Wyndham Worldwide Reports Fourth Quarter and Full Year 2014 Earnings

Fourth Quarter Adjusted Diluted EPS Growth of 23%

Annual Free Cash Flow Target Increased to $800 Million

Increases Dividend 20%

PARSIPPANY, N.J., Feb. 10, 2015 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months and year ended December 31, 2014. 

Highlights:

  • Fourth quarter adjusted diluted earnings per share (EPS) was $0.90, an increase of 23% from adjusted diluted EPS of $0.73 in the fourth quarter of 2013.  Reported diluted EPS was $0.65 in the fourth quarter of 2014, unchanged from the same period in 2013.
  • Full year adjusted diluted EPS was $4.53, an increase of 18% from adjusted diluted EPS of $3.83 for the prior year period.  Reported diluted EPS was $4.18 compared with $3.21 for the prior year period.
  • During the quarter, the Company repurchased 2.1 million shares of its common stock for $171 million.  For the full year, the Company spent $652 million to repurchase 8.6 million shares of its common stock.
  • The Company's Board of Directors authorized an increase in the quarterly cash dividend to $0.42 from $0.35 per share, beginning with the dividend that is expected to be declared in the first quarter of 2015.
  • The Company increased its annual free cash flow target to $800 million from $750 million beginning in 2015.

"A strong fourth quarter led to 18% growth in full-year adjusted EPS, capping another year of double-digit earnings growth," said Stephen P. Holmes, chairman and CEO.  "All three of our businesses performed well and we're enthusiastic about the opportunities and initiatives that will drive growth going forward.  As an indication of confidence in our prospects, the Board of Directors approved a 20% increase in our quarterly dividend."    

FOURTH QUARTER 2014 OPERATING RESULTS

Fourth quarter revenues were $1.2 billion, an increase of 3% from the prior year period, or 4% in constant currency.  The increase reflects growth in all of the Company's business segments.

Adjusted net income was $112 million, or $0.90 per diluted share, compared with $96 million, or $0.73 per diluted share for the same period in 2013.  The increases reflect stronger operating results in the Company's lodging and vacation exchange and rentals businesses and lower net interest expense.  EPS also benefited from the Company's share repurchase program, which decreased weighted average diluted share count by 5% year-over-year.

Reported net income for the fourth quarter of 2014 was $81 million, or $0.65 per diluted share, compared with $86 million, or $0.65 per diluted share, for the fourth quarter of 2013.  Reported net income in both periods reflects several items excluded from adjusted net income.  The net result of these items unfavorably impacted fourth quarter 2014 net income by $31 million and unfavorably impacted fourth quarter 2013 net income by $10 million.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2014 OPERATING RESULTS

Revenues for full year 2014 were $5.3 billion, an increase of 5% over the prior year period.  Adjusted net income for the full year 2014 was $573 million, or $4.53 per diluted share, compared with $515 million, or $3.83 per diluted share, for the prior year.  The increases reflect stronger operating results across all of the Company's businesses.  EPS also benefited from the Company's share repurchase program, which decreased weighted average diluted share count by 6% compared with 2013.

Reported net income for full year 2014 was $529 million, or $4.18 per diluted share, compared with reported net income of $432 million, or $3.21 per diluted share, for the prior year period.  Reported net income reflects several items excluded from adjusted net income.  The net result of these items unfavorably impacted full year 2014 net income by $44 million and unfavorably impacted full year 2013 net income by $83 million.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2014 CASH FLOW

Free cash flow was $749 million for the year ended December 31, 2014, compared with $770 million for the same period in 2013.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures.  For the year ended December 31, 2014, net cash provided by operating activities was $984 million, compared with $1,008 million in the prior year period. 

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $267 million in the fourth quarter of 2014, a 9% increase over the fourth quarter of 2013.    

Domestic RevPAR increased 8.6%, partially offset by a 7.8% decline in international RevPAR, resulting in a 3.0% increase in total system-wide RevPAR compared with the fourth quarter of 2013.  In constant currency, total system-wide RevPAR increased 5.0%. 

Adjusted EBITDA for the fourth quarter of 2014 was $79 million, a 23% increase compared with the fourth quarter of 2013.  The increase primarily reflects higher RevPAR and the favorable timing of loyalty and marketing expenses compared with the same period last year.

As of December 31, 2014, the Company's hotel system consisted of approximately 7,650 properties and approximately 661,000 rooms, a 2.4% room increase compared with the fourth quarter of 2013.  The development pipeline included approximately 960 hotels and 117,000 rooms, of which 57% were international and 64% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $311 million in the fourth quarter of 2014, a 2% increase over the fourth quarter of 2013.  In constant currency, revenues were up 6%.

Exchange revenues were $150 million, flat compared with the fourth quarter of 2013.  In constant currency, exchange revenues increased 2%, as the average number of members increased 2.2% and exchange revenue per member was flat.

Vacation rental revenues were $144 million, a 4% increase over the fourth quarter of 2013.  In constant currency, vacation rental revenues were up 11%, reflecting a 7.3% increase in transaction volume and a 3.3% increase in the average net price per vacation rental. 

Adjusted EBITDA for the fourth quarter of 2014 was $39 million, an 8% increase compared with the fourth quarter of 2013.  On a currency-neutral basis, adjusted EBITDA increased 14% compared with the prior year period due to the revenue increases and cost controls.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $668 million in the fourth quarter of 2014, a 2% increase over the fourth quarter of 2013, primarily reflecting higher resort management fees. 

Gross VOI sales were $470 million in the fourth quarter of 2014, a decrease of 4% compared with the fourth quarter of 2013, reflecting a 1.4% decline in volume per guest and a 2.1% decline in tour flow.   

Net VOI sales were flat compared with the fourth quarter of 2013, reflecting a lower provision for loan loss resulting from improved portfolio performance.

EBITDA for the fourth quarter of 2014 was $172 million, flat compared with the fourth quarter of 2013.

Other Items

  • The Company repurchased 2.1 million shares of common stock for $171 million during the fourth quarter of 2014.  For the full-year 2014, the Company purchased 8.6 million shares of common stock for $652 million.  From January 1 through February 9, 2015, the Company repurchased an additional 0.8 million shares for $68 million.  The Company's remaining share repurchase authorization totals $948 million as of February 9, 2015.
  • Reported net interest expense in the fourth quarter of 2014 was $25 million, compared with $32 million in the fourth quarter of 2013, primarily reflecting the benefit of lower interest rates associated with fixed-for-floating interest rate swaps. 

Balance Sheet Information as of December 31, 2014:

  • Cash and cash equivalents of $183 million, compared with $194 million at December 31, 2013
  • Vacation ownership contract receivables, net, of $2.7 billion, compared with $2.8 billion at December 31, 2013
  • Vacation ownership and other inventory of $1.2 billion, compared with $1.0 billion at December 31, 2013   
  • Securitized vacation ownership debt of $2.2 billion, compared with $1.9 billion at December 31, 2013
  • Long-term debt of $2.9 billion, unchanged from December 31, 2013. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of December 31, 2014, unchanged from December 31, 2013

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 from $5.400 - $5.500 billion.
  • Adjusted EBITDA of approximately $1.285 - $1.315 billion from $1.300 - $1.330 billion, reflecting the adverse impact of foreign exchange partially offset by stronger underlying performance. Based on January 31, 2015 rates, foreign exchange movements have had a $25 million adverse effect on 2015 EBITDA guidance since the Company's initial 2015 guidance, which was issued on October 24, 2014.  The Company's 2015 guidance reflects a $34 million adverse impact from foreign exchange compared with 2014 full year results.
  • Adjusted EPS of approximately $4.75 - $4.90 based on a diluted share count of 123 million from $4.70 - $4.85 based on a diluted share count of 125 million.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Tuesday, February 10, 2015 at 8:30 a.m. EST. 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 EST on February 10, 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 EST on February 10, 2015, at 888-484-4840.

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

Presentation of Financial Information

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

About Wyndham Worldwide Corporation

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with over 7,600 franchised hotels and approximately 661,000 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 107,000 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 200 vacation ownership resorts serving approximately 904,000 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, dividends 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 14, 2014.  Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 

 














Table 1














(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)





























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















The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the three months ended December 31, 2014 and 2013:













Three Months Ended December 31,




2014


2013




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$

267


$

77


$

245


$

47


Vacation Exchange and Rentals


311



2



305



36


Vacation Ownership


668



172



658



172


     Total Reportable Segments


1,246



251



1,208



255


Corporate and Other (a)


(15)



(36)



(13)



(33)


     Total Company

$

1,231


$

215


$

1,195


$

222
















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders
































Three Months Ended December 31, 







2014





2013


EBITDA




$

215





$

222


Depreciation and amortization





58






56


Interest expense





29






34


Interest income





(4)






(2)


Income before income taxes





132






134


Provision for income taxes





51






48


Net income attributable to Wyndham shareholders




$

81





$

86
















__________













(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 December 31, 2014 and 2013 (for a description of adjustments by segment, see Table 7):

















Three Months Ended December 31, 




2014


2013




 Net Revenues 


 Adjusted
EBITDA 


 Net Revenues 


 Adjusted
EBITDA 


Lodging

$

267


$

79


$

245


$

64


Vacation Exchange and Rentals


311



39



305



36


Vacation Ownership


668



172



658



172


     Total Reportable Segments


1,246



290



1,208



272


Corporate and Other


(15)



(38)



(13)



(33)


     Total Company

$

1,231


$

252


$

1,195


$

239
















 

 














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 twelve months ended December 31, 2014 and 2013:

















Twelve Months Ended December 31, 




2014


2013




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$

1,101


$

327


$

1,027


$

279


Vacation Exchange and Rentals


1,604



335



1,526



356


Vacation Ownership


2,638



660



2,515



619


     Total Reportable Segments


5,343



1,322



5,068



1,254


Corporate and Other (a)


(62)



(141)



(59)



(122)


     Total Company

$

5,281


$

1,181


$

5,009


$

1,132
















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders
































Twelve Months Ended December 31, 







2014





2013


EBITDA




$

1,181





$

1,132


Depreciation and amortization





233






216


Interest expense





113






131


Early extinguishment of debt





-






111


Interest income





(10)






(9)


Income before income taxes





845






683


Provision for income taxes





316






250


Net income





529






433


Net income attributable to noncontrolling interest





-






(1)


Net income attributable to Wyndham shareholders




$

529





$

432
















__________













(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 twelve months ended December 31, 2014 and 2013 (for a description of adjustments by segment, see Table 7):








Twelve Months Ended December 31, 




2014


2013




 Net Revenues 


 Adjusted
EBITDA 


 Net Revenues 


 Adjusted
EBITDA 


Lodging

$

1,101


$

340


$

1,027


$

296


Vacation Exchange and Rentals


1,604



380



1,526



356


Vacation Ownership


2,638



660



2,515



621


     Total Reportable Segments


5,343



1,380



5,068



1,273


Corporate and Other


(62)



(142)



(59)



(121)


     Total Company

$

5,281


$

1,238


$

5,009


$

1,152
















 














Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)
































 Three Months Ended 


 Twelve Months Ended 




 December 31, 


 December 31, 




2014


2013


2014


2013

Net revenues














Service and membership fees


$

508


$

496


$

2,431


$

2,329


Vacation ownership interest sales



385



384



1,485



1,379


Franchise fees



151



139



632



599


Consumer financing



108



108



427



426


Other



79



68



306



276

Net revenues



1,231



1,195



5,281



5,009















Expenses














Operating



542



517



2,262



2,161


Cost of vacation ownership interests 



42



48



171



155


Consumer financing interest



18



18



71



78


Marketing and reservation



188



180



802



751


General and administrative



189



193



755



720


Loss on sale and asset impairments



27



8



35



8


Restructuring



12



9



11



10


Depreciation and amortization



58



56



233



216

Total expenses



1,076



1,029



4,340



4,099















Operating income



155



166



941



910

Other income, net



(2)



-



(7)



(6)

Interest expense



29



34



113



131

Early extinguishment of debt



-



-



-



111

Interest income



(4)



(2)



(10)



(9)















Income before income taxes



132



134



845



683

Provision for income taxes



51



48



316



250

Net income



81



86



529



433

Net income attributable to noncontrolling interest


-



-



-



(1)

Net income attributable to Wyndham shareholders

$

81


$

86


$

529


$

432















Earnings per share














Basic


$

0.66


$

0.66


$

4.22


$

3.25


Diluted



0.65



0.65



4.18



3.21















Weighted average shares outstanding














Basic



122



129



125



133


Diluted



124



131



127



135

__________



























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













Number of Rooms 

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 






2011


609,600


612,900


611,200


613,100


 N/A 


















RevPAR

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






2011

$

27.71

$

35.38

$

39.49

$

30.65

$

33.34

















Vacation Exchange and Rentals













Average Number of Members (in 000s)

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






2011


3,766


3,755


3,744


3,734


3,750


















Exchange Revenue Per Member

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






2011

$

205.64

$

178.46

$

172.38

$

161.68

$

179.59


















Vacation Rental Transactions (in 000s) (a)

2014


429


376


455


293


1,552






2013


423


355


433


273


1,483






2012


418


325


390


259


1,392






2011


398


328


370


250


1,347


















Average Net Price Per Vacation Rental (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






2011

$

377.71

$

549.09

$

701.81

$

497.04

$

530.78

















Vacation Ownership (a)













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

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






2011

$

319,000

$

412,000

$

455,000

$

409,000

$

1,595,000


















Tours (in 000s) (c)

2014


170


208


225


191


794






2013


163


206


225


195


789






2012


148


186


207


183


724






2011


137


177


197


173


685


















Volume Per Guest (VPG) (c)

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






2011

$

2,192

$

2,227

$

2,197

$

2,296

$

2,229

















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












(a)

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

(b)

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).

(c)

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

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 






2011


7,190


7,220


7,190


7,210


 N/A 

















Vacation Ownership













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

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






2011

$

79,000

$

80,000

$

96,000

$

83,000

$

339,000

















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, (ii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided and (iii) properties managed under a joint venture.  



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 2011-2014.  



















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)




















































2014


2013





 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Lodging
























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 Lodging



237


283


315


267


1,101



222


262


297


245


1,027

























Vacation Exchange and Rentals
























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 Vacation Exchange and Rentals


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




















































2012


2011





 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Lodging
























Royalties and Franchise Fees


$

62

$

80

$

88

$

71

$

301


$

58

$

75

$

85

$

66

$

284


Marketing, Reservation and Wyndham Rewards Revenues (a)


68


99


98


80


345



54


75


94


76


299


Hotel Management Reimbursable Revenues (b)


21


22


25


23


91



19


19


21


20


79


Intersegment Trademark Fees (f)



8


9


9


8


34



1


2


3


4


10


Owned Hotel Revenues



8


8


7


18


41



-


-


-


5


5


Ancillary Revenues (c)



18


15


22


23


78



17


19


19


17


72


Total Lodging



185


233


249


223


890



149


190


222


188


749

























Vacation Exchange and Rentals
























Exchange Revenues



188


162


157


153


660



194


168


161


150


673


Rental Revenues



159


170


248


125


702



150


180


260


125


715


Ancillary Revenues (d)



14


16


15


15


60



12


13


15


16


56


Total Vacation Exchange and Rentals


361


348


420


293


1,422



356


361


436


291


1,444

























Vacation Ownership
























Vacation Ownership Interest Sales


271


342


373


337


1,323



222


313


320


295


1,150


Consumer Financing



103


102


106


110


421



102


103


105


105


415


Property Management Fees



110


108


117


125


460



110


108


105


101


424


WAAM Fee-for-Service Commissions


12


11


4


6


33



10


11


23


21


65


Ancillary Revenues (e)



5


7


8


12


32



6


6


6


5


23


Total Vacation Ownership



501


570


608


590


2,269



450


541


559


527


2,077

Total Reportable Segments


$

1,047

$

1,151

$

1,277

$

1,106

$

4,581


$

955

$

1,092

$

1,217

$

1,006

$

4,270

















































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, such amounts include reimbursable revenues of $2 million in each of Q1, Q2 and Q3 and $1 million in Q4 which were charged to the Company's vacation ownership business and were eliminated in consolidation. During 2013, such amounts include reimbursable revenues of $1 million, $3 million and $2 million, in Q2, Q3 and Q4 respectively, which were charged to the Company's vacation ownership business and were eliminated in consolidation.

(c)

Primarily includes additional services provided to franchisees.

(d)

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

(e)

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

(f)

During 2011, $3 million, $1 million and $2 million of intersegment trademark fees were recorded as a reduction of expenses in Q1, Q2 and Q3, respectively.  As such, total intersegment trademark fees for 2011 were $16 million.



 





















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)















































December 31,
2014


September 30,
2014


June 30,
2014


March 31,
2014


December 31,
2013





















Securitized vacation ownership debt (a)















Term notes

$

1,962


$

1,670


$

1,600


$

1,823


$

1,648

Bank conduit facility (b)


203



271



291



156



262

Total securitized vacation ownership debt (c)


2,165



1,941



1,891



1,979



1,910

Less: Current portion of securitized vacation ownership debt


214



192



187



192



184

Long-term securitized vacation ownership debt

$

1,951


$

1,749


$

1,704


$

1,787


$

1,726









































Debt:















Revolving credit facility (due July 2018) (d)

$

25


$

18


$

16


$

10


$

23

Commercial paper (e)





189



237



107



184



210

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


317



317



318



318



318

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


299



299



299



299



298

$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



447



447

$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



246



246



246

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


648



646



646



645



643

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


410



401



403



395



387

Capital leases


170



175



186



188



191

Other


81



80



99



100



114

Total long-term debt


2,888



2,922



2,822



2,886



2,931

Less: Current portion of long-term debt


47



49



50



52



49

Long-term debt

$

2,841


$

2,873


$

2,772


$

2,834


$

2,882

__________

(a)

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

(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2016 and borrowing capacity of $650 million. As of December 31, 2014, this facility had a remaining borrowing capacity of $447 million.

(c)

This debt is collateralized by $2,629 million, $2,326 million, $2,287 million, $2,328 million and $2,314 million of underlying vacation ownership contract receivables and related assets as of December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013, respectively.

(d)

Represents a $1.5 billion revolving credit facility that expires in July 2018. As of December 31, 2014, the Company had $2 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $189 million, the remaining borrowing capacity was $1.3 billion as of December 31, 2014.

(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.1 billion, as of December 31, 2014.

(f)

Includes unamortized gains from the settlement of a derivative in the amount of $2 million as of December 31, 2014 and September 30, 2014, respectively, and $3 million as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively.

(g)

Includes a $3 million increase and $2 million decrease in the carrying value resulting from a fair value hedge derivative as of December 31, 2014 and December 31, 2013, respectively. 

(h)

Includes a $13 million increase and $10 million decrease in the carrying value resulting from a fair value hedge derivative as of December 31, 2014 and December 31, 2013, respectively.

 

 







Table 6







(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Three Months Ended December 31, 2014

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)








Lodging






Wyndham Hotels and Resorts

195

43,865

58.0%

$116.50

$67.53








TRYP by Wyndham

119

16,965

59.5%

$84.73

$50.44








Wingate by Wyndham

153

13,923

58.2%

$84.83

$49.35








Hawthorn Suites by Wyndham

97

9,620

63.1%

$75.65

$47.72








Ramada 

837

115,923

51.1%

$78.04

$39.86








Baymont

369

29,727

47.1%

$64.64

$30.42








Days Inn 

1,794

145,078

45.7%

$63.86

$29.18








Super 8 

2,510

160,847

53.8%

$48.07

$25.85








Howard Johnson 

429

45,919

46.7%

$62.82

$29.34








Travelodge 

421

30,989

45.0%

$63.71

$28.68








Microtel Inns & Suites by Wyndham

323

23,138

56.1%

$67.28

$37.74








Knights Inn 

398

24,832

42.1%

$45.61

$19.19









Total Lodging

7,645

660,826

50.6%

$67.27

$34.06








Vacation Ownership






Wyndham Vacation Ownership resorts

203

23,644

N/A

N/A

N/A









Total Wyndham Worldwide

7,848

684,470




















As of and For the Three Months Ended December 31, 2013

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)








Lodging






Wyndham Hotels and Resorts

170

37,569

54.5%

$120.69

$65.76








TRYP by Wyndham

113

16,216

57.4%

$97.16

$55.74








Wingate by Wyndham

159

14,559

56.0%

$83.38

$46.66








Hawthorn Suites by Wyndham

91

8,933

59.2%

$69.39

$41.10








Ramada 

834

115,394

50.9%

$80.82

$41.13








Baymont

329

27,108

46.0%

$62.11

$28.60








Days Inn 

1,817

146,959

44.3%

$62.20

$27.54








Super 8 

2,391

152,648

52.2%

$49.36

$25.77








Howard Johnson 

449

46,777

45.8%

$59.86

$27.39








Travelodge 

432

32,012

44.2%

$63.13

$27.91








Microtel Inns & Suites by Wyndham

312

22,304

53.7%

$63.53

$34.11








Knights Inn 

380

23,325

40.0%

$43.43

$17.37








Dream

5

989

74.6%

$249.45

$186.05








Night

3

630

63.3%

$172.81

$109.40









Total Lodging

7,485

645,423

49.1%

$67.36

$33.07








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,506

N/A

N/A

N/A









Total Wyndham Worldwide

7,676

668,929




_______________






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 Year Ended December 31, 2014

Brand

Number of 
Properties

Number of Rooms

Average

 Occupancy Rate

Average Daily

 Rate (ADR)

Average Revenue

 Per Available

 Room (RevPAR)








Lodging






Wyndham Hotels and Resorts

195

43,865

61.8%

$115.17

$71.14








TRYP by Wyndham

119

16,965

61.9%

$90.45

$55.97








Wingate by Wyndham

153

13,923

63.6%

$86.61

$55.05








Hawthorn Suites by Wyndham

97

9,620

65.5%

$76.59

$50.19








Ramada 

837

115,923

54.2%

$79.70

$43.22








Baymont

369

29,727

52.5%

$65.75

$34.51








Days Inn 

1,794

145,078

51.0%

$65.68

$33.48








Super 8 

2,510

160,847

57.2%

$50.86

$29.09








Howard Johnson 

429

45,919

48.8%

$63.46

$30.96








Travelodge 

421

30,989

51.1%

$67.75

$34.62








Microtel Inns & Suites by Wyndham

323

23,138

59.8%

$67.26

$40.23








Knights Inn 

398

24,832

44.9%

$46.67

$20.94









Total Lodging

7,645

660,826

54.5%

$68.94

$37.57








Vacation Ownership






Wyndham Vacation Ownership resorts

203

23,644

N/A

N/A

N/A









Total Wyndham Worldwide

7,848

684,470




















As of and For the Year Ended December 31, 2013

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)








Lodging






Wyndham Hotels and Resorts

170

37,569

58.6%

$117.27

$68.74








TRYP by Wyndham

113

16,216

60.5%

$96.09

$58.16








Wingate by Wyndham

159

14,559

60.9%

$85.11

$51.82








Hawthorn Suites by Wyndham

91

8,933

62.6%

$71.46

$44.71








Ramada 

834

115,394

53.0%

$80.19

$42.50








Baymont

329

27,108

51.3%

$63.14

$32.40








Days Inn 

1,817

146,959

48.8%

$64.34

$31.42








Super 8 

2,391

152,648

56.3%

$52.33

$29.45








Howard Johnson 

449

46,777

47.7%

$62.06

$29.58








Travelodge 

432

32,012

49.5%

$67.10

$33.23








Microtel Inns & Suites by Wyndham

312

22,304

57.6%

$64.42

$37.10








Knights Inn 

380

23,325

42.0%

$45.04

$18.92








Dream

5

989

71.8%

$229.77

$164.88








Night

3

630

62.4%

$152.65

$95.18









Total Lodging

7,485

645,423

52.7%

$68.27

$36.00








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,506

N/A

N/A

N/A









Total Wyndham Worldwide

7,676

668,929




_______________






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, 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 7























(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)















































Three months ended March 31, 2013


Net Revenues


Reported
EBITDA


Legacy
Adjustments (b)


Acquisition
Costs (c)


Restructuring
Costs (d)


Asset
Impairment (e)


Adjusted
EBITDA

Lodging


$

222


$

58


$

-


$

-


$

-


$

-


$

58

Vacation Exchange and Rentals



374



94



-



-



-



-



94

Vacation Ownership



549



111



-



2



-



-



113

Total Reportable Segments



1,145



263



-



2



-



-



265

Corporate and Other (a)



(12)



(29)



-



-



-



-



(29)

Total Company


$

1,133


$

234


$

-


$

2


$

-


$

-


$

236
























Three months ended June 30, 2013






















Lodging


$

262


$

78


$

-


$

-


$

-


$

-


$

78

Vacation Exchange and Rentals



376



85



-



-



-



-



85

Vacation Ownership



630



161



-



-



-



-



161

Total Reportable Segments



1,268



324



-



-



-



-



324

Corporate and Other (a)



(15)



(27)



-



-



-



-



(27)

Total Company


$

1,253


$

297


$

-


$

-


$

-


$

-


$

297
























Three months ended September 30, 2013





















Lodging


$

297


$

95


$

-


$

-


$

-


$

-


$

95

Vacation Exchange and Rentals



470



141



-



-



-



-



141

Vacation Ownership



677



176



-



-



-



-



176

Total Reportable Segments



1,444



412



-



-



-



-



412

Corporate and Other (a)



(17)



(33)



(1)



-



-



-



(34)

Total Company


$

1,427


$

379


$

(1)


$

-


$

-


$

-


$

378
























Three months ended December 31, 2013





















Lodging


$

245


$

47


$

-


$

-


$

9


$

8


$

64

Vacation Exchange and Rentals



305



36



-



-



-



-



36

Vacation Ownership



658



172



-



-



-



-



172

Total Reportable Segments



1,208



255



-



-



9



8



272

Corporate and Other (a)



(13)



(33)



-



-



-



-



(33)

Total Company


$

1,195


$

222


$

-


$

-


$

9


$

8


$

239
























Twelve months ended December 31, 2013





















Lodging


$

1,027


$

279


$

-


$

-


$

9


$

8


$

296

Vacation Exchange and Rentals



1,526



356



-



-



-



-



356

Vacation Ownership



2,515



619



-



2



-



-



621

Total Reportable Segments



5,068



1,254



-



2



9



8



1,273

Corporate and Other (a)



(59)



(122)



1



-



-



-



(121)

Total Company


$

5,009


$

1,132


$

1


$

2


$

9


$

8


$

1,152

________________






















Note: The sum of the quarters may not agree to the twelve months ended December 31, 2013 due to rounding.


(a)

Includes the elimination of transactions between segments.

(b)

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

(c)

Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013).

(d)

Relates to costs incurred as a result of an organizational realignment initiative.

(e)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark.

 

 

















Table 8

















(1 of 4)


















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





















Three Months Ended December 31, 2014




















 As Reported 


Legacy
  Adjustments(a)


Restructuring
Costs (c)


Loss on Sale
and Asset
Impairment (d)


As Adjusted
non-GAAP

Net revenues

















Service and membership fees


$

508


$



$



$



$

508


Vacation ownership interest sales



385












385


Franchise fees



151












151


Consumer financing



108












108


Other



79












79

Net revenues



1,231



-



-



-



1,231


















Expenses

















Operating



542












542


Cost of vacation ownership interests 



42












42


Consumer financing interest



18












18


Marketing and reservation



188












188


General and administrative



189



2









191


Loss on sale and asset impairment



27









(27)



-


Restructuring



12






(12)






-


Depreciation and amortization



58












58

Total expenses



1,076



2



(12)



(27)



1,039


















Operating income



155



(2)



12



27



192

Other income, net



(2)












(2)

Interest expense



29












29

Interest income



(4)












(4)


















Income before income taxes



132



(2)



12



27



169

Provision for income taxes



51



(1)

(b)


4

(b)


3

(b)


57


















Net income attributable to Wyndham shareholders


$

81


$

(1)


$

8


$

24


$

112


















Earnings per share

















Basic


$

0.66


$

(0.01)


$

0.07


$

0.20


$

0.91


Diluted



0.65



(0.01)



0.06



0.20



0.90


















Weighted average shares outstanding

















Basic



122



122



122



122



122


Diluted



124



124



124



124



124

__________
















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

Note:

EPS amounts may not add due to rounding.







(a)

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

(b)

Relates to the tax effect of the adjustment.
















(c)

Relates to costs incurred as a result of organizational realignment initiatives at the Company's lodging and vacation exchange and rentals businesses. 

(d)

Relates to 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.



 


























Table 8


























(2 of 4)



























Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






























Twelve Months Ended December 31, 2014






























 As Reported 


Executive
Departure
Costs (a)


Venezuela
Currency
    Devaluation(c)


Legacy
  Adjustments(d)


    VAT
    Adjustment(f)


Restructuring
Costs(g)


Loss on Sale
and Asset
Impairments(h)


As Adjusted
non-GAAP

Net revenues


























Service and membership fees


$

2,431


$



$



$



$



$



$



$

2,431


Vacation ownership interest sales



1,485





















1,485


Franchise fees



632





















632


Consumer financing



427





















427


Other



306





















306

Net revenues



5,281



-



-



-



-



-



-



5,281



























Expenses


























Operating



2,262






(10)















2,252


Cost of vacation ownership interests 



171





















171


Consumer financing interest



71





















71


Marketing and reservation



802





















802


General and administrative



755



(4)






1



2









754


Loss on sale and asset impairments



35


















(35)



-


Restructuring



11















(11)






-


Depreciation and amortization



233





















233

Total expenses



4,340



(4)



(10)



1



2



(11)



(35)



4,283



























Operating income



941



4



10



(1)



(2)



11



35



998

Other income, net



(7)





















(7)

Interest expense



113












2









115

Interest income



(10)





















(10)



























Income before income taxes



845



4



10



(1)



(4)



11



35



900

Provision for income taxes



316



1

(b)


1

(b)


1

(e)


(2)

(b)


4

(b)


6

(b)


327



























Net income



529



3



9



(2)



(2)



7



29



573

Net income attributable to noncontrolling interest



-



-



-



-



-



-



-



-



























Net income attributable to Wyndham shareholders


$

529


$

3


$

9


$

(2)


$

(2)


$

7


$

29


$

573



























Earnings per share


























Basic


$

4.22


$

0.02


$

0.07


$

(0.01)


$

(0.02)


$

0.06


$

0.23


$

4.57


Diluted



4.18



0.02



0.07



(0.01)



(0.02)



0.06



0.23



4.53



























Weighted average shares outstanding


























Basic



125



125



125



125



125



125



125



125


Diluted



127



127



127



127



127



127



127



127

__________

























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 benefit 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 (i) costs incurred as a result of organizational realignment initiatives at the Company's lodging and vacation exchange and rentals businesses, partially offset by (ii) the reversal of a portion of a restructuring reserve of $1 million established during the fourth quarter of 2013.

(h)

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. 

 














Table 8














(3 of 4)















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)


















Three Months Ended December 31, 2013


















 As Reported 


Restructuring
    Costs(a)


Asset
   Impairment(b)


As Adjusted
non-GAAP

Net revenues














Service fees and membership


$

496


$



$



$

496


Vacation ownership interest sales



384









384


Franchise fees



139









139


Consumer financing



108









108


Other



68









68

Net revenues



1,195



-



-



1,195















Expenses














Operating



517









517


Cost of vacation ownership interests 



48









48


Consumer financing interest



18









18


Marketing and reservation



180









180


General and administrative



193









193


Loss on sale and asset impairments



8






(8)



-


Restructuring



9



(9)






-


Depreciation and amortization



56









56

Total expenses



1,029



(9)



(8)



1,012















Operating income



166



9



8



183

Interest expense



34









34

Interest income



(2)









(2)















Income before income taxes



134



9



8



151

Provision for income taxes



48



4

(c)


3

(c)


55















Net income attributable to Wyndham shareholders


$

86


$

5


$

5


$

96















Earnings per share














Basic


$

0.66


$

0.04



0.04


$

0.74


Diluted



0.65



0.04



0.04



0.73















Weighted average shares outstanding














Basic



129



129



129



129


Diluted



131



131



131



131

__________













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.















(a)

Relates to costs incurred as a result of an organizational realignment initiative at the Company's lodging business.

(b)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark 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)



























Twelve Months Ended December 31, 2013



























 As Reported 


Legacy
  Adjustments(a)


Acquisition
   Costs(c)


Early
Extinguishment
    of Debt (e)


Restructuring
     Costs (f)


Asset
    Impairment(g)


As Adjusted
non-GAAP

Net revenues























Service fees and membership


$

2,329


$



$



$



$



$



$

2,329


Vacation ownership interest sales



1,379


















1,379


Franchise fees



599


















599


Consumer financing



426


















426


Other



276


















276

Net revenues



5,009



-



-



-



-



-



5,009
























Expenses























Operating



2,161






(2)












2,159


Cost of vacation ownership interests 



155


















155


Consumer financing interest



78


















78


Marketing and reservation



751


















751


General and administrative



720



(1)















719


Loss on sale and asset impairments



8















(8)



-


Restructuring



10












(9)






1


Depreciation and amortization



216


















216

Total expenses



4,099



(1)



(2)



-



(9)



(8)



4,079
























Operating income



910



1



2



-



9



8



930

Other income, net



(6)


















(6)

Interest expense



131


















131

Early extinguishment of debt



111









(111)









-

Interest income



(9)


















(9)
























Income before income taxes



683



1



2



111



9



8



814

Provision for income taxes



250



(2)

(b)


1

(d)


42

(d)


4

(d)


3

(d)


298
























Net income



433



3



1



69



5



5



516

Net loss attributable to noncontrolling interest



(1)



-



-



-



-



-



(1)
























Net income attributable to Wyndham shareholders


$

432


$

3


$

1


$

69


$

5


$

5


$

515
























Earnings per share























Basic


$

3.25


$

0.02


$

0.01


$

0.51


$

0.04


$

0.04


$

3.87


Diluted



3.21



0.02



0.01



0.51



0.04



0.04



3.83
























Weighted average shares outstanding























Basic



133



133



133



133



133



133



133


Diluted



135



135



135



135



135



135



135

__________






















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 a state tax accrual for legacy tax matters.

(c)

Relates to the costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013) at the Company's vacation ownership business.

(d)

Relates to the tax effect of the adjustment.

(e)

Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior unsecured notes and the remaining portion of the 9.875% senior unsecured notes.

(f)

Relates to costs incurred as a result of an organizational realignment initiative at the Company's lodging business.

(g)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark 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:















Twelve Months Ended December 31, 







2014



2013

















Net cash provided by operating activities


$

984



$

1,008





Less: Property and equipment additions



(235)




(238)





Free cash flow


$

749



$

770





























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












2014


Q1

Q2

Q3

Q4

Full Year













Gross VOI sales (a)


$

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 (a)


$

303

$

382

$

415

$

385

$

1,485













2013
























Gross VOI sales (a)


$

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 (a)


$

263

$

347

$

384

$

384

$

1,379













2012
























Gross VOI sales (a)


$

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 (a)


$

271

$

342

$

373

$

337

$

1,323













2011
























Gross VOI sales


$

319

$

412

$

455

$

409

$

1,595

Less: Sales under WAAM Fee-for-Service



(18)


(19)


(38)


(31)


(106)

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



302


393


417


378


1,489

Less: Loan loss provision



(79)


(80)


(96)


(83)


(339)

Vacation ownership interest sales


$

222

$

313

$

320

$

295

$

1,150

_____________












Note: Amounts may not add due to rounding.












(a)  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













2014


$

25

$

21

$

27

$

24

$

97

2013


$

24

$

18

$

22

$

25

$

89

2012


$

27

$

20

$

22

$

28

$

97

2011


$

18

$

18

$

21

$

11

$

68













 

 

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SOURCE Wyndham Worldwide Corporation