Exhibit 99.1
Wyndham Worldwide Reports Fourth Quarter and Full Year 2009 Results
Company Triples Dividend Payout
Resumes Share Repurchase Program
PARSIPPANY, N.J. (February 10, 2010)— Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months and year ended December 31, 2009. Separately, the Company also announced an increase in its quarterly cash dividend and that it plans to resume its share repurchase program.
FOURTH QUARTER and FULL-YEAR HIGHLIGHTS:
Wyndham Worldwide generated fourth quarter diluted earnings per share (EPS) of $0.40, compared with Company-issued guidance of $0.35 — $0.38. For the year ended December 31, 2009, the Company generated net cash from operating activities of approximately $690 million, compared with $109 million in 2008.
“We are pleased to report solid earnings and increasing free cash flow for the quarter and the year, and to announce an increase in our dividend along with our intention to resume our share repurchase program. While continuing high unemployment and economic uncertainty created a difficult operating environment, our results reflect resilient business models and strong execution,” said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. “Going forward, we remain focused on cash flow generation, transforming the Company by rebalancing our worldwide business portfolio to our fee-for-service businesses and positioning our businesses for future earnings growth.”
Increases Quarterly Dividend Payout
The Company’s Board of Directors authorized an increase of the quarterly cash dividend to $0.12 from $0.04 per share, beginning with the dividend that is expected to be declared in the first quarter of 2010. With this increase, the dividend is equivalent to an annual rate of $0.48 per share.
Resumes Share Repurchase Program
The Company plans to resume repurchase of its common stock under its existing $200 million stock repurchase program, which currently has $157 million remaining capacity. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. Repurchases may be conducted in the open market or in privately negotiated transactions.
FOURTH QUARTER 2009 OPERATING RESULTS
Revenues for the fourth quarter of 2009 were $913 million, relatively flat compared with the prior-year period. Net income for the fourth quarter of 2009 was $73 million, or $0.40 diluted EPS, compared with a fourth quarter of 2008 net loss of $1.4 billion, or $7.63 loss per diluted share. The prior-year period includes the after-tax impact of $1.4 billion, or $8.10 per diluted share, of goodwill impairments, foreign currency losses, restructuring costs and legacy items. Excluding these items, adjusted net income would have been $84 million, or $0.47 diluted adjusted EPS for the fourth quarter of 2008.
FULL YEAR 2009 OPERATING RESULTS
Revenues for full year 2009 were $3.8 billion, a decline of 12% over the prior-year period, reflecting the following:
| | • | | Lodging revenues were $660 million, a 12% decrease compared with 2008, primarily resulting from a global decline in revenue per available room (RevPAR). |
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| | • | | Exchange and Rentals revenues were $1.2 billion, an 8% decrease compared with 2008, primarily resulting from unfavorable foreign exchange rate movements. In constant currency, revenues declined 2%. |
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| | • | | Vacation Ownership revenues were $1.9 billion, a 15% decrease compared with 2008, primarily resulting from the Company’s previously announced initiative to reduce capital deployed in the business, which included sales office closures and the elimination of certain marketing programs that resulted in fewer tours. |
Net income for full year 2009 was $293 million, or $1.61 diluted EPS, compared with a prior-year period net loss of $1.1 billion, or $6.05 loss per diluted share. Adjusted net income for full year 2009 was $327 million, or $1.80 diluted EPS, compared with adjusted net income of $388 million, or $2.18 diluted adjusted EPS for full year 2008. Adjusted net income for full year 2009 excludes the after-tax impact of $34 million, or $0.19 per diluted share, of restructuring costs and legacy items. Adjusted net income for the prior-year period excludes the after-tax impact of $1.5 billion, or $8.23 per diluted share, of goodwill and other impairments, foreign currency losses, restructuring costs and legacy items.
FOURTH QUARTER 2009 BUSINESS UNIT RESULTS
Wyndham Hotel Group
Revenues were $149 million in the fourth quarter of 2009, a decline of 12% compared with the fourth quarter of 2008, primarily reflecting the global RevPAR decline.
System-wide RevPAR declined 11.9% in the fourth quarter of 2009. In constant currency, fourth quarter 2009 system-wide RevPAR decreased 13.3%, reflecting declines of 13.8% and 15.4% in domestic and international RevPAR, respectively.
Fourth quarter 2009 EBITDA was $32 million, compared with $38 million in the fourth quarter of 2008, which included a $16 million non-cash impairment charge. The year-over-year change reflects the global RevPAR decline, increased bad debt reserve primarily related to the hotel management business, and a non-cash impairment charge associated with an underperforming joint venture in the hotel management business, partially offset by cost containment initiatives.
As of December 31, 2009, the Company’s hotel system consisted of approximately 7,110 properties and 597,700 rooms, of which 22% were international. The development pipeline included approximately 950 hotels and 108,100 rooms, of which 51% were new construction and 43% were international.
Wyndham Exchange and Rentals
Revenues were $258 million in the fourth quarter of 2009, a 3% increase compared with the fourth quarter of 2008. In constant currency, revenues were relatively flat.
Annual dues and exchange revenues were $106 million, a 5% increase from the prior-year period. In constant currency, revenues increased $2 million, or 2% compared with the fourth quarter of 2008, driven by a 2% growth in the average number of members.
Vacation rental revenues were $122 million, an 8% increase from the prior-year period. In constant currency, revenues increased $2 million, or 2%, compared with the fourth quarter of 2008, primarily driven by a 3% increase in average price per vacation rental, partially offset by a 1% decrease in rental transaction volume.
Ancillary revenues were $30 million, a 17% decrease from the fourth quarter of 2008. In constant currency, revenues decreased 19% due primarily to lower fees generated from programs with affiliated resorts and our termination of a low margin travel service contract.
Fourth quarter 2009 EBITDA was $48 million, compared with a loss of $4 million in the fourth quarter of 2008, which included $67 million of asset impairments, foreign currency conversion losses and restructuring costs. Excluding these items and an unfavorable 2009 net effect of foreign currency of $15 million, 2009 EBITDA was flat, compared with 2008 adjusted EBITDA.
Wyndham Vacation Ownership
Driven by the previously announced initiative to reduce capital deployed in this business, gross vacation ownership interest (VOI) sales declined 21%, from the prior-year period, to $343 million in the fourth quarter of 2009. The year-over-year change reflects a 36% increase in volume per guest which partially offset the planned reduction in tour flow of 41%.
Total segment revenues were $508 million in the fourth quarter of 2009, a 3% increase from the fourth quarter of 2008. This change was driven by a decline in our provision for loan losses, a favorable impact from the percentage-of-completion (POC) method of accounting and higher ancillary revenue, partially offset by lower VOI sales. Under the POC method of accounting for VOI sales, the Company recognized $47 million of previously deferred revenue during the fourth quarter of 2009, compared with $14 million in the fourth quarter 2008.
EBITDA for the fourth quarter of 2009 was $132 million, compared with a loss of $1.3 billion in the fourth quarter of 2008, which included $1.4 billion of goodwill, other impairments and restructuring costs. Excluding these items, 2009 EBITDA increased $41 million, compared with the prior-year period, reflecting the net impact of the planned reduction in the VOI business and its related expenses, a lower provision for loan losses, and the impact from the net increase in the recognition of revenue previously deferred under the POC method of accounting.
Other Items
Net interest expense in the fourth quarter of 2009 was $33 million, a $15 million increase from the fourth quarter of 2008. The increase reflected lower capitalized interest and long-term debt issuances in May 2009, the proceeds of which were used primarily to reduce revolving credit facility borrowings, which had a lower interest rate.
Balance Sheet Information as of December 31, 2009:
| | • | | Cash and cash equivalents of approximately $155 million compared with $135 million at December 31, 2008 |
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| | • | | Vacation ownership contract receivables, net, of $3.1 billion compared with $3.3 billion at December 31, 2008 |
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| | • | | Vacation ownership and other inventory of $1.3 billion, unchanged from December 31, 2008 |
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| | • | | Securitized vacation ownership debt of $1.5 billion compared with $1.8 billion at December 31, 2008 |
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| | • | | Other debt of $2.0 billion, unchanged from December 31, 2008; remaining borrowing capacity on the revolving credit facility was approximately $870 million compared with approximately $290 million as of December 31, 2008 |
A schedule of debt is included in the financial tables section of this press release.
Guidance
The Company’s full-year 2010 guidance is:
| | • | | Revenues of $3.5 — $3.9 billion |
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| | • | | Adjusted EBITDA of $775 — $800 million |
The guidance reflects assumptions used for internal planning purposes. All guidance excludes legacy items and restructuring costs, if any, which may have a positive or negative impact on reported results. If economic conditions improve or deteriorate
materially from current levels, these assumptions and our guidance may change materially. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA to the most directly comparable GAAP measure because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to our financial results.
Conference Call Information
Wyndham Worldwide Corporation will provide a webcast of its conference call to discuss the Company’s fourth quarter and full year 2009 financial results on Wednesday, February 10, 2010 at 8:30 a.m. ET. Listeners can access the webcast live through the company’s website atwww.wyndhamworldwide.com/investors/. The conference call also may be accessed by dialing(800) 369-2052and 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 February 10, 2010. A telephone replay will be available for approximately 90 days beginning at 12:00pm ET on February 10, 2010 at (866) 490-2538.
Presentation of Financial Information
Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release.
About Wyndham Worldwide
As one of the world’s largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses approximately 7,110 franchised hotels and approximately 597,700 hotel rooms worldwide. Wyndham Exchange and Rentals offers leisure travelers, including its 3.8 million members, access to over 65,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of over 155 vacation ownership resorts serving over 820,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs approximately 25,000 employees globally.
For more information about Wyndham Worldwide, please visit the Company’s web site atwww.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 for the future, including, without limitation the information under the “Guidance”, which are 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, related financial and operating measures, dividend policy and share repurchases.
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, changes in interest expense relating to the Company’s existing or future indebtedness, the economic environment for the hospitality industry, the impact of war and terrorist activity, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2009. 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@wyndhamworldwide.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/(loss) before depreciation and amortization, interest expense (excluding consumer financing interest), interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company’s Consolidated Statements of Operations. The Company believes that EBITDA is a useful measure of performance for the Company’s industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of the Company’s operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.
The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income/(loss) for the three and twelve months ended December 31, 2009 and 2008:
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | |
| | | 2009 | | | 2008 | |
| | | Net Revenues | | | EBITDA | | | Net Revenues | | | EBITDA (f) | |
| Lodging | | $ | 149 | | | $ | 32 | (c) | | $ | 170 | | | $ | 38 | (g) |
| Vacation Exchange and Rentals | | | 258 | | | | 48 | | | | 250 | | | | (4) | (h) |
| Vacation Ownership | | | 508 | | | | 132 | (d) | | | 492 | | | | (1,321) | (i) |
| | | | | | | | | | | | | |
| Total Reportable Segments | | | 915 | | | | 212 | | | | 912 | | | | (1,287 | ) |
Corporate and Other(a) (b) | | | (2 | ) | | | (18 | ) | | | (1 | ) | | | 7 | |
| | | | | | | | | | | | | |
| Total Company | | $ | 913 | | | $ | 194 | | | $ | 911 | | | $ | (1,280 | ) |
| | | | | | | | | | | | | |
| Reconciliation of EBITDA to Net Income/(Loss) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| EBITDA | | | | | | $ | 194 | | | | | | | $ | (1,280 | ) |
| Depreciation and amortization | | | | | | | 44 | | | | | | | | 47 | |
| Interest expense | | | | | | | 35 | | | | | | | | 22 | |
| Interest income | | | | | | | (2 | ) | | | | | | | (4 | ) |
| | | | | | | | | | | | | | | |
| Income/(loss) before income taxes | | | | | | | 117 | | | | | | | | (1,345 | ) |
| Provision for income taxes | | | | | | | 44 | | | | | | | | 11 | |
| | | | | | | | | | | | | | | |
| Net income/(loss) | | | | | | $ | 73 | | | | | | | $ | (1,356 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 31, | |
| | | 2009 | | | 2008 | |
| | | Net Revenues | | | EBITDA (j) | | | Net Revenues | | | EBITDA (l) | |
| Lodging | | $ | 660 | | | $ | 175 | (c) | | $ | 753 | | | $ | 218 | (g) |
| Vacation Exchange and Rentals | | | 1,152 | | | | 287 | | | | 1,259 | | | | 248 | (h) |
| Vacation Ownership | | | 1,945 | | | | 387 | (k) | | | 2,278 | | | | (1,074 | ) (i) (m) |
| | | | | | | | | | | | | |
| Total Reportable Segments | | | 3,757 | | | | 849 | | | | 4,290 | | | | (608 | ) |
Corporate and Other(a) (e) | | | (7 | ) | | | (71 | ) | | | (9 | ) | | | (27 | ) |
| | | | | | | | | | | | | |
| Total Company | | $ | 3,750 | | | $ | 778 | | | $ | 4,281 | | | $ | (635 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of EBITDA to Net Income/(Loss) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| EBITDA | | | | | | $ | 778 | | | | | | | $ | (635 | ) |
| Depreciation and amortization | | | | | | | 178 | | | | | | | | 184 | |
| Interest expense | | | | | | | 114 | | | | | | | | 80 | |
| Interest income | | | | | | | (7 | ) | | | | | | | (12 | ) |
| | | | | | | | | | | | | | | |
| Income/(loss) before income taxes | | | | | | | 493 | | | | | | | | (887 | ) |
| Provision for income taxes | | | | | | | 200 | | | | | | | | 187 | |
| | | | | | | | | | | | | | | |
| Net income/(loss) | | | | | | $ | 293 | | | | | | | $ | (1,074 | ) |
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| (a) | | Includes the elimination of transactions between segments. |
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| (b) | | Includes $14 million ($7 million, net of tax) of a net benefit during the three months ended December 31, 2008 related to the resolution of and adjustment to certain contingent liabilities and assets. |
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| (c) | | Includes a non-cash impairment charge of $6 million ($3 million, net of tax) to reduce the value of an underperforming joint venture in the Company’s lodging property management business. |
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| (d) | | Includes (i) restructuring costs of $1 million ($1 million, net of tax) and (ii) a non-cash impairment charge of $1 million ($1 million, net of tax) to reduce the value of assets held for sale related to a vacation ownership property that is no longer consistent with the Company’s development plans. |
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| (e) | | Includes $6 million ($6 million, net of tax) of a net expense and $18 million ($6 million, net of tax) of a net benefit during the twelve months ended December 31, 2009 and 2008, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets. |
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| (f) | | Includes restructuring costs of $7 million and $66 million for Vacation Exchange and Rentals and Vacation Ownership, respectively. The after-tax impact of such costs is $45 million. |
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| (g) | | Includes a non-cash impairment charge of $16 million ($10 million, net of tax) related to the write down of franchise agreements of one of the Company’s brands. |
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| (h) | | Includes (i) non-cash impairment charges of $36 million ($28 million, net of tax) due to trademark and fixed asset write downs related to the Company’s vacation rentals businesses and the write-off of the Company’s investment in a joint venture and (ii) a cash charge of $24 million ($24 million, net of tax) due to foreign currency losses. |
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| (i) | | Includes (i) a non-cash goodwill impairment charge of $1,342 million ($1,337 million, net of tax) to reflect reduced future cash flow estimates and (ii) a non-cash impairment charge of $4 million ($3 million, net of tax) related to the termination of a development project. |
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| (j) | | Includes restructuring costs of $3 million, $6 million, $37 million and $1 million for Lodging, Vacation Exchange and Rentals, Vacation Ownership and Corporate and Other, respectively. The after-tax impact of such costs is $29 million. |
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| (k) | | Includes non-cash impairment charges of $9 million ($7 million, net of tax) to reduce the value of certain vacation ownership properties and related assets held for sale that are no longer consistent with the Company’s development plans. |
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| (l) | | Includes restructuring costs of $4 million, $9 million and $66 million for Lodging, Vacation Exchange and Rentals and Vacation Ownership, respectively. The after-tax impact of such costs is $49 million. |
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| (m) | | Includes a non-cash impairment charge of $28 million ($17 million, net of tax) due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand. |
Table 2
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Net revenues | | | | | | | | | | | | | | | | |
| Service fees and membership | | $ | 371 | | | $ | 360 | | | $ | 1,613 | | | $ | 1,705 | |
| Vacation ownership interest sales | | | 287 | | | | 309 | | | | 1,053 | | | | 1,463 | |
| Franchise fees | | | 98 | | | | 113 | | | | 440 | | | | 514 | |
| Consumer financing | | | 109 | | | | 112 | | | | 435 | | | | 426 | |
| Other | | | 48 | | | | 17 | | | | 209 | | | | 173 | |
| | | | | | | | | | | | | |
| Net revenues | | | 913 | | | | 911 | | | | 3,750 | | | | 4,281 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
| Operating | | | 356 | | | | 337 | | | | 1,501 | | | | 1,622 | |
| Cost of vacation ownership interests | | | 47 | | | | 52 | | | | 183 | | | | 278 | |
| Consumer financing interest | | | 37 | | | | 37 | | | | 139 | | | | 131 | |
| Marketing and reservation | | | 137 | | | | 171 | | | | 560 | | | | 830 | |
General and administrative(a) (b) | | | 136 | | | | 124 | | | | 533 | | | | 561 | |
| Goodwill and other impairments | | | 7 | (c) | | | 1,398 | (d) | | | 15 | (c) | | | 1,426 | (d) |
Restructuring costs(e) | | | 1 | | | | 73 | | | | 47 | | | | 79 | |
| Depreciation and amortization | | | 44 | | | | 47 | | | | 178 | | | | 184 | |
| | | | | | | | | | | | | |
| Total expenses | | | 765 | | | | 2,239 | | | | 3,156 | | | | 5,111 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income/(loss) | | | 148 | | | | (1,328 | ) | | | 594 | | | | (830 | ) |
| Other income, net | | | (2 | ) | | | (1 | ) | | | (6 | ) | | | (11 | ) |
| Interest expense | | | 35 | | | | 22 | | | | 114 | | | | 80 | |
| Interest income | | | (2 | ) | | | (4 | ) | | | (7 | ) | | | (12 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income/(loss) before income taxes | | | 117 | | | | (1,345 | ) | | | 493 | | | | (887 | ) |
| Provision for income taxes | | | 44 | | | | 11 | | | | 200 | | | | 187 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net income/(loss) | | $ | 73 | | | $ | (1,356 | ) | | $ | 293 | | | $ | (1,074 | ) |
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| | | | | | | | | | | | | | | | | |
Earnings/(losses) per share | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.41 | | | $ | (7.63 | ) | | $ | 1.64 | | | $ | (6.05 | ) |
| Diluted | | | 0.40 | | | | (7.63 | ) | | | 1.61 | | | | (6.05 | ) |
| | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 179 | | | | 178 | | | | 179 | | | | 178 | |
| Diluted | | | 184 | | | | 178 | | | | 182 | | | | 178 | |
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| (a) | | Includes (i) $14 million ($7 million, net of tax) of a net benefit during the three months ended December 31, 2008 and $6 million ($6 million, net of tax) of a net expense and $18 million ($6 million, net of tax) of a net benefit during the twelve months ended December 31, 2009 and 2008, respectively, related to the resolution of and loss to certain contingent liabilities and assets. |
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| (b) | | Includes a cash charge of $24 million ($24 million, net of tax) for Vacation Exchange and Rentals due to foreign currency losses during the three and twelve months ended December 31, 2008. |
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| (c) | | Represents (i) a non-cash impairment charge of $6 million ($3 million, net of tax) to reduce the value of an underperforming joint venture in the Company’s lodging property management business and (ii) a non-cash impairment charge of $1 million ($1 million, net of tax) to reduce the value of assets held for sale related to a vacation ownership property that is no longer consistent with the Company’s development plans during the three and twelve months ended December 31, 2009. The twelve months ended December 31, 2009 also includes non-cash impairment charges of $8 million ($6 million, net of tax) to reduce the value of certain other vacation ownership properties and related assets held for sale that are no longer consistent with the Company’s development plans. |
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| (d) | | Represents (i) a non-cash goodwill impairment charge of $1,342 million ($1,337 million, net of tax) for Vacation Ownership to reflect reduced future cash flow estimates, (ii) non-cash impairment charges of $36 million ($28 million, net of tax) for Vacation Exchange and Rentals due to trademark and fixed asset write downs related to the Company’s vacation rentals businesses and the write-off of the Company’s investment in a joint venture, (iii) a non-cash impairment charge of $16 million ($10 million, net of tax) for Lodging related to the write down of franchise agreements of one of the Company’s brands and (iv) a non-cash impairment charge of $4 million ($3 million, net of tax) for Vacation Ownership related to the termination of a development project during the three and twelve months ended December 31, 2008. The twelve months ended December 31, 2008 also includes a non-cash impairment charge of $28 million ($17 million, net of tax) for Vacation Ownership due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand. |
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| (e) | | Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during 2008. Such amounts, net of tax, were $1 million and $29 million during the three and twelve months ended December 31, 2009, respectively, and $45 million and $49 million during the three and twelve months ended December 31, 2008, respectively. |
Table 3
(1 of 3)
Wyndham Worldwide Corporation
OPERATING STATISTICS
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| | | Year | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | Full Year | |
Lodging(a) | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Rooms (b) | | | 2009 | | | | 588,500 | | | | 590,200 | | | | 590,900 | | | | 597,700 | | | | N/A | |
| | | | 2008 | | | | 551,100 | | | | 551,500 | | | | 583,400 | | | | 592,900 | | | | N/A | |
| | | | 2007 | | | | 539,300 | | | | 541,700 | | | | 540,900 | | | | 550,600 | | | | N/A | |
| | | | 2006 | | | | 525,500 | | | | 535,900 | | | | 533,700 | | | | 543,200 | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| RevPAR | | | 2009 | | | $ | 27.69 | | | $ | 32.38 | | | $ | 34.81 | | | $ | 26.47 | | | $ | 30.34 | |
| | | | 2008 | | | $ | 32.21 | | | $ | 38.87 | | | $ | 41.93 | | | $ | 30.03 | | | $ | 35.74 | |
| | | | 2007 | | | $ | 31.35 | | | $ | 38.35 | | | $ | 43.10 | | | $ | 33.09 | | | $ | 36.48 | |
| | | | 2006 | | | $ | 30.45 | | | $ | 36.97 | | | $ | 40.82 | | | $ | 31.41 | | | $ | 34.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Exchange and Rentals | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Number of Members (in 000s) | | | 2009 | | | | 3,789 | | | | 3,795 | | | | 3,781 | | | | 3,765 | | | | 3,782 | |
| | | | 2008 | | | | 3,632 | | | | 3,682 | | | | 3,673 | | | | 3,693 | | | | 3,670 | |
| | | | 2007 | | | | 3,474 | | | | 3,506 | | | | 3,538 | | | | 3,588 | | | | 3,526 | |
| | | | 2006 | | | | 3,292 | | | | 3,327 | | | | 3,374 | | | | 3,429 | | | | 3,356 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Dues and Exchange Revenue Per Member | | | 2009 | | | $ | 134.38 | | | $ | 117.59 | | | $ | 116.76 | | | $ | 112.10 | | | $ | 120.22 | |
| | | | 2008 | | | $ | 150.84 | | | $ | 128.91 | | | $ | 124.51 | | | $ | 109.56 | | | $ | 128.37 | |
| | | | 2007 | | | $ | 155.60 | | | $ | 132.33 | | | $ | 131.38 | | | $ | 124.59 | | | $ | 135.85 | |
| | | | 2006 | | | $ | 152.10 | | | $ | 130.37 | | | $ | 132.31 | | | $ | 128.13 | | | $ | 135.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Vacation Rental Transactions (in 000s) | | | 2009 | | | | 387 | | | | 324 | | | | 367 | | | | 278 | | | | 1,356 | |
| | | | 2008 | | | | 387 | | | | 319 | | | | 360 | | | | 282 | | | | 1,347 | |
| | | | 2007 | | | | 398 | | | | 326 | | | | 360 | | | | 293 | | | | 1,376 | |
| | | | 2006 | | | | 385 | | | | 310 | | | | 356 | | | | 293 | | | | 1,344 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Net Price Per Vacation Rental | | | 2009 | | | $ | 335.54 | | | $ | 422.00 | | | $ | 505.82 | | | $ | 436.79 | | | $ | 423.04 | |
| | | | 2008 | | | $ | 412.74 | | | $ | 477.63 | | | $ | 553.69 | | | $ | 400.09 | | | $ | 463.10 | |
| | | | 2007 | | | $ | 349.73 | | | $ | 415.71 | | | $ | 506.78 | | | $ | 426.93 | | | $ | 422.83 | |
| | | | 2006 | | | $ | 312.51 | | | $ | 374.91 | | | $ | 442.75 | | | $ | 356.16 | | | $ | 370.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Ownership | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross Vacation Ownership Interest Sales (in 000s) | | | 2009 | | | $ | 280,000 | | | $ | 327,000 | | | $ | 366,000 | | | $ | 343,000 | | | $ | 1,315,000 | |
| | | | 2008 | | | $ | 458,000 | | | $ | 532,000 | | | $ | 566,000 | | | $ | 432,000 | | | $ | 1,987,000 | |
| | | | 2007 | | | $ | 430,000 | | | $ | 523,000 | | | $ | 552,000 | | | $ | 488,000 | | | $ | 1,993,000 | |
| | | | 2006 | | | $ | 357,000 | | | $ | 434,000 | | | $ | 482,000 | | | $ | 469,000 | | | $ | 1,743,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Tours | | | 2009 | | | | 137,000 | | | | 164,000 | | | | 173,000 | | | | 142,000 | | | | 617,000 | |
| | | | 2008 | | | | 255,000 | | | | 314,000 | | | | 334,000 | | | | 240,000 | | | | 1,143,000 | |
| | | | 2007 | | | | 240,000 | | | | 304,000 | | | | 332,000 | | | | 268,000 | | | | 1,144,000 | |
| | | | 2006 | | | | 208,000 | | | | 273,000 | | | | 312,000 | | | | 254,000 | | | | 1,046,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Volume Per Guest (VPG) | | | 2009 | | | $ | 1,866 | | | $ | 1,854 | | | $ | 1,944 | | | $ | 2,210 | | | $ | 1,964 | |
| | | | 2008 | | | $ | 1,668 | | | $ | 1,583 | | | $ | 1,550 | | | $ | 1,630 | | | $ | 1,602 | |
| | | | 2007 | | | $ | 1,607 | | | $ | 1,596 | | | $ | 1,545 | | | $ | 1,690 | | | $ | 1,606 | |
| | | | 2006 | | | $ | 1,475 | | | $ | 1,426 | | | $ | 1,434 | | | $ | 1,623 | | | $ | 1,486 | |
| | |
| Note:Full year amounts may not foot across due to rounding. |
| |
| (a) | | Quarterly drivers in the Lodging segment include the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008) and Baymont Inn & Suites (April 2006) from their acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis. |
| |
| (b) | | Numbers include affiliated rooms from the fourth quarter of 2006 forward. |
Table 3
(2 of 3)
Wyndham Worldwide Corporation
ADDITIONAL DATA
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | Full Year | |
Lodging(a) | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Properties (b) | | | 2009 | | | | 6,990 | | | | 7,020 | | | | 7,040 | | | | 7,110 | | | | N/A | |
| | | | 2008 | | | | 6,550 | | | | 6,560 | | | | 6,970 | | | | 7,040 | | | | N/A | |
| | | | 2007 | | | | 6,450 | | | | 6,460 | | | | 6,460 | | | | 6,540 | | | | N/A | |
| | | | 2006 | | | | 6,300 | | | | 6,440 | | | | 6,420 | | | | 6,470 | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Ownership | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred Revenues (in 000s) (c) | | | 2009 | | | $ | 66,516 | | | $ | 37,140 | | | $ | 36,102 | | | $ | 46,784 | | | $ | 186,543 | |
| | | | 2008 | | | $ | (81,716 | ) | | $ | (5,240 | ) | | $ | (2,023 | ) | | $ | 13,870 | | | $ | (75,108 | ) |
| | | | 2007 | | | $ | 3,906 | | | $ | (4,908 | ) | | $ | 506 | | | $ | (21,092 | ) | | $ | (21,588 | ) |
| | | | 2006 | | | $ | 12,708 | | | $ | (221 | ) | | $ | (23,491 | ) | | $ | (10,675 | ) | | $ | (21,679 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Provision for Loan Losses (in 000s)(d) | | | 2009 | | | $ | 107,202 | | | $ | 121,641 | | | $ | 117,111 | | | $ | 103,115 | | | $ | 449,069 | |
| | | | 2008 | | | $ | 82,344 | | | $ | 112,669 | | | $ | 118,609 | | | $ | 136,090 | | | $ | 449,712 | |
| | | | 2007 | | | $ | 60,869 | | | $ | 75,032 | | | $ | 85,762 | | | $ | 83,644 | | | $ | 305,307 | |
| | | | 2006 | | | $ | 61,242 | | | $ | 55,872 | | | $ | 63,213 | | | $ | 78,680 | | | $ | 259,007 | |
| | |
| Note:Full year amounts may not foot across due to rounding. |
| |
| (a) | | Information includes the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008) and Baymont Inn & Suites (April 2006) from their acquisition dates forward. Therefore, the data is not presented on a comparable basis. |
| |
| (b) | | Numbers include affiliated hotels from the fourth quarter of 2006 forward. |
| |
| (c) | | Represents the revenue that is deferred under the percentage of completion method of accounting. Under the percentage of completion method of accounting, a portion of the total revenue from a vacation ownership contract sale is not recognized if the construction of the vacation resort has not yet been fully completed. This revenue will be recognized in future periods in proportion to the costs incurred as compared to the total expected costs for completion of construction of the vacation resort. Positive amounts represent the recognition of previously deferred revenues. |
| |
| (d) | | 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
(3 of 3)
Wyndham Worldwide Corporation
OPERATING STATISTICS
GLOSSARY OF TERMS
Lodging
Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, (ii) properties affiliated with Wyndham Hotels and Resorts brand for which we receive a fee for reservation and/or other services provided or (iii) properties managed under a joint venture.
Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.
Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.
RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR. Comparable RevPAR represents RevPAR of hotels which are included in both periods.
Vacation Exchange and Rentals
Average Number of Members: Represents members in our vacation exchange programs who pay annual membership dues. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with our vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related products and services.
Annual Dues and Exchange Revenue Per Member: Represents total revenues from annual membership dues and exchange fees generated for the period divided by the average number of vacation exchange members during the year.
Vacation Rental Transactions: Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. In our European vacation rentals businesses, one rental transaction is recorded each time a standard one-week rental is booked; however, in the United States, one rental transaction is recorded each time a vacation rental stay is booked, regardless of whether it is less than or more than one week.
Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers divided by the number of rental transactions.
Vacation Ownership
Gross Vacation Ownership Interest Sales: Represents gross sales of vacation ownership interests (including tele-sales upgrades, which are a component of upgrade sales) before deferred sales and loan loss provisions.
Tours: Represents the number of tours taken by guests in our efforts to sell vacation ownership interests.
Volume per Guest (VPG): Represents revenue per guest and is calculated by dividing the gross vacation ownership interest sales, excluding tele-sales upgrades, which are a component of upgrade sales, by the number of tours.
General
Constant Currency: Represents comparison eliminating the effects of foreign exchange rate fluctuations between periods.
Table 4
Wyndham Worldwide Corporation
Revenue Detail by Reportable Segment
(In millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2009 | | 2008 |
| | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | Year | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | Year |
| | | | | |
Lodging | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Royalties and Franchise Fees | | $ | 57 | | | $ | 68 | | | $ | 72 | | | | 57 | | | | 254 | | | $ | 64 | | | $ | 78 | | | $ | 88 | | | $ | 66 | | | $ | 297 | |
Marketing, Reservation and Wyndham Rewards Revenues(a) | | | 54 | | | | 66 | | | | 73 | | | | 53 | | | | 246 | | | | 60 | | | | 75 | | | | 84 | | | | 61 | | | | 280 | |
Property Management Reimbursable Revenues(b) | | | 22 | | | | 23 | | | | 21 | | | | 19 | | | | 85 | | | | 27 | | | | 26 | | | | 25 | | | | 21 | | | | 100 | |
Ancillary Revenues(c) | | | 21 | | | | 17 | | | | 17 | | | | 20 | | | | 75 | | | | 19 | | | | 21 | | | | 16 | | | | 22 | | | | 76 | |
| | | | | |
Total Lodging | | | 154 | | | | 174 | | | | 183 | | | | 149 | | | | 660 | | | | 170 | | | | 200 | | | | 213 | | | | 170 | | | | 753 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Exchange and Rentals | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exchange Revenues | | | 127 | | | | 112 | | | | 110 | | | | 106 | | | | 455 | | | | 137 | | | | 119 | | | | 114 | | | | 101 | | | | 471 | |
| Rental Revenues | | | 130 | | | | 137 | | | | 185 | | | | 122 | | | | 574 | | | | 160 | | | | 153 | | | | 199 | | | | 113 | | | | 624 | |
Ancillary Revenues(d) | | | 30 | | | | 31 | | | | 32 | | | | 30 | | | | 123 | | | | 44 | | | | 42 | | | | 41 | | | | 36 | | | | 164 | |
| | | | | |
Total Vacation Exchange and Rentals | | | 287 | | | | 280 | | | | 327 | | | | 258 | | | | 1,152 | | | | 341 | | | | 314 | | | | 354 | | | | 250 | | | | 1,259 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Ownership | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Vacation Ownership Interest Sales | | | 239 | | | | 242 | | | | 285 | | | | 287 | | | | 1,053 | | | | 294 | | | | 414 | | | | 446 | | | | 309 | | | | 1,463 | |
| Consumer Financing | | | 109 | | | | 109 | | | | 108 | | | | 109 | | | | 435 | | | | 99 | | | | 104 | | | | 111 | | | | 112 | | | | 426 | |
| Property Management Fees | | | 91 | | | | 94 | | | | 96 | | | | 95 | | | | 376 | | | | 85 | | | | 84 | | | | 89 | | | | 89 | | | | 346 | |
Ancillary Revenues(e) | | | 23 | | | | 22 | | | | 19 | | | | 17 | | | | 81 | | | | 26 | | | | 19 | | | | 15 | | | | (18 | ) | | | 43 | |
| | | | | |
Total Vacation Ownership | | | 462 | | | | 467 | | | | 508 | | | | 508 | | | | 1,945 | | | | 504 | | | | 621 | | | | 661 | | | | 492 | | | | 2,278 | |
| | | | | |
Total Reportable Segments | | $ | 903 | | | $ | 921 | | | $ | 1,018 | | | $ | 915 | | | $ | 3,757 | | | $ | 1,015 | | | $ | 1,135 | | | $ | 1,228 | | | $ | 912 | | | $ | 4,290 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | 2006 |
| | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | Year | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | Year |
| | | | | |
Lodging | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Royalties and Franchise Fees | | $ | 63 | | | $ | 78 | | | $ | 89 | | | $ | 67 | | | $ | 296 | | | $ | 59 | | | $ | 75 | | | $ | 81 | | | $ | 63 | | | $ | 278 | |
Marketing, Reservation and Wyndham Rewards Revenues(a) | | | 60 | | | | 73 | | | | 84 | | | | 64 | | | | 281 | | | | 58 | | | | 70 | | | | 78 | | | | 60 | | | | 266 | |
Property Management Reimbursable Revenues(b) | | | 16 | | | | 22 | | | | 26 | | | | 28 | | | | 92 | | | | 16 | | | | 20 | | | | 17 | | | | 16 | | | | 69 | |
Ancillary Revenues(c) | | | 13 | | | | 13 | | | | 12 | | | | 17 | | | | 56 | | | | 11 | | | | 11 | | | | 13 | | | | 13 | | | | 48 | |
| | | | | |
Total Lodging | | | 152 | | | | 186 | | | | 211 | | | | 176 | | | | 725 | | | | 144 | | | | 176 | | | | 189 | | | | 152 | | | | 661 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Exchange and Rentals | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exchange Revenues | | | 135 | | | | 116 | | | | 116 | | | | 112 | | | | 479 | | | | 125 | | | | 108 | | | | 112 | | | | 110 | | | | 455 | |
| Rental Revenues | | | 139 | | | | 136 | | | | 182 | | | | 125 | | | | 582 | | | | 120 | | | | 116 | | | | 158 | | | | 105 | | | | 498 | |
Ancillary Revenues(d) | | | 40 | | | | 36 | | | | 38 | | | | 43 | | | | 157 | | | | 37 | | | | 37 | | | | 40 | | | | 51 | | | | 166 | |
| | | | | |
Total Vacation Exchange and Rentals | | | 314 | | | | 288 | | | | 336 | | | | 280 | | | | 1,218 | | | | 282 | | | | 261 | | | | 310 | | | | 266 | | | | 1,119 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vacation Ownership | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Vacation Ownership Interest Sales | | | 373 | | | | 443 | | | | 467 | | | | 383 | | | | 1,666 | | | | 309 | | | | 377 | | | | 396 | | | | 379 | | | | 1,461 | |
| Consumer Financing | | | 81 | | | | 88 | | | | 93 | | | | 96 | | | | 358 | | | | 65 | | | | 70 | | | | 77 | | | | 79 | | | | 291 | |
| Property Management Fees | | | 74 | | | | 78 | | | | 79 | | | | 78 | | | | 310 | | | | 58 | | | | 60 | | | | 66 | | | | 68 | | | | 253 | |
Ancillary Revenues(e) | | | 21 | | | | 20 | | | | 32 | | | | 19 | | | | 91 | | | | 13 | | | | 11 | | | | 12 | | | | 28 | | | | 63 | |
| | | | | |
Total Vacation Ownership | | | 549 | | | | 629 | | | | 671 | | | | 576 | | | | 2,425 | | | | 445 | | | | 518 | | | | 551 | | | | 554 | | | | 2,068 | |
| | | | | |
Total Reportable Segments | | $ | 1,015 | | | $ | 1,103 | | | $ | 1,218 | | | $ | 1,032 | | | $ | 4,368 | | | $ | 871 | | | $ | 955 | | | $ | 1,050 | | | $ | 972 | | | $ | 3,848 | |
| | | | | |
| | |
| Note: Full year amounts may not foot across due to rounding. |
| |
| (a) | | Marketing and reservation revenues represent fees we receive 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 we receive relating to our loyalty program. |
| |
| (b) | | Primarily represents payroll costs in our hotel management business that we incur and pay on behalf of property owners and for which we are reimbursed by the property owners. |
| |
| (c) | | Primarily includes additional services provided to franchisees. |
| |
| (d) | | Primarily includes fees from additional services provided to transacting members, fees from a credit card loyalty program and fees generated from programs with affiliated resorts. |
| |
| (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 businesses. |
Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
| | | | | | | | | | | | | | | | | | | | | |
| | | December 31, | | | September 30, | | | June 30, | | | March 31, | | | December 31, | |
| | | 2009 | | | 2009 | | | 2009 | | | 2009 | | | 2008 | |
| Securitized vacation ownership debt | | | | | | | | | | | | | | | | | | | | |
| Term notes | | $ | 1,112 | | | $ | 1,305 | | | $ | 1,290 | | | $ | 1,165 | | | $ | 1,252 | |
Bank conduit facilities(a) | | | 395 | | | | 299 | | | | 340 | | | | 569 | | | | 558 | |
| | | | | | | | | | | | | | | | |
Securitized vacation ownership debt(b) | | | 1,507 | | | | 1,604 | | | | 1,630 | | | | 1,734 | | | | 1,810 | |
| Less: Current portion of securitized vacation ownership debt | | | 209 | | | | 291 | | | | 288 | | | | 305 | | | | 294 | |
| | | | | | | | | | | | | | | | |
| Long-term securitized vacation ownership debt | | $ | 1,298 | | | $ | 1,313 | | | $ | 1,342 | | | $ | 1,429 | | | $ | 1,516 | |
| | | | | | | | | | | | | | | | |
| Debt: | | | | | | | | | | | | | | | | | | | | |
6.00% senior unsecured notes (due December 2016)(c) | | $ | 797 | | | $ | 797 | | | $ | 797 | | | $ | 797 | | | $ | 797 | |
| Term loan (due July 2011) | | | 300 | | | | 300 | | | | 300 | | | | 300 | | | | 300 | |
Revolving credit facility (due July 2011)(d) | | | — | | | | 21 | | | | 30 | | | | 517 | | | | 576 | |
9.875% senior unsecured notes (due May 2014)(e) | | | 238 | | | | 237 | | | | 237 | | | | — | | | | — | |
3.50% convertible notes (due May 2012)(f) | | | 367 | | | | 309 | | | | 253 | | | | — | | | | — | |
Vacation ownership bank borrowings (g) | | | 153 | | | | 163 | | | | 154 | | | | 156 | | | | 159 | |
| Vacation rentals capital leases | | | 133 | | | | 139 | | | | 135 | | | | 130 | | | | 139 | |
| Other | | | 27 | | | | 23 | | | | 22 | | | | 13 | | | | 13 | |
| | | | | | | | | | | | | | | | |
| Total debt | | | 2,015 | | | | 1,989 | | | | 1,928 | | | | 1,913 | | | | 1,984 | |
| Less: Current portion of debt | | | 175 | | | | 176 | | | | 169 | | | | 166 | | | | 169 | |
| | | | | | | | | | | | | | | | |
| Long-term debt | | $ | 1,840 | | | $ | 1,813 | | | $ | 1,759 | | | $ | 1,747 | | | $ | 1,815 | |
| | | | | | | | | | | | | | | | |
| | |
| (a) | | Represents (i) a 364-day, non-recourse vacation ownership bank conduit facility with a term through October 2010 and borrowing capacity of $600 million and (ii) the outstanding balance of the Company’s prior bank conduit facility through October 8, 2009, the date on which such balance was repaid. At December 31, 2009, our 364-day facility has remaining borrowing capacity of $205 million. |
| |
| (b) | | This debt is collateralized by $2,755 million, $2,947 million, $2,916 million, $3,005 million and $2,929 million of underlying vacation ownership contract receivables and related assets at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009 and December 31, 2008, respectively. |
| |
| (c) | | The balance at December 31, 2009 represents $800 million aggregate principal less $3 million of unamortized discount. |
| |
| (d) | | The Company’s revolving credit facility has a borrowing capacity of $900 million. At December 31, 2009, the Company has $31 million of outstanding letters of credit and a remaining borrowing capacity of $869 million. |
| |
| (e) | | Represents senior unsecured notes issued by the Company during May 2009. The balance at December 31, 2009 represents $250 million aggregate principal less $12 million of unamortized discount. |
| |
| (f) | | Represents cash convertible notes issued by the Company during May 2009. At December 31, 2009, such balance includes $191 million of debt ($230 million aggregate principal less $39 million of unamortized discount) and a liability with a fair value of $176 million related to a bifurcated conversion feature. |
| |
| (g) | | Represents a 364-day, AUD 213 million, secured, revolving foreign credit facility, which expires in June 2010. |
Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
| | | | | | | | | | | | | | | | | | | | | |
| | | As of and For the Three Months Ended December 31, 2009 |
| Brand | | Number of Properties | | Number of Rooms | | Average
Occupancy Rate | | Average Daily
Rate (ADR) | | Average Revenue
Per Available
Room (RevPAR) |
| |
| Wyndham Hotels and Resorts | | | 94 | | | | 24,517 | | | | 50.5 | % | | $ | 108.64 | | | $ | 54.83 | |
| Wingate by Wyndham | | | 166 | | | | 15,239 | | | | 49.3 | % | | $ | 78.41 | | | $ | 38.65 | |
| Hawthorn Suites by Wyndham | | | 89 | | | | 8,238 | | | | 46.7 | % | | $ | 76.24 | | | $ | 35.62 | |
| Ramada | | | 910 | | | | 118,880 | | | | 43.8 | % | | $ | 75.97 | | | $ | 33.28 | |
| Baymont | | | 240 | | | | 20,459 | | | | 40.2 | % | | $ | 58.50 | | | $ | 23.50 | |
| Days Inn | | | 1,858 | | | | 149,633 | | | | 39.0 | % | | $ | 58.96 | | | $ | 23.01 | |
| Super 8 | | | 2,137 | | | | 132,876 | | | | 42.9 | % | | $ | 53.87 | | | $ | 23.11 | |
| Howard Johnson | | | 492 | | | | 46,748 | | | | 38.9 | % | | $ | 58.18 | | | $ | 22.65 | |
| Travelodge | | | 460 | | | | 34,098 | | | | 38.4 | % | | $ | 59.37 | | | $ | 22.77 | |
| Microtel Inns & Suites | | | 314 | | | | 22,376 | | | | 43.5 | % | | $ | 55.15 | | | $ | 23.97 | |
| Knights Inn | | | 343 | | | | 21,061 | | | | 33.7 | % | | $ | 40.24 | | | $ | 13.57 | |
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels (*) | | | 11 | | | | 3,549 | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | |
| Total | | | 7,114 | | | | 597,674 | | | | 41.6 | % | | $ | 63.62 | | | $ | 26.47 | |
| | | | | | | | | | | | | | | |
| |
| | | As of and For the Three Months Ended December 31, 2008 |
| Brand | | Number of Properties | | Number of Rooms | | Average
Occupancy Rate | | Average Daily
Rate (ADR) | | Average Revenue
Per Available
Room (RevPAR) |
| |
| Wyndham Hotels and Resorts | | | 82 | | | | 21,724 | | | | 53.2 | % | | $ | 111.86 | | | $ | 59.49 | |
| Wingate by Wyndham | | | 164 | | | | 15,051 | | | | 51.5 | % | | $ | 90.77 | | | $ | 46.76 | |
| Hawthorn Suites by Wyndham | | | 90 | | | | 8,423 | | | | 53.1 | % | | $ | 86.20 | | | $ | 45.73 | |
| Ramada | | | 897 | | | | 114,986 | | | | 48.1 | % | | $ | 79.31 | | | $ | 38.15 | |
| Baymont | | | 227 | | | | 19,090 | | | | 45.4 | % | | $ | 64.60 | | | $ | 29.35 | |
| Days Inn | | | 1,880 | | | | 152,971 | | | | 43.4 | % | | $ | 60.17 | | | $ | 26.09 | |
| Super 8 | | | 2,110 | | | | 130,920 | | | | 47.2 | % | | $ | 55.82 | | | $ | 26.37 | |
| Howard Johnson | | | 482 | | | | 47,177 | | | | 41.9 | % | | $ | 60.04 | | | $ | 25.16 | |
| Travelodge | | | 479 | | | | 36,154 | | | | 41.2 | % | | $ | 57.40 | | | $ | 23.63 | |
| Microtel Inns & Suites | | | 308 | | | | 22,106 | | | | 51.4 | % | | $ | 56.88 | | | $ | 29.22 | |
| Knights Inn | | | 301 | | | | 19,542 | | | | 36.9 | % | | $ | 42.39 | | | $ | 15.65 | |
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels (*) | | | 23 | | | | 4,736 | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | |
| Total | | | 7,043 | | | | 592,880 | | | | 45.7 | % | | $ | 65.68 | | | $ | 30.03 | |
| | | | | | | | | | | | | | | |
| | |
| NOTE:A glossary of terms is included in Table 3 (3 of 3). |
| |
| (*) | | Represents (i) affiliated properties for which we receive a fee for reservation services provided and (ii) properties managed under a joint venture. These properties are not branded; as such, certain operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant. December 31, 2008 amounts also include AmeriHost branded properties. |
Table 6
(2 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
| | | | | | | | | | | | | | | | | | | | | |
| | | As of and For the Twelve Months Ended December 31, 2009 | |
| Brand | | Number of Properties | | Number of Rooms | | Average
Occupancy Rate | | Average Daily
Rate (ADR) | | Average Revenue
Per Available
Room (RevPAR) |
| |
| Wyndham Hotels and Resorts | | | 94 | | | | 24,517 | | | | 52.6 | % | | $ | 114.56 | | | $ | 60.21 | |
| Wingate by Wyndham | | | 166 | | | | 15,239 | | | | 53.6 | % | | $ | 83.16 | | | $ | 44.54 | |
| Hawthorn Suites by Wyndham | | | 89 | | | | 8,238 | | | | 51.6 | % | | $ | 83.55 | | | $ | 43.10 | |
| Ramada | | | 910 | | | | 118,880 | | | | 47.0 | % | | $ | 74.55 | | | $ | 35.04 | |
| Baymont | | | 240 | | | | 20,459 | | | | 45.2 | % | | $ | 62.46 | | | $ | 28.25 | |
| Days Inn | | | 1,858 | | | | 149,633 | | | | 44.9 | % | | $ | 62.24 | | | $ | 27.95 | |
| Super 8 | | | 2,137 | | | | 132,876 | | | | 48.5 | % | | $ | 56.67 | | | $ | 27.48 | |
| Howard Johnson | | | 492 | | | | 46,748 | | | | 42.2 | % | | $ | 61.22 | | | $ | 25.86 | |
| Travelodge | | | 460 | | | | 34,098 | | | | 43.4 | % | | $ | 61.87 | | | $ | 26.85 | |
| Microtel Inns & Suites | | | 314 | | | | 22,376 | | | | 49.0 | % | | $ | 56.72 | | | $ | 27.79 | |
| Knights Inn | | | 343 | | | | 21,061 | | | | 37.2 | % | | $ | 42.46 | | | $ | 15.79 | |
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels (*) | | | 11 | | | | 3,549 | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | |
| Total | | | 7,114 | | | | 597,674 | | | | 46.3 | % | | $ | 65.52 | | | $ | 30.34 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | As of and For the Twelve Months Ended December 31, 2008 | |
| Brand | | Number of Properties | | Number of Rooms | | Average
Occupancy Rate | | Average Daily
Rate (ADR) | | Average Revenue
Per Available
Room (RevPAR) |
| |
| Wyndham Hotels and Resorts | | | 82 | | | | 21,724 | | | | 61.0 | % | | $ | 120.79 | | | $ | 73.67 | |
| Wingate by Wyndham | | | 164 | | | | 15,051 | | | | 59.5 | % | | $ | 92.29 | | | $ | 54.94 | |
| Hawthorn Suites by Wyndham | | | 90 | | | | 8,423 | | | | 57.7 | % | | $ | 88.57 | | | $ | 51.14 | |
| Ramada | | | 897 | | | | 114,986 | | | | 52.6 | % | | $ | 81.62 | | | $ | 42.94 | |
| Baymont | | | 227 | | | | 19,090 | | | | 49.7 | % | | $ | 65.96 | | | $ | 32.80 | |
| Days Inn | | | 1,880 | | | | 152,971 | | | | 49.9 | % | | $ | 64.57 | | | $ | 32.19 | |
| Super 8 | | | 2,110 | | | | 130,920 | | | | 53.8 | % | | $ | 59.38 | | | $ | 31.95 | |
| Howard Johnson | | | 482 | | | | 47,177 | | | | 46.9 | % | | $ | 64.62 | | | $ | 30.28 | |
| Travelodge | | | 479 | | | | 36,154 | | | | 48.3 | % | | $ | 67.50 | | | $ | 32.64 | |
| Microtel Inns & Suites | | | 308 | | | | 22,106 | | | | 54.3 | % | | $ | 60.00 | | | $ | 32.55 | |
| Knights Inn | | | 301 | | | | 19,542 | | | | 41.0 | % | | $ | 43.40 | | | $ | 17.80 | |
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels (*) | | | 23 | | | | 4,736 | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | |
| Total | | | 7,043 | | | | 592,880 | | | | 51.4 | % | | $ | 69.52 | | | $ | 35.74 | |
| | | | | | | | | | | | | | | |
| | |
| | | NOTE:A glossary of terms is included in Table 3 (3 of 3). |
| |
| (*) | | Represents (i) affiliated properties for which we receive a fee for reservation services provided and (ii) properties managed under a joint venture. These properties are not branded; as such, certain operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant. December 31, 2008 amounts also include AmeriHost branded properties. |
Table 7
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | March 31, 2009 | | | June 30, 2009 | | | September 30, 2009 | | | December 31, 2009 | | | December 31, 2009 | |
Reported EBITDA | | $ | 134 | | | $ | 196 | | | $ | 254 | | | $ | 194 | | | $ | 778 | |
Resolution of and adjustment to contingent liabilities and assets(a) | | | 4 | | | | — | | | | 2 | | | | — | | | | 6 | |
Restructuring costs(b) | | | 43 | | | | 3 | | | | — | | | | — | | | | 46 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted EBITDA | | $ | 181 | | | $ | 199 | | | $ | 256 | | | $ | 194 | | | $ | 830 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported PreTax Income | | $ | 74 | | | $ | 127 | | | $ | 175 | | | $ | 117 | | | $ | 493 | |
Resolution of and adjustment to contingent liabilities and assets(a) | | | 4 | | | | — | | | | 2 | | | | — | | | | 6 | |
Restructuring costs(b) | | | 43 | | | | 3 | | | | — | | | | — | | | | 46 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted PreTax Income | | $ | 121 | | | $ | 130 | | | $ | 177 | | | $ | 117 | | | $ | 545 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Tax Provision | | $ | (29 | ) | | $ | (56 | ) | | $ | (71 | ) | | $ | (44 | ) | | $ | (200 | ) |
Resolution of and adjustment to contingent liabilities and assets(c) | | | (2 | ) | | | 2 | | | | — | | | | — | | | | — | |
Restructuring costs(c) | | | (16 | ) | | | (1 | ) | | | — | | | | — | | | | (18 | ) |
| | | | | | | | | | | | | | | | |
| |
Adjusted Tax Provision | | $ | (47 | ) | | $ | (55 | ) | | $ | (71 | ) | | $ | (44 | ) | | $ | (218 | ) |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Net Income | | $ | 45 | | | $ | 71 | | | $ | 104 | | | $ | 73 | | | $ | 293 | |
| Resolution of and adjustment to contingent liabilities and assets | | | 2 | | | | 2 | | | | 2 | | | | — | | | | 6 | |
| Restructuring costs | | | 27 | | | | 2 | | | | — | | | | — | | | | 28 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted Net Income | | $ | 74 | | | $ | 75 | | | $ | 106 | | | $ | 73 | | | $ | 327 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Diluted EPS | | $ | 0.25 | | | $ | 0.39 | | | $ | 0.57 | | | $ | 0.40 | | | $ | 1.61 | |
| Resolution of and adjustment to contingent liabilities and assets | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | — | | | | 0.03 | |
| Restructuring costs | | | 0.15 | | | | 0.01 | | | | — | | | | — | | | | 0.16 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted Diluted EPS | | $ | 0.41 | | | $ | 0.41 | | | $ | 0.58 | | | $ | 0.40 | | | $ | 1.80 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted Shares | | | 178 | | | | 182 | | | | 183 | | | | 184 | | | | 182 | |
| | |
| Note: Amounts may not foot across due to rounding. |
| |
| (a) | | Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets. |
| |
| (b) | | Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008. |
| |
| (c) | | Relates to the tax effect of the adjustments. |
Table 7
(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | March 31, 2008 | | | June 30, 2008 | | | September 30, 2008 | | | December 31, 2008 | | | December 31, 2008 | |
Reported EBITDA | | $ | 130 | | | $ | 221 | | | $ | 294 | | | $ | (1,280 | ) | | $ | (635 | ) |
Goodwill impairment(a) | | | — | | | | — | | | | — | | | | 1,342 | | | | 1,342 | |
Other impairments(b) | | | 28 | | | | — | | | | — | | | | 56 | | | | 84 | |
Foreign currency losses (c) | | | — | | | | — | | | | — | | | | 24 | | | | 24 | |
Resolution of and adjustment to contingent liabilities and assets(d) | | | 3 | | | | (7 | ) | | | 1 | | | | (14 | ) | | | (18 | ) |
Restructuring costs(e) | | | — | | | | — | | | | 6 | | | | 73 | | | | 79 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted EBITDA | | $ | 161 | | | $ | 214 | | | $ | 301 | | | $ | 201 | | | $ | 876 | |
| | | | |
| |
Reported PreTax Income/(Loss) | | $ | 70 | | | $ | 160 | | | $ | 228 | | | $ | (1,345 | ) | | $ | (887 | ) |
Goodwill impairment(a) | | | — | | | | — | | | | — | | | | 1,342 | | | | 1,342 | |
Other impairments(b) | | | 28 | | | | — | | | | — | | | | 56 | | | | 84 | |
Foreign currency losses (c) | | | — | | | | — | | | | — | | | | 24 | | | | 24 | |
Resolution of and adjustment to contingent liabilities and assets(d) | | | 3 | | | | (7 | ) | | | 1 | | | | (14 | ) | | | (18 | ) |
Restructuring costs(e) | | | — | | | | — | | | | 6 | | | | 73 | | | | 79 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted PreTax Income | | $ | 101 | | | $ | 153 | | | $ | 235 | | | $ | 136 | | | $ | 624 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Tax Provision | | $ | (28 | ) | | $ | (62 | ) | | $ | (86 | ) | | $ | (11 | ) | | $ | (187 | ) |
Goodwill impairment(f) | | | — | | | | — | | | | — | | | | (5 | ) | | | (5 | ) |
Other impairments(f) | | | (11 | ) | | | — | | | | — | | | | (15 | ) | | | (26 | ) |
Foreign currency losses (f) | | | — | | | | — | | | | — | | | | — | | | | — | |
Resolution of and adjustment to contingent liabilities and assets(f) | | | — | | | | 3 | | | | 1 | | | | 7 | | | | 12 | |
Restructuring costs(f) | | | — | | | | — | | | | (2 | ) | | | (28 | ) | | | (30 | ) |
| | | | | | | | | | | | | | | | |
| |
Adjusted Tax Provision | | $ | (39 | ) | | $ | (59 | ) | | $ | (87 | ) | | $ | (52 | ) | | $ | (236 | ) |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Net Income/(Loss) | | $ | 42 | | | $ | 98 | | | $ | 142 | | | $ | (1,356 | ) | | $ | (1,074 | ) |
| Goodwill impairment | | | — | | | | — | | | | — | | | | 1,337 | | | | 1,337 | |
| Other impairments | | | 17 | | | | — | | | | — | | | | 41 | | | | 58 | |
| Foreign currency losses | | | — | | | | — | | | | — | | | | 24 | | | | 24 | |
| Resolution of and adjustment to contingent liabilities and assets | | | 3 | | | | (4 | ) | | | 2 | | | | (7 | ) | | | (6 | ) |
| Restructuring costs | | | — | | | | — | | | | 4 | | | | 45 | | | | 49 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted Net Income | | $ | 62 | | | $ | 94 | | | $ | 148 | | | $ | 84 | | | $ | 388 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reported Diluted EPS | | $ | 0.24 | | | $ | 0.55 | | | $ | 0.80 | | | $ | (7.63 | ) | | $ | (6.05 | ) |
| Goodwill impairment | | | — | | | | — | | | | — | | | | 7.52 | | | | 7.51 | |
| Other impairments | | | 0.10 | | | | — | | | | — | | | | 0.23 | | | | 0.32 | |
| Foreign currency losses | | | — | | | | — | | | | — | | | | 0.14 | | | | 0.14 | |
| Resolution of and adjustment to contingent liabilities and assets | | | 0.01 | | | | (0.02 | ) | | | 0.01 | | | | (0.04 | ) | | | (0.03 | ) |
| Restructuring costs | | | — | | | | — | | | | 0.02 | | | | 0.25 | | | | 0.28 | |
| | | | | | | | | | | | | | | | |
| |
Adjusted Diluted EPS | | $ | 0.35 | | | $ | 0.53 | | | $ | 0.83 | | | $ | 0.47 | | | $ | 2.18 | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted Shares | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | |
| | |
| Note: Amounts may not foot due to rounding. |
| |
| (a) | | Represents a non-cash goodwill impairment charge for Vacation Ownership to reflect reduced future cash flow estimates. |
| |
| (b) | | During the three months ended March 31, 2008, represents a non-cash impairment charge of $28 million ($17 million, net of tax) for Vacation Ownership due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand. During the three months ended December 31, 2008, represents (i) non-cash impairment charges of $36 million ($28 million, net of tax) for Vacation Exchange and Rentals due to trademark and fixed asset write downs related to the Company’s vacation rentals businesses and the write-off of the Company’s investment in a joint venture, (iii) a non-cash impairment charge of $16 million ($10 million, net of tax) for Lodging related to the write down of franchise agreements of one of the Company’s brands and (iv) a non-cash impairment charge of $4 million ($3 million, net of tax) for Vacation Ownership related to the termination of a development project. |
| |
| (c) | | Represents a cash charge for Vacation Exchange and Rentals due to foreign currency losses. |
| |
| (d) | | Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets. |
| |
| (e) | | Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during the third quarter of 2008. |
| |
| (f) | | Relates to the tax effect of the adjustments. |
Table 8
(1 of 3)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
| | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 31, 2009 | |
| | | | | | | Legacy | | | Restructuring | | | | |
| | | As Reported | | | Adjustments | | | Costs | | | As Adjusted | |
Net revenues | | | | | | | | | | | | | | | | |
| Service fees and membership | | $ | 1,613 | | | | | | | | | | | $ | 1,613 | |
| Vacation ownership interest sales | | | 1,053 | | | | | | | | | | | | 1,053 | |
| Franchise fees | | | 440 | | | | | | | | | | | | 440 | |
| Consumer financing | | | 435 | | | | | | | | | | | | 435 | |
| Other | | | 209 | | | | | | | | | | | | 209 | |
| | | | | | | | | | | | | |
| Net revenues | | | 3,750 | | | | — | | | | — | | | | 3,750 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
| Operating | | | 1,501 | | | | | | | | | | | | 1,501 | |
| Cost of vacation ownership interests | | | 183 | | | | | | | | | | | | 183 | |
| Consumer financing interest | | | 139 | | | | | | | | | | | | 139 | |
| Marketing and reservation | | | 560 | | | | | | | | | | | | 560 | |
| General and administrative | | | 533 | | | | (6 | ) (a) | | | | | | | 527 | |
| Goodwill and other impairments | | | 15 | | | | | | | | | | | | 15 | |
| Restructuring costs | | | 47 | | | | | | | | (46 | ) (b) | | | 1 | |
| Depreciation and amortization | | | 178 | | | | | | | | | | | | 178 | |
| | | | | | | | | | | | | |
| Total expenses | | | 3,156 | | | | (6 | ) | | | (46 | ) | | | 3,104 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | | 594 | | | | 6 | | | | 46 | | | | 646 | |
| Other income, net | | | (6 | ) | | | | | | | | | | | (6 | ) |
| Interest expense | | | 114 | | | | | | | | | | | | 114 | |
| Interest income | | | (7 | ) | | | | | | | | | | | (7 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income before income taxes | | | 493 | | | | 6 | | | | 46 | | | | 545 | |
| Provision for income taxes | | | 200 | | | | — | (c) | | | 18 | (c) | | | 218 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net income | | $ | 293 | | | $ | 6 | | | $ | 28 | | | $ | 327 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Earnings per share | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.64 | | | $ | 0.03 | | | $ | 0.16 | | | $ | 1.83 | |
| Diluted | | | 1.61 | | | | 0.03 | | | | 0.16 | | | | 1.80 | |
| | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 179 | | | | 179 | | | | 179 | | | | 179 | |
| Diluted | | | 182 | | | | 182 | | | | 182 | | | | 182 | |
| | |
| (a) | | Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets. |
| |
| (b) | | Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008. |
| |
| (c) | | Relates to the tax effect of the adjustments. |
Table 8
(2 of 3)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2008 | |
| | | | | | | Goodwill | | | Other | | | Foreign Currency | | | Legacy | | | Restructuring | | | | |
| | | As Reported | | | Impairment | | | Impairments | | | Losses | | | Adjustments | | | Costs | | | As Adjusted | |
Net revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service fees and membership | | $ | 360 | | | | | | | | | | | | | | | | | | | | | | | $ | 360 | |
| Vacation ownership interest sales | | | 309 | | | | | | | | | | | | | | | | | | | | | | | | 309 | |
| Franchise fees | | | 113 | | | | | | | | | | | | | | | | | | | | | | | | 113 | |
| Consumer financing | | | 112 | | | | | | | | | | | | | | | | | | | | | | | | 112 | |
| Other | | | 17 | | | | | | | | | | | | | | | | | | | | | | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | | 911 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 911 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating | | | 337 | | | | | | | | | | | | | | | | | | | | | | | | 337 | |
| Cost of vacation ownership interests | | | 52 | | | | | | | | | | | | | | | | | | | | | | | | 52 | |
| Consumer financing interest | | | 37 | | | | | | | | | | | | | | | | | | | | | | | | 37 | |
| Marketing and reservation | | | 171 | | | | | | | | | | | | | | | | | | | | | | | | 171 | |
| General and administrative | | | 124 | | | | | | | | | | | | (24 | )(c) | | | 14 | (d) | | | | | | | 114 | |
| Goodwill and other impairments | | | 1,398 | | | | (1,342 | )(a) | | | (56 | )(b) | | | | | | | | | | | | | | | — | |
| Restructuring costs | | | 73 | | | | | | | | | | | | | | | | | | | | (73 | )(e) | | | — | |
| Depreciation and amortization | | | 47 | | | | | | | | | | | | | | | | | | | | | | | | 47 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total expenses | | | 2,239 | | | | (1,342 | ) | | | (56 | ) | | | (24 | ) | | | 14 | | | | (73 | ) | | | 758 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income/(loss) | | | (1,328 | ) | | | 1,342 | | | | 56 | | | | 24 | | | | (14 | ) | | | 73 | | | | 153 | |
| Other income, net | | | (1 | ) | | | | | | | | | | | | | | | | | | | | | | | (1 | ) |
| Interest expense | | | 22 | | | | | | | | | | | | | | | | | | | | | | | | 22 | |
| Interest income | | | (4 | ) | | | | | | | | | | | | | | | | | | | | | | | (4 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income/(loss) before income taxes | | | (1,345 | ) | | | 1,342 | | | | 56 | | | | 24 | | | | (14 | ) | | | 73 | | | | 136 | |
| Provision for income taxes | | | 11 | | | | 5 | (f) | | | 15 | (f) | | | — | (f) | | | (7 | )(f) | | | 28 | (f) | | | 52 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income/(loss) | | $ | (1,356 | ) | | $ | 1,337 | | | $ | 41 | | | $ | 24 | | | $ | (7 | ) | | $ | 45 | | | $ | 84 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings/(losses) per share | | $ | (7.63 | ) | | $ | 7.52 | | | $ | 0.23 | | | $ | 0.14 | | | $ | (0.04 | ) | | $ | 0.25 | | | $ | 0.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | |
| | |
| (a) | | Represents a non-cash goodwill impairment charge for Vacation Ownership to reflect reduced future cash flow estimates. |
| |
| (b) | | Represents (i) non-cash impairment charges of $36 million ($28 million, net of tax) for Vacation Exchange and Rentals due to trademark and fixed asset write downs related to the Company’s vacation rentals businesses and the write-off of the Company’s investment in a joint venture, (ii) a non-cash impairment charge of $16 million ($10 million, net of tax) for Lodging related to the write down of franchise agreements of one of the Company’s brands and (iii) a non-cash impairment charge of $4 million ($3 million, net of tax) for Vacation Ownership related to the termination of a development project. |
| |
| (c) | | Represents a cash charge for Vacation Exchange and Rentals due to foreign currency losses. |
| |
| (d) | | Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets. |
| |
| (e) | | Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008. |
| |
| (f) | | Relates to the tax effect of the adjustment. |
Table 8
(3 of 3)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 31, 2008 | |
| | | | | | | Goodwill | | | Other | | | Foreign Currency | | | Legacy | | | Restructuring | | | | |
| | | As Reported | | | Impairment | | | Impairments | | | Losses | | | Adjustments | | | Costs | | | As Adjusted | |
Net revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service fees and membership | | $ | 1,705 | | | | | | | | | | | | | | | | | | | | | | | $ | 1,705 | |
| Vacation ownership interest sales | | | 1,463 | | | | | | | | | | | | | | | | | | | | | | | | 1,463 | |
| Franchise fees | | | 514 | | | | | | | | | | | | | | | | | | | | | | | | 514 | |
| Consumer financing | | | 426 | | | | | | | | | | | | | | | | | | | | | | | | 426 | |
| Other | | | 173 | | | | | | | | | | | | | | | | | | | | | | | | 173 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net revenues | | | 4,281 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,281 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating | | | 1,622 | | | | | | | | | | | | | | | | | | | | | | | | 1,622 | |
| Cost of vacation ownership interests | | | 278 | | | | | | | | | | | | | | | | | | | | | | | | 278 | |
| Consumer financing interest | | | 131 | | | | | | | | | | | | | | | | | | | | | | | | 131 | |
| Marketing and reservation | | | 830 | | | | | | | | | | | | | | | | | | | | | | | | 830 | |
| General and administrative | | | 561 | | | | | | | | | | | | (24) | (c) | | | 18 | (d) | | | | | | | 555 | |
| Goodwill and other impairments | | | 1,426 | | | | (1,342) | (a) | | | (84) | (b) | | | | | | | | | | | | | | | — | |
| Restructuring costs | | | 79 | | | | | | | | | | | | | | | | | | | | (79) | (e) | | | — | |
| Depreciation and amortization | | | 184 | | | | | | | | | | | | | | | | | | | | | | | | 184 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total expenses | | | 5,111 | | | | (1,342 | ) | | | (84 | ) | | | (24 | ) | | | 18 | | | | (79 | ) | | | 3,600 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income/(loss) | | | (830 | ) | | | 1,342 | | | | 84 | | | | 24 | | | | (18 | ) | | | 79 | | | | 681 | |
| Other income, net | | | (11 | ) | | | | | | | | | | | | | | | | | | | | | | | (11 | ) |
| Interest expense | | | 80 | | | | | | | | | | | | | | | | | | | | | | | | 80 | |
| Interest income | | | (12 | ) | | | | | | | | | | | | | | | | | | | | | | | (12 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income/(loss) before income taxes | | | (887 | ) | | | 1,342 | | | | 84 | | | | 24 | | | | (18 | ) | | | 79 | | | | 624 | |
| Provision for income taxes | | | 187 | | | | 5 | (f) | | | 26 | (f) | | | — | (f) | | | (12 | ) (f) | | | 30 | (f) | | | 236 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income/(loss) | | $ | (1,074 | ) | | $ | 1,337 | | | $ | 58 | | | $ | 24 | | | $ | (6 | ) | | $ | 49 | | | $ | 388 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings/(losses) per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | (6.05 | ) | | $ | 7.53 | | | $ | 0.33 | | | $ | 0.14 | | | $ | (0.03 | ) | | $ | 0.28 | | | $ | 2.19 | |
| Diluted | | | (6.05 | ) | | | 7.51 | | | | 0.32 | | | | 0.14 | | | | (0.03 | ) | | | 0.28 | | | | 2.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | |
| Diluted | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | | | | 178 | |
| | |
| Note: EPS amounts may not foot across due to rounding. |
| |
| (a) | | Represents a non-cash goodwill impairment charge for Vacation Ownership to reflect reduced future cash flow estimates. |
| |
| (b) | | Represents (i) non-cash impairment charges of $36 million ($28 million, net of tax) for Vacation Exchange and Rentals due to trademark and fixed asset write downs related to the Company’s vacation rentals businesses and the write-off of the Company’s investment in a joint venture, (ii) a non-cash impairment charge of $28 million ($17 million, net of tax) for Vacation Ownership due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand, (iii) a non-cash impairment charge of $16 million ($10 million, net of tax) for Lodging related to the write down of franchise agreements of one of the Company’s brands and (iv) a non-cash impairment charge of $4 million ($3 million, net of tax) for Vacation Ownership related to the termination of a development project. |
| |
| (c) | | Represents a cash charge for Vacation Exchange and Rentals due to foreign currency losses. |
| |
| (d) | | Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets. |
| |
| (e) | | Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008. |
| |
| (f) | | Relates to the tax effect of the adjustments. |
