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Wyndham Worldwide Reports Fourth Quarter And Full Year 2015 Results

The following excerpt is from the company's SEC filing.

Full Year Adjusted Diluted EPS increased 13% over 2014

Increases Dividend 19%

One Billion Dollar Increase in Share Repurchase Authorization

– Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months and year ended December 31, 2015.

HIGHLIGHTS:

Fourth quarter adjusted diluted earnings per share (EPS) was $0.98, an increase of 9% from adjusted diluted EPS of $0.90 in the fourth quarter of 2014. Reported diluted EPS was $1.21, compared with $0.65 in the fourth quarter of 2014.

Full year adjusted diluted earnings per share (EPS) was $5.11, an increase of 13% from adjusted diluted EPS of $4.53 in 2014. Reported diluted EPS was $5.14, compared with $4.18 in 2014.

Fourth quarter 2015 revenues increased 6% and adjusted EBITDA increased 8% compared with the fourth quarter of 2014.

The Company's Board of Directors authorized an increase in the quarterly cash dividend to $0.50 from $0.42 per share, beginning with the dividend that is expected to be declared in the first quarter of 2016.

The Company repurchased 2.2 million shares of its common stock for $165 million during the quarter.

The Company’s Board of Directors approved a $1 billion increase in the share repurchase authorization.

"With our strong fourth quarter financial results and sharp operational execution across our global portfolio of hospitality brands, we have delivered our sixth consecutive year of double-digit growth in full year adjusted diluted EPS," said Stephen P. Holmes, chairman and CEO. "As we enter 2016, we are confident in the strength and resilience of our business and remain focused on innovating and executing every day to deliver superior value for our shareholders and all our stakeholders. Reflecting our strong performance in 2015 and as an indication of our confidence in our prospects, the Board of Directors approved a 19% increase in our quarterly dividend and $1 billion increase in our share repurchase authorization.”

FOURTH QUARTER 2015 OPERATING RESULTS

Fourth quarter revenues were $1.3 billion, an increase of 6% from the prior year period.

Fourth quarter adjusted EBITDA was $273 million, compared with $252 million in the prior year period, an increase of 8%. Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $8 million in 2015. On a currency-neutral basis and excluding acquisitions and a divestiture, adjusted EBITDA also increased 8%.

Adjusted net income was $113 million, or $0.98 per diluted share, compared with $112 million, or $0.90 per diluted share for the same period in 2014. Net income and earnings per share benefited from strong operating results, but were reduced by foreign currency effects and higher interest expense. EPS also benefited from the Company’s share repurchase program.

Reported net income for the fourth quarter of 2015 was $140 million, or $1.21 per diluted share, compared with $81 million, or $0.65 per diluted share, for the fourth quarter of 2014. Reported net income in both periods reflects several items excluded from adjusted net income. The net result of these items favorably impacted fourth quarter 2015 net income by $27 million and unfavorably impacted fourth quarter 2014 net income by $31 million. Full reconciliations of adjusted net income to GAAP results appear in Table 8 of this press release. Year-over-year fourth quarter reported net income comparisons also were negatively impacted by foreign currency effects.

FULL YEAR 2015 OPERATING RESULTS

Revenues for full year 2015 were $5.5 billion, an increase of 5% over the prior year period.

Adjusted EBITDA for full year 2015 was $1,297 million, compared with $1,238 million in the prior year period. Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $46 million in 2015. On a currency-neutral basis and excluding acquisitions and a divestiture, adjusted EBITDA increased 8%.

Adjusted net income for the full year 2015 was $608 million, or $5.11 per diluted share, compared with $573 million, or $4.53 per diluted share, for the prior year. The increases reflect stronger operating results across all of the Company’s businesses, partially offset by foreign currency effects. EPS also benefited from the Company’s share repurchase program.

Reported net income for full year 2015 was $612 million, or $5.14 per diluted share, compared with reported net income of $529 million, or $4.18 per diluted share, for the prior year period. Reported net income reflects several items excluded from adjusted net income. The net result of these items favorably impacted full year 2015 net income by $4 million and unfavorably impacted full year 2014 net income by $44 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2015 CASH FLOW

Free cash flow was $769 million for the year ended December 31, 2015, compared with $749 million for the same period in 2014. The increase reflects strong operating results and lower capital expenditures. In addition, 2015 free cash flow was unfavorably impacted by changes in foreign currency exchange rates. For the year ended December 31, 2015, net cash provided by operating activities was $991 million, compared with $984 million in the prior year period. The Company defines free cash flow as net cash provided by operating activities less capital expenditures.

FOURTH QUARTER 2015 BUSINESS UNIT RESULTS

Hotel Group

Revenues were $314 million in the fourth quarter of 2015, an 18% increase compared with the fourth quarter 2014. Adjusted EBITDA was $93 million, an 18% increase compared with the same period in 2014. In constant currency, excluding acquisitions and the impact of the increase in the inter-segment licensing fee rate charged for use of the Wyndham brand trade name, revenues increased 6% and adjusted EBITDA increased 10%. Results reflect higher royalty and management fees and growth in our Wyndham Rewards credit card program.

Fourth quarter domestic RevPAR increased 2.9%. In constant currency, total system-wide RevPAR was flat compared with the fourth quarter of 2014, which reflects higher unit growth in lower RevPAR countries such as China.

As of December 31, 2015, the Company’s hotel system consisted of over 7,800 properties and 678,000 rooms, a 2.6% net room increase compared with the fourth quarter of 2014. The development pipeline included 890 hotels and over 119,000 rooms, of which 60% were international and 70% were new construction.

Destination Network (formerly Vacation Exchange and Rentals)

Revenues were $310 million in the fourth quarter of 2015, flat compared with the fourth quarter of 2014. In constant currency, and excluding acquisitions and a divestiture in 2014, revenues increased 5%.

Exchange revenues were $146 million, down 3% compared with the fourth quarter of 2014. In constant currency, exchange revenues were up 1% compared with the prior year, as the average number of members increased 0.7% while exchange revenue per member was flat.

Vacation rental revenues were $144 million, flat compared with the fourth quarter of 2014. In constant currency and excluding the impact of acquisitions and the divestiture, vacation rental revenues were up 8%, reflecting an 8.1% increase in transaction volume and flat average net price per vacation rental.

Adjusted EBITDA for the fourth quarter of 2015 was $43 million, a 10% increase compared with the fourth quarter of 2014. On a currency-neutral basis and excluding the impact of acquisitions and the divestiture, adjusted EBITDA increased 9% compared with the prior year period.

Vacation Ownership

Revenues were $706 million in the fourth quarter of 2015, a 6% increase over the fourth quarter of 2014. In constant currency, revenues increased 7%.

Gross VOI sales were $507 million in the fourth quarter of 2015, an increase of 8% compared with the fourth quarter of 2014. In constant currency, Gross VOI sales increased 9%. Volume per guest (VPG) for the quarter increased 3.4% in constant currency and tour flow increased 4.7%.

Adjusted EBITDA for the fourth quarter of 2015 was $174 million, an increase of 1% compared with the fourth quarter of 2014. On a currency-neutral basis and excluding the impact of the increase in the inter-segment licensing fee rate, adjusted EBITDA increased 5%, reflecting higher sales volume.

OTHER ITEMS

The Company repurchased 2.2 million shares of common stock for $165 million during the fourth quarter of 2015. For the full-year 2015, the Company repurchased 7.9 million shares of common stock for $650 million. From January 1 through February 8, 2016, the Company repurchased an additional 1.6 million shares for $107 million.

The Company’s Board of Directors approved a $1 billion increase in the share repurchase authorization. Including the increase, the Company’s remaining share repurchase authorization totals $1.3 billion as of February 8, 2016.

Reported net interest expense in the fourth quarter of 2015 was $35 million, compared with $25 million in the fourth quarter of 2014, reflecting the $350 million 5.10% bond issued in September and the absence of a fixed-to-floating interest rate swap.

Balance Sheet Information as of December, 2015:

Cash and cash equivalents of $171 million, compared with $183 million at December 31, 2014

Vacation ownership contract receivables, net, of $2.7 billion, unchanged from December 31, 2014

Vacation ownership and other inventory of $1.3 billion, compared with $1.2 billion at December 31, 2014

Securitized vacation ownership debt of $2.1 billion, compared with $2.2 billion at December 31, 2014

Long-term debt of $3.1 billion, compared with $2.9 billion at December 31, 2014. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of December 31, 2015, compared with $1.3 billion at December 31, 2014.

A schedule of debt is included in Table 5 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.

For the full year 2016, the Company provides the following guidance:

Revenues of approximately $5.800 - $5.950 billion.

Adjusted EBITDA of approximately $1.375 - $1.400 billion.

Adjusted EPS of approximately $5.46 - $5.60 based on a diluted share count of 116 million.

The Company will post 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 Tuesday, February 9, 2016 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 877-876-9177 and providing the pass code "WYNQ415." 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...


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