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Travel + Leisure Co. Reports First Quarter 2024 Results

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240424345984/en/

• Net income of $66 million, $0.92 diluted earnings per share, on net revenue of $916 million
• Adjusted EBITDA of $191 million and adjusted diluted earnings per share of $0.97⁽¹⁾
• Expects second quarter adjusted EBITDA of $235 million to $245 million
• Reaffirms expectations for full year adjusted EBITDA of $910 million to $930 million
• Management will recommend a second quarter dividend of $0.50 per share for approval by the Board of Directors

"We have an excellent team in place who are executing well against plans to grow the business. With owner room nights for the remainder of the year up 7 percent, we are looking forward to a strong summer travel season and are increasingly confident in meeting our 2024 commitments."

Business Segment Results

Vacation Ownership

Vacation Ownership revenue increased 6% to $725 million in the first quarter of 2024 compared to the same period in the prior year. Net vacation ownership interest (VOI) sales were $369 million in the first quarter compared to $338 million in the prior year period, and Gross VOI sales were $490 million compared to $454 million in the prior year. Gross VOI sales were driven by 155,000 tours during the quarter compared to 135,000 in the same period last year, partially offset by a 6% decrease in VPG due to a higher mix of new owner tours.

First quarter adjusted EBITDA was $135 million compared to $131 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, an increase in sales and commission expenses due to higher gross VOI sales, and higher interest rates on our ABS debt.

Travel and Membership

Travel and Membership revenue decreased 4% to $193 million in the first quarter of 2024 compared to the same period in the prior year. This was driven by a 6% decrease in transactions offset by a 1% increase in revenue per transaction. Transactions were impacted by an increasing mix of exchange members with a club affiliation, who have a lower transaction propensity.

First quarter Adjusted EBITDA was $75 million compared to $71 million in the prior year, with the revenue decrease more than offset by lower operating costs primarily driven by the restructure of the segment in the fourth quarter of 2023.

Balance Sheet and Liquidity

Net Debt - As of March 31, 2024, the Company's leverage ratio for covenant purposes was 3.5x. The Company had $3.9 billion of corporate debt outstanding as of March 31, 2024, 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 $479 million. At the end of the first quarter, the Company had $1.2 billion of liquidity in cash and cash equivalents and revolving credit facility availability. Subsequent to the end of the quarter, the Company repaid its $300 million secured notes due April 2024 using proceeds from 2023 borrowings, cash on hand, and a partial draw down of its revolving credit facility.

Timeshare Receivables Financing - On March 21, 2024, the Company closed on a $350 million term securitization transaction with a weighted average coupon of 5.7% and a 95.3% advance rate.

Cash Flow - For the three months ended March 31, 2024, net cash provided by operating activities was $47 million compared to $7 million in the prior year period. Adjusted free cash flow was $22 million for the three months ended March 31, 2024 compared to an outflow of $8 million in the same period of 2023 due to a decrease in cash utilized for working capital items, mainly due to timing of payments.

Share Repurchases - During the first quarter of 2024, the Company repurchased 0.6 million shares of common stock for $25 million at a weighted average price of $40.07 per share. As of March 31, 2024, the Company had $146 million remaining in its share repurchase authorization.

Dividend - The Company paid $38 million ($0.50 per share) in cash dividends on March 29, 2024 to shareholders of record as of March 21, 2024. Management will recommend a second quarter dividend of $0.50 per share for approval by the Company's Board of Directors in May 2024.

Outlook

The Company is reaffirming guidance regarding expectations for the 2024 full year:

• Adjusted EBITDA of $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 second quarter 2024:

• Adjusted EBITDA of $235 million to $245 million
• Gross VOI sales of $580 million to $610 million
• VPG of $2,900 to $3,000
• Travel and Membership Adjusted EBITDA of $60 million to $65 million

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 more than 270 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," "outlook," "guidance," "commitments," 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 our travel clubs; 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; 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, 2023, filed with the SEC on February 21, 2024. 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. Definitions

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