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Wyndham Worldwide Reports Second Quarter 2010 Earnings
28 Jul, 2010 @ 06:00 am EDT
PARSIPPANY, N.J., July 28 /PRNewswire-FirstCall/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2010.
HIGHLIGHTS:
-- Second quarter 2010 diluted earnings per share (EPS) was $0.51, compared
with Company-issued guidance of $0.38 - $0.42 and $0.39 in the second
quarter of 2009.
-- Free cash flow, which the Company defines as net cash from operations
less capital expenditures, equity investments and development advances,
increased 32% to $486 million in the first half of 2010, compared with
$368 million during the same period in 2009.
-- The Company's Board of Directors authorized an increase to the current
share repurchase program by $300 million. For the quarter, the Company
repurchased approximately 2.2 million shares of its common stock at an
average price of $24.33.
-- The Company announced on July 26, 2010 that it completed a term
securitization transaction involving the issuance of $350 million of
investment-grade asset-backed notes at an advance rate of 83.25% and an
all-in yield of 4.15%.
"Continued strong operating performance in each of our businesses in the second quarter, combined with a lower overall tax rate, enables us to increase our full-year earnings guidance," said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. "We continue to generate significant levels of sustainable free cash flow that we are deploying to drive shareholder value."
SECOND QUARTER 2010 OPERATING RESULTS
Second quarter revenues of $963 million increased 5% from the prior-year period. The revenue growth primarily reflected continued sales momentum across the Company's three business units. Excluding the $37 million of Vacation Ownership revenue associated with the percentage-of-completion (POC) accounting method in the second quarter of 2009, second quarter 2010 adjusted revenue growth was 9%.
Net income for the second quarter of 2010 grew 34% to $95 million, or $0.51 per diluted share, compared with net income of $71 million, or $0.39 per diluted share, for the second quarter of 2009. The increase in net income from 2009 primarily reflected the year-over-year improvement in the Exchange and Rentals business, a lower effective tax rate and the favorable net effect of foreign currency.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $178 million in the second quarter of 2010, an increase of 2%, compared with the second quarter of 2009, reflecting increased royalty, marketing and reservation revenues primarily from room growth. In constant currency, second quarter 2010 system-wide RevPAR decreased 1.2%. Including the impact of foreign currency, system-wide RevPAR remained flat in the second quarter of 2010. Second quarter 2010 adjusted EBITDA was $50 million, consistent with 2009.
As of June 30, 2010, the Company's hotel system consisted of approximately 7,160 properties and 606,800 rooms, of which 24% were international. The development pipeline included approximately 980 hotels and 107,600 rooms, of which 54% were new construction and 49% were international.
Wyndham Hotel Group acquired the Tryp hotel brand from Sol Melia Hotels & Resorts on June 30th. The acquisition of the midmarket international brand adds 92 hotels or approximately 13,200 rooms concentrated in cosmopolitan cities such as Madrid, Barcelona and Paris.
Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $281 million in the second quarter of 2010, consistent with the second quarter of 2009. In constant currency, revenues increased by 3%.
Exchange revenues were $161 million, a 2% decline compared with the second quarter of 2009. In constant currency, exchange revenues decreased 3% from the second quarter of 2009 reflecting a 2% decline in exchange revenue per member and a 1% decline in the average number of members.
Vacation rental revenues were $115 million, a 6% increase compared with the second quarter of 2009. In constant currency, vacation rental revenues increased 12% from the second quarter of 2009, reflecting the contribution of incremental revenues from the recently acquired Hoseasons brand.
Second quarter 2010 Exchange and Rentals EBITDA was $78 million, compared with adjusted EBITDA of $58 million in the second quarter of 2009. Excluding a favorable net effect of foreign currency of $10 million, second quarter 2010 adjusted EBITDA increased 17% from the second quarter of 2009, due to the impact of the Hoseasons acquisition and continued cost management efforts.
Vacation Ownership (Wyndham Vacation Ownership)
Gross Vacation Ownership Interest (VOI) sales were $371 million in the second quarter of 2010, up 13% from the second quarter of 2009, reflecting an increase of 16% in volume per guest (VPG), while tour flow remained relatively flat.
Total segment revenues were $505 million in the second quarter of 2010, compared with $467 million in the second quarter of 2009, which included the recognition of $37 million of previously deferred POC revenues. The absence of these revenues in the second quarter of 2010 was more than offset by the reduction in the provision for loan losses of $35 million primarily related to improved credit metrics of the portfolio and a $31 million increase in gross VOI sales.
EBITDA for the second quarter of 2010 was $104 million, compared with adjusted EBITDA of $108 million in the second quarter of 2009. Excluding an estimated $17 million impact from the POC method of accounting in the second quarter of 2009, second quarter 2010 adjusted EBITDA growth was 14%. This growth reflected the lower provision for loan losses and the increase in VOI sales.
Other Items
-- The Company repurchased approximately 2.2 million shares of its common
stock during the second quarter of 2010 at an average price of $24.33
and an additional 525,000 shares at an average price of $21.39 through
July 27, 2010.
-- Interest expense in the second quarter of 2010 was $36 million, an
increase of $10 million from the second quarter of 2009, reflecting
higher interest expense related to long-term debt issuances in May 2009
and February 2010.
Balance Sheet Information as of June 30, 2010:
-- Cash and cash equivalents of approximately $240 million, compared with
$155 million at December 31, 2009
-- Vacation ownership contract receivables, net, of $3.0 billion, compared
with $3.1 billion at December 31, 2009
-- Vacation ownership and other inventory of approximately $1.3 billion,
unchanged from December 31, 2009
-- Securitized vacation ownership debt of $1.5 billion, unchanged from
December 31, 2009
-- Other debt of $1.8 billion, compared with $2.0 billion at December 31,
2009, reflecting the repayment of the outstanding balance on the
revolving credit facility and a decrease in fair value of the conversion
feature related to the Company's convertible notes. The remaining
borrowing capacity on the revolving credit facility was $919 million,
compared with $869 million as of December 31, 2009.
A schedule of debt is included in the financial tables section of this press release.
Outlook
The Company increased full-year 2010 guidance:
-- Revenues increased to $3.7 - $4.0 billion from $3.6 - $3.9 billion
-- Adjusted EBITDA increased to $825 - $860 million from $805 - $840
million
-- Adjusted diluted EPS increased to $1.78 - $1.88 from $1.56 - $1.71
-- Lodging RevPAR of 0% - 3% from (3%) - 0%
-- Vacation Ownership VPG of 10% - 14% from 6% - 9%
For the third quarter of 2010, the Company expects adjusted diluted EPS of $0.60 - $0.64.
The guidance reflects assumptions used for internal planning purposes. All guidance excludes legacy items, restructuring costs, debt extinguishment and acquisition costs, if any, which may have a positive or negative impact on reported results. If economic conditions change materially from current levels, these assumptions and our guidance may change materially.
Board Increases Share Repurchase Authorization
The Company's Board of Directors has increased the authorization for the stock repurchase program by $300 million. As of July 27, 2010, $91 million remained unused under the previous $200 million authorization. The amount and timing of specific repurchases is subject to market conditions, applicable legal requirements and other factors. Repurchases may be conducted in the open market or in privately negotiated transactions.
Completed $350 Million Term Securitization
On July 26, 2010, the Company announced that it completed a term securitization transaction involving the issuance of $350 million of investment-grade, asset-backed notes with an advance rate of 83.25%. Sierra Timeshare 2010-2 Receivables Funding LLC issued $286 million of A rated and $64 million of BBB rated notes, with coupons of 3.84% and 5.31%, respectively, backed by vacation ownership loans.
Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, July 28, 2010 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EDT on July 28, 2010. The conference call may also be accessed by dialing (800) 369-2052 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on July 28, 2010, at (800) 876-5258.
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 Corporation
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 7,160 franchised hotels and approximately 606,800 hotel rooms worldwide. Wyndham Exchange & Rentals offers leisure travelers, including its 3.8 million members, access to over 80,000 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 website at 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, related financial and operating measures 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, 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 April 30, 2010. 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 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 its operating
performance. The Company's presentation of EBITDA may not be comparable
to similarly-titled measures used by other companies.
The following tables summarize net revenues and EBITDA for reportable
segments, as well as reconcile EBITDA to net income for the three and six
months ended June 30, 2010 and 2009:
Three Months Ended June 30,
---------------------------
2010 2009
---- ----
Net Net
Revenues EBITDA Revenues EBITDA(e)
-------- ------ -------- ---------
Lodging $178 $49(d) $174 $50
Vacation
Exchange
and
Rentals 281 78 280 56
Vacation
Ownership 505 104 467 107(f)
--- --- --- ---
Total
Reportable
Segments 964 231 921 213
Corporate
and
Other
(a) (b) (1) (14) (1) (17)
Total
Company $963 $217 $920 $196
==== ==== ==== ====
Reconciliation of
EBITDA to Net Income
---------------------
EBITDA $217 $196
Depreciation and
amortization 42 45
Interest expense 36 26
Interest income (2) (2)
--- ---
Income before income
taxes 141 127
Provision for income
taxes 46 56
--- ---
Net income $95 $71
=== ===
Six Months Ended June 30,
-------------------------
2010 2009
---- ----
Net Net
Revenues EBITDA Revenues EBITDA(i)
-------- ------ -------- ---------
Lodging $322 $82(d) $328 $85
Vacation
Exchange
and
Rentals 582 158(g) 566 132
Vacation
Ownership 950 186 929 151(j)
--- --- --- ---
Total
Reportable
Segments 1,854 426 1,823 368
Corporate
and
Other
(a) (c) (5) (34) (2) (39)
Total
Company $1,849 $392 $1,821 $329
====== ==== ====== ====
Reconciliation of
EBITDA to Net Income
---------------------
EBITDA $392 $329
Depreciation and
amortization 85 88
Interest expense 86(h) 45
Interest income (2) (4)
--- ---
Income before income
taxes 223 200
Provision for income
taxes 78 84
--- ---
Net income $145 $116
==== ====
---------------------
(a) Includes the elimination of transactions between segments.
(b) Includes $1 million, net of tax, of a net benefit and $2 million, net
of tax, of a net expense during the three months ended June 30, 2010
and 2009, respectively, related to the resolution of and adjustment
to certain contingent liabilities and assets.
(c) Includes $1 million ($0, net of tax) and $3 million ($3 million, net
of tax) of a net expense during the six months ended June 30, 2010
and 2009, respectively, related to the resolution of and adjustment
to certain contingent liabilities and assets.
(d) Includes $1 million ($1 million, net of tax) related to costs
incurred in connection with the Company's acquisition of the Tryp
hotel brand during June 2010.
(e) Includes restructuring costs of $2 million and $1 million for
Vacation Exchange and Rentals and Vacation Ownership, respectively.
The after-tax impact of such costs is $2 million.
(f) Includes a non-cash impairment charge of $3 million ($2 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.
(g) Includes $4 million ($3 million, net of tax) related to costs
incurred in connection with the Company's acquisition of Hoseasons
Holdings Ltd. during March 2010.
(h) Includes $1 million and $15 million for Vacation Ownership and
Corporate and Other, respectively, of costs incurred for the early
extinguishment of the Company's term loan facility and revolving
foreign credit facility during March 2010. The after-tax impact of
such costs is $10 million.
(i) Includes restructuring costs of $3 million, $6 million, $36 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.
(j) Includes a non-cash impairment charge of $8 million ($6 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.
Table 2
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
---- ---- ---- ----
Net revenues
Service fees and
membership $409 $397 $833 $797
Vacation ownership
interest sales 271 242 488 482
Franchise fees 120 117 211 216
Consumer financing 106 109 211 217
Other 57 55 106 109
--- --- --- ---
Net revenues 963 920 1,849 1,821
--- --- ----- -----
Expenses
Operating 387 (a) 391 769 (a) 759
Cost of vacation
ownership
interests 49 33 86 82
Consumer financing
interest 29 35 53 67
Marketing and
reservation 138 137 261 275
General and
administrative (b) 146 122 293 258
Asset impairment - 3 (c) - 8 (c)
Restructuring costs - 3 (d) - 46 (d)
Depreciation and
amortization 42 45 85 88
--- --- --- ---
Total expenses 791 769 1,547 1,583
--- --- ----- -----
Operating income 172 151 302 238
Other income, net (3) - (5) (3)
Interest expense 36 26 86 (e) 45
Interest income (2) (2) (2) (4)
--- --- --- ---
Income before
income taxes 141 127 223 200
Provision for
income taxes 46 56 78 84
--- --- --- ---
Net income $95 $71 $145 $116
=== === ==== ====
Earnings per share
Basic $0.53 $0.40 $0.81 $0.65
Diluted 0.51 0.39 0.78 0.64
Weighted average
shares outstanding
Basic 180 179 180 178
Diluted 187 182 186 180
__________
(a) Includes $1 million ($1 million, net of tax) during both the three
and six months ended June 30, 2010 related to costs incurred
in connection with the Company's June 2010 acquisition of the Tryp
hotel brand. The six months ended June 30, 2010 also
includes $4 million ($3 million, net of tax) of costs incurred in
connection with the Company's March 2010 acquisition of
Hoseasons Holdings Ltd.
(b) Includes $1 million, net of tax, of a net benefit and $2 million, net
of tax, of a net expense during the three months ended
June 30, 2010 and 2009, respectively, and $1 million ($0, net of tax)
and $3 million ($3 million, net of tax) of a net expense
during the six months ended June 30, 2010 and 2009, respectively,
related to the resolution of and adjustment to certain
contingent liabilities and assets.
(c) Relates to non-cash impairment charges 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. The after-tax impact of such charges
was $2 million and $6 million during the three and six months ended
June 30, 2009, respectively.
(d) Relates to costs incurred as a result of various strategic
initiatives approved by the Company and commenced during 2008.
The after-tax impact of such costs was $2 million and $29 million
during the three and six months ended June 30, 2009,
respectively.
(e) Includes costs incurred for the early extinguishment of the Company's
term loan facility and revolving foreign credit facility
during March 2010. The after-tax impact of such costs was $10 million.
Table 3
(1 of 3)
Wyndham Worldwide Corporation
OPERATING STATISTICS
Full
Year Q1 Q2 Q3 Q4 Year
---- --- --- --- --- ----
Lodging (a) (b)
Number of Rooms 2010 593,300 606,800 N/A N/A N/A
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
RevPAR 2010 $25.81 $32.25 N/A N/A N/A
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
Vacation Exchange
and Rentals (c)
Average Number of
Members (in
000s) 2010 3,746 3,741 N/A N/A N/A
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
Exchange Revenue
Per Member 2010 $201.93 $172.20 N/A N/A N/A
2009 $194.83 $174.22 $173.90 $163.89 $176.73
2008 $234.05 $201.04 $193.39 $165.99 $198.48
2007 $236.71 $203.84 $203.44 $195.86 $209.80
Vacation Rental
Transactions (in
000s) (d) 2010 291 297 N/A N/A N/A
2009 273 231 264 196 964
2008 269 220 255 191 936
2007 272 223 254 192 942
Average Net Price
Per Vacation
Rental (d) 2010 $361.17 $387.01 N/A N/A N/A
2009 $353.15 $471.74 $594.34 $499.66 $477.38
2008 $442.50 $541.69 $659.93 $460.86 $528.95
2007 $365.20 $465.60 $598.26 $504.47 $480.32
Vacation Ownership
Gross Vacation
Ownership Interest
(VOI) Sales (in
000s) (e) 2010 $308,000 $371,000 N/A N/A N/A
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
Tours 2010 123,000 163,000 N/A N/A N/A
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
Volume Per Guest
(VPG) 2010 $2,334 $2,156 N/A N/A N/A
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
---------------------
Note: Full year amounts may not foot across due to rounding.
(a) Includes the impact of the acquisition of Microtel Inns & Suites and
Hawthorn Suites (July 2008) from the acquisition date forward.
Therefore, the operating statistics are not presented on a
comparable basis.
(b) Number of rooms includes the impact of the acquisition of the Tryp
hotel brand (June 2010) from the acquisition date forward and, as
such, the number of rooms is not presented on a comparable basis.
RevPAR excludes the impact of the acquisition of the Tryp hotel brand
as the acquisition was not completed until June 30, 2010.
(c) Vacation Exchange and Rentals statistics were revised during the
first quarter of 2010 to capture member-related rentals and other
servicing fees as components of the exchange statistics. Prior to
the first quarter of 2010, such amounts were included within the
Company's vacation rental statistics and other ancillary revenues.
(d) Includes the impact of the acquisition of Hoseasons Holdings Ltd.
(March 2010) from the acquisition date forward. Therefore, the
operating statistics are not presented on a comparable basis.
(e) Includes gross VOI sales under the Company's Wyndham Asset Affiliate
Model (WAAM) beginning in the first quarter of 2010 (see Table 9 for
a reconciliation of Gross VOI sales to Vacation ownership interest
sales).
Table 3
(2 of 3)
Wyndham Worldwide Corporation
ADDITIONAL DATA
Full
Year Q1 Q2 Q3 Q4 Year
---- --- --- --- --- ----
Lodging (a)
Number of
Properties 2010 7,090 7,160 N/A N/A N/A
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
Vacation Ownership
Deferred Revenues
(in 000s) (b) 2010 $- $- N/A N/A N/A
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)
Provision for Loan
Losses (in 000s)
(c) 2010 $86,332 $87,331 N/A N/A N/A
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
Sales under the
WAAM (in 000s)
(d) 2010 $5,000 $13,000 N/A N/A N/A
WAAM Commission
Revenues (in
000s) 2010 $3,000 $8,000 N/A N/A N/A
-----------------
Note: Full year amounts may not foot across due to rounding.
(a) Information includes the impact of the acquisition of Microtel Inns &
Suites and Hawthorn Suites (July 2008) and the Tryp hotel brand
(June 2010) from the acquisition date forward. Therefore, the data
is not presented on a comparable basis.
(b) 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.
(c) 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.
(d) Represents gross VOI sales under the Company's WAAM for which the
Company earns commission revenue (WAAM Commission Revenues). The
commission revenue earned on these sales is included in service fees
and membership revenues on the Consolidated Statement of Income.
The Company implemented this sales model during the first quarter of
2010 and, as such, there is no historical data prior to 2010.
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 the 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.
Exchange Revenue Per Member: Represents total revenue generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.
Vacation Rental Transactions: Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. One rental transaction is recorded each time a standard one-week rental is booked.
Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties and other related rental servicing fees to customers divided by the number of vacation rental transactions.
Vacation Ownership
Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including Wyndham Asset Affiliation Model sales, before the net effect of percentage-of-completion accounting and loan loss provisions. See Table 9 for a reconciliation of Gross VOI sales to Vacation Ownership Interest Sales. We believe that Gross VOI sales provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period.
Tours: Represents the number of tours taken by guests in our efforts to sell vacation ownership interests.
Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel. See Table 9 for a detail of tele-sales upgrades for 2007-2010. We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business' tour selling efforts during a given reporting period.
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)
2010
----
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
Lodging
Royalties and Franchise Fees $52 $69 N/A N/A N/A
Marketing, Reservation and Wyndham
Rewards Revenues (a) 50 65 N/A N/A N/A
Hotel Management Reimbursable
Revenues (b) 21 20 N/A N/A N/A
Ancillary Revenues (c) 21 24 N/A N/A N/A
Total Lodging 144 178 N/A N/A N/A
--- --- -- -- --
Vacation Exchange and Rentals
Exchange Revenues 189 161 N/A N/A N/A
Rental Revenues 105 115 N/A N/A N/A
Ancillary Revenues (d) 6 5 N/A N/A N/A
--- --- -- -- --
Total Vacation Exchange and Rentals 300 281 N/A N/A N/A
--- --- -- -- --
Vacation Ownership
Vacation Ownership Interest Sales 217 271 N/A N/A N/A
Consumer Financing 105 106 N/A N/A N/A
Property Management Fees 100 100 N/A N/A N/A
Ancillary Revenues (e) 22 28 N/A N/A N/A
Total Vacation Ownership 444 505 N/A N/A N/A
--- --- -- -- --
Total Reportable Segments $888 $964 N/A N/A N/A
==== ==== == == ==
2008
----
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
Lodging
Royalties and Franchise Fees $64 $78 $88 $66 $297
Marketing, Reservation and Wyndham
Rewards Revenues (a) 60 75 84 61 280
Hotel Management Reimbursable
Revenues (b) 27 26 25 21 100
Ancillary Revenues (c) 19 21 16 22 76
Total Lodging 170 200 213 170 753
--- --- --- --- ---
Vacation Exchange and Rentals
Exchange Revenues 213 185 178 152 728
Rental Revenues 119 119 169 88 495
Ancillary Revenues (d) 9 10 7 10 36
--- --- --- --- ---
Total Vacation Exchange and Rentals 341 314 354 250 1,259
--- --- --- --- -----
Vacation Ownership
Vacation Ownership Interest Sales 294 414 446 309 1,463
Consumer Financing 99 104 111 112 426
Property Management Fees 85 84 89 89 346
Ancillary Revenues (e) 26 19 15 (18) 43
Total Vacation Ownership 504 621 661 492 2,278
--- --- --- --- -----
Total Reportable Segments $1,015 $1,135 $1,228 $912 $4,290
====== ====== ====== ==== ======
2009
----
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
Lodging
Royalties and Franchise Fees $57 $68 $72 $57 $254
Marketing, Reservation and Wyndham
Rewards Revenues (a) 54 66 73 53 246
Hotel Management Reimbursable
Revenues (b) 22 23 21 19 85
Ancillary Revenues (c) 21 17 17 20 75
--- --- --- --- ---
Total Lodging 154 174 183 149 660
--- --- --- --- ---
Vacation Exchange and Rentals
Exchange Revenues 185 165 164 154 668
Rental Revenues 96 109 157 98 460
Ancillary Revenues (d) 6 6 6 6 24
--- --- --- --- ---
Total Vacation Exchange and Rentals 287 280 327 258 1,152
--- --- --- --- -----
Vacation Ownership
Vacation Ownership Interest Sales 239 242 285 287 1,053
Consumer Financing 109 109 108 109 435
Property Management Fees 91 94 96 95 376
Ancillary Revenues (e) 23 22 19 17 81
--- --- --- --- ---
Total Vacation Ownership 462 467 508 508 1,945
--- --- --- --- -----
Total Reportable Segments $903 $921 $1,018 $915 $3,757
==== ==== ====== ==== ======
2007
----
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
Lodging
Royalties and Franchise Fees $63 $78 $89 $67 $296
Marketing, Reservation and Wyndham
Rewards Revenues (a) 60 73 84 64 281
Hotel Management Reimbursable
Revenues (b) 16 22 26 28 92
Ancillary Revenues (c) 13 13 12 17 56
--- --- --- --- ---
Total Lodging 152 186 211 176 725
--- --- --- --- ---
Vacation Exchange and Rentals
Exchange Revenues 206 179 180 175 740
Rental Revenues 99 104 152 97 452
Ancillary Revenues (d) 9 5 4 8 26
--- --- --- --- ---
Total Vacation Exchange and Rentals 314 288 336 280 1,218
--- --- --- --- -----
Vacation Ownership
Vacation Ownership Interest Sales 373 443 467 383 1,666
Consumer Financing 81 88 93 96 358
Property Management Fees 74 78 79 78 310
Ancillary Revenues (e) 21 20 32 19 91
--- --- --- --- ---
Total Vacation Ownership 549 629 671 576 2,425
--- --- --- --- -----
Total Reportable Segments $1,015 $1,103 $1,218 $1,032 $4,368
====== ====== ====== ====== ======
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 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 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)
June 30, March 31, December 31, September 30, June 30,
2010 2010 2009 2009 2009
---- ---- ---- ---- ----
Securitized
vacation
ownership
debt
Term notes $1,255 $1,258 $1,112 $1,305 $1,290
Bank conduit
facilities
(a) 291 240 395 299 340
--- --- --- --- ---
Securitized
vacation
ownership
debt (b) 1,546 1,498 1,507 1,604 1,630
Less:
Current
portion of
securitized
vacation
ownership
debt 248 220 209 291 288
--- --- --- --- ---
Long-term
securitized
vacation
ownership
debt $1,298 $1,278 $1,298 $1,313 $1,342
====== ====== ====== ====== ======
Debt:
6.00% senior
unsecured
notes (due
December
2016) (c) $798 $798 $797 $797 $797
Term loan
(d) - - 300 300 300
Revolving
credit
facility
(due
October
2013) (e) - 199 - 21 30
9.875%
senior
unsecured
notes (due
May 2014)
(f) 239 239 238 237 237
3.50%
convertible
notes (due
May 2012)
(g) 362 448 367 309 253
7.375%
senior
unsecured
notes (due
March 2020)
(h) 247 247 - - -
Vacation
ownership
bank
borrowings
(i) - - 153 163 154
Vacation
rentals
capital
leases 110 123 133 139 135
Other 36 28 27 23 22
--- --- --- --- ---
Total debt 1,792 2,082 2,015 1,989 1,928
Less:
Current
portion of
debt 29 23 175 176 169
--- --- --- --- ---
Long-term
debt $1,763 $2,059 $1,840 $1,813 $1,759
====== ====== ====== ====== ======
__________
(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. As of June 30, 2010, our
364-day facility has remaining borrowing capacity of $309 million.
(b) This debt is collateralized by $2,862 million, $2,712 million, $2,755
million, $2,947 million and $2,916 million of underlying vacation
ownership contract receivables and related assets as of June 30,
2010,
March 31, 2010, December 31, 2009, September 30, 2009 and June 30,
2009, respectively.
(c) The balance as of June 30, 2010 represents $800 million aggregate
principal less $2 million of unamortized discount.
(d) The Company's term loan facility was fully repaid during March 2010.
(e) During March 2010, the Company replaced its five-year $900 million
revolving credit facility with a $950 million revolving credit
facility that expires on October 1, 2013. As of June 30, 2010, the
Company
has $31 million of outstanding letters of credit and a remaining
borrowing capacity of $919 million.
(f) Represents senior unsecured notes issued by the Company during May
2009. The balance as of June 30, 2010 represents $250 million
aggregate principal less $11 million of unamortized discount.
(g) Represents convertible notes issued by the Company during May 2009,
which includes debt principal, less unamortized discount, and a
liability related to a bifurcated conversion feature. The following
table details the components of the convertible notes:
June 30, March 31, December September June 30,
2010 2010 31, 2009 30, 2009 2009
--------- ---------- -------- --------- ---------
Debt principal $230 $230 $230 $230 $230
Unamortized
discount (31) (35) (39) (43) (46)
--- --- --- --- ---
Debt less
discount 199 195 191 187 184
Fair value of
conversion
feature (*) 163 253 176 122 69
--- --- --- --- ---
Convertible notes $362 $448 $367 $309 $253
==== ==== ==== ==== ====
(*) The Company also has an asset with a fair value equal to the
conversion feature, which represents cash-settled call options that
the Company purchased concurrent with the issuance of the
convertible notes.
(h) Represents senior unsecured notes issued by the Company during
February 2010. The balance as of June 30, 2010 represents $250
million aggregate principal
less $3 million of unamortized discount.
(i) Represents a 364-day, AUD 213 million, secured, revolving foreign
credit facility, which was paid down and terminated during March
2010.
Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
As of and For the Three Months Ended
June 30, 2010
------------------------------------
Number Number Average
of of Daily Average
Brand Properties Rooms Average Rate Revenue
Occupancy Per
----- ----------- ------- Rate (ADR) Available
Room
---------- ----- (RevPAR)
---------
Wyndham Hotels and
Resorts 99 27,771 59.5% $108.71 $64.66
Tryp (a) 92 13,236 N/A N/A N/A
Wingate by Wyndham 164 15,020 61.5% $79.97 $49.15
Hawthorn Suites by
Wyndham 80 7,563 57.7% $78.07 $45.08
Ramada 901 118,521 51.3% $71.95 $36.88
Baymont 242 20,496 49.6% $61.26 $30.38
Days Inn 1,857 148,457 48.6% $60.66 $29.47
Super 8 2,149 134,189 51.6% $55.89 $28.86
Howard Johnson 477 45,513 46.8% $60.84 $28.48
Travelodge 442 32,762 45.9% $62.35 $28.63
Microtel Inns &
Suites 318 22,666 52.3% $56.90 $29.76
Knights Inn 338 20,157 37.9% $41.80 $15.84
Affiliated Hotels
(b) 2 404 N/A N/A N/A
Total 7,161 606,755 50.2% $64.27 $32.25
===== =======
As of and For the Three Months Ended June
30, 2009
-----------------------------------------
Number Number Average
of of Daily Average
Brand Properties Rooms Average Rate Revenue
Occupancy Per
----- ----------- ------- Rate (ADR) Available
Room
---------- ----- (RevPAR)
---------
Wyndham
Hotels and
Resorts 85 22,562 55.1% $117.44 $64.66
Wingate by
Wyndham 165 15,109 57.1% $85.57 $48.87
Hawthorn
Suites by
Wyndham 90 8,386 53.3% $84.88 $45.22
Ramada 894 116,225 48.3% $74.04 $35.78
Baymont 234 19,850 48.3% $64.64 $31.19
Days Inn 1,856 149,901 48.5% $64.45 $31.24
Super 8 2,116 131,282 51.6% $56.66 $29.22
Howard
Johnson 475 45,679 42.6% $62.53 $26.61
Travelodge 464 34,911 45.6% $62.23 $28.40
Microtel
Inns &
Suites 317 22,660 53.5% $55.17 $29.54
Knights Inn 317 20,039 39.2% $43.49 $17.03
Affiliated
Hotels (b) 11 3,549 N/A N/A N/A
Total 7,024 590,153 48.9% $66.22 $32.38
===== =======
_______________
NOTE: A glossary of terms is included in Table 3 (3 of 3); RevPAR may
not recalculate by multiplying average occupancy rate by ADR due to
rounding.
(a) The Tryp hotel brand was acquired on June 30, 2010 and, as such,
average occupancy rate, ADR and RevPAR are not relevant.
(b) Represents properties managed under a joint venture and, as of
December 31, 2009, also includes properties for which we receive a
fee for reservation services provided. As these properties are
not branded, 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 Six Months Ended June
30, 2010
---------------------------------------
Number Number Average
of of Daily Average
Brand Properties Rooms Average Rate Revenue
Occupancy Per
----- ----------- ------- Rate (ADR) Available
Room
---------- ----- (RevPAR)
---------
Wyndham Hotels and
Resorts 99 27,771 55.4% $110.61 $61.25
Tryp (a) 92 13,236 N/A N/A N/A
Wingate by Wyndham 164 15,020 56.6% $78.81 $44.63
Hawthorn Suites by
Wyndham 80 7,563 53.4% $77.56 $41.41
Ramada 901 118,521 47.2% $72.32 $34.15
Baymont 242 20,496 45.5% $59.65 $27.13
Days Inn 1,857 148,457 43.6% $59.39 $25.92
Super 8 2,149 134,189 46.4% $54.59 $25.34
Howard Johnson 477 45,513 42.8% $59.42 $25.44
Travelodge 442 32,762 42.0% $61.92 $25.99
Microtel Inns &
Suites 318 22,666 48.0% $56.04 $26.88
Knights Inn 338 20,157 35.5% $40.46 $14.36
Affiliated Hotels
(b) 2 404 N/A N/A N/A
Total 7,161 606,755 45.7% $63.60 $29.04
===== =======
As of and For the Six Months Ended June
30, 2009
---------------------------------------
Number Number Average
of of Daily Average
Brand Properties Rooms Average Rate Revenue
Occupancy Per
----- ----------- ------- Rate (ADR) Available
Room
---------- ----- (RevPAR)
---------
Wyndham Hotels
and Resorts 85 22,562 53.4% $120.80 $64.47
Wingate by
Wyndham 165 15,109 53.9% $85.39 $46.04
Hawthorn
Suites by
Wyndham 90 8,386 52.0% $87.33 $45.37
Ramada 894 116,225 46.2% $74.23 $34.29
Baymont 234 19,850 46.0% $63.22 $29.10
Days Inn 1,856 149,901 45.0% $62.07 $27.90
Super 8 2,116 131,282 47.6% $55.76 $26.55
Howard Johnson 475 45,679 41.2% $61.31 $25.28
Travelodge 464 34,911 42.6% $59.84 $25.49
Microtel Inns
& Suites 317 22,660 49.6% $55.53 $27.54
Knights Inn 317 20,039 37.6% $42.35 $15.94
Affiliated
Hotels (b) 11 3,549 N/A N/A N/A
Total 7,024 590,153 45.9% $65.41 $30.04
===== =======
_______________
NOTE: A glossary of terms is included in Table 3 (3 of 3); RevPAR may
not recalculate by multiplying average occupancy rate by ADR due to
rounding.
(a) The Tryp hotel brand wasFor more iinformation, go to www.prnewswire.com
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