EXHIBIT 99.1

 

WW_Logo_1clr_Spot

 

Wyndham Worldwide Reports First Quarter 2017 Results

Increases Full-Year EPS Guidance

 

 

PARSIPPANY, N.J. (April 26, 2017) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended March 31, 2017.

 

 

FIRST QUARTER 2017 OPERATING RESULTS

First quarter revenues were $1.3 billion, up 1% compared with the prior year period. Full reconciliations of GAAP results to non-GAAP measures for all reported periods appear in the tables to this press release.

 

Net income for the first quarter of 2017 was $141 million compared with $96 million for the first quarter of 2016. Diluted earnings per share (EPS) were $1.33 compared with $0.84 for the prior year period. Adjusted net income for the first quarter of 2017, which excludes charges and gains in 2017 and charges in 2016 as detailed in Table 7 of this press release, was $120 million compared with $127 million for the first quarter of 2016, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017. Adjusted diluted EPS was $1.14 compared with $1.12 per share in the prior year period, reflecting the benefit of the Company’s share repurchase program.

 

First quarter EBITDA was $266 million, compared with $267 million in the prior year period. Adjusted EBITDA, which excludes charges in both 2017 and 2016 as detailed in Table 8 of this press release, was $278 million, compared with $291 million in the prior year period, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017.

 

“Our first quarter results were right in line with our expectations,” said Stephen P. Holmes, chairman and CEO. “We’re excited by the progress we’re making in connecting our customers and brands through Wyndham Rewards to enhance customer acquisition, experience and retention. We expect this to result in stronger growth and greater long-term value for our shareholders this year and for years to come.

 

“In addition, we are pleased to welcome Mike Brown as the new CEO and president of our vacation ownership business,” continued Mr. Holmes. “Mike is a 25-year hospitality industry veteran and brings an ideal combination of strategic vision, operational expertise, and industry knowledge to the role. I am confident that Mike is the right leader to take Wyndham Vacation Ownership to the next level.”

 

 

 

 

For the three months ended March 31, 2017, net cash provided by operating activities was $238 million, compared with $261 million in the prior year period. The decrease primarily reflects changes in the timing of inventory purchases.

 

Free cash flow was $203 million for the three months ended March 31, 2017, compared with $218 million for the same period in 2016, primarily reflecting the changes in net cash provided by operating activities. The Company defines free cash flow as net cash provided by operating activities less capital expenditures.

 

FIRST QUARTER 2017 BUSINESS UNIT RESULTS

 

Hotel Group

Revenues were $298 million in the first quarter of 2017, compared with $295 million in the first quarter of 2016. EBITDA was $85 million in the first quarter compared with $84 million in the prior-year quarter, growing 2% on a currency-neutral basis. Results reflect higher franchise fees and growth in the Wyndham Rewards credit card program, partially offset by lower occupancy at the Company’s owned hotel in Puerto Rico due to consumer concerns about the Zika virus.

 

First quarter domestic same-store RevPAR increased 1.7% compared with the first quarter of 2016. In constant currency, total system-wide same-store RevPAR increased 2.2%.

 

As of March 31, 2017, the Company’s hotel system consisted of approximately 8,100 properties and 699,800 rooms, a 3.0% net room increase compared with the first quarter of 2016. The development pipeline increased to 1,130 hotels and approximately 143,100 rooms, of which 59% were international and 68% were new construction.

 

Destination Network

Revenues were $391 million in the first quarter of 2017, compared with $385 million in the first quarter of 2016, an increase of 2%. In constant currency and excluding acquisitions, revenues increased 1%.

 

Vacation rental revenues were $184 million compared with $183 million in the prior year quarter. In constant currency and excluding acquisitions, vacation rental revenues increased 1%, reflecting a 2.8% increase in transaction volume partially offset by a 2.0% decline in the average net price per rental. Transaction volume benefited from capacity increases across the Company’s U.K.-based cottages and parks brands and Denmark-based Novasol brand, partially offset by the impact from the timing of the Easter holiday. Average net price per rental declined due to the mix impact of growth in the Company’s more modestly priced brands and the timing of the Easter holiday.

 

Exchange revenues were $183 million compared with $182 million in the prior year quarter. In constant currency, exchange revenue per member increased 0.8% and the average number of members declined 0.6%.

 

 

 

 

EBITDA was $102 million in the first quarter of 2017, including $2 million from acquisitions. This compares with first quarter 2016 EBITDA of $81 million or adjusted EBITDA of $105 million. 2016 adjusted EBITDA excluded a $24 million loss related to a currency devaluation. First quarter year-over-year EBITDA and adjusted EBITDA comparisons reflect the absence of a benefit of $3 million from business disruption claims received in the first quarter of 2016, as well as the unfavorable impact of the timing of the Easter holiday.

 

Vacation Ownership

Revenues were $648 million in the first quarter of 2017, compared with $641 million in the first quarter of 2016.

 

Gross VOI sales increased 3% in the first quarter of 2017. Volume per guest (VPG) was up 4.9%, reflecting both a higher average close rate and transaction size. Tour flow declined 1.7% due to the closure of sales offices as part of a restructuring in the second half of last year.

 

EBITDA was $118 million in the first quarter of 2017 compared with $136 million in the prior year quarter. Adjusted EBITDA was $124 million in the first quarter of 2017. First quarter year-over-year EBITDA and adjusted EBITDA results reflect higher gross VOI sales offset by a higher provision for loan losses and the absence of a $6 million benefit from business interruption insurance claims received in the first quarter of 2016.

 

 

OTHER ITEMS

·The Company repurchased 1.9 million shares of common stock for $150 million during the first quarter of 2017 at an average price of $80.93. From April 1 through April 25, 2017, the Company repurchased an additional 0.4 million shares for $36 million.
·Net interest expense in the first quarter of 2017 was $31 million, flat compared with the first quarter of 2016.
·Depreciation and amortization in the first quarter of 2017 was $63 million, compared with $62 million in the first quarter of 2016.

 

 

 

 

Balance Sheet Information as of March 31, 2017:

·Cash and cash equivalents of $222 million, compared with $185 million at December 31, 2016
·Vacation ownership contract receivables, net of $2.8 billion, unchanged from December 31, 2016
·Vacation ownership and other inventory of $1.4 billion, unchanged from December 31, 2016
·Securitized vacation ownership debt of $2.1 billion, unchanged from December 31, 2016
·Long-term debt of $3.6 billion, compared with $3.4 billion at December 31, 2016. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of March 31, 2017, compared with $1.1 billion at December 31, 2016.

 

A schedule of debt is included in Table 12 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.

 

The Company provides the following guidance for the full year 2017:

·Reiterates revenues of approximately $5.80 billion to $5.95 billion
·Updates adjusted net income to approximately $631 million to $652 million from $637 million to $658 million, reflecting higher interest expense from a new long-term debt issuance in the first quarter 2017 that replaced lower cost borrowings
·Reiterates adjusted EBITDA of approximately $1.41 billion to $1.44 billion
·Updates adjusted diluted EPS to approximately $5.98 to $6.18 based on a diluted share count of 105.5 million from $5.90 to $6.10 based on a diluted share count of 108 million

 

In determining adjusted net income, adjusted EBITDA and adjusted EPS, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. A description of the adjustments that have been applicable for the reported periods in determining adjusted net income, adjusted EBITDA and adjusted EPS are reflected in Tables 7 and 8 of this press release. The Company is providing an outlook for net income, EBITDA and EPS only on a non-GAAP basis because the Company is unable to predict with reasonable certainty the totality or ultimate outcome or occurrence of these adjustments or other potential adjustments that may arise in the future during the outlook period, which can be dependent on future events that may not be reliably predicted. See Table 10 for certain non-GAAP information concerning the outlook period.

 

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

 

 

 

 

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company’s results, outlook and guidance on Wednesday, April 26, 2017 at 8:30 a.m. ET. Listeners can access the webcast live through the Company’s website at http://www.wyndhamworldwide.com/investors/. The conference call may also be accessed by dialing 800-862-9098 and providing the pass code "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. An archive of this webcast will be available on the website for approximately 90 days beginning at 12:00 p.m. ET on April 26, 2017. A telephone replay will be available for approximately 10 days beginning at 12:00 p.m. ET on April 26, 2017 at 800-839-4012.

 

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 operating performance. Exclusion of items in the Company’s non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of the press release.

 

ABOUT WYNDHAM WORLDWIDE

Wyndham Worldwide (NYSE: WYN) is one of the largest global hospitality companies, providing travelers with access to a collection of trusted hospitality brands in hotels, vacation ownership, and unique accommodations including vacation exchange, holiday parks, and managed home rentals. With a collective inventory of nearly 130,000 places to stay across more than 110 countries on six continents, Wyndham Worldwide and its 38,000 associates welcomes people to experience travel the way they want. This is enhanced by Wyndham Rewards®, the Company’s re-imagined guest loyalty program across its businesses, which is making it simpler for members to earn more rewards and redeem their points faster. 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. Forward-looking statements are those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by terminology such as “will,” “expect,” believe,” “plan,” “anticipate,” “goal,” “future,” “outlook,” guidance,” “target,” “estimate” and similar expressions. 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 17, 2017. 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 Contacts:

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

  

 

 

 

Wyndham Worldwide Corporation

Earnings Release Schedules

Quarter One - March 31, 2017

Table of Contents

    

  Table No.
   
Consolidated Statements of Income (Unaudited) 1
   
Operating Results of Reportable Segments 2
   
Operating Statistics 3
   
Condensed Consolidated Statements of Cash Flows and Reconciliation of Free Cash Flows (Unaudited) 5
   
Revenue Detail by Reportable Segment 6
   
Brand System Details 7
   
Non-GAAP Reconciliation of Adjusted Net Income and EPS 8
   
Non-GAAP Reconciliation of Adjusted EBITDA by Reportable Segment 9
   
Non-GAAP Reconciliation of Gross VOI Sales 12
   
Non-GAAP Reconciliation of 2017 Outlook 13
   
Non-GAAP Reconciliation - Constant Currency, Currency Neutral and Acquisitions 14
   
Schedule of Debt 15

 

 

 

 

                Table 1 

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

                 

 

   Three Months Ended 
   March 31, 
   2017   2016 
Net revenues          
Service and membership fees  $636   $634 
Vacation ownership interest sales   351    342 
Franchise fees   141    138 
Consumer financing   111    107 
Other   80    82 
Net revenues   1,319    1,303 
           
Expenses          
Operating   601    613 
Cost of vacation ownership interests   36    37 
Consumer financing interest   18    18 
Marketing and reservation   195    192 
General and administrative   193    186 
Asset impairments   5    - 
Restructuring   7    - 
Depreciation and amortization   63    62 
Total expenses   1,118    1,108 
           
Operating income   201    195 
Other (income)/expense, net   (2)   (10)
Interest expense   33    33 
Early extinguishment of debt   -    11 
Interest income   (2)   (2)
           
Income before income taxes   172    163 
Provision for income taxes   31    67 
Net income  $141   $96 
           
Earnings per share          
Basic  $1.34   $0.85 
Diluted   1.33    0.84 
           
Weighted average shares outstanding          
Basic   105    113 
Diluted   106    114 

 

 

 

 

                          Table 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 also uses adjusted EBITDA as a financial measure of its operating performance.  The Company believes that EBITDA and adjusted EBITDA are useful measures of assessing performance of the Company and for the Company's segments which, when considered with GAAP measures, give a more complete understanding of its operating performance and assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or nonrecurring and which in our view do not necessarily reflect ongoing operating performance. We also internally use these measures to assess our operating performance, both in absolute terms and in comparison to other companies, and in evaluating or making selected compensation decisions.  These supplemental disclosures are in addition to GAAP reported measures.  The Company’s presentation of EBITDA and adjusted 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 net income to EBITDA for the three months ended March 31, 2017 and 2016:

                              

   Three Months Ended March 31, 
   2017   2016 
   Net Revenues   EBITDA   Net Revenues   EBITDA 
Hotel Group  $298   $85   $295   $84 
Destination Network   391    102    385    81 
Vacation Ownership   648    118    641    136 
     Total Reportable Segments   1,337    305    1,321    301 
Corporate and Other (a)   (18)   (39)   (18)   (34)
     Total Company  $1,319   $266   $1,303   $267 

 

Reconciliation of net income to EBITDA

 

       Three Months Ended March 31, 
       2017       2016 
Net income       $141        $96 
Provision for income taxes        31         67 
Depreciation and amortization        63         62 
Interest expense        33         33 
Early extinguishment of debt        -         11 
Interest income        (2)        (2)
EBITDA       $266        $267 

 

 

(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 March 31, 2017 and 2016 (for a description of adjustments and reconciliation by segment, see Table 8):

                              

   Three Months Ended March 31, 
   2017   2016 
       Adjusted      Adjusted 
   Net Revenues   EBITDA   Net Revenues   EBITDA 
Hotel Group  $298   $85   $295   $84 
Destination Network   391    102    385    105 
Vacation Ownership   648    124    641    136 
     Total Reportable Segments   1,337    311    1,321    325 
Corporate and Other (a)   (18)   (33)   (18)   (34)
     Total Company  $1,319   $278   $1,303   $291 

 

 

 

 

      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 
Hotel Group (a)                            
Number of Rooms   2017   699,800     N/A      N/A      N/A      N/A  
   2016   679,100    683,300    689,800    697,600     N/A  
   2015   667,400    668,500    671,900    678,000     N/A  
   2014   646,900    650,200    655,300    660,800     N/A  
                             
RevPAR  2017  $31.73   $ N/A    $ N/A    $ N/A    $ N/A  
   2016  $31.59   $39.10   $43.04   $32.92   $36.67 
   2015  $32.84   $39.82   $43.34   $32.98   $37.26 
   2014  $32.30   $40.11   $43.71   $34.06   $37.57 
Destination Network                            
Average Number of Members (in 000s)  2017   3,817     N/A      N/A      N/A      N/A  
   2016   3,841    3,857    3,868    3,843    3,852 
   2015   3,822    3,831    3,835    3,836    3,831 
   2014   3,727    3,748    3,777    3,808    3,765 
                             
Exchange Revenue Per Member  2017  $192.01   $ N/A    $ N/A    $ N/A    $ N/A  
   2016  $189.78   $164.61   $164.39   $151.19   $167.48 
   2015  $194.06   $167.81   $163.38   $152.00   $169.29 
   2014  $200.78   $179.17   $171.77   $157.24   $177.12 
                             
Vacation Rental Transactions (in 000s) (a) (b)  2017   538     N/A      N/A      N/A      N/A  
   2016   500    409    508    350    1,767 
   2015   459    390    462    319    1,630 
   2014   429    376    455    293    1,552 
                             
Average Net Price Per Vacation Rental (a) (b)  2017  $343.07   $ N/A    $ N/A    $ N/A    $ N/A  
   2016  $366.08   $492.83   $599.59   $430.14   $475.24 
   2015  $361.20   $513.14   $642.00   $452.19   $494.92 
   2014  $410.04   $577.13   $727.40   $492.25   $558.95 
Vacation Ownership (a)                            
Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c)  2017  $439,000   $ N/A    $ N/A    $ N/A    $ N/A  
   2016  $428,000   $518,000   $564,000   $502,000   $2,012,000 
   2015  $390,000   $502,000   $565,000   $507,000   $1,965,000 
   2014  $410,000   $496,000   $513,000   $470,000   $1,889,000 
                             
Tours (in 000s)  2017   176     N/A      N/A      N/A      N/A  
   2016   179    213    230    197    819 
   2015   168    206    227    200    801 
   2014   170    208    225    191    794 
                             
Volume Per Guest (VPG)  2017  $2,354   $ N/A    $ N/A    $ N/A    $ N/A  
   2016  $2,244   $2,328   $2,320   $2,399   $2,324 
   2015  $2,177   $2,353   $2,354   $2,390   $2,326 
   2014  $2,272   $2,280   $2,158   $2,336   $2,257 

 

 

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 destination network 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. (See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).

 

ADDITIONAL DATA                                 

 

   Year  Q1   Q2   Q3   Q4   Full Year 
Hotel Group                            
Number of Properties  2017   8,080     N/A      N/A      N/A      N/A  
   2016   7,830    7,880    7,930    8,040     N/A  
   2015   7,670    7,700    7,760    7,810     N/A  
   2014   7,500    7,540    7,590    7,650     N/A  
Vacation Ownership                            
Provision for Loan Losses (in 000s) (*)  2017  $85,000   $ N/A    $ N/A    $N/A    $N/A  
   2016  $63,000   $90,000   $104,000   $86,000   $342,000 
   2015  $46,000   $60,000   $78,000   $64,000   $248,000 
   2014  $60,000   $70,000   $70,000   $60,000   $260,000 

 

 

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

 

Hotel Group

 

Number of Rooms: Represents the number of rooms at hotel group 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.

 

Destination Network

 

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 in connection with customers booking their vacation rental stays through one of our vacation brands. 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 divided by the number of vacation rental transactions.

 

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. We believe gross VOI sales provide an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period. 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 2014-2017.  

 

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND RECONCILIATION OF FREE CASH FLOWS

(In millions)

(Unaudited)

               

 

Condensed Consolidated Statements of Cash Flows:        
   Three Months Ended March 31, 
   2017   2016 
Net cash provided by operating activities  $238   $261 
           
Net cash used in investing activities   (79)   (90)
           
Net cash used in financing activities   (124)   (27)
           
Effect of changes in exchange rates on cash and cash equivalents   2    3 
           
Net increase in cash and cash equivalents  $37   $147 

 

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 measures 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:

 

   Three Months Ended March 31, 
   2017   2016 
Net cash provided by operating activities  $238   $261 
Less: Property and equipment additions   (35)   (43)
Free cash flow  $203   $218 

 

 

 

  

                                                Table 5

Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)

 

 

   2017   2016 
   Q1   Q2   Q3   Q4   Year   Q1   Q2   Q3   Q4   Year 
Hotel Group                                                  
Royalties and Franchise Fees  $79     N/A      N/A      N/A      N/A    $74   $94   $105   $94   $367 
Marketing, Reservation and Wyndham Rewards Revenues (a)   83     N/A      N/A      N/A      N/A     83    103    125    92    405 
Hotel Management Reimbursable Revenues (b)   66     N/A      N/A      N/A      N/A     67    71    67    65    271 
Intersegment Trademark Fees   13     N/A      N/A      N/A      N/A     13    15    16    14    56 
Owned Hotel Revenues   23     N/A      N/A      N/A      N/A     27    19    17    17    81 
Ancillary Revenues (c)   34     N/A      N/A      N/A      N/A     31    32    34    34    129 
Total Hotel Group   298     N/A      N/A      N/A      N/A     295    334    364    316    1,309 
                                                   
Destination Network                                                  
Exchange Revenues   183     N/A      N/A      N/A      N/A     182    159    159    145    645 
Rental Revenues   184     N/A      N/A      N/A      N/A     183    202    304    151    840 
Ancillary Revenues (d)   24     N/A      N/A      N/A      N/A     20    23    23    21    86 
Total Destination Network   391     N/A      N/A      N/A      N/A     385    384    486    317    1,571 
                                                   
Vacation Ownership                                                  
Vacation Ownership Interest Sales   351     N/A      N/A      N/A      N/A     342    409    441    415    1,606 
Consumer Financing   111     N/A      N/A      N/A      N/A     107    108    112    113    440 
Property Management Fees and Reimbursable Revenues   175     N/A      N/A      N/A      N/A     164    161    168    168    660 
WAAM Fee-for-Service Commissions   2     N/A      N/A      N/A      N/A     17    16    13    -    46 
Ancillary Revenues (e)   9     N/A      N/A      N/A      N/A     11    11    10    9    42 
Total Vacation Ownership   648     N/A      N/A      N/A      N/A     641    705    744    705    2,794 
Total Reportable Segments  $1,337     N/A      N/A      N/A      N/A    $1,321   $1,423   $1,594   $1,338   $5,674 

 

   2015   2014 
   Q1   Q2   Q3   Q4   Year   Q1   Q2   Q3   Q4   Year 
Hotel Group                                                  
Royalties and Franchise Fees  $74   $96   $103   $87   $361   $68   $88   $100   $83   $339 
Marketing, Reservation and Wyndham Rewards Revenues (a)   96    108    112    92    407    76    101    117    91    385 
Hotel Management Reimbursable Revenues (b)   61    71    73    68    273    37    39    39    39    154 
Intersegment Trademark Fees   12    15    16    15    57    9    11    11    10    41 
Owned Hotel Revenues   25    20    16    19    79    24    20    18    20    81 
Ancillary Revenues (c)   24    24    37    33    120    23    24    30    24    101 
Total Hotel Group   292    334    357    314    1,297    237    283    315    267    1,101 
                                                   
Destination Network                                                  
Exchange Revenues   185    161    157    146    649    187    168    162    150    667 
Rental Revenues   166    200    296    144    807    176    217    331    144    868 
Ancillary Revenues (d)   18    22    23    20    82    16    17    19    17    69 
Total Destination Network   369    383    476    310    1,538    379    402    512    311    1,604 
                                                   
Vacation Ownership                                                  
Vacation Ownership Interest Sales   336    417    448    403    1,604    303    382    415    385    1,485 
Consumer Financing   104    105    108    109    427    105    106    108    108    427 
Property Management Fees and Reimbursable Revenues   153    149    159    155    615    143    145    150    142    581 
WAAM Fee-for-Service Commissions   12    19    23    28    83    33    30    18    16    98 
Ancillary Revenues (e)   12    9    12    11    43    9    10    13    17    47 
Total Vacation Ownership   617    699    750    706    2,772    593    673    704    668    2,638 
Total Reportable Segments  $1,278   $1,416   $1,583   $1,330   $5,607   $1,209   $1,358   $1,531   $1,246   $5,343 

 

 

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 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 6

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

               

 

   As of and For the Three Months Ended March 31, 2017
Brand  Number of
Properties
  Number of Rooms  Average
Occupancy Rate
  Average Daily
Rate (ADR)
  Average Revenue
Per Available
Room (RevPAR)
                
Hotel Group               
Super 8  2,839  179,268  52.7%  $44.35  $23.39
                
Days Inn  1,786  142,872  45.2%  $65.14  $29.44
                
Ramada     862  120,647  50.0%  $69.58  $34.82
                
Wyndham Hotels and Resorts     254    55,694  53.1%  $101.23  $53.75
                
Howard Johnson     367    42,318  45.8%  $57.08  $26.12
                
Baymont     437    34,519  46.1%  $66.85  $30.79
                
Travelodge     406    29,725  43.4%  $66.41  $28.85
                
Microtel Inns & Suites by Wyndham     336    24,226  52.1%  $65.65  $34.21
                
Knights Inn     370    22,589  41.5%  $48.78  $20.25
                
TRYP by Wyndham     115    16,223  58.0%  $73.59  $42.67
                
Wingate by Wyndham     153    14,073  57.1%  $85.49  $48.79
                
Hawthorn Suites by Wyndham     108    10,633  61.6%  $82.74  $50.98
                
Dolce       21      4,747  46.8%  $154.48  $72.36
                
Dazzler       12      1,525  63.4%  $91.84  $58.25
                
Esplendor       10         698  66.1%  $92.14  $60.90
                
Total Hotel Group  8,076   699,757  49.5%  $64.04  $31.73
                
Vacation Ownership               
Wyndham Vacation Ownership resorts     221      24,859  N/A  N/A  N/A
                
Total Wyndham Worldwide  8,297  724,616         

 

  

   As of and For the Three Months Ended March 31, 2016
Brand  Number of
Properties
  Number of Rooms  Average
Occupancy Rate
  Average Daily
Rate (ADR)
  Average Revenue
Per Available
Room (RevPAR)
                
Hotel Group               
Super 8  2,665  170,454  51.5%  $45.73  $23.54
                
Days Inn  1,791  143,212  44.3%  $63.81  $28.28
                
Ramada  837  117,409  49.0%  $73.76  $36.12
                
Wyndham Hotels and Resorts  228  49,952  54.7%  $103.78  $56.73
                
Howard Johnson  381  41,555  44.1%  $59.74  $26.33
                
Baymont  416  33,070  44.9%  $66.07  $29.66
                
Travelodge  406  29,760  45.3%  $63.18  $28.63
                
Microtel Inns & Suites by Wyndham  333  24,045  51.1%  $63.64  $32.52
                
Knights Inn  381  23,258  41.5%  $48.76  $20.22
                
TRYP by Wyndham  120  17,274  54.8%  $72.93  $39.97
                
Wingate by Wyndham  149  13,610  56.3%  $86.52  $48.70
                
Hawthorn Suites by Wyndham  105  10,466  62.3%  $82.76  $51.57
                
Dolce  22  5,080  45.5%  $152.13  $69.17
                
Total Hotel Group  7,834  679,145  48.6%  $64.93  $31.59
                
Vacation Ownership               
Wyndham Vacation Ownership resorts  216  24,442  N/A  N/A  N/A
                
Total Wyndham Worldwide  8,050  703,587         

 

 

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

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME AND EPS

(In millions, except per share data)

                         

 

   Location on Consolidated Statements of Income  Three Months Ended March 31, 
      2017   2016 
Diluted weighted average shares outstanding      106    114 
              
Diluted EPS     $1.33   $0.84 
              
Net income     $141   $96 
              
Adjustments:             
Restructuring costs (a)  Restructuring   7    - 
Asset impairments (b)  Asset impairments   5    - 
Venezuela currency devaluation (c)  Operating   -    24 
Early extinguishment of debt (d)  Early extinguishment of debt   -    11 
Total adjustments before tax       12    35 
Income tax (benefit)/expense (e) (f)  Provision for income taxes   (33)   (4)
Total adjustments after tax      (21)   31 
Adjustments - EPS impact     $(0.19)  $0.27 
Adjusted Net income     $120   $104 
Adjusted diluted EPS     $1.14   $1.12 

 

 

Note: Amounts may not add due to rounding.

 

(a) Relates to expenses associated with restructuring initiatives at the Company's corporate operations which focused on rationalizing its sourcing function and outsourcing certain information technology functions as well at its Hotel Group segment which primarily focused on realigning its brand operations.
(b) Represents a non-cash impairment charge related to the write-down of assets resulting from the decision to abandon a new product initiative at the Company's vacation ownership business.
(c) Represents the impact from the devaluation of the exchange rate of Venezuela at the Company's destination network business.
(d) Represents costs incurred in connection with the Company's early repurchase of its 6.0% senior unsecured notes.
(e) The amount for 2017 relates to (i) the tax effect of the adjustments and (ii) a tax benefit on foreign currency losses recognized from an internal restructuring.
(f) The amount for 2016 relates to the tax effect of the adjustments. There was no tax benefit associated with the $24 million Venezuela currency devaluation adjustment.

 

The above tables reconcile certain non-GAAP financial measures.  The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors' understanding of the overall impact of such adjustments.  In addition to GAAP financial measures, the Company provides adjusted net income and adjusted EPS financial measures to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance.  We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions.  These supplemental disclosures are in addition to GAAP reported measures.  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.

 

 

 

 

                              Table 8

                              (1 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT

(In millions)

                               

 

      Restructuring   Asset   Adjusted 
   EBITDA   Costs (b)   Impairments (c)   EBITDA 
Three months ended March 31, 2017                    
Hotel Group  $85   $1   $-   $85 
Destination Network   102    -    -    102 
Vacation Ownership   118    -    5    124 
Total Reportable Segments   305    1    5    311 
Corporate and Other (a)   (39)   6    -    (33)
Total Company  $266   $7   $5   $278 

 

 

Note: Amounts may not add across due to rounding. 

 

(a) Includes the elimination of transactions between segments.
(b) Relates to expenses associated with restructuring initiatives at the Company's corporate operations which focused on rationalizing its sourcing function and outsourcing certain information technology functions as well at its Hotel Group segment which primarily focused on realigning its brand operations.
(c) Represents a non-cash impairment charge related to the write-down of assets resulting from the decision to abandon a new product initiative.

 

 

 

 

                                                            Table 8

                                                            (2 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT

(In millions)

                                                             

 

   

 

EBITDA

   

Venezuela

Currency

Devaluation (b)

    Acquisition
Costs (c)
    Legacy
Costs (d)
    Restructuring
Costs (e)
   

Contract

Termination (f)

   

Executive

Departure
Costs (g)

   

Bargain

Purchase
Gain (h)

   

 

Adjusted
EBITDA

 
Three months ended March 31, 2016                                                                        
Hotel Group   $ 84     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 84  
Destination Network     81       24       -       -       -       -       -       -       105  
Vacation Ownership     136       -       -       -       -       -       -       -       136  
Total Reportable Segments     301       24       -       -       -       -       -       -       325  
Corporate and Other (a)     (34 )     -       -       -       -       -       -       -       (34 )
Total Company   $ 267     $ 24     $ -     $ -     $ -     $ -     $ -     $ -     $ 291  
                                                                         
Three months ended June 30, 2016                                                                        
Hotel Group   $ 101     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 101  
Destination Network     85       -       1               -       -       -       -       85  
Vacation Ownership     187       -       -       -       -       -       -       -       187  
Total Reportable Segments     373       -       1       -       -       -       -       -       373  
Corporate and Other (a)     (33 )     -       -       -       -       -       -       -       (33 )
Total Company   $ 340     $ -     $ 1     $ -     $ -     $ -     $ -     $ -     $ 340  
                                                                         
Three months ended September 30, 2016                                                                        
Hotel Group   $ 107     $ -     $ -     $ -     $ 3     $ 7     $ -     $ -     $ 117  
Destination Network     138       -       -       -       4       -       -       -       142  
Vacation Ownership     189       -       -       -       6       -       -       -       195  
Total Reportable Segments     434       -       -       -       13       7       -       -       454  
Corporate and Other (a)     (32 )     -               (1 )     1       -       -       -       (31 )
Total Company   $ 402     $ -     $ -     $ (1 )   $ 14     $ 7     $ -     $ -     $ 423  
                                                                         
Three months ended December 31, 2016                                                                        
Hotel Group   $ 99     $ -     $ 1     $ -     $ (1 )   $ -     $ -     $ -     $ 99  
Destination Network     53       -       1       -       -       -       -       (2 )     52  
Vacation Ownership     182       -               -       2       -       6       -       191  
Total Reportable Segments     334       -       2       -       1       -       6       (2 )     342  
Corporate and Other (a)     (12 )     -       -       (11 )     -       -       -       -       (24 )
Total Company   $ 322     $ -     $ 2     $ (11 )   $ 1     $ -     $ 6     $ (2 )   $ 318  
                                                                         
Twelve months ended December 31, 2016                                                                        
Hotel Group   $ 391     $ -     $ 1     $ -     $ 2     $ 7     $ -     $ -     $ 401  
Destination Network     356       24       1       -       5       -       -       (2 )     385  
Vacation Ownership     694       -       -       -       8       -       6       -       708  
Total Reportable Segments     1,441       24       2       -       15       7       6       (2 )     1,494  
Corporate and Other (a)     (110 )     -       -       (11 )     -       -       -       -       (121 )
Total Company   $ 1,331     $ 24     $ 2     $ (11 )   $ 15     $ 7     $ 6     $ (2 )   $ 1,373  

 

 

Note: Amounts may not add across due to rounding. The sum of the quarters may not add down due to rounding.                                                            

 

(a) Includes the elimination of transactions between segments.
(b) Represents the impact from the devaluation of the exchange rate of Venezuela.
(c) Represents costs related to acquisitions.
(d) Relates to a benefit from adjustments to certain contingent liabilities from the Company's separation from Cendant.
(e) Relates to costs incurred due to enhancing organizational efficiency and rationalizing existing facilities across the Company.
(f) Relates to additional costs associated with the termination of a management contract.
(g) Represents costs associated with the departure of the chief executive officer at the Company's vacation ownership business. 
(h) Represents a gain from a bargain purchase on an acquisition of a vacation rentals business.

  

 

 

 

                                  Table 8

                                  (3 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT

SHARED-BASED COMPENSATION EXPENSE

(In millions)

 

The following tables provide detail regarding share-based compensation expense which is included within adjusted EBITDA:                                   

  

   2017 
   Q1   Q2   Q3   Q4   Full Year 
Adjusted EBITDA  $278     N/A      N/A      N/A      N/A  
Share-based compensation expense (*)   14     N/A      N/A      N/A      N/A  
Adjusted EBITDA excluding share-based compensation expense  $293     N/A      N/A      N/A      N/A  

  

 

   2016 
   Q1   Q2   Q3   Q4   Full Year 
Adjusted EBITDA  $291   $340   $423   $318   $1,373 
Share-based compensation expense (*)   13    20    14    13    61 
Adjusted EBITDA excluding share-based compensation expense  $304   $360   $437   $331   $1,434 

 

 

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

(*)Excludes share-based compensation expenses for which there was no impact on adjusted EBITDA. Such costs amounted to $1 million during Q1 2017. During 2016, such costs amounted to $1 million during Q1, Q2 and Q3, and $4 million during Q4 and $7 million for the full year. The Company believes providing adjusted EBITDA with the additional exclusion of share-based compensation expense assists our investors and management by providing an additional financial measure to evaluate ongoing operations by excluding the variations among companies in timing, amount and reporting of share-based compensation expense, which may differ significantly among companies.

 

 

 

 

                        Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION OF GROSS VOI SALES

(In millions)

GROSS VOI SALES

 

 

We believe gross vacation ownership sales provide an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period.

 

The following table provides a reconciliation of Gross VOI sales (see Table 3) to vacation ownership interest sales (see Table 5):

  

Year                    
2017  Q1   Q2   Q3   Q4   Full Year 
                     
Gross VOI sales  $439   $N/A   $N/A    $N/A   $N/A  
Less: Sales under WAAM Fee-for-Service   (3)    N/A      N/A      N/A      N/A  
Gross VOI sales, net of WAAM Fee-for-Service sales   436     N/A      N/A      N/A      N/A  
Less: Loan loss provision   (85)    N/A      N/A      N/A      N/A  
Vacation ownership interest sales  $351   $N/A    $N/A    $N/A    $N/A  

 

2016                    
                     
Gross VOI sales  $428   $518   $564   $502   $2,012 
Less: Sales under WAAM Fee-for-Service   (23)   (20)   (20)   (1)   (64)
Gross VOI sales, net of WAAM Fee-for-Service sales   405    498    544    501    1,948 
Less: Loan loss provision   (63)   (90)   (104)   (86)   (342)
Vacation ownership interest sales  $342   $409   $441   $415   $1,606 

 

2015                    
                     
Gross VOI sales  $390   $502   $565   $507   $1,965 
Less: Sales under WAAM Fee-for-Service   (21)   (26)   (37)   (42)   (126)
Gross VOI sales, net of WAAM Fee-for-Service sales   369    477    528    464    1,838 
Less: Loan loss provision   (46)   (60)   (78)   (64)   (248)
Less: Impact of percentage-of-completion accounting   13    -    (2)   2    13 
Vacation ownership interest sales  $336   $417   $448   $403   $1,604 

 

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 

  

 

Note: Amounts may not add due to rounding.

 

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 
                     
2017  $25   $ N/A    $ N/A    $ N/A    $ N/A  
2016  $25   $22   $31   $30   $108 
2015  $24   $17   $32   $27   $100 
2014  $25   $21   $27   $24   $97 

 

 

 

 

 

              Table 10

Wyndham Worldwide Corporation

2017 OUTLOOK -  NON-GAAP

(In millions, except per share data)

               

 

   Outlook (a)   Outlook (a) 
   As Adjusted   As Adjusted 
   (Non-GAAP)   (Non-GAAP) 
   Low   High 
         
Net revenues  $5,800   $5,950 
           
           
Adjusted EBITDA  $1,410   $1,440 
Depreciation and amortization   (268)   (263)
Interest expense, net   (146)   (142)
Adjusted income before taxes   995    1,028 
Income taxes   (364)   (376)
Adjusted net income  $631   $652 
           
Adjusted diluted earnings per share  $5.98   $6.18 
           
Diluted shares   105.5    105.5 

 

 

In determining adjusted EBIDTA, adjusted Net Income and adjusted EPS, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. A description of the adjustments which have been applicable in determining adjusted EBITDA, adjusted Net Income and adjusted EPS is included in Tables 7 and 8.  The Company is providing outlook on a non-GAAP basis because the Company is unable to predict with reasonable certainty the totality or ultimate outcome or occurrence of potential adjustments for the forward-looking period, which can be dependent on future events that may not be reliably predicted, such as acquisitions, legacy expenses, restructuring events, asset impairments, contract terminations, currency devaluations, or early extinguishment of debt instruments. Based on past reported results, where one or more of these items have been applicable, such excluded special items could be material, individually or in the aggregate, to the reported results. See Tables 7 and 8 for historical adjustments.

 

(a)Outlook represents Company's approximate projection of performance for the outlook period.  Projections may not total because the Company does not expect the actual results of all items to be at the precise amount simultaneously.

 

 

 

 

Table 11

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION - CONSTANT CURRENCY, CURRENCY NEUTRAL AND ACQUISITIONS

(In millions, except per share data)

 

 

The Company reports certain current year period financial measures on a constant currency and currency-neutral basis and excluding the impact of acquisitions.  The Company believes providing certain financial measures on a constant currency and currency-neutral basis as well as excluding the impact of acquisitions assists management and investors in better understanding underlying results and trends by excluding the impact of period over period changes in foreign exchange rates and changes resulting from acquisitions.

 

Constant currency results assume foreign results are translated from foreign currencies to the U.S. dollar at exchange rates consistent with those in the comparable period.

 

Currency Neutral results (i) assume foreign results are translated from foreign currencies to the U.S. dollar at exchange rates consistent with those in the comparable period and (ii) eliminating foreign exchange related activities such as foreign exchange hedges, balance sheet remeasurements, currency devaluations and/or other adjustments.

 

Acquisition results are defined as the incremental period over period changes in the Company's results directly attributable to acquisitions.

                          

Revenues in Constant Currency and Excluding Acquisitions:   Three Months Ended March 31,
   2017   2016   % Change 
Destination Network revenue as reported  $391   $385    2%
Adjustments:               
Foreign currency - constant currency   9    -    * 
Incremental revenues from acquisitions   (13)   -    * 
Total Destination Network revenues in constant currency and excluding acquisitions  $387   $385    1%
                
Rental revenue as reported  $184   $183    1%
Adjustments:               
Foreign currency - constant currency   9    -    * 
Incremental revenues from acquisitions   (9)   -    * 
Total Rental revenues in constant currency and excluding acquisitions  $184   $183    1%

 

Currency-neutral Adjusted EBITDA:   Three months ended March 31,
   2017   2016   % Change 
Hotel Group EBITDA (a)  $85   $84    1%
Adjustments:               
Foreign currency - currency-neutral   1    -    * 
Hotel Group currency-neutral EBITDA  $86   $84    2%
                
Destination Network Adjusted EBITDA (a)  $102   $105    -3%
Adjustments:               
Incremental EBITDA from acquisitions   (2)   -    * 
Destination Network Adjusted EBITDA excluding acquisitions  $100   $105    -5%

  

 

*Not meaningful.
(a)See Table 8 for a reconciliation of EBITDA to adjusted EBITDA and Table 2 for a reconciliation of Net Income to EBITDA

  

 

 

 

                              Table 12

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

                                 

 

   March 31,   December 31,   March 31, 
   2017   2016   2016 
             
Securitized vacation ownership debt: (a)               
   Term notes  $1,902   $1,857   $2,005 
   Bank conduit facility (b)   236    284    121 
Total securitized vacation ownership debt (c)   2,138    2,141    2,126 
Less: Current portion of securitized vacation ownership debt   191    195    207 
Long-term securitized vacation ownership debt  $1,947   $1,946   $1,919 
                
                
Debt:               
   Revolving credit facility (due July 2020) (d)  $8   $14   $10 
   Commercial paper (e)   221    427    343 
   Term loan (due March 2021)   324    323    323 
   $300 million 2.95% senior unsecured notes (due March 2017) (f)   -    300    299 
   $14 million 5.75% senior unsecured notes (due February 2018) (g)   14    14    14 
   $450 million 2.50% senior unsecured notes (due March 2018) (g)   449    449    448 
   $40 million 7.375% senior unsecured notes (due March 2020)   40    40    40 
   $250 million 5.625% senior unsecured notes (due March 2021)   248    248    247 
   $650 million 4.25% senior unsecured notes (due March 2022)   648    648    648 
   $400 million 3.90% senior unsecured notes (due March 2023)   406    407    408 
   $300 million 4.15% senior unsecured notes (due April 2024)   297    -    - 
   $350 million 5.10% senior unsecured notes (due October 2025)   339    338    337 
   $400 million 4.50% senior unsecured notes (due April 2027)   396    -    - 
   Capital leases   141    143    158 
   Other   44    20    31 
Total long-term debt   3,575    3,371    3,306 
Less: Current portion of long-term debt   40    34    45 
Long-term debt  $3,535   $3,337   $3,261 

 

 

(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 2018 and borrowing capacity of $650 million. As of March 31, 2017, this facility had a remaining borrowing capacity of $414 million.
(c) This debt is collateralized by $2,582 million, $2,601 million and $2,548 million, of underlying vacation ownership contract receivables and related assets as of March 31, 2017, December 31, 2016, and March 31, 2016, respectively.
(d) Represents a $1.5 billion revolving credit facility that expires in July 2020. As of March 31, 2017, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $221 million, the remaining borrowing capacity was $1.3 billion as of March 31, 2017.
(e) Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.0 billion as of March 31, 2017.
(f) Classified as long-term as of December 31, 2016 and March 31, 2016 as the Company had the intent to refinance such debt on a long-term basis and the ability to do so with its revolving credit facility.
(g) Classified as long-term as of March 31, 2017 as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with its revolving credit facility.