All right. I think we can go ahead and get started. It is right at 9:15 A.M. So good morning, and thank you so much everyone for joining us here at this next session at the Goldman Sachs Global Consumer and Retail Conference. My name is Lizzie Dove. I cover gaming, leisure, and lodging here, and it is my absolute pleasure to welcome Erik Hoag, CFO of Travel + Leisure, and Andrew Burns, Vice President at Investor Relations. Thank you so much for taking the time to be here. We really appreciate it. Lizzie, thanks for having us. Yeah. Let us start off. Of course, there is always the quarterly puts and takes, but just stepping back for a second. T+L has been very consistent. It has been consistently a mid-single digit EBITDA grower. EPS has been in the double digits. You have recently done a couple of acquisitions. When we step back for a second and think about the next 12 to 24 months, how do you think about the sustainability of that algo? With these acquisitions, or anything else, has anything structurally changed at all in that outlook? Well, thanks for having us, Lizzie. Maybe I just zoom out a little bit and talk about our performance year to date. I think that that is maybe just to ground everyone in terms of how we are doing. In the first quarter, we outperformed our sales above the high end of our guide. In EBITDA, we outperformed the high end of our guide. In our second quarter results, revenue grew 4%, EBITDA grew 8%, earnings per share was up 14%. Again, sales above the high end of our guide, EBITDA above the high end of our guide. Then maybe even more interesting in terms of the first six months of the year, Lizzie, than the P&L, or equally as important, is what we have done from a balance sheet and capital allocation perspective. We've increased our dividend by 7% year-over-year. We've increased share buybacks by 25% first half to first half. We've reduced our leverage by one quarter turn, and to your point, in the month of July, we added in two tuck-in M&A transactions. We've had a great start to the year. In terms of the algorithm, to your very specific question, we're already living inside the algo o ur algo is sales growth of 6%-8%, translating into mid-single digit EBITDA growth and teens EPS. Yep. Converting roughly 50% of that EBITDA into free cash flow. Over the next 12 months, we are absolutely focused associated with continuing to execute against the core algo. We want to integrate our M&A transactions. Yep. We've got a heavy focus associated with launching our new brands. All of that under the umbrella of continuing to be thoughtful allocators of capital to our shareholders. Definitely. There's a lot of interesting points you made there that I certainly want to come back to. But maybe before we go into some of the segments, we're at the consumer conference, we're going to hear from a lot of different consumer verticals here. I'd love to hear from you, from your vantage point, what do you think about the health of the consumer right now. As we've progressed over the summer, there's been some puts and takes this year, tax refunds, good guy, higher gas prices, bad guy. What are you seeing. Has there been any kind of divergence between cohorts or anything that you call out as we go into this back-to-school season? Yeah. When I think about Travel + Leisure, our consumer continues to perform pretty well. Again, zooming out a little bit, whether you go back to Liberation Day during the second quarter of 2025, where again, we sort of outperformed the guide numbers that we had in that period. Whether you go back to the first part of this year when things opened up in the Middle East, or look at the summer. We continue to perform on top of choppy macro, but our consumer continues to be very durable. If you look at some of the KPIs under the hood at Travel + Leisure, whether it is length of stay, our booking window, the distance traveled to our resorts, tour flow. Yeah. We continue to see positive tour flow. We continue to see guests arrive at our properties, tour, and purchase our product. Yep, definitely. Yeah. I think one of the selling points also of just timeshare generally as an industry has been that it is pretty resilient overall. It is kind of prepaid vacations, and so can weather the storm a lot easier usually. Could you maybe talk a little bit about that, of just A, if the macro does worsen, how you think about levers, and B, now there is a lot of talk about rates and timeshare is an industry that maybe is not totally positively correlated with that. I would love to hear your thoughts there. Yeah. So in terms of levers and things that we could do, number one, I would come back and say we continue to perform on top of choppy macro environments. I think the value proposition of our product, where it is a prepaid vacation, where roughly two-thirds of our transactions go to existing owners versus new owners. We create a value proposition for our consumers that is very attractive. And when things do get a little bit more expensive for them- Yeah. they have the fallback to be able to visit our properties, enjoy vacation, very low cost. And again, what that does for us is it gives us the opportunity to get them on tour and potentially upsell those customers. In terms of levers that we have, if things were to get much more protracted, again, I would look at whether it's Liberation Day or the GFC or COVID, the Travel + Leisure businesses continue to perform extraordinarily well. We've got a number of levers that we could pull. We could certainly look at marketing and demand quality. We could look at timing associated with our development projects. We could look at consumer financing in terms of promotions or pricing. Then obviously the last thing would be we could look at cost. But those are things that we haven't had to take into our purview because the business- Yeah. has performed so consistently over time. I was going to say, we're certainly not there yet. You've been kind of consistently, as you said, growing BOI around 6%-8%. It's interesting because there's been this debate of what's the right level of tour growth versus VPG growth and the kind of puts and takes there, and obviously the resort optimization may be slightly complicated things there, but how do you think about that balance longer term going forward? Yeah, I think you used the right word. It's balance. VPG, tour flow, both super important metrics for us. At the end of the day, we're looking for qualified tours and we're looking for exceptional sales execution. In some years you might see us move new owner transactions up a little bit, which puts a little bit of pressure associated with VPG. Yeah. Then, in other years you'll see the opposite. But for us, it's really all about having a balanced approach to the business. Yeah. With that 6%-8% that you have been doing, it sounds like it is still your target. Does tour growth need to accelerate to get there, or can it be more VPG driven over time? I think about the long term, 6%-8% really is having positive tour flow. Positive tour flow with a mix roughly of one third, two thirds between new owners and existing owners. Yeah. Okay. On that topic of the new owners versus existing owners. Q2, I believe your new owners, or at least as a percentage of the mix, they accelerated again. When you are now here, I think still in the low 30s range, is that the right place that you want to be, or is there a drive or a need to move higher to that over time? Yeah. I'll come back and point back to the one third, two thirds. Okay. The one third, let's say low to mid-30s allows us to continue to sustain the model and feed the top of the funnel with new owners. One of the great things about our business, Lizzie, is that we have found that when we capture a new owner, we will typically upgrade them 2.5x over the first 10 years of their ownership. So two thirds of our transactions come from existing owners, but continuing to feed the top of the funnel and get that healthy upgrade cycle going on new owners is also very important. Makes sense. Has anything changed about that over time? As you think about getting back to right at that one third, like the real 33%, is that something that we should be watching out for as kind of how we think about how that translates in the mix in terms of VPG, I suppose? I would say it hasn't really changed over time. I think the one third, two third is the right place to be. Again, it feeds the funnel. Again, when you do see us in periods where new owner mix is a little bit higher, new owner transaction purchase price, average purchase price, a little bit lower. So it does put a little bit of pressure on VPG. But again, the word of the day associated with VPG and tour flow is really about ensuring that we have balance. Yeah. Makes sense. Let's switch gears then. Think about resort optimization. You announced that earlier in the year, and by all accounts seems to have been incredibly successful. Before we get into what you've done so far there, I'd love to hear, are you done post of this? Was this a one and done situation or are there other pockets of opportunity of other resorts where you could maybe optimize the portfolio over time? Yeah. The resort optimization initiative, for those maybe new to the story, was an opportunity where Travel + Leisure went in and we took 17 properties out of the network. These are properties that are a little bit older. The occupancy was a little bit lower, customer satisfaction, a little bit lower. And then there was some deferred maintenance that needed to be done. Yeah. More than just your typical deferred maintenance, but a little bit heavier deferred maintenance. We took them out of the network, and it did a couple things to the P&L. There were some sales centers there, so we expected sales to step back, which it really didn't do. Yeah. Property management fees went down, as we didn't have seven members, so we had 17 less resorts. Then we had lower carry costs. These are properties that also had inventory- Yeah. which meant that inventory on our balance sheet and carry cost that ran through the P&L. The 17 resorts coming out top graded the portfolio a little bit. Then you mix in 23 properties associated with M&A, and I'm sure we'll get to M&A here later on. But the portfolio at T+L from January to the end of the year has transformed quite a bit. Yeah. We've taken out the 17 with resort optimization, and then we've done some M&A that's added in 23 resorts. Coming to your question, are we done with it? I think the 17 resorts was a little bit of a catch-up in 2026. Yep. I think we'll always be thoughtful around making sure that we've got a very attractive portfolio for our owners top to bottom. Yeah. Where are you in that process with the resort optimization, and has there been anything that has surprised you as you have been going through that over the last six or so months? Yeah, it is predominantly done. Yeah. We have got the cost out in 2026. I think the one thing that has surprised me is the resiliency of the sales organization. When we guided to the full year back in February, we had talked specifically about there being roughly $100 million sales headwind. Yep. associated with these sales centers that were taken out of the network. As I mentioned, in the first quarter we had sales that were above the top end of the guide, second quarter sales above the top end of the guide. Our sales organization is operating at a very high level right now. Despite those fewer sales centers, we are actually operating inside the long-term algo for sales. Yeah. So it sounds like productivity higher, maybe redirection of sales even without all of those kind of- That is right. Yeah. Okay. Awesome. Acquisitions. You kind of alluded to it earlier, there's the two, the Yes& Vacations and the Spinnaker Resorts that you announced a couple of months ago. It seems like it's more tuck-in M&A, although it's not small by any means. I think it's increasing your owner base by around 10% or so, if I'm not wrong. Could you maybe remind us how to think about, or how you thought about the strategic rationale and why these two assets specifically made sense? Yeah. So it's really the first M&A of consequence since TNL spun out from Wyndham Worldwide in 2018. Yeah. There was a couple things that were important to us as we started to look at M&A. Number one, we were looking for transactions that were going to be immediately accretive. Immediately incremental to our financials. Second, we were looking for an owner base. Yeah. To your point. Pre-acquisition, we had about 800,000 owners. The two transactions brought 100,000 new owners with them. Immediately accretive, an owner base that we can upsell and monetize. The third thing was locations. Right? One of the transactions brought us Hilton Head Island that we weren't in. Oh, yeah. The other transaction brought us on the West Coast, Maui. Yeah. Which we weren't in as well. So they were accretive to our map. The fourth thing that we looked for was transactions that had low risk of integration. Or maybe even said a little differently, Lizzie, high confidence in terms of value realization. Yeah. I think we found those with these two transactions. The last thing was transactions that had very little balance sheet intensity. Yep. These two transactions, it is about two-tenths of one turn of leverage. These two transactions, they passed every one of the criteria. Accretive, approximately $50 million of incremental EBITDA in the first year. 100,000 owners, resorts that we did not have footprints in. Integration complexity, very low. Yep. Roughly two-tenths of a turn of leverage. Makes sense. You mentioned the $50 million of incremental EBITDA in year one. I am curious how you think about both just medium term of the revenue synergies and the cost synergies, but also just longer term, I imagine there is a big owner upsell opportunity there. Could you walk us through how you think about that and how that could phase over time? Yeah. I think you framed it really well, Lizzie. I think that there is three pieces to it. There is the base case associated with the two companies. We are going to continue to sell the arrivals that come. We are going to continue to try to upgrade the existing owners. The second thing would be the operating expense synergies that we believe we can get out. It is really these first two things that aggregate to the $50 million. Yep. Again, high confidence of delivery. Let us call that the base case. This third piece over here, it is the long tail of owner upgrades. Yep. Which, again, I will come back and say that Travel + Leisure has got a pretty predictable pattern of being able to upgrade a new owner about 2.5 times over the first 10 years of ownership. We have now got 100,000 owners that we can begin to sell into the network. Yeah. That is really the important point is instead of having a fixed unit in Hilton Head or Las Vegas or Maui, they now have the ability to enter into the network where they can use the entire 300 resort footprint across Travel + Leisure, and instead of it being a fixed week, they can travel when they want to and effectively where they want to. Yeah. Makes a lot of sense. As you said, it has been a while since TNL has done M&A like this. When you are thinking about that propensity to upgrade and the integration process, what gives you the confidence of that? Even since you have announced it, I know it is early, but could you give us an update of where you are at in that cycle? Yeah. It has gone well. It has been about six weeks. Yeah. We are in the process of really ensuring that the employees feel branded- Yeah. under TNL. As we move deeper into the budget season, I think that that third piece around what the incremental upgrade opportunity could look like is going to become more and more in focus. The reception has been great from an employee perspective. The reception has been great from an owner perspective. Yeah. We are certainly excited about it. Yeah. We see you have this multi-brand strategy, and it has been, by all accounts, I think, very successful in what you have been able to do with Margaritaville, for example, and Accor, and I think it is now a pretty big piece of your overall business. I think it is around 10% or so. Where can that go over time, and how do you think about that? Yeah. Travel + Leisure, we operate under six brands. If you think about the six brands, I might break them up into three different categories. We have got two legacy brands, which is Club Wyndham and WorldMark. Yep. The majority of our sales come here, continues to perform extraordinarily well. We've got two growth brands that over the last three or four years have continued to perform extraordinarily well. This is Margaritaville and Accor Vacation Club. Yep. We've got two emerging brands. This is Sports Illustrated and Eddie Bauer. I think what makes us feel really comfortable and confident in the longer term outgo is that we're going to run the same playbook for Sports Illustrated and Eddie Bauer that we ran with Accor and Margaritaville. Yeah. We introduced the percent of revenue for those four brands, the four being Accor, Margaritaville, Sports Illustrated, and Eddie Bauer. I think that as we move deeper into 2027, you're going to see that number grow. Yeah. If you think about the kind of economics or even just the demographics of these different brands, how should we think about that? Is it vastly different, one brand versus another? When you add a brand, does that really broaden your demographic? I am just curious, the real key differences in how that shows up in the economics of it all. Yeah. What we are trying to do is we are trying to grow TAM. Yeah. At the end of the day, we are trying to find brands with consumer affinity that we can widen the top of the funnel. Coming back to some comments early on, roughly one third of our transactions go to new owners. Yep. As we think about Sports Illustrated and Eddie Bauer and Margaritaville, we are trying to attract a new owner. A different demographic. A younger demographic, because we do believe it is a differentiated product. At the end of the day, what we really want is a wider TAM with more owners. Yeah. Makes sense. Maybe we pivot a little bit to provisions for a second, because it feels like that it has been a huge topic for the industry and, what you said at Q1 got a lot of focus, then things really seemed to improve a lot at Q2. Stepping back of now what you have seen now, nine months into the year, I guess, was Q1 just noise? How do you feel about where things sit today from a provisioning standpoint? The first quarter, I would say, was more about transparency. Right. than alarm. Yes. I think that's what I would say about the first quarter. In the second quarter, we saw our delinquency rate move back to the seasonal curve plus some. About double the change from 12/31 to 6/30, so we saw that improvement. What we have seen over the last two months, the first two months of the third quarter, is very consistent with what we said in the second quarter call. Yeah. Perfect. I think your LLC pool is going to be in that kind of 21% range when all is said and done this year. I think you have been consistent in saying that upper teens is maybe the longer term goal. Is that still true today, and what are the kind of moving pieces that gets you to that upper teens level? Yeah. A couple things. I mentioned early-stage delinquencies, but if we actually pivot over to the loan loss provision, we guided to be down year-over-year. We did that in February. In April, we guided to be down year-over-year. In July, we guided to be down year-over-year. Here in September, we are guiding to be down year-over-year. We have got a very consistent message associated with the provision. Yep. We are doing a couple things to help drive it down. Number one, we have got a tremendous amount of focus associated with the credit quality at the point of sale. As you would expect. We have got average FICO's as of 6/30 of about 740. We have got an average household income about $130,000. Maybe that is the first thing. The second thing is we are maniacally focused associated with owner engagement. Yep. When we secure a new owner, we want to get their first vacation booked very quickly. Most of our purchases come while they are on vacation. Yep. It is important that we get them back their next vacation scheduled. Then the third thing, quite frankly, Lizzie, is we are trying to improve the servicing and collections processes within the organization. I think that those are the three things, credit quality at the front, owner engagement, and operational excellence. Yeah. Correct me if I'm wrong, but I think the recent acquisitions maybe carry a slightly higher provisioning rate. How do you think about that? Is there a path to as you integrate those brands, then moving them closer to what legacy T+L provisioning rate is? What does the process for that look like? That's exactly right. We will provision at the point of sale based on the demographics of the customer that sold. Over the next several quarters, as we continue to integrate these businesses into our underwriting, into our servicing, into our collections environments, we would expect that the provision on the acquired portfolios to mirror- Yep. the provision of HoldCo. Yep. Over time. Or T+L. Yeah. Mm-hmm. We have touched a lot on the vacation ownership segment. Maybe we will just spend a moment on travel and membership, which, not a surprise to anyone, has faced some structural challenges for reasons that are very well flagged across the industry. How do you think about that long term? Is the goal to find levers, whether that be cost wise or anything else, to stabilize that business, or is there more of a structural different solution on the table over time? Yeah. Maybe even zooming out a little bit. The travel and membership business has got 3.3 million subscribers. We have got scale to begin with. We guided the business to be down roughly double digits at the start of the year, and that is generally where we have moved. In terms of a couple things that we are working on, we are trying to create value for those 3.3 million subscribers. Yep. Right? These are people who have got timeshare points, and we want to ensure that we're creating value for them. Late last year, we created a way where these timeshare vacationers could redeem their points for cruise vacations. For example. Trying to increase the selection of things that they could redeem their points on is one thing. Yep. The second thing, Lizzie, is as this business continues to have headwinds at the top line, we continue to be very focused associated with what we're doing on the cost side. Yep. On the investment side. Trying to be very thoughtful there. Yeah. Makes sense. Before we get into some of the capital allocation and balance sheet questions, if I sum up everything I have heard from you, and I do not want to put words in your mouth, what I am hearing all sounds very good. We have M&A that is going to be coming through the system, loan loss provisions, there is space for that to go lower over time. There is the benefit from resort acquisition, so it feels like that is a lot of tailwinds as we come into 2027. Would you agree with that, or are there other puts and takes when we think about, again, the drivers of that ALGO that would be an offset, I suppose? No, I would agree. I think the business has got a lot of momentum. Yeah. Whether you look at 2025 or you look at 2026, some of the macro things that have occurred, the business has continued to perform very well. We continue to add to the owner counts. We continue to focus on thoughtful capital allocation, to your point. We are very focused around the quality of the resort footprint that we have. Whether it is through resort optimization initiative or through M&A. I think about 2027 very much like living inside the algo- Right. with the benefit of some M&A. Yep. Totally. I wonder about from a margin perspective, I feel like your margin growth has also been fairly consistent over time. Is there any low-hanging fruit left, or where are there opportunities as you think about where that kind of margin goes over time? Yeah. We are living in the mid-20s right now. Yeah. I think that that's a fair place for, as you're thinking about 2027, I think that's Yep. a fair place to be. Yep. Okay. On the cash flow side, I think that's also somewhere you've been very consistent of the, call it, mid 50% or so range in terms of conversion. As the business mix evolves, maybe there's a benefit of scale, you work through some of this inventory. Is there a reason that couldn't move a little higher over time, or how do you think about that? What are the key swing factors, I suppose? Yeah. First, I think 50% is a fair place to be. Roughly half. Last year we were at 52% free cash flow conversion. I think roughly 50% or half is the right way to be. The swing factors, development spend, working capital consumer finance. We've got a couple of things that swing one way or another. But more than anything else, Lizzie, I don't want to constrain development spend- Right. to try to hit- Yeah. an in-period conversion rate. We've got a very disciplined approach to capital allocation, and I think 50% is a fair place to be over the cycle. Yep. On those swing factors, inventory has been a topic, I think ever since we've moved through COVID for the industry. Where would you say you're at now? Are you back to the kind of level that you want to be from an inventory perspective? I'd say three, four years- Yep. of inventory right now. I would say aspirationally, maybe closer to two at the brand level. Okay. Yeah. Makes sense. Let's tie all this together and just from a balance sheet and capital allocation perspective. As you said earlier, this has really been tuck-in M&A, and you've been able to do that without really slowing down the buybacks at all, and you've been able to delever over the last few years. Sitting here today, I guess, how do you think about that over time? Is this the right algo from a buyback perspective, for example, or is there a room for that to change over time? Yeah. From a capital allocation perspective, maintaining a healthy balance sheet is priority number one. We ended 2025 with leverage of right at 3x. We want to continue to pay an attractive dividend. Yeah. We increased our dividend by 7% earlier this year. I think we're yielding right around, we're between 3% and 4% from a dividend yield perspective. Then beyond that, Lizzie, quite frankly, we'll allocate our capital to the projects that drive the highest incremental return to us the highest risk-adjusted return. I do think about the implied return on buybacks as being our current free cash flow yield plus the longer term EBIT growth rate. Yeah. Mm-hmm. So if you think about those two things, you're talking about somewhere in the 16%-18% implied buyback return. So we've got a pretty high threshold associated with that, and you're seeing that manifest in terms of the concentration of our dollars that are going to buybacks. Our weighted shares outstanding are down 6% year-over-year. Buybacks are up 25% year-over-year. So, we'll continue to evaluate M&A and alternatives. Yeah. Right now, the implied buyback return is very attractive. Yeah. I was going to ask about M&A, because obviously you've recently just done these acquisitions. Does that put M&A on hold for a while, or for the right opportunity, would you be willing to do more and maybe even lever up a little bit for something? Listen, we are maniacally focused on ensuring that we get integration right on the M&A. So I would certainly expect us to be focused on that for the next several quarters. Then beyond that, I'll bring it all the way back to, we're going to look at risk-adjusted returns for all the alternatives we've got to- Yep. capital deployment. Makes sense. Right at the end, I am going to ask a few rapid-fire questions that we are asking all of our consumer retail companies here. Before that, maybe just let us tie a bow on all of this great insight that you have given, and I like to ask this question. If you and I were sitting here hopefully a year from now or two years from now, what would you say is the goal before you get there, and where would you think there is the highest scope for outperformance versus expectations? What I would say, Lizzie, is we do not have nor do we need a big bet. If you think back at just some of the things that we have even covered today, I believe the core algo is going to continue, right? We have lived inside the algo for some time now. The core algo continues. We could potentially have outperformance associated with the M&A. We could get a faster ramp associated with our multi-brand strategy. Yep. We could curtail the loan losses on the portfolio. We could stabilize the travel and membership business. We have got an entire suite of potential tailwinds associated with the business right now. If we are sitting here three years from now and we have wildly outperformed the algo, I think it could be one or all of those. Yeah. Makes sense. All right, let me hit you with some of these rapid-fire, if that is okay. Sure. Starting off, health of the consumer. What are your expectations for the environment, both in the second half of 2026 and as we move into 2027 relative to what you have seen year to date? Would you expect it to be better, worse, same? How do you think about that? I think it's pretty steady on the TNL side. Yep. That's second half and 2027 steady for both. Second half for sure. Yep. We're starting the 2027 budget process in earnest right now. Yep. Then AI. How much are you using that, and do you expect your efficiency as related to AI to increase, or it doesn't move the needle for you next year? No, I think broadly speaking, AI is going to be a tailwind for us. The tailwind composition in 2027, probably not as much. Yeah. But I think that we've got some things in the pipeline right now that will be accretive. Okay. Then last one as it relates to margins. Do you see more margin headwinds or tailwinds as you look into 2027? I think about margins as relatively stable in 2027 v 2026. We will have fully rationalized and taken the benefit of the resort optimization initiative. Yep By the time we have turned the calendar over, but I think margins relatively stable. Okay, great. That is a great place to end it. Thank you so much, Erik and Andrew. Really appreciate you being here, and thanks for a great session. Thanks for having us. Yeah. Thank you.