Wyndham Worldwide Reports Strong Fourth Quarter and Full Year 2007 Results
- Delivers Double-Digit Top
- and Bottom-Line Growth for Full Year 2007
- Announces Full Year 2007 Adjusted EPS Growth of 25%
- Affirms 2008 Guidance
PARSIPPANY, N.J., Feb. 12 // PRNewswire-FirstCall // -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months and year ended December 31, 2007.
Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items, or reflect pro forma adjustments, related to the Company's spin-off effective July 31, 2006. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. Non-GAAP measures are indicated as "Adjusted." A complete reconciliation of reported GAAP results to the comparable Adjusted information appears in the financial tables section of this press release.
FOURTH QUARTER AND 2007 HIGHLIGHTS:
-- Fourth quarter 2007 revenues increased 6% to $1.0 billion
-- Fourth quarter 2007 net income was $104 million or $0.58 diluted earnings per share. Adjusted net income was $83 million or $0.46 diluted earnings per share.
-- Revenues for full year 2007 increased 13% to $4.4 billion compared to full year 2006, with strong, top-line growth across the Company's three businesses
-- Net income for full year 2007 increased 40% to $403 million, or $2.20 per diluted share, compared to 2006 net income of $287 million, or $1.44 per diluted share
-- Adjusted net income for full year 2007 increased to $387 million, or $2.12 per diluted share, up 14% and 25%, respectively, compared to 2006 Adjusted net income of $339 million, or $1.70 per diluted share
-- Vacation Ownership posted strong full-year results, with 2007 revenues and gross vacation ownership sales increasing 17% and 14%, respectively, compared to 2006
-- Vacation Ownership resort count continued to expand, adding over 1,500 units to the portfolio during the year
-- Comparable revenue per available room (RevPAR) rose 5.9% in the fourth quarter of 2007 compared to the fourth quarter of 2006, while system-wide RevPAR increased 5.3% over the prior year period
-- Lodging opened nearly 19,000 rooms in the fourth quarter of 2007, while ending the year with a hotel pipeline of over 105,000 rooms
-- Average number of vacation exchange members increased 5% for full year 2007 compared to 2006, reaching a Company record of more than 3.5 million members
-- Average net price per vacation rental increased 14% for full year 2007 compared to 2006, or 6% excluding the favorable effect of currency translations
-- During 2007, Wyndham Worldwide repurchased approximately 14.8 million shares. At December 31, 2007, approximately $163 million remained under the Company's previously announced share repurchase program.
"Wyndham Worldwide posted strong financial and operating results in 2007, concluding our first full year as a public company with double-digit revenue and EBITDA growth as each of our business units delivered within our expectations," said Stephen P. Holmes, Wyndham Worldwide chairman and chief executive officer. "Our company continues to benefit from a global portfolio of economically resilient businesses and brands and from our multiple revenue sources, with more than half of our revenue generated from fee-for-service businesses. We continue to believe that our business model solidly positions us for continued growth, even in what looks like a tougher economic environment in 2008."
FULL YEAR 2007 OPERATING RESULTS Revenues for full year 2007 increased to $4.4 billion, up 13% over the same period in 2006, reflecting strong organic growth:
-- Lodging revenues grew 10% primarily due to solid RevPAR gains, increased property management reimbursable revenues and the continued strength and positioning of our portfolio of brands worldwide
-- Vacation Exchange and Rentals revenues increased 9% due to strength in vacation rentals and solid growth in the vacation exchange member base, as well as favorable currency translations
-- Vacation Ownership posted terrific results, with full year 2007 revenues and gross vacation ownership sales increasing 17% and 14%, respectively, driven by increases in both tour flow and volume per guest
Net income for full year 2007 was $403 million or $2.20 diluted earnings per share, compared to 2006 net income of $287 million or $1.44 diluted earnings per share. Net income for 2007 includes $10 million after-tax of separation and related costs and $26 million in after-tax net benefit from the resolution of and adjustment to certain legacy items. Excluding these items, Adjusted net income for full year 2007 was $387 million or $2.12 diluted earnings per share, up 14% and 25%, respectively, from full year 2006. Adjusted net income for full year 2006 was $339 million, or $1.70 diluted earnings per share.
FOURTH QUARTER 2007 OPERATING RESULTS
Revenues for the fourth quarter of 2007 were $1.0 billion, up 6% over the same period in 2006, reflecting continued organic growth.
Net income for the fourth quarter of 2007 was $104 million or $0.58 diluted earnings per share, compared to $92 million or $0.48 diluted earnings per share for the fourth quarter of 2006.
Excluding $21 million in after-tax net benefit from the resolution of and adjustment to certain legacy items, primarily related to a previously disclosed litigation settlement agreement by our former parent company, Adjusted net income for the fourth quarter of 2007 was $83 million, or $0.46 diluted earnings per share.
Excluding $22 million after-tax of separation and related costs and excluding $30 million in after-tax net benefit from the resolution of and adjustment to certain legacy items, Adjusted net income for the fourth quarter of 2006 was $84 million, or $0.44 diluted earnings per share.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues increased 16% to $176 million in the fourth quarter of 2007 compared with the fourth quarter of 2006, reflecting strong RevPAR gains and increased property management reimbursable revenues. Comparable RevPAR increased 5.9% in the fourth quarter of 2007 and system-wide RevPAR increased 5.3% over the prior year period. For the quarter, Days Inn and Super 8, which collectively represent almost 60% of the Company's U.S. lodging portfolio -- continued to experience industry-leading comparable RevPAR growth for their segments. The Company's top five international lodging markets, Canada, China, the U.K., Germany and Mexico, which collectively represent 75% of the Company's international lodging portfolio, enjoyed RevPAR growth of almost 19% in the fourth quarter.
Property management reimbursable revenues were $28 million and marketing/reservation revenues, including TripRewards revenues, were $65 million in the fourth quarter of 2007, compared to $16 million and $61 million, respectively, in the fourth quarter of 2006; these items contribute little, if any, margin.
Fourth quarter 2007 EBITDA grew to $49 million compared to $47 million in the fourth quarter of 2006 (which included $1 million of separation and related costs). The EBITDA growth was muted by the timing of approximately $5 million of incremental marketing expenses.
As of December 31, 2007, the Company's hotel system consisted of approximately 550,600 rooms and 6,540 properties, with a development pipeline of approximately 930 hotels and over 105,000 rooms, of which 44% were new construction and 32% were international.
Vacation Exchange and Rentals (Group RCI)
Revenues increased to $280 million in the fourth quarter of 2007, a 5% increase compared with the fourth quarter of 2006, reflecting growth in both vacation exchange and vacation rentals, as well as favorable currency translations, partially offset by a decline in other ancillary revenue. Excluding the favorable effect of currency translations of $14 million, revenues were flat compared to the fourth quarter of 2006.
Vacation exchange revenues were $112 million, up 2% compared to the fourth quarter of 2006, primarily driven by a 5% increase in the average number of members, partially offset by a 3% decrease in annual dues and exchange revenue per member primarily related to the timing and mix of exchange deposits.
Vacation rentals revenues were $125 million, a 20% increase compared to the fourth quarter of 2006, or a 9% increase excluding the favorable effect of currency translations. These results reflect a 20% increase in the average net price per vacation rental, or 9% excluding favorable currency translations, primarily due to the mix of activity at premium locations and the conversion of existing Landal parks from franchised to managed properties.
Other ancillary revenues generated primarily from additional products and services provided to affiliates and members were $43 million in the fourth quarter of 2007, compared with $51 million in the fourth quarter of 2006, primarily due to the absence of $4 million of revenues recorded during the fourth quarter of 2006 relating to consulting activities in Asia Pacific and $3 million of other marketing program revenues.
Fourth quarter 2007 EBITDA was $56 million, compared to fourth quarter 2006 EBITDA of $59 million, dampened by the impact of the consulting activities mentioned above and other marketing revenues in the fourth quarter of 2006 that were not repeated in 2007.
Vacation Ownership (Wyndham Vacation Ownership)
Revenues increased 4% to $576 million in the fourth quarter of 2007 compared to the fourth quarter of 2006, reflecting continued success in marketing and sales, incremental property management revenues and growing consumer finance revenues. Fourth quarter 2007 revenues included a $21 million reduction in revenues as a result of deferred vacation ownership revenue under the percentage-of-completion method of accounting compared with an $11 million reduction in the fourth quarter of 2006.
Gross Vacation Ownership Interest sales (which exclude the effect of deferred revenues) were $488 million for the fourth quarter of 2007, up 4% compared to the fourth quarter of 2006, driven by marketing efforts resulting in increases in tour flow and volume per guest based on strong performance by our sales force and continued strength in transaction pricing.
Consumer finance revenues increased $17 million or 22% for the fourth quarter of 2007 compared to the fourth quarter of 2006, which was partially offset in EBITDA due to improved borrowing efficiency against vacation ownership receivables. This shifted approximately $4 million of what would have been interest expense below EBITDA into interest expense reflected within EBITDA.
EBITDA for the fourth quarter of 2007 increased 11% to $99 million, compared to $89 million in the fourth quarter of 2006, which included $15 million of separation and related costs. Fourth quarter 2007 EBITDA reflects a net reduction of approximately $6 million due to the increase in deferred vacation ownership revenue compared with the fourth quarter of 2006.
By the end of the quarter, Wyndham Vacation Ownership had largely completed its program of rebranding its properties under the Wyndham flag.
Other Items
Corporate results were positively affected by lower legal fees and transition service expenses in fourth quarter 2007 compared to the prior year period. Interest expense for the fourth quarter of 2007 was $17 million, unchanged from the fourth quarter of 2006. Interest income for the quarter was $2 million, a $1 million decrease from the comparable prior year period. Depreciation and amortization rose $3 million to $44 million.
Balance Sheet Information as of December 31, 2007:
-- Cash and cash equivalents of approximately $210 million compared to approximately $270 million at December 31, 2006
-- Vacation ownership contract receivables, net, of $2.9 billion compared to $2.4 billion at December 31, 2006
-- Vacation ownership and other inventory of approximately $1.2 billion compared to approximately $955 million at December 31, 2006
-- Securitized vacation ownership debt of $2.1 billion compared to $1.5 billion at December 31, 2006
-- Other debt of $1.5 billion, compared to $1.4 billion at December 31,2006
A schedule of debt is included in the financial tables section of this press release.
Share Repurchase
The Company repurchased 970,000 shares of stock during the fourth quarter of 2007 at an average price of $27.92. For full year 2007, the Company repurchased 14.8 million shares of stock at an average price of $34.32. At December 31, 2007, approximately $163 million remained under the Company's previously announced share repurchase program.
Through February 11, the Company repurchased an additional 473,000 shares of stock at an average price of $22.19 and had approximately $154 million remaining under the current share repurchase authorization.
Outlook and Guidance
Wyndham Worldwide affirms guidance as follows:
Full Year 2008:
-- Revenues of $4,800 - $4,900 million
-- EBITDA of $920 - $945 million
-- Depreciation and amortization expense of $175 - $185 million
-- Interest expense, net of $75 - $85 million
-- Effective tax rate of 38.25%
-- Net income of $401 - $429 million
-- EPS of $2.23 - $2.38 based on weighted average shares of approximately 180 million
First Quarter 2008:
-- EPS of $0.30 - $0.35 based on weighted average shares of approximately 180 million
-- EPS guidance reflects a reduction for the estimated impact of deferred vacation ownership revenue of $0.12 - $0.15 per share that will be recognized in future quarters
All guidance excludes legacy items which may have a positive or negative impact on reported results.
"I am pleased with our performance in 2007 and believe we are well- positioned to generate substantial long-term value for our shareholders," said Mr. Holmes. "While we see no current evidence of a slowdown in our businesses, we are watching consumer sentiment and the overall economy very carefully. That said, we believe 2008 will be a year of opportunity for Wyndham Worldwide, in large part because of the resiliency and flexibility inherent in our business model. We believe that Wyndham Worldwide can successfully compete and perform even in a slowing macro-economic environment."
Conference Call Information
Wyndham Worldwide Corporation will provide a webcast of its conference call to discuss the Company's fourth quarter and full year 2007 financial results on Tuesday, February 12, 2008 at 8:30 a.m. EST. Listeners may access the webcast live through the Company's Web site at http://www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the Web site for approximately 90 days beginning at noon EST on February 12. The conference call also may be accessed by dialing (517) 308- 9108 and providing the pass code "Wyndham." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available at (203) 369-0767 beginning at noon EST on February 12 until 5 p.m. EST on February 17.
About Wyndham Worldwide
As one of the world's largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses more than 6,500 franchised hotels and approximately 550,000 hotel rooms worldwide. Group RCI offers its more than 3.6 million members access to more than 67,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of approximately 145 vacation ownership resorts serving over 800,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs more than 33,000 employees globally.
For more information about Wyndham Worldwide, please visit the Company's web site at http://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 trends for the Company's revenues, earnings and related financial and operating measures and the number of hotels the Company intends to add in future periods.
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 markets, the economic environment for the hospitality industry, the impact of war and terrorist activity, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those in the Company's 2006 Annual Report on Form 10-K, filed with the SEC on March 7, 2007. 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.
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 interest on securitized
vacation ownership debt), interest income, income taxes and cumulative
effect of accounting change, net of tax, each of which is presented on
the Company's Consolidated and Combined Statements of Income. 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 reportable
segments, as well as reconcile EBITDA to net income for the three and
twelve months ended December 31, 2007 and 2006:
Three Months Ended December 31,
----------------------------------------
2007 2006
------------------- -------------------
Net Revenues EBITDA Net Revenues EBITDA(c)
------------ ------ ------------ ------
Lodging $176 $49 $152 $47
Vacation Exchange and Rentals 280 56 266 59
Vacation Ownership 576 99 554 89
------------ ------ ------------ ------
Total Reportable Segments 1,032 204 972 195
Corporate and Other (a) (b) - 28 (2) 6
------------ ------ ------------ ------
Total Company $1,032 $232 $970 $201
============ ====== ============ ======
Reconciliation of EBITDA to
Net Income
---------------------------
EBITDA $232 $201
Depreciation and amortization 44 41
Interest expense 17 17
Interest income (2) (3)
------ ------
Income before income taxes 173 146
Provision for income taxes 69 54
------ ------
Net income $104 $92
====== ======
Twelve Months Ended December 31,
------------------------------------------
2007 2006
------------------- -------------------
Net Revenues EBITDA(d) Net Revenues EBITDA(d)
------------ ------ ------------ ------
Lodging $725 $223 $661 $208
Vacation Exchange and Rentals 1,218 293 1,119 265
Vacation Ownership 2,425 378 2,068 325
------------ ------ ------------ ------
Total Reportable Segments 4,368 894 3,848 798
Corporate and Other (a) (b) (8) (11) (6) (73)
------------ ------ ------------ ------
Total Company $4,360 $883 $3,842 $725
============ ====== ============ ======
Reconciliation of EBITDA
to Net Income
------------------------
EBITDA $883 $725
Depreciation and amortization 166 148
Interest expense 73 67
Interest income (11) (32)
------ ------
Income before income taxes 655 542
Provision for income taxes 252 190
------ ------
Income before cumulative effect of
accounting change 403 352
Cumulative effect of accounting
change, net of tax - (65)
------ ------
Net income $403 $287
----------
(a) Includes the elimination of transactions between segments; excludes
incremental stand alone company costs through July 31, 2006.
(b) Includes $41 million and $46 million of a net benefit during the
three and twelve months ended December 31, 2007, respectively, and
$32 million of a net benefit for the three and twelve months ended
December 31, 2006 related to the resolution of and adjustment to
certain contingent liabilities and assets.
(c) Includes separation and related costs of $1 million, $15 million and
$7 million for Lodging, Vacation Ownership and Corporate and Other,
respectively, during the three months ended December 31, 2006.
(d) Includes separation and related costs of $9 million and $7 million
for Vacation Ownership and Corporate and Other, respectively, during
the twelve months ended December 31, 2007 and $2 million, $3 million,
$18 million and $76 million for Lodging, Vacation Exchange and
Rentals, Vacation Ownership and Corporate and Other, respectively,
during the twelve months ended December 31, 2006.
Table 2
Wyndham Worldwide Corporation
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2007 2006 2007 2006
------- -------- -------- --------
Net revenues
Vacation ownership interest sales $383 $379 $1,666 $1,461
Service fees and membership 387 348 1,619 1,437
Franchise fees 118 112 523 501
Consumer financing 96 79 358 291
Other 48 52 194 152
------- -------- -------- --------
Net revenues 1,032 970 4,360 3,842
------- -------- -------- --------
Expenses
Operating 420 391 1,742 1,474
Cost of vacation ownership
interests 80 78 376 317
Marketing and reservation 199 168 831 734
General and administrative (a) 100 109 519 493
Separation and related costs (b) - 23 16 99
Depreciation and amortization 44 41 166 148
------- -------- -------- --------
Total expenses 843 810 3,650 3,265
------- -------- -------- --------
Operating income 189 160 710 577
Other (income)/loss, net 1 - (7) -
Interest expense 17 17 73 67
Interest income (2) (3) (11) (32)
------- -------- -------- --------
Income before income taxes 173 146 655 542
Provision for income taxes 69 54 252 190
------- -------- -------- --------
Income before cumulative effect of
accounting change 104 92 403 352
Cumulative effect of accounting
change, net of tax (c) - - - (65)
------- -------- -------- --------
Net income $104 $92 $403 $287
======= ======== ======== ========
Earnings per share
Basic
Income before cumulative effect
of accounting change $0.59 $0.48 $2.22 $1.78
Cumulative effect of accounting
change, net of tax - - - (0.33)
------- -------- -------- --------
Net income $0.59 $0.48 $2.22 $1.45
======= ======== ======== ========
Diluted
Income before cumulative effect
of accounting change $0.58 $0.48 $2.20 $1.77
Cumulative effect of accounting
change, net of tax - - - (0.33)
------- -------- -------- --------
Net income $0.58 $0.48 $2.20 $1.44
======= ======== ======== ========
Weighted average shares outstanding
Basic 178 193 181 198
Diluted 179 194 183 199
----------
(a) Includes a net benefit of $41 million and $46 million during the
three and twelve months ended December 31, 2007, respectively, and
$32 million during the three and twelve months ended December 31,
2006 related to the resolution of and adjustment to certain
contingent liabilities and assets.
(b) Represents costs that the Company incurred in connection with the
execution of its separation from its former parent, Cendant (now
Avis Budget Group, Inc.). Such amounts, net of tax, were $22
million during the three months ended December 31, 2006 and $10
million and $69 million during the twelve months ended December 31,
2007 and 2006, respectively.
(c) Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January
1, 2006.
Table 3
(1 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
Year Q1 Q2 Q3 Q4 Full Year
---- -- -- -- -- ---------
Lodging (a)
Number of
Rooms (b) 2007 539,300 541,700 540,900 550,600 N/A
2006 525,500 535,900 533,700 543,200 N/A
2005 519,300 516,000 512,000 532,700 N/A
2004 515,700 514,500 509,600 521,200 N/A
Weighted
Average
Rooms
Available 2007 529,700 530,700 529,800 537,500 532,300
2006 520,600 531,000 529,200 529,900 527,700
2005 517,400 512,000 511,500 535,100 519,000
2004 512,000 510,700 507,300 503,000 508,200
RevPAR 2007 $31.35 $38.35 $43.10 $33.09 $36.48
2006 $30.45 $36.97 $40.82 $31.41 $34.95
2005 $25.53 $31.91 $36.86 $29.72 $31.00
2004 $22.50 $29.08 $34.04 $24.53 $27.55
Royalty,
Marketing and
Reservation
Revenue
(in 000s) 2007 $105,426 $129,453 $146,290 $107,870 $489,041
2006 $102,741 $125,409 $138,383 $104,505 $471,039
2005 $84,704 $104,281 $119,829 $99,804 $408,620
2004 $77,830 $97,959 $112,765 $82,502 $371,058
Vacation Exchange
and Rentals
Average Number
of Members
(in 000s) 2007 3,474 3,506 3,538 3,588 3,526
2006 3,292 3,327 3,374 3,429 3,356
2005 3,148 3,185 3,233 3,271 3,209
2004 2,995 3,031 3,074 3,116 3,054
Annual Dues
and Exchange
Revenue Per
Member 2007 $155.60 $132.33 $131.38 $124.59 $135.85
2006 $152.10 $130.37 $132.31 $128.13 $135.62
2005 $159.12 $134.98 $125.64 $124.05 $135.76
2004 $159.55 $132.51 $123.55 $124.43 $134.82
Vacation Rental
Transactions
(in 000s) 2007 398 326 360 293 1,376
2006 385 310 356 293 1,344
2005 367 311 344 278 1,300
2004 309 246 295 253 1,104
Average Net
Price Per
Vacation
Rental 2007 $349.73 $415.71 $506.78 $426.93 $422.83
2006 $312.51 $374.91 $442.75 $356.16 $370.93
2005 $331.37 $363.14 $412.66 $325.62 $359.27
2004 $279.46 $333.76 $368.79 $337.42 $328.77
Vacation
Ownership
Gross Vacation
Ownership
Interest
Sales
(in 000s) 2007 $430,000 $523,000 $552,000 $488,000 $1,993,000
2006 $357,000 $434,000 $482,000 $469,000 $1,743,000
2005 $281,000 $354,000 $401,000 $360,000 $1,396,000
2004 $274,000 $315,000 $361,000 $304,000 $1,254,000
Tours 2007 240,000 304,000 332,000 268,000 1,144,000
2006 208,000 273,000 312,000 254,000 1,046,000
2005 195,000 250,000 272,000 217,000 934,000
2004 181,000 227,000 246,000 205,000 859,000
Volume Per
Guest (VPG) 2007 $1,607 $1,596 $1,545 $1,690 $1,606
2006 $1,475 $1,426 $1,434 $1,623 $1,486
2005 $1,349 $1,284 $1,349 $1,507 $1,368
2004 $1,303 $1,253 $1,273 $1,327 $1,287
Note: Full year amounts may not foot across due to rounding.
(a) Quarterly drivers in the Lodging segment include the acquisitions of
Ramada International (December 2004), Wyndham Hotels and Resorts
(October 2005) and Baymont Inn & Suites (April 2006) from their
acquisition dates forward. Therefore, the operating statistics are
not presented on a comparable basis.
(b) Numbers include affiliated rooms from the fourth quarter of 2006
forward.
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
under franchise and/or management agreements at the end of the period.
Weighted Average Rooms Available: Represents the weighted average number
of hotel rooms available for rental during the period.
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.
Royalty, Marketing and Reservation Revenues: Royalty, marketing and
reservation revenues are typically based on a percentage of the gross
room revenues of each franchised hotel. Royalty revenue is generally a
fee charged to each franchised hotel for the use of one of our trade
names, while marketing and reservation revenues are fees that we collect
and are contractually obligated to spend to support marketing and
reservation activities. Marketing and reservation fees are also included
in the above table within marketing, reservation and TripRewards
revenues.
Vacation Exchange and Rentals
Average Number of Members: Represents members in our vacation exchange
programs who pay annual membership dues. For additional fees, such
participants are entitled to exchange intervals for intervals at other
properties affiliated with our vacation exchange business. In addition,
certain participants may exchange intervals for other leisure-related
products and services.
Annual Dues and Exchange Revenue Per Member: Represents total revenues
from annual membership dues and exchange fees generated for the period
divided by the average number of vacation exchange members during the
year.
Vacation Rental Transactions: Represents the gross number of transactions
that are generated in connection with customers booking their vacation
rental stays through us. In our European vacation rentals businesses, one
rental transaction is recorded each time a standard one-week rental is
booked; however, in the United States, one rental transaction is recorded
each time a vacation rental stay is booked, regardless of whether it is
less than or more than one week.
Average Net Price Per Vacation Rental: Represents the net rental price
generated from renting vacation properties to customers divided by the
number of rental transactions.
Vacation Ownership
Gross Vacation Ownership Interest Sales: Represents gross sales of
vacation ownership interests (including tele-sales upgrades, which are a
component of upgrade sales) before deferred sales and loan loss
provisions.
Tours: Represents the number of tours taken by guests in our efforts to
sell vacation ownership interests.
Volume per Guest (VPG): Represents revenue per guest and is calculated by
dividing the gross vacation ownership interest sales, excluding tele-sales
upgrades, which are a component of upgrade sales, by the number of tours.
Table 4
Wyndham Worldwide Corporation
ADDITIONAL DATA
Year Q1 Q2 Q3 Q4 Full Year
---- -- -- -- -- ---------
Lodging (a)
Number of
Properties (b) 2007 6,450 6,460 6,460 6,540 N/A
2006 6,300 6,440 6,420 6,470 N/A
2005 6,400 6,380 6,350 6,350 N/A
2004 6,380 6,390 6,350 6,400 N/A
Marketing,
Reservation and
TripRewards
Revenues
(in 000s) (c) 2007 $61,369 $74,575 $84,820 $65,208 $285,973
2006 $58,572 $70,931 $78,856 $61,135 $269,495
2005 $45,066 $56,558 $65,812 $58,053 $225,491
2004 $39,092 $50,181 $57,485 $43,284 $190,044
Property Management
Reimbursable
Revenue
(in 000s) (d) 2007 $15,624 $22,338 $25,612 $28,414 $91,987
2006 $15,732 $19,935 $17,210 $16,263 $69,142
2005 $- $- $- $17,291 $17,291
2004 $- $- $- $- $-
Vacation Ownership
Deferred
Revenues
(in 000s) (e) 2007 $3,906 $(4,908) $506 $(21,092) $(21,588)
2006 $12,708 $(221) $(23,491) $(10,675) $(21,679)
2005 $492 $(9,150) $(5,856) $(2,022) $(16,536)
2004 $5,420 $(1,482) $(10,080) $(2,467) $(8,610)
Estimated
Uncollectible
Receivables
(in 000s) (f) 2007 $60,869 $75,032 $85,762 $83,644 $305,307
2006 $61,242 $55,872 $63,213 $78,680 $259,007
2005 $24,652 $27,754 $44,050 $31,644 $128,101
2004 $19,428 $21,910 $24,698 $19,535 $85,571
Note: Full year amounts may not foot across due to rounding.
(a) Information includes the acquisitions of Ramada International
(December 2004), Wyndham Hotels and Resorts (October 2005) and
Baymont Inn & Suites (April 2006) from their acquisition dates
forward. Therefore, the data is not presented on a comparable basis.
(b) Numbers include affiliated hotels from the fourth quarter of 2006
forward.
(c) Marketing and reservation revenues represent fees we receive from
franchisees that are to be expended for marketing purposes or the
operation of a centralized, brand-specific reservation system for the
respective franchisees. These fees are typically based on a
percentage of the gross room revenues of each franchised hotel.
Marketing and reservation fees are also included in the above table
within royalty, marketing and reservation revenues. TripRewards
revenues represent fees we receive from the franchisees relating to
our loyalty program.
(d) Primarily represents payroll costs in our hotel management business
that we incur and pay on behalf of property owners and for which we
are reimbursed by the property owners.
(e) Represents the revenue that is deferred under the percentage of
completion method of accounting. Under the percentage of completion
method of accounting, a portion of the total revenue from a vacation
ownership contract sale is not recognized if the construction of the
vacation resort has not yet been fully completed. This revenue will
be recognized in future periods in proportion to the costs incurred
as compared to the total expected costs for completion of
construction of the vacation resort. Positive amounts represent the
recognition of previously deferred revenues.
(f) Represents expected losses on vacation ownership contract
receivables. Beginning January 1, 2006, the Company recorded
estimated uncollectible receivables as a contra revenue to vacation
ownership interest sales on the Consolidated and Combined Statements
of Income, as required by Statement of Financial Accounting Standards
No. 152, "Accounting for Real Estate Time-Sharing Transactions."
Prior to January 1, 2006, the Company recorded estimated
uncollectible receivables, net of estimated inventory recoveries, as
a separate expense line item on the Consolidated and Combined
Statements of Income and thus 2004 and 2005 amounts are not
comparable to 2006 and 2007 amounts.
Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2007 2007 2007 2007 2006
-------- --------- -------- --------- --------
Securitized vacation
ownership debt
Term notes $1,435 $1,148 $1,322 $887 $838
Bank conduit facility (a) 646 777 491 826 625
-------- --------- -------- --------- --------
Securitized vacation
ownership debt (b) 2,081 1,925 1,813 1,713 1,463
Less: Current portion of
securitized vacation
ownership debt 237 304 242 231 178
-------- --------- -------- --------- --------
Long-term securitized
vacation ownership debt $1,844 $1,621 $1,571 $1,482 $1,285
======== ========= ======== ========= ========
Debt:
6.00% Senior unsecured
notes (due December
2016) (c) $797 $797 $797 $796 $796
Term loan (due July 2011) 300 300 300 300 300
Revolving credit facility
(due July 2011) (d) 97 133 215 48 -
Bank borrowings:
Vacation ownership 164 148 130 112 103
Vacation rentals (e) - - - - 73
Vacation rentals capital
leases 154 153 147 147 148
Other 14 14 14 16 17
-------- --------- -------- --------- --------
Total debt 1,526 1,545 1,603 1,419 1,437
Less: Current portion
of debt 175 159 140 123 115
-------- --------- -------- --------- --------
Long-term debt $1,351 $1,386 $1,463 $1,296 $1,322
======== ========= ======== ========= ========
(a) This 364-day vacation ownership bank conduit facility was renewed
through October 2008 and upsized to $1,200 million on October 30,
2007.
(b) This debt is collateralized by $2,596 million, $2,428 million, $2,288
million, $2,198 million and $1,844 million of underlying vacation
ownership contract receivables and related assets at December 31,
2007, September 30, 2007, June 30, 2007, March 31, 2007 and December
31, 2006, respectively.
(c) The balance at December 31, 2007 represents $800 million aggregate
principal less $3 million of original issue discount.
(d) The Company's revolving credit facility has a borrowing capacity of
$900 million. At December 31, 2007, the Company has $53 million of
outstanding letters of credit and a remaining borrowing capacity of
$750 million.
(e) The borrowings under this facility were repaid on January 31, 2007.
Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
As of and For the Three Months Ended December 31, 2007
------------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily Available
of of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
--------------------------------------------------------------------------
Wyndham Hotels and Resorts 79 20,953 60.4% $111.71 $67.44
Wingate Inn 152 13,944 56.8% $92.25 $52.42
Ramada 874 106,978 50.9% $83.24 $42.38
Baymont 193 16,592 43.2% $58.92 $25.43
AmeriHost Inn 28 1,943 45.5% $69.40 $31.60
Days Inn 1,883 153,333 46.7% $62.19 $29.05
Super 8 2,081 128,587 51.1% $57.77 $29.53
Howard Johnson 471 45,781 45.4% $60.33 $27.39
Travelodge 494 36,876 44.7% $67.25 $30.03
Knights Inn 268 18,733 37.7% $43.35 $16.33
Unmanaged, Affiliated and
Managed, Non-Proprietary
Hotels (*) 21 6,856 N/A N/A N/A
---------------
Total 6,544 550,576 48.6% $68.03 $33.09
===============
As of and For the Three Months Ended December 31, 2006
------------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily Available
of of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
--------------------------------------------------------------------------
Wyndham Hotels and Resorts 82 22,582 64.9% $108.63 $70.46
Wingate Inn 154 14,146 59.2% $85.15 $50.41
Ramada 871 105,986 49.6% $73.65 $36.53
Baymont 137 12,377 50.9% $60.71 $30.88
AmeriHost Inn 98 6,745 50.0% $61.58 $30.78
Days Inn 1,859 151,438 47.5% $59.24 $28.13
Super 8 2,054 126,175 50.2% $56.00 $28.11
Howard Johnson 467 44,432 38.9% $64.49 $25.06
Travelodge 503 37,468 45.5% $60.06 $27.33
Knights Inn 231 16,892 39.5% $39.43 $15.56
Unmanaged, Affiliated and
Managed, Non-Proprietary
Hotels (*) 17 4,993 N/A N/A N/A
---------------
Total 6,473 543,234 48.5% $64.70 $31.41
===============
NOTE: A glossary of terms is included in Table 3 (2 of 2).
(*) Represents 1) affiliated properties for which we receive a fee for
reservation services provided and 2) properties managed under the CHI
Limited joint venture. These properties are not branded; as such,
certain operating statistics (such as average occupancy rate, ADR and
RevPAR) are not relevant. Eight of the managed properties are
scheduled to be branded or cobranded as either Wyndham or Ramada
during 2008.
Table 6
(2 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
As of and For the Twelve Months Ended December 31, 2007
-------------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily Available
of of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
--------------------------------------------------------------------------
Wyndham Hotels and Resorts 79 20,953 63.9% $112.42 $71.88
Wingate Inn 152 13,944 64.2% $90.23 $57.96
Ramada 874 106,978 55.1% $78.88 $43.48
Baymont 193 16,592 52.7% $66.60 $35.09
AmeriHost Inn 28 1,943 48.5% $67.09 $32.51
Days Inn 1,883 153,333 52.5% $63.37 $33.24
Super 8 2,081 128,587 56.2% $58.35 $32.80
Howard Johnson 471 45,781 48.4% $64.34 $31.12
Travelodge 494 36,876 50.3% $66.60 $33.52
Knights Inn 268 18,733 41.1% $43.53 $17.88
Unmanaged, Affiliated and
Managed, Non-Proprietary
Hotels (*) 21 6,856 N/A N/A N/A
--------------
Total 6,544 550,576 53.7% $67.96 $36.48
==============
As of and For the Twelve Months Ended December 31, 2006
-------------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily Available
of of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
--------------------------------------------------------------------------
Wyndham Hotels and Resorts 82 22,582 68.6% $110.37 $75.68
Wingate Inn 154 14,146 64.7% $83.99 $54.33
Ramada 871 105,986 53.7% $72.34 $38.85
Baymont 137 12,377 57.7% $63.35 $36.56
AmeriHost Inn 98 6,745 53.7% $62.09 $33.37
Days Inn 1,859 151,438 52.0% $60.37 $31.41
Super 8 2,054 126,175 55.2% $56.17 $31.00
Howard Johnson 467 44,432 46.3% $65.82 $30.45
Travelodge 503 37,468 50.7% $63.05 $31.95
Knights Inn 231 16,892 42.3% $40.11 $16.98
Unmanaged, Affiliated and
Managed, Non-Proprietary
Hotels (*) 17 4,993 N/A N/A N/A
--------------
Total 6,473 543,234 53.4% $65.44 $34.95
==============
Table 7
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
Three Months Ended
------------------------------------ Year
Ended
March 31, June 30, Sept. 30, Dec. 31, Dec. 31,
2007 2007 2007 2007 2007
-------- ------- -------- ------- --------
Reported EBITDA $192 $211 $248 $232 $883
Separation and related
costs (a) 6 7 3 - 16
Resolution of and adjustment
to contingent liabilities
and assets (b) (13) (17) 25 (41) (46)
-------- ------- -------- ------- --------
Adjusted EBITDA $185 $201 $276 $191 $853
-------- ------- -------- ------- --------
Reported PreTax Income $139 $154 $189 $173 $655
Separation and related
costs (a) 6 7 3 - 16
Resolution of and
adjustment to contingent
liabilities and assets (b) (13) (17) 25 (41) (46)
-------- ------- -------- ------- --------
Adjusted PreTax Income $132 $144 $217 $132 $625
-------- ------- -------- ------- --------
Reported Tax Provision $(53) $(58) $(72) $(69) $(252)
Separation and related
costs (c) (2) (3) (1) - (6)
Resolution of and
adjustment to contingent
liabilities and assets (c) 4 6 (10) 20 20
-------- ------- -------- ------- --------
Adjusted Tax Provision $(51) $(55) $(83) $(49) $(238)
-------- ------- -------- ------- --------
Reported Net Income $86 $96 $117 $104 $403
Separation and related costs 4 4 2 - 10
Resolution of and
adjustment to contingent
liabilities and assets (9) (11) 15 (21) (26)
-------- ------- -------- ------- --------
Adjusted Net Income $81 $89 $134 $83 $387
-------- ------- -------- ------- --------
Reported Diluted EPS $0.45 $0.52 $0.65 $0.58 $2.20
Separation and related
costs 0.02 0.02 0.01 - 0.05
Resolution of and
adjustment to contingent
liabilities and assets (0.05) (0.06) 0.09 (0.12) (0.14)
-------- ------- -------- ------- --------
Adjusted Diluted EPS $0.43 $0.49 $0.75 $0.46 $2.12
-------- ------- -------- ------- --------
Diluted Shares 190 183 180 179 183
Note: Amounts may not foot due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group).
(b) Relates to the net (benefit)/expense from the resolution of and
adjustment to certain contingent liabilities and assets.
(c) Relates to the tax effect of the adjustments.
Table 7
(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
Three Months Ended Year
-------------------------------------- Ended
March 31, June 30, Sept. 30, Dec. 31, Dec. 31,
2006 2006 2006 2006 2006
--------- -------- --------- ------- --------
Reported EBITDA $182 $166 $176 $201 $725
Separation and related
costs (a) 3 5 68 23 99
Incremental stand-alone
costs (b) (13) (13) (4) - (30)
Resolution of contingent
liabilities (c) - - - (32) (32)
--------- -------- --------- ------- --------
Adjusted EBITDA $172 $158 $240 $192 $762
--------- -------- --------- ------- --------
Reported Depreciation and
Amortization $(34) $(36) $(37) $(41) $(148)
Incremental stand-alone
costs (b) (1) (1) - - (2)
--------- -------- --------- ------- --------
Adjusted Depreciation and
Amortization $(35) $(37) $(37) $(41) $(150)
--------- -------- --------- ------- --------
Reported Interest
Income/(Expense), Net $2 $(11) $(12) $(14) $(35)
Incremental stand-alone
costs (b) (12) (12) (4) - (28)
--------- -------- --------- ------- --------
Adjusted Interest
Expense, Net $(10) $(23) $(16) $(14) $(63)
--------- -------- --------- ------- --------
Reported PreTax Income $150 $119 $127 $146 $542
Separation and related
costs (a) 3 5 68 23 99
Incremental stand-alone
costs (b) (26) (26) (8) - (60)
Resolution of contingent
liabilities (c) - - - (32) (32)
--------- -------- --------- ------- --------
Adjusted PreTax Income $127 $98 $187 $137 $549
--------- -------- --------- ------- --------
Reported Tax Provision $(57) $(44) $(35) $(54) $(190)
Separation and related
costs (d) (2) (2) (25) (1) (30)
Incremental stand-alone
costs (d) 10 10 3 - 23
State tax rate
adjustment (d) (e) - - (15) - (15)
Resolution of contingent
liabilities (d) - - - 2 2
--------- -------- --------- ------- --------
Adjusted Tax Provision $(49) $(36) $(72) $(53) $(210)
--------- -------- --------- ------- --------
Reported Net Income $28 $75 $92 $92 $287
Cumulative effect of
SFAS No. 152 (f) 65 - - - 65
--------- -------- --------- ------- --------
Reported Income before
Cumulative Effect of
SFAS No. 152 93 75 92 92 352
Separation and related costs 1 3 43 22 69
Incremental stand-alone
costs (16) (16) (5) - (37)
State tax rate adjustment - - (15) - (15)
Resolution of contingent
liabilities - - - (30) (30)
--------- -------- --------- ------- --------
Adjusted Net Income $78 $62 $115 $84 $339
--------- -------- --------- ------- --------
Reported Diluted EPS $0.14 $0.37 $0.45 $0.48 $1.44
Cumulative effect of
SFAS No. 152 0.32 - - - 0.33
--------- -------- --------- ------- --------
Reported Income before
Cumulative Effect of
SFAS No. 152 0.46 0.37 0.45 0.48 1.77
Separation and related
costs 0.00 0.01 0.21 0.11 0.35
Incremental stand-alone
costs (0.08) (0.08) (0.02) - (0.19)
State tax rate adjustment - - (0.07) - (0.08)
Resolution of contingent
liabilities - - - (0.15) (0.15)
--------- -------- --------- ------- --------
Adjusted Diluted EPS $0.39 $0.31 $0.56 $0.44 $1.70
--------- -------- --------- ------- --------
Diluted Shares (g) 200 200 203 194 199
Note: Amounts may not foot due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group), primarily the
acceleration of vesting of Cendant equity awards and the related
equitable adjustments of such awards.
(b) Represents the Company's estimate of incremental stand-alone
corporate costs, depreciation and amortization and interest expense
associated with corporate debt that the Company would have incurred
in 2006 if it was a separate stand-alone company.
(c) Relates to the net benefit from the resolution of certain contingent
liabilities.
(d) Relates to the tax effect of the adjustments.
(e) Relates to a $15 million benefit relating to changes in the Company's
2005 state effective tax rate.
(f) Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January 1,
2006.
(g) On July 31, 2006, the Separation from Cendant was completed in a tax-
free distribution to the Company's stockholders of one share of
Wyndham common stock for every five shares of Cendant common stock
held on July 21, 2006. As a result, on July 31, 2006, the Company
had 200 million shares of common stock outstanding. This share
amount is being utilized for the calculation of diluted earnings per
share for all periods presented prior to the date of Separation.
Table 8
(1 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended December 31, 2007
-------------------------------------
Legacy
and Other
As Reported Adjustments As Adjusted
----------- ----------- -----------
Net revenues
Vacation ownership interest sales $383 $383
Service fees and membership 387 387
Franchise fees 118 118
Consumer financing 96 96
Other 48 48
----------- ----------- -----------
Net revenues 1,032 - 1,032
----------- ----------- -----------
Expenses
Operating 420 420
Cost of vacation ownership
interests 80 80
Marketing and reservation 199 199
General and administrative 100 41 (a) 141
Depreciation and amortization 44 44
----------- ----------- -----------
Total expenses 843 41 884
----------- ----------- -----------
Operating income 189 (41) 148
Other loss, net 1 1
Interest expense 17 17
Interest income (2) (2)
----------- ----------- -----------
Income before income taxes 173 (41) 132
Provision for income taxes 69 (20)(b) 49
----------- ----------- -----------
Net income $104 $(21) $83
=========== =========== ===========
Earnings per share
Basic 0.59 $(0.12) $0.47
Diluted 0.58 $(0.12) 0.46
Weighted average shares outstanding
Basic 178 178 178
Diluted 179 179 179
Note: EPS amounts may not foot across due to rounding.
(a) Relates to the net benefit from the resolution of and adjustment to
certain contingent liabilities and assets.
(b) Relates to the tax effect of the adjustments.
Table 8
(2 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Year Ended December 31, 2007
--------------------------------------
Separation Legacy
and and
Related Other
As Adjust- Adjust- As
Reported ments ments Adjusted
-------- --------- -------- --------
Net revenues
Vacation ownership interest sales $1,666 $1,666
Service fees and membership 1,619 1,619
Franchise fees 523 523
Consumer financing 358 358
Other 194 194
-------- --------- -------- --------
Net revenues 4,360 - - 4,360
-------- --------- -------- --------
Expenses
Operating 1,742 1,742
Cost of vacation ownership
interests 376 376
Marketing and reservation 831 831
General and administrative 519 46 (b) 565
Separation and related costs 16 (16)(a) -
Depreciation and amortization 166 166
-------- --------- -------- --------
Total expenses 3,650 (16) 46 3,680
-------- --------- -------- --------
Operating income 710 16 (46) 680
Other income, net (7) (7)
Interest expense 73 73
Interest income (11) (11)
-------- --------- -------- --------
Income before income taxes 655 16 (46) 625
Provision for income taxes 252 6 (c) (20)(c) 238
-------- --------- -------- --------
Net income $403 $10 $(26) $387
======== ========= ======== ========
Earnings per share
Basic $2.22 $0.05 $(0.14) $2.13
Diluted 2.20 0.05 (0.14) 2.12
Weighted average shares outstanding
Basic 181 181 181 181
Diluted 183 183 183 183
Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant.
(b) Relates to the net benefit from the resolution of and adjustment to
certain contingent liabilities and assets.
(c) Relates to the tax effect of the adjustments.
Table 8
(3 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended December 31, 2006
------------------------------------
Separation Legacy
and and
Related Other
As Adjust- Adjust- As
Reported ments ments Adjusted
-------- --------- -------- --------
Net revenues
Vacation ownership interest sales $379 $379
Service fees and membership 348 348
Franchise fees 112 112
Consumer financing 79 79
Other 52 52
-------- --------- -------- --------
Net revenues 970 - - 970
-------- --------- -------- --------
Expenses
Operating 391 391
Cost of vacation ownership interests 78 78
Marketing and reservation 168 168
General and administrative 109 32 (b) 141
Separation and related costs 23 (23)(a) -
Depreciation and amortization 41 41
-------- --------- -------- --------
Total expenses 810 (23) 32 819
-------- --------- -------- --------
Operating income 160 23 (32) 151
Interest expense 17 17
Interest income (3) (3)
-------- --------- -------- --------
Income before income taxes 146 23 (32) 137
Provision for income taxes 54 1 (c) (2)(c) 53
-------- --------- -------- --------
Net income $92 $22 $(30) $84
======== ========= ======== ========
Earnings per share
Basic $0.48 $0.11 $(0.16) $0.44
Diluted 0.48 0.11 (0.15) 0.44
Weighted average shares outstanding
Basic 193 193 193 193
Diluted 194 194 194 194
Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group).
(b) Relates to the net benefit from the resolution of certain contingent
liabilities.
(c) Relates to the tax effect of the adjustments.
Table 8
(4 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Year Ended December 31, 2006
-----------------------------------------------
Separation Legacy Stand-
and and Alone
Related Other Company
As Adjust- Adjust- Adjust- As
Reported ments ments ments Adjusted
--------- --------- --------- -------- --------
Net revenues
Vacation ownership interest
sales $1,461 $1,461
Service fees and membership 1,437 1,437
Franchise fees 501 501
Consumer financing 291 291
Other 152 152
--------- --------- --------- -------- --------
Net revenues 3,842 - - - 3,842
--------- --------- --------- -------- --------
Expenses
Operating 1,474 1,474
Cost of vacation ownership
interests 317 317
Marketing and reservation 734 734
General and administrative 493 32(b) 30(c) 555
Separation and related costs 99 (99)(a) -
Depreciation and
amortization 148 2(c) 150
--------- --------- --------- -------- --------
Total expenses 3,265 (99) 32 32 3,230
--------- --------- --------- -------- --------
Operating income 577 99 (32) (32) 612
Interest expense 67 28(c) 95
Interest income (32) (32)
--------- --------- --------- -------- --------
Income before income taxes 542 99 (32) (60) 549
Provision for income taxes 190 30(d) (2)(d) (8)(d) 210
--------- --------- --------- -------- --------
Income before cumulative effect
of accounting change 352 69 (30) (52) 339
Cumulative effect of
accounting change (65) 65(e) -
--------- --------- --------- -------- --------
Net income $287 $69 $35 $(52) $339
========= ========= ========= ======== ========
Earnings per share
Basic
Income before cumulative
effect of accounting
change $1.78 $0.35 $(0.15) $(0.26) $1.71
Cumulative effect of
accounting change (0.33) - 0.33 - -
--------- --------- --------- -------- --------
Net income $1.45 $0.35 $0.18 $(0.26) $1.71
========= ========= ========= ======== ========
Diluted
Income before cumulative
effect of accounting
change $1.77 $0.35 $(0.15) $(0.26) $1.70
Cumulative effect of
accounting change (0.33) - 0.33 - -
--------- --------- --------- -------- --------
Net income $1.44 $0.35 $0.18 $(0.26) $1.70
========= ========= ========= ======== ========
Weighted average shares outstanding
Basic 198 198 198 198 198
Diluted 199 199 199 199 199
Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group), primarily the
acceleration of vesting of Cendant equity awards and the related
equitable adjustments of such awards.
(b) Relates to the net benefit from the resolution of certain contingent
liabilities.
(c) Represents the Company's estimate of incremental stand-alone
corporate costs, depreciation and amortization and interest expense
associated with corporate debt that the Company would have incurred
if it was a separate stand-alone company in 2006.
(d) Relates to the tax effect of the adjustments and a $15 million
benefit relating to the changes in the Company's 2005 state effective
tax rates.
(e) Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January 1,
2006.
SOURCE Wyndham Worldwide Corporation
###
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