TRAVEL + LEISURE CO. PARSIPPANY, N.J., July 27, 2016 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended June 30, 2016.
Second quarter revenues were $1.4 billion, flat compared with the prior year period. In constant currency and excluding acquisitions, revenues increased 1%.
Net income for the second quarter of 2016 was $156 million, or $1.39 per diluted share, compared with $159 million, or $1.33 per diluted share, for the second quarter of 2015. Adjusted net income for the second quarter of 2016 was $156 million, or $1.40 per diluted share, compared with $159 million, or $1.32 per diluted share, for the second quarter of 2015. Net income was impacted by higher interest expense and depreciation, as well as a higher tax rate, which offset growth in EBITDA. EPS benefited from the Company's share repurchase program. Full reconciliations of adjusted net income and adjusted EPS appear on table 7 of this press release.
Second quarter EBITDA was $340 million, compared with $332 million in the prior year period, an increase of 2%. On a currency-neutral basis and excluding acquisitions, adjusted EBITDA increased 3%. Full reconciliations of EBITDA to net income appear on Table 2 of this press release.
"In the second quarter, we continued to execute our strategy to drive growth and free cash flow while maintaining our disciplined capital allocation framework to enhance shareholder value," said Stephen P. Holmes, chairman and CEO. "We are looking ahead - making sure we continually innovate and invest for the future in order to ensure strong, continued growth in the years to come."
For the six months ended June 30, 2016, net cash provided by operating activities was $706 million, compared with $737 million in the prior year period. The decrease reflects unfavorable currency movements of $35 million, including a $24 million devaluation of the Venezuelan bolivar in the first quarter of 2016.
Free cash flow was $616 million for the six months ended June 30, 2016, compared with $625 million for the same period in 2015, reflecting the changes in net cash provided by operating activities highlighted above in addition to the favorable timing of capital expenditures. The Company defines free cash flow as net cash provided by operating activities less capital expenditures as illustrated in Table 4 of this press release.
SECOND QUARTER 2016 BUSINESS UNIT RESULTS
Hotel Group
Revenues were $334 million in the second quarter of 2016, flat compared with the second quarter 2015. Revenues reflected growth in royalties and the Company's Wyndham Rewards credit card program, offset by the absence of pass-through revenues associated with the Company's franchisee conference in the second quarter of 2015.
EBITDA grew 5% to $101 million, reflecting growth in royalties and the Company's Wyndham Rewards credit card program, and expense management.
Second quarter domestic RevPAR increased 2.0%. In constant currency, total system-wide RevPAR declined by 0.6% compared with the second quarter of 2015, which reflects continued weakness in domestic and Canadian oil markets and higher unit growth in lower RevPAR countries such as China.
As of June 30, 2016, the Company's hotel system consisted of approximately 7,880 properties and over 683,300 rooms, a 2.2% net room increase compared with the second quarter of 2015. The development pipeline included over 1,000 hotels and approximately 128,000 rooms, of which 61% were international and 66% were new construction.
Destination Network (formerly Vacation Exchange and Rentals)
Revenues were $384 million in the second quarter of 2016, flat compared with the second quarter of 2015. In constant currency and excluding acquisitions, revenues increased 1%.
Exchange revenues were $159 million. In constant currency, exchange revenues grew 1% as the average number of members increased 0.7% and exchange revenue per member increased 0.3%.
Vacation rental revenues were $202 million. In constant currency and excluding the impact of acquisitions, vacation rental revenues were up 1%, reflecting a 4.0% increase in transaction volume, partially offset by a 3.3% decrease in average net price per vacation rental reflecting faster growth in our more moderate product offerings.
EBITDA for the second quarter of 2016 was $85 million, a 1% increase compared with the second quarter of 2015. On a currency-neutral basis and excluding the impact of acquisitions, EBITDA increased 2% compared with the prior year period, largely reflecting growth in rental transactions and exchange members.
Vacation Ownership
Revenues were $705 million in the second quarter of 2016, a 1% increase over the second quarter of 2015.
Net VOI sales declined by 2%, as higher gross VOI sales volume was offset by an increase in the provision for loan losses, which was in line with the Company's expectations.
Gross VOI sales were $518 million in the second quarter of 2016, an increase of 3% compared with the second quarter of 2015. Results reflect tour flow growth of 3.4%, partially offset by a volume per guest (VPG) decline of 0.8% in constant currency, reflecting higher sales to new owners. The number of new owners added increased 13% from the second quarter of 2015.
EBITDA for the second quarter of 2016 was $187 million, an increase of 3% compared with the second quarter of 2015, reflecting higher gross VOI sales, a lower cost of sales and higher management fees, partially offset by an increase in the provision for loan losses.
OTHER ITEMS
-- The Company repurchased 2.1 million shares of common stock for $150
million during the second quarter of 2016. From July 1 through July 26,
2016, the Company repurchased an additional 0.6 million shares for $42
million.
-- Reported net interest expense in the second quarter of 2016 was $32
million, compared with $28 million in the second quarter of 2015,
reflecting increased debt levels including the $350 million 5.10% bond
issued in September 2015 and the absence of a fixed-to-floating interest
rate swap terminated in 2015.
-- Depreciation and amortization in the second quarter of 2016 was $63
million, compared with $58 million in the second quarter of 2015,
reflecting new projects that were placed into service.
Balance Sheet Information as June 30, 2016:
-- Cash and cash equivalents of $478 million, compared with $171 million at
December 31, 2015, reflecting higher seasonal cash collections at the
Company's vacation rental businesses
-- Vacation ownership contract receivables, net, of $2.7 billion, unchanged
from December 31, 2015
-- Vacation ownership and other inventory of $1.3 billion, unchanged from
December 31, 2015
-- Securitized vacation ownership debt of $2.0 billion, compared with $2.1
billion at December 31, 2015
-- Long-term debt of $3.4 billion, compared with $3.1 billion at December
31, 2015. The remaining borrowing capacity on the revolving credit
facility, net of commercial paper borrowings, was $1.1 billion as of
June 30, 2016, compared with $1.4 billion at December 31, 2015.
A schedule of debt is included in Table 12 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.
Full reconciliations of the outlook for adjusted EBITDA, adjusted net income and adjusted EPS to GAAP results appear in Table 10 of this press release.
The Company provides the following guidance for the full year 2016:
-- Revenues of approximately $5.650 - $5.800 billion.
-- Adjusted net income of approximately $635 - $651 million.
-- Adjusted EBITDA of approximately $1.375 - $1.400 billion.
-- Adjusted diluted EPS of approximately $5.68 - $5.82 based on a diluted
share count of 112 million.
The Company will post guidance information on its website following the conference call.
CONFERENCE CALL INFORMATION
Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Wednesday, July 27, 2016 at 8:30 a.m. ET. Listeners can access the webcast live through the Company's website at http://www.wyndhamworldwide.com/investors/. The conference call may also be accessed by dialing 888-632-3384 and providing the pass code "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. An archive of this webcast will be available on the website for approximately 90 days beginning at 12:00pm ET on July 27, 2016. A telephone replay will be available for approximately 10 days beginning at 12:00pm ET on July 27, 2016 at 800-723-0394.
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 the Company's non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. A reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. A reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures is provided in Table 10 of this press release.
ABOUT WYNDHAM WORLDWIDE
Wyndham Worldwide (NYSE: WYN) is one of the largest global hospitality companies, providing travelers with access to a collection of trusted hospitality brands in hotels, vacation ownership, and unique accommodations including vacation exchange, holiday parks, and managed home rentals. With a collective inventory of more than 120,000 places to stay across 100 countries on six continents, Wyndham Worldwide and its 38,000 associates welcomes people to experience travel the way they want. This is enhanced by Wyndham Rewards®, the Company's re-imagined guest loyalty program across its businesses, which is making it simpler for members to earn more rewards and redeem their points faster. For more information, please visit www.wyndhamworldwide.com.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company's revenues, earnings, cash flow and related financial and operating measures.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 12, 2016. Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
Wyndham Worldwide Corporation
Earnings Release Schedules
Quarter Two - June 30, 2016
Table of Contents
Table No.
---------
Consolidated Statements of Income
(Unaudited) 1
Operating Results of Reportable
Segments 2
Operating Statistics 3
Condensed Consolidated Statements
of Cash Flows and Reconciliation
of Free Cash Flows (Unaudited) 4
Revenue Detail by Reportable
Segment 5
Brand System Details 6
Non-GAAP Reconciliation of
Adjusted Net Income and EPS 7
Non-GAAP Reconciliation of
Adjusted EBITDA by Reportable
Segment 8
Non-GAAP Reconciliation of Gross
VOI Sales 9
Non-GAAP Reconciliation of 2016
Outlook 10
Non-GAAP Reconciliation -
Constant Currency and Currency
Neutral 11
Schedule of Debt 12
Table 1
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
Net revenues
Service and membership fees $632 $623 $1,266 $1,223
Vacation ownership interest sales 409 417 750 753
Franchise fees 172 178 310 325
Consumer financing 108 105 215 210
Other 82 75 165 150
Net revenues 1,403 1,398 2,706 2,661
----- ----- ----- -----
Expenses
Operating 622 610 1,236 1,176
Cost of vacation ownership
interests 32 47 68 80
Consumer financing interest 19 19 36 36
Marketing and reservation 211 211 403 406
General and administrative 185 182 372 362
Depreciation and amortization 63 58 125 114
Total expenses 1,132 1,127 2,240 2,174
----- ----- ----- -----
Operating income 271 271 466 487
Other (income)/expense, net (6) (3) (16) (8)
Interest expense 34 30 68 56
Early extinguishment of debt - - 11 -
Interest income (2) (2) (4) (5)
--- --- --- ---
Income before income taxes 245 246 407 444
Provision for income taxes 89 87 156 162
--- --- --- ---
Net income $156 $159 $251 $282
==== ==== ==== ====
Earnings per share
Basic $1.40 $1.34 $2.25 $2.35
Diluted 1.39 1.33 2.23 2.33
Weighted average shares outstanding
Basic 111 119 112 120
Diluted 112 120 113 121
Note: For a description of adjustments to Net Income, see Table 7.
Table 2
(1 of 2)
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)
In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA", which is defined as net income before depreciation and amortization, interest expense (excluding
consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes, each of which is presented on the Company's Consolidated Statements of Income. The Company also uses
adjusted EBITDA as a financial measure. The Company believes that EBITDA and Adjusted EBITDA are useful measures of assessing performance of the Company and for the Company's segments which, when considered with GAAP measures, give a more
complete understanding of its operating performance and assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items
which may be recurring or nonrecurring and which in our view do not necessarily reflect ongoing operating performance. We also internally use these measures to assess our operating performance, both in absolute terms and in comparison to other
companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. The Company's presentation of EBITDA and Adjusted EBITDA may not be comparable to similarly-
titled measures used by other companies.
The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income for the three months ended June 30, 2016 and 2015:
Three Months Ended June 30,
---------------------------
2016 2015
---- ----
Net Revenues EBITDA Net Revenues EBITDA
------------ ------ ------------ ------
Hotel Group $334 $101 $334 $96
Destination Network 384 85 383 84
Vacation Ownership 705 187 699 182
--- --- --- ---
Total Reportable Segments 1,423 373 1,416 362
Corporate and Other (a) (20) (33) (18) (30)
Total Company $1,403 $340 $1,398 $332
====== ==== ====== ====
Reconciliation of EBITDA to Net income
--------------------------------------
Three Months Ended June 30,
---------------------------
2016 2015
---- ----
EBITDA $340 $332
Depreciation and amortization 63 58
Interest expense 34 30
Interest income (2) (2)
--- ---
Income before income taxes 245 246
Provision for income taxes 89 87
--- ---
Net income $156 $159
==== ====
(a) Includes the elimination of transactions between segments.
The following tables summarize net revenues and Adjusted EBITDA for the Company's reportable segments for the three months ended June 30, 2016 and 2015 (for a description of adjustments and reconciliation by segment, see Table 8):
Three Months Ended June 30,
---------------------------
2016 2015
---- ----
Adjusted Adjusted
Net Revenues EBITDA Net Revenues EBITDA
------------ ------ ------------ ------
Hotel Group $334 $101 $334 $97
Destination Network 384 85 383 84
Vacation Ownership 705 187 699 182
--- --- --- ---
Total Reportable Segments 1,423 373 1,416 363
Corporate and Other (20) (33) (18) (31)
---
Total Company $1,403 $340 $1,398 $332
====== ==== ====== ====
Table 2
(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 for the six months ended June 30, 2016 and 2015:
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Net Revenues EBITDA Net Revenues EBITDA
------------ ------ ------------ ------
Hotel Group $629 $185 $626 $172
Destination Network 768 166 752 189
Vacation Ownership 1,345 323 1,316 313
----- --- ----- ---
Total Reportable Segments 2,742 674 2,694 674
Corporate and Other (a) (36) (67) (33) (65)
Total Company $2,706 $607 $2,661 $609
====== ==== ====== ====
Reconciliation of EBITDA to Net income
--------------------------------------
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
EBITDA $607 $609
Depreciation and amortization 125 114
Interest expense 68 56
Early extinguishment of debt 11 -
Interest income (4) (5)
--- ---
Income before income taxes 407 444
Provision for income taxes 156 162
--- ---
Net income $251 $282
==== ====
(a) Includes the elimination of transactions between segments.
The following tables summarize net revenues and Adjusted EBITDA for the Company's reportable segments for the six months ended June 30, 2016 and 2015 (for a description of adjustments and reconciliation by segment, see Table
8):
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Adjusted Adjusted
Net Revenues EBITDA Net Revenues EBITDA
------------ ------ ------------ ------
Hotel Group $629 $185 $626 $175
Destination Network 768 190 752 189
Vacation Ownership 1,345 323 1,316 313
----- --- ----- ---
Total Reportable Segments 2,742 698 2,694 677
Corporate and Other (36) (66) (33) (66)
--- ---
Total Company $2,706 $632 $2,661 $611
====== ==== ====== ====
Table 3
(1 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:
Year Q1 Q2 Q3 Q4 Full Year
---- --- --- --- --- ---------
Hotel Group (a)
Number of Rooms 2016 679,100 683,300 N/A N/A N/A
2015 667,400 668,500 671,900 678,000 N/A
2014 646,900 650,200 655,300 660,800 N/A
2013 631,800 635,100 638,300 645,400 N/A
RevPAR 2016 $31.59 $39.10 N/A N/A N/A
2015 $32.84 $39.82 $43.34 $32.98 $37.26
2014 $32.30 $40.11 $43.71 $34.06 $37.57
2013 $31.05 $38.00 $41.78 $33.07 $36.00
Destination Network
Average Number of Members (in 000s) 2016 3,841 3,857 N/A N/A N/A
2015 3,822 3,831 3,835 3,836 3,831
2014 3,727 3,748 3,777 3,808 3,765
2013 3,668 3,686 3,711 3,728 3,698
Exchange Revenue Per Member 2016 $189.78 $164.61 N/A N/A N/A
2015 $194.06 $167.81 $163.38 $152.00 $169.29
2014 $200.78 $179.17 $171.77 $157.24 $177.12
2013 $210.96 $182.42 $169.95 $161.21 $181.02
Vacation Rental Transactions (in 000s) (a) (b) 2016 500 409 N/A N/A N/A
2015 459 390 462 319 1,630
2014 429 376 455 293 1,552
2013 423 355 433 273 1,483
Average Net Price Per Vacation Rental(a) (b) 2016 $366.08 $492.83 N/A N/A N/A
2015 $361.20 $513.14 $642.00 $452.19 $494.92
2014 $410.04 $577.13 $727.40 $492.25 $558.95
2013 $392.64 $540.38 $677.81 $506.62 $532.11
Vacation Ownership (a)
Gross Vacation Ownership Interest (VOI) Sales (in
000s) (c) 2016 $428,000 $518,000 N/A N/A N/A
2015 $390,000 $502,000 $565,000 $507,000 $1,965,000
2014 $410,000 $496,000 $513,000 $470,000 $1,889,000
2013 $384,000 $481,000 $536,000 $488,000 $1,889,000
Tours (in 000s) 2016 179 213 N/A N/A N/A
2015 168 206 227 200 801
2014 170 208 225 191 794
2013 163 206 225 195 789
Volume Per Guest (VPG) 2016 $2,244 $2,328 N/A N/A N/A
2015 $2,177 $2,353 $2,354 $2,390 $2,326
2014 $2,272 $2,280 $2,158 $2,336 $2,257
2013 $2,211 $2,256 $2,278 $2,370 $2,281
Note: Full year amounts may not add across due to rounding.
(a) Includes the impact of acquisitions/dispositions from the acquisition/disposition dates forward. Therefore, the operating
statistics are not presented on a comparable basis.
(b) The destination network operating statistics excluding our U.K.-based camping business sold in Q4 2014 are as follows:
Year Q1 Q2 Q3 Q4 Full Year
---- --- --- --- --- ---------
Vacation Rental Transactions (in 000s) 2014 429 367 431 292 1,518
Average Net Price Per Vacation Rental 2014 $410.02 $578.02 $700.56 $492.64 $548.93
(c) Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time. (See Table 9 for a
reconciliation of Gross VOI sales to vacation ownership interest sales).
ADDITIONAL DATA
Year Q1 Q2 Q3 Q4 Full Year
---- --- --- --- --- ---------
Hotel Group
Number of Properties 2016 7,830 7,880 N/A N/A N/A
2015 7,670 7,700 7,760 7,810 N/A
2014 7,500 7,540 7,590 7,650 N/A
2013 7,380 7,410 7,440 7,490 N/A
Vacation Ownership
Provision for Loan Losses (in 000s) (*) 2016 $63,000 $90,000 N/A N/A N/A
2015 $46,000 $60,000 $78,000 $64,000 $248,000
2014 $60,000 $70,000 $70,000 $60,000 $260,000
2013 $84,000 $90,000 $102,000 $73,000 $349,000
Note: Full year amounts may not add across due to rounding.
(*) Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is
recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.
Table 3
(2 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
GLOSSARY OF TERMS
-----------------
Hotel Group
Number of Rooms: Represents the number
of rooms at hotel group properties at
the end of the period which are either
(i) under franchise and/or management
agreements, or company owned and (ii)
properties under affiliation agreements
for which the Company receives a fee
for reservation and/or other services
provided.
----------------------------------------
Average Occupancy Rate: Represents the
percentage of available rooms occupied
during the period.
---------------------------------------
Average Daily Rate (ADR): Represents the
average rate charged for renting a
lodging room for one day.
----------------------------------------
RevPAR: Represents revenue per available
room and is calculated by multiplying
average occupancy rate by ADR.
Comparable RevPAR represents RevPAR of
hotels which are included in both
periods.
----------------------------------------
Destination Network
Average Number of Members: Represents
members in our vacation exchange
programs who paid annual membership
dues as of the end of the period or who
are within the allowed grace period.
For additional fees, such participants
are entitled to exchange intervals for
intervals at other properties
affiliated with the Company's vacation
exchange business. In addition, certain
participants may exchange intervals for
other leisure-related services and
products.
----------------------------------------
Exchange Revenue Per Member: Represents
total annualized revenues generated
from fees associated with memberships,
exchange transactions, member-related
rentals and other servicing for the
period divided by the average number of
vacation exchange members during the
period.
----------------------------------------
Vacation Rental Transactions: Represents
the number of transactions that are
generated in connection with customers
booking their vacation rental stays
through one of our vacation brands. One
rental transaction is recorded for each
standard one-week rental.
----------------------------------------
Average Net Price Per Vacation Rental:
Represents the net rental price
generated from renting vacation
properties to customers and other
related rental servicing fees divided
by the number of vacation rental
transactions.
--------------------------------------
Vacation Ownership
Gross Vacation Ownership Interest Sales:
Represents sales of vacation ownership
interest (VOIs), including WAAM sales,
before the net effect of percentage-
of-completion accounting and loan loss
provisions. We believe gross VOI sales
provide an enhanced understanding of
the performance of our vacation
ownership business because it directly
measures the sales volume of this
business during a given reporting
period. See Table 9 for a
reconciliation of Gross VOI sales to
vacation ownership interest sales.
----------------------------------------
Tours: Represents the number of tours
taken by guests in our efforts to sell
VOIs.
---------------------------------------
Volume per Guest (VPG): Represents Gross
VOI sales (excluding tele-sales
upgrades, which are non-tour upgrade
sales) divided by the number of tours.
The Company has excluded non-tour
upgrade sales in the calculation of VPG
because non-tour upgrade sales are
generated by a different marketing
channel. See Table 9 for a detail of
tele-sales upgrades for 2013-2016.
----------------------------------------
General
Constant Currency: Represents a
comparison eliminating the effects of
foreign exchange rate fluctuations
between periods (foreign currency
translation).
--------------------------------------
Currency-Neutral: Represents a
comparison eliminating the effects of
foreign exchange rate fluctuations
between periods (foreign currency
translation) and the impact caused by
any foreign exchange related activities
(i.e., hedges, balance sheet
remeasurements and/or adjustments)
----------------------------------------
Table 4
Wyndham Worldwide Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND RECONCILIATION OF FREE CASH FLOWS
(In millions)
(Unaudited)
Condensed Consolidated Statements of Cash Flows:
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Net cash provided by operating activities $706 $737
Net cash used in investing activities (140) (233)
Net cash used in financing activities (251) (269)
Effect of changes in exchange rates on cash and cash equivalents (8) (8)
Net increase in cash and cash equivalents $307 $227
==== ====
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 measures of net cash provided by operating activities, net cash used in investing activities
and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the
consolidated statement of cash flows.
The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these
financial measures:
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Net cash provided by operating activities $706 $737
Less: Property and equipment additions (90) (112)
Free cash flow $616 $625
==== ====
Table 5
Wyndham Worldwide Corporation
REVENUE DETAIL BY REPORTABLE SEGMENT
(In millions)
2016 2015
---- ----
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
--- --- --- --- ---- --- --- --- --- ----
Hotel Group
Royalties and Franchise Fees $74 $94 N/A N/A N/A $74 $96 $103 $87 $361
Marketing, Reservation and Wyndham
Rewards Revenues (a) 83 103 N/A N/A N/A 96 108 112 92 407
Hotel Management Reimbursable
Revenues (b) 67 71 N/A N/A N/A 61 71 73 68 273
Intersegment Trademark Fees 13 15 N/A N/A N/A 12 15 16 15 57
Owned Hotel Revenues 27 19 N/A N/A N/A 25 20 16 19 79
Ancillary Revenues (c) 31 32 N/A N/A N/A 24 24 37 33 120
Total Hotel Group 295 334 N/A N/A N/A 292 334 357 314 1,297
Destination Network
Exchange Revenues 182 159 N/A N/A N/A 185 161 157 146 649
Rental Revenues 183 202 N/A N/A N/A 166 200 296 144 807
Ancillary Revenues (d) 20 23 N/A N/A N/A 18 22 23 20 82
Total Destination Network 385 384 N/A N/A N/A 369 383 476 310 1,538
Vacation Ownership
Vacation Ownership Interest
Sales 342 409 N/A N/A N/A 336 417 448 403 1,604
Consumer Financing 107 108 N/A N/A N/A 104 105 108 109 427
Property Management Fees and
Reimbursable Revenues 164 161 N/A N/A N/A 153 149 159 155 615
WAAM Fee-for-Service Commissions 17 16 N/A N/A N/A 12 19 23 28 83
Ancillary Revenues (e) 11 11 N/A N/A N/A 12 9 12 11 43
Total Vacation Ownership 641 705 N/A N/A N/A 617 699 750 706 2,772
Total Reportable Segments $1,321 $1,423 N/A N/A N/A $1,278 $1,416 $1,583 $1,330 $5,607
====== ====== === === === ====== ====== ====== ====== ======
2014 2013
---- ----
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
--- --- --- --- ---- --- --- --- --- ----
Hotel Group
Royalties and Franchise Fees $68 $88 $100 $83 $339 $64 $79 $91 $75 $309
Marketing, Reservation and Wyndham
Rewards Revenues (a) 76 101 117 91 385 73 92 118 83 365
Hotel Management Reimbursable
Revenues (b) 37 39 39 39 154 25 38 37 35 135
Intersegment Trademark Fees 9 11 11 10 41 8 10 11 10 39
Owned Hotel Revenues 24 20 18 20 81 26 20 18 19 84
Ancillary Revenues (c) 23 24 30 24 101 26 23 22 23 95
Total Hotel Group 237 283 315 267 1,101 222 262 297 245 1,027
Destination Network
Exchange Revenues 187 168 162 150 667 193 168 158 150 669
Rental Revenues 176 217 331 144 868 166 192 293 138 789
Ancillary Revenues (d) 16 17 19 17 69 15 16 19 17 68
Total Destination Network 379 402 512 311 1,604 374 376 470 305 1,526
Vacation Ownership
Vacation Ownership Interest
Sales 303 382 415 385 1,485 263 347 384 384 1,379
Consumer Financing 105 106 108 108 427 105 106 107 108 426
Property Management Fees 143 145 150 142 581 146 141 143 137 567
WAAM Fee-for-Service Commissions 33 30 18 16 98 24 30 33 20 107
Ancillary Revenues (e) 9 10 13 17 47 11 6 10 9 36
Total Vacation Ownership 593 673 704 668 2,638 549 630 677 658 2,515
Total Reportable Segments $1,209 $1,358 $1,531 $1,246 $5,343 $1,145 $1,268 $1,444 $1,208 $5,068
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Note: Full year amounts may not add across due to rounding.
(a) Marketing and reservation revenues represent fees the Company receives from franchised and managed hotels that are to be expended for marketing
purposes or the operation of a centralized, brand-specific reservation system. These fees are typically based on a percentage of the gross room
revenues of each hotel. Wyndham Rewards revenues represent fees the Company receives relating to its loyalty program.
Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is
reimbursed by the property owners. During 2014, reimbursable revenues of $2 million in each of Q1, Q2 and Q3 and $1 million in Q4 which were
charged to the Company's vacation ownership business and were eliminated in consolidation. During 2013, such amounts include reimbursable revenues
of $1 million, $3 million and $2 million, in Q2, Q3 and Q4 respectively, which were charged to the Company's vacation ownership business and were
(b) eliminated in consolidation.
(c) Primarily includes additional services provided to franchisees and managed properties and fees related to our co-branded credit card program.
(d) Primarily includes fees generated from programs with affiliated resorts and homeowners.
(e) Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from
other non-core operations.
Table 6
(1 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
As of and For the Three Months Ended June 30, 2016
--------------------------------------------------
Average Revenue
Number of Average Average Daily Per Available
Brand Properties Number of Rooms Occupancy Rate Rate (ADR) Room (RevPAR)
----- ---------- --------------- -------------- --------- ------------
Hotel Group
Super 8 2,707 172,924 60.4% $49.33 $29.81
Days Inn 1,791 142,987 53.6% $68.92 $36.92
Ramada 842 117,964 56.5% $72.86 $41.18
Wyndham Hotels and Resorts 226 49,776 62.3% $106.74 $66.52
Howard Johnson 377 43,538 49.5% $60.57 $29.99
Baymont 424 33,711 55.0% $71.93 $39.58
Travelodge 404 29,705 53.1% $71.45 $37.96
Microtel Inns & Suites by Wyndham 334 24,102 59.9% $69.69 $41.77
Knights Inn 381 23,228 48.3% $50.28 $24.27
TRYP by Wyndham 113 16,120 70.2% $79.96 $56.09
Wingate by Wyndham 148 13,493 68.1% $93.21 $63.49
Hawthorn Suites by Wyndham 107 10,618 70.0% $82.98 $58.06
Dolce 22 5,110 55.9% $171.50 $95.89
Total Hotel Group 7,876 683,276 57.2% $68.30 $39.10
Vacation Ownership
Wyndham Vacation Ownership resorts 216 24,475 N/A N/A N/A
--- ------
Total Wyndham Worldwide 8,092 707,751
============ =====
As of and For the Three Months Ended June 30, 2015
--------------------------------------------------
Average Revenue
Number of Average Average Daily Per Available
Brand Properties Number of Rooms Occupancy Rate Rate (ADR) Room (RevPAR)
----- ---------- --------------- -------------- --------- ------------
Hotel Group
Super 8 2,549 163,510 61.1% $51.27 $31.33
Days Inn 1,782 143,046 54.2% $68.18 $36.95
Ramada 836 116,799 56.0% $75.49 $42.24
Wyndham Hotels and Resorts 207 44,489 63.8% $113.95 $72.68
Howard Johnson 413 44,945 50.3% $63.70 $32.06
Baymont 383 30,471 56.1% $69.39 $38.93
Travelodge 415 30,701 53.3% $69.14 $36.87
Microtel Inns & Suites by Wyndham 327 23,446 61.4% $70.02 $43.02
Knights Inn 388 23,994 47.5% $48.21 $22.92
TRYP by Wyndham 123 17,895 64.8% $81.02 $52.48
Wingate by Wyndham 150 13,645 67.2% $91.15 $61.27
Hawthorn Suites by Wyndham 101 10,053 70.5% $81.33 $57.31
Dolce 24 5,530 58.4% $150.86 $88.09
Total Hotel Group 7,698 668,524 57.4% $69.32 $39.82
Vacation Ownership
Wyndham Vacation Ownership resorts 211 24,068 N/A N/A N/A
--- ------
Total Wyndham Worldwide 7,909 692,592
============ =====
Note: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.
Table 6
(2 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
As of and For the Six Months Ended June 30, 2016
------------------------------------------------
Average Revenue
Number of Average Average Daily Per Available
Brand Properties Number of Rooms Occupancy Rate Rate (ADR) Room (RevPAR)
----- ---------- --------------- -------------- --------- ------------
Hotel Group
Super 8 2,707 172,924 56.0% $47.68 $26.69
Days Inn 1,791 142,987 49.0% $66.61 $32.60
Ramada 842 117,964 52.7% $73.28 $38.65
Wyndham Hotels and Resorts 226 49,776 58.5% $105.36 $61.64
Howard Johnson 377 43,538 46.8% $60.19 $28.17
Baymont 424 33,711 50.0% $69.32 $34.66
Travelodge 404 29,705 49.2% $67.64 $33.29
Microtel Inns & Suites by Wyndham 334 24,102 55.5% $66.91 $37.14
Knights Inn 381 23,228 44.9% $49.58 $22.25
TRYP by Wyndham 113 16,120 62.3% $76.80 $47.84
Wingate by Wyndham 148 13,493 62.2% $90.16 $56.04
Hawthorn Suites by Wyndham 107 10,618 66.2% $82.88 $54.84
Dolce 22 5,110 50.6% $162.73 $82.42
Total Hotel Group 7,876 683,276 53.0% $66.76 $35.35
Vacation Ownership
Wyndham Vacation Ownership resorts 216 24,475 N/A N/A N/A
--- ------
Total Wyndham Worldwide 8,092 707,751
============ =====
As of and For the Six Months Ended June 30, 2015
------------------------------------------------
Average Revenue
Number of Average Average Daily Per Available
Brand Properties Number of Rooms Occupancy Rate Rate (ADR) Room (RevPAR)
----- ---------- --------------- -------------- --------- ------------
Hotel Group
Super 8 2,549 163,510 56.1% $50.01 $28.04
Days Inn 1,782 143,046 49.7% $66.32 $32.98
Ramada 836 116,799 53.7% $75.12 $40.37
Howard Johnson 413 44,945 47.2% $63.13 $29.82
Wyndham Hotels and Resorts 207 44,489 59.9% $113.13 $67.81
Travelodge 415 30,701 49.4% $65.86 $32.54
Baymont 383 30,471 51.6% $67.52 $34.85
Knights Inn 388 23,994 45.8% $46.73 $21.41
Microtel Inns & Suites by Wyndham 327 23,446 57.5% $68.55 $39.41
TRYP by Wyndham 123 17,895 58.2% $78.87 $45.92
Wingate by Wyndham 150 13,645 62.9% $88.74 $55.81
Hawthorn Suites by Wyndham 101 10,053 67.7% $80.89 $54.75
Dolce 24 5,530 56.7% $143.28 $81.30
Total Hotel Group 7,698 668,524 53.5% $68.00 $36.35
Vacation Ownership
Wyndham Vacation Ownership resorts 211 24,068 N/A N/A N/A
--- ------
Total Wyndham Worldwide 7,909 692,592
============ =====
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
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME AND EPS
(In millions, except per share data)
Location on Condensed Three Months Ended June 30,
Consolidated Statements of
Income
------
2016 2015
---- ----
Diluted weighted average shares outstanding 112 120
Diluted EPS $1.39 $1.33
Net income $156 $159
Adjustments:
Acquisition costs (a) Operating 1 1
Legacy costs (b) General and administrative - (1)
Total adjustments before tax 1 -
Income tax benefit/(expense) on adjustments (c) Provision for income taxes (1) -
Total adjustments after tax - -
Adjustments - EPS impact $0.01 $(0.01)
Adjusted Net income $156 $159
==== ====
Adjusted diluted EPS $1.40 $1.32
===== =====
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Diluted weighted average shares outstanding 113 121
Diluted EPS $2.23 $2.33
Net income $251 $282
Adjustments:
Venezuela currency devaluation (d) Operating 24 -
Acquisition costs (a ) Operating 1 4
Legacy costs (b) General and administrative 1 (1)
Restructuring costs (e) Operating - (1)
Early extinguishment of debt (f) Interest expense 11 -
Total adjustments before tax 37 2
Income tax (expense)/benefit on adjustments (g) Provision for income taxes (5) 1
Total adjustments after tax 32 3
Total adjustments - EPS impact $0.29 $0.03
Adjusted Net income $283 $285
==== ====
Adjusted diluted EPS $2.52 $2.36
===== =====
Note: Amounts may not add due to rounding.
(a) The amount for 2016 represents costs related to an acquisition that closed on July 1, 2016 at the Company's destination network business. The amount for 2015 relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts at the Company's hotel group business during 2015.
(b) Relates to the 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 the tax effect of the adjustments.
(d) Represents the impact from the devaluation of the exchange rate of Venezuela at the Company's destination network business during 2016.
(e) Relates to the reversal of a portion of the restructuring reserve established during the fourth quarter of 2014 at the Company's destination network business.
(f) Represents costs incurred in connection with the Company's early repurchase of its 6.0% senior unsecured notes during 2016.
(g) Relates to (i) the tax effect of the adjustments during both 2015 and 2016 and (ii) a valuation allowance established in connection with the acquisition of Dolce Hotels and Resorts during 2015.
The above tables reconcile certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors' understanding of the overall impact of such adjustments. In addition to GAAP financial measures, the
Company provides adjusted net income and adjusted EPS financial measures to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not
necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. 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.
Table 8
(1 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
(In millions)
Venezuela
Currency Acquisition Adjusted
Three months ended March 31, 2016 EBITDA Devaluation (b) Costs(c) EBITDA
------ --------------- ------- ------
Hotel Group $84 $ - $ - $84
Destination Network 81 24 - 105
Vacation Ownership 136 - - 136
--- --- --- ---
Total Reportable Segments 301 24 - 325
Corporate and Other (a) (34) - - (34)
--- --- --- ---
Total Company $267 $24 $ - $291
==== === === === ====
Three months ended June 30, 2016
Hotel Group $101 $ - $ - $101
Destination Network 85 - 1 85
Vacation Ownership 187 - - 187
--- --- --- ---
Total Reportable Segments 373 - 1 373
Corporate and Other (a) (33) - - (33)
--- --- --- ---
Total Company $340 $ - $1 $340
==== === === === ====
Note: Amounts may not add across due to rounding.
(a) Includes the elimination of transactions between segments.
(b) Represents the impact from the devaluation of the exchange rate of Venezuela.
(c) Represents costs related to an acquisition that closed on July 1, 2016.
Table 8
(2 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
(In millions)
Legacy Acquisition Restructuring Asset Contract Adjusted
Three months ended March 31, 2015 EBITDA Adjustments(b) Costs (c) Costs (d) Impairment (e) Termination (f) EBITDA
------ ------------- -------- -------- ------------- --------------- ------
Hotel Group $76 $ - $3 $ - $ - $ - $79
Destination Network 105 - - (1) - - 104
Vacation Ownership 130 - - - - - 130
--- --- --- --- --- --- ---
Total Reportable Segments 311 - 3 (1) - - 313
Corporate and Other (a) (34) - - - - - (34)
--- --- --- --- --- --- ---
Total Company $277 $ - $3 $(1) $ - $ - $279
==== === === === === === === === === ====
Three months ended June 30, 2015
Hotel Group $96 $ - $1 $ - $ - $ - $97
Destination Network 84 - - - - - 84
Vacation Ownership 182 - - - - - 182
--- --- --- --- --- --- ---
Total Reportable Segments 362 - 1 - - - 363
Corporate and Other (a) (30) (1) - - - - (31)
--- --- --- --- --- --- ---
Total Company $332 $(1) $1 $ - $ - $ - $332
==== === === === === === === === === ====
Three months ended September 30, 2015
Hotel Group $83 $ - $ - $4 $7 $14 $108
Destination Network 134 - - 3 - - 137
Vacation Ownership 200 - - 1 - - 201
--- --- --- --- --- --- ---
Total Reportable Segments 417 - - 8 7 14 446
Corporate and Other (a) (35) 1 - - - - (34)
--- --- --- --- --- --- ---
Total Company $382 $1 $ - $8 $7 $14 $412
==== === === === === === === ====
Three months ended December 31, 2015
Hotel Group $94 $ - $ - $(1) $ - $ - $93
Destination Network 44 - - (1) - - 43
Vacation Ownership 174 - - - - - 174
--- --- --- --- --- --- ---
Total Reportable Segments 312 - - (2) - - 310
Corporate and Other (a) (37) - - - - - (37)
--- --- --- --- --- --- ---
Total Company $275 $ - $ - $(2) $ - $ - $273
==== === === === === === === === === === ====
Twelve months ended December 31, 2015
Hotel Group $349 $ - $3 $3 $7 $14 $376
Destination Network 367 - 1 2 - - 370
Vacation Ownership 687 - - 1 - - 688
--- --- --- --- --- --- ---
Total Reportable Segments 1,403 - 4 6 7 14 1,434
Corporate and Other (a) (137) - - - - - (137)
---- --- --- --- --- --- ----
Total Company $1,266 $ - $4 $6 $7 $14 $1,297
====== === === === === === === ======
Note: The sum of the quarters may not agree to the twelve months ended December 31, 2015 due to rounding.
(a) Includes the elimination of transactions between segments.
(b) Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.
(c) Relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015).
(d) Relates to costs incurred as a result of various organizational realignment initiatives and the reversal of a portion of restructuring reserves that were established in prior periods.
(e) Relates to a non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from the Company's decision to outsource its reservation system to a
third-party provider.
(f) Relates to costs associated with the anticipated termination of a management contract.
Table 8
(3 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
SHARED-BASED COMPENSATION EXPENSE
(In millions)
The following tables provide detail regarding share-based compensation expense which is included within adjusted EBITDA:
2016
----
Q1 Q2 Q3 Q4 Full Year
--- --- --- --- ---------
Adjusted EBITDA $291 $340 N/A N/A N/A
Share-based compensation expense
(*) 13 20 N/A N/A N/A
Adjusted EBITDA excluding share-based compensation expense $304 $360 N/A N/A N/A
==== ==== === === ===
2015
----
Q1 Q2 Q3 Q4 Full Year
--- --- --- --- ---------
Adjusted EBITDA $279 $332 $412 $273 $1,297
Share-based compensation expense
(*) 15 13 13 15 55
Adjusted EBITDA excluding share-based compensation expense $294 $345 $425 $288 $1,352
==== ==== ==== ==== ======
Note: Full year amounts may not add across due to rounding.
Excludes share-based compensation expenses for which there was no impact on EBITDA. Such costs
amounted to $1 million during both Q1 and Q2 2016 and $3 million for the full year 2015. The
Company believes providing Adjusted EBITDA with the additional exclusion of share-based
compensation expense assists our investors and management by providing an additional financial
measure to evaluate ongoing operations by excluding the variations among companies in timing,
amount and reporting of share-based compensation expense, which may differ significantly among
(*) companies.
Table 9
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF GROSS VOI SALES
(In millions)
GROSS VOI SALES
---------------
We believe gross vacation ownership sales provide an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period.
The following table provides a reconciliation of Gross VOI sales (see Table 3) to vacation ownership interest sales (see Table 5):
Year
----
2016 Q1 Q2 Q3 Q4 Full Year
---- --- --- --- --- ---------
Gross VOI sales $428 $518 N/A N/A N/A
Less: Sales under WAAM Fee-for-Service (23) (20) N/A N/A N/A
--- --- --- --- ---
Gross VOI sales, net of WAAM Fee-for-Service sales 405 498 N/A N/A N/A
Less: Loan loss provision (63) (90) N/A N/A N/A
Vacation ownership interest sales $342 $409 N/A N/A N/A
==== ==== === === ===
2015
----
Gross VOI sales $390 $502 $565 $507 $1,965
Less: Sales under WAAM Fee-for-Service (21) (26) (37) (42) (126)
--- --- --- --- ----
Gross VOI sales, net of WAAM Fee-for-Service sales 369 477 528 464 1,838
Less: Loan loss provision (46) (60) (78) (64) (248)
Plus: Impact of percentage-of-completion accounting 13 - (2) 2 13
Vacation ownership interest sales $336 $417 $448 $403 $1,604
==== ==== ==== ==== ======
2014
----
Gross VOI sales $410 $496 $513 $470 $1,889
Less: Sales under WAAM Fee-for-Service (44) (40) (27) (21) (132)
--- --- --- --- ----
Gross VOI sales, net of WAAM Fee-for-Service sales 366 456 486 449 1,757
Less: Loan loss provision (60) (70) (70) (60) (260)
Less: Impact of percentage-of-completion accounting (3) (4) (1) (4) (12)
Vacation ownership interest sales $303 $382 $415 $385 $1,485
==== ==== ==== ==== ======
2013
----
Gross VOI sales $384 $481 $536 $488 $1,889
Less: Sales under WAAM Fee-for-Service (36) (44) (51) (29) (160)
--- --- --- --- ----
Gross VOI sales, net of WAAM Fee-for-Service sales 347 437 486 459 1,729
Less: Loan loss provision (84) (90) (102) (73) (349)
Less: Impact of percentage-of-completion accounting - - - (1) (1)
Vacation ownership interest sales $263 $347 $384 $384 $1,379
==== ==== ==== ==== ======
_____________
Note: Amounts may not add due to rounding.
The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):
Q1 Q2 Q3 Q4 Full Year
--- --- --- --- ---------
2016 $25 $22 N/A N/A N/A
2015 $24 $17 $32 $27 $100
2014 $25 $21 $27 $24 $97
2013 $24 $18 $22 $25 $89
Table 10
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF 2016 OUTLOOK
(In millions, except per share data)
Outlook
Outlook As Adjusted
(GAAP) Adjustments (Non-GAAP)
----- ----------- ---------
Low High Low High Low High
--- ---- --- ---- --- ----
Net revenues $5,650 $5,800 $ - $ - $5,650 $5,800
EBITDA $1,351 $1,376 $24 (b) $24 (b) $1,375 $1,400
Depreciation and amortization (250) (245) - - (250) (245)
Interest expense, net (140) (138) 11 (c) 11 (c) (129) (127)
---- ---- --- --- ---- ----
Income before taxes (a) 963 988 35 35 998 1,023
Income taxes (359) (368) (4) (d) (4) (d) (363) (372)
---- ---- --- --- ---- ----
Net income $604 $620 $31 $31 $635 $651
==== ==== === === ==== ====
Diluted earnings per share $5.40 $5.54 $5.68 $5.82
Diluted shares 112 112 112 112
(a) Projections do not total because the Company does not expect the actual results of all items to be at the highest or lowest end of any projected
range simultaneously.
(b) Adjustment represents Venezuela currency devaluation in the first quarter of 2016 the Company's destination network business.
(c) Adjustment represents early extinguishment of debt in the first quarter of 2016.
(d) Adjustment represents tax effect of Venezuela currency devaluation and early extinguishment of debt.
Table 11
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION - CONSTANT CURRENCY AND
CURRENCY NEUTRAL
(In millions, except per share data)
The Company reports certain current year period
financial measures on a constant currency and
currency-neutral basis and excluding the impact of
acquisitions. The Company believes providing certain
financial measures on a constant currency and
currency-neutral basis as well as excluding the
impact of acquisitions assists management and
investors in better understanding underlying results
and trends by excluding the impact of period over
period changes in foreign exchange rates and changes
resulting from acquisitions.
Constant currency results assume foreign results are
translated from foreign currencies to the U.S. dollar
at exchange rates consistent with those in the
comparable period.
Currency Neutral results (i) assume foreign results are
translated from foreign currencies to the U.S. dollar
at exchange rates consistent with those in the
comparable period and (ii) eliminating foreign
exchange related activities such as foreign exchange
hedges, balance sheet remeasurements, currency
devaluations and/or other adjustments.
Acquisition results are defined as the incremental
period over period changes in the Company's results
directly attributable to acquisitions.
Revenues in Constant Currency and Excluding Acquisitions: Three months ended June 30,
---------------------------
2016 2015 % Change
---- ---- --------
Total revenues as reported $1,403 $1,398 -
Adjustments:
Foreign currency - constant currency 10 - *
Incremental revenues from acquisitions (3) - *
--- --- ---
Total revenues in constant currency and excluding acquisitions $1,410 $1,398 1%
===
Destination Network revenue as reported $384 $383 -
Adjustments:
Foreign currency - constant currency 7 - *
Incremental revenues from acquisitions (3) - *
--- --- ---
Total Destination Network revenues in constant currency and excluding
acquisitions $388 $383 1%
===
Exchange revenue as reported $159 $161 -1%
Adjustments:
Foreign currency - constant currency 4 - *
--- --- ---
Total Exchange revenues in constant currency and excluding acquisitions $163 $161 1%
==== ==== ===
Rental revenue as reported $202 $200 1%
Adjustments:
Foreign currency - constant currency 2 - *
Incremental revenues from acquisitions (3) - *
--- --- ---
Total Rental revenues in constant currency and excluding acquisitions $201 $200 1%
==== ==== ===
Currency-neutral Adjusted EBITDA: Three months ended June 30,
---------------------------
2016 2015 % Change
---- ---- --------
Adjusted EBITDA (a) $340 $332 2%
Adjustments:
Foreign currency - currency - neutral 2 - *
--- --- ---
Currency-neutral Adjusted EBITDA excluding acquisitions $342 $332 3%
===
Destination Network Adjusted EBITDA (a) $85 $84 1%
Adjustments:
Foreign currency - currency - neutral 1 - *
--- --- ---
Destination Network Currency-neutral Adjusted EBITDA excluding acquisitions $86 $84 2%
===
(a) See Table 8 for a reconciliation of EBITDA to Adjusted EBITDA and Table 2 for a reconciliation of EBITDA to Net Income.
* Not Meaningful.
Table 12
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
June 30, December 31, June 30,
2016 2015 2015
---- ---- ----
Securitized vacation ownership debt (a)
Term notes $1,717 $1,867 $1,818
Bank conduit facility (b) 315 239 253
---
Total securitized vacation ownership debt (c) 2,032 2,106 2,071
Less: Current portion of securitized vacation ownership debt 198 209 211
Long-term securitized vacation ownership debt $1,834 $1,897 $1,860
====== ====== ======
Debt:
Revolving credit facility (due July 2020) (d) $16 $7 $23
Commercial paper (e) 408 109 476
Term loan (due March 2021) 323 - -
$315 million 6.00% senior unsecured notes (due December 2016) - 316 316
$300 million 2.95% senior unsecured notes (due March 2017) (f) 300 299 299
$14 million 5.75% senior unsecured notes (due February 2018) 14 14 14
$450 million 2.50% senior unsecured notes (due March 2018) 449 448 448
$40 million 7.375% senior unsecured notes (due March 2020) 40 40 40
$250 million 5.625% senior unsecured notes (due March 2021) 247 247 247
$650 million 4.25% senior unsecured notes (due March 2022) 648 648 648
$400 million 3.90% senior unsecured notes (due March 2023) 407 408 408
$350 million 5.10% senior unsecured notes (due October 2025) 338 337 -
Capital leases 152 153 161
Other 32 49 69
--- ---
Total long-term debt 3,374 3,075 3,149
Less: Current portion of long-term debt 46 44 52
Long-term debt $3,328 $3,031 $3,097
====== ====== ======
(a) The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") that
are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held
by the bankruptcy-remote SPEs are not available to the Company's creditors and legally are not the Company's assets. Additionally, the non-
recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors of these SPEs have no
recourse to the Company for principal and interest.
(b) Represents a non-recourse vacation ownership bank conduit facility with a term through August 2017 and borrowing capacity of $650
million. As of June 30, 2016, this facility had a remaining borrowing capacity of $335 million.
(c) This debt is collateralized by $2,526 million, $2,576 million and $2,558 million, of underlying vacation ownership contract receivables and
related assets as of June 30, 2016, December 31, 2015, and June 30, 2015. respectively.
(d) Represents a $1.5 billion revolving credit facility that expires in July 2020. As of June 30, 2016, the Company had $1 million of
outstanding letters of credit. After considering outstanding commercial paper borrowings of $408 million, the remaining borrowing capacity
was $1.1 billion as of June 30, 2016.
(e) Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $842 million as of June 30, 2016.
(f) Classified as long-term as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with its
revolving credit facility.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wyndham-worldwide-reports-second-quarter-2016-results-300304505.html
SOURCE Wyndham Worldwide Corporation
