Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported second quarter 2022
financial results for the three months ended June 30, 2022.
Highlights and outlook include:
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Travel + Leisure Co. (NYSE:TNL), the
world’s leading membership and leisure travel company, today
reported second quarter 2022 financial results for the three months
ended June 30, 2022. (Graphic: Business Wire)
- Net income of $100 million, $1.16 diluted earnings per
share, on net revenue of $922 million
- Adjusted EBITDA of $230 million and adjusted diluted
earnings per share of $1.27 (1)
- Net cash provided by operating activities of $230 million
and adjusted free cash flow of $121 million for the six months
ended June 30, 2022
- Expects full year adjusted EBITDA from $860 million to $880
million and third quarter adjusted EBITDA from $230 million to $240
million
- Repurchased $83 million of common stock in the second
quarter and $128 million in the first half of 2022
- Record Volume per Guest (VPG) for the second consecutive
quarter
- Management will recommend a third quarter dividend of $0.40
per share for approval by the Board of Directors
“Our strong top and bottom line results reflect the resiliency
of our business model and the desire of our customers to prioritize
vacations. Vacation ownership sales to new and existing owners were
robust, with record-setting sales volume per guest driving our
performance for the quarter,” said Michael D. Brown, President and
CEO of Travel + Leisure Co.
“Bookings at our vacation resorts in the second half of the year
remain above 2019 driven by a similar number of reservations with a
longer length of stay, reflecting the strength of consumer demand
for leisure travel in the U.S. This gives us the confidence to
raise our guidance for the full year.”
(1) This press release includes adjusted
EBITDA, adjusted diluted EPS, adjusted free cash flow, gross VOI
sales and adjusted net income, 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 to the most directly comparable 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
Vacation Ownership
$ in millions
Q2 2022
Q2 2021
% change
Revenue
$735
$604
22 %
Adjusted EBITDA
$187
$137
36 %
Vacation Ownership revenue increased 22% to $735 million in the
second quarter of 2022 compared to the same period in the prior
year. Gross vacation ownership interest (VOI) sales were $527
million compared to $383 million in the prior year and tours were
148,000 during the quarter compared to 117,000 in the same period
last year. VPG increased 11% to $3,489.
Second quarter adjusted EBITDA was $187 million compared to $137
million in the prior year period. The increase was driven by higher
Gross VOI sales due to the ongoing recovery of operations from
COVID-19, partially offset by an adjustment in the prior year to
the COVID-19 related allowance for loan losses. The second quarter
2021 COVID-19 related allowance adjustment resulted in a $26
million increase to revenue and a $16 million net positive impact
to Adjusted EBITDA.
Travel and Membership
$ in millions
Q2 2022
Q2 2021
% change
Revenue
$188
$194
(3) %
Adjusted EBITDA
$64
$71
(10) %
Travel and Membership revenue decreased 3% to $188 million in
the second quarter of 2022 compared to the same period in the prior
year. The decrease was driven by the impact of COVID-19 with
bookings shifting from the first quarter into the second quarter of
2021.
Second quarter Adjusted EBITDA was $64 million compared to $71
million in the prior year due to the revenue decrease and higher
staffing and marketing costs to support new travel club
launches.
Balance Sheet and
Liquidity
Net Debt — As of June 30, 2022, the Company had net debt
of $3.1 billion comprised of $3.4 billion of corporate debt and
$241 million of cash and cash equivalents. Corporate debt excludes
$1.8 billion of non-recourse debt related to the securitized notes
receivables portfolio. The Company's leverage ratio for covenant
purposes was 3.7x. At the end of the second quarter, the Company
had $1.2 billion of liquidity in cash and cash equivalents and
revolving credit facility availability.
Timeshare Receivables Financing — The Company closed on a
$275 million term securitization on July 21, 2022 with a weighted
average coupon of 5.7% and a 90.5% advance rate.
Cash Flow — For the six months ended June 30, 2022, net
cash provided by operating activities was $230 million, compared to
$290 million in the prior year period. Adjusted free cash flow was
$121 million for the six months ended June 30, 2022 compared to $56
million in the same period of 2021.
Share Repurchases — During the second quarter of 2022,
the Company repurchased 1.7 million shares of common stock for $83
million at a weighted average price of $48.12 per share. In April
2022, the Board of Directors approved an increase to the authorized
capacity of the Company's share repurchase program of $500 million.
As of June 30, 2022, the Company had $700 million of remaining
availability under its share repurchase program.
Dividend — The Company paid $35 million ($0.40 per share)
in cash dividends on June 30, 2022 to shareholders of record as of
June 15, 2022. Management will recommend a third quarter dividend
of $0.40 per share for approval by the Company’s Board of Directors
in August 2022.
Outlook
The Company is providing guidance regarding expectations for the
2022 full year:
- Adjusted EBITDA of $860 million to $880 million
- Gross VOI sales of $1.9 billion to $2.0 billion
- VPG range of $3,300 to $3,400
The Company is providing guidance regarding expectations for the
third quarter 2022:
- Adjusted EBITDA of $230 million to $240 million
- Gross VOI sales of $530 million to $550 million
- VPG range of $3,300 to $3,400
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. Where one or more of the
currently unavailable items is applicable, such items could be
material, individually or in the aggregate, to GAAP reported
results.
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.
EDT. 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
800-891-3968, 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. EDT today. Additionally, a telephone
replay will be available for four days beginning at 12:00 p.m. EDT
today at 800-925-9356.
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 6, 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 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 6 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,” “intends” 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,
unemployment rates and consumer sentiment, terrorism or acts of gun
violence, political strife, war, including hostilities in Ukraine,
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 for the fiscal year
ended December 31, 2021, filed with the SEC on February 23, 2022.
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
- Condensed Consolidated Statements of Income (Unaudited)
- Summary Data Sheet
- Non-GAAP Measure: Reconciliation of Net Income to Adjusted Net
Income to Adjusted EBITDA
- Non-GAAP Measure: Reconciliation of Net Cash Provided by
Operating Activities to Adjusted Free Cash Flow
- COVID-19 Impacts
- Definitions
Table 1
Travel + Leisure Co.
Condensed Consolidated Statements
of Income (Unaudited)
(in millions, except per share
amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net revenues
Service and membership fees
$
410
$
388
$
812
$
736
Net VOI sales
400
294
697
466
Consumer financing
99
102
198
201
Other
13
13
24
22
Net revenues
922
797
1,731
1,425
Expenses
Operating
404
349
785
639
Cost of vacation ownership interests
46
41
86
62
Consumer financing interest
17
20
34
44
General and administrative
121
112
241
218
Marketing
119
92
213
161
Depreciation and amortization
31
31
61
63
Restructuring
1
—
8
(1
)
COVID-19 related costs
—
1
2
2
Asset recoveries, net
(2
)
—
(1
)
—
Total expenses
737
646
1,429
1,188
Operating income
185
151
302
237
Interest expense
47
47
94
100
Other expense/(income), net
7
—
4
(1
)
Interest (income)
(1
)
(1
)
(2
)
(1
)
Income before income taxes
132
105
206
139
Provision for income taxes
32
31
55
37
Net income from continuing
operations
100
74
151
102
Loss on disposal of discontinued business,
net of income taxes
—
(2
)
—
(2
)
Net income attributable to TNL
shareholders
$
100
$
72
$
151
$
100
Basic earnings per share
Continuing operations
$
1.17
$
0.85
$
1.76
$
1.18
Discontinued operations
—
(0.02
)
—
(0.02
)
$
1.17
$
0.83
$
1.76
$
1.16
Diluted earnings per share
Continuing operations
$
1.16
$
0.84
$
1.75
$
1.17
Discontinued operations
—
(0.02
)
—
(0.02
)
$
1.16
$
0.82
$
1.75
$
1.15
Weighted average shares
outstanding
Basic
85.0
86.5
85.5
86.4
Diluted
85.7
87.4
86.4
87.1
Table 2
Travel + Leisure Co.
Summary Data Sheet
(in millions, except per share
amounts, unless otherwise indicated)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
Change
2022
2021
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
100
$
72
39
%
$
151
$
100
51
%
Diluted earnings per share
$
1.16
$
0.82
41
%
$
1.75
$
1.15
52
%
Net income from continuing operations
$
100
$
74
35
%
$
151
$
102
48
%
Diluted earnings per share from continuing
operations
$
1.16
$
0.84
38
%
$
1.75
$
1.17
50
%
Net income margin
10.8
%
9.0
%
8.7
%
7.0
%
Adjusted Earnings
Adjusted EBITDA
$
230
$
193
19
%
$
399
$
322
24
%
Adjusted net income
$
109
$
77
42
%
$
169
$
110
54
%
Adjusted diluted earnings per share
$
1.27
$
0.88
44
%
$
1.95
$
1.27
53
%
Segment
Results
Net Revenues
Vacation Ownership
$
735
$
604
22
%
$
1,344
$
1,057
27
%
Travel and Membership
188
194
(3
) %
389
370
5
%
Corporate and other
(1
)
(1
)
(2
)
(2
)
Total
$
922
$
797
16
%
$
1,731
$
1,425
21
%
Adjusted EBITDA
Vacation Ownership
$
187
$
137
36
%
$
291
$
204
43
%
Travel and Membership
64
71
(10
) %
146
146
—
%
Segment Adjusted EBITDA
251
208
437
350
Corporate and other
(21
)
(15
)
(38
)
(28
)
Total Adjusted EBITDA
$
230
$
193
19
%
$
399
$
322
24
%
Adjusted EBITDA margin
24.9
%
24.2
%
23.1
%
22.6
%
Note: Amounts may not calculate due to
rounding. See "Presentation of Financial Information" and Table 6
for Non-GAAP definitions. For a full reconciliation of non-GAAP
financial measures to the most directly comparable GAAP financial
measures, refer to Table 3.
Table 2
(continued)
Travel + Leisure Co.
Summary Data Sheet
(in millions, unless otherwise
indicated)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
Change
2022
2021
Change
Vacation
Ownership
Net VOI sales
$
400
$
294
36
%
$
697
$
466
50
%
Loan loss provision
76
33
130
%
125
71
76
%
Gross VOI sales, net of Fee-for-Service
sales
476
327
46
%
821
537
53
%
Fee-for-Service sales
51
56
(9
) %
85
82
4
%
Gross VOI sales
$
527
$
383
38
%
$
906
$
619
46
%
Tours (in thousands)
148
117
26
%
256
193
33
%
VPG (in dollars)
$
3,489
$
3,151
11
%
$
3,441
$
3,031
14
%
Tour generated VOI sales
$
516
$
368
40
%
$
882
$
586
51
%
Telesales and other
11
15
(27
) %
24
33
(27
) %
Gross VOI sales
$
527
$
383
38
%
$
906
$
619
46
%
Net VOI sales
$
400
$
294
36
%
$
697
$
466
50
%
Property management revenue
189
166
14
%
374
327
14
%
Consumer financing
99
102
(3
) %
198
201
(1
) %
Other (a)
47
42
12
%
75
63
19
%
Total Vacation Ownership
revenue
$
735
$
604
22
%
$
1,344
$
1,057
27
%
Travel and
Membership (b)
Avg. number of exchange members (in
thousands)
3,517
3,582
(2
) %
3,543
3,579
(1
) %
Transactions (in thousands)
253
288
(12
) %
564
605
(7
) %
Revenue per transaction (in dollars)
$
343
$
329
4
%
$
334
$
312
7
%
Exchange transaction revenue
$
86
$
95
(9
) %
$
188
$
189
(1
) %
Transactions (in thousands)
190
169
12
%
356
303
17
%
Revenue per transaction (in dollars)
$
257
$
284
(9
) %
$
264
$
261
1
%
Travel Club transaction revenue
$
49
$
48
2
%
$
94
$
79
19
%
Transactions (in thousands)
443
457
(3
) %
920
908
1
%
Revenue per transaction (in dollars)
$
306
$
312
(2
) %
$
307
$
295
4
%
Travel and Membership transaction
revenue
$
135
$
143
(6
) %
$
282
$
268
5
%
Transaction revenue
$
135
$
143
(6
) %
$
282
$
268
5
%
Subscription revenue
45
43
5
%
90
84
7
%
Other (c)
8
8
—
%
17
18
(6
) %
Total Travel and Membership
revenue
$
188
$
194
(3
) %
$
389
$
370
5
%
Note: Amounts may not compute due to rounding.
Due to changes in organizational structure in the second quarter
of 2022, the management of Extra Holidays was transitioned to the
Vacation Ownership segment. As such, the Company reclassified the
results of Extra Holidays, which was previously reported within the
Travel and Membership segment, into the Vacation Ownership segment.
Prior period segment information has been updated to reflect this
change.
(a)
Includes fee-for-service
commission revenues and other ancillary revenues.
(b)
In 2022, the Travel and
Membership segment determined that certain rental transactions for
travelers that were not RCI members are more closely aligned with
Travel Club transactions (previously “Non-exchange”). Prior period
results reflect the reclassification of this activity from Exchange
to Travel Club.
(c)
Primarily related to cancellation
fees, commissions and other ancillary revenue.
Table 3
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net Income to Adjusted Net Income to Adjusted EBITDA
(in millions, except diluted per
share amounts)
Three Months Ended June
30,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
100
$
1.16
10.8
%
$
72
$
0.82
9.0
%
Loss on disposal of discontinued business,
net of income taxes
—
2
Net income from continuing
operations
$
100
$
1.16
10.8
%
$
74
$
0.84
9.3
%
Unrealized loss on equity investment
8
—
Amortization of acquired intangibles
(a)
3
2
Restructuring
1
—
Legacy items
1
1
COVID-19 related costs
—
1
Asset recoveries, net (b)
(1
)
—
Taxes (c)
(3
)
(1
)
Adjusted net income
$
109
$
1.27
11.8
%
$
77
$
0.88
9.7
%
Income taxes on adjusted net income
35
32
Interest expense
47
47
Depreciation
28
29
Stock-based compensation expense (d)
12
9
Interest income
(1
)
(1
)
Adjusted EBITDA
$
230
24.9
%
$
193
24.2
%
Diluted Shares Outstanding
85.7
87.4
Six Months Ended June
30,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
151
$
1.75
8.7
%
$
100
$
1.15
7.0
%
Loss on disposal of discontinued business,
net of income taxes
—
2
Net income from continuing
operations
$
151
$
1.75
8.7
%
$
102
$
1.17
7.2
%
Restructuring (e)
8
(1
)
Unrealized loss on equity investment
8
—
Amortization of acquired intangibles
(a)
5
5
COVID-19 related costs
2
2
Legacy items
2
4
Asset recoveries, net (b)
(1
)
—
Taxes (c)
(6
)
(2
)
Adjusted net income
$
169
$
1.95
9.8
%
$
110
$
1.27
7.7
%
Income taxes on adjusted net income
61
39
Interest expense
94
100
Depreciation
56
58
Stock-based compensation expense (d)
21
16
Interest income
(2
)
(1
)
Adjusted EBITDA
$
399
23.1
%
$
322
22.6
%
Diluted Shares Outstanding
86.4
87.1
Amounts may not calculate due to rounding. The tables above
reconcile 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,
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 6 for the definitions of these non-GAAP measures.
(a)
Amortization of
acquisition-related intangible assets is excluded from adjusted net
income and adjusted EBITDA.
(b)
Includes $1 million of inventory
impairments for the three and six months ended June 30, 2022,
included in Cost of vacation ownership interests on the Condensed
Consolidated Statements of Income.
(c)
Represents the tax effects on the
adjustments.
(d)
All stock-based compensation is
excluded from adjusted EBITDA.
(e)
Includes $3 million of
stock-based compensation expenses for the six months ended June 30,
2022 associated with the 2022 restructuring.
Table 4
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net Cash Provided by Operating Activities to Adjusted Free Cash
Flow
(in millions)
Six Months Ended June
30,
2022
2021
Net cash provided by operating
activities
$
230
$
290
Property and equipment additions
(24
)
(25
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
(87
)
(213
)
Free cash flow
$
119
$
52
COVID-19 related adjustments (a)
2
4
Adjusted free cash flow (b)
$
121
$
56
(a)
Includes cash paid for COVID-19
expenses factored into the calculation of Adjusted EBITDA.
(b)
The Company had $29 million of
net cash used in investing activities and $315 million of net cash
used in financing activities for the six months ended June 30,
2022, and $62 million of net cash used in investing activities and
$1.1 billion of net cash used in financing activities for the six
months ended June 30, 2021.
Table 5
Travel + Leisure Co.
COVID-19 Related Impacts
(in millions)
The table below presents the COVID-19 related impacts on our
results of operations for the six months ended June 30, 2022, and
the related classification on the Condensed Consolidated Statements
of Income. There were no COVID-19 related impacts recognized during
the three months ended June 30, 2022.
Six Months Ended
Vacation Ownership
Travel and Membership
Corporate & Other
Consolidated
Non-GAAP Adjustments
Income Statement
Classification
June 30, 2022
Employee compensation related and
other
$
—
$
—
$
2
$
2
$
2
COVID-19 related costs
Total COVID-19
$
—
$
—
$
2
$
2
$
2
The tables below present the COVID-19 related impacts on our
results of operations for the three and six months ended June 30,
2021, and the related classification on the Condensed Consolidated
Statements of Income:
Three Months Ended
Vacation Ownership
Travel and Membership
Corporate & Other
Consolidated
Non-GAAP Adjustments
Income Statement
Classification
June 30, 2021
Allowance for loan losses:
Provision
$
(26
)
$
—
$
—
$
(26
)
$
—
Vacation ownership interest
sales
Recoveries
10
—
—
10
—
Cost of vacation ownership
interests
Employee compensation related and
other
1
—
—
1
1
COVID-19 related costs
Total COVID-19
$
(15
)
$
—
$
—
$
(15
)
$
1
Six Months Ended
Vacation Ownership
Travel and Membership
Corporate & Other
Consolidated
Non-GAAP Adjustments
Income Statement
Classification
June 30, 2021
Allowance for loan losses:
Provision
$
(26
)
$
—
$
—
$
(26
)
$
—
Vacation ownership interest
sales
Recoveries
10
—
—
10
—
Cost of vacation ownership
interests
Employee compensation related and
other
1
—
1
2
2
COVID-19 related costs
Lease related
(1
)
—
—
(1
)
(1
)
Restructuring
Total COVID-19
$
(16
)
$
—
$
1
$
(15
)
$
1
Table 6
Definitions
Adjusted Diluted
Earnings per Share: A non-GAAP measure, defined by the
Company as Adjusted net income divided by the diluted weighted
average number of common shares. Adjusted Diluted Earnings per
Share is useful to assist our investors in evaluating our ongoing
operating performance for the current reporting period and, where
provided, over different reporting periods.
Adjusted
EBITDA: A non-GAAP measure, defined by the Company as net
income 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 Condensed 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 EBITDA Margin is useful to assist
our investors in evaluating our ongoing operating performance for
the current reporting period and, where provided, over different
reporting periods.
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. 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
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 Free Cash
Flow Conversion: Adjusted free cash flow as a percentage of
Adjusted EBITDA. Forward-looking outlook regarding Adjusted Free
Cash Flow Conversion is provided only on a non-GAAP basis because
not all of the information necessary for a quantitative
reconciliation is available without unreasonable effort.
Adjusted Net
Income: A non-GAAP measure, defined by the Company as net
income 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. Adjusted Net Income is useful to assist our investors
in evaluating our ongoing operating performance for the current
reporting period and, where provided, over different reporting
periods.
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.
Tours:
Represents the number of tours taken by guests in our efforts to
sell VOIs.
Travel and
Membership Revenue per Transaction: Represents transaction
revenue divided by transactions, provided in two categories;
Exchange, which is primarily RCI, and Travel Club.
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 Travel Club.
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. We believe that VPG provides an
enhanced understanding of the performance of our Vacation Ownership
business because it directly measures the efficiency of its tour
selling efforts during a given reporting period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005293/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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