Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported third quarter 2022
financial results for the three months ended September 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 third quarter 2022 financial results for the three months
ended September 30, 2022.
- Net income of $116 million, $1.38 diluted earnings per
share, on net revenue of $937 million
- Adjusted EBITDA of $234 million and adjusted diluted
earnings per share of $1.28 (1)
- Net cash provided by operating activities of $267 million
and adjusted free cash flow of $195 million for the nine months
ended September 30, 2022
- Expects full year adjusted EBITDA from $855 million to $865
million
- Repurchased $115 million of common stock in the third
quarter and $243 million for the nine months ended September 30,
2022
- Management will recommend a fourth quarter dividend of $0.40
per share for approval by the Board of Directors
- Executed $250 million term securitization on October 20,
2022
“Our third quarter results and outlook for the remainder of the
year clearly demonstrate the strength of leisure travel and the
strong desire for new and existing timeshare owners to buy, use,
and upgrade their membership,” said Michael D. Brown, president and
CEO of Travel + Leisure Co.
“Our Vacation Ownership segment is performing as well as it ever
has, driven by VPG 45% higher than 2019. The strength in VPG
reflects the value our consumer sees in the timeshare product, with
strong relative value to hotel and alternative accommodations.”
(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
Q3 2022
Q3 2021
% change
Revenue
$754
$665
13 %
Adjusted EBITDA
$188
$181
4 %
Vacation Ownership revenue increased 13% to $754 million in the
third quarter of 2022 compared to the same period in the prior
year. Gross vacation ownership interest (VOI) sales were $555
million compared to $440 million in the prior year and tours were
158,000 during the quarter compared to 129,000 in the same period
last year. VPG increased 5% to $3,393.
Third quarter adjusted EBITDA was $188 million compared to $181
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 third quarter
2021 COVID-19 related allowance adjustment resulted in a $21
million increase to revenue and a $13 million net positive impact
to Adjusted EBITDA.
Travel and Membership
$ in millions
Q3 2022
Q3 2021
% change
Revenue
$183
$175
5 %
Adjusted EBITDA
$65
$64
2 %
Travel and Membership revenue increased 5% to $183 million in
the third quarter of 2022 compared to the same period in the prior
year, primarily due to transaction growth.
Third quarter Adjusted EBITDA was $65 million compared to $64
million in the prior year due to the revenue increase partially
offset by higher staffing and marketing costs to support new travel
club launches.
Balance Sheet and
Liquidity
Net Debt — As of September 30, 2022, the Company had net
debt of $3.2 billion comprised of $3.4 billion of corporate debt
and $169 million of cash and cash equivalents. Corporate debt
excludes $1.9 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 third
quarter, the Company had $1.2 billion of liquidity in cash and cash
equivalents and revolving credit facility availability.
Timeshare Receivables Financing — On July 21, 2022, the
Company closed on a $275 million term securitization transaction
with a weighted average coupon of 5.7% and a 90.5% advance rate.
Subsequent to the end of the quarter, on October 20, 2022, the
Company closed on an additional $250 million term securitization
transaction with a weighted average coupon of 6.9% and a 87.5%
advance rate.
Cash Flow — For the nine months ended September 30, 2022,
net cash provided by operating activities was $267 million,
compared to $435 million in the prior year period. Adjusted free
cash flow was $195 million for the nine months ended September 30,
2022 compared to $128 million in the same period of 2021.
Share Repurchases — During the third quarter of
2022, the Company repurchased 2.8 million shares of common stock
for $115 million at a weighted average price of $41.76 per share.
As of September 30, 2022, the Company had $585 million of remaining
availability under its share repurchase program.
Dividend — The Company paid $33 million ($0.40 per share)
in cash dividends on September 30, 2022 to shareholders of record
as of September 15, 2022. Management will recommend a fourth
quarter dividend of $0.40 per share for approval by the Company’s
Board of Directors in November 2022.
Outlook
The Company is providing guidance regarding expectations for the
2022 full year:
- Adjusted EBITDA of $855 million to $865 million
- Gross VOI sales of $1.95 billion to $2.0 billion
- VPG of approximately $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
travelandleisureco.com/investors, or by dialing 877-733-4794 ten
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 seven
days beginning at 12:00 p.m. EDT today at 877-660-6853.
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,” and 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,
inflation and potential recessionary impacts, unemployment rates,
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; rising
interest rates 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 Related Impacts
- Definitions
Table 1
Travel + Leisure Co. Condensed
Consolidated Statements of Income (Unaudited) (in millions, except
per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Net revenues
Service and membership fees
$
410
$
378
$
1,222
$
1,114
Net VOI sales
403
344
1,099
810
Consumer financing
104
103
302
304
Other
20
14
45
36
Net revenues
937
839
2,668
2,264
Expenses
Operating
417
352
1,202
992
Cost of vacation ownership interests
39
43
125
105
Consumer financing interest
20
19
55
63
Marketing
125
101
337
261
General and administrative
117
106
358
325
Depreciation and amortization
30
31
91
93
Restructuring
—
—
8
(1
)
COVID-19 related costs
—
1
2
3
Asset recoveries, net
—
—
(1
)
—
Total expenses
748
653
2,177
1,841
Operating income
189
186
491
423
Interest expense
48
47
143
147
Interest (income)
(2
)
(1
)
(3
)
(1
)
Other (income), net
(19
)
—
(16
)
(2
)
Income before income taxes
162
140
367
279
Provision for income taxes
46
39
101
76
Net income from continuing
operations
116
101
266
203
Loss on disposal of discontinued business,
net of income taxes
—
—
—
(2
)
Net income attributable to TNL
shareholders
$
116
$
101
$
266
$
201
Basic earnings per share
Continuing operations
$
1.39
$
1.16
$
3.15
$
2.35
Discontinued operations
—
—
—
(0.02
)
$
1.39
$
1.16
$
3.15
$
2.33
Diluted earnings per share
Continuing operations
$
1.38
$
1.15
$
3.12
$
2.33
Discontinued operations
—
—
—
(0.03
)
$
1.38
$
1.15
$
3.12
$
2.30
Weighted average shares
outstanding
Basic
83.0
86.6
84.6
86.5
Diluted
83.6
87.4
85.5
87.3
Table 2
Travel + Leisure Co. Summary Data
Sheet (in millions, except per share amounts, unless otherwise
indicated)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
Change
2022
2021
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
116
$
101
15
%
$
266
$
201
32
%
Diluted earnings per share
$
1.38
$
1.15
20
%
$
3.12
$
2.30
36
%
Net income from continuing operations
$
116
$
101
15
%
$
266
$
203
31
%
Diluted earnings per share from continuing
operations
$
1.38
$
1.15
20
%
$
3.12
$
2.33
34
%
Net income margin
12.4
%
12.0
%
10.0
%
8.9
%
Adjusted Earnings
Adjusted EBITDA
$
234
$
228
3
%
$
634
$
550
15
%
Adjusted net income
$
107
$
104
3
%
$
275
$
214
29
%
Adjusted diluted earnings per share
$
1.28
$
1.19
8
%
$
3.22
$
2.46
31
%
Segment
Results
Net Revenues
Vacation Ownership
$
754
$
665
13
%
$
2,098
$
1,722
22
%
Travel and Membership
183
175
5
%
572
544
5
%
Corporate and other
—
(1
)
(2
)
(2
)
Total
$
937
$
839
12
%
$
2,668
$
2,264
18
%
Adjusted EBITDA
Vacation Ownership
$
188
$
181
4
%
$
480
$
386
24
%
Travel and Membership
65
64
2
%
211
209
1
%
Segment Adjusted EBITDA
253
245
691
595
Corporate and other
(19
)
(17
)
(57
)
(45
)
Total Adjusted EBITDA
$
234
$
228
3
%
$
634
$
550
15
%
Adjusted EBITDA margin
25.0
%
27.2
%
23.8
%
24.3
%
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 September
30,
Nine Months Ended September
30,
2022
2021
Change
2022
2021
Change
Vacation
Ownership
Net VOI sales
$
403
$
344
17
%
$
1,099
$
810
36
%
Loan loss provision
91
49
86
%
216
120
80
%
Gross VOI sales, net of Fee-for-Service
sales
494
393
26
%
1,315
930
41
%
Fee-for-Service sales
61
47
30
%
146
129
13
%
Gross VOI sales
$
555
$
440
26
%
$
1,461
$
1,059
38
%
Tours (in thousands)
158
129
22
%
415
323
28
%
VPG (in dollars)
$
3,393
$
3,233
5
%
$
3,423
$
3,112
10
%
Tour generated VOI sales
$
537
$
418
28
%
$
1,419
$
1,004
41
%
Telesales and other
18
22
(18
) %
42
55
(24
) %
Gross VOI sales
$
555
$
440
26
%
$
1,461
$
1,059
38
%
Net VOI sales
$
403
$
344
17
%
$
1,099
$
810
36
%
Property management revenue
191
176
9
%
565
503
12
%
Consumer financing
104
103
1
%
302
304
(1
) %
Other (a)
56
42
33
%
132
105
26
%
Total Vacation Ownership
revenue
$
754
$
665
13
%
$
2,098
$
1,722
22
%
Travel and
Membership (b)
Avg. number of exchange members (in
thousands)
3,501
3,895
(10
) %
3,529
3,684
(4
) %
Transactions (in thousands)
250
231
8
%
813
836
(3
) %
Revenue per transaction (in dollars)
$
334
$
344
(3
) %
$
334
$
321
4
%
Exchange transaction revenue
$
84
$
79
6
%
$
272
$
268
1
%
Transactions (in thousands)
189
172
10
%
560
476
18
%
Revenue per transaction (in dollars)
$
239
$
248
(4
) %
$
248
$
256
(3
) %
Travel Club transaction revenue
$
45
$
43
5
%
$
139
$
122
14
%
Transactions (in thousands)
439
403
9
%
1,373
1,312
5
%
Revenue per transaction (in dollars)
$
293
$
303
(3
) %
$
299
$
297
1
%
Travel and Membership transaction
revenue
$
129
$
122
6
%
$
411
$
390
5
%
Transaction revenue
$
129
$
122
6
%
$
411
$
390
5
%
Subscription revenue
47
43
9
%
137
127
8
%
Other (c)
7
10
(30
) %
24
27
(11
) %
Total Travel and Membership
revenue
$
183
$
175
5
%
$
572
$
544
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”). It was also determined
that the presentation of transactions for Travel Club would be more
reflective of how members use the club if it included add-on
vacation travel bookings, such as car rentals. These changes are
reflected in all periods presented.
(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 September
30,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
116
$
1.38
12.4
%
$
101
$
1.15
12.0
%
Amortization of acquired intangibles
(a)
2
2
COVID-19 related costs
—
1
Legacy items
(1
)
2
Gain on equity investment
(3
)
—
Fair value change in contingent
consideration
(10
)
—
Taxes (b)
3
(1
)
Adjusted net income
$
107
$
1.28
11.4
%
$
104
$
1.19
12.4
%
Income taxes on adjusted net income
43
41
Interest expense
48
47
Depreciation
28
29
Stock-based compensation expense (c)
10
8
Interest income
(2
)
(1
)
Adjusted EBITDA
$
234
25.0
%
$
228
27.2
%
Diluted Shares Outstanding
83.6
87.4
Nine Months Ended September
30,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
266
$
3.12
10.0
%
$
201
$
2.30
8.9
%
Loss on disposal of discontinued business,
net of income taxes
—
2
Net income from continuing
operations
$
266
$
3.12
10.0
%
$
203
$
2.33
9.0
%
Restructuring (d)
8
(1
)
Amortization of acquired intangibles
(a)
7
7
Loss on equity investment
5
—
COVID-19 related costs
2
3
Legacy items
1
6
Asset recoveries, net (e)
(1
)
—
Fair value change in contingent
consideration
(10
)
—
Taxes (b)
(3
)
(4
)
Adjusted net income
$
275
$
3.22
10.3
%
$
214
$
2.46
9.5
%
Income taxes on adjusted net income
104
80
Interest expense
143
147
Depreciation
84
86
Stock-based compensation expense (c)
31
24
Interest income
(3
)
(1
)
Adjusted EBITDA
$
634
23.8
%
$
550
24.3
%
Diluted Shares Outstanding
85.5
87.3
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)
Represents the tax effects on the
adjustments.
(c)
All stock-based compensation is excluded
from adjusted EBITDA.
(d)
Includes $3 million of stock-based
compensation expenses for the nine months ended September 30, 2022
associated with the 2022 restructuring.
(e)
Includes $1 million of inventory
impairments for the nine months ended September 30, 2022, included
in Cost of vacation ownership interests on the Condensed
Consolidated Statements of Income.
Table 4
Travel + Leisure Co. Non-GAAP
Measure: Reconciliation of Net Cash Provided by Operating
Activities to Adjusted Free Cash Flow (in millions)
Nine Months Ended September
30,
2022
2021
Net cash provided by operating
activities
$
267
$
435
Property and equipment additions
(36
)
(40
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
(38
)
(272
)
Free cash flow
$
193
$
123
COVID-19 related adjustments (a)
2
5
Adjusted free cash flow (b)
$
195
$
128
(a)
Includes cash paid for COVID-19 expenses
factored into the calculation of Adjusted EBITDA.
(b)
The Company had $34 million of net cash
used in investing activities and $414 million of net cash used in
financing activities for the nine months ended September 30, 2022,
and $77 million of net cash used in investing activities and $1.2
billion of net cash used in financing activities for the nine
months ended September 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 nine months
ended September 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 September
30, 2022.
Nine Months Ended
Vacation
Ownership
Travel and
Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
September 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 nine
months ended September 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
September 30, 2021
Allowance for loan losses:
Provision
$
(21
)
$
—
$
—
$
(21
)
$
—
Vacation ownership interest sales
Recoveries
8
—
—
8
—
Cost of vacation ownership interests
Employee compensation related and
other
1
—
—
1
1
COVID-19 related costs
Total COVID-19
$
(12
)
$
—
$
—
$
(12
)
$
1
Nine Months Ended
Vacation
Ownership
Travel and
Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
September 30, 2021
Allowance for loan losses:
Provision
$
(47
)
$
—
$
—
$
(47
)
$
—
Vacation ownership interest sales
Recoveries
17
—
—
17
—
Cost of vacation ownership interests
Employee compensation related and
other
2
—
1
3
3
COVID-19 related costs
Lease related
(1
)
—
—
(1
)
(1
)
Restructuring
Total COVID-19
$
(29
)
$
—
$
1
$
(28
)
$
2
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 exchanges and travel club bookings
recognized as revenue during the period, net of cancellations. This
measure is 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/20221027005320/en/
Investors: Christopher Agnew Senior Vice President,
FP&A and Investor Relations (407) 626-4050
Christopher.Agnew@travelandleisure.com
Media: Steven Goldsmith Public Relations (407) 626-5882
Steven.Goldsmith@travelandleisure.com
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