EXHIBIT 99.1

  

Wyndham Worldwide Reports First Quarter 2016 Results

Increases Full Year EPS Guidance

 

PARSIPPANY, N.J. (April 26, 2016) – 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.

# # #

 

 

Investor and Media contact:

Margo C. Happer

Senior Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-6472

margo.happer@wyn.com

 

Barry Goldschmidt

Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-7703

barry.goldschmidt@wyn.com

 

 

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