Wyndham Worldwide Reports First Quarter 2016 Results

Increases Full Year EPS Guidance

PARSIPPANY, N.J., April 26, 2016 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended March 31, 2016.

HIGHLIGHTS:

  • First quarter adjusted diluted earnings per share (EPS) was $1.12, an increase of 9% from $1.03 in the first quarter of 2015. Reported diluted EPS was $0.84, compared with $1.00 in the first quarter of 2015.
  • First quarter 2016 adjusted EBITDA increased 4%, or 6% on a currency neutral basis and excluding acquisitions compared with the first quarter of 2015.
  • The Company repurchased 2.5 million shares of its common stock for $175 million during the quarter.

"We're off to a good start this year," said Stephen P. Holmes, chairman and CEO. "We continue to execute and innovate across our businesses to drive growth, profitability and shareholder value.  Our businesses are well positioned for long term growth and they are resilient, regardless of economic and industry cycle dynamics.  Of course, disciplined capital allocation continues to be a hallmark and commitment of our company." 

FIRST QUARTER 2016 OPERATING RESULTS

First quarter revenues were $1.3 billion, an increase of 3% from the prior year period. 

First quarter adjusted EBITDA was $291 million, compared with $279 million in the prior year period, an increase of 4%.  Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $6 million in 2016.  On a currency-neutral basis and excluding acquisitions, adjusted EBITDA increased 6%.

Adjusted net income was $127 million, or $1.12 per diluted share, compared with $126 million, or $1.03 per diluted share for the same period in 2015.  Adjusted net income and earnings per share benefited from solid operating results, but were reduced by higher interest expense and higher depreciation and amortization.  EPS also benefited from the Company's share repurchase program. 

Reported net income for the first quarter of 2016 was $96 million, or $0.84 per diluted share, compared with $122 million, or $1.00 per diluted share, for the first quarter of 2015.  Reported net income in both periods reflects several items excluded from adjusted net income.  The net result of these items unfavorably impacted first quarter 2016 net income by $31 million and unfavorably impacted first quarter 2015 net income by $4 million.  Full reconciliations of adjusted net income to GAAP results appear in Table 8 of this press release. 

Free cash flow was $218 million for the three months ended March 31, 2016, compared with $197 million for the same period in 2015.  The increase reflects solid operating results and the timing of capital expenditures, partially offset by a $24 million unfavorable impact from the devaluation of the Venezuelan currency.  For the three months ended March 31, 2016, net cash provided by operating activities was $261 million, compared with $253 million in the prior year period.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures. 

FIRST QUARTER 2016 BUSINESS UNIT RESULTS

Hotel Group

Revenues were $295 million in the first quarter of 2016, a 1% increase compared with the first quarter 2015.  Despite weaker RevPAR, adjusted EBITDA grew 6% to $84 million reflecting growth in our Wyndham Rewards credit card program, strong performance at our owned hotels and expense management.

First quarter domestic RevPAR was flat.  In constant currency, total system-wide RevPAR declined 1.6% compared with the first quarter of 2015, which reflects continued weakness in domestic and Canadian oil markets and higher unit growth in lower RevPAR countries such as China. 

As of March 31, 2016, the Company's hotel system consisted of approximately 7,830 properties and approximately 679,100 rooms, a 1.8% net room increase compared with the first quarter of 2015.  The development pipeline included over 1,000 hotels and over 124,000 rooms, of which 61% were international and 65% were new construction.

Destination Network (formerly Vacation Exchange and Rentals)

Revenues were $385 million in the first quarter of 2016, a 4% increase compared with the first quarter of 2015. In constant currency and excluding acquisitions, revenues increased 5%.

Exchange revenues were $182 million, down 2% compared with the first quarter of 2015. In constant currency, exchange revenues and exchange revenue per member were flat, as was the average number of members.

Vacation rental revenues were $183 million, a 10% increase compared with the first quarter of 2015.  In constant currency and excluding the impact of acquisitions, vacation rental revenues were up 9%, reflecting a 7.0% increase in transaction volume and a 2.3% increase in average net price per vacation rental. 

Adjusted EBITDA for the first quarter of 2016 was $105 million, a 1% increase compared with the first quarter of 2015.  On a currency-neutral basis and excluding the impact of acquisitions, adjusted EBITDA increased 3% compared with the prior year period.

Vacation Ownership

Revenues were $641 million in the first quarter of 2016, a 4% increase over the first quarter of 2015. 

Gross VOI sales were $428 million in the first quarter of 2016, an increase of 10% compared with the first quarter of 2015.  Volume per guest (VPG) for the quarter increased 3.8% in constant currency and tour flow increased 6.5%.

EBITDA for the first quarter of 2016 was $136 million, an increase of 5% compared with the first quarter of 2015, reflecting higher sales volume and stronger resort management and consumer finance results, partially offset by an increase in the provision for loan losses. 

OTHER ITEMS

  • The Company repurchased 2.5 million shares of common stock for $175 million during the first quarter of 2016.  From April 1 through April 25, 2016, the Company repurchased an additional 0.6 million shares for $45 million. 
  • Reported net interest expense in the first quarter of 2016 was $31 million, compared with $23 million in the first quarter of 2015, reflecting the $350 million 5.10% bond issued in September 2015 and the absence of a fixed-to-floating interest rate swap terminated in 2015.
  • Depreciation and amortization in the first quarter of 2016 was $62 million, compared with $56 million in the first quarter of 2015, reflecting new projects that were placed into service. 

Balance Sheet Information as March 31, 2016:

  • Cash and cash equivalents of $318 million, compared with $171 million at December 31, 2015
  • Vacation ownership contract receivables, net, of $2.7 billion, unchanged from December 31, 2015
  • Vacation ownership and other inventory of $1.3 billion, unchanged from December 31, 2015
  • Securitized vacation ownership debt of $2.1 billion, unchanged from December 31, 2015
  • Long-term debt of $3.3 billion, compared with $3.1 billion at December 31, 2015. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.1 billion as of March 31, 2016, compared with $1.4 billion at December 31, 2015.

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 2016, the Company reiterates the following guidance:

  • Revenues of approximately $5.800 - $5.950 billion.
  • Adjusted EBITDA of approximately $1.375 - $1.400 billion.

For the full year 2016, the Company updates the following guidance:

  • Adjusted diluted EPS of approximately $5.61 - $5.75 based on a diluted share count of 113 million, up from $5.46 - $5.60 based on a diluted share count of 116 million.

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

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Tuesday, April 26, 2016 at 8:30 a.m. ET. Listeners can access the webcast live through the company's website at http://www.wyndhamworldwide.com/investors/.  The conference call may also be accessed by dialing 877-876-9177 and providing the pass code "WYNDHAM."  Listeners are urged to call at least 10 minutes prior to the scheduled start time.  An archive of this webcast will be available on the website for approximately 90 days beginning at 12:00pm ET on April 26, 2016.  A telephone replay will be available for approximately 10 days beginning at 12:00pm ET on April 26, 2016 at 800-723-5154.

PRESENTATION OF FINANCIAL INFORMATION

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

ABOUT WYNDHAM WORLDWIDE

Wyndham Worldwide (NYSE: WYN) is one of the largest global hospitality companies, providing travelers with access to a collection of trusted hospitality brands in hotels, vacation ownership, and unique accommodations including vacation exchange, holiday parks, and managed home rentals. With a collective inventory of more than 120,000 places to stay across 100 countries on six continents, Wyndham Worldwide and its 38,000 associates welcomes people to experience travel the way they want. This is enhanced by Wyndham Rewards®, the Company's re-imagined guest loyalty program across its businesses, which is making it simpler for members to earn more rewards and redeem their points faster. For more information, please visit www.wyndhamworldwide.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, 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 12, 2016.  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


Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)
















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
















The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income for the
three months ended March 31, 2016 and 2015:



















Three Months Ended March 31, 





2016


2015





 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Hotel Group

$

295


$

84


$

292


$

76


Destination Network


385



81



369



105


Vacation Ownership


641



136



617



130


     Total Reportable Segments


1,321



301



1,278



311


Corporate and Other (a)


(18)



(34)



(16)



(34)


     Total Company

$

1,303


$

267


$

1,262


$

277

















Reconciliation of EBITDA to Net income


































 Three Months Ended March 31,  








2016





2015


EBITDA





$

267





$

277


Depreciation and amortization





62






56


Interest expense





33






26


Early extinguishment of debt





11






-


Interest income





(2)






(3)


Income before income taxes





163






198


Provision for income taxes





67






76


Net income





$

96





$

122
































(a)  Includes the elimination of transactions between segments.  
















The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the three months ended March 31, 2016
and 2015 (for a description of adjustments by segment, see Table 7):



















Three Months Ended March 31, 





2016


2015







Adjusted 




Adjusted 





 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Hotel Group

$

295


$

84


$

292


$

79


Destination Network


385



105



369



104


Vacation Ownership


641



136



617



130


     Total Reportable Segments


1,321



325



1,278



313


Corporate and Other


(18)



(34)



(16)



(34)


     Total Company

$

1,303


$

291


$

1,262


$

279


 

 









Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)























 Three Months Ended 





 March 31, 





2016


2015

Net revenues








Service and membership fees


$

634


$

599


Vacation ownership interest sales



342



336


Franchise fees



138



147


Consumer financing



107



104


Other




82



76

Net revenues




1,303



1,262










Expenses









Operating



613



564


Cost of vacation ownership interests 



37



33


Consumer financing interest



18



18


Marketing and reservation



192



195


General and administrative



186



181


Restructuring



-



(1)


Depreciation and amortization



62



56

Total expenses



1,108



1,046










Operating income




195



216

Other (income)/expense, net




(10)



(5)

Interest expense




33



26

Early extinguishment of debt




11



-

Interest income




(2)



(3)










Income before income taxes




163



198

Provision for income taxes




67



76

Net income



$

96


$

122










Earnings per share








Basic



$

0.85


$

1.01


Diluted



0.84



1.00










Weighted average shares outstanding








Basic




113



121


Diluted



114



122





















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

Hotel Group (a)













Number of Rooms 

2016


679,100


 N/A 


 N/A 


 N/A 


 N/A 







2015


667,400


668,500


671,900


678,000


 N/A 







2014


646,900


650,200


655,300


660,800


 N/A 







2013


631,800


635,100


638,300


645,400


 N/A 



















RevPAR

2016

$

31.59


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

32.84

$

39.82

$

43.34

$

32.98

$

37.26







2014

$

32.30

$

40.11

$

43.71

$

34.06

$

37.57







2013

$

31.05

$

38.00

$

41.78

$

33.07

$

36.00


















Destination Network













Average Number of Members (in 000s)

2016


3,841


 N/A 


 N/A 


 N/A 


 N/A 







2015


3,822


3,831


3,835


3,836


3,831







2014


3,727


3,748


3,777


3,808


3,765







2013


3,668


3,686


3,711


3,728


3,698



















Exchange Revenue Per Member

2016

$

189.78


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

194.06

$

167.81

$

163.38

$

152.00

$

169.29







2014

$

200.78

$

179.17

$

171.77

$

157.24

$

177.12







2013

$

210.96

$

182.42

$

169.95

$

161.21

$

181.02



















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

2016


500


 N/A 


 N/A 


 N/A 


 N/A 







2015


459


390


462


319


1,630







2014


429


376


455


293


1,552







2013


423


355


433


273


1,483



















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

2016

$

366.08


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

361.20

$

513.14

$

642.00

$

452.19

$

494.92







2014

$

410.04

$

577.13

$

727.40

$

492.25

$

558.95







2013

$

392.64

$

540.38

$

677.81

$

506.62

$

532.11


















Vacation Ownership (a)













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

2016

$

428,000


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

390,000

$

502,000

$

565,000

$

507,000

$

1,965,000







2014

$

410,000

$

496,000

$

513,000

$

470,000

$

1,889,000







2013

$

384,000

$

481,000

$

536,000

$

488,000

$

1,889,000



















Tours (in 000s)

2016


179


 N/A 


 N/A 


 N/A 


 N/A 







2015


168


206


227


200


801







2014


170


208


225


191


794







2013


163


206


225


195


789



















Volume Per Guest (VPG)

2016

$

2,244


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

2,177

$

2,353

$

2,354

$

2,390

$

2,326







2014

$

2,272

$

2,280

$

2,158

$

2,336

$

2,257







2013

$

2,211

$

2,256

$

2,278

$

2,370

$

2,281


















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

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

(b)  The destination network operating statistics excluding our U.K.-based camping business sold in Q4 2014 are as follows:
























Year


Q1


Q2


Q3


Q4


Full Year


Vacation Rental Transactions (in 000s)

2014


429


367


431


292


1,518


Average Net Price Per Vacation Rental

2014

$

410.02

$

578.02

$

700.56

$

492.64

$

548.93



































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








































ADDITIONAL DATA
































Year


Q1


Q2


Q3


Q4


Full Year

Hotel Group













Number of Properties

2016


7,830


 N/A 


 N/A 


 N/A 


 N/A 







2015


7,670


7,700


7,760


7,810


 N/A 







2014


7,500


7,540


7,590


7,650


 N/A 







2013


7,380


7,410


7,440


7,490


 N/A 


















Vacation Ownership













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

2016

$

63,000


 N/A 


 N/A 


 N/A 


 N/A 







2015

$

46,000

$

60,000

$

78,000

$

64,000

$

248,000







2014

$

60,000

$

70,000

$

70,000

$

60,000

$

260,000







2013

$

84,000

$

90,000

$

102,000

$

73,000

$

349,000


















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

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

 

 

















Table 3


















(2 of 2)




















Wyndham Worldwide Corporation


OPERATING STATISTICS




GLOSSARY OF TERMS




















Hotel Group


































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





















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




















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




















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





















Destination Network


































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



















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





















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





















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





















Vacation Ownership


































Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM sales, before the net effect of percentage-of-completion accounting and
loan loss provisions.  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 2013-2016.



















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)























































2016


2015






 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Hotel Group
























Royalties and Franchise Fees


$

74


 N/A 


 N/A 


 N/A 


 N/A 


$

74

$

96

$

103

$

87

$

361


Marketing, Reservation and Wyndham Rewards Revenues (a)


83


 N/A 


 N/A 


 N/A 


 N/A 



96


108


112


92


407


Hotel Management Reimbursable Revenues (b)


67


 N/A 


 N/A 


 N/A 


 N/A 



61


71


73


68


273


Intersegment Trademark Fees



13


 N/A 


 N/A 


 N/A 


 N/A 



12


15


16


15


57


Owned Hotel Revenues



27


 N/A 


 N/A 


 N/A 


 N/A 



25


20


16


19


79


Ancillary Revenues (c)



31


 N/A 


 N/A 


 N/A 


 N/A 



24


24


37


33


120


Total Hotel Group



295


 N/A 


 N/A 


 N/A 


 N/A 



292


334


357


314


1,297


























Destination Network
























Exchange Revenues



182


 N/A 


 N/A 


 N/A 


 N/A 



185


161


157


146


649


Rental Revenues



183


 N/A 


 N/A 


 N/A 


 N/A 



166


200


296


144


807


Ancillary Revenues (d)



20


 N/A 


 N/A 


 N/A 


 N/A 



18


22


23


20


82


Total Destination Network



385


 N/A 


 N/A 


 N/A 


 N/A 



369


383


476


310


1,538


























Vacation Ownership
























Vacation Ownership Interest Sales



342


 N/A 


 N/A 


 N/A 


 N/A 



336


417


448


403


1,604


Consumer Financing



107


 N/A 


 N/A 


 N/A 


 N/A 



104


105


108


109


427


Property Management Fees and Reimbursable Revenues


164


 N/A 


 N/A 


 N/A 


 N/A 



153


149


159


155


615


WAAM Fee-for-Service Commissions


17


 N/A 


 N/A 


 N/A 


 N/A 



12


19


23


28


83


Ancillary Revenues (e)



11


 N/A 


 N/A 


 N/A 


 N/A 



12


9


12


11


43


Total Vacation Ownership



641


 N/A 


 N/A 


 N/A 


 N/A 



617


699


750


706


2,772

Total Reportable Segments


$

1,321


 N/A 


 N/A 


 N/A 


 N/A 


$

1,278

$

1,416

$

1,583

$

1,330

$

5,607























































2014


2013






 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Hotel Group
























Royalties and Franchise Fees


$

68

$

88

$

100

$

83

$

339


$

64

$

79

$

91

$

75

$

309


Marketing, Reservation and Wyndham Rewards Revenues (a)


76


101


117


91


385



73


92


118


83


365


Hotel Management Reimbursable Revenues (b)


37


39


39


39


154



25


38


37


35


135


Intersegment Trademark Fees



9


11


11


10


41



8


10


11


10


39


Owned Hotel Revenues



24


20


18


20


81



26


20


18


19


84


Ancillary Revenues (c)



23


24


30


24


101



26


23


22


23


95


Total Hotel Group



237


283


315


267


1,101



222


262


297


245


1,027


























Destination Network
























Exchange Revenues



187


168


162


150


667



193


168


158


150


669


Rental Revenues



176


217


331


144


868



166


192


293


138


789


Ancillary Revenues (d)



16


17


19


17


69



15


16


19


17


68


Total Destination Network



379


402


512


311


1,604



374


376


470


305


1,526


























Vacation Ownership
























Vacation Ownership Interest Sales



303


382


415


385


1,485



263


347


384


384


1,379


Consumer Financing



105


106


108


108


427



105


106


107


108


426


Property Management Fees



143


145


150


142


581



146


141


143


137


567


WAAM Fee-for-Service Commissions


33


30


18


16


98



24


30


33


20


107


Ancillary Revenues (e)



9


10


13


17


47



11


6


10


9


36


Total Vacation Ownership



593


673


704


668


2,638



549


630


677


658


2,515

Total Reportable Segments


$

1,209

$

1,358

$

1,531

$

1,246

$

5,343


$

1,145

$

1,268

$

1,444

$

1,208

$

5,068



















































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

(a)

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

(b)

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

(c)

Primarily includes additional services provided to franchisees and managed properties and fees related to our co-branded credit card program.

(d)

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

(e)

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

 

 























Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)







































March 31,


December 31,


March 31,
















2016


2015


2015
























Securitized vacation ownership debt (a)









Term notes

$

2,005


$

1,867


$

2,062

Bank conduit facility (b)


121



239



98

Total securitized vacation ownership debt (c)


2,126



2,106



2,160

Less: Current portion of securitized vacation ownership debt


207



209



217

Long-term securitized vacation ownership debt

$

1,919


$

1,897


$

1,943



















Debt:









   Revolving credit facility (due July 2020) (d)

$

10


$

7


$

14

   Commercial paper (e)


343



109



346

  Term loan (due March 2021)


323



-



-

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


-



316



316

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


299



299



299

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


14



14



14

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


448



448



448

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


40



40



40

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


247



247



247

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


648



648



649

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


408



408



417

   $350 million 5.10% senior unsecured notes (due October 2025)


337



337



-

   Capital leases


158



153



161

   Other


31



49



70

Total long-term debt


3,306



3,075



3,021

Less: Current portion of long-term debt


45



44



53

Long-term debt

$

3,261


$

3,031


$

2,968
























(a)

The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") that are consolidated within our financial statements. These bankruptcy-remote
SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company's creditors and legally are not the Company's assets. Additionally, the non-
recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors of these SPEs have no recourse to the Company for principal and interest.

(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2017 and borrowing capacity of $650 million. As of March 31, 2016, this facility had a remaining borrowing capacity
of $529 million.

(c)

This debt is collateralized by $2,548 million, $2,576 million and $2,609, of underlying vacation ownership contract receivables and related assets as of March 31, 2016, December 31, 2015, and March 31, 2015.
respectively.

(d)

Represents a $1.5 billion revolving credit facility that expires in July 2020. As of March 31, 2016, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper
borrowings of $343 million, the remaining borrowing capacity was $1.1 billion as of March 31, 2016.

(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $907 million as of March 31, 2016.

(f)

Classified as long-term as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with its revolving credit facility.

 

 








Table 6









Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS




















As of and For the Three Months Ended March 31, 2016








Average Revenue 




Number of 


Average 

Average Daily 

Per Available

Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

Room (RevPAR)









Hotel Group







Super 8 

2,665

170,454

51.5%

$45.73

$23.54









Days Inn 

1,791

143,212

44.3%

$63.81

$28.28









Ramada 

837

117,409

49.0%

$73.76

$36.12









Wyndham Hotels and Resorts

228

49,952

54.7%

$103.78

$56.73









Howard Johnson 

381

41,555

44.1%

$59.74

$26.33









Baymont

416

33,070

44.9%

$66.07

$29.66









Travelodge 

406

29,760

45.3%

$63.18

$28.63









Microtel Inns & Suites by Wyndham

333

24,045

51.1%

$63.64

$32.52









Knights Inn 

381

23,258

41.5%

$48.76

$20.22









TRYP by Wyndham

120

17,274

54.8%

$72.93

$39.97









Wingate by Wyndham

149

13,610

56.3%

$86.52

$48.70









Hawthorn Suites by Wyndham

105

10,466

62.3%

$82.76

$51.57









Dolce

22

5,080

45.5%

$152.13

$69.17









      Total Hotel Group

7,834

679,145

48.6%

$64.93

$31.59









Vacation Ownership






Wyndham Vacation Ownership resorts

216

24,442

N/A

N/A

N/A









      Total Wyndham Worldwide

8,050

703,587























As of and For the Three Months Ended March 31, 2015








Average Revenue




Number of 


Average 

Average Daily 

Per Available 

Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

Room (RevPAR)









Hotel Group







Super 8 

2,519

161,538

50.9%

$48.46

$24.66









Days Inn 

1,784

144,231

45.2%

$64.08

$28.98









Ramada 

840

116,409

51.5%

$74.72

$38.49







 Wyndham Hotels and Resorts

201

44,042

56.0%

$112.18

$62.85









Howard Johnson 

419

45,588

44.1%

$62.50

$27.59









Baymont

373

30,012

47.0%

$65.21

$30.63









Travelodge 

422

31,025

45.5%

$62.05

$28.24









Microtel Inns & Suites by Wyndham

325

23,302

53.5%

$66.83

$35.73









Knights Inn 

392

24,476

44.1%

$45.16

$19.91









TRYP by Wyndham

122

17,455

51.3%

$76.01

$39.02









Wingate by Wyndham

153

13,929

58.5%

$85.97

$50.33









Hawthorn Suites by Wyndham

99

9,825

64.8%

$80.39

$52.11









Dolce

24

5,530

54.4%

$131.50

$71.47









      Total Hotel Group

7,673

667,362

49.4%

$66.43

$32.84









Vacation Ownership






Wyndham Vacation Ownership resorts

210

23,965

N/A

N/A

N/A









      Total Wyndham Worldwide

7,883

691,327












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 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)












































Venezuela 












Reported 


Currency 


Adjusted

Three months ended March 31, 2016


Net Revenues


EBITDA


Devaluation (b)


EBITDA

Hotel Group



$

295


$

84


$

-


$

84

Destination Network




385



81



24



105

Vacation Ownership




641



136



-



136

Total Reportable Segments



1,321



301



24



325

Corporate and Other (a)




(18)



(34)



-



(34)

Total Company



$

1,303


$

267


$

24


$

291

















(a)  Includes the elimination of transactions between segments.

(b)  Represents the impact from the devaluation of the exchange rate of Venezuela.

 

 




























Table 7




























(2 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)


























































































Reported


Legacy


Acquisition


Restructuring


Asset


Contract 


Adjusted 

Three months ended March 31, 2015


Net Revenues


EBITDA


Adjustments(b)


Costs (c)


Costs (d)


Impairment (e)


Termination (f)


EBITDA

Hotel Group



$

292


$

76


$

-


$

3


$

-


$

-


$

-


$

79

Destination Network




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

























Hotel Group



$

334


$

96


$

-


$

1


$

-


$

-


$

-


$

97

Destination Network




383



84



-



-



-



-



-



84

Vacation Ownership




699



182



-



-



-



-



-



182

Total Reportable Segments



1,416



362



-



1



-



-



-



363

Corporate and Other (a)




(18)



(30)



(1)



-



-



-



-



(31)

Total Company



$

1,398


$

332


$

(1)


$

1


$

-


$

-


$

-


$

332





























Three months ended September 30, 2015
























Hotel Group



$

357


$

83


$

-


$

-


$

4


$

7


$

14


$

108

Destination Network




476



134



-



-



3



-



-



137

Vacation Ownership




750



200



-



-



1



-



-



201

Total Reportable Segments



1,583



417



-



-



8



7



14



446

Corporate and Other (a)




(19)



(35)



1



-



-



-



-



(34)

Total Company



$

1,564


$

382


$

1


$

-


$

8


$

7


$

14


$

412





























Three months ended December 31, 2015

























Hotel Group



$

314


$

94


$

-


$

-


$

(1)


$

-


$

-


$

93

Destination Network




310



44



-



-



(1)



-



-



43

Vacation Ownership




706



174



-



-



-



-



-



174

Total Reportable Segments



1,330



312



-



-



(2)



-



-



310

Corporate and Other (a)




(19)



(37)



-



-



-



-



-



(37)

Total Company



$

1,311


$

275


$

-


$

-


$

(2)


$

-


$

-


$

273





























Twelve months ended December 31, 2015
























Hotel Group



$

1,297


$

349


$

-


$

3


$

3


$

7


$

14


$

376

Destination Network




1,538



367



-



1



2



-



-



370

Vacation Ownership




2,772



687



-



-



1



-



-



688

Total Reportable Segments



5,607



1,403



-



4



6



7



14



1,434

Corporate and Other (a)




(71)



(137)



-



-



-



-



-



(137)

Total Company



$

5,536


$

1,266


$

-


$

4


$

6


$

7


$

14


$

1,297





























Note: The sum of the quarters may not agree to the twelve months ended December 31, 2015 due to rounding.

(a)  Includes the elimination of transactions between segments.

(b)  Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

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

(d)  Relates to costs incurred as a result of various organizational realignment initiatives and the reversal of a portion of restructuring reserves that were established in prior periods.

(e)  Relates to a non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from the Company's decision to outsource its reservation system to a third-party provider.

(f)  Relates to costs associated with the anticipated termination of a management contract.

 

 


















Table 7


















(3 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

ADDITIONAL DATA ON SHARE-BASED COMPENSATION EXPENSE

(In millions)





































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









































2016





Q1


Q2


Q3


Q4


Full Year

Adjusted EBITDA


$

291



 N/A 



 N/A 



 N/A 



 N/A 

     Share-based compensation expense (*)



13



 N/A 



 N/A 



 N/A 



 N/A 

Adjusted EBITDA excluding share-based compensation expense


$

304



 N/A 



 N/A 



 N/A 



 N/A 



























































2015





Q1


Q2


Q3


Q4


Full Year

Adjusted EBITDA


$

279


$

332


$

412


$

273


$

1,297

     Share-based compensation expense (*)



15



13



13



15



55

Adjusted EBITDA excluding share-based compensation expense


$

294


$

345


$

425


$

288


$

1,352





































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

(*)  Excludes share-based compensation expenses for which there was no impact on EBITDA. Such costs amounted to $1 million during Q1 2016 and $3 million for the full year 2015.

 

 
















Table 8
















(1 of 2)

















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






















Three Months Ended March 31, 2016









 Venezuela 


 Early 












 Currency 


 Extinguishment of  


As Adjusted





 As Reported 


Devaluation  (a)


Debt(b)


non-GAAP

Net revenues














Service and membership fees


$

634


$



$



$

634


Vacation ownership interest sales



342









342


Franchise fees



138









138


Consumer financing



107









107


Other




82









82

Net revenues



1,303



-



-



1,303

















Expenses















Operating



613



(24)






589


Cost of vacation ownership interests 



37









37


Consumer financing interest



18









18


Marketing and reservation



192









192


General and administrative



186









186


Depreciation and amortization



62









62

Total expenses



1,108



(24)



-



1,084

















Operating income



195



24



-



219

Other (income)/expense, net



(10)









(10)

Interest expense



33









33

Early extinguishment of debt



11






(11)



-

Interest income



(2)









(2)

















Income before income taxes



163



24



11



198

Provision for income taxes



67



-



4

(c)


71

















Net income



$

96


$

24


$

7


$

127

















Earnings per share














Basic



$

0.85


$

0.21


$

0.06


$

1.13


Diluted




0.84



0.21



0.06



1.12

















Weighted average shares outstanding














Basic




113



113



113



113


Diluted




114



114



114



114

















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)  Represents the impact from the devaluation of the exchange rate of Venezuela at the Company's destination network business.

(b)  Represents costs incurred in connection with the Company's early repurchase of its 6.0% senior unsecured notes.

(c)  Relates to the tax effect of the adjustment.

 

 
















Table 8
















(2 of 2)

















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






















Three Months Ended March 31, 2015

























Acquisition


Restructuring


As Adjusted 






 As Reported 


Costs(a)


Costs(c)


non-GAAP

Net revenues














Service fees and membership


$

599


$



$



$

599


Vacation ownership interest sales



336









336


Franchise fees



147









147


Consumer financing



104









104


Other




76









76

Net revenues



1,262



-



-



1,262

















Expenses















Operating



564



(3)






561


Cost of vacation ownership interests 



33









33


Consumer financing interest



18









18


Marketing and reservation



195









195


General and administrative



181









181


Restructuring



(1)






1



-


Depreciation and amortization



56









56

Total expenses



1,046



(3)



1



1,044

















Operating income



216



3



(1)



218

Other (income)/expense, net



(5)









(5)

Interest expense



26









26

Interest income



(3)









(3)

















Income before income taxes



198



3



(1)



200

Provision for income taxes



76



(1)

(b)


(1)

(d)


74

















Net income



$

122


$

4


$

-


$

126

















Earnings per share














Basic



$

1.01


$

0.03


$

-


$

1.04


Diluted




1.00



0.03



-



1.03

















Weighted average shares outstanding














Basic




121



121



121



121


Diluted




122



122



122



122

















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 costs incurred in connection with the acquistion of Dolce Hotels and Resorts (January 2015) at the Company's hotel group business.

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

(c)  Relates to the reversal of a portion of a restructuring reserve established during the fourth quarter of 2014 at the Company's destination network business.

(d)  Relates to the tax effect of the adjustment.

 

 













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:

















Three Months Ended March 31, 








2016



2015


















Net cash provided by operating activities


$

261



$

253





Less: Property and equipment additions



(43)




(56)





Free cash flow



$

218



$

197































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












2016


Q1

Q2

Q3

Q4

Full Year














Gross VOI sales



$

428


 N/A 


 N/A 


 N/A 


 N/A 

Less: Sales under WAAM Fee-for-Service



(23)


 N/A 


 N/A 


 N/A 


 N/A 

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



405


 N/A 


 N/A 


 N/A 


 N/A 

Less: Loan loss provision



(63)


 N/A 


 N/A 


 N/A 


 N/A 

Plus: Impact of percentage-of-completion accounting



-


 N/A 


 N/A 


 N/A 


 N/A 

Vacation ownership interest sales


$

342


 N/A 


 N/A 


 N/A 


 N/A 














2015

























Gross VOI sales



$

390

$

502

$

565

$

507

$

1,965

Less: Sales under WAAM Fee-for-Service



(21)


(26)


(37)


(42)


(126)

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



369


477


528


464


1,838

Less: Loan loss provision



(46)


(60)


(78)


(64)


(248)

Less: Impact of percentage-of-completion accounting



13


-


(2)


2


13

Vacation ownership interest sales


$

336

$

417

$

448

$

403

$

1,604














2014

























Gross VOI sales



$

410

$

496

$

513

$

470

$

1,889

Less: Sales under WAAM Fee-for-Service



(44)


(40)


(27)


(21)


(132)

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



366


456


486


449


1,757

Less: Loan loss provision



(60)


(70)


(70)


(60)


(260)

Less: Impact of percentage-of-completion accounting



(3)


(4)


(1)


(4)


(12)

Vacation ownership interest sales


$

303

$

382

$

415

$

385

$

1,485














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

_____________












Note: Amounts may not add due to rounding.








































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

















Q1

Q2

Q3

Q4

Full Year














2016


$

25


 N/A 


 N/A 


 N/A 


 N/A 

2015


$

24

$

17

$

32

$

27

$

100

2014


$

25

$

21

$

27

$

24

$

97

2013


$

24

$

18

$

22

$

25

$

89

 

 

 

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SOURCE Wyndham Worldwide Corporation