MARRIOTT VACATIONS WORLDWIDE Corp
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
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8. Earnings Per Share
| 8. | EARNINGS PER SHARE |
Basic earnings per common share attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the reporting period. Diluted earnings per common share attributable to common stockholders reflects the assumed conversion of all dilutive securities, calculated using the treasury stock method.
The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic earnings per share attributable to common stockholders.
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| (in millions, except per share amounts) | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 |
| Net income attributable to common stockholders | $37 | $90 | $84 | $177 |
| Shares for basic earnings per share | 35.4 | 36.9 | 35.5 | 37.1 |
| Basic earnings per share | $1.04 | $2.46 | $2.36 | $4.78 |
The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of diluted earnings per share attributable to common stockholders.
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| (in millions, except per share amounts) | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 |
| Net income attributable to common stockholders | $37 | $90 | $84 | $177 |
| Add back of interest expense related to convertible notes, net of tax | 4 | 5 | 9 | 9 |
| Numerator used to calculate diluted earnings per share | $41 | $95 | $93 | $186 |
| Shares for basic earnings per share | 35.4 | 36.9 | 35.5 | 37.1 |
| Effect of dilutive shares outstanding | ||||
| Employee SARs | — | 0.1 | — | 0.2 |
| Restricted stock units | 0.1 | 0.3 | 0.1 | 0.3 |
| 2026 Convertible Notes | 3.6 | 3.5 | 3.6 | 3.5 |
| 2027 Convertible Notes | 3.1 | 3.0 | 3.0 | 3.0 |
| Shares for diluted earnings per share | 42.2 | 43.8 | 42.2 | 44.1 |
| Diluted earnings per share | $0.98 | $2.17 | $2.20 | $4.23 |
The computations of diluted earnings per share attributable to common stockholders in the table above exclude approximately 393,000 and 213,000 shares of common stock, the maximum number of shares issuable as of June 30, 2024 and June 30, 2023, respectively, upon the vesting of certain performance-based awards, because the performance conditions required to be met for the shares subject to such awards to vest were not achieved by the end of the reporting period.
In accordance with the applicable accounting guidance for calculating earnings per share, for the second quarter of 2024, we excluded from our calculation of diluted earnings per share 559,444 shares underlying stock appreciation rights (“SARs”) that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $96.82 to $173.88, were greater than the average market price of our common stock for the applicable period.
For the first half of 2024, we excluded from our calculation of diluted earnings per share 646,203 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $93.73 to $173.88, were greater than the average market price of our common stock for the applicable period.
For each of the second quarter and first half of 2023, we excluded from our calculation of diluted earnings per share 289,750 shares underlying SARs that may settle in shares of common stock because the exercise prices of such SARs, which ranged from $143.38 to $173.88, were greater than the average market price of our common stock for the applicable period.
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