Wyndham Worldwide Reports Fourth Quarter and Full Year 2009 Results Company Triples Dividend Payout Resumes Share Repurchase Program
PARSIPPANY, N.J. (February 10, 2010) –
Wyndham Worldwide Corporation
(NYSE:WYN) today announced results for the three months and year ended December
31, 2009. Separately, the Company also announced an increase in its quarterly cash
dividend and that it plans to resume its share repurchase program.
FOURTH QUARTER and FULL-YEAR HIGHLIGHTS:
Wyndham Worldwide generated fourth quarter diluted earnings per share (EPS) of
$0.40, compared with Company-issued guidance of $0.35 - $0.38. For the year ended
December 31, 2009, the Company generated net cash from operating activities of
approximately $690 million, compared with $109 million in 2008.
“We are pleased to report solid earnings and increasing free cash flow for the quarter
and the year, and to announce an increase in our dividend along with our intention to
resume our share repurchase program. While continuing high unemployment and
economic uncertainty created a difficult operating environment, our results reflect
resilient business models and strong execution,” said Stephen P. Holmes, chairman and
CEO, Wyndham Worldwide. “Going forward, we remain focused on cash flow
generation, transforming the Company by rebalancing our worldwide business portfolio
to our fee-for-service businesses and positioning our businesses for future earnings
Increases Quarterly Dividend Payout
The Company’s Board of Directors authorized an increase of the quarterly cash
dividend to $0.12 from $0.04 per share, beginning with the dividend that is expected to
be declared in the first quarter of 2010. With this increase, the dividend is equivalent to
an annual rate of $0.48 per share.
Resumes Share Repurchase Program
The Company plans to resume repurchase of its common stock under its existing $200
million stock repurchase program, which currently has $157 million remaining capacity.
The amount and timing of specific repurchases are subject to market conditions,
applicable legal requirements and other factors. Repurchases may be conducted in the
open market or in privately negotiated transactions.
FOURTH QUARTER 2009 OPERATING RESULTS
Revenues for the fourth quarter of 2009 were $913 million, relatively flat compared with
the prior-year period. Net income for the fourth quarter of 2009 was $73 million, or $0.40 diluted EPS, compared with a fourth quarter of 2008 net loss of $1.4 billion, or
$7.63 loss per diluted share. The prior-year period includes the after-tax impact of $1.4
billion, or $8.10 per diluted share, of goodwill impairments, foreign currency losses,
restructuring costs and legacy items. Excluding these items, adjusted net income would
have been $84 million, or $0.47 diluted adjusted EPS for the fourth quarter of 2008.
FULL YEAR 2009 OPERATING RESULTS
Revenues for full year 2009 were $3.8 billion, a decline of 12% over the prior-year
period, reflecting the following:
- Lodging revenues were $660 million, a 12% decrease compared with 2008,
primarily resulting from a global decline in revenue per available room (RevPAR).
- Exchange and Rentals revenues were $1.2 billion, an 8% decrease compared
with 2008, primarily resulting from unfavorable foreign exchange rate
movements. In constant currency, revenues declined 2%.
- Vacation Ownership revenues were $1.9 billion, a 15% decrease compared with
2008, primarily resulting from the Company’s previously announced initiative to
reduce capital deployed in the business, which included sales office closures and
the elimination of certain marketing programs that resulted in fewer tours.
Net income for full year 2009 was $293 million, or $1.61 diluted EPS, compared with a
prior-year period net loss of $1.1 billion, or $6.05 loss per diluted share. Adjusted net
income for full year 2009 was $327 million, or $1.80 diluted EPS, compared with
adjusted net income of $388 million, or $2.18 diluted adjusted EPS for full year 2008.
Adjusted net income for full year 2009 excludes the after-tax impact of $34 million, or
$0.19 per diluted share, of restructuring costs and legacy items. Adjusted net income
for the prior-year period excludes the after-tax impact of $1.5 billion, or $8.23 per diluted
share, of goodwill and other impairments, foreign currency losses, restructuring costs
and legacy items.
FOURTH QUARTER 2009 BUSINESS UNIT RESULTS
Wyndham Hotel Group
Revenues were $149 million in the fourth quarter of 2009, a decline of 12% compared
with the fourth quarter of 2008, primarily reflecting the global RevPAR decline.
System-wide RevPAR declined 11.9% in the fourth quarter of 2009. In constant
currency, fourth quarter 2009 system-wide RevPAR decreased 13.3%, reflecting
declines of 13.8% and 15.4% in domestic and international RevPAR, respectively.
Fourth quarter 2009 EBITDA was $32 million, compared with $38 million in the fourth
quarter of 2008, which included a $16 million non-cash impairment charge. The yearover-
year change reflects the global RevPAR decline, increased bad debt reserve
primarily related to the hotel management business, and a non-cash impairment charge associated with an underperforming joint venture in the hotel management business,
partially offset by cost containment initiatives.
As of December 31, 2009, the Company’s hotel system consisted of approximately
7,110 properties and 597,700 rooms, of which 22% were international. The
development pipeline included approximately 950 hotels and 108,100 rooms, of which
51% were new construction and 43% were international.
Wyndham Exchange and Rentals
Revenues were $258 million in the fourth quarter of 2009, a 3% increase compared with
the fourth quarter of 2008. In constant currency, revenues were relatively flat.
Annual dues and exchange revenues were $106 million, a 5% increase from the prioryear
period. In constant currency, revenues increased $2 million, or 2% compared with
the fourth quarter of 2008, driven by a 2% growth in the average number of members.
Vacation rental revenues were $122 million, an 8% increase from the prior-year period.
In constant currency, revenues increased $2 million, or 2%, compared with the fourth
quarter of 2008, primarily driven by a 3% increase in average price per vacation rental,
partially offset by a 1% decrease in rental transaction volume.
Ancillary revenues were $30 million, a 17% decrease from the fourth quarter of 2008. In
constant currency, revenues decreased 19% due primarily to lower fees generated from
programs with affiliated resorts and our termination of a low margin travel service
Fourth quarter 2009 EBITDA was $48 million, compared with a loss of $4 million in the
fourth quarter of 2008, which included $67 million of asset impairments, foreign
currency conversion losses and restructuring costs. Excluding these items and an
unfavorable 2009 net effect of foreign currency of $15 million, 2009 EBITDA was flat,
compared with 2008 adjusted EBITDA.
Wyndham Vacation Ownership
Driven by the previously announced initiative to reduce capital deployed in this
business, gross vacation ownership interest (VOI) sales declined 21%, from the prioryear
period, to $343 million in the fourth quarter of 2009. The year-over-year change
reflects a 36% increase in volume per guest which partially offset the planned reduction
in tour flow of 41%.
Total segment revenues were $508 million in the fourth quarter of 2009, a 3% increase
from the fourth quarter of 2008. This change was driven by a decline in our provision
for loan losses, a favorable impact from the percentage-of-completion (POC) method of
accounting and higher ancillary revenue, partially offset by lower VOI sales. Under the
POC method of accounting for VOI sales, the Company recognized $47 million of
previously deferred revenue during the fourth quarter of 2009, compared with $14
million in the fourth quarter 2008.
EBITDA for the fourth quarter of 2009 was $132 million, compared with a loss of $1.3
billion in the fourth quarter of 2008, which included $1.4 billion of goodwill, other
impairments and restructuring costs. Excluding these items, 2009 EBITDA increased
$41 million, compared with the prior-year period, reflecting the net impact of the planned
reduction in the VOI business and its related expenses, a lower provision for loan
losses, and the impact from the net increase in the recognition of revenue previously
deferred under the POC method of accounting.
Net interest expense in the fourth quarter of 2009 was $33 million, a $15 million
increase from the fourth quarter of 2008. The increase reflected lower capitalized
interest and long-term debt issuances in May 2009, the proceeds of which were used
primarily to reduce revolving credit facility borrowings, which had a lower interest rate.
Balance Sheet Information as of December 31, 2009:
- Cash and cash equivalents of approximately $155 million compared with $135
million at December 31, 2008
- Vacation ownership contract receivables, net, of $3.1 billion compared with $3.3
billion at December 31, 2008
- Vacation ownership and other inventory of $1.3 billion, unchanged from
December 31, 2008
- Securitized vacation ownership debt of $1.5 billion compared with $1.8 billion at
December 31, 2008
- Other debt of $2.0 billion, unchanged from December 31, 2008; remaining
borrowing capacity on the revolving credit facility was approximately $870 million
compared with approximately $290 million as of December 31, 2008
A schedule of debt is included in the financial tables section of this press release.
The Company’s full-year 2010 guidance is:
- Revenues of $3.5 – $3.9 billion
- Adjusted EBITDA of $775 – $825 million
The guidance reflects assumptions used for internal planning purposes. All guidance
excludes legacy items and restructuring costs, if any, which may have a positive or
negative impact on reported results. If economic conditions improve or deteriorate
materially from current levels, these assumptions and our guidance may change
materially. It is not practicable to provide a reconciliation of forecasted adjusted
EBITDA to the most directly comparable GAAP measure because certain items cannot
be reasonably estimated or predicted at this time. Any such items could be significant to
our financial results.
Conference Call Information
Wyndham Worldwide Corporation will provide a webcast of its conference call to
discuss the Company’s fourth quarter and full year 2009 financial results on
Wednesday, February 10, 2010 at 8:30 a.m. ET. Listeners can access the webcast live
through the company’s website at www.wyndhamworldwide.com/investors/. The
conference call also may be accessed by dialing (800) 369-2052 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 12:00pm ET on February 10, 2010. A telephone replay will be
available for approximately 90 days beginning at 12:00pm ET on February 10, 2010 at
Presentation of Financial Information
Financial information discussed in this press release includes both GAAP and non-
GAAP measures, which include or exclude certain items. These non-GAAP measures
differ from reported results and are intended to illustrate what management believes are
relevant period-over-period comparisons. A complete reconciliation of reported GAAP
results to the comparable non-GAAP information appears in the financial tables section
of the press release.
About Wyndham Worldwide
As one of the world’s largest hospitality companies, Wyndham Worldwide offers
individual consumers and business-to-business customers a broad suite of hospitality
products and services across various accommodation alternatives and price ranges
through its premier portfolio of world-renowned brands. Wyndham Hotel Group
encompasses approximately 7,110 franchised hotels and approximately 597,700 hotel
rooms worldwide. Wyndham Exchange and Rentals offers leisure travelers, including its
3.8 million members, access to over 65,000 vacation properties located in
approximately 100 countries. Wyndham Vacation Ownership develops, markets and
sells vacation ownership interests and provides consumer financing to owners through
its network of over 155 vacation ownership resorts serving over 820,000 owners
throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide,
headquartered in Parsippany, N.J., employs approximately 25,000 employees globally.
For more information about Wyndham Worldwide, please visit the Company’s web site
This press release contains “forward-looking statements” within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, conveying management’s
expectations for the future, including, without limitation the information under the
“Guidance”, which are based on plans, estimates and projections at the time the
Company makes the statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements contained in this press release include statements related to the Company’s revenues, earnings, related financial and
operating measures, dividend policy and share repurchases.
You are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. Factors that could cause actual
results to differ materially from those in the forward-looking statements include general
economic conditions, the performance of the financial and credit markets, changes in
interest expense relating to the Company’s existing or future indebtedness, the
economic environment for the hospitality industry, the impact of war and terrorist
activity, operating risks associated with the hotel, vacation exchange and rentals and
vacation ownership businesses, as well as those described in the Company’s Quarterly
Report on Form 10-Q, filed with the SEC on November 5, 2009. Except for the
Company’s ongoing obligations to disclose material information under the federal
securities laws, it undertakes no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of unanticipated
Investor and Media Contact:
Margo C. Happer
Senior Vice President, Investor Relations
Wyndham Worldwide Corporation