Travel + Leisure Co.

Good morning, and welcome to Wyndham Destination's third quarter 2019 earnings conference call. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key on your telephone keypad. As a reminder, ladies and gentlemen, this conference call is being recorded. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Chris Agnew. Please go ahead.

Thanks, Katherine. Good morning and welcome. Before we begin, we'd like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and the forward-looking statements made today are effective only as of today. We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings, and you can find a reconciliation of the non-GAAP financial measures discussed in today's call and our earnings press release on our website at investor.windhamdestinations.com. This morning, Michael Brown, our President and Chief Executive Officer, will provide an overview on our strategic initiatives and our third quarter results. And Mike Hugg, our Chief Financial Officer, will then provide greater detail on our results and discuss our outlook. Following these remarks, we will be available to respond to your questions. With that, I'm pleased to turn the call over to Michael Brown.

Thank you, Chris. Good morning, everyone, and thank you for joining us today. We're happy to report the third quarter was another strong quarter. demonstrating the strength of our business model, cash flow generation, and commitment to returning cash to shareholders. This morning, we reported third quarter adjusted earnings per share of $1.57 versus our 146 to 154 guidance. We reported adjusted EBITDA of $267 million, and year-to-date adjusted free cash flow of $466 million. For the full year, we are increasing guidance for adjusted EPS and adjusted free cash flow. We are narrowing our adjusted EBITDA guidance after updating for the impact of Hurricane Dorian. Gross VOI sales in the third quarter increased 4% over the prior year on a 4% increase in tours. We also had sequential and year-over-year improvement in our loan loss provision to 20.3% of gross VOI sales. Since our last earnings call, we closed on two strategic transactions. Last week, we sold Wyndham Vacation Rentals to Vacasa for $162 million. On August the 7th, RCI acquired Alliance Reservations Network, or ARN, for $102 million. ARN is a travel technology platform that will enable us to provide integrated travel services and value-added benefits to RCI and other closed user groups. This acquisition enables RCI to build a vertically integrated travel business by enhancing the value proposition of its core business and opening doors to business-to-business diversification and new channels of growth. These two transactions demonstrate our commitment to the growth of our core business by optimizing the allocation of resources strategically across the enterprise. We're very excited about the acquisition of ARN. The business provides the platform and technology to enable RCI to expand its membership business, which is core to our strategy. The integration of ARN is well underway, and we continue to unlock new efficiencies and opportunities between our businesses. RCI already has programs in development to improve the customer experience. One such program we have implemented is our Deposits Plus Cash program, allowing greater flexibility for our exchange members. Deposits Plus Cash is a program where our RCI members can purchase accommodations through ARM with a combination of RCI currency and cash. RCI's other initiatives that focus on improving the customer experience by simplifying the booking process and offering more travel alternatives continue to gain momentum and helped improve the revenue per member trend. Let me now switch gears to discuss a key strategic partnership, which is important for our growth. In September, we announced that we extended our marketing relationship with Caesars Entertainment through 2030. Caesars is an outstanding partnership that supports our open market platform of nearly $800 million in new owner sales. This relationship has generated significant value to us over the 20 years Caesars has been a partner. and last year alone delivered approximately 40,000 tours to our Las Vegas sales offices. This 10-year renewal secures a significant new owner tour pipeline going forward. Our Wyndham Vacation Club's customer and owner engagement initiatives continue to progress and pay dividends. We saw growth in new owner transactions to the Gen X and Millennial segments, continued growth in our Blue Thread initiative, and had consistent, strong growth in owner arrivals and sales. Year-to-date, owner arrivals increased 41,000, which was 8% higher than the prior year. This success with owner arrivals does have a natural dilution to our new owner sales mix. This was amplified over the important Labor Day weekend due to Hurricane Dorian. We remain confident in new owner sales and are generating enough new owners to achieve our long-term sales objectives. So far this year, we added 29,000 new owners and increased new owner tours by 4% in the quarter. 68% of new owner sales are to Gen X and Millennials, which is 20% growth year-over-year in the quarter and 18% year-to-date. And last, Blue Thread sales continue to be strong, increasing 24% in the third quarter and 29% year-to-date. This strategic partnership with the Wyndham Rewards Program continues to drive more engaged customers who deliver over 25% higher VPGs than overall new owner VPGs. Our long-term strategy of new owner growth will continue to occur as new sales centers and marketing locations ramp. Switching to capital allocation, we demonstrated once again our commitment to returning cash to shareholders with $371 million in dividends and share repurchases year-to-date through October the 29th. Since the spin in June of 2018, we have now returned 17% of our market cap to shareholders in 17 months. We are committed to our quarterly dividend, which expresses confidence in our ability to consistently generate free cash flow. And in the absence of compelling transactions, we believe the best use of excess free cash flow remains share repurchases. Since we laid out our initial guidance in 2019, we have increased free cash flow twice, totaling $25 million. This encompasses our commitment to generate free cash flow while identifying efficiencies in our business. To conclude, I would like to reinforce three major takeaways from our recent performance. First, we closed on two strategic transactions that were important milestones for RCI and Wyndham destinations. Second, Blue Thread sales increased 24% in the quarter and are up 29% year-to-date. And lastly, regarding our outlook for the full year, we are increasing our adjusted net income, adjusted EPS, and adjusted free cash flow guidance. With that, I would like to hand the call over to Mike Hugg.