Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported first quarter 2023
financial results for the three months ended March 31, 2023.
Highlights and outlook include:
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Travel + Leisure Co. Reports First
Quarter 2023 Results and Increases Full Year 2023 Guidance
(Graphic: Business Wire)
- Net income of $64 million, $0.81 diluted earnings per share,
on net revenue of $879 million
- Adjusted EBITDA of $184 million and adjusted diluted
earnings per share of $0.89 (1)
- Increases expected full year adjusted EBITDA guidance to a
range of $925 million to $945 million from $920 million to $940
million
- Expects second quarter adjusted EBITDA from $230 million to
$240 million
- Repurchased 2.5 million shares of common stock for $102
million in the first quarter representing 3% of shares outstanding
at year-end 2022
- Management will recommend a second quarter dividend of $0.45
per share for approval by the Board of Directors
- Executed $250 million term securitization on April 5,
2023
“We reported a strong quarter which saw 9% year-over-year growth
of net revenue and a 29% year-over-year growth of adjusted EPS,
enabling us to beat our expectations,” said Michael D. Brown,
president and CEO of Travel + Leisure Co.
“With consumers continuing to prioritize travel, our outlook
remains positive. Steady summer bookings as well as the continuing
strength in VPG give us confidence to carry through the performance
in the first quarter to the full year and we are raising our
outlook for adjusted EBITDA to a range of $925 to $945
million.”
Business Segment Results
Vacation Ownership
$ in millions
Q1 2023
Q1 2022
% change
Revenue
$
685
$
609
12
%
Adjusted EBITDA
$
131
$
105
25
%
Vacation Ownership revenue increased 12% to $685 million in the
first quarter of 2023 compared to the same period in the prior
year. Net vacation ownership (VOI) sales were $338 million in the
first quarter compared to $297 million in the prior year period.
Gross VOI sales were $454 million compared to $379 million in the
prior year. The $75 million increase in Gross VOI sales was driven
by tours of 135 thousand during the quarter compared to 108
thousand in the same period last year, partially offset by a 5%
decrease in VPG as a result of new owner and international tour
mix.
First quarter adjusted EBITDA was $131 million compared to $105
million in the prior year period. The increase was driven by higher
Gross VOI sales, partially offset by higher provision for loan
losses as a result of an increase in financed sales.
Travel and Membership
$ in millions
Q1 2023
Q1 2022
% change
Revenue
$
200
$
201
—
%
Adjusted EBITDA
$
71
$
82
(13
)%
Travel and Membership revenue of $200 million in the first
quarter of 2023 was flat compared to the same period in the prior
year, as revenue per transaction growth of 2% was offset by a 2%
decrease in transactions. The transaction decrease was impacted by
a 2% decrease in average number of Exchange members.
First quarter Adjusted EBITDA was $71 million compared to $82
million in the prior year due to higher cost of sales driven by
transaction mix, higher marketing costs to support travel clubs,
and unfavorable foreign currency impact.
Balance Sheet and
Liquidity
Net Debt — As of March 31, 2023, the Company's leverage
ratio for covenant purposes was 3.7x. The Company had $3.5 billion
of corporate debt outstanding as of March 31, 2023, which excluded
$2.0 billion of non-recourse debt related to its securitized notes
receivables portfolio. Additionally, the Company had cash and cash
equivalents of $196 million. At the end of the first quarter, the
Company had $980 million of liquidity in cash and cash equivalents
and revolving credit facility availability.
Timeshare Receivables Financing — Subsequent to the end
of the first quarter, the Company closed on a $250 million term
securitization transaction with a weighted average coupon of 6.3%
and a 91.3% advance rate.
Cash Flow — For the three months ended March 31, 2023,
net cash provided by operating activities was $7 million compared
to $141 million in the prior year period. Adjusted free cash flow
was a use of cash of $8 million for the three months ended March
31, 2023 compared to $146 million of cash generated in the same
period of 2022 due to timing of working capital, securitization
activity, and inventory spend as well as higher year-over-year
originations in our loan portfolio.
Share Repurchases — During the first quarter of 2023, the
Company repurchased 2.5 million shares of common stock for $102
million at a weighted average price of $40.13 per share. As of
March 31, 2023, the Company had $375 million remaining in its share
repurchase authorization.
Dividend — The Company paid $37 million ($0.45 per share)
in cash dividends on March 31, 2023 to shareholders of record as of
March 15, 2023. Management will recommend a second quarter dividend
of $0.45 per share for approval by the Company’s Board of Directors
in May 2023.
Outlook
The Company is updating guidance regarding expectations for the
2023 full year:
- Adjusted EBITDA of $925 million to $945 million from $920
million to $940 million
- Gross VOI sales of $2.1 billion to $2.2 billion
- VPG of approximately $3,050 to $3,150
The Company is providing guidance regarding expectations for the
second quarter 2023:
- Adjusted EBITDA of $230 million to $240 million
- Gross VOI sales of $550 million to $560 million
- VPG of approximately $3,050 to $3,150
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, some
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. ET.
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. ET
today. Additionally, a telephone replay will be available for seven
days beginning at 12:00 p.m. ET 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,
which include or exclude certain items, as well as non-GAAP
guidance. The Company utilizes non-GAAP measures, defined in Table
5, 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.
The Company may use its website as a means of disclosing
information concerning its operations, results and prospects,
including information which may constitute material nonpublic
information, and for complying with its disclosure obligations
under SEC Regulation FD. Disclosure of such information will be
included on the Company’s website in the Investor Relations section
at travelandleisureco.com/investors. Accordingly, investors should
monitor that Investor Relations section of the Company website, in
addition to accessing its press releases, its submissions and
filings with the SEC, and its publicly noticed conference calls and
webcasts.
About Travel + Leisure
Co.
As the world’s leading membership and leisure travel company,
Travel + Leisure Co. (NYSE:TNL) transformed the way families
vacation with the introduction of the most dynamic points-based
vacation ownership program at Club Wyndham, and the first vacation
exchange network, RCI. The company delivers more than six million
vacations each year at 245+ timeshare resorts worldwide, through
tailored travel and membership products, and via Travel + Leisure
GO - the signature subscription travel club inspired by the pages
of Travel + Leisure magazine. With hospitality and responsible
tourism at the heart of all we do, our 18,000+ dedicated associates
bring out the best in people and places around the globe. 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
(including inflation, higher interest rates, and recessionary
pressures), 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; our
ability to access capital and insurance 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 potential resurgences of
the novel coronavirus global pandemic (“COVID-19”) and its impacts;
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, 2022, filed with the SEC on February 22, 2023.
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.
(1) This press release includes Adjusted
EBITDA, Adjusted diluted EPS, Adjusted free cash flow, Gross VOI
sales and Adjusted net income, which are measures 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..
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
- Definitions
Table 1
Travel + Leisure Co.
Condensed Consolidated Statements
of Income (Unaudited)
(in millions, except per share
amounts)
Three Months Ended
March 31,
2023
2022
Net revenues
Service and membership fees
$
420
$
402
Net VOI sales
338
297
Consumer financing
103
98
Other
18
12
Net revenues
879
809
Expenses
Operating
420
381
Cost of vacation ownership interests
30
40
Consumer financing interest
25
17
Marketing
112
94
General and administrative
124
120
Depreciation and amortization
28
30
Restructuring
—
7
COVID-19 related costs
—
2
Asset impairments
—
1
Total expenses
739
692
Loss on sale of business
2
—
Operating income
138
117
Interest expense
58
47
Other (income), net
(2
)
(3
)
Interest (income)
(3
)
(1
)
Income before income taxes
85
74
Provision for income taxes
22
23
Net income from continuing
operations
63
51
Gain on disposal of discontinued business,
net of income taxes
1
—
Net income attributable to TNL
shareholders
$
64
$
51
Basic earnings per share
Continuing operations
$
0.81
$
0.59
Discontinued operations
0.01
—
$
0.82
$
0.59
Diluted earnings per share
Continuing operations
$
0.81
$
0.59
Discontinued operations
—
—
$
0.81
$
0.59
Weighted average shares
outstanding
Basic
77.5
85.9
Diluted
78.3
87.0
Table 2
Travel + Leisure Co.
Summary Data Sheet
(in millions, except per share
amounts, unless otherwise indicated)
Three Months Ended March
31,
2023
2022
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
64
$
51
25
%
Diluted earnings per share
$
0.81
$
0.59
37
%
Net income from continuing operations
$
63
$
51
24
%
Diluted earnings per share from continuing
operations
$
0.81
$
0.59
37
%
Net income margin
7.3
%
6.3
%
Adjusted Earnings
Adjusted EBITDA
$
184
$
170
8
%
Adjusted net income
$
70
$
60
17
%
Adjusted diluted earnings per share
$
0.89
$
0.69
29
%
Segment
Results
Net Revenues
Vacation Ownership
$
685
$
609
12
%
Travel and Membership
200
201
—
%
Corporate and other
(6
)
(1
)
Total
$
879
$
809
9
%
Adjusted EBITDA
Vacation Ownership
$
131
$
105
25
%
Travel and Membership
71
82
(13
)%
Segment Adjusted EBITDA
202
187
Corporate and other
(18
)
(17
)
Total Adjusted EBITDA
$
184
$
170
8
%
Adjusted EBITDA margin
20.9
%
21.0
%
Note: Amounts may not calculate due to
rounding. See "Presentation of Financial Information" and Table 5
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.
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.
Table 2
(continued)
Travel + Leisure Co.
Summary Data Sheet
(in millions, unless otherwise
indicated)
Three Months Ended March
31,
2023
2022
Change
Vacation
Ownership
Net VOI sales
$
338
$
297
14
%
Loan loss provision
71
48
47
%
Gross VOI sales, net of Fee-for-Service
sales
409
345
18
%
Fee-for-Service sales
45
34
34
%
Gross VOI sales
$
454
$
379
20
%
Tours (in thousands)
135
108
24
%
VPG (in dollars)
$
3,215
$
3,377
(5
)%
Tour generated VOI sales
$
433
$
366
18
%
Telesales and other
21
13
62
%
Gross VOI sales
$
454
$
379
20
%
Net VOI sales
$
338
$
297
14
%
Property management revenue
199
185
8
%
Consumer financing
103
98
5
%
Other (a)
45
29
55
%
Total Vacation Ownership
revenue
$
685
$
609
12
%
Travel and
Membership (b)
Avg. number of exchange members (in
thousands)
3,512
3,570
(2
)%
Transactions (in thousands)
300
311
(4
)%
Revenue per transaction (in dollars)
$
347
$
328
6
%
Exchange transaction revenue
$
104
$
102
2
%
Transactions (in thousands)
175
174
1
%
Revenue per transaction (in dollars)
$
247
$
259
(5
)%
Travel Club transaction revenue
$
43
$
45
(4
)%
Transactions (in thousands)
475
485
(2
)%
Revenue per transaction (in dollars)
$
310
$
303
2
%
Travel and Membership transaction
revenue
$
147
$
147
—
%
Transaction revenue
$
147
$
147
—
%
Subscription revenue
45
45
—
%
Other (c)
8
9
(11
)%
Total Travel and Membership
revenue
$
200
$
201
—
%
Note:
Amounts may not compute due to
rounding.
(a)
Includes Fee-for-Service commission
revenues and other ancillary revenues.
(b)
In the third quarter of 2022, the Travel
and Membership segment 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 March
31,
2023
EPS
Margin %
2022
EPS
Margin %
Net income attributable to TNL
shareholders
$
64
$
0.81
7.3
%
$
51
$
0.59
6.3
%
Gain on disposal of discontinued business,
net of income taxes
(1
)
—
Net income from continuing
operations
$
63
$
0.81
7.2
%
$
51
$
0.59
6.3
%
Legacy items
4
1
Amortization of acquired intangibles
(a)
3
2
Loss on sale of business (b)
2
—
Restructuring (c)
—
7
COVID-19 related costs
—
2
Asset impairments
—
1
Taxes (d)
(2
)
(4
)
Adjusted net income
$
70
$
0.89
8.0
%
$
60
$
0.69
7.4
%
Income taxes on adjusted net income
24
27
Interest expense
58
47
Depreciation
25
28
Stock-based compensation expense (e)
10
9
Interest income
(3
)
(1
)
Adjusted EBITDA
$
184
20.9
%
$
170
21.0
%
Diluted Shares Outstanding
78.3
87.0
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 5 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 loss on sale of the Love
Home Swap business.
(c)
Includes $3 million of stock-based
compensation expenses for the three months ended March 31, 2022
associated with the 2022 restructuring.
(d)
Represents the tax effects on the
adjustments. We determine the tax effects of the non-GAAP
adjustments based on the nature of the underlying adjustment and
the relevant tax jurisdictions. The tax effect of the non-GAAP
adjustments was calculated based on an evaluation of the statutory
tax treatment and the applicable statutory tax rate in the relevant
jurisdictions.
(e)
All stock-based compensation is excluded
from Adjusted EBITDA.
Table 4
Travel + Leisure Co.
Non-GAAP Measure: Reconciliation
of Net Cash Provided by Operating Activities to Adjusted Free Cash
Flow
(in millions)
Three Months Ended March
31,
2023
2022
Net cash provided by operating
activities
$
7
$
141
Property and equipment additions
(12
)
(10
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
(3
)
13
Free cash flow
$
(8
)
$
144
COVID-19 related adjustments (a)
—
2
Adjusted free cash flow (b)
$
(8
)
$
146
(a)
Includes cash paid for COVID-19 expenses
factored into the calculation of Adjusted EBITDA.
(b)
The Company had $17 million of net cash
used in investing activities and $343 million of net cash used in
financing activities for the three months ended March 31, 2023 and
had $16 million of net cash used in investing activities and $79
million of net cash used in financing activities for the three
months ended March 31, 2022.
Table 5
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,
asset impairments/recoveries, 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 & Resorts, Inc. 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. We use this non-GAAP
performance measure to assist in evaluating our operating
performance and the quality of our earnings as represented by
adjusted EBITDA, and to evaluate the performance of our current and
prospective operating and strategic initiatives in generating cash
flows from our earnings performance. This measure also assists
investors in evaluating our operating performance, management of
our assets, and ability to generate cash flows from our earnings,
as well as facilitating period-to-period comparisons.
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 telesales and virtual sales) divided by
the number of tours. The Company has excluded non-tour sales in the
calculation of VPG because non-tour 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/20230426005286/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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