+ INVESTOR PRESENTATION February 2023 LEISURE MA R G A R I T A V I LL E V A C A T I O N C L UB B Y W YND HA M CLUB WYNDHAM - ATLANTA Forward Looking Statements Disclaimer This presentation 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 ca ...

Financial Data and Key Metrics Changes - In Q4 2022, the company reported adjusted EBITDA of $225 million and adjusted earnings per share of $1.30, with adjusted free cash flow of $245 million [4][13] - For the full year 2022, adjusted EBITDA increased 10% year-over-year to $859 million, and adjusted free cash flow doubled to $439 million compared to the prior year [5][15] - The company returned $486 million of cash capital to shareholders, representing 15% of its current market cap [5] Business Line Data and Key Metrics Changes - Vacation ownership segment reported revenue of $737 million and adjusted EBITDA of $186 million, increases of 5% and 1% respectively over Q4 2021 [13] - Travel and Membership segment revenue was $163 million, a 4% decrease year-over-year, with adjusted EBITDA down 8% to $57 million [14] - The company delivered 147,000 tours in Q4 2022, with a volume per guest (VPG) of $3,434, representing increases of 14% and 7% respectively over the prior year [13] Market Data and Key Metrics Changes - The company experienced robust leisure travel demand, which has continued into Q1 2023 [4][9] - RCI's North American revenue per transaction increased 10%, although international RPT decreased [8] - Owner reservations for the first quarter are pacing 6% ahead of the prior year [9] Company Strategy and Development Direction - The overarching strategic goal is to increase historical growth rates while generating substantial cash flow [4][11] - The company aims to strengthen cornerstone businesses and add growth through travel clubs, with a focus on maintaining high margins [11][12] - The guidance for 2023 includes adjusted EBITDA between $920 million and $940 million, with gross VOI sales of $2.1 billion to $2.2 billion [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of leisure travel and the company's ability to capitalize on this trend [18] - The company anticipates a slight headwind in the first half of 2023 due to lower RCI member count but expects growth in the second half [17][24] - Management highlighted that the business model remains resilient and predictable, with confidence in achieving guidance despite economic uncertainties [54] Other Important Information - The company repurchased $351 million of common stock and paid $135 million in dividends in 2022 [15] - Adjusted free cash flow conversion from adjusted EBITDA was 51%, with expectations to reach 55% to 60% by the end of 2023 [15][16] - The company expects to maintain a net corporate leverage ratio below 3.5 times by the end of the year [16] Q&A Session Summary Question: M&A Opportunities and Subscription Revenue Growth - Management stated that they continue to evaluate M&A opportunities but prioritize strategic and accretive options [20] - Subscription revenue is expected to face a slight headwind in the first half of the year due to lower member count, but growth is anticipated in the second half [22] Question: Confidence in Q2 to Q4 Guidance - Management expressed confidence in guidance due to strong performance in cornerstone businesses, particularly vacation ownership [23][24] Question: Loan Loss Provision and Portfolio Performance - The loan loss provision is guided at 18% to 19% for the year, reflecting strategic decisions to grow the portfolio [26][53] - Portfolio performance has improved, with delinquency rates dropping in the fourth quarter [27] Question: New Owner Demographics and Travel Club Growth - Management noted that new owner tours are primarily driven by traditional marketing channels, with no change in demographic criteria [31][32] - Travel Club transaction growth was 37% in 2022, with guidance of 20% to 25% for 2023 [33] Question: Tours and VPG Expectations - The company expects nearly 20% growth in tour count for 2023, with VPGs anticipated to remain strong despite some dilution [40][41] Question: Travel and Membership Growth Outlook - Management indicated that the majority of transaction growth in Travel and Membership will come from existing clubs, with proper marketing planned for the year [47]

PART I [Business](index=5&type=section&id=Item%201.%20Business) Travel + Leisure Co. operates as a membership and leisure travel company through its Vacation Ownership and Travel and Membership segments [Company Overview](index=5&type=section&id=Company%20Overview) Travel + Leisure Co. is a leading membership and leisure travel company with two primary business segments, Wyndham Destinations and Travel and Membership - The company operates through two main business segments: Wyndham Destinations (Vacation Ownership) and Travel and Membership (Exchange and Travel Club)[19](index=19&type=chunk) - Wyndham Destinations is the world's largest vacation ownership company with **816,000 owners** and over **245 resorts**[19](index=19&type=chunk) - The Travel and Membership segment includes RCI, the world's largest exchange company with **3.5 million members** and over **4,100 affiliated resorts**[19](index=19&type=chunk) - In 2022, the company generated **42%** of its revenues from the sale of vacation ownership interests and **45%** from fee-for-service businesses[23](index=23&type=chunk) - The company derived **89%** of its 2022 revenues from the United States and **11%** internationally[24](index=24&type=chunk) [Vacation Ownership](index=6&type=section&id=Vacation%20Ownership) The Vacation Ownership segment generates revenue from VOI sales, financing, and property management, with a key strategy of selling upgrades to its existing owner base - As of December 31, 2022, the company had more than **245 vacation ownership resorts** and **816,000 owners**[28](index=28&type=chunk) - VOI upgrade sales to existing owners represented **70% of net VOI sales** in 2022[36](index=36&type=chunk) - The company offers consumer financing for up to 10 years with a typical minimum down payment of 10%; the average down payment on financed VOI sales was **19%** in 2022[40](index=40&type=chunk) - In 2022, **64% of gross VOI sales** (net of Fee-for-Service sales) were financed, totaling **$1.14 billion** in receivables[41](index=41&type=chunk) - As of December 31, 2022, **94%** of the company's loan portfolio was current (not more than 30 days past due)[43](index=43&type=chunk) - Property management fees are generally based on total operating costs and typically approximate **10%** of budgeted operating expenses[44](index=44&type=chunk) [Travel and Membership](index=11&type=section&id=Travel%20and%20Membership) The Travel and Membership segment generates revenue from membership dues and transaction fees through its RCI exchange network and various travel clubs - The RCI exchange network has **3.5 million paid members** and relationships with over **4,100 affiliated resorts** in 104 countries[51](index=51&type=chunk)[52](index=52&type=chunk) - The average annual member retention rate for the exchange business over the last three years was **84%**[51](index=51&type=chunk) - The segment's strategy includes expanding B2B travel club solutions and growing a direct-to-consumer travel club under the Travel + Leisure brand[55](index=55&type=chunk)[56](index=56&type=chunk) - Revenues are primarily derived from annual membership dues and fees for facilitating exchange and non-exchange transactions[57](index=57&type=chunk) [Human Capital](index=14&type=section&id=Human%20Capital) The company employed over 18,200 associates globally as of year-end 2022, with a focus on employee development and performance-based compensation Employee Distribution as of Dec 31, 2022 | Category | Number of Associates | | :--- | :--- | | **Total Global Associates** | **>18,200** | | - Vacation Ownership | 14,000 | | - Travel and Membership | 2,300 | | - Corporate Group | 1,900 | | - Outside the U.S. | >3,700 | - Less than **1%** of associates are subject to collective bargaining agreements[77](index=77&type=chunk) - **43%** of associates participate in a variable pay incentive program as of year-end 2022[80](index=80&type=chunk) - The company offers an Employee Stock Purchase Plan, available to **89%** of associates, allowing the purchase of company stock at a **10% discount**[79](index=79&type=chunk) [Environmental, Social, and Governance (ESG)](index=18&type=section&id=Environmental%2C%20Social%2C%20and%20Governance) The company's "Full Circle" ESG strategy focuses on environmental protection, community support, and fostering an inclusive culture - Key environmental goals include a **40% reduction in GHG emissions intensity** and a **35% reduction in water withdrawal** per square foot by 2025, compared to a 2010 baseline[88](index=88&type=chunk)[90](index=90&type=chunk) - As of December 31, 2021, the company had achieved a **39% reduction in Scope 1 + Scope 2 GHG emissions intensity** and a **21% reduction in water withdrawal** per square foot compared to its 2010 baseline[88](index=88&type=chunk) - Approximately **35%** of managed properties are in Tier I windstorm areas, **20%** in high flood risk areas, and **20%** in high-risk wildfire-prone states, indicating significant exposure to climate-related risks[90](index=90&type=chunk) Global Workforce Gender Distribution (as of Dec 31, 2022) | Level | Female | Male | Undeclared | | :--- | :--- | :--- | :--- | | Below Director | 54% | 44% | 2% | | Director and above | 39% | 60% | 1% | U.S. Workforce Ethnic Diversity Distribution (as of Dec 31, 2022) | Level | White | Diverse | Undeclared | | :--- | :--- | :--- | :--- | | Below Director | 46% | 52% | 2% | | Director and above | 76% | 23% | 1% | [Key Agreements Related to the Spin-Off](index=21&type=section&id=Key%20Agreements%20Related%20to%20the%20Spin-Off) Following the 2018 spin-off, key agreements govern the ongoing relationship with Wyndham Hotels, including liability allocation and trademark licensing - Travel + Leisure Co. assumed **two-thirds** and Wyndham Hotels assumed **one-third** of certain shared contingent corporate liabilities incurred prior to the spin-off[104](index=104&type=chunk)[168](index=168&type=chunk) - The Tax Matters Agreement specifies that Wyndham Hotels will bear one-third and Travel + Leisure Co. two-thirds of the combined U.S. federal income tax liability for periods when Wyndham Hotels was part of the consolidated group[108](index=108&type=chunk) - A **100-year license agreement** grants Travel + Leisure Co. the right to use the "Wyndham" trademark in its vacation ownership and exchange businesses, with an option to extend for 30 years[109](index=109&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks related to its business operations, the 2018 spin-off, and its common stock [Risks Related to Our Business and Our Industry](index=24&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) The company's performance is subject to significant business and industry risks, including competition, cybersecurity threats, and dependency on the travel industry - The company faces risks that it may not achieve the expected objectives of the Travel + Leisure brand acquisition, and the brand's value could be negatively impacted if the media properties operated by Dotdash Meredith deteriorate[112](index=112&type=chunk)[114](index=114&type=chunk) - The timeshare and leisure travel industries are **highly competitive**, which could reduce fee structures and adversely impact profits[115](index=115&type=chunk)[118](index=118&type=chunk) - Revenues are **highly dependent on the travel industry**, which can be disrupted by economic slowdowns, inflation, terrorism, war, pandemics, and severe weather events associated with climate change[127](index=127&type=chunk)[128](index=128&type=chunk) - Failure to protect internal or customer data from cyber-attacks could disrupt business, damage reputation, and lead to significant costs, fines, or lawsuits[135](index=135&type=chunk) - The company is subject to risks from its vacation ownership receivables portfolio, including defaults by purchasers, which could necessitate increased loan loss reserves[142](index=142&type=chunk) - **Significant indebtedness** exposes the company to risks such as increased interest costs, potential default if covenants are breached, and reduced cash flow for other operational needs[145](index=145&type=chunk)[146](index=146&type=chunk) - The **COVID-19 pandemic** has had, and could in the future have, a significant negative effect on operations due to travel restrictions, health concerns, and economic impacts[164](index=164&type=chunk) [Risks Related to the Spin-Off](index=34&type=section&id=Risks%20Related%20to%20the%20Spin-Off) The company faces ongoing risks from its 2018 spin-off, including its reliance on Wyndham Hotels and shared contingent liabilities - The company's success depends in part on its ongoing relationship with Wyndham Hotels, including brand licensing and the Wyndham Rewards loyalty program[167](index=167&type=chunk) - The company is responsible for **two-thirds** of certain contingent corporate liabilities of Wyndham Worldwide incurred prior to the spin-off, with Wyndham Hotels responsible for the remaining one-third[168](index=168&type=chunk) - If the spin-off transaction fails to qualify as a tax-free reorganization for U.S. federal income tax purposes, the company and its shareholders could be required to pay substantial taxes[171](index=171&type=chunk)[174](index=174&type=chunk) [General Risk Factors Related to Our Common Stock](index=35&type=section&id=General%20Risk%20Factors%20Related%20to%20Our%20Common%20Stock) Investors in the company's common stock face risks including price volatility, anti-takeover provisions, and uncertainty regarding future capital returns - The trading price of the company's common stock is subject to fluctuation due to company performance, industry trends, economic conditions, and overall market volatility[175](index=175&type=chunk) - Corporate governance provisions and Delaware law may deter or delay a potential takeover, which could be seen as beneficial by some shareholders[176](index=176&type=chunk) - The continuation of dividend payments and the share repurchase program is not guaranteed and is subject to the Board of Directors' discretion based on financial conditions and other factors[177](index=177&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[178](index=178&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) The company operates from a leased corporate headquarters in Orlando, Florida, with numerous owned and leased properties globally supporting its business segments - Corporate headquarters are located in a leased office at 6277 Sea Harbor Drive in Orlando, Florida[179](index=179&type=chunk) - The Vacation Ownership business utilizes **160 marketing and sales offices**, with 116 in the U.S. and the remainder in various international locations[180](index=180&type=chunk) - The Travel and Membership business owns one property in Indianapolis, Indiana, and one in Mexico, in addition to its leased offices[181](index=181&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal matters in the ordinary course of business, none of which are expected to be materially adverse - The company is involved in various claims and lawsuits arising in the ordinary course of business, none of which are expected to have a material adverse effect on its financial results[182](index=182&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[183](index=183&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE under TNL, and in Q4 2022, it repurchased 2.9 million shares, with its five-year total return underperforming the S&P Midcap 400 - The company's common stock is listed on the NYSE under the ticker symbol **TNL**[186](index=186&type=chunk) Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October 2022 | 1,159,600 | $37.71 | | November 2022 | 1,053,096 | $37.49 | | December 2022 | 684,602 | $36.79 | | **Total Q4** | **2,897,298** | **$37.41** | - As of December 31, 2022, approximately **$477 million** remained available for purchase under the company's Share Repurchase Program[187](index=187&type=chunk) 5-Year Cumulative Total Return Comparison | Index | 2017 | 2022 | Total Return | | :--- | :--- | :--- | :--- | | **Travel + Leisure Co.** | **$100.00** | **$83.37** | **-16.6%** | | S&P Midcap 400 | $100.00 | $138.34 | +38.3% | | S&P Hotels, Resorts & Cruise Lines | $100.00 | $75.57 | -24.4% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, strong leisure travel demand drove revenue and net income growth, supported by a strong liquidity position and significant capital returns to shareholders [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net revenues increased to $3.57 billion in 2022, driven by strong performance in the Vacation Ownership segment, resulting in a net income of $357 million Consolidated Results of Operations (2022 vs. 2021) | Metric (in millions) | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Net revenues | $3,567 | $3,134 | $433 | | Operating income | $653 | $618 | $35 | | Net income attributable to shareholders | $357 | $308 | $49 | Key Operating Statistics (2022 vs. 2021) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **Vacation Ownership** | | | | | Gross VOI sales (in millions) | $1,982 | $1,491 | 33.0% | | Tours (in 000s) | 561 | 451 | 24.4% | | Volume Per Guest (VPG) | $3,426 | $3,143 | 9.0% | | **Travel and Membership** | | | | | Total transactions (in 000s) | 1,731 | 1,688 | 2.5% | | Average number of exchange members (in 000s) | 3,524 | 3,721 | (5.3%) | Adjusted EBITDA by Segment (2022 vs. 2021) | Segment (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | Vacation Ownership | $665 | $569 | | Travel and Membership | $268 | $271 | | Corporate and other | ($74) | ($62) | | **Total Company** | **$859** | **$778** | [Financial Condition](index=46&type=section&id=Financial%20Condition) Total assets and liabilities increased in 2022, driven by higher cash balances and an incremental term loan borrowing, respectively Balance Sheet Summary (as of Dec 31) | (In millions) | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Total assets | $6,757 | $6,588 | $169 | | Total liabilities | $7,661 | $7,382 | $279 | | Total deficit | ($904) | ($794) | ($110) | - The increase in total assets was driven by a **$181 million increase in Cash and cash equivalents** and a **$61 million increase in Vacation ownership contract receivables, net**[231](index=231&type=chunk) - The increase in total liabilities was primarily due to a **$290 million increase in Debt** from an incremental term loan B borrowing[231](index=231&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with significant cash reserves and full availability on its revolving credit facility as of year-end 2022 - As of December 31, 2022, the company had **$550 million of Cash and cash equivalents** and **$1.0 billion of available capacity** under its revolving credit facility[235](index=235&type=chunk)[236](index=236&type=chunk) - In December 2022, the company entered into a third amendment to its credit agreement, providing for an incremental term loan B borrowing of **$300 million** due 2029[240](index=240&type=chunk) Material Future Contractual Obligations (as of Dec 31, 2022) | (In millions) | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Debt | $411 | $309 | $636 | $654 | $403 | $1,285 | $3,698 | | Non-recourse debt | $226 | $224 | $514 | $215 | $201 | $611 | $1,991 | | Interest on debt | $286 | $261 | $220 | $157 | $107 | $154 | $1,185 | | Purchase commitments | $177 | $146 | $136 | $129 | $86 | $88 | $762 | | Operating leases | $31 | $29 | $24 | $14 | $13 | $21 | $132 | - The company utilizes surety bonds for its Vacation Ownership business, with commitments from 12 providers totaling **$2.3 billion**, of which **$455 million** was outstanding as of December 31, 2022[255](index=255&type=chunk) [Cash Flows](index=52&type=section&id=Cash%20Flows) In 2022, operating cash flow decreased due to working capital changes, while financing cash use was lower due to net debt proceeds compared to net repayments in 2021 Summary of Cash Flows (Year Ended Dec 31) | (In millions) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $442 | $568 | | Net cash used in investing activities | ($50) | ($93) | | Net cash used in financing activities | ($196) | ($1,288) | | **Net change in cash, cash equivalents and restricted cash** | **$191** | **($820)** | - The company repurchased **8.2 million shares for $351 million** in 2022[273](index=273&type=chunk) - The company paid cash dividends of **$1.60 per share**, totaling **$135 million**, in 2022[275](index=275&type=chunk) [Critical Accounting Estimates](index=54&type=section&id=Critical%20Accounting%20Estimates) The company's financial statements rely on critical accounting estimates, most significantly the allowance for loan losses on its vacation ownership receivables - The allowance for loan losses on VOCRs is the most significant estimate, based on a static pool analysis of historical defaults, FICO scores, and economic conditions; the year-end allowance has ranged from **18.1% to 19.5%** of gross VOCRs over the past five years, with an exception of **21.8%** in 2020 due to COVID-19[282](index=282&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - VOI inventory is valued using the relative sales value method, which requires estimates of future sales prices, volumes, and credit losses[286](index=286&type=chunk) - Goodwill and other indefinite-lived intangible assets are tested for impairment annually or more frequently if indicators exist, requiring significant judgments about future cash flows and market conditions[287](index=287&type=chunk) - The company regularly reviews deferred tax assets for realizability and establishes a valuation allowance based on projections of future taxable income[292](index=292&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks stem from interest rate and foreign currency fluctuations, which it manages using derivative instruments - The company's principal market exposures are **interest rate and foreign currency rate risks**[295](index=295&type=chunk) - As of December 31, 2022, the company had **$1.002 billion in variable rate borrowings** ($428 million non-recourse and $574 million corporate)[298](index=298&type=chunk) - A **100-basis point change** in underlying interest rates would result in a **$4 million change** in annual consumer financing interest expense and a **$6 million change** in annual corporate debt interest expense[298](index=298&type=chunk) - The company expects to replace LIBOR with Term SOFR as the benchmark rate for its revolving credit facility and Term Loan B in the first quarter of 2023[296](index=296&type=chunk)[260](index=260&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and the independent auditor's report for the fiscal years 2020 through 2022 [Report of Independent Registered Public Accounting Firm](index=60&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on the financial statements and internal controls, identifying the Allowance for Loan Losses as a critical audit matter - The independent auditor, Deloitte & Touche LLP, issued an **unqualified (clean) opinion** on the financial statements and the effectiveness of internal control over financial reporting[305](index=305&type=chunk) - The audit identified the **'Allowance for Loan Losses' as a Critical Audit Matter**, highlighting the complex and subjective judgments required to predict losses over the life of contract receivables[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk) [Consolidated Financial Statements](index=62&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's performance, showing net revenues of $3.57 billion and net income of $357 million for 2022 Consolidated Statement of Income (Year Ended Dec 31) | (In millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net revenues | $3,567 | $3,134 | $2,160 | | Operating income/(loss) | $653 | $618 | ($105) | | Net income/(loss) attributable to shareholders | $357 | $308 | ($255) | | Diluted EPS | $4.24 | $3.52 | ($2.97) | Consolidated Balance Sheet (As of Dec 31) | (In millions) | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $550 | $369 | | Vacation ownership contract receivables, net | $2,370 | $2,309 | | Total assets | $6,757 | $6,588 | | Non-recourse vacation ownership debt | $1,973 | $1,934 | | Debt | $3,669 | $3,379 | | Total liabilities | $7,661 | $7,382 | | Total deficit | ($904) | ($794) | Consolidated Statement of Cash Flows (Year Ended Dec 31) | (In millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $442 | $568 | $374 | | Net cash used in investing activities | ($50) | ($93) | ($65) | | Net cash (used in)/provided by financing activities | ($196) | ($1,288) | $502 | [Notes to Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies and financial data, including revenue recognition, debt structure, and segment information Disaggregation of Net Revenues by Segment (2022) | (In millions) | Vacation Ownership | Travel and Membership | | :--- | :--- | :--- | | Vacation ownership interest sales | $1,484 | - | | Property management & reimbursable revenues | $763 | - | | Consumer financing | $406 | - | | Transaction revenues | - | $519 | | Subscription revenues | - | $184 | | **Total Net Revenues** | **$2,835** | **$735** | Vacation Ownership Contract Receivables (as of Dec 31, 2022) | (In millions) | Amount | | :--- | :--- | | Vacation ownership contract receivables, gross | $2,911 | | Less: allowance for loan losses | $541 | | **Vacation ownership contract receivables, net** | **$2,370** | Debt Summary (as of Dec 31, 2022) | (In millions) | Amount | | :--- | :--- | | Non-recourse vacation ownership debt | $1,973 | | Corporate Debt (Term Loans, Notes, etc.) | $3,669 | | **Total Debt** | **$5,642** | - In 2021, the company released **$91 million** of its COVID-19 related loan loss allowance, positively impacting revenue, due to improved portfolio performance; no COVID-19 specific allowance remained as of year-end 2021[409](index=409&type=chunk)[519](index=519&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=111&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[556](index=556&type=chunk) [Controls and Procedures](index=111&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - The principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of December 31, 2022[557](index=557&type=chunk) - Management's assessment, based on the COSO framework, concluded that internal control over financial reporting was **effective** as of December 31, 2022[558](index=558&type=chunk) [Other Information](index=112&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[561](index=561&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=112&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[562](index=562&type=chunk) PART III Part III incorporates by reference information from the company's 2023 Proxy Statement regarding governance, compensation, and security ownership [Directors, Executive Officers and Corporate Governance](index=113&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information required by this item is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) [Executive Compensation](index=113&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding director and executive compensation is incorporated by reference from the 2023 Proxy Statement - Information required by this item is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders[570](index=570&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=113&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of year-end 2022, 5.0 million securities were issuable under approved equity compensation plans, with 10.8 million available for future issuance Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Securities to be issued upon exercise (millions) | Weighted-average exercise price of options | Securities remaining available for future issuance (millions) | | :--- | :--- | :--- | :--- | | Approved by security holders | 5.0 | $45.36 | 10.8 | - Additional information regarding security ownership is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders[573](index=573&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=113&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Information required by this item is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders[574](index=574&type=chunk) [Principal Accounting Fees and Services](index=114&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - Information required by this item is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders[575](index=575&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=115&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the report - This section lists all financial statements, schedules, and exhibits filed with the report[577](index=577&type=chunk) - Financial statement schedule II, related to valuation and qualifying accounts, was omitted because the information is included in the notes to the financial statements[578](index=578&type=chunk) [Form 10-K Summary](index=120&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - None[588](index=588&type=chunk)

Financial Performance & Goals - Travel + Leisure Co's market capitalization was $3 billion as of October 31, 2022[10] - The company's 2022 adjusted EBITDA outlook is $855 million to $865 million[10] - The company anticipates an adjusted EBITDA-to-FCF conversion rate of approximately 50% for 2022[10] - The company's annualized dividend is $1.60, yielding 4.2% as of October 31, 2022[10] - The company projects 2025 adjusted EBITDA between $1.13 billion and $1.25 billion[32] - The company projects adjusted FCF conversion between 58% and 63% in 2025[32] - The company estimates cumulative adjusted FCF between $2.4 billion and $2.6 billion from 2022-2025[32] Revenue & Business Segments (YTD Through September 30, 2022) - Vacation Ownership accounted for 79% of revenue, totaling $2.098 billion[16,17] - Travel & Membership accounted for 21% of revenue, totaling $572 million[15,16] - Vacation Ownership accounted for 69% of adjusted EBITDA, totaling $480 million[22,23] - Travel & Membership accounted for 31% of adjusted EBITDA, totaling $211 million[21,22] Key Statistics & Metrics - The company has over 833,000 vacation owners[10,27] - The company has approximately 3.7 million RCI members[10,28] - The company has over 245 resorts[10] - The company's Volume Per Guest (VPG) was $3,423 YTD through September 30, 2022[30] - The company's average FICO score on new originations is between 720 and 740[51]

Travel + Leisure Co. (NYSE:TNL) Q3 2022 Earnings Conference Call October 27, 2022 8:30 AM ET Company Participants Christopher Agnew - Senior Vice President, Financial Planning and Analysis and Investor Relations Michael Brown - President and Chief Executive Officer Mike Hug - Chief Financial Officer Conference Call Participants Joe Greff - JPMorgan Patrick Scholes - Truist David Katz - Jefferies Brandt Montour - Barclays Stephen Grambling - Morgan Stanley Chris Woronka - Deutsche Bank Operator Greetings and ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32876 TRAVEL + LEISURE CO. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Inc ...

+ INVESTOR PRESENTATION Fall 2022 TRAVEL+ LEISURE Forward Looking Statements Disclaimer This presentation 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, ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $230 million and adjusted EPS of $1.27 for Q2 2022, reflecting strong performance compared to $193 million in EBITDA and $0.88 in EPS in the prior year [7][23] - The adjusted EBITDA margin improved to 24.9%, an increase of 70 basis points year-over-year and 40 basis points compared to Q2 2019 [8] - The company expects Q3 adjusted EBITDA to be between $230 million and $240 million, raising full-year adjusted EBITDA guidance to $860 million to $880 million [20][34] Business Line Data and Key Metrics Changes - The Vacation Ownership segment reported revenue of $735 million and EBITDA of $187 million, increases of 22% and 36% respectively over Q2 2021 [24] - The Travel and Membership segment saw a revenue decline of 3% in Q2 but finished up 5% for the first half of the year, with subscription revenue increasing by 5% and transaction revenue declining by 6% [16][27] Market Data and Key Metrics Changes - The company noted that the South, Southwest, and Hawaii regions showed the most demand, while the West Coast and international markets lagged [10] - Drive-to arrivals increased from 73% in March to 79% in June, indicating a shift in consumer behavior towards more accessible vacation options [10] Company Strategy and Development Direction - The company is focused on increasing the percentage of sales financed, which rose to approximately 65% from 55% in the prior year, aiming to grow high-margin net interest income [14] - The company plans to return $350 million to $400 million to shareholders through buybacks and dividends, representing about 10% of its market cap [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued robust vacation ownership demand, with booking pace at 2019 levels and nearly 90% of 2019 second-half room nights already booked [9][52] - The management highlighted that inflation is seen as a net positive for the business model, as rising hotel and vacation rental rates enhance the value proposition for customers [15] Other Important Information - The company added nine new Travel Clubs in Q2 and expects more in Q3, with a focus on driving transactions to these new clubs [17][19] - The company reported a strong balance sheet and cash flow generation, with a net corporate leverage ratio of 3.7 times at the end of the quarter [31] Q&A Session All Questions and Answers Question: Can you talk about what's going on in the West and whether that's just a year-over-year comparison issue? - Management noted that the West Coast is marginally lagging, with occupancy differences of only 2-3 percentage points, which could improve with remaining bookings [40] Question: Are you seeing consumers trade from a fly-to market to a drive-to market? - Management indicated that the increase in drive-to arrivals is a natural shift due to longer airport lines and ease of travel, but it is not a dramatic change [42] Question: How do you grow the Travel and Membership segment from here? - Management expects high-single-digit growth in the Travel and Membership segment for the second half of the year, driven by strategic shifts and increased affiliate engagement [44] Question: Can you share any perspectives on the economic context for later this year and early next year? - Management reiterated confidence in the second half of the year, with booking pace remaining strong and low cancellation rates indicating consumer certainty [52][54] Question: What are the key variables driving volatility in the new fee-based businesses? - Management identified four key variables, including demand for the travel platform and the propensity of memberships, indicating a positive outlook for growth [55] Question: How do you think about the VPG range going up? - Management attributed the increase in VPG to improved close rates and a combination of factors including inflation and demand, with a slight moderation expected due to the new owner mix [59][60] Question: Can you discuss the recent securitization and changes in advance rates? - Management explained that the decrease in advance rates was due to higher interest rates, not performance issues, and highlighted the strength of the portfolio [62][63] Question: Is there enough inventory available in the vacation exchange business? - Management acknowledged that higher owner occupancies could impact available inventory but did not indicate significant revenue or EBITDA impacts from this [104]

[PART I FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the first half of 2022 [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements for Q2 and H1 2022, showing increased revenues and net income driven by Vacation Ownership Condensed Consolidated Statements of Income Highlights (Q2 & H1 2022 vs 2021) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $922 million | $797 million | $1,731 million | $1,425 million | | **Operating Income** | $185 million | $151 million | $302 million | $237 million | | **Net Income from Continuing Operations** | $100 million | $74 million | $151 million | $102 million | | **Net Income Attributable to Shareholders** | $100 million | $72 million | $151 million | $100 million | | **Diluted EPS from Continuing Operations** | $1.16 | $0.84 | $1.75 | $1.17 | Condensed Consolidated Balance Sheet Highlights (As of June 30, 2022) | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $241 million | $369 million | | Vacation ownership contract receivables, net | $2,304 million | $2,309 million | | Total assets | $6,477 million | $6,588 million | | Non-recourse vacation ownership debt | $1,842 million | $1,934 million | | Debt | $3,379 million | $3,379 million | | Total liabilities | $7,323 million | $7,382 million | | Total stockholders' (deficit) | ($854 million) | ($801 million) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Metric | 2022 (in millions) | 2021 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $230 million | $290 million | | Net cash used in investing activities | ($29 million) | ($62 million) | | Net cash used in financing activities | ($315 million) | ($1,098 million) | | Net change in cash, cash equivalents and restricted cash | ($119 million) | ($871 million) | [Note 1 - Background and Basis of Presentation](index=14&type=section&id=Note%201%20-%20Background%20and%20Basis%20of%20Presentation) The company operates two segments: Vacation Ownership and Travel and Membership, with Extra Holidays reclassified to Vacation Ownership in Q2 2022 - The company's two reportable segments are **Vacation Ownership** (comprising the Wyndham Destinations business line) and **Travel and Membership** (comprising Panorama and Travel + Leisure Group business lines)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Organizational changes in Q2 2022 led to the reclassification of the Extra Holidays business from the Travel and Membership segment to the Vacation Ownership segment, with prior period data restated[32](index=32&type=chunk)[34](index=34&type=chunk) [Note 3 - Revenue Recognition](index=15&type=section&id=Note%203%20-%20Revenue%20Recognition) This note details revenue recognition policies and disaggregates revenues by segment, showing significant growth in Vacation Ownership sales Disaggregation of Net Revenues by Segment (Six Months Ended June 30) | Segment & Revenue Source | 2022 (in millions) | 2021 (in millions) | | :--- | :--- | :--- | | **Vacation Ownership** | | | | Vacation ownership interest sales | $697 million | $466 million | | Property management & reimbursable | $374 million | $327 million | | Consumer financing | $198 million | $201 million | | *Total Vacation Ownership* | *$1,344 million* | *$1,057 million* | | **Travel and Membership** | | | | Transaction revenues | $282 million | $268 million | | Subscription revenues | $90 million | $84 million | | *Total Travel and Membership* | *$389 million* | *$370 million* | | **Total Net Revenues** | **$1,731 million** | **$1,425 million** | - Contract liabilities, representing advance payments for services not yet rendered, stood at **$391 million** as of June 30, 2022, up from **$382 million** at year-end 2021, primarily deferred subscription and VOI trial package revenue[51](index=51&type=chunk) [Note 10 - Debt](index=20&type=section&id=Note%2010%20-%20Debt) As of June 30, 2022, total debt was $5.221 billion, with the company in compliance with all debt covenants and $1.4 billion available capacity Debt Composition as of June 30, 2022 | Debt Category | Amount (in millions) | | :--- | :--- | | Non-recourse vacation ownership debt | $1,842 million | | Corporate Debt (Secured Notes, Term Loan, etc.) | $3,379 million | | **Total Debt** | **$5,221 million** | - The company renewed its USD timeshare receivables conduit facility in March 2022, extending the term to July 2024 and reducing capacity from **$800 million** to **$600 million**[83](index=83&type=chunk) - As of June 30, 2022, the company was in compliance with its key financial covenants: a maximum first lien leverage ratio of **4.75 to 1.0** (actual **3.72 to 1.0**) and a minimum interest coverage ratio of **2.50 to 1.0** (actual **4.62 to 1.0**)[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 19 - Segment Information](index=31&type=section&id=Note%2019%20-%20Segment%20Information) This note breaks down financial performance by segment, showing significant revenue and Adjusted EBITDA growth in Vacation Ownership for H1 2022 Segment Performance (Six Months Ended June 30) | Segment | Net Revenues 2022 (in millions) | Net Revenues 2021 (in millions) | Adjusted EBITDA 2022 (in millions) | Adjusted EBITDA 2021 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Vacation Ownership | $1,344 million | $1,057 million | $291 million | $204 million | | Travel and Membership | $389 million | $370 million | $146 million | $146 million | | **Total Reportable Segments** | **$1,733 million** | **$1,427 million** | **$437 million** | **$350 million** | - The company uses **Net Revenues** and **Adjusted EBITDA** as key metrics to assess segment performance, with Adjusted EBITDA reconciled to Net Income[144](index=144&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong recovery in Vacation Ownership driving H1 2022 growth, liquidity, capital resources, and capital deployment strategies Key Operating Statistics (Q2 2022 vs Q2 2021) | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | **Vacation Ownership** | | | | | Gross VOI sales | $527 million | $383 million | 37.7% | | Tours (in thousands) | 148 | 117 | 26.6% | | Volume Per Guest (VPG) | $3,489 | $3,151 | 10.7% | | **Travel and Membership** | | | | | Total transactions (in thousands) | 443 | 457 | (3.1%) | - For Q2 2022, consolidated net revenues increased by **$125 million** year-over-year, primarily driven by a **$159 million** increase in the Vacation Ownership segment, partially offset by a **$5 million** decrease in Travel and Membership[182](index=182&type=chunk)[183](index=183&type=chunk)[186](index=186&type=chunk) - The company maintains a strong liquidity position with **$998 million** available on its revolving credit facility as of June 30, 2022, sufficient to meet obligations including **$400 million** in notes due March 2023[214](index=214&type=chunk)[215](index=215&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash from operations, cash on hand, a $1.0 billion revolving credit facility, and access to debt markets - The company's credit facility was renewed in 2021, extending the commitment period to October 2026, with compliance with all financial covenants as of June 30, 2022[215](index=215&type=chunk)[219](index=219&type=chunk) - The company actively uses asset-backed securitizations to finance its VOCRs, closing a **$275 million** financing in Q1 2022 and another **$275 million** subsequent to quarter-end in July 2022[222](index=222&type=chunk)[223](index=223&type=chunk)[171](index=171&type=chunk) Material Future Contractual Obligations | Obligation Type | Total Amount (in millions) | | :--- | :--- | | Debt | $3,379 million | | Non-recourse debt | $1,842 million | | Interest on debt | $975 million | | Purchase commitments | $799 million | | Operating leases | $145 million | | **Total** | **$7,205 million** | [Capital Deployment](index=50&type=section&id=Capital%20Deployment) Capital deployment focuses on business growth, cash flow optimization, and shareholder value, including share repurchases and dividend payments - The company repurchased **2.5 million shares** for **$128 million** in the first six months of 2022, with **$700 million** remaining available under the share repurchase program as of June 30, 2022[242](index=242&type=chunk)[243](index=243&type=chunk) - Cash dividends of **$0.40 per share** were paid in Q1 and Q2 2022, totaling **$70 million** for the first half, an increase from **$0.30 per share** in the prior year[244](index=244&type=chunk) - Anticipated spending for 2022 includes **$150-$170 million** for vacation ownership development projects and **$55-$60 million** for capital expenditures[237](index=237&type=chunk)[238](index=238&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company faces interest rate and foreign currency risks, with a 10% change not materially affecting earnings or cash flows - The company's primary market risks are **interest rate** and **foreign currency exchange rate** fluctuations[250](index=250&type=chunk) - A **100 basis point** change in interest rates on variable rate debt would result in a **$4 million** change in annual consumer financing interest expense and a **$3 million** change in annual corporate debt interest expense[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control - The principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of the end of the period[254](index=254&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[254](index=254&type=chunk) [PART II OTHER INFORMATION](index=53&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and exhibits for the reporting period [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and lawsuits, none of which are expected to have a material adverse effect on financial results - The company states that ongoing legal proceedings are **not expected to have a material impact** on its financial results[255](index=255&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported for the period ended June 30, 2022 - No material changes to the company's risk factors were reported for the period ended June 30, 2022[256](index=256&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases in Q2 2022, totaling 1,724,986 shares at an average price of $48.12 per share Share Repurchases for Q2 2022 | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 2022 | 214,530 | $53.66 | | May 2022 | 818,319 | $50.08 | | June 2022 | 692,137 | $44.08 | | **Total Q2** | **1,724,986** | **$48.12** | - The Board of Directors increased the share repurchase program authorization by **$500 million** in April 2022, bringing the total authorization to **$6.5 billion**[259](index=259&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits filed include CEO and CFO certifications (31.1, 31.2, 32) and various Inline XBRL documents (101 series)[263](index=263&type=chunk)

Travel + Leisure Co (NYSE:TNL) Q1 2022 Earnings Conference Call April 28, 2022 8:30 AM ET Company Participants Christopher Agnew - SVP, FP&A and IR Michael Brown - CEO, President & Director Michael Hug - EVP & CFO Conference Call Participants Joseph Greff - JPMorgan Chase & Co. Charles Scholes - Truist Securities Ian Zaffino - Oppenheimer Stephen Grambling - Goldman Sachs Group Benjamin Chaiken - Crédit Suisse Chris Woronka - Deutsche Bank Operator Good morning, and welcome to the First Quarter 2022 Earning ...