Travel + Leisure Co.

Greetings. Welcome to Travel and Leisure, fourth quarter, 23 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Michael Hugg, Executive Vice President and CFO. Thank you. You may begin.

Thank you, Sherry, and good morning to everyone. Before we begin, we'd like to remind you that our discussions today 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 in our earnings press release accompanying this earnings call. And you can find a reconciliation of the non-GAAP financial measures discussed in today's call in the earnings press release available on our website at TravelMeasureCo.com slash investors. This morning, Michael Brown, our President and Chief Executive Officer, will provide an overview of our fourth quarter full year results and outlook. And then I will provide greater detail on the quarter, our balance sheet, and outlook for the rest of the year. Following our prepared remarks, we will open up the call for questions. With that, I'm pleased to turn the call over to Michael Brown.

Good morning, and thank you for joining us. As you saw from the press release, we had a solid finish to the year with fourth quarter adjusted EBITDA of $240 million, a 7% increase over the prior year. Adjusted diluted earnings per share was $1.98, inclusive of a 37-cent income tax benefit, which Mike will discuss. Excluding this benefit, our adjusted EBITDA adjusted earnings per share growth would have been 24% over Q4 2022. Our full year 2023 results reflect an intense focus on organic execution, delivering 5% year-over-year top line growth, 6% year-over-year adjusted EBITDA growth to $908 million, 10% adjusted EBITDA growth in vacation ownership, our core business segment, reflecting strong consumer demand for our product and great execution by our teams, and 26% adjusted EPS growth over the prior year. Excluding the Q4 tax benefit, our adjusted earnings per share growth would have been 18%, reflecting in part our strong continued commitment to share repurchases. For the second consecutive year, we returned approximately 15% of our market capitalization to shareholders. That brings our cumulative capital return to shareholders since then to over $2.1 billion. Now let me review the operational highlights from the quarter and full year and touch upon how we're positioned for growth in 2024 and beyond. I'll begin with our core business, vacation ownership. In a year that demonstrated the stabilization of domestic leisure travel demand, our VOI business delivered fully to the 2023 guidance that we laid out last February. Gross VOI sales in the fourth quarter increased 4% year-over-year to $540 million, with a VPG of $3,058. For the full year, gross VOI sales increased 8% year-over-year to $2.15 billion with a VPG of $3,128. We delivered both gross VOI sales and VPG at or above the middle of our 2023 expectations, a credit to our sales and marketing teams. Tours increased 17% year-over-year in the fourth quarter and 18% year-over-year in for the full year. We made great progress last year in sourcing and securing new owners. As we mentioned in last quarter's call, we have been investing in new owner marketing channels, focusing on both additional marketing packages for future stays, as well as adding new off-premise marketing locations. The results have been strong, with new owner transaction mix improving 330 basis points in the fourth quarter. and 240 basis points for the full year. In our experience, new owners in the system spend, on average, an additional 2.6 times their initial purchase during their ownership, giving us a large, reliable revenue pipeline. Our receivables portfolio continues to perform well. The portfolio grows naturally with sales but we are accelerating that growth somewhat while maintaining our tightened credit standards to help offset higher interest expense. We expect the provision to remain below 19%. Turning to travel and membership, we reported fourth quarter adjusted EBITDA of $52 million, above the range of $45 to $50 million we shared on our October third quarter call. We completed our cost realignment during the quarter and feel confident that we have right-side the business to execute our plan and fully leverage future opportunities. With these changes, we expect Travel and Membership adjusted EBITDA to grow low single digits in 2024, providing recurring revenue, high margins, and strong free cash flow. In addition to strong organic execution in 2023, We were excited to announce the acquisition of the rights to the Sports Illustrated vacation ownership business in September. It represents an opportunity to drive incremental growth for years to come with the most celebrated name in sports. So far, we have announced our first resort in Tuscaloosa, Alabama, home of the University of Alabama, which is expected to open in late 2025. The Sports Illustrated Club will be immaterial to 2024 earnings, but will support our long-term growth. We look forward to announcing more locations at universities and leisure destinations in the months and years ahead. Last month, we announced the addition of a core to our vacation ownership portfolio, which already includes Wyndham, Margaritaville, and as noted, Sports Illustrated. This was the second significant milestone in executing our multi-brand strategy in less than six months, demonstrating great momentum. It is further affirmation of our ability to be a trusted steward of world-class hospitality brands for vacation ownership development. The agreement gives us the exclusive license to grow the Accor Vacation Club brand, utilizing the travel and leisure global platform. The acquisition will have 24 resorts, 30,000 members, and finished inventory to our Asia Pacific region. It lays the groundwork for economic benefits for years to come, providing revenue streams from sales, resort management, and consumer finance. We expect to close the transaction next month, and I couldn't be more pleased to welcome Accor to the Travel Leisure brand family. Mike will review guidance in a moment. But let me first share some color on the key performance indicators we monitor to gauge the health of our consumer. Forward resort bookings, sales volume per guest, and the performance of our consumer finance portfolio. Regarding forward bookings, 2024 owner nights on the books are ahead of 2023, reflecting continued robust consumer demands. VEGs are normalizing from post-pandemic pent-up demand for leisure travel, but remain at the high end of our 2021 investor day range and 30% above pre-pandemic levels. And finally, as I mentioned earlier, our continued focus on credit quality has resulted in a portfolio that continues to perform to our expectations. To summarize, we were pleased with our performance and execution in 2023, We delivered our full year plan with 5% top line growth, 6% adjusted EBITDA growth, and 26% adjusted EPS growth. We returned a significant amount of capital to shareholders, paying $136 million in dividends, and repurchasing 7.8 million shares of stock. These results were achieved by the strength of our business model and by an intense focus on organic execution by our associates around the world. I want to thank each and every one of them. For 2024, we are off to a solid start with a strong foundation in our core vacation ownership business and a clear line of sight for execution in the travel and membership segment. Reflecting our confidence in the future, we intend to recommend to the Board a first quarter 2024 dividend increase to 50 cents per share. This action supports our continued commitment to use our significant free cash flow generation to drive shareholder value through increased dividends, strategic M&As should opportunities arise, and continued share repurchases. The ability to generate and effectively utilize our free cash flow, combined with our proven track record of organic execution, leave us excited about the opportunities ahead. For more detail on our performance and outlook, I would now like to hand the call over to Mike Hugg. Mike.