Wyndham Worldwide Reports Fourth Quarter and Full Year 2015 Results

Full Year Adjusted Diluted EPS increased 13% over 2014

Increases Dividend 19%

One Billion Dollar Increase in Share Repurchase Authorization

Feb 09, 2016, 06:30 ET from Wyndham Worldwide Corporation

PARSIPPANY, N.J., Feb. 9, 2016 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months and year ended December 31, 2015.

HIGHLIGHTS:

  • Fourth quarter adjusted diluted earnings per share (EPS) was $0.98, an increase of 9% from adjusted diluted EPS of $0.90 in the fourth quarter of 2014. Reported diluted EPS was $1.21, compared with $0.65 in the fourth quarter of 2014.
  • Full year adjusted diluted earnings per share (EPS) was $5.11, an increase of 13% from adjusted diluted EPS of $4.53 in 2014. Reported diluted EPS was $5.14, compared with $4.18 in 2014.
  • Fourth quarter 2015 revenues increased 6% and adjusted EBITDA increased 8% compared with the fourth quarter of 2014.
  • The Company's Board of Directors authorized an increase in the quarterly cash dividend to $0.50 from $0.42 per share, beginning with the dividend that is expected to be declared in the first quarter of 2016.
  • The Company repurchased 2.2 million shares of its common stock for $165 million during the quarter.
  • The Company's Board of Directors approved a $1 billion increase in the share repurchase authorization.

"With our strong fourth quarter financial results and sharp operational execution across our global portfolio of hospitality brands, we have delivered our sixth consecutive year of double-digit growth in full year adjusted diluted EPS," said Stephen P. Holmes, chairman and CEO.  "As we enter 2016, we are confident in the strength and resilience of our business and remain focused on innovating and executing every day to deliver superior value for our shareholders and all our stakeholders.  Reflecting our strong performance in 2015 and as an indication of our confidence in our prospects, the Board of Directors approved a 19% increase in our quarterly dividend and $1 billion increase in our share repurchase authorization."

FOURTH QUARTER 2015 OPERATING RESULTS
Fourth quarter revenues were $1.3 billion, an increase of 6% from the prior year period. 

Fourth quarter adjusted EBITDA was $273 million, compared with $252 million in the prior year period, an increase of 8%.  Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $8 million in 2015.  On a currency-neutral basis and excluding acquisitions and a divestiture, adjusted EBITDA also increased 8%.

Adjusted net income was $113 million, or $0.98 per diluted share, compared with $112 million, or $0.90 per diluted share for the same period in 2014.  Net income and earnings per share benefited from strong operating results, but were reduced by foreign currency effects and higher interest expense.  EPS also benefited from the Company's share repurchase program. 

Reported net income for the fourth quarter of 2015 was $140 million, or $1.21 per diluted share, compared with $81 million, or $0.65 per diluted share, for the fourth quarter of 2014.  Reported net income in both periods reflects several items excluded from adjusted net income.  The net result of these items favorably impacted fourth quarter 2015 net income by $27 million and unfavorably impacted fourth quarter 2014 net income by $31 million.  Full reconciliations of adjusted net income to GAAP results appear in Table 8 of this press release.  Year-over-year fourth quarter reported net income comparisons also were negatively impacted by foreign currency effects.

FULL YEAR 2015 OPERATING RESULTS
Revenues for full year 2015 were $5.5 billion, an increase of 5% over the prior year period. 

Adjusted EBITDA for full year 2015 was $1,297 million, compared with $1,238 million in the prior year period.  Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $46 million in 2015.  On a currency-neutral basis and excluding acquisitions and a divestiture, adjusted EBITDA increased 8%.

Adjusted net income for the full year 2015 was $608 million, or $5.11 per diluted share, compared with $573 million, or $4.53 per diluted share, for the prior year.  The increases reflect stronger operating results across all of the Company's businesses, partially offset by foreign currency effects.  EPS also benefited from the Company's share repurchase program.

Reported net income for full year 2015 was $612 million, or $5.14 per diluted share, compared with reported net income of $529 million, or $4.18 per diluted share, for the prior year period.  Reported net income reflects several items excluded from adjusted net income.  The net result of these items favorably impacted full year 2015 net income by $4 million and unfavorably impacted full year 2014 net income by $44 million.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2015 CASH FLOW
Free cash flow was $769 million for the year ended December 31, 2015, compared with $749 million for the same period in 2014.  The increase reflects strong operating results and lower capital expenditures.  In addition, 2015 free cash flow was unfavorably impacted by changes in foreign currency exchange rates.  For the year ended December 31, 2015, net cash provided by operating activities was $991 million, compared with $984 million in the prior year period.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures. 

FOURTH QUARTER 2015 BUSINESS UNIT RESULTS

Hotel Group
Revenues were $314 million in the fourth quarter of 2015, an 18% increase compared with the fourth quarter 2014.  Adjusted EBITDA was $93 million, an 18% increase compared with the same period in 2014.  In constant currency, excluding acquisitions and the impact of the increase in the inter-segment licensing fee rate charged for use of the Wyndham brand trade name, revenues increased 6% and adjusted EBITDA increased 10%.  Results reflect higher royalty and management fees and growth in our Wyndham Rewards credit card program.

Fourth quarter domestic RevPAR increased 2.9%.  In constant currency, total system-wide RevPAR was flat compared with the fourth quarter of 2014, which reflects higher unit growth in lower RevPAR countries such as China. 

As of December 31, 2015, the Company's hotel system consisted of over 7,800 properties and 678,000 rooms, a 2.6% net room increase compared with the fourth quarter of 2014.  The development pipeline included 890 hotels and over 119,000 rooms, of which 60% were international and 70% were new construction.

Destination Network (formerly Vacation Exchange and Rentals)
Revenues were $310 million in the fourth quarter of 2015, flat compared with the fourth quarter of 2014. In constant currency, and excluding acquisitions and a divestiture in 2014, revenues increased 5%.

Exchange revenues were $146 million, down 3% compared with the fourth quarter of 2014. In constant currency, exchange revenues were up 1% compared with the prior year, as the average number of members increased 0.7% while exchange revenue per member was flat.

Vacation rental revenues were $144 million, flat compared with the fourth quarter of 2014.  In constant currency and excluding the impact of acquisitions and the divestiture, vacation rental revenues were up 8%, reflecting an 8.1% increase in transaction volume and flat average net price per vacation rental. 

Adjusted EBITDA for the fourth quarter of 2015 was $43 million, a 10% increase compared with the fourth quarter of 2014.  On a currency-neutral basis and excluding the impact of acquisitions and the divestiture, adjusted EBITDA increased 9% compared with the prior year period.

Vacation Ownership
Revenues were $706 million in the fourth quarter of 2015, a 6% increase over the fourth quarter of 2014.  In constant currency, revenues increased 7%.

Gross VOI sales were $507 million in the fourth quarter of 2015, an increase of 8% compared with the fourth quarter of 2014.  In constant currency, Gross VOI sales increased 9%.  Volume per guest (VPG) for the quarter increased 3.4% in constant currency and tour flow increased 4.7%.

Adjusted EBITDA for the fourth quarter of 2015 was $174 million, an increase of 1% compared with the fourth quarter of 2014.  On a currency-neutral basis and excluding the impact of the increase in the inter-segment licensing fee rate, adjusted EBITDA increased 5%, reflecting higher sales volume. 

OTHER ITEMS

  • The Company repurchased 2.2 million shares of common stock for $165 million during the fourth quarter of 2015. For the full-year 2015, the Company repurchased 7.9 million shares of common stock for $650 million. From January 1 through February 8, 2016, the Company repurchased an additional 1.6 million shares for $107 million.
  • The Company's Board of Directors approved a $1 billion increase in the share repurchase authorization. Including the increase, the Company's remaining share repurchase authorization totals $1.3 billion as of February 8, 2016.
  • Reported net interest expense in the fourth quarter of 2015 was $35 million, compared with $25 million in the fourth quarter of 2014, reflecting the $350 million 5.10% bond issued in September and the absence of a fixed-to-floating interest rate swap.

Balance Sheet Information as of December, 2015:

  • Cash and cash equivalents of $171 million, compared with $183 million at December 31, 2014
  • Vacation ownership contract receivables, net, of $2.7 billion, unchanged from December 31, 2014
  • Vacation ownership and other inventory of $1.3 billion, compared with $1.2 billion at December 31, 2014
  • Securitized vacation ownership debt of $2.1 billion, compared with $2.2 billion at December 31, 2014
  • Long-term debt of $3.1 billion, compared with $2.9 billion at December 31, 2014. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of December 31, 2015, compared with $1.3 billion at December 31, 2014.

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

OUTLOOK

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

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

  • Revenues of approximately $5.800 - $5.950 billion.
  • Adjusted EBITDA of approximately $1.375 - $1.400 billion.
  • Adjusted EPS of approximately $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, February 9, 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 "WYNQ415."  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 February 9, 2016.  A telephone replay will be available for approximately 10 days beginning at 12:00pm ET on February 9, 2016 at 800-723-0607.

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

About Wyndham Worldwide Corporation
One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with over 7,800 franchised hotels and 678,000 hotel rooms worldwide. Wyndham Destination Network is the world's largest provider of professionally managed, unique vacation accommodations with more than 112,000 vacation properties in over 100 countries, sending more than 13 million people annually to their desired destinations through its trusted, diverse network of brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 210 vacation ownership resorts serving approximately 897,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 38,000 associates globally. For more information, please visit www.wyndhamworldwide.com.

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

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

 















Table 1
















(1 of 2)


Wyndham Worldwide Corporation


OPERATING RESULTS OF REPORTABLE SEGMENTS


(In millions)


































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























The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income for the three months ended December 31, 2015 and 2014:





















Three Months Ended December 31, 






2015


2014






 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 



Hotel Group

$

314


$

94


$

267


$

77



Destination Network


310



44



311



2



Vacation Ownership


706



174



668



172



     Total Reportable Segments


1,330



312



1,246



251



Corporate and Other (a)


(19)



(37)



(15)



(36)



     Total Company

$

1,311


$

275


$

1,231


$

215



















Reconciliation of EBITDA to Net income




































Three Months Ended December 31, 









2015





2014



EBITDA





$

275





$

215



Depreciation and amortization





61






58



Interest expense





37






29



Interest income





(2)






(4)



Income before income taxes





179






132



Provision for income taxes





39






51



Net income





$

140





$

81



































(a) Includes the elimination of transactions between segments.  


















The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the three months ended December 31, 2015 and 2014 (for a description of adjustments by segment, see Table 7):






















Three Months Ended December 31, 






2015


2014








Adjusted 




Adjusted 






 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 



Hotel Group

$

314


$

93


$

267


$

79



Destination Network


310



43



311



39



Vacation Ownership


706



174



668



172



     Total Reportable Segments


1,330



310



1,246



290



Corporate and Other


(19)



(37)



(15)



(38)



     Total Company

$

1,311


$

273


$

1,231


$

252



































 

 















Table 1
















(2 of 2)


Wyndham Worldwide Corporation


OPERATING RESULTS OF REPORTABLE SEGMENTS


(In millions)


































The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile EBITDA to Net income for the twelve months ended December 31, 2015 and 2014:





















Twelve Months Ended December 31, 






2015


2014






 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 



Hotel Group

$

1,297


$

349


$

1,101


$

327



Destination Network


1,538



367



1,604



335



Vacation Ownership


2,772



687



2,638



660



     Total Reportable Segments


5,607



1,403



5,343



1,322



Corporate and Other (a)


(71)



(137)



(62)



(141)



     Total Company

$

5,536


$

1,266


$

5,281


$

1,181



















Reconciliation of EBITDA to Net income




































Twelve Months Ended December 31, 









2015





2014



EBITDA





$

1,266





$

1,181



Depreciation and amortization





234






233



Interest expense





125






113



Interest income





(9)






(10)



Income before income taxes





916






845



Provision for income taxes





304






316



Net income





$

612





$

529



































(a) Includes the elimination of transactions between segments.  






The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the twelve months ended December 31, 2015 and 2014 (for a description of adjustments by segment, see Table 7):






















Twelve Months Ended December 31, 






2015


2014








Adjusted 




Adjusted 






 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 



Hotel Group

$

1,297


$

376


$

1,101


$

340



Destination Network


1,538



370



1,604



380



Vacation Ownership


2,772



688



2,638



660



     Total Reportable Segments


5,607



1,434



5,343



1,380



Corporate and Other


(71)



(137)



(62)



(142)



     Total Company

$

5,536


$

1,297


$

5,281


$

1,238



































 

 















Table 2


Wyndham Worldwide Corporation


CONSOLIDATED STATEMENTS OF INCOME


(In millions, except per share data)






































 Three Months Ended 


 Twelve Months Ended 






 December 31, 


 December 31, 






2015


2014


2015


2014


Net revenues















Service and membership fees


$

562


$

508


$

2,519


$

2,431



Vacation ownership interest sales



403



385



1,604



1,485



Franchise fees



157



151



674



632



Consumer financing



109



108



427



427



Other




80



79



312



306


Net revenues



1,311



1,231



5,536



5,281


















Expenses
















Operating



594



542



2,461



2,262



Cost of vacation ownership interests 



43



42



165



171



Consumer financing interest



19



18



74



71



Marketing and reservation



189



188



813



802



General and administrative



199



189



761



755



Loss on sale and asset impairments



-



27



7



35



Restructuring



(2)



12



6



11



Depreciation and amortization



61



58



234



233


Total expenses



1,103



1,076



4,521



4,340


















Operating income



208



155



1,015



941


Other (income)/expense, net



(6)



(2)



(17)



(7)


Interest expense



37



29



125



113


Interest income



(2)



(4)



(9)



(10)


















Income before income taxes



179



132



916



845


Provision for income taxes



39



51



304



316


Net income



$

140


$

81


$

612


$

529


















Earnings per share















Basic



$

1.22


$

0.66


$

5.18


$

4.22



Diluted



1.21



0.65



5.14



4.18


















Weighted average shares outstanding















Basic




115



122



118



125



Diluted



116



124



119



127


































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 

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 








2012


609,300


608,300


618,100


627,400


 N/A 





















RevPAR

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








2012

$

29.73

$

37.23

$

40.39

$

31.86

$

34.80




















Destination Network














Average Number of Members (in 000s)

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








2012


3,684


3,670


3,672


3,670


3,674





















Exchange Revenue Per Member

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








2012

$

204.56

$

177.07

$

171.14

$

165.86

$

179.68





















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

2015


459


390


462


319


1,630








2014


429


376


455


293


1,552








2013


423


355


433


273


1,483








2012


418


325


390


259


1,392





















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

2015

$

361.20

$

513.14

$

642.00

$

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








2012

$

379.40

$

524.40

$

635.44

$

484.69

$

504.55




















Vacation Ownership (a)














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

2015

$

390,000

$

502,000

$

565,000

$

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








2012

$

384,000

$

460,000

$

502,000

$

435,000

$

1,781,000





















Tours (in 000s) (d)

2015


168


206


227


200


801








2014


170


208


225


191


794








2013


163


206


225


195


789








2012


148


186


207


183


724





















Volume Per Guest (VPG) (d)

2015

$

2,177

$

2,353

$

2,354

$

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








2012

$

2,414

$

2,361

$

2,315

$

2,225

$

2,324




















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


(a)

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


(b)

The 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 beginning in the second quarter of 2012 (see Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).


(d)

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











































ADDITIONAL DATA


































Year


Q1


Q2


Q3


Q4


Full Year


Hotel Group














Number of Properties

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 








2012


7,150


7,170


7,260


7,340


 N/A 




















Vacation Ownership














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

2015

$

46,000

$

60,000

$

78,000

$

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








2012

$

96,000

$

100,000

$

124,000

$

89,000

$

409,000




















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


(*)

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






































 

Table 3
(2 of 2)

Wyndham Worldwide Corporation
OPERATING STATISTICS

GLOSSARY OF TERMS

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 2012-2015. 

General

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

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

 

























Table 4




























Wyndham Worldwide Corporation


REVENUE DETAIL BY REPORTABLE SEGMENT


(In millions)


























































2015


2014







 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 


Hotel Group

























Royalties and Franchise Fees


$

74

$

96

$

103

$

87

$

361


$

68

$

88

$

100

$

83

$

339



Marketing, Reservation and Wyndham Rewards Revenues (a)


96


108


112


92


407



76


101


117


91


385



Hotel Management Reimbursable Revenues (b)


61


71


73


68


273



37


39


39


39


154



Intersegment Trademark Fees



12


15


16


15


57



9


11


11


10


41



Owned Hotel Revenues



25


20


16


19


79



24


20


18


20


81



Ancillary Revenues (c)



24


24


37


33


120



23


24


30


24


101



Total Hotel Group



292


334


357


314


1,297



237


283


315


267


1,101




























Destination Network

























Exchange Revenues



185


161


157


146


649



187


168


162


150


667



Rental Revenues



166


200


296


144


807



176


217


331


144


868



Ancillary Revenues (d)



18


22


23


20


82



16


17


19


17


69



Total Destination Network



369


383


476


310


1,538



379


402


512


311


1,604




























Vacation Ownership

























Vacation Ownership Interest Sales



336


417


448


403


1,604



303


382


415


385


1,485



Consumer Financing



104


105


108


109


427



105


106


108


108


427



Property Management Fees and Reimbursable Revenues


153


149


159


155


615



143


145


150


142


581



WAAM Fee-for-Service Commissions


12


19


23


28


83



33


30


18


16


98



Ancillary Revenues (e)



12


9


12


11


43



9


10


13


17


47



Total Vacation Ownership



617


699


750


706


2,772



593


673


704


668


2,638


Total Reportable Segments


$

1,278

$

1,416

$

1,583

$

1,330

$

5,607


$

1,209

$

1,358

$

1,531

$

1,246

$

5,343


























































2013


2012







 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 


Hotel Group

























Royalties and Franchise Fees


$

64

$

79

$

91

$

75

$

309


$

62

$

80

$

88

$

71

$

301



Marketing, Reservation and Wyndham Rewards Revenues (a)


73


92


118


83


365



68


99


98


80


345



Hotel Management Reimbursable Revenues (b)


25


38


37


35


135



21


22


25


23


91



Intersegment Trademark Fees



8


10


11


10


39



8


9


9


8


34



Owned Hotel Revenues



26


20


18


19


84



8


8


7


18


41



Ancillary Revenues (c)



26


23


22


23


95



18


15


22


23


78



Total Hotel Group



222


262


297


245


1,027



185


233


249


223


890




























Destination Network

























Exchange Revenues



193


168


158


150


669



188


162


157


153


660



Rental Revenues



166


192


293


138


789



159


170


248


125


702



Ancillary Revenues (d)



15


16


19


17


68



14


16


15


15


60



Total Destination Network



374


376


470


305


1,526



361


348


420


293


1,422




























Vacation Ownership

























Vacation Ownership Interest Sales



263


347


384


384


1,379



271


342


373


337


1,323



Consumer Financing



105


106


107


108


426



103


102


106


110


421



Property Management Fees



146


141


143


137


567



110


108


117


125


460



WAAM Fee-for-Service Commissions


24


30


33


20


107



12


11


4


6


33



Ancillary Revenues (e)



11


6


10


9


36



5


7


8


12


32



Total Vacation Ownership



549


630


677


658


2,515



501


570


608


590


2,269


Total Reportable Segments


$

1,145

$

1,268

$

1,444

$

1,208

$

5,068


$

1,047

$

1,151

$

1,277

$

1,106

$

4,581






















































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


(a)

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


(b)

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


(c)

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


(d)

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


(e)

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
































 





























Table 5


Wyndham Worldwide Corporation


SCHEDULE OF DEBT


(In millions)













































































December 31,


September 30,


June 30,


March 31,


December 31,

















2015


2015


2015


2015


2014
































Securitized vacation ownership debt (a)
















Term notes

$

1,891


$

1,843


$

1,841


$

2,090


$

1,962


Bank conduit facility (b)


239



267



253



98



203


Total securitized vacation ownership debt (c)


2,130



2,110



2,094



2,188



2,165


Less: Current portion of securitized vacation ownership debt


209



210



211



217



214


Long-term securitized vacation ownership debt

$

1,921


$

1,900


$

1,883


$

1,971


$

1,951


































Debt:
















   Revolving credit facility (due July 2020) (d)

$

7


$

20


$

23


$

14


$

25


   Commercial paper (e)


109



87



476



346



189


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


316



316



317



317



317


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


299



299



299



299



299


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


14



14



14



14



14


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


449



448



448



448



448


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


40



40



40



40



40


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


247



247



247



247



247


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


648



648



648



650



648


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


408



409



409



418



410


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


338



338



-



-



-


   Capital leases


153



158



161



161



170


   Other


50



49



70



70



81


Total long-term debt


3,078



3,073



3,152



3,024



2,888


Less: Current portion of long-term debt


44



44



52



53



47


Long-term debt

$

3,034


$

3,029


$

3,100


$

2,971


$

2,841
































(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 December 31, 2015, this facility had a remaining borrowing capacity of $411 million.


(c)

This debt is collateralized by $2,576 million, $2,582 million, $2,558 million, $2,609 million, and $2,629 million of underlying vacation ownership contract receivables and related assets as of December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014.


(d)

Represents a $1.5 billion revolving credit facility that expires in July 2020. As of December 31, 2015, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $109 million, the remaining borrowing capacity was $1.4 billion as of December 31, 2015.


(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.1 billion as of December 31, 2015.





 








Table 6









(1 of 2)


Wyndham Worldwide Corporation


BRAND SYSTEM DETAILS























As of and For the Three Months Ended December 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 

2,631

168,438

50.9%

$48.82

$24.86











Days Inn 

1,788

142,870

46.0%

$64.04

$29.43











Ramada 

839

118,132

50.2%

$72.84

$36.54











Wyndham Hotels and Resorts

225

48,753

56.6%

$108.79

$61.57











Howard Johnson 

393

42,888

46.7%

$60.92

$28.44











Baymont

410

32,667

46.8%

$66.11

$30.92











Travelodge 

411

30,188

44.6%

$62.65

$27.93











Microtel Inns & Suites by Wyndham

332

23,941

52.5%

$67.29

$35.30











Knights Inn 

386

23,560

41.7%

$47.21

$19.71











TRYP by Wyndham

121

17,355

61.0%

$78.94

$48.12











Wingate by Wyndham

151

13,780

57.0%

$87.38

$49.77











Hawthorn Suites by Wyndham

102

10,174

60.8%

$80.45

$48.89











Dolce

23

5,296

49.5%

$150.61

$74.59












Total Hotel Group

7,812

678,042

49.6%

$66.46

$32.98











Vacation Ownership







Wyndham Vacation Ownership resorts

213

24,329

N/A

N/A

N/A












Total Wyndham Worldwide

8,025

702,371


























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









Average Revenue





Number of 


Average 

Average Daily 

Per Available 


Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

Room (RevPAR)











Hotel Group








Super 8 

2,510

160,847

53.8%

$48.07

$25.85











Days Inn 

1,794

145,078

45.7%

$63.86

$29.18











Ramada 

837

115,923

51.1%

$78.04

$39.86











Howard Johnson 

429

45,919

46.7%

$62.82

$29.34











Wyndham Hotels and Resorts

195

43,865

58.0%

$116.50

$67.53











Travelodge 

421

30,989

45.0%

$63.71

$28.68











Baymont

369

29,727

47.1%

$64.64

$30.42











Knights Inn 

398

24,832

42.1%

$45.61

$19.19











Microtel Inns & Suites by Wyndham

323

23,138

56.1%

$67.28

$37.74











TRYP by Wyndham

119

16,965

59.5%

$84.73

$50.44











Wingate by Wyndham

153

13,923

58.2%

$84.83

$49.35











Hawthorn Suites by Wyndham

97

9,620

63.1%

$75.65

$47.72












Total Hotel Group

7,645

660,826

50.6%

$67.27

$34.06











Vacation Ownership







Wyndham Vacation Ownership resorts

203

23,644

N/A

N/A

N/A












Total Wyndham Worldwide

7,848

684,470














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




















 








Table 6









(2 of 2)


Wyndham Worldwide Corporation


BRAND SYSTEM DETAILS























As of and For the Year Ended December 31, 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 

2,631

168,438

57.0%

$50.51

$28.81











Days Inn 

1,788

142,870

50.9%

$67.26

$34.22











Ramada 

839

118,132

54.2%

$75.08

$40.67











Wyndham Hotels and Resorts

225

48,753

60.5%

$110.76

$66.96











Howard Johnson 

393

42,888

50.0%

$62.45

$31.24











Baymont

410

32,667

52.5%

$68.50

$35.95











Travelodge 

411

30,188

50.8%

$67.71

$34.39











Microtel Inns & Suites by Wyndham

332

23,941

57.9%

$69.23

$40.08











Knights Inn 

386

23,560

45.7%

$48.26

$22.03











TRYP by Wyndham

121

17,355

62.0%

$80.39

$49.84











Wingate by Wyndham

151

13,780

63.3%

$89.17

$56.43











Hawthorn Suites by Wyndham

102

10,174

66.5%

$81.00

$53.89











Dolce

23

5,296

55.4%

$150.03

$83.08












Total Hotel Group

7,812

678,042

54.5%

$68.39

$37.26











Vacation Ownership







Wyndham Vacation Ownership resorts

213

24,329

N/A

N/A

N/A












Total Wyndham Worldwide

8,025

702,371


























As of and For the Year Ended December 31, 2014









Average Revenue





Number of 


Average 

Average Daily 

 Per Available


Brand

Properties

Number of Rooms

Occupancy Rate

Rate (ADR)

 Room (RevPAR)











Hotel Group








Super 8 

2,510

160,847

57.2%

$50.86

$29.09











Days Inn 

1,794

145,078

51.0%

$65.68

$33.48











Ramada 

837

115,923

54.2%

$79.70

$43.22











Howard Johnson 

429

45,919

48.8%

$63.46

$30.96











Wyndham Hotels and Resorts

195

43,865

61.8%

$115.17

$71.14











Travelodge 

421

30,989

51.1%

$67.75

$34.62











Baymont

369

29,727

52.5%

$65.75

$34.51











Knights Inn 

398

24,832

44.9%

$46.67

$20.94











Microtel Inns & Suites by Wyndham

323

23,138

59.8%

$67.26

$40.23











TRYP by Wyndham

119

16,965

61.9%

$90.45

$55.97











Wingate by Wyndham

153

13,923

63.6%

$86.61

$55.05











Hawthorn Suites by Wyndham

97

9,620

65.5%

$76.59

$50.19












Total Hotel Group

7,645

660,826

54.5%

$68.94

$37.57











Vacation Ownership







Wyndham Vacation Ownership resorts

203

23,644

N/A

N/A

N/A












Total Wyndham Worldwide

7,848

684,470














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




















 

 

































Table 7


































(1 of 2)


Wyndham Worldwide Corporation


NON-GAAP RECONCILIATION


(In millions)



















































































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





































(2 of 2)


Wyndham Worldwide Corporation


NON-GAAP RECONCILIATION


(In millions)




























































































Executive


Venezuela 








Loss on Sale 





















Reported


Departure


Currency 


VAT 


Restructuring 


and Asset 


Legacy 


Adjusted 


Three months ended March 31, 2014


Net Revenues


EBITDA


Costs


Devaluation (b)


Adjustment (c)


Costs (d)


Impairments (e)


Adjustments (f)


EBITDA


Hotel Group


$

237


$

64


$

4


$

-


$

-


$

-


$

-


$

-


$

68


Destination Network



379



85



-



10



-



-



-



-



95


Vacation Ownership



593



115



-



-



-



-



-



-



115


Total Reportable Segments



1,209



264



4



10



-



-



-



-



278


Corporate and Other (a)



(16)



(34)



-



-



-



-



-



-



(34)


Total Company


$

1,193


$

230


$

4


$

10


$

-


$

-


$

-


$

-


$

244































Three months ended June 30, 2014





























Hotel Group


$

283


$

87


$

-


$

-


$

-


$

-


$

-


$

-


$

87


Destination Network



402



89



-



-



(2)



-



-



-



87


Vacation Ownership



673



185



-



-



-



-



-



-



185


Total Reportable Segments



1,358



361



-



-



(2)



-



-



-



359


Corporate and Other (a)



(15)



(35)



-



-



-



-



-



-



(35)


Total Company


$

1,343


$

326


$

-


$

-


$

(2)


$

-


$

-


$

-


$

324































Three months ended September 30, 2014





























Hotel Group


$

315


$

100


$

-


$

-


$

-


$

(1)


$

8


$

-


$

107


Destination Network



512



159



-



-



-



-



-



-



159


Vacation Ownership



704



188



-



-



-



-



-



-



188


Total Reportable Segments



1,531



447



-



-



-



(1)



8



-



454


Corporate and Other (a)



(17)



(36)



-



-



-



-



-



-



(36)


Total Company


$

1,514


$

411


$

-


$

-


$

-


$

(1)


$

8


$

-


$

418































Three months ended December 31, 2014





























Hotel Group


$

267


$

77


$

-


$

-


$

-


$

2


$

-


$

-


$

79


Destination Network



311



2



-



-



-



10



27



-



39


Vacation Ownership



668



172



-



-



-



-



-



-



172


Total Reportable Segments



1,246



251



-



-



-



12



27



-



290


Corporate and Other (a)



(15)



(36)



-



-



-



-



-



(2)



(38)


Total Company


$

1,231


$

215


$

-


$

-


$

-


$

12


$

27


$

(2)


$

252































Twelve months ended December 31, 2014





























Hotel Group


$

1,101


$

327


$

4


$

-


$

-


$

1


$

8


$

-


$

340


Destination Network



1,604



335



-



10



(2)



10



27



-



380


Vacation Ownership



2,638



660



-



-



-



-



-



-



660


Total Reportable Segments



5,343



1,322



4



10



(2)



11



35



-



1,380


Corporate and Other (a)



(62)



(141)



-



-



-



-



-



(1)



(142)


Total Company


$

5,281


$

1,181


$

4


$

10


$

(2)


$

11


$

35


$

(1)


$

1,238































Note: The sum of the quarters may not agree to the twelve months ended December 31, 2014 due to rounding.


(a)

Includes the elimination of transactions between segments.


(b)

Represents the devaluation of the official exchange rate of Venezuela.


(c)

Reversal of a reserve for value-added taxes.


(d)

Relates to (i) the reversal of a portion of a restructuring reserve established during the fourth quarter of 2013 and (ii) costs incurred as a result of various organizational realignment initiatives by the Company. 


(e)

Relates to (i) a loss on the sale of a business and a write-down of an equity investment at the Company's destination network business and (ii) a write-down of an investment in a joint venture at the Company's hotel group business. 


(f)

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







































 

 
















Table 8

















(1 of 4)



















Wyndham Worldwide Corporation


NON-GAAP FINANCIAL INFORMATION


(In millions, except per share data)
























Three Months Ended December 31, 2015



























 Restructuring 


 Foreign Tax 


As Adjusted






 As Reported 


Costs(a)


Credit  (c)


non-GAAP


Net revenues















Service and membership fees


$

562


$



$



$

562



Vacation ownership interest sales



403









403



Franchise fees



157









157



Consumer financing



109









109



Other




80









80


Net revenues



1,311



-



-



1,311



















Expenses
















Operating



594









594



Cost of vacation ownership interests 



43









43



Consumer financing interest



19









19



Marketing and reservation



189









189



General and administrative



199









199



Restructuring



(2)



2






-



Depreciation and amortization



61









61


Total expenses



1,103



2



-



1,105



















Operating income



208



(2)



-



206


Other (income)/expense, net



(6)









(6)


Interest expense



37









37


Interest income



(2)









(2)



















Income before income taxes



179



(2)



-



177


Provision for income taxes



39



(1)

(b)


26



64



















Net income



$

140


$

(1)


$

(26)


$

113



















Earnings per share















Basic



$

1.22


$

(0.01)


$

(0.22)


$

0.99



Diluted




1.21



(0.01)



(0.22)



0.98



















Weighted average shares outstanding















Basic




115



115



115



115



Diluted




116



116



116



116



















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



















Note: EPS amounts may not add due to rounding.


(a)

Relates to a reversal of a portion of restructuring reserves that were established in prior periods.


(b)

Relates to the tax effect of the adjustment.


(c)

Relates to the release of a valuation allowance on foreign tax credits.





 

























Table 8


























(2 of 4)




























Wyndham Worldwide Corporation


NON-GAAP FINANCIAL INFORMATION


(In millions, except per share data)

































Twelve Months Ended December 31, 2015




































Acquisition


Restructuring


Asset


Contract 


Foreign Tax


 As Adjusted  







 As Reported 


Costs(a)


 Costs (c)


Impairment (e)


Termination (f)


Credit (g)


non-GAAP


Net revenues

























Service and membership fees


$

2,519


$



$



$



$



$



$

2,519



Vacation ownership interest sales



1,604


















1,604



Franchise fees



674


















674



Consumer financing



427


















427



Other




312


















312


Net revenues




5,536



-



-



-



-



-



5,536




























Expenses

























Operating




2,461



(4)









(14)






2,443



Cost of vacation ownership interests 



165


















165



Consumer financing interest



74


















74



Marketing and reservation



813


















813



General and administrative



761


















761



Asset impairment



7









(7)









-



Restructuring



6






(6)












-



Depreciation and amortization



234


















234


Total expenses



4,521



(4)



(6)



(7)



(14)



-



4,490




























Operating income



1,015



4



6



7



14



-



1,046


Other (income)/expense, net



(17)


















(17)


Interest expense



125


















125


Interest income



(9)


















(9)




























Income before income taxes



916



4



6



7



14



-



947


Provision for income taxes



304



(1)

(b)


2

(d)


2

(d)


6

(d)


26



339




























Net income



$

612


$

5


$

4


$

5


$

8


$

(26)


$

608




























Earnings per share
























Basic



$

5.18


$

0.04


$

0.04


$

0.04


$

0.07


$

(0.22)


$

5.15



Diluted




5.14



0.04



0.04



0.04



0.07



(0.22)



5.11




























Weighted average shares outstanding



















Basic




118



118



118



118



118



118



118



Diluted




119



119



119



119



119



119



119




























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




























Note: EPS amounts may not add due to rounding.


(a)

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


(b)

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


(c)

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


(d)

Relates to the tax effect of the adjustment.


(e)

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


(f)

Relates to costs associated with the anticipated termination of a management contract within the Company's hotel group business.


(g)

Relates to the release of a valuation allowance on foreign tax credits.





 



















Table 8




















(3 of 4)






















Wyndham Worldwide Corporation


NON-GAAP FINANCIAL INFORMATION


(In millions, except per share data)



























Three Months Ended December 31, 2014




































Loss on Sale 













Legacy


Restructuring


 and Asset 


As Adjusted 







 As Reported 


Adjustments(a)


Costs(c)


Impairment (d)


non-GAAP


Net revenues


















Service fees and membership


$

508


$



$



$



$

508



Vacation ownership interest sales



385












385



Franchise fees



151












151



Consumer financing



108












108



Other




79












79


Net revenues



1,231



-



-



-



1,231






















Expenses



















Operating



542












542



Cost of vacation ownership interests 



42












42



Consumer financing interest



18












18



Marketing and reservation



188












188



General and administrative



189



2









191



Loss on sale and asset impairment



27









(27)



-



Restructuring



12






(12)






-



Depreciation and amortization



58












58


Total expenses



1,076



2



(12)



(27)



1,039






















Operating income



155



(2)



12



27



192


Other (income)/expense, net



(2)












(2)


Interest expense



29












29


Interest income



(4)












(4)






















Income before income taxes



132



(2)



12



27



169


Provision for income taxes



51



(1)

(b)


4

(b)


3

(b)


57






















Net income



$

81


$

(1)


$

8


$

24


$

112






















Earnings per share


















Basic



$

0.66


$

(0.01)


$

0.07


$

0.20


$

0.91



Diluted




0.65



(0.01)



0.06



0.20



0.90






















Weighted average shares outstanding


















Basic




122



122



122



122



122



Diluted




124



124



124



124



124




















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






















Note: EPS amounts may not add due to rounding.


(a)

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


(b)

Relates to the tax effect of the adjustment.


(c)

Relates to costs incurred as a result of organizational realignment initiatives at the Company's hotel group and destination network businesses.


(d)

Relates to a loss on the sale of a business and a write-down of an equity investment at the Company's destination network business.






















 




























Table 8





























(4 of 4)































Wyndham Worldwide Corporation


NON-GAAP FINANCIAL INFORMATION


(In millions, except per share data)




































Twelve Months Ended December 31, 2014







































Executive 


Venezuela 











Loss on sale 













Departure 


Currency 


Legacy


VAT 


Restructuring


and Asset


As Adjusted 







 As Reported 


Costs(a)


Devaluation(c)


Adjustments (d)


Adjustment (f)


Costs (g)


Impairments (h)


non-GAAP


Net revenues



























Service fees and membership


$

2,431


$



$



$



$



$



$



$

2,431



Vacation ownership interest sales



1,485





















1,485



Franchise fees



632





















632



Consumer financing



427





















427



Other




306





















306


Net revenues



5,281



-



-



-



-



-



-



5,281































Expenses




























Operating



2,262






(10)















2,252



Cost of vacation ownership interests 



171





















171



Consumer financing interest



71





















71



Marketing and reservation



802





















802



General and administrative



755



(4)






1



2









754



Loss on sale and asset impairments



35


















(35)



-



Restructuring



11















(11)






-



Depreciation and amortization



233





















233


Total expenses



4,340



(4)



(10)



1



2



(11)



(35)



4,283































Operating income



941



4



10



(1)



(2)



11



35



998


Other (income)/expense, net



(7)





















(7)


Interest expense



113












2









115


Interest income



(10)





















(10)































Income before income taxes



845



4



10



(1)



(4)



11



35



900


Provision for income taxes



316



1

(b)


1

(b)


1

(e)


(2)

(b)


4

(b)


6

(b)


327































Net income



$

529


$

3


$

9


$

(2)


$

(2)


$

7


$

29


$

573































Earnings per share



























Basic



$

4.22


$

0.02


$

0.07


$

(0.01)


$

(0.02)


$

0.06


$

0.23


$

4.57



Diluted




4.18



0.02



0.07



(0.01)



(0.02)



0.06



0.23



4.53































Weighted average shares outstanding



























Basic




125



125



125



125



125



125



125



125



Diluted




127



127



127



127



127



127



127



127































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































Note: EPS amounts may not add due to rounding.


(a)

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


(b)

Relates to the tax effect of the adjustment.


(c)

Represents the devaluation of the official exchange rate of Venezuela at the Company's destination network business.


(d)

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


(e)

Relates to the reversal of a state tax accrual.


(f)

Relates to the reversal of a reserve for value-added taxes at the Company's destination network business.


(g)

Relates to (i) costs incurred as a result of organizational realignment initiatives at the Company's hotel group and destination network businesses, partially offset by (ii) the reversal of a portion of a restructuring reserve of $1 million established during the fourth quarter of 2013.


(h)

Relates to (i) a loss on the sale of a business and a write-down of an equity investment at the Company's destination network business and (ii) a write-down of an investment in a joint venture at the Company's hotel group business.































 













Table 9


Wyndham Worldwide Corporation


NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION


(In millions)
















FREE CASH FLOW













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




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
















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



















Twelve Months Ended December 31, 









2015



2014




















Net cash provided by operating activities


$

991



$

984






Less: Property and equipment additions



(222)




(235)






Free cash flow



$

769



$

749


































GROSS VOI SALES



























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
















Year













2015


Q1

Q2

Q3

Q4

Full Year
















Gross VOI sales (*)


$

390

$

502

$

565

$

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
















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