Travel + Leisure Co. (NYSE:TNL), the world’s leading vacation ownership and membership travel company, today reported third quarter 2024 financial results for the three months ended September 30, 2024. Highlights and outlook include:

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• Net income of $97 million, $1.39 diluted earnings per share from continuing operations, on net revenue of $993 million

• Adjusted EBITDA of $242 million and adjusted diluted earnings per share of $1.57 ⁽¹⁾

• Volume per guest (VPG) above $3,000 on a 4 percent increase in tours year-over-year, with new owner tours up 9 percent

• Expects fourth quarter adjusted EBITDA of $240 million to $260 million and reaffirms full-year adjusted EBITDA guidance

• Returned $105 million to shareholders through $35 million of dividends and $70 million of share repurchases

“Our results this quarter show that we are executing well against our key priorities for the year and that demand for our products remains solid. We have good momentum in our Vacation Ownership business and were especially pleased with our VPG performance, which remains consistently above $3,000, even during our peak new owner mix quarters,” said Michael D. Brown, President and CEO of Travel + Leisure Co.

"We have already begun setting our plans for 2025. We expect the momentum in our Vacation Ownership business to continue, having achieved our targeted new owner mix, the ramping up of Accor sales, and easing of interest rate headwinds. We also expect further progress on our Travel & Membership transformation to allow that segment to stabilize."

^{(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

Vacation Ownership

Vacation Ownership revenue increased 2% to $825 million in the third quarter of 2024 compared to the same period in the prior year. Net vacation ownership interest (VOI) sales increased 5% year over year despite a higher provision rate and Gross VOI sales increased 1% despite lower fee-for-service sales. These increases were driven by a 4% increase in tours compared to the same period last year, partially offset by a 3% decrease in VPG.

Third quarter adjusted EBITDA was $202 million, flat to prior year, due to the revenue growth and lower cost of VOIs sold, offset by an increase in sales and marketing expenses.

Travel and Membership

Travel and Membership revenue decreased 3% to $168 million in the third quarter of 2024 compared to the same period in the prior year. This was driven by an 8% decrease in transactions, partially offset by a 3% increase in revenue per transaction.

Third quarter Adjusted EBITDA was $62 million, flat to the prior year period, as the revenue decrease was offset by higher margin transactions and effective cost management.

Balance Sheet and Liquidity

Net Debt — As of September 30, 2024, the Company's leverage ratio for covenant purposes was 3.4x. The Company had $3.5 billion of corporate debt outstanding as of September 30, 2024, which excluded $2.0 billion of non-recourse debt related to its securitized notes receivables portfolio.

Timeshare Receivables Financing — Subsequent to the end of the quarter, the Company closed on a $325 million term securitization transaction with a weighted average coupon of 5.18% and a 98% advance rate.

Cash Flow — For the nine months ended September 30, 2024, net cash provided by operating activities was $366 million compared to $198 million in the prior year period. Adjusted free cash flow was $266 million for the nine months ended September 30, 2024 compared to $81 million in the same period of 2023 due to a decrease in cash utilized for working capital items, mainly due to lower prepayments, lower tax payments, and higher collections.

Share Repurchases — During the third quarter of 2024, the Company repurchased 1.6 million shares of common stock for $70 million at a weighted average price of $44.23 per share. As of September 30, 2024, the Company had $509 million remaining in its share repurchase authorization.

Dividend — The Company paid $35 million ($0.50 per share) in cash dividends on September 29, 2024 to shareholders of record as of September 15, 2024. Management will recommend a fourth quarter dividend of $0.50 per share for approval by the Company’s Board of Directors in November 2024.

“We had a solid third quarter driven by strong volume per guest performance. The VPG, combined with our disciplined cost management, offset the majority of the $14 million year-over-year headwind from higher interest rates and variable compensation. The financial strength of our consumer remains solid and trends with our loan portfolio for the quarter were stable,” said Mike Hug, Chief Financial Officer of Travel + Leisure Co. "The strong cash generation of our business is evident in the $154 million of adjusted free cash flow produced in the quarter and the $105 million returned to shareholders through dividends and share repurchases."

Outlook

The Company is providing its fourth quarter 2024 guidance:

• Adjusted EBITDA of $240 million to $260 million

• Gross VOI sales of $550 million to $600 million

• VPG of $2,900 to $3,000

• Travel and Membership Adjusted EBITDA of $45 million to $50 million

The Company is updating its previous guidance for the 2024 full year:

• Adjusted EBITDA of $915 million to $935 million (no change from prior outlook)

• Gross VOI sales of $2.25 billion to $2.30 billion (vs. prior outlook of $2.25 billion to $2.35 billion)

• VPG of $3,000 to $3,025 (vs. prior outlook of $2,950 to $3,050)

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 7, 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.

Travel + Leisure Co. (NYSE:TNL) provides more than six million vacations to travelers every year. The company operates a portfolio of vacation ownership, travel club, and lifestyle travel brands designed to meet the needs of the modern leisure traveler, whether they’re traveling the world or staying a little closer to home. With hospitality and responsible tourism at its heart, the company’s 19,000+ dedicated associates around the globe help the company achieve its mission to 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,” "intends," “estimates,” “predicts,” “potential,” "projects," “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.