Wyndham Worldwide Reports Strong Fourth Quarter and Full Year 2006 Results14 February 2007
Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three-months and year ended December 31, 2006.
Financial information discussed in this press release include both GAAP and non-GAAP measures, which include or exclude certain items, or reflect pro forma adjustments, related to the Company's spin-off effective July 31, 2006. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. Non-GAAP measures are indicated as "Adjusted." A complete reconciliation of reported GAAP results to the comparable Adjusted information appears in the financial tables section of this press release.
FOURTH QUARTER 2006 HIGHLIGHTS INCLUDE:
* Net income for the quarter was $92 million, or $0.48 per diluted share.
Adjusted net income was $84 million or $0.44 per diluted share, at the
upper end of company-issued guidance, or 11% ahead of last year's
results on an Adjusted basis.
* Revenue increased 13% compared to the fourth quarter of 2005, with
strong top-line growth across the Company's three businesses: Lodging,
Vacation Exchange and Rentals, and Vacation Ownership.
-- Lodging revenues grew 6% and franchise fees grew 5% compared to the
fourth quarter of 2005. Wyndham Worldwide added approximately 10,000
net rooms to its hotel portfolio.
-- Positive momentum continued in the Vacation Exchange and Rentals
business, with revenue increasing 13% compared to the fourth quarter
of 2005.
-- Continued robust growth of the Vacation Ownership business, with
gross vacation ownership interest sales increasing more than 30%
compared to the fourth quarter of 2005 driven by strong increases in
both tour flow and volume per guest.
* The Company's Board of Directors has authorized a new share repurchase
program of $400 million. The Company recently completed a share
repurchase announced in August 2006, under which it repurchased 13.5
million shares at an average price of $29.72.
"We finished the year with great momentum in each of our three businesses," said Stephen P. Holmes, Wyndham Worldwide chairman and chief executive officer. "We posted double-digit revenue and Adjusted EBITDA growth in the fourth quarter of 2006. Our portfolio of diverse brands, locations and products gives us great financial stability, particularly since more than half of our revenue stems from fees related to services for consumers and business partners. Our strength in leisure accommodations allows us to capture share and expand our presence in a growing global travel industry."
Fourth Quarter 2006 Operating Results
Revenues for the fourth quarter of 2006 were $970 million, up 13% over the same period in 2005, reflecting strong growth across the businesses. Adjusted EBITDA for the fourth quarter was $192 million, excluding separation and related costs and the net benefit from the resolution of certain contingent liabilities, compared to $164 million for the fourth quarter of 2005. Adjusted net income for the fourth quarter of 2006 was $84 million or $0.44 per diluted earnings per share excluding:
* $22 million after-tax separation and related costs associated with
Wyndham Worldwide's spin-off from Cendant Corporation (now Avis Budget
Group)
* A $30 million after-tax net benefit from the resolution of certain
contingent liabilities
Net income for the fourth quarter of 2006 was $92 million, compared to $91 million for the fourth quarter of 2005. Net income for 2005 excludes stand- alone corporate costs and interest expense associated with corporate debt since Wyndham Worldwide was a subsidiary of Cendant for all of 2005. Had Wyndham Worldwide been a stand-alone, public company during the fourth quarter of 2005 compared to the fourth quarter of 2006, Adjusted net income would have increased 11% to $84 million from $76 million.
Lodging (Wyndham Hotel Group)
Lodging revenues increased 6% to $152 million for the fourth quarter of 2006 compared to $144 million for the fourth quarter of 2005. EBITDA for the fourth quarter of 2006 was $47 million. Adjusted EBITDA for the fourth quarter of 2006 increased 7% to $48 million (excluding separation and related costs of $1 million) compared to EBITDA for the prior year period of $45 million.
EBITDA for the fourth quarter of 2006 includes incremental marketing expense of approximately $3 million associated with increasing Wyndham brand recognition.
RevPAR for the fourth quarter of 2006 increased 7% from the fourth quarter of 2005, excluding Wyndham and Baymont. Including these brands, fourth quarter 2006 RevPAR was $31.41, a 6% increase from the comparable prior year period.
At December 31, 2006, the Wyndham Hotel Group system consisted of nearly 6,500 properties with over 543,000 rooms, an increase of approximately 10,000 net rooms from the third quarter of 2006. The Company's hotel development pipeline as of December 31, 2006 included approximately 845 hotels and approximately 92,000 rooms, of which approximately 15% are international and approximately 45% are new construction.
Vacation Exchange and Rentals (RCI Global Vacation Network)
Vacation Exchange and Rentals revenues increased 13% to $266 million in the fourth quarter of 2006 from $235 million in the fourth quarter of 2005, reflecting continued momentum in transaction volume, pricing and members.
Vacation exchange revenues were $110 million, an 8% increase compared to the fourth quarter of 2005. The average number of members as well as the annual dues and exchange revenue per member increased 5% and 3%, respectively, from the fourth quarter of 2005, reflecting new members, higher transaction volume and price increases implemented in the third quarter of 2006.
Vacation rentals revenues were $105 million, a 16% increase compared to the fourth quarter of 2005, supported by improved inventory offerings, enhanced marketing and local economic conditions. Vacation rental transactions and average net price per vacation rentals increased 6% and 9%, respectively, from the fourth quarter of 2005.
Other ancillary revenues generated primarily from additional products and services provided to affiliates and members were $51 million in the fourth quarter of 2006.
Vacation Exchange and Rentals EBITDA grew to $59 million for the fourth quarter of 2006, a 28% increase compared to $46 million in the fourth quarter of 2005 which reflected a $14 million restructuring charge taken to combine our vacation exchange and vacation rentals operations. Absent that charge, EBITDA was relatively flat due to continued investment during 2006 in new offerings to leverage our leading position in the growing leisure travel industry worldwide.
Vacation Ownership (Wyndham Vacation Ownership)
Gross Vacation Ownership Interest sales were $469 million for the fourth quarter of 2006, up more than 30% compared to the fourth quarter of 2005, driven by a 17% growth in tour flow and an 8% increase in volume per guest. The strong tour flow growth was the result of ongoing development of in-house sales programs, enhancements to local marketing efforts and continued industry demand.
Vacation Ownership fourth quarter 2006 revenues were $554 million and EBITDA was $89 million, including separation and related costs of $15 million. Excluding separation and related costs, Adjusted EBITDA for the fourth quarter of 2006 rose 18% compared to EBITDA for the fourth quarter of 2005 of $88 million. These 2006 results reflect the adoption of SFAS No. 152, "Accounting for Real Estate Time-Sharing Transactions," which reduced comparative quarterly revenue by $63 million and increased EBITDA by $5 million.
Wyndham Vacation Ownership active development pipeline consists of approximately 3,900 units in 15 U.S. states, the Virgin Islands and 3 foreign countries. The Company expects the pipeline to support both new purchases of vacation ownership and upgrade sales to existing owners.
Full Year 2006 Operating Results
Revenues for full year 2006 were $3,842 million, up 11% compared to full year 2005, reflecting strong growth across all the businesses. Full year 2006 Adjusted EBITDA was $762 million, excluding separation and related costs and the net benefit from the resolution of certain contingent liabilities, but including pro forma incremental stand-alone corporate costs, a 9% increase over 2005 Adjusted EBITDA of $699 million. Full year EBITDA was $725 million compared to $751 million in the prior year period including separation and related costs and the net benefit from the resolution of certain contingent liabilities in 2006 and excluding pro forma incremental stand-alone corporate costs for both periods.
Adjusted net income for full year 2006 was $339 million, excluding the cumulative effect of SFAS No. 152, separation and related costs and the net benefit from the resolution of certain contingent liabilities, but including pro forma incremental stand-alone corporate costs. Income before the cumulative effect of SFAS No. 152 for full year 2006 was $352 million, compared to $431 million for full year 2005. Net income for 2005 excludes stand-alone corporate costs and interest expense associated with corporate debt since Wyndham Worldwide was a subsidiary of Cendant for all of 2005.
Full year 2006 highlights include:
* Lodging revenues grew by 24%
* Franchise fees grew 15%
* RevPAR grew nearly 13%
* Vacation exchange and rentals revenues were up 5%
* Gross Vacation Ownership Interest Sales grew more than 25%
Holmes continued: "2006 was a landmark year for Wyndham Worldwide. We exceeded our initial revenue guidance and hit our Adjusted EBITDA guidance, despite taking the previously reported second quarter 2006 $21 million tax accrual; excluding the accrual, we would have exceeded our Adjusted EBITDA guidance. These results would be commendable in any year, but are extraordinary in light of our corporate and operating initiatives this year: our transformation into an independent, publicly traded company, the integration of two hotel companies, and the re-branding of our vacation ownership business to Wyndham."
Balance Sheet
The Company provided the following balance sheet data as of December 31, 2006:
* Cash and cash equivalents of approximately $270 million compared to $99
million at December 31, 2005
* Vacation ownership contract receivables, net, of $2.4 billion compared
to $2.1 billion at December 31, 2005
* Vacation ownership inventory of approximately $955 million, including
approximately $170 million related to the effect of SFAS No. 152.
Excluding the effect of SFAS No. 152, inventory was approximately $785
million compared to $636 million at December 31, 2005
* Securitized vacation ownership debt of $1.5 billion and other debt of
$1.4 billion as of December 31, 2006
A debt table is included in the financial tables section of this press release.
Outlook
Wyndham Worldwide reiterates the following full year 2007 guidance:
* Revenue of $4,110 - $4,260 million
* Adjusted EBITDA of $820 - $855 million, excluding separation and related
costs of $10 - $20 million ($6 - $12 million, after-tax), as well as
legacy matters
* Full year depreciation and amortization expense of $160 - $170 million
* Interest expense of $75 - $85 million
* Provision for income taxes of $215 - $236 million
* Adjusted net income of $350 - $385 million
New company guidance for 2007:
* Full year Adjusted EPS increased from $1.77 - $1.95 to $1.84 - $2.02,
excluding separation and related costs, as well as legacy matters, based
on a diluted share count of approximately 190 million at December 31,
2006 (prior share count guidance was 198 million)
* First quarter Adjusted EPS of $0.37 - $0.40, excluding separation and
related costs, as well as legacy matters
Share Repurchase
On August 24, 2006, Wyndham Worldwide announced the launch of a stock repurchase program of up to $400 million. Through December 31, 2006, the Company had repurchased 11.9 million shares at an average price of $29.35. During January 2007, the Company repurchased an additional 1.6 million shares, completing the program with 13.5 million shares purchased at an average price of $29.72.
Wyndham Worldwide today announced that its Board of Directors has authorized a new stock repurchase program that enables the Company to purchase up to $400 million of its common stock. 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.
"We believe our stock is a terrific value and that a repurchase program is an effective way to enhance shareholder value," added Holmes. "2006 was a banner year and we look forward to continued growth in 2007: growth in our global presence, expansion of our Wyndham brand across our hotels and vacation ownership resorts and growth in consumer preference for our brands. We are well-positioned to benefit from many consumer trends through our global reach, familiar brands and unparalleled scale. I am pleased with what we've accomplished, but, more importantly, with what we see in the future for Wyndham Worldwide."
Wyndham Worldwide Corporation will provide a webcast of its conference call to discuss the Company's fourth-quarter and full year 2006 financial results on Tuesday, February 13 at 9 a.m. EST. Listeners may access the webcast live through the Company's Web site at http://www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the Web site for approximately 90 days beginning at noon EST on February 13. The conference call also may be accessed by dialing (517) 308- 9029 and providing the pass code "Wyndham." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available at (203) 369-0940 beginning at noon EST on February 13 until 5 p.m. EST on February 18.
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 almost 6,500 franchised hotels and over 543,000 hotel rooms worldwide. RCI Global Vacation Network offers its more than 3.4 million members access to over 60,000 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 approximately 150 vacation ownership resorts serving over 800,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs more than 30,000 employees globally.
For more information about Wyndham Worldwide, please visit the company's web site at http://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 trends for the Company's revenues, earnings and related financial and operating measures, the number of hotels and resorts the Company intends to add in future periods, debt levels, rebranding initiatives 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 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 specified in the Company's Quarterly Report on Form 10-Q, filed August 18, 2006 under the heading "Risk Factors." Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
Table 1
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)
In addition to other measures, management evaluates the operating results
of each of its reportable segments based upon revenue and "EBITDA," which
is defined as net income before depreciation and amortization, interest
expense (excluding interest on securitized vacation ownership debt) and
income taxes, each of which is presented on the Company's Consolidated and
Combined Statements of Income. The Company's presentation of EBITDA may
not be comparable to similarly-titled measures used by other companies.
The following tables summarize revenues and EBITDA for reportable
segments, as well as reconcile EBITDA to net income for the three month
and twelve month periods ended December 31, 2006 and 2005:
Three Months Ended December 31,
-----------------------------------
2006 2005
----------------- ----------------
Revenues EBITDA(a) Revenues EBITDA
-------- ------ -------- ------
Lodging $152 $47 $144 $45
Vacation Exchange and Rentals 266 59 235 46
Vacation Ownership 554 89 481 88
------- ------ -------- -----
Total Reportable Segments 972 195 860 179
Corporate and Other (*) (2) 6 1 (2)
------- ------ -------- -----
Total Company $970 $201 $861 $177
======= ====== ======== =====
Reconciliation of EBITDA to Net
Income
-------------------------------
EBITDA $201 $177
Depreciation and amortization 41 33
Interest expense (income), net 14 (8)
------ -----
Income before income taxes 146 152
Provision for income taxes 54 61
------ -----
Net income $92 $91
====== =====
Twelve Months Ended December 31,
-----------------------------------
2006 2005
--------------- ----------------
Revenues EBITDA(b) Revenues EBITDA
-------- ------ -------- -------
Lodging $661 $208 $533 $197
Vacation Exchange and Rentals 1,119 265 1,068 284
Vacation Ownership 2,068 325 1,874 283
-------- ------ -------- -------
Total Reportable Segments 3,848 798 3,475 764
Corporate and Other (*) (6) (73) (4) (13)
-------- ------ -------- -------
Total Company $3,842 $725 $3,471 $751
======== ====== ======== =======
Reconciliation of EBITDA to Net
Income
-------------------------------
EBITDA $725 $751
Depreciation and amortization 148 131
Interest expense (income), net 35 (6)
------ -------
Income before income taxes 542 626
Provision for income taxes 190 195
------ -------
Income before cumulative effect of
accounting change 352 431
Cumulative effect of accounting
change, net of tax (65) -
------ -------
Net income $287 $431
====== =======
---------------
(*)Includes the elimination of transactions between segments; excludes
incremental stand alone company costs for 2005 and through July 31,
2006.
(a)Includes separation and related costs of $1 million, $15 million and
$7 million for Lodging, Vacation Ownership and Corporate and Other,
respectively.
(b)Includes separation and related costs of $2 million, $3 million, $18
million and $76 million for Lodging, Vacation Exchange and Rentals,
Vacation Ownership and Corporate and Other, respectively.
Table 2
Wyndham Worldwide Corporation
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Twelve Months
Ended Ended
December 31, December 31,
-------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------
Revenues
Vacation ownership interest sales $379 $358 $1,461 $1,379
Service fees and membership 348 305 1,437 1,288
Franchise fees 112 105 501 434
Consumer financing 79 64 291 234
Other 52 29 152 136
------ ------ ------ ------
Net revenues 970 861 3,842 3,471
------ ------ ------ ------
Expenses
Operating 391 320 1,474 1,199
Cost of vacation ownership
interests 78 90 317 341
Marketing and reservation 168 142 734 628
General and administrative (a) 109 101 493 424
Provision for loan losses - 31 - 128
Separation and related costs (b) 23 - 99 -
Depreciation and amortization 41 33 148 131
------ ------ ------ ------
Total expenses 810 717 3,265 2,851
------ ------ ------ ------
Operating income 160 144 577 620
Interest expense (income), net 14 (8) 35 (6)
------ ------ ------ ------
Income before income taxes 146 152 542 626
Provision for income taxes 54 61 190 195
------ ------ ------ ------
Income before cumulative effect of
accounting change 92 91 352 431
Cumulative effect of accounting
change, net of tax (c) - - (65) -
------ ------ ------ ------
Net income $92 $91 $287 $431
====== ====== ====== ======
Earnings per share
Basic
Income before cumulative effect of
accounting change $0.48 $0.45 $1.78 $2.15
Cumulative effect of accounting
change - - (0.33) -
------ ------ ------ ------
Net income $0.48 $0.45 $1.45 $2.15
====== ====== ====== ======
Diluted
Income before cumulative effect of
accounting change $0.48 $0.45 $1.77 $2.15
Cumulative effect of accounting
change - - (0.33) -
------ ------ ------ ------
Net income $0.48 $0.45 $1.44 $2.15
====== ====== ====== ======
Weighted average shares outstanding
Basic 193 200 198 200
Diluted 194 200 199 200
---------------
(a)Includes $32 million related to the net benefit from the resolution of
certain contingent liabilities during the three and twelve months ended
December 31, 2006.
(b)Represents costs that the Company incurred in connection with the
execution of its separation from its former parent, Cendant (now
Avis Budget Group, Inc.). Such amounts, net of tax, were $22
million and $69 million during the three and twelve months ended
December 31, 2006, respectively.
(c)Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January
1, 2006.
Table 3
Wyndham Worldwide Corporation
OPERATING STATISTICS
Year Q1 Q2 Q3 Q4 Full Year
Lodging(a)
Weighted Average
Rooms Available 2006 520,600 531,000 529,200 529,900(b) 527,700(b)
2005 517,400 512,000 511,500 535,100 519,000
2004 512,000 510,700 507,300 503,000 508,200
2003 532,900 525,600 522,400 518,200 524,700
Number of
Properties 2006 6,300 6,440 6,420 6,470(b) N/A
2005 6,400 6,380 6,350 6,350 N/A
2004 6,380 6,390 6,350 6,400 N/A
2003 6,500 6,480 6,430 6,400 N/A
RevPAR 2006 $30.45 $36.97 $40.82 $31.41 $34.95
2005 $25.53 $31.91 $36.86 $29.72 $31.00
2004 $22.50 $29.08 $34.04 $24.53 $27.55
2003 $22.05 $27.50 $31.38 $22.71 $25.92
Royalty,
Marketing and
Reservation
Revenue (in
000s) 2006 $102,741 $125,409 $138,383 $104,505 $471,039
2005 $84,704 $104,281 $119,829 $99,804 $408,620
2004 $77,830 $97,959 $112,765 $82,502 $371,058
2003 $76,048 $95,280 $108,828 $77,277 $357,432
Vacation
Exchange and
Rentals
Average Number
of Members
(in 000s) 2006 3,292 3,327 3,374 3,429 3,356
2005 3,148 3,185 3,233 3,271 3,209
2004 2,995 3,031 3,074 3,116 3,054
2003 2,929 2,925 2,954 2,982 2,948
Annual Dues
and Exchange
Revenue Per
Member 2006 $152.10 $130.37 $132.31 $128.13 $135.62
2005 $159.12 $134.98 $125.64 $124.05 $135.76
2004 $159.55 $132.51 $123.55 $124.43 $134.82
2003 $145.99 $129.37 $128.99 $120.37 $131.13
Vacation Rental
Transactions
(in 000s) 2006 385 310 356 293 1,344
2005 367 311 344 278 1,300
2004 309 246 295 253 1,104
2003 290 192 206 194 882
Average Net
Price Per
Vacation
Rental 2006 $312.51 $374.91 $442.75 $356.16 $370.93
2005 $331.37 $363.14 $412.66 $325.62 $359.27
2004 $279.46 $333.76 $368.79 $337.42 $328.77
2003 $233.49 $255.62 $247.46 $265.72 $248.65
Vacation
Ownership
Gross Vacation
Ownership
Interest Sales
(in 000s) 2006 $357,000 $434,000 $482,000 $469,000 $1,743,000
2005 $281,000 $354,000 $401,000 $360,000 $1,396,000
2004 $274,000 $315,000 $361,000 $304,000 $1,254,000
2003 $224,000 $302,000 $330,000 $290,000 $1,146,000
Tours 2006 208,000 273,000 312,000 254,000 1,046,000
2005 195,000 250,000 272,000 217,000 934,000
2004 181,000 227,000 246,000 205,000 859,000
2003 196,000 253,000 275,000 200,000 925,000
Volume per
Guest (VPG) 2006 $1,475 $1,426 $1,434 $1,623 $1,486
2005 $1,349 $1,284 $1,349 $1,507 $1,368
2004 $1,303 $1,253 $1,273 $1,327 $1,287
2003 $1,067 $1,082 $1,127 $1,293 $1,138
Note: Full year amounts may not foot across due to rounding.
(a)Quarterly drivers in the Lodging segment include the acquisitions of
Ramada International (December 2004), Wyndham Hotels and Resorts
(October 2005) and Baymont Inn & Suites (April 2006) from their
acquisition dates forward. Therefore, the operating statistics are not
presented on a comparable basis.
(b)Amounts include managed hotels - non-proprietary brands rooms and
properties.
Wyndham Worldwide Corporation
OPERATING STATISTICS
GLOSSARY OF TERMS
Lodging
Weighted Average Rooms Available: Represents the weighted average number of hotel rooms available for rental for the period at lodging properties.
Number of Properties: Represents the number of lodging properties operated under franchise and management agreements at the end of the period.
RevPAR: Represents revenue per available room and is calculated by multiplying the percentage of available rooms occupied for the period by the average rate charged for renting a lodging room for one day.
Royalty, Marketing and Reservation Revenue: Royalty, marketing and reservation revenue are typically based on a percentage of the gross room revenues of each franchise. Royalty revenue is generally a fee charged to each franchise for the use of one of our trade names, while marketing and reservation revenue are fees that we collect and are contractually obligated to spend to support marketing and reservation activities.
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 gross number of transactions that are generated in connection with customers booking their vacation rental stays through us. In our European vacation rental 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 is 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 is a component of upgrade sales, by the number of tours.
Table 4
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
December September June March December
31, 30, 30, 31, 31,
2006 2006 2006 2006 2005
Securitized vacation ownership
debt
Term notes $838 $967 $575 $656 $740
Bank conduit facility (a) 625 371 653 511 395
Securitized vacation ownership
debt (b) 1,463 1,338 1,228 1,167 1,135
Less: Current portion of
securitized vacation
ownership debt 178 213 210 184 154
Long-term securitized vacation
ownership debt $1,285 $1,125 $1,018 $983 $981
Debt:
6.00% Senior unsecured notes
(due December 2016)(c) $796 $- $- $- $-
Revolving credit facility (due
July 2011)(d) - 150 - - -
Interim loan facility (due July
2007) - 350 - - -
Term loan (due July 2011) 300 300 - - -
Vacation ownership asset-
linked facility(e) - - 600 575 550
Bank borrowings:
Vacation ownership 103 113 111 104 113
Vacation rental 73 70 70 66 68
Vacation rental capital leases 148 144 145 141 139
Other 17 37 35 35 37
Total debt 1,437 1,164 961 921 907
Less: Current portion of debt 115 143 207 196 201
Long-term debt $1,322 $1,021 $754 $725 $706
(a)This 364-day vacation ownership bank conduit facility was renewed and
upsized to $1,000 million on November 13, 2006. The borrowings under
this facility have a maturity date of December 2009.
(b)This debt is collateralized by $1,844 million, $1,718 million, $1,624
million, $1,556 million and $1,515 million of underlying vacation
ownership contract receivables and related assets at December 31, 2006,
September 30, 2006, June 30, 2006, March 31, 2006 and December 31,
2005, respectively.
(c)These notes represent $800 million aggregate principal less $4 million
of original issue discount.
(d)The Company's revolving credit facility has a borrowing capacity of
$900 million. At December 31, 2006, the Company has $30 million of
outstanding letters of credit and a remaining borrowing capacity of
$870 million.
(e)The Company provided $600 million to its former parent, Cendant (now
Avis Budget Group, Inc.) to repay this facility in July 2006.
Table 5
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
December 31, 2006
Average
Revenue
Average Per
Average Daily Available
Number of Number of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
Wyndham Hotels
and Resorts 82 22,582 68.6% $110.37 $75.68
Wingate Inn 154 14,146 64.7% $83.99 $54.33
Ramada 871 105,986 53.7% $72.34 $38.85
Baymont (a) 137 12,377 57.7% $63.35 $36.56
AmeriHost Inn 98 6,745 53.7% $62.09 $33.37
Days Inn 1,859 151,438 52.0% $60.37 $31.41
Super 8 2,054 126,175 55.2% $56.17 $31.00
Howard Johnson 467 44,432 46.3% $65.82 $30.45
Travelodge 503 37,468 50.7% $63.05 $31.95
Knights Inn 231 16,892 42.3% $40.11 $16.98
Managed Hotels - Non-
Proprietary Brands (b) 17 4,993 N/A N/A N/A
Total 6,473 543,234 53.4% $65.44 $34.95
December 31, 2005
Average
Revenue
Average Per
Average Daily Available
Number of Number of Occupancy Rate Room
Brand Properties Rooms Rate (ADR) (RevPAR)
Wyndham Hotels
and Resorts (a) 101 29,651 62.1% $102.46 $63.66
Wingate Inn 146 13,573 63.9% $78.33 $50.08
Ramada 916 108,937 53.4% $66.61 $35.60
AmeriHost Inn 114 8,194 56.4% $60.69 $34.24
Days Inn 1,844 150,302 50.2% $57.65 $28.96
Super 8 2,040 124,031 53.7% $53.36 $28.65
Howard Johnson 458 43,430 48.4% $60.12 $29.10
Travelodge 513 38,410 48.9% $57.44 $28.09
Knights Inn 216 16,141 42.2% $38.34 $16.19
Total 6,348 532,669 51.9% $59.78 $31.00
(a)Average Occupancy Rate, ADR and RevPAR include the impact of the
acquisitions of Baymont Inn & Suites (April 2006) and Wyndham Hotel and
Resorts (October 2005) from their acquisition dates forward.
(b)Thirteen of these properties are scheduled to be branded as either
Wyndham or Ramada during 2007.
Table 6
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION
(In millions, except per share data)
Year
Three Months Ended Ended
March June September December December
31, 30, 30, 31, 31,
2006 2006 2006 2006 2006
Reported EBITDA $182 $166 $176 $201 $725
Separation and related
costs(a) 3 5 68 23 99
Incremental stand-alone
costs(b) (13) (13) (4) - (30)
Resolution of contingent
liabilities(c) - - - (32) (32)
Adjusted EBITDA $172 $158 $240 $192 $762
Reported Depreciation and
Amortization $(34) $(36) $(37) $(41) $(148)
Incremental stand-alone
costs(b) (1) (1) - - (2)
Adjusted Depreciation and
Amortization $(35) $(37) $(37) $(41) $(150)
Reported Interest Income/
(Expense) $2 $(11) $(12) $(14) $(35)
Incremental stand-alone
costs(b) (12) (12) (4) - (28)
Adjusted Interest Expense $(10) $(23) $(16) $(14) $(63)
Reported PreTax Income $150 $119 $127 $146 $542
Separation and related
costs(a) 3 5 68 23 99
Incremental stand-alone
costs(b) (26) (26) (8) - (60)
Resolution of contingent
liabilities(c) - - - (32) (32)
Adjusted PreTax Income $127 $98 $187 $137 $549
Reported Tax Provision $(57) $(44) $(35) $(54) $(190)
Separation and related
costs(d) (2) (2) (25) (1) (30)
Incremental stand-alone
costs(d) 10 10 3 - 23
State tax rate
adjustment(d)(e) - - (15) - (15)
Resolution of contingent
liabilities(d) - - - 2 2
Adjusted Tax Provision $(49) $(36) $(72) $(53) $(210)
Reported Net Income $28 $75 $92 $92 $287
Cumulative effect of
SFAS No. 152(f) 65 - - - 65
Reported Income Before
Cumulative
Effect of SFAS No. 152 93 75 92 92 352
Separation and related
costs 1 3 43 22 69
Incremental stand-alone
costs (16) (16) (5) - (37)
State tax rate adjustment - - (15) - (15)
Resolution of contingent
liabilities - - - (30) (30)
Adjusted Net Income $78 $62 $115 $84 $339
Reported EPS $0.14 $0.37 $0.45 $0.48 $1.44
Cumulative effect of
SFAS No. 152 0.32 - - - 0.33
Reported Income Before
Cumulative
Effect of SFAS No. 152 0.46 0.37 0.45 0.48 1.77
Separation and related
costs 0.00 0.01 0.21 0.11 0.35
Incremental stand-alone
costs (0.08) (0.08) (0.02) - (0.19)
State tax rate adjustment - - (0.07) - (0.08)
Resolution of contingent
liabilities - - - (0.15) (0.15)
Adjusted EPS $0.39 $0.31 $0.56 $0.44 $1.70
Diluted Shares(g) 200 200 203 194 199
Note: EPS amounts may not foot down or across due to rounding.
(a)Represents the costs incurred in connection with the Company's
separation from Cendant (primarily the acceleration of vesting of
Cendant equity awards and the related equitable adjustments of such
awards).
(b)Represents the Company's estimate of incremental stand-alone corporate
costs, depreciation and amortization and interest expense associated
with corporate debt that the Company would have incurred if it was a
separate stand-alone company.
(c)Relates to the net benefit from the resolution of certain contingent
liabilities.
(d)Relates to the tax effect of the adjustments.
(e)Relates to a $15 million benefit relating to refinements in the
Company's 2005 state effective tax rates.
(f)Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January 1,
2006.
(g)For all periods prior to our separation date (July 31, 2006), the
Company assumed one share of Wyndham common stock outstanding for every
five shares of Cendant common stock outstanding as of July 21, 2006,
the record date for the distribution of Wyndham common stock.
Table 6
(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION
(In millions, except per share data)
Year
Three Months Ended Ended
March June September December December
31, 30, 30, 31, 31,
2005 2005 2005 2005 2005
Reported EBITDA $159 $182 $233 $177 $751
Incremental stand-
alone costs(a) (13) (13) (13) (13) (52)
Adjusted EBITDA $146 $169 $220 $164 $699
Reported Depreciation and
Amortization $(32) $(33) $(33) $(33) $(131)
Incremental stand-
alone costs(a) (1) (1) (1) (1) (4)
Adjusted Depreciation and
Amortization $(33) $(34) $(34) $(34) $(135)
Reported Interest Income/
(Expense) $(2) $(1) $1 $8 $6
Incremental stand-alone
costs(a) (12) (12) (12) (11) (47)
Adjusted Interest Expense $(14) $(13) $(11) $(3) $(41)
Reported PreTax Income $125 $148 $201 $152 $626
Incremental stand-
alone costs(a) (26) (26) (26) (25) (103)
Adjusted PreTax Income $99 $122 $175 $127 $523
Reported Tax (Provision)/
Benefit $5 $(59) $(80) $(61) $(195)
Incremental stand-
alone costs(b) 10 10 10 10 40
Adjusted Tax (Provision)/
Benefit $15 $(49) $(70) $(51) $(155)
Reported Net Income $130 $89 $121 $91 $431
Incremental stand-
alone costs (16) (16) (16) (15) (63)
Adjusted Net Income $114 $73 $105 $76 $368
Reported EPS $0.65 $0.44 $0.60 $0.45 $2.15
Incremental stand-
alone costs (0.08) (0.08) (0.08) (0.07) (0.31)
Adjusted EPS $0.57 $0.36 $0.52 $0.38 $1.84
Diluted Shares (c) 200 200 200 200 200
Note: EPS amounts may not foot across due to rounding.
(a) Represents the Company's estimate of incremental stand-alone corporate
costs, depreciation and amortization and interest expense associated
with corporate debt that the Company would have incurred if it was a
separate stand-alone company.
(b) Relates to the tax effect of the adjustments.
(c) For all periods prior to our separation date (July 31, 2006), the
Company assumed one share of Wyndham common stock outstanding for
every five shares of Cendant common stock outstanding as of July 21,
2006, the record date for the distribution of Wyndham common stock.
Table 7
(1 of 5)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended March 31, 2006
Legacy
Separation and Stand-Alone
As and Related Other Company As
Reported Adjustments Adjustments Adjustments Adjusted
Revenues
Vacation
ownership
interest
sales $309 $309
Service fees
and membership 356 356
Franchise fees 109 109
Consumer
financing 65 65
Other 31 31
Net revenues 870 - - - 870
Expenses
Operating 332 332
Cost of vacation
ownership
interests 67 67
Marketing and
reservation 174 174
General and
administrative 112 13(b) 125
Separation and
related costs 3 (3)(a) -
Depreciation and
amortization 34 1(b) 35
Total expenses 722 (3) - 14 733
Operating income 148 3 - (14) 137
Interest expense
(income), net (2) - - 12(b) 10
Income before
income taxes 150 3 - (26) 127
Provision for
income taxes 57 2(c) - (10)(c) 49
Income before
cumulative
effect of
accounting change 93 1 - (16) 78
Cumulative effect
of accounting
change, net of
tax (65) - 65(d) - -
Net income $28 $1 $65 $(16) $78
Earnings per share
Basic
Income before
cumulative
effect of
accounting
change $0.46 $- $- $(0.08) $0.39
Cumulative
effect of
accounting
change (0.32) - 0.32 - -
Net income $0.14 $- $0.32 $(0.08) $0.39
Diluted
Income before
cumulative
effect of
accounting
change $0.46 $- $- $(0.08) $0.39
Cumulative
effect of
accounting
change (0.32) - 0.32 - -
Net income $0.14 $- $0.32 $(0.08) $0.39
Weighted average
shares
outstanding
Basic 200 200 200 200 200
Diluted 200 200 200 200 200
Note: EPS amounts may not foot across due to rounding.
(a)Represents the costs incurred in connection with the Company's
separation from Cendant.
(b)Represents the Company's estimate of incremental stand-alone
corporate costs, depreciation and amortization and interest expense
associated with corporate debt that the Company would have incurred
if it was a separate stand-alone company.
(c)Relates to the tax effect of the adjustments.
(d)Represents non-cash charges to reflect the cumulative effect of
adopting Statement of Financial Accounting Standards No. 152,
"Accounting for Real Estate Time-Sharing Transactions," on January
1, 2006.
Table 7
(2 of 5)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended June 30, 2006
Separation
and Stand-Alone
As Related Company As
Reported Adjustments Adjustments Adjusted
Revenues
Vacation ownership
interest sales $377 $377
Service fees and
membership 341 341
Franchise fees 134 134
Consumer financing 70 70
Other 33 33
Net revenues 955 - - 955
Expenses
Operating 369 369
Cost of vacation ownership
interests 80 80
Marketing and reservation 194 194
General and administrative 141 13(b) 154
Separation and related
costs 5 (5)(a) -
Depreciation and
amortization 36 1(b) 37
Total expenses 825 (5) 14 834
Operating income 130 5 (14) 121
Interest expense, net 11 - 12(b) 23
Income before income taxes 119 5 (26) 98
Provision for income taxes 44 2(c) (10)(c) 36
Net income $75 $3 $(16) $62
Earnings per share
Basic $0.37 $0.01 $(0.08) $0.31
Diluted $0.37 $0.01 $(0.08) $0.31
Weighted average shares
outstanding
Basic 200 200 200 200
Diluted 200 200 200 200
Note: EPS amounts may not foot across due to rounding.
(a)Represents the costs incurred in connection with the Company's
separation from Cendant.
(b)Represents the Company's estimate of incremental stand-alone corporate
costs, depreciation and amortization and interest expense associated
with corporate debt that the Company would have incurred if it was a
separate stand-alone company.
(c)Relates to the tax effect of the adjustments.
Table 7
(3 of 5)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended September 30, 2006
Separation
and Stand-Alone
As Related Company As
Reported Adjustments Adjustments Adjusted
Revenues
Vacation ownership interest
sales $396 $396
Service fees and membership 392 392
Franchise fees 146 146
Consumer financing 77 77
Other 36 36
Net revenues 1,047 - - 1,047
Expenses
Operating 382 382
Cost of vacation ownership
interests 92 92
Marketing and reservation 198 198
General and administrative 131 4(b) 135
Separation and related costs 68 (68)(a) -
Source: prnewswire
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