Travel Leisure Co. · NYSE:TNL

Travel Leisure — Wyndham Destinations — Investor Presentation (May 2018)

65 slides from Travel Leisure's investor presentation, May 2018

  1. Slide 1: Slide 1

  2. Slide 2: Disclaimers

    WYNDHAM DESTINATIONS Disclaimers Certain statements in this presentation constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements that refer

  3. Slide 3: Execution is in the DNA

    WYNDHAM eDESTINATIONS = Execution is in the DNA => Wyndham is everywhere => Potential to leverage Wyndham Hotels & Resorts relationship

  4. Slide 4: Wyndham Destinations brands

    WYNDHAM DESTINATIONS bai ce RCI WYNDHAM WYNDHAM eDESTINATIONS

  5. Slide 5: 100% focused on vacations

    WYNDHAM rn RCI VACATION OWNERSHIP* S78K owner 3.9M womers 2? | Resorts 43 kK Resorts $ 2 | By VOI Sales | 6 M oxchange anc Rental WYNDHAM DESTINATIONS 100% focused on vacations

  6. Slide 6: DESTINATIONS

    WYNDHAM DESTINATIONS

  7. Slide 7: Hospitality = Relationship

    WYNDHAM DESTINATIONS Hospitality = Relationship @ oe Higher Utilization & Transactions => Conversation Satisfaction Rates {© 2018 Wyndham Destinations Proprietary 7

  8. Slide 8: Flexibility and value; owner satisfaction

    WYNDHAM *DESTINATIONS A7% of New Owners are Gen X or Millennials “iad 6Q0M+ Loyalty Members GOM+ includes anticipated impact of La Quinta acquisition ©2018 Wyndham Destinations Proprietary FLEXIBILITY and Value HIGH Owner Satisfaction

  9. Slide 9: Business Benefits

    WYNDHAM DESTINATIONS Business Benefits és Marketing Reach & KAM Management aoul Lead Generation = Contract Retention Membership Untapped New Renewal Owner Opportunity Mitigated Portfolio Risk ‘©2018 Wyndham Destinations Proprietary 9

  10. Slide 10: Slide 10

  11. Slide 11: Slide 11

  12. Slide 12: Wyndham Vacation Resorts

    i, ing $ i ae Non ~. We Maem NT Ilham Vacation Resorts at Glagie a)

  13. Slide 13: Strengths and Competitive Advantages

    WYNDHAM DESTINATIONS STRENGTHS AND COMPETITIVE ADVANTAGES => Leading Size and Scale => Best at Owner Acquisition => Expansive Brand Portfolio

  14. Slide 14: Slide 14

  15. Slide 15: VOI Sales and Resorts vs. Peers

    WYNDHAM DESTINATIONS VOI Sales WYNDHAM *DESTINATIONS $21 B aU tee $1.3B VACATIONS $O, 8B WORLDWIDE . interval leisure $0. 6B group 7 Source: Annual reports on Form 10-K for year ended December 31, 2017 ‘©2018 Wyndham Destinations Proprietary Resorts WYNDHAM DESTINATIONS MARRIOTT VACATIONS WORLDWIDE

  16. Slide 16: Members and Exchange Options

    WYNDHAM Members Exchange Options RCI 3.9m RCI 4.3K nw BM meal 3 OK

  17. Slide 17: Customer acquisition drives growth

    (© 2018 Wyndham ation’ Proprietary WYNDHAM DESTINATIONS Customer acquisition drives top line growth Access to deals that grow the network Innovation keeps WYND at the forefront

  18. Slide 18: Partners

    I AR Al ¥,\ VACATION C BY WYNDHAM ENTERTAINMENT: WYNDHAM DESTINATIONS y Six\t! Flags ..and many more

  19. Slide 19: Development Partner of Choice

    WYNDHAM DESTINATIONS Development Partner of Choice CLUB WYNDHAM

  20. Slide 20: Pioneers in the Industry

    WYNDHAM DESTINATIONS Pioneers in the Industry Wyndham Asset Affiliation Model OVATION —— BY WYNDHAM —— Established 2008 Established 2013 RC I Launched Established 2017 Wyndham Cares

  21. Slide 21: Strengths and Competitive Advantages

    WYNDHAM ¢DESTINATIONS STRENGTHS AND COMPETITIVE ADVANTAGES => Leading Size and Scale => Best at Owner Acquisition : » Expansive Brand Portfolio (© 2018 Wyndham Destinations Proprietary

  22. Slide 22: Unassailable leader in Open Market channels

    WYNDHAM DESTINATIONS = Unassailable leader in Open Market channels = Untapped Blue Thread potential ; > Owner base with highly predictable revenues 22

  23. Slide 23: Industry Leader in New Owner Sales

    WYNDHAM *DESTINATIONS Industry Leader in New Owner Sales $21B New Owner Sales 2017 VOI 36K New Members

  24. Slide 24: New Owner Sales

    WYNDHAM DESTINATIONS New Owner Sales Blue Thread $762M $44 > Open Market $718M ~ WYNDHAM DESTINATIONS —) 15% Marketing partners 40% Community Marketing Programs 45% Rental and other 24

  25. Slide 25: Blue Thread Opportunity

    Blue WYNDHAM DESTINATIONS Threacl Opportunity = 100-year exclusive license agreement with Wyndham Hotels & Resorts => D => => S) © * Based on blended rate Purely variable 4.25% of gross VOI sales* Bifurcated fee, higher for Blue Thread sales and lower for open market and owner upgrade sales WYND exc

  26. Slide 26: Wyndham Hotels & Resorts

    WYNDHAM DESTINATIONS = WYNDHAM HOTELS & RESORTS

  27. Slide 27: Blue Thread Opportunity

    ———esese—ae Blue Thread Opportunity Wyndham.com Cross selling of 174 resorts 6OM+ includes anticipated impact of La Quinta acquisition Wyndham Hotels & Resorts In-hotel marketing to ~140M annual guests Wyndham Contact Center Access to 11M annual phone calls WYNDHAM DESTINATIONS Wyndham Rewards Marke

  28. Slide 28: Rewards Members Correlate to Club Owner Demographics

    WYNDHAM DESTINATIONS Rewards Members Correlate to Club Owner Demographics WYNDHAM ~ REWARDS” WYNDHAM DESTINATIONS New Owners (<5 Years) ©2018 Wyndham Destinations Proprietary Average Household Income >$100k >$100k Homeowner 93% 94% Married 69% 13% Gen X Millennials 15% 17%

  29. Slide 29: Committed to Boosting New Owner Sales

    Committed to Boosting como | New Owner Sales A 2011-2016 Average 2017 —

  30. Slide 30: The Value of New Members is High

    “BBtinos | He Value of New Members is High Initial Sale Spend Years O-5 upgrades spend Years 6+ upgrades spend Owners spend an incremental ~2.6X the initial purchase over their lifetime Average lifetime spend per owner, ~$65K Source: Club Wyndham Owner Data ©2018 Wyndham Destinations Proprietary 30

  31. Slide 31: Strengths and Competitive Advantages

    WYNDHAM *DESTINATIONS STRENGTHS AND COMPETITIVE ADVANTAGES => Leading Size and Scale => Best at Owner Acquisition => Expansive Brand Portfolio

  32. Slide 32: Expansive Brand Portfolio

    WYNDHAM DESTINATIONS ey CLUB ey WYNDHAM ey CLUB ELL A wenonam =A AUS Seesic | EA Wanpnam = Mac ions — WoplelP aap. hinellaaphe.. ASIA VACATION CLUB, CLUB = WYNDHAM = Ed wrnonan ; HOME rs tripbeat ARMED FORGES RCI dae> REGISTRY pbeat vacation club WYNDHAM ' ResortQuest i AWYINDHAM OCEANA RisontQuist

  33. Slide 33: Grow in Existing Markets: Myrtle Beach

    Myrtle Beach, SC WYNDHAM DESTINATIONS Grow in Existing Markets Case Study: Myrtle Beach => Added an off beach location => Multiple brands provide flexibility to expand lip hajre sy WYNDHAM 33

  34. Slide 34: Expand into New Markets: Nashville

    WYNDHAM DESTINATIONS Expand into New Markets Case Study: Nashville => Opened access to prime downtown location = Provides developer diversity = Naturally grows development pipeline

  35. Slide 35: Increase Member Base Through Segmented Products

    Nl Disney's Beach Club Villas Orlando, FL WYNDHAM DESTINATIONS Increase Member Base Through Segmented Products => Segment and grow membership base => Acquire and grow locations RCI dae» 35

  36. Slide 36: *DESTINATIONS

    WYNDHAM *DESTINATIONS © 2018 Wyndham Destin:

  37. Slide 37: eDESTINATIONS

    WYNDHAM eDESTINATIONS

  38. Slide 38: Slide 38

  39. Slide 39: Highly Attractive Business Model

    WYNDHAM DESTINATIONS Highly Attractive Business Model Recurring and predictable revenue base Stable margins across ° High FCF conversion the cycle ° Strong balance sheet Capital efficient Loan portfolio strength ©2018 Wyndham Destinations Proprietary

  40. Slide 40: ¢DESTINATIONS

    WYNDHAM ¢DESTINATIONS 40

  41. Slide 41: Predictable Revenues: Owner Upgrades

    WYNDHAM *DESTINATIONS 100% 90% Predictable Revenues: OWNER UPGRADES - 70% 60% ° More than 25 years of data proves owners consistently upgrade 50% 2, . ; 40% ° Today's new owner is tomorrow's upgrade 30% 20% 10% 0% (© 2018 Wyndham Destinations Proprietary VOI Upgrade Sales $1,078 2017 Recurring Reven

  42. Slide 42: Predictable Revenues: Hospitality Services

    WYNDHAM *DESTINATIONS Predictable Revenues: HOSPITALITY SERV CES * Management fees from 200+ resorts * 98% contract retention ° Cost-plus business: not tied to broader real estate cycle (© 2018 Wyndham Destinations Proprietary 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Hospitality Services $649 201

  43. Slide 43: Predictable Revenues: Vacation Exchange

    WYNDHAM Predictable Revenues: VACATION EXCHANG Vacation Exchange * 3.9M members paying annual dues paying won $671 ° 85% retention : 40% Hospitality Services $649 VOI Upgrade Sales 10% $1,078 2017 Recurring Revenues ($m) ©2018 Wyndham Destinations Proprietary

  44. Slide 44: Predictable Revenues: Consumer Finance

    WYNDHAM *DESTINATIONS Predictable Revenues: CONSUMER FINANC rT] Consumer Finance $463 60% * $3,6B loan portfolio Vacation Exchange $ Pp son $671 ° Fixed interest rates 40% Hospitality Services ° T-year average life 30% $649 20% VOI Upgrade Sales 10% $1,078 0% 2017 Recurring Revenues ($m) ©2018 Wyndh

  45. Slide 45: ~75% of Revenue is Recurring & Predictable

    WYNDHAM ~25% Primarily New Owner Sales ~75% of Revenue is RECURRING & PREDICTABLE ©2018 Wyndham Destinations Proprietary D> Other $947 Consumer Finance $463 Vacation Exchange $671 Hospitality Services $649 VOI Upgrade Sales $1,078 2017 Recurring Revenues ($m)

  46. Slide 46: Maintain High Margins Across the Cycle

    Maintain High Margins Across the Cycle ceecctt , 25% 24% 25% 25% 25% 25% 24% 27 22% 22% , - ’ ’ 7 17 ’ I iT il 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Wyndham Vacation Ownership Segment Adjusted EBITDA Margin ©2018 Wyndham Destinations Proprietary 46

  47. Slide 47: Capital Efficient Inventory Model

    WYNDHAM DESTINATIONS Capital Efficient Inventory Model said : j | Moderate and consistent inventory spend Strong ROIC Maximizes returns to shareholders New York, NY

  48. Slide 48: Strong ROIC

    740 14.5% 720 14.0% 700 13.5% 680 13.0% 660 12.5% 640 620 12.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

  49. Slide 49: High Free Cash Flow Conversion

    WYNDHAM DESTINATIONS High Free Cash Flow Conversion ° Lower cash taxes with deferred taxes on financed sales * Access to ABS markets Disciplined capex ‘© 2018 Wyndham Destinations Proprietary

  50. Slide 50: Strong Balance Sheet

    WYNDHAM DESTINATIONS Strong Balance Sheet Debt Maturity Schedule Net Leverage: 3.2x “ é nmin) Target: 2.25x to 3.0x $e0a $6 WACD < ~4.A% +00 $250 $300 WAM § ~5.8 years we $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 (a) Assumes revolving credit facility matures on May 1, 2025 ©2018 Wyndham Destin

  51. Slide 51: Key Drivers: Steady Mid-Single Digit Growth

    WYNDHAM *DESTINATIONS Key Drivers: Steady Mid-Single Digit Growth Gross VOI Sales ($ in millions) $2,750 $2,910 2017 2018E 2021E 9 2021E Low High Consumer Finance Portfolio (Sin millions) $4,635 $4,790 $3,591 $3,804. 6%-8% CAGR 2017 2018E 2021E 2021E Low — High ©2018 Wyndham Destinations Proprietary

  52. Slide 52: Three Year Growth Outlook

    WYNDHAM *DESTINATIONS Three Year Growth Outlook Adjusted EBITDA Margins 24% 24% 24% 24% 2017 2018E 2021E Low 2021E High Adjusted EBITDA ($ in millions) $914 $965 2017 2018E 2021E Low 2021E High ©2018 Wyndham Destinations Proprietary Total Revenue ($ in millions) $3,817 2017 2018E 2021ELow 2021E High

  53. Slide 53: Commitment to Returning Cash to Shareholders

    WYNDHAM DESTINATIONS Commitment to Returning Cash to Shareholders 2018E - 2021E Cumulative Capital Allocation ~$600-$800M Dividends ~$2.3-$2.5B FOF Debt Repayment ~$1.2-$1.4B Business Investments Share Buyback M&A

  54. Slide 54: WYND Listed NYSE

    WYND LISTED NYSE

  55. Slide 55: Leadership Team

    WYNDHAM ¢DESTINATIONS Leadership Team ® 2? 6 @ 8 Michael Brown Michael Hug Noah Brodsky Mary Lynn Clark CEO & President Chief Financial Officer Chief Brand Officer President, Wyndham Vacations Rentals North America ) { y) ] <> 4 Gordon Gurnik Kim Marshall Jeff Myers Geoff Richards Barry Robinson Pre

  56. Slide 56: Q&A

    A WYNDHAM ¢DESTINATIONS Q&A

  57. Slide 57: Appendix

    WYNDHAM ¢DESTINATIONS "APPENDIX

  58. Slide 58: Historical Financials - Vacation Ownership

    WYNDHAM *DESTINATIONS Historical Financials - Vacation Ownership Number of Tours Volume Per Guest (VPG) (in 000s) 2% CAGR 1% CAGR os s19 $2081 $2,326 $2,324 $2,345 " ; a a a i 7 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Total Revenues Adjusted EBITDA (in millions) (in millions) > 3% CAGR $0,

  59. Slide 59: Historical Financials - Exchange & Rentals

    WYNDHAM *DESTINATIONS Historical Financials - Exchange & Rentals Average Number of Members (in 000s) Total Revenues > ($in millions) - 1%CAGR 2%CAGR * poe 3,831 3,852 3,799 $916 3,698 $880 2013 2016 2016 2017 2018 2016 2016 Adjusted EBITDA ($in millions) _. 3%CAGR $261 $249 $251 $241 = a oO a 2017 (

  60. Slide 60: Historical Financials - Consolidated

    WYNDHAM *DESTINATIONS Historical Financials - Consolidated Net VOI Sales ($in Millions) 5% CAGR $1,684 . $1,604 $1,601 $1,485 - Z 2013 2014 2015 2016 2017 (a) Does not reflect impact of the adoption of the new revenue recognition standard. ©2018 Wyndham Destinations Proprietary Total Revenues ($ in

  61. Slide 61: Appendix: Non-GAAP Reconciliations

    Appendix: Non-GAAP Reconciliations Wyndham Destinations Reconciliation of Pro Forma Net Income to Pro Forma Adjusted EBITDA ($ in millions) ($ in millions) 2017 Pro Forma Net Income $ 591 Benefit for income taxes $ (235) Depreciation and amortization $ 131 Interest expense $ 130 Interest income $ (7

  62. Slide 62: Appendix: Non-GAAP Reconciliations

    Appendix: Non-GAAP Reconciliations Wyndham Destinations Reconciliation of Free Cash Flow ($ in millions) 2017 Pro Forma net cash provided by operating activities 534 Less: Property and equipment additions (107) Free Cash Flow 427 ‘©2018 Wyndham Destinations Proprietary 62

  63. Slide 63: Appendix: Non-GAAP Reconciliations

    Appendix: Non-GAAP Reconciliations Wyndham Vacation Ownership (WVO) Adjusted EBITDA Reconciliation ($ in millions) WVO Segment Loss on Reported Acquisition Restructuring Sale/Asset Executive Separation WVO Adjusted EBITDA Related Costs Impairments Costs Costs EBITDA 2017 | $ 489 $ - $ - $ 205 $ 1 $

  64. Slide 64: Appendix: Non-GAAP Reconciliations

    Appendix: Non-GAAP Reconciliations Exchange & Rentals Adjusted EBITDA Reconciliation ($ in millions) Exchange & Rentals Exchange & Segment Venezuela Loss on Rentals Reported Currency Restructuring Sale/Asset Separation Executive Adjusted EBITDA Devaluation Costs Impairment VAT Adjustment Costs Costs

  65. Slide 65: Definitions of non-GAAP measures

    Adjusted EBITDA: Net income excluding interest expense (but including consumer financing interest), depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related costs (acquisition-, disposition- or separation-related), stock-ba

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