Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.22.4
Segment Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information The Company has two reportable segments: Vacation Ownership and Travel and Membership. Due to changes in organizational structure in the second quarter of 2022, the management of the Extra Holidays business was transitioned to the Vacation Ownership segment. As such, the Company reclassified the results of the Extra Holidays business, which was previously reported within the Travel and Membership segment, into the Vacation Ownership segment. Prior period segment information has been updated to reflect this change. The reportable segments presented below are those for which discrete financial information is available and which are utilized on a regular basis by the chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. Management uses net revenues and Adjusted EBITDA to assess the performance of the reportable segments. Adjusted EBITDA is defined by the Company as Net income/(loss) 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 and Cendant, and the sale of the vacation rentals businesses. The Company believes that Adjusted EBITDA is a useful measure of performance for its segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company’s presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
The following tables present the Company’s segment information (in millions):
Year Ended December 31,
Net revenues 2022 2021 2020
Vacation Ownership $ 2,835  $ 2,423  $ 1,637 
Travel and Membership 735  714  528 
Total reportable segments 3,570  3,137  2,165 
Corporate and other (a)
(3) (3) (5)
Total Company $ 3,567  $ 3,134  $ 2,160 
Year Ended December 31,
Reconciliation of Net income to Adjusted EBITDA 2022 2021 2020
Net income/(loss) attributable to Travel + Leisure Co. shareholders $ 357  $ 308  $ (255)
(Gain)/loss on disposal of discontinued business, net of income taxes (1) 5  2 
Provision/(benefit) for income taxes 130  116  (23)
Depreciation and amortization 119  124  126 
Interest expense 195  198  192 
Interest (income) (6) (3) (7)
Stock-based compensation 42  32  20 
Restructuring (b)
14  (1) 39 
Asset impairments/(recoveries), net (c)
11  (5) 57 
Loss/(gain) on equity investment 5  (3) — 
COVID-19 related costs (d)
2  3  56 
Legacy items 1  4  4 
Exchange inventory write-off —  —  48 
Fair value change in contingent consideration (10) —  — 
Adjusted EBITDA $ 859  $ 778  $ 259 
Year Ended December 31,
Adjusted EBITDA 2022 2021 2020
Vacation Ownership $ 665  $ 569  $ 121 
Travel and Membership 268  271  191 
Total reportable segments 933  840  312 
Corporate and other (a)
(74) (62) (53)
Total Company $ 859  $ 778  $ 259 
(a)Includes the elimination of transactions between segments.
(b)Includes $3 million of stock-based compensation expense for the year ended December 31, 2022 associated with the 2022 restructuring plans.
(c)Includes $1 million of inventory impairments for the year ended December 31, 2022, included in Cost of vacation ownership interests on the Consolidated Statements of Income/(Loss). Includes $5 million of bad debt expense related to a note receivable for the year ended December 31, 2020, included in Operating expenses on the Consolidated Statements of Income/(Loss).
(d)Includes expenses related to COVID-19 testing and other expenses associated with the Company’s return-to-work program in 2022. In 2021 and 2020, this includes severance and other employee costs associated with layoffs due to the COVID-19 workforce reduction offset in part by U.S. and international government employee retention credits.
As of December 31,
Segment Assets (a)
2022 2021
Vacation Ownership $ 4,826  $ 4,760 
Travel and Membership 1,335  1,397 
Total reportable segments 6,161  6,157 
Corporate and other 596  431 
Total Company $ 6,757  $ 6,588 
(a)Excludes investment in consolidated subsidiaries.
Year Ended December 31,
Capital Expenditures 2022 2021 2020
Vacation Ownership $ 32  $ 34  $ 41 
Travel and Membership 17  17  21 
Total reportable segments 49  51  62 
Corporate and other 3  6  7 
Total Company $ 52  $ 57  $ 69 

The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries (in millions):
Net Revenues Net Long-lived Assets
Year Ended December 31, As of December 31,
2022 2021 2020 2022 2021
United States $ 3,166  $ 2,753  $ 1,904  $ 1,572  $ 1,574 
All other countries 401  381  256  248  295 
Total $ 3,567  $ 3,134  $ 2,160  $ 1,820  $ 1,869