Travel + Leisure Co. (NYSE:TNL), the world’s leading membership
and leisure travel company, today reported fourth quarter and
full-year 2023 financial results for the period ended December 31,
2023.
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Fourth quarter 2023 highlights:
- Net income of $129 million (diluted EPS of $1.77) on net
revenue of $935 million
- Adjusted EBITDA of $240 million and Adjusted diluted EPS of
$1.98 (1)
- Repurchased $40 million of common stock during the fourth
quarter
Full-year 2023 highlights:
- Net income of $396 million (diluted EPS of $5.28) on net
revenue of $3.8 billion
- Adjusted EBITDA of $908 million and Adjusted diluted EPS of
$5.70(1)
- Net cash provided by operating activities of $350 million
and Adjusted free cash flow of $379 million(1)
- Repurchased $307 million of common stock during the
full-year
Outlook:
- Full Year 2024 Adjusted EBITDA expected to range from $910
million to $930 million and first quarter 2024 Adjusted EBITDA
expected to range from $185 million to $190 million
- The Company will recommend increasing first quarter 2024
dividend to $0.50 per share for approval by the Board of
Directors
“Our team produced strong year-over-year growth in revenue,
vacation ownership sales and adjusted EBITDA, enabling us to return
$443 million in capital to shareholders through dividends and stock
buybacks," said Michael D. Brown, President and CEO of Travel +
Leisure Co. "Our core vacation ownership business performed at or
better than our expectations on every key measure, effectively
leveraging continued leisure travel demand."
“Our multi-brand strategy is coming to fruition. We recently
announced the acquisition of Accor Vacation Club, building upon our
presence in Asia-Pacific. We start the year with a vacation
ownership brand portfolio including Wyndham, Margaritaville, Sports
Illustrated, which we added last September, and soon Accor. We have
great momentum coming into 2024. We expect that momentum, combined
with a strong leisure travel market, to drive earnings and adjusted
free cash flow,” Brown concluded.
(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 2023 and 2022.
Vacation Ownership
$ in millions
Q4 2023
Q4 2022
% change
FY 2023
FY 2022
% change
Revenue
$776
$737
5%
$3,041
$2,835
7%
Adjusted EBITDA
$208
$186
12%
$729
$665
10%
Vacation Ownership revenue increased 5% to $776 million in the
fourth quarter of 2023 compared to the same period in the prior
year. Net vacation ownership interest (VOI) sales were $410 million
in the fourth quarter compared to $384 million in the prior year
period, and Gross VOI sales were $540 million compared to $521
million in the prior year. Gross VOI sales were driven by 172,000
tours during the quarter compared to 147,000 in the same period
last year, partially offset by an 11% decrease in VPG due to a
higher mix of new owner tours.
Fourth quarter Adjusted EBITDA was $208 million compared to $186
million in the prior year period, with the revenue growth partially
offset by an increase in marketing costs to support increased tour
flow and new owner mix.
Travel and Membership
$ in millions
Q4 2023
Q4 2022
% change
FY 2023
FY 2022
% change
Revenue
$158
$163
(3)%
$711
$735
(3)%
Adjusted EBITDA
$52
$57
(9)%
$247
$268
(8)%
Travel and Membership revenue decreased 3% to $158 million in
the fourth quarter of 2023 compared to the same period in the prior
year. This was driven by a 6% decrease in transactions offset by a
2% increase in revenue per transaction. The transaction decline was
driven by lower exchange transaction propensity and a decrease in
Travel Club transactions.
Fourth quarter Adjusted EBITDA was $52 million compared to $57
million in the prior year due to lower transaction revenue,
partially offset by lower staff costs.
Balance Sheet and
Liquidity
Net Debt — As of December 31, 2023, the Company's
leverage ratio for covenant purposes was 3.4x. The Company had $3.6
billion of corporate debt outstanding as of December 31, 2023,
which excluded $2.1 billion of non-recourse debt related to its
securitized notes receivables portfolio. Additionally, the Company
had cash and cash equivalents of $282 million. At the end of the
fourth quarter, the Company had $1.3 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 facilities on
December 20, 2023. This amendment refinanced $298 million of
outstanding borrowings under the 2022 Incremental Term Loan B and
included an additional $300 million of borrowings. We expect to use
net proceeds from the 2023 Incremental Term Loan B facility,
together with available cash on hand and revolving credit facility
borrowings to repay our outstanding $300 million 5.65% secured
notes due April 2024 and pay related fees and expenses.
Timeshare Receivables Financing — The Company closed on a
$300 million term securitization on October 19, 2023 with a
weighted average coupon of 6.78% and a 91.8% advance rate and an
incremental $238 million term securitization on December 20, 2023
with a coupon of 6.51% and an 80.0% advance rate.
Cash Flow — For the full-year 2023, net cash provided by
operating activities was $350 million compared to $442 million in
the prior year. Adjusted free cash flow was $379 million in 2023
compared to $439 million in the prior year. These decreases in 2023
were primarily attributable to an increase in cash utilization for
working capital, including impacts of the Sports Illustrated
agreement and continued growth in our loan portfolio.
Share Repurchases — During the fourth quarter of 2023,
the Company repurchased 1.1 million shares of common stock for $40
million at an average price of $35.67 per share. For the full-year
2023, the Company repurchased 7.8 million shares of common stock
for $307 million at an average price of $39.11 per share. As of
December 31, 2023, the Company had $170 million remaining in its
share repurchase authorization.
Dividend — The Company paid $32 million ($0.45 per share)
in cash dividends on December 29, 2023 to shareholders of record as
of December 15, 2023. For the full-year 2023, Travel + Leisure Co.
paid an aggregate $136 million in dividends to shareholders.
Management will recommend a first quarter dividend of $0.50 per
share for approval by the Company's Board of Directors in March
2024.
Other Items
Taxes — During the quarter a valuation allowance
associated with foreign tax credit carryforwards was partially
reversed as the Company now expects that the benefit of the credits
will be realized. This resulted in a diluted EPS benefit of $0.37
for the quarter and a diluted EPS benefit of $0.35 for the full
year.
Outlook
The Company is providing guidance regarding expectations for the
2024 full year:
- Adjusted EBITDA to range from $910 million to $930
million.
- Gross VOI sales of $2.25 billion to $2.35 billion
- VPG of $2,900 to $3,000
The Company is providing guidance regarding expectations for the
first quarter 2024:
- Adjusted EBITDA to range from $185 million to $190 million
- Gross VOI sales of $460 million to $480 million
- VPG of $2,925 to $3,025
- Travel and Membership Adjusted EBITDA of $75 million to $80
million
Following are sensitivities to full year Adjusted EBITDA
guidance. The impact of 100 bps change in our key Vacation
Ownership drivers would be expected to be as follows:
- Tours: approximately $6 million change in Adjusted EBITDA
- VPG: approximately $11 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, 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 8:30 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.
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 19,000+ 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 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 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
- 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.
Consolidated Statements of Income
(Unaudited)
(in millions, except per share
amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net revenues
Service and membership fees
$
386
$
389
$
1,649
$
1,611
Net VOI sales
410
384
1,582
1,484
Consumer financing
114
105
427
406
Other
25
21
92
66
Net revenues
935
899
3,750
3,567
Expenses
Operating
409
401
1,684
1,603
Cost of vacation ownership interests
25
32
133
157
Consumer financing interest
31
24
112
79
General and administrative
107
120
454
479
Marketing
128
114
507
451
Depreciation and amortization
29
28
112
119
Restructuring
14
7
26
14
Asset impairments, net
1
12
—
10
COVID-19 related costs
—
—
—
2
Total expenses
744
738
3,028
2,914
Loss on sale of business
—
—
2
—
Operating income
191
161
720
653
Interest expense
68
51
251
195
Interest (income)
(4
)
(3
)
(13
)
(6
)
Other (income), net
—
(6
)
(3
)
(22
)
Income before income taxes
127
119
485
486
(Benefit)/provision for income taxes
(2
)
29
94
130
Net income from continuing
operations
129
90
391
356
Gain on disposal of discontinued business,
net of income taxes
—
—
5
1
Net income attributable to TNL
shareholders
$
129
$
90
$
396
$
357
Basic earnings per share
Continuing operations
$
1.78
$
1.13
$
5.24
$
4.27
Discontinued operations
—
—
0.07
0.01
$
1.78
$
1.13
$
5.31
$
4.28
Diluted earnings per share
Continuing operations
$
1.77
$
1.12
$
5.21
$
4.23
Discontinued operations
—
—
0.07
0.01
$
1.77
$
1.12
$
5.28
$
4.24
Weighted average shares
outstanding
Basic
72.2
79.8
74.5
83.4
Diluted
72.7
80.5
75.0
84.2
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,
2023
2022
Change
2023
2022
Change
Consolidated
Results
Net income attributable to TNL
shareholders
$
129
$
90
43
%
$
396
$
357
11
%
Diluted earnings per share
$
1.77
$
1.12
58
%
$
5.28
$
4.24
25
%
Net income from continuing operations
$
129
$
90
43
%
$
391
$
356
10
%
Diluted earnings per share from continuing
operations
$
1.77
$
1.12
58
%
$
5.21
$
4.23
23
%
Net income margin
13.8
%
10.0
%
10.6
%
10.0
%
Adjusted Earnings
Adjusted EBITDA
$
240
$
225
7
%
$
908
$
859
6
%
Adjusted net income
$
144
$
105
37
%
$
427
$
380
12
%
Adjusted diluted earnings per share
$
1.98
$
1.30
52
%
$
5.70
$
4.52
26
%
Segment
Results
Net Revenues
Vacation Ownership
$
776
$
737
5
%
$
3,041
$
2,835
7
%
Travel and Membership
158
163
(3
)%
711
735
(3
)%
Corporate and other
1
(1
)
(2
)
(3
)
Total
$
935
$
899
4
%
$
3,750
$
3,567
5
%
Adjusted EBITDA
Vacation Ownership
$
208
$
186
12
%
$
729
$
665
10
%
Travel and Membership
52
57
(9
)%
247
268
(8
)%
Segment Adjusted EBITDA
260
243
976
933
Corporate and other
(20
)
(18
)
(68
)
(74
)
Total Adjusted EBITDA
$
240
$
225
7
%
$
908
$
859
6
%
Adjusted EBITDA Margin
25.7
%
25.0
%
24.2
%
24.1
%
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 December
31,
Twelve Months Ended December
31,
2023
2022
Change
2023
2022
Change
Vacation
Ownership
Net VOI Sales
$
410
$
384
7
%
$
1,582
$
1,484
7
%
Loan loss provision
92
86
7
%
348
302
15
%
Gross VOI sales, net of Fee-for-Service
sales
502
470
7
%
1,930
1,786
8
%
Fee-for-Service sales
38
51
(25
)%
219
196
12
%
Gross VOI sales
$
540
$
521
4
%
$
2,149
$
1,982
8
%
Tours (in thousands)
172
147
17
%
663
561
18
%
VPG (in dollars)
3,058
3,434
(11
)%
3,128
3,426
(9
)%
Tour generated VOI sales
525
503
4
%
2,075
1,923
8
%
Telesales and other
15
18
(17
)%
74
59
25
%
Gross VOI sales
540
521
4
%
2,149
1,982
8
%
Net VOI sales
410
384
7
%
1,582
1,484
7
%
Property management revenue
204
198
3
%
814
763
7
%
Consumer financing
114
105
9
%
427
406
5
%
Other (a)
48
50
(4
)%
218
182
20
%
Total Vacation Ownership
revenue
776
737
5
%
3,041
2,835
7
%
Travel and
Membership
Avg. number of exchange members (in
thousands)
3,524
3,508
—
%
3,515
3,524
—
%
Transactions (in thousands)
191
208
(8
)%
959
1,022
(6
)%
Revenue per transaction (in dollars)
375
367
2
%
357
341
5
%
Exchange transaction revenue
72
76
(5
)%
343
348
(1
)%
Transactions (in thousands)
145
150
(3
)%
679
709
(4
)%
Revenue per transaction (in dollars)
222
212
5
%
230
241
(4
)%
Travel Club transaction revenue
32
32
—
%
156
171
(9
)%
Transactions (in thousands)
336
358
(6
)%
1,638
1,731
(5
)%
Revenue per transaction (in dollars)
310
302
2
%
305
300
2
%
Travel and Membership transaction
revenue
104
108
(4
)%
499
519
(4
)%
Transaction revenue
104
108
(4
)%
499
519
(4
)%
Subscription revenue
46
47
(2
)%
183
184
(1
)%
Other (b)
8
8
—
%
29
32
(9
)%
Total Travel and Membership
revenue
158
163
(3
)%
711
735
(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 December
31,
2023
EPS
Margin %
2022
EPS
Margin %
Net income attributable to TNL
shareholders
$
129
$
1.77
13.8
%
$
90
$
1.12
10.0
%
Restructuring (a)
14
7
Amortization of acquired intangibles
(b)
3
2
Asset impairments, net
1
12
Debt modification
1
—
Taxes (c)
(4
)
(5
)
Adjusted net income
$
144
$
1.98
15.4
%
$
105
1.30
11.7
%
Income taxes on adjusted net income
2
34
Interest expense
68
51
Depreciation
26
26
Stock-based compensation expense (d)
5
11
Debt modification (e)
(1
)
—
Interest income
(4
)
(3
)
Adjusted EBITDA
$
240
25.7
%
$
225
25.0
%
Diluted Shares Outstanding
72.7
80.5
Twelve Months Ended December
31,
2023
EPS
Margin %
2022
EPS
Margin %
Net income attributable to TNL
shareholders
$
396
$
5.28
10.6
%
$
357
$
4.24
10.0
%
Gain on disposal of discontinued business,
net of income taxes
(5
)
(1
)
Net income from continuing
operations
$
391
$
5.21
10.4
%
$
356
$
4.23
10.0
%
Restructuring (a)
26
14
Amortization of acquired intangibles
(b)
10
9
Legacy items
8
1
Loss on sale of business
2
—
Asset impairments, net (f)
1
11
Debt modification
1
—
Loss on equity investment
—
5
COVID-19 related costs
—
2
Fair value change in contingent
consideration
—
(10
)
Taxes (c)
(12
)
(8
)
Adjusted net income
$
427
$
5.70
11.4
%
$
380
4.52
10.7
%
Income taxes on adjusted net income
106
138
Interest expense
251
195
Depreciation
102
110
Stock-based compensation expense (d)
36
42
Debt modification (e)
(1
)
—
Interest income
(13
)
(6
)
Adjusted EBITDA
$
908
24.2
%
$
859
24.1
%
Diluted Shares Outstanding
75.0
84.2
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)
Includes $2 million stock-based
compensation expenses associated with the 2023 restructuring plans
for the three months ended December 31, 2023. Includes $2 million
and $3 million of stock-based compensation expenses associated with
the 2023 and 2022 restructuring plans for the twelve months ended
December 31, 2023 and 2022.
(b)
Amortization of
acquisition-related intangible assets is excluded from Adjusted net
income and Adjusted EBITDA.
(c)
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.
(d)
All stock-based compensation is
excluded from Adjusted EBITDA.
(e)
Debt modifications are excluded
from Adjusted net income, while included for Adjusted EBITDA.
(f)
Includes $1 million of inventory
impairments for the twelve months ended December 31, 2023 and 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)
Twelve Months Ended
December 31,
2023
2022
Net cash provided by operating
activities
$
350
$
442
Property and equipment additions
(74
)
(52
)
Sum of proceeds and principal payments of
non-recourse vacation ownership debt
103
47
Free cash flow
$
379
$
437
COVID-19 related adjustments (a)
—
2
Adjusted free cash flow (b)
$
379
$
439
Net income attributable to TNL
shareholders
$
396
$
357
Adjusted EBITDA (c)
$
908
$
859
Net income cash flow conversion
(d)
88
%
124
%
Adjusted free cash flow
conversion
42
%
51
%
(a)
Includes cash paid for COVID-19
expenses factored into the calculation of Adjusted EBITDA.
(b)
The Company had $80 million of
net cash used in investing and $500 million of net cash used in
financing activities for the year ended December 31, 2023, and $50
million of net cash used in investing activities and $196 million
of net cash used in financing activities for the year ended
December 31, 2022.
(c)
See table 3 for a reconciliation
of Net income attributable to TNL shareholders to Adjusted
EBITDA.
(d)
Represents Net cash provided by
operating activities as a percentage of Net Income
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 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 Adjusted 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: A non-GAAP measure, represents Adjusted
free cash flow as a percentage of Adjusted EBITDA. 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 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/20240221285798/en/
Investors: Kendrick Calilao Investor Relations (407)
626-4487 Kendrick.Calilao@travelandleisure.com
Media: Steven Goldsmith Public Relations (407) 626-5882
Steven.Goldsmith@travelandleisure.com
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