Travel + Leisure(US:TNL)2025-04-23 13:40Financial Performance - Gross VOI sales increased by 4.5% to $512 million for the three months ended March 31, 2025, compared to $490 million in the same period last year [176]. - Net revenues rose by $18 million to $934 million for the three months ended March 31, 2025, with a foreign currency impact of $4 million [177]. - Net income attributable to Travel + Leisure Co. shareholders increased by $7 million to $73 million for the three months ended March 31, 2025 [180]. - Net revenues for the Vacation Ownership segment increased by $30 million to $755 million for the three months ended March 31, 2025, compared to $725 million in the same period of 2024, with a $2 million unfavorable impact from foreign currency [182]. - Travel and Membership segment net revenues decreased by $13 million to $180 million, primarily due to a $9 million decrease in transaction revenue and a $2 million decrease in subscription revenues [185]. - Total Company Adjusted EBITDA increased by $11 million to $202 million for the three months ended March 31, 2025, compared to $191 million in the same period of 2024 [182]. Operational Metrics - Volume per guest (VPG) increased by 5.8% to $3,212, reflecting consumers' recognition of the value proposition of the company's products [176]. - Adjusted EBITDA margin improved sequentially in the Travel and Membership business due to cost-saving initiatives, despite lower revenues from decreased member counts [167]. - Adjusted EBITDA for the Vacation Ownership segment rose by $24 million to $159 million, driven by a 5.8% increase in VPG due to a higher owner upgrade transaction mix [184]. - The number of exchange transactions decreased by 12.6% to 240,000, while total transactions fell by 6.7% to 415,000 [176]. Cash Flow and Liquidity - Net cash provided by operating activities increased by $74 million to $121 million for the three months ended March 31, 2025, compared to $47 million in the prior year [215]. - Net cash used in investing activities decreased by $35 million to $(22) million during the three months ended March 31, 2025, primarily due to a $40 million acquisition of Accor Vacation Club in 2024 [216]. - Net cash used in financing activities was $(63) million for the three months ended March 31, 2025, compared to $203 million provided in the prior year, reflecting a $274 million decrease in net proceeds from corporate debt [217]. - The company closed on securitization financings of $350 million during the first quarter of 2025, reinforcing its liquidity position [205]. - The company expects to finance capital spending programs and vacation ownership development projects primarily with cash flow generated from operations and cash equivalents [223]. Debt and Interest - Interest expense decreased by $7 million to $57 million due to a lower average outstanding debt balance and reduced interest rates on variable borrowings [178]. - As of March 31, 2025, total debt amounts to $3.493 billion, with non-recourse debt at $2.200 billion and interest on debt at $1.100 billion [210]. - The total outstanding balance of variable rate borrowings at March 31, 2025, was $1.365 billion, including $295 million in non-recourse debt and $1.07 billion in corporate debt [233]. - A hypothetical 10% change in interest rates would result in a $1 million increase or decrease in annual consumer financing interest expense and a $6 million increase or decrease in annual debt interest expense for Q1 2025 [232]. - As of March 31, 2025, the interest coverage ratio was 4.48 to 1.0 and the first lien leverage ratio was 3.31 to 1.0, indicating compliance with financial covenants [200]. Assets and Liabilities - Total assets increased by $29 million to $6,764 million as of March 31, 2025, primarily due to a $39 million increase in prepaid expenses and a $21 million increase in cash and cash equivalents [191]. - Total liabilities increased by $52 million to $7,667 million, mainly due to a $51 million increase in non-recourse vacation ownership debt [194]. - The company had $188 million in cash and cash equivalents as of March 31, 2025, which includes highly liquid investments [197]. - The revolving credit facility had $785 million of available capacity as of March 31, 2025, and is set to expire in October 2026 [198]. Shareholder Returns - The share repurchase program has a total authorization of $7.0 billion, with $373 million remaining available as of March 31, 2025 [224]. - Cash dividends paid were $0.56 per share during Q1 2025, totaling $41 million, compared to $0.50 per share and $38 million in Q1 2024 [226]. Expenses - Property management expenses increased by $11 million due to higher resort operating costs [181]. - The company continues to face pressure on its loan portfolio due to elevated delinquencies compared to historical levels [169]. - The company spent $22 million on vacation ownership development projects during the three months ended March 31, 2025, with anticipated full-year spending between $150 million and $180 million [220].