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Adjusted EPS up 11% to $0.83
PARSIPPANY, N.J., Oct. 30, 2008 - Wyndham Worldwide
Corporation (NYSE: WYN) today announced results for the three months ended
September 30, 2008.
HIGHLIGHTS:
-- Third quarter reported EPS grew by 23%, or
11% on an adjusted basis. Third quarter 2008 net income was $142 million,
or $0.80 diluted earnings per share. Adjusted net income, excluding
$6 million after-tax in legacy items and restructuring costs, was $148
million, or $0.83 adjusted diluted earnings per share, exceeding Company-issued
guidance of $0.80 - 0.82.
-- Third quarter 2008 revenues were $1.2 billion,
up 1% from the third quarter of 2007.
Compared to the third quarter of 2007:
-- System size increased by 42,500 rooms, or
8% (2% excluding the impact of the Microtel and Hawthorn brands acquisition
in July 2008). -- Average net price per vacation rental increased
9%, or 5% in constant currency.
-- Average number of vacation exchange members
increased 4%, or 135,000 members.
-- Gross Vacation Ownership Interest sales increased
3%.
-- EBITDA increased in each of the Company's
businesses.
"We produced solid operating results during the quarter
in a difficult global economic environment," said Stephen P. Holmes, Wyndham
Worldwide Chairman and Chief Executive Officer. "We are taking the necessary
steps to best weather this storm and, if necessary, we will make further
adjustments. The diversity and flexibility of our business model enables
us to adjust to changes in the marketplace to optimize our performance."
THIRD QUARTER 2008 OPERATING RESULTS
Revenues for the third quarter of 2008 were $1.2 billion,
up 1% compared to the third quarter of 2007. The Company also reported
year-over-year EBITDA growth in each of its three business units during
the third quarter of 2008. Reported net income for the third quarter of
2008 was $142 million, or $0.80 diluted earnings per share, compared to
$117 million, or $0.65 diluted earnings per share, for the third quarter
of 2007. Excluding $2 million in after-tax net expense from the resolution
of, and adjustment to, certain legacy items and $4 million in after-tax
restructuring costs, adjusted net income for the third quarter of 2008
would have been $148 million, or $0.83 adjusted diluted earnings per share,
an 11% increase compared to adjusted net income of $134 million, or adjusted
diluted earnings per share of $0.75, in the third quarter of 2007. Adjusted
net income in the third quarter of 2007 excludes $2 million in after-tax
separation and related costs and $15 million in after-tax net expense from
the resolution of, and adjustment to, certain legacy items.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $213 million in the third quarter of 2008,
up $2 million, or 1%, when compared with the third quarter of 2007. Higher
revenues resulting from the Microtel and Hawthorn brands acquisition and
incremental properties were partially offset by a decline in worldwide
RevPAR. System-wide RevPAR decreased 2.7% in the third quarter of 2008,
reflecting 4.2% and 1.7% declines in domestic and international RevPAR,
respectively. Third quarter 2008 EBITDA grew 3% to $72 million, compared
to $70 million in the third quarter of 2007. This increase was driven by
cost containment initiatives, the Microtel and Hawthorn brands acquisition,
a one-time benefit resulting from the sale of a non-strategic asset and
lower marketing expenses due to timing, which were partially offset by
$4 million in restructuring costs. Excluding the $4 million restructuring
costs, adjusted third quarter 2008 EBITDA would have been $76 million,
a 9% increase over 2007. As of September 30, 2008, the Company's hotel
system consisted of 6,970 properties and approximately 583,400 rooms, of
which 20% were international, with a development pipeline of approximately
990 hotels and more than 111,000 rooms, of which 51% were new construction
and 41% were international.
Vacation Exchange and Rentals (Group RCI)
Revenues were $354 million in the third quarter of 2008,
a 5% increase compared with the third quarter of 2007, reflecting growth
in vacation rentals and ancillary revenues, partially offset by lower annual
dues and exchange revenues. In constant currency, revenues increased 3%
compared to the third quarter of 2007. Vacation rentals revenues were $199
million, up 9% compared to the third quarter of 2007, or a 5% increase
in constant currency. The increase reflects a higher average net price
per rental and the conversion of an existing Landal park from franchised
to a managed property. Rental transaction volume was flat during the third
quarter of 2008 compared to the prior year. Annual dues and exchange revenues
were $114 million, down 2% compared to the third quarter of 2007. A 4%
increase in the average number of members was more than offset by a 5%
decline in the average revenue per member. Other ancillary revenues were
$41 million, up 8% compared to the third quarter of 2007, reflecting increased
club servicing revenues, fees from credit card loyalty programs and fees
generated from programs with affiliated resorts. Third quarter 2008 EBITDA
was $105 million, compared to third quarter 2007 EBITDA of $103 million.
Revenue gains and overhead cost reductions were partially offset by unfavorable
foreign exchange impact on expenses, incremental marketing expenditures
and higher operational expenses related to a Landal park conversion. In
constant currency, EBITDA increased 4% compared to the third quarter of
2007. Excluding $2 million of restructuring costs, in constant currency
adjusted third quarter 2008 EBITDA would have been $109 million, a 6% increase
over the prior year.
Vacation Ownership (Wyndham Vacation Ownership)
Gross Vacation Ownership Interest sales were $566 million
for the third quarter of 2008, up 3% compared to the third quarter of 2007.
This increase was principally driven by modest increases in tour flow and
volume per guest, as well as higher levels of upgrades. Consumer finance
revenues increased $18 million to $111 million in the third quarter of
2008, up 19% compared to the third quarter of 2007, reflecting continued
growth in the portfolio due to higher gross VOI sales. Reported revenues
were $661 million in the third quarter of 2008, down 1% compared to the
third quarter of 2007, including a higher provision for loan losses. Third
quarter 2008 revenues were also reduced by $2 million as a result of deferred
vacation ownership revenue recorded under the percentage-of-completion
method of accounting, while the Company recognized $1 million of previously
deferred revenue in the third quarter of 2007. EBITDA for the third quarter
of 2008 increased 10% to $128 million, compared to $116 million in the
third quarter of 2007. The increase was primarily due to cost containment
and higher net interest income of $13 million. Third quarter 2007 EBITDA
includes a $7 million pre-tax gain on the sale of certain vacation ownership
properties.
Other Items
Interest expense for the third quarter of 2008 was $21
million, up from $20 million in the third quarter of 2007. Interest income
for the quarter was $2 million, down from $4 million from the comparable
prior-year period. Depreciation and amortization increased $4 million to
$47 million reflecting increased capital investments over the past two
years.
Bank Conduit Facility
The Company also announced that it expects to close
on or about November 10, 2008, a new timeshare receivables conduit facility
led by J.P. Morgan. The facility is expected to have capacity of at least
$800 million.
Balance Sheet Information as of September 30, 2008:
-- Cash and cash equivalents of approximately
$230 million compared to approximately $210 million at December 31, 2007
-- Vacation ownership contract receivables,
net, of $3.3 billion compared to $2.9 billion at December 31, 2007
-- Vacation ownership and other inventory of
approximately $1.3 billion compared to $1.2 billion at December 31, 2007
-- Securitized vacation ownership debt of $2.1
billion, unchanged since December 31, 2007
-- Other debt of $1.7 billion, compared to $1.5
billion at December 31, 2007
A schedule of debt is included in the financial tables
section of this press release.
Outlook
Given the disruptions in the global economy and capital
markets, and uncertainty about how these will impact employment, consumer
spending and other macroeconomic drivers, guidance related to Wyndham Worldwide's
performance during the remainder of 2008 and 2009 is subject to higher
than normal levels of uncertainty. The following guidance reflects assumptions
used for internal planning purposes. If economic conditions improve or
deteriorate materially from current levels, these assumptions and our guidance
may change materially. For the fourth quarter 2008, the Company expects
adjusted EPS of $0.41 - $0.46 based on weighted average shares of approximately
178 million.
The Company's updated full-year 2008 guidance is:
-- Revenues of $4,360 - $4,410 million
-- Adjusted* EBITDA of $850 - $880 million
-- Depreciation and amortization expense of
$175 - $185 million
-- Interest expense, net of $70 - $80 million
-- Adjusted* net income of $377 - $386 million
-- Adjusted* EPS of $2.12 - $2.17 based on weighted
average shares of approximately 178 million
Management provided preliminary guidance for the full-year
2009:
-- Revenues of approximately $4.1 - $4.5 billion
-- Adjusted* EBITDA of approximately $830 -
$890 million
* All guidance excludes legacy items, rebranding charges
and restructuring costs, if any, which may have a positive or negative
impact on reported results, as applicable.
On October 6, 2008, the Company announced strategic
realignments that would result in estimated pre-tax restructuring costs
of approximately $7 million in the third quarter of 2008, $10 - $15 million
in the fourth quarter of 2008, and $5 - $10 million in the first quarter
of 2009. Based upon more refined plans, the Company now believes it will
incur restructuring costs of approximately $25 - $30 million in the fourth
quarter of 2008 and approximately $5 - $10 million in the first quarter
of 2009.
Conference Call Information
Wyndham Worldwide Corporation will provide a webcast
of its conference call to discuss the Company's third quarter 2008 financial
results and outlook for the remainder of 2008 and full-year 2009 on Thursday,
October 30, 2008 at 8:30 a.m. EDT. 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 EDT on October 30. The conference call also may
be accessed by dialing (888) 395-6878 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 (800) 280-4691 beginning
at noon EDT on October 30 until 5 p.m. EST on December 15, 2008.
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 this 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 6,970 franchised
hotels and approximately 583,400 hotel rooms worldwide. Group RCI offers
its nearly 3.7 million members access to more than 67,000 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 145 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 32,000 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 the Company's revenues,
earnings and related financial and operating measures, financing transactions,
restructuring plans, and the number of hotel rooms the Company intends
to add in future periods. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of
this press release. Factors that could cause actual results to differ materially
from those in the forward-looking statements include general economic conditions,
the performance of the financial and credit markets, the economic environment
for the hospitality industry, the impact of war 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
2007 Annual Report on Form 10-K, filed with the SEC on February 29, 2008.
Except for the Company's ongoing obligations to disclose material information
under the federal securities laws, it undertakes no obligation to release
publicly any revisions to any forward-looking statements, to report events
or to report the occurrence of unanticipated events.
Table 1 Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS (In millions)
In addition to other measures, management evaluates
the operating results of each of its reportable segments based upon net
revenues and "EBITDA," which is defined as net income before depreciation
and amortization, interest expense (excluding interest on securitized vacation
ownership debt), interest income and income taxes, each of which is presented
on the Company's Consolidated 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 net revenues and EBITDA for reportable
segments, as well as reconcile EBITDA to net income for the three and nine
months ended September 30, 2008 and 2007:
Three Months Ended Sept. 30,
----------------------------
2008
2007
----
----
Net Revenues EBITDA (d) Net Revenues EBITDA (f)
------------ ------ ------------
------
Lodging
$213 $72
$211 $70
Vacation Exchange
and Rentals
354 105
336 103
Vacation Ownership
661 128
671 116
--- ---
--- ---
Total
Reportable
Segments
1,228 305
1,218 289
Corporate and Other(a)(b)
(2) (11)
(2) (41)
-- ---
-- ---
Total Company
$1,226 $294
$1,216 $248
====== ====
====== ====
Reconciliation of
EBITDA to Net Income
-----------------
EBITDA
$294
$248
Depreciation and
amortization
47
43
Interest expense
21
20
Interest income
(2)
(4)
--
--
Income before income
taxes
228
189
Provision for income
taxes
86
72
--
--
Net income
$142
$117
====
====
Nine Months Ended Sept. 30,
---------------------------
2008
2007
----
----
Net Revenues EBITDA (d) Net Revenues EBITDA (f)
------------ ------ ------------
------
Lodging
$583 $179
$549 $174
Vacation Exchange
and Rentals
1,009 252
937 237
Vacation Ownership
1,786 248 (e)
1,849 279
----- ---
----- ---
Total
Reportable
Segments
3,378 679
3,335 690
Corporate and Other(a)(c)
(8) (34)
(7) (40)
-- ---
-- ---
Total Company
$3,370 $645
$3,328 $650
====== ====
====== ====
Reconciliation of
EBITDA to Net Income
-----------------
EBITDA
$645
$650
Depreciation and
amortization
137
122
Interest expense
59
55
Interest income
(8)
(9)
--
--
Income before income
taxes
457
482
Provision for income
taxes
175
184
---
---
Net income
$282
$298
====
====
__________
(a) Includes the elimination of transactions between
segments.
(b) Includes $1 million and $25 million of a net expense
during the three
months ended September 30, 2008
and 2007, respectively, related to the
resolution of and adjustment
to certain contingent liabilities and
assets.
(c) Includes $4 million and $5 million of a net benefit
during the nine
months ended September 30, 2008
and 2007, respectively, related to the
resolution of and adjustment
to certain contingent liabilities and
assets.
(d) Includes restructuring costs of $4 million and $2
million for Lodging
and Vacation Exchange and Rentals,
respectively, during both the three
and nine months ended September
30, 2008.
(e) Includes an impairment charge of $28 million due
to the Company's
initiative to rebrand its vacation
ownership trademarks to the Wyndham
brand.
(f) Includes separation and related costs of $1 million
and $2 million for
Vacation Ownership and Corporate
and Other, respectively, during the
three months ended September
30, 2007 and $9 million and $7 million
for Vacation Ownership and Corporate
and Other, respectively, during
the nine months ended September
30, 2007.
Table 2
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
Net revenues
Vacation ownership interest sales
$446 $467 $1,153 $1,283
Service fees and membership
468 442 1,344 1,232
Franchise fees
153 155 402
406
Consumer financing
111 93 314
261
Other
48 59 157
146
-- -- ---
---
Net revenues
1,226 1,216 3,370 3,328
----- ----- ----- -----
Expenses
Operating
439 440 1,284 1,246
Cost of vacation ownership
interests
86 101 226
296
Consumer financing interest (a)
34 29 93
77
Marketing and reservation
232 229 659
632
General and administrative (b)
140 174 438
419
Separation and related costs (c)
- 3 -
16
Trademark impairment (d)
- - 28
-
Restructuring costs (e)
6 - 6
-
Depreciation and amortization
47 43 137
122
-- -- ---
---
Total expenses
984 1,019 2,871 2,808
--- ----- ----- -----
Operating income
242 197 499
520
Other income, net
(5) (8) (9)
(8)
Interest expense
21 20 59
55
Interest income
(2) (4) (8)
(9)
-- -- --
--
Income before income taxes
228 189 457
482
Provision for income taxes
86 72 175
184
-- -- ---
---
Net income
$142 $117 $282 $298
==== ==== ==== ====
Earnings per share
Basic
$0.80 $0.65 $1.59 $1.63
Diluted
0.80 0.65 1.58 1.62
Weighted average shares outstanding
Basic
178 179 177
183
Diluted
178 180 178
184
__________
(a) Prior to periods ending September 30, 2008, such
amounts were included
as a component of Operating
Expenses.
(b) Includes $1 million and $25 million of a net expense
during the three
months ended September 30, 2008
and 2007, respectively, and $4 million
and $5 million of a net benefit
during the nine months ended
September 30, 2008 and 2007,
respectively, related to the resolution
of and adjustment to certain
contingent liabilities and assets.
(c) 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 $2 million and
$10 million during the three
and nine months ended September 30, 2007,
respectively.
(d) Represents an impairment charge due to the Company's
initiative to
rebrand its vacation ownership
trademarks to the Wyndham brand. Such
amount, net of tax, was $17
million during the nine months ended
September 30, 2008.
(e) Relates to costs incurred as a result of various
strategic initiatives
approved by the Company and
commenced during the third quarter of
2008. Such amount, net
of tax, was $4 million during both the three
and nine months ended September
30, 2008.
Table 3
(1 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
Year Q1 Q2
Q3 Q4 Full
Year
---- -- --
-- -- ---------
Lodging (a)
Number of
Rooms (b)
2008 551,100 551,500 583,400
N/A N/A
2007 539,300 541,700 540,900 550,600
N/A
2006 525,500 535,900 533,700 543,200
N/A
2005 519,300 516,000 512,000 532,700
N/A
RevPAR
2008 $32.21 $38.87 $41.93
N/A N/A
2007 $31.35 $38.35 $43.10
$33.09 $36.48
2006 $30.45 $36.97 $40.82
$31.41 $34.95
2005 $25.53 $31.91 $36.86
$29.72 $31.00
Royalty,
Marketing and
Reservation
Revenue (in
000s)
2008 $104,162 $127,238 $145,502 N/A
N/A
2007 $105,426 $129,453 $146,290 $107,870 $489,041
2006 $102,741 $125,409 $138,383 $104,505 $471,039
2005 $84,704 $104,281 $119,829 $99,804 $408,620
Vacation
Exchange and
Rentals
Average
Number of
Members
(in 000s)
2008 3,632 3,682
3,673 N/A
N/A
2007 3,474 3,506
3,538 3,588 3,526
2006 3,292 3,327
3,374 3,429 3,356
2005 3,148 3,185
3,233 3,271 3,209
Annual Dues
and Exchange
Revenue Per
Member
2008 $150.84 $128.91 $124.51
N/A N/A
2007 $155.60 $132.33 $131.38 $124.59
$135.85
2006 $152.10 $130.37 $132.31 $128.13
$135.62
2005 $159.12 $134.98 $125.64 $124.05
$135.76
Vacation
Rental
Transactions
(in 000s)
2008 387 319
360 N/A
N/A
2007 398 326
360 293 1,376
2006 385 310
356 293 1,344
2005 367 311
344 278 1,300
Average Net
Price Per
Vacation
Rental
2008 $412.74 $477.63 $553.69
N/A N/A
2007 $349.73 $415.71 $506.78 $426.93
$422.83
2006 $312.51 $374.91 $442.75 $356.16
$370.93
2005 $331.37 $363.14 $412.66 $325.62
$359.27
Vacation
Ownership
Gross
Vacation
Ownership
Interest
Sales (in
000s)
2008 $458,000 $532,000 $566,000 N/A
N/A
2007 $430,000 $523,000 $552,000 $488,000 $1,993,000
2006 $357,000 $434,000 $482,000 $469,000 $1,743,000
2005 $281,000 $354,000 $401,000 $360,000 $1,396,000
Tours
2008 255,000 314,000 334,000
N/A N/A
2007 240,000 304,000 332,000 268,000 1,144,000
2006 208,000 273,000 312,000 254,000 1,046,000
2005 195,000 250,000 272,000 217,000
934,000
Volume Per
Guest (VPG) 2008
$1,668 $1,583 $1,550
N/A N/A
2007 $1,607 $1,596 $1,545
$1,690 $1,606
2006 $1,475 $1,426 $1,434
$1,623 $1,486
2005 $1,349 $1,284 $1,349
$1,507 $1,368
__________
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), 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) Numbers include affiliated rooms from the fourth
quarter of
2006 forward.
Table 3
(2 of 2)
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 the CHI Limited 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.
Royalty, Marketing and Reservation Revenues: Royalty,
marketing and
reservation revenues are typically based on a percentage of the gross room
revenues of each hotel. Royalty revenue is generally a fee charged to each
franchised or managed hotel for the use of one of our trade names, while
marketing and reservation revenues are fees that we collect and are
contractually obligated to spend to support marketing and reservation
activities. Marketing and reservation fees are also included in Table 4
within Marketing, Reservation and Wyndham Rewards Revenues.
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 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
ADDITIONAL DATA
Year Q1 Q2
Q3 Q4
Full Year
---- -- --
-- --
---------
Lodging (a)
Number of
Properties(b) 2008
6,550 6,560 6,970
N/A N/A
2007 6,450 6,460
6,460 6,540
N/A
2006 6,300 6,440
6,420 6,470
N/A
2005 6,400 6,380
6,350 6,350
N/A
Marketing,
Reservation
and Wyndham
Rewards
Revenues
(in 000s)(c) 2008 $62,200
$76,507 $85,491 N/A
N/A
2007 $61,369 $74,575 $84,820
$65,208 $285,973
2006 $58,572 $70,931 $78,856
$61,135 $269,495
2005 $45,066 $56,558 $65,812
$58,053 $225,491
Property
Management
Reimbursable
Revenue
(in 000s)(d) 2008 $27,128
$26,326 $24,973 N/A
N/A
2007 $15,624 $22,338 $25,612
$28,414 $91,987
2006 $15,732 $19,935 $17,210
$16,263 $69,142
2005 $-
$- $- $17,291
$17,291
Vacation
Ownership
Deferred
Revenues
(in 000s)(e) 2008 $(81,716)
$(5,240) $(2,023) N/A
N/A
2007 $3,906 $(4,908) $506
$(21,092) $(21,588)
2006 $12,708 $(221) $(23,491) $(10,675)
$(21,679)
2005 $492 $(9,150) $(5,856)
$(2,022) $(16,536)
Provision for
Loan Losses
(in 000s)(f) 2008 $82,344
$112,669 $118,609 N/A
N/A
2007 $60,869 $75,032 $85,762
$83,644 $305,307
2006 $61,242 $55,872 $63,213
$78,680 $259,007
2005 $24,652 $27,754 $44,050
$31,644 $128,101
__________
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),
Wyndham Hotels and Resorts
(October 2005) 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) 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. Marketing and reservation
fees are also included in the
above table within royalty, marketing
and reservation revenues.
Wyndham Rewards revenues represent fees
we receive relating to our loyalty
program.
(d) 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.
(e) 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.
(f) Represents provision for estimated losses on vacation
ownership
contract receivables originated
during the period. Beginning
January 1, 2006, the Company
recorded such provision as a contra
revenue to vacation ownership
interest sales on the Consolidated and
Combined Statements of Income,
as required by Statement of Financial
Accounting Standards No. 152,
''Accounting for Real Estate
Time-Sharing Transactions.''
Prior to January 1, 2006, the Company
recorded such provision, net
of estimated inventory recoveries, as a
separate expense line item on
the Combined Statements of Income and
thus 2005 amounts are not comparable
to 2006, 2007 and 2008 amounts.
Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
Sept. 30, June 30, March 31, Dec. 31, Sept.
30,
2008 2008
2008 2007 2007
--------- ----------- ---------- -------- ---------
Securitized
vacation
ownership
debt
Term notes $1,437
$1,727 $1,278 $1,435
$1,148
Bank
conduit
facility(a)
647 354
841 646
777
--- ---
--- ---
---
Securitized
vacation
ownership
debt (b)
2,084 2,081
2,119 2,081 1,925
Less:
Current portion
of securitized
vacation
ownership debt 324
284 268
237 304
--- ---
--- ---
---
Long-term
securitized
vacation
ownership debt $1,760
$1,797 $1,851 $1,844
$1,621
====== ====== ======
====== ======
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)
305 145
95 97
133
Vacation
ownership
bank
borrowings
172 196
181 164
148
Vacation
rentals
capital
leases
143 162
165 154
153
Other
12 13
14 14
14
-- --
-- --
--
Total debt
1,729 1,613
1,552 1,526 1,545
Less: Current
portion of debt 182
207 193
175 159
--- ---
--- ---
---
Long-term debt $1,547
$1,406 $1,359 $1,351
$1,386
====== ====== ======
====== ======
__________
(a) This 364-day vacation ownership bank conduit facility
has availability
of $1,200 million and is no
longer revolving as of October 29, 2008.
See press release discussion
regarding a new bank conduit facility.
(b) This debt is collateralized by $2,721 million, $2,723
million, $2,667
million, $2,596 million and
$2,428 million of underlying vacation
ownership contract receivables
and related assets at September 30,
2008, June 30, 2008, March 31,
2008, December 31, 2007 and September
30, 2007, respectively.
(c) The balance at September 30, 2008 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 September
30, 2008, the Company has $60 million
of outstanding letters of credit
and a remaining borrowing capacity
of $535 million. The increase
in balance from June 30, 2008 to
September 30, 2008 primarily
relates to amounts borrowed to fund the
July 2008 acquisition of U.S.
Franchise Systems, Inc. and its
Microtel Inns & Suites and
Hawthorn Suites hotel brands.
Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
As of and For the Three Months Ended Sept. 30, 2008
---------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily
Available
of of Occupancy
Rate Room
Brand
Properties Rooms Rate
(ADR) (RevPAR)
-----
---------- ------- ---------- -------- ----------
Wyndham Hotels
and Resorts
80 21,365 63.4%
$123.13 $78.09
Wingate Inn
158 14,427 62.9%
$93.44 $58.77
Hawthorn Suites
90 8,404 63.5%
$91.00 $57.78
Ramada
877 110,844 57.0%
$82.35 $46.92
Baymont
213 18,194 55.7%
$67.82 $37.74
AmeriHost Inn
14 893 59.8%
$79.06 $47.27
Days Inn
1,878 152,557 56.9%
$68.95 $39.22
Super 8
2,098 130,056 62.1%
$63.69 $39.57
Howard Johnson
471 45,084 52.4%
$69.09 $36.20
Travelodge
482 36,203 56.1%
$73.48 $41.19
Microtel Inns &
Suites
301 21,431 57.9%
$63.51 $36.78
Knights Inn
294 19,568 45.4%
$46.18 $20.95
Unmanaged,
Affiliated and
Managed,
Non-Proprietary
Hotels (*)
14 4,367 N/A
N/A N/A
----- -------
Total
6,970 583,393 57.7%
$72.61 $41.93
===== =======
As of and For the Three Months Ended Sept. 30, 2007
----------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily
Available
of of Occupancy
Rate Room
Brand
Properties Rooms Rate
(ADR) (RevPAR)
-----
---------- ------- ---------- -------- ----------
Wyndham Hotels
and Resorts
75 20,585 65.3%
$110.47 $72.10
Wingate Inn
152 13,952 67.1%
$89.71 $60.18
Ramada
854 103,230 61.6%
$79.38 $48.91
Baymont
182 15,962 63.6%
$72.61 $46.16
AmeriHost Inn
39 2,754 58.4%
$70.99 $41.45
Days Inn
1,857 150,667 59.7%
$67.91 $40.57
Super 8
2,061 127,038 65.4%
$62.05 $40.60
Howard Johnson
465 44,422 53.9%
$69.40 $37.41
Travelodge
492 36,639 59.1%
$71.48 $42.27
Knights Inn
261 18,193 45.2%
$46.49 $21.01
Unmanaged,
Affiliated and
Managed,
Non-Proprietary
Hotels (*)
23 7,475 N/A
N/A N/A
----- -------
Total
6,461 540,917 60.9%
$70.77 $43.10
===== =======
_______________
NOTE: A glossary of terms is included in Table 3 (2
of 2).
(*) Represents 1) affiliated properties for which we
receive a fee for
reservation services provided and 2) properties managed
under the CHI
Limited joint venture. These properties are not
branded; as such, certain
operating statistics (such as average occupancy rate,
ADR and RevPAR) are
not relevant.
Table 6
(2 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
As of and For the Nine Months Ended Sept. 30, 2008
-------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily
Available
of of Occupancy
Rate Room
Brand
Properties Rooms Rate
(ADR) (RevPAR)
-----
---------- ------ ---------- -------- ----------
Wyndham Hotels
and Resorts
80 21,365 63.6%
$123.30 $78.44
Wingate Inn
158 14,427 62.3%
$92.72 $57.78
Hawthorn Suites
90 8,404 63.5%
$91.00 $57.78
Ramada
877 110,844 54.2%
$82.35 $44.63
Baymont
213 18,194 51.2%
$66.38 $34.02
AmeriHost Inn
14 893 49.2%
$71.45 $35.15
Days Inn
1,878 152,557 52.0%
$65.80 $34.24
Super 8
2,098 130,056 56.0%
$60.40 $33.84
Howard Johnson
471 45,084 48.5%
$65.95 $32.01
Travelodge
482 36,203 50.7%
$70.20 $35.60
Microtel Inns &
Suites
301 21,431 57.9%
$63.51 $36.78
Knights Inn
294 19,568 42.4%
$43.71 $18.54
Unmanaged,
Affiliated and
Managed,
Non-Proprietary
Hotels (*)
14 4,367 N/A
N/A N/A
----- -------
Total
6,970 583,393 53.4%
$70.68 $37.76
===== =======
As of and For the Nine Months Ended Sept. 30, 2007
-------------------------------------------------
Average
Revenue
Average Per
Number Number Average Daily
Available
of of Occupancy
Rate Room
Brand
Properties Rooms Rate
(ADR) (RevPAR)
-----
---------- ------- ---------- -------- ----------
Wyndham Hotels
and Resorts
75 20,585 65.2%
$112.65 $73.42
Wingate Inn
152 13,952 66.7%
$89.65 $59.82
Ramada
854 103,230 56.5%
$77.55 $43.86
Baymont
182 15,962 56.5%
$68.91 $38.90
AmeriHost Inn
39 2,754 49.0%
$66.71 $32.66
Days Inn
1,857 150,667 54.4%
$63.72 $34.67
Super 8
2,061 127,038 57.9%
$58.53 $33.91
Howard Johnson
465 44,422 49.4%
$65.59 $32.39
Travelodge
492 36,639 52.2%
$66.42 $34.68
Knights Inn
261 18,193 42.3%
$43.58 $18.43
Unmanaged,
Affiliated and
Managed,
Non-Proprietary
Hotels (*)
23 7,475 N/A
N/A N/A
----- -------
Total
6,461 540,917 55.4%
$67.94 $37.63
===== =======
_______________
NOTE: A glossary of terms is included in Table 3 (2
of 2).
(*) Represents 1) affiliated properties for which we
receive a fee for
reservation services provided and 2) properties managed
under the CHI
Limited joint venture. These properties are not
branded; as such, certain
operating statistics (such as average occupancy rate,
ADR and RevPAR) are
not relevant.
Table 7
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
Three Months Ended Nine
Months Ended
------------------ -----------------
March 31, June 30, Sept. 30,
Sept. 30,
2008 2008
2008
2008
---------- --------- ----------
----------
Reported EBITDA
$130 $221
$294
$645
Resolution of and
adjustment to
contingent
liabilities and
assets (a)
3 (7)
1
(4)
Trademark
impairment (b)
28 -
-
28
Restructuring costs(c)
- -
6
6
---- ----
----
----
Adjusted EBITDA
$161 $214
$301
$675
---------------
---- ----
----
----
Reported PreTax Income
$70 $160
$228
$457
Resolution of and
adjustment to
contingent
liabilities and
assets (a)
3 (7)
1
(4)
Trademark
impairment (b)
28 -
-
28
Restructuring costs(c)
- -
6
6
---- ----
----
----
Adjusted PreTax Income $101
$153 $235
$487
---------------
---- ----
----
----
Reported Tax Provision $(28)
$(62) $86
$175
Resolution of and
adjustment to
contingent
liabilities and
assets (d)
- 3
(1)
(5)
Trademark
impairment (d)
(11) -
-
11
Restructuring costs(d)
- -
2
2
---- ----
----
----
Adjusted Tax
Provision
$(39) $(59)
$87 $183
------------
---- ----
--- ----
Reported Net Income
$42 $98
$142
$282
Resolution of and
adjustment to
contingent
liabilities and
assets
3 (4)
2
1
Trademark impairment
17 -
-
17
Restructuring costs
- -
4
4
---- ----
----
----
Adjusted Net Income
$62 $94
$148
$304
-------------------
--- ---
----
----
Reported Diluted EPS $0.24
$0.55 $0.80
$1.58
Resolution of and
adjustment to
contingent
liabilities and
assets
0.01 (0.02)
0.01
0.01
Trademark impairment
0.10 -
- 0.10
Restructuring costs
- -
0.02
0.02
---- ----
----
----
Adjusted Diluted EPS $0.35
$0.53 $0.83
$1.71
-------------------- -----
----- -----
-----
Diluted Shares
178 178
178
178
__________
Note: Amounts may not foot due to rounding.
(a) Relates to the net (benefit)/expense from the resolution
of and
adjustment to certain contingent
liabilities and assets.
(b) Represents an impairment charge due to the Company's
initiative to
rebrand its vacation ownership
trademarks to the Wyndham brand.
(c) Relates to costs incurred as a result of various
strategic initiatives
approved by the Company and
commenced during the third quarter of
2008.
(d) 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 Nine
Months Ended
------------------ -----------------
March 31, June 30, Sept. 30,
Sept. 30,
2007 2007
2007
2007
---------- --------- ----------
----------
Reported EBITDA
$192 $211
$248
$650
Separation and
related costs (a)
6 7
3
16
Resolution of and
adjustment to
contingent
liabilities and
assets (b)
(13) (17)
25
(5)
--- ---
--
--
Adjusted EBITDA
$185 $201
$276
$661
---------------
---- ----
----
----
Reported PreTax Income $139
$154 $189
$482
Separation and
related costs (a)
6 7
3
16
Resolution of and
adjustment to
contingent
liabilities and
assets (b)
(13) (17)
25
(5)
--- ---
--
--
Adjusted PreTax Income $132
$144 $217
$493
---------------
---- ----
----
----
Reported Tax Provision $(53)
$(58) $(72)
$(184)
Separation and
related costs (c)
(2) (3)
(1)
(6)
Resolution of and
adjustment to
contingent
liabilities and
assets (c)
4 6
(10)
1
-- --
---
--
Adjusted Tax Provision $(51)
$(55) $(83)
$(189)
------------
---- ----
---- -----
Reported Net Income
$86 $96
$117
$298
Separation and
related costs
4 4
2
10
Resolution of and
adjustment to
contingent
liabilities and assets
(9) (11)
15
(4)
-- ---
--
--
Adjusted Net Income
$81 $89
$134
$304
-------------------
--- ---
----
----
Reported Diluted EPS $0.45
$0.52 $0.65
$1.62
Separation and
related costs
0.02 0.02
0.01
0.05
Resolution of and
adjustment to
contingent
liabilities and
assets
(0.05) (0.06)
0.09 (0.02)
----- -----
---- -----
Adjusted Diluted EPS $0.43
$0.49 $0.75
$1.65
-------------------- -----
----- -----
-----
Diluted Shares
190 183
180
184
__________
Note: Amounts may not foot due to rounding.
(a) Represents the costs incurred in connection with
the Company's
separation from Cendant (now
Avis Budget Group).
(b) Relates to the net (benefit)/expense from the resolution
of and
adjustment to certain contingent
liabilities and assets.
(c) Relates to the tax effect of the adjustments.
Table 8
(1 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended Sept. 30, 2008
-------------------------------------
As Legacy
Restructuring As
Reported Adjustments Costs
Adjusted
-------- ---------- -------------
---------
Net revenues
Vacation ownership
interest sales
$446
$446
Service fees
and membership
468
468
Franchise fees
153
153
Consumer financing 111
111
Other
48
48
--- ---
--- ---
Net revenues
1,226
-
- 1,226
----- ---
--- -----
Expenses
Operating
439
439
Cost of
vacation
ownership
interests
86
86
Consumer financing
Interest
34
34
Marketing
and reservation
232
232
General and
administrative
140 (1) (a)
139
Restructuring
costs
6
(6) (b) -
Depreciation
and
amortization
47
47
--- ---
--- ---
Total expenses
984 (1)
(6) 977
--- ---
--- ---
Operating income
242 1
6 249
Other income, net
(5)
(5)
Interest expense
21
21
Interest income
(2)
(2)
--- ---
--- ---
Income before
income taxes
228 1
6 235
Provision for
income taxes
86 (1) (c)
2 (c) 87
--- ---
--- ---
Net income
$142 $2
$4 $148
==== ===
=== ====
Earnings per share
Basic
$0.80 $0.01
$0.02 $0.83
Diluted
0.80 0.01
0.02 0.83
Weighted average
shares outstanding
Basic
178 178
178 178
Diluted
178 178
178 178
__________
(a) Relates to the net benefit from the resolution of
and adjustment to
certain contingent liabilities
and assets.
(b) Relates to costs incurred as a result of various
strategic initiatives
approved by the Company and
commenced during the third quarter of
2008.
(c) Relates to the tax effect of the adjustment.
Table 8
(2 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Nine Months Ended Sept. 30, 2008
--------------------------------
As Legacy Trademark
Restructuring As
Reported Adjustments Impairment
Costs Adjusted
-------- ----------- ---------- -----------
-------
Net revenues
Vacation
ownership
interest
sales
$1,153
$1,153
Service fees
and
membership
1,344
1,344
Franchise fees 402
402
Consumer
financing
314
314
Other
157
157
--- ---
--- ---
---
Net revenues 3,370
- -
- 3,370
----- ---
--- ---
-----
Expenses
Operating
1,284
1,284
Cost of
vacation
ownership
interests
226
226
Consumer
financing
interest
93
93
Marketing
and
reservation
659
659
General and
administrative 438
4 (a)
442
Trademark
impairment
28
(28) (b)
-
Restructuring
costs
6
(6)(c) -
Depreciation
and
amortization
137
137
--- ---
---
--- ---
Total expenses 2,871
4 (28)
(6) 2,841
----- ---
---
--- -----
Operating income 499
(4) 28
6 529
Other income, net (9)
(9)
Interest expense 59
59
Interest income (8)
(8)
--- ---
---
--- ---
Income before
income taxes
457 (4)
28
6 487
Provision for
income taxes
175 (5) (d)
11 (d) 2 (d)
183
--- ---
---
--- ---
Net income
$282 $1
$17
$4 $304
==== ===
===
=== ====
Earnings per share
Basic
$1.59 $0.01 $0.10
$0.02 $1.71
Diluted
1.58 0.01
0.10
0.02 1.71
Weighted average
shares outstanding
Basic
177 177
177
177 177
Diluted
178 178
178
178 178
__________
Note: EPS amounts may not foot across due to rounding.
(a) Relates to the net benefit from the resolution of
and adjustment to
certain contingent liabilities
and assets.
(b) Represents an impairment charge due to the Company's
initiative to
rebrand its vacation ownership
trademarks to the Wyndham brand.
(c) Relates to costs incurred as a result of various
strategic initiatives
approved by the Company and
commenced during the third quarter of
2008.
(d) Relates to the tax effect of the adjustments.
Table 8
(3 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Three Months Ended Sept. 30, 2007
---------------------------------
Separation
and
As Related
Legacy As
Reported Adjustments Adjustments
Adjusted
-------- ----------- -----------
--------
Net revenues
Vacation
ownership
interest sales
$467
$467
Service fees
and membership
442
442
Franchise fees
155
155
Consumer financing
93
93
Other
59
59
--- ---
--- ---
Net revenues
1,216
-
- 1,216
----- ---
--- -----
Expenses
Operating
440
440
Cost of vacation
ownership interests 101
101
Consumer financing
Interest
29
29
Marketing and
reservation
229
229
General and
administrative
174
(25) (b) 149
Separation and
related costs
3 (3) (a)
-
Depreciation and
amortization
43
43
--- ---
--- --
Total expenses
1,019 (3)
(25) 991
----- ---
--- ---
Operating income
197 3
25 225
Other income, net
(8)
(8)
Interest expense
20
20
Interest income
(4)
(4)
--- ---
--- ---
Income before
income taxes
189 3
25 217
Provision for
income taxes
72 1
(c) 10 (c)
83
--- ---
--- ---
Net income
$117 $2
$15 $134
==== ==
=== ====
Earnings per share
Basic
$0.65 $0.01
$0.09 $0.75
Diluted
0.65 0.01
0.09 0.75
Weighted average
shares outstanding
Basic
179 179
179 179
Diluted
180 180
180 180
__________
Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with
the Company's
separation from Cendant (now
Avis Budget Group).
(b) Relates to the net benefit from the resolution of
certain contingent
liabilities.
(c) Relates to the tax effect of the adjustments.
Table 8
(4 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
Nine Months Ended September 30, 2007
------------------------------------
Separation
and
As Related
Legacy As
Reported Adjustments Adjustments
Adjusted
-------- ----------- -----------
--------
Net revenues
Vacation
ownership
interest sales $1,283
$1,283
Service fees
and membership
1,232
1,232
Franchise fees
406
406
Consumer financing 261
261
Other
146
146
--- ---
--- ---
Net revenues
3,328
-
- 3,328
----- ---
--- -----
Expenses
Operating
1,246
1,246
Cost of
vacation
ownership
interests
296
296
Consumer financing
Interest
77
77
Marketing and
reservation
632
632
General and
administrative
419
5 (b) 424
Separation and
related costs
16 (16) (a)
-
Depreciation
and amortization
122
122
--- ---
--- ---
Total expenses
2,808 (16)
5 2,797
----- ---
--- -----
Operating income
520 16
(5) 531
Other income, net
(8)
(8)
Interest expense
55
55
Interest income
(9)
(9)
--- ---
--- ---
Income before
income taxes
482 16
(5) 493
Provision for
income taxes
184 6
(c) (1) (c)
189
--- ---
--- ---
Net income
$298 $10
$(4) $304
==== ===
=== ====
Earnings per share
Basic
$1.63 $0.05
$(0.02) $1.66
Diluted
1.62 0.05
(0.02) 1.65
Weighted average
shares outstanding
Basic
183 183
183 183
Diluted
184 184
184 184
__________
Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with
the Company's
separation from Cendant (now
Avis Budget Group).
(b) Relates to the net benefit from the resolution of
certain contingent
liabilities and assets.
(c) Relates to the tax effect of the adjustments. |
|
