Financial Data and Key Metrics - Q2 adjusted EBITDA was $236 million, a 3% increase YoY, and adjusted EPS was $1.33, a 5% improvement YoY [1] - Adjusted EBITDA margin was 25%, flat YoY, impacted by higher interest expense and investment in new owner growth [122] - Net corporate leverage ratio was 3.7x at the end of Q2, expected to decline below 3.5x by year-end [113] - Q2 VPG was $3,150, at the top end of guidance and 30% above 2019 levels [143] - Q2 share repurchases totaled $100 million, with $275 million remaining under the approved program [127] Business Segment Performance - Vacation Ownership segment revenue was $768 million, up 4% YoY, with adjusted EBITDA of $187 million, flat YoY [18] - Travel and Membership segment revenue was $179 million, down from $188 million YoY, with adjusted EBITDA of $62 million, down from $64 million YoY [19] - Blue Thread tours increased 20% YoY, outperforming overall tour growth of 15% [29] - Travel Club transactions declined 9% YoY, consistent with prior expectations [16] Market and Consumer Trends - Owner nights booked for H2 2023 are ahead of 2019 levels, with room nights up 4% due to longer stays [41] - Booking windows remain stable at 120 days, with search patterns starting 160 days in advance, indicating strong travel demand [53] - Delinquencies in the consumer finance portfolio normalized in Q2 but remain within expectations [124] - Exchange member count is recovering but not enough to offset lower transaction propensity [19] Strategic Direction and Industry Competition - The company reaffirmed full-year adjusted EBITDA guidance of $925 million to $945 million and gross VOI sales of $2.1 billion to $2.2 billion [30] - Strategic focus on new owner growth, with new owner transactions increasing to 34% of total transactions, up 200 bps YoY [28] - Opportunities for diversification in the VO business, with potential for new brands and market expansion [51] - The company is well-positioned with four years of inventory on the balance sheet, minimizing exposure to rising construction costs [152] Management Commentary on Operating Environment and Outlook - Management expressed confidence in the resilience of the timeshare model, with 80% of owners having fully paid for their timeshares [110] - The company expects Q3 adjusted EBITDA to be in the range of $245 million to $260 million, with Travel and Membership contributing $60 million to $65 million [3] - Full-year loan loss provision guidance remains at 18% to 19%, with Q3 provision expected to exceed 19% [33] - Management highlighted the strong performance of the Mexican exchange market and consistent demand across geographies [151] Other Key Information - The company completed a $300 million ABS transaction in July with a weighted average coupon of 6.72% and an advance rate of 92% [112] - Adjusted free cash flow was $11 million in H1 2023, down from $121 million YoY due to higher loan originations and interest payments [128] - The effective tax rate for the full year is expected to be between 27% and 28% [95] Q&A Session Summary Question: Close rate trends for new and existing owners [116] - Close rates normalized in Q2, with rates still above historical norms for owner, Blue Thread, and non-affinity new owner tours [45] - Close rates in July are consistent with June levels and expected to remain stable for the rest of the year [34] Question: Margin expectations for VO in Q3 and Q4 [116] - Margins are expected to improve in Q4, with Q3 pressure due to high new owner tour volume [36] - Full-year VO margins are expected to be comparable to 2022 levels [65] Question: Geographic spread of demand [63] - Demand is consistent across key markets, with no significant regional variations [150] - The Mexican exchange market has shown strong resurgence, benefiting from mid-haul travel demand [151] Question: Inventory strategy amid rising rates [58] - The company has minimal inventory spend due to four years of inventory on the balance sheet, reducing exposure to rising costs [152] Question: Capital allocation and buyback pace [89] - Share repurchases will be evaluated monthly, with continued buybacks expected through year-end [90] Question: Consumer behavior and transaction size [66] - VPG declines are primarily due to close rate normalization, with no significant changes in transaction size or consumer propensity [67] Question: Securitization terms and credit spreads [73] - Credit spreads have tightened, with potential for further improvement if interest rate uncertainty decreases [77][85]

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 June 30, 2023 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 Incorpor ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $184 million, an 8% increase over the prior year, and adjusted earnings per share (EPS) of $0.89, a 29% improvement over Q1 2022 [4][10] - The company repurchased 3% of its shares outstanding in the first quarter, reflecting confidence in 2023 free cash flow [4][10] Business Line Data and Key Metrics Changes - The Vacation Ownership segment reported revenue of $685 million and adjusted EBITDA of $131 million, increases of 12% and 25% respectively over the first quarter of 2022 [11] - The Travel and Membership segment generated revenue of $200 million, flat compared to the prior year, with adjusted EBITDA decreasing to $71 million from $82 million due to higher costs [11] Market Data and Key Metrics Changes - Forward bookings for owners are pacing above 2019 levels, indicating strong demand in major destination markets such as Orlando, Las Vegas, and Hawaii [5][7] - Length of stay remains 6% above 2019 levels, reflecting ongoing consumer demand [5] Company Strategy and Development Direction - The company is focused on maintaining a resilient business model with $19 billion of embedded revenue potential over the next 10 years from the existing owner base [8] - The company raised its adjusted EBITDA guidance for the full year to a range of $925 million to $945 million, while reiterating expectations for gross VOI sales between $2.1 billion and $2.2 billion [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the trends observed in April returned to pre-March levels, indicating that the dip in performance was temporary [16][28] - The company remains optimistic about summer leisure travel, with expectations for continued growth in new owner business [27][28] Other Important Information - The company reported a use of cash of $8 million in adjusted free cash flow for the quarter, compared to a source of cash of $146 million in the same period of 2022 [12] - The company expects to maintain a free cash flow conversion rate of 55% to 60% in 2023 [13] Q&A Session Summary Question: Can you discuss the monthly cadence within the quarter and what you are seeing in April regarding close rates and VPG? - Management observed that metrics were strong in January and February, with a temporary dip in March due to market volatility, but trends returned to normal in April [16] Question: What are the expectations for Travel and Membership growth in the second half of the year? - Management expects growth in the second half, driven by new owners entering the timeshare space [17] Question: Are there differences in performance by geographic region? - Management noted some impact on West Coast operations in late March, but performance metrics returned to normal in April [22] Question: What is the strategy for the exchange business moving forward? - Management acknowledged the long-term headwinds in the exchange space but emphasized maintaining market share and revenue per transaction [24] Question: How is summer leisure travel shaping up year-over-year? - Management is optimistic about summer travel, with strong forward bookings and a positive outlook based on April trends [27][28] Question: Can you provide insight into consumer financing trends? - Management indicated that the propensity to finance is strategic, with improvements in portfolio quality leading to higher prepayment rates [48] Question: What is the refinancing strategy given upcoming maturities? - Management expressed confidence in their ability to refinance upcoming debt, with a strong capital structure in place [50][51]

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 March 31, 2023 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 Incorpo ...

+ 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 ...

Travel + Leisure Co. (NYSE:TNL) Q4 2022 Earnings Conference Call February 22, 2023 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 Chris Woronka - Deutsche Bank Brandt Montour - Barclays Isaac Sellhausen - Oppenheimer Ben Chaiken - Credit Suisse David Katz - Jefferi ...

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 ...