Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported third quarter 2023
financial results for the three months ended September 30, 2023.
Highlights and outlook include:
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- Net income of $110 million, $1.49 diluted earnings per share
from continuing operations, on net revenue of $986 million
- Adjusted EBITDA of $248 million and adjusted diluted
earnings per share of $1.54 (1)
- Updates full year adjusted EBITDA guidance range to $900
million to $915 million
- Repurchased $267 million of common stock in the first nine
months of 2023, including $65 million in the third quarter
- Management will recommend a fourth quarter dividend of $0.45
per share for approval by the Board of Directors
- Executed $300 million term securitization on October 19,
2023, and renewed ABS conduit facility through September
2025
- Acquired the rights to the vacation ownership business of
Sports Hospitality Ventures to launch a network of future
sports-themed resort and lifestyle complexes under the Sports
Illustrated Resorts Brand
“The year-over-year growth of our cornerstone vacation ownership
business continues to demonstrate the strength of our business
model and the desire from our owners to vacation with us. Sales
volume per guest was once again at the high end of our guidance
range for the quarter and vacation ownership revenue increased 8%
year-over-year,” said Michael D. Brown, president and CEO of Travel
+ Leisure Co.
“On the strategic front, our acquisition of the rights to the
vacation ownership business of Sports Hospitality Ventures sets the
stage for future growth as we build out a new network of
sports-themed destinations in popular college towns and leisure
destinations under the Sports Illustrated Resorts brand, starting
in Tuscaloosa, Alabama.”
(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.
Business Segment Results
Vacation Ownership
$ in millions
Q3 2023
Q3 2022
% change
Revenue
$812
$754
8 %
Adjusted EBITDA
$203
$188
8 %
Vacation Ownership revenue increased 8% to $812 million in the
third quarter of 2023 compared to the same period in the prior
year. Net vacation ownership interest (VOI) sales were $433 million
in the third quarter compared to $403 million in the prior year
period, and Gross VOI sales were $598 million compared to $555
million in the prior year. Gross VOI sales were driven by 187,000
tours during the quarter compared to 158,000 in the same period
last year, partially offset by an 8% decrease in VPG.
Third quarter adjusted EBITDA was $203 million compared to $188
million in the prior year period. The EBITDA growth of 8% is in
line with the revenue growth.
Travel and Membership
$ in millions
Q3 2023
Q3 2022
% change
Revenue
$174
$183
(5) %
Adjusted EBITDA
$62
$65
(5) %
Travel and Membership revenue decreased 5% to $174 million in
the third quarter of 2023 compared to the same period in the prior
year. This was driven by a 7% decrease in transactions offset by a
1% increase in revenue per transaction. The transaction decline was
driven by lower RCI member propensity and a decrease in Travel Club
transactions.
Third quarter Adjusted EBITDA was $62 million compared to $65
million in the prior year due to lower transaction revenue,
partially offset by lower cost of sales and lower marketing
costs.
Balance Sheet and
Liquidity
Net Debt — As of September 30, 2023, the Company's
leverage ratio for covenant purposes was 3.7x. The Company had $3.7
billion of corporate debt outstanding as of September 30, 2023,
which excluded $1.9 billion of non-recourse debt related to its
securitized notes receivables portfolio. Additionally, the Company
had cash and cash equivalents of $238 million. At the end of the
third quarter, the Company had $785 million of liquidity in cash
and cash equivalents and revolving credit facility
availability.
Timeshare Receivables Financing — On September 26, 2023,
the Company renewed its $600 million USD timeshare receivables
conduit facility, extending the end of the commitment period from
July 2024 to September 2025. Subsequent to the end of the third
quarter, the Company closed on a $300 million term securitization
transaction with a weighted average coupon of 6.8% and a 92%
advance rate.
Cash Flow — For the nine months ended September 30, 2023,
net cash provided by operating activities was $198 million compared
to $267 million in the prior year period. Adjusted free cash flow
was $81 million for the nine months ended September 30, 2023
compared to $195 million in the same period of 2022 due to higher
year-over-year originations in our loan portfolio, as well as other
working capital items and increased interest payments on our
corporate debt.
Share Repurchases — During the third quarter of 2023, the
Company repurchased 1.6 million shares of common stock for $65
million at a weighted average price of $40.82 per share. As of
September 30, 2023, the Company had $210 million remaining in its
share repurchase authorization.
Dividend — The Company paid $33 million ($0.45 per share)
in cash dividends on September 30, 2023 to shareholders of record
as of September 15, 2023. Management will recommend a fourth
quarter dividend of $0.45 per share for approval by the Company’s
Board of Directors in November 2023.
Outlook
The Company is providing guidance regarding expectations for the
2023 full year:
- Adjusted EBITDA of $900 million to $915 million
- Gross VOI sales of $2.15 billion to $2.2 billion
- VPG of approximately $3,100 to $3,150
The Company is providing guidance regarding expectations for the
fourth quarter 2023:
- Adjusted EBITDA of $233 million to $248 million
- Gross VOI sales of $541 million to $591 million
- VPG of approximately $3,000 to $3,150
- Travel and Membership Adjusted EBITDA of $45 million to $50
million
- Adjusted EPS of approximately $1.32 to $1.46 assuming no
additional share repurchases
Following are sensitivities to fourth quarter Adjusted EBITDA
guidance. The impact of a 100 bps change in our key Vacation
Ownership drivers would be expected to be as follows:
- Tours: approximately $1.5 million change in Adjusted
EBITDA
- VPG: approximately $2.5 million change in Adjusted EBITDA
Sensitivities to Adjusted EBITDA are based on average
system-wide trends. Operating circumstances, including but not
limited to brand mix, product mix, geographical concentration or
market segment variability, may cause the impact to differ
materially.
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 8:00 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.
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 19,500+ 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,” "outlook," 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 and the Middle East),
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.
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
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Net revenues
Service and membership fees
$
419
$
410
$
1,263
$
1,222
Net VOI sales
433
403
1,172
1,099
Consumer financing
107
104
313
302
Other
27
20
66
45
Net revenues
986
937
2,814
2,668
Expenses
Operating
428
417
1,275
1,202
Cost of vacation ownership interests
43
39
107
125
Consumer financing interest
29
20
81
55
Marketing
141
125
379
337
General and administrative
108
117
347
358
Depreciation and amortization
28
30
83
91
Restructuring
2
—
12
8
COVID-19 related costs
—
—
—
2
Asset recoveries, net
—
—
(1
)
(1
)
Total expenses
779
748
2,283
2,177
Loss on sale of business
—
—
2
—
Operating income
207
189
529
491
Interest expense
64
48
183
143
Other (income), net
(2
)
(19
)
(3
)
(16
)
Interest (income)
(3
)
(2
)
(9
)
(3
)
Income before income taxes
148
162
358
367
Provision for income taxes
38
46
96
101
Net income from continuing
operations
110
116
262
266
Gain on disposal of discontinued business,
net of income taxes
—
—
5
—
Net income attributable to TNL
shareholders
$
110
$
116
$
267
$
266
Basic earnings per share
Continuing operations
$
1.50
$
1.39
$
3.48
$
3.15
Discontinued operations
—
—
0.07
—
$
1.50
$
1.39
$
3.55
$
3.15
Diluted earnings per share
Continuing operations
$
1.49
$
1.38
$
3.46
$
3.12
Discontinued operations
—
—
0.07
—
$
1.49
$
1.38
$
3.53
$
3.12
Weighted average shares
outstanding
Basic
73.3
83.0
75.3
84.6
Diluted
73.6
83.6
75.7
85.5
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,
2023
2022
Change
2023
2022
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
110
$
116
(5
)%
$
267
$
266
—
%
Diluted earnings per share
$
1.49
$
1.38
8
%
$
3.53
$
3.12
13
%
Net income from continuing operations
$
110
$
116
(5
)%
$
262
$
266
(2
)%
Diluted earnings per share from continuing
operations
$
1.49
$
1.38
8
%
$
3.46
$
3.12
11
%
Net income margin
11.2
%
12.4
%
9.5
%
10.0
%
Adjusted Earnings
Adjusted EBITDA
$
248
$
234
6
%
$
667
$
634
5
%
Adjusted net income
$
113
$
107
6
%
$
283
$
275
3
%
Adjusted diluted earnings per share
$
1.54
$
1.28
20
%
$
3.74
$
3.22
16
%
Segment
Results
Net Revenues
Vacation Ownership
$
812
$
754
8
%
$
2,265
$
2,098
8
%
Travel and Membership
174
183
(5
)%
553
572
(3
)%
Corporate and other
—
—
(4
)
(2
)
Total
$
986
$
937
5
%
$
2,814
$
2,668
5
%
Adjusted EBITDA
Vacation Ownership
$
203
$
188
8
%
$
521
$
480
9
%
Travel and Membership
62
65
(5
)%
195
211
(8
)%
Segment Adjusted EBITDA
265
253
716
691
Corporate and other
(17
)
(19
)
(49
)
(57
)
Total Adjusted EBITDA
$
248
$
234
6
%
$
667
$
634
5
%
Adjusted EBITDA margin
25.2
%
25.0
%
23.7
%
23.8
%
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.
Table 2
(continued)
Travel + Leisure Co.
Summary Data Sheet
(in millions, unless otherwise
indicated)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
Change
2023
2022
Change
Vacation
Ownership
Net VOI sales
$
433
$
403
7
%
$
1,172
$
1,099
7
%
Loan loss provision
99
91
9
%
257
216
19
%
Gross VOI sales, net of Fee-for-Service
sales
532
494
8
%
1,428
1,315
9
%
Fee-for-Service sales
66
61
8
%
181
146
24
%
Gross VOI sales
$
598
$
555
8
%
$
1,609
$
1,461
10
%
Tours (in thousands)
187
158
18
%
492
415
19
%
VPG (in dollars)
$
3,108
$
3,393
(8
)%
$
3,152
$
3,423
(8
)%
Tour generated VOI sales
$
580
$
537
8
%
$
1,550
$
1,419
9
%
Telesales and other
18
18
—
%
59
42
40
%
Gross VOI sales
$
598
$
555
8
%
$
1,609
$
1,461
10
%
Net VOI sales
$
433
$
403
7
%
$
1,172
$
1,099
7
%
Property management revenue
206
191
8
%
610
565
8
%
Consumer financing
107
104
3
%
313
302
4
%
Other (a)
66
56
18
%
170
132
29
%
Total Vacation Ownership
revenue
$
812
$
754
8
%
$
2,265
$
2,098
8
%
Travel and
Membership
Avg. number of exchange members (in
thousands)
3,523
3,501
1
%
3,513
3,529
—
%
Transactions (in thousands)
231
250
(8
)%
767
813
(6
)%
Revenue per transaction (in dollars)
$
354
$
334
6
%
$
353
$
334
6
%
Exchange transaction revenue
$
82
$
84
(2
)%
$
271
$
272
—
%
Transactions (in thousands)
179
189
(5
)%
535
560
(5
)%
Revenue per transaction (in dollars)
$
220
$
239
(8
)%
$
232
$
248
(7
)%
Travel Club transaction revenue
$
39
$
45
(13
)%
$
124
$
139
(11
)%
Transactions (in thousands)
410
439
(7
)%
1,301
1,373
(5
)%
Revenue per transaction (in dollars)
$
296
$
293
1
%
$
303
$
299
1
%
Travel and Membership transaction
revenue
$
121
$
129
(6
)%
$
395
$
411
(4
)%
Transaction revenue
$
121
$
129
(6
)%
$
395
$
411
(4
)%
Subscription revenue
46
47
(2
)%
137
137
—
%
Other (b)
7
7
—
%
21
24
(13
)%
Total Travel and Membership
revenue
$
174
$
183
(5
)%
$
553
$
572
(3
)%
Note: Amounts may not compute due to
rounding.
(a) Includes Fee-for-Service commission
revenues and other ancillary revenues.
(b) 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,
2023
EPS
Margin %
2022
EPS
Margin %
Net income attributable to TNL
shareholders
$
110
$
1.49
11.2
%
$
116
$
1.38
12.4
%
Amortization of acquired intangibles
(a)
3
2
Restructuring
2
—
Legacy items
—
(1
)
Gain on equity investment
—
(3
)
Fair value change in contingent
consideration
—
(10
)
Taxes (b)
(1
)
3
Adjusted net income
$
113
$
1.54
11.5
%
$
107
$
1.28
11.4
%
Income taxes on adjusted net income
40
43
Interest expense
64
48
Depreciation
25
28
Stock-based compensation expense (c)
9
10
Interest income
(3
)
(2
)
Adjusted EBITDA
$
248
25.2
%
$
234
25.0
%
Diluted Shares Outstanding
73.6
83.6
Nine Months Ended September
30,
2023
EPS
Margin %
2022
EPS
Margin %
Net income attributable to TNL
shareholders
$
267
$
3.53
9.5
%
$
266
$
3.12
10.0
%
Gain on disposal of discontinued business,
net of income taxes
(5
)
—
Net income from continuing
operations
$
262
$
3.46
9.3
%
$
266
$
3.12
10.0
%
Restructuring (d)
12
8
Amortization of acquired intangibles
(a)
8
7
Legacy items
7
1
Loss on sale of business (e)
2
—
Loss on equity investment
—
5
COVID-19 related costs
—
2
Fair value change in contingent
consideration
—
(10
)
Asset recoveries, net
—
(1
)
Taxes (b)
(8
)
(3
)
Adjusted net income from continuing
operations
$
283
$
3.74
10.1
%
$
275
$
3.22
10.3
%
Income taxes on adjusted net income
104
104
Interest expense
183
143
Depreciation
75
84
Stock-based compensation expense (c)
31
31
Interest income
(9
)
(3
)
Adjusted EBITDA
$
667
23.7
%
$
634
23.8
%
Diluted Shares Outstanding
75.7
85.5
Table 3
(continued)
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 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.
(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)
Represents the loss on sale of the Love
Home Swap business.
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,
2023
2022
Net cash provided by operating activities
$
198
$
267
Property and equipment additions
(42
)
(36
)
Sum of proceeds and principal payments of non-recourse vacation
ownership debt
(75
)
(38
)
Free cash flow
$
81
$
193
COVID-19 related adjustments (a)
—
2
Adjusted free cash flow (b)
$
81
$
195
(a)
Includes cash paid for COVID-19 expenses
factored into the calculation of Adjusted EBITDA.
(b)
The Company had $46 million of net cash
used in investing activities and $444 million of net cash used in
financing activities for the nine months ended September 30, 2023
and 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.
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/20231025384519/en/
Investors: Christopher Agnew 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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