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Press Release

Wyndham Worldwide Reports First Quarter 2017 Results
Increases Full-Year EPS Guidance

PARSIPPANY, N.J., April 26, 2017 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2017.

FIRST QUARTER 2017 OPERATING RESULTS
First quarter revenues were $1.3 billion, up 1% compared with the prior year period. Full reconciliations of GAAP results to non-GAAP measures for all reported periods appear in the tables to this press release.

Net income for the first quarter of 2017 was $141 million compared with $96 million for the first quarter of 2016. Diluted earnings per share (EPS) were $1.33 compared with $0.84 for the prior year period. Adjusted net income for the first quarter of 2017, which excludes charges and gains in 2017 and charges in 2016 as detailed in Table 7 of this press release, was $120 million compared with $127 million for the first quarter of 2016, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017. Adjusted diluted EPS was $1.14 compared with $1.12 per share in the prior year period, reflecting the benefit of the Company's share repurchase program.      

First quarter EBITDA was $266 million, compared with $267 million in the prior year period. Adjusted EBITDA, which excludes charges in both 2017 and 2016 as detailed in Table 8 of this press release, was $278 million, compared with $291 million in the prior year period, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017. 

"Our first quarter results were right in line with our expectations," said Stephen P. Holmes, chairman and CEO. "We're excited by the progress we're making in connecting our customers and brands through Wyndham Rewards to enhance customer acquisition, experience and retention. We expect this to result in stronger growth and greater long-term value for our shareholders this year and for years to come.

"In addition, we are pleased to welcome Mike Brown as the new CEO and president of our vacation ownership business," continued Mr. Holmes. "Mike is a 25-year hospitality industry veteran and brings an ideal combination of strategic vision, operational expertise, and industry knowledge to the role. I am confident that Mike is the right leader to take Wyndham Vacation Ownership to the next level."

For the three months ended March 31, 2017, net cash provided by operating activities was $238 million, compared with $261 million in the prior year period. The decrease primarily reflects changes in the timing of inventory purchases.

Free cash flow was $203 million for the three months ended March 31, 2017, compared with $218 million for the same period in 2016, primarily reflecting the changes in net cash provided by operating activities. The Company defines free cash flow as net cash provided by operating activities less capital expenditures.

FIRST QUARTER 2017 BUSINESS UNIT RESULTS

Hotel Group
Revenues were $298 million in the first quarter of 2017, compared with $295 million in the first quarter of 2016.  EBITDA was $85 million in the first quarter compared with $84 million in the prior-year quarter, growing 2% on a currency-neutral basis.  Results reflect higher franchise fees and growth in the Wyndham Rewards credit card program, partially offset by lower occupancy at the Company's owned hotel in Puerto Rico due to consumer concerns about the Zika virus.

First quarter domestic same-store RevPAR increased 1.7% compared with the first quarter of 2016.  In constant currency, total system-wide same-store RevPAR increased 2.2%.

As of March 31, 2017, the Company's hotel system consisted of approximately 8,100 properties and 699,800 rooms, a 3.0% net room increase compared with the first quarter of 2016.  The development pipeline increased to 1,130 hotels and approximately 143,100 rooms, of which 59% were international and 68% were new construction.

Destination Network
Revenues were $391 million in the first quarter of 2017, compared with $385 million in the first quarter of 2016, an increase of 2%.  In constant currency and excluding acquisitions, revenues increased 1%.

Vacation rental revenues were $184 million compared with $183 million in the prior year quarter.  In constant currency and excluding acquisitions, vacation rental revenues increased 1%, reflecting a 2.8% increase in transaction volume partially offset by a 2.0% decline in the average net price per rental.  Transaction volume benefited from capacity increases across the Company's U.K.-based cottages and parks brands and Denmark-based Novasol brand, partially offset by the impact from the timing of the Easter holiday.  Average net price per rental declined due to the mix impact of growth in the Company's more modestly priced brands and the timing of the Easter holiday.

Exchange revenues were $183 million compared with $182 million in the prior year quarter.  In constant currency, exchange revenue per member increased 0.8% and the average number of members declined 0.6%.                                                                                                                  

EBITDA was $102 million in the first quarter of 2017, including $2 million from acquisitions.  This compares with first quarter 2016 EBITDA of $81 million or adjusted EBITDA of $105 million.  2016 adjusted EBITDA excluded a $24 million loss related to a currency devaluation.  First quarter year-over-year EBITDA and adjusted EBITDA comparisons reflect the absence of a benefit of $3 million from business disruption claims received in the first quarter of 2016, as well as the unfavorable impact of the timing of the Easter holiday.

Vacation Ownership
Revenues were $648 million in the first quarter of 2017, compared with $641 million in the first quarter of 2016. 

Gross VOI sales increased 3% in the first quarter of 2017.  Volume per guest (VPG) was up 4.9%, reflecting both a higher average close rate and transaction size.  Tour flow declined 1.7% due to the closure of sales offices as part of a restructuring in the second half of last year.

EBITDA was $118 million in the first quarter of 2017 compared with $136 million in the prior year quarter. Adjusted EBITDA was $124 million in the first quarter of 2017.  First quarter year-over-year EBITDA and adjusted EBITDA results reflect higher gross VOI sales offset by a higher provision for loan losses and the absence of a $6 million benefit from business interruption insurance claims received in the first quarter of 2016.

OTHER ITEMS

  • The Company repurchased 1.9 million shares of common stock for $150 million during the first quarter of 2017 at an average price of $80.93.  From April 1 through April 25, 2017, the Company repurchased an additional 0.4 million shares for $36 million
  • Net interest expense in the first quarter of 2017 was $31 million, flat compared with the first quarter of 2016.
  • Depreciation and amortization in the first quarter of 2017 was $63 million, compared with $62 million in the first quarter of 2016. 

Balance Sheet Information as of March 31, 2017:

  • Cash and cash equivalents of $222 million, compared with $185 million at December 31, 2016
  • Vacation ownership contract receivables, net of $2.8 billion, unchanged from December 31, 2016
  • Vacation ownership and other inventory of $1.4 billion, unchanged from December 31, 2016
  • Securitized vacation ownership debt of $2.1 billion, unchanged from December 31, 2016
  • Long-term debt of $3.6 billion, compared with $3.4 billion at December 31, 2016. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of March 31, 2017, compared with $1.1 billion at December 31, 2016.

A schedule of debt is included in Table 12 of this press release.

OUTLOOK

Note to Editors: The guidance excludes possible future share repurchases, while analysts' estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.

The Company provides the following guidance for the full year 2017:

  • Reiterates revenues of approximately $5.80 billion to $5.95 billion
  • Updates adjusted net income to approximately $631 million to $652 million from $637 million to $658 million, reflecting higher interest expense from a new long-term debt issuance in the first quarter 2017 that replaced lower cost borrowings
  • Reiterates adjusted EBITDA of approximately $1.41 billion to $1.44 billion
  • Updates adjusted diluted EPS to approximately $5.98 to $6.18 based on a diluted share count of 105.5 million from $5.90 to $6.10 based on a diluted share count of 108 million

In determining adjusted net income, adjusted EBITDA and adjusted EPS, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. A description of the adjustments that have been applicable for the reported periods in determining adjusted net income, adjusted EBITDA and adjusted EPS are reflected in Tables 7 and 8 of this press release. The Company is providing an outlook for net income, EBITDA and EPS only on a non-GAAP basis because the Company is unable to predict with reasonable certainty the totality or ultimate outcome or occurrence of these adjustments or other potential adjustments that may arise in the future during the outlook period, which can be dependent on future events that may not be reliably predicted. See Table 10 for certain non-GAAP information concerning the outlook period.

The Company will post full guidance information on its website following the conference call.

CONFERENCE CALL INFORMATION
Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Wednesday, April 26, 2017 at 8:30 a.m. ET. Listeners can access the webcast live through the Company's website at http://www.wyndhamworldwide.com/investors/.  The conference call may also be accessed by dialing 800-862-9098 and providing the pass code "WYNDHAM."  Listeners are urged to call at least 10 minutes prior to the scheduled start time.  An archive of this webcast will be available on the website for approximately 90 days beginning at 12:00 p.m. ET on April 26, 2017.  A telephone replay will be available for approximately 10 days beginning at 12:00 p.m. ET on April 26, 2017 at 800-839-4012.

PRESENTATION OF FINANCIAL INFORMATION
Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing operating performance.  Exclusion of items in the Company's non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring.  Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of the press release.

ABOUT WYNDHAM WORLDWIDE
Wyndham Worldwide (NYSE: WYN) is one of the largest global hospitality companies, providing travelers with access to a collection of trusted hospitality brands in hotels, vacation ownership, and unique accommodations including vacation exchange, holiday parks, and managed home rentals. With a collective inventory of nearly 130,000 places to stay across more than 110 countries on six continents, Wyndham Worldwide and its 38,000 associates welcomes people to experience travel the way they want. This is enhanced by Wyndham Rewards®, the Company's re-imagined guest loyalty program across its businesses, which is making it simpler for members to earn more rewards and redeem their points faster. For more information, please visit www.wyndhamworldwide.com.

FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements are those that convey management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by terminology such as "will," "expect," believe," "plan," "anticipate," "goal," "future," "outlook," guidance," "target," "estimate" and similar expressions.  Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  The forward-looking statements contained in this press release include statements related to the Company's revenues, earnings, cash flow and related financial and operating measures.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 17, 2017.  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.

 

Wyndham Worldwide Corporation

Earnings Release Schedules

Quarter One - March 31, 2017

Table of Contents




Table No.



Consolidated Statements of Income (Unaudited)

1



Operating Results of Reportable Segments

2



Operating Statistics

3



Condensed Consolidated Statements of Cash Flows and Reconciliation of Free Cash Flows (Unaudited)

4



Revenue Detail by Reportable Segment

5



Brand System Details

6



Non-GAAP Reconciliation of Adjusted Net Income and EPS

7



Non-GAAP Reconciliation of Adjusted EBITDA by Reportable Segment

8



Non-GAAP Reconciliation of Gross VOI Sales

9



Non-GAAP Reconciliation of 2017 Outlook

10



Non-GAAP Reconciliation - Constant Currency, Currency Neutral and Acquisitions

11



Schedule of Debt

12



 

 









Table 1

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)























 Three Months Ended 





 March 31, 





2017


2016

Net revenues








Service and membership fees


$

636


$

634


Vacation ownership interest sales



351



342


Franchise fees



141



138


Consumer financing



111



107


Other




80



82

Net revenues



1,319



1,303










Expenses









Operating



601



613


Cost of vacation ownership interests 



36



37


Consumer financing interest



18



18


Marketing and reservation



195



192


General and administrative



193



186


Asset impairments



5



-


Restructuring



7



-


Depreciation and amortization



63



62

Total expenses



1,118



1,108










Operating income



201



195

Other (income)/expense, net



(2)



(10)

Interest expense



33



33

Early extinguishment of debt



-



11

Interest income



(2)



(2)










Income before income taxes



172



163

Provision for income taxes



31



67

Net income



$

141


$

96










Earnings per share








Basic



$

1.34


$

0.85


Diluted



1.33



0.84










Weighted average shares outstanding








Basic




105



113


Diluted



106



114

 

 














Table 2

















Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)































In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA", which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes, each of which is presented on the Company's Consolidated Statements of Income.  The Company also uses adjusted EBITDA as a financial measure of its operating performance.  The Company believes that EBITDA and adjusted EBITDA are useful measures of assessing performance of the Company and for the Company's segments which, when considered with GAAP measures, give a more complete understanding of its operating performance and assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or nonrecurring and which in our view do not necessarily reflect ongoing operating performance. We also internally use these measures to assess our operating performance, both in absolute terms and in comparison to other companies, and in evaluating or making selected compensation decisions.  These supplemental disclosures are in addition to GAAP reported measures.  The Company's presentation of EBITDA and adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.






















The following tables summarize net revenues and EBITDA for the Company's reportable segments, as well as reconcile net income to EBITDA for the three months ended March 31, 2017 and 2016:




















Three Months Ended March 31, 





2017


2016





 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Hotel Group

$

298


$

85


$

295


$

84


Destination Network


391



102



385



81


Vacation Ownership


648



118



641



136


     Total Reportable Segments


1,337



305



1,321



301


Corporate and Other (a)


(18)



(39)



(18)



(34)


     Total Company

$

1,319


$

266


$

1,303


$

267

















Reconciliation of net income to EBITDA


































 Three Months Ended March 31,  








2017





2016


Net income





$

141





$

96


Provision for income taxes





31






67


Depreciation and amortization





63






62


Interest expense





33






33


Early extinguishment of debt





-






11


Interest income





(2)






(2)


EBITDA





$

266





$

267
































(a)  Includes the elimination of transactions between segments.  
















The following tables summarize net revenues and adjusted EBITDA for the Company's reportable segments for the three months ended March 31, 2017 and 2016 (for a description of adjustments and reconciliation by segment, see Table 8):





















Three Months Ended March 31, 





2017


2016







Adjusted 




Adjusted 





 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Hotel Group

$

298


$

85


$

295


$

84


Destination Network


391



102



385



105


Vacation Ownership


648



124



641



136


     Total Reportable Segments


1,337



311



1,321



325


Corporate and Other (a)


(18)



(33)



(18)



(34)


     Total Company

$

1,319


$

278


$

1,303


$

291

















 

 

















Table 3

















(1 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS


















The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:
























Year


Q1


Q2


Q3


Q4


Full Year

Hotel Group(a)













Number of Rooms 

2017


699,800


 N/A 


 N/A 


 N/A 


 N/A 



2016


679,100


683,300


689,800


697,600


 N/A 



2015


667,400


668,500


671,900


678,000


 N/A 



2014


646,900


650,200


655,300


660,800


 N/A 















RevPAR

2017

$

31.73

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

31.59

$

39.10

$

43.04

$

32.92

$

36.67



2015

$

32.84

$

39.82

$

43.34

$

32.98

$

37.26



2014

$

32.30

$

40.11

$

43.71

$

34.06

$

37.57














Destination Network













Average Number of Members (in 000s)

2017


3,817


 N/A 


 N/A 


 N/A 


 N/A 



2016


3,841


3,857


3,868


3,843


3,852



2015


3,822


3,831


3,835


3,836


3,831



2014


3,727


3,748


3,777


3,808


3,765















Exchange Revenue Per Member

2017

$

192.01

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

189.78

$

164.61

$

164.39

$

151.19

$

167.48



2015

$

194.06

$

167.81

$

163.38

$

152.00

$

169.29



2014

$

200.78

$

179.17

$

171.77

$

157.24

$

177.12















Vacation Rental Transactions (in 000s) (a) (b)

2017


538


 N/A 


 N/A 


 N/A 


 N/A 



2016


500


409


508


350


1,767



2015


459


390


462


319


1,630



2014


429


376


455


293


1,552















Average Net Price Per Vacation Rental(a) (b)

2017

$

343.07

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

366.08

$

492.83

$

599.59

$

430.14

$

475.24



2015

$

361.20

$

513.14

$

642.00

$

452.19

$

494.92



2014

$

410.04

$

577.13

$

727.40

$

492.25

$

558.95














Vacation Ownership (a)













Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c)

2017

$

439,000

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

428,000

$

518,000

$

564,000

$

502,000

$

2,012,000



2015

$

390,000

$

502,000

$

565,000

$

507,000

$

1,965,000



2014

$

410,000

$

496,000

$

513,000

$

470,000

$

1,889,000















Tours (in 000s)

2017


176


 N/A 


 N/A 


 N/A 


 N/A 



2016


179


213


230


197


819



2015


168


206


227


200


801



2014


170


208


225


191


794















Volume Per Guest (VPG)

2017

$

2,354

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

2,244

$

2,328

$

2,320

$

2,399

$

2,324



2015

$

2,177

$

2,353

$

2,354

$

2,390

$

2,326



2014

$

2,272

$

2,280

$

2,158

$

2,336

$

2,257


















Note: Full year amounts may not add across due to rounding.

(a)

Includes the impact of acquisitions/dispositions from the acquisition/disposition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

(b)

The destination network operating statistics excluding our U.K.-based camping business sold in Q4 2014 are as follows:
























Year


Q1


Q2


Q3


Q4


Full Year


Vacation Rental Transactions (in 000s)

2014


429


367


431


292


1,518


Average Net Price Per Vacation Rental

2014

$

410.02

$

578.02

$

700.56

$

492.64

$

548.93



































(c)

Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time. (See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).








































ADDITIONAL DATA
































Year


Q1


Q2


Q3


Q4


Full Year

Hotel Group













Number of Properties

2017


8,080


 N/A 


 N/A 


 N/A 


 N/A 



2016


7,830


7,880


7,930


8,040


 N/A 



2015


7,670


7,700


7,760


7,810


 N/A 



2014


7,500


7,540


7,590


7,650


 N/A 














Vacation Ownership













Provision for Loan Losses (in 000s) (*) 

2017

$

85,000

$

 N/A 

$

 N/A 

$

 N/A 

$

 N/A 



2016

$

63,000

$

90,000

$

104,000

$

86,000

$

342,000



2015

$

46,000

$

60,000

$

78,000

$

64,000

$

248,000



2014

$

60,000

$

70,000

$

70,000

$

60,000

$

260,000


















Note: Full year amounts may not add across due to rounding.

(*)

Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.





















 

 

















Table 3


















(2 of 2)




















Wyndham Worldwide Corporation


OPERATING STATISTICS




GLOSSARY OF TERMS




















Hotel Group




















Number of Rooms: Represents the number of rooms at hotel group properties at the end of the period which are either (i) under franchise and/or management agreements, or company owned and (ii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided. 





















Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.




















Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day. 




















RevPAR:  Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR. Comparable RevPAR represents RevPAR of hotels which are included in both periods.





















Destination Network




















Average Number of Members:  Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or who are within the allowed grace period. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with the Company's vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related services and products.






















Exchange Revenue Per Member: Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period. 





















Vacation Rental Transactions:  Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through one of our vacation brands. One rental transaction is recorded for each standard one-week rental.





















Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees divided by the number of vacation rental transactions.





















Vacation Ownership




















Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM sales, before the net effect of percentage-of-completion accounting and loan loss provisions. We believe gross VOI sales provide 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. See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales.





















Tours: Represents the number of tours taken by guests in our efforts to sell VOIs.




















Volume per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  The Company has excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2014-2017. 






















General




















Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation).




















Currency-Neutral: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation) and the impact caused by any foreign exchange related activities (i.e., hedges, balance sheet remeasurements and/or adjustments).





















 

 








Table 4

Wyndham Worldwide Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND RECONCILIATION OF FREE CASH FLOWS

(In millions)

(Unaudited)

















Condensed Consolidated Statements of Cash Flows:










Three Months Ended March 31, 




2017


2016

Net cash provided by operating activities


$

238


$

261









Net cash used in investing activities



(79)



(90)









Net cash used in financing activities



(124)



(27)









Effect of changes in exchange rates on cash and cash equivalents



2



3









Net increase in cash and cash equivalents


$

37


$

147

















Free Cash Flow:
















We define free cash flow to be net cash provided by operating activities less property and equipment additions which we also refer to as capital expenditures.

We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measures of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.


The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these financial measures:




Three Months Ended March 31, 




2017


2016

Net cash provided by operating activities


$

238


$

261

Less: Property and equipment additions



(35)



(43)

Free cash flow



$

203


$

218









 

 

























Table 5


























Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)























































2017


2016






 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Hotel Group
























Royalties and Franchise Fees


$

79


 N/A 


 N/A 


 N/A 


 N/A 


$

74

$

94

$

105

$

94

$

367


Marketing, Reservation and Wyndham Rewards Revenues (a)


83


 N/A 


 N/A 


 N/A 


 N/A 



83


103


125


92


405


Hotel Management Reimbursable Revenues (b)


66


 N/A 


 N/A 


 N/A 


 N/A 



67


71


67


65


271


Intersegment Trademark Fees



13


 N/A 


 N/A 


 N/A 


 N/A 



13


15


16


14


56


Owned Hotel Revenues



23


 N/A 


 N/A 


 N/A 


 N/A 



27


19


17


17


81


Ancillary Revenues (c)



34


 N/A 


 N/A 


 N/A 


 N/A 



31


32


34


34


129


Total Hotel Group



298


 N/A 


 N/A 


 N/A 


 N/A 



295


334


364


316


1,309


























Destination Network
























Exchange Revenues



183


 N/A 


 N/A 


 N/A 


 N/A 



182


159


159


145


645


Rental Revenues



184


 N/A 


 N/A 


 N/A 


 N/A 



183


202


304


151


840


Ancillary Revenues (d)



24


 N/A 


 N/A 


 N/A 


 N/A 



20


23


23


21


86


Total Destination Network



391


 N/A 


 N/A 


 N/A 


 N/A 



385


384


486


317


1,571


























Vacation Ownership
























Vacation Ownership Interest Sales



351


 N/A 


 N/A 


 N/A 


 N/A 



342


409


441


415


1,606


Consumer Financing



111


 N/A 


 N/A 


 N/A 


 N/A 



107


108


112


113


440


Property Management Fees and Reimbursable Revenues


175


 N/A 


 N/A 


 N/A 


 N/A 



164


161


168


168


660


WAAM Fee-for-Service Commissions


2


 N/A 


 N/A 


 N/A 


 N/A 



17


16


13


-


46


Ancillary Revenues (e)



9


 N/A 


 N/A 


 N/A 


 N/A 



11


11


10


9


42


Total Vacation Ownership



648


 N/A 


 N/A 


 N/A 


 N/A 



641


705


744


705


2,794

Total Reportable Segments


$

1,337


 N/A 


 N/A 


 N/A 


 N/A 


$

1,321

$

1,423

$

1,594

$

1,338

$

5,674























































2015


2014






 Q1 


 Q2 


 Q3 


 Q4 


 Year 



 Q1 


 Q2 


 Q3 


 Q4 


 Year 

Hotel Group
























Royalties and Franchise Fees


$

74

$

96

$

103

$

87

$

361


$

68

$

88

$

100

$

83

$

339


Marketing, Reservation and Wyndham Rewards Revenues (a)


96


108


112


92


407



76


101


117


91


385


Hotel Management Reimbursable Revenues (b)


61


71


73


68


273



37


39


39


39


154


Intersegment Trademark Fees



12


15


16


15


57



9


11


11


10


41


Owned Hotel Revenues



25


20


16


19


79



24


20


18


20


81


Ancillary Revenues (c)



24


24


37


33


120



23


24


30


24


101


Total Hotel Group



292


334


357


314


1,297



237


283


315


267


1,101


























Destination Network
























Exchange Revenues



185


161


157


146


649



187


168


162


150


667


Rental Revenues



166


200


296


144


807



176


217


331


144


868


Ancillary Revenues (d)



18


22


23


20


82



16


17


19


17


69


Total Destination Network



369


383


476


310


1,538



379


402


512


311


1,604


























Vacation Ownership
























Vacation Ownership Interest Sales



336


417


448


403


1,604



303


382


415


385


1,485


Consumer Financing



104


105


108


109


427



105


106


108


108


427


Property Management Fees and Reimbursable Revenues


153


149


159


155


615



143


145


150


142


581


WAAM Fee-for-Service Commissions


12


19


23


28


83



33


30


18


16


98


Ancillary Revenues (e)



12


9


12


11


43



9


10


13


17


47


Total Vacation Ownership



617


699


750


706


2,772



593


673


704


668


2,638

Total Reportable Segments


$

1,278

$

1,416

$

1,583

$

1,330

$

5,607


$

1,209

$

1,358

$

1,531

$

1,246

$

5,343



















































Note: Full year amounts may not add across due to rounding.

(a)

Marketing and reservation revenues represent fees the Company receives from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific reservation system.  These fees are typically based on a percentage of the gross room revenues of each hotel.  Wyndham Rewards revenues represent fees the Company receives relating to its loyalty program.

(b)

Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During 2014, reimbursable revenues of $2 million in each of Q1, Q2 and Q3 and $1 million in Q4 were charged to the Company's vacation ownership business and were eliminated in consolidation. 

(c)

Primarily includes additional services provided to franchisees and managed properties and fees related to our co-branded credit card program.

(d)

Primarily includes fees generated from programs with affiliated resorts and homeowners.

(e)

Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.





 

 








Table 6









Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS




















As of and For the Three Months Ended March 31, 2017

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)









Hotel Group







Super 8 

2,839

179,268

52.7%

$44.35

$23.39









Days Inn 

1,786

142,872

45.2%

$65.14

$29.44









Ramada 

862

120,647

50.0%

$69.58

$34.82









Wyndham Hotels and Resorts

254

55,694

53.1%

$101.23

$53.75









Howard Johnson 

367

42,318

45.8%

$57.08

$26.12









Baymont

437

34,519

46.1%

$66.85

$30.79









Travelodge 

406

29,725

43.4%

$66.41

$28.85









Microtel Inns & Suites by Wyndham

336

24,226

52.1%

$65.65

$34.21









Knights Inn 

370

22,589

41.5%

$48.78

$20.25









TRYP by Wyndham

115

16,223

58.0%

$73.59

$42.67









Wingate by Wyndham

153

14,073

57.1%

$85.49

$48.79









Hawthorn Suites by Wyndham

108

10,633

61.6%

$82.74

$50.98









Dolce

21

4,747

46.8%

$154.48

$72.36









Dazzler

12

1,525

63.4%

$91.84

$58.25









Esplendor

10

698

66.1%

$92.14

$60.90









         Total Hotel Group

8,076

699,757

49.5%

$64.04

$31.73









Vacation Ownership






Wyndham Vacation Ownership resorts

221

24,859

N/A

N/A

N/A









         Total Wyndham Worldwide

8,297

724,616























As of and For the Three Months Ended March 31, 2016

Brand

Number of
Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)









Hotel Group







Super 8 

2,665

170,454

51.5%

$45.73</