November 28, 2022

TRAVEL & LEISURE CO. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

FORWARD-LOOKING STATEMENTS This report includes “forward-looking statements” as that term is defined by the Securities…

TRAVEL & LEISURE CO. Management’s Discussion and Analysis of Financial Condition and Results
of Operations. (form 10-Q)

FORWARD-LOOKING STATEMENTS

This report 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 cases, forward-looking statements can be identified by the
use of words such as "may," "will," "expects," "should," "believes," "plans,"
"anticipates," "estimates," "predicts," "potential," "continue," "future,"
"intend," and other words of similar meaning. Forward-looking statements are
subject to risks and uncertainties that could cause actual results of Travel +
Leisure Co. and its subsidiaries ("Travel + Leisure Co." or "we") to differ
materially from those discussed in, or implied by, the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, risks associated with: the acquisition of the Travel + Leisure brand
and the future prospects and plans for Travel + Leisure Co., including our
ability to execute our strategies to grow our cornerstone timeshare and exchange
businesses and expand into the broader leisure travel industry through new
business extensions; our ability to compete in the highly competitive timeshare
and leisure travel industries; uncertainties related to acquisitions,
dispositions and other strategic transactions; the health of the travel industry
and declines or disruptions caused by adverse economic conditions and
unemployment rates, terrorism or acts of gun violence, political strife, war,
including hostilities in Ukraine, pandemics, and severe weather events and other
natural disasters; adverse changes in consumer travel and vacation patterns,
consumer preferences and demand for our products; increased or unanticipated
operating costs and other inherent business risks; our ability to comply with
financial and restrictive covenants under our indebtedness and our ability to
access capital markets on reasonable terms, at a reasonable cost or at all;
maintaining the integrity of internal or customer data and protecting our
systems from cyber-attacks; uncertainty with respect to the scope, impact and
duration of the novel coronavirus global pandemic ("COVID-19"), including
resurgences, the pace of recovery, distribution and adoption of vaccines and
treatments, and actions in response to the evolving pandemic by governments,
businesses and individuals; the timing and amount of future dividends and share
repurchases, if any; and those other factors disclosed as risks under "Risk
Factors" in documents we have filed with the SEC, including in Part I, Item 1A
of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,
filed with the SEC on February 23, 2022. We caution readers that any such
statements are based on currently available operational, financial and
competitive information, and they should not place undue reliance on these
forward-looking statements, which reflect management's opinion only as of the
date on which they were made. Except as required by law, we undertake no
obligation to review or update these forward-looking statements to reflect
events or circumstances as they occur.

BUSINESS AND OVERVIEW

We are a global provider of hospitality services and travel products and operate
our business in the following two segments:

•Vacation Ownership-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 is wholly comprised of our Wyndham Destinations business line. The
following brands operate under the Wyndham Destinations business line: Club
Wyndham, WorldMark by Wyndham, Shell Vacations Club, Margaritaville Vacation
Club by Wyndham, and Presidential Reserve by Wyndham.

•Travel and Membership-operates a variety of travel businesses, including three
vacation exchange brands, a home exchange network, travel technology platforms,
travel memberships, and direct-to-consumer rentals. This segment is comprised of
our Panorama and Travel + Leisure Group business lines. The following brands
operate under the Panorama business line: RCI, Panorama Travel Solutions,
Alliance Reservations Network ("ARN"), 7Across, The Registry Collection, and
Love Home Swap. The Travel + Leisure Group operates Travel + Leisure Travel
Clubs, Travel + Leisure GO, and Extra Holidays brands.

Impact of COVID-19

The results of operations for the three months ended March 31, 2022 and 2021
include impacts related to the novel coronavirus global pandemic ("COVID-19"),
which are significantly lower than the impacts we experienced in the earlier
stages of the pandemic.

Travel + Leisure Brand Acquisition

On January 5, 2021, Wyndham Destinations, Inc. acquired the Travel + Leisure
brand and related assets from Meredith Corporation ("Meredith") for
$100 million, of which $55 million was paid during 2021. We will make the next
$20 million payment in June 2022 with the remaining payments to be completed by
June 2024. This acquisition included Travel + Leisure branded travel clubs and
members. We acquired the Travel + Leisure brand to accelerate our strategic plan
to broaden our reach with the launch of new travel services, expand our
membership travel business, and amplify the global visibility of our leisure
travel products. Meredith will continue to operate and monetize Travel + Leisure
branded multi-platform media assets across

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multiple channels under a 30-year royalty-free, renewable licensing
relationship. In connection with this acquisition, on February 17, 2021, Wyndham
Destinations, Inc. was renamed Travel + Leisure Co. and continues to trade on
the New York Stock Exchange under the new ticker symbol TNL.

RESULTS OF OPERATIONS

We have two reportable segments: Vacation Ownership and Travel and Membership.
The reportable segments presented below are those for which discrete financial
information is available and which are utilized on a regular basis by our chief
operating decision maker to assess performance and to allocate resources. In
identifying the reportable segments, we also consider the nature of services
provided by our operating segments. Management uses net revenues and Adjusted
EBITDA to assess the performance of the reportable segments. We define Adjusted
EBITDA 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, impairments, 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. We believe that Adjusted EBITDA is a
useful measure of performance for our segments which, when considered with GAAP
measures, we believe gives a more complete understanding of our operating
performance. Our presentation of Adjusted EBITDA may not be comparable to
similarly-titled measures used by other companies.

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OPERATING STATISTICS

The table below presents our operating statistics for the three months ended
March 31, 2022 and 2021. These operating statistics are the drivers of our
revenues and therefore provide an enhanced understanding of our businesses.
Refer to the Three Months Ended March 31, 2022 vs. Three Months Ended March 31,
2021 section for a discussion on how these operating statistics affected our
business for the periods presented.
                                                                       

Three Months Ended March 31,

                                                             2022                  2021              % Change (i)
Vacation Ownership
Gross VOI sales (in millions) (a) (j)                  $          379          $     236                 60.8
Tours (in 000s) (b)                                               108                 76                 41.8
Volume Per Guest ("VPG") (c)                           $        3,377          $   2,847                 18.6
Travel and Membership (d)
Transactions (in 000s) (e) (f)
Exchange                                                          311                317                (2.0)
Travel Club                                                       232                196                 18.3
Total transactions                                                543                513                 5.8
Revenue per transaction(f) (g)
Exchange                                               $          328          $     297                 10.2
Travel Club                                            $          234          $     194                 20.7
Total revenue per transaction                          $          288          $     258                 11.6
Average number of exchange members (in 000s) (h)                3,570              3,576                (0.2)




(a)Represents total sales of VOIs, including sales under the Fee-for-Service
program before the effect of loan loss provisions. We believe that Gross VOI
sales provide an enhanced understanding of the performance of our Vacation
Ownership business because it directly measures the sales volume of this
business during a given reporting period.
(b)Represents the number of tours taken by guests in our efforts to sell VOIs.
(c)VPG is calculated by dividing Gross VOI sales (excluding tele-sales upgrades,
which are non-tour upgrade sales) by the number of tours. We believe that VPG
provides an enhanced understanding of the performance of our Vacation Ownership
business because it directly measures the efficiency of this business' tour
selling efforts during a given reporting period.
(d)Includes the impact of acquisitions from the acquisition dates forward.
(e)Represents the number of vacation bookings recognized as revenue during the
period, net of cancellations.
(f)In 2022, the Travel and Membership segment determined that certain rental
transactions to travelers that were not RCI members are more closely aligned
with Travel Club transactions (previously "Non-exchange"). Prior period results
reflect the reclassification of this activity from Exchange to Travel Club.
(g)Represents transactional revenue divided by transactions.
(h)Represents paid members in our vacation exchange programs who are considered
to be in good standing.
(i)Percentage of change may not calculate due to rounding.
(j)The following table provides a reconciliation of Vacation ownership interest
sales, net to Gross VOI sales for the three months ended March 31, 2022 and 2021
(in millions):
                                                 2022       2021

Vacation ownership interest sales, net $ 297 $ 172
Loan loss provision

                                48         38

Gross VOI sales, net of Fee-for-Service sales     345        210
Fee-for-Service sales (1)                          34         26
Gross VOI sales                                 $ 379      $ 236




(1)Represents total sales of VOIs through our Fee-for-Service programs where
inventory is sold through our sales and marketing channels for a commission.
There were $17 million and $12 million Fee-for-Service commission revenues for
the three months ended March 31, 2022 and 2021. These commissions are reported
within Service and membership fees on the Condensed Consolidated Statements of
Income.


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THREE MONTHS ENDED MARCH 31, 2022 VS. THREE MONTHS ENDED MARCH 31, 2021

Our consolidated results are as follows (in millions):

Three Months Ended March 31,

                                                          2022                2021             Favorable/(Unfavorable)
Net revenues                                          $      809          $     628          $                    181
Expenses                                                     692                541                              (151)
Operating income                                             117                 87                                30
Interest expense                                              47                 53                                 6
Interest (income)                                             (1)                (1)                                -
Other (income), net                                           (3)                 -                                 3
Income before income taxes                                    74                 35                                39
Provision for income taxes                                    23                  6                               (17)

Net income attributable to Travel + Leisure Co.
shareholders                                          $       51          $      29          $                     22



Net revenues increased $181 million for the three months ended March 31, 2022,
compared with the same period last year. This increase was unfavorably impacted
by foreign currency of $3 million (0.5%). Excluding the impacts of foreign
currency, the remaining revenue increase was primarily the result of:

•$157 million of increased revenues at our Vacation Ownership segment primarily
due to an increase in net VOI sales, property management revenues, and
commission revenues as a result of the ongoing recovery of our operations from
the impact of COVID-19; and
•$28 million of increased revenues at our Travel and Membership segment driven
by higher transaction revenues as a result of the ongoing recovery of our
operations from the impact of COVID-19, and growth in our business-to-business
("B2B") Travel Club businesses.

Expenses increased $151 million for the three months ended March 31, 2022,
compared with the same period last year. This increase was favorably impacted by
foreign currency of $1 million (0.2%). Excluding the foreign currency impact,
the increase in expenses was primarily the result of:

•$35 million increase in sales and commission expenses at the Vacation Ownership
segment due to higher gross VOI sales;
•$25 million increase in marketing costs in support of increased revenue;
•$20 million increase in property management expenses due to higher management
fees and reimbursable expenses;
•$19 million increase in the cost of VOIs sold primarily due to higher gross VOI
sales;
•$16 million increase in operating costs in support of higher Travel and
Membership revenues;
•$14 million increase in general and administrative expenses primarily due to
higher employee-related costs and legal expenses; and
•$14 million increase in maintenance fees on unsold inventory.

Interest expense decreased $6 million for the three months ended March 31, 2022
compared with the same period last year primarily due to a lower average debt
balance.

Other income, net of other expenses increased by $3 million for the three months
ended March 31, 2022, compared with the same period last year, primarily due to
a value added tax provision release in 2022.

Our effective tax rates were 31.3% and 17.1% during the three months ended
March 31, 2022 and 2021. The change in the effective tax rate is primarily due
to excess benefits from stock-based compensation recognized during the three
months ended March 31, 2021. The effective tax rate for the three months ended
March 31, 2022 also increased due to statutory changes as well as increases to
unrecognized tax benefits.

As a result of these items, Net income attributable to Travel + Leisure Co.
shareholders increased $22 million for the three months ended March 31, 2022 as
compared to the same period last year.

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Our segment results are as follows (in millions):

                                                                             Three Months Ended
                                                                                 March 31,
Net revenues                                                              2022                2021
Vacation Ownership                                                    $      604          $     449
Travel and Membership                                                        210                183
Total reportable segments                                                    814                632
Corporate and other (a)                                                       (5)                (4)
Total Company                                                         $      809          $     628

                                                                             Three Months Ended
                                                                                 March 31,
Reconciliation of Net income to Adjusted EBITDA                           2022                2021

Net income attributable to Travel + Leisure Co. shareholders $

51 $ 29

Provision for income taxes                                                    23                  6
Depreciation and amortization                                                 30                 31
Interest expense                                                              47                 53
Interest (income)                                                             (1)                (1)
Stock-based compensation                                                       9                  7
Restructuring (b)                                                              7                 (1)
COVID-19 related costs (c)                                                     2                  1
Legacy items                                                                   1                  4

Asset impairments                                                              1                  -

Adjusted EBITDA                                                       $      170          $     129

                                                                             Three Months Ended
                                                                                 March 31,
Adjusted EBITDA                                                           2022                2021
Vacation Ownership                                                    $      103          $      66
Travel and Membership                                                         84                 75
Total reportable segments                                                    187                141
Corporate and other (a)                                                      (17)               (12)
Total Company                                                         $      170          $     129




(a)Includes the elimination of transactions between segments.
(b)Includes $3 million of stock-based compensation expense for the three months
ended March 31, 2022 associated with the 2022 restructuring.
(c)Includes expenses related to COVID-19 testing and other expenses associated
with our return-to-work program in 2022. In 2021, 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.

Vacation Ownership

Net revenues increased $155 million (35.0%) and Adjusted EBITDA increased $37
million (56.1%) during the three months ended March 31, 2022, compared with the
same period of 2021. The net revenue increase was unfavorably impacted by
foreign currency of $2 million (0.4%) and the Adjusted EBITDA increase was not
materially impacted by foreign currency.

The net revenue increase excluding the impact of foreign currency was primarily
driven by:

•$136 million increase in gross VOI sales, net of Fee-for-Service sales, due to
increased tours and higher VPG associated with the ongoing recovery of our
operations from the impact of COVID-19;
•$22 million increase in property management revenues primarily due to higher
management fees and reimbursable revenues; and
•$5 million increase in commission revenues as a result of higher
Fee-for-Service VOI sales.

These increases were partially offset by an $11 million increase in our
provision for loan losses primarily due to higher gross VOI sales.

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In addition to the drivers above, Adjusted EBITDA was further impacted by:

•$35 million increase in sales and commission expenses due to higher gross VOI
sales;
•$23 million increase in marketing costs in support of increased revenue;
•$20 million increase in property management expenses due to higher management
fees and reimbursable expenses;
•$19 million increase in the cost of VOIs sold primarily due to higher gross VOI
sales;
•$14 million increase in maintenance fees on unsold inventory;
•$10 million increase in general and administrative expenses primarily due to
higher employee-related costs; and
•$4 million increase in commission expense as a result of higher Fee-for-Service
VOI sales.

These increases were partially offset by a $7 million decrease in consumer
financing interest expense primarily due to a lower average non-recourse debt
balance.

Travel and Membership

Net revenues increased $27 million and Adjusted EBITDA increased $9 million
during the three months ended March 31, 2022, compared with the same period of
2021. The net revenue increase was unfavorably impacted by foreign currency of
$1 million (0.5%) and the Adjusted EBITDA increase was unfavorably impacted by
foreign currency of $1 million (1.3%).

Increases in net revenues excluding the impact of foreign currency were
primarily due to a $30 million increase in transaction revenue driven by higher
revenue per transaction and growth in B2B Travel Club transactions.

In addition to the revenue change explained above, Adjusted EBITDA, excluding
the impact of foreign currency, was further impacted by the following
operational costs in support of higher revenue:

•$12 million increase in cost of sales;
•$4 million increase in operational expenses; and
•$2 million increase in marketing expense.

Corporate and other

Corporate and other Adjusted EBITDA decreased $5 million for the three months
ended March 31, 2022 compared to 2021, primarily due to higher employee-related
costs and legal expenses.

RESTRUCTURING PLANS

During the three months ended March 31, 2022, we incurred $7 million of
restructuring expense. Certain positions were made redundant based upon changes
to our organizational structure, primarily within the Travel and Membership
segment. The majority of the initiative and related expenses were incurred in
the first quarter of 2022 with the remaining charges to be completed in the
second quarter. The charges consisted of (i) $5 million of personnel costs at
the Travel and Membership segment (ii) $1 million of lease and personnel-related
costs at the Vacation Ownership segment, and (iii) $1 million of
personnel-related costs at our corporate operations. These restructuring charges
included $3 million of accelerated stock-based compensation expense. The
majority of the remaining liability of $4 million is expected to be paid in 2022
with lease-related payments continuing through 2025.

During 2020, we recorded $37 million of restructuring charges, most of which
were COVID-19 related. These charges included $22 million at the Travel and
Membership segment associated with our decision to abandon the remaining portion
of the administrative offices in New Jersey, and $14 million of charges at the
Vacation Ownership segment due to a renegotiated agreement and closed sales
centers. As of December 31, 2021 this restructuring liability was $22 million
which was reduced by $1 million of cash payments during the three months ended
March 31, 2022. The remaining 2020 restructuring liability of $21 million is
lease-related and is expected to be paid by the end of 2029.


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FINANCIAL CONDITION

                     March 31,       December 31,
(In millions)           2022             2021           Change
Total assets        $    6,600      $       6,588      $   12
Total liabilities   $    7,411      $       7,382      $   29
Total (deficit)     $     (811)     $        (794)     $  (17)


Total assets increased by $12 million from December 31, 2021 to March 31, 2022,
primarily due to:

•$38 million increase in Restricted cash primarily associated with our
non-recourse debt borrowings;
•$15 million increase in Trade receivables, net, primarily due to annual
billings;
•$54 million increase in Property and equipment, net, primarily due to the
transfer of completed VOI inventory to property and equipment, partially offset
by depreciation; and
•$30 million increase in Other assets primarily due to timing of payroll
funding.

These increases were partially offset by an $87 million decrease in Inventory
driven by the transfer of completed VOI inventory to property and equipment and
VOI sales; and a $48 million decrease in Vacation ownership contract
receivables, net, primarily due to increased allowance for loan losses and net
principal collections.

Total liabilities increased by $29 million from December 31, 2021 to March 31,
2022
, primarily due to:

•$9 million increase in Deferred income primarily due to annual billing cycle
for subscription revenues; and
•$15 million increase in Non-recourse vacation ownership debt due to net
borrowings.

Total deficit increased $17 million from December 31, 2021 to March 31, 2022,
primarily due to $45 million of share repurchases and $35 million of dividends,
partially offset by $51 million of Net income attributable to Travel + Leisure
Co. shareholders and a $12 million change in stock-based compensation.

LIQUIDITY AND CAPITAL RESOURCES

We believe that we have sufficient liquidity to meet our ongoing cash needs for
the next year and beyond, including capital expenditures, operational and/or
strategic opportunities, and expenditures for human capital, intellectual
property, contractual obligations, off-balance sheet arrangements, and other
such requirements. Our net cash from operations and cash and cash equivalents
are key sources of liquidity along with our revolving credit facilities, bank
conduit facilities, and continued access to debt markets. We believe these
sources of liquidity are sufficient to meet our ongoing cash needs, including
the repayment of our $400 million notes due in March 2023. Our discussion below
highlights these sources of liquidity and how they have been utilized to support
our cash needs.

$1.0 Billion Revolving Credit Facility

We generally utilize our revolving credit facility to finance our short-term to
medium-term business operations, as needed. The facility was renewed during
2021, extending the commitment period to October 2026. As of March 31, 2022, we
had $998 million of available capacity on our revolving credit facility, net of
letters of credit.

The revolving credit facility and term loan B are subject to covenants including
the maintenance of specific financial ratios as defined in the credit agreement.
The financial ratio covenants consist of a minimum interest coverage ratio and a
maximum first lien leverage ratio. The interest coverage ratio is calculated by
dividing consolidated EBITDA (as defined in the credit agreement) by
consolidated interest expense (as defined in the credit agreement), both as
measured on a trailing 12-month basis preceding the measurement date. The first
lien leverage ratio is calculated by dividing consolidated first lien debt (as
defined in the credit agreement) as of the measurement date by consolidated
EBITDA (as defined in the credit agreement) as measured on a trailing 12-month
basis preceding the measurement date.

As a precautionary measure during 2020, we amended the credit agreement
governing the revolving credit facility and term loan B ("First Amendment"). The
First Amendment provided flexibility during the relief period spanning from
July 15, 2020 through April 1, 2022, or upon our earlier termination ("Relief
Period"). Among other changes, the First Amendment established Relief Period
restrictions regarding share repurchases, dividends, and acquisitions. During
2021 we entered into the second amendment governing our revolving credit
facility and term loan B ("Second Amendment") which resulted in the termination
of the aforementioned Relief Period restrictions and extended the commitment
period for the revolving credit facility from May 2023 to October 2026. The
Second Amendment stipulates a first lien leverage ratio financial covenant not
to exceed 4.75 to 1.0 which commenced with the December 31, 2021 period and
extends through June 30, 2022, after which time

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it will return to 4.25 to 1.0 and reestablished the interest coverage ratio (as
defined in the credit agreement) of no less than 2.50 to 1.0, the levels in
place prior to COVID-19. Additionally, the Second Amendment reestablished the
annual interest rate pricing schedule in existence prior to COVID-19 which is
equal to, at our option, either a base rate plus a margin ranging from 0.75% to
1.25% or the London Interbank Offered Rate ("LIBOR") plus a margin ranging from
1.75% to 2.25%, in either case based upon our first lien leverage ratio. The
Second Amendment also includes customary LIBOR replacement language providing
for alternative interest rate options upon the cessation of LIBOR publication.

As of March 31, 2022, our first lien leverage ratio was 3.79 to 1.0 and our
interest coverage ratio was 4.32 to 1.0. These ratios do not include interest
expense or indebtedness related to any qualified securitization financing (as
defined in the credit agreement). As of March 31, 2022, we were in compliance
with the financial covenants described above.

Secured Notes and Term Loan B

We generally utilize borrowing under our secured notes to meet our long-term
financing needs. As of March 31, 2022, we had $3.37 billion outstanding of
secured notes and Term Loan B, with maturities ranging from 2023 to 2030.

Non-recourse Vacation Ownership Debt

Our Vacation Ownership business finances certain of its vacation ownership
contract receivables ("VOCRs") through (i) asset-backed conduit facilities and
(ii) term asset-backed securitizations, all of which are non-recourse to us with
respect to principal and interest. For the securitizations, we pool qualifying
VOCRs and sell them to bankruptcy-remote entities, all of which are consolidated
into the accompanying Condensed Consolidated Balance Sheets as of March 31,
2022. We plan to continue using these sources to finance certain VOCRs. On
March 4, 2022 we renewed our USD bank conduit facility, extending its term
through July 2024. This renewal included a reduction of the USD borrowing
capacity from $800 million to $600 million. We believe that our USD bank conduit
facility and our AUD/NZD bank conduit facility, with a term through April 2023,
amounting to a combined capacity of $824 million ($533 million available as of
March 31, 2022) along with our ability to issue term asset-backed securities,
provides sufficient liquidity to finance the sale of VOIs beyond the next year.

We closed on securitization financings of $275 million during the three months
ended March 31, 2022 and $850 million during the full year 2021. These
transactions positively impacted our liquidity and reinforce our expectation
that we will maintain adequate liquidity for the next year and beyond.

Our liquidity position may be negatively affected by unfavorable conditions in
the capital markets in which we operate or if our VOCR portfolios do not meet
specified portfolio credit parameters. Our liquidity, as it relates to our VOCR
securitization program, could be adversely affected if we were to fail to renew
or replace our conduit facilities on their expiration dates, or if a particular
receivables pool were to fail to meet certain ratios, which could occur in
certain instances if the default rates or other credit metrics of the underlying
VOCRs deteriorate. Our ability to sell securities backed by our VOCRs depends on
the continued ability and willingness of capital market participants to invest
in such securities.

Each of our non-recourse securitized term notes and the bank conduit facilities
contain various triggers relating to the performance of the applicable loan
pools. If the VOCR pool that collateralizes one of our securitization notes
fails to perform within the parameters established by the contractual triggers
(such as higher default or delinquency rates), there are provisions pursuant to
which the cash flows for that pool will be maintained in the securitization as
extra collateral for the note holders or applied to accelerate the repayment of
outstanding principal to the note holders. As of March 31, 2022, all of our
securitized loan pools were in compliance with applicable contractual triggers.

We may, from time to time, depending on market conditions and other factors,
repurchase our outstanding indebtedness, whether or not such indebtedness trades
above or below its face amount, for cash and/or in exchange for other securities
or other consideration, in each case in open market purchases and/or privately
negotiated transactions.

For additional details regarding our credit facilities, term loan B, and
non-recourse debt see Note 9-Debt to the Condensed Consolidated Financial
Statements.



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Material Cash Requirements

The following table summarizes material future contractual obligations of our
continuing operations (in millions). We plan to fund these obligations, along
with our other cash requirements, with net cash from operations, cash and cash
equivalents, and through the use of our revolving credit facilities, bank
conduit facilities, and continued access to debt markets.

                               4/1/22 -           4/1/23 -            4/1/24 -            4/1/25 -           4/1/26 -
                               3/31/23             3/31/24             3/31/25            3/31/26            3/31/27            Thereafter           Total
Debt                         $     408          $        6          $      303          $     625          $     643          $     1,394          $ 3,379
Non-recourse debt (a)              224                 256                 230                303                207                  729            1,949
Interest on debt (b)               234                 212                 188                161                107                  136            1,038
Purchase commitments (c)           219                 116                 107                129                 93                  150              814
Operating leases                    30                  30                  27                 21                 14                   31              153
Inventory sold subject to
conditional repurchase (d)          65                   -                   -                  -                  -                    -               65

Total (e)                    $   1,180          $      620          $      855          $   1,239          $   1,064          $     2,440          $ 7,398




(a)Represents debt that is securitized through bankruptcy-remote special purpose
entities the creditors of which have no recourse to us for principal and
interest.
(b)Includes interest on debt and non-recourse debt; estimated using the stated
interest rates.
(c)Includes (i) $648 million for marketing-related activities; (ii) $60 million
relating to the development of vacation ownership properties; and (iii) $46
million for information technology activities.
(d)Represents obligations to repurchase completed vacation ownership properties
from third-party developers (See Note 7-Inventory to the Condensed Consolidated
Financial Statements for further detail) of which $13 million was included
within Accrued expenses and other liabilities on the Condensed Consolidated
Balance Sheets.
(e)Excludes a $38 million liability for unrecognized tax benefits as it is not
reasonably estimable to determine the periods in which such liability would be
settled with the respective tax authorities.

In addition to the amounts shown in the table above and in connection with our
separation from Cendant, we entered into certain guarantee commitments with
Cendant (pursuant to our assumption of certain liabilities and our obligation to
indemnify Cendant, Realogy, and Travelport for such liabilities) and guarantee
commitments related to deferred compensation arrangements with Cendant and
Realogy. We also entered into certain guarantee commitments and indemnifications
related to the sale of our vacation rentals businesses. For information on
matters related to our former parent and subsidiaries see Note 21-Transactions
with Former Parent and Former Subsidiaries to the Condensed Consolidated
Financial Statements.

In addition to the key contractual obligation and separation related commitments
described above, we also utilize surety bonds in our Vacation Ownership business
for sales and development transactions in order to meet regulatory requirements
of certain states. In the ordinary course of our business, we have assembled
commitments from 12 surety providers in the amount of $2.3 billion, of which we
had $364 million outstanding as of March 31, 2022. The availability, terms and
conditions and pricing of bonding capacity are dependent on, among other things,
continued financial strength and stability of the insurance company affiliates
providing the bonding capacity, general availability of such capacity and our
corporate credit rating. If the bonding capacity is unavailable or,
alternatively, the terms and conditions and pricing of the bonding capacity are
unacceptable to us, our Vacation Ownership business could be negatively
impacted.

Our secured debt is rated Ba3 with a "negative outlook" by Moody's Investors
Service, BB- with a "stable outlook" by Standard & Poor's Rating Services, and
BB+ with a "negative outlook" by Fitch Rating Agency. A security rating is not a
recommendation to buy, sell or hold securities and is subject to revision or
withdrawal by the assigning rating organization. Reference in this report to any
such credit rating is intended for the limited purpose of discussing or
referring to aspects of our liquidity and of our costs of funds. Any reference
to a credit rating is not intended to be any guarantee or assurance of, nor
should there be any undue reliance upon, any credit rating or change in credit
rating, nor is any such reference intended as any inference concerning future
performance, future liquidity, or any future credit rating.

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CASH FLOW

The following table summarizes the changes in cash, cash equivalents and
restricted cash during the three months ended March 31, 2022 and 2021 (in
millions):
                                                          2022               2021              Change
Cash provided by/(used in):
Operating activities                                  $     141          $      78          $       63

Investing activities                                        (16)               (47)                 31

Financing activities                                        (79)              (884)                805

Effects of changes in exchange rates on cash and cash
equivalents

                                                   4                 (3)                  7
Net change in cash, cash equivalents and restricted
cash                                                  $      50          $    (856)         $      906



Operating Activities

Net cash provided by operating activities was $141 million for the three months
ended March 31, 2022, compared to $78 million in the prior year. This $63
million increase was driven by a $22 million increase in net income, a $36
million increase in non-cash add-back items primarily due to deferred income
taxes and a higher provision for loan losses, and a $5 million decrease in cash
utilized for working capital.

Investing Activities

Net cash used in investing activities was $16 million for the three months ended
March 31, 2022, compared to $47 million in the prior year. This decrease was
primarily related to $35 million of cash payments for the acquisition of the
Travel + Leisure brand in 2021.

Financing Activities

Net cash used in financing activities was $79 million for the three months ended
March 31, 2022, compared to $884 million in the prior year. This decrease was
primarily due to $799 million of repayments on the revolving credit facility and
notes in 2021, $47 million of net repayments on non-recourse debt in 2021
compared to $13 million of net proceeds in 2022; partially offset by $45 million
of share repurchases in 2022.

Capital Deployment

We focus on deploying capital for the highest possible returns. Ultimately, our
business objective is to grow our business while optimizing cash flow and
Adjusted EBITDA. We intend to continue to invest in select capital and
technological improvements across our business. We may also seek to
strategically grow the business through merger and acquisition activities. As
part of our merger and acquisition strategy, we have made, and expect to
continue to make, acquisition proposals and enter into non-binding letters of
intent, allowing us to conduct due diligence on a confidential basis. A
potential transaction contemplated by a letter of intent may never reach the
point where we enter into a definitive agreement, nor can we predict the timing
of such a potential transaction. Finally, we intend to continue to return value
to shareholders through the repurchase of common stock and payment of dividends.
All future declarations of quarterly cash dividends are subject to final
approval by the Board of Directors.

During the three months ended March 31, 2022, we spent $13 million on vacation
ownership development projects (inventory). We believe that our Vacation
Ownership business currently has adequate finished inventory to support vacation
ownership sales for several years. During 2022, we anticipate spending between
$150 million and $170 million on vacation ownership development projects. The
average inventory spend on vacation ownership development projects for the
four-year period 2023 through 2026 is expected to be between $140 million and
$170 million annually. After factoring in the anticipated additional average
annual spending, we expect to have adequate inventory to support vacation
ownership sales through at least the next four to five years.

During the three months ended March 31, 2022, we spent $10 million on capital
expenditures, primarily for information technology and sales center improvement
projects. During 2022, we anticipate spending between $60 million and $65
million on capital expenditures.

In connection with our focus on optimizing cash flow, we are continuing our
asset-light efforts in vacation ownership by seeking opportunities with
financial partners whereby they make strategic investments to develop assets on
our behalf. We refer to this as Just-in-Time. The partner may invest in new
ground-up development projects or purchase from us, for cash, existing
in-process inventory which currently resides on our Condensed Consolidated
Balance Sheets. The partner will complete the

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development of the project and we may purchase finished inventory at a future
date as needed or as obligated under the agreement.

We expect that the majority of the expenditures that will be required to pursue
our capital spending programs, strategic investments, and vacation ownership
development projects will be financed with cash flow generated through
operations and cash and cash equivalents. We expect that additional expenditures
will be financed with general secured corporate borrowings, including through
the use of available capacity under our revolving credit facility.

Share Repurchase Program

On August 20, 2007, our Board of Directors authorized a share repurchase program
that enables us to purchase our common stock. As of March 31, 2022, the Board of
Directors had increased the capacity of the program eight times, most recently
in October 2017 by $1.0 billion, bringing the total authorization under the
current program to $6.0 billion. Proceeds received from stock option exercises
have increased the repurchase capacity under the program by $81 million since
the inception of this program. We had $283 million of remaining availability in
our program as of March 31, 2022.

Under our current share repurchase program, we repurchased 0.8 million shares at
an average price of $56.15 for a cost of $45 million during the three months
ended March 31, 2022. The amount and timing of specific repurchases are subject
to market conditions, applicable legal requirements and other factors, including
capital allocation priorities. Repurchases may be conducted in the open market
or in privately negotiated transactions.

Subsequent to the end of the quarter, our Board of Directors increased the
authorization for the share repurchase program by $500 million.

Dividends

During the quarterly period ended March 31, 2022, we paid cash dividends of
$0.40 per share ($35 million in aggregate). During the quarterly period ended
March 31, 2021, we paid cash dividends of $0.30 per share ($26 million in
aggregate). Our long-term plan is to grow our dividend at the rate of growth of
our earnings at a minimum. The declaration and payment of future dividends to
holders of our common stock are at the discretion of our Board of Directors and
depend upon many factors, including our financial condition, earnings, capital
requirements of our business, covenants associated with certain debt
obligations, legal requirements, regulatory constraints, industry practice, and
other factors that our Board of Directors deems relevant. There is no assurance
that a payment of a dividend will occur in the future.

SEASONALITY

We experience seasonal fluctuations in our net revenues and net income from
sales of VOIs and vacation exchange fees. Revenues from sales of VOIs are
generally higher in the third quarter than in other quarters due to increased
leisure travel. Revenues from vacation exchange fees are generally highest in
the first quarter, which is generally when members of our vacation exchange
business book their vacations for the year. Our seasonality has been and could
continue to be impacted by COVID-19.

The seasonality of our business may cause fluctuations in our quarterly
operating results. As we expand into new markets and geographical locations, we
may experience increased or different seasonality dynamics that create
fluctuations in operating results different from the fluctuations we have
experienced in the past.

COMMITMENTS AND CONTINGENCIES

From time to time, we are involved in claims, legal and regulatory proceedings,
and governmental inquiries related to our business, none of which, in the
opinion of management, is expected to have a material effect on our results of
operations or financial condition. See Note 15-Commitments and Contingencies to
the Condensed Consolidated Financial Statements for a description of claims and
legal actions arising in the ordinary course of our business along with our
guarantees and indemnifications and Note 21-Transactions with Former Parent and
Former Subsidiaries to the Condensed Consolidated Financial Statements for a
description of our obligations regarding Cendant contingent litigation, matters
related to Wyndham Hotels, and matters related to the vacation rentals
businesses.

CRITICAL ACCOUNTING ESTIMATES

In presenting our Condensed Consolidated Financial Statements in conformity with
generally accepted accounting principles, we are required to make estimates and
assumptions that affect the amounts reported therein. Several of the estimates
and assumptions we are required to make relate to matters that are inherently
uncertain as they pertain to future events. However,

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events that are outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and assumptions. If there is
a significant unfavorable change to current conditions, it could result in a
material impact to our consolidated results of operations, financial position,
and liquidity. We believe that the estimates and assumptions we used when
preparing our Condensed Consolidated Financial Statements were the most
appropriate at that time. These Condensed Consolidated Financial Statements
should be read in conjunction with our "Management's Discussion and Analysis of
Financial Condition" and "Results of Operations" and the audited Consolidated
Financial Statements included in the Annual Report filed on Form 10-K with the
SEC on February 23, 2022, which includes a description of our critical
accounting estimates that involve subjective and complex judgments that could
potentially affect reported results.

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