Wyndham Worldwide Reports Third Quarter 2014 Earnings

Adjusted Diluted EPS Growth of 18%

Additional One Billion Dollar Share Repurchase Authorization

PARSIPPANY, N.J., Oct. 24, 2014 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2014.

THIRD QUARTER HIGHLIGHTS:

  • Adjusted diluted earnings per share (EPS) was $1.67, an increase of 18% from adjusted diluted EPS of $1.41 in the third quarter of 2013.  Reported diluted EPS was $1.64, compared with $1.40 in the third quarter of 2013.
  • Revenues increased 6% compared with the third quarter of 2013.
  • Adjusted EBITDA increased 11% compared with the third quarter of 2013.
  • The Company repurchased 2.0 million shares of its common stock for $161 million during the quarter.
  • The Company announced today that its Board of Directors approved a $1 billion increase in the share repurchase authorization.

"We delivered strong results in the third quarter, with 11% growth in adjusted EBITDA and 18% growth in adjusted EPS," said Stephen P. Holmes, chairman and chief executive officer.  "Domestic RevPAR growth once again exceeded 8%, our vacation rentals business had a robust summer and our vacation ownership business significantly increased sales to new owners while continuing to benefit from improved lending practices.  Based on our confidence in the prospects of our business, the Board of Directors approved a one billion dollar increase in our share repurchase authorization." 

THIRD QUARTER 2014 OPERATING RESULTS

Third quarter revenues were $1.5 billion, an increase of 6% from the prior year period.  The increase reflects growth in all of the Company's business segments.

Adjusted net income was $210 million, or $1.67 per diluted share, compared with $187 million, or $1.41 per diluted share for the same period in 2013.  The performance reflects solid operating results across all of the Company's businesses.  EPS growth also benefited from the Company's share repurchase activity.

Reported net income for the third quarter of 2014 was $206 million, or $1.64 per diluted share, compared with $187 million, or $1.40 per diluted share, for the third quarter of 2013.  Reported net income included items excluded from adjusted net income.  The net result of these items unfavorably impacted third quarter 2014 net income by $4 million.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $750 million for the nine months ended September 30, 2014, compared with $705 million for the same period in 2013.  The growth of free cash flow largely reflects the favorable timing of working capital.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures.  For the nine months ended September 30, 2014, net cash provided by operating activities was $899 million, compared with $858 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $315 million in the third quarter of 2014, a 6% increase over the third quarter of 2013.  The increase predominantly reflects higher RevPAR and increased ancillary fees related to our co-branded credit card program.  The increase was partially offset by the absence of $11 million of fees from a global franchisee conference held in the third quarter of 2013, which were fully offset in expenses. 

Domestic RevPAR increased 8.4%, partially offset by a 3.5% decline in international RevPAR, resulting in a 4.6% increase in total system-wide RevPAR compared with the third quarter of 2013.  International RevPAR declined due to growth in lower RevPAR countries and unfavorable currency effects. 

Adjusted EBITDA for the third quarter of 2014 was $107 million, a 13% increase compared with the third quarter of 2013, primarily reflecting the revenue increases.  

As of September 30, 2014, the Company's hotel system consisted of approximately 7,590 properties and 655,300 rooms, a 2.7% room increase compared with the third quarter of 2013.  The development pipeline included over 960 hotels and over 116,000 rooms, of which 57% were international and 66% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $512 million in the third quarter of 2014, a 9% increase over the third quarter of 2013. In constant currency and excluding the impact of acquisitions, revenues were up 6%.

Exchange revenues were $162 million, up 3% compared with the third quarter of 2013, as the average number of members increased 1.8% and exchange revenue per member increased 1.1%.

Vacation rental revenues were $331 million, a 13% increase over the third quarter of 2013.  Excluding the impact of foreign currency and acquisitions, vacation rental revenues were up 8%, reflecting a 3.8% increase in the average net price per vacation rental and a 3.6% increase in transaction volume.  

EBITDA for the third quarter of 2014 was $159 million, a 13% increase compared with the third quarter of 2013.  Excluding the impact of acquisitions and the net effect of foreign currency, EBITDA increased 6% compared with the prior year period.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $704 million in the third quarter of 2014, a 4% increase over the third quarter of 2013, primarily reflecting 8% higher net VOI revenues, which benefited from a lower loan loss provision.  Revenues also increased due to higher resort management fees. 

Gross VOI sales were $513 million in the third quarter of 2014, a decrease of 4% compared with the third quarter of 2013, reflecting a 5.3% decrease in volume per guest.  VPG declined primarily due to an increase in the percentage of new owner tours, which generally have a lower VPG than tours to existing owners.  Total tour flow was flat compared with the third quarter of 2013. 

EBITDA for the third quarter of 2014 was $188 million, a 7% increase compared with the third quarter of 2013, primarily reflecting the net revenue increases.

OTHER ITEMS

  • The Company repurchased 2.0 million shares of common stock for $161 million during the third quarter of 2014.  From October 1 through October 23, 2014, the Company repurchased an additional 0.6 million shares for $50 million.  The Company's remaining share repurchase authorization, including the $1 billion authorization increase, totals $1.1 billion as of October 23, 2014.
  • Reported net interest expense in the third quarter of 2014 was $26 million, compared with $29 million in the third quarter of 2013, reflecting lower rates associated with fixed-for-floating interest rate swaps and an increase in capitalized interest. 

BALANCE SHEET INFORMATION AS OF SEPTEMBER 30, 2014:

  • Cash and cash equivalents of $252 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 $1.0 billion, unchanged from December 31, 2013
  • Securitized vacation ownership debt of $1.9 billion, unchanged from 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 $1.2 billion as of September 30, 2014, compared with $1.3 billion as of 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 2014, the Company provides the following guidance:

  • Revenues of approximately $5.250 - $5.350 billion (unchanged)
  • Adjusted EBITDA of approximately $1.230 - $1.245 billion (unchanged)
  • Adjusted EPS of approximately $4.45 - $4.48 based on a diluted share count of 127 million up from $4.34 - $4.44 based on a diluted share count of 128 million

The Company's preliminary guidance for the full-year 2015 is as follows:

  • Revenues of approximately $5.400 - $5.500 billion
  • EBITDA of approximately $1.300 - $1.330 billion
  • EPS of approximately $4.70 - $4.85 based on a diluted share count of 125 million.  EPS guidance assumes a higher year-over-year tax rate and higher depreciation and amortization.

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Friday, October 24, 2014 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 24, 2014. 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 24, 2014, at 800-841-4360.

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

PRESENTATION OF FINANCIAL INFORMATION

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

ABOUT WYNDHAM WORLDWIDE CORPORATION

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with approximately 7,600 franchised hotels and over 655,000 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 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 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 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 industry 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 reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the three months ended September 30, 2014 and 2013:


















Three Months Ended September 30, 




2014


2013




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$

315


$

100


$

297


$

95


Vacation Exchange and Rentals


512



159



470



141


Vacation Ownership


704



188



677



176


     Total Reportable Segments


1,531



447



1,444



412


Corporate and Other (a)


(17)



(36)



(17)



(33)


     Total Company

$

1,514


$

411


$

1,427


$

379
















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders



























Three Months Ended September 30, 







2014





2013


EBITDA




$

411





$

379


Depreciation and amortization





60






54


Interest expense





28






31


Interest income





(2)






(2)


Income before income taxes





325






296


Provision for income taxes





119






109


Net income attributable to Wyndham shareholders




$

206





$

187
















__________













(a)     Includes the elimination of transactions between segments.  


The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended September 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):




Three Months Ended September 30, 




2014


2013




 Net Revenues 


 Adjusted

EBITDA 


 Net Revenues 


 Adjusted

EBITDA 


Lodging

$

315


$

107


$

297


$

95


Vacation Exchange and Rentals


512



159



470



141


Vacation Ownership


704



188



677



176


     Total Reportable Segments


1,531



454



1,444



412


Corporate and Other


(17)



(36)



(17)



(34)


     Total Company

$

1,514


$

418


$

1,427


$

378
















     

 

Table 1

(2 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)


The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the nine months ended September 30, 2014 and 2013:




Nine Months Ended September 30, 




2014


2013




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$

835


$

250


$

782


$

232


Vacation Exchange and Rentals


1,293



333



1,220



320


Vacation Ownership


1,970



488



1,856



447


     Total Reportable Segments


4,098



1,071



3,858



999


Corporate and Other (a)


(48)



(104)



(44)



(89)


     Total Company

$

4,050


$

967


$

3,814


$

910
















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders



























Nine Months Ended September 30, 







2014





2013


EBITDA




$

967





$

910


Depreciation and amortization





175






160


Interest expense





84






97


Early extinguishment of debt





-






111


Interest income





(6)






(6)


Income before income taxes





714






548


Provision for income taxes





265






201


Net income





449






347


Net income attributable to noncontrolling interest





(1)






(1)


Net income attributable to Wyndham shareholders




$

448





$

346
















__________













(a)     Includes the elimination of transactions between segments.  


The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the nine months ended September 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):




Nine Months Ended September 30, 




2014


2013




 Net Revenues 


 Adjusted

EBITDA 


 Net Revenues 


 Adjusted

EBITDA 


Lodging

$

835


$

261


$

782


$

232


Vacation Exchange and Rentals


1,293



341



1,220



320


Vacation Ownership


1,970



488



1,856



449


     Total Reportable Segments


4,098



1,090



3,858



1,001


Corporate and Other


(48)



(103)



(44)



(88)


     Total Company

$

4,050


$

987


$

3,814


$

913









































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, 




2014


2013


2014


2013

Net revenues














Service and membership fees


$

717


$

680


$

1,922


$

1,833


Vacation ownership interest sales



415



384



1,101



995


Franchise fees



189



186



482



460


Consumer financing



108



107



319



318


Other



85



70



226



208

Net revenues



1,514



1,427



4,050



3,814















Expenses














Operating



613



589



1,721



1,645


Cost of vacation ownership interests 



49



43



129



107


Consumer financing interest



18



19



52



60


Marketing and reservation



227



213



614



570


General and administrative



188



186



564



528


Asset impairment



8



-



8



-


Depreciation and amortization



60



54



175



160

Total expenses



1,163



1,104



3,263



3,070















Operating income



351



323



787



744

Other income, net



-



(2)



(5)



(6)

Interest expense



28



31



84



97

Early extinguishment of debt



-



-



-



111

Interest income



(2)



(2)



(6)



(6)















Income before income taxes



325



296



714



548

Provision for income taxes



119



109



265



201

Net income



206



187



449



347

Net income attributable to noncontrolling interest


-



-



(1)



(1)

Net income attributable to Wyndham shareholders

$

206


$

187


$

448


$

346















Earnings per share














Basic


$

1.65


$

1.42


$

3.55


$

2.58


Diluted



1.64



1.40



3.51



2.55















Weighted average shares outstanding














Basic



124



131



126



134


Diluted



126



133



128



136

__________



























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


 N/A 


 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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 N/A 






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


 N/A 


 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


 N/A 


 N/A 






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.                

 

 

 























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


 N/A 


 N/A 


$

64

$

79

$

91

$

75

$

309


Marketing, Reservation and Wyndham Rewards Revenues (a)


76


101


117


 N/A 


 N/A 



73


92


118


83


365


Hotel Management Reimbursable Revenues (b)


37


39


39


 N/A 


 N/A 



25


38


37


35


135


Intersegment Trademark Fees



9


11


11


 N/A 


 N/A 



8


10


11


10


39


Owned Hotel Revenues



24


20


18


 N/A 


 N/A 



26


20


18


19


84


Ancillary Revenues (c)



23


24


30


 N/A 


 N/A 



26


23


22


23


95


Total Lodging



237


283


315


 N/A 


 N/A 



222


262


297


245


1,027

























Vacation Exchange and Rentals
























Exchange Revenues



187


168


162


 N/A 


 N/A 



193


168


158


150


669


Rental Revenues



176


217


331


 N/A 


 N/A 



166


192


293


138


789


Ancillary Revenues (d)



16


17


19


 N/A 


 N/A 



15


16


19


17


68


Total Vacation Exchange and Rentals


379


402


512


 N/A 


 N/A 



374


376


470


305


1,526

























Vacation Ownership
























Vacation Ownership Interest Sales


303


382


415


 N/A 


 N/A 



263


347


384


384


1,379


Consumer Financing



105


106


108


 N/A 


 N/A 



105


106


107


108


426


Property Management Fees



143


145


150


 N/A 


 N/A 



146


141


143


137


567


WAAM Fee-for-Service Commissions


33


30


18


 N/A 


 N/A 



24


30


33


20


107


Ancillary Revenues (e)



9


10


13


 N/A 


 N/A 



11


6


10


9


36


Total Vacation Ownership



593


673


704


 N/A 


 N/A 



549


630


677


658


2,515

Total Reportable Segments


$

1,209

$

1,358

$

1,531


 N/A 


 N/A 


$

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 each of Q1, Q2 and Q3 2014, reimbursable revenues of $2 million, respectively, which eliminate in consolidation, were charged to the Company's vacation ownership business. During Q2, Q3 and Q4 2013, such amounts were $1 million, $3 million and $2 million, respectively.                      

(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 inter-segment trademark fees for

2011 were $16 million.                      

 

 

 




















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)















































September 30,
2014


June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013





















Securitized vacation ownership debt (a)















Term notes

$

1,670


$

1,600


$

1,823


$

1,648


$

1,615

Bank conduit facility (b)


271



291



156



262



273

Total securitized vacation ownership debt (c)


1,941



1,891



1,979



1,910



1,888

Less: Current portion of securitized vacation ownership debt


192



187



192



184



186

Long-term securitized vacation ownership debt

$

1,749


$

1,704


$

1,787


$

1,726


$

1,702









































Debt:















Revolving credit facility (due July 2018) (d)

$

18


$

16


$

10


$

23


$

74

Commercial paper (e)





237



107



184



210



164

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


317



318



318



318



318

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


299



299



299



298



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



447



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



246



246



246



246

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


646



646



645



643



644

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


401



403



395



387



396

Capital leases


175



186



188



191



185

Other


80



99



100



114



117

Total long-term debt


2,922



2,822



2,886



2,931



2,943

Less: Current portion of long-term debt


49



50



52



49



55

Long-term debt

$

2,873


$

2,772


$

2,834


$

2,882


$

2,888

__________

(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 September 30, 2014, this facility had a remaining borrowing capacity of $379 million.                  

(c) 

This debt is collateralized by $2,326 million, $2,287 million, $2,328 million, $2,314 million and $2,306 million of underlying vacation ownership contract receivables and related assets as of September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013, respectively.                  

(d) 

Represents a $1.5 billion revolving credit facility that expires in July 2018. As of September 30, 2014, the Company had $2 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $237 million, the remaining borrowing capacity was $1.2 billion as of September 30, 2014.                  

(e) 

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.0 billion, as of September 30, 2014.                  

(f) 

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

(g) 

Includes a $1 million increase and $2 million decrease in the carrying value resulting from a fair value hedge derivative as of September 30, 2014 and December 31, 2013, respectively.                   

(h) 

Includes a $4 million increase and $10 million decrease in the carrying value resulting from a fair value hedge derivative as of September 30, 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 September 30, 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

182

41,510

67.0%

$113.52

$76.06








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








Ramada 

829

114,918

58.5%

$82.00

$47.95








Baymont

359

29,293

59.0%

$69.16

$40.78








Days Inn 

1,791

144,405

57.7%

$70.77

$40.83








Super 8 

2,476

158,347

63.3%

$55.36

$35.05








Howard Johnson 

432

46,303

54.4%

$65.79

$35.77








Travelodge 

424

31,117

60.5%

$75.65

$45.74








Microtel Inns & Suites by Wyndham

320

22,862

65.6%

$71.02

$46.59








Knights Inn 

394

24,326

50.2%

$49.53

$24.84








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




















As of and For the Three Months Ended September 30, 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

144

33,748

60.3%

$116.22

$70.08








TRYP by Wyndham

108

15,218

66.2%

$94.58

$62.61








Wingate by Wyndham

158

14,491

65.6%

$86.69

$56.88








Hawthorn Suites by Wyndham

91

9,126

64.7%

$73.12

$47.31








Ramada 

829

113,815

58.0%

$80.70

$46.81








Baymont

323

26,636

57.9%

$65.65

$38.00








Days Inn 

1,828

147,891

56.4%

$67.76

$38.25








Super 8 

2,382

152,534

64.0%

$56.34

$36.06








Howard Johnson 

445

45,199

53.7%

$64.43

$34.57








Travelodge 

439

32,773

58.2%

$73.66

$42.87








Microtel Inns & Suites by Wyndham

309

22,085

63.7%

$67.61

$43.08








Knights Inn 

377

23,174

47.1%

$49.32

$23.21








Dream

5

990

75.3%

$226.39

$170.40








Night

3

630

69.8%

$143.58

$100.16









Total Lodging

7,441

638,310

59.2%

$70.59

$41.78








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,440

N/A   

N/A     

N/A     









Total Wyndham Worldwide

7,632

661,750




_______________






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, 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

182

41,510

63.2%

$114.72

$72.47








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








Ramada 

829

114,918

55.3%

$80.22

$44.36








Baymont

359

29,293

54.4%

$66.09

$35.95








Days Inn 

1,791

144,405

52.7%

$66.20

$34.91








Super 8 

2,476

158,347

58.4%

$51.75

$30.21








Howard Johnson 

432

46,303

49.5%

$63.66

$31.49








Travelodge 

424

31,117

53.1%

$68.87

$36.56








Microtel Inns & Suites by Wyndham

320

22,862

61.1%

$67.25

$41.08








Knights Inn 

394

24,326

45.9%

$47.01

$21.56








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




















As of and For the Nine Months Ended September 30, 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

144

33,748

60.2%

$116.07

$69.90








TRYP by Wyndham

108

15,218

61.7%

$95.72

$59.05








Wingate by Wyndham

158

14,491

62.6%

$85.63

$53.56








Hawthorn Suites by Wyndham

91

9,126

63.7%

$72.10

$45.90








Ramada 

829

113,815

53.7%

$79.99

$42.96








Baymont

323

26,636

53.1%

$63.44

$33.70








Days Inn 

1,828

147,891

50.4%

$64.97

$32.73








Super 8 

2,382

152,534

57.7%

$53.25

$30.71








Howard Johnson 

445

45,199

48.3%

$62.76

$30.32








Travelodge 

439

32,773

51.3%

$68.24

$35.01








Microtel Inns & Suites by Wyndham

309

22,085

58.9%

$64.70

$38.12








Knights Inn 

377

23,174

42.7%

$45.56

$19.44








Dream

5

990

70.8%

$222.79

$157.74








Night

3

630

62.0%

$145.14

$89.99









Total Lodging

7,441

638,310

54.0%

$68.56

$37.00








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,440

N/A   

N/A     

N/A     









Total Wyndham Worldwide

7,632

661,750




_______________






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
   Reversal(d)


Asset
  Impairment(e)


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

________________

(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 the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013.      

(e) 

Relates to a write-down of an investment in a joint venture.    

 

  

 

















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 September 30, 2014


















 As Reported 


Restructuring
  Reversal(a)


Asset
  Impairment(b)


As Adjusted
non-GAAP

Net revenues














Service and membership fees


$

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 attributable to Wyndham shareholders


$

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

























(2 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 and membership fees


$

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 rental 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 8










(3 of 4)












Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)















Three Months Ended September 30, 2013















 As Reported 


Legacy
  Adjustments(a)


As Adjusted
non-GAAP

Net revenues











Service fees and membership


$

680


$



$

680


Vacation ownership interest sales



384






384


Franchise fees



186






186


Consumer financing



107






107


Other



70






70

Net revenues



1,427



-



1,427












Expenses











Operating



589






589


Cost of vacation ownership interests 



43






43


Consumer financing interest



19






19


Marketing and reservation



213






213


General and administrative



186



1



187


Depreciation and amortization



54






54

Total expenses



1,104



1



1,105












Operating income



323



(1)



322

Other income, net



(2)






(2)

Interest expense



31






31

Interest income



(2)






(2)












Income before income taxes



296



(1)



295

Provision for income taxes



109



(1)

(b)


108












Net income attributable to Wyndham shareholders


$

187


$

-


$

187












Earnings per share











Basic


$

1.42


$

-


$

1.42


Diluted



1.40



-



1.41












Weighted average shares outstanding











Basic



131



131



131


Diluted



133



133



133

__________

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 a net benefit 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.         

 

 

 
















Table 8
















(4 of 4)


















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





















Nine Months Ended September 30, 2013





















 As Reported 


Legacy
  Adjustments(a)


Acquisition
   Costs(c)


Early
Extinguishment
    of Debt (e)


As Adjusted
non-GAAP

Net revenues

















Service fees and membership


$

1,833


$



$



$



$

1,833


Vacation ownership interest sales



995












995


Franchise fees



460












460


Consumer financing



318












318


Other



208












208

Net revenues



3,814



-



-



-



3,814


















Expenses

















Operating



1,645






(2)






1,643


Cost of vacation ownership interests 



107












107


Consumer financing interest



60












60


Marketing and reservation



570












570


General and administrative



528



(1)









527


Depreciation and amortization



160












160

Total expenses



3,070



(1)



(2)



-



3,067


















Operating income



744



1



2



-



747

Other income, net



(6)












(6)

Interest expense



97












97

Early extinguishment of debt



111









(111)



-

Interest income



(6)












(6)


















Income before income taxes



548



1



2



111



662

Provision for income taxes



201



(2)

(b)


1

(d)


42

(d)


242


















Net income



347



3



1



69



420

Net loss attributable to noncontrolling interest



(1)



-



-



-



(1)


















Net income attributable to Wyndham shareholders


$

346


$

3


$

1


$

69


$

419


















Earnings per share

















Basic


$

2.58


$

0.02


$

0.01


$

0.51


$

3.12


Diluted



2.55



0.02



0.01



0.50



3.09


















Weighted average shares outstanding

















Basic



134



134



134



134



134


Diluted



136



136



136



136



136

__________

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 a 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.               

 

           


 

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, 







2014



2013

















Net cash provided by operating activities


$

899



$

858





Less: Property and equipment additions



(149)




(153)





Free cash flow


$

750



$

705





























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


 N/A 


 N/A 

Less: Sales under WAAM Fee-for-Service



(44)


(40)


(27)


 N/A 


 N/A 

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



366


456


486


 N/A 


 N/A 

Less: Loan loss provision



(60)


(70)


(70)


 N/A 


 N/A 

Less: Impact of percentage-of-completion accounting



(3)


(4)


(1)


 N/A 


 N/A 

Vacation ownership interest sales (a)


$

303

$

382

$

415


 N/A 


 N/A 













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


 N/A 


 N/A 

2013


$

24

$

18

$

22

$

25

$

89

2012


$

27

$

20

$

22

$

28

$

97

2011


$

18

$

18

$

21

$

11

$

68


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wyndham-worldwide-reports-third-quarter-2014-earnings-961644521.html

SOURCE Wyndham Worldwide Corporation