wyn-20240630

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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, 2024

☐ 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)


Delaware		20-0052541
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

6277 Sea Harbor Drive		32821
Orlando,	Florida	(Zip Code)
(Address of Principal Executive Offices)

(407) 626-5200

(Registrant’s Telephone Number, Including Area Code)

None

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value per share	TNL	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

69,761,786 shares of common stock outstanding as of June 30, 2024.

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		Page
PART I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Report of Independent Registered Public Accounting Firm	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Deficit	8
	Notes to Condensed Consolidated Financial Statements	10
	Note 1 - Background and Basis of Presentation	10
	Note 2 - New Accounting Pronouncements	10
	Note 3 - Revenue Recognition	11
	Note 4 - Earnings Per Share	15
	Note 5 - Acquisitions	16
	Note 6 - Discontinued Operations	17
	Note 7 - Vacation Ownership Contract Receivables	17
	Note 8 - Inventory	19
	Note 9 - Property and Equipment	20
	Note 10 - Debt	20
	Note 11 - Variable Interest Entities	22
	Note 12 - Fair Value	23
	Note 13 - Derivative Instruments and Hedging Activities	24
	Note 14 - Income Taxes	24
	Note 15 - Leases	25
	Note 16 - Commitments and Contingencies	26
	Note 17 - Accumulated Other Comprehensive Loss	28
	Note 18 - Stock-Based Compensation	28
	Note 19 - Segment Information	30


	Note 20 - Restructuring	31
	Note 21 - Transactions with Former Parent and Former Subsidiaries	31
	Note 22 - Related Party Transactions	33
	Note 23 - Subsequent Event	33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
	Forward-Looking Statements	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	48
Item 4.	Controls and Procedures	48
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
	Signatures	52

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GLOSSARY OF TERMS

The following terms and acronyms appear in the text of this report and have the definitions indicated below:


Adjusted EBITDA			A non-GAAP measure, defined by the Company as net income from continuing operations before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes. Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction costs for acquisitions and divestitures, asset impairments/recoveries, gains and losses on sale/disposition of business, and items that meet the conditions of unusual and/or infrequent. Legacy items include the resolution of and adjustments to certain contingent assets and liabilities related to acquisitions of continuing businesses and dispositions, including the separation of Wyndham Hotels & Resorts, Inc. and Cendant, and the sale of the vacation rentals businesses.
AOCL			Accumulated Other Comprehensive Loss
AUD			Australian Dollar
Awaze			Awaze Limited, formerly Compass IV Limited, an affiliate of Platinum Equity, LLC
Company			Travel + Leisure Co. and its subsidiaries
EPS			Earnings Per Share
FASB			Financial Accounting Standards Board
GAAP			Generally Accepted Accounting Principles in the United States


NQ			Non-Qualified stock options
NZD			New Zealand Dollar
PSU			Performance-vested restricted Stock Units
RSU			Restricted Stock Unit

SEC			Securities and Exchange Commission

SPE			Special Purpose Entity
Spin-off			Spin-off of Wyndham Hotels & Resorts, Inc.

Travel + Leisure Co.			Travel + Leisure Co. and its subsidiaries
Vacasa			Vacasa LLC
VIE			Variable Interest Entity
VOCR			Vacation Ownership Contract Receivable
VOI			Vacation Ownership Interest
VPG			Volume Per Guest
Wyndham Hotels			Wyndham Hotels & Resorts, Inc.

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PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited).

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Travel + Leisure Co.

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Travel + Leisure Co. and subsidiaries (the "Company") as of June 30, 2024, the related condensed consolidated statements of income, comprehensive income and deficit for the three-month and six-month periods ended June 30, 2024 and 2023, and of cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of income, comprehensive income, cash flows and deficit for the year then ended (not presented herein); and in our report dated February 21, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Tampa, FL

July 24, 2024

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net revenues
Service and membership fees	$	413	$	424	$	832	$	844
Vacation ownership interest sales	441		401		810		739
Consumer financing	111		103		221		206
Other	20		21		37		40
Net revenues	985		949		1,900		1,829
Expenses
Operating	442		427		880		847
Cost of vacation ownership interests	21		33		55		64
Consumer financing interest	33		27		66		52
Marketing	144		127		265		238
General and administrative	128		114		239		239
Depreciation and amortization	28		28		56		55
Restructuring	—		11		—		11
Asset recoveries, net	—		(1)		—		(1)
Total expenses	796		766		1,561		1,505
Loss on sale of business	—		—		—		2
Operating income	189		183		339		322
Interest expense	63		61		127		119
Other (income), net	(4)		—		(5)		(1)
Interest (income)	(3)		(3)		(8)		(6)
Income before income taxes	133		125		225		210
Provision for income taxes	36		36		62		58
Net income from continuing operations	97		89		163		152

Gain on disposal of discontinued business, net of income taxes	32		5		32		5


Net income attributable to Travel + Leisure Co. shareholders	$	129	$	94	$	195	$	157


Basic earnings per share
Continuing operations	$	1.36	$	1.18	$	2.29	$	1.99
Discontinued operations	0.46		0.07		0.45		0.07
	$	1.82	$	1.25	$	2.74	$	2.06
Diluted earnings per share
Continuing operations	$	1.36	$	1.18	$	2.28	$	1.98
Discontinued operations	0.45		0.07		0.45		0.07
	$	1.81	$	1.25	$	2.73	$	2.05

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income attributable to Travel + Leisure Co. shareholders	$	129	$	94	$	195	$	157


Foreign currency translation adjustments, net of tax	3		2		(12)		—


Other comprehensive income/(loss), net of tax	3		2		(12)		—
Comprehensive income attributable to Travel + Leisure Co. shareholders	$	132	$	96	$	183	$	157

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


	June 30, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	166	$	282
Restricted cash (VIE - $89 as of 2024 and $96 as of 2023)	166		176
Trade receivables, net	176		179
Vacation ownership contract receivables, net (VIE - $2,206 as of 2024 and $2,291 as of 2023)	2,562		2,527
Inventory	1,206		1,135
Prepaid expenses	252		229
Property and equipment, net	596		655
Goodwill	968		962
Other intangibles, net	216		199
Other assets	385		394
Total assets	$	6,693	$	6,738
Liabilities and (deficit)
Accounts payable	$	50	$	73
Accrued expenses and other liabilities	788		807
Deferred income	453		442
Non-recourse vacation ownership debt (VIE)	2,000		2,071
Debt	3,577		3,575
Deferred income taxes	709		687
Total liabilities	7,577		7,655
Commitments and contingencies (Note 16)
Stockholders' (deficit):
Preferred stock, $0.01 par value, authorized 6,000,000 shares, none issued and outstanding	—		—
Common stock, $0.01 par value, 600,000,000 shares authorized, 224,403,040 issued as of 2024 and 223,767,468 as of 2023	2		2
Treasury stock, at cost – 154,518,072 shares as of 2024 and 152,336,714 shares as of 2023	(7,292)		(7,196)
Additional paid-in capital	4,298		4,279
Retained earnings	2,189		2,067
Accumulated other comprehensive loss	(82)		(70)
Total stockholders’ (deficit)	(885)		(918)
Noncontrolling interest	1		1
Total (deficit)	(884)		(917)
Total liabilities and (deficit)	$	6,693	$	6,738

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Six Months Ended
	June 30,
	2024		2023
Operating activities
Net income	$	195	$	157

Gain on disposal of discontinued business, net of income taxes	(32)		(5)
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	191		158
Depreciation and amortization	56		55
Deferred income taxes	24		36
Stock-based compensation	20		22
Non-cash interest	12		9
Non-cash lease expense	6		7
Loss on sale of business	—		2

Other, net	(1)		4
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables	13		1
Vacation ownership contract receivables	(235)		(216)
Inventory	(2)		11
Prepaid expenses	(24)		(45)
Other assets	4		(31)
Accounts payable, accrued expenses, and other liabilities	(14)		(71)
Deferred income	8		16


Net cash provided by operating activities	221		110
Investing activities
Acquisitions, net of cash acquired	(44)		(6)
Property and equipment additions	(38)		(28)


Proceeds from sale of assets	1		—
Other, net	—		1


Net cash used in investing activities	(81)		(33)
Financing activities
Proceeds from non-recourse vacation ownership debt	657		687
Principal payments on non-recourse vacation ownership debt	(728)		(758)
Proceeds from debt	949		1,062
Principal payments on debt	(650)		(672)

Repayment of notes	(304)		(403)
Repurchase of common stock	(94)		(202)
Dividends to shareholders	(73)		(71)
Net share settlement of incentive equity awards	(9)		(10)
Payment of deferred acquisition consideration	(9)		(14)
Debt issuance/modification costs	(7)		(5)
Repayments of vacation ownership inventory arrangement	—		(6)


Proceeds from issuance of common stock	7		6



Net cash used in financing activities	(261)		(386)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(5)		(1)
Net change in cash, cash equivalents and restricted cash	(126)		(310)
Cash, cash equivalents and restricted cash, beginning of period	458		688
Cash, cash equivalents and restricted cash, end of period	332		378
Less: Restricted cash	166		164

Cash and cash equivalents	$	166	$	214

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED STATEMENTS OF DEFICIT

(In millions)

(Unaudited)


	Common Shares Outstanding	Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Non-controlling Interest		Total Deficit
Balance as of December 31, 2023	71.4	$	2	$	(7,196)	$	4,279	$	2,067	$	(70)	$	1	$	(917)
Net income	—	—		—		—		66		—		—		66
Other comprehensive loss	—	—		—		—		—		(15)		—		(15)

Issuance of shares for RSU/PSU vesting	0.5	—		—		—		—		—		—		—
Net share settlement of stock-based compensation	—	—		—		(9)		—		—		—		(9)
Change in stock-based compensation	—	—		—		9		—		—		—		9
Repurchase of common stock	(0.6)	—		(25)		—		—		—		—		(25)
Dividends ($0.50 per share)	—	—		—		—		(36)		—		—		(36)

Other	—	—		—		2		—		—		—		2
Balance as of March 31, 2024	71.3	2		(7,221)		4,281		2,097		(85)		1		(925)
Net income	—	—		—		—		129		—		—		129
Other comprehensive income	—	—		—		—		—		3		—		3
Stock option exercises	0.1	—		—		1		—		—		—		1


Employee stock purchase program issuances	0.1	—		—		5		—		—		—		5
Change in stock-based compensation	—	—		—		11		—		—		—		11
Repurchase of common stock	(1.6)	—		(70)		—		—		—		—		(70)
Dividends ($0.50 per share)	—	—		—		—		(37)		—		—		(37)

Other	—	—		(1)		—		—		—		—		(1)
Balance as of June 30, 2024	69.9	$	2	$	(7,292)	$	4,298	$	2,189	$	(82)	$	1	$	(884)

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

CONDENSED CONSOLIDATED STATEMENTS OF DEFICIT

(In millions)

(Unaudited)


	Common Shares Outstanding	Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Non-controlling Interest		Total Deficit
Balance as of December 31, 2022	78.4	$	2	$	(6,886)	$	4,242	$	1,808	$	(79)	$	9	$	(904)
Net income	—	—		—		—		64		—		—		64
Other comprehensive loss	—	—		—		—		—		(2)		—		(2)

Issuance of shares for RSU vesting	0.3	—		—		—		—		—		—		—
Net share settlement of stock-based compensation	—	—		—		(5)		—		—		—		(5)
Change in stock-based compensation	—	—		—		10		—		—		—		10
Repurchase of common stock	(2.5)	—		(102)		—		—		—		—		(102)
Dividends ($0.45 per share)	—	—		—		—		(36)		—		—		(36)


Balance as of March 31, 2023	76.2	2		(6,988)		4,247		1,836		(81)		9		(975)
Net income	—	—		—		—		94		—		—		94
Other comprehensive income	—	—		—		—		—		2		—		2
Issuance of shares for RSU vesting	0.3	—		—		—		—		—		—		—

Net share settlement of stock-based compensation	—	—		—		(5)		—		—		—		(5)
Employee stock purchase program issuances	0.1	—		—		5		—		—		—		5
Change in stock-based compensation	—	—		—		12		—		—		—		12
Repurchase of common stock	(2.6)	—		(102)		—		—		—		—		(102)
Dividends ($0.45 per share)	—	—		—		—		(35)		—		—		(35)
Non-controlling interest ownership change	—	—		—		—		—		—		1		1
Other	—	—		—		(1)		—		—		—		(1)
Balance as of June 30, 2023	74.0	$	2	$	(7,090)	$	4,258	$	1,895	$	(79)	$	10	$	(1,004)

See Notes to Condensed Consolidated Financial Statements.

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TRAVEL + LEISURE CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are in millions, except share and per share amounts)

(Unaudited)

1. Background and Basis of Presentation

Background

Travel + Leisure Co. and its subsidiaries (collectively, “Travel + Leisure Co.,” or the “Company”) is a global provider of hospitality services and travel products. The Company has two reportable segments: Vacation Ownership and Travel and Membership.

The Vacation Ownership segment develops, markets, and sells vacation ownership interests (“VOIs”) to individual consumers, provides consumer financing in connection with the sale of VOIs, and provides property management services at resorts. This segment includes the Wyndham Destinations business line.

The Travel and Membership segment operates a variety of travel businesses, including vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment is comprised of the Exchange and Travel Club business lines.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q include the accounts and transactions of Travel + Leisure Co., as well as the entities in which Travel + Leisure Co. directly or indirectly has a controlling financial interest. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements.

The Company presents an unclassified balance sheet which conforms to that of the Company’s peers and industry practice.

In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates and assumptions. In management’s opinion, the Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2023 Consolidated Financial Statements included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 21, 2024.

2. New Accounting Pronouncements

Recently Issued Accounting Pronouncements

Business Combinations—Joint Venture Formations. In August 2023, the Financial Accounting Standards Board (“FASB”) issued guidance to address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. The guidance was issued in an effort to reduce diversity in practice and requires a joint venture to initially measure its assets and liabilities at fair value on the formation date. This guidance is effective prospectively for all joint ventures within the scope of the standard that are formed on or after January 1, 2025. Existing joint ventures have the option to apply the guidance retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures.

Disclosure Improvements. In October 2023, the FASB issued guidance to modify the disclosure and presentation requirements of a variety of topics in the codification. Among other updates, amendments specific to the Company include updates to disclosure requirements related to derivative instruments, diluted earnings per share, commitments, and amounts and terms of unused lines of credit. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures.

Segment Reporting. In November 2023, the FASB issued guidance to enhance segment disclosures by requiring incremental segment information on an annual and interim basis for all public entities. Among other provisions, this guidance will require public entities to disclose significant segment expenses that are regularly provided to the chief

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operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. This guidance is effective for all public entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures.

Improvements to Income Tax Disclosures. In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures through improvements in rate reconciliation and income taxes paid information. Among other provisions, this guidance requires public entities to disclose specific categories in the rate reconciliation, using both percentages and reporting currency amounts; and present cash taxes paid on a disaggregated basis. This guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures.

3. Revenue Recognition

Vacation Ownership

The Company develops, markets, and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs, and provides property management services at resorts. The Company’s sales of VOIs are either cash sales or developer-financed sales. Developer-financed sales are typically collateralized by the underlying VOI. Revenue is recognized on VOI sales upon transfer of control, which is defined as the point in time when a binding sales contract has been executed, the financing contract has been executed for the remaining transaction price, the statutory rescission period has expired, and the transaction price has been deemed to be collectible.

For developer-financed sales, the Company reduces the VOI sales transaction price by an estimate of uncollectible consideration at the time of the sale. The Company’s estimates of uncollectible amounts are based largely on the results of the Company’s static pool analysis which relies on historical payment data by customer class.

In connection with entering into a VOI sale, the Company may provide its customers with certain non-cash incentives, such as credits for future stays at its resorts. For those VOI sales, the Company allocates the sales price between the VOI sale and the non-cash incentive based upon the relative standalone selling price of the performance obligations within the contract. Non-cash incentives generally have expiration periods of two years or less and are recognized at a point in time upon transfer of control.

The Company provides day-to-day property management services including oversight of housekeeping services, maintenance, and certain accounting and administrative services for property owners’ associations and clubs. These services may also include reservation and resort renovation activities. Such agreements are generally for terms of one year or less and are renewed automatically on an annual basis. The Company’s management agreements contain cancellation clauses, which allow for either party to cancel the agreement, by either a majority board vote or a majority vote of non-developer interests. The Company receives fees for such property management services which are collected monthly in advance and are based upon total costs to operate such resorts (or as services are provided in the case of resort renovation activities). Fees for property management services typically approximate 10% of budgeted operating expenses. The Company is entitled to consideration for reimbursement of costs incurred on behalf of the property owners’ association in providing management services (“reimbursable revenue”). These reimbursable costs principally relate to the payroll costs for management of the associations, club and resort properties where the Company is the employer and are reflected as a component of Operating expenses on the Condensed Consolidated Statements of Income. The Company reduces its management fee revenue for amounts it has paid to the property owners’ association that reflect maintenance fees for VOIs for which it retains ownership, as the Company has concluded that such payments are consideration payable to a customer.

Property management fee revenues and reimbursable revenues are recognized when the services are performed and are recorded as a component of Service and membership fees on the Condensed Consolidated Statements of Income. Property management fee and reimbursable revenues were (in millions):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Management fee revenues	$	113	$	108	$	227	$	215
Reimbursable revenues	97		97		194		189
Property management fees and reimbursable revenues	$	210	$	205	$	421	$	404

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One of the associations that the Company manages paid its Travel and Membership segment $9 million and $8 million for exchange services during the three months ended June 30, 2024 and 2023, and $17 million during both the six months ended June 30, 2024 and 2023.

Travel and Membership

Travel and Membership derives a majority of its revenues from membership dues and fees for facilitating members’ trading of their timeshare intervals. Revenues from membership dues represent the fees paid by members or affiliated clubs on their behalf. As a provider of vacation exchange services, the Company enters into affiliation agreements with developers of vacation ownership properties to allow owners of VOIs to trade their intervals for intervals at other properties affiliated with the Company’s vacation exchange network and, for some members, for other leisure-related services and products. The Company recognizes revenues from membership dues paid by the member on a straight-line basis over the membership period as the performance obligations are fulfilled through delivery of publications, if applicable, and by providing access to travel-related products and services. Estimated net contract consideration payable by affiliated clubs for memberships is recognized as revenue over the term of the contract with the affiliated club in proportion to the estimated average monthly member count. Such estimates are adjusted periodically for changes in actual and forecasted member activity. For additional fees, members have the right to exchange their intervals for intervals at other properties affiliated with the Company’s vacation exchange networks and, for certain members, for other leisure-related services and products. The Company also derives revenue from facilitating bookings of travel accommodations that were acquired from various sources. Revenue is recognized when these transactions have been confirmed, net of expected cancellations.

The Company’s vacation exchange business also derives revenues from programs with affiliated resorts, club servicing, and loyalty programs; and additional exchange-related products that provide members with the ability to protect trading power or points, extend the life of deposits, and combine two or more deposits for the opportunity to exchange into intervals with higher trading power. Revenues from other vacation exchange related product fees are deferred and recognized upon the occurrence of a future exchange, event, or other related transaction.

The Company earns revenue from its RCI Elite Rewards co–branded credit card program, which is primarily generated by cardholder spending and the enrollment of new cardholders. The advance payments received under the program are recognized as a contract liability until the Company’s performance obligations have been satisfied. The primary performance obligation for the program relates to brand performance services. Total contract consideration is estimated and recognized on a straight-line basis over the contract term.

Other Items

The Company records property management service revenues for its Vacation Ownership segment and RCI Elite Rewards revenues for its Travel and Membership segment gross as a principal.

Contract Liabilities

Contract liabilities generally represent payments or consideration received in advance for goods or services that the Company has not yet transferred to the customer. Contract liabilities consisted of (in millions):


	June 30, 2024		December 31, 2023
Deferred subscription revenue	$	159	$	161
Deferred VOI trial package revenue	140		136
Deferred VOI incentive revenue	84		81
Deferred exchange-related revenue (a)	60		59
Deferred co-branded credit card programs revenue	5		6
Deferred other revenue	6		1
Total	$	454	$	444

(a)Includes contractual liabilities to accommodate members for cancellations due to unexpected events. These amounts are included within Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets.

In the Company’s Vacation Ownership business, deferred VOI trial package revenue represents consideration received in advance for a trial VOI, which allows customers to utilize a vacation package typically within three years of purchase, but may extend longer for certain programs. Deferred VOI incentive revenue represents payments received in advance for additional travel-related services and products at the time of a VOI sale. Revenue is recognized when a customer utilizes

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the additional services and products, which is typically within two years of the VOI sale, but may extend longer for certain programs.

Within the Company’s Travel and Membership business, deferred subscription revenue represents billings and payments received in advance from members and affiliated clubs for memberships in the Company’s travel programs which are recognized in future periods. Deferred exchange-related revenue primarily represents payments received in advance from members to book vacation exchanges which are recognized upon the future confirmed transaction. Deferred revenue also includes other leisure-related service and product revenues which are recognized as customers utilize the associated benefits.

Changes in contract liabilities for the periods presented were as follows (in millions):


	Six Months Ended
	June 30,
	2024		2023
Beginning balance	$	444	$	400
Additions	173		177
Revenue recognized	(163)		(153)

Ending balance	$	454	$	424

Capitalized Contract Costs

The Vacation Ownership segment incurs certain direct and incremental selling costs in connection with VOI trial package and incentive revenues. Such costs are capitalized and subsequently recognized over the utilization period when usage or expiration occurs, which is typically within three years from the date of sale. As of June 30, 2024 and December 31, 2023, these capitalized costs were $47 million and $46 million and are included within Other assets on the Condensed Consolidated Balance Sheets.

The Travel and Membership segment incurs certain direct and incremental selling costs to obtain contracts with customers in connection with subscription revenues and exchange–related revenues. Such costs, which are primarily comprised of commissions paid to internal and external parties and credit card processing fees, are deferred at the inception of the contract and recognized when the benefit is transferred to the customer. As of June 30, 2024, the capitalized costs were $17 million, of which $11 million was included in Prepaid expenses and $6 million was included in Other assets on the Condensed Consolidated Balance Sheets. As of December 31, 2023, these capitalized costs were $16 million, of which $11 million was included in Prepaid expenses and $5 million was included in Other assets on the Condensed Consolidated Balance Sheets.

Practical Expedients

The Company has not adjusted the consideration for the effects of a significant financing component if it expected, at contract inception, that the period between when the Company will satisfy the performance obligation and when the customer will pay for that good or service will be one year or less.

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Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. The consideration received from a customer is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied.

The following table summarizes the Company’s remaining performance obligations for the 12-month periods set forth below (in millions):


	7/1/2024 - 6/30/2025		7/1/2025 - 6/30/2026		7/1/2026 - 6/30/2027		Thereafter		Total
Subscription revenue	$	91	$	35	$	16	$	17	$	159
VOI trial package revenue	131		3		3		3		140
VOI incentive revenue	84		—		—		—		84
Exchange-related revenue	57		3		—		—		60
Co-branded credit card programs revenue	3		2		—		—		5
Other revenue	6		—		—		—		6
Total	$	372	$	43	$	19	$	20	$	454

Disaggregation of Net Revenues

The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products for each of the Company’s segments (in millions):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Vacation Ownership
Vacation ownership interest sales	$	441	$	401	$	810	$	739
Property management fees and reimbursable revenues	210		205		421		404
Consumer financing	111		103		221		206
Fee-for-Service commissions	27		41		45		67
Ancillary revenues	18		18		36		37
Total Vacation Ownership	807		768		1,533		1,453

Travel and Membership
Transaction revenues	126		126		266		273
Subscription revenues	44		46		90		91
Ancillary revenues	7		7		14		15
Total Travel and Membership	177		179		370		379

Corporate and other
Ancillary revenues	1		3		1		3
Eliminations	—		(1)		(4)		(6)
Total Corporate and other	1		2		(3)		(3)

Net revenues	$	985	$	949	$	1,900	$	1,829

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4. Earnings Per Share

The computations of basic and diluted earnings per share (“EPS”) are based on Net income attributable to Travel + Leisure Co. shareholders divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding. The following table sets forth the computations of basic and diluted EPS (in millions, except per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income from continuing operations attributable to Travel + Leisure Co. shareholders	$	97	$	89	$	163	$	152

Gain on disposal of discontinued business attributable to Travel + Leisure Co. shareholders, net of income taxes	32		5		32		5
Net income attributable to Travel + Leisure Co. shareholders	$	129	$	94	$	195	$	157

Basic earnings per share (a)
Continuing operations	$	1.36	$	1.18	$	2.29	$	1.99
Discontinued operations	0.46		0.07		0.45		0.07
	$	1.82	$	1.25	$	2.74	$	2.06

Diluted earnings per share (a)
Continuing operations	$	1.36	$	1.18	$	2.28	$	1.98
Discontinued operations	0.45		0.07		0.45		0.07
	$	1.81	$	1.25	$	2.73	$	2.05

Basic weighted average shares outstanding	70.8		75.2		71.2		76.3
RSUs,(b) PSUs (c) and NQs (d)	0.2		0.3		0.3		0.5
Diluted weighted average shares outstanding (e)	71.0		75.5		71.5		76.8

Dividends:
Aggregate dividends paid to shareholders (f)	$	35	$	35	$	73	$	71

(a)Earnings per share amounts are calculated using whole numbers.

(b)Excludes 0.8 million of restricted stock units (“RSUs”) that would have been anti-dilutive to EPS for both the three and six months ended June 30, 2024 and 1.3 million and 1.2 million of RSUs that would have been anti-dilutive to EPS for the three and six months ended June 30, 2023. These shares could potentially dilute EPS in the future.

(c)Excludes performance-vested restricted stock units (“PSUs”) of 0.9 million for both the three and six months ended June 30, 2024 and 0.9 million of PSUs for both the three and six months ended June 30, 2023, as the Company has not met the required performance metrics. These PSUs could potentially dilute EPS in the future.

(d)Excludes 0.9 million and 1.4 million of outstanding non-qualified stock options (“NQs”) that would have been anti-dilutive to EPS for the three and six months ended June 30, 2024 and 2.3 million of outstanding NQs for both the three and six months ended June 30, 2023. These outstanding NQs could potentially dilute EPS in the future.

(e)The dilutive impact of the Company’s potential common stock is computed utilizing the treasury stock method using average market prices during the period.

(f)The Company paid cash dividends of $0.50 and $1.00 per share during the three and six months ended June 30, 2024 and $0.45 and $0.90 per share during the three and six months ended June 30, 2023.

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Share Repurchase Program

The following table summarizes stock repurchase activity under the current share repurchase program (in millions):


	Shares	Cost
As of December 31, 2023	127.8	$	6,411
Repurchases	2.2	95
As of June 30, 2024	130.0	$	6,506

On August 20, 2007, the Company’s Board of Directors authorized a share repurchase program that enabled it to purchase its common stock. As of June 30, 2024, the Board of Directors has increased the capacity of the program 10 times, most recently in May 2024 by $500 million, bringing the total authorization under the current program to $7.0 billion. Proceeds received from stock option exercises have increased the repurchase capacity by $84 million since the inception of this program. As of June 30, 2024, the Company had $578 million of remaining availability in its program.

The Company had $3 million of excise tax related to share repurchases accrued as of June 30, 2024 and December 31, 2023, included within Treasury stock on the Condensed Consolidated Balance Sheets.

5. Acquisitions

Accor Vacation Club. On March 1, 2024, the Company acquired the vacation ownership business of Accor for $50 million ($44 million net of cash acquired) subject to customary post-closing adjustments based on final valuation information and additional analysis. The fair value of purchase consideration was comprised of $40 million net cash paid at closing and $4 million paid during the second quarter of 2024. This acquisition creates a new line of business for Travel + Leisure Co. as Accor Vacation Club adds to the Company’s portfolio of brand affiliations and expands its international portfolio in the Asia Pacific region. Accor will receive a percentage of the associated vacation ownership sales revenue as a licensing fee under a licensing agreement.

This transaction was accounted for as a business acquisition. As of June 30, 2024, the Company has recognized the assets and liabilities of Accor Vacation Club based on estimates of their acquisition date fair values. The determination of the fair values of the acquired assets and assumed liabilities, including goodwill and other intangible assets, requires significant judgment. The preliminary purchase price allocation included: (i) $22 million of definite-lived intangible assets with a weighted average life of 26 years consisting of management agreements and customer relationships, included within Other intangibles, net; (ii) $9 million of Inventory; (iii) $8 million of Trade receivables, net; (iv) $7 million of Goodwill, none of which is expected to be deductible for Australian income tax purposes; (v) $6 million of Property and equipment, net; and (vi) $8 million of Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. This business is included within the Vacation Ownership segment.

Playbook365. On January 3, 2023, the Company acquired the Playbook365 business for $13 million, comprised of $6 million of cash paid at closing and contingent consideration with a fair market value of $7 million, which can range up to $24 million, based on the achievement of certain financial metrics. If these financial metrics are achieved, the Company would be required to make payments in the first quarter of 2025 and/or 2026. Playbook365 is a youth and amateur sports management platform. This platform was integrated with Travel Club’s event lodging management platform to create an all-in-one solution in the youth sports market. This acquisition was made to broaden the products and services offered by Travel Club.

This transaction was accounted for as a business acquisition. The Company recognized the assets and liabilities of Playbook365 based on estimates of their acquisition date fair values. The determination of the fair values of the acquired assets and assumed liabilities, including goodwill and other intangible assets, required significant judgment. The purchase price allocation included: (i) $5 million of developed software with a weighted average life of four years included within Property and equipment, net on the Condensed Consolidated Balance Sheets; (ii) $5 million of Goodwill; (iii) $3 million of definite-lived intangible assets with a weighted average life of four years primarily consisting of customer relationships included within Other intangibles, net on the Condensed Consolidated Balance Sheets; and (iv) $7 million of Accrued expenses and other liabilities. All of the goodwill and other intangible assets are expected to be deductible for income tax purposes. This business is included within the Travel and Membership segment. The Company completed purchase accounting for this transaction during the third quarter of 2023.

Travel + Leisure. On January 5, 2021, the Company acquired the Travel + Leisure brand from Dotdash Meredith (formerly Meredith Corporation) for $100 million, $35 million of which was paid at closing. The Company made additional payments of $20 million, $20 million, and $15 million during each of the second quarters of 2021, 2022, and 2023, and its final payment of $10 million during the second quarter of 2024. The majority of these payments were reflected as cash

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used in Financing activities on the Condensed Consolidated Statements of Cash Flows. This transaction was accounted for as an asset acquisition, with the full consideration allocated to the related trademark indefinite-lived intangible asset. The Company acquired the Travel + Leisure brand to accelerate its strategic plan to broaden its reach with the launch of new travel services, expand its membership travel business, and amplify the global visibility of its leisure travel products.

6. Discontinued Operations

During 2018, the Company sold its European vacation rentals business. In connection with this sale, during the three and six months ended June 30, 2024 the Company recognized a $32 million Gain on disposal of discontinued business, net of income taxes, and a $5 million Gain on disposal of discontinued business, net of income taxes during the three and six months ended June 30, 2023. These gains resulted from the expiration of certain guarantees made in connection with the sales agreement. See Note 21—Transactions with Former Parent and Former Subsidiaries for additional details.

7. Vacation Ownership Contract Receivables

The Company generates vacation ownership contract receivables (“VOCRs”) by extending financing to the purchasers of its VOIs. Vacation ownership contract receivables, net consisted of the following (in millions):


	June 30, 2024		December 31, 2023
Vacation ownership contract receivables:
Securitized (a)	$	2,206	$	2,291
Non-securitized (b)	930		810
Vacation ownership contract receivables, gross	3,136		3,101
Less: allowance for loan losses	574		574
Vacation ownership contract receivables, net	$	2,562	$	2,527

(a)Excludes $17 million and $18 million of accrued interest on VOCRs as of June 30, 2024 and December 31, 2023, which are included in Trade receivables, net on the Condensed Consolidated Balance Sheets.

(b)Excludes $8 million of accrued interest on VOCRs as of both June 30, 2024 and December 31, 2023, which are included in Trade receivables, net on the Condensed Consolidated Balance Sheets.

During the three and six months ended June 30, 2024, the Company’s securitized VOCRs generated interest income of $79 million and $159 million. During the three and six months ended June 30, 2023, the Company’s securitized VOCRs generated interest income of $78 million and $154 million. Such interest income is included within Consumer financing revenue on the Condensed Consolidated Statements of Income.

During the six months ended June 30, 2024 and 2023, the Company had net VOCR originations of $728 million and $674 million, and received principal collections of $493 million and $458 million. The weighted average interest rate on outstanding VOCRs was 14.7% as of both June 30, 2024 and December 31, 2023.

The Company records the difference between VOCRs and the variable consideration included in the transaction price for the sale of the related VOIs as a provision for loan losses on VOCRs. The activity in the allowance for loan losses on VOCRs was as follows (in millions):


	Six Months Ended
	June 30,
	2024		2023
Allowance for loan losses, beginning balance	$	574	$	541
Provision for loan losses, net (a)	191		158
Contract receivables write-offs, net	(191)		(154)
Allowance for loan losses, ending balance	$	574	$	545

(a)Recorded as a reduction to Net revenue.

Credit Quality for Financed Receivables and the Allowance for Credit Losses

The basis of the differentiation within the identified class of financed VOI contract receivables is the consumer’s Fair Isaac Corporation (“FICO”) score. A FICO score is a branded version of a consumer credit score widely used within the U.S. by the largest banks and lending institutions. FICO scores range from 300 to 850 and are calculated based on information obtained from one or more of the three major U.S. credit reporting agencies that compile and report on a consumer’s credit

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history. The Company updates its records for all active VOI contract receivables with a balance due on a rolling monthly basis to ensure that all VOI contract receivables are scored at least every six months. The Company groups all VOI contract receivables into five different categories: FICO scores ranging from 700 to 850, from 600 to 699, below 600, no score (primarily comprised of consumers for whom a score is not readily available, including consumers declining access to FICO scores and non-U.S. residents), and Asia Pacific (comprised of receivables in the Company’s Travel + Leisure Vacation Clubs Asia Pacific business for which scores are not available).

The following table details an aging analysis of financing receivables using the most recently updated FICO scores, based on the policy described above (in millions):


	As of June 30, 2024
	700+		600-699		<600		No Score		Asia Pacific		Total
Current	$	1,831	$	742	$	137	$	84	$	185	$	2,979
31 - 60 days	20		25		12		2		7		66