Exhibit 99.1

WW_Logo_1clr_Spot

 

Wyndham Worldwide Reports Strong Third Quarter 2015 Results

Increases 2015 Adjusted EPS Guidance

 

PARSIPPANY, N.J. (October 27, 2015) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2015.

 

THIRD QUARTER HIGHLIGHTS:

 

·Adjusted diluted earnings per share (EPS) was $1.78, an increase of 7% from adjusted diluted EPS of $1.67 in the third quarter of 2014. Reported diluted EPS was $1.61, compared with $1.64 in the third quarter of 2014.

 

·Revenues for the third quarter of 2015 increased 3% compared with the third quarter of 2014. On a currency neutral basis and excluding the impact of acquisitions and a divestiture, revenues increased 6% and adjusted EBITDA increased 7%.

 

·Gross vacation ownership sales increased 12% on a constant currency basis.

 

·Vacation rental transactions increased 6% excluding the impact of acquisitions and a divestiture.

 

·The Company repurchased 2.1 million shares of its common stock for $170 million during the quarter.

 

 

“We delivered great results in the third quarter across all our businesses, with more guests, staying more often, and more engaged than ever,” said Stephen P. Holmes, chairman and CEO. “This quarter was highlighted by a double digit increase in gross vacation ownership interest sales, strong growth in vacation rental transaction volume, and increased activity through our re-invigorated loyalty program. We are connecting the widest range of guests around the globe with the accommodation options they desire.”

 

 

 


THIRD QUARTER 2015 OPERATING RESULTS

Third quarter revenues were $1.6 billion, an increase of 3% from the prior year period. Excluding acquisitions and a divestiture, constant currency revenues increased 6% reflecting growth in each of the Company’s business segments.

 

Third quarter adjusted EBITDA was $412 million, compared with $418 million in the prior year period. Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $17 million in 2015, and the absence of results in 2015 from Canvas Holiday, a U.K.-based camping business, which contributed $18 million of EBITDA in the third quarter 2014 and was divested in the fourth quarter of 2014. Excluding these items and acquisitions, adjusted EBITDA increased 7%.

 

Adjusted net income was $210 million, or $1.78 per diluted share, compared with $210 million, or $1.67 per diluted share for the same period in 2014. Net income and earnings per share benefited from strong operations, but were negatively affected by the same factors that influenced adjusted EBITDA comparisons, noted above. EPS also benefited from the Company’s share repurchase program, which decreased the weighted average diluted share count 6% year-over-year.

 

Reported net income for the third quarter of 2015 was $190 million, or $1.61 per diluted share, compared with $206 million, or $1.64 per diluted share, for the third quarter of 2014. Reported net income in both periods reflects several items excluded from adjusted net income. The net result of these items unfavorably impacted third quarter 2015 net income by $20 million and unfavorably impacted third quarter 2014 net income by $4 million. Full reconciliations of adjusted net income to GAAP results appear in Table 8 of this press release. Year-over-year reported net income third quarter comparisons were negatively impacted by the same factors that influenced adjusted EBITDA comparisons, noted above.

 

Free cash flow was $660 million for the nine months ended September 30, 2015, compared with $750 million for the same period in 2014. The decline in free cash flow reflects the timing of capital expenditures and working capital, including inventory spending. The Company expects inventory spending in the fourth quarter of 2015 to be significantly lower than in the fourth quarter of 2014. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the nine months ended September 30, 2015, net cash provided by operating activities was $817 million, compared with $899 million in the prior year period.

 

 

 

 

BUSINESS UNIT RESULTS

 

Lodging (Wyndham Hotel Group)

Revenues were $357 million in the third quarter of 2015, a 13% increase compared with the third quarter 2014. Adjusted EBITDA was $108 million, flat compared with the same period in 2014.

 

In constant currency and excluding acquisitions, revenues increased 4% and adjusted EBITDA increased 3%, reflecting domestic RevPAR growth, which was partially offset by increased marketing expenditures and higher costs related to the implementation of new property management and central reservation systems.

 

Domestic RevPAR increased 5.2%. In constant currency, total system-wide RevPAR increased 3.3%.

 

As of September 30, 2015, the Company’s hotel system consisted of approximately 7,760 properties and 672,000 rooms, a 2.5% room increase compared with the third quarter of 2014. The development pipeline included 910 hotels and over 122,800 rooms, of which 61% were international and 68% were new construction.

 

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $476 million in the third quarter of 2015, a 7% decline compared with the third quarter of 2014. In constant currency, and excluding acquisitions and the impact of the divestiture of Canvas Holidays in 2014, revenues increased 6%.

 

Exchange revenues were $157 million, down 3% compared with the third quarter of 2014. In constant currency, exchange revenues were up 1% compared with the prior year, as the average number of members increased 1.5% while exchange revenue per member was flat.

 

Vacation rental revenues were $296 million, an 11% decrease compared with the third quarter of 2014. In constant currency and excluding the impact of acquisitions and the divestiture, vacation rental revenues were up 8%, reflecting a 5.8% increase in transaction volume, and a 1.7% increase in average net price per vacation rental.

 

Adjusted EBITDA for the third quarter of 2015 was $137 million, a 14% decrease compared with the third quarter of 2014. On a currency neutral basis and excluding the impact of acquisitions and the divestiture, adjusted EBITDA increased 5% compared with the prior year period.

 

 

 

 

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $750 million in the third quarter of 2015, a 7% increase over the third quarter of 2014. In constant currency, revenues increased 8%.

 

Gross VOI sales were $565 million in the third quarter of 2015, an increase of 10% compared with the third quarter of 2014. In constant currency, Gross VOI sales increased 12%. Volume per guest (VPG) for the quarter increased 10.6% in constant currency while tour flow increased 0.9%. VPG increases were driven primarily by a higher average transaction size.

 

Adjusted EBITDA for the third quarter of 2015 was $201 million, an increase of 7% compared with the third quarter of 2014. Results primarily reflect higher VPG. On a currency neutral basis adjusted EBITDA increased 9%.

 

OTHER ITEMS

·The Company repurchased 2.1 million shares of common stock for $170 million during the third quarter of 2015. From October 1 through October 26, 2015, the Company repurchased an additional 0.9 million shares for $70 million. The Company’s remaining share repurchase authorization totals $461 million as of October 26, 2015.
·Reported net interest expense in the third quarter of 2015 was $31 million, compared with $26 million in the third quarter of 2014.

 

Balance Sheet Information as of September 30, 2015:

·Cash and cash equivalents of $259 million, compared with $183 million at December 31, 2014
·Vacation ownership contract receivables, net, of $2.7 billion, unchanged from December 31, 2014
·Vacation ownership and other inventory of $1.3 billion, compared with $1.2 billion at December 31, 2014
·Securitized vacation ownership debt of $2.1 billion, compared with $2.2 billion at December 31, 2014
·Long-term debt of $3.1 billion, compared with $2.9 billion at December 31, 2014. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of September 30, 2015, compared with $1.3 billion at December 31, 2014

 

A schedule of debt is included in Table 5 of this press release.

 

 

 

 

OUTLOOK

 

Note to Editors: The guidance excludes possible future share repurchases, while analysts’ estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.

 

For the full year 2015, the Company provides the following guidance:

·Revenues of approximately $5.450 - $5.550 billion
·Adjusted EBITDA of approximately $1.285 - $1.315 billion. Guidance reflects a $46 million adverse earnings impact from foreign exchange compared with 2014 full year results
·Adjusted EPS of approximately $5.06 to $5.09 based on a diluted share count of 119.4 million up from $4.88 to $5.03 based on a diluted share count of 120.2 million

 

“We were pleased with our performance across the Company in the third quarter, but we’re even more excited by what lies ahead. We have the broadest range of lodging accommodations in the world – including hotels, timeshare and rentals – spanning luxury to budget. We are uniquely positioned to satisfy the burgeoning travel demand around the globe. In 2016, we expect organic adjusted EBITDA growth consistent with our long-term target range of 6 – 8%,” said Mr. Holmes.

 

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company’s results, outlook and guidance on Tuesday, October 27, 2015 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company’s website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available on the website for approximately 90 days beginning at noon EDT on October 27, 2015. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on October 27, 2015, at 800-388-4923.

 

The Company will post guidance information on its website following the conference call.

 

 

 

 

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items.  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 core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. A reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company’s reported results.

 

About Wyndham Worldwide Corporation

One of the world’s largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands.  The world’s largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world’s best-known hotel brands, with approximately 7,760 franchised hotels and approximately 672,000 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world’s largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 110,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 210 vacation ownership resorts serving approximately 900,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs over 34,000 associates globally. For more information, please visit www.wyndhamworldwide.com.

 

 

 

 

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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 press release include statements related to the Company’s revenues, earnings, cash flow and related financial and operating measures.

 

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s Annual Report on Form 10-K, filed with the SEC on February 13, 2015. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

# # #

 

Investor and Media contact:

Margo C. Happer

Senior Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-6472

margo.happer@wyn.com

 

Barry Goldschmidt

Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-7703

barry.goldschmidt@wyn.com

 

 

 

 

 

Table 1

(1 of 2)

 

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

 

In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and “EBITDA”, which is defined 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 Company’s Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for the Company's segments which when considered with GAAP measures, gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

 

The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income for the three months ended September 30, 2015 and 2014:

 

   Three Months Ended September 30, 
   2015   2014 
   Net Revenues   EBITDA   Net Revenues   EBITDA 
Lodging  $357   $83   $315   $100 
Vacation Exchange and Rentals   476    134    512    159 
Vacation Ownership   750    200    704    188 
Total Reportable Segments   1,583    417    1,531    447 
Corporate and Other (a)   (19)   (35)   (17)   (36)
Total Company  $1,564   $382   $1,514   $411 

 

Reconciliation of EBITDA to Net income

 

       Three Months Ended September 30,  
       2015       2014 
EBITDA       $382       $411 
Depreciation and amortization        59         60 
Interest expense        33         28 
Interest income        (2)       (2)
Income before income taxes        292         325 
Provision for income taxes        102         119 
Net income       $190        $206 

 

 

 

 

 

(a) Includes the elimination of transactions between segments.

 

The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the three months ended September 30, 2015 and 2014 (for a description of adjustments by segment, see Table 7):

 

   Three Months Ended September 30,  
   2015   2014 
    Net Revenues    Adjusted
EBITDA
    Net Revenues    Adjusted
EBITDA
 
Lodging  $357   $108   $315   $107 
Vacation Exchange and Rentals   476    137    512    159 
Vacation Ownership   750    201    704    188 
Total Reportable Segments   1,583    446    1,531    454 
Corporate and Other   (19)   (34)   (17)   (36)
Total Company  $1,564   $412   $1,514   $418 

 

 

 

 

Table 1

(2 of 2)

 

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

 

The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the nine months ended September 30, 2015 and 2014:

 

   Nine Months Ended September 30,  
   2015   2014 
    Net Revenues     EBITDA     Net Revenues     EBITDA  
Lodging  $983   $255   $835   $250 
Vacation Exchange and Rentals   1,228    323    1,293    333 
Vacation Ownership   2,067    513    1,970    488 
Total Reportable Segments   4,278    1,091    4,098    1,071 
Corporate and Other (a)   (54)   (100)   (48)   (104)
Total Company  $4,224   $991   $4,050   $967 

 

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

 

       Nine Months Ended September 30,  
       2015       2014 
EBITDA         $991        $967 
Depreciation and amortization        173         175 
Interest expense        89         84 
Interest income        (7)        (6)
Income before income taxes        736         714 
Provision for income taxes        265         265 
Net income        471         449 
Net income attributable to noncontrolling interest        -         (1)
Net income attributable to Wyndham shareholders       $471        $448 

 

 

(a) Includes the elimination of transactions between segments.

 

The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the nine months ended September 30, 2015 and 2014 (for a description of adjustments by segment, see Table 7):

 

   Nine Months Ended September 30,  
   2015   2014 
    Net Revenues    Adjusted
EBITDA
    Net Revenues     Adjusted
EBITDA
 
Lodging  $983   $284   $835   $261 
Vacation Exchange and Rentals   1,228    326    1,293    341 
Vacation Ownership   2,067    514    1,970    488 
Total Reportable Segments   4,278    1,124    4,098    1,090 
Corporate and Other   (54)   (101)   (48)   (103)
Total Company  $4,224   $1,023   $4,050   $987 

 

 

 

 

Table 2

 

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
   2015   2014   2015   2014 
Net revenues                    
Service and membership fees  $734   $717   $1,957   $1,922 
Vacation ownership interest sales   448    415    1,201    1,101 
Franchise fees   192    189    517    482 
Consumer financing   108    108    318    319 
Other   82    85    231    226 
Net revenues   1,564    1,514    4,224    4,050 
                     
Expenses                    
Operating   691    613    1,865    1,721 
Cost of vacation ownership interests   43    49    123    129 
Consumer financing interest   18    18    55    52 
Marketing and reservation   218    227    624    614 
General and administrative   200    188    562    564 
Asset impairment   7    8    7    8 
Restructuring   8    -    8    - 
Depreciation and amortization   59    60    173    175 
Total expenses   1,244    1,163    3,417    3,263 
                     
Operating income   320    351    807    787 
Other income, net   (3)   -    (11)   (5)
Interest expense   33    28    89    84 
Interest income   (2)   (2)   (7)   (6)
                     
Income before income taxes   292    325    736    714 
Provision for income taxes   102    119    265    265 
Net income   190    206    471    449 
Net income attributable to noncontrolling interest   -    -    -    (1)
Net income attributable to Wyndham shareholders  $190   $206   $471   $448 
                     
Earnings per share                    
Basic  $1.62   $1.65   $3.96   $3.55 
Diluted   1.61    1.64    3.93    3.51 
                     
Weighted average shares outstanding                    
Basic   117    124    119    126 
Diluted   118    126    120    128 

 

 

Note: For a description of adjustments to Net Income, see Table 8.

 

 

 

  

Table 3

(1 of 2)

 

Wyndham Worldwide Corporation

OPERATING STATISTICS

 

The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:

 

   Year  Q1   Q2   Q3   Q4   Full Year 
Lodging (a)                            
Number of Rooms   2015   667,400    668,500    671,900     N/A      N/A  
   2014   646,900    650,200    655,300    660,800     N/A  
   2013   631,800    635,100    638,300    645,400     N/A  
   2012   609,300    608,300    618,100    627,400     N/A  
                             
RevPAR  2015  $32.84   $39.82   $43.34     N/A      N/A  
   2014  $32.30   $40.11   $43.71   $34.06   $37.57 
   2013  $31.05   $38.00   $41.78   $33.07   $36.00 
   2012  $29.73   $37.23   $40.39   $31.86   $34.80 
                             
Vacation Exchange and Rentals                            
Average Number of Members (in 000s)  2015   3,822    3,831    3,835     N/A      N/A  
   2014   3,727    3,748    3,777    3,808    3,765 
   2013   3,668    3,686    3,711    3,728    3,698 
   2012   3,684    3,670    3,672    3,670    3,674 
                             
Exchange Revenue Per Member  2015  $194.06   $167.81   $163.38     N/A      N/A  
   2014  $200.78   $179.17   $171.77   $157.24   $177.12 
   2013  $210.96   $182.42   $169.95   $161.21   $181.02 
   2012  $204.56   $177.07   $171.14   $165.86   $179.68 
                             
Vacation Rental Transactions (in 000s) (a) (b)  2015   459    390    462     N/A      N/A  
   2014   429    376    455    293    1,552 
   2013   423    355    433    273    1,483 
   2012   418    325    390    259    1,392 
                             
Average Net Price Per Vacation Rental (a) (b)  2015  $361.20   $513.14   $642.00     N/A      N/A  
   2014  $410.04   $577.13   $727.40   $492.25   $558.95 
   2013  $392.64   $540.38   $677.81   $506.62   $532.11 
   2012  $379.40   $524.40   $635.44   $484.69   $504.55 
                             
Vacation Ownership (a)                            
Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c)  2015  $390,000   $502,000   $565,000     N/A      N/A  
   2014  $410,000   $496,000   $513,000   $470,000   $1,889,000 
   2013  $384,000   $481,000   $536,000   $488,000   $1,889,000 
   2012  $384,000   $460,000   $502,000   $435,000   $1,781,000 
                             
Tours (in 000s) (d)  2015   168    206    227     N/A      N/A  
   2014   170    208    225    191    794 
   2013   163    206    225    195    789 
   2012   148    186    207    183    724 
                             
Volume Per Guest (VPG) (d)  2015  $2,177   $2,353   $2,354     N/A      N/A  
   2014  $2,272   $2,280   $2,158   $2,336   $2,257 
   2013  $2,211   $2,256   $2,278   $2,370   $2,281 
   2012  $2,414   $2,361   $2,315   $2,225   $2,324 

 

 

Note: Full year amounts may not add across due to rounding.

 

(a)Includes the impact of acquisitions/dispositions from the acquisition/disposition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
(b)The vacation exchange and rentals operating statistics excluding our U.K.-based camping business sold in Q4 2014 are as follows:

 

   Year  Q1   Q2   Q3   Q4   Full Year 
Vacation Rental Transactions (in 000s)  2014   429    367    431    292    1,518 
Average Net Price Per Vacation Rental  2014  $410.02   $578.02   $700.56   $492.64   $548.93 

  

(c) Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time beginning in the second quarter of 2012 (see Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).
(d) Includes the impact of WAAM Just-in-Time related tours beginning in the second quarter of 2012.

 

ADDITIONAL DATA

 

   Year  Q1   Q2   Q3   Q4   Full Year 
Lodging                            
Number of Properties  2015   7,670    7,700    7,760     N/A      N/A  
   2014   7,500    7,540    7,590    7,650     N/A  
   2013   7,380    7,410    7,440    7,490     N/A  
   2012   7,150    7,170    7,260    7,340     N/A  
                             
Vacation Ownership                            
Provision for Loan Losses (in 000s) (*)   2015  $46,000   $60,000   $78,000     N/A      N/A  
   2014  $60,000   $70,000   $70,000   $60,000   $260,000 
   2013  $84,000   $90,000   $102,000   $73,000   $349,000 
   2012  $96,000   $100,000   $124,000   $89,000   $409,000 

 

 

Note: Full year amounts may not add across due to rounding.

 

(*) Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.

 

 

 

 

Table 3

(2 of 2)

 

Wyndham Worldwide Corporation
OPERATING STATISTICS
 
GLOSSARY OF TERMS

 

Lodging

 

Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, or company owned and (ii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided.

 

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

 

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.

 

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR. Comparable RevPAR represents RevPAR of hotels which are included in both periods.

 

Vacation Exchange and Rentals

 

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.

 

Vacation Rental Transactions: Represents the number of transactions that are generated during the period in connection with customers booking their vacation rental stays through the Company. One rental transaction is recorded for each standard one-week rental.

 

Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees during the period divided by the number of vacation rental transactions during the period.

 

Vacation Ownership

 

Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM sales, before the net effect of percentage-of-completion accounting and loan loss provisions. See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales.

 

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. See Table 9 for a detail of tele-sales upgrades for 2012-2015.

 

General

 

Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation).

 

Currency-Neutral: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation) and the impact caused by any foreign exchange related activities (i.e., hedges, balance sheet remeasurements and/or adjustments).

 

 

 

  

Table 4

 

Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)

 

   2015    2014  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  
Lodging                                                  
Royalties and Franchise Fees  $74   $96   $103     N/A      N/A    $68   $88   $100   $83   $339 
Marketing, Reservation and Wyndham Rewards Revenues (a)   96    108    112     N/A      N/A     76    101    117    91    385 
Hotel Management Reimbursable Revenues (b)   61    71    73     N/A      N/A     37    39    39    39    154 
Intersegment Trademark Fees   12    15    16     N/A      N/A     9    11    11    10    41 
Owned Hotel Revenues   25    20    16     N/A      N/A     24    20    18    20    81 
Ancillary Revenues (c)   24    24    37     N/A      N/A     23    24    30    24    101 
Total Lodging   292    334    357     N/A      N/A     237    283    315    267    1,101 
                                                   
Vacation Exchange and Rentals                                                  
Exchange Revenues   185    161    157     N/A      N/A     187    168    162    150    667 
Rental Revenues   166    200    296     N/A      N/A     176    217    331    144    868 
Ancillary Revenues (d)   18    22    23     N/A      N/A     16    17    19    17    69 
Total Vacation Exchange and Rentals   369    383    476     N/A      N/A     379    402    512    311    1,604 
                                                   
Vacation Ownership                                                  
Vacation Ownership Interest Sales   336    417    448     N/A      N/A     303    382    415    385    1,485 
Consumer Financing   104    105    108     N/A      N/A     105    106    108    108    427 
Property Management Fees and Reimbursable Revenues   153    149    159     N/A      N/A     143    145    150    142    581 
WAAM Fee-for-Service Commissions   12    19    23     N/A      N/A     33    30    18    16    98 
Ancillary Revenues (e)   12    9    12     N/A      N/A     9    10    13    17    47 
Total Vacation Ownership   617    699    750     N/A      N/A     593    673    704    668    2,638 
Total Reportable Segments  $1,278   $1,416   $1,583     N/A      N/A    $1,209   $1,358   $1,531   $1,246   $5,343 

 

   2013    2012  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  
Lodging                                                  
Royalties and Franchise Fees  $64   $79   $91   $75   $309   $62   $80   $88   $71   $301 
Marketing, Reservation and Wyndham Rewards Revenues (a)   73    92    118    83    365    68    99    98    80    345 
Hotel Management Reimbursable Revenues (b)   25    38    37    35    135    21    22    25    23    91 
Intersegment Trademark Fees   8    10    11    10    39    8    9    9    8    34 
Owned Hotel Revenues   26    20    18    19    84    8    8    7    18    41 
Ancillary Revenues (c)   26    23    22    23    95    18    15    22    23    78 
Total Lodging   222    262    297    245    1,027    185    233    249    223    890 
                                                   
Vacation Exchange and Rentals                                                  
Exchange Revenues   193    168    158    150    669    188    162    157    153    660 
Rental Revenues   166    192    293    138    789    159    170    248    125    702 
Ancillary Revenues (d)   15    16    19    17    68    14    16    15    15    60 
Total Vacation Exchange and Rentals   374    376    470    305    1,526    361    348    420    293    1,422 
                                                   
Vacation Ownership                                                  
Vacation Ownership Interest Sales   263    347    384    384    1,379    271    342    373    337    1,323 
Consumer Financing   105    106    107    108    426    103    102    106    110    421 
Property Management Fees   146    141    143    137    567    110    108    117    125    460 
WAAM Fee-for-Service Commissions   24    30    33    20    107    12    11    4    6    33 
Ancillary Revenues (e)   11    6    10    9    36    5    7    8    12    32 
Total Vacation Ownership   549    630    677    658    2,515    501    570    608    590    2,269 
Total Reportable Segments  $1,145   $1,268   $1,444   $1,208   $5,068   $1,047   $1,151   $1,277   $1,106   $4,581 

 

 

Note: Full year amounts may not add across due to rounding.

(a)Marketing and reservation revenues represent fees the Company receives from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific reservation system. These fees are typically based on a percentage of the gross room revenues of each hotel. Wyndham Rewards revenues represent fees the Company receives relating to its loyalty program.
(b)Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During 2014, reimbursable revenues of $2 million in each of Q1, Q2 and Q3 and $1 million in Q4 which were charged to the Company's vacation ownership business and were eliminated in consolidation. During 2013, such amounts include reimbursable revenues of $1 million, $3 million and $2 million, in Q2, Q3 and Q4 respectively, which were charged to the Company's vacation ownership business and were eliminated in consolidation.
(c)Primarily includes additional services provided to franchisees and managed properties and fees related to our co-branded credit card program.
(d)Primarily includes fees generated from programs with affiliated resorts and homeowners.
(e)Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.

 

 

 

  

Table 5

 

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

 

   September 30,
2015
   June 30,
2015
   March 31,
2015
   December 31,
2014
   September 30,
2014
 
                     
Securitized vacation ownership debt (a)                         
Term notes  $1,843   $1,841   $2,090   $1,962   $1,670 
Bank conduit facility (b)   267    253    98    203    271 
Total securitized vacation ownership debt (c)   2,110    2,094    2,188    2,165    1,941 
Less: Current portion of securitized vacation ownership debt   210    211    217    214    192 
Long-term securitized vacation ownership debt  $1,900   $1,883   $1,971   $1,951   $1,749 
                          
                          
Debt:                         
Revolving credit facility (due July 2020) (d)  $20   $23   $14   $25   $18 
Commercial paper (e)   87    476    346    189    237 
$315 million 6.00% senior unsecured notes (due December 2016)   316    317    317    317    317 
$300 million 2.95% senior unsecured notes (due March 2017)   299    299    299    299    299 
$14 million 5.75% senior unsecured notes (due February 2018)   14    14    14    14    14 
$450 million 2.50% senior unsecured notes (due March 2018)   448    448    448    448    448 
$40 million 7.375% senior unsecured notes (due March 2020)   40    40    40    40    40 
$250 million 5.625% senior unsecured notes (due March 2021)   247    247    247    247    247 
$650 million 4.25% senior unsecured notes (due March 2022)   648    648    650    648    646 
$400 million 3.90% senior unsecured notes (due March 2023)   409    409    418    410    401 
$350 million 5.10% senior unsecured notes (due October 2025)   338    -    -    -    - 
Capital leases   158    161    161    170    175 
Other   49    70    70    81    80 
Total long-term debt   3,073    3,152    3,024    2,888    2,922 
Less: Current portion of long-term debt   44    52    53    47    49 
Long-term debt  $3,029   $3,100   $2,971   $2,841   $2,873 

 

 

(a) The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") that are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company's creditors and legally are not the Company's assets. Additionally, the non-recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors of these SPEs have no recourse to the Company for principal and interest.
(b) Represents a non-recourse vacation ownership bank conduit facility with a term through August 2017 and borrowing capacity of $650 million. As of September 30, 2015, this facility had a remaining borrowing capacity of $383 million.
(c) This debt is collateralized by $2,582 million, $2,558 million, $2,609 million, $2,629 million, and $2,326 million of underlying vacation ownership contract receivables and related assets as of September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014 and September 30, 2014.
(d) Represents a $1.5 billion revolving credit facility that expires in July 2020. As of September 30, 2015, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $87 million, the remaining borrowing capacity was $1.4 billion as of September 30, 2015.
(e) Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.2 billion as of September 30, 2015.

 

 

 

  

Table 6

(1 of 2)

 

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

 

   As of and For the Three Months Ended September 30, 2015 
Brand  Number of
Properties
   Number of Rooms   Average
Occupancy Rate
   Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)
 
                     
Lodging                         
Super 8   2,600    166,656    65.1%  $52.68   $34.29 
                          
Days Inn   1,785    142,613    58.1%  $71.39   $41.48 
                          
Ramada   838    117,044    59.0%  $76.94   $45.42 
                          
Wyndham Hotels and Resorts   210    45,537    65.5%  $108.30   $70.92 
                          
Howard Johnson   403    43,803    59.0%  $62.54   $36.88 
                          
Baymont   396    31,480    60.0%  $72.04   $43.20 
                          
Travelodge   414    30,692    59.8%  $74.56   $44.56 
                          
Microtel Inns & Suites by Wyndham   333    23,960    64.2%  $72.00   $46.20 
                          
Knights Inn   383    23,464    49.2%  $52.00   $25.58 
                          
TRYP by Wyndham   122    17,641    70.3%  $84.05   $59.05 
                          
Wingate by Wyndham   148    13,450    70.4%  $91.42   $64.39 
                          
Hawthorn Suites by Wyndham   101    10,053    70.1%  $81.67   $57.28 
                          
Dolce   24    5,530    58.8%  $160.45   $94.40 
                          
Total Lodging   7,757    671,923    61.4%  $70.63   $43.34 
                          
Vacation Ownership                         
Wyndham Vacation Ownership resorts   211    24,095    N/A    N/A    N/A 
                          
Total Wyndham Worldwide   7,968    696,018                

 

 

   As of and For the Three Months Ended September 30, 2014 
Brand  Number of
Properties
   Number of Rooms   Average
Occupancy Rate
   Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)
 
                     
Lodging                         
Super 8   2,476    158,347    63.3%  $55.36   $35.05 
                          
Days Inn   1,791    144,405    57.7%  $70.77   $40.83 
                          
Ramada   829    114,918    58.5%  $82.00   $47.95 
                          
Howard Johnson   432    46,303    54.4%  $65.79   $35.77 
                          
Wyndham Hotels and Resorts   182    41,510    67.0%  $113.52   $76.06 
                          
Travelodge   424    31,117    60.5%  $75.65   $45.74 
                          
Baymont   359    29,293    59.0%  $69.16   $40.78 
                          
Knights Inn   394    24,326    50.2%  $49.53   $24.84 
                          
Microtel Inns & Suites by Wyndham   320    22,862    65.6%  $71.02   $46.59 
                          
TRYP by Wyndham   119    16,910    69.4%  $93.45   $64.85 
                          
Wingate by Wyndham   157    14,377    68.2%  $89.34   $60.89 
                          
Hawthorn Suites by Wyndham   97    9,685    69.5%  $77.13   $53.62 
                          
Dream   5    989    63.9%  $221.73   $141.74 
                          
Night   2    280    76.6%  $164.40   $125.90 
                          
Total Lodging   7,587    655,322    60.4%  $72.34   $43.71 
                          
Vacation Ownership                         
Wyndham Vacation Ownership resorts   202    23,498    N/A    N/A    N/A 
                          
Total Wyndham Worldwide   7,789    678,820                

 

 

 

NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

 

 

 

  

Table 6

(2 of 2)

 

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

 

   As of and For the Nine Months Ended September 30, 2015 
Brand  Number of
Properties
   Number of Rooms   Average
Occupancy Rate
   Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)
 
                     
Lodging                         
Super 8   2,600    166,656    59.2%  $51.01   $30.17 
                          
Days Inn   1,785    142,613    52.5%  $68.20   $35.83 
                          
Ramada   838    117,044    55.5%  $75.78   $42.08 
                          
Wyndham Hotels and Resorts   210    45,537    61.8%  $111.39   $68.87 
                          
Howard Johnson   403    43,803    51.1%  $62.91   $32.15 
                          
Baymont   396    31,480    54.5%  $69.23   $37.72 
                          
Travelodge   414    30,692    52.9%  $69.14   $36.55 
                          
Microtel Inns & Suites by Wyndham   333    23,960    59.8%  $69.81   $41.73 
                          
Knights Inn   383    23,464    46.9%  $48.56   $22.79 
                          
TRYP by Wyndham   122    17,641    62.4%  $80.87   $50.42 
                          
Wingate by Wyndham   148    13,450    65.4%  $89.70   $58.66 
                          
Hawthorn Suites by Wyndham   101    10,053    68.5%  $81.16   $55.62 
                          
Dolce   24    5,530    57.5%  $149.84   $86.20 
                          
Total Lodging   7,757    671,923    56.1%  $68.97   $38.72 
                          
Vacation Ownership                         
Wyndham Vacation Ownership resorts   211    24,095    N/A    N/A    N/A 
                          
Total Wyndham Worldwide   7,968    696,018                

 

 

   As of and For the Nine Months Ended September 30, 2014 
Brand  Number of
Properties
   Number of Rooms   Average
Occupancy Rate
   Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)
 
                     
Lodging                         
Super 8   2,476    158,347    58.4%  $51.75   $30.21 
                          
Days Inn   1,791    144,405    52.7%  $66.20   $34.91 
                          
Ramada   829    114,918    55.3%  $80.22   $44.36 
                          
Howard Johnson   432    46,303    49.5%  $63.66   $31.49 
                          
Wyndham Hotels and Resorts   182    41,510    63.2%  $114.72   $72.47 
                          
Travelodge   424    31,117    53.1%  $68.87   $36.56 
                          
Baymont   359    29,293    54.4%  $66.09   $35.95 
                          
Knights Inn   394    24,326    45.9%  $47.01   $21.56 
                          
Microtel Inns & Suites by Wyndham   320    22,862    61.1%  $67.25   $41.08 
                          
TRYP by Wyndham   119    16,910    62.7%  $92.33   $57.89 
                          
Wingate by Wyndham   157    14,377    65.3%  $87.14   $56.93 
                          
Hawthorn Suites by Wyndham   97    9,685    66.4%  $76.90   $51.03 
                          
Dream   5    989    70.2%  $219.10   $153.79 
                          
Night   2    280    69.4%  $147.35   $102.20 
                          
Total Lodging   7,587    655,322    55.8%  $69.45   $38.77 
                          
Vacation Ownership                         
Wyndham Vacation Ownership resorts   202    23,498    N/A    N/A    N/A 
                          
Total Wyndham Worldwide   7,789    678,820                

 

 

NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

 

 

 

 

 

Table 7

(1 of 2)

 

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

 

  Net Revenues   Reported
EBITDA
   Legacy
 Adjustments (b)
   Acquisition
 Costs (c)
   Restructuring
 Costs (d)
   Asset
 Impairment (e)
   Contract
Termination (f)
   Adjusted
EBITDA
 
Three months ended March 31, 2015                                
Lodging  $292   $76   $-   $3   $-   $-   $-   $79 
Vacation Exchange and Rentals   369    105    -    -    (1)   -    -    104 
Vacation Ownership   617    130    -    -    -    -    -    130 
Total Reportable Segments   1,278    311    -    3    (1)   -    -    313 
Corporate and Other (a)   (16)   (34)   -    -    -    -    -    (34)
Total Company  $1,262   $277   $-   $3   $(1)  $-   $-   $279 
                                         
Three months ended June 30, 2015                                        
Lodging  $334   $96   $-   $1   $-   $-   $-   $97 
Vacation Exchange and Rentals   383    84    -    -    -    -    -    84 
Vacation Ownership   699    182    -    -    -    -    -    182 
Total Reportable Segments   1,416    362    -    1    -    -    -    363 
Corporate and Other (a)   (18)   (30)   (1)   -    -    -    -    (31)
Total Company  $1,398   $332   $(1)  $1   $-   $-   $-   $332 
                                         
Three months ended September 30, 2015                                        
Lodging  $357   $83   $-   $-   $4   $7   $14   $108 
Vacation Exchange and Rentals   476    134    -    -    3    -    -    137 
Vacation Ownership   750    200    -    -    1    -    -    201 
Total Reportable Segments   1,583    417    -    -    8    7    14    446 
Corporate and Other (a)   (19)   (35)   1    -    -    -    -    (34)
Total Company  $1,564   $382   $1   $-   $8   $7   $14   $412 

 

 

(a) Includes the elimination of transactions between segments.
(b) Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
(c) Relates to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015).
(d) Relates to costs incurred as a result of various organizational realignment inititatives and the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014.
(e) Relates to a non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from the Company's decision to outsource its reservation system to a third-party provider.
(f) Relates to the cost of the anticipated termination of a management contract.

 

 

 

  

Table 7

(2 of 2)

 

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

 

  Net Revenues   Reported
EBITDA
   Executive
Departure
Costs
   Venezuela
Currency
 Devaluation (b)
   VAT
 Adjustment (c)
   Restructuring
Costs (d)
   Loss on Sale
and Asset
 Impairments (e)
   Legacy
 Adjustments (f)
   Adjusted
EBITDA
 
Three months ended March 31, 2014                                    
Lodging  $237   $64   $4   $-   $-   $-   $-   $-   $68 
Vacation Exchange and Rentals   379    85    -    10    -    -    -    -    95 
Vacation Ownership   593    115    -    -    -    -    -    -    115 
Total Reportable Segments   1,209    264    4    10    -    -    -    -    278 
Corporate and Other (a)   (16)   (34)   -    -    -    -    -    -    (34)
Total Company  $1,193   $230   $4   $10   $-   $-   $-   $-   $244 
                                              
Three months ended June 30, 2014                                             
Lodging  $283   $87   $-   $-   $-   $-   $-   $-   $87 
Vacation Exchange and Rentals   402    89    -    -    (2)   -    -    -    87 
Vacation Ownership   673    185    -    -    -    -    -    -    185 
Total Reportable Segments   1,358    361    -    -    (2)   -    -    -    359 
Corporate and Other (a)   (15)   (35)   -    -    -    -    -    -    (35)
Total Company  $1,343   $326   $-   $-   $(2)  $-   $-   $-   $324 
                                              
Three months ended September 30, 2014                                             
Lodging  $315   $100   $-   $-   $-   $(1)  $8   $-   $107 
Vacation Exchange and Rentals   512    159    -    -    -    -    -    -    159 
Vacation Ownership   704    188    -    -    -    -    -    -    188 
Total Reportable Segments   1,531    447    -    -    -    (1)   8    -    454 
Corporate and Other (a)   (17)   (36)   -    -    -    -    -    -    (36)
Total Company  $1,514   $411   $-   $-   $-   $(1)  $8   $-   $418 
                                              
Three months ended December 31, 2014                                             
Lodging  $267   $77   $-   $-   $-   $2   $-   $-   $79 
Vacation Exchange and Rentals   311    2    -    -    -    10    27    -    39 
Vacation Ownership   668    172    -    -    -    -    -    -    172 
Total Reportable Segments   1,246    251    -    -    -    12    27    -    290 
Corporate and Other (a)   (15)   (36)   -    -    -    -    -    (2)   (38)
Total Company  $1,231   $215   $-   $-   $-   $12   $27   $(2)  $252 
                                              
Twelve months ended December 31, 2014                                             
Lodging  $1,101   $327   $4   $-   $-   $1   $8   $-   $340 
Vacation Exchange and Rentals   1,604    335    -    10    (2)   10    27    -    380 
Vacation Ownership   2,638    660    -    -    -    -    -    -    660 
Total Reportable Segments   5,343    1,322    4    10    (2)   11    35    -    1,380 
Corporate and Other (a)   (62)   (141)   -    -    -    -    -    (1)   (142)
Total Company  $5,281   $1,181   $4   $10   $(2)  $11   $35   $(1)  $1,238 

 

 

Note: The sum of the quarters may not agree to the twelve months ended December 31, 2014 due to rounding.
(a) Includes the elimination of transactions between segments.  
(b) Represents the devaluation of the official exchange rate of Venezuela.
(c) Reversal of a reserve for value-added taxes.
(d) Relates to (i) the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 and (ii) costs incurred as a result of various organizational realignment initiatives by the Company.
(e) Relates to (i) a loss on the sale of a business and a write-down of an equity investment at the Company's vacation exchange and rentals business and (ii) a write-down of an investment in a joint venture at the Company's lodging business.
(f) Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

 

 

 

  

Table 8

(1 of 4)

 

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

   Three Months Ended September 30, 2015 
                         
    As Reported    Legacy
 Adjustments (a)
   Restructuring
 Costs (b)
   Asset
 Impairment (d)
   Contract
Termination (e)
   As Adjusted
non-GAAP
 
Net revenues                              
Service and membership fees  $734   $   $   $   $   $734 
Vacation ownership interest sales   448                        448 
Franchise fees   192                        192 
Consumer financing   108                        108 
Other   82                        82 
Net revenues   1,564    -    -    -    -    1,564 
                               
Expenses                              
Operating   691                   (14)   677 
Cost of vacation ownership interests   43                        43 
Consumer financing interest   18                        18 
Marketing and reservation   218                        218 
General and administrative   200    (1)                  199 
Asset impairment   7              (7)        - 
Restructuring   8         (8)             - 
Depreciation and amortization   59                        59 
Total expenses   1,244    (1)   (8)   (7)   (14)   1,214 
                               
Operating income   320    1    8    7    14    350 
Other income, net   (3)                       (3)
Interest expense   33                        33 
Interest income   (2)                       (2)
                               
Income before income taxes   292    1    8    7    14    322 
Provision for income taxes   102    -    2(c)   2(c)   6(c)   112 
                               
Net income  $190   $1   $6   $5   $8   $210 
                               
Earnings per share                              
Basic  $1.62   $0.01   $0.05   $0.04   $0.07   $1.79 
Diluted   1.61    0.01    0.05    0.04    0.07    1.78 
                               
Weighted average shares outstanding                              
Basic   117    117    117    117    117    117 
Diluted   118    118    118    118    118    118 

 

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

Note:  EPS amounts may not add due to rounding.
(a) Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
(b) Relates to costs incurred as a result of various organizational realignment initiatives across the Company.
(c) Relates to the tax effect of the adjustment.
(d) Relates to a non-cash impairment charge at the Company's lodging business related to the write-down of terminated in-process technology projects resulting from the decision to outsource the reservation system to a third-party provider.
(e) Relates to the cost of the anticipated termination of a management contract within the Company's lodging business.

 

 

 

 

Table 8

(2 of 4)

 

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

   Nine Months Ended September 30, 2015 
                         
    As Reported    Acquisition
 Costs (a)
   Restructuring
 Costs (c)
   Asset
Impairment (e)
   Contract
Termination (f)
   As Adjusted
non-GAAP
 
Net revenues                              
Service and membership fees  $1,957   $   $   $   $   $1,957 
Vacation ownership interest sales   1,201                        1,201 
Franchise fees   517                        517 
Consumer financing   318                        318 
Other   231                        231 
Net revenues   4,224    -    -    -    -    4,224 
                               
Expenses                              
Operating   1,865    (3)             (14)   1,848 
Cost of vacation ownership interests   123                        123 
Consumer financing interest   55                        55 
Marketing and reservation   624                        624 
General and administrative   562                        562 
Asset impairment   7              (7)        - 
Restructuring   8         (8)             - 
Depreciation and amortization   173                        173 
Total expenses   3,417    (3)   (8)   (7)   (14)   3,385 
                               
Operating income   807    3    8    7    14    839 
Other income, net   (11)                       (11)
Interest expense   89                        89 
Interest income   (7)                       (7)
                               
Income before income taxes   736    3    8    7    14    768 
Provision for income taxes   265    (1)(b)   2(d)   2(d)   6(d)   274 
                               
Net income  $471   $4   $6   $5   $8   $494 
                               
Earnings per share                              
Basic  $3.96   $0.04   $0.05   $0.04   $0.07   $4.15 
Diluted   3.93    0.04    0.05    0.04    0.07    4.12 
                               
Weighted average shares outstanding                              
Basic   119    119    119    119    119    119 
Diluted   120    120    120    120    120    120 

 

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

Note: EPS amounts may not add due to rounding.

(a) Relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015) at the Company's lodging business.  
(b) Relates to (i) the tax effect of the adjustment and (ii) a valuation allowance established in connection with the acquisition of Dolce Hotels and Resorts.    
(c) Relates to costs incurred as a result of various organizational realignment initiatives across the Company and the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014 at the Company's vacation exchange and rentals business.     
(d) Relates to the tax effect of the adjustment.    
(e) Relates to a non-cash impairment charge at the Company's lodging business related to the write-down of terminated in-process technology projects resulting from the decision to outsource the reservation system to a third-party provider.     
(f) Relates to the cost of the anticipated termination of a management contract within the Company's lodging business.    

 

 

 

  

Table 8

(3 of 4)

 

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

   Three Months Ended September 30, 2014 
                 
    As Reported    Restructuring
Reversal (a)
   Asset
Impairment (b)
   As Adjusted
non-GAAP
 
Net revenues                    
Service fees and membership  $717   $   $   $717 
Vacation ownership interest sales   415              415 
Franchise fees   189              189 
Consumer financing   108              108 
Other   85              85 
Net revenues   1,514    -    -    1,514 
                     
Expenses                    
Operating   613              613 
Cost of vacation ownership interests   49              49 
Consumer financing interest   18              18 
Marketing and reservation   227              227 
General and administrative   188    1         189 
Asset impairment   8         (8)   - 
Depreciation and amortization   60              60 
Total expenses   1,163    1    (8)   1,156 
                     
Operating income   351    (1)   8    358 
Interest expense   28              28 
Interest income   (2)             (2)
                     
Income before income taxes   325    (1)   8    332 
Provision for income taxes   119    -    3(c)   122 
                     
Net income  $206   $(1)  $5   $210 
                     
Earnings per share                    
Basic  $1.65   $(0.01)  $0.04   $1.69 
Diluted   1.64    (0.01)   0.04    1.67 
                     
Weighted average shares outstanding                    
Basic   124    124    124    124 
Diluted   126    126    126    126 

 

 

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

Note: EPS amounts may not add due to rounding.

(a) Relates to the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 at the Company's lodging business.
(b) Relates to a write-down of an investment in a joint venture at the Company's lodging business.
(c) Relates to the tax effect of the adjustment.

 

 

 

  

Table 8

(4 of 4)

 

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

   Nine Months Ended September 30, 2014 
                                 
    As Reported    Executive
Departure
Costs (a)
   Venezuela
Currency
Devaluation (c)
   Legacy
Adjustments (d)
   VAT
Adjustment (f)
   Restructuring
Reversal (g)
   Asset
Impairment (h)
   As Adjusted
non-GAAP
 
Net revenues                                        
Service fees and membership  $1,922   $   $   $   $   $   $   $1,922 
Vacation ownership interest sales   1,101                                  1,101 
Franchise fees   482                                  482 
Consumer financing   319                                  319 
Other   226                                  226 
Net revenues   4,050    -    -    -    -    -    -    4,050 
                                         
Expenses                                        
Operating   1,721         (10)                       1,711 
Cost of vacation ownership interests   129                                  129 
Consumer financing interest   52                                  52 
Marketing and reservation   614                                  614 
General and administrative   564    (4)        (1)   2    1         562 
Asset impairment   8                             (8)   - 
Depreciation and amortization   175                                  175 
Total expenses   3,263    (4)   (10)   (1)   2    1    (8)   3,243 
                                         
Operating income   787    4    10    1    (2)   (1)   8    807 
Other income, net   (5)                                 (5)
Interest expense   84                   2              86 
Interest income   (6)                                 (6)
                                         
Income before income taxes   714    4    10    1    (4)   (1)   8    732 
Provision for income taxes   265    1(b)   1(b)   1(e)   (2)(b)   -    3(b)   269 
                                         
Net income   449    3    9    -    (2)   (1)   5    463 
Net income attributable to noncontrolling interest   (1)   -    -    -    -    -    -    (1)
                                         
Net income attributable to Wyndham shareholders  $448   $3   $9   $-   $(2)  $(1)  $5   $462 
                                         
Earnings per share                                        
Basic  $3.55   $0.02   $0.07   $-   $(0.02)  $(0.01)  $0.04   $3.65 
Diluted   3.51    0.02    0.07    -    (0.02)   (0.01)   0.04    3.62 
                                         
Weighted average shares outstanding                                        
Basic   126    126    126    126    126    126    126    126 
Diluted   128    128    128    128    128    128    128    128 

 

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

Note: EPS amounts may not add due to rounding.

(a) Related to costs associated with an executive's departure at the Company's lodging business.
(b) Relates to the tax effect of the adjustment.
(c) Represents the devaluation of the official exchange rate of Venezuela at the Company's vacation exchange and rentals business.
(d) Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
(e) Relates to the reversal of a state tax accrual.
(f) Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.
(g) Relates to the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 at the Company's lodging business.
(h) Relates to a write-down of an investment in a joint venture at the Company's lodging business.

 

 

 

  

Table 9

 

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)

 

FREE CASH FLOW  

We define free cash flow to be net cash provided by operating activities less property and equipment additions which we also refer to as capital expenditures.

 

We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.

 

The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these financial measures:

  

   Nine Months Ended September 30,         
   2015       2014         
                     
Net cash provided by operating activities  $817        $899           
Less: Property and equipment additions   (157)        (149)          
Free cash flow  $660        $750           

    

GROSS VOI SALES  

 

The following table provides a reconciliation of Gross VOI sales (see Table 3) to vacation ownership interest sales (see Table 4):

 

Year
2015
  Q1   Q2   Q3   Q4   Full Year 
                     
Gross VOI sales (*)  $390   $502   $565     N/A      N/A  
Less: Sales under WAAM Fee-for-Service   (21)   (26)   (37)    N/A      N/A  
Gross VOI sales, net of WAAM Fee-for-Service sales   369    477    528     N/A      N/A  
Less: Loan loss provision   (46)   (60)   (78)    N/A      N/A  
Plus: Impact of percentage-of-completion accounting   13    -    (2)    N/A      N/A  
Vacation ownership interest sales (*)  $336   $417   $448     N/A      N/A  
                          
2014                         
                          
Gross VOI sales (*)  $410   $496   $513   $470   $1,889 
Less: Sales under WAAM Fee-for-Service   (44)   (40)   (27)   (21)   (132)
Gross VOI sales, net of WAAM Fee-for-Service sales   366    456    486    449    1,757 
Less: Loan loss provision   (60)   (70)   (70)   (60)   (260)
Less: Impact of percentage-of-completion accounting   (3)   (4)   (1)   (4)   (12)
Vacation ownership interest sales (*)  $303   $382   $415   $385   $1,485 
                          
2013                         
                          
Gross VOI sales (*)  $384   $481   $536   $488   $1,889 
Less: Sales under WAAM Fee-for-Service   (36)   (44)   (51)   (29)   (160)
Gross VOI sales, net of WAAM Fee-for-Service sales   347    437    486    459    1,729 
Less: Loan loss provision   (84)   (90)   (102)   (73)   (349)
Less: Impact of percentage-of-completion accounting   -    -    -    (1)   (1)
Vacation ownership interest sales (*)  $263   $347   $384   $384   $1,379 
                          
2012                         
                          
Gross VOI sales (*)  $384   $460   $502   $435   $1,781 
Less: Sales under WAAM Fee-for-Service   (17)   (18)   (5)   (10)   (49)
Gross VOI sales, net of WAAM Fee-for-Service sales   367    442    497    426    1,732 
Less: Loan loss provision   (96)   (100)   (124)   (89)   (409)
Vacation ownership interest sales (*)  $271   $342   $373   $337   $1,323 

 

 

Note: Amounts may not add due to rounding.

(*) Includes VOI sales under WAAM Just-in-Time beginning in the second quarter of 2012.

 

The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):

 

  Q1   Q2   Q3   Q4   Full Year 
                    
2015  $24   $17   $32      N/A       N/A  
2014  $25   $21   $27   $24   $97 
2013  $24   $18   $22   $25   $89 
2012  $27   $20   $22   $28   $97