Marriott Vacations Worldwide(VAC) - 2024 Q4 - Annual Results

Financial Performance - Consolidated Vacation Ownership contract sales increased by 7% year-over-year in Q4 2024, reaching $477 million, with first-time buyer contract sales growing by 9%[4] - Net income attributable to common stockholders was $50 million, resulting in diluted earnings per share of $1.30; adjusted net income was $73 million with adjusted diluted earnings per share of $1.86[4] - Adjusted EBITDA for Q4 2024 was $185 million, while full-year cash provided by operating activities was $205 million, leading to an adjusted free cash flow of $278 million[4] - Revenues for the three months ended December 31, 2024, increased by 11% to $1,327 million compared to $1,194 million in the same period of 2023[24] - Net income attributable to common stockholders rose by 44% to $50 million for the three months ended December 31, 2024, compared to $35 million in the prior year[24] - Adjusted EBITDA for the fiscal year ended December 31, 2024, decreased by 4% to $727 million from $761 million in 2023[24] - The company reported a 23% decline in income before income taxes for the fiscal year ended December 31, 2024, totaling $306 million compared to $398 million in 2023[24] - The diluted earnings per share for the three months ended December 31, 2024, increased by 40% to $1.30, while the fiscal year diluted earnings per share decreased by 11% to $5.61[24] - Total revenues for the fiscal year ended December 31, 2024, reached $4,967 million, a 5% increase from $4,727 million in 2023[24] - The company experienced a 20% decline in adjusted net income attributable to common stockholders for the fiscal year ended December 31, 2024, totaling $258 million compared to $322 million in 2023[24] Debt and Liquidity - The company ended 2024 with $914 million in liquidity, including $197 million in cash and cash equivalents[8] - Total corporate debt stood at $3.1 billion, with an additional $2.1 billion in non-recourse debt related to securitized vacation ownership notes receivable[9] - Total cash provided by operating activities for 2024 was $205 million, a decrease from $232 million in 2023[52] - Adjusted free cash flow for 2024 was $278 million, down from $348 million in 2023[52] - The net change in cash, cash equivalents, and restricted cash for 2024 was a decrease of $46 million, compared to a decrease of $280 million in 2023[52] Segment Performance - Revenues from the Exchange & Third-Party Management segment decreased by 13% year-over-year to $49 million, with a segment margin of 26.5%[6] - Vacation Ownership segment adjusted EBITDA for the three months ended December 31, 2024, decreased by 7% to $221 million compared to $236 million in the same period of 2023[26] - Management and exchange segment adjusted EBITDA fell by 27% to $22 million for the three months ended December 31, 2024, from $31 million in the prior year[26] - The segment margin for vacation ownership was 27.3%, while the third-party management segment margin was 31.1%[35] - Segment financial results attributable to common stockholders for Q4 2024 were $172 million, down 13.6% from $199 million in Q4 2023[47] - Segment Adjusted EBITDA for Q4 2024 was $221 million, representing a decrease of 6.4% compared to $236 million in Q4 2023, with an Adjusted EBITDA margin of 27.0%[47] Future Guidance and Expectations - The company expects to generate $150 million to $200 million in run-rate benefits from operational initiatives by the end of 2026, with half from cost savings and efficiencies[3] - Full-year 2025 guidance includes contract sales projected between $1.85 billion and $1.93 billion, and adjusted EBITDA expected to be between $750 million and $780 million[11] - The company expects adjusted free cash flow for 2025 to be between $290 million and $350 million[56] Operational Insights - The company had over 700,000 owner families and approximately 120 vacation ownership resorts in its portfolio[15] - The total active Interval International members at the end of Q4 2024 was 1.546 million, slightly down from 1.564 million in Q4 2023[59] - The average revenue per Interval International member for 2024 was $154.34, compared to $156.65 in 2023[59] - The company plans to continue expanding its market presence and investing in new product development[35] Other Financial Metrics - Development profit margin decreased to 25.7% from 32.0% year-over-year[38] - The company incurred $39 million in interest expense for the quarter, consistent with the previous year[44] - The total profit for the quarter was $291 million, reflecting a slight decrease from $292 million in the prior year[35] - The company reported a 72% increase in other income for the three months ended December 31, 2024, amounting to $6 million compared to $3 million in the same period of 2023[26] Definitions and Measures - EBITDA is defined as earnings before interest expense, income taxes, depreciation, and amortization, with Adjusted EBITDA reflecting additional adjustments for certain items[67] - Adjusted EBITDA is considered an indicator of operating performance, allowing the company to measure its ability to service debt and fund capital expenditures[67] - Adjusted EBITDA margin is evaluated as an indicator of operating profitability, calculated as Adjusted EBITDA divided by total revenues less cost reimbursement revenues[69] - Adjusted pretax income is calculated as Adjusted EBITDA less depreciation, amortization, and net interest expense, providing insights into operating performance[70] - Free Cash Flow and Adjusted Free Cash Flow are evaluated as liquidity measures, indicating cash generated by operating activities after capital expenditures[71] - Adjusted Free Cash Flow allows for period-over-period comparisons of cash generated before the impact of certain items, facilitating management's comparison with competitors[71] - The company does not adjust for consumer financing interest expense associated with term securitization transactions, considering it an operating expense[67] - Adjusted net income attributable to common stockholders is calculated as Adjusted pretax income less provision for income tax adjusted for certain items[70] - Segment Adjusted EBITDA margin provides useful information for evaluating the profitability of specific segments within the company[69] - The company believes that Adjusted EBITDA and related measures facilitate comparisons with results from other companies in the same industry[68]