Wyndham Worldwide Reports First Quarter 2016 Results

Increases Full Year EPS Guidance

News provided by

Wyndham Worldwide Corporation

Apr 26, 2016, 06:30 ET

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

HIGHLIGHTS:

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

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

FIRST QUARTER 2016 OPERATING RESULTS

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

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

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

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

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

FIRST QUARTER 2016 BUSINESS UNIT RESULTS

Hotel Group

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

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

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

Destination Network (formerly Vacation Exchange and Rentals)

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

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

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

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

Vacation Ownership

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

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

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

OTHER ITEMS

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

Balance Sheet Information as March 31, 2016:

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

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

OUTLOOK

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

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

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

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

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

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

CONFERENCE CALL INFORMATION

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

PRESENTATION OF FINANCIAL INFORMATION

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

ABOUT WYNDHAM WORLDWIDE

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

FORWARD-LOOKING STATEMENTS

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

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 12, 2016.  Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

Table 1

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)















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















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


















Three Months Ended March 31, 



2016

2015



 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Hotel Group

$

295

$

84

$

292

$

76

Destination Network

385

81

369

105

Vacation Ownership

641

136

617

130

     Total Reportable Segments

1,321

301

1,278

311

Corporate and Other (a)

(18)

(34)

(16)

(34)

     Total Company

$

1,303

$

267

$

1,262

$

277















Reconciliation of EBITDA to Net income
































 Three Months Ended March 31,  






2016



2015

EBITDA



$

267



$

277

Depreciation and amortization



62




56

Interest expense



33




26

Early extinguishment of debt



11




-

Interest income



(2)




(3)

Income before income taxes



163




198

Provision for income taxes



67




76

Net income



$

96



$

122






























(a)  Includes the elimination of transactions between segments.  















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


















Three Months Ended March 31, 



2016

2015





Adjusted 


Adjusted 



 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Hotel Group

$

295

$

84

$

292

$

79

Destination Network

385

105

369

104

Vacation Ownership

641

136

617

130

     Total Reportable Segments

1,321

325

1,278

313

Corporate and Other

(18)

(34)

(16)

(34)

     Total Company

$

1,303

$

291

$

1,262

$

279








Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)






















 Three Months Ended 




 March 31, 




2016

2015

Net revenues






Service and membership fees

$

634

$

599

Vacation ownership interest sales

342

336

Franchise fees

138

147

Consumer financing

107

104

Other


82

76

Net revenues


1,303

1,262









Expenses







Operating

613

564

Cost of vacation ownership interests 

37

33

Consumer financing interest

18

18

Marketing and reservation

192

195

General and administrative

186

181

Restructuring

-

(1)

Depreciation and amortization

62

56

Total expenses

1,108

1,046









Operating income


195

216

Other (income)/expense, net


(10)

(5)

Interest expense


33

26

Early extinguishment of debt


11

-

Interest income


(2)

(3)









Income before income taxes


163

198

Provision for income taxes


67

76

Net income

$

96

$

122









Earnings per share






Basic

$

0.85

$

1.01

Diluted

0.84

1.00









Weighted average shares outstanding






Basic


113

121

Diluted

114

122




















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
















Table 3
















(1 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS

















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























Year

Q1

Q2

Q3

Q4

Full Year

Hotel Group (a)











Number of Rooms 

2016

679,100

 N/A 

 N/A 

 N/A 

 N/A 






2015

667,400

668,500

671,900

678,000

 N/A 






2014

646,900

650,200

655,300

660,800

 N/A 






2013

631,800

635,100

638,300

645,400

 N/A 


















RevPAR

2016

$

31.59

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

32.84

$

39.82

$

43.34

$

32.98

$

37.26






2014

$

32.30

$

40.11

$

43.71

$

34.06

$

37.57






2013

$

31.05

$

38.00

$

41.78

$

33.07

$

36.00

















Destination Network











Average Number of Members (in 000s)

2016

3,841

 N/A 

 N/A 

 N/A 

 N/A 






2015

3,822

3,831

3,835

3,836

3,831






2014

3,727

3,748

3,777

3,808

3,765






2013

3,668

3,686

3,711

3,728

3,698


















Exchange Revenue Per Member

2016

$

189.78

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

194.06

$

167.81

$

163.38

$

152.00

$

169.29






2014

$

200.78

$

179.17

$

171.77

$

157.24

$

177.12






2013

$

210.96

$

182.42

$

169.95

$

161.21

$

181.02


















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

2016

500

 N/A 

 N/A 

 N/A 

 N/A 






2015

459

390

462

319

1,630






2014

429

376

455

293

1,552






2013

423

355

433

273

1,483


















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

2016

$

366.08

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

361.20

$

513.14

$

642.00

$

452.19

$

494.92






2014

$

410.04

$

577.13

$

727.40

$

492.25

$

558.95






2013

$

392.64

$

540.38

$

677.81

$

506.62

$

532.11

















Vacation Ownership (a)











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

2016

$

428,000

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

390,000

$

502,000

$

565,000

$

507,000

$

1,965,000






2014

$

410,000

$

496,000

$

513,000

$

470,000

$

1,889,000






2013

$

384,000

$

481,000

$

536,000

$

488,000

$

1,889,000


















Tours (in 000s)

2016

179

 N/A 

 N/A 

 N/A 

 N/A 






2015

168

206

227

200

801






2014

170

208

225

191

794






2013

163

206

225

195

789


















Volume Per Guest (VPG)

2016

$

2,244

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

2,177

$

2,353

$

2,354

$

2,390

$

2,326






2014

$

2,272

$

2,280

$

2,158

$

2,336

$

2,257






2013

$

2,211

$

2,256

$

2,278

$

2,370

$

2,281

















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

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

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























Year

Q1

Q2

Q3

Q4

Full Year

Vacation Rental Transactions (in 000s)

2014

429

367

431

292

1,518

Average Net Price Per Vacation Rental

2014

$

410.02

$

578.02

$

700.56

$

492.64

$

548.93


































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







































ADDITIONAL DATA






























Year

Q1

Q2

Q3

Q4

Full Year

Hotel Group











Number of Properties

2016

7,830

 N/A 

 N/A 

 N/A 

 N/A 






2015

7,670

7,700

7,760

7,810

 N/A 






2014

7,500

7,540

7,590

7,650

 N/A 






2013

7,380

7,410

7,440

7,490

 N/A 

















Vacation Ownership











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

2016

$

63,000

 N/A 

 N/A 

 N/A 

 N/A 






2015

$

46,000

$

60,000

$

78,000

$

64,000

$

248,000






2014

$

60,000

$

70,000

$

70,000

$

60,000

$

260,000






2013

$

84,000

$

90,000

$

102,000

$

73,000

$

349,000

















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

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
















Table 3
















(2 of 2)


















Wyndham Worldwide Corporation

OPERATING STATISTICS


GLOSSARY OF TERMS


















Hotel Group
































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





















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


















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




















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



















Destination Network
































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


















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





















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



















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



















Vacation Ownership
































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





















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


















Volume per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  The Company has excluded non-tour
upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2013-2016.


















General
































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


















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

























Table 4

























Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)






















































2016

2015





 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Hotel Group






















Royalties and Franchise Fees

$

74

 N/A 

 N/A 

 N/A 

 N/A 

$

74

$

96

$

103

$

87

$

361

Marketing, Reservation and Wyndham Rewards Revenues (a)

83

 N/A 

 N/A 

 N/A 

 N/A 

96

108

112

92

407

Hotel Management Reimbursable Revenues (b)

67

 N/A 

 N/A 

 N/A 

 N/A 

61

71

73

68

273

Intersegment Trademark Fees

13

 N/A 

 N/A 

 N/A 

 N/A 

12

15

16

15

57

Owned Hotel Revenues

27

 N/A 

 N/A 

 N/A 

 N/A 

25

20

16

19

79

Ancillary Revenues (c)

31

 N/A 

 N/A 

 N/A 

 N/A 

24

24

37

33

120

Total Hotel Group

295

 N/A 

 N/A 

 N/A 

 N/A 

292

334

357

314

1,297

























Destination Network






















Exchange Revenues

182

 N/A 

 N/A 

 N/A 

 N/A 

185

161

157

146

649

Rental Revenues

183

 N/A 

 N/A 

 N/A 

 N/A 

166

200

296

144

807

Ancillary Revenues (d)

20

 N/A 

 N/A 

 N/A 

 N/A 

18

22

23

20

82

Total Destination Network

385

 N/A 

 N/A 

 N/A 

 N/A 

369

383

476

310

1,538

























Vacation Ownership






















Vacation Ownership Interest Sales

342

 N/A 

 N/A 

 N/A 

 N/A 

336

417

448

403

1,604

Consumer Financing

107

 N/A 

 N/A 

 N/A 

 N/A 

104

105

108

109

427

Property Management Fees and Reimbursable Revenues

164

 N/A 

 N/A 

 N/A 

 N/A 

153

149

159

155

615

WAAM Fee-for-Service Commissions

17

 N/A 

 N/A 

 N/A 

 N/A 

12

19

23

28

83

Ancillary Revenues (e)

11

 N/A 

 N/A 

 N/A 

 N/A 

12

9

12

11

43

Total Vacation Ownership

641

 N/A 

 N/A 

 N/A 

 N/A 

617

699

750

706

2,772

Total Reportable Segments

$

1,321

 N/A 

 N/A 

 N/A 

 N/A 

$

1,278

$

1,416

$

1,583

$

1,330

$

5,607






















































2014

2013





 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Hotel Group






















Royalties and Franchise Fees

$

68

$

88

$

100

$

83

$

339

$

64

$

79

$

91

$

75

$

309

Marketing, Reservation and Wyndham Rewards Revenues (a)

76

101

117

91

385

73

92

118

83

365

Hotel Management Reimbursable Revenues (b)

37

39

39

39

154

25

38

37

35

135

Intersegment Trademark Fees

9

11

11

10

41

8

10

11

10

39

Owned Hotel Revenues

24

20

18

20

81

26

20

18

19

84

Ancillary Revenues (c)

23

24

30

24

101

26

23

22

23

95

Total Hotel Group

237

283

315

267

1,101

222

262

297

245

1,027

























Destination Network






















Exchange Revenues

187

168

162

150

667

193

168

158

150

669

Rental Revenues

176

217

331

144

868

166

192

293

138

789

Ancillary Revenues (d)

16

17

19

17

69

15

16

19

17

68

Total Destination Network

379

402

512

311

1,604

374

376

470

305

1,526

























Vacation Ownership






















Vacation Ownership Interest Sales

303

382

415

385

1,485

263

347

384

384

1,379

Consumer Financing

105

106

108

108

427

105

106

107

108

426

Property Management Fees

143

145

150

142

581

146

141

143

137

567

WAAM Fee-for-Service Commissions

33

30

18

16

98

24

30

33

20

107

Ancillary Revenues (e)

9

10

13

17

47

11

6

10

9

36

Total Vacation Ownership

593

673

704

668

2,638

549

630

677

658

2,515

Total Reportable Segments

$

1,209

$

1,358

$

1,531

$

1,246

$

5,343

$

1,145

$

1,268

$

1,444

$

1,208

$

5,068


















































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

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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






















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)






































March 31,

December 31,

March 31,















2016

2015

2015























Securitized vacation ownership debt (a)







Term notes

$

2,005

$

1,867

$

2,062

Bank conduit facility (b)

121

239

98

Total securitized vacation ownership debt (c)

2,126

2,106

2,160

Less: Current portion of securitized vacation ownership debt

207

209

217

Long-term securitized vacation ownership debt

$

1,919

$

1,897

$

1,943


















Debt:







   Revolving credit facility (due July 2020) (d)

$

10

$

7

$

14

   Commercial paper (e)

343

109

346

  Term loan (due March 2021)

323

-

-

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

-

316

316

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

299

299

299

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

14

14

14

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

448

448

448

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

40

40

40

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

247

247

247

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

648

648

649

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

408

408

417

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

337

337

-

   Capital leases

158

153

161

   Other

31

49

70

Total long-term debt

3,306

3,075

3,021

Less: Current portion of long-term debt

45

44

53

Long-term debt

$

3,261

$

3,031

$

2,968























(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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







Table 6








Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS



















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







Average Revenue 



Number of 

Average 

Average Daily 

Per Available

Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

Room (RevPAR)








Hotel Group





Super 8 

2,665

170,454

51.5%

$45.73

$23.54








Days Inn 

1,791

143,212

44.3%

$63.81

$28.28








Ramada 

837

117,409

49.0%

$73.76

$36.12








Wyndham Hotels and Resorts

228

49,952

54.7%

$103.78

$56.73








Howard Johnson 

381

41,555

44.1%

$59.74

$26.33








Baymont

416

33,070

44.9%

$66.07

$29.66








Travelodge 

406

29,760

45.3%

$63.18

$28.63








Microtel Inns & Suites by Wyndham

333

24,045

51.1%

$63.64

$32.52








Knights Inn 

381

23,258

41.5%

$48.76

$20.22








TRYP by Wyndham

120

17,274

54.8%

$72.93

$39.97








Wingate by Wyndham

149

13,610

56.3%

$86.52

$48.70








Hawthorn Suites by Wyndham

105

10,466

62.3%

$82.76

$51.57








Dolce

22

5,080

45.5%

$152.13

$69.17








      Total Hotel Group

7,834

679,145

48.6%

$64.93

$31.59








Vacation Ownership




Wyndham Vacation Ownership resorts

216

24,442

N/A

N/A

N/A








      Total Wyndham Worldwide

8,050

703,587





















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







Average Revenue



Number of 

Average 

Average Daily 

Per Available 

Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

Room (RevPAR)








Hotel Group





Super 8 

2,519

161,538

50.9%

$48.46

$24.66








Days Inn 

1,784

144,231

45.2%

$64.08

$28.98








Ramada 

840

116,409

51.5%

$74.72

$38.49






 Wyndham Hotels and Resorts

201

44,042

56.0%

$112.18

$62.85








Howard Johnson 

419

45,588

44.1%

$62.50

$27.59








Baymont

373

30,012

47.0%

$65.21

$30.63








Travelodge 

422

31,025

45.5%

$62.05

$28.24








Microtel Inns & Suites by Wyndham

325

23,302

53.5%

$66.83

$35.73








Knights Inn 

392

24,476

44.1%

$45.16

$19.91








TRYP by Wyndham

122

17,455

51.3%

$76.01

$39.02








Wingate by Wyndham

153

13,929

58.5%

$85.97

$50.33








Hawthorn Suites by Wyndham

99

9,825

64.8%

$80.39

$52.11








Dolce

24

5,530

54.4%

$131.50

$71.47








      Total Hotel Group

7,673

667,362

49.4%

$66.43

$32.84








Vacation Ownership




Wyndham Vacation Ownership resorts

210

23,965

N/A

N/A

N/A








      Total Wyndham Worldwide

7,883

691,327










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















Table 7















(1 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)











































Venezuela 










Reported 

Currency 

Adjusted

Three months ended March 31, 2016

Net Revenues

EBITDA

Devaluation (b)

EBITDA

Hotel Group

$

295

$

84

$

-

$

84

Destination Network


385

81

24

105

Vacation Ownership


641

136

-

136

Total Reportable Segments

1,321

301

24

325

Corporate and Other (a)


(18)

(34)

-

(34)

Total Company

$

1,303

$

267

$

24

$

291
















(a)  Includes the elimination of transactions between segments.

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



























Table 7



























(2 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

























































































Reported

Legacy

Acquisition

Restructuring

Asset

Contract 

Adjusted 

Three months ended March 31, 2015

Net Revenues

EBITDA

Adjustments(b)

Costs (c)

Costs (d)

Impairment (e)

Termination (f)

EBITDA

Hotel Group

$

292

$

76

$

-

$

3

$

-

$

-

$

-

$

79

Destination Network


369

105

-

-

(1)

-

-

104

Vacation Ownership


617

130

-

-

-

-

-

130

Total Reportable Segments

1,278

311

-

3

(1)

-

-

313

Corporate and Other (a)


(16)

(34)

-

-

-

-

-

(34)

Total Company

$

1,262

$

277

$

-

$

3

$

(1)

$

-

$

-

$

279




























Three months ended June 30, 2015























Hotel Group

$

334

$

96

$

-

$

1

$

-

$

-

$

-

$

97

Destination Network


383

84

-

-

-

-

-

84

Vacation Ownership


699

182

-

-

-

-

-

182

Total Reportable Segments

1,416

362

-

1

-

-

-

363

Corporate and Other (a)


(18)

(30)

(1)

-

-

-

-

(31)

Total Company

$

1,398

$

332

$

(1)

$

1

$

-

$

-

$

-

$

332




























Three months ended September 30, 2015






















Hotel Group

$

357

$

83

$

-

$

-

$

4

$

7

$

14

$

108

Destination Network


476

134

-

-

3

-

-

137

Vacation Ownership


750

200

-

-

1

-

-

201

Total Reportable Segments

1,583

417

-

-

8

7

14

446

Corporate and Other (a)


(19)

(35)

1

-

-

-

-

(34)

Total Company

$

1,564

$

382

$

1

$

-

$

8

$

7

$

14

$

412




























Three months ended December 31, 2015























Hotel Group

$

314

$

94

$

-

$

-

$

(1)

$

-

$

-

$

93

Destination Network


310

44

-

-

(1)

-

-

43

Vacation Ownership


706

174

-

-

-

-

-

174

Total Reportable Segments

1,330

312

-

-

(2)

-

-

310

Corporate and Other (a)


(19)

(37)

-

-

-

-

-

(37)

Total Company

$

1,311

$

275

$

-

$

-

$

(2)

$

-

$

-

$

273




























Twelve months ended December 31, 2015






















Hotel Group

$

1,297

$

349

$

-

$

3

$

3

$

7

$

14

$

376

Destination Network


1,538

367

-

1

2

-

-

370

Vacation Ownership


2,772

687

-

-

1

-

-

688

Total Reportable Segments

5,607

1,403

-

4

6

7

14

1,434

Corporate and Other (a)


(71)

(137)

-

-

-

-

-

(137)

Total Company

$

5,536

$

1,266

$

-

$

4

$

6

$

7

$

14

$

1,297




























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

(a)  Includes the elimination of transactions between segments.

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

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

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

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

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

















Table 7

















(3 of 3)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

ADDITIONAL DATA ON SHARE-BASED COMPENSATION EXPENSE

(In millions)




































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








































2016




Q1

Q2

Q3

Q4

Full Year

Adjusted EBITDA

$

291

 N/A 

 N/A 

 N/A 

 N/A 

     Share-based compensation expense (*)

13

 N/A 

 N/A 

 N/A 

 N/A 

Adjusted EBITDA excluding share-based compensation expense

$

304

 N/A 

 N/A 

 N/A 

 N/A 


























































2015




Q1

Q2

Q3

Q4

Full Year

Adjusted EBITDA

$

279

$

332

$

412

$

273

$

1,297

     Share-based compensation expense (*)

15

13

13

15

55

Adjusted EBITDA excluding share-based compensation expense

$

294

$

345

$

425

$

288

$

1,352




































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

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















Table 8















(1 of 2)
















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





















Three Months Ended March 31, 2016








 Venezuela 

 Early 










 Currency 

 Extinguishment of  

As Adjusted




 As Reported 

Devaluation  (a)

Debt(b)

non-GAAP

Net revenues












Service and membership fees

$

634

$

$

$

634

Vacation ownership interest sales

342







342

Franchise fees

138







138

Consumer financing

107







107

Other


82







82

Net revenues

1,303

-

-

1,303
















Expenses













Operating

613

(24)




589

Cost of vacation ownership interests 

37







37

Consumer financing interest

18







18

Marketing and reservation

192







192

General and administrative

186







186

Depreciation and amortization

62







62

Total expenses

1,108

(24)

-

1,084
















Operating income

195

24

-

219

Other (income)/expense, net

(10)







(10)

Interest expense

33







33

Early extinguishment of debt

11




(11)

-

Interest income

(2)







(2)
















Income before income taxes

163

24

11

198

Provision for income taxes

67

-

4

(c)

71
















Net income

$

96

$

24

$

7

$

127
















Earnings per share












Basic

$

0.85

$

0.21

$

0.06

$

1.13

Diluted


0.84

0.21

0.06

1.12
















Weighted average shares outstanding












Basic


113

113

113

113

Diluted


114

114

114

114
















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
















Note: EPS amounts may not add due to rounding.

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

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

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















Table 8















(2 of 2)
















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





















Three Months Ended March 31, 2015
























Acquisition

Restructuring

As Adjusted 





 As Reported 

Costs(a)

Costs(c)

non-GAAP

Net revenues












Service fees and membership

$

599

$

$

$

599

Vacation ownership interest sales

336







336

Franchise fees

147







147

Consumer financing

104







104

Other


76







76

Net revenues

1,262

-

-

1,262
















Expenses













Operating

564

(3)




561

Cost of vacation ownership interests 

33







33

Consumer financing interest

18







18

Marketing and reservation

195







195

General and administrative

181







181

Restructuring

(1)




1

-

Depreciation and amortization

56







56

Total expenses

1,046

(3)

1

1,044
















Operating income

216

3

(1)

218

Other (income)/expense, net

(5)







(5)

Interest expense

26







26

Interest income

(3)







(3)
















Income before income taxes

198

3

(1)

200

Provision for income taxes

76

(1)

(b)

(1)

(d)

74
















Net income

$

122

$

4

$

-

$

126
















Earnings per share












Basic

$

1.01

$

0.03

$

-

$

1.04

Diluted


1.00

0.03

-

1.03
















Weighted average shares outstanding












Basic


121

121

121

121

Diluted


122

122

122

122
















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
















Note: EPS amounts may not add due to rounding.

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

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

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

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












Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)













FREE CASH FLOW










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

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













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
















Three Months Ended March 31, 






2016

2015
















Net cash provided by operating activities

$

261

$

253



Less: Property and equipment additions

(43)


(56)



Free cash flow

$

218

$

197





























GROSS VOI SALES























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













Year










2016

Q1

Q2

Q3

Q4

Full Year













Gross VOI sales

$

428

 N/A 

 N/A 

 N/A 

 N/A 

Less: Sales under WAAM Fee-for-Service

(23)

 N/A 

 N/A 

 N/A 

 N/A 

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

405

 N/A 

 N/A 

 N/A 

 N/A 

Less: Loan loss provision

(63)

 N/A 

 N/A 

 N/A 

 N/A 

Plus: Impact of percentage-of-completion accounting

-

 N/A 

 N/A 

 N/A 

 N/A 

Vacation ownership interest sales

$

342

 N/A 

 N/A 

 N/A 

 N/A 













2015























Gross VOI sales

$

390

$

502

$

565

$

507

$

1,965

Less: Sales under WAAM Fee-for-Service

(21)

(26)

(37)

(42)

(126)

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

369

477

528

464

1,838

Less: Loan loss provision

(46)

(60)

(78)

(64)

(248)

Less: Impact of percentage-of-completion accounting

13

-

(2)

2

13

Vacation ownership interest sales

$

336

$

417

$

448

$

403

$

1,604













2014























Gross VOI sales

$

410

$

496

$

513

$

470

$

1,889

Less: Sales under WAAM Fee-for-Service

(44)

(40)

(27)

(21)

(132)

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

366

456

486

449

1,757

Less: Loan loss provision

(60)

(70)

(70)

(60)

(260)

Less: Impact of percentage-of-completion accounting

(3)

(4)

(1)

(4)

(12)

Vacation ownership interest sales

$

303

$

382

$

415

$

385

$

1,485













2013























Gross VOI sales

$

384

$

481

$

536

$

488

$

1,889

Less: Sales under WAAM Fee-for-Service

(36)

(44)

(51)

(29)

(160)

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

347

437

486

459

1,729

Less: Loan loss provision

(84)

(90)

(102)

(73)

(349)

Less: Impact of percentage-of-completion accounting

-

-

-

(1)

(1)

Vacation ownership interest sales

$

263

$

347

$

384

$

384

$

1,379

_____________










Note: Amounts may not add due to rounding.







































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
















Q1

Q2

Q3

Q4

Full Year













2016

$

25

 N/A 

 N/A 

 N/A 

 N/A 

2015

$

24

$

17

$

32

$

27

$

100

2014

$

25

$

21

$

27

$

24

$

97

2013

$

24

$

18

$

22

$

25

$

89

Logo - http://photos.prnewswire.com/prnh/20150203/173290LOGO

SOURCE Wyndham Worldwide Corporation

Related Links

http://www.wyndhamworldwide.com

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