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Travel + Leisure Co. Reports Second Quarter 2022 Results

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ORLANDO, Fla.–()–Travel + Leisure Co. (NYSE:TNL), the world’s leading membership and leisure travel company, today reported second quarter 2022 financial results for the three months ended June 30, 2022. Highlights and outlook include:

  • Net income of $100 million, $1.16 diluted earnings per share, on net revenue of $922 million
  • Adjusted EBITDA of $230 million and adjusted diluted earnings per share of $1.27 (1)
  • Net cash provided by operating activities of $230 million and adjusted free cash flow of $121 million for the six months ended June 30, 2022
  • Expects full year adjusted EBITDA from $860 million to $880 million and third quarter adjusted EBITDA from $230 million to $240 million
  • Repurchased $83 million of common stock in the second quarter and $128 million in the first half of 2022
  • Record Volume per Guest (VPG) for the second consecutive quarter
  • Management will recommend a third quarter dividend of $0.40 per share for approval by the Board of Directors

“Our strong top and bottom line results reflect the resiliency of our business model and the desire of our customers to prioritize vacations. Vacation ownership sales to new and existing owners were robust, with record-setting sales volume per guest driving our performance for the quarter,” said Michael D. Brown, President and CEO of Travel + Leisure Co.

“Bookings at our vacation resorts in the second half of the year remain above 2019 driven by a similar number of reservations with a longer length of stay, reflecting the strength of consumer demand for leisure travel in the U.S. This gives us the confidence to raise our guidance for the full year.”

(1) This press release includes adjusted EBITDA, adjusted diluted EPS, adjusted free cash flow, gross VOI sales and adjusted net income, which are metrics 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 to the most directly comparable GAAP measures. Forward-looking non-GAAP measures are presented in this press release only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation is available without unreasonable effort.

Business Segment Results

Vacation Ownership

$ in millions

Q2 2022

Q2 2021

% change

Revenue

$735

$604

22 %

Adjusted EBITDA

$187

$137

36 %

Vacation Ownership revenue increased 22% to $735 million in the second quarter of 2022 compared to the same period in the prior year. Gross vacation ownership interest (VOI) sales were $527 million compared to $383 million in the prior year and tours were 148,000 during the quarter compared to 117,000 in the same period last year. VPG increased 11% to $3,489.

Second quarter adjusted EBITDA was $187 million compared to $137 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, partially offset by an adjustment in the prior year to the COVID-19 related allowance for loan losses. The second quarter 2021 COVID-19 related allowance adjustment resulted in a $26 million increase to revenue and a $16 million net positive impact to Adjusted EBITDA.

Travel and Membership

$ in millions

Q2 2022

Q2 2021

% change

Revenue

$188

$194

(3) %

Adjusted EBITDA

$64

$71

(10) %

Travel and Membership revenue decreased 3% to $188 million in the second quarter of 2022 compared to the same period in the prior year. The decrease was driven by the impact of COVID-19 with bookings shifting from the first quarter into the second quarter of 2021.

Second quarter Adjusted EBITDA was $64 million compared to $71 million in the prior year due to the revenue decrease and higher staffing and marketing costs to support new travel club launches.

Balance Sheet and Liquidity

Net Debt — As of June 30, 2022, the Company had net debt of $3.1 billion comprised of $3.4 billion of corporate debt and $241 million of cash and cash equivalents. Corporate debt excludes $1.8 billion of non-recourse debt related to the securitized notes receivables portfolio. The Company’s leverage ratio for covenant purposes was 3.7x. At the end of the second quarter, the Company had $1.2 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 July 21, 2022 with a weighted average coupon of 5.7% and a 90.5% advance rate.

Cash Flow For the six months ended June 30, 2022, net cash provided by operating activities was $230 million, compared to $290 million in the prior year period. Adjusted free cash flow was $121 million for the six months ended June 30, 2022 compared to $56 million in the same period of 2021.

Share Repurchases — During the second quarter of 2022, the Company repurchased 1.7 million shares of common stock for $83 million at a weighted average price of $48.12 per share. In April 2022, the Board of Directors approved an increase to the authorized capacity of the Company’s share repurchase program of $500 million. As of June 30, 2022, the Company had $700 million of remaining availability under its share repurchase program.

Dividend The Company paid $35 million ($0.40 per share) in cash dividends on June 30, 2022 to shareholders of record as of June 15, 2022. Management will recommend a third quarter dividend of $0.40 per share for approval by the Company’s Board of Directors in August 2022.

Outlook

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

  • Adjusted EBITDA of $860 million to $880 million
  • Gross VOI sales of $1.9 billion to $2.0 billion
  • VPG range of $3,300 to $3,400

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

  • Adjusted EBITDA of $230 million to $240 million
  • Gross VOI sales of $530 million to $550 million
  • VPG range of $3,300 to $3,400

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 800-891-3968, 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 800-925-9356.

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, unemployment rates and consumer sentiment, 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 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

Table 1

Travel + Leisure Co.

Condensed Consolidated Statements of Income (Unaudited)

(in millions, except per share amounts)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Net revenues

 

 

 

 

 

 

 

Service and membership fees

$

410

 

 

$

388

 

 

$

812

 

 

$

736

 

Net VOI sales

 

400

 

 

 

294

 

 

 

697

 

 

 

466

 

Consumer financing

 

99

 

 

 

102

 

 

 

198

 

 

 

201

 

Other

 

13

 

 

 

13

 

 

 

24

 

 

 

22

 

Net revenues

 

922

 

 

 

797

 

 

 

1,731

 

 

 

1,425

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Operating

 

404

 

 

 

349

 

 

 

785

 

 

 

639

 

Cost of vacation ownership interests

 

46

 

 

 

41

 

 

 

86

 

 

 

62

 

Consumer financing interest

 

17

 

 

 

20

 

 

 

34

 

 

 

44

 

General and administrative

 

121

 

 

 

112

 

 

 

241

 

 

 

218

 

Marketing

 

119

 

 

 

92

 

 

 

213

 

 

 

161

 

Depreciation and amortization

 

31

 

 

 

31

 

 

 

61

 

 

 

63

 

Restructuring

 

1

 

 

 

 

 

 

8

 

 

 

(1

)

COVID-19 related costs

 

 

 

 

1

 

 

 

2

 

 

 

2

 

Asset recoveries, net

 

(2

)

 

 

 

 

 

(1

)

 

 

 

Total expenses

 

737

 

 

 

646

 

 

 

1,429

 

 

 

1,188

 

 

 

 

 

 

 

 

 

Operating income

 

185

 

 

 

151

 

 

 

302

 

 

 

237

 

Interest expense

 

47

 

 

 

47

 

 

 

94

 

 

 

100

 

Other expense/(income), net

 

7

 

 

 

 

 

 

4

 

 

 

(1

)

Interest (income)

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(1

)

Income before income taxes

 

132

 

 

 

105

 

 

 

206

 

 

 

139

 

Provision for income taxes

 

32

 

 

 

31

 

 

 

55

 

 

 

37

 

Net income from continuing operations

 

100

 

 

 

74

 

 

 

151

 

 

 

102

 

Loss on disposal of discontinued business, net of income taxes

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Net income attributable to TNL shareholders

$

100

 

 

$

72

 

 

$

151

 

 

$

100

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

 

Continuing operations

$

1.17

 

 

$

0.85

 

 

$

1.76

 

 

$

1.18

 

Discontinued operations

 

 

 

 

(0.02

)

 

 

 

 

 

(0.02

)

 

$

1.17

 

 

$

0.83

 

 

$

1.76

 

 

$

1.16

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

Continuing operations

$

1.16

 

 

$

0.84

 

 

$

1.75

 

 

$

1.17

 

Discontinued operations

 

 

 

 

(0.02

)

 

 

 

 

 

(0.02

)

 

$

1.16

 

 

$

0.82

 

 

$

1.75

 

 

$

1.15

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic

 

85.0

 

 

 

86.5

 

 

 

85.5

 

 

 

86.4

 

Diluted

 

85.7

 

 

 

87.4

 

 

 

86.4

 

 

 

87.1

 

Table 2

Travel + Leisure Co.

Summary Data Sheet

(in millions, except per share amounts, unless otherwise indicated)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

Change

 

2022

 

2021

 

Change

Consolidated Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TNL shareholders

$

100

 

 

$

72

 

 

39

%

 

$

151

 

 

$

100

 

 

51

%

Diluted earnings per share

$

1.16

 

 

$

0.82

 

 

41

%

 

$

1.75

 

 

$

1.15

 

 

52

%

Net income from continuing operations

$

100

 

 

$

74

 

 

35

%

 

$

151

 

 

$

102

 

 

48

%

Diluted earnings per share from continuing operations

$

1.16

 

 

$

0.84

 

 

38

%

 

$

1.75

 

 

$

1.17

 

 

50

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income margin

 

10.8

%

 

 

9.0

%

 

 

 

 

8.7

%

 

 

7.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

230

 

 

$

193

 

 

19

%

 

$

399

 

 

$

322

 

 

24

%

Adjusted net income

$

109

 

 

$

77

 

 

42

%

 

$

169

 

 

$

110

 

 

54

%

Adjusted diluted earnings per share

$

1.27

 

 

$

0.88

 

 

44

%

 

$

1.95

 

 

$

1.27

 

 

53

%

 

 

 

 

 

 

 

 

 

 

 

 

Segment Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenues

 

 

 

 

 

 

 

 

 

 

 

Vacation Ownership

$

735

 

 

$

604

 

 

22

%

 

$

1,344

 

 

$

1,057

 

 

27

%

Travel and Membership

 

188

 

 

 

194

 

 

(3

) %

 

 

389

 

 

 

370

 

 

5

%

Corporate and other

 

(1

)

 

 

(1

)

 

 

 

 

(2

)

 

 

(2

)

 

 

Total

$

922

 

 

$

797

 

 

16

%

 

$

1,731

 

 

$

1,425

 

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Vacation Ownership

$

187

 

 

$

137

 

 

36

%

 

$

291

 

 

$

204

 

 

43

%

Travel and Membership

 

64

 

 

 

71

 

 

(10

) %

 

 

146

 

 

 

146

 

 

%

Segment Adjusted EBITDA

 

251

 

 

 

208

 

 

 

 

 

437

 

 

 

350

 

 

 

Corporate and other

 

(21

)

 

 

(15

)

 

 

 

 

(38

)

 

 

(28

)

 

 

Total Adjusted EBITDA

$

230

 

 

$

193

 

 

19

%

 

$

399

 

 

$

322

 

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

24.9

%

 

 

24.2

%

 

 

 

 

23.1

%

 

 

22.6

%

 

 

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 June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

Change

 

2022

 

2021

 

Change

Vacation Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net VOI sales

$

400

 

$

294

 

36

%

 

$

697

 

$

466

 

50

%

Loan loss provision

 

76

 

 

33

 

130

%

 

 

125

 

 

71

 

76

%

Gross VOI sales, net of Fee-for-Service sales

 

476

 

 

327

 

46

%

 

 

821

 

 

537

 

53

%

Fee-for-Service sales

 

51

 

 

56

 

(9

) %

 

 

85

 

 

82

 

4

%

Gross VOI sales

$

527

 

$

383

 

38

%

 

$

906

 

$

619

 

46

%

 

 

 

 

 

 

 

 

 

 

 

 

Tours (in thousands)

 

148

 

 

117

 

26

%

 

 

256

 

 

193

 

33

%

VPG (in dollars)

$

3,489

 

$

3,151

 

11

%

 

$

3,441

 

$

3,031

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

Tour generated VOI sales

$

516

 

$

368

 

40

%

 

$

882

 

$

586

 

51

%

Telesales and other

 

11

 

 

15

 

(27

) %

 

 

24

 

 

33

 

(27

) %

Gross VOI sales

$

527

 

$

383

 

38

%

 

$

906

 

$

619

 

46

%

 

 

 

 

 

 

 

 

 

 

 

 

Net VOI sales

$

400

 

$

294

 

36

%

 

$

697

 

$

466

 

50

%

Property management revenue

 

189

 

 

166

 

14

%

 

 

374

 

 

327

 

14

%

Consumer financing

 

99

 

 

102

 

(3

) %

 

 

198

 

 

201

 

(1

) %

Other (a)

 

47

 

 

42

 

12

%

 

 

75

 

 

63

 

19

%

Total Vacation Ownership revenue

$

735

 

$

604

 

22

%

 

$

1,344

 

$

1,057

 

27

%

 

 

 

 

 

 

 

 

 

 

 

 

Travel and Membership (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avg. number of exchange members (in thousands)

 

3,517

 

 

3,582

 

(2

) %

 

 

3,543

 

 

3,579

 

(1

) %

 

 

 

 

 

 

 

 

 

 

 

 

Transactions (in thousands)

 

253

 

 

288

 

(12

) %

 

 

564

 

 

605

 

(7

) %

Revenue per transaction (in dollars)

$

343

 

$

329

 

4

%

 

$

334

 

$

312

 

7

%

Exchange transaction revenue

$

86

 

$

95

 

(9

) %

 

$

188

 

$

189

 

(1

) %

 

 

 

 

 

 

 

 

 

 

 

 

Transactions (in thousands)

 

190

 

 

169

 

12

%

 

 

356

 

 

303

 

17

%

Revenue per transaction (in dollars)

$

257

 

$

284

 

(9

) %

 

$

264

 

$

261

 

1

%

Travel Club transaction revenue

$

49

 

$

48

 

2

%

 

$

94

 

$

79

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

Transactions (in thousands)

 

443

 

 

457

 

(3

) %

 

 

920

 

 

908

 

1

%

Revenue per transaction (in dollars)

$

306

 

$

312

 

(2

) %

 

$

307

 

$

295

 

4

%

Travel and Membership transaction revenue

$

135

 

$

143

 

(6

) %

 

$

282

 

$

268

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

Transaction revenue

$

135

 

$

143

 

(6

) %

 

$

282

 

$

268

 

5

%

Subscription revenue

 

45

 

 

43

 

5

%

 

 

90

 

 

84

 

7

%

Other (c)

 

8

 

 

8

 

%

 

 

17

 

 

18

 

(6

) %

Total Travel and Membership revenue

$

188

 

$

194

 

(3

) %

 

$

389

 

$

370

 

5

%

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”). Prior period results reflect the reclassification of this activity from Exchange to Travel Club.

(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 June 30,

 

2022

EPS

 

Margin %

 

2021

EPS

 

Margin %

Net income attributable to TNL shareholders

$

100

 

 

$

1.16

 

10.8

%

 

$

72

 

 

$

0.82

 

9.0

%

Loss on disposal of discontinued business, net of income taxes

 

 

 

 

 

 

 

 

2

 

 

 

 

 

Net income from continuing operations

$

100

 

 

$

1.16

 

10.8

%

 

$

74

 

 

$

0.84

 

9.3

%

Unrealized loss on equity investment

 

8

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquired intangibles (a)

 

3

 

 

 

 

 

 

 

2

 

 

 

 

 

Restructuring

 

1

 

 

 

 

 

 

 

 

 

 

 

 

Legacy items

 

1

 

 

 

 

 

 

 

1

 

 

 

 

 

COVID-19 related costs

 

 

 

 

 

 

 

 

1

 

 

 

 

 

Asset recoveries, net (b)

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

Taxes (c)

 

(3

)

 

 

 

 

 

 

(1

)

 

 

 

 

Adjusted net income

$

109

 

 

$

1.27

 

11.8

%

 

$

77

 

 

$

0.88

 

9.7

%

Income taxes on adjusted net income

 

35

 

 

 

 

 

 

 

32

 

 

 

 

 

Interest expense

 

47

 

 

 

 

 

 

 

47

 

 

 

 

 

Depreciation

 

28

 

 

 

 

 

 

 

29

 

 

 

 

 

Stock-based compensation expense (d)

 

12

 

 

 

 

 

 

 

9

 

 

 

 

 

Interest income

 

(1

)

 

 

 

 

 

 

(1

)

 

 

 

 

Adjusted EBITDA

$

230

 

 

 

 

24.9

%

 

$

193

 

 

 

 

24.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

85.7

 

 

 

 

 

 

 

87.4

 

 

 

 

 

 

Six Months Ended June 30,

 

2022

EPS

 

Margin %

 

2021

EPS

 

Margin %

Net income attributable to TNL shareholders

$

151

 

 

$

1.75

 

8.7

%

 

$

100

 

 

$

1.15

 

7.0

%

Loss on disposal of discontinued business, net of income taxes

 

 

 

 

 

 

 

 

2

 

 

 

 

 

Net income from continuing operations

$

151

 

 

$

1.75

 

8.7

%

 

$

102

 

 

$

1.17

 

7.2

%

Restructuring (e)

 

8

 

 

 

 

 

 

 

(1

)

 

 

 

 

Unrealized loss on equity investment

 

8

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquired intangibles (a)

 

5

 

 

 

 

 

 

 

5

 

 

 

 

 

COVID-19 related costs

 

2

 

 

 

 

 

 

 

2

 

 

 

 

 

Legacy items

 

2

 

 

 

 

 

 

 

4

 

 

 

 

 

Asset recoveries, net (b)

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

Taxes (c)

 

(6

)

 

 

 

 

 

 

(2

)

 

 

 

 

Adjusted net income

$

169

 

 

$

1.95

 

9.8

%

 

$

110

 

 

$

1.27

 

7.7

%

Income taxes on adjusted net income

 

61

 

 

 

 

 

 

 

39

 

 

 

 

 

Interest expense

 

94

 

 

 

 

 

 

 

100

 

 

 

 

 

Depreciation

 

56

 

 

 

 

 

 

 

58

 

 

 

 

 

Stock-based compensation expense (d)

 

21

 

 

 

 

 

 

 

16

 

 

 

 

 

Interest income

 

(2

)

 

 

 

 

 

 

(1

)

 

 

 

 

Adjusted EBITDA

$

399

 

 

 

 

23.1

%

 

$

322

 

 

 

 

22.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

86.4

 

 

 

 

 

 

 

87.1

 

 

 

 

 

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)

Includes $1 million of inventory impairments for the three and six months ended June 30, 2022, included in Cost of vacation ownership interests on the Condensed Consolidated Statements of Income.

(c)

Represents the tax effects on the adjustments.

(d)

All stock-based compensation is excluded from adjusted EBITDA.

(e)

Includes $3 million of stock-based compensation expenses for the six months ended June 30, 2022 associated with the 2022 restructuring.

 

Table 4

Travel + Leisure Co.

Non-GAAP Measure: Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow

(in millions)

 

 

Six Months Ended June 30,

 

 

2022

 

2021

 

 

 

 

 

Net cash provided by operating activities

 

$

230

 

 

$

290

 

Property and equipment additions

 

 

(24

)

 

 

(25

)

Sum of proceeds and principal payments of non-recourse vacation ownership debt

 

 

(87

)

 

 

(213

)

Free cash flow

 

$

119

 

 

$

52

 

COVID-19 related adjustments (a)

 

 

2

 

 

 

4

 

Adjusted free cash flow (b)

 

$

121

 

 

$

56

(a)

Includes cash paid for COVID-19 expenses factored into the calculation of Adjusted EBITDA.

(b)

The Company had $29 million of net cash used in investing activities and $315 million of net cash used in financing activities for the six months ended June 30, 2022, and $62 million of net cash used in investing activities and $1.1 billion of net cash used in financing activities for the six months ended June 30, 2021.

Table 5

Travel + Leisure Co.

COVID-19 Related Impacts

(in millions)

The table below presents the COVID-19 related impacts on our results of operations for the six months ended June 30, 2022, and the related classification on the Condensed Consolidated Statements of Income. There were no COVID-19 related impacts recognized during the three months ended June 30, 2022.

Six Months Ended

 

Vacation

Ownership

 

Travel and

Membership

 

Corporate &

Other

 

Consolidated

 

Non-GAAP

Adjustments

 

Income Statement

Classification

June 30, 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 on our results of operations for the three and six months ended June 30, 2021, and the related classification on the Condensed Consolidated Statements of Income:

Three Months Ended

 

Vacation

Ownership

 

Travel and

Membership

 

Corporate &

Other

 

Consolidated

 

Non-GAAP

Adjustments

 

Income Statement

Classification

June 30, 2021

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Provision

 

$

(26

)

 

$

 

$

 

$

(26

)

 

$

 

Vacation ownership interest sales

Recoveries

 

 

10

 

 

 

 

 

 

 

10

 

 

 

 

Cost of vacation ownership interests

Employee compensation related and other

 

 

1

 

 

 

 

 

 

 

1

 

 

 

1

 

COVID-19 related costs

Total COVID-19

 

$

(15

)

 

$

 

$

 

$

(15

)

 

$

1

 

 

Six Months Ended

 

Vacation

Ownership

 

Travel and

Membership

 

Corporate &

Other

 

Consolidated

 

Non-GAAP

Adjustments

 

Income Statement

Classification

June 30, 2021

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Provision

 

$

(26

)

 

$

 

$

 

$

(26

)

 

$

 

 

Vacation ownership interest sales

Recoveries

 

 

10

 

 

 

 

 

 

 

10

 

 

 

 

 

Cost of vacation ownership interests

Employee compensation related and other

 

 

1

 

 

 

 

 

1

 

 

2

 

 

 

2

 

 

COVID-19 related costs

Lease related

 

 

(1

)

 

 

 

 

 

 

(1

)

 

 

(1

)

 

Restructuring

Total COVID-19

 

$

(16

)

 

$

 

$

1

 

$

(15

)

 

$

1

 

 

 

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 Condensed Consolidated Statements of Income. Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction costs for acquisitions and divestitures, impairments, 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 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 vacation bookings recognized as revenue during the period, net of cancellations, provided in two categories; Exchange, which is primarily RCI, and Travel Club.

 

Volume Per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. The Company has excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade 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.

 



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Travel

Beyond the hype, a dirty side of Da Lat

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Most of this is true, but that’s not the only local reality where things get pretty ugly, too. Unless this reality is recognized and seriously addressed, Da Lat will lose its charm and become a shadow of itself.

Here’s an unflattering picture of the other side.

When walking or running on a sidewalk around Xuan Huong Lake in Da Lat in the early morning, at a certain point you can no longer stay on the sidewalk. One is forced to walk or run into the street as there can be up to ten street kitchens completely blocking sidewalk access. Going out on a street at night can be a bit dangerous as there are quite a number of drunk drivers on the road at night, some driving at speeds well in excess of 120km/h.

These street vendors sell food and drink in plastic bowls and cups. Plastic waste is scattered about a hundred meters in front of and behind their stands. Food and drink thrown away or spilled on sidewalks and streets is a common sight.

Because food safety isn’t monitored regularly, or because people might be very drunk, it’s also not uncommon to see vomit on sidewalks. Open stool and urination is a regular occurrence in the early hours of the morning.

There are many signs along the lake advising that making fires is forbidden, but the street vendors completely ignore them. Many tourists from warmer parts of Vietnam easily come to Da Lat in shorts and T-shirts, despite the colder weather. Street vendors want these visitors to stay warm so they stay longer and buy more food and drink. Sidewalks are often blackened with ash from these staying-warm fires.

When I was photographing these fires, a street vendor threatened to stab me with scissors several times. Some vendors started throwing rocks. A man tried to grab my walking stick and the cell phone I use to take pictures. I reported these incidents to the police but they took no action.

These charcoal fires release many deadly toxins such as PM2.5, carbon monoxide and benzene. When street vendors run out of charcoal, some start burning plastic waste. Burning plastic waste releases dioxins and other highly toxic substances. A piece of dioxin the size of a grain of rice is enough to poison a million people.

To keep their customers happy, some street vendors sell beer and other alcoholic beverages. Some install large speakers so their customers can sing and make lots of noise when they get totally drunk. Not infrequently, the karaoke singing continues until 4 a.m. and can be heard up to two miles away. Although the law prohibits singing karaoke after 10:30 p.m., this law is not enforced around Xuan Huong Lake. Once I heard karaoke singing in three different places around the lake, all blaring at the same time.

Almost everything I have described so far represents laws that are constantly being broken. But why don’t street vendors and their customers obey the law when it’s clearly stated on signs in the area?

The answer is simple.

Laws are not enforced. I have more than 12,000 pictures on my files of breaking the law in this city that gets dirty and ugly quite often, but I didn’t see a fine being issued when I called the police to intervene — not once.

A policeman explained it to me in a somewhat pompous way. If the police consistently enforce laws, it would infuriate many people, and with many angry people out and about, the country’s stability would be undermined and civil unrest could ensue.

The same officer went on to explain that if the police strictly enforce the law, things could get out of hand very quickly. People could become violent, and if the police hit back to defend themselves, controversy would ensue.

Police Policing

With a huge police force and militia, Vietnam has everything it needs to counter the violence and maintain political stability. So what’s the problem?

For many years, the police in Division 8 themselves have blatantly flouted the laws about dumping trash, throwing cigarette butts on the ground, and burning garbage. They even ran a fire pit on police property.

How can the police enforce laws when they themselves break them all the time?

On October 31, I informed a senior police officer in Da Lat that I have over 12,000 pictures of people breaking laws – laws related to setting fires on sidewalks, burning trash, dumping trash, dumping of waste and fishing in the filthy waters of Da Lat Xuan Huong Lake and its stinking lagoons, singing karaoke until 4 a.m., binge drinking, drunk driving, high speed motorcycle racing and so on.

I was surprised when he explained that I should not photograph people breaking the law unless their lawlessness directly impacted my safety and well-being.

Surely it is every citizen’s duty to record violations of the law and report them to law enforcement?

Even when someone threatened me with violence, he advised me not to take photos and to report the person to the police unless I had stab wounds or other injuries.

I was stunned.

I think the government needs to be much more serious about enforcing its most basic safety and environmental laws. If it doesn’t, it won’t be able to tackle far bigger things like the impact of global warming, carbon neutrality and sustainable development.

Photos by Paul A. Olivier of public waste in Da Lat:

*Paul A. Olivier is an American expat living and working in Da Lat.



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How two Hyderabadi 3D artists are popularizing city’s flyovers, roads, buildings at global level

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Kodak Moment: How two 3D artists from Hyderabadi are popularizing overpasses, roads and city buildings on a global scale

Hyderabad: For most of us, photography means clicking photos of a beautiful sunset, landscape or people. But Laxman Pithani and Nikhil Chakravarthy from Hyderabad are crazy about new buildings, roads, highways, flyovers and other infrastructure projects in the city.

“When you’re driving on a newly constructed freeway, with not many vehicles and hardly anyone to stop you or ask you anything, you have a kind of absolute freedom. We both enjoy it,” says Nikhil.

Laxman and Nikhil jointly run a Twitter and YouTube page, Traveling with Laxman, where they post videos and photos of newly constructed or inaugurated flyovers, roads and buildings. They have released drone footage of the Uppal SkyWalk project, the renovated Yadagirigutta Temple, Gandipet Park, the Biodiversity Flyover and more.

Laxman (left) and Nikhil (right) at the recently inaugurated Shilpa layout transition

Her most recent work was the transition of the Shilpa layout. When the city witnessed their first Formula E racing event, they were there to capture the track on which the race took place. On their Twitter Page Travel with Laxman, they have around 2,806 followers and on their youtube Page they have around 57,000 subscribers.

Transition of the Shilpa layout

It’s not about the end product. But Laxman and Nikhil began pursuing infrastructure projects in the city from the start. “If there are upcoming projects, we consult the person concerned and get detailed information about it. We shoot it from start to finish,” says Laxman.

In this way, it helps the audience to keep up to date with the progress of these projects.

T hub

When Laxman met Nikhil

Laxman is originally from Hyderabad but Nikhil is from Tenali in Andhra Pradesh. He moved to Hyderabad in 2002. Both met in 2007 in an animation institute `Arena; where they served as 3D training faculty. Here they taught the students how to use animation techniques in films and character forms. They later moved on to teach interior design at the same institute. In 2015 they both joined Custom Furnish, a company specializing in interior design, where they worked as 3D artists. In 2019, Nikhil left and Laxman continued for another year and a half before retiring in 2021.

Durgam Cheruvu Bridge

Ever since they met, they have discovered their shared passion for travel. Your definition of travel sounds very unique and interesting. “We both love to explore unknown roads. I can drive straight for 10 hours without thinking about the destination. We used to always discover new roads, overpasses, buildings, etc. on such trips, which fascinated us a lot. Each specific destination where nobody bothered us gave us a different kind of freedom,” explains Nikhil.

Until December 2021, Laxman and Nikhil were doing this as a part-time job. But in December 2021 both resigned and started doing so full-time.

Her work is now also being recognized by the Telangana government, which is asking for her help in getting photos of some of the infrastructure projects in the city.

Command and Control Center, Banjara Hills

Development in Hyderabad

Both Laxman and Nikhil say the pace of development in Hyderabad has been very fast compared to other cities. “I was born here, so I’m really excited to see the city developing at this pace,” says Laxman. Nikhil adds: “Something happens every week that it just can’t keep up with this speed. For example, the other day when the Shilpa layout flyover was inaugurated, on the same day Skyroot Aerospace’s private rocket was launched from Sriharikota.”

transfer of biodiversity

In addition to updating townspeople on the development, Travel with Laxman now allows many expatriate Hyderabadis to regain their lost connection with the city. “We have people calling from places like the United States and telling us they’re excited about how their city is doing,” says Laxman.

Renovated Yadadrigutta Temple

The duo are happy to be able to fill this gap faced by Hyderabadis living elsewhere.



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Wedding of the week: Lovebirds elope on a Balinese beach following three months of top secret planning

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Jamie Hart, 36, and Daniel Sutton, 44

Western Australian senior graphic designer Jamie and welder Daniel always knew their wedding should be small and intimate, but they also wanted an element of surprise.

The couple, who met online in March 2021, had planned a trip to Indonesia and made the spur of the moment decision to elope because why not? They were too excited to wait a year to tie the knot, so they turned their engagement party into a secret wedding celebration.

After legally signing the papers at The Old Tower House in Perth a week earlier, Jamie and Daniel said ‘yes, I do’ in Bali, with Daniel honorably taking Jamie’s maiden name, Hart.

Jamie Hart and Daniel Sutton get married on the beach in Bali.
camera iconJamie Hart and Daniel Sutton get married on the beach in Bali. Recognition: Srivijaya Stories

When and where

The big day took place on October 22, 2022 on the white sandy beaches of the Nusa Dua Beach Hotel & Spa.

Jamie and Daniel's big day in Nusa Dua, Bali.
camera iconJamie and Daniel’s big day in Nusa Dua, Bali. Recognition: Srivijaya Stories

a dress

Jamie’s dress of choice, Morilee, was by New York bridal designer Madeline Gardner.

Jamie's dress was a stunning Madeline Gardner piece.
camera iconJamie’s dress was a stunning Madeline Gardner piece. Recognition: Srivijaya Stories

honeymoon

There was no need to travel to their honeymoon destination as the newlyweds were already there! They celebrated in Nusa Dua, Ubud, Seminyak and Canggu.

Jamie and Daniel started their honeymoon in Bali.
camera iconJamie and Daniel started their honeymoon in Bali. Recognition: Srivijaya Stories

If you would like to be featured, send your wedding details and high resolution photos to [email protected]

Add details about when, where, dress information, honeymoon and anything that made your big day special!

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