 7 31 31 Share-based compensation 1 — 2 2 Certain items: Gain on disposition of hotel, land, and other — — (1 ) — Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation — — — 2 Litigation charges 1 — 1 — Impairment charges 4 — 4 — Early termination of VRI management contract — — — (2 ) Other (1 ) — — — SEGMENT ADJUSTED EBITDA* $ 31 $ 31 $ 130 $ 148 SEGMENT ADJUSTED EBITDA MARGIN* 52% 55% 52% 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-12 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (unaudited) BALANCE SHEET ITEMS Fiscal Year 2023 2022 Cash and cash equivalents $ 248 $ 524 Vacation ownership notes receivable, net $ 2,343 $ 2,198 Inventory $ 634 $ 660 Property and equipment, net $ 1,260 $ 1,139 Goodwill $ 3,117 $ 3,117 Intangibles, net $ 854 $ 911 Debt, net $ 3,049 $ 3,088 Stockholders’ equity $ 2,382 $ 2,496 SUMMARY CASH FLOW Fiscal Year CASH FLOW 2023 2022 Cash, cash equivalents, and restricted cash provided by (used in): Operating activities $ 232 $ 522 Investing activities (112 ) 16 Financing activities (401 ) (486 ) Effect of changes in exchange rates on cash, cash equivalents, and restricted cash 1 (1 ) Net change in cash, cash equivalents, and restricted cash $ (280 ) $ 51 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-13 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except per share amounts) 2024 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Provision for income taxes 119 134 Income before income taxes attributable to common stockholders 404 454 Certain items(1) 29 24 Adjusted pretax income* 433 478 Provision for income taxes (128 ) (143 ) Adjusted net income attributable to common stockholders* $ 305 $ 335 Earnings per share - Diluted(2)(3) $ 7.17 $ 8.00 Adjusted earnings per share - Diluted(2)(3)* $ 7.65 $ 8.35 Diluted shares(2) 42.3 42.3 2024 ADJUSTED EBITDA OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Interest expense 161 156 Provision for income taxes 119 134 Depreciation and amortization 128 128 Share-based compensation 38 38 Certain items(1) 29 24 Adjusted EBITDA* $ 760 $ 800 (1) Certain items adjustment includes $10 million to $15 million of anticipated transaction and integration costs, $12 million of anticipated litigation charges and $2 million of anticipated purchase accounting adjustments. (2) Includes 6.5 million shares from the assumed conversion of our convertible notes. (3) Includes an add back of $19 million of interest expense related to our convertible notes, net of tax for purposes of calculating net income in the diluted earnings per share calculation. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-14 MARRIOTT VACATIONS WORLDWIDE CORPORATION 2024 ADJUSTED FREE CASH FLOW OUTLOOK (In millions) Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net cash, cash equivalents and restricted cash provided by operating activities $ 265 $ 295 Capital expenditures for property and equipment (excluding inventory) (65 ) (85 ) Borrowings from securitizations, net of repayments 166 195 Securitized debt issuance costs (14 ) (15 ) Free cash flow* 352 390 Adjustments: Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1) 25 40 Certain items(2) 23 20 Adjusted free cash flow* $ 400 $ 450 (1) Represents the anticipated net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2023 and 2024 year ends. (2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs and litigation charges. * 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 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 2023 $ 434 $ 453 $ 438 $ 447 $ 1,772 2022 $ 394 $ 506 $ 483 $ 454 $ 1,837 2021 $ 226 $ 362 $ 380 $ 406 $ 1,374 VPG 2023 $ 4,358 $ 3,968 $ 4,055 $ 4,002 $ 4,088 2022 $ 4,706 $ 4,613 $ 4,353 $ 4,088 $ 4,421 2021 $ 4,644 $ 4,304 $ 4,300 $ 4,305 $ 4,356 Tours 2023 92,890 106,746 100,609 105,580 405,825 2022 78,505 102,857 104,000 105,231 390,593 2021 45,871 79,900 84,098 89,495 299,364 Exchange & Third-Party Management Total active Interval International members (000's)(1) 2023 1,568 1,566 1,571 1,564 1,564 2022 1,606 1,596 1,591 1,566 1,566 2021 1,479 1,321 1,313 1,296 1,296 Average revenue per Interval International member 2023 $ 42.07 $ 39.30 $ 39.15 $ 36.16 $ 156.65 2022 $ 44.33 $ 38.79 $ 38.91 $ 35.60 $ 157.97 2021 $ 47.13 $ 46.36 $ 42.95 $ 42.93 $ 179.48 (1) Includes members at the end of each period. A-16 MARRIOTT VACATIONS WORLDWIDE CORPORATION NON-GAAP FINANCIAL MEASURES In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by an asterisk (“*”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common stockholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. Certain Items Excluded from Non-GAAP Financial Measures We evaluate non-GAAP financial measures, including those identified by an asterisk (“*”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other companies. Adjusted Development Profit and Adjusted Development Profit Margin We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin. Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other companies. Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin as indicators of operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations. Free Cash Flow and Adjusted Free Cash Flow We evaluate Free Cash Flow and Adjusted Free Cash Flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted Free Cash Flow, which reflects additional adjustments to Free Cash Flow for the impact of transaction and integration charges, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free Cash Flow and Adjusted Free Cash Flow also facilitates management’s comparison of our results with our competitors’ results. Results As Adjusted for the Estimated Impact of the Maui Fires In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2023 for comparison purposes. The As Adjusted results reflect the estimated impact of the Maui fires on the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the estimated impact of the Maui fires. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any estimated impact from the Maui fires. Results As Adjusted for the Impact of the Alignment In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2022 for comparison purposes. The As Adjusted results exclude any impacts to the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures, due to the Alignment. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the impact of the Alignment. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any impact from the Alignment. View source version on businesswire.com: https://www.businesswire.com/news/home/20240219343110/en/Contacts Neal Goldner Investor Relations 407-206-6149 neal.goldner@mvwc.com Cameron Klaus Global Communications 407-513-6066 cameron.klaus@mvwc.com
Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW” or the “Company”) reported financial results for the fourth quarter and full year 2023 and provided guidance for full year 2024. “After a challenging year, we ended the year on a very positive note, growing contract sales by 4% in the fourth quarter on a year-over-year basis with VPG in-line with the prior year, after adjusting for the estimated impact of the Maui wildfires,” said John Geller, President and Chief Executive Officer. “The transition to Abound by Marriott Vacations is behind us. Moving forward, we continue to look for ways to leverage technology to grow our revenues while driving efficiencies and cost savings across the organization.” Fourth Quarter 2023 Highlights Consolidated Vacation Ownership contract sales declined 2% year-over-year to $447 million driven by 2% lower volume per guest (“VPG”). The Company estimates that excluding the impact of the Maui wildfires, contract sales would have grown 4%, tours would have increased 4% and VPG would have been unchanged compared to the prior year. Net income attributable to common stockholders was $35 million and fully diluted earnings per share was $0.93. Adjusted net income attributable to common stockholders was $75 million and adjusted fully diluted earnings per share was $1.88. Adjusted EBITDA was $186 million. The Company repurchased 431,000 shares of its common stock for $38 million during the quarter and increased its quarterly dividend to $0.76 per share, which was paid in January. For the year, the Company repurchased 6% of its shares outstanding for $286 million and paid $106 million in dividends. Fourth Quarter 2023 Results On August 8, 2023, a wildfire devastated the area of West Maui. While the Company operates four vacation ownership resorts and sales centers in the area, it did not sustain any physical damage to these resorts and sales centers. However, the Company estimates the Maui wildfires negatively impacted its fourth quarter contract sales by approximately $25 million, Net income attributable to common stockholders by $17 million and Adjusted EBITDA by $24 million. In the third quarter of 2022, the Company aligned its contract terms for the sale of its Marriott-, Westin-, and Sheraton-branded vacation ownership products, resulting in the acceleration of revenue from the sale of Marriott-branded vacation ownership interests. In addition, the Company aligned its reserve methodology for vacation ownership notes receivable for these brands, resulting in a decrease in the reserve for the acquired notes offset by an increase in the reserve for the originated notes. Together, these changes are referred to as the “Alignment.” The tables below illustrate the comparison of the reported results from the fourth quarter of 2023, as well as adjusted results that reflect the estimated impact of the Maui fires, to the results from the fourth quarter of 2022, including the impact of the Alignment on the Company’s reported results for that time period. In the tables below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. Consolidated Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Net income attributable to common stockholders $ 35 $ 17 $ 52 $ 88 $ (5 ) $ 83 Adjusted net income attributable to common stockholders* $ 75 $ 17 $ 92 $ 115 $ (5 ) $ 110 Adjusted EBITDA* $ 186 $ 24 $ 210 $ 239 $ (7 ) $ 232 Vacation Ownership Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions, except VPG) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 25 $ 472 $ 454 $ — $ 454 VPG $ 4,002 $ 88 $ 4,090 $ 4,088 $ — $ 4,088 Tours 105,580 4,028 109,608 105,231 — 105,231 Sale of vacation ownership products $ 375 $ 24 $ 399 $ 439 $ (12 ) $ 427 Development profit $ 120 $ 18 $ 138 $ 162 $ (7 ) $ 155 Management and exchange profit $ 75 $ 2 $ 77 $ 70 $ — $ 70 Rental profit $ 15 $ 2 $ 17 $ 15 $ — $ 15 Financing profit $ 51 $ — $ 51 $ 50 $ — $ 50 Other $ (3 ) $ 3 $ — $ 1 $ — $ 1 Segment financial results attributable to common stockholders $ 199 $ 25 $ 224 $ 241 $ (5 ) $ 236 Segment margin 27.3% 29.7% 31.9% 31.7% Segment Adjusted EBITDA* $ 236 $ 25 $ 261 $ 261 $ (7 ) $ 254 Segment Adjusted EBITDA margin* 32.5% 34.7% 34.6% 34.2% Revenues excluding cost reimbursements decreased 3% in the fourth quarter of 2023 compared to the prior year. The decline was driven by a 2% year-over-year reduction in consolidated contract sales resulting from the Maui wildfires, as well as a $24 million prior year reportability benefit. Adjusted for the estimated $25 million impact of the Maui wildfires, consolidated contract sales would have increased 4% year-over-year. Segment financial results attributable to common stockholders declined $42 million to $199 million in the fourth quarter of 2023 and Segment Adjusted EBITDA declined $25 million to $236 million. Adjusting for the $25 million estimated impact from the Maui wildfires in the current year and $7 million Alignment benefit in the prior year, Segment Adjusted EBITDA would have increased 3% to $261 million. Exchange & Third-Party Management Selected Items Three Months Ended December 31, 2023 December 31, 2022 ($ in millions) As Reported Estimated Impact of Maui Fires As Adjusted* As Reported Impact of Alignment As Adjusted* Management and exchange profit $ 22 $ (1 ) $ 21 $ 22 $ — $ 22 Segment financial results attributable to common stockholders $ 18 $ (1 ) $ 17 $ 24 $ — $ 24 Segment margin 31.1% 28.3% 41.3% 41.3% Segment Adjusted EBITDA* $ 31 $ (1 ) $ 30 $ 31 $ — $ 31 Segment Adjusted EBITDA margin* 52.2% 49.3% 54.9% 54.9% Revenues excluding cost reimbursements decreased 2% in the fourth quarter of 2023 compared to the prior year driven by lower member transactions. Interval International ended the year with 1.6 million active members, in-line with the prior year, and Average revenue per member increased 2% year-over-year in the fourth quarter. Segment financial results attributable to common stockholders were $18 million in the fourth quarter of 2023, Segment margin was 31% and Segment Adjusted EBITDA was $31 million. Adjusted for the estimated impact from the Maui wildfires, Segment Adjusted EBITDA would have decreased $1 million to $30 million. Corporate and Other General and administrative costs increased $22 million in the fourth quarter of 2023 compared to the prior year primarily due to higher IT spending to drive our digital and data initiatives. Balance Sheet and Liquidity The Company ended the year with $929 million in liquidity, including $248 million of cash and cash equivalents, $60 million of gross notes receivable that were eligible for securitization, and $621 million of available capacity under its revolving corporate credit facility. At the end of 2023, the Company had $3.0 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable. Full Year 2024 Outlook The Company is providing guidance for the full year 2024 as reflected in the chart below. The Financial Schedules that follow reconcile the following full year 2024 expected GAAP results for the Company to the non-GAAP financial measures set forth below. In the table below “*” denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. (in millions, except per share amounts) 2024 Guidance Contract sales $1,880 to $1,930 Net income attributable to common stockholders $285 to $320 Earnings per share - diluted $7.17 to $8.00 Net cash, cash equivalents, and restricted cash provided by operating activities $265 to $295 Adjusted EBITDA* $760 to $800 Adjusted earnings per share - diluted* $7.65 to $8.35 Adjusted free cash flow* $400 to $450 Non-GAAP Financial Information Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission. Fourth Quarter 2023 Financial Results Conference Call The Company will hold a conference call on February 22, 2024 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website. About Marriott Vacations Worldwide Corporation Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has approximately 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates an exchange network and membership programs comprised of more than 3,200 affiliated resorts in over 90 countries and territories, and provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com. 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 leveraging technology to enhance core operations and other benefits to the organization and full year 2024 outlook for contract sales, results of operations and cash flows. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: a future health crisis and responses to a health crisis, including possible quarantines or other government imposed travel or health-related restrictions and the effects of a health crisis, including the short and longer-term impact on consumer confidence and demand for travel and the pace of recovery following a health crisis; variations in demand for vacation ownership and exchange products and services; worker absenteeism; price inflation; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the impact of a future banking crisis; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; global supply chain disruptions; volatility in the international and national economy and credit markets, including as a result of the ongoing conflicts between Russia and Ukraine, Israel and Gaza, and elsewhere in the world and related sanctions and other measures; our ability to attract and retain our global workforce; competitive conditions; the availability of capital to finance growth; the impact of changes in interest rates; the effects of steps we have taken and may continue to take to reduce operating costs; political or social strife; and other matters referred to under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and which may be updated in our future periodic filings with the U.S. Securities and Exchange Commission. All forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. Any such risks could cause our results to differ materially from those we express in forward-looking statements. Financial Schedules Follow MARRIOTT VACATIONS WORLDWIDE CORPORATION FINANCIAL SCHEDULES QUARTER 4, 2023 TABLE OF CONTENTS Summary Financial Information A-1 Adjusted EBITDA by Segment A-2 Consolidated Statements of Income A-3 to A-4 Revenues and Profit by Segment A-5 to A-6 Consolidated Contract Sales to Adjusted Development Profit A-7 to A-8 Adjusted Net Income Attributable to Common Stockholders and Adjusted Earnings Per Share - Diluted A-9 Adjusted EBITDA A-10 Segment Adjusted EBITDA Vacation Ownership A-11 Exchange & Third-Party Management Balance Sheet Items and Summary Cash Flow A-12 2024 Outlook Adjusted Net Income Attributable to Common Stockholders, Adjusted Earnings Per Share - Diluted and Adjusted EBITDA A-13 Adjusted Free Cash Flow A-14 Quarterly Operating Metrics A-15 Non-GAAP Financial Measures A-16 to A-17 A-1 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except VPG, tours, total active Interval International members, average revenue per member, and per share amounts) (Unaudited) SUMMARY FINANCIAL INFORMATION Quarter Ended Change % Fiscal Year Ended Change % December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Key Measures Total consolidated contract sales $ 447 $ 454 (2%) $ 1,772 $ 1,837 (4%) VPG $ 4,002 $ 4,088 (2%) $ 4,088 $ 4,421 (8%) Tours 105,580 105,231 0% 405,825 390,593 4% Total active Interval International members (000's)(1) 1,564 1,566 0% 1,564 1,566 0% Average revenue per Interval International member $ 36.16 $ 35.60 2% $ 156.65 $ 157.97 (1%) GAAP Measures Revenues $ 1,194 $ 1,188 0% $ 4,727 $ 4,656 2% Income before income taxes and noncontrolling interests $ 64 $ 145 (55%) $ 398 $ 582 (31%) Net income attributable to common stockholders $ 35 $ 88 (60%) $ 254 $ 391 (35%) Diluted shares 42.5 43.0 (1%) 43.5 45.2 (4%) Earnings per share - diluted $ 0.93 $ 2.08 (55%) $ 6.28 $ 8.77 (28%) Non-GAAP Measures* Adjusted EBITDA $ 186 $ 239 (22%) $ 761 $ 966 (21%) Adjusted pretax income $ 105 $ 169 (38%) $ 450 $ 677 (34%) Adjusted net income attributable to common stockholders $ 75 $ 115 (35%) $ 322 $ 458 (30%) Adjusted earnings per share - diluted $ 1.88 $ 2.74 (31%) $ 7.83 $ 10.26 (24%) (1) Includes members at the end of each period. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-2 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA BY SEGMENT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 236 $ 261 $ (7 ) $ 254 Exchange & Third-Party Management 31 31 — 31 Segment Adjusted EBITDA* 267 292 (7 ) 285 General and administrative (84 ) (62 ) — (62 ) Other 3 9 — 9 Adjusted EBITDA* $ 186 $ 239 $ (7 ) $ 232 Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Vacation Ownership $ 883 $ 1,033 $ (51 ) $ 982 Exchange & Third-Party Management 130 148 — 148 Segment Adjusted EBITDA* 1,013 1,181 (51 ) 1,130 General and administrative (273 ) (249 ) — (249 ) Other 21 34 — 34 Adjusted EBITDA* $ 761 $ 966 $ (51 ) $ 915 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-3 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 375 $ 439 $ (12 ) $ 427 Management and exchange 202 204 — 204 Rental 136 113 — 113 Financing 83 76 — 76 Cost reimbursements 398 356 — 356 TOTAL REVENUES 1,194 1,188 (12 ) 1,176 EXPENSES Cost of vacation ownership products 50 73 (5 ) 68 Marketing and sales 205 204 — 204 Management and exchange 110 114 — 114 Rental 108 88 — 88 Financing 32 26 — 26 General and administrative 84 62 — 62 Depreciation and amortization 36 34 — 34 Litigation charges 6 4 — 4 Restructuring 6 — — — Royalty fee 29 30 — 30 Impairment 28 1 — 1 Cost reimbursements 398 356 — 356 TOTAL EXPENSES 1,092 992 (5 ) 987 Gains and other income, net 13 1 — 1 Interest expense, net (39 ) (27 ) — (27 ) Transaction and integration costs (9 ) (26 ) — (26 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 64 145 (7 ) 138 (Provision for) benefit from income taxes (31 ) (57 ) 2 (55 ) NET INCOME (LOSS) 33 88 (5 ) 83 Net income attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ (5 ) $ 83 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 35.6 38.2 — 38.2 Basic $ 0.98 $ 2.30 $ (0.16 ) $ 2.14 Diluted shares 42.5 43.0 — 43.0 Diluted $ 0.93 $ 2.08 $ (0.14 ) $ 1.94 * 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-4 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* REVENUES Sale of vacation ownership products $ 1,460 $ 1,618 $ (39 ) $ 1,579 Management and exchange 813 827 — 827 Rental 571 551 — 551 Financing 322 293 — 293 Cost reimbursements 1,561 1,367 — 1,367 TOTAL REVENUES 4,727 4,656 (39 ) 4,617 EXPENSES Cost of vacation ownership products 224 289 (7 ) 282 Marketing and sales 823 807 — 807 Management and exchange 442 444 — 444 Rental 452 382 — 382 Financing 113 75 19 94 General and administrative 273 249 — 249 Depreciation and amortization 135 132 — 132 Litigation charges 13 11 — 11 Restructuring 6 — — — Royalty fee 117 114 — 114 Impairment 32 2 — 2 Cost reimbursements 1,561 1,367 — 1,367 TOTAL EXPENSES 4,191 3,872 12 3,884 Gains and other income, net 47 40 — 40 Interest expense, net (145 ) (118 ) — (118 ) Transaction and integration costs (37 ) (125 ) — (125 ) Other (3 ) 1 — 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 398 582 (51 ) 531 (Provision for) benefit from income taxes (146 ) (191 ) 13 (178 ) NET INCOME (LOSS) 252 391 (38 ) 353 Net loss attributable to noncontrolling interests 2 — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 254 $ 391 $ (38 ) $ 353 EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS Basic shares 36.5 40.4 — 40.4 Basic $ 6.96 $ 9.69 $ (0.93 ) $ 8.76 Diluted shares 43.5 45.2 — 45.2 Diluted $ 6.28 $ 8.77 $ (0.83 ) $ 7.94 * 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-5 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2023 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management REVENUES Sales of vacation ownership products $ 375 $ — $ — $ 375 Management and exchange(1) Ancillary 59 2 — 61 Management fee 46 6 (1 ) 51 Exchange and other services 38 41 11 90 Management and exchange 143 49 10 202 Rental 127 9 — 136 Financing 83 — — 83 Cost reimbursements(1) 405 4 (11 ) 398 TOTAL REVENUES $ 1,133 $ 62 $ (1 ) $ 1,194 PROFIT Development $ 120 $ — $ — $ 120 Management and exchange(1) 75 22 (5 ) 92 Rental(1) 15 9 4 28 Financing 51 — — 51 TOTAL PROFIT 261 31 (1 ) 291 OTHER General and administrative — — (84 ) (84 ) Depreciation and amortization (24 ) (8 ) (4 ) (36 ) Litigation charges (4 ) (1 ) (1 ) (6 ) Restructuring — — (6 ) (6 ) Royalty fee (29 ) — — (29 ) Impairment (8 ) (4 ) (16 ) (28 ) Gains and other income, net 6 — 7 13 Interest expense, net — — (39 ) (39 ) Transaction and integration costs — — (9 ) (9 ) Other (3 ) — — (3 ) INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 199 18 (153 ) 64 Provision for income taxes — — (31 ) (31 ) NET INCOME (LOSS) 199 18 (184 ) 33 Net income attributable to noncontrolling interests(1) — — 2 2 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 18 $ (182 ) $ 35 SEGMENT MARGIN(2) 27% 31% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. A-6 MARRIOTT VACATIONS WORLDWIDE CORPORATION REVENUES AND PROFIT BY SEGMENT for the three months ended December 31, 2022 (In millions) Reportable Segment Corporate and Other Total Vacation Ownership Exchange & Third-Party Management As Reported As Adjusted* As Reported Impact of Alignment As Adjusted* REVENUES Sales of vacation ownership products $ 439 $ (12 ) $ 427 $ — $ — $ 439 $ 427 Management and exchange(1) Ancillary 58 — 58 1 — 59 59 Management fee 42 — 42 6 — 48 48 Exchange and other services 32 — 32 42 23 97 97 Management and exchange 132 — 132 49 23 204 204 Rental 104 — 104 9 — 113 113 Financing 76 — 76 — — 76 76 Cost reimbursements(1) 362 — 362 4 (10 ) 356 356 TOTAL REVENUES $ 1,113 $ (12 ) $ 1,101 $ 62 $ 13 $ 1,188 $ 1,176 PROFIT Development $ 162 $ (7 ) $ 155 $ — $ — $ 162 $ 155 Management and exchange(1) 70 — 70 22 (2 ) 90 90 Rental(1) 15 — 15 9 1 25 25 Financing 50 — 50 — — 50 50 TOTAL PROFIT 297 (7 ) 290 31 (1 ) 327 320 OTHER General and administrative — — — — (62 ) (62 ) (62 ) Depreciation and amortization (25 ) — (25 ) (7 ) (2 ) (34 ) (34 ) Litigation charges (2 ) — (2 ) — (2 ) (4 ) (4 ) Royalty fee (30 ) — (30 ) — — (30 ) (30 ) Impairment (1 ) — (1 ) — — (1 ) (1 ) Gains and other income, net 1 — 1 — — 1 1 Interest expense, net — — — — (27 ) (27 ) (27 ) Transaction and integration costs — — — — (26 ) (26 ) (26 ) Other 1 — 1 — — 1 1 INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS 241 (7 ) 234 24 (120 ) 145 138 Benefit from (provision for) income taxes — 2 2 — (57 ) (57 ) (55 ) NET INCOME (LOSS) 241 (5 ) 236 24 (177 ) 88 83 Net income attributable to noncontrolling interests(1) — — — — — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 241 $ (5 ) $ 236 $ 24 $ (177 ) $ 88 $ 83 SEGMENT MARGIN(2) 32% 32% 41% (1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners. (2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-7 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Three Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 447 $ 454 $ — $ 454 Less resales contract sales (10 ) (10 ) — (10 ) Consolidated contract sales, net of resales 437 444 — 444 Plus: Settlement revenue 10 10 — 10 Resales revenue 4 7 — 7 Revenue recognition adjustments: Reportability (2 ) 36 (12 ) 24 Sales reserve (47 ) (40 ) — (40 ) Other(1) (27 ) (18 ) — (18 ) Sale of vacation ownership products 375 439 (12 ) 427 Less: Cost of vacation ownership products (50 ) (73 ) 5 (68 ) Marketing and sales (205 ) (204 ) — (204 ) Development Profit 120 162 (7 ) 155 Revenue recognition reportability adjustment 1 (27 ) 7 (20 ) Purchase accounting adjustments 3 (1 ) — (1 ) Other — (8 ) — (8 ) Adjusted development profit* $ 124 $ 126 $ — $ 126 Development profit margin 32.0% 36.8% 36.2% Adjusted development profit margin* 33.1% 31.5% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-8 MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited) Twelve Months Ended December 31, 2023 December 31, 2022 As Reported Impact of Alignment As Adjusted* Consolidated contract sales $ 1,772 $ 1,837 $ — $ 1,837 Less resales contract sales (42 ) (40 ) — (40 ) Consolidated contract sales, net of resales 1,730 1,797 — 1,797 Plus: Settlement revenue 39 36 — 36 Resales revenue 22 20 — 20 Revenue recognition adjustments: Reportability 3 43 (58 ) (15 ) Sales reserve (232 ) (170 ) 19 (151 ) Other(1) (102 ) (108 ) — (108 ) Sale of vacation ownership products 1,460 1,618 (39 ) 1,579 Less: Cost of vacation ownership products (224 ) (289 ) 7 (282 ) Marketing and sales (823 ) (807 ) — (807 ) Development Profit 413 522 (32 ) 490 Revenue recognition reportability adjustment (2 ) (35 ) 46 11 Purchase accounting adjustments 9 13 — 13 Other — (13 ) — (13 ) Adjusted development profit* $ 420 $ 487 $ 14 $ 501 Development profit margin 28.3% 32.2% 31.0% Adjusted development profit margin* 28.8% 31.0% 31.5% (1) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-9 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED (In millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income attributable to common stockholders $ 35 $ 88 $ 254 $ 391 Provision for income taxes 31 57 146 191 Income before income taxes attributable to common stockholders 66 145 400 582 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 Adjusted pretax income* 105 169 450 677 Provision for income taxes (30 ) (54 ) (128 ) (219 ) Adjusted net income attributable to common stockholders* $ 75 $ 115 $ 322 $ 458 Diluted shares 42.5 43.0 43.5 45.2 Adjusted earnings per share - Diluted* $ 1.88 $ 2.74 $ 7.83 $ 10.26 Excluding the Impact of Alignment: Adjusted net income attributable to common stockholders* $ 75 $ 110 $ 322 $ 420 Adjusted earnings per share - Diluted* $ 1.88 $ 2.60 $ 7.83 $ 9.42 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-10 MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA (In millions) Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 35 $ 88 $ 254 $ 391 Interest expense, net 39 27 145 118 Provision for income taxes 31 57 146 191 Depreciation and amortization 36 34 135 132 Share-based compensation 6 9 31 39 Certain items: ILG integration — 18 15 98 Welk acquisition and integration 9 4 22 14 Other transformation initiatives — 4 — 10 Other transaction costs — — — 3 Transaction and integration costs 9 26 37 125 Early redemption of senior secured notes — — 10 — Gain on disposition of hotel, land, and other — — (8 ) (33 ) Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation (7 ) — (6 ) 10 Insurance proceeds (6 ) (1 ) (9 ) (6 ) Change in indemnification asset (1 ) 1 (31 ) 3 Other 1 (1 ) (3 ) 3 Gains and other income, net (13 ) (1 ) (47 ) (40 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 6 4 13 11 Restructuring charges 6 — 6 — Impairment charges 28 1 32 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Early termination of VRI management contract — — — (2 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 1 3 1 6 ADJUSTED EBITDA* $ 186 $ 239 $ 761 $ 966 ADJUSTED EBITDA MARGIN* 23% 29% 24% 29% Excluding the Impact of Alignment ADJUSTED EBITDA* $ 186 $ 232 $ 761 $ 915 ADJUSTED EBITDA MARGIN* 23% 28% 24% 28% * 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 (In millions) (Unaudited) VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 199 $ 241 $ 777 $ 961 Depreciation and amortization 24 25 93 92 Share-based compensation 2 2 8 7 Certain items: Transaction and integration costs — — — 3 Gain on disposition of hotel, land, and other — — (7 ) (33 ) Insurance proceeds (6 ) (1 ) (9 ) (4 ) Change in indemnification asset — — (9 ) — Other — — (4 ) — Gains and other income, net (6 ) (1 ) (29 ) (37 ) Purchase accounting adjustments 2 (2 ) 8 11 Litigation charges 4 2 12 9 Impairment charges 8 1 12 2 Expiration/forfeiture of deposits on pre-acquisition preview packages — — — (6 ) Change in estimate relating to pre-acquisition contingencies — (7 ) — (12 ) Other 3 — 2 3 SEGMENT ADJUSTED EBITDA* $ 236 $ 261 $ 883 $ 1,033 SEGMENT ADJUSTED EBITDA MARGIN* 32% 35% 31% 35% Excluding the Impact of Alignment SEGMENT ADJUSTED EBITDA* $ 236 $ 254 $ 883 $ 982 SEGMENT ADJUSTED EBITDA MARGIN* 32% 34% 31% 34% EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 18 $ 24 $ 93 $ 132 Depreciation and amortization 8 7 31 31 Share-based compensation 1 — 2 2 Certain items: Gain on disposition of hotel, land, and other — — (1 ) — Gain on disposition of VRI Americas — — — (17 ) Foreign currency translation — — — 2 Litigation charges 1 — 1 — Impairment charges 4 — 4 — Early termination of VRI management contract — — — (2 ) Other (1 ) — — — SEGMENT ADJUSTED EBITDA* $ 31 $ 31 $ 130 $ 148 SEGMENT ADJUSTED EBITDA MARGIN* 52% 55% 52% 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-12 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (unaudited) BALANCE SHEET ITEMS Fiscal Year 2023 2022 Cash and cash equivalents $ 248 $ 524 Vacation ownership notes receivable, net $ 2,343 $ 2,198 Inventory $ 634 $ 660 Property and equipment, net $ 1,260 $ 1,139 Goodwill $ 3,117 $ 3,117 Intangibles, net $ 854 $ 911 Debt, net $ 3,049 $ 3,088 Stockholders’ equity $ 2,382 $ 2,496 SUMMARY CASH FLOW Fiscal Year CASH FLOW 2023 2022 Cash, cash equivalents, and restricted cash provided by (used in): Operating activities $ 232 $ 522 Investing activities (112 ) 16 Financing activities (401 ) (486 ) Effect of changes in exchange rates on cash, cash equivalents, and restricted cash 1 (1 ) Net change in cash, cash equivalents, and restricted cash $ (280 ) $ 51 * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-13 MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except per share amounts) 2024 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Provision for income taxes 119 134 Income before income taxes attributable to common stockholders 404 454 Certain items(1) 29 24 Adjusted pretax income* 433 478 Provision for income taxes (128 ) (143 ) Adjusted net income attributable to common stockholders* $ 305 $ 335 Earnings per share - Diluted(2)(3) $ 7.17 $ 8.00 Adjusted earnings per share - Diluted(2)(3)* $ 7.65 $ 8.35 Diluted shares(2) 42.3 42.3 2024 ADJUSTED EBITDA OUTLOOK Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net income attributable to common stockholders $ 285 $ 320 Interest expense 161 156 Provision for income taxes 119 134 Depreciation and amortization 128 128 Share-based compensation 38 38 Certain items(1) 29 24 Adjusted EBITDA* $ 760 $ 800 (1) Certain items adjustment includes $10 million to $15 million of anticipated transaction and integration costs, $12 million of anticipated litigation charges and $2 million of anticipated purchase accounting adjustments. (2) Includes 6.5 million shares from the assumed conversion of our convertible notes. (3) Includes an add back of $19 million of interest expense related to our convertible notes, net of tax for purposes of calculating net income in the diluted earnings per share calculation. * Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. A-14 MARRIOTT VACATIONS WORLDWIDE CORPORATION 2024 ADJUSTED FREE CASH FLOW OUTLOOK (In millions) Fiscal Year 2024 (Low) Fiscal Year 2024 (High) Net cash, cash equivalents and restricted cash provided by operating activities $ 265 $ 295 Capital expenditures for property and equipment (excluding inventory) (65 ) (85 ) Borrowings from securitizations, net of repayments 166 195 Securitized debt issuance costs (14 ) (15 ) Free cash flow* 352 390 Adjustments: Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1) 25 40 Certain items(2) 23 20 Adjusted free cash flow* $ 400 $ 450 (1) Represents the anticipated net change in borrowings available from the securitization of eligible vacation ownership notes receivable between the 2023 and 2024 year ends. (2) Certain items adjustment consists primarily of the after-tax impact of anticipated transaction and integration costs and litigation charges. * 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 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 2023 $ 434 $ 453 $ 438 $ 447 $ 1,772 2022 $ 394 $ 506 $ 483 $ 454 $ 1,837 2021 $ 226 $ 362 $ 380 $ 406 $ 1,374 VPG 2023 $ 4,358 $ 3,968 $ 4,055 $ 4,002 $ 4,088 2022 $ 4,706 $ 4,613 $ 4,353 $ 4,088 $ 4,421 2021 $ 4,644 $ 4,304 $ 4,300 $ 4,305 $ 4,356 Tours 2023 92,890 106,746 100,609 105,580 405,825 2022 78,505 102,857 104,000 105,231 390,593 2021 45,871 79,900 84,098 89,495 299,364 Exchange & Third-Party Management Total active Interval International members (000's)(1) 2023 1,568 1,566 1,571 1,564 1,564 2022 1,606 1,596 1,591 1,566 1,566 2021 1,479 1,321 1,313 1,296 1,296 Average revenue per Interval International member 2023 $ 42.07 $ 39.30 $ 39.15 $ 36.16 $ 156.65 2022 $ 44.33 $ 38.79 $ 38.91 $ 35.60 $ 157.97 2021 $ 47.13 $ 46.36 $ 42.95 $ 42.93 $ 179.48 (1) Includes members at the end of each period. A-16 MARRIOTT VACATIONS WORLDWIDE CORPORATION NON-GAAP FINANCIAL MEASURES In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by an asterisk (“*”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common stockholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures. Certain Items Excluded from Non-GAAP Financial Measures We evaluate non-GAAP financial measures, including those identified by an asterisk (“*”) on the preceding pages, that exclude certain items as further described in the financial schedules included herein, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other companies. Adjusted Development Profit and Adjusted Development Profit Margin We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit margin is calculated by dividing Adjusted development profit by revenues from the Sale of vacation ownership products. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, include corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe they provide useful information to investors because they allow for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin. Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common stockholders, before interest expense, net (excluding consumer financing interest expense associated with term securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures, expand our business, and return cash to stockholders. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other companies. Adjusted EBITDA Margin and Segment Adjusted EBITDA Margin We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin as indicators of operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by the Company’s total revenues less cost reimbursement revenues. Segment Adjusted EBITDA margin represents Segment Adjusted EBITDA divided by the applicable segment’s total revenues less cost reimbursement revenues. We evaluate Adjusted EBITDA margin and Segment Adjusted EBITDA margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations. Free Cash Flow and Adjusted Free Cash Flow We evaluate Free Cash Flow and Adjusted Free Cash Flow as liquidity measures that provide useful information to management and investors about the amount of cash provided by operating activities after capital expenditures for property and equipment and the borrowing and repayment activity related to our term securitizations, which cash can be used for, among other purposes, strategic opportunities, including acquisitions and strengthening the balance sheet. Adjusted Free Cash Flow, which reflects additional adjustments to Free Cash Flow for the impact of transaction and integration charges, impact of borrowings available from the securitization of eligible vacation ownership notes receivable, and changes in restricted cash, allows for period-over-period comparisons of the cash generated by our business before the impact of these items. Analysis of Free Cash Flow and Adjusted Free Cash Flow also facilitates management’s comparison of our results with our competitors’ results. Results As Adjusted for the Estimated Impact of the Maui Fires In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2023 for comparison purposes. The As Adjusted results reflect the estimated impact of the Maui fires on the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the estimated impact of the Maui fires. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any estimated impact from the Maui fires. Results As Adjusted for the Impact of the Alignment In our press release and schedules we provide As Adjusted results for the three- and twelve-months ended December 31, 2022 for comparison purposes. The As Adjusted results exclude any impacts to the Company’s reported results on a GAAP basis, as well as to the Company’s non-GAAP financial measures, due to the Alignment. We provide this As Adjusted information because we believe that it facilitates the comparison of results from our on-going core operations before the impact of the Alignment. We believe that the As Adjusted results provide useful information to assist with period-over-period comparisons of our on-going operations excluding any impact from the Alignment. View source version on businesswire.com: https://www.businesswire.com/news/home/20240219343110/en/
Neal Goldner Investor Relations 407-206-6149 neal.goldner@mvwc.com Cameron Klaus Global Communications 407-513-6066 cameron.klaus@mvwc.com
