Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported fourth quarter and
full-year 2022 financial results for the period ended December 31,
2022.
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Travel + Leisure Co., the world’s leading
membership and leisure travel company, today reported 2022 full
year financial results, with net income of $357 million, $4.24
diluted earnings per share, on net revenue of $3.6 billion.
(Graphic: Business Wire)
Fourth quarter 2022 highlights:
- Net income of $90 million (diluted EPS of $1.12) on net
revenue of $899 million
- Adjusted EBITDA of $225 million and Adjusted diluted EPS of
$1.30 (1)
- Repurchased $108 million of common stock during the fourth
quarter
Full-year 2022 highlights:
- Net income of $357 million (diluted EPS of $4.24) on net
revenue of $3.6 billion
- Adjusted EBITDA of $859 million and Adjusted diluted EPS of
$4.52
- Net cash provided by operating activities of $442 million
and Adjusted free cash flow of $439 million
- Repurchased $351 million of common stock during the
full-year
Outlook:
- Full Year 2023 Adjusted EBITDA expected to range from $920
million to $940 million and first quarter 2023 Adjusted EBITDA
expected to range from $170 million to $180 million
- The Company will recommend increasing first quarter 2023
dividend to $0.45 per share for approval by the Board of
Directors
"Our fourth quarter and full year results demonstrate our
ability to capitalize on the strong leisure travel market and
deliver great vacations for our owners and members while maximizing
return of capital to our shareholders,” said Michael D. Brown,
president and CEO of Travel + Leisure Co. “We finished the year
with the highest annual sales volume per guest in our company’s
history, and returned $486 million of capital to shareholders.”
“December’s strong finish has carried into January and February,
and our owner reservations on the books are pacing ahead of 2022,
underscoring that consumers see the value of our product and are
continuing to prioritize vacations.”
(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
The results of operations during the fourth quarter and
full-year of 2022 and 2021 include impacts related to the COVID-19
global pandemic. Refer to Table 5 for a breakout of COVID-19
related impacts.
Vacation Ownership
$ in millions
Q4 2022
Q4 2021
% change
FY 2022
FY 2021
% change
Revenue
$737
$700
5
%
$2,835
$2,423
17
%
Adjusted EBITDA
$186
$184
1
%
$665
$569
17
%
Vacation Ownership revenue increased 5% to $737 million in the
fourth quarter of 2022 compared to the same period in the prior
year. In the fourth quarter, Gross VOI sales were $521 million
compared to $432 million in the prior year period and tours were
147,000 in the fourth quarter compared to 129,000 in the same
period last year. Volume Per Guest (VPG) increased 7% to $3,434 due
to strong close rates and higher quality tours.
Fourth quarter Adjusted EBITDA was $186 million compared to $184
million in the prior year period. The increase was driven by higher
Gross VOI sales due to the ongoing recovery of our operations from
COVID-19, partially offset by an adjustment in the prior year to
the COVID-19 related allowance for loan losses, which resulted in a
$44 million increase to revenue and a $28 million net positive
impact to Adjusted EBITDA.
Travel and Membership
$ in millions
Q4 2022
Q4 2021
% change
FY 2022
FY 2021
% change
Revenue
$163
$170
(4
)%
$735
$714
3
%
Adjusted EBITDA
$57
$62
(8
)%
$268
$271
(1
)%
Travel and Membership revenue decreased 4% to $163 million in
the fourth quarter of 2022 compared to the same period in the prior
year, primarily due to a decrease in Exchange subscription revenue
related to a lower average member count and a stronger U.S.
dollar.
Fourth quarter Adjusted EBITDA was $57 million compared to $62
million in the prior year due to the revenue decrease, partially
offset by cost savings.
Balance Sheet and
Liquidity
Net Debt — As of December 31, 2022, the Company's
leverage ratio for covenant purposes was 3.5x. The Company had $3.7
billion of corporate debt outstanding as of December 31, 2022,
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 $550 million. At the end of the
fourth quarter, the Company had $1.6 billion of liquidity in cash
and cash equivalents and revolving credit facility
availability.
The Company amended the credit agreement governing its $1
billion revolving credit facility and term loan B on December 14,
2022. This amendment provides for an incremental term loan B of
$300 million, which will mature on December 14, 2029. We expect to
use the net proceeds of the incremental term loan B and revolving
credit facility capacity to repay our outstanding $400 million
dollar secured notes that mature in March, 2023.
Timeshare Receivables Financing — The Company closed on a
$250 million term securitization on October 20, 2022 with a
weighted average coupon of 6.91% and an 87.5% advance rate.
Cash Flow — For the full-year 2022, net cash provided by
operating activities was $442 million compared to $568 million in
the prior year. Adjusted free cash flow was $439 million in 2022
compared to $223 million in the prior year.
Share Repurchases — During the fourth quarter of 2022,
the Company repurchased 2.9 million shares of common stock for $108
million at a weighted average price of $37.41 per share. For the
full-year 2022, the Company repurchased 8.2 million shares of
common stock for $351 million at a weighted average price of $42.97
per share. As of December 31, 2022, the Company had $477 million
remaining in its share repurchase authorization.
Dividend — The Company paid $31 million ($0.40 per share)
in cash dividends on December 30, 2022 to shareholders of record as
of December 15, 2022. For the full-year 2022, Travel + Leisure Co.
paid an aggregate $135 million in dividends to shareholders.
Management will recommend a first quarter dividend of $0.45 per
share for approval by the Company's Board of Directors in March
2023.
Outlook
The Company is providing guidance regarding expectations for the
2023 full year:
- Adjusted EBITDA to range from $920 million to $940 million
- Gross VOI sales of $2.1 billion to $2.2 billion
- VPG of $3,050 to $3,150
The Company is providing guidance regarding expectations for the
first quarter 2023:
- Adjusted EBITDA to range from $170 million to $180 million
- Gross VOI sales of $400 million to $420 million
- VPG of $3,100 to $3,200
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
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 our
operating performance, both absolutely and in comparison to other
companies, and in evaluating or making selected compensation
decisions. Exclusion of items in the Company’s non-GAAP
presentation should not be considered an inference that these items
are unusual, infrequent or non-recurring. Full reconciliations of
non-GAAP financial measures to the most directly comparable GAAP
financial measures for the reported periods appear in the financial
tables section of the press release. See definitions on Table 6 for
an explanation of our non-GAAP measures.
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 most recently filed
with the SEC. We caution readers that any such statements are based
on currently available operational, financial and competitive
information, and they should not place undue reliance on these
forward-looking statements, which reflect management’s opinion only
as of the date on which they were made. Except as required by law,
we undertake no obligation to review or update these
forward-looking statements to reflect events or circumstances as
they occur.
Travel + Leisure Co. Table of Contents
Table Number
1.
Consolidated Statements of Income
(Unaudited)
2.
Summary Data Sheet
3.
Non-GAAP Measure: Reconciliation of Net
Income to Adjusted Net Income to Adjusted EBITDA
4.
Non-GAAP Measure: Reconciliation of Net
Cash Provided by Operating Activities to Adjusted Free Cash
Flow
5.
COVID-19 Related Impacts
6.
Definitions
Table 1
Travel + Leisure Co.
Consolidated Statements of Income
(Unaudited)
(in millions, except per share
amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Net revenues
Service and membership fees
$
389
$
388
$
1,611
$
1,502
Net VOI sales
384
366
1,484
1,176
Consumer financing
105
100
406
404
Other
21
16
66
52
Net revenues
899
870
3,567
3,134
Expenses
Operating
401
367
1,603
1,359
Cost of vacation ownership interests
32
52
157
157
Consumer financing interest
24
18
79
81
General and administrative
120
110
479
434
Marketing
114
102
451
363
Depreciation and amortization
28
31
119
124
Restructuring
7
—
14
(1
)
Asset impairments/(recoveries), net
12
(5
)
10
(5
)
COVID-19 related costs
—
—
2
4
Total expenses
738
675
2,914
2,516
Operating income
161
195
653
618
Interest expense
51
50
195
198
Interest (income)
(3
)
(1
)
(6
)
(3
)
Other (income), net
(6
)
(4
)
(22
)
(6
)
Income before income taxes
119
150
486
429
Provision for income taxes
29
40
130
116
Net income from continuing
operations
90
110
356
313
(Loss)/gain on disposal of discontinued
business, net of income taxes
—
(3
)
1
(5
)
Net income attributable to TNL
shareholders
$
90
$
107
$
357
$
308
Basic earnings per share
Continuing operations
$
1.13
$
1.27
$
4.27
$
3.62
Discontinued operations
—
(0.04
)
0.01
(0.06
)
$
1.13
$
1.23
$
4.28
$
3.56
Diluted earnings per share
Continuing operations
$
1.12
$
1.26
$
4.23
$
3.58
Discontinued operations
—
(0.04
)
0.01
(0.06
)
$
1.12
$
1.22
$
4.24
$
3.52
Weighted average shares
outstanding
Basic
79.8
86.5
83.4
86.5
Diluted
80.5
87.4
84.2
87.3
Table 2
Travel + Leisure Co.
Summary Data Sheet
(in millions, except per share
amounts, unless otherwise indicated)
Three Months Ended December
31,
Twelve Months Ended December
31,
2022
2021
Change
2022
2021
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
90
$
107
(16
)%
$
357
$
308
16
%
Diluted earnings per share
$
1.12
$
1.22
(8
)%
$
4.24
$
3.52
20
%
Net income from continuing operations
$
90
$
110
(18
)%
$
356
$
313
14
%
Diluted earnings per share from continuing
operations
$
1.12
$
1.26
(11
)%
$
4.23
$
3.58
18
%
Net income margin
10.0
%
12.3
%
10.0
%
9.8
%
Adjusted Earnings
Adjusted EBITDA
$
225
$
228
(1
)%
$
859
$
778
10
%
Adjusted net income
$
105
$
104
1
%
$
380
$
319
19
%
Adjusted diluted earnings per share
$
1.30
$
1.19
9
%
$
4.52
$
3.65
24
%
Segment
Results
Net Revenues
Vacation Ownership
$
737
$
700
5
%
$
2,835
$
2,423
17
%
Travel and Membership
163
170
(4
)%
735
714
3
%
Corporate and other
(1
)
—
(3
)
(3
)
Total
$
899
$
870
3
%
$
3,567
$
3,134
14
%
Adjusted EBITDA
Vacation Ownership
$
186
$
184
1
%
$
665
$
569
17
%
Travel and Membership
57
62
(8
)%
268
271
(1
)%
Segment Adjusted EBITDA
243
246
933
840
Corporate and other
(18
)
(18
)
(74
)
(62
)
Total Adjusted EBITDA
$
225
$
228
(1
)%
$
859
$
778
10
%
Adjusted EBITDA Margin
25.0
%
26.2
%
24.1
%
24.8
%
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 December
31,
Twelve Months Ended December
31,
2022
2021
Change
2022
2021
Change
Vacation
Ownership
Net VOI Sales
$
384
$
366
5
%
$
1,484
$
1,176
26
%
Loan loss provision
86
9
856
%
302
129
134
%
Gross VOI sales, net of Fee-for-Service
sales
470
375
25
%
1,786
1,305
37
%
Fee-for-Service sales
51
57
(11
)%
196
186
5
%
Gross VOI sales
$
521
$
432
21
%
$
1,982
$
1,491
33
%
Tours (in thousands)
147
129
14
%
561
451
24
%
VPG (in dollars)
3,434
3,222
7
%
3,426
3,143
9
%
Tour generated VOI sales
503
415
21
%
1,923
1,419
36
%
Telesales and other
18
17
6
%
59
72
(18
)%
Gross VOI sales
521
432
21
%
1,982
1,491
33
%
Net VOI sales
384
366
5
%
1,484
1,176
26
%
Property management revenue
198
187
6
%
763
691
10
%
Consumer financing
105
100
5
%
406
404
—
%
Other (a)
50
47
6
%
182
152
20
%
Total Vacation Ownership
revenue
737
700
5
%
2,835
2,423
17
%
Travel and
Membership (b)
Avg. number of exchange members (in
thousands)
3,508
3,831
(8
)%
3,524
3,721
(5
)%
Transactions (in thousands)
208
228
(9
)%
1,022
1,064
(4
)%
Revenue per transaction (in dollars)
367
340
8
%
341
325
5
%
Exchange transaction revenue
76
78
(3
)%
348
346
1
%
Transactions (in thousands)
150
149
1
%
709
624
14
%
Revenue per transaction (in dollars)
212
241
(12
)%
241
252
(5
)%
Travel Club transaction revenue
32
35
(9
)%
171
157
8
%
Transactions (in thousands)
358
377
(5
)%
1,731
1,688
3
%
Revenue per transaction (in dollars)
302
301
—
%
300
298
1
%
Travel and Membership transaction
revenue
108
113
(4
)%
519
503
3
%
Transaction revenue
108
113
(4
)%
519
503
3
%
Subscription revenue
47
48
(2
)%
184
176
5
%
Other (c)
8
9
(11
)%
32
35
(9
)%
Total Travel and Membership
revenue
163
170
(4
)%
735
714
3
%
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 December
31,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
90
$
1.12
10.0
%
$
107
$
1.22
12.3
%
(Gain)/loss on disposal of discontinued
business, net of income taxes
—
3
Net income from continuing
operations
$
90
$
1.12
10.0
%
$
110
$
1.26
12.6
%
Asset impairments/(recoveries), net
12
(5
)
Restructuring
7
—
Amortization of acquired intangibles
(a)
2
2
Legacy items
—
(2
)
Loss/(gain) on equity investment
—
(3
)
Taxes (b)
(5
)
2
Adjusted net income
$
105
$
1.30
11.7
%
$
104
1.19
12.0
%
Income taxes on adjusted net income
34
38
Interest expense
51
50
Depreciation
26
29
Stock-based compensation expense (c)
11
8
Interest income
(3
)
(1
)
Adjusted EBITDA
$
225
25.0
%
$
228
26.2
%
Diluted Shares Outstanding
80.5
87.4
Twelve Months Ended December
31,
2022
EPS
Margin %
2021
EPS
Margin %
Net income attributable to TNL
shareholders
$
357
$
4.24
10.0
%
$
308
$
3.52
9.8
%
(Gain)/loss on disposal of discontinued
business, net of income taxes
(1
)
5
Net income from continuing
operations
$
356
$
4.23
10.0
%
$
313
$
3.58
10.0
%
Restructuring (d)
14
(1
)
Asset impairments/(recoveries), net
(e)
11
(5
)
Amortization of acquired intangibles
(a)
9
9
Loss/(gain) on equity investment
5
(3
)
COVID-19 related costs
2
3
Legacy items
1
4
Fair value change in contingent
consideration
(10
)
—
Taxes (b)
(8
)
(1
)
Adjusted net income
$
380
$
4.52
10.7
%
$
319
3.65
10.2
%
Income taxes on adjusted net income
138
117
Interest expense
195
198
Depreciation
110
115
Stock-based compensation expense (c)
42
32
Interest income
(6
)
(3
)
Adjusted EBITDA
$
859
24.1
%
$
778
24.8
%
Diluted Shares Outstanding
84.2
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. 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.resents 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)
2022 includes $3 million of stock-based
compensation expenses associated with the 2022 restructuring.
(e)
Includes $1 million of inventory
impairments during 2022, included in Cost of vacation ownership
interests on the 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)
Three Months Ended
December 31,
Twelve Months
Ended December 31,
2022
2021
2022
2021
Net cash provided by operating
activities
$
175
$
133
$
442
$
568
Property and equipment additions
(16
)
(17
)
(52
)
(57
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
86
(22
)
47
(294
)
Free cash flow
$
245
$
94
$
437
$
217
COVID-19 related adjustments (a)
—
1
2
6
Adjusted free cash flow (b)
$
245
$
95
$
439
$
223
(a)
Includes cash paid for COVID-19 expenses
factored into the calculation of Adjusted EBITDA.
(b)
The Company had $16 million of net cash
used in investing activities and $218 million of net cash provided
by financing activities for the three months ended December 31,
2022, and $16 million of net cash used in investing activities and
$93 million of net cash used in financing activities for the three
months ended December 31, 2021.The Company had $50 million of net
cash used in investing and $196 million of net cash used in
financing activities for the year ended December 31, 2022, and $93
million of net cash used in investing activities and $1.29 billion
of net cash used in financing activities for the year ended
December 31, 2021.
Table 5
Travel + Leisure Co. COVID-19
Related Impacts (in millions)
The table below present the COVID-19
related impacts to our results of operations for the twelve months
ended December 31, 2022, and the related classification on the
Consolidated Statements of Income. There were no COVID-19 related
impacts recognized during the three months ended December 31,
2022.
Twelve Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 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 to our results of operations for three and twelve
months ended December 31, 2021, and the related classification on
the Consolidated Statements of Income:
Three Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2021
Allowance for loan losses:
Provision
$
(44
)
$
—
$
—
$
(44
)
$
—
Vacation ownership interest sales
Recoveries
16
—
—
16
—
Cost of vacation ownership interests
Asset recoveries
—
(6
)
—
(6
)
(6
)
Asset impairments/ (recoveries), net
Total COVID-19
$
(28
)
$
(6
)
$
—
$
(34
)
$
(6
)
Twelve Months Ended
Vacation Ownership
Travel and Membership
Corporate
& Other
Consolidated
Non-GAAP
Adjustments
Income Statement
Classification
December 31, 2021
Allowance for loan losses:
Provision
$
(91
)
$
—
$
—
$
(91
)
$
—
Vacation ownership interest sales
Recoveries
33
—
—
33
—
Cost of vacation ownership interests
Employee compensation related and
other
3
—
1
4
3
COVID-19 related costs
Asset recoveries
—
(6
)
—
(6
)
(6
)
Asset impairments/ (recoveries), net
Lease-related
(1
)
—
—
(1
)
(1
)
Restructuring
Total COVID-19
$
(56
)
$
(6
)
$
1
$
(61
)
$
(4
)
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 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.
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/20230222005302/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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