ORLANDO, Fla. – November 1, 2023 – Marriott Vacations Worldwide Corporation (NYSE: VAC) (“MVW” or the “Company”) reported third quarter 2023 financial results.

Third Quarter 2023 Highlights:

• Consolidated Vacation Ownership contract sales were $438 million and volume per guest (“VPG”) increased $87 sequentially from the second quarter, or 2%, to $4,055. The Company estimates the Maui wildfires negatively impacted contract sales by $28 million and VPG by approximately $66, or 2%, in the quarter.
• Net income attributable to common shareholders was $42 million compared to $109 million in the prior year, and fully diluted earnings per share was $1.09.
• The Company recorded a $59 million charge to its loan loss provision in the third quarter resulting in a $36 million negative impact to Net income attributable to common shareholders and a $49 million negative impact to Adjusted EBITDA.
• Adjusted net income attributable to common shareholders was $48 million and adjusted fully diluted earnings per share was $1.20.
• Adjusted EBITDA was $150 million. The Company estimates the Maui wildfires negatively impacted Adjusted EBITDA by $24 million in the quarter and the increased loan loss provision impacted Adjusted EBITDA by $49 million.
• The Company repurchased 793,300 shares of its common stock for $86 million during the quarter and declared a $0.72 per share quarterly dividend, which was paid in October.
• The Company updated its full year outlook.

“We had a difficult quarter between the devastating wildfires in Maui and default rates on our loan portfolio remaining above our recent experience. However, our loan delinquencies are stabilizing and with Maui reopen for tourism we have started to see our resort occupancies recover,” said John Geller, president and chief executive officer. “We’ve also been working hard educating consumers about the benefits of Abound by Marriott Vacations and our salespeople are getting more comfortable selling the new product, which was evident in our results this quarter, with VPG growing sequentially from the prior quarter.”

Third 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 third quarter contract sales by approximately $28 million, its third quarter Net income attributable to common shareholders by $18 million and its 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 were referred to as the “Alignment.”

The tables below illustrate the comparison of the reported results from the third quarter of 2023, as well as adjusted results that reflect the estimated impact of the Maui fires, to the results from the third 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 “NonGAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

Consolidated

Vacation Ownership

Revenues excluding cost reimbursements decreased 17% in the third quarter of 2023 compared to the prior year. The decline was driven by a 9% year-over-year reduction in consolidated contract sales resulting from 7% lower VPG and a 3% decline in tours, and a $59 million increase in its loan loss provision. Adjusted for the estimated $28 million impact of the Maui wildfires, consolidated contract sales would have declined 4% year-over-year, tours would have increased 2% and VPG would have declined 5%.

Segment financial results attributable to common shareholders declined $121 million to $149 million in the third quarter of 2023. Adjusting for the estimated impact from the Maui wildfires and the prior year Alignment benefit:

• Segment Adjusted EBITDA declined $60 million year-over-year primarily due to lower
  development and rental profit and a $49 million net loan loss impact in the current year.
• Development profit declined $56 million year-over-year primarily due to a $49 million net loan
  loss impact in the current year and 4% lower contract sales.
• Rental profit declined $13 million year-over-year primarily due to lower ADR and higher
  inventory costs.
• Management and exchange profit increased $5 million year-over-year due to higher revenue
  from management fees and club dues.

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 7% in the third quarter of 2023 compared to the prior year driven primarily by lower exchange and Getaway volumes. Interval International active members decreased 1% compared to the prior year to 1.6 million and Average revenue per member increased 1% year-over-year.

Segment financial results attributable to common shareholders were $23 million in the third quarter of 2023 and Segment margin was 37%. Adjusted for the estimated $1 million negative impact from the Maui wildfires, Segment Adjusted EBITDA decreased to $31 million and Segment Adjusted EBITDA Margin was 50%.

Corporate and Other

General and administrative costs decreased $5 million in the third quarter of 2023 compared to the prior year primarily as a result of lower variable compensation costs.

Balance Sheet and Liquidity

The Company ended the quarter with $1.0 billion in liquidity, including $265 million of cash and cash equivalents, $70 million of gross notes receivable that were eligible for securitization, and $659 million of available capacity under its revolving corporate credit facility.

At the end of the third quarter of 2023, the Company had $3.0 billion of corporate debt and $2.0 billion of non-recourse debt related to its securitized notes receivable.

Full Year 2023 Outlook

While the Company’s resorts in West Maui have reopened, it expects the wildfires to negatively impact its fourth quarter contract sales by approximately $32 to $37 million, its Net income attributable to common shareholders by approximately $19 to $22 million and its Adjusted EBITDA by approximately $26 to $31 million.

The Company updated its full year 2023 guidance as reflected in the chart below. The Financial Schedules that follow reconcile the non-GAAP financial measures set forth below to the following full year 2023 expected GAAP results for the Company.

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.

Note: 2023 guidance includes the estimated impact of the Maui wildfires on the Company’s results.

Non-GAAP Financial Information

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

Third Quarter 2023 Financial Results Conference Call

The Company will hold a conference call on November 2, 2023 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company’s website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has over 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates 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 expectations for contract sales, results of operations, cash flows, future growth and projections for full year 2023. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the effects of a future health crisis, including its short and longer-term impacts 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 and wage inflation; global supply chain disruptions; volatility in the international and national economy and credit markets; the impact of the current or a future banking crisis; wars involving Russia, Ukraine, Israel and Gaza 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 rising interest rates; political or social strife; difficulties associated with implementing new or maintaining existing technology; changes in privacy laws; the effects of steps that we or our affiliates have taken and may continue to take to reduce operating costs; impacts from natural or man-made disasters and wildfires, including the Maui wildfires; 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.

For the full press release with financial schedules, please click the link below:

Marriott Vacations Worldwide Reports Third Quarter 2023 Financial Results