Wyndham Worldwide Reports Strong Third Quarter 2015 Results

Increases 2015 Adjusted EPS Guidance

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

THIRD QUARTER HIGHLIGHTS:

  • Adjusted diluted earnings per share (EPS) was $1.78, an increase of 7% from adjusted diluted EPS of $1.67 in the third quarter of 2014. Reported diluted EPS was $1.61, compared with $1.64 in the third quarter of 2014.
  • Revenues for the third quarter of 2015 increased 3% compared with the third quarter of 2014. On a currency neutral basis and excluding the impact of acquisitions and a divestiture, revenues increased 6% and adjusted EBITDA increased 7%.
  • Gross vacation ownership sales increased 12% on a constant currency basis.
  • Vacation rental transactions increased 6% excluding the impact of acquisitions and a divestiture.
  • The Company repurchased 2.1 million shares of its common stock for $170 million during the quarter.

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

THIRD QUARTER 2015 OPERATING RESULTS
Third quarter revenues were $1.6 billion, an increase of 3% from the prior year period.  Excluding acquisitions and a divestiture, constant currency revenues increased 6% reflecting growth in each of the Company's business segments.

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

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

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

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

BUSINESS UNIT RESULTS

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

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

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

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

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

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

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

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

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

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

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

OTHER ITEMS

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

Balance Sheet Information as of September 30, 2015:

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

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

OUTLOOK

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

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

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

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

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

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

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

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

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

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

 

 














Table 1















(1 of 2)


Wyndham Worldwide Corporation


OPERATING RESULTS OF REPORTABLE SEGMENTS


(In millions)
































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






















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



















Three Months Ended September 30,





2015


2014





 Net Revenues


 EBITDA


 Net Revenues


 EBITDA



Lodging

$

357


$

83


$

315


$

100



Vacation Exchange and Rentals


476



134



512



159



Vacation Ownership


750



200



704



188



     Total Reportable Segments


1,583



417



1,531



447



Corporate and Other (a)


(19)



(35)



(17)



(36)



     Total Company

$

1,564


$

382


$

1,514


$

411


















Reconciliation of EBITDA to Net income


































Three Months Ended September 30,








2015





2014



EBITDA




$

382





$

411



Depreciation and amortization





59






60



Interest expense





33






28



Interest income





(2)






(2)



Income before income taxes





292






325



Provision for income taxes





102






119



Net income




$

190





$

206


















__________














(a) Includes the elimination of transactions between segments. 

















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




















Three Months Ended September 30,





2015


2014





 Net Revenues


 Adjusted
EBITDA


 Net Revenues


 Adjusted
EBITDA



Lodging

$

357


$

108


$

315


$

107



Vacation Exchange and Rentals


476



137



512



159



Vacation Ownership


750



201



704



188



     Total Reportable Segments


1,583



446



1,531



454



Corporate and Other


(19)



(34)



(17)



(36)



     Total Company

$

1,564


$

412


$

1,514


$

418


















 

 














Table 1















(2 of 2)


Wyndham Worldwide Corporation


OPERATING RESULTS OF REPORTABLE SEGMENTS


(In millions)














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





Nine Months Ended September 30,




2015


2014




 Net Revenues


 EBITDA


 Net Revenues


 EBITDA



Lodging

$

983


$

255


$

835


$

250



Vacation Exchange and Rentals


1,228



323



1,293



333



Vacation Ownership


2,067



513



1,970



488



     Total Reportable Segments


4,278



1,091



4,098



1,071



Corporate and Other (a)


(54)



(100)



(48)



(104)



     Total Company

$

4,224


$

991


$

4,050


$

967

















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders




















Nine Months Ended September 30,







2015





2014



EBITDA




$

991





$

967



Depreciation and amortization





173






175



Interest expense





89






84



Interest income





(7)






(6)



Income before income taxes





736






714



Provision for income taxes





265






265



Net income





471






449



Net income attributable to noncontrolling interest





-






(1)



Net income attributable to Wyndham shareholders




$

471





$

448

















__________














(a) Includes the elimination of transactions between segments. 




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


















Nine Months Ended September 30,




2015


2014




 Net Revenues


 Adjusted
EBITDA


 Net Revenues


 Adjusted
EBITDA



Lodging

$

983


$

284


$

835


$

261



Vacation Exchange and Rentals


1,228



326



1,293



341



Vacation Ownership


2,067



514



1,970



488



     Total Reportable Segments


4,278



1,124



4,098



1,090



Corporate and Other


(54)



(101)



(48)



(103)



     Total Company

$

4,224


$

1,023


$

4,050


$

987

















 

 














Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)
































 Three Months Ended


 Nine Months Ended




 September 30, 


 September 30, 




2015


2014


2015


2014

Net revenues














Service and membership fees


$

734


$

717


$

1,957


$

1,922


Vacation ownership interest sales



448



415



1,201



1,101


Franchise fees



192



189



517



482


Consumer financing



108



108



318



319


Other



82



85



231



226

Net revenues



1,564



1,514



4,224



4,050















Expenses














Operating



691



613



1,865



1,721


Cost of vacation ownership interests 



43



49



123



129


Consumer financing interest



18



18



55



52


Marketing and reservation



218



227



624



614


General and administrative



200



188



562



564


Asset impairment



7



8



7



8


Restructuring



8



-



8



-


Depreciation and amortization



59



60



173



175

Total expenses



1,244



1,163



3,417



3,263















Operating income



320



351



807



787

Other income, net



(3)



-



(11)



(5)

Interest expense



33



28



89



84

Interest income



(2)



(2)



(7)



(6)















Income before income taxes



292



325



736



714

Provision for income taxes



102



119



265



265

Net income



190



206



471



449

Net income attributable to noncontrolling interest


-



-



-



(1)

Net income attributable to Wyndham shareholders

$

190


$

206


$

471


$

448















Earnings per share














Basic


$

1.62


$

1.65


$

3.96


$

3.55


Diluted



1.61



1.64



3.93



3.51















Weighted average shares outstanding














Basic



117



124



119



126


Diluted



118



126



120



128

__________



























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
























 

 
















Table 3
















(1 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS

















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






















Year


Q1


Q2


Q3


Q4


Full Year

Lodging (a)













Number of Rooms 

2015


667,400


668,500


671,900


 N/A 


 N/A 






2014


646,900


650,200


655,300


660,800


 N/A 






2013


631,800


635,100


638,300


645,400


 N/A 






2012


609,300


608,300


618,100


627,400


 N/A 


















RevPAR

2015

$

32.84

$

39.82

$

43.34


 N/A 


 N/A 






2014

$

32.30

$

40.11

$

43.71

$

34.06

$

37.57






2013

$

31.05

$

38.00

$

41.78

$

33.07

$

36.00






2012

$

29.73

$

37.23

$

40.39

$

31.86

$

34.80

















Vacation Exchange and Rentals













Average Number of Members (in 000s)

2015


3,822


3,831


3,835


 N/A 


 N/A 






2014


3,727


3,748


3,777


3,808


3,765






2013


3,668


3,686


3,711


3,728


3,698






2012


3,684


3,670


3,672


3,670


3,674


















Exchange Revenue Per Member

2015

$

194.06

$

167.81

$

163.38


 N/A 


 N/A 






2014

$

200.78

$

179.17

$

171.77

$

157.24

$

177.12






2013

$

210.96

$

182.42

$

169.95

$

161.21

$

181.02






2012

$

204.56

$

177.07

$

171.14

$

165.86

$

179.68


















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

2015


459


390


462


 N/A 


 N/A 






2014


429


376


455


293


1,552






2013


423


355


433


273


1,483






2012


418


325


390


259


1,392


















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

2015

$

361.20

$

513.14

$

642.00


 N/A 


 N/A 






2014

$

410.04

$

577.13

$

727.40

$

492.25

$

558.95






2013

$

392.64

$

540.38

$

677.81

$

506.62

$

532.11






2012

$

379.40

$

524.40

$

635.44

$

484.69

$

504.55

















Vacation Ownership (a)













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

2015

$

390,000

$

502,000

$

565,000


 N/A 


 N/A 






2014

$

410,000

$

496,000

$

513,000

$

470,000

$

1,889,000






2013

$

384,000

$

481,000

$

536,000

$

488,000

$

1,889,000






2012

$

384,000

$

460,000

$

502,000

$

435,000

$

1,781,000


















Tours (in 000s) (d)

2015


168


206


227


 N/A 


 N/A 






2014


170


208


225


191


794






2013


163


206


225


195


789






2012


148


186


207


183


724


















Volume Per Guest (VPG) (d)

2015

$

2,177

$

2,353

$

2,354


 N/A 


 N/A 






2014

$

2,272

$

2,280

$

2,158

$

2,336

$

2,257






2013

$

2,211

$

2,256

$

2,278

$

2,370

$

2,281






2012

$

2,414

$

2,361

$

2,315

$

2,225

$

2,324

















Note:

Full year amounts may not add across due to rounding.










(a)

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

(b)

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






















Year


Q1


Q2


Q3


Q4


Full Year


Vacation Rental Transactions (in 000s)

2014


429


367


431


292


1,518


Average Net Price Per Vacation Rental

2014

$

410.02

$

578.02

$

700.56

$

492.64

$

548.93

















(c)

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

(d)

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






































ADDITIONAL DATA






























Year


Q1


Q2


Q3


Q4


Full Year

Lodging













Number of Properties

2015


7,670


7,700


7,760


 N/A 


 N/A 






2014


7,500


7,540


7,590


7,650


 N/A 






2013


7,380


7,410


7,440


7,490


 N/A 






2012


7,150


7,170


7,260


7,340


 N/A 

















Vacation Ownership













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

2015

$

46,000

$

60,000

$

78,000


 N/A 


 N/A 






2014

$

60,000

$

70,000

$

70,000

$

60,000

$

260,000






2013

$

84,000

$

90,000

$

102,000

$

73,000

$

349,000






2012

$

96,000

$

100,000

$

124,000

$

89,000

$

409,000

















Note:

Full year amounts may not add across due to rounding.










(*)

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

















 

 

Table 3
(2 of 2)

Wyndham Worldwide Corporation
OPERATING STATISTICS

GLOSSARY OF TERMS

Lodging

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

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

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

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

Vacation Exchange and Rentals

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

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

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

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

Vacation Ownership

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

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

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

General

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

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

 

 
























Table 4

























Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)




















































2015


2014





 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Lodging
























Royalties and Franchise Fees


$

74

$

96

$

103


 N/A 


 N/A 


$

68

$

88

$

100

$

83

$

339


Marketing, Reservation and Wyndham Rewards Revenues (a)


96


108


112


 N/A 


 N/A 



76


101


117


91


385


Hotel Management Reimbursable Revenues (b)


61


71


73


 N/A 


 N/A 



37


39


39


39


154


Intersegment Trademark Fees



12


15


16


 N/A 


 N/A 



9


11


11


10


41


Owned Hotel Revenues



25


20


16


 N/A 


 N/A 



24


20


18


20


81


Ancillary Revenues (c)



24


24


37


 N/A 


 N/A 



23


24


30


24


101


Total Lodging



292


334


357


 N/A 


 N/A 



237


283


315


267


1,101

























Vacation Exchange and Rentals
























Exchange Revenues



185


161


157


 N/A 


 N/A 



187


168


162


150


667


Rental Revenues



166


200


296


 N/A 


 N/A 



176


217


331


144


868


Ancillary Revenues (d)



18


22


23


 N/A 


 N/A 



16


17


19


17


69


Total Vacation Exchange and Rentals


369


383


476


 N/A 


 N/A 



379


402


512


311


1,604

























Vacation Ownership
























Vacation Ownership Interest Sales


336


417


448


 N/A 


 N/A 



303


382


415


385


1,485


Consumer Financing



104


105


108


 N/A 


 N/A 



105


106


108


108


427


Property Management Fees and Reimbursable Revenues


153


149


159


 N/A 


 N/A 



143


145


150


142


581


WAAM Fee-for-Service Commissions


12


19


23


 N/A 


 N/A 



33


30


18


16


98


Ancillary Revenues (e)



12


9


12


 N/A 


 N/A 



9


10


13


17


47


Total Vacation Ownership



617


699


750


 N/A 


 N/A 



593


673


704


668


2,638

Total Reportable Segments


$

1,278

$

1,416

$

1,583


 N/A 


 N/A 


$

1,209

$

1,358

$

1,531

$

1,246

$

5,343




















































2013


2012





 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Lodging
























Royalties and Franchise Fees


$

64

$

79

$

91

$

75

$

309


$

62

$

80

$

88

$

71

$

301


Marketing, Reservation and Wyndham Rewards Revenues (a)


73


92


118


83


365



68


99


98


80


345


Hotel Management Reimbursable Revenues (b)


25


38


37


35


135



21


22


25


23


91


Intersegment Trademark Fees



8


10


11


10


39



8


9


9


8


34


Owned Hotel Revenues



26


20


18


19


84



8


8


7


18


41


Ancillary Revenues (c)



26


23


22


23


95



18


15


22


23


78


Total Lodging



222


262


297


245


1,027



185


233


249


223


890

























Vacation Exchange and Rentals
























Exchange Revenues



193


168


158


150


669



188


162


157


153


660


Rental Revenues



166


192


293


138


789



159


170


248


125


702


Ancillary Revenues (d)



15


16


19


17


68



14


16


15


15


60


Total Vacation Exchange and Rentals


374


376


470


305


1,526



361


348


420


293


1,422

























Vacation Ownership
























Vacation Ownership Interest Sales


263


347


384


384


1,379



271


342


373


337


1,323


Consumer Financing



105


106


107


108


426



103


102


106


110


421


Property Management Fees



146


141


143


137


567



110


108


117


125


460


WAAM Fee-for-Service Commissions


24


30


33


20


107



12


11


4


6


33


Ancillary Revenues (e)



11


6


10


9


36



5


7


8


12


32


Total Vacation Ownership



549


630


677


658


2,515



501


570


608


590


2,269

Total Reportable Segments


$

1,145

$

1,268

$

1,444

$

1,208

$

5,068


$

1,047

$

1,151

$

1,277

$

1,106

$

4,581







































































Note:

Full year amounts may not add across due to rounding.


(a)   

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

(b)

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

(c)

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

(d)

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

(e)

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

 

 





















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)















































September 30,

2015


June 30,

2015


March 31,

2015


December 31,

2014


September 30,

2014





















Securitized vacation ownership debt (a)















Term notes

$

1,843


$

1,841


$

2,090


$

1,962


$

1,670

Bank conduit facility (b)


267



253



98



203



271

Total securitized vacation ownership debt (c)


2,110



2,094



2,188



2,165



1,941

Less: Current portion of securitized vacation ownership debt


210



211



217



214



192

Long-term securitized vacation ownership debt

$

1,900


$

1,883


$

1,971


$

1,951


$

1,749









































Debt:















Revolving credit facility (due July 2020) (d)

$

20


$

23


$

14


$

25


$

18

Commercial paper (e)





87



476



346



189



237

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


316



317



317



317



317

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


299



299



299



299



299

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


14



14



14



14



14

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


448



448



448



448



448

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


40



40



40



40



40

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


247



247



247



247



247

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


648



648



650



648



646

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


409



409



418



410



401

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


338



-



-



-



-

Capital leases


158



161



161



170



175

Other


49



70



70



81



80

Total long-term debt


3,073



3,152



3,024



2,888



2,922

Less: Current portion of long-term debt


44



52



53



47



49

Long-term debt

$

3,029


$

3,100


$

2,971


$

2,841


$

2,873

__________







































(a)

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

(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2017 and borrowing capacity of $650 million. As of September 30, 2015, this facility had a remaining borrowing capacity of $383 million.

(c)

This debt is collateralized by $2,582 million, $2,558 million, $2,609 million, $2,629 million, and $2,326 million of underlying vacation ownership contract receivables and related assets as of September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014 and September 30, 2014.

(d)

Represents a $1.5 billion revolving credit facility that expires in July 2020. As of September 30, 2015, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $87 million, the remaining borrowing capacity was $1.4 billion as of September 30, 2015.

(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.2 billion as of September 30, 2015.
























 

 







Table 6







(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















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

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily

Rate (ADR)

Average Revenue
Per Available

Room (RevPAR)








Lodging






Super 8 

2,600

166,656

65.1%

$52.68

$34.29








Days Inn 

1,785

142,613

58.1%

$71.39

$41.48








Ramada 

838

117,044

59.0%

$76.94

$45.42








Wyndham Hotels and Resorts

210

45,537

65.5%

$108.30

$70.92








Howard Johnson 

403

43,803

59.0%

$62.54

$36.88








Baymont

396

31,480

60.0%

$72.04

$43.20








Travelodge 

414

30,692

59.8%

$74.56

$44.56








Microtel Inns & Suites by Wyndham

333

23,960

64.2%

$72.00

$46.20








Knights Inn 

383

23,464

49.2%

$52.00

$25.58








TRYP by Wyndham

122

17,641

70.3%

$84.05

$59.05








Wingate by Wyndham

148

13,450

70.4%

$91.42

$64.39








Hawthorn Suites by Wyndham

101

10,053

70.1%

$81.67

$57.28








Dolce

24

5,530

58.8%

$160.45

$94.40









Total Lodging

7,757

671,923

61.4%

$70.63

$43.34








Vacation Ownership






Wyndham Vacation Ownership resorts

211

24,095

N/A

N/A

N/A









Total Wyndham Worldwide

7,968

696,018




















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

Brand

Number of
Properties

Number of Rooms

Average

Occupancy Rate

Average Daily

Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)








Lodging






Super 8 

2,476

158,347

63.3%

$55.36

$35.05








Days Inn 

1,791

144,405

57.7%

$70.77

$40.83








Ramada 

829

114,918

58.5%

$82.00

$47.95








Howard Johnson 

432

46,303

54.4%

$65.79

$35.77








Wyndham Hotels and Resorts

182

41,510

67.0%

$113.52

$76.06








Travelodge 

424

31,117

60.5%

$75.65

$45.74








Baymont

359

29,293

59.0%

$69.16

$40.78








Knights Inn 

394

24,326

50.2%

$49.53

$24.84








Microtel Inns & Suites by Wyndham

320

22,862

65.6%

$71.02

$46.59








TRYP by Wyndham

119

16,910

69.4%

$93.45

$64.85








Wingate by Wyndham

157

14,377

68.2%

$89.34

$60.89








Hawthorn Suites by Wyndham

97

9,685

69.5%

$77.13

$53.62








Dream

5

989

63.9%

$221.73

$141.74








Night

2

280

76.6%

$164.40

$125.90









Total Lodging

7,587

655,322

60.4%

$72.34

$43.71








Vacation Ownership






Wyndham Vacation Ownership resorts

202

23,498

N/A

N/A

N/A









Total Wyndham Worldwide

7,789

678,820




_______________






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








 

 







Table 6







(2 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Nine Months Ended September 30, 2015

Brand

Number of
Properties

Number of Rooms

Average

 Occupancy Rate

Average Daily

Rate (ADR)

Average Revenue

 Per Available

 Room (RevPAR)








Lodging






Super 8 

2,600

166,656

59.2%

$51.01

$30.17








Days Inn 

1,785

142,613

52.5%

$68.20

$35.83








Ramada 

838

117,044

55.5%

$75.78

$42.08








Wyndham Hotels and Resorts

210

45,537

61.8%

$111.39

$68.87








Howard Johnson 

403

43,803

51.1%

$62.91

$32.15








Baymont

396

31,480

54.5%

$69.23

$37.72








Travelodge 

414

30,692

52.9%

$69.14

$36.55








Microtel Inns & Suites by Wyndham

333

23,960

59.8%

$69.81

$41.73








Knights Inn 

383

23,464

46.9%

$48.56

$22.79








TRYP by Wyndham

122

17,641

62.4%

$80.87

$50.42








Wingate by Wyndham

148

13,450

65.4%

$89.70

$58.66








Hawthorn Suites by Wyndham

101

10,053

68.5%

$81.16

$55.62








Dolce

24

5,530

57.5%

$149.84

$86.20









Total Lodging

7,757

671,923

56.1%

$68.97

$38.72








Vacation Ownership






Wyndham Vacation Ownership resorts

211

24,095

N/A

N/A

N/A









Total Wyndham Worldwide

7,968

696,018




















As of and For the Nine Months Ended September 30, 2014

Brand

Number of
Properties

Number of Rooms

Average

Occupancy Rate

Average Daily

 Rate (ADR)

Average Revenue

 Per Available

 Room (RevPAR)








Lodging






Super 8 

2,476

158,347

58.4%

$51.75

$30.21








Days Inn 

1,791

144,405

52.7%

$66.20

$34.91








Ramada 

829

114,918

55.3%

$80.22

$44.36








Howard Johnson 

432

46,303

49.5%

$63.66

$31.49








Wyndham Hotels and Resorts

182

41,510

63.2%

$114.72

$72.47








Travelodge 

424

31,117

53.1%

$68.87

$36.56








Baymont

359

29,293

54.4%

$66.09

$35.95








Knights Inn 

394

24,326

45.9%

$47.01

$21.56








Microtel Inns & Suites by Wyndham

320

22,862

61.1%

$67.25

$41.08








TRYP by Wyndham

119

16,910

62.7%

$92.33

$57.89








Wingate by Wyndham

157

14,377

65.3%

$87.14

$56.93








Hawthorn Suites by Wyndham

97

9,685

66.4%

$76.90

$51.03








Dream

5

989

70.2%

$219.10

$153.79








Night

2

280

69.4%

$147.35

$102.20









Total Lodging

7,587

655,322

55.8%

$69.45

$38.77








Vacation Ownership






Wyndham Vacation Ownership resorts

202

23,498

N/A

N/A

N/A









Total Wyndham Worldwide

7,789

678,820




_______________






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








 

 


























Table 7


























(1 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)





















































Three months ended March 31, 2015


Net Revenues


Reported
EBITDA


Legacy
    Adjustments (b)


Acquisition

   Costs (c)


Restructuring

Costs (d)


Asset

   Impairment (e)


Contract

 Termination (f)


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



























Three months ended September 30, 2015

























Lodging


$

357


$

83


$

-


$

-


$

4


$

7


$

14


$

108

Vacation Exchange and Rentals



476



134



-



-



3



-



-



137

Vacation Ownership



750



200



-



-



1



-



-



201

Total Reportable Segments



1,583



417



-



-



8



7



14



446

Corporate and Other (a)



(19)



(35)



1



-



-



-



-



(34)

Total Company


$

1,564


$

382


$

1


$

-


$

8


$

7


$

14


$

412

________________

























(a)

Includes the elimination of transactions between segments.




















(b)

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







(c)

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














(d)

Relates to costs incurred as a result of various organizational realignment initiatives and the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014.



(e)

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

(f)

Relates to the cost of the anticipated termination of a management contract.

















 

 






























Table 7





























(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)



























































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 September 30, 2015























 As Reported 


Legacy
    Adjustments (a)


Restructuring
    Costs (b)


Asset
    Impairment (d)


Contract

 Termination (e)


As Adjusted
non-GAAP

Net revenues




















Service and membership fees


$

734


$



$



$



$



$

734


Vacation ownership interest sales



448















448


Franchise fees



192















192


Consumer financing



108















108


Other



82















82

Net revenues



1,564



-



-



-



-



1,564





















Expenses




















Operating



691












(14)



677


Cost of vacation ownership interests 



43















43


Consumer financing interest



18















18


Marketing and reservation



218















218


General and administrative



200



(1)












199


Asset impairment



7









(7)






-


Restructuring



8






(8)









-


Depreciation and amortization



59















59

Total expenses



1,244



(1)



(8)



(7)



(14)



1,214





















Operating income



320



1



8



7



14



350

Other income, net



(3)















(3)

Interest expense



33















33

Interest income



(2)















(2)





















Income before income taxes



292



1



8



7



14



322

Provision for income taxes



102



-



2

(c)


2

(c)


6

(c)


112





















Net income


$

190


$

1


$

6


$

5


$

8


$

210





















Earnings per share




















Basic


$

1.62


$

0.01


$

0.05


$

0.04


$

0.07


$

1.79


Diluted



1.61



0.01



0.05



0.04



0.07



1.78





















Weighted average shares outstanding




















Basic



117



117



117



117



117



117


Diluted



118



118



118



118



118



118

__________



















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






















Note: 

EPS amounts may not add due to rounding.

(a)    

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

(b)

Relates to costs incurred as a result of various organizational realignment initiatives across the Company.

(c)

Relates to the tax effect of the adjustment.

(d)

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

(e)

Relates to the cost of the anticipated termination of a management contract within the Company's lodging business.

 

 




















Table 8




















(2 of 4)





















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)
























Nine Months Ended September 30, 2015
























 As Reported 


Acquisition
    Costs (a)


Restructuring
    Costs (c)


Asset
Impairment (e)


Contract

Termination (f)


As Adjusted
non-GAAP

Net revenues




















Service and membership fees


$

1,957


$



$



$



$



$

1,957


Vacation ownership interest sales



1,201















1,201


Franchise fees



517















517


Consumer financing



318















318


Other



231















231

Net revenues



4,224



-



-



-



-



4,224





















Expenses




















Operating



1,865



(3)









(14)



1,848


Cost of vacation ownership interests 



123















123


Consumer financing interest



55















55


Marketing and reservation



624















624


General and administrative



562















562


Asset impairment



7









(7)






-


Restructuring



8






(8)









-


Depreciation and amortization



173















173

Total expenses



3,417



(3)



(8)



(7)



(14)



3,385





















Operating income



807



3



8



7



14



839

Other income, net



(11)















(11)

Interest expense



89















89

Interest income



(7)















(7)





















Income before income taxes



736



3



8



7



14



768

Provision for income taxes



265



(1)

(b)


2

(d)


2

(d)


6

(d)


274





















Net income


$

471


$

4


$

6


$

5


$

8


$

494





















Earnings per share




















Basic


$

3.96


$

0.04


$

0.05


$

0.04


$

0.07


$

4.15


Diluted



3.93



0.04



0.05



0.04



0.07



4.12





















Weighted average shares outstanding




















Basic



119



119



119



119



119



119


Diluted



120



120



120



120



120



120

__________



















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

















Note:

EPS amounts may not add due to rounding.

(a)  

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

(b)

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

(c)

Relates to costs incurred as a result of various organizational realignment initiatives across the Company and the reversal of a portion of the restructuring reserve established during the fourth

quarter of 2014 at the Company's vacation exchange and rentals business. 

(d)

Relates to the tax effect of the adjustment.













(e)

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

(f)

Relates to the cost of the anticipated termination of a management contract within the Company's lodging business.




 

 














Table 8














(3 of 4)















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)


















Three Months Ended September 30, 2014


















 As Reported 


Restructuring
Reversal (a)


Asset
Impairment (b)


As Adjusted
non-GAAP

Net revenues














Service fees and membership


$

717


$



$



$

717


Vacation ownership interest sales



415









415


Franchise fees



189









189


Consumer financing



108









108


Other



85









85

Net revenues



1,514



-



-



1,514















Expenses














Operating



613









613


Cost of vacation ownership interests 



49









49


Consumer financing interest



18









18


Marketing and reservation



227









227


General and administrative



188



1






189


Asset impairment



8






(8)



-


Depreciation and amortization



60









60

Total expenses



1,163



1



(8)



1,156















Operating income



351



(1)



8



358

Interest expense



28









28

Interest income



(2)









(2)















Income before income taxes



325



(1)



8



332

Provision for income taxes



119



-



3

(c)


122















Net income


$

206


$

(1)


$

5


$

210















Earnings per share














Basic


$

1.65


$

(0.01)


$

0.04


$

1.69


Diluted



1.64



(0.01)



0.04



1.67















Weighted average shares outstanding














Basic



124



124



124



124


Diluted



126



126



126



126

__________













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















Note:

EPS amounts may not add due to rounding.

(a)   

Relates to the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 at the Company's lodging business.

(b)

Relates to a write-down of an investment in a joint venture at the Company's lodging business.







(c)

Relates to the tax effect of the adjustment.













 

 


























Table 8


























(4 of 4)



























Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






























Nine Months Ended September 30, 2014






























 As Reported 


Executive
Departure
Costs (a)


Venezuela
Currency

 Devaluation (c)


Legacy
Adjustments (d)


VAT
Adjustment (f)


Restructuring
Reversal (g)


Asset
Impairment (h)


As Adjusted
non-GAAP

Net revenues


























Service fees and membership


$

1,922


$



$



$



$



$



$



$

1,922


Vacation ownership interest sales



1,101





















1,101


Franchise fees



482





















482


Consumer financing



319





















319


Other



226





















226

Net revenues



4,050



-



-



-



-



-



-



4,050



























Expenses


























Operating



1,721






(10)















1,711


Cost of vacation ownership interests 



129





















129


Consumer financing interest



52





















52


Marketing and reservation



614





















614


General and administrative



564



(4)






(1)



2



1






562


Asset impairment



8


















(8)



-


Depreciation and amortization



175





















175

Total expenses



3,263



(4)



(10)



(1)



2



1



(8)



3,243



























Operating income



787



4



10



1



(2)



(1)



8



807

Other income, net



(5)





















(5)

Interest expense



84












2









86

Interest income



(6)





















(6)



























Income before income taxes



714



4



10



1



(4)



(1)



8



732

Provision for income taxes



265



1

(b)


1

(b)


1

(e)


(2)

(b)


-



3

(b)


269



























Net income



449



3



9



-



(2)



(1)



5



463

Net income attributable to noncontrolling interest



(1)



-



-



-



-



-



-



(1)



























Net income attributable to Wyndham shareholders


$

448


$

3


$

9


$

-


$

(2)


$

(1)


$

5


$

462



























Earnings per share


























Basic


$

3.55


$

0.02


$

0.07


$

-


$

(0.02)


$

(0.01)


$

0.04


$

3.65


Diluted



3.51



0.02



0.07



-



(0.02)



(0.01)



0.04



3.62



























Weighted average shares outstanding


























Basic



126



126



126



126



126



126



126



126


Diluted



128



128



128



128



128



128



128



128

__________

























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



























Note:

EPS amounts may not add due to rounding.

(a) 

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

(b)

Relates to the tax effect of the adjustment.

(c)

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

(d)

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











(e)

Relates to the reversal of a state tax accrual.














(f)

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










(g)

Relates to the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 at the Company's lodging business.













(h)

Relates to a write-down of an investment in a joint venture at the Company's lodging business.

 

 












Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)













FREE CASH FLOW












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


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













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















Nine Months Ended September 30, 







2015



2014

















Net cash provided by operating activities


$

817



$

899





Less: Property and equipment additions



(157)




(149)





Free cash flow


$

660



$

750





























GROSS VOI SALES
























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













Year












2015


Q1

Q2

Q3

Q4

Full Year













Gross VOI sales (*)


$

390

$

502

$

565


 N/A 


 N/A 

Less: Sales under WAAM Fee-for-Service



(21)


(26)


(37)


 N/A 


 N/A 

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



369


477


528


 N/A 


 N/A 

Less: Loan loss provision



(46)


(60)


(78)


 N/A 


 N/A 

Plus: Impact of percentage-of-completion accounting



13


-


(2)


 N/A 


 N/A 

Vacation ownership interest sales (*)


$

336

$

417

$

448


 N/A 


 N/A 













2014
























Gross VOI sales (*)


$

410

$

496

$

513

$

470

$

1,889

Less: Sales under WAAM Fee-for-Service



(44)


(40)


(27)


(21)


(132)

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



366


456


486


449


1,757

Less: Loan loss provision



(60)


(70)


(70)


(60)


(260)

Less: Impact of percentage-of-completion accounting



(3)


(4)


(1)


(4)


(12)

Vacation ownership interest sales (*)


$

303

$

382

$

415

$

385

$

1,485













2013
























Gross VOI sales (*)


$

384

$

481

$

536

$

488

$

1,889

Less: Sales under WAAM Fee-for-Service



(36)


(44)


(51)


(29)


(160)

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



347


437


486


459


1,729

Less: Loan loss provision



(84)


(90)


(102)


(73)


(349)

Less: Impact of percentage-of-completion accounting



-


-


-


(1)


(1)

Vacation ownership interest sales (*)


$

263

$

347

$

384

$

384

$

1,379













2012
























Gross VOI sales (*)


$

384

$

460

$

502

$

435

$

1,781

Less: Sales under WAAM Fee-for-Service



(17)


(18)


(5)


(10)


(49)

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



367


442


497


426


1,732

Less: Loan loss provision



(96)


(100)


(124)


(89)


(409)

Vacation ownership interest sales (*)


$

271

$

342

$

373

$

337

$

1,323

_____________












Note: Amounts may not add due to rounding.












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













































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















Q1

Q2

Q3

Q4

Full Year













2015


$

24

$

17

$

32


 N/A 


 N/A 

2014


$

25

$

21

$

27

$

24

$

97

2013


$

24

$

18

$

22

$

25

$

89

2012


$

27

$

20

$

22

$

28

$

97













 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wyndham-worldwide-reports-strong-third-quarter-2015-results-300166491.html

SOURCE Wyndham Worldwide Corporation