ORLANDO, Fla.,
Oct. 30, 2019 Wyndham Destinations, Inc. (NYSE: WYND),
the world's largest vacation ownership and exchange company, today
reported third quarter 2019 financial results for the three months
ended September 30, 2019. Highlights include:
- Net revenue increased 4% to $1,105 million
- Net VOI sales increased 5% to $528 million; gross VOI sales increased 4% to
$663 million
- Net income from continuing operations increased 3% to
$135 million ($1.47 diluted EPS)
- Adjusted net income from continuing operations
decreased 3% to $144 million
($1.57 adjusted diluted
EPS)
- Adjusted EBITDA decreased 1% to $267 million (1)
- Net cash provided by operating activities from
continuing operations year-to-date increased 57% to $321 million and adjusted freecash flow increased
31% to $466
million
- Repurchased 5.6 million shares of common stock for
$245 million year-to-date through
October 29
- Increased 2019 adjusted diluted EPS from continuing
operations guidance to a range of $5.54 to $5.62 and
increased 2019 adjusted free cash flow from continuing operations
guidance to a range of $565 to
$585 million
- Narrowed 2019 adjusted EBITDA guidance to a range of
$990 to $1,000
million, after adjusting for the impact of Hurricane
Dorian
Michael D. Brown, president
and CEO of Wyndham Destinations, commented, "Our company reported
strong quarterly results and increased our guidance for adjusted
diluted EPS. We are continuing to see an expansion of Blue Thread
sales and robust gross VOI sales, which increased 4% in the
quarter. We remain committed to generating strong free cash flows
and year-to-date we have returned $371
million of capital to shareholders in the form of dividends
and share repurchases."
"We recently completed two key transactions — the
sale of Wyndham Vacation Rentals to Vacasa for $162 million and the acquisition by RCI of
Alliance Reservations Network for $102
million. These transactions were important milestones for
RCI and Wyndham Destinations as we focus on our core business and
continue to execute on our key strategic objectives," said
Brown.
(1) The comparison
and variance between 2019 Adjusted EBITDA, adjusted diluted EPS
from continuing operations and adjusted net income from continuing
operations compared to the prior year was calculated using 2019
Adjusted data and 2018 Further Adjusted data in order to provide a
more accurate comparison. See "Presentation of Financial
Information" and the tables for the definitions and reconciliations
of these non-GAAP measures in accordance with GAAP.
|
Business Segment Results
Vacation Ownership
$ in millions
|
2019
|
2018
|
% change
|
Revenue
|
$858
|
|
$820
|
|
5
|
%
|
Adjusted
EBITDA
|
$203
|
|
$203
|
|
—
|
%
|
Vacation Ownership revenues increased 5%, primarily due to
a 4% increase in gross vacation ownership interest (VOI) sales to
$663 million. Tours increased 4%
year-over-year and Volume Per Guest (VPG) decreased 1%.
Adjusted EBITDA was flat at $203
million, with revenue growth of 5% offset by higher
inventory costs and increased costs in sales and
marketing.
Gross vacation ownership contract receivables grew 4%
year-over-year to $3.9 billion. The
provision for loan loss as a percentage of gross VOI sales, net of
fee-for-service sales, was 20.3% for the third quarter
of 2019, an improvement from 20.8% during the third
quarter of 2018.
Exchange & Rentals
$ in millions
|
2019
|
2018
|
% change
|
Revenue
|
$250
|
|
$243
|
|
3
|
%
|
Adjusted
EBITDA
|
$83
|
|
$79
|
|
5
|
%
|
Exchange & Rentals revenue increased 3%, primarily due
to incremental revenue from the acquisition of Alliance
Reservations Network, partially offset by a loss of Wyndham Hotels
and Resorts servicing revenue as a result of the
spin-off.
Adjusted EBITDA increased 5% to $83 million, primarily driven by lower general
and administrative costs.
Balance Sheet and Liquidity
Net Debt — As of
September 30, 2019, the Company's leverage ratio was 2.9x,
within the Company's target range of 2.25x to 3.0x. The Company had
$3.0 billion of corporate debt
outstanding, which excluded $2.5
billion of non-recourse debt related to securitized notes
receivable. Additionally, the Company had cash and cash equivalents
of $250 million. Refer to Table 9 for
definitions of net debt and leverage ratio.
Cash Flow — For
the nine months ended September 30, 2019, net cash provided by
operating activities from continuing operations was $321 million, compared to $205 million in the prior year period. The
increase was driven by higher net income and a decrease in cash
used for working capital, partially offset by lower stock-based
compensation. Adjusted free cash flow from continuing operations
was $466 million for the nine months
ended September 30, 2019, compared to $356 million in the same period of 2018. The
increase in adjusted free cash flow was due to the increase in net
cash provided by operating activities, lower separation-related
payments and higher net securitization activity.
Share Repurchases —
During the third quarter of 2019, the Company repurchased 2.0
million shares of common stock for $90
million at a weighted average price of
$44.45 per share. As of
September 30, 2019, the Company had $601 million remaining in its share repurchase
authorization. Subsequent to the end of the third quarter, the
Company repurchased an additional $30
million of shares through October
29.
Dividend — The
Company paid a cash dividend of $0.45
per share on September 30,
2019 to shareholders of record as of September 13, 2019. The cash dividend represents
a 10% increase over dividends paid in the third quarter of
2018.
Timeshare Receivables Financing — The
Company closed a $450 million term
securitization on July 24, 2019 with
a weighted average coupon rate of 2.96% and an advance rate of 98%.
Subsequent to the end of the quarter, the Company closed a
$300 million term securitization on
October 23, 2019 with a weighted average coupon rate of 2.76%
and an advance rate of 98%.
Other
Alliance Reservations Network — On
August 7, 2019, RCI acquired Alliance
Reservations Network, a travel technology platform, for
$102 million, comprised of
$48 million in cash and $10 million in WYND equity at closing, with
$21 million in cash and $13 million in WYND equity to be paid over the
next 24 months, and $10 million of
contingent consideration based on achieving certain financial and
operational metrics.
Wyndham Vacation Rentals — On
October 22, 2019, the Company
completed the sale of Wyndham Vacation Rentals to Vacasa for
$162 million. After customary closing
adjustments, Wyndham Destinations received $156 million in cash and $10 million in Vacasa equity. The purchase
agreement contains customary post-closing adjustments.
Outlook
The Company revised the following full-year 2019
guidance:
- Net revenue of $4,040
million to $4,140 million,
compared to the previous expectation of $4,120 million to $4,220
million. The guidance has been revised in part due to a
disruption of business from Hurricane Dorian
- Adjusted EBITDA of $990
million to $1,000 million,
compared to the previous expectation of $995
million to $1,015 million. The
guidance has been revised due to a disruption of business from
Hurricane Dorian
- Adjusted net income of $514
million to $522 million,
compared to the previous expectation of $503
million to $521 million. The
guidance has increased to reflect lower interest expense and lower
taxes
- Adjusted diluted EPS of $5.54 to $5.62,
based on a diluted share count of 92.8 million, which assumes no
future share repurchases after September 30,
2019. This compared to the previous guidance of $5.38 to $5.58.The
guidance has increased to reflect a lower share count from share
repurchases, lower interest expense and lower taxes
- Adjusted free cash flow of $565
million to $585 million,
compared to the previous expectation of $555
million to $575
million
The Company reaffirmed the following full-year 2019
guidance:
- Provision for loan loss as a percentage of gross VOI
sales, net of fee-for-service sales, to be comparable to 2018,
which was 20.5%
This guidance is presented only on a non-GAAP basis
because not all of the information necessary for a quantitative
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP financial measure is available
without unreasonable effort, primarily due to uncertainties
relating to the occurrence or amount of these adjustments that may
arise in the future. Please refer to Table 8 for further
information.
Conference Call Information
Wyndham
Destinations will hold a conference call with investors to discuss
the Company's results and outlook today at 8:30 a.m. ET. Participants may listen to a
simultaneous webcast of the conference call, which may be accessed
through the Company's website at investor.wyndhamdestinations.com,
or by dialing 866-342-8591, passcode WYND, 10 minutes before the
scheduled start time. For those unable to listen to the live
broadcast, an archive of the webcast will be available on the
Company's website for 90 days beginning at 12:00 p.m.
ET today. Additionally, a telephone replay will be available
for four days beginning at 12:00 p.m. ET today at
800-753-9146.
Presentation of Financial
Information
Financial information discussed in
this press release includes non-GAAP measures such as adjusted
EBITDA, adjusted diluted EPS from continuing operations and
adjusted net income from continuing operations, which include or
exclude certain items. The Company utilizes non-GAAP measures,
defined in Table 9, on a regular basis to assess performance of its
reportable segments and allocate resources. 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 by adjusting for items which in our view do not
necessarily reflect ongoing performance. Management also internally
uses these measures to assess our operating performance, both
absolutely and in comparison to other companies, and in evaluating
or making selected compensation decisions. 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. The Company is also presenting non-GAAP results on a
further adjusted basis for prior period comparison as if the
spin-off of its hotel business and the sale of its European
vacation rentals business had occurred for all periods presented.
Full reconciliations of non-GAAP financial measures to the most
directly comparable GAAP financial measures for the reported
periods appear in the financial tables section of the press
release. See definitions on Table 9 for an explanation of our
non-GAAP measures.
About Wyndham Destinations
Wyndham
Destinations, Inc. (NYSE:WYND) believes in putting the world on
vacation. As the world's largest vacation ownership and exchange
company, Wyndham Destinations offers everyday travelers the
opportunity to own or exchange their vacation experience while
enjoying the quality, flexibility and value that Wyndham delivers.
The Company's global presence in approximately 110 countries means
more vacation choices for its more than four million members and
owner families, with more than 220 resorts which offer a
contemporary take on the timeshare model - including vacation club
brands Club Wyndham®, WorldMark® by Wyndham, and Margaritaville
Vacation Club® by Wyndham - and 4,300+ affiliated resorts through
RCI, the world's leader in vacation exchange. Year after year, a
worldwide team of more than 23,000 associates delivers exceptional
vacation experiences to families around the globe as they make
memories to last a lifetime. At Wyndham Destinations, our world is
your destination. Learn more at WyndhamDestinations.com.
Forward-Looking Statements
This
presentation includes "forward-looking statements" as that term is
defined by the Securities and Exchange Commission ("SEC").
Forward-looking statements are any statements other than statements
of historical fact, including statements regarding our
expectations, beliefs, hopes, intentions or strategies regarding
the future. In some cases, forward-looking statements can be
identified by the use of words such as "may," "will," "expects,"
"should," "believes," "plans," "anticipates," "estimates,"
"predicts," "potential," "continue," "future" or other words of
similar meaning. Forward-looking statements are subject to risks
and uncertainties that could cause actual results of Wyndham
Destinations, Inc. ("Wyndham Destinations") to differ materially
from those discussed in, or implied by, the forward-looking
statements. The forward-looking statements contained in this
presentation include statements related to Wyndham Destinations'
current views and expectations with respect to its future
performance and operations (including the statements in the
"Outlook" section of this presentation). You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this presentation. Factors that might
cause such a difference include, but are not limited to, general
economic conditions, the performance of the financial and credit
markets, the competition in and the economic environment for the
timeshare industry, the impact of war, terrorist activity or
political strife, operating risks associated with the vacation
ownership and vacation exchange and rentals businesses,
uncertainties related to our ability to realize the anticipated
benefits of the spin-off of the hotel business ("spin-off") Wyndham
Hotels & Resorts, Inc. ("Wyndham Hotels") or the divestiture of
our European vacation rentals business, unanticipated developments
related to the impact of the spin-off, the divestiture of our
European vacation rentals business and related transactions on our
relationships with our customers, suppliers, employees and others
with whom we have relationships, unanticipated developments
resulting from possible disruption to our operations resulting from
the Spin-off and the divestiture of our European vacation rentals
business, our ability to execute on our strategy, the divestiture
of Wyndham Vacation Rentals or the acquisition of Alliance
Reservations Network may not prove successful and could result in
operating difficulties, the timing and amount of future dividends
and share repurchases and those disclosed as risks under "Risk
Factors" in documents we have filed with the SEC, including in Part
I, Item 1A of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, filed with
the SEC on February 26, 2019. We
caution readers that any such statements are based on currently
available operational, financial and competitive information, and
they should not place undue reliance on these forward-looking
statements, which reflect management's opinion only as of the date
on which they were made. Except as required by law, we undertake no
obligation to review or update these forward-looking statements to
reflect events or circumstances as they occur.
Wyndham Destinations
Table
of Contents
Table Number
- Condensed Consolidated Statements of Income
(Unaudited)
- Summary Data Sheet
- Operating Statistics
- Revenue by Reportable Segment
- Non-GAAP Measure: Reconciliation of Net Income to
Adjusted EBITDA to Further Adjusted Net Income From Continuing
Operations
- Non-GAAP Measure: Reconciliation of Net VOI Sales to
Gross VOI Sales
- Non-GAAP Measure: Reconciliation of Net Cash Provided by
Operating Activities from Continuing Operations to Adjusted Free
Cash Flow from Continuing Operations
- 2019 Guidance
- Definitions
Table
1
|
Wyndham
Destinations
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(in millions,
except per share amounts)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
|
|
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net revenues
|
|
|
|
|
|
|
|
Net VOI
sales
|
$
|
528
|
|
|
$
|
503
|
|
|
$
|
1,384
|
|
|
$
|
1,323
|
|
Service and
membership fees
|
426
|
|
|
417
|
|
|
1,241
|
|
|
1,245
|
|
Consumer
financing
|
132
|
|
|
126
|
|
|
385
|
|
|
363
|
|
Other
|
19
|
|
|
16
|
|
|
52
|
|
|
45
|
|
Net
revenues
|
1,105
|
|
|
1,062
|
|
|
3,062
|
|
|
2,976
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Operating
|
450
|
|
|
431
|
|
|
1,269
|
|
|
1,252
|
|
Cost of vacation
ownership interests
|
60
|
|
|
53
|
|
|
141
|
|
|
131
|
|
Consumer financing
interest
|
26
|
|
|
23
|
|
|
78
|
|
|
62
|
|
Marketing
|
188
|
|
|
179
|
|
|
505
|
|
|
465
|
|
General and
administrative
|
129
|
|
|
116
|
|
|
379
|
|
|
402
|
|
Separation and
related costs
|
7
|
|
|
35
|
|
|
44
|
|
|
198
|
|
Asset
impairments
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
Restructuring
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
Depreciation and
amortization
|
31
|
|
|
32
|
|
|
90
|
|
|
105
|
|
Total
expenses
|
891
|
|
|
865
|
|
|
2,510
|
|
|
2,611
|
|
|
|
|
|
|
|
|
|
Operating income
|
214
|
|
|
197
|
|
|
552
|
|
|
365
|
|
Other (income),
net
|
(6)
|
|
|
(22)
|
|
|
(18)
|
|
|
(33)
|
|
Interest
expense
|
40
|
|
|
37
|
|
|
122
|
|
|
129
|
|
Interest
(income)
|
(1)
|
|
|
—
|
|
|
(6)
|
|
|
(3)
|
|
Income before income taxes
|
181
|
|
|
182
|
|
|
454
|
|
|
272
|
|
Provision for income
taxes
|
46
|
|
|
51
|
|
|
120
|
|
|
112
|
|
Net income from continuing
operations
|
135
|
|
|
131
|
|
|
334
|
|
|
160
|
|
Loss from
discontinued operations, net
|
—
|
|
|
(3)
|
|
|
—
|
|
|
(52)
|
|
Gain on disposal of
discontinued operations, net
|
—
|
|
|
20
|
|
|
5
|
|
|
452
|
|
Net income attributable to WYND
shareholders
|
$
|
135
|
|
|
$
|
148
|
|
|
$
|
339
|
|
|
$
|
560
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.48
|
|
|
$
|
1.32
|
|
|
$
|
3.59
|
|
|
$
|
1.61
|
|
Discontinued
operations
|
—
|
|
|
0.17
|
|
|
0.05
|
|
|
4.01
|
|
|
$
|
1.48
|
|
|
$
|
1.49
|
|
|
$
|
3.64
|
|
|
$
|
5.62
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.47
|
|
|
$
|
1.31
|
|
|
$
|
3.58
|
|
|
$
|
1.60
|
|
Discontinued
operations
|
—
|
|
|
0.18
|
|
|
0.06
|
|
|
4.00
|
|
|
$
|
1.47
|
|
|
$
|
1.49
|
|
|
$
|
3.64
|
|
|
$
|
5.60
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
91.7
|
|
99.1
|
|
93.0
|
|
99.7
|
Diluted
|
92.0
|
|
99.5
|
|
93.3
|
|
100.1
|
Table
2
|
Wyndham
Destinations
|
Summary Data
Sheet
|
(in millions,
except per share amounts, unless otherwise
indicated)
|
|
|
Three Months Ended September
30,
|
|
Nine Months Ended September 30,
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
Consolidated Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to WYND shareholders
|
$
|
135
|
|
|
$
|
148
|
|
|
(9)
|
%
|
|
$
|
339
|
|
|
$
|
560
|
|
|
(39)
|
%
|
Diluted earnings per
share
|
$
|
1.47
|
|
|
$
|
1.49
|
|
|
(1)
|
%
|
|
$
|
3.64
|
|
|
$
|
5.60
|
|
|
(35)
|
%
|
Net income from
continuing operations
|
$
|
135
|
|
|
$
|
131
|
|
|
3
|
%
|
|
$
|
334
|
|
|
$
|
160
|
|
|
109
|
%
|
Diluted earnings per
share from continuing operations
|
$
|
1.47
|
|
|
$
|
1.31
|
|
|
12
|
%
|
|
$
|
3.58
|
|
|
$
|
1.60
|
|
|
124
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings from Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
267
|
|
|
$
|
269
|
|
|
(1)
|
%
|
|
$
|
726
|
|
|
$
|
702
|
|
|
3
|
%
|
Adjusted net
income
|
$
|
144
|
|
|
$
|
148
|
|
|
(3)
|
%
|
|
$
|
378
|
|
|
$
|
343
|
|
|
10
|
%
|
Adjusted diluted
earnings per share
|
$
|
1.57
|
|
|
$
|
1.48
|
|
|
6
|
%
|
|
$
|
4.05
|
|
|
$
|
3.42
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Further Adjusted Earnings from Continuing Operations
(a)
|
|
|
|
|
|
|
|
|
|
|
Further adjusted
EBITDA
|
$
|
267
|
|
|
$
|
271
|
|
|
(1)
|
%
|
|
$
|
726
|
|
|
$
|
717
|
|
|
1
|
%
|
Further adjusted net
income
|
$
|
144
|
|
|
$
|
146
|
|
|
(1)
|
%
|
|
$
|
378
|
|
|
$
|
357
|
|
|
6
|
%
|
Further adjusted
diluted earnings per share
|
$
|
1.57
|
|
|
$
|
1.47
|
|
|
7
|
%
|
|
$
|
4.05
|
|
|
$
|
3.57
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
Ownership
|
$
|
858
|
|
|
$
|
820
|
|
|
5
|
%
|
|
$
|
2,351
|
|
|
$
|
2,251
|
|
|
4
|
%
|
Exchange &
Rentals
|
250
|
|
|
243
|
|
|
3
|
%
|
|
716
|
|
|
727
|
|
|
(2)
|
%
|
Corporate and
other
|
(3)
|
|
|
(1)
|
|
|
|
|
(5)
|
|
|
(2)
|
|
|
|
Total
|
$
|
1,105
|
|
|
$
|
1,062
|
|
|
4
|
%
|
|
$
|
3,062
|
|
|
$
|
2,976
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
Ownership
|
$
|
203
|
|
|
$
|
203
|
|
|
—
|
%
|
|
$
|
534
|
|
|
$
|
530
|
|
|
1
|
%
|
Exchange &
Rentals
|
83
|
|
|
79
|
|
|
5
|
%
|
|
234
|
|
|
228
|
|
|
3
|
%
|
Segment Adjusted EBITDA
|
286
|
|
|
282
|
|
|
|
|
768
|
|
|
758
|
|
|
|
Corporate and
other
|
(19)
|
|
|
(13)
|
|
|
|
|
(42)
|
|
|
(56)
|
|
|
|
Total Adjusted EBITDA
|
$
|
267
|
|
|
$
|
269
|
|
|
(1)
|
%
|
|
$
|
726
|
|
|
$
|
702
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Further Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Vacation
Ownership
|
$
|
203
|
|
|
$
|
203
|
|
|
—
|
%
|
|
$
|
534
|
|
|
$
|
520
|
|
|
3
|
%
|
Exchange &
Rentals
|
83
|
|
|
79
|
|
|
5
|
%
|
|
234
|
|
|
228
|
|
|
3
|
%
|
Segment Further Adjusted EBITDA
|
286
|
|
|
282
|
|
|
|
|
768
|
|
|
748
|
|
|
|
Corporate and
other
|
(19)
|
|
|
(11)
|
|
|
|
|
(42)
|
|
|
(31)
|
|
|
|
Total Further Adjusted EBITDA
|
$
|
267
|
|
|
$
|
271
|
|
|
(1)
|
%
|
|
$
|
726
|
|
|
$
|
717
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(b)
|
24.2
|
%
|
|
25.5
|
%
|
|
|
|
23.7
|
%
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Operating Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Ownership
|
|
|
|
|
|
|
|
|
|
|
|
Gross VOI
sales
|
$
|
663
|
|
|
$
|
640
|
|
|
4
|
%
|
|
$
|
1,773
|
|
|
$
|
1,707
|
|
|
4
|
%
|
Tours (in
thousands)
|
269
|
|
|
259
|
|
|
4
|
%
|
|
710
|
|
|
690
|
|
|
3
|
%
|
VPG (in
dollars)
|
$
|
2,332
|
|
|
$
|
2,350
|
|
|
(1)
|
%
|
|
$
|
2,384
|
|
|
$
|
2,358
|
|
|
1
|
%
|
New owner sales
mix
|
38.2
|
%
|
|
40.9
|
%
|
|
|
|
37.8
|
%
|
|
38.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange & Rentals
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
members (in thousands)
|
3,895
|
|
|
3,857
|
|
|
1
|
%
|
|
3,888
|
|
|
3,851
|
|
|
1
|
%
|
Exchange revenue per
member (in dollars)
|
$
|
162.47
|
|
|
$
|
163.84
|
|
|
(1)
|
%
|
|
$
|
170.93
|
|
|
$
|
177.19
|
|
|
(4)
|
%
|
|
Note: Amounts may not
add due to rounding. See Table 9 for definitions. For a full
reconciliation of non-GAAP financial measures to the most directly
comparable GAAP financial measures, refer to Table 5 and Table
6.
|
(a)
|
2018 is further
adjusted to reflect results as if Wyndham Hotels & Resorts were
separated from Wyndham Destinations and the sale of the European
rentals business was completed for all periods.
|
(b)
|
The comparison and
variance between 2019 Adjusted EBITDA margin, compared to the prior
year was calculated using 2019 Adjusted data and 2018 Further
Adjusted data in order to provide a more accurate comparison. See
"Presentation of Financial Information" and the tables for the
definitions and reconciliations of these non-GAAP measures in
accordance with GAAP.
|
Table
3
|
Wyndham
Destinations
|
Operating
Statistics
|
|
The following
operating statistics are the drivers of the Company's revenues and
therefore provide an enhanced understanding of the Company's
businesses:
|
|
|
Year
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Vacation Ownership
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Gross VOI Sales (in
millions)(b)
|
2019
|
|
$
|
484
|
|
|
$
|
626
|
|
|
$
|
663
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
|
$
|
465
|
|
|
$
|
602
|
|
|
$
|
640
|
|
|
$
|
564
|
|
|
$
|
2,271
|
|
|
2017
|
|
$
|
438
|
|
|
$
|
562
|
|
|
$
|
600
|
|
|
$
|
538
|
|
|
$
|
2,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tours (in
thousands)
|
2019
|
|
192
|
|
|
249
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
2018
|
|
190
|
|
|
241
|
|
|
259
|
|
|
214
|
|
|
904
|
|
|
2017
|
|
176
|
|
|
235
|
|
|
247
|
|
|
210
|
|
|
869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VPG
|
2019
|
|
$
|
2,405
|
|
|
$
|
2,425
|
|
|
$
|
2,332
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
|
$
|
2,303
|
|
|
$
|
2,411
|
|
|
$
|
2,350
|
|
|
$
|
2,499
|
|
|
$
|
2,392
|
|
|
2017
|
|
$
|
2,354
|
|
|
$
|
2,302
|
|
|
$
|
2,299
|
|
|
$
|
2,438
|
|
|
$
|
2,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan
Losses
(in
millions)(c)
|
2019
|
|
$
|
(109)
|
|
|
$
|
(129)
|
|
|
$
|
(135)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018
|
|
$
|
(92)
|
|
|
$
|
(126)
|
|
|
$
|
(132)
|
|
|
$
|
(106)
|
|
|
$
|
(456)
|
|
|
2017
|
|
$
|
(85)
|
|
|
$
|
(111)
|
|
|
$
|
(123)
|
|
|
$
|
(101)
|
|
|
$
|
(420)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Loan
Loss as a
Percentage of Gross VOI Sales, net
of Fee-for-Service sales
|
2019
|
|
22.5
|
%
|
|
21.2
|
%
|
|
20.3
|
%
|
|
—
|
%
|
|
—
|
%
|
2018
|
|
20.4
|
%
|
|
21.4
|
%
|
|
20.8
|
%
|
|
19.3
|
%
|
|
20.5
|
%
|
2017
|
|
19.6
|
%
|
|
19.8
|
%
|
|
20.9
|
%
|
|
19.3
|
%
|
|
20.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses
(in
millions)
|
2019
|
|
$
|
721
|
|
|
$
|
735
|
|
|
$
|
767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018
|
|
$
|
684
|
|
|
$
|
705
|
|
|
$
|
743
|
|
|
$
|
734
|
|
|
$
|
734
|
|
|
2017
|
|
$
|
619
|
|
|
$
|
643
|
|
|
$
|
684
|
|
|
$
|
691
|
|
|
$
|
691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Vacation
Ownership
Contract Receivables
(in millions)
|
2019
|
|
$
|
3,741
|
|
|
$
|
3,783
|
|
|
$
|
3,885
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018
|
|
$
|
3,560
|
|
|
$
|
3,609
|
|
|
$
|
3,732
|
|
|
$
|
3,771
|
|
|
$
|
3,771
|
|
2017
|
|
$
|
3,377
|
|
|
$
|
3,435
|
|
|
$
|
3,547
|
|
|
$
|
3,591
|
|
|
$
|
3,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Loss as a Percentage of Gross Vacation Ownership Contract
Receivables
|
2019
|
|
19.3
|
%
|
|
19.4
|
%
|
|
19.7
|
%
|
|
—
|
%
|
|
—
|
%
|
2018
|
|
19.2
|
%
|
|
19.5
|
%
|
|
19.9
|
%
|
|
19.5
|
%
|
|
19.5
|
%
|
2017
|
|
18.3
|
%
|
|
18.7
|
%
|
|
19.3
|
%
|
|
19.2
|
%
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange & Rentals
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of
Members
(in
thousands)
|
2019
|
|
3,875
|
|
|
3,893
|
|
|
3,895
|
|
|
—
|
|
|
—
|
|
2018
|
|
3,852
|
|
|
3,844
|
|
|
3,857
|
|
|
3,833
|
|
|
3,847
|
|
2017
|
|
3,817
|
|
|
3,791
|
|
|
3,792
|
|
|
3,796
|
|
|
3,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Revenue Per
Member
|
2019
|
|
$
|
185.40
|
|
|
$
|
165.00
|
|
|
$
|
162.47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
|
$
|
194.70
|
|
|
$
|
173.05
|
|
|
$
|
163.84
|
|
|
$
|
152.51
|
|
|
$
|
171.04
|
|
|
2017
|
|
$
|
195.84
|
|
|
$
|
174.12
|
|
|
$
|
172.43
|
|
|
$
|
164.45
|
|
|
$
|
176.74
|
|
|
|
Note:
|
Full year amounts and
percentages may not compute due to rounding.
|
(a)
|
Includes the impact
of acquisitions from the acquisition dates forward.
|
(b)
|
Includes Gross VOI
sales under the Company's fee-for-service sales. (See Table 6 for a
reconciliation of Net VOI sales to Gross VOI sales).
|
(c)
|
Represents provision
for estimated losses on vacation ownership contract receivables
originated during the period, which is recorded as contra revenue
to vacation ownership interest sales on the Condensed Consolidated
Statements of Income.
|
Table
4
|
Wyndham
Destinations
|
Revenue by Reportable
Segment
|
(in
millions)
|
|
|
|
2019
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full
Year
|
Vacation
Ownership
|
|
|
|
|
|
|
|
|
|
|
Net VOI
Sales
|
|
$
|
375
|
|
|
$
|
481
|
|
|
$
|
528
|
|
|
—
|
|
|
—
|
|
Property Management
Fees and Reimbursable Revenues
|
|
170
|
|
|
170
|
|
|
178
|
|
|
—
|
|
|
—
|
|
Consumer
Financing
|
|
125
|
|
|
128
|
|
|
132
|
|
|
—
|
|
|
—
|
|
Other
Revenues
|
|
13
|
|
|
31
|
|
|
20
|
|
|
—
|
|
|
—
|
|
Total Vacation
Ownership
|
|
683
|
|
|
810
|
|
|
858
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange &
Rentals
|
|
|
|
|
|
|
|
|
|
|
Exchange
Revenues
|
|
180
|
|
|
161
|
|
|
158
|
|
|
—
|
|
|
—
|
|
Rental & Other
Revenues
|
|
56
|
|
|
69
|
|
|
92
|
|
|
—
|
|
|
—
|
|
Total Exchange
& Rentals
|
|
236
|
|
|
230
|
|
|
250
|
|
|
—
|
|
|
—
|
|
Total Reportable
Segments
|
|
$
|
919
|
|
|
$
|
1,040
|
|
|
$
|
1,108
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full
Year
|
Vacation
Ownership
|
|
|
|
|
|
|
|
|
|
|
Net VOI
Sales
|
|
$
|
358
|
|
|
$
|
462
|
|
|
$
|
503
|
|
|
$
|
446
|
|
|
$
|
1,769
|
|
Property Management
Fees and Reimbursable Revenues
|
|
164
|
|
|
162
|
|
|
172
|
|
|
168
|
|
|
665
|
|
Consumer
Financing
|
|
118
|
|
|
120
|
|
|
126
|
|
|
128
|
|
|
491
|
|
Other
Revenues
|
|
21
|
|
|
26
|
|
|
19
|
|
|
23
|
|
|
91
|
|
Total Vacation
Ownership
|
|
661
|
|
|
770
|
|
|
820
|
|
|
765
|
|
|
3,016
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange &
Rentals
|
|
|
|
|
|
|
|
|
|
|
Exchange
Revenues
|
|
188
|
|
|
166
|
|
|
158
|
|
|
146
|
|
|
658
|
|
Rental & Other
Revenues
|
|
58
|
|
|
72
|
|
|
85
|
|
|
45
|
|
|
260
|
|
Total Exchange
& Rentals
|
|
246
|
|
|
238
|
|
|
243
|
|
|
191
|
|
|
918
|
|
Total Reportable
Segments
|
|
$
|
907
|
|
|
$
|
1,008
|
|
|
$
|
1,063
|
|
|
$
|
956
|
|
|
$
|
3,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full
Year
|
Vacation
Ownership
|
|
|
|
|
|
|
|
|
|
|
Net VOI
Sales
|
|
$
|
350
|
|
|
$
|
446
|
|
|
$
|
466
|
|
|
$
|
422
|
|
|
$
|
1,684
|
|
Property Management
Fees and Reimbursable Revenues
|
|
163
|
|
|
164
|
|
|
160
|
|
|
162
|
|
|
649
|
|
Consumer
Financing
|
|
111
|
|
|
114
|
|
|
119
|
|
|
120
|
|
|
463
|
|
Other
Revenues
|
|
15
|
|
|
21
|
|
|
23
|
|
|
25
|
|
|
85
|
|
Total Vacation
Ownership
|
|
639
|
|
|
745
|
|
|
768
|
|
|
729
|
|
|
2,881
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange &
Rentals
|
|
|
|
|
|
|
|
|
|
|
Exchange
Revenues
|
|
187
|
|
|
165
|
|
|
163
|
|
|
156
|
|
|
671
|
|
Rental & Other
Revenues
|
|
56
|
|
|
69
|
|
|
85
|
|
|
46
|
|
|
256
|
|
Total Exchange
& Rentals
|
|
243
|
|
|
234
|
|
|
248
|
|
|
202
|
|
|
927
|
|
Total Reportable
Segments
|
|
$
|
882
|
|
|
$
|
979
|
|
|
$
|
1,016
|
|
|
$
|
931
|
|
|
$
|
3,808
|
|
|
|
Note:
|
Full year amounts may
not add across due to rounding.
|
Table
5
|
Wyndham
Destinations
|
Non-GAAP Measure:
Reconciliation of Net Income to Adjusted EBITDA to
|
Further Adjusted Net
Income From Continuing Operations
|
(in millions,
except diluted per share amounts)
|
|
|
Three Months Ended September
30,
|
|
Nine Months Ended September 30,
|
|
2019
|
EPS
|
|
2018
|
EPS
|
|
2019
|
|
EPS
|
|
2018
|
|
EPS
|
Net Income
attributable to WYND shareholders
|
$
|
135
|
|
|
$
|
1.47
|
|
|
$
|
148
|
|
|
$
|
1.49
|
|
|
$
|
339
|
|
|
$
|
3.64
|
|
|
$
|
560
|
|
|
$
|
5.60
|
|
Gain on disposal of
discontinued operations, net of income taxes
|
—
|
|
|
|
|
20
|
|
|
|
|
5
|
|
|
|
|
452
|
|
|
|
Loss from
discontinued operations, net of income taxes
|
—
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
(52)
|
|
|
|
Net income from
continuing operations
|
$
|
135
|
|
|
$
|
1.47
|
|
|
$
|
131
|
|
|
$
|
1.31
|
|
|
$
|
334
|
|
|
$
|
3.58
|
|
|
$
|
160
|
|
|
$
|
1.60
|
|
Restructuring
costs
|
—
|
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
Separation and
related costs
|
7
|
|
|
|
|
35
|
|
|
|
|
44
|
|
|
|
|
198
|
|
|
|
Legacy
items
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
Amortization of
acquired intangibles (a)
|
2
|
|
|
|
|
3
|
|
|
|
|
6
|
|
|
|
|
9
|
|
|
|
Debt modification
costs in interest expense
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
Impairments
|
—
|
|
|
|
|
(4)
|
|
|
|
|
—
|
|
|
|
|
(4)
|
|
|
|
Acquisition and
divestiture costs
|
4
|
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
Value-added tax
refund
|
—
|
|
|
|
|
(16)
|
|
|
|
|
—
|
|
|
|
|
(16)
|
|
|
|
Taxes
(b)
|
(4)
|
|
|
|
|
(1)
|
|
|
|
|
(15)
|
|
|
|
|
(7)
|
|
|
|
Adjusted net
income from continuing operations
|
$
|
144
|
|
|
$
|
1.57
|
|
|
$
|
148
|
|
|
$
|
1.48
|
|
|
$
|
378
|
|
|
$
|
4.05
|
|
|
$
|
343
|
|
|
$
|
3.42
|
|
Income taxes on
adjusted net income
|
50
|
|
|
|
|
52
|
|
|
|
|
135
|
|
|
|
|
119
|
|
|
|
Stock-based
compensation expense (c)
|
5
|
|
|
|
|
3
|
|
|
|
|
13
|
|
|
|
|
21
|
|
|
|
Depreciation
|
29
|
|
|
|
|
29
|
|
|
|
|
84
|
|
|
|
|
96
|
|
|
|
Interest
expense
|
40
|
|
|
|
|
37
|
|
|
|
|
122
|
|
|
|
|
127
|
|
|
|
Interest
income
|
(1)
|
|
|
|
|
—
|
|
|
|
|
(6)
|
|
|
|
|
(3)
|
|
|
|
Adjusted
EBITDA
|
$
|
267
|
|
|
|
|
$
|
269
|
|
|
|
|
$
|
726
|
|
|
|
|
$
|
702
|
|
|
|
Separation and other
adjustments (d)
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
16
|
|
|
|
Further adjusted
EBITDA (e)
|
$
|
267
|
|
|
|
|
$
|
271
|
|
|
|
|
$
|
726
|
|
|
|
|
$
|
717
|
|
|
|
Depreciation
(f)
|
(29)
|
|
|
|
|
(29)
|
|
|
|
|
(84)
|
|
|
|
|
(91)
|
|
|
|
Interest expense
(g)
|
(40)
|
|
|
|
|
(40)
|
|
|
|
|
(122)
|
|
|
|
|
(124)
|
|
|
|
Interest
income
|
1
|
|
|
|
|
—
|
|
|
|
|
6
|
|
|
|
|
4
|
|
|
|
Stock-based
compensation (c)
|
(5)
|
|
|
|
|
(3)
|
|
|
|
|
(13)
|
|
|
|
|
(15)
|
|
|
|
Further adjusted
taxes (h)
|
(50)
|
|
|
|
|
(52)
|
|
|
|
|
(135)
|
|
|
|
|
(133)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Further adjusted
net income from continuing operations (e)
|
$
|
144
|
|
|
$
|
1.57
|
|
|
$
|
146
|
|
|
$
|
1.47
|
|
|
$
|
378
|
|
|
$
|
4.05
|
|
|
$
|
357
|
|
|
$
|
3.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares
Outstanding
|
92.0
|
|
|
|
|
99.5
|
|
|
|
|
93.3
|
|
|
|
|
100.1
|
|
|
|
Amounts may not add due to rounding. The table above
reconciles certain non-GAAP financial measures to their closest
GAAP measure. The presentation of these adjustments is intended to
permit the comparison of particular adjustments as they appear in
the income statement in order to assist investors' understanding of
the overall impact of such adjustments. In addition to GAAP
financial measures, the Company provides adjusted net income from
continuing operations and adjusted diluted EPS from continuing
operations to 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 in our view do not necessarily reflect ongoing
performance. We also internally use these measures to assess our
operating performance, both absolutely and in comparison to other
companies, and in evaluating or making selected compensation
decisions. The Company is also presenting non-GAAP results on a
further adjusted basis as if the spin-off of its hotel business and
the sale of its European vacation rentals business had occurred for
all periods presented. These supplemental disclosures are in
addition to GAAP reported measures. Non-GAAP measures should not be
considered a substitute for, nor superior to, financial results and
measures determined or calculated. The variance between 2019
Adjusted EBITDA, adjusted diluted EPS from continuing operations
and adjusted net income from continuing operations compared to the
prior year was calculated using 2019 Adjusted data and 2018 Further
Adjusted data in order to provide a more accurate comparison. See
"Presentation of Financial Information" and the tables for the
definitions and reconciliations of these non-GAAP
measures.
(a)
|
Amortization of
acquisition-related assets is excluded from adjusted net income
from continuing operations, adjusted EBITDA, further adjusted
EBITDA and further adjusted net income from continuing
operations.
|
(b)
|
In the three and nine
months ended September 30, 2019, amounts represent the tax
effect of the adjustments totaling $5 million and $16 million,
respectively. Both periods were partially offset by $1 million of
tax benefit resulting from a post-separation internal
restructuring. In the three months ended September 30, 2018 the
amounts represent the tax effect of the adjustments totaling $1
million. In the nine months ended September 30, 2018, amounts
represent the tax effect of the adjustments totaling $50 million
partially offset by $30 million of non-cash state tax expense
related to the separation of the hotel business and $13 million of
non-cash tax expense from certain internal restructurings
associated with the sale of the European vacation rentals
business.
|
(c)
|
All stock-based
compensation is excluded from adjusted EBITDA and further adjusted
EBITDA. Stock-based compensation for the Wyndham Destinations'
equity recipients is included as a reduction to further adjusted
net income from continuing operations.
|
(d)
|
Includes 2018
incremental license fees paid to Wyndham Hotels & Resorts and
other corporate costs being effected in order to reflect the
Company's position as if the spin-off had occurred for all periods
presented.
|
(e)
|
2018 is further
adjusted to reflect results as if Wyndham Hotels & Resorts were
separated from Wyndham Destinations and the sale of the European
rentals business was completed for all periods.
|
(f)
|
For 2018 comparative
purposes, excludes depreciation related to corporate assets
transferred to Wyndham Hotels & Resorts.
|
(g)
|
For 2018 comparative
purposes, interest expense for 2018 was calculated based on $3.0
billion of outstanding debt, excluding non-recourse vacation
ownership debt, and a non-investment-grade rating, resulting in
higher interest rates for select tranches of notes.
|
(h)
|
For the first quarter
of 2018, an effective tax rate of 27% was assumed.
|
Table
6
|
Wyndham
Destinations
|
Non-GAAP Measure:
Reconciliation of Net VOI Sales to Gross VOI Sales
|
(in
millions)
|
|
The Company believes
gross VOI sales provide an enhanced understanding of the
performance of its vacation ownership business because it directly
measures the sales volume of this business during a given reporting
period.
|
|
The following table
provides a reconciliation of Net VOI sales (see Table 4) to Gross
VOI sales (see Table 3):
|
|
Year
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
|
|
|
|
|
|
|
|
|
|
|
Net VOI
sales
|
|
$
|
375
|
|
|
$
|
481
|
|
|
$
|
528
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loan loss
provision
|
|
109
|
|
|
129
|
|
|
135
|
|
|
—
|
|
|
—
|
|
Gross VOI sales, net
of Fee-for-Service sales
|
|
484
|
|
|
610
|
|
|
663
|
|
|
—
|
|
|
—
|
|
Sales under
Fee-for-Service
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gross VOI
sales
|
|
$
|
484
|
|
|
$
|
626
|
|
|
$
|
663
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net VOI
sales
|
|
$
|
358
|
|
|
$
|
462
|
|
|
$
|
503
|
|
|
$
|
446
|
|
|
$
|
1,769
|
|
Loan loss
provision
|
|
92
|
|
|
126
|
|
|
132
|
|
|
106
|
|
|
456
|
|
Gross VOI sales, net
of Fee-for-Service sales
|
|
450
|
|
|
588
|
|
|
635
|
|
|
552
|
|
|
2,225
|
|
Sales under
Fee-for-Service
|
|
15
|
|
|
14
|
|
|
5
|
|
|
12
|
|
|
46
|
|
Gross VOI
sales
|
|
$
|
465
|
|
|
$
|
602
|
|
|
$
|
640
|
|
|
$
|
564
|
|
|
$
|
2,271
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net VOI
sales
|
|
$
|
350
|
|
|
$
|
446
|
|
|
$
|
466
|
|
|
$
|
422
|
|
|
$
|
1,684
|
|
Loan loss
provision
|
|
85
|
|
|
111
|
|
|
123
|
|
|
101
|
|
|
420
|
|
Gross VOI sales, net
of Fee-for-Service sales
|
|
435
|
|
|
557
|
|
|
589
|
|
|
523
|
|
|
2,104
|
|
Sales under
Fee-for-Service
|
|
3
|
|
|
5
|
|
|
11
|
|
|
15
|
|
|
34
|
|
Gross VOI
sales
|
|
$
|
438
|
|
|
$
|
562
|
|
|
$
|
600
|
|
|
$
|
538
|
|
|
$
|
2,138
|
|
The following
includes primarily tele-sales upgrades and other non-tour revenue,
which are excluded from Gross VOI sales in the Company's VPG
calculation (see Table 3):
|
|
Non-tour revenue
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
35
|
|
|
—
|
|
|
—
|
|
2018
|
|
$
|
28
|
|
|
$
|
21
|
|
|
$
|
31
|
|
|
$
|
29
|
|
|
$
|
108
|
|
2017
|
|
$
|
24
|
|
|
$
|
20
|
|
|
$
|
32
|
|
|
$
|
26
|
|
|
$
|
102
|
|
|
|
Note:
|
Amounts may not add
due to rounding.
|
Table
7
|
Wyndham
Destinations
|
Non-GAAP Measure:
Reconciliation of Net Cash Provided by Operating Activities from
Continuing Operations to Adjusted Free Cash Flow from Continuing
Operations
|
(in
millions)
|
|
|
|
Nine Months Ended September 30,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
|
$
|
321
|
|
|
$
|
205
|
|
Property and
equipment additions
|
|
(75)
|
|
|
(63)
|
|
Sum of proceeds and
principal payments of non-recourse vacation ownership
debt
|
|
139
|
|
|
94
|
|
Free cash flow from continuing
operations
|
|
$
|
385
|
|
|
$
|
236
|
|
Separation and other
adjustments (a)
|
|
81
|
|
|
120
|
|
Adjusted free cash flow from continuing
operations
|
|
$
|
466
|
|
|
$
|
356
|
|
|
|
(a)
|
Includes cash paid
for separation-related activities and transaction costs for
acquisitions and divestitures in 2019 and 2018, as well as certain
adjustments to 2018 for comparative purposes for incremental
license fees to Wyndham Hotels and Resorts and other corporate
costs being effected in order to reflect the Company's position as
if the spin-off had occurred for all periods presented.
|
Table
8
|
Wyndham
Destinations
|
2019
Guidance
|
(in millions,
except per share amounts)
|
|
|
|
2019 Guidance
|
|
2018A (a)
|
|
Year-over-Year
Growth at
|
|
|
Low
|
|
High
|
|
|
|
Midpoint
|
|
|
|
|
|
|
|
|
|
Net Revenues
|
|
|
|
|
|
|
|
|
Vacation
Ownership
|
|
$
|
3,140
|
|
|
$
|
3,220
|
|
|
$
|
3,016
|
|
|
5%
|
Exchange &
Rentals
|
|
905
|
|
|
925
|
|
|
918
|
|
|
—%
|
Corporate and
other
|
|
(5)
|
|
|
(5)
|
|
|
(3)
|
|
|
|
Total
|
|
$
|
4,040
|
|
|
$
|
4,140
|
|
|
$
|
3,931
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
990
|
|
|
$
|
1,000
|
|
|
$
|
942
|
|
|
6%
|
Separation and other
costs (a)
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|
Further adjusted EBITDA
(a)
|
|
$
|
990
|
|
|
$
|
1,000
|
|
|
$
|
957
|
|
|
4%
|
Stock-based
compensation
|
|
(19)
|
|
|
(17)
|
|
|
(18)
|
|
|
|
Depreciation and
amortization (b)
|
|
(113)
|
|
|
(111)
|
|
|
(121)
|
|
|
|
Net interest
expense
|
|
(157)
|
|
|
(155)
|
|
|
(159)
|
|
|
|
Adjusted pre-tax income
|
|
$
|
704
|
|
|
$
|
714
|
|
|
$
|
659
|
|
|
8%
|
Adjusted taxes
(c)
|
|
(190)
|
|
|
(192)
|
|
|
(179)
|
|
|
|
Adjusted net income from continuing
operations
|
|
$
|
514
|
|
|
$
|
522
|
|
|
$
|
480
|
|
|
8%
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
92.8
|
|
|
92.8
|
|
|
99.2
|
|
|
|
Adjusted diluted earnings per share from continuing
operations
|
|
$
|
5.54
|
|
|
$
|
5.62
|
|
|
$
|
4.84
|
|
|
15%
|
Note: Amounts may not add due to rounding. The Company is
providing guidance for adjusted net income from continuing
operations, adjusted EBITDA and adjusted diluted EPS only on a
non-GAAP adjusted basis because not all of the information
necessary for a quantitative reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable GAAP
financial measures is available without unreasonable effort,
primarily due to uncertainties relating to the occurrence or amount
of these adjustments or other potential adjustments that may arise
in the future. Definitions are included in Table 9.
|
|
2019 Guidance
|
|
2018A
|
|
Adjusted EBITDA
Impact of
|
Full-Year Drivers
|
|
Low
|
|
High
|
|
|
|
100 bps Change (d)
|
|
|
|
|
|
|
|
|
|
Vacation Ownership
|
|
|
|
|
|
|
|
|
Tours
|
|
5%
|
|
7%
|
|
4%
|
|
$7.0
|
VPG
|
|
—%
|
|
1%
|
|
2%
|
|
$10.0
|
|
|
|
|
|
|
|
|
|
Exchange & Rentals
|
|
|
|
|
|
|
|
|
Average number of
members
|
|
—%
|
|
2%
|
|
1%
|
|
$4.5
|
Exchange revenue per
member
|
|
(2%)
|
|
—%
|
|
(3%)
|
|
$6.5
|
|
|
(a)
|
2018 is adjusted to
reflect results as if Wyndham Hotels & Resorts were separated
from Wyndham Destinations and the sale of the European vacation
rentals business was completed for all periods.
|
(b)
|
Excludes amortization
of acquisition-related intangible assets.
|
(c)
|
2019 guidance assumes
an effective tax rate of 27%.
|
(d)
|
Sensitivities for
revenue drivers are based on average systemwide trends. Operating
circumstances including but not limited to brand mix, product mix,
geographical concentration or market segment result in variability,
which may change the impact.
|
Table 9
Definitions
Adjusted EBITDA: A non-GAAP measure, defined
by the Company 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 Consolidated Statements of Income. Adjusted EBITDA also
excludes stock-based compensation costs, separation and
restructuring costs, transaction costs and impairments, and items
that meet the conditions of unusual and/or infrequent. We believe
that Adjusted EBITDA is useful to assist our investors in
evaluating our ongoing operating performance for the current
reporting period and, where provided, over different reporting
periods. We also internally use these measures to assess our
operating performance, both absolutely and in comparison to other
companies, and in evaluating or making selected compensation
decisions. Adjusted EBITDA should not be considered in isolation or
as a substitute for net income or other income statement data
prepared in accordance with GAAP and our presentation of Adjusted
EBITDA may not be comparable to similarly-titled measures used by
other companies.
Adjusted net income from continuing
operations: A non-GAAP measure, defined by the Company
as net income from continuing operations adjusted to exclude
separation and restructuring costs, amortization of
acquisition-related assets, debt modification costs, impairments,
and items that meet the conditions of unusual and/or infrequent and
the tax effect of such adjustments.
Adjusted diluted earnings per share: A
non-GAAP measure, defined by the Company as Adjusted net income
from continuing operations divided by the diluted weighted average
number of common shares.
Further adjusted earnings measures: For 2018,
a non-GAAP measure, defined by the Company to exclude certain items
including impairment charges, restructuring and other related
charges, transaction-related items, contract termination costs and
other significant charges which in the Company's view does not
reflect ongoing performance. Further adjusted earnings measures
adjust for license fees, credit card income and corporate expense
to reflect the performance of the Company as if it were separated
from Wyndham Hotels & Resorts and the sale of the European
rentals business was completed for all reported periods. All
further adjusted earnings measures are reported from continuing
operations, unless otherwise noted. Wyndham Destinations believes
that these measures are useful to investors as supplemental
measures in evaluating the aggregate performance of the Company. A
full reconciliation of non-GAAP measures to GAAP are included in
Table 5.
Gross Vacation Ownership Interest Sales: A
non-GAAP measure, represents sales of vacation ownership interests
(VOIs), including sales under the fee-for-service program before
the effect of loan loss provisions. We believe that 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.
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.
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.
Free Cash Flow from Continuing Operations
(FCF): A non-GAAP measure, defined by the Company as
net cash provided by operating activities from continuing
operations less property and equipment additions (capital
expenditures) plus the sum of proceeds and principal payments of
non-recourse vacation ownership debt. The Company believes FCF to
be a useful operating performance measure to evaluate the ability
of its operations to generate cash for uses other than capital
expenditures and, after debt service and other obligations, its
ability to grow its business through acquisitions and equity
investments, as well as its ability to return cash to shareholders
through dividends and share repurchases. A limitation of using FCF
versus the GAAP measures of net cash provided by operating
activities as a means for evaluating Wyndham Destinations is that
FCF does not represent the total cash movement for the period as
detailed in the consolidated statement of cash flows.
Adjusted Free Cash Flow from Continuing
Operations: A non-GAAP measure, defined by the Company
as net cash provided by operating activities from continuing
operations less property and equipment additions (capital
expenditures) plus the sum of proceeds and principal payments of
non-recourse vacation ownership debt, while also adding back
corporate and other costs and separation adjustments associated
with the spin-off to reflect the performance of the Company as if
it were separated from Wyndham Hotels & Resorts during all
reported periods.
Net Debt: Net debt equals total debt
outstanding, less non-recourse vacation ownership debt and cash and
cash equivalents.
Leverage Ratio: The Company calculates
leverage ratio as net debt divided by Adjusted EBITDA.
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SOURCE Wyndham Destinations