Travel + Leisure Co. (TNL) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. As such, the Zacks rating upgrade for Travel Leisure Co. is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS esti ...

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Travel + Leisure Co. (NYSE:TNL) Q1 2024 Earnings Conference Call April 24, 2024 8:00 AM ET Company Participants Jill Greer - VP, IR Michael Brown - President & CEO Mike Hug - CFO Conference Call Participants Joe Greff - JP Morgan David Katz - Jefferies Chris Woronka - Deutsche Bank Patrick Scholes - Truist Securities Ben Chaiken - Credit Suisse Ian Zaffino - Oppenheimer Brandt Montour - Barclays Operator Greetings, and welcome to the Travel + Leisure First Quarter 2024 Earnings Conference Call. At this time ...

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q%20Filing%20Information) - The report is a Quarterly Report on Form 10-Q for the period ended March 31, 2024[2](index=2&type=chunk) - The registrant is TRAVEL + LEISURE CO., with common stock traded on the New York Stock Exchange under the symbol TNL[2](index=2&type=chunk)[3](index=3&type=chunk) - As of March 31, 2024, there were 71,263,534 shares of common stock outstanding[4](index=4&type=chunk) [Table of Contents](index=2&type=section&id=Table%20of%20Contents) [Glossary of Terms](index=4&type=section&id=GLOSSARY%20OF%20TERMS) - The glossary defines key terms and acronyms used throughout the report, such as Adjusted EBITDA, AOCL, EPS, and VOCR, to ensure clarity and consistent understanding[9](index=9&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements of Travel + Leisure Co., including statements of income, comprehensive income, balance sheets, cash flows, and deficit, along with detailed notes. The independent auditors reviewed these statements and found no material modifications needed for GAAP conformity [Report of Independent Registered Public Accounting Firm](index=5&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - Deloitte & Touche LLP reviewed the interim financial statements for the three-month periods ended March 31, 2024 and 2023, and found no material modifications should be made for conformity with GAAP[11](index=11&type=chunk) - The firm previously audited the consolidated balance sheet as of December 31, 2023, expressing an unqualified opinion, and confirmed the accompanying condensed balance sheet information is fairly stated[12](index=12&type=chunk) [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net revenues | $916 | $879 | | Operating income | $150 | $138 | | Income before income taxes | $92 | $85 | | Net income from continuing operations | $66 | $63 | | Net income attributable to Travel + Leisure Co. shareholders | $66 | $64 | | Basic earnings per share (Continuing operations) | $0.93 | $0.81 | | Diluted earnings per share (Continuing operations) | $0.92 | $0.81 | - Net revenues increased by $37 million (4.2%) year-over-year, while operating income grew by $12 million (8.7%)[17](index=17&type=chunk) - Net income attributable to shareholders increased by $2 million (3.1%) to $66 million, and diluted EPS from continuing operations rose to $0.92 from $0.81[17](index=17&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net income attributable to Travel + Leisure Co. shareholders | $66 | $64 | | Foreign currency translation adjustments, net of tax | $(15) | $(2) | | Other comprehensive loss, net of tax | $(15) | $(2) | | Comprehensive income attributable to Travel + Leisure Co. shareholders | $51 | $62 | - Comprehensive income attributable to shareholders decreased by $11 million year-over-year, primarily due to a $13 million increase in foreign currency translation adjustments, net of tax[18](index=18&type=chunk) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | Change (Millions) | | :------------------------------------ | :-------------------------- | :--------------------------- | :---------------- | | Total assets | $7,023 | $6,738 | $285 | | Cash and cash equivalents | $479 | $282 | $197 | | Vacation ownership contract receivables, net | $2,535 | $2,527 | $8 | | Inventory | $1,187 | $1,135 | $52 | | Total liabilities | $7,948 | $7,655 | $293 | | Debt | $3,867 | $3,575 | $292 | | Total stockholders' (deficit) | $(926) | $(918) | $(8) | - Total assets increased by $285 million (4.2%) from December 31, 2023, to March 31, 2024, driven by increases in cash and cash equivalents, inventory, and prepaid expenses[21](index=21&type=chunk)[180](index=180&type=chunk) - Total liabilities increased by $293 million (3.8%), primarily due to a $292 million increase in debt, partially offset by a decrease in non-recourse vacation ownership debt[21](index=21&type=chunk)[180](index=180&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash provided by operating activities | $47 | $7 | | Net cash used in investing activities | $(57) | $(17) | | Net cash provided by/(used in) financing activities | $203 | $(343) | | Net change in cash, cash equivalents and restricted cash | $189 | $(354) | | Cash and cash equivalents, end of period | $479 | $196 | - Net cash provided by operating activities significantly increased to $47 million in Q1 2024 from $7 million in Q1 2023, primarily due to a decrease in cash utilized for working capital[23](index=23&type=chunk)[203](index=203&type=chunk) - Net cash provided by financing activities was $203 million in Q1 2024, a substantial improvement from $343 million used in Q1 2023, driven by net borrowings on the revolving credit facility and notes, and reduced share repurchases[23](index=23&type=chunk)[205](index=205&type=chunk) [Condensed Consolidated Statements of Deficit](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Deficit) - Total stockholders' deficit increased by $8 million from December 31, 2023, to March 31, 2024, reaching $(925) million[25](index=25&type=chunk) - This increase was primarily due to $36 million in dividends, $25 million in share repurchases, and $15 million in unfavorable currency translation adjustments, partially offset by $66 million in net income[25](index=25&type=chunk)[181](index=181&type=chunk) - The company paid cash dividends of $0.50 per share in Q1 2024, totaling $36 million, compared to $0.45 per share ($36 million total) in Q1 2023[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 - Background and Basis of Presentation](index=12&type=section&id=Note%201%20-%20Background%20and%20Basis%20of%20Presentation) - Travel + Leisure Co. operates in two reportable segments: Vacation Ownership (VOIs, consumer financing, property management) and Travel and Membership (vacation exchange, travel technology, memberships, rentals)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP and include all normal recurring adjustments necessary for a fair presentation of interim results[29](index=29&type=chunk)[31](index=31&type=chunk) [Note 2 - New Accounting Pronouncements](index=12&type=section&id=Note%202%20-%20New%20Accounting%20Pronouncements) - The FASB issued new guidance on Business Combinations—Joint Venture Formations (effective Jan 1, 2025), Disclosure Improvements (effective upon SEC's removal of related disclosure), Segment Reporting (effective for fiscal years beginning after Dec 15, 2023, and interim periods within fiscal years beginning after Dec 15, 2024), and Improvements to Income Tax Disclosures (effective for annual periods beginning after Dec 15, 2024)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - The Company is currently evaluating the impact of these new accounting pronouncements on its financial statements and related disclosures[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3 - Revenue Recognition](index=13&type=section&id=Note%203%20-%20Revenue%20Recognition) - Revenue from Vacation Ownership Interest (VOI) sales is recognized upon transfer of control, expiration of the statutory rescission period, and deemed collectibility of the transaction price[37](index=37&type=chunk) Property Management Fees and Reimbursable Revenues | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Management fee revenues | $113 | $107 | | Reimbursable revenues | $98 | $92 | | Property management fees and reimbursable revenues | $211 | $199 | Disaggregation of Net Revenues by Segment | Revenue Source | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | | **Vacation Ownership:** | | | | Vacation ownership interest sales | $369 | $338 | | Property management fees and reimbursable revenues | $211 | $199 | | Consumer financing | $110 | $103 | | Fee-for-Service commissions | $18 | $27 | | Ancillary revenues | $17 | $18 | | Total Vacation Ownership | $725 | $685 | | **Travel and Membership:** | | | | Transaction revenues | $140 | $147 | | Subscription revenues | $45 | $45 | | Ancillary revenues | $8 | $8 | | Total Travel and Membership | $193 | $200 | | **Net Revenues (Total Company)** | $916 | $879 | [Note 4 - Earnings Per Share](index=18&type=section&id=Note%204%20-%20Earnings%20Per%20Share) Basic and Diluted EPS (Continuing Operations) | Metric | 3 Months Ended March 31, 2024 | 3 Months Ended March 31, 2023 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Basic earnings per share | $0.93 | $0.81 | | Diluted earnings per share | $0.92 | $0.81 | Weighted Average Shares Outstanding | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Basic weighted average shares outstanding | 71.5 | 77.5 | | Diluted weighted average shares outstanding | 72.0 | 78.3 | - The company repurchased 0.6 million shares for $25 million during Q1 2024, with $146 million remaining availability under the share repurchase program as of March 31, 2024[56](index=56&type=chunk)[57](index=57&type=chunk) [Note 5 - Acquisitions](index=19&type=section&id=Note%205%20-%20Acquisitions) - On March 1, 2024, the company acquired Accor Vacation Club for $50 million ($44 million net of cash acquired), expanding its international portfolio in the Asia Pacific region and adding 24 resorts and nearly 30,000 members[58](index=58&type=chunk)[156](index=156&type=chunk) - On January 3, 2023, the company acquired Playbook365 for $13 million, integrating it with Travel Club's event lodging management platform to broaden products and services in the youth sports market[60](index=60&type=chunk)[61](index=61&type=chunk) - The company acquired the Travel + Leisure brand on January 5, 2021, for $100 million, with the remaining $10 million payment due in June 2024[62](index=62&type=chunk) [Note 6 - Discontinued Operations](index=19&type=section&id=Note%206%20-%20Discontinued%20Operations) - During the three months ended March 31, 2023, the company recognized a $1 million gain on disposal of its European vacation rentals business, net of income taxes, related to value-added tax refunds[63](index=63&type=chunk) [Note 7 - Vacation Ownership Contract Receivables](index=20&type=section&id=Note%207%20-%20Vacation%20Ownership%20Contract%20Receivables) Vacation Ownership Contract Receivables, Net | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :------------------------------------ | :-------------------------- | :--------------------------- | | Vacation ownership contract receivables, gross | $3,096 | $3,101 | | Less: allowance for loan losses | $561 | $574 | | Vacation ownership contract receivables, net | $2,535 | $2,527 | - The weighted average interest rate on outstanding VOCRs was 14.6% as of March 31, 2024, slightly down from 14.7% at December 31, 2023[65](index=65&type=chunk) Allowance for Loan Losses on VOCRs | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Provision for loan losses, net | $78 | $71 | | Contract receivables write-offs, net | $(91) | $(82) | [Note 8 - Inventory](index=22&type=section&id=Note%208%20-%20Inventory) Inventory Composition | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------- | :-------------------------- | :--------------------------- | | Completed VOI inventory | $938 | $899 | | Estimated VOI recoveries | $206 | $207 | | Land held for VOI development | $29 | $20 | | VOI construction in process | $10 | $5 | | Vacation exchange credits and other | $4 | $4 | | Total inventory | $1,187 | $1,135 | - Total inventory increased by $52 million from December 31, 2023, to March 31, 2024, primarily due to a $39 million net transfer of completed VOI inventory from property and equipment[71](index=71&type=chunk)[180](index=180&type=chunk) [Note 9 - Property and Equipment](index=23&type=section&id=Note%209%20-%20Property%20and%20Equipment) Property and Equipment, Net | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Total property and equipment | $1,662 | $1,682 | | Less: accumulated depreciation and amortization | $1,048 | $1,027 | | Property and equipment, net | $614 | $655 | - Property and equipment, net, decreased by $41 million from December 31, 2023, to March 31, 2024, primarily due to $39 million of net transfers of completed VOI inventory to inventory[74](index=74&type=chunk)[180](index=180&type=chunk) [Note 10 - Debt](index=23&type=section&id=Note%2010%20-%20Debt) Company Indebtedness | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Non-recourse vacation ownership debt | $2,057 | $2,071 | | Debt | $3,867 | $3,575 | | Total Indebtedness | $5,924 | $5,646 | - On March 21, 2024, the company closed on a placement of $350 million in term notes payable, secured by VOCRs, with a weighted average coupon rate of 5.66%[76](index=76&type=chunk) Available Borrowing Capacity (March 31, 2024) | Facility | Total Capacity (Millions) | Outstanding Borrowings (Millions) | Available Capacity (Millions) | | :-------------------------- | :------------------------ | :------------------------------ | :---------------------------- | | Non-recourse Conduit Facilities | $745 | $233 | $512 | | Revolving Credit Facilities | $1,000 | $292 | $706 | - As of March 31, 2024, the company was in compliance with its financial covenants, with an interest coverage ratio of 4.16 to 1.0 and a first lien leverage ratio of 3.50 to 1.0[80](index=80&type=chunk) [Note 11 - Variable Interest Entities](index=25&type=section&id=Note%2011%20-%20Variable%20Interest%20Entities) - The company consolidates bankruptcy-remote special purpose entities (SPEs) used for securitizing VOCRs, where the receivables and non-recourse debt are legally separate from the company[86](index=86&type=chunk) SPE Assets and Liabilities | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------- | :-------------------------- | :--------------------------- | | Total SPE assets | $2,357 | $2,418 | | Total SPE liabilities | $2,060 | $2,075 | | SPE assets in excess of SPE liabilities | $297 | $343 | - Non-securitized contract receivables totaled $874 million as of March 31, 2024, up from $810 million at December 31, 2023[88](index=88&type=chunk) [Note 12 - Fair Value](index=26&type=section&id=Note%2012%20-%20Fair%20Value) - The company measures financial assets and liabilities at fair value using a three-level hierarchy: Level 1 (quoted active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[90](index=90&type=chunk)[91](index=91&type=chunk) Fair Value of Financial Instruments (March 31, 2024) | Instrument | Carrying Amount (Millions) | Estimated Fair Value (Millions) | Level | | :------------------------------------ | :-------------------------- | :------------------------------ | :---- | | Vacation ownership contract receivables, net | $2,535 | $2,836 | Level 3 | | Debt | $5,924 | $5,845 | Level 2 | - Fair value of VOCRs is estimated using a discounted cash flow model (Level 3 inputs), while non-recourse vacation ownership debt and corporate debt fair values are based on indicative bids from investment banks (Level 2 inputs)[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 13 - Derivative Instruments and Hedging Activities](index=27&type=section&id=Note%2013%20-%20Derivative%20Instruments%20and%20Hedging%20Activities) - The company uses freestanding foreign currency forward contracts to manage exposure to foreign currency exchange rate fluctuations, particularly for the Euro, British pound sterling, Australian and Canadian dollars, and Mexican peso[100](index=100&type=chunk) - Interest rate caps are periodically used to strategically adjust the mix of fixed to floating rate debt and manage overall interest cost[101](index=101&type=chunk) - As of March 31, 2024, and 2023, the company had no interest rate derivatives designated as fair value or cash flow hedges[101](index=101&type=chunk) [Note 14 - Income Taxes](index=27&type=section&id=Note%2014%20-%20Income%20Taxes) - The effective tax rate was 28.5% for Q1 2024, up from 25.5% in Q1 2023, primarily impacted by the portion of stock-based compensation expense that is not deductible for tax purposes[104](index=104&type=chunk) - Income tax payments, net of tax refunds, were $6 million in Q1 2024, compared to $5 million in Q1 2023[105](index=105&type=chunk) [Note 15 - Leases](index=28&type=section&id=Note%2015%20-%20Leases) Lease Costs (3 Months Ended March 31) | Metric | 2024 (Millions) | 2023 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Operating lease cost | $5 | $5 | | Short-term lease cost | $3 | $3 | | Total finance lease cost | $3 | $2 | Lease-Related Assets and Liabilities (March 31) | Metric | 2024 (Millions) | 2023 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Operating lease right-of-use assets | $44 | $46 | | Operating lease liabilities | $82 | $87 | | Finance lease assets | $21 | $21 | | Finance lease liabilities | $21 | $20 | - The weighted average remaining lease term for operating leases is 4.6 years, and for finance leases, it is 2.8 years as of March 31, 2024[108](index=108&type=chunk) [Note 16 - Commitments and Contingencies](index=29&type=section&id=Note%2016%20-%20Commitments%20and%20Contingencies) - The company records an accrual for legal contingencies when a liability is probable and estimable, with reserves of $10 million as of March 31, 2024, up from $7 million at December 31, 2023[112](index=112&type=chunk)[114](index=114&type=chunk) - Potential exposure from adverse outcomes of legal proceedings could range up to $20 million in excess of recorded accruals, but management does not expect a material liability to consolidated financial position or liquidity[114](index=114&type=chunk) - The company enters into standard guarantees and indemnifications in the ordinary course of business, but the maximum potential amount of future payments is not estimable[116](index=116&type=chunk) [Note 17 - Accumulated Other Comprehensive Loss](index=32&type=section&id=Note%2017%20-%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated Other Comprehensive Loss (Net of Tax) | Metric | December 31, 2023 (Millions) | March 31, 2024 (Millions) | | :-------------------------- | :--------------------------- | :-------------------------- | | Balance | $(70) | $(85) | | Other comprehensive loss | — | $(15) | - Accumulated other comprehensive loss (net of tax) increased by $15 million during Q1 2024, primarily due to foreign currency translation adjustments[119](index=119&type=chunk) [Note 18 - Stock-Based Compensation](index=32&type=section&id=Note%2018%20-%20Stock-Based%20Compensation) - During Q1 2024, the company granted $32 million in RSUs and $10 million in PSUs to key employees and senior officers[122](index=122&type=chunk) - Stock-based compensation expense was $9 million in Q1 2024, down from $10 million in Q1 2023, with associated tax benefits of $2 million and $3 million, respectively[127](index=127&type=chunk) - Unrecognized compensation expense for RSUs was $72 million as of March 31, 2024 (expected over 3.0 years), and for PSUs (probable of vesting) was $16 million (expected over 2.3 years)[125](index=125&type=chunk) [Note 19 - Segment Information](index=35&type=section&id=Note%2019%20-%20Segment%20Information) Net Revenues by Segment (3 Months Ended March 31) | Segment | 2024 (Millions) | 2023 (Millions) | | :-------------------- | :-------------- | :-------------- | | Vacation Ownership | $725 | $685 | | Travel and Membership | $193 | $200 | | Total reportable segments | $918 | $885 | Adjusted EBITDA by Segment (3 Months Ended March 31) | Segment | 2024 (Millions) | 2023 (Millions) | | :-------------------- | :-------------- | :-------------- | | Vacation Ownership | $135 | $131 | | Travel and Membership | $75 | $71 | | Total reportable segments | $210 | $202 | | Total Company | $191 | $184 | - Vacation Ownership segment assets were $5,064 million and Travel and Membership segment assets were $1,362 million as of March 31, 2024[132](index=132&type=chunk) [Note 20 - Restructuring](index=37&type=section&id=Note%2020%20-%20Restructuring) - The 2023 restructuring plan incurred $26 million in charges, primarily for personnel-related costs (reduction of approximately 250 employees) and facility reductions, aimed at enhancing organizational efficiency[132](index=132&type=chunk)[176](index=176&type=chunk) Restructuring Liability Activity | Metric | Liability as of Dec 31, 2023 (Millions) | Cash Payments (Millions) | Liability as of March 31, 2024 (Millions) | | :---------------- | :-------------------------------------- | :----------------------- | :---------------------------------------- | | Facility-related | $17 | $(1) | $16 | | Personnel-related | $16 | $(9) | $7 | | Total | $33 | $(10) | $23 | - All material initiative and related expenses for the 2023 restructuring plan have been incurred as of March 31, 2024[176](index=176&type=chunk) [Note 21 - Transactions with Former Parent and Former Subsidiaries](index=37&type=section&id=Note%2021%20-%20Transactions%20with%20Former%20Parent%20and%20Former%20Subsidiaries) - As of March 31, 2024, Cendant separation and related tax liabilities totaled $23 million[136](index=136&type=chunk) - Travel + Leisure Co. is responsible for two-thirds of certain contingent corporate liabilities and is entitled to two-thirds of certain contingent corporate assets incurred prior to the Spin-off from Wyndham Hotels[139](index=139&type=chunk) - The estimated fair value of guarantees and indemnifications for which Travel + Leisure Co. is responsible related to the sale of the European vacation rentals business totaled $84 million as of March 31, 2024[144](index=144&type=chunk) [Note 22 - Related Party Transactions](index=39&type=section&id=Note%2022%20-%20Related%20Party%20Transactions) - The company incurred less than $1 million in expenses during Q1 2024 and Q1 2023 for subletting an aircraft from its former CEO and current Chairman of the Board for business travel[147](index=147&type=chunk) [Note 23 - Subsequent Event](index=39&type=section&id=Note%2023%20-%20Subsequent%20Event) - On April 1, 2024, the company repaid its $300 million 5.65% secured notes that matured in April 2024[148](index=148&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and liquidity for the three months ended March 31, 2024. It covers key business trends, the impact of recent acquisitions, operational results by segment, restructuring efforts, and strategies for capital deployment, including share repurchases and dividends [Forward-Looking Statements](index=40&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements that are subject to risks and uncertainties, including economic conditions, competition, acquisitions, and changes in consumer travel patterns, which could cause actual results to differ materially[150](index=150&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which reflect management's opinion only as of the date they were made[150](index=150&type=chunk) [Business and Overview](index=40&type=section&id=BUSINESS%20AND%20OVERVIEW) - The company operates in two segments: Vacation Ownership (developing, marketing, and selling VOIs, consumer financing, property management) and Travel and Membership (vacation exchange, travel technology, memberships, and direct-to-consumer rentals)[154](index=154&type=chunk) - Q1 2024 saw strong demand for leisure travel, leading to higher tours and Gross VOI sales in the Vacation Ownership business, with VPGs performing above pre-pandemic levels despite a strategic shift to increase new owners[151](index=151&type=chunk) - The Travel and Membership segment experienced increased net income and Adjusted EBITDA due to cost savings from strategic realignment and pricing increases, despite lower transaction volumes[152](index=152&type=chunk) - The acquisition of Accor Vacation Club on March 1, 2024, for $50 million ($44 million net of cash acquired), expands the company's international portfolio in the Asia Pacific region[156](index=156&type=chunk) [Results of Operations](index=41&type=section&id=RESULTS%20OF%20OPERATIONS) [Operating Statistics](index=42&type=section&id=OPERATING%20STATISTICS) Vacation Ownership Operating Statistics | Metric | 3 Months Ended March 31, 2024 | 3 Months Ended March 31, 2023 | % Change | | :-------------------- | :---------------------------- | :---------------------------- | :------- | | Gross VOI sales (in millions) | $490 | $454 | 7.8 | | Tours (in 000s) | 155 | 135 | 14.8 | | Volume per guest | $3,035 | $3,215 | (5.6) | Travel and Membership Operating Statistics | Metric | 3 Months Ended March 31, 2024 | 3 Months Ended March 31, 2023 | % Change | | :-------------------- | :---------------------------- | :---------------------------- | :------- | | Total transactions (in 000s) | 445 | 475 | (6.3) | | Total revenue per transaction | $315 | $310 | 1.4 | | Average number of exchange members (in 000s) | 3,493 | 3,512 | (0.5) | [Three Months Ended March 31, 2024 vs. Three Months Ended March 31, 2023 (Consolidated)](index=43&type=section&id=THREE%20MONTHS%20ENDED%20MARCH%2031%2C%202024%20VS.%20THREE%20MONTHS%20ENDED%20MARCH%2031%2C%202023) Consolidated Financial Performance | Metric | 3 Months Ended March 31, 2024 (Millions) | 3 Months Ended March 31, 2023 (Millions) | Favorable/(Unfavorable) (Millions) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------------------- | | Net revenues | $916 | $879 | $37 | | Expenses | $766 | $739 | $(27) | | Operating income | $150 | $138 | $12 | | Interest expense | $64 | $58 | $(6) | | Income before income taxes | $92 | $85 | $7 | | Net income attributable to Travel + Leisure Co. shareholders | $66 | $64 | $2 | - The $37 million increase in net revenues was primarily driven by a $41 million increase in the Vacation Ownership segment, partially offset by a $7 million decrease in the Travel and Membership segment[165](index=165&type=chunk) - The $27 million increase in expenses was mainly due to higher sales and commission expenses, increased marketing costs, and higher property management and consumer financing interest expenses[165](index=165&type=chunk) [Segment Results](index=45&type=section&id=Our%20segment%20results%20are%20as%20follows%20(in%20millions)) - Vacation Ownership net revenues increased by $40 million and Adjusted EBITDA increased by $4 million in Q1 2024 compared to Q1 2023[167](index=167&type=chunk) - The Vacation Ownership revenue increase was driven by a $39 million increase in gross VOI sales (due to 14.8% increase in tours, despite a 5.6% decrease in VPG), a $13 million increase in property management revenues, and a $7 million increase in consumer financing revenues[168](index=168&type=chunk) - Travel and Membership net revenues decreased by $7 million, but Adjusted EBITDA increased by $4 million, primarily due to lower transactions offset by price increases and significant cost savings from strategic restructuring[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Restructuring Plans](index=47&type=section&id=RESTRUCTURING%20PLANS) - The 2023 restructuring plan incurred $26 million in charges, primarily for personnel-related costs (reducing approximately 250 employees) and facility reductions, aimed at enhancing organizational efficiency[176](index=176&type=chunk) - All material initiative and related expenses for the 2023 restructuring plan have been incurred as of March 31, 2024[176](index=176&type=chunk) [Financial Condition](index=48&type=section&id=FINANCIAL%20CONDITION) Financial Condition Summary | Metric | March 31, 2024 (Millions) | December 31, 2023 (Millions) | Change (Millions) | | :---------------- | :-------------------------- | :--------------------------- | :---------------- | | Total assets | $7,023 | $6,738 | $285 | | Total liabilities | $7,948 | $7,655 | $293 | | Total (deficit) | $(925) | $(917) | $(8) | - Total assets increased by $285 million, driven by a $197 million increase in cash and cash equivalents, $52 million in inventory, $40 million in prepaid expenses, and $31 million in goodwill[180](index=180&type=chunk) - Total liabilities increased by $293 million, primarily due to a $292 million increase in debt and a $22 million increase in deferred income taxes, partially offset by a $14 million decrease in non-recourse vacation ownership debt[180](index=180&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [Cash and Cash Equivalents](index=48&type=section&id=Cash%20and%20Cash%20Equivalents) - As of March 31, 2024, the company had $479 million in cash and cash equivalents[183](index=183&type=chunk) [$1.0 Billion Revolving Credit Facility](index=48&type=section&id=$1.0%20Billion%20Revolving%20Credit%20Facility) - The company's $1.0 billion revolving credit facility, expiring in October 2026, had $706 million of available capacity as of March 31, 2024[184](index=184&type=chunk) - As of March 31, 2024, the company was in compliance with its financial covenants, reporting an interest coverage ratio of 4.16 to 1.0 and a first lien leverage ratio of 3.50 to 1.0[187](index=187&type=chunk) - The benchmark rate on the revolving credit facility and the 2018 Term Loan B Facility was changed from LIBOR to Term SOFR effective March 31, 2023[188](index=188&type=chunk) [Secured Notes and Term Loan B facilities](index=50&type=section&id=Secured%20Notes%20and%20Term%20Loan%20B%20facilities) - As of March 31, 2024, the company had $3.55 billion of outstanding borrowings under its secured notes and term loan B facilities, with maturities ranging from 2024 to 2030[190](index=190&type=chunk) - Subsequent to the quarter-end, the company repaid its $300 million 5.65% secured notes that came due in April 2024[190](index=190&type=chunk) [Non-recourse Vacation Ownership Debt](index=50&type=section&id=Non-recourse%20Vacation%20Ownership%20Debt) - The Vacation Ownership business finances VOCRs through non-recourse asset-backed conduit facilities and term asset-backed securitizations[191](index=191&type=chunk) - The company closed on $350 million of securitization financings during Q1 2024[192](index=192&type=chunk) - As of March 31, 2024, all securitized loan pools were in compliance with applicable contractual triggers[194](index=194&type=chunk) [Material Cash Requirements](index=51&type=section&id=Material%20Cash%20Requirements) Material Future Contractual Obligations (as of March 31, 2024) | Obligation Type | Total (Millions) | | :---------------------- | :--------------- | | Debt | $3,879 | | Non-recourse debt | $2,081 | | Interest on debt | $1,295 | | Purchase commitments | $711 | | Operating leases | $97 | | **Total** | **$8,063** | - The company had $542 million in surety bonds outstanding as of March 31, 2024, for sales and development transactions[199](index=199&type=chunk) [Cash Flow](index=52&type=section&id=CASH%20FLOW) Summary of Cash Flow Changes (3 Months Ended March 31) | Activity | 2024 (Millions) | 2023 (Millions) | Change (Millions) | | :------------------------------------------ | :-------------- | :-------------- | :---------------- | | Operating activities | $47 | $7 | $40 | | Investing activities | $(57) | $(17) | $(40) | | Financing activities | $203 | $(343) | $546 | | Net change in cash, cash equivalents and restricted cash | $189 | $(354) | $543 | - The $40 million increase in net cash provided by operating activities was primarily due to a decrease in cash utilized for working capital[203](index=203&type=chunk) - The $546 million increase in net cash provided by financing activities was mainly due to $288 million of net borrowings on the revolving credit facility and notes, and a $76 million decrease in share repurchases[205](index=205&type=chunk) [Capital Deployment](index=52&type=section&id=Capital%20Deployment) - The company spent $34 million on vacation ownership development projects (inventory) in Q1 2024, with anticipated spending between $105 million and $125 million for the full year 2024[207](index=207&type=chunk) - Capital expenditures were $17 million in Q1 2024, primarily for information technology and sales center improvement projects, with anticipated spending between $80 million and $85 million for the full year 2024[208](index=208&type=chunk) - The company continues its 'asset-light' efforts in vacation ownership through 'Just-in-Time' partnerships, where financial partners develop assets and the company purchases finished inventory as needed[209](index=209&type=chunk) [Share Repurchase Program](index=54&type=section&id=Share%20Repurchase%20Program) - The company's share repurchase program has a total authorization of $6.5 billion, with $146 million remaining availability as of March 31, 2024[213](index=213&type=chunk) - During Q1 2024, the company repurchased 0.6 million shares at an average price of $40.07, for a total cost of $25 million[214](index=214&type=chunk) [Dividends](index=54&type=section&id=Dividends) - The company paid cash dividends of $0.50 per share in Q1 2024, totaling $38 million, compared to $0.45 per share ($37 million total) in Q1 2023[215](index=215&type=chunk) - The long-term plan is to grow the dividend at a minimum rate of earnings growth, with future declarations subject to Board discretion and various financial factors[215](index=215&type=chunk) [Seasonality](index=54&type=section&id=SEASONALITY) - The company experiences seasonal fluctuations, with revenues from VOI sales generally higher in the third quarter due to increased leisure travel[216](index=216&type=chunk) - Revenues from vacation exchange fees are typically highest in the first quarter, when members usually book their vacations for the year[216](index=216&type=chunk) [Commitments and Contingencies](index=54&type=section&id=COMMITMENTS%20AND%20CONTINGENCIES) - The company is involved in various claims and legal proceedings, none of which are expected to have a material effect on its results of operations or financial condition[218](index=218&type=chunk) - Further details on commitments and contingencies are provided in Note 16 and Note 21 to the Condensed Consolidated Financial Statements[218](index=218&type=chunk) [Critical Accounting Estimates](index=54&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) - The Condensed Consolidated Financial Statements rely on estimates and assumptions that are inherently uncertain, and significant unfavorable changes could materially impact reported results[219](index=219&type=chunk) - Management believes the estimates and assumptions used were appropriate at the time of preparation[219](index=219&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) This section assesses the company's market risks related to interest rate and foreign currency exchange rate fluctuations using a sensitivity analysis. It concludes that a hypothetical 10% change in these rates would not materially affect the company's prices, earnings, fair values, or cash flows - A hypothetical 10% change in interest rates or foreign currency exchange rates would not have a material effect on the company's prices, earnings, fair values, or cash flows[220](index=220&type=chunk) - A 100-basis point change in underlying interest rates would result in a $2 million increase or decrease in annual consumer financing interest expense and a $12 million increase or decrease in annual debt interest expense[221](index=221&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024. There were no material changes in internal control over financial reporting during the period - As of March 31, 2024, the company's disclosure controls and procedures were designed and functioning effectively to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[223](index=223&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the period covered by this report[223](index=223&type=chunk) [PART II — OTHER INFORMATION](index=56&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) 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 results of operations or financial condition - The company is involved in various claims and lawsuits in the ordinary course of business, but management does not expect any to have a material adverse effect on its results of operations or financial condition[224](index=224&type=chunk) - Further details on legal actions are provided in Note 16 and Note 21 to the Condensed Consolidated Financial Statements[224](index=224&type=chunk) [Item 1A. Risk Factors](index=56&type=page&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive discussion of risk factors contained in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and states that there have been no material changes to these risks as of March 31, 2024 - There have been no material changes to the risk factors set forth in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as of March 31, 2024[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes the company's common stock repurchase activity for the quarter ended March 31, 2024, detailing the number of shares purchased, average price, and remaining authorization under the Share Repurchase Program Common Stock Repurchases (Quarter Ended March 31, 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Cost (Millions) | | :------------------------ | :------------------------------- | :--------------------------- | :-------------------- | | January 2024 | 439,240 | $39.87 | $17.5 | | February 2024 | 185,154 | $40.54 | $7.5 | | March 2024 | — | — | — | | **Total** | **624,394** | **$40.07** | **$25.0** | - As of March 31, 2024, the approximate dollar value of shares that may yet be purchased under the publicly announced plan was $145.6 million[226](index=226&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[229](index=229&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[230](index=230&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This item indicates that there is no other information to report - No other information is reported under this item[231](index=231&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including corporate governance documents, equity incentive plans, award agreements, and certifications - The exhibits include corporate documents (Restated Certificate of Incorporation, Bylaws), equity incentive plans, award agreements, and certifications (President and CEO, CFO)[232](index=232&type=chunk) [Signatures](index=58&type=section&id=SIGNATURES) - The report was signed on April 24, 2024, by Michael A. Hug, Chief Financial Officer, and Thomas M. Duncan, Chief Accounting Officer[235](index=235&type=chunk)

Exhibit 99.1 Travel + Leisure Co. Reports First Quarter 2024 Results ORLANDO, Fla. (April 24, 2024) — Travel + Leisure Co. (NYSE:TNL), the world's leading membership and leisure travel company, today reported first quarter 2024 financial results for the three months ended March 31, 2024. Highlights and outlook include: "We are off to a solid start for the year with a 15 percent increase in tours, 28 percent growth in new owner tours and volume per guest above $3,000," said Michael D. Brown, president and ch ...

Financial Data and Key Metrics Changes - The company reported a fourth quarter adjusted EBITDA of $240 million, a 7% increase year-over-year, and a full year adjusted EBITDA of $908 million, reflecting a 6% year-over-year growth [36][52] - Adjusted diluted earnings per share for the fourth quarter was $1.98, which includes a $0.37 income tax benefit, leading to a 52% increase [36][52] - Full year adjusted EPS grew by 26% over the prior year, with a cumulative capital return to shareholders since spin exceeding $2.1 billion [38][50] Business Line Data and Key Metrics Changes - Vacation Ownership segment reported a revenue increase of 5% to $776 million in the fourth quarter, with adjusted EBITDA rising 12% to $208 million [53] - Gross VOI sales for the full year increased 8% to $2.15 billion, with a VPG of $3,128 [40] - Travel and Membership segment revenue was $158 million in the fourth quarter, down from $163 million the previous year, with adjusted EBITDA of $52 million compared to $57 million [54] Market Data and Key Metrics Changes - Tours increased by 17% year-over-year in the fourth quarter and 18% for the full year, indicating strong consumer demand [41] - New owner transaction mix improved by 330 basis points in the fourth quarter and 240 basis points for the full year [41] - Forward bookings for 2024 owner nights are ahead of 2023 levels, reflecting robust consumer demand [48] Company Strategy and Development Direction - The company aims for growth through a multi-brand strategy, recently acquiring the rights to the Sports Illustrated Vacation Ownership business and the Accor Vacation Club brand [44][46] - The focus remains on enhancing marketing standards and ensuring profitable partnerships to drive new owner growth [6][7] - The company expects to leverage its strong relationships with partners like Wyndham Hotels to enhance marketing capabilities and drive growth [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low single-digit EBITDA growth in the Travel and Membership segment for 2024, despite challenges [43] - The company anticipates a return to high single-digit growth rates in the long term as interest rates subside and operational efficiencies improve [15][63] - Management highlighted the importance of maintaining credit quality and managing provisions effectively, with expectations for provisions to remain in the 18% to 19% range [81] Other Important Information - The company returned approximately 15% of its market capitalization to shareholders through dividends and share repurchases [38][50] - Adjusted free cash flow for the year was $379 million, resulting in a 42% adjusted EBITDA to free cash flow conversion [57] - The company plans to recommend a dividend increase to $0.50 per share for the first quarter of 2024, reflecting confidence in future performance [51] Q&A Session Summary Question: Can you discuss the growth expectations for tours? - Management expects tour growth to exceed 10% for the year, building on the previous year's 18% growth [5][6] Question: How is the cost structure for the B2B and B2C business? - The company believes the cost structure is right-sized and is focused on maintaining EBITDA levels with minimal top-line growth [8][9] Question: What are the expectations for the Travel and Membership segment? - Management anticipates low single-digit EBITDA growth for this segment in 2024, with a focus on improving margins [75] Question: How is the company managing its capital allocation strategy? - The company remains committed to dividends and strategic M&A opportunities, with a focus on long-term growth [90][91] Question: What is the outlook for the Accor acquisition? - The Accor acquisition is expected to provide incremental growth, with plans for future expansion and synergies [65][66]

Financial Performance - Net revenues for 2023 reached $3,750 million, a 5.1% increase from $3,567 million in 2022[322]. - Operating income increased to $720 million in 2023, up from $653 million in 2022, representing a 10.3% growth[322]. - Net income attributable to Travel + Leisure Co. shareholders was $396 million in 2023, compared to $357 million in 2022, reflecting an increase of 10.9%[324]. - Basic earnings per share for continuing operations rose to $5.24 in 2023, up from $4.27 in 2022, marking a 22.8% increase[322]. - The cumulative total return for Travel + Leisure Co. from December 31, 2018, to December 31, 2023, was $131.98, compared to $181.15 for the S&P Midcap 400 Index[198]. Assets and Liabilities - Total assets decreased slightly to $6,738 million in 2023 from $6,757 million in 2022[326]. - The company’s total liabilities remained stable at $7,655 million in 2023, slightly down from $7,661 million in 2022[326]. - The company’s total deficit as of December 31, 2023, was $917 million, compared to $904 million in 2022, showing a slight increase of 1.4%[332]. - The allowance for doubtful accounts decreased to $143 million in 2023 from $168 million in 2022, representing a reduction of approximately 14.9%[349]. - The total balance of restricted cash for securitizations increased to $96 million in 2023 from $83 million in 2022, indicating a growth of 15.7%[346]. Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of 2023 were $282 million, down from $550 million at the end of 2022[326]. - The company repurchased common stock worth $307 million in 2023, a decrease from $352 million in 2022, reflecting a reduction of approximately 12.8%[332]. - The company issued dividends of $1.80 per share in 2023, up from $1.60 per share in 2022, marking a 12.5% increase[332]. - The company had accrued expenses and other liabilities of $807 million as of December 31, 2023, compared to $876 million in 2022[437]. Debt and Financing - As of December 31, 2023, the total outstanding balance of variable rate borrowings was $1.231 billion, comprising $364 million in non-recourse debt and $867 million in corporate debt[303]. - The company’s total debt, including finance leases, was $3,575 million as of December 31, 2023, down from $3,669 million in 2022[438]. - The Company closed a placement of term notes with an initial principal amount of $250 million, secured by VOCRs, bearing interest at a weighted average coupon rate of 6.33%[443]. - The Company had $394 million in other assets as of December 31, 2023, up from $324 million in 2022[436]. - The combined weighted average interest rate on the Company's total non-recourse vacation ownership debt was 5.9% in 2023[451]. Revenue Segments - The Vacation Ownership segment generated $3,041 million in total revenues for 2023, up from $2,835 million in 2022, reflecting a growth of 7.3%[392]. - The Travel and Membership segment reported total revenues of $711 million for 2023, a decrease from $735 million in 2022, indicating a decline of 3.3%[392]. - Management fee revenue increased to $432 million in 2023 from $413 million in 2022, while reimbursable revenues rose to $382 million from $350 million in the same period[379]. - Total property management fees and reimbursable revenues reached $814 million in 2023, up from $763 million in 2022 and $691 million in 2021[379]. Market Risks - The company assesses market risks based on changes in interest and foreign currency exchange rates using a sensitivity analysis[302]. - The company anticipates that SOFR and asset-backed commercial paper rates will remain its primary market risk exposures[305]. - A hypothetical 10% change in interest rates would result in a $2 million increase or decrease in annual consumer financing interest expense and a $5 million increase or decrease in annual debt interest expense[302]. - The fair value of outstanding foreign exchange hedging instruments was $61 million as of December 31, 2023, with a potential $5 million change in fair value from a 10% change in foreign currency exchange rates[302]. Acquisitions and Goodwill - The company acquired Playbook365 for $13 million, which includes $6 million in cash and contingent consideration valued at $7 million, potentially rising to $24 million based on financial metrics[398]. - The company acquired the Travel + Leisure brand for a total of $100 million, with $35 million paid at closing and additional payments of $20 million in 2021, 2022, and $15 million in 2023, with a remaining $10 million due in June 2024[400]. - As of December 31, 2023, the company's total goodwill increased to $962 million, up from $955 million in 2022, with $935 million attributed to the Travel and Membership segment[409]. - The Company completed its annual goodwill impairment test as of October 1, 2023, and determined that no impairment exists[364]. Taxation - The effective income tax rate for the company in 2023 was 19.4%, down from 26.7% in 2022, primarily due to changes in valuation allowances and foreign tax credits[413]. - The company had deferred income tax liabilities of $1,067 million as of December 31, 2023, compared to $1,040 million in 2022[412]. - The ending balance of unrecognized tax benefits decreased to $22 million in 2023 from $25 million in 2022, with potential penalties and interest liabilities of $3 million and $10 million respectively as of December 31, 2023[414][418]. Vacation Ownership Contracts - Vacation ownership contract receivables (VOCRs) increased to $3.101 billion in 2023 from $2.911 billion in 2022, with net VOCR originations of $1.43 billion in 2023, up from $1.14 billion in 2022[419][421]. - The allowance for loan losses on VOCRs rose to $574 million in 2023 from $541 million in 2022, reflecting a provision for loan losses of $348 million during 2023[422]. - The total vacation ownership receivables, net of securitized liabilities and allowance for loan losses, reached $579 million in 2023, up from $517 million in 2022, indicating a growth of approximately 12%[468]. - The fair value of vacation ownership contract receivables, net, was estimated at $2,527 million as of December 31, 2023, down from $2,829 million in 2022[477].

Exhibit 99.1 Travel + Leisure Co. Reports Fourth Quarter and Full-Year 2023 Results and Provides 2024 Outlook ORLANDO, Fla. (February 21, 2024) — Travel + Leisure Co. (NYSE:TNL), the world's leading membership and leisure travel company, today reported fourth quarter and full-year 2023 financial results for the period ended December 31, 2023. Fourth quarter 2023 highlights: Full-year 2023 highlights: Outlook: "Our team produced strong year-over-year growth in revenue, vacation ownership sales and adjusted E ...

Financial Data and Key Metrics Changes - The third quarter adjusted EBITDA was reported at $248 million, reflecting a 6% increase year-over-year, while adjusted diluted earnings per share rose by 20% to $1.54 [16][27] - The adjusted EBITDA margin for the third quarter remained flat at 25% compared to the prior quarter and the previous year [2] - Year-to-date adjusted EBITDA growth is 5%, and adjusted EPS growth is 16% [16] Business Line Data and Key Metrics Changes - The Vacation Ownership segment reported revenues of $812 million, an 8% increase, with adjusted EBITDA also increasing by 8% to $203 million [39] - The Travel Membership segment generated $174 million in revenue, down from $183 million in the prior year, with adjusted EBITDA decreasing to $62 million from $65 million [18] - Total owner arrivals were ahead, with a length of stay 5% above the fourth quarter of 2019 [29] Market Data and Key Metrics Changes - Forward resort booking sales volume per guest increased, with Q4 owner nights on the books 7% ahead of the same period in 2019 [3] - The exchange member count has started to recover, but the transaction propensity remains below pre-COVID levels [18][24] Company Strategy and Development Direction - The company acquired the rights to the Vacation Ownership business of Sports Hospitality Ventures, aiming to develop a network of sports-themed resorts [12][35] - The strategic goal includes adding incremental Vacation Ownership revenue streams under the Travel + Leisure brand, with a focus on capital-efficient development [13][35] - The company plans to streamline operations in the Travel and Membership segment to align costs with revised revenue forecasts [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the Travel and Membership segment will see growth in 2024, citing stabilization in transaction propensity [48] - The company anticipates that the fourth quarter will mark the trough in revenue momentum for the Travel and Membership segment [34] - Management noted that 80% of owners have fully paid for their timeshare, indicating resilience against economic downturns [14] Other Important Information - The company returned $98 million to shareholders in Q3 through dividends and share repurchases, aiming to reduce outstanding shares by 10% for the full year [8] - The adjusted free cash flow for the nine months was $81 million, down from $195 million in the same period last year, primarily due to higher originations and interest payments [41] Q&A Session Summary Question: What gives confidence that Travel and Membership will trough in Q4? - Management noted stabilization in transaction propensity and a rebound in membership growth as key factors [48][49] Question: Can you walk through the guidance cut for this year? - The guidance cut was primarily due to a $15 million reduction in the Travel and Membership business forecast for Q4 [60] Question: What are the dynamics affecting free cash flow conversion? - The free cash flow conversion is expected to be around 50%, influenced by timing in the receivable portfolio and increased corporate interest expense [83][84] Question: How significant is the Sports Illustrated acquisition? - The acquisition is expected to be capital efficient, with most costs being cash out the door that will be recovered through product sales [134] Question: What is the outlook for tour flow? - Tour flow expectations are for double-digit growth in Q4 and for the full year, with higher teens anticipated [118]

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section details the unaudited interim financial statements, management's analysis, market risks, and internal controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides the unaudited interim financial statements for the three and nine-month periods, reviewed by independent auditors [Report of Independent Registered Public Accounting Firm](index=6&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP reviewed the Company's interim financial statements and found no material modifications needed for U.S. GAAP conformity - The auditors are **not aware of any material modifications** that should be made to the accompanying interim financial statements for them to be in conformity with U.S. GAAP[12](index=12&type=chunk) [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company reported net revenues of $986 million for Q3 2023, with net income attributable to shareholders at $110 million Q3 & Nine Months 2023 vs 2022 Income Statement Highlights (in millions, except EPS) | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $986 | $937 | $2,814 | $2,668 | | **Operating Income** | $207 | $189 | $529 | $491 | | **Net Income to Shareholders** | $110 | $116 | $267 | $266 | | **Diluted EPS** | $1.49 | $1.38 | $3.53 | $3.12 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets slightly decreased to $6.655 billion, while total stockholders' deficit increased to $997 million Balance Sheet Summary (in millions) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | $6,655 | $6,757 | | Cash and cash equivalents | $238 | $550 | | Vacation ownership contract receivables, net | $2,460 | $2,370 | | **Total Liabilities** | $7,652 | $7,661 | | Debt | $3,729 | $3,669 | | Non-recourse vacation ownership debt | $1,893 | $1,973 | | **Total (Deficit)** | ($997) | ($904) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $198 million for the nine months ended September 30, 2023, with significant cash used in financing activities Cash Flow Summary for Nine Months Ended Sep 30 (in millions) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $198 | $267 | | **Net cash used in investing activities** | ($46) | ($34) | | **Net cash used in financing activities** | ($444) | ($414) | | **Net change in cash, cash equivalents and restricted cash** | ($296) | ($192) | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies and financial figures presented in the consolidated statements [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, condition, and liquidity, highlighting strong leisure demand amidst macroeconomic uncertainties and strategic capital deployment - The company continues to see **strong demand for leisure travel**, but faces uncertainty from inflationary pressures, rising interest rates, and recession risk[166](index=166&type=chunk) - A strategic shift to increase new owner sales is moderating Volume Per Guest (VPG) levels, though they remain above pre-pandemic levels[166](index=166&type=chunk) - The company believes it has **sufficient liquidity** to meet ongoing cash needs, including the repayment of **$300 million in notes due April 2024**[216](index=216&type=chunk) Q3 2023 vs Q3 2022 Consolidated Results (in millions) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $986 | $937 | $49 | | **Operating Income** | $207 | $189 | $18 | | **Net Income** | $110 | $116 | ($6) | [Results of Operations](index=48&type=section&id=Results%20of%20Operations) For Q3 2023, consolidated net revenues rose 5.2% to $986 million, driven by the Vacation Ownership segment, despite a 5.2% decrease in net income Q3 2023 Operating Statistics vs Q3 2022 | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Vacation Ownership** | | | | | Gross VOI sales (in millions) | $598 | $555 | 7.8% | | Tours (in 000s) | 187 | 158 | 18.0% | | Volume per guest (VPG) | $3,108 | $3,393 | (8.4%) | | **Travel and Membership** | | | | | Total transactions (in 000s) | 410 | 439 | (6.5%) | - Vacation Ownership revenue increased by **$58 million** in Q3 2023, driven by a **39% increase in gross VOI sales** from more tours, despite a lower VPG. Adjusted EBITDA for the segment rose by **$15 million**[184](index=184&type=chunk)[185](index=185&type=chunk) - Travel and Membership revenue decreased by **$9 million** in Q3 2023 due to lower transaction volumes. Adjusted EBITDA for the segment fell by **$3 million**[189](index=189&type=chunk)[190](index=190&type=chunk) [Financial Condition](index=58&type=section&id=Financial%20Condition) As of September 30, 2023, total assets decreased by $102 million, primarily due to cash used for debt repayment and shareholder returns, while total liabilities saw a net decrease of $9 million - Total assets decreased primarily due to a **$312 million drop in Cash and cash equivalents**, which was used for debt repayment (**$400 million**), share repurchases (**$269 million**), and dividends (**$104 million**)[214](index=214&type=chunk) - Total liabilities saw a net decrease of **$9 million**, with an **$80 million reduction** in non-recourse debt and a **$58 million decrease** in accrued expenses, partially offset by a **$60 million increase** in corporate debt[214](index=214&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $238 million in cash and $547 million available under its revolving credit facility, with significant capital deployment towards share repurchases and dividends - As of September 30, 2023, the company had **$547 million of available capacity** under its **$1.0 billion revolving credit facility**[218](index=218&type=chunk) - During the first nine months of 2023, the company repurchased **6.7 million shares for $267 million** and paid **$104 million in dividends**[247](index=247&type=chunk)[248](index=248&type=chunk) Material Future Contractual Obligations (in millions) | Category | Total Commitment | | :--- | :--- | | Debt | $3,743 | | Non-recourse debt | $1,911 | | Interest on debt | $1,212 | | Purchase commitments | $763 | | Operating leases | $109 | | **Total** | **$7,738** | [Quantitative and Qualitative Disclosures About Market Risks](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company is exposed to interest rate and foreign currency risks, though a 10% change is not expected to materially affect financials, while a 100-basis point interest rate change would impact annual interest expense by $15 million - A hypothetical **10% change in interest rates or foreign currency exchange rates** is not expected to have a **material effect** on the company's financials[253](index=253&type=chunk) - A **100-basis point change** in underlying interest rates would impact annual consumer financing interest expense by **$5 million** and annual corporate debt interest expense by **$10 million**[254](index=254&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's **disclosure controls and procedures were effective** as of the end of the period[256](index=256&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[256](index=256&type=chunk) [PART II - OTHER INFORMATION](index=53&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides disclosures on legal proceedings, risk factors, equity sales, and other miscellaneous information [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) 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 - The company is involved in various claims and lawsuits, none of which are expected to have a **material adverse effect** on its financial results or condition[258](index=258&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - As of September 30, 2023, there have been **no material changes** to the risk factors set forth in the company's 2022 Annual Report on Form 10-K[259](index=259&type=chunk) [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) During Q3 2023, the company repurchased approximately 1.6 million shares for about $65 million, with $210 million remaining available for future repurchases Share Repurchases for Quarter Ended September 30, 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2023 | 773,316 | $41.40 | | August 2023 | 819,577 | $40.26 | | September 2023 | — | $— | | **Total** | **1,592,893** | **$40.82** | - As of September 30, 2023, the company had approximately **$210 million remaining** under its share repurchase authorization[260](index=260&type=chunk) [Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - There were **no defaults** upon senior securities[263](index=263&type=chunk) [Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is **not applicable** to the company[264](index=264&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) None - No other information was reported under this item[265](index=265&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to agreements, certifications by the CEO and CFO, and XBRL data files - Exhibits filed include the Twelfth Amendment to an indenture and servicing agreement, officer certifications (Rule 13a-14(a) and Section 1350), and Inline XBRL documents[266](index=266&type=chunk) [Signatures](index=55&type=section&id=Signatures) This section contains the required signatures for the filing