Travel + Leisure Co. Reports First Quarter 2022 Results and Provides Full Year 2022 Guidance

Travel + Leisure Co. (NYSE:TNL), the world’s leading membership and leisure travel company, today reported first quarter 2022 financial results for the three months ended March 31, 2022. Highlights and outlook include:

• Net income of $51 million ($0.59 diluted earnings per share) on net revenue of $809 million

• Adjusted EBITDA of $170 million and adjusted diluted earnings per share of $0.69 ⁽¹⁾

• Net cash provided by operating activities of $141 million and adjusted free cash flow of $146 million for the first three months of 2022

• Expects full year adjusted EBITDA from $855 million to $875 million and second quarter adjusted EBITDA from $220 million to $230 million

• Repurchased $45 million of common stock in the first quarter

• The Board of Directors approved an increase to the authorized capacity of the Company's share repurchase program by $500 million in April 2022

• Management will recommend a second quarter dividend of $0.40 per share for approval by the Board of Directors

“Leisure travel is back and Travel + Leisure Co. benefited from families returning to vacation in the first quarter after a long hiatus due to the pandemic,” said Michael D. Brown, president and CEO of Travel + Leisure Co.

“We continue to see record-setting sales volume per guest from our timeshare business and we expect occupancy for the remainder of the year to be above 2019 as we anticipate a robust travel season in North America. Our strong revenue and Adjusted EBITDA in the quarter give us confidence in the year ahead as families appreciate more than ever that vacation ownership is a preferred way to vacation in a period where travel costs are rising.”

Business Segment Results

Vacation Ownership

Vacation Ownership revenue increased 35% to $604 million in the first quarter of 2022 compared to the same period in the prior year. Gross vacation ownership interest (VOI) sales were $379 million compared to $236 million in the prior year and tours were 108,000 during the quarter compared to 76,000 in the same period last year. Volume Per Guest (VPG) increased 19% to $3,377.

First quarter adjusted EBITDA was $103 million compared to $66 million in the prior year period. The increase was driven by higher Gross VOI sales due to the ongoing recovery of operations from COVID-19 and continued improvement in the provision for loan losses.

Travel and Membership

Travel and Membership revenue increased 15% to $210 million in the first quarter of 2022 compared to the same period in the prior year. The increase was driven by higher transaction revenue due to improved revenue per transaction and growth in B2B Travel Club transactions.

First quarter Adjusted EBITDA was $84 million compared to $75 million in the prior year due to the revenue increase.

Balance Sheet and Liquidity

Net Debt — As of March 31, 2022, the Company had net debt of $3.0 billion comprised of $3.4 billion of corporate debt and $381 million of cash and cash equivalents. The corporate debt excludes $1.9 billion of non-recourse debt related to its securitized notes receivables portfolio. The Company's leverage ratio for covenant purposes was 3.8x. At the end of the first quarter, the Company had $1.4 billion of liquidity in cash and cash equivalents and revolving credit facility availability.

Timeshare Receivables Financing — The Company closed on a $275 million term securitization on March 23, 2022 with a weighted average coupon of 3.84% and a 98% advance rate. Additionally, the Company renewed its USD timeshare receivables conduit facility with a borrowing capacity of $600 million and extended its term to July 2024.

Cash Flow — For the three months ended March 31, 2022, net cash provided by operating activities was $141 million, compared to $78 million in the prior year period. Adjusted free cash flow was $146 million for the three months ended March 31, 2022 compared to $20 million in the same period of 2021.

Share Repurchases — During the first quarter of 2022, the Company repurchased 0.8 million shares of common stock for $45 million at a weighted average price of $56.15 per share. As of March 31, 2022, the Company had $283 million of remaining availability under its share repurchase program. In April 2022, the Board of Directors approved an increase to the authorized capacity of the Company's share repurchase program by $500 million.

Dividend — The Company paid $35 million ($0.40 per share) in cash dividends on March 31, 2022 to shareholders of record as of March 15, 2022. Management will recommend a second quarter dividend of $0.40 per share for approval by the Company’s Board of Directors in May 2022.

Outlook

The Company is providing guidance regarding expectations for the 2022 full year:

• Adjusted EBITDA of $855 million to $875 million

• Gross VOI sales of $1.9 billion to $2.0 billion

• VPG of approximately $3,200

The Company is providing guidance regarding expectations for the second quarter 2022:

• Adjusted EBITDA of $220 million to $230 million

• Gross VOI sales of $500 million to $520 million

• VPG of approximately $3,300

This guidance is presented only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure is available without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount of these adjustments that may arise in the future. Where one or more of the currently unavailable items is applicable, such items could be material, individually or in the aggregate, to GAAP reported results.

Conference Call Information

Travel + Leisure Co. will hold a conference call with investors to discuss the Company’s results and outlook today at 8:30 a.m. EDT. Participants may listen to a simultaneous webcast of the conference call, which may be accessed through the Company's website at investor.travelandleisureco.com, or by dialing 866-831-8713, passcode TNL, 10 minutes before the scheduled start time. For those unable to listen to the live broadcast, an archive of the webcast will be available on the Company's website for 90 days beginning at 12:00 p.m. EDT today. Additionally, a telephone replay will be available for four days beginning at 12:00 p.m. EDT today at 800-839-6980.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures such as adjusted EBITDA, adjusted diluted EPS, adjusted free cash flow, gross VOI sales and adjusted net income/(loss), which include or exclude certain items, as well as non-GAAP guidance. The Company utilizes non-GAAP measures, defined in Table 6, on a regular basis to assess performance of its reportable segments and allocate resources. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors when considered with GAAP measures as an additional tool for further understanding and assessing the Company’s ongoing operating performance by adjusting for items which in our view do not necessarily reflect ongoing performance. Management also internally uses these measures to assess operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Exclusion of items in the Company’s non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures for the reported periods appear in the financial tables section of the press release. See definitions on Table 6 for an explanation of our non-GAAP measures.

About Travel + Leisure Co.

Travel + Leisure Co. (NYSE:TNL) is the world’s leading membership and leisure travel company, with nearly 20 travel brands across its resort, travel club, and lifestyle portfolio. The company provides outstanding vacation experiences and travel inspiration to millions of owners, members, and subscribers every year through its products and services: Wyndham Destinations, the largest vacation ownership company with more than 245 vacation club resort locations across the globe; Panorama, the world’s foremost membership travel business that includes the largest vacation exchange company and subscription travel brands; and Travel + Leisure Group, featuring top travel content and travel services including the brand’s eponymous travel club. At Travel + Leisure Co., our global team of associates brings hospitality to millions each year, turning vacation inspiration into exceptional travel experiences. We put the world on vacation. Learn more at travelandleisureco.com.

Forward-Looking Statements

This press release includes “forward-looking statements” as that term is defined by the Securities and Exchange Commission (“SEC”). Forward-looking statements are any statements other than statements of historical fact, including statements regarding our expectations, beliefs, hopes, intentions or strategies regarding the future. In some cases, forward-looking statements can be identified by the use of words such as “may,” “will,” “expects,” “should,” “believes,” “plans,” “anticipates,” “estimates,” “predicts,” “potential,” “continue,” “future,” “intends” 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 and unemployment rates, terrorism or acts of gun violence, political strife, war, 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 and our ability to access capital markets on reasonable terms, at a reasonable cost or at all; maintaining the integrity of internal or customer data and protecting our systems from cyber-attacks; uncertainty with respect to the scope, impact and duration of the novel coronavirus global pandemic (“COVID-19”), including resurgences, the pace of recovery, distribution and adoption of vaccines and treatments, and actions in response to the evolving pandemic by governments, businesses and individuals; the timing and amount of future dividends and share repurchases, if any; and those other factors disclosed as risks under “Risk Factors” in documents we have filed with the SEC, including in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 23, 2022. We caution readers that any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we undertake no obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

Travel + Leisure Co.

Table of Contents

Table Number

1. Condensed 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 Impacts
6. Definitions

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.

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