Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported fourth quarter and
full-year 2021 financial results for the period ended December 31,
2021.
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Travel + Leisure Co. (NYSE:TNL) reports
4Q and FY 2021 results
Fourth quarter 2021 highlights:
- Net income from continuing operations of $110 million
(diluted EPS of $1.26) on net revenue of $870 million
- Adjusted EBITDA of $228 million and adjusted diluted EPS of
$1.19 (1)
- Resumed stock repurchase program and increased
dividend
Full-year 2021 highlights:
- Net income from continuing operations of $313 million
(diluted EPS of $3.58) on net revenue of $3.1 billion
- Adjusted EBITDA of $778 million and adjusted diluted EPS of
$3.65
- Net cash provided by operating activities of $568 million
and adjusted free cash flow of $223 million
Outlook:
- First quarter 2022 adjusted EBITDA is expected to range from
$160 million to $170 million
- The Company will recommend a first quarter 2022 dividend of
$0.40 per share for approval by the Board of Directors
“The continued recovery in leisure travel and business
improvements made at the start of the pandemic helped us deliver
full-year adjusted EBITDA and adjusted diluted EPS above our
guidance range,” said Michael D. Brown, president and CEO of Travel
+ Leisure Co. “Based on our strong results in 2021 and optimism for
the year ahead, we increased the dividend and resumed stock
repurchases in the fourth quarter.”
“We anticipate that leisure travel will continue to lead the
broader travel industry, which will support the 2025 growth plan
announced at our Investor Day in September 2021.”
(1) This press release includes adjusted EBITDA, adjusted
diluted EPS, adjusted free cash flow, gross VOI sales and adjusted
net income/(loss), which are metrics that are not calculated in
accordance with Generally Accepted Accounting Principles in the
U.S. (“GAAP”). See "Presentation of Financial Information" and the
tables for the definitions and reconciliations of these non-GAAP
measures. Forward-looking non-GAAP measures are presented in this
press release only on a non-GAAP basis because not all of the
information necessary for a quantitative reconciliation is
available without unreasonable effort.
Business Segment Results
The results of operations during the fourth quarter and
full-year of 2021 and 2020 include impacts related to the COVID-19
global pandemic. Refer to Table 8 for a breakout of COVID-19
related impacts.
Vacation Ownership
$ in millions
Q4 2021
Q4 2020
% change
FY 2021
FY 2020
% change
Revenue
$695
$509
37%
$2,403
$1,625
48%
Adjusted EBITDA
$182
$115
58%
$558
$121
361%
Vacation Ownership revenue increased 37% to $695 million in the
fourth quarter of 2021 compared to the same period in the prior
year. Gross vacation ownership interest (VOI) sales were $432
million in the fourth quarter compared to $281 million in the prior
year period and tours were 129,000 in the fourth quarter compared
to 85,000 in the prior year period. Volume Per Guest (VPG)
increased 10% to $3,222 due to strong close rates and higher
quality tours in the fourth quarter compared to the prior year
period.
Fourth quarter adjusted EBITDA was $182 million compared to $115
million in the prior year period. The increase was driven by higher
Gross VOI sales due to the ongoing recovery of our operations from
COVID-19 and improvement in the provision for loan losses.
Fourth quarter 2021 results include an adjustment to the
COVID-19 related allowance for loan losses, resulting in a $44
million increase to revenue and a $16 million increase to cost of
vacation ownership interests, and yielding a $28 million net
positive impact to Adjusted EBITDA. Fourth quarter 2020 results
also include an adjustment to the COVID-19 related allowance,
resulting in a $20 million increase to revenue and a $7 million
increase to cost of vacation ownership interests, yielding a $13
million net positive impact to Adjusted EBITDA.
Travel and Membership
$ in millions
Q4 2021
Q4 2020
% change
FY 2021
FY 2020
% change
Revenue
$179
$141
27%
$752
$552
36%
Adjusted EBITDA
$64
$50
28%
$282
$191
48%
Travel and Membership revenue increased 27% to $179 million in
the fourth quarter driven by a 30% increase in transactions and 6%
increase in revenue per transaction. Transactions grew year over
year in every quarter of 2021 as we continue to recover from
COVID-19 impacted levels.
Fourth quarter Adjusted EBITDA increased 28% to $64 million
driven by higher revenue, partially offset by increased operational
costs supporting the revenue increase.
Balance Sheet and
Liquidity
Net Debt — As of December 31, 2021, the Company's
leverage ratio for covenant purposes was 3.99x. The Company had
$3.4 billion of corporate debt outstanding as of December 31, 2021,
which excluded $1.9 billion of non-recourse debt related to its
securitized notes receivables portfolio. Additionally, the Company
had cash and cash equivalents of $369 million. At the end of the
fourth quarter, the Company had $1.4 billion of liquidity in cash
and cash equivalents and revolving credit facility
availability.
The Company renewed its $1 billion revolving credit facility on
October 22, 2021 and extended the term through October 2026. This
renewal terminated the relief period and restrictions regarding
share repurchases, dividends and acquisitions under the first
amendment.
During the quarter, the Company issued $650 million senior
secured notes due 2029 with an interest rate of 4.5% and paid off
$650 million senior secured notes due March 2022. The Company's
next long-term debt maturity is $400 million of secured notes due
March 2023.
Timeshare Receivables Financing — The Company closed on a
$350 million term securitization on October 26, 2021 with a
weighted average coupon of 1.82% and a 98% advance rate.
Cash Flow — For the full-year 2021, net cash provided by
operating activities was $568 million compared to $374 million in
the prior year. Adjusted free cash flow was $223 million in 2021
compared to $35 million in the prior year.
Share Repurchases — The Company resumed share repurchase
activity in the fourth quarter of 2021 and repurchased 0.5 million
shares of common stock for $26 million at a weighted average price
of $52.94 per share during the quarter.
Dividend — The Company paid $30 million ($0.35 per share)
in cash dividends on December 30, 2021 to shareholders of record as
of December 15, 2021. For the full-year 2021, Travel + Leisure Co.
paid an aggregate $109 million in dividends to shareholders.
Outlook
For the first quarter of 2022, the Company expects adjusted
EBITDA to range from $160 million to $170 million.
This guidance is presented only on a non-GAAP basis because not
all of the information necessary for a quantitative reconciliation
of forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measure is available without unreasonable
effort, primarily due to uncertainties relating to the occurrence
or amount of these adjustments that may arise in the future.
Conference Call
Information
Travel + Leisure Co. will hold a conference call with investors
to discuss the Company’s results and outlook today at 8:30 a.m. ET.
Participants may listen to a simultaneous webcast of the conference
call, which may be accessed through the Company's website at
investor.travelandleisureco.com, or by dialing 866-831-8713,
passcode TNL, 10 minutes before the scheduled start time. For those
unable to listen to the live broadcast, an archive of the webcast
will be available on the Company's website for 90 days beginning at
12:00 p.m. ET today. Additionally, a telephone replay will be
available for four days beginning at 12:00 p.m. ET today at
800-753-0348.
Presentation of Financial
Information
Financial information discussed in this press release includes
non-GAAP measures such as adjusted EBITDA, adjusted diluted EPS,
adjusted free cash flow, gross VOI sales and adjusted net
income/(loss), which include or exclude certain items, as well as
non-GAAP guidance. The Company utilizes non-GAAP measures, defined
in Table 9, on a regular basis to assess performance of its
reportable segments and allocate resources. These non-GAAP measures
differ from reported GAAP results and are intended to illustrate
what management believes are relevant period-over-period
comparisons and are helpful to investors when considered with GAAP
measures as an additional tool for further understanding and
assessing the Company’s ongoing operating performance by adjusting
for items which in our view do not necessarily reflect ongoing
performance. Management also internally uses these measures to
assess our operating performance, both absolutely and in comparison
to other companies, and in evaluating or making selected
compensation decisions. Exclusion of items in the Company’s
non-GAAP presentation should not be considered an inference that
these items are unusual, infrequent or non-recurring. Full
reconciliations of non-GAAP financial measures to the most directly
comparable GAAP financial measures for the reported periods appear
in the financial tables section of the press release. See
definitions on Table 9 for an explanation of our non-GAAP
measures.
About Travel + Leisure
Co.
Travel + Leisure Co. (NYSE:TNL) is the world’s leading
membership and leisure travel company, with nearly 20 travel brands
across its resort, travel club, and lifestyle portfolio. The
company provides outstanding vacation experiences and travel
inspiration to millions of owners, members, and subscribers every
year through its products and services: Wyndham Destinations, the
largest vacation ownership company with more than 245 vacation club
resort locations across the globe; Panorama, the world’s foremost
membership travel business that includes the largest vacation
exchange company and subscription travel brands; and Travel +
Leisure Group, featuring top travel content and travel services
including the brand’s eponymous travel club. At Travel + Leisure
Co., our global team of associates brings hospitality to millions
each year, turning vacation inspiration into exceptional travel
experiences. We put the world on vacation. Learn more at
travelandleisureco.com.
Forward-Looking
Statements
This press release includes “forward-looking statements” as that
term is defined by the Securities and Exchange Commission (“SEC”).
Forward-looking statements are any statements other than statements
of historical fact, including statements regarding our
expectations, beliefs, hopes, intentions or strategies regarding
the future. In some cases, forward-looking statements can be
identified by the use of words such as “may,” “will,” “expects,”
“should,” “believes,” “plans,” “anticipates,” “estimates,”
“predicts,” “potential,” “continue,” “future” or other words of
similar meaning. Forward-looking statements are subject to risks
and uncertainties that could cause actual results of Travel +
Leisure Co. and its subsidiaries (“Travel + Leisure Co.” or “we”)
to differ materially from those discussed in, or implied by, the
forward-looking statements. Factors that might cause such a
difference include, but are not limited to, risks associated with:
the acquisition of the Travel + Leisure brand and the future
prospects and plans for Travel + Leisure Co., including our ability
to execute our strategies to grow our cornerstone timeshare and
exchange businesses and expand into the broader leisure travel
industry through new business extensions; our ability to compete in
the highly competitive timeshare and leisure travel industries;
uncertainties related to acquisitions, dispositions and other
strategic transactions; the health of the travel industry and
declines or disruptions caused by adverse economic conditions and
unemployment rates, terrorism or acts of gun violence, political
strife, war, pandemics, and severe weather events and other natural
disasters; adverse changes in consumer travel and vacation
patterns, consumer preferences and demand for our products;
increased or unanticipated operating costs and other inherent
business risks; our ability to comply with financial and
restrictive covenants under our indebtedness and our ability to
access capital markets on reasonable terms, at a reasonable cost or
at all; maintaining the integrity of internal or customer data and
protecting our systems from cyber-attacks; uncertainty with respect
to the scope, impact and duration of the novel coronavirus global
pandemic (“COVID-19”), including resurgences, the pace of recovery,
distribution and adoption of vaccines and treatments, and actions
in response to the evolving pandemic by governments, businesses and
individuals; the timing and amount of future dividends and share
repurchases, if any; and those other factors disclosed as risks
under “Risk Factors” in documents we have filed with the SEC,
including in Part I, Item 1A of our Annual Report on Form 10-K most
recently filed with the SEC. We caution readers that any such
statements are based on currently available operational, financial
and competitive information, and they should not place undue
reliance on these forward-looking statements, which reflect
management’s opinion only as of the date on which they were made.
Except as required by law, we undertake no obligation to review or
update these forward-looking statements to reflect events or
circumstances as they occur.
Travel + Leisure Co. Table of Contents
Table Number
- Consolidated Statements of Income/(Loss) (Unaudited)
- Summary Data Sheet
- Operating Statistics
- Revenue by Reportable Segment
- Non-GAAP Measure: Reconciliation of Net Income/(Loss) to
Adjusted Net Income/(Loss) to Adjusted EBITDA
- Non-GAAP Measure: Reconciliation of Net VOI Sales to Gross VOI
Sales
- Non-GAAP Measure: Reconciliation of Net Cash Provided by
Operating Activities to Adjusted Free Cash Flow
- COVID-19 Related Impacts
- Definitions
Table 1
Travel + Leisure Co.
Consolidated Statements of
Income/(Loss) (Unaudited)
(in millions, except per share
amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2021
2020
2021
2020
Net revenues
Service and membership fees
$
388
$
293
$
1,502
$
1,139
Net VOI sales
366
231
1,176
505
Consumer financing
100
107
404
467
Other
16
14
52
49
Net revenues
870
645
3,134
2,160
Expenses
Operating
367
269
1,359
1,130
Cost of vacation ownership interests
52
29
157
2
Consumer financing interest
18
26
81
101
General and administrative
110
102
434
398
Marketing
102
82
363
329
Depreciation and amortization
31
32
124
126
COVID-19 related costs
—
6
4
88
Restructuring
—
12
(1
)
39
Asset impairments/(recovery)
(5
)
2
(5
)
52
Total expenses
675
560
2,516
2,265
Operating income/(loss)
195
85
618
(105
)
Other (income), net
(4
)
(3
)
(6
)
(14
)
Interest expense
50
54
198
192
Interest (income)
(1
)
(1
)
(3
)
(7
)
Income/(loss) before income
taxes
150
35
429
(276
)
Provision for/(benefit from) income
taxes
40
31
116
(23
)
Net income/(loss) from continuing
operations
110
4
313
(253
)
Loss on disposal of discontinued business,
net of income taxes
(3
)
(2
)
(5
)
(2
)
Net income/(loss) attributable to TNL
shareholders
$
107
$
2
$
308
$
(255
)
Basic earnings/(loss) per share
Continuing operations
$
1.27
$
0.05
$
3.62
$
(2.95
)
Discontinued operations
(0.04
)
(0.02
)
(0.06
)
(0.02
)
$
1.23
$
0.03
$
3.56
$
(2.97
)
Diluted earnings/(loss) per
share
Continuing operations
$
1.26
$
0.05
$
3.58
$
(2.95
)
Discontinued operations
(0.04
)
(0.02
)
(0.06
)
(0.02
)
$
1.22
$
0.03
$
3.52
$
(2.97
)
Weighted average shares
outstanding
Basic
86.5
86.1
86.5
86.1
Diluted
87.4
86.6
87.3
86.1
Table 2
Travel + Leisure Co.
Summary Data Sheet
(in millions, except per share
amounts, unless otherwise indicated)
Three Months Ended December
31,
Twelve Months Ended December
31,
2021
2020
Change
2021
2020
Change
Consolidated
Results
Net income/(loss) attributable to TNL
shareholders
$
107
$
2
NM
$
308
$
(255
)
221
%
Diluted earnings/(loss) per share
$
1.22
$
0.03
NM
$
3.52
$
(2.97
)
219
%
Net income/(loss) from continuing
operations
$
110
$
4
NM
$
313
$
(253
)
224
%
Diluted earnings/(loss) per share from
continuing operations
$
1.26
$
0.05
NM
$
3.58
$
(2.95
)
221
%
Net income/(loss) margin
12.3
%
0.3
%
9.8
%
(11.8
) %
Adjusted Earnings/(Loss)
Adjusted EBITDA
$
228
$
148
54
%
$
778
$
259
200
%
Adjusted net income/(loss)
$
104
$
28
271
%
$
319
$
(80
)
499
%
Adjusted diluted earnings/(loss) per
share
$
1.19
$
0.32
272
%
$
3.65
$
(0.94
)
488
%
Segment
Results
Net Revenues
Vacation Ownership
$
695
$
509
37
%
$
2,403
$
1,625
48
%
Travel and Membership
179
141
27
%
752
552
36
%
Corporate and other
(4
)
(5
)
(21
)
(17
)
Total
$
870
$
645
35
%
$
3,134
$
2,160
45
%
Adjusted EBITDA
Vacation Ownership
$
182
$
115
58
%
$
558
$
121
361
%
Travel and Membership
64
50
28
%
282
191
48
%
Segment Adjusted EBITDA
246
165
840
312
Corporate and other
(18
)
(17
)
(62
)
(53
)
Total Adjusted EBITDA
$
228
$
148
54
%
$
778
$
259
200
%
Adjusted EBITDA Margin
26.2
%
22.9
%
24.8
%
12.0
%
Key Operating
Statistics
Vacation Ownership
Gross VOI sales
$
432
$
281
54
%
$
1,491
$
967
54
%
Tours (in thousands)
129
85
52
%
451
333
35
%
VPG (in dollars)
$
3,222
$
2,938
10
%
$
3,143
$
2,486
26
%
New owner sales, volume mix
25.3
%
25.3
%
28.0
%
27.3
%
New owner sales, transaction mix
24.7
%
24.8
%
27.8
%
28.9
%
Travel and Membership
Transactions (in thousands)
452
348
30
%
1,960
1,220
61
%
Revenue per transaction (in dollars)
$
270
$
254
6
%
$
275
$
258
7
%
Avg. number of exchange members (in
thousands)
3,831
3,652
5
%
3,721
3,749
(1
) %
NM is defined as Not Meaningful
Note: Amounts may not calculate due to
rounding. See Table 9 for definitions. For a full reconciliation of
non-GAAP financial measures to the most directly comparable GAAP
financial measures, refer to Table 5 and Table 6. See "Presentation
of Financial Information" and the tables for the definitions and
reconciliations of these non-GAAP measures in accordance with
GAAP.
In connection with the Travel + Leisure
brand acquisition we updated the names and composition of our
reportable segments to better align with how they are managed. We
created the Travel + Leisure Group which falls under the Travel and
Membership segment along with the Panorama business line. With the
formation of Travel + Leisure Group, we decided that the operations
of our Extra Holidays business, which focuses on direct to consumer
bookings, better aligns with the operations of this new business
line and therefore transitioned the management of our Extra
Holidays business to the Travel and Membership segment. As such, we
reclassified the results of our Extra Holidays business, which were
previously reported within the Vacation Ownership segment, into the
Travel and Membership segment.
Table 3
Travel + Leisure Co.
Operating Statistics: Travel and
Membership
The following operating statistics
are the significant drivers of the Company's revenues and therefore
provide an enhanced understanding of the Company's businesses:
(a)
Year
Q1
Q2
Q3
Q4
Full Year
Gross VOI Sales (in millions) (a)
2021
$
236
$
383
$
440
$
432
$
1,491
2020
$
413
$
18
$
256
$
281
$
967
2019
$
484
$
626
$
663
$
582
$
2,355
Tours (in thousands)
2021
76
117
129
129
451
2020
162
6
80
85
333
2019
192
249
269
234
945
VPG
2021
$
2,847
$
3,151
$
3,233
$
3,222
$
3,143
2020
$
2,128
NM
$
3,039
$
2,938
$
2,486
2019
$
2,405
$
2,425
$
2,332
$
2,373
$
2,381
Provision for Loan Losses
(in millions) (b)
2021
$
(38
)
$
(33
)
$
(49
)
$
(9
)
$
(129
)
2020
$
(315
)
$
(30
)
$
(45
)
$
(25
)
$
(415
)
2019
$
(109
)
$
(129
)
$
(135
)
$
(106
)
$
(479
)
Provision for Loan Loss as a
Percentage of Gross VOI Sales,
net of Fee-for-Service sales
2021
18.1
%
10.1% (c)
12.4% (d)
2.4% (e)
9.9% (f)
2020
NM
NM
18.8
%
9.5% (g)
NM
2019
22.5
%
21.2
%
20.3
%
18.6
%
20.6
%
Allowance for Loan Losses
(in millions)
2021
$
622
$
573
$
565
$
510
$
510
2020
$
930
$
846
$
788
$
693
$
693
2019
$
721
$
735
$
767
$
747
$
747
Gross Vacation Ownership
Contract Receivables (in millions)
2021
$
2,975
$
2,892
$
2,857
$
2,819
$
2,819
2020
$
3,722
$
3,461
$
3,309
$
3,175
$
3,175
2019
$
3,741
$
3,783
$
3,885
$
3,867
$
3,867
Allowance for Loan Loss as a
Percentage of Gross Vacation
Ownership Contract Receivables
2021
20.9
%
19.8
%
19.8
%
18.1
%
18.1
%
2020
25.0
%
24.4
%
23.8
%
21.8
%
21.8
%
2019
19.3
%
19.4
%
19.7
%
19.3
%
19.3
%
Note: Full year amounts and percentages may not compute due to
rounding. NM Not Meaningful
(a)
Includes Gross VOI sales under
the Company's Fee-for-Service sales. (See Table 6 for a
reconciliation of Net VOI sales to Gross VOI sales).
(b)
Represents provision for
estimated losses on vacation ownership contract receivables, which
is recorded as contra revenue to vacation ownership interest sales
on the Consolidated Statements of Income/(Loss).
(c)
The percentage was 18.0%,
excluding the release of $26 million of the COVID-19 related
provision during the period.
(d)
The percentage was 17.8%,
excluding the release of $21 million of the COVID-19 related
provision during the period.
(e)
The percentage was 14.1%,
excluding the release of $44 million of the COVID-19 related
provision during the period.
(f)
The percentage was 16.8%,
excluding the release of $91 million of the COVID-19 related
provision during the period.
(g)
The percentage was 17.3%,
excluding the release of $20 million of the COVID-19 related
provision during the period.
Table 3
(continued)
Travel + Leisure Co.
Operating Statistics: Travel and
Membership
The following operating statistics are the
significant drivers of the Company's revenues and therefore provide
an enhanced understanding of the Company's businesses: (a)
Year
Q1
Q2
Q3
Q4
Full Year
Transactions (in thousands)
Exchange
2021
354
314
256
257
1,182
Non-Exchange
2021
159
210
214
195
778
Total Transactions
2021
513
524
470
452
1,960
Exchange
2020
260
72
214
217
762
Non-Exchange
2020
141
44
142
131
458
Total Transactions
2020
401
116
356
348
1,220
Exchange
2019
444
377
367
304
1,493
Non-Exchange
2019
52
63
138
153
405
Total Transactions
2019
496
440
505
457
1,898
Revenue per transaction (in
dollars)
Exchange
2021
$
292
$
331
$
339
$
335
$
322
Non-Exchange
2021
$
182
$
231
$
214
$
184
$
205
Total Revenue per transaction
2021
$
258
$
291
$
282
$
270
$
275
Exchange
2020
$
279
$
540
$
300
$
330
$
324
Non-Exchange
2020
$
164
$
133
$
157
$
128
$
148
Total Revenue per transaction
2020
$
239
$
384
$
243
$
254
$
258
Exchange
2019
$
275
$
276
$
276
$
307
$
282
Non-Exchange
2019
$
216
$
185
$
172
$
165
$
177
Total Revenue per transaction
2019
$
269
$
263
$
247
$
259
$
259
Avg. Number of Exchange Members
(in thousands)
2021
3,576
3,582
3,895
3,831
3,721
2020
3,864
3,799
3,680
3,652
3,749
2019
3,875
3,893
3,895
3,884
3,887
Note: Full year amounts and percentages may not compute due to
rounding.
(a)
Includes the impact of
acquisitions from the acquisition dates forward.
Table 4
Travel + Leisure Co.
Revenue by Reportable Segment
(in millions)
2021
Q1
Q2
Q3
Q4
Full Year
Vacation Ownership
Net VOI Sales
$
172
$
294
$
344
$
366
$
1,176
Property Management Fees and Reimbursable
Revenues
157
161
171
182
671
Consumer Financing
98
102
103
100
404
Other Revenues
22
42
42
47
152
Total Vacation Ownership
449
599
660
695
2,403
Travel and Membership
Transaction Revenues
132
153
133
122
540
Subscription Revenues
41
43
43
48
176
Other Revenues
10
8
9
9
36
Total Travel and Membership
183
204
185
179
752
Total Reportable Segments
$
632
$
803
$
845
$
874
$
3,155
2020
Q1
Q2
Q3
Q4
Full Year
Vacation Ownership
Net VOI Sales
$
90
$
(13
)
$
196
$
231
$
505
Property Management Fees and Reimbursable
Revenues
170
122
146
145
583
Consumer Financing
127
119
115
107
467
Other Revenues
16
10
18
26
70
Total Vacation Ownership
403
238
475
509
1,625
Travel and Membership
Transaction Revenues
96
44
86
88
315
Subscription Revenues
44
33
43
40
160
Other Revenues
19
29
16
13
77
Total Travel and Membership
159
106
145
141
552
Total Reportable Segments
$
562
$
344
$
620
$
650
$
2,177
2019
Q1
Q2
Q3
Q4
Full Year
Vacation Ownership
Net VOI Sales
$
375
$
481
$
528
$
464
$
1,848
Property Management Fees and Reimbursable
Revenues
163
162
170
176
672
Consumer Financing
125
128
132
130
515
Other Revenues
12
31
20
24
87
Total Vacation Ownership
675
802
850
794
3,122
Travel and Membership
Transaction Revenues
133
116
125
118
492
Subscription Revenues
55
54
54
53
216
Vacation Rental Revenue
38
48
60
7
153
Other Revenues
22
24
24
14
83
Total Travel and Membership
248
242
263
192
944
Total Reportable Segments
$
923
$
1,044
$
1,113
$
986
$
4,066
Note: Full year amounts may not add across
due to rounding.
Table 5
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net Income/(Loss) to
Adjusted Net Income/(Loss) to
Adjusted EBITDA
(in millions, except diluted per
share amounts)
Three Months Ended December
31,
2021
EPS
Margin %
2020
EPS
Margin %
Net income attributable to TNL
shareholders
$
107
$
1.22
12.3
%
$
2
$
0.03
0.3
%
Loss on disposal of discontinued business,
net of income taxes
(3
)
(2
)
Net income from continuing
operations
$
110
$
1.26
12.6
%
$
4
$
0.05
0.6
%
Amortization of acquired intangibles
(a)
2
2
Restructuring costs
—
12
COVID-19 related costs (b)
—
6
Legacy items
(2
)
2
Unrealized gain on equity investment
(c)
(3
)
—
Impairments/(recovery) (d)
(5
)
2
Taxes (e)
2
—
Adjusted net income
$
104
$
1.19
12.0
%
$
28
$
0.32
4.3
%
Income taxes on adjusted net income
38
31
Interest expense
50
54
Depreciation
29
30
Stock-based compensation expense (f)
8
6
Interest income
(1
)
(1
)
Adjusted EBITDA
$
228
26.2
%
$
148
22.9
%
Diluted Shares Outstanding
87.4
86.6
Table 5
(continued)
Twelve Months Ended December
31,
2021
EPS
Margin %
2020
EPS
Margin %
Net income/(loss) attributable to TNL
shareholders
$
308
$
3.52
9.8
%
$
(255
)
$
(2.97
)
(11.8
) %
Loss on disposal of discontinued business,
net of income taxes
(5
)
(2
)
Net income/(loss) from continuing
operations
$
313
$
3.58
10.0
%
$
(253
)
$
(2.95
)
(11.7
) %
Amortization of acquired intangibles
(a)
9
9
Legacy items
4
4
COVID-19 related costs (b)
3
56
Exchange inventory write-off
—
48
Restructuring costs
(1
)
39
Unrealized gain on equity investment
(c)
(3
)
—
Impairments/(recovery) (d)
(5
)
57
Taxes (e)
(1
)
(40
)
Adjusted net income/(loss)
$
319
$
3.65
10.2
%
$
(80
)
$
(0.94
)
(3.7
) %
Income taxes on adjusted net
income/(loss)
117
17
Interest expense
198
192
Depreciation
115
117
Stock-based compensation expense (f)
32
20
Interest income
(3
)
(7
)
Adjusted EBITDA
$
778
24.8
%
$
259
12.0
%
Diluted Shares Outstanding
87.3
86.1
Amounts may not calculate due to rounding. The table above
reconciles certain non-GAAP financial measures to their closest
GAAP measure. The presentation of these adjustments is intended to
permit the comparison of particular adjustments as they appear in
the income statement in order to assist investors' understanding of
the overall impact of such adjustments. In addition to GAAP
financial measures, the Company provides adjusted net
income/(loss), adjusted EBITDA, adjusted EBITDA margin, and
adjusted diluted EPS to assist our investors in evaluating our
ongoing operating performance for the current reporting period and,
where provided, over different reporting periods, by adjusting for
certain items which in our view do not necessarily reflect ongoing
performance. We also internally use these measures to assess our
operating performance, both absolutely and in comparison to other
companies, and in evaluating or making selected compensation
decisions. These supplemental disclosures are in addition to GAAP
reported measures. Non-GAAP measures should not be considered a
substitute for, nor superior to, financial results and measures
determined or calculated in accordance with GAAP. Our presentation
of adjusted measures may not be comparable to similarly-titled
measures used by other companies. See "Presentation of Financial
Information" and table 9 for the definitions of these non-GAAP
measures.
(a)
Amortization of acquisition-related
intangible assets is excluded from adjusted net income/(loss) and
adjusted EBITDA.
(b)
Reflects severance and other employee
costs associated with layoffs due to the COVID-19 workforce
reduction offset in part by employee retention credits received in
connection with the U.S. CARES Act, ARPA and similar international
programs for wages paid to certain employees despite having
operations suspended. This amount does not include costs associated
with idle pay.
(c)
Represents the unrealized gain associated
with Vacasa equity acquired as part of the consideration for the
sale of North America vacation rentals. The total amount of
unrealized gain on this investment was $9 million for the year
ended December 31, 2021, of which $6 million is included in Asset
Impairments/(recovery) on the Consolidated Statements of
Income/(Loss) to offset the 2020 impairment recognized on this
investment.
(d)
Includes $5 million of bad debt expense
related to a note receivable for the twelve months ended December
31, 2020, included in Operating expenses on the Consolidated
Statements of Income/(Loss).
(e)
The amounts represent the tax effects on
the adjustments. In addition, during the three months ended
December 31, 2020, the amounts are partially offset by $3 million
of non-cash tax expense associated with COVID-19 related increases
to valuation allowances and $5 million of additional tax related to
the Company's former rentals businesses. In the twelve months ended
December 31, 2020, the amounts are partially offset by $9 million
of non-cash tax expense associated with COVID-19 related increases
to valuation allowances and $5 million of additional tax related to
the Company's former rentals businesses.
(f)
All stock-based compensation is excluded
from adjusted EBITDA.
Table 6
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net VOI Sales to Gross VOI Sales
(in millions)
The Company believes gross VOI sales
provide an enhanced understanding of the performance of its
vacation ownership business because it directly measures the sales
volume of this business during a given reporting period.
The following table provides a
reconciliation of Net VOI sales (see Table 4) to Gross VOI sales
(see Table 3):
Year
2021
Q1
Q2
Q3
Q4
Full Year
Net VOI sales
$
172
$
294
$
344
$
366
$
1,176
Loan loss provision
38
33
49
9
129
Gross VOI sales, net of Fee-for-Service
sales
210
327
393
375
1,305
Fee-for-Service sales
26
56
47
57
186
Gross VOI sales
$
236
$
383
$
440
$
432
$
1,491
2020
Net VOI sales
$
90
$
(13
)
$
196
$
231
$
505
Loan loss provision
315
30
45
25
415
Gross VOI sales, net of Fee-for-Service
sales
405
17
241
256
920
Fee-for-Service sales
8
1
15
25
47
Gross VOI sales
$
413
$
18
$
256
$
281
$
967
2019
Net VOI sales
$
375
$
481
$
528
$
464
$
1,848
Loan loss provision
109
129
135
106
479
Gross VOI sales, net of Fee-for-Service
sales
484
610
663
570
2,327
Fee-for-Service sales
—
16
—
12
28
Gross VOI sales
$
484
$
626
$
663
$
582
$
2,355
Note: Amounts may not add due to
rounding.
Table 7
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net Cash Provided by Operating Activities to Adjusted Free Cash
Flow
(in millions)
Twelve Months
Ended December 31,
2021
2020
Net cash provided by operating
activities
$
568
$
374
Property and equipment additions
(57
)
(69
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
(294
)
(333
)
Free cash flow
$
217
$
(28
)
Separation and other adjustments (a)
—
16
COVID-19 related adjustments (b)
6
47
Adjusted free cash flow (c)
$
223
$
35
(a)
Includes cash paid for separation-related
activities and transaction costs for acquisitions and
divestitures.
(b)
Includes cash paid for COVID-19 expenses
factored into the calculation of Adjusted EBITDA.
(c)
The Company had $93 million of net cash
used in investing and $1.29 billion of net cash used in financing
activities for the year ended December 31, 2021, and $65
million of net cash used in investing activities and $502 million
of net cash provided by financing activities for the year ended
December 31, 2020.
Table 8
Travel + Leisure Co.
COVID-19 Related Impacts
(in millions)
The tables below present the COVID-19
related impacts to our results of operations for three and twelve
months ended December 31, 2021, and the related classification
on the Consolidated Statements of Income/(Loss):
Three Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2021
Allowance for loan losses:
Provision
$
(44
)
$
—
$
—
$
(44
)
$
—
Vacation ownership interest sales
Recoveries
16
—
—
16
—
Cost of vacation ownership interests
Asset impairment recovery
—
(6
)
—
(6
)
(6
)
Asset impairments/(recovery)
Total COVID-19
$
(28
)
$
(6
)
$
—
$
(34
)
$
(6
)
Twelve Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2021
Allowance for loan losses:
Provision
$
(91
)
$
—
$
—
$
(91
)
$
—
Vacation ownership interest sales
Recoveries
33
—
—
33
—
Cost of vacation ownership interests
Employee compensation related and
other
3
—
1
4
3
COVID-19 related costs
Asset impairment recovery
—
(6
)
—
(6
)
(6
)
Asset impairments/(recovery)
Lease-related
(1
)
—
—
(1
)
(1
)
Restructuring
Total COVID-19
$
(56
)
$
(6
)
$
1
$
(61
)
$
(4
)
Table 8
(continued)
The tables below present the COVID-19
related impacts to our results of operations for three and twelve
months ended December 31, 2020, and the related classification
on the Consolidated Statements of Income/(Loss):
Three Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2020
Allowance for loan losses:
Provision
$
(20
)
$
—
$
—
$
(20
)
$
—
Vacation ownership interest sales
Recoveries
7
—
—
7
—
Cost of vacation ownership interests
Employee compensation related and
other
3
2
2
7
6
COVID-19 related costs
Asset impairments
1
—
1
2
2
Asset impairments/(recovery)
Lease-related
12
—
—
12
12
Restructuring
Total COVID-19
$
3
$
2
$
3
$
8
$
20
Twelve Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2020
Allowance for loan losses:
Provision
$
205
$
—
$
—
$
205
$
—
Vacation ownership interest sales
Recoveries
(48
)
—
—
(48
)
—
Cost of vacation ownership interests
Employee compensation related and
other
65
9
14
88
56
COVID-19 related costs
Asset impairments
21
34
1
56
56
Asset impairments/(recovery) and Operating
expenses
Exchange inventory write-off
—
48
—
48
48
Operating expenses
Lease-related
14
22
—
36
36
Restructuring
Total COVID-19
$
257
$
113
$
15
$
385
$
196
Table 9
Definitions
Adjusted Diluted
Earnings/(Loss) per Share: A non-GAAP measure, defined by
the Company as Adjusted net income/(loss) divided by the diluted
weighted average number of common shares.
Adjusted
EBITDA: A non-GAAP measure, defined by the Company as net
income/(loss) from continuing operations before depreciation and
amortization, interest expense (excluding consumer financing
interest), early extinguishment of debt, interest income (excluding
consumer financing revenues) and income taxes, each of which is
presented on the Consolidated Statements of Income. Adjusted EBITDA
also excludes stock-based compensation costs, separation and
restructuring costs, legacy items, transaction costs for
acquisitions and divestitures, impairments, gains and losses on
sale/disposition of business, and items that meet the conditions of
unusual and/or infrequent. Legacy items include the resolution of
and adjustments to certain contingent assets and liabilities
related to acquisitions of continuing businesses and dispositions,
including the separation of Wyndham Hotels and Cendant, and the
sale of the vacation rentals businesses. We believe that when
considered with GAAP measures, Adjusted EBITDA is useful to assist
our investors in evaluating our ongoing operating performance for
the current reporting period and, where provided, over different
reporting periods. We also internally use these measures to assess
our operating performance, both absolutely and in comparison to
other companies, and in evaluating or making selected compensation
decisions. Adjusted EBITDA should not be considered in isolation or
as a substitute for net income/(loss) or other income statement
data prepared in accordance with GAAP and our presentation of
Adjusted EBITDA may not be comparable to similarly-titled measures
used by other companies.
Adjusted EBITDA
Margin: A non-GAAP measure, represents Adjusted EBITDA as a
percentage of revenue.
Adjusted Free Cash
Flow: A non-GAAP measure, defined by the Company as net cash
provided by operating activities from continuing operations less
property and equipment additions (capital expenditures) plus the
sum of proceeds and principal payments of non-recourse vacation
ownership debt, while also adding back cash paid for transaction
costs for acquisitions and divestitures, separation adjustments
associated with the spin-off of Wyndham Hotels, and certain
adjustments related to COVID-19. A limitation of using Adjusted
free cash flow versus the GAAP measure of net cash provided by
operating activities as a means for evaluating TNL is that Adjusted
free cash flow does not represent the total cash movement for the
period as detailed in the consolidated statement of cash flows.
Adjusted Net
Income/(Loss): A non-GAAP measure, defined by the Company as
net income/(loss) from continuing operations adjusted to exclude
separation and restructuring costs, legacy items, transaction costs
for acquisitions and divestitures, amortization of
acquisition-related assets, debt modification costs, impairments,
gains and losses on sale/disposition of business, and items that
meet the conditions of unusual and/or infrequent and the tax effect
of such adjustments. Legacy items include the resolution of and
adjustments to certain contingent assets and liabilities related to
acquisitions of continuing businesses and dispositions, including
the separation of Wyndham Hotels and Cendant, and the sale of the
vacation rentals businesses.
Average Number of
Exchange Members: Represents paid members in our vacation
exchange programs who are considered to be in good standing.
Free Cash Flow
(FCF): A non-GAAP measure, defined by TNL as net cash
provided by operating activities from continuing operations less
property and equipment additions (capital expenditures) plus the
sum of proceeds and principal payments of non-recourse vacation
ownership debt. TNL believes FCF to be a useful operating
performance measure to evaluate the ability of its operations to
generate cash for uses other than capital expenditures and, after
debt service and other obligations, its ability to grow its
business through acquisitions and equity investments, as well as
its ability to return cash to shareholders through dividends and
share repurchases. A limitation of using FCF versus the GAAP
measure of net cash provided by operating activities as a means for
evaluating TNL is that FCF does not represent the total cash
movement for the period as detailed in the consolidated statement
of cash flows.
Gross Vacation
Ownership Interest Sales: A non-GAAP measure, represents
sales of vacation ownership interests (VOIs), including sales under
the fee-for-service program before the effect of loan loss
provisions. We believe that Gross VOI sales provide an enhanced
understanding of the performance of our vacation ownership business
because it directly measures the sales volume of this business
during a given reporting period.
Leverage
Ratio: The Company calculates leverage ratio as net debt
divided by Adjusted EBITDA as defined in the credit agreement.
Net Debt: Net
debt equals total debt outstanding, less non-recourse vacation
ownership debt and cash and cash equivalents.
New owner sales,
volume mix: Represents VOI sales (tour generated plus
telephonic) to first time buyers as a percentage of total VOI
sales.
New owner sales,
transactions mix: Represents the number of first time buyer
transactions as a percentage of the total number of VOIs sold
during the period.
Tours:
Represents the number of tours taken by guests in our efforts to
sell VOIs.
Travel and
Membership Revenue per Transaction: Represents transactional
revenue divided by transactions, provided in two categories;
Exchange, which is primarily RCI, and non-Exchange.
Travel and
Membership Transactions: Represents the number of vacation
bookings recognized as revenue during the period, net of
cancellations, provided in two categories; Exchange, which is
primarily RCI, and non-Exchange.
Volume Per Guest
(VPG): Represents Gross VOI sales (excluding tele-sales
upgrades, which are non-tour upgrade sales) divided by the number
of tours. The Company has excluded non-tour upgrade sales in the
calculation of VPG because non-tour upgrade sales are generated by
a different marketing channel.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223005484/en/
Investors: Christopher Agnew Senior Vice President,
FP&A and Investor Relations (407) 626-4050
Christopher.Agnew@travelandleisure.com Media: Steven
Goldsmith Corporate Communications (407) 626-5882
Steven.Goldsmith@travelandleisure.com
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