Marriott Vacations Worldwide Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Marriott Vacations Worldwide (NYSE: VAC) reported mixed Q2 2024 results. Consolidated Vacation Ownership contract sales declined 1% to $449 million, but increased 3% excluding Maui. The company recorded a $70 million increase in sales reserve due to higher expected defaults. Net income attributable to common stockholders was $37 million, down from $90 million in Q2 2023. Adjusted EBITDA decreased 29% to $157 million.

Key highlights include:

• Fully diluted EPS: $0.98
• Adjusted fully diluted EPS: $1.10
• Resort occupancy: 90%
• Tours increased 5%
• Owner VPG flat, first-time buyer VPG declined

The company updated its full-year outlook, adjusting contract sales guidance for H2 2024 due to slower Maui recovery and declining first-time buyer VPGs.

Positive

• Resort occupancy reached 90% in Q2, indicating strong travel demand
• Tours increased by 5% compared to the previous year
• Contract sales increased 3% excluding Maui
• Owner VPG remained flat year-over-year

Negative

• Consolidated Vacation Ownership contract sales declined 1% to $449 million
• $70 million increase in sales reserve due to higher expected defaults
• Net income attributable to common stockholders decreased from $90 million to $37 million
• Adjusted EBITDA decreased 29% to $157 million
• First-time buyer VPGs declined compared to last year
• Maui recovery slower than initially expected
• Exchange & Third-Party Management segment revenue decreased 9%

Insights

Financial Analyst

Marriott Vacations Worldwide's Q2 2024 results present a mixed picture with some concerning trends. The 1% decline in consolidated Vacation Ownership contract sales to $449 million is worrisome, especially considering the 3% growth excluding Maui. This suggests significant weakness in the Maui market, likely due to the wildfires' aftermath.

The most alarming aspect is the $70 million increase in sales reserves, reflecting higher expected future defaults on vacation ownership notes receivable. This had a substantial impact, reducing net income attributable to common stockholders by $45 million and Adjusted EBITDA by $57 million. This increase in expected defaults could signal underlying economic stress among customers or issues with the quality of recent sales.

The decline in VPG (Volume Per Guest) by 6% to $3,741 is concerning, particularly the weakness in first-time buyer VPGs. This could indicate challenges in attracting new customers or a shift in the customer mix towards lower-value transactions.

On a positive note, resort occupancy remains strong at 90% and tours increased by 5%. However, the 29% decrease in Adjusted EBITDA to $157 million is a significant red flag, even accounting for the sales reserve increase.

The company's liquidity position remains solid with $820 million available, but the reduced full-year guidance suggests management expects these challenges to persist. Investors should closely monitor default rates, VPG trends and the Maui recovery in coming quarters.

Market Research Analyst

The vacation ownership market is showing signs of strain, as evidenced by Marriott Vacations Worldwide's Q2 results. The divergence between the 5% increase in tours and the 6% decrease in VPG suggests a shift in consumer behavior. This could be indicative of broader economic pressures affecting discretionary spending on travel and leisure.

The significant increase in sales reserves is particularly telling. It implies that the company is anticipating a higher rate of defaults on vacation ownership payments, which could be an early warning sign of consumer financial stress. This aligns with broader economic indicators suggesting a potential slowdown or recession.

The slower-than-expected recovery in Maui highlights the long-lasting impact of natural disasters on tourism-dependent regions. This situation warrants closer attention to climate-related risks in the vacation ownership sector.

The decline in Exchange & Third-Party Management revenues, particularly the lower exchange volumes at Interval International, may indicate a broader trend of changing consumer preferences in the vacation market. The 3% decrease in average revenue per Interval International member could suggest increased price sensitivity or a shift towards alternative vacation models.

Looking ahead, the reduced full-year guidance for contract sales ($1,790 to $1,825 million) and Adjusted EBITDA ($685 to $715 million) reflects a cautious outlook. This conservatism might be warranted given the mixed signals in the broader travel and leisure market, but it could also indicate potential market share losses to competitors or alternative vacation models.

ORLANDO, Fla.--(BUSINESS WIRE)-- Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW,” the “Company,” “we” or “our”) reported second quarter 2024 financial results.

Second Quarter 2024 Highlights

• Consolidated Vacation Ownership contract sales declined 1% compared to the second quarter of 2023 to $449 million. Excluding Maui, contract sales increased 3% compared to the prior year.
• The Company recorded a $70 million increase to its sales reserve reflecting higher expected future defaults on its existing vacation ownership notes receivable portfolio.
• Net income attributable to common stockholders was $37 million compared to $90 million in the prior year, and fully diluted earnings per share was $0.98. Net income attributable to common stockholders reflects a $45 million impact of the higher sales reserve.
• Adjusted net income attributable to common stockholders was $42 million compared to $90 million in the prior year, and adjusted fully diluted earnings per share was $1.10.
• Adjusted EBITDA decreased 29% compared to the prior year to $157 million reflecting a $57 million net increase to the Company’s sales reserve.
• The Company updates its full-year outlook.

“We had a mixed second quarter, with rentals exceeding our expectations and lower VPGs negatively impacting our contract sales. In addition, we have not seen the necessary improvements in our loan delinquencies, so we increased our sales reserves to reflect higher expected defaults,” said John Geller, president and chief executive officer. “Demand for travel remains strong with our resorts running 90% occupancy in the second quarter, tours increasing 5% and owner VPG’s flat compared to last year. However, first time buyer VPGs declined versus last year and Maui is recovering slower than our original expectations. As a result, we adjusted our contract sales guidance for the second half of the year.”

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

Vacation Ownership

	Three Months Ended								Change
(In millions, except volume per guest (“VPG”) and tours)	June 30, 2024				June 30, 2023
Revenues excluding cost reimbursement	$	694			$	753			(8%)
Total consolidated contract sales	$	449			$	453			(1%)
VPG	$	3,741			$	3,968			(6%)
Tours		111,752				106,746			5%
Segment financial results attributable to common stockholders	$	144			$	224			(36%)
Segment Adjusted EBITDA*	$	180			$	245			(26%)
Segment Adjusted EBITDA margin*		26.0%				32.5%			(650 bps)

Contract sales declined 1% primarily due to the impact of the Maui wildfires. Excluding Maui, contract sales increased 3%. Segment Adjusted EBITDA declined compared to the prior year driven by lower Development and Financing profit, including an increase to the Company's sales reserve, partially offset by higher Management and exchange and Rental profit.

Sales Reserve

The Company recorded a $70 million increase in its sales reserve in the second quarter resulting in a $45 million impact to Net income attributable to common stockholders and a $57 million net impact to Adjusted EBITDA.

Exchange & Third-Party Management

(In millions, except total active Interval International members and average revenue per member)	Three Months Ended								Change
	June 30, 2024				June 30, 2023
Revenues excluding cost reimbursement	$	55			$	62			(9%)
Total active Interval International members (000's)(1)		1,530				1,566			(2%)
Average revenue per Interval International member	$	38.30			$	39.30			(3%)
Segment financial results attributable to common stockholders	$	15			$	24			(35%)
Segment Adjusted EBITDA*	$	25			$	32			(22%)
Segment Adjusted EBITDA margin*		44.3%				51.9%			(760 bps)
(1) Includes members at the end of each period.

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

Corporate and Other
General and administrative costs decreased $10 million in the second quarter of 2024 compared to the prior year driven by lower IT and compensation-related costs.

Balance Sheet and Liquidity
During the second quarter the Company repurchased approximately 131,000 shares of its common stock for $12 million and paid $27 million in dividends.

The Company ended the quarter with $820 million in liquidity, including $206 million of cash and cash equivalents and $543 million of available capacity under its revolving corporate credit facility. The Company had $3.1 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized vacation ownership notes receivable at the end of the second quarter.

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

(in millions, except per share amounts)	2024 Guidance
Contract sales	$1,790	to	$1,825
Net income attributable to common stockholders	$195	to	$215
Earnings per share - diluted	$5.05	to	$5.55
Net cash, cash equivalents and restricted cash provided by operating activities	$239	to	$256
Adjusted EBITDA*	$685	to	$715
Adjusted earnings per share - diluted*	$5.90	to	$6.45
Adjusted free cash flow*	$300	to	$340

Non-GAAP Financial Information
Non-GAAP financial measures are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use. In addition to the foregoing non-GAAP financial measures, we present certain key metrics as performance measures which are further described in our most recent Annual Report on Form 10-K, and which may be updated in our periodic filings with the U.S. Securities and Exchange Commission.

Second Quarter 2024 Financial Results Conference Call
The Company will hold a conference call on August 1, 2024 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company's website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.

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

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

Note on forward-looking statements
This press release and accompanying schedules contain “forward-looking statements” within the meaning of federal securities laws, including statements about expectations for full year 2024 outlook for contract sales, results of operations, cash flows and future defaults on vacation ownership notes receivable. 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 such 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 2, 2024   TABLE OF CONTENTS
Summary Financial Information and Adjusted EBITDA by Segment	A-1
Interim Consolidated Statements of Income	A-2
Revenues and Profit by Segment	A-3 to A-4
Consolidated Contract Sales to Adjusted Development Profit	A-5
Adjusted Net Income Attributable to Common Stockholders	A-6
Adjusted Earnings Per Share - Diluted
Adjusted EBITDA	A-7
Segment Adjusted EBITDA
Vacation Ownership	A-8
Exchange & Third-Party Management
Interim Balance Sheet Items and Summary Cash Flow	A-9
2024 Outlook
Adjusted Net Income Attributable to Common Stockholders
Adjusted Earnings Per Share - Diluted	A-10
Adjusted EBITDA
Adjusted Free Cash Flow	A-11
Quarterly Operating Metrics	A-12
Non-GAAP Financial Measures	A-13

A-1
MARRIOTT VACATIONS WORLDWIDE CORPORATION   SUMMARY FINANCIAL INFORMATION (In millions, except per share amounts) (Unaudited)
	Three Months Ended						Change %		Six Months Ended						Change %
	June 30, 2024			June 30, 2023					June 30, 2024			June 30, 2023
GAAP Measures
Revenues	$	1,140		$	1,178		(3%)		$	2,335		$	2,347		(1%)
Income before income taxes and noncontrolling interests	$	48		$	140		(66%)		$	129		$	268		(52%)
Net income attributable to common stockholders	$	37		$	90		(59%)		$	84		$	177		(53%)
Diluted shares		42.2			43.8		(4%)			42.2			44.1		(4%)
Earnings per share - diluted	$	0.98		$	2.17		(55%)		$	2.20		$	4.23		(48%)
Non-GAAP Measures*
Adjusted EBITDA	$	157		$	222		(29%)		$	344		$	425		(19%)
Adjusted pretax income	$	70		$	140		(50%)		$	172		$	270		(36%)
Adjusted net income attributable to common stockholders	$	42		$	90		(54%)		$	113		$	199		(43%)
Adjusted earnings per share - diluted	$	1.10		$	2.19		(50%)		$	2.91		$	4.73		(38%)
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

ADJUSTED EBITDA BY SEGMENT (In millions) (Unaudited)
	Three Months Ended								Change %		Six Months Ended								Change %
	June 30, 2024				June 30, 2023						June 30, 2024				June 30, 2023
Vacation Ownership	$	180			$	245			(26%)		$	393			$	474			(17%)
Exchange & Third-Party Management		25				32			(22%)			57				69			(17%)
Segment Adjusted EBITDA*		205				277			(26%)			450				543			(17%)
General and administrative		(54	)			(64	)		15%			(117	)			(132	)		11%
Other		6				9			(28%)			11				14			(22%)
Adjusted EBITDA*	$	157			$	222			(29%)		$	344			$	425			(19%)
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-2
MARRIOTT VACATIONS WORLDWIDE CORPORATION   INTERIM CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) (Unaudited)
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
REVENUES
Sale of vacation ownership products	$	309			$	391			$	661			$	766
Management and exchange		215				206				426				406
Rental		153				146				311				297
Financing		85				80				168				158
Cost reimbursements		378				355				769				720
TOTAL REVENUES		1,140				1,178				2,335				2,347
EXPENSES
Cost of vacation ownership products		38				66				91				124
Marketing and sales		226				206				449				416
Management and exchange		119				110				235				217
Rental		111				112				218				225
Financing		35				25				69				51
General and administrative		54				64				117				132
Depreciation and amortization		35				34				73				66
Litigation charges		10				2				13				5
Restructuring		1				—				3				—
Royalty fee		29				29				57				58
Impairment		2				—				2				4
Cost reimbursements		378				355				769				720
TOTAL EXPENSES		1,038				1,003				2,096				2,018
(Losses) gains and other (expense) income, net		(7	)			10				(7	)			31
Interest expense, net		(43	)			(36	)			(83	)			(70	)
Transaction and integration costs		(3	)			(10	)			(18	)			(23	)
Other		(1	)			1				(2	)			1
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS		48				140				129				268
Provision for income taxes		(10	)			(50	)			(45	)			(91	)
NET INCOME		38				90				84				177
Net income attributable to noncontrolling interests		(1	)			—				—				—
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	37			$	90			$	84			$	177
EARNINGS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
Basic shares		35.4				36.9				35.5				37.1
Basic	$	1.04			$	2.46			$	2.36			$	4.78
Diluted shares		42.2				43.8				42.2				44.1
Diluted	$	0.98			$	2.17			$	2.20			$	4.23

A-3
MARRIOTT VACATIONS WORLDWIDE CORPORATION   REVENUES AND PROFIT BY SEGMENT for the three months ended June 30, 2024 (In millions) (Unaudited)
	Reportable Segment								Corporate and Other				Total
	Vacation Ownership				Exchange & Third-Party Management
REVENUES
Sales of vacation ownership products	$	309			$	—			$	—			$	309
Management and exchange(1)
Ancillary revenues		72				1				—				73
Management fee revenues		51				2				(1	)			52
Exchange and other services revenues		34				42				14				90
Management and exchange		157				45				13				215
Rental		143				10				—				153
Financing		85				—				—				85
Cost reimbursements(1)		384				3				(9	)			378
TOTAL REVENUES	$	1,078			$	58			$	4			$	1,140
PROFIT
Development	$	45			$	—			$	—			$	45
Management and exchange(1)		84				14				(2	)			96
Rental(1)		30				10				2				42
Financing		50				—				—				50
TOTAL PROFIT		209				24				—				233
OTHER
General and administrative		—				—				(54	)			(54	)
Depreciation and amortization		(25	)			(7	)			(3	)			(35	)
Litigation charges		(10	)			—				—				(10	)
Restructuring		—				—				(1	)			(1	)
Royalty fee		(29	)			—				—				(29	)
Impairment		—				(2	)			—				(2	)
Gains (losses) and other income (expense), net		1				—				(8	)			(7	)
Interest expense, net		—				—				(43	)			(43	)
Transaction and integration costs		—				—				(3	)			(3	)
Other		(2	)			—				1				(1	)
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS		144				15				(111	)			48
Provision for income taxes		—				—				(10	)			(10	)
NET INCOME (LOSS)		144				15				(121	)			38
Net income attributable to noncontrolling interests(1)		—				—				(1	)			(1	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	144			$	15			$	(122	)		$	37
SEGMENT MARGIN(2)	20.8%				28.1%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues.

A-4
MARRIOTT VACATIONS WORLDWIDE CORPORATION   REVENUES AND PROFIT BY SEGMENT for the three months ended June 30, 2023 (In millions) (Unaudited)
	Reportable Segment
	Vacation Ownership				Exchange & Third-Party Management				Corporate and Other				Total
REVENUES
Sales of vacation ownership products	$	391			$	—			$	—			$	391
Management and exchange(1)
Ancillary revenues		70				1				—				71
Management fee revenues		45				5				(1	)			49
Exchange and other services revenues		32				45				9				86
Management and exchange		147				51				8				206
Rental		135				11				—				146
Financing		80				—				—				80
Cost reimbursements(1)		359				3				(7	)			355
TOTAL REVENUES	$	1,112			$	65			$	1			$	1,178
PROFIT
Development	$	119			$	—			$	—			$	119
Management and exchange(1)		78				21				(3	)			96
Rental(1)		19				11				4				34
Financing		55				—				—				55
TOTAL PROFIT		271				32				1				304
OTHER
General and administrative		—				—				(64	)			(64	)
Depreciation and amortization		(23	)			(8	)			(3	)			(34	)
Litigation charges		(3	)			—				1				(2	)
Royalty fee		(29	)			—				—				(29	)
Gains and other income, net		7				—				3				10
Interest expense, net		—				—				(36	)			(36	)
Transaction and integration costs		—				—				(10	)			(10	)
Other		1				—				—				1
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS		224				24				(108	)			140
Provision for income taxes		—				—				(50	)			(50	)
NET INCOME (LOSS)		224				24				(158	)			90
Net income attributable to noncontrolling interests(1)		—				—				—				—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	224			$	24			$	(158	)		$	90
SEGMENT MARGIN(2)	29.7%				39.5%
(1) Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, and represent the portion attributable to individual or third-party vacation ownership interest owners.
(2) Segment margin represents the applicable segment’s net income or loss attributable to common stockholders divided by the applicable segment’s total revenues less cost reimbursement revenues.

A-5
MARRIOTT VACATIONS WORLDWIDE CORPORATION   CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited)
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Consolidated contract sales	$	449			$	453			$	877			$	887
Less resales contract sales		(9	)			(10	)			(21	)			(21	)
Consolidated contract sales, net of resales		440				443				856				866
Plus:
Settlement revenue		10				9				18				17
Resales revenue		6				6				11				12
Revenue recognition adjustments:
Reportability		1				5				(8	)			5
Sales reserve(1)		(122	)			(45	)			(168	)			(83	)
Other(2)		(26	)			(27	)			(48	)			(51	)
Sale of vacation ownership products		309				391				661				766
Less:
Cost of vacation ownership products		(38	)			(66	)			(91	)			(124	)
Marketing and sales		(226	)			(206	)			(449	)			(416	)
Development Profit		45				119				121				226
Revenue recognition reportability adjustment		(1	)			(3	)			6				(3	)
Purchase accounting adjustments		—				2				1				4
Adjusted development profit*	$	44			$	118			$	128			$	227
Development profit margin	14.7%				30.8%				18.3%				29.6%
Adjusted development profit margin*	14.3%				30.4%				19.2%				29.8%
(1) Reflects a $70 million increase in the Company’s sales reserve that was recorded in the second quarter of 2024.
(2) Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-6
MARRIOTT VACATIONS WORLDWIDE CORPORATION   ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED (In millions, except per share amounts) (Unaudited)
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Net income attributable to common stockholders	$	37			$	90			$	84			$	177
Provision for income taxes		10				50				45				91
Income before income taxes attributable to common stockholders		47				140				129				268
Certain items:
ILG integration		—				6				—				15
Welk acquisition and integration		3				4				18				8
Transaction and integration costs		3				10				18				23
Early redemption of senior secured notes		—				—				—				10
Gain on disposition of hotel, land and other		(1	)			(7	)			(1	)			(7	)
Foreign currency translation		4				(2	)			6				(4	)
Insurance proceeds		—				—				—				(2	)
Change in indemnification asset		4				(1	)			2				(24	)
Other		—				—				—				(4	)
Losses (gains) and other expense (income), net		7				(10	)			7				(31	)
Purchase accounting adjustments		—				1				1				3
Litigation charges		10				2				13				5
Restructuring charges		1				—				3				—
Impairment charges		2				—				2				4
Other		—				(3	)			(1	)			(2	)
Adjusted pretax income*		70				140				172				270
Provision for income taxes		(28	)			(50	)			(59	)			(71	)
Adjusted net income attributable to common stockholders*	$	42			$	90			$	113			$	199
Diluted shares		42.2				43.8				42.2				44.1
Adjusted earnings per share - Diluted*	$	1.10			$	2.19			$	2.91			$	4.73
* 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.

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MARRIOTT VACATIONS WORLDWIDE CORPORATION   ADJUSTED EBITDA (In millions) (Unaudited)
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Net income attributable to common stockholders	$	37			$	90			$	84			$	177
Interest expense, net		43				36				83				70
Provision for income taxes		10				50				45				91
Depreciation and amortization		35				34				73				66
Share-based compensation		9				12				16				19
Certain items:
ILG integration		—				6				—				15
Welk acquisition and integration		3				4				18				8
Transaction and integration costs		3				10				18				23
Early redemption of senior secured notes		—				—				—				10
Gain on disposition of hotel, land and other		(1	)			(7	)			(1	)			(7	)
Foreign currency translation		4				(2	)			6				(4	)
Insurance proceeds		—				—				—				(2	)
Change in indemnification asset		4				(1	)			2				(24	)
Other		—				—				—				(4	)
Losses (gains) and other expense (income), net		7				(10	)			7				(31	)
Purchase accounting adjustments		—				1				1				3
Litigation charges		10				2				13				5
Restructuring charges		1				—				3				—
Impairment charges		2				—				2				4
Other		—				(3	)			(1	)			(2	)
Adjusted EBITDA*	$	157			$	222			$	344			$	425
Adjusted EBITDA Margin*	20.7%				26.9%				22.0%				26.1%
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

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MARRIOTT VACATIONS WORLDWIDE CORPORATION  (In millions) (Unaudited)   VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Segment financial results attributable to common stockholders	$	144			$	224			$	326			$	429
Depreciation and amortization		25				23				50				46
Share-based compensation		2				3				4				4
Certain items:
Gain on disposition of hotel, land and other		(1	)			(7	)			(1	)			(7	)
Insurance proceeds		—				—				—				(2	)
Change in indemnification asset		—				—				—				(3	)
Other		—				—				—				(4	)
Gains and other income, net		(1	)			(7	)			(1	)			(16	)
Purchase accounting adjustments		—				1				1				3
Litigation charges		10				3				13				6
Impairment charges		—				—				—				4
Other		—				(2	)			—				(2	)
Segment Adjusted EBITDA*	$	180			$	245			$	393			$	474
Segment Adjusted EBITDA Margin*	26.0%				32.5%				27.6%				32.0%

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA
	Three Months Ended								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Segment financial results attributable to common stockholders	$	15			$	24			$	40			$	52
Depreciation and amortization		7				8				14				16
Share-based compensation		1				—				1				1
Certain items:
Impairment charges		2				—				2				—
Segment Adjusted EBITDA*	$	25			$	32			$	57			$	69
Segment Adjusted EBITDA Margin*	44.3%				51.9%				48.0%				53.8%
* Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

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MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (Unaudited)   INTERIM BALANCE SHEET ITEMS
	June 30, 2024				December 31, 2023
Cash and cash equivalents	$	206			$	248
Vacation ownership notes receivable, net	$	2,308			$	2,343
Inventory	$	643			$	634
Property and equipment, net	$	1,295			$	1,260
Goodwill	$	3,117			$	3,117
Intangibles, net	$	822			$	854
Debt, net	$	3,137			$	3,049
Stockholders’ equity	$	2,372			$	2,382

SUMMARY CASH FLOW
	Six Months Ended
CASH FLOW	June 30, 2024				June 30, 2023
Cash, cash equivalents, and restricted cash provided by (used in):
Operating activities	$	33			$	27
Investing activities		(88	)			(53	)
Financing activities		(59	)			(349	)
Effect of changes in exchange rates on cash, cash equivalents, and restricted cash		(3	)			1
Net change in cash, cash equivalents, and restricted cash	$	(117	)		$	(374	)

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MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except per share amounts)   2024 ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND ADJUSTED EARNINGS PER SHARE - DILUTED OUTLOOK
	Fiscal Year 2024
	Low				High
Net income attributable to common stockholders	$	195			$	215
Provision for income taxes		92				102
Income before income taxes attributable to common stockholders		287				317
Certain items(1)		50				50
Adjusted pretax income*		337				367
Provision for income taxes		(106	)			(113	)
Adjusted net income attributable to common stockholders*	$	231			$	254
Earnings per share - Diluted(2)(3)	$	5.05			$	5.55
Adjusted earnings per share - Diluted(2)(3)*	$	5.90			$	6.45
Diluted shares(2)		42.3				42.3

2024 ADJUSTED EBITDA OUTLOOK
	Fiscal Year 2024
	Low				High
Net income attributable to common stockholders	$	195			$	215
Interest expense		169				169
Provision for income taxes		92				102
Depreciation and amortization		146				146
Share-based compensation		33				33
Certain items(1)		50				50
Adjusted EBITDA*	$	685			$	715
(1) Certain items adjustment includes $18 million of transaction and integration costs and $32 million of anticipated litigation charges and other items.
(2) Includes 6.6 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.

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MARRIOTT VACATIONS WORLDWIDE CORPORATION   2024 ADJUSTED FREE CASH FLOW OUTLOOK (In millions)
		Fiscal Year 2024
		Low				High
Net cash, cash equivalents and restricted cash provided by operating activities		$	239			$	256
Capital expenditures for property and equipment (excluding inventory)			(70	)			(75	)
Borrowings from securitizations, net of repayments			45				60
Securitized debt issuance costs			(11	)			(12	)
Free cash flow*			203				229
Adjustments:
Net change in borrowings available from the securitization of eligible vacation ownership notes receivable(1)			65				79
Certain items(2)			32				32
Adjusted free cash flow*		$	300			$	340
(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 transaction and integration costs and anticipated 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.

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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
	2024		$	428				$	449
	2023		$	434				$	453				$	438				$	447				$	1,772
	2022		$	394				$	506				$	483				$	454				$	1,837
VPG
	2024		$	4,129				$	3,741
	2023		$	4,358				$	3,968				$	4,055				$	4,002				$	4,088
	2022		$	4,706				$	4,613				$	4,353				$	4,088				$	4,421
Tours
	2024			96,579					111,752
	2023			92,890					106,746					100,609					105,580					405,825
	2022			78,505					102,857					104,000					105,231					390,593
Exchange & Third-Party Management
Total active Interval International members (000's)(1)
	2024			1,566					1,530
	2023			1,568					1,566					1,571					1,564					1,564
	2022			1,606					1,596					1,591					1,566					1,566
Average revenue per Interval International member
	2024		$	41.74				$	38.30
	2023		$	42.07				$	39.30				$	39.15				$	36.16				$	156.65
	2022		$	44.33				$	38.79				$	38.91				$	35.60				$	157.97
(1) Includes members at the end of each period.

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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 before the impact of excluded items.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729768009/en/

Neal Goldner

Investor Relations

407-206-6149

neal.goldner@mvwc.com



Cameron Klaus

Global Communications

407-513-6606

cameron.klaus@mvwc.com

Source: Marriott Vacations Worldwide Corporation

FAQ

What were Marriott Vacations Worldwide's (VAC) Q2 2024 contract sales?

Marriott Vacations Worldwide's (VAC) consolidated Vacation Ownership contract sales in Q2 2024 were $449 million, a 1% decline compared to Q2 2023. Excluding Maui, contract sales increased by 3%.

How did Marriott Vacations Worldwide's (VAC) net income change in Q2 2024?

Marriott Vacations Worldwide's (VAC) net income attributable to common stockholders in Q2 2024 was $37 million, down from $90 million in Q2 2023. This reflects a $45 million impact from the higher sales reserve.

What was Marriott Vacations Worldwide's (VAC) Adjusted EBITDA for Q2 2024?

Marriott Vacations Worldwide's (VAC) Adjusted EBITDA for Q2 2024 was $157 million, a 29% decrease compared to the prior year. This reflects a $57 million net increase to the company's sales reserve.

How did Marriott Vacations Worldwide's (VAC) resort occupancy perform in Q2 2024?

Marriott Vacations Worldwide's (VAC) resorts ran at 90% occupancy in Q2 2024, indicating strong demand for travel.