Wyndham Worldwide Reports Second Quarter 2015 Earnings

Second Quarter Adjusted Diluted EPS up 13% Year-Over-Year; Increases Full-Year EPS Guidance

PARSIPPANY, N.J. - July 28, 2015 // PRNewswire // - Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended June 30, 2015.

Second Quarter Highlights:

  • Second quarter adjusted diluted earnings per share (EPS) was $1.32, an increase of 13% from adjusted diluted EPS of $1.17 in the second quarter of 2014. Reported diluted EPS was $1.33 in the second quarter of 2015, an increase of 11% from reported diluted EPS of $1.20 from the same period in 2014.
  • Revenues increased 4% compared with the second quarter of 2014. In constant currency, revenues increased 8%.
  • Adjusted EBITDA increased 2% compared with the second quarter of 2014. In constant currency, adjusted EBITDA increased 6%.
  • The Company repurchased 1.9 million shares of its common stock during the quarter for $165 million.

"We delivered strong results in the second quarter," said Stephen P. Holmes, chairman and CEO. "We're seeing good momentum across the company. Our Wyndham Rewards program re-launch is off to a great start, rental bookings are strong in the US and in Europe, and sales are up in Wyndham Vacation Ownership. We're well positioned to benefit from improving economies and emerging trends in leisure travel. We expect this to drive continued growth going forward."

Second Quarter 2015 Operating Results

Second quarter revenues were $1.4 billion, an increase of 4% from the prior year period. In constant currency, revenues increased 8%, reflecting growth across all the Company's business segments.

Adjusted net income was $159 million, or $1.32 per diluted share, compared with $150 million, or $1.17 per diluted share for the same period in 2014. EPS also benefited from the Company's share repurchase program, which decreased the weighted average diluted share count by 6% year-over-year.

Reported net income for the second quarter of 2015 was $159 million, or $1.33 per diluted share, compared with $153 million, or $1.20 per diluted share, for the second quarter of 2014. Reported net income in the second quarter of 2014 reflects several items excluded from adjusted net income that favorably impacted net income by $3 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $625 million for the six months ended June 30, 2015, compared with $695 million for the same period in 2014. The decline in free cash flow reflects the timing of capital expenditures and working capital, including inventory spending. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the six months ended June 30, 2015, net cash provided by operating activities was $737 million, compared with $793 million in the prior year period. The Company expects free cash flow for the full year 2015 of approximately $800 million compared with $749 million in 2014.

Business Unit Results

Lodging (Wyndham Hotel Group)

Revenues were $334 million in the second quarter of 2015, an 18% increase over the second quarter of 2014. In constant currency and excluding acquisitions, revenues increased 8%, reflecting higher domestic RevPAR and worldwide room growth.

Total system-wide RevPAR was flat when compared with the second quarter of 2014. In constant currency, total system-wide RevPAR increased 2.5%. Domestic RevPAR increased 4.5%. International RevPAR declined 1.2% in constant currency, which reflects higher unit growth in lower RevPAR countries such as China.

Adjusted EBITDA for the second quarter of 2015 was $97 million, an 11% increase compared with the second quarter of 2014. In constant currency, excluding acquisitions and the impact of the increase in the inter-segment licensing fee rate charged for use of the Wyndham brand trade name, adjusted EBITDA increased 9%. The increase primarily reflects higher royalties and franchise fees.

As of June 30, 2015, the Company's hotel system consisted of approximately 7,700 properties and over 668,500 rooms, a 2.8% room increase compared with the second quarter of 2014. The development pipeline included 895 hotels and approximately 116,800 rooms, of which 61% were international and 66% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $383 million in the second quarter of 2015, a 5% decrease from the second quarter of 2014. In constant currency, and excluding acquisitions and the impact of a divestiture in 2014, revenues increased 5%.

Exchange revenues were $161 million, a 4% decrease compared with the second quarter of 2014. In constant currency, exchange revenues were flat compared to the prior year, as a 2.7% decline in exchange revenue per member was partially offset by a 2.2% increase in the average number of members.

Vacation rental revenues were $200 million, an 8% decrease compared to the second quarter of 2014. In constant currency and excluding acquisitions and the impact of a divestiture in 2014, vacation rental revenues were up 8%, reflecting a 6.1% increase in transaction volume and a 1.7% increase in average net price per vacation rental.

Adjusted EBITDA for the second quarter of 2015 was $84 million, a 3% decrease compared with the second quarter of 2014. On a currency-neutral basis and excluding acquisitions and the divestiture of a business in 2014, adjusted EBITDA increased 3% compared with the prior year period.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $699 million in the second quarter of 2015, a 4% increase over the second quarter of 2014. In constant currency, revenues increased 5%.

Gross VOI sales were $502 million in the second quarter of 2015, an increase of 1% compared with the second quarter of 2014. In constant currency, Gross VOI sales increased 3%. Net VOI sales increased 9% (or 11% in constant currency), reflecting higher volume per guest and a lower loan loss provision. Volume per guest for the quarter increased 3.2% (or 4.4% in constant currency) while tour flow declined 1.0%.

Adjusted EBITDA for the second quarter of 2015 was $182 million, a decrease of 2% compared with the second quarter of 2014. Results reflected higher commission expenses and the increased licensing fee to the Wyndham Hotel Group. On a currency neutral basis, and excluding the increased licensing fee, EBITDA increased 2%.

Other Items

  • The Company repurchased 1.9 million shares of common stock for $165 million during the second quarter of 2015. From July 1 through July 27, 2015, the Company repurchased an additional 0.8 million shares for $66 million. The Company's remaining share repurchase authorization totals $635 million as of July 27, 2015.
  • Reported net interest expense in the second quarter of 2015 was $28 million, compared with $26 million in the second quarter of 2014.

Balance Sheet Information as of June 30, 2015:

  • Cash and cash equivalents of $410 million, compared with $183 million at December 31, 2014
  • Vacation ownership contract receivables, net, of $2.7 billion, unchanged from December 31, 2014
  • Vacation ownership and other inventory of $1.2 billion, unchanged from December 31, 2014
  • Securitized vacation ownership debt of $2.1 billion, a 3% decrease from December 31, 2014
  • Long-term debt of $3.2 billion, compared with $2.9 billion at December 31, 2014. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.0 billion as of June 30, 2015, compared to $1.3 billion from December 31, 2014

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

Outlook

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

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

  • Revenues of approximately $5.450 - $5.550 billion.
  • Adjusted EBITDA of approximately $1.285 - $1.315 billion. Guidance reflects a $38 million adverse impact from foreign exchange compared with 2014 full year results.

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

  • Adjusted diluted EPS of approximately $4.88 - $5.03 based on a diluted share count of 120.2 million, up from $4.81 - $4.96 based on a diluted share count of 121.4 million.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Tuesday, July 28, 2015 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available on the website for approximately 90 days beginning at noon EDT on July 28, 2015. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on July 28, 2015, at 866-443-2927.

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

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company's reported results.

About Wyndham Worldwide Corporation

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands. The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with approximately 7,700 franchised hotels and over 668,500 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world's largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to approximately 110,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 210 vacation ownership resorts serving approximately 901,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs over 34,000 associates globally. For more information, please visit www.wyndhamworldwide.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company's revenues, earnings, cash flow and related financial and operating measures.

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

 


                         

Table 1

                         

(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

                           
                           

In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA", which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company's Consolidated Statements of Income.  The Company believes that EBITDA is a useful measure of performance for the Company's segments which when considered with GAAP measures, gives a more complete understanding of its operating performance.  The Company's presentation of EBITDA may not be comparable to similarly-titled measures used by other companies. 

 

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

 
 
   

Three Months Ended June 30, 

 
   

2015

 

2014

 
   

 Net Revenues 

 

 EBITDA 

 

 Net Revenues 

 

 EBITDA 

 

Lodging

$

334

 

$

96

 

$

283

 

$

87

 

Vacation Exchange and Rentals

 

383

   

84

   

402

   

89

 

Vacation Ownership

 

699

   

182

   

673

   

185

 

     Total Reportable Segments

 

1,416

   

362

   

1,358

   

361

 

Corporate and Other (a)

 

(18)

   

(30)

   

(15)

   

(35)

 

     Total Company

$

1,398

 

$

332

 

$

1,343

 

$

326

 
                           

Reconciliation of EBITDA to Net income

                       
                           
         

Three Months Ended June 30, 

 
         

2015

       

2014

 

EBITDA

     

$

332

       

$

326

 

Depreciation and amortization

       

58

         

59

 

Interest expense

       

30

         

29

 

Interest income

       

(2)

         

(3)

 

Income before income taxes

       

246

         

241

 

Provision for income taxes

       

87

         

88

 

Net income

     

$

159

       

$

153

 
                           

__________

                       

(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 June 30, 2015 
and 2014 (for a description of adjustments by segment, see Table 7):

 
                           
   

Three Months Ended June 30, 

 
   

2015

 

2014

 
   

 Net Revenues 

 

 Adjusted 
EBITDA 

 

 Net Revenues 

 

 Adjusted 
EBITDA 

 

Lodging

$

334

 

$

97

 

$

283

 

$

87

 

Vacation Exchange and Rentals

 

383

   

84

   

402

   

87

 

Vacation Ownership

 

699

   

182

   

673

   

185

 

     Total Reportable Segments

 

1,416

   

363

   

1,358

   

359

 

Corporate and Other

 

(18)

   

(31)

   

(15)

   

(35)

 

     Total Company

$

1,398

 

$

332

 

$

1,343

 

$

324

 
                           

 

 

                         

Table 1

                         

(2 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

                           
                           

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

                           
   

Six Months Ended June 30, 

 
   

2015

 

2014

 
   

 Net Revenues 

 

 EBITDA 

 

 Net Revenues 

 

 EBITDA 

 

Lodging

$

626

 

$

172

 

$

520

 

$

151

 

Vacation Exchange and Rentals

 

752

   

189

   

781

   

174

 

Vacation Ownership

 

1,316

   

313

   

1,266

   

300

 

     Total Reportable Segments

 

2,694

   

674

   

2,567

   

625

 

Corporate and Other (a)

 

(33)

   

(65)

   

(31)

   

(69)

 

     Total Company

$

2,661

 

$

609

 

$

2,536

 

$

556

 
                           

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

         
                           
         

Six Months Ended June 30, 

 
         

2015

       

2014

 

EBITDA

     

$

609

       

$

556

 

Depreciation and amortization

       

114

         

115

 

Interest expense

       

56

         

56

 

Interest income

       

(5)

         

(5)

 

Income before income taxes

       

444

         

390

 

Provision for income taxes

       

162

         

146

 

Net income

       

282

         

244

 

Net income attributable to noncontrolling interest

       

-

         

(1)

 

Net income attributable to Wyndham shareholders

     

$

282

       

$

243

 
                           

__________

                       

(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 six months ended June 30, 2015 
and 2014 (for a description of adjustments by segment, see Table 7):

   
   

Six Months Ended June 30, 

 
   

2015

 

2014

 
   

 Net Revenues 

 

 Adjusted 
EBITDA 

 

 Net Revenues 

 

 Adjusted 
EBITDA 

 

Lodging

$

626

 

$

175

 

$

520

 

$

155

 

Vacation Exchange and Rentals

 

752

   

189

   

781

   

182

 

Vacation Ownership

 

1,316

   

313

   

1,266

   

300

 

     Total Reportable Segments

 

2,694

   

677

   

2,567

   

637

 

Corporate and Other

 

(33)

   

(66)

   

(31)

   

(69)

 

     Total Company

$

2,661

 

$

611

 

$

2,536

 

$

568

 
                           

 

 

 

                         

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

                           
                           
     

 Three Months Ended 

 

 Six Months Ended 

     

 June 30, 

 

 June 30, 

     

2015

 

2014

 

2015

 

2014

Net revenues

                       
 

Service and membership fees

 

$

623

 

$

616

 

$

1,223

 

$

1,205

 

Vacation ownership interest sales

   

417

   

382

   

753

   

685

 

Franchise fees

   

178

   

166

   

325

   

293

 

Consumer financing

   

105

   

106

   

210

   

211

 

Other

   

75

   

73

   

150

   

142

Net revenues

   

1,398

   

1,343

   

2,661

   

2,536

                           

Expenses

                       
 

Operating

   

610

   

572

   

1,177

   

1,106

 

Cost of vacation ownership interests 

   

47

   

42

   

80

   

81

 

Consumer financing interest

   

19

   

17

   

36

   

35

 

Marketing and reservation

   

211

   

206

   

406

   

387

 

General and administrative

   

182

   

181

   

362

   

376

 

Restructuring

   

-

   

-

   

(1)

   

-

 

Depreciation and amortization

   

58

   

59

   

114

   

115

Total expenses

   

1,127

   

1,077

   

2,174

   

2,100

                           

Operating income

   

271

   

266

   

487

   

436

Other income, net

   

(3)

   

(1)

   

(8)

   

(5)

Interest expense

   

30

   

29

   

56

   

56

Interest income

   

(2)

   

(3)

   

(5)

   

(5)

                           

Income before income taxes

   

246

   

241

   

444

   

390

Provision for income taxes

   

87

   

88

   

162

   

146

Net income

   

159

   

153

   

282

   

244

Net income attributable to noncontrolling interest

 

-

   

-

   

-

   

(1)

Net income attributable to Wyndham shareholders

$

159

 

$

153

 

$

282

 

$

243

                           

Earnings per share

                       
 

Basic

 

$

1.34

 

$

1.21

 

$

2.35

 

$

1.91

 

Diluted

   

1.33

   

1.20

   

2.33

   

1.89

                           

Weighted average shares outstanding

                       
 

Basic

   

119

   

127

   

120

   

127

 

Diluted

   

120

   

128

   

121

   

129

__________

                       
                           

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

                 

 

                             

Table 3

                             

(1 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS

                               

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

                               
         

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Full Year

Lodging (a)

                     
 

Number of Rooms 

2015

 

667,400

 

668,500

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

 

646,900

 

650,200

 

655,300

 

660,800

 

 N/A 

         

2013

 

631,800

 

635,100

 

638,300

 

645,400

 

 N/A 

         

2012

 

609,300

 

608,300

 

618,100

 

627,400

 

 N/A 

                               
 

RevPAR

2015

$

32.84

$

39.82

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

32.30

$

40.11

$

43.71

$

34.06

$

37.57

         

2013

$

31.05

$

38.00

$

41.78

$

33.07

$

36.00

         

2012

$

29.73

$

37.23

$

40.39

$

31.86

$

34.80

                               

Vacation Exchange and Rentals

                     
 

Average Number of Members (in 000s)

2015

 

3,822

 

3,831

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

 

3,727

 

3,748

 

3,777

 

3,808

 

3,765

         

2013

 

3,668

 

3,686

 

3,711

 

3,728

 

3,698

         

2012

 

3,684

 

3,670

 

3,672

 

3,670

 

3,674

                               
 

Exchange Revenue Per Member

2015

$

194.06

$

167.81

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

200.78

$

179.17

$

171.77

$

157.24

$

177.12

         

2013

$

210.96

$

182.42

$

169.95

$

161.21

$

181.02

         

2012

$

204.56

$

177.07

$

171.14

$

165.86

$

179.68

                               
 

Vacation Rental Transactions (in 000s) (a) (b)

2015

 

459

 

390

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

 

429

 

376

 

455

 

293

 

1,552

         

2013

 

423

 

355

 

433

 

273

 

1,483

         

2012

 

418

 

325

 

390

 

259

 

1,392

                               
 

Average Net Price Per Vacation Rental (a) (b)

2015

$

361.20

$

513.14

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

410.04

$

577.13

$

727.40

$

492.25

$

558.95

         

2013

$

392.64

$

540.38

$

677.81

$

506.62

$

532.11

         

2012

$

379.40

$

524.40

$

635.44

$

484.69

$

504.55

                               

Vacation Ownership (a)

                     
 

Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c)

2015

$

390,000

$

502,000

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

410,000

$

496,000

$

513,000

$

470,000

$

1,889,000

         

2013

$

384,000

$

481,000

$

536,000

$

488,000

$

1,889,000

         

2012

$

384,000

$

460,000

$

502,000

$

435,000

$

1,781,000

                               
 

Tours (in 000s) (d)

2015

 

168

 

206

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

 

170

 

208

 

225

 

191

 

794

         

2013

 

163

 

206

 

225

 

195

 

789

         

2012

 

148

 

186

 

207

 

183

 

724

                               
 

Volume Per Guest (VPG) (d)

2015

$

2,177

$

2,353

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

2,272

$

2,280

$

2,158

$

2,336

$

2,257

         

2013

$

2,211

$

2,256

$

2,278

$

2,370

$

2,281

         

2012

$

2,414

$

2,361

$

2,315

$

2,225

$

2,324

                               

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

                   

(a)

Includes the impact of acquisitions/dispositions from the acquisition/disposition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

(b)

The vacation exchange and rentals operating statistics excluding our U.K.-based camping business sold in Q4 2014 are as follows:

                               
         

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Full Year

 

Vacation Rental Transactions (in 000s)

2014

 

429

 

367

 

431

 

292

 

1,518

 

Average Net Price Per Vacation Rental

2014

$

410.02

$

578.02

$

700.56

$

492.64

$

548.93

                               

(c)

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

(d)

Includes the impact of WAAM Just-in-Time related tours beginning in the second quarter of 2012.

                               
                               

ADDITIONAL DATA

                               
         

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Full Year

Lodging

                     
 

Number of Properties

2015

 

7,670

 

7,700

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

 

7,500

 

7,540

 

7,590

 

7,650

 

 N/A 

         

2013

 

7,380

 

7,410

 

7,440

 

7,490

 

 N/A 

         

2012

 

7,150

 

7,170

 

7,260

 

7,340

 

 N/A 

                               

Vacation Ownership

                     
 

Provision for Loan Losses (in 000s) (*) 

2015

$

46,000

$

60,000

 

 N/A 

 

 N/A 

 

 N/A 

         

2014

$

60,000

$

70,000

$

70,000

$

60,000

$

260,000

         

2013

$

84,000

$

90,000

$

102,000

$

73,000

$

349,000

         

2012

$

96,000

$

100,000

$

124,000

$

89,000

$

409,000

                               

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

                   

(*)

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

  

                             

Table 3

 
                             

(2 of 2)

 
                                 

Wyndham Worldwide Corporation

 

OPERATING STATISTICS

 
   

GLOSSARY OF TERMS

 
                                 

Lodging

                             
                                 

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

 
 
                                 

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

 
                                 

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

 
                                 

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

 
 
                                 

Vacation Exchange and Rentals

                     
                                 

Average Number of Members:  Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or who are within the allowed grace period. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with the Company's vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related services and products.

 
 
 
                                 

Exchange Revenue Per Member:  Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.  

 
 
                                 

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

 
 
                                 

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

 
 
                                 

Vacation Ownership

                         
                                 

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

 
 
                                 

Tours:  Represents the number of tours taken by guests in our efforts to sell VOIs.

 
                                 

Volume per Guest (VPG):  Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  The Company has excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2012-2015.  

 
 
 
                                 

General

                             
                                 

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

 
                                 

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

 
  

 

                                             

Table 4

                                               

Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)

                                               
                                               
     

2015

 

2014

       

 Q1 

 

 Q2 

 

 Q3 

 

 Q4 

 

 Year 

   

 Q1 

 

 Q2 

 

 Q3 

 

 Q4 

 

 Year 

Lodging

                                           
 

Royalties and Franchise Fees

 

$

74

$

96

 

 N/A 

 

 N/A 

 

 N/A 

 

$

68

$

88

$

100

$

83

$

339

 

Marketing, Reservation and Wyndham Rewards Revenues (a)

 

96

 

108

 

 N/A 

 

 N/A 

 

 N/A 

   

76

 

101

 

117

 

91

 

385

 

Hotel Management Reimbursable Revenues (b)

 

61

 

71

 

 N/A 

 

 N/A 

 

 N/A 

   

37

 

39

 

39

 

39

 

154

 

Intersegment Trademark Fees

   

12

 

15

 

 N/A 

 

 N/A 

 

 N/A 

   

9

 

11

 

11

 

10

 

41

 

Owned Hotel Revenues

   

25

 

20

 

 N/A 

 

 N/A 

 

 N/A 

   

24

 

20

 

18

 

20

 

81

 

Ancillary Revenues (c)

   

24

 

24

 

 N/A 

 

 N/A 

 

 N/A 

   

23

 

24

 

30

 

24

 

101

 

Total Lodging

   

292

 

334

 

 N/A 

 

 N/A 

 

 N/A 

   

237

 

283

 

315

 

267

 

1,101

                                               

Vacation Exchange and Rentals

                                           
 

Exchange Revenues

   

185

 

161

 

 N/A 

 

 N/A 

 

 N/A 

   

187

 

168

 

162

 

150

 

667

 

Rental Revenues

   

166

 

200

 

 N/A 

 

 N/A 

 

 N/A 

   

176

 

217

 

331

 

144

 

868

 

Ancillary Revenues (d)

   

18

 

22

 

 N/A 

 

 N/A 

 

 N/A 

   

16

 

17

 

19

 

17

 

69

 

Total Vacation Exchange and Rentals

 

369

 

383

 

 N/A 

 

 N/A 

 

 N/A 

   

379

 

402

 

512

 

311

 

1,604

                                               

Vacation Ownership

                                           
 

Vacation Ownership Interest Sales

 

336

 

417

 

 N/A 

 

 N/A 

 

 N/A 

   

303

 

382

 

415

 

385

 

1,485

 

Consumer Financing

   

104

 

105

 

 N/A 

 

 N/A 

 

 N/A 

   

105

 

106

 

108

 

108

 

427

 

Property Management Fees and Reimbursable Revenues

 

153

 

149

 

 N/A 

 

 N/A 

 

 N/A 

   

143

 

145

 

150

 

142

 

581

 

WAAM Fee-for-Service Commissions

 

12

 

19

 

 N/A 

 

 N/A 

 

 N/A 

   

33

 

30

 

18

 

16

 

98

 

Ancillary Revenues (e)

   

12

 

9

 

 N/A 

 

 N/A 

 

 N/A 

   

9

 

10

 

13

 

17

 

47

 

Total Vacation Ownership

   

617

 

699

 

 N/A 

 

 N/A 

 

 N/A 

   

593

 

673

 

704

 

668

 

2,638

Total Reportable Segments

 

$

1,278

$

1,416

 

 N/A 

 

 N/A 

 

 N/A 

 

$

1,209

$

1,358

$

1,531

$

1,246

$

5,343

                                               
                                               
     

2013

 

2012

       

 Q1 

 

 Q2 

 

 Q3 

 

 Q4 

 

 Year 

   

 Q1 

 

 Q2 

 

 Q3 

 

 Q4 

 

 Year 

Lodging

                                           
 

Royalties and Franchise Fees

 

$

64

$

79

$

91

$

75

$

309

 

$

62

$

80

$

88

$

71

$

301

 

Marketing, Reservation and Wyndham Rewards Revenues (a)

 

73

 

92

 

118

 

83

 

365

   

68

 

99

 

98

 

80

 

345

 

Hotel Management Reimbursable Revenues (b)

 

25

 

38

 

37

 

35

 

135

   

21

 

22

 

25

 

23

 

91

 

Intersegment Trademark Fees

   

8

 

10

 

11

 

10

 

39

   

8

 

9

 

9

 

8

 

34

 

Owned Hotel Revenues

   

26

 

20

 

18

 

19

 

84

   

8

 

8

 

7

 

18

 

41

 

Ancillary Revenues (c)

   

26

 

23

 

22

 

23

 

95

   

18

 

15

 

22

 

23

 

78

 

Total Lodging

   

222

 

262

 

297

 

245

 

1,027

   

185

 

233

 

249

 

223

 

890

                                               

Vacation Exchange and Rentals

                                           
 

Exchange Revenues

   

193

 

168

 

158

 

150

 

669

   

188

 

162

 

157

 

153

 

660

 

Rental Revenues

   

166

 

192

 

293

 

138

 

789

   

159

 

170

 

248

 

125

 

702

 

Ancillary Revenues (d)

   

15

 

16

 

19

 

17

 

68

   

14

 

16

 

15

 

15

 

60

 

Total Vacation Exchange and Rentals

 

374

 

376

 

470

 

305

 

1,526

   

361

 

348

 

420

 

293

 

1,422

                                               

Vacation Ownership

                                           
 

Vacation Ownership Interest Sales

 

263

 

347

 

384

 

384

 

1,379

   

271

 

342

 

373

 

337

 

1,323

 

Consumer Financing

   

105

 

106

 

107

 

108

 

426

   

103

 

102

 

106

 

110

 

421

 

Property Management Fees

   

146

 

141

 

143

 

137

 

567

   

110

 

108

 

117

 

125

 

460

 

WAAM Fee-for-Service Commissions

 

24

 

30

 

33

 

20

 

107

   

12

 

11

 

4

 

6

 

33

 

Ancillary Revenues (e)

   

11

 

6

 

10

 

9

 

36

   

5

 

7

 

8

 

12

 

32

 

Total Vacation Ownership

   

549

 

630

 

677

 

658

 

2,515

   

501

 

570

 

608

 

590

 

2,269

Total Reportable Segments

 

$

1,145

$

1,268

$

1,444

$

1,208

$

5,068

 

$

1,047

$

1,151

$

1,277

$

1,106

$

4,581

                                               
                                               

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

                                       

(a)

Marketing and reservation revenues represent fees the Company receives from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific 
reservation system.  These fees are typically based on a percentage of the gross room revenues of each hotel.  Wyndham Rewards revenues represent fees the Company receives relating to its loyalty program.

(b)

Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During 2014, reimbursable revenues 
of $2 million in each of Q1, Q2 and Q3 and $1 million in Q4 which were charged to the Company's vacation ownership business and were eliminated in consolidation. During 2013, such amounts include 
reimbursable revenues of $1 million, $3 million and $2 million, in Q2, Q3 and Q4 respectively, which were charged to the Company's vacation ownership business and were eliminated in consolidation.

(c)

Primarily includes additional services provided to franchisees.

(d)

Primarily includes fees generated from programs with affiliated resorts and homeowners.

(e)

Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.

 

 

 

 

                                     

Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

                                       
                                       
           

June 30,
2015

 

March 31,
2015

 

December 31,
2014

 

September 30,
2014

 

June 30,
2014

                                                   

Securitized vacation ownership debt (a)

                           

Term notes

$

1,841

 

$

2,090

 

$

1,962

 

$

1,670

 

$

1,600

Bank conduit facility (b)

 

253

   

98

   

203

   

271

   

291

Total securitized vacation ownership debt (c)

 

2,094

   

2,188

   

2,165

   

1,941

   

1,891

Less: Current portion of securitized vacation ownership debt

 

211

   

217

   

214

   

192

   

187

Long-term securitized vacation ownership debt

$

1,883

 

$

1,971

 

$

1,951

 

$

1,749

 

$

1,704

                                       
                                       

Debt:

                           

Revolving credit facility (due July 2020) (d)

$

23

 

$

14

 

$

25

 

$

18

 

$

16

Commercial paper (e)

       

476

   

346

   

189

   

237

   

107

$315 million 6.00% senior unsecured notes (due December 2016)

 

317

   

317

   

317

   

317

   

318

$300 million 2.95% senior unsecured notes (due March 2017)

 

299

   

299

   

299

   

299

   

299

$14 million 5.75% senior unsecured notes (due February 2018)

 

14

   

14

   

14

   

14

   

14

$450 million 2.50% senior unsecured notes (due March 2018)

 

448

   

448

   

448

   

448

   

448

$40 million 7.375% senior unsecured notes (due March 2020)

 

40

   

40

   

40

   

40

   

40

$250 million 5.625% senior unsecured notes (due March 2021)

 

247

   

247

   

247

   

247

   

246

$650 million 4.25% senior unsecured notes (due March 2022)

 

648

   

650

   

648

   

646

   

646

$400 million 3.90% senior unsecured notes (due March 2023)

 

409

   

418

   

410

   

401

   

403

Capital leases

 

161

   

161

   

170

   

175

   

186

Other

 

70

   

70

   

81

   

80

   

99

Total long-term debt

 

3,152

   

3,024

   

2,888

   

2,922

   

2,822

Less: Current portion of long-term debt

 

52

   

53

   

47

   

49

   

50

Long-term debt

$

3,100

 

$

2,971

 

$

2,841

 

$

2,873

 

$

2,772

__________

                                   

(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 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 2016 and borrowing capacity of $650 million. As of June 30, 2015, 
this facility had a remaining borrowing capacity of $397 million.

(c)

This debt is collateralized by $2,558 million, $2,609 million, $2,629 million, $2,326 million, and $2,287 million of underlying vacation ownership contract 
receivables and related assets as of June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014.

(d)

Represents a $1.5 billion revolving credit facility that expires in July 2020. As of June 30, 2015, the Company had $1 million of outstanding letters of credit. After 
considering outstanding commercial paper borrowings of $476 million, the remaining borrowing capacity was $1 billion as of June 30, 2015.

(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $774 million as of June 30, 2015.

 

           

Table 6

           

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

             
             
   

As of and For the Three Months Ended June 30, 2015

Brand

Number of 
Properties

Number of Rooms

Average 
Occupancy Rate

Average Daily 
Rate (ADR)

Average Revenue 
Per Available 
Room (RevPAR)

             

Lodging

         

Super 8 

2,549

163,510

61.1%

$51.27

$31.33

             

Days Inn 

1,782

143,046

54.2%

$68.18

$36.95

             

Ramada 

836

116,799

56.0%

$75.49

$42.24

             

Howard Johnson 

413

44,945

50.3%

$63.70

$32.06

             

Wyndham Hotels and Resorts

207

44,489

63.8%

$113.95

$72.68

             

Travelodge 

415

30,701

53.3%

$69.14

$36.87

             

Baymont

383

30,471

56.1%

$69.39

$38.93

             

Knights Inn 

388

23,994

47.5%

$48.21

$22.92

             

Microtel Inns & Suites by Wyndham

327

23,446

61.4%

$70.02

$43.02

             

TRYP by Wyndham

123

17,895

64.8%

$81.02

$52.48

             

Wingate by Wyndham

150

13,645

67.2%

$91.15

$61.27

             

Hawthorn Suites by Wyndham

101

10,053

70.5%

$81.33

$57.31

             

Dolce

24

5,530

58.4%

$150.86

$88.09

             
 

Total Lodging

7,698

668,524

57.4%

$69.32

$39.82

             

Vacation Ownership

         

Wyndham Vacation Ownership resorts

211

24,068

N/A

N/A

N/A

             
 

Total Wyndham Worldwide

7,909

692,592

     
             
             
   

As of and For the Three Months Ended June 30, 2014

Brand

Number of 
Properties

Number of Rooms

Average 
Occupancy Rate

Average Daily 
Rate (ADR)

Average Revenue 
Per Available 
Room (RevPAR)

             

Lodging

         

Super 8 

2,436

155,711

60.0%

$50.77

$30.46

             

Days Inn 

1,807

146,139

55.8%

$64.86

$36.20

             

Ramada 

829

114,195

57.2%

$79.00

$45.15

             

Howard Johnson 

439

46,214

50.4%

$62.88

$31.68

             

Wyndham Hotels and Resorts

178

39,816

66.7%

$117.57

$78.43

             

Travelodge 

425

31,075

54.3%

$67.35

$36.60

             

Baymont

346

28,325

56.9%

$66.36

$37.78

             

Knights Inn 

383

23,472

46.4%

$46.78

$21.70

             

Microtel Inns & Suites by Wyndham

318

22,744

63.8%

$67.26

$42.88

             

TRYP by Wyndham

117

16,740

66.9%

$96.01

$64.19

             

Wingate by Wyndham

158

14,436

68.7%

$88.24

$60.65

             

Hawthorn Suites by Wyndham

98

9,737

68.1%

$77.37

$52.72

             

Dream

5

989

72.9%

$246.03

$179.38

             

Night

3

630

72.8%

$158.86

$115.62

             
 

Total Lodging

7,542

650,223

58.0%

$69.13

$40.11

             

Vacation Ownership

         

Wyndham Vacation Ownership resorts

201

23,450

N/A

N/A

N/A

             
 

Total Wyndham Worldwide

7,743

673,673

     

_______________

         

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

             

 

 

 

           

Table 6

           

(2 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

             
             
   

As of and For the Six Months Ended June 30, 2015

Brand

Number of 
Properties

Number of Rooms

Average 
Occupancy Rate

Average Daily 
Rate (ADR)

Average Revenue 
Per Available 
Room (RevPAR)

             

Lodging

         

Super 8 

2,549

163,510

56.1%

$50.01

$28.04

             

Days Inn 

1,782

143,046

49.7%

$66.32

$32.98

             

Ramada 

836

116,799

53.7%

$75.12

$40.37

             

Howard Johnson 

413

44,945

47.2%

$63.13

$29.82

             

Wyndham Hotels and Resorts

207

44,489

59.9%

$113.13

$67.81

             

Travelodge 

415

30,701

49.4%

$65.86

$32.54

             

Baymont

383

30,471

51.6%

$67.52

$34.85

             

Knights Inn 

388

23,994

45.8%

$46.73

$21.41

             

Microtel Inns & Suites by Wyndham

327

23,446

57.5%

$68.55

$39.41

             

TRYP by Wyndham

123

17,895

58.2%

$78.87

$45.92

             

Wingate by Wyndham

150

13,645

62.9%

$88.74

$55.81

             

Hawthorn Suites by Wyndham

101

10,053

67.7%

$80.89

$54.75

             

Dolce

24

5,530

56.7%

$143.28

$81.30

             
 

Total Lodging

7,698

668,524

53.5%

$68.00

$36.35

             

Vacation Ownership

         

Wyndham Vacation Ownership resorts

211

24,068

N/A

N/A

N/A

             
 

Total Wyndham Worldwide

7,909

692,592

     
             
             
   

As of and For the Six Months Ended June 30, 2014

Brand

Number of 
Properties

Number of Rooms

Average 
Occupancy Rate

Average Daily 
Rate (ADR)

Average Revenue 
Per Available
Room (RevPAR)

             

Lodging

         

Super 8 

2,436

155,711

55.8%

$49.63

$27.69

             

Days Inn 

1,807

146,139

50.2%

$63.56

$31.92

             

Ramada 

829

114,195

53.7%

$79.22

$42.52

             

Howard Johnson 

439

46,214

47.0%

$62.41

$29.32

             

Wyndham Hotels and Resorts

178

39,816

61.1%

$115.42

$70.55

             

Travelodge 

425

31,075

49.5%

$64.82

$32.08

             

Baymont

346

28,325

52.0%

$64.25

$33.40

             

Knights Inn 

383

23,472

43.6%

$45.50

$19.84

             

Microtel Inns & Suites by Wyndham

318

22,744

58.8%

$65.08

$38.24

             

TRYP by Wyndham

117

16,740

59.2%

$91.64

$54.22

             

Wingate by Wyndham

158

14,436

63.9%

$85.95

$54.93

             

Hawthorn Suites by Wyndham

98

9,737

64.7%

$76.76

$49.66

             

Dream

5

989

73.4%

$217.94

$159.91

             

Night

3

630

66.3%

$139.04

$92.20

             
 

Total Lodging

7,542

650,223

53.5%

$67.78

$36.23

             

Vacation Ownership

         

Wyndham Vacation Ownership resorts

201

23,450

N/A

N/A

N/A

             
 

Total Wyndham Worldwide

7,743

673,673

     

_______________

         

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

             

 

                                       

Table 7

                                       

(1 of 2)

 

Wyndham Worldwide Corporation

 

NON-GAAP RECONCILIATION

 

(In millions)

                                         
                                         

 

Three months ended March 31, 2015

 

Net Revenues

 

Reported 
EBITDA

 

Legacy
    Adjustments (b)

 

Acquisition
   Costs (c)

 

Restructuring
    Costs (d)

 

Adjusted 
EBITDA

Lodging

 

$

292

 

$

76

 

$

   

$

3

 

$

-

 

$

79

Vacation Exchange and Rentals

   

369

   

105

   

-

   

-

   

(1)

   

104

Vacation Ownership

   

617

   

130

   

-

   

-

   

-

   

130

Total Reportable Segments

   

1,278

   

311

   

-

   

3

   

(1)

   

313

Corporate and Other (a)

   

(16)

   

(34)

   

-

   

-

   

-

   

(34)

Total Company

 

$

1,262

 

$

277

 

$

-

 

$

3

 

$

(1)

 

$

279

                                       

Three months ended June 30, 2015

                                   

Lodging

 

$

334

 

$

96

 

$

-

 

$

1

 

$

-

 

$

97

Vacation Exchange and Rentals

   

383

   

84

   

-

   

-

   

-

   

84

Vacation Ownership

   

699

   

182

   

-

   

-

   

-

   

182

Total Reportable Segments

   

1,416

   

362

   

-

   

1

   

-

   

363

Corporate and Other (a)

   

(18)

   

(30)

   

(1)

   

-

   

-

   

(31)

Total Company

 

$

1,398

 

$

332

 

$

(1)

 

$

1

 

$

-

 

$

332

                                       

________________

                                   

(a)

 Includes the elimination of transactions between segments.

(b)

 Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(c)

 Relates to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015).

(d)

 Relates to the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014. 

 

                                                         

Table 7

                                                         

(2 of 2)

 

Wyndham Worldwide Corporation

 

NON-GAAP RECONCILIATION

 

(In millions)

                                                           
                                                           

Three months ended March 31, 2014

 

Net Revenues

 

Reported
EBITDA

 

Executive
Departure
Costs

 

Venezuela 
Currency 
    Devaluation(b)

 

VAT 
  Adjustment(c)

 

Restructuring
Costs (d)

 

Loss on Sale 
and Asset 
   Impairments(e)

 

Legacy 
   Adjustments(f)

 

Adjusted 
EBITDA

Lodging

 

$

237

 

$

64

 

$

4

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

68

Vacation Exchange and Rentals

   

379

   

85

   

-

   

10

   

-

   

-

   

-

   

-

   

95

Vacation Ownership

   

593

   

115

   

-

   

-

   

-

   

-

   

-

   

-

   

115

Total Reportable Segments

   

1,209

   

264

   

4

   

10

   

-

   

-

   

-

   

-

   

278

Corporate and Other (a)

   

(16)

   

(34)

   

-

   

-

   

-

   

-

   

-

   

-

   

(34)

Total Company

 

$

1,193

 

$

230

 

$

4

 

$

10

 

$

-

 

$

-

 

$

-

 

$

-

 

$

244

                                                           

Three months ended June 30, 2014

                                                     

Lodging

 

$

283

 

$

87

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

87

Vacation Exchange and Rentals

   

402

   

89

   

-

   

-

   

(2)

   

-

   

-

   

-

   

87

Vacation Ownership

   

673

   

185

   

-

   

-

   

-

   

-

   

-

   

-

   

185

Total Reportable Segments

   

1,358

   

361

   

-

   

-

   

(2)

   

-

   

-

   

-

   

359

Corporate and Other (a)

   

(15)

   

(35)

   

-

   

-

   

-

   

-

   

-

   

-

   

(35)

Total Company

 

$

1,343

 

$

326

 

$

-

 

$

-

 

$

(2)

 

$

-

 

$

-

 

$

-

 

$

324

                                                           

Three months ended September 30, 2014

                                                   

Lodging

 

$

315

 

$

100

 

$

-

 

$

-

 

$

-

 

$

(1)

 

$

8

 

$

-

 

$

107

Vacation Exchange and Rentals

   

512

   

159

   

-

   

-

   

-

   

-

   

-

   

-

   

159

Vacation Ownership

   

704

   

188

   

-

   

-

   

-

   

-

   

-

   

-

   

188

Total Reportable Segments

   

1,531

   

447

   

-

   

-

   

-

   

(1)

   

8

   

-

   

454

Corporate and Other (a)

   

(17)

   

(36)

   

-

   

-

   

-

   

-

   

-

   

-

   

(36)

Total Company

 

$

1,514

 

$

411

 

$

-

 

$

-

 

$

-

 

$

(1)

 

$

8

 

$

-

 

$

418

                                                           

Three months ended December 31, 2014

                                                   

Lodging

 

$

267

 

$

77

 

$

-

 

$

-

 

$

-

 

$

2

 

$

-

 

$

-

 

$

79

Vacation Exchange and Rentals

   

311

   

2

   

-

   

-

   

-

   

10

   

27

   

-

   

39

Vacation Ownership

   

668

   

172

   

-

   

-

   

-

   

-

   

-

   

-

   

172

Total Reportable Segments

   

1,246

   

251

   

-

   

-

   

-

   

12

   

27

   

-

   

290

Corporate and Other (a)

   

(15)

   

(36)

   

-

   

-

   

-

   

-

   

-

   

(2)

   

(38)

Total Company

 

$

1,231

 

$

215

 

$

-

 

$

-

 

$

-

 

$

12

 

$

27

 

$

(2)

 

$

252

                                                           

 

Twelve months ended December 31, 2014

                                                   

Lodging

 

$

1,101

 

$

327

 

$

4

 

$

-

 

$

-

 

$

1

 

$

8

 

$

-

 

$

340

Vacation Exchange and Rentals

   

1,604

   

335

   

-

   

10

   

(2)

   

10

   

27

   

-

   

380

Vacation Ownership

   

2,638

   

660

   

-

   

-

   

-

   

-

   

-

   

-

   

660

Total Reportable Segments

   

5,343

   

1,322

   

4

   

10

   

(2)

   

11

   

35

   

-

   

1,380

Corporate and Other (a)

   

(62)

   

(141)

   

-

   

-

   

-

   

-

   

-

   

(1)

   

(142)

Total Company

 

$

5,281

 

$

1,181

 

$

4

 

$

10

 

$

(2)

 

$

11

 

$

35

 

$

(1)

 

$

1,238

________________

                                                     

Note:  The sum of the quarters may not agree to the twelve months ended December 31, 2014 due to rounding.

(a)

Includes the elimination of transactions between segments.

(b)

Represents the devaluation of the official exchange rate of Venezuela.

(c)

Reversal of a reserve for value-added taxes.

(d)

Relates to (i) the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 and (ii) costs incurred as a result of various organizational realignment initiatives by the Company. 

(e)

Relates to (i) a loss on the sale of a business and a write-down of an equity investment at the Company's vacation exchange and rentals business and (ii) a write-down of an investment in a joint venture at the Company's lodging business. 

(f)

Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

 

                         

Table 8

                         

(1 of 4)

                           

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

                           
     

Three Months Ended June 30, 2015

                           
   

 As Reported 

 

Legacy
    Adjustments (a)

 

Acquisition
    Costs (b)

 

As Adjusted
non-GAAP

Net revenues

                       
 

Service and membership fees

 

$

623

 

$

   

$

   

$

623

 

Vacation ownership interest sales

   

417

               

417

 

Franchise fees

   

178

               

178

 

Consumer financing

   

105

               

105

 

Other

   

75

               

75

Net revenues

   

1,398

   

-

   

-

   

1,398

                           

Expenses

                       
 

Operating

   

610

         

(1)

   

609

 

Cost of vacation ownership interests 

   

47

               

47

 

Consumer financing interest

   

19

               

19

 

Marketing and reservation

   

211

               

211

 

General and administrative

   

182

   

1

         

183

 

Depreciation and amortization

   

58

               

58

Total expenses

   

1,127

   

1

   

(1)

   

1,127

                           

Operating income

   

271

   

(1)

   

1

   

271

Other income, net

   

(3)

               

(3)

Interest expense

   

30

               

30

Interest income

   

(2)

               

(2)

                           

Income before income taxes

   

246

   

(1)

   

1

   

246

Provision for income taxes

   

87

               

87

                           

Net income

 

$

159

 

$

(1)

 

$

1

 

$

159

                           

Earnings per share

                       
 

Basic

 

$

1.34

 

$

(0.01)

 

$

0.01

 

$

1.33

 

Diluted

   

1.33

   

(0.01)

   

0.01

   

1.32

                           

Weighted average shares outstanding

                       
 

Basic

   

119

   

119

   

119

   

119

 

Diluted

   

120

   

120

   

120

   

120

__________

                       

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

                           

Note: EPS amounts may not add due to rounding.

(a)

Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b)

Relates to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015).

 

                               

Table 8

                               

(2 of 4)

                                 

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

                                 
     

Six Months Ended June 30, 2015

                                 
     

 As Reported 

 

Legacy
   Adjustments (a)

 

Acquisition
    Costs (b)

 

Restructuring
    Costs (d)

 

As Adjusted 
non-GAAP

Net revenues

                             
 

Service and membership fees

 

$

1,223

 

$

   

$

   

$

   

$

1,223

 

Vacation ownership interest sales

   

753

                     

753

 

Franchise fees

   

325

                     

325

 

Consumer financing

   

210

                     

210

 

Other

   

150

                     

150

Net revenues

   

2,661

   

-

   

-

   

-

   

2,661

                                 

Expenses

                             
 

Operating

   

1,177

         

(4)

         

1,173

 

Cost of vacation ownership interests 

   

80

                     

80

 

Consumer financing interest

   

36

                     

36

 

Marketing and reservation

   

406

                     

406

 

General and administrative

   

362

   

1

               

363

 

Restructuring

   

(1)

               

1

   

-

 

Depreciation and amortization

   

114

                     

114

Total expenses

   

2,174

   

1

   

(4)

   

1

   

2,172

                                 

Operating income

   

487

   

(1)

   

4

   

(1)

   

489

Other income, net

   

(8)

                     

(8)

Interest expense

   

56

                     

56

Interest income

   

(5)

                     

(5)

                                 

Income before income taxes

   

444

   

(1)

   

4

   

(1)

   

446

Provision for income taxes

   

162

   

-

   

(1)

(c)

 

-

   

161

                                 

Net income

 

$

282

 

$

(1)

 

$

5

 

$

(1)

 

$

285

                                 

Earnings per share

                             
 

Basic

 

$

2.35

 

$

(0.01)

 

$

0.04

 

$

(0.01)

 

$

2.37

 

Diluted

   

2.33

   

(0.01)

   

0.04

   

(0.01)

   

2.36

                                 

Weighted average shares outstanding

                             
 

Basic

   

120

   

120

   

120

   

120

   

120

 

Diluted

   

121

   

121

   

121

   

121

   

121

__________

                             

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

Note:  EPS amounts may not add due to rounding.

(a)

Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b)

Relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015) at the Company's lodging business.

(c)

Relates to (i) the tax effect of the adjustment and (ii) a valuation allowance established in connection with the acquisition of Dolce Hotels and Resorts.

(d)

Relates to the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014 at the Company's vacation exchange and rentals business.

 

                         

Table 8

                         

(3 of 4)

                           

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

                           
     

Three Months Ended June 30, 2014

                           
     

 As Reported 

 

Legacy 
Adjustments

 

VAT 
Adjustment (b)

 

As Adjusted 
non-GAAP

Net revenues

                       
 

Service fees and membership

 

$

616

 

$

   

$

   

$

616

 

Vacation ownership interest sales

   

382

               

382

 

Franchise fees

   

166

               

166

 

Consumer financing

   

106

               

106

 

Other

   

73

               

73

Net revenues

   

1,343

   

-

   

-

   

1,343

                           

Expenses

                       
 

Operating

   

572

               

572

 

Cost of vacation ownership interests 

   

42

               

42

 

Consumer financing interest

   

17

               

17

 

Marketing and reservation

   

206

               

206

 

General and administrative

   

181

         

2

   

183

 

Depreciation and amortization

   

59

               

59

Total expenses

   

1,077

   

-

   

2

   

1,079

                           

Operating income

   

266

   

-

   

(2)

   

264

Other income, net

   

(1)

               

(1)

Interest expense

   

29

         

2

   

31

Interest income

   

(3)

               

(3)

                           

Income before income taxes

   

241

   

-

   

(4)

   

237

Provision for income taxes

   

88

   

1

(a)

 

(2)

(c)

 

87

                           

Net income

 

$

153

 

$

(1)

 

$

(2)

 

$

150

                           

Earnings per share

                       
 

Basic

 

$

1.21

 

$

-

 

$

(0.02)

 

$

1.18

 

Diluted

   

1.20

   

-

   

(0.02)

   

1.17

                           

Weighted average shares outstanding

                       
 

Basic

   

127

   

127

   

127

   

127

 

Diluted

   

128

   

128

   

128

   

128

__________

                       

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

Note:  EPS amounts may not add due to rounding.

(a)

Relates to the reversal of a state tax accrual.

(b)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

(c)

Relates to the tax effect of the adjustment

 

                                     

Table 8

                                     

(4 of 4)

                                       

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

                                       
     

Six Months Ended June 30, 2014

                                       
     

 As Reported 

 

Executive 
Departure 
Costs (a)

 

Venezuela 
Currency 
Devaluation (c)

 

Legacy
 Adjustments

 

VAT 
Adjustment (e)

 

As Adjusted 
non-GAAP

Net revenues

                                   
 

Service fees and membership

 

$

1,205

 

$

   

$

   

$

   

$

   

$

1,205

 

Vacation ownership interest sales

   

685

                           

685

 

Franchise fees

   

293

                           

293

 

Consumer financing

   

211

                           

211

 

Other

   

142

                           

142

Net revenues

   

2,536

   

-

   

-

   

-

   

-

   

2,536

                                       

Expenses

                                   
 

Operating

   

1,106

         

(10)

               

1,096

 

Cost of vacation ownership interests 

   

81

                           

81

 

Consumer financing interest

   

35

                           

35

 

Marketing and reservation

   

387

                           

387

 

General and administrative

   

376

   

(4)

               

2

   

374

 

Depreciation and amortization

   

115

                           

115

Total expenses

   

2,100

   

(4)

   

(10)

   

-

   

2

   

2,088

                                       

Operating income

   

436

   

4

   

10

   

-

   

(2)

   

448

Other income, net

   

(5)

                           

(5)

Interest expense

   

56

                     

2

   

58

Interest income

   

(5)

                           

(5)

                                       

Income before income taxes

   

390

   

4

   

10

   

-

   

(4)

   

400

Provision for income taxes

   

146

   

1

(b)

 

1

(b)

 

1

(d)

 

(2)

(b)

 

147

                                       

Net income

   

244

   

3

   

9

   

(1)

   

(2)

   

253

Net loss attributable to noncontrolling interest

   

(1)

   

-

   

-

   

-

   

-

   

(1)

                                       

Net income attributable to Wyndham shareholders

 

$

243

 

$

3

 

$

9

 

$

(1)

 

$

(2)

 

$

252

                                       

Earnings per share

                                   
 

Basic

 

$

1.91

 

$

0.02

 

$

0.07

 

$

-

 

$

(0.02)

 

$

1.98

 

Diluted

   

1.89

   

0.02

   

0.07

   

-

   

(0.02)

   

1.96

                                       

Weighted average shares outstanding

                                   
 

Basic

   

127

   

127

   

127

   

127

   

127

   

127

 

Diluted

   

129

   

129

   

129

   

129

   

129

   

129

__________

                                   

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

                                       

Note:  EPS amounts may not add due to rounding.

(a)

Related to costs associated with an executive's departure at the Company's lodging business.

(b)

Relates to the tax effect of the adjustment.

(c)

Represents the devaluation of the official exchange rate of Venezuela at the Company's vacation exchange and rental business.

(d)

Relates to the reversal of a state tax accrual.

(e)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

  

                     

Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)

                       

FREE CASH FLOW

                     

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

 

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

                       

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

                       
   

Six Months Ended June 30, 

       
   

2015

   

2014

       
                       

Net cash provided by operating activities

 

$

737

   

$

793

       

Less: Property and equipment additions

   

(112)

     

(98)

       

Free cash flow

 

$

625

   

$

695

       
                       
                       

GROSS VOI SALES

                     
                       

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

                       

Year

                     

2015

 

Q1

Q2

Q3

Q4

Full Year

                       

Gross VOI sales (*)

 

$

390

$

502

 

 N/A 

 

 N/A 

 

 N/A 

Less: Sales under WAAM Fee-for-Service

   

(21)

 

(26)

 

 N/A 

 

 N/A 

 

 N/A 

Gross VOI sales, net of WAAM Fee-for-Service sales

   

369

 

477

 

 N/A 

 

 N/A 

 

 N/A 

Less: Loan loss provision

   

(46)

 

(60)

 

 N/A 

 

 N/A 

 

 N/A 

Plus: Impact of percentage-of-completion accounting

   

13

 

-

 

 N/A 

 

 N/A 

 

 N/A 

Vacation ownership interest sales (*)

 

$

336

$

417

 

 N/A 

 

 N/A 

 

 N/A 

                       

2014

                     
                       

Gross VOI sales (*)

 

$

410

$

496

$

513

$

470

$

1,889

Less: Sales under WAAM Fee-for-Service

   

(44)

 

(40)

 

(27)

 

(21)

 

(132)

Gross VOI sales, net of WAAM Fee-for-Service sales

   

366

 

456

 

486

 

449

 

1,757

Less: Loan loss provision

   

(60)

 

(70)

 

(70)

 

(60)

 

(260)

Less: Impact of percentage-of-completion accounting

   

(3)

 

(4)

 

(1)

 

(4)

 

(12)

Vacation ownership interest sales (*)

 

$

303

$

382

$

415

$

385

$

1,485

                       

2013

                     
                       

Gross VOI sales (*)

 

$

384

$

481

$

536

$

488

$

1,889

Less: Sales under WAAM Fee-for-Service

   

(36)

 

(44)

 

(51)

 

(29)

 

(160)

Gross VOI sales, net of WAAM Fee-for-Service sales

   

347

 

437

 

486

 

459

 

1,729

Less: Loan loss provision

   

(84)

 

(90)

 

(102)

 

(73)

 

(349)

Less: Impact of percentage-of-completion accounting

   

-

 

-

 

-

 

(1)

 

(1)

Vacation ownership interest sales (*)

 

$

263

$

347

$

384

$

384

$

1,379

                       

2012

                     
                       

Gross VOI sales (*)

 

$

384

$

460

$

502

$

435

$

1,781

Less: Sales under WAAM Fee-for-Service

   

(17)

 

(18)

 

(5)

 

(10)

 

(49)

Gross VOI sales, net of WAAM Fee-for-Service sales

   

367

 

442

 

497

 

426

 

1,732

Less: Loan loss provision

   

(96)

 

(100)

 

(124)

 

(89)

 

(409)

Vacation ownership interest sales (*)

 

$

271

$

342

$

373

$

337

$

1,323

_____________

                     

Note: Amounts may not add due to rounding.

                     

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

               
                       
                       
                       

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

                       
   

Q1

Q2

Q3

Q4

Full Year

                       

2015

 

$

24

$

17

 

 N/A 

 

 N/A 

 

 N/A 

2014

 

$

25

$

21

$

27

$

24

$

97

2013

 

$

24

$

18

$

22

$

25

$

89

2012

 

$

27

$

20

$

22

$

28

$

97

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wyndham-worldwide-reports-second-quarter-2015-earnings-300119436.html

SOURCE Wyndham Worldwide Corporation

Investor and Media Contact:

Margo C. Happer
Senior Vice President
Investor Relations
Wyndham Worldwide Corporation
(973) 753-6472
margo.happer@wyn.com

Barry Goldschmidt
Vice President
Investor Relations
Wyndham Worldwide Corporation
(973) 753-7703
barry.goldschmidt@wyn.com

###

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