Greetings, and welcome to Marriott Vacations Worldwide First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today's call, Mr. Jeff Hansen, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Rob. And welcome everyone to the Marriott Vacations Worldwide first quarter 2016 earnings conference call. I'm joined today by Steve Weisz, President and CEO; and John Geller, Executive Vice President and CFO. I do need to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under Federal Securities Laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings which could cause future results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the press release that we issued this morning, along with our comments on this call are effective only today, April 28, 2016, and will not be updated as actual events unfold. Throughout the call we will make references to non-GAAP financial information. You can find a reconciliation of non-GAAP financial measures referred to in our remarks in the schedules attached to our press release as well as the Investor Relation page on our website at ir.mvwc.com. I will now turn the call over to Steve Weisz, President and CEO of Marriott Vacations Worldwide.

Thanks Jeff. Good morning, everyone and thank you for joining our first quarter earnings call. This morning, I will walk through our first quarter results and provide an update on our top-line growth initiatives which give us confidence that we will achieve our full year guidance. I will then turn the call over to John to provide a more detailed review of our first quarter and his thoughts on our full year before opening the call to your questions. As we indicated on our year end call at the end of February, first quarter contract sales in North America faced several challenges stemming primarily from the tough comparison to last year's strong first quarter results as well as the weakness we have experienced in our Latin American sales channels. Remember in our first quarter of 2015, we adjusted our owner recognition levels, or what we call ORLs, increasing the benefits at higher levels of ownership. This helps drive a 7% increase in owner tours and approximately 1.5 points of improvement in owner closing efficiency over the first quarter of 2014. As a result, first quarter vacation ownership contract sales last year were up almost $16 million over 11% driven mainly by the improved sales metrics to existing owners. Shifting to the current year, in the first quarter of 2016, North America time share contract sales were approximately $140 million down $16 million from the first quarter of 2015, $2.5 million of this decline at quarter -- in our Latin America sales channels as we continue to experience headwinds from the strong U.S. dollar. This decrease, however, was less than the year-over-year declines we saw in the Latin American sales channels in the third and fourth quarters of last year. The remaining contract sales decline primarily resulted from almost 7% fewer…

Thank you, Steve, and good morning, everyone. Adjusted EBITDA totaled $51.6 million, $8.6 million below the first quarter of 2015. While we saw continued growth in our financing and resort management businesses, as expected we did see a decline in our development business year-over-year. For the first quarter, adjusted development margin was down roughly $10 million of which nearly $9 million of the decline was in our North America segment as a result of lower contract sales to existing owners in the quarter. North America adjusted development margin was 20.6% in the quarter, down over 3 points from the prior year. Product costs continues to be a great story for us favorably impacting development margin by roughly 3 percentage points year-over-year driven primarily from the continued strength of our inventory repurchase program. However, our product cost benefit was more than offset by higher marketing and sales costs as the lower contract sales impacted our ability to leverage our fixed marketing and sales costs. In addition, our variable marketing and sales costs were impacted by higher spending related to our investment in future tours primarily in our call transfer and encore programs as well as pre-opening costs associated with the start-up of new sales distributions. It's important to remember these higher variable costs will drive future contract sales growth for us in the second half of this year and beyond. In the company's financing business, revenue net of related expenses was $19.2 million up $1.1 million or 6% from the first quarter of last year. The program we launched last year to help drive financing propensity has continued to be successful with our North America propensity up 15 basis points to 57%. And our purchasers remain very creditworthy as we have seen a 16 point increase in FICO scores to 744…

Thank you. [Operator Instructions] Our first question is from Chris Agnew with MKM Partners. Please go ahead with your question.

Good morning, Chris.

Thanks very much. Good morning. Thank you for that color. Those express very strong -- expecting very strong second half via by sales and confidence in 4% to 8% growth, can I ask, is your confidence say in the midpoint the same as when you initiated guidance back in February given the first quarter that we just saw?

I would say so. I mean I'll be the first to tell you that the first quarter was a -- maybe a little softer than we had originally anticipated. However, that's balanced out by the continued strength that we see in terms of booking and activating tours for the balance of the year plus the progress we are making on the new sales centers. So yes, I don't -- I wouldn't characterize our confidence in that 4% to 8% number as being markedly differently from when we first announced it.

Okay. Thanks. And then, have -- I think if I'm reading it right, there was no increase in your provision for loan loss from a year-over-year perspective, have you seen any increase in default activity and any third party sponsor defaults?

Chris, this is John. To answer the second part of your question, no. We haven't seen any of that. First part of your question, we've actually as a percentage of finance sales, our bad debt allowance I think is down slightly or sorry its improved year-over-year. I mean, what you are seeing as I talked about is your actual finance sales is up about 15 percentage points year-over-year. And so but the rate we're actually providing is continuing to improve. Our core portfolio continues to perform very well, where we're seeing a little bit on the edges not surprisingly would be with some of the Latin American paper just given some of the foreign currency, but that's in that overall number so net-net the overall portfolio continues to perform very well.

Got you. And the sales that you talked about the additional -- potential $60 million -- is -- are you more less expecting that by the end of this year or -- is it just the timing around, or just give us a little bit more color on what needs to happen for those sales?

I'm assuming your reference is to the dispositions, correct?

Yes, sorry.

On Surfers Paradise, we are very close we have a few minor kind of conditions precedent that have to be satisfied before we can close that sale. So we're not prepared to announce that yet, but I expect you'll probably hear from us in the not too distant future that that sale is concluded. And we are well along the way about selling that, making that bulk sale at our Ritz-Carlton Residence property in San Francisco on a collective basis between the two. It's between $60 million and $70 million worth of proceeds.

Yes. So, I think Chris, we feel good about it. I have to say I mean until they're done they're not done right. So there is always some risk, but we feel very good to Steve's point.

Thanks. And one more question sorry to steal so much time.

Yes, okay.

But in terms of thinking about how these new sales centers ramp because obviously I think you've said some of them -- temporary facility moving to larger facility. But what -- did they ramp over a couple of years, or is it six months how do you think about sales centers and…

Clearly for us and I would argue probably for the rest of the industry. When you open up a new sales center, I mean you're starting from dead stop and you're trying to move forward further compounded by the fact that as I indicated that both in New York and Washington we've got temporary sales centers that we kind of put together and as the permanents are finished here in the next couple of months. It will take several years for any new sales center to reach kind of its stabilized run rate, but that's all been factored into our guidance about how we think about the contract sales unfolding as well as the EBITDA for the balance of the year.

Excellent. Thank you.

Thank you.

Our next question comes from Steven Kent with Goldman Sachs. Please proceed with your question.

Good morning, Steve.

Hi, good morning. Just to follow on that last question about Washington and New York City, what are some of the early indicators that these markets will be robust for you and -- the reason I'm asking is because my recollection is the Boston property did very well and that was relatively new and I think that was almost 10 years ago, I mean when you rolled that out. So, what are some of the early indicators that would say this city focus is moving in the right direction? And then, commentary on LatAm business, how that's holding up that was an issue more last year, but I wanted to see if that was still an issue for this year?

Yes. Well, first of all, actually its kind of hard for me to put this is in perspective having been here 20 years, but actually Boston custom house probably started sales 15 years ago even. And keep in mind at that point in time, we were selling a site-based product we weren't selling our points program et cetera. The thing you gain by opening up a sales center that is in conjunction with inventory that you have in a marketplace is that you get the benefit of obviously any in-house marketing that you can do to those units or you can in fact talk to people that are either renting the unit or people that are there on either a usage or exchange about buying more points within our system that's the first point. The second point is also gives you an opportunity to talk to that people that live in that destination. New York City market as an example or Washington market both very vibrant, very wealthy markets that we can market too and we can people to come take a presentation from us there. So we are -- I mean there is nothing in life is guaranteed and certainly we can't guarantee that these will be homeruns we have a reason to believe that they will be very successful and that's the way we have underwritten these products. As far as LatAm, I will John talk about that.

Sure. Yes. Obviously, Steve the foreign currency hasn't necessarily improved much versus the U.S. dollar when you look it from an overall basis from mid year last year. I think what we're seeing is and we talked about this even early on. And over time some of those fluctuations become the new norm and people within those markets to the extent they want to travel and do things. Yes, they're going to have to come to terms with what's happened with the foreign currency. We obviously target a more fluent buyer probably people that have more means in terms of buying our product given our price point. So, I think we're seeing as we said in the script, I think we're seeing the year-over-year decline notwithstanding not much improvement in the foreign currency exchange rates getting less which is positive, but its obviously still a headwind, will be a headwind here in the second quarter in terms of EBITDA, I think stay where they're at, it won't be till really the third quarter where we get some benefit from that easier comps for the balance of the year.

Okay. Thank you.

Thank you.

Our next question comes from Patrick Scholes with SunTrust. Please proceed with your question.

Hi, Patrick.

Hey good morning guys. It's actually Brad on for Pat. Just a quick one with Marriott buying Starwood, is there any chance that's changed the way the sales leads are going to be distributed any chance against Starwood leads or any changes otherwise? I appreciate it.

Well first of all, I guess you would find it not uncommon for me to say that we really don't comment on third party M&A kind of activity. However, I will also say that we look forward to dialogue with Marriott about how the terms of our license agreement and that of what would be the span of signature experiences lines up -- with them as the licensor and understand what the impact will have on the loyalty programs.

Got it. Appreciate it.

Thank you.

There are no further questions at this time. At this point, I would like to turn the call back over to Steve Weisz for closing comments.

First quarter of 2016 was the turning point of our growth strategy as we began opening new sales centers with more to come. And we continue to ramp-up our first time buyer tour production across all of our current sites. I'm excited about the remainder of the year and look forward to updating you on our performance on future calls. And finally to everyone on the call and your families, enjoy your next vacation. Thank you.

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.