Investor Presentation...loan balance of owners have no loans outstanding annual owner churn...
Transcript of Investor Presentation...loan balance of owners have no loans outstanding annual owner churn...
Investor Presentation
NOVEMBER 2018
© 2018 Wyndham Destinations Proprietary
Forward-Looking Statements
This presentation contains "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. Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham Destinations makes the statements
and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "projection," "estimate" and similar words or expressions, including
the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or
achievements of Wyndham Destinations to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements
contained in this presentation include statements related to Wyndham Destinations’ current views and expectations with respect to its future performance and operations. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of this presentation. Factors that could cause actual results to differ materially from those in the forward-looking statements include
without limitation general economic conditions, the performance of the financial and credit markets, our ability to obtain financing, our credit ratings (including changes thereto as result of the spin-off and other
related transactions), post-closing credit obligations as result of the sale of our European vacation rentals business, the economic environment for the timeshare industry, the impact of war, terrorist activity or
political strife, operating risks associated with the vacation ownership and vacation exchange businesses, unanticipated developments related to the impact of the spin-off on our relationships with our customers,
suppliers, employees and others with whom we have relationships, uncertainties related to our ability to realize the anticipated benefits of the spin-off, as well as those factors described in our Quarterly Report on
Form 10-Q, filed with the SEC on November 1, 2018, and subsequently filed periodic filings with the SEC. Except as required by law, Wyndham Destinations undertakes no obligation to update or keep current
the information contained in this presentation, whether as a result of new information, subsequent events or otherwise.
Further Adjusted Financial Information
This presentation also includes certain further adjusted financial information, which is unaudited, presented for illustrative purposes only and is not necessarily indicative of the operating results or financial
position that would have occurred if the relevant transactions had been consummated on the date indicated, nor is it indicative of future operating results. The further adjusted financial information presented
includes adjustments that would not be included in the pro forma financial statements contained in a registration statement filed with the SEC that contain further adjusted information prepared in accordance with
Regulation S-X under the Securities Act.
Disclaimer
This presentation and the information contained herein are solely for informational purposes. This presentation does not constitute a recommendation regarding the securities of Wyndham Destinations. This
presentation or any related oral presentation does not constitute any offer to sell or issue, or any solicitation of any offer to subscribe for, purchase or otherwise acquire any securities of Wyndham Destinations,
nor shall it form the basis of, or be relied upon in connection with, or act as any inducement to enter into any contract or commitment whatsoever with respect to such securities. This presentation is not directed
to, or intended for distribution to or use by, any person or entity that is a citizen or resident located in any jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or
which would require registration of licensing within such jurisdiction. The information contained in this presentation, including the forward-looking statements herein, is provided as of the date of this presentation
and may change materially in the future. Except as required by law, Wyndham Destinations undertakes no obligation to update or keep current the information contained in this presentation, whether as a result of
new information, subsequent events or otherwise.
Non-GAAP Financial Measures
Financial information contained in this presentation includes non-GAAP measures, which include or exclude certain items. The Company utilizes non-GAAP measures on a regular basis to assess performance of
its reportable segments and allocate resources. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period
comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing operating performance. Management also internally uses these measures to assess
our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Exclusion of items in the Company’s non-GAAP presentation
should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP non-GAAP financial measures to the most directly comparable GAAP financial
measures for the reported periods appear in the appendix of this presentation. 2
Expansive Brand Portfolio
Best at Owner Acquisition
Strengths and Competitive Advantages
• Customer acquisition drives top line growth
• Access to deals that grow the network
• Innovation keeps WYND at the forefront
Leading Size and Scale
• Unassailable leader in Open Market channels
• Untapped Blue Thread potential
• Owner base with highly predictable revenues
• Seven vacation ownership brands
• Grow/expand into new markets
• Development partner of choice
3
Source: Annual reports on Form 10-K for year ended December 31, 2017. Marriott Vacations Worldwide metrics include ILG’s annual report for the same time period.
$2.1B
$1.3B
$1.4B
Members
3.9M
1.8M
221
48
108
4.3K
3.2K
Exchange Options
Unprecedented Size and Scale
4
VOI Sales Resorts
Note: Mid point of bubble corresponds to mean owner demographic by brand; area of circle corresponds to relative owner count of each brand.
Sources: US Census (2016), WYND Owner Data (September 2018, excludes Discovery), HGV Investor Deck (September 2018), VAC Investor Day (2015), ILG Investor Day (2017).
Serving the broadest demographic of travelersWYND HGV VAC ILG
US Census
Households
17.1M
17.8M
36.9M
54.4M
Owner Count 881K 288K 400K 250K
Mean HHI $91K $113K $155K $161K
US Traveler Mean HHI
$87,695
$0
$50,000
$100,000
$150,000
$200,000
US
Ho
us
eh
old
In
co
me
5
6
Key Statistics Show Stability in Owner Base
OWNERS OWNERS HAVE A
LOAN BALANCE
OF OWNERS HAVE NO
LOANS OUTSTANDING
ANNUAL OWNER CHURN
INCLUDING ELEVATED
LOAN DEFAULTS*
ANNUAL RETENTION OF
OWNERS WITHOUT A
LOAN BALANCE*
OF OWNERS WHO
PURCHASED IN AND SINCE
THE 1990s ARE STILL ACTIVE
IN THE WYND SYSTEM
881K 185K ~80%
~4% >98% ~70%
*Annual average over last 10 years
Source: Club Wyndham Owner Data
Shifting Sales Mix to Increase New Owners
7
The Future Value of New Members is High
• Owners spend an incremental ~2.6X the
initial purchase over their lifetime
• Average lifetime spend per owner, ~$65K
• Mix improved over the first nine months of
2018
• Shift mix while growing EBITDA and
maintaining industry leading margins
32% 36% 35.5% 38.8%45%
2011-2016
Average
2017 2017 YTD 2018 YTD 2022
8
New
Owner
Sales
2017 VOI
Blue Thread
$44M
Open Market
$718M
• Owner acquisition channels are strong,
diversified, and a growth engine
• Generated more than $750M in new
owner sales and 36K new owners in 2017
$762M
Industry Leader in New Owner Sales$2.1B
Blue Thread Opportunity
• Rental: Renting 174 resorts on Wyndham.com
• On Property Marketing: In-hotel marketing at select WH&R locations
• Call transfer: Access to 11M annual phone calls
• Loyalty Data: Marketing to database of 60M+ Wyndham Rewards members and post stay guests
Aligned Demographic
>$100k 93% 69% 29% 15%
>$100k 94% 73% 30% 17%
Average Household
IncomeHomeowner Married Gen X Millennials
New Owners (< 5 Years)
60M+ includes anticipated impact of La Quinta acquisition
+20% VPG
9
17%16% 16%
22% 22%
25%24%
25% 25% 25% 25%24% 23.6% 24.1%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2017 YTD 2018
673
683691
725 725 725 725 725 725 725 727 726 726
12.5%12.7%
12.9%13.1%
13.3%13.5%
13.6%13.7%
13.8%14.0%
14.1%14.2%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
640
660
680
700
720
740
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Strong Credit Quality
Average FICO Score on
New Originations
Average Interest Rate
Maintain High Margins Across the Cycle
Wyndham Vacation Ownership Segment Adjusted EBITDA Margin
10
VOI Upgrade Sales
$1,078
Hospitality Services
$649
Vacation Exchange
$671
Consumer Finance
$463
Other
$947
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%$3,808
$3.6B loan portfolio;
Fixed interest rates
25+ years of data proves owners
consistently upgrade
Management fees from 200+ resorts;
98% contract retention
3.9M members paying annual dues;
85% retention~75% of Revenue is
RECURRING &
PREDICTABLE
~25% Primarily
New Owner Sales
11
High Free Cash
Flow Conversion
• Lower cash taxes with deferred
taxes on financed sales
• Access to ABS markets
• Disciplined capex
Capital Efficient
Inventory Model
• Moderate and consistent annual
inventory spend, ~$250M
• Strong ROIC
• Maximizes returns to shareholders
with ~90% of inventory sourced
through capital-efficient channels
12
Return of Capital to Shareholders
• Returned $237M to shareholders through dividends and share repurchases,
since June 1, 2018 through the end of October
• Total repurchases represented ~7% of market capitalization (a)
$44M $40M --
$15M $106M $32M
Month of June
(post-spin)
Q3
2018
Month of
October
Total Return
of Capital
13
DIVIDENDS
PAID
SHARE
REPURCHASES
$237M
(a) Market capitalization of $3.57B on October 31, 2018 with a share price of $35.88
Expected Further
Adjusted Free Cash Flow
Further Adjusted Full-Year 2018 Free Cash Flow
14
(a) Interest expense was calculated based on $3.0 billion of outstanding debt and assuming Wyndham Destinations is rated non-investment grade credit, resulting in higher interest rates for select tranches of notes; excludes non-cash interest expense.
(b) Based on an estimated cash tax rate of approximately 17%.
(c) Reflects the net change in vacation ownership contract receivables offset by the provision from loan losses and the net expected proceeds from securitization activities.
(d) Operating cash flow less capital expenditures. Does not include redundant personnel and related costs during the transition period.
($ in millions)
($109 - $113)
Changes in net working capital
Interest expense
$63 - $83
Expected Further
Adjusted EBITDA
Capital expenditures
($108 - $128)
Cash taxes
Net Consumer Finance activity
Net inventory spending
$952 - $960
($154 - $158)
($31 - $51)($28 - $48)
$555 - $575
Strong Balance Sheet
$19$64 $40
$250
$650
$400
$300
$884
$0
$400
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Debt Maturity Schedule (a)
($ in millions)
(a) Assumes revolving credit facility matures on May 1, 2025
Net Leverage: 2.9x
Target: 2.25x to 3.0x
WACD
~5%
WAM
~5.8 years
15
2018 Further Adjusted Guidance
16
Outlook is based upon September 30, 2018 foreign exchange rates
(a) Based upon 99.7 million diluted shares expected to be outstanding.
(b) Reflects projected growth over 2017.
(c) EBITDA sensitivities for revenue drivers are based on average systemwide trends. Operating circumstances including but not limited to brand mix, product mix, geographical concentration or market segment may result in
variability.
Revenues Further Adjusted EBITDA Further Adjusted EPS (a)
$3.925 - $3.975B $952 - $960M $4.77 - $4.85
Key Drivers (b)
Tours:
5% - 7%
VPG:
1% - 3%
Average Number of
Members:
1% - 3%
Exchange Revenue per
Member:
(2%) - 0%
EBITDA Impact of 100bps Change (c)
Tours:
$6.0M
VPG:
$9.0M
Average Number of
Members:
$4.5M
Exchange Revenue per
Member:
$7.0M
Consumer Finance Portfolio ($ in millions)
6%-8%
CAGR
Hospitality Services Revenue ($ in millions)
7%-9%
CAGR
Gross VOI Sales ($ in millions)
6%-8%
CAGR
Volume Per Guest (VPG)
0%-2%
CAGR
Number of Tours (in 000s)
5%-7%
CAGR
RCI Revenues ($ in millions)
1%-3%
CAGR
17
Key Drivers: Steady Mid-Single Digit Growth
The Company does not provide a reconciliation of 2018 – 2021 non-GAAP measures to the closest GAAP equivalent because the Company is unable to predict with reasonable certainty the totality or ultimate
outcome or occurrence of these adjustments or other potential adjustments that may arise in the future during the outlook period, which can be dependent on future events that may not be reliably predicted.
Total Revenue ($ in millions)
Adjusted EBITDA ($ in millions)
Free Cash Flow ($ in millions)
4%-7%
CAGR
4%-7%
CAGR
4%-7%
CAGR
Adjusted EBITDA Margins
18
Three Year Growth Outlook – Further Adjusted
The Company does not provide a reconciliation of 2018 – 2021 non-GAAP measures to the closest GAAP equivalent because the Company is unable to predict with reasonable certainty the totality or ultimate
outcome or occurrence of these adjustments or other potential adjustments that may arise in the future during the outlook period, which can be dependent on future events that may not be reliably predicted.
APPENDIX
789 794819
869
Number of Tours (in 000s)
$2,515 (a)$2,638 (a)
$2,772 (a) $2,774$2,881
Total Revenues ($ in millions)
$2,281 $2,257
$2,324 $2,345
Volume Per Guest (VPG)
$621$660
$708 $696
Adjusted EBITDA ($ in millions) (b)
(a) Does not reflect impact of the adoption of the new revenue recognition standard.
(b) Adjusted EBITDA is per Wyndham Worldwide’s definition.
3% CAGR
2% CAGR1% CAGR
3% CAGR
20
Historical FinancialsVacation Ownership
(a) Does not reflect impact of the adoption of the new revenue recognition standard.
3,6983,765
3,852 3,799
Average Number of Members (in 000s)
$856 (a) $864 (a)$880 (a)
$916$927
Total Revenues ($ in millions)
$229 (a)
$249 (a)
$241 (a)
$251$261
Adjusted EBITDA ($ in millions)
2% CAGR3% CAGR
Consolidated
$1,379 (a)$1,485 (a)
$1,604 (a) $1,601$1,684
Net VOI Sales ($ in Millions)
$3,372 (a)$3,503 (a)
$3,653 (a) $3,690$3,808
Total Revenues ($ in millions)
5% CAGR 3% CAGR
1% CAGR
21
Historical FinancialsExchange & Rentals
Appendix: Non-GAAP Reconciliations
2017
Further Adjusted Net Income $ 591
Benefit for income taxes $ (235)
Depreciation and amortization $ 131
Interest expense $ 130
Interest income $ (7)
Impairment $ 205
Stock-based compensation $ 36
Restructuring $ 14
Acquisition-related gain $ (12)
Assumed general and administrative cost savings $ 65
Other adjusting items $ (4)
Further Adjusted EBITDA $ 914
22
Wyndham Destinations Reconciliation of Further Adjusted Net
Income to Further Adjusted EBITDA ($ in millions)
Adjusted EBITDA is per Wyndham Worldwide’s definition and does not reflect the adoption of the new revenue recognition accounting standard.
VO Segment
Reported
EBITDA
Acquisition
Related
Restructuring
Costs
Loss on
Sale/Asset
Impairments
Executive
Costs
Separation
Costs
VO Adjusted
EBITDA
VO Adjusted
EBITDA
Margin
2017 $ 489 $ - $ - $ 205 $ 1 $ 1 $ 696 24%
2016 $ 694 $ - $ 8 $ - $ 6 $ - $ 708 25%
2015 $ 687 $ - $ 1 $ - $ - $ - $ 688 25%
2014 $ 660 $ - $ - $ - $ - $ - $ 660 25%
2013 $ 619 $ 2 $ - $ - $ - $ - $ 621 25%
2012 $ 549 $ 1 $ 2 $ - $ - $ - $ 552 24%
2011 $ 515 $ - $ (1) $ - $ - $ - $ 514 25%
2010 $ 440 $ - $ - $ - $ - $ - $ 440 22%
2009 $ 387 $ - $ 37 $ 9 $ - $ - $ 433 22%
2008 $ (1,074) $ - $ 66 $ 1,374 $ - $ - $ 366 16%
2007 $ 378 $ - $ - $ - $ - $ 9 $ 387 16%
2006 $ 325 $ - $ - $ - $ - $ 18 $ 343 17%
23
Appendix: Non-GAAP ReconciliationsVacation Ownership (VO) Further Adjusted EBITDA Reconciliation ($ in millions)
2018 2017
Q1 Q2 Q3 Q4 Full Year Full Year
Net revenues $907 $1,007 $1,062 N/A $3,925 - $3,975 $3,806
Adjusted EBITDA $189 $243 $269 $229 - $236 $931 - $938 $882
Separation adjustments (a) (5) (5) — — (10) (25)
Corporate and other costs (b) 13 11 1 6 – 8 31 - 33 57
Further adjusted EBITDA $197 $249 $271 $235 - $243 $952 - $960 $914
Depreciation and amortization (c) (31) (31) (29) (27 - 31) (119 - 123) (110)
Interest expense (d) (40) (40) (40) (38 - 42) (158 - 162) (160)
Stock-based compensation (9) (4) (3) (2 - 4) (17 - 19) (35)
Further adjusted pre-tax income $117 $174 $198 $162 - $170 $652 - $660 $609
Further adjusted taxes (e) (32) (49) (52) (43 - 46) (176 - 179) (164)
Further adjusted net income
from continuing operations$85 $125 $146 $118 - $126 $475 - $483 $443
Diluted shares outstanding 101.6 100.3 99.5 98.1 99.7 103.7
Further adjusted diluted earnings per share $0.84 $1.25 $1.47 $1.20 - $1.28 $4.77 - $4.85 $4.29
(a) Includes incremental license fees paid to Wyndham Hotels & Resorts and other changes being effected in conjunction with the spin-off.
(b) Represents the difference between corporate costs incurred and those expected to be incurred following the spin-off and transition period.
(c) Excludes amortization of acquisition-related intangible assets. Includes expected depreciation related to retained Wyndham Destinations' corporate
assets.
(d) Interest expense was calculated based on $3.0 billion of outstanding debt, excluding non-recourse vacation ownership debt, and a non-investment-
grade rating, resulting in higher interest rates for select tranches of notes.
(e) Assumes a stabilized effective tax rate of approximately 27% in all quarters, prior to the spin-off, which occurred in the second quarter of 2018. The
rate used for 2017 reflects the benefit of the tax rate reduction resulting from the U.S. Tax Cuts and Jobs Act. 24
Note: Amounts may not add due to rounding. The Company is providing guidance for net
income, EBITDA and diluted EPS only on a non-GAAP further adjusted basis because not all
of the information necessary for a quantitative reconciliation of forward-looking non-GAAP
financial measures to the most directly comparable GAAP financial measures is available
without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount
of these adjustments or other potential adjustments that may arise in the future. Unavailable
reconciling items could significantly impact the Company’s financial results.
2018 Further Adjusted Guidance (in millions, except per share amounts)
Non-GAAP Measure: Reconciliation of Gross VOI Sales
25
2018 Q1 Q2 Q3 Q4 Full Year
Gross VOI sales $ 465 $ 602 $ 640 N/A N/A
Less: Sales under fee-for-service (15) (14) (5) N/A N/A
Gross VOI sales, net of fee-for-service sales 450 588 635 N/A N/A
Less: Loan loss provision (92) (126) (132) N/A N/A
Net VOI sales $ 358 $ 462 $ 503 N/A N/A
2017
Gross VOI sales $ 438 $ 562 $ 600 $ 538 $ 2,139
Less: Sales under fee-for-service (3) (5) (11) (15) (35)
Gross VOI sales, net of fee-for-service sales 435 556 589 523 2,104
Less: Loan loss provision (85) (110) (123) (101) (420)
Net VOI sales $ 350 $ 446 $ 466 $ 422 $ 1,684
(in millions)
The Company believes gross VOI sales provide an enhanced understanding of the performance of its vacation ownership business because it
directly measures the sales volume of this business during a given reporting period. The following table provides a reconciliation of Gross VOI sales
to Net VOI sales:
Non-GAAP Measure: Free Cash Flows and Further Adjusted Free Cash Flows
26
(in millions)
Nine Months Ended September 30,
Continuing Operations 2018 2017
Net cash provided by operating activities $ 205 $ 264
Less: Property and equipment additions (63) (76)
Less: Sum of proceeds and principal payments of non-recourse vacation ownership debt 94 (146)
Free cash flow from continuing operations $ 236 $ 42
Corporate and other costs (a) 27 145
Separation adjustments 93 --
Further adjusted free cash flow from continuing operations $ 356 $ 187
Discontinued Operations
Net cash provided by operating activities $ 150 $ 400
Less: Property and equipment additions -- --
Less: Sum of proceeds and principal payments of non-recourse vacation ownership debt -- --
Free cash flow from discontinued operations $ 150 $ 400
Corporate and other costs (a) -- --
Separation adjustments -- --
Further adjusted free cash flow from discontinued operations $ 150 $ 400
Total further adjusted free cash flow $ 506 $ 587
(a) Includes incremental license fees paid to Wyndham Hotels & Resorts and other changes being effected in conjunction with the spin-off including corporate costs that reflect the Company’s position as if the spin-off had occurred for
all periods presented.
Appendix: DefinitionsAdjusted EBITDA: A non-GAAP measure, defined by the Company as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest
income (excluding consumer financing revenues) and income taxes, each of which is presented on the Condensed Consolidated Statements of Income. Adjusted EBITDA also excludes stock-based compensation
costs, separation and restructuring costs, transaction costs and impairments, and items that meet the conditions of unusual and/or infrequent. We believe that Adjusted EBITDA is useful to assist our investors in
evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods. We also internally use these measures to assess our operating performance, both
absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other
income statement data prepared in accordance with GAAP and our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
Further adjusted earnings measures: A non-GAAP measure, defined by the Company to exclude certain items including impairment charges, restructuring and other related charges, transaction-related items,
contract termination costs and other significant charges which in the Company's view does not reflect ongoing performance. Further adjusted earnings measures adjust for license fees, credit card income and
corporate expense to reflect the performance of the Company as if it were separated from Wyndham Hotels & Resorts during all reported periods. All further adjusted earnings measures are reported from continuing
operations, unless otherwise noted. Wyndham Destinations believes that these measures are useful to investors as supplemental measures in evaluating the aggregate performance of the Company. A full
reconciliation of non-GAAP measures to GAAP are included in Table 5.
Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interests (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.
Tours: Represents the number of tours taken by guests in our efforts to sell VOIs.
Volume Per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. The Company has excluded non-tour upgrade sales in the
calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.
Average Number of Members: Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or who are within the allowed grace period. For additional fees,
such participants are entitled to exchange intervals for intervals at other properties affiliated with the Company's vacation exchange business. In addition, certain participants may exchange intervals for other leisure-
related services and products.
Exchange Revenue Per Member: Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided
by the average number of vacation exchange members during the period.
Free Cash Flow (FCF): A non-GAAP measure, defined by the Company as Net Cash provided by operating activities less property and equipment additions which the Company also refers to as capital expenditures and
less the sum of proceeds and principal payments of non-recourse vacation ownership debt. The Company believes free cash flow to be a useful operating performance measure to evaluate the ability of its operations
to generate cash for uses other than capital expenditures and, after debt service and other obligations, its ability to grow its business through acquisitions, development advances and equity investments, as well as
its ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measures of net cash provided by operating activities as a means for evaluating
Wyndham Destinations is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.
Net Debt: Net debt equals total debt outstanding, less non-recourse vacation ownership debt and cash and cash equivalents.
Leverage Ratio: The Company calculates leverage ratio as net debt divided by Adjusted EBITDA.27