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Wyndham Worldwide Corp$110.77($1.03)(.92%)

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 Wyndham Worldwide Reports Fourth Quarter and Full Year 2016 Results
   Wednesday, February 15, 2017 6:30:00 AM ET

Wyndham Worldwide Corporation (WYN ) today announced results for the three months and year ended December 31, 2016.

FOURTH QUARTER 2016 OPERATING RESULTS Fourth 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 fourth quarter of 2016 was $164 million compared with $140 million for the fourth quarter of 2015. Diluted earnings per share (EPS) increased 26% to $1.53 per diluted share compared with $1.21 for the prior year period. Adjusted net income for the fourth quarter of 2016, which excludes charges and gains in both 2016 and 2015 as detailed in Table 7 of this press release, was $146 million compared with $113 million for the fourth quarter of 2015. Adjusted diluted EPS increased 38% to $1.35 from $0.98 per diluted share in the prior year period. Adjusted net income and EPS benefited from earnings growth across all of our businesses. EPS also benefited from the Company’s share repurchase program.



Fourth quarter EBITDA was $322 million, compared with $275 million in the prior year period, an increase of 17%. Adjusted EBITDA, which excludes charges and gains in 2016 and charges in 2015 as detailed in Table 8 of this press release, was $318 million, compared with $273 million in the prior year period, an increase of 16%.

"In 2016, we delivered earnings growth and free cash flow that were both in line with our targets despite headwinds from a higher provision for loan losses and foreign exchange rates," said Stephen P. Holmes, chairman and CEO. "We achieved these results through consistent execution, careful expense management, and continued disciplined capital allocation."

FULL YEAR 2016 OPERATING RESULTS Revenues for full year 2016 were $5.6 billion, an increase of 1% over the prior year.

Net income for full year 2016 was $611 million compared with $612 million for full year 2015. Diluted EPS increased 8% to $5.53 from $5.14 per diluted share in the prior year. Adjusted net income for full year 2016, which excludes charges and gains in both 2016 and 2015 as detailed in Table 7 of this press release, was $636 million compared with $608 million for full year 2015. Adjusted diluted EPS increased 13% to $5.75 from $5.11 in the prior year period. Adjusted net income and EPS benefited from earnings growth across all of our businesses. EPS also benefited from the Company’s share repurchase program.

Full year 2016 EBITDA was $1,331 million, compared with $1,266 million in the prior year, an increase of 5%. Adjusted EBITDA, which excludes charges and gains in 2016 and charges in 2015 as detailed in Table 8 of this press release, was $1,373 million. This compares with $1,297 million in the prior year, an increase of 6%. On a currency-neutral basis and excluding acquisitions, adjusted EBITDA increased 7%.

For the twelve months ended December 31, 2016, net cash provided by operating activities was $973 million, compared with $991 million in the prior year period. The decrease reflects unfavorable currency movements of $48 million, including a $24 million devaluation of the Venezuelan bolivar in the first quarter of 2016.

Free cash flow was $782 million for the twelve months ended December 31, 2016, compared with $769 million for the same period in 2015, reflecting lower capital expenditures that were partially offset by the unfavorable currency movements referenced above. The Company defines free cash flow as net cash provided by operating activities less capital expenditures.

FOURTH QUARTER 2016 BUSINESS UNIT RESULTS

Hotel Group Revenues were $316 million in the fourth quarter of 2016, compared with $314 million in the fourth quarter of 2015. Revenues reflected higher franchise fees and growth in the Company’s Wyndham Rewards credit card program, partially offset by lower reimbursable property management revenues.

EBITDA was $99 million in the fourth quarter compared with $94 million in the prior year quarter. Adjusted EBITDA grew 6% to $99 million. In constant currency and excluding acquisitions, adjusted EBITDA increased 8%. This reflects the higher franchise fees and growth in the Company’s Wyndham Rewards credit card program.

Fourth quarter domestic same store RevPAR increased 2.9%. Excluding oil markets, domestic same store RevPAR increased 3.7%. In constant currency, total systemwide same store RevPAR increased 2.7% compared with the fourth quarter of 2015, which reflects softness in domestic and Canadian oil markets.

As of December 31, 2016, the Company’s hotel system consisted of over 8,000 properties and over 697,600 rooms, a 2.9% net room increase compared with year-end 2015. The development pipeline increased to more than 1,110 hotels and approximately 138,300 rooms, of which 60% were international and 67% were new construction.

Destination Network Revenues were $317 million in the fourth quarter of 2016, compared with $310 million in the fourth quarter of 2015, an increase of 2%. In constant currency and excluding acquisitions, revenues increased 3%.

Vacation rental revenues were $151 million compared with $144 million in the prior year quarter. In constant currency and excluding the impact of acquisitions, vacation rental revenues were up 5%, reflecting a 5.3% increase in transaction volume, which benefited from enhanced yield management as well as capacity increases across our Denmark-based Novasol brand and our U.K. cottage and parks brands. Average net price per rental was flat.

Exchange revenues were $145 million compared with $146 million in the prior year quarter. In constant currency, exchange revenues grew 1% as exchange revenue per member increased 0.4% and the average number of members increased 0.2%.

EBITDA was $53 million in the fourth quarter, compared with $44 million in the prior year quarter. Adjusted EBITDA increased $9 million to $52 million for the fourth quarter of 2016, which reflects the revenue gains from continued strong vacation rental performance and lower costs.

Vacation Ownership Revenues were $705 million in the fourth quarter of 2016, compared with $706 million in the fourth quarter of 2015.

Gross VOI sales in the fourth quarter of 2016 were flat, impacted by sales office closures from a restructuring and Hurricane Matthew. The number of new owners added during the quarter was up 8% from the prior year quarter. Volume per guest was up 0.4% and tour flow declined 1.5%, reflecting the closure of sales sites as noted above.

EBITDA was $182 million in the fourth quarter compared with $174 million in the prior year quarter. Adjusted EBITDA was $191 million for the fourth quarter of 2016, an increase of 10% compared with the prior year quarter, due to lower costs.

OTHER ITEMS

-- The Company’s Board of Directors authorized an increase in the quarterly cash dividend to $0.58 from $0.50 per share, beginning with the dividend that is expected to be declared in the first quarter of 2017.

-- The Company repurchased 2.1 million shares of common stock for $150 million during the fourth quarter of 2016 at an average price of $70.34. From January 1 through February 14, 2017, the Company repurchased an additional 1.0 million shares for $75 million.

-- Net interest expense in the fourth quarter of 2016 was $32 million, compared with $35 million in the fourth quarter of 2015. This reflects a larger proportion of lower cost variable debt partially offset by higher debt levels.

-- Depreciation and amortization in the fourth quarter of 2016 was $65 million, compared with $61 million in the fourth quarter of 2015, reflecting new projects that were placed into service.

Balance Sheet Information as of December 31, 2016:

-- Cash and cash equivalents of $185 million, compared with $171 million at December 31, 2015

-- Vacation ownership contract receivables, net, of $2.8 billion, compared with $2.7 billion at December 31, 2015

-- Vacation ownership and other inventory of $1.4 billion, compared with $1.3 billion at December 31, 2015

-- Securitized vacation ownership debt of $2.1 billion, unchanged from December 31, 2015

-- Long-term debt of $3.4 billion, compared with $3.1 billion at December 31, 2015. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.1 billion as of December 31, 2016, compared with $1.4 billion at December 31, 2015.

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:

-- Revenues of approximately $5.80 billion to $5.95 billion

-- Adjusted net income of approximately $637 million to $658 million

-- Adjusted EBITDA of approximately $1.41 billion to $1.44 billion

-- Adjusted diluted EPS of approximately $5.90 to $6.10 based on a diluted share count of 108 million

In determining adjusted EBITDA, adjusted net income 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, EPS and EBITDA 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 for 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, February 15, 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 888-632-3384 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 February 15, 2017. A telephone replay will be available for approximately 10 days beginning at 12:00 p.m. ET on February 15, 2017 at 800-839-0866.

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 (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, conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company’s revenues, earnings, cash flow, dividends, 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 12, 2016. 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 Four - December 31, 2016
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 and Currency Neutral                                  11
Schedule of Debt                                                                                  12
                                                                                        Table 1
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
                                                   Three Months Ended    Twelve Months Ended
                                                   December 31,          December 31,
                                                   2016       2015       2016       2015
Net revenues
             Service and membership fees           $   550    $   562    $   2,552  $   2,519
             Vacation ownership interest sales         415        403        1,606      1,604
             Franchise fees                            164        157        677        674
             Consumer financing                        113        109        440        427
             Other                                     78         80         324        312
Net revenues                                           1,320      1,311      5,599      5,536
Expenses
             Operating                                 597        594        2,511      2,461
             Cost of vacation ownership interests      31         43         146        165
             Consumer financing interest               19         19         75         74
             Marketing and reservation                 184        189        829        813
             General and administrative                169        199        714        761
             Loss on sale and asset impairment         -          -          -          7
             Restructuring                             1          (2)        15         6
             Depreciation and amortization             65         61         252        234
Total expenses                                         1,066      1,103      4,542      4,521
Operating income                                       254        208        1,057      1,015
Other (income)/expense, net                            (3)        (6)        (22)       (17)
Interest expense                                       34         37         136        125
Early extinguishment of debt                           -          -          11         -
Interest income                                        (2)        (2)        (8)        (9)
Income before income taxes                             225        179        940        916
Provision for income taxes                             61         39         328        304
Net income                                             164        140        612        612
Net income attributable to noncontrolling interest     -          -          (1)        -
Net income attributable to Wyndham shareholders    $   164    $   140    $   611    $   612
Earnings per share
             Basic                                 $   1.54   $   1.22   $   5.56   $   5.18
             Diluted                                   1.53       1.21       5.53       5.14
Weighted average shares outstanding
             Basic                                     107        115        110        118
             Diluted                                   108        116        111        119
                                                                                                                                                                                                                                                                                                                                                                                   Table 2
                                                                                                                                                                                                                                                                                                                                                                                   (1 of 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 EBITDA to net income for the three months ended December 31, 2016 and 2015:
                                                                                                               Three Months Ended December 31,
                                                                                                               2016                                                                                                                                                                                                                                   2015
                                                                                                               Net Revenues                                                                                                        EBITDA                                                                                                             Net Revenues        EBITDA
Hotel Group                                                                                                    $                                                                                                            316    $                                                                                                            99    $            314    $        94
Destination Network                                                                                                                                                                                                         317                                                                                                                 53                 310             44
Vacation Ownership                                                                                                                                                                                                          705                                                                                                                 182                706             174
Total Reportable Segments                                                                                                                                                                                                   1,338                                                                                                               334                1,330           312
Corporate and Other (a)                                                                                                                                                                                                     (18)                                                                                                                (12)               (19)            (37)
Total Company                                                                                                  $                                                                                                            1,320  $                                                                                                            322   $            1,311  $        275
Reconciliation of EBITDA to net income
                                                                                                                                                                                                                                   Three Months Ended December 31,
                                                                                                                                                                                                                                   2016                                                                                                                                   2015
EBITDA                                                                                                                                                                                                                             $                                                                                                            322                       $        275
Depreciation and amortization                                                                                                                                                                                                                                                                                                                   65                                 61
Interest expense                                                                                                                                                                                                                                                                                                                                34                                 37
Interest income                                                                                                                                                                                                                                                                                                                                 (2)                                (2)
Income before income taxes                                                                                                                                                                                                                                                                                                                      225                                179
Provision for income taxes                                                                                                                                                                                                                                                                                                                      61                                 39
Net income                                                                                                                                                                                                                         $                                                                                                            164                       $        140
(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 December 31, 2016 and 2015 (for a description of adjustments and reconciliation by segment, see Table 8):
                                                                                                               Three Months Ended December 31,
                                                                                                               2016                                                                                                                                                                                                                                   2015
                                                                                                                                                                                                                                   Adjusted                                                                                                                               Adjusted
                                                                                                               Net Revenues                                                                                                        EBITDA                                                                                                             Net Revenues        EBITDA
Hotel Group                                                                                                    $                                                                                                            316    $                                                                                                            99    $            314    $        93
Destination Network                                                                                                                                                                                                         317                                                                                                                 52                 310             43
Vacation Ownership                                                                                                                                                                                                          705                                                                                                                 191                706             174
Total Reportable Segments                                                                                                                                                                                                   1,338                                                                                                               342                1,330           310
Corporate and Other (a)                                                                                                                                                                                                     (18)                                                                                                                (24)               (19)            (37)
Total Company                                                                                                  $                                                                                                            1,320  $                                                                                                            318   $            1,311  $        273
                                                                                                                                                                             Table 2
                                                                                                                                                                             (2 of 2)
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)
The following tables summarize net revenues and EBITDA for the Company’s reportable segments, as well as reconcile EBITDA to net income attributable to Wyndham shareholders for the twelve months ended December 31, 2016 and 2015:
                                                   Twelve Months Ended December 31,
                                                   2016                                                                  2015
                                                   Net Revenues                       EBITDA                             Net Revenues                       EBITDA
Hotel Group                                        $                1,309             $                391               $                1,297             $                349
Destination Network                                                 1,571                              356                                1,538                              367
Vacation Ownership                                                  2,794                              694                                2,772                              687
Total Reportable Segments                                           5,674                              1,441                              5,607                              1,403
Corporate and Other (a)                                             (75)                               (110)                              (71)                               (137)
Total Company                                      $                5,599             $                1,331             $                5,536             $                1,266
Reconciliation of EBITDA to net income attributable to Wyndham shareholders
                                                                                      Twelve Months Ended December 31,
                                                                                      2016                                                                  2015
EBITDA                                                                                $                1,331                                                $                1,266
Depreciation and amortization                                                                          252                                                                   234
Interest expense                                                                                       136                                                                   125
Early extinguishment of debt                                                                           11                                                                    -
Interest income                                                                                        (8)                                                                   (9)
Income before income taxes                                                                             940                                                                   916
Provision for income taxes                                                                             328                                                                   304
Net income                                                                                             612                                                                   612
Net income attributable to noncontrolling interest                                                     (1)                                                                   -
Net income attributable to Wyndham shareholders                                       $                611                                                  $                612
(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 twelve months ended December 31, 2016 and 2015 (for a description of adjustments and reconciliation by segment, see Table 8):
                                                   Twelve Months Ended December 31,
                                                   2016                                                                  2015
                                                                                      Adjusted                                                              Adjusted
                                                   Net Revenues                       EBITDA                             Net Revenues                       EBITDA
Hotel Group                                        $                1,309             $                401               $                1,297             $                376
Destination Network                                                 1,571                              385                                1,538                              370
Vacation Ownership                                                  2,794                              708                                2,772                              688
Total Reportable Segments                                           5,674                              1,494                              5,607                              1,434
Corporate and Other (a)                                             (75)                               (121)                              (71)                               (137)
Total Company                                      $                5,599             $                1,373             $                5,536             $                1,297
                                                                                                                                                         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                                             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
                                                                    2013             631,800          635,100          638,300          645,400          N/A
        RevPAR                                                      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
                                                                    2013           $ 31.05          $ 38.00          $ 41.78          $ 33.07          $ 36.00
Destination Network
        Average Number of Members (in 000s)                         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
                                                                    2013             3,668            3,686            3,711            3,728            3,698
        Exchange Revenue Per Member                                 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
                                                                    2013           $ 210.96         $ 182.42         $ 169.95         $ 161.21         $ 181.02
        Vacation Rental Transactions (in 000s) (a) (b)              2016             500              409              508              350              1,767
                                                                    2015             459              390              462              319              1,630
                                                                    2014             429              376              455              293              1,552
                                                                    2013             423              355              433              273              1,483
        Average Net Price Per Vacation Rental(a) (b)                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
                                                                    2013           $ 392.64         $ 540.38         $ 677.81         $ 506.62         $ 532.11
Vacation Ownership (a)
        Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c) 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
                                                                    2013           $ 384,000        $ 481,000        $ 536,000        $ 488,000        $ 1,889,000
        Tours (in 000s)                                             2016             179              213              230              197              819
                                                                    2015             168              206              227              200              801
                                                                    2014             170              208              225              191              794
                                                                    2013             163              206              225              195              789
        Volume Per Guest (VPG)                                      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
                                                                    2013           $ 2,211          $ 2,256          $ 2,278          $ 2,370          $ 2,281
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                                        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
                                                                    2013             7,380            7,410            7,440            7,490            N/A
Vacation Ownership
        Provision for Loan Losses (in 000s) (*)                     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
                                                                    2013           $ 84,000         $ 90,000         $ 102,000        $ 73,000         $ 349,000
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 2013-2016.
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:
                                                                                                    Twelve Months Ended December 31,
                                                                                                    2016                                                                                                     2015
Net cash provided by operating activities                                                           $                                                                                                 973    $    991
Net cash used in investing activities                                                                                                                                                                 (353)       (302)
Net cash used in financing activities                                                                                                                                                                 (586)       (675)
Effect of changes in exchange rates on cash and cash equivalents                                                                                                                                      (20)        (26)
Net increase / (decrease) in cash and cash equivalents                                              $                                                                                                 14     $    (12)
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:
                                                                                                    Twelve Months Ended December 31,
                                                                                                    2016                                                                                                     2015
Net cash provided by operating activities                                                           $                                                                                                 973    $    991
Less: Property and equipment additions                                                                                                                                                                (191)       (222)
Free cash flow                                                                                      $                                                                                                 782    $    769
                                                                                                                                                       Table 5
Wyndham Worldwide Corporation
REVENUE DETAIL BY REPORTABLE SEGMENT
(In millions)
                                                                      2016                                        2015
                                                                           Q1      Q2      Q3      Q4      Year        Q1      Q2      Q3      Q4      Year
Hotel Group
         Royalties and Franchise Fees                                 $    74    $ 94    $ 105   $ 94    $ 367    $    74    $ 96    $ 103   $ 87    $ 361
         Marketing, Reservation and Wyndham Rewards Revenues (a)           83      103     125     92      405         96      108     112     92      407
         Hotel Management Reimbursable Revenues (b)                        67      71      67      65      271         61      71      73      68      273
         Intersegment Trademark Fees                                       13      15      16      14      56          12      15      16      15      57
         Owned Hotel Revenues                                              27      19      17      17      81          25      20      16      19      79
         Ancillary Revenues (c)                                            31      32      34      34      129         24      24      37      33      120
         Total Hotel Group                                                 295     334     364     316     1,309       292     334     357     314     1,297
Destination Network
         Exchange Revenues                                                 182     159     159     145     645         185     161     157     146     649
         Rental Revenues                                                   183     202     304     151     840         166     200     296     144     807
         Ancillary Revenues (d)                                            20      23      23      21      86          18      22      23      20      82
         Total Destination Network                                         385     384     486     317     1,571       369     383     476     310     1,538
Vacation Ownership
         Vacation Ownership Interest Sales                                 342     409     441     415     1,606       336     417     448     403     1,604
         Consumer Financing                                                107     108     112     113     440         104     105     108     109     427
         Property Management Fees and Reimbursable Revenues                164     161     168     168     660         153     149     159     155     615
         WAAM Fee-for-Service Commissions                                  17      16      13      -       46          12      19      23      28      83
         Ancillary Revenues (e)                                            11      11      10      9       42          12      9       12      11      43
         Total Vacation Ownership                                          641     705     744     705     2,794       617     699     750     706     2,772
Total Reportable Segments                                             $    1,321 $ 1,423 $ 1,594 $ 1,338 $ 5,674  $    1,278 $ 1,416 $ 1,583 $ 1,330 $ 5,607
                                                                      2014                                        2013
                                                                           Q1      Q2      Q3      Q4      Year        Q1      Q2      Q3      Q4      Year
Hotel Group
         Royalties and Franchise Fees                                 $    68    $ 88    $ 100   $ 83    $ 339    $    64    $ 79    $ 91    $ 75    $ 309
         Marketing, Reservation and Wyndham Rewards Revenues (a)           76      101     117     91      385         73      92      118     83      365
         Hotel Management Reimbursable Revenues (b)                        37      39      39      39      154         25      38      37      35      135
         Intersegment Trademark Fees                                       9       11      11      10      41          8       10      11      10      39
         Owned Hotel Revenues                                              24      20      18      20      81          26      20      18      19      84
         Ancillary Revenues (c)                                            23      24      30      24      101         26      23      22      23      95
         Total Hotel Group                                                 237     283     315     267     1,101       222     262     297     245     1,027
Destination Network
         Exchange Revenues                                                 187     168     162     150     667         193     168     158     150     669
         Rental Revenues                                                   176     217     331     144     868         166     192     293     138     789
         Ancillary Revenues (d)                                            16      17      19      17      69          15      16      19      17      68
         Total Destination Network                                         379     402     512     311     1,604       374     376     470     305     1,526
Vacation Ownership
         Vacation Ownership Interest Sales                                 303     382     415     385     1,485       263     347     384     384     1,379
         Consumer Financing                                                105     106     108     108     427         105     106     107     108     426
         Property Management Fees and Reimbursable Revenues                143     145     150     142     581         146     141     143     137     567
         WAAM Fee-for-Service Commissions                                  33      30      18      16      98          24      30      33      20      107
         Ancillary Revenues (e)                                            9       10      13      17      47          11      6       10      9       36
         Total Vacation Ownership                                          593     673     704     668     2,638       549     630     677     658     2,515
Total Reportable Segments                                             $    1,209 $ 1,358 $ 1,531 $ 1,246 $ 5,343  $    1,145 $ 1,268 $ 1,444 $ 1,208 $ 5,068
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 which were charged to the Company’s vacation ownership business and were eliminated in consolidation. During 2013, such amounts include reimbursable revenues of $1 million, $3 million and $2 million, in Q2, Q3 and Q4 respectively, which 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
                                                                                                              (1 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
                                  As of and For the Three Months Ended December 31, 2016
                                                                                                              Average Revenue
                                  Number of                             Average            Average Daily      Per Available
Brand                             Properties         Number of Rooms    Occupancy Rate     Rate (ADR)         Room (RevPAR)
Hotel Group
Super 8                           2,793              177,191            55.4%              $44.53             $24.69
Days Inn                          1,792              143,610            47.0%              $64.63             $30.36
Ramada                            866                120,809            50.8%              $69.42             $35.29
Wyndham Hotels and Resorts        247                54,143             54.7%              $102.54            $56.08
Howard Johnson                    369                42,346             49.5%              $56.39             $27.90
Baymont                           436                34,614             48.1%              $67.28             $32.39
Travelodge                        402                29,604             44.6%              $65.75             $29.34
Microtel Inns & Suites by Wyndham 336                24,224             54.8%              $67.74             $37.13
Knights Inn                       377                22,912             44.9%              $44.79             $20.11
TRYP by Wyndham                   115                16,370             64.6%              $77.53             $50.05
Wingate by Wyndham                149                13,703             58.0%              $87.16             $50.57
Hawthorn Suites by Wyndham        111                10,959             61.7%              $81.48             $50.29
Dolce                             21                 4,951              49.4%              $152.61            $75.37
Dazzler                           11                 1,464              87.2%              $61.21             $53.39
Esplendor                         10                 707                66.6%              $77.05             $51.29
Total Hotel Group                 8,035              697,607            51.6%              $63.78             $32.92
Vacation Ownership
Wyndham Vacation Ownership resorts219                24,665             N/A                N/A                N/A
Total Wyndham Worldwide           8,254              722,272
                                  As of and For the Three Months Ended December 31, 2015
                                                                                                              Average Revenue
                                  Number of                             Average            Average Daily      Per Available
Brand                             Properties         Number of Rooms    Occupancy Rate     Rate (ADR)         Room (RevPAR)
Hotel Group
Super 8                           2,631              168,438            50.9%              $48.82             $24.86
Days Inn                          1,788              142,870            46.0%              $64.04             $29.43
Ramada                            839                118,132            50.2%              $72.84             $36.54
Wyndham Hotels and Resorts        225                48,753             56.6%              $108.79            $61.57
Howard Johnson                    393                42,888             46.7%              $60.92             $28.44
Baymont                           410                32,667             46.8%              $66.11             $30.92
Travelodge                        411                30,188             44.6%              $62.65             $27.93
Microtel Inns & Suites by Wyndham 332                23,941             52.5%              $67.29             $35.30
Knights Inn                       386                23,560             41.7%              $47.21             $19.71
TRYP by Wyndham                   121                17,355             61.0%              $78.94             $48.12
Wingate by Wyndham                151                13,780             57.0%              $87.38             $49.77
Hawthorn Suites by Wyndham        102                10,174             60.8%              $80.45             $48.89
Dolce                             23                 5,296              49.5%              $150.61            $74.59
Total Hotel Group                 7,812              678,042            49.6%              $66.46             $32.98
Vacation Ownership
Wyndham Vacation Ownership resorts213                24,329             N/A                N/A                N/A
Total Wyndham Worldwide           8,025              702,371
Note: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.
                                                                                                              Table 6
                                                                                                              (2 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
                                  As of and For the Year Ended December 31, 2016
                                                                                                              Average Revenue
                                  Number of                             Average            Average Daily      Per Available
Brand                             Properties         Number of Rooms    Occupancy Rate     Rate (ADR)         Room (RevPAR)
Hotel Group
Super 8                           2,793              177,191            57.8%              $48.18             $27.84
Days Inn                          1,792              143,610            50.6%              $68.06             $34.44
Ramada                            866                120,809            53.6%              $73.72             $39.50
Wyndham Hotels and Resorts        247                54,143             57.2%              $105.60            $60.44
Howard Johnson                    369                42,346             49.7%              $61.32             $30.47
Baymont                           436                34,614             51.8%              $70.63             $36.57
Travelodge                        402                29,604             50.5%              $70.73             $35.74
Microtel Inns & Suites by Wyndham 336                24,224             57.4%              $68.89             $39.55
Knights Inn                       377                22,912             46.0%              $49.80             $22.90
TRYP by Wyndham                   115                16,370             65.6%              $77.79             $51.06
Wingate by Wyndham                149                13,703             62.7%              $90.70             $56.84
Hawthorn Suites by Wyndham        111                10,959             66.3%              $82.39             $54.60
Dolce                             21                 4,951              52.4%              $162.59            $85.17
Dazzler                           11                 1,464              87.2%              $61.21             $53.39
Esplendor                         10                 707                66.6%              $77.05             $51.29
Total Hotel Group                 8,035              697,607            54.4%              $67.44             $36.67
Vacation Ownership
Wyndham Vacation Ownership resorts219                24,665             N/A                N/A                N/A
Total Wyndham Worldwide           8,254              722,272
                                  As of and For the Year Ended December 31, 2015
                                                                                                              Average Revenue
                                  Number of                             Average            Average Daily      Per Available
Brand                             Properties         Number of Rooms    Occupancy Rate     Rate (ADR)         Room (RevPAR)
Hotel Group
Super 8                           2,631              168,438            57.0%              $50.51             $28.81
Days Inn                          1,788              142,870            50.9%              $67.26             $34.22
Ramada                            839                118,132            54.2%              $75.08             $40.67
Wyndham Hotels and Resorts        225                48,753             60.5%              $110.76            $66.96
Howard Johnson                    393                42,888             50.0%              $62.45             $31.24
Baymont                           410                32,667             52.5%              $68.50             $35.95
Travelodge                        411                30,188             50.8%              $67.71             $34.39
Microtel Inns & Suites by Wyndham 332                23,941             57.9%              $69.23             $40.08
Knights Inn                       386                23,560             45.7%              $48.26             $22.03
TRYP by Wyndham                   121                17,355             62.0%              $80.39             $49.84
Wingate by Wyndham                151                13,780             63.3%              $89.17             $56.43
Hawthorn Suites by Wyndham        102                10,174             66.5%              $81.00             $53.89
Dolce                             23                 5,296              55.4%              $150.03            $83.08
Total Hotel Group                 7,812              678,042            54.5%              $68.39             $37.26
Vacation Ownership
Wyndham Vacation Ownership resorts213                24,329             N/A                N/A                N/A
Total Wyndham Worldwide           8,025              702,371
Note: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.
                                                                                                            Table 7
                                                                                                            (1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME AND EPS
(In millions, except per share data)
                                                          Location on Consolidated    Three Months Ended December 31,
                                                          Statements of Income
                                                                                      2016           2015
Diluted weighted average shares outstanding                                                  108            116
Diluted EPS                                                                           $      1.53    $      1.21
Net income attributable to Wyndham shareholders                                       $      164     $      140
Adjustments:
Acquisition costs (a)                                     Operating                          2              -
Restructuring costs (b)                                   Restructuring                      1              (2)
Executive departure costs (c)                             General and administrative         6              -
Bargain purchase gain (d)                                 Operating                          (2)            -
Legacy costs (e)                                          General and administrative         (11)           -
Total adjustments before tax                                                                 (4)            (2)
Income tax (benefit)/expense (f) (g)                      Provision for income taxes         (14)           (25)
Total adjustments after tax                                                                  (18)           (27)
Adjustments - EPS impact                                                              $      (0.17)  $      (0.23)
Adjusted net income attributable to Wyndham shareholders                              $      146     $      113
Adjusted diluted EPS                                                                  $      1.35    $      0.98
Note: Amounts may not add due to rounding.
(a)                                                                                              The amount for 2016 represents costs related to (i) the Fen acquisition that closed in the fourth quarter at the Company’s hotel group business and (ii) acquisitions that closed in the third and fourth quarters at the Company’s destination network business.
(b)                                                                                              The amount for 2016 represents costs incurred as a result of enhancing organizational efficiency and rationalizing existing facilities. The amount for 2015 represents a reversal of a portion of restructuring reserves that were established in prior periods.
(c)                                                                                              Represents costs associated with the departure of the chief executive officer at the Company’s vacation ownership business.
(d)                                                                                              Represents a gain from a bargain purchase on an acquisition at the Company’s destination network business.
(e)                                                                                              Relates to a benefit from an adjustment to certain contingent liabilities from the Company’s separation from Cendant.
(f)                                                                                              The amount for 2016 represents (i) the tax effect of the adjustments, (ii) an $8 million benefit primarily due to the release of a foreign tax credit valuation allowance, and (iii) a $7 million benefit from foreign tax credits.
(g)                                                                                              The amount for 2015 represents (i) the tax effect of the adjustments and (ii) a $26 million benefit primarily due to the release of a foreign tax credit valuation allowance.
The above tables reconcile certain non-GAAP financial measures.  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 and adjusted EPS financial measures 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 may be recurring or non-recurring and 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.  These supplemental disclosures are in addition to GAAP reported measures.  This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
                                                                                                                   Table 7
                                                                                                                   (2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME AND EPS
(In millions, except per share data)
                                                          Location on Consolidated           Twelve Months Ended December 31,
                                                          Statements of Income
                                                                                             2016           2015
Diluted weighted average shares outstanding                                                         111            119
Diluted EPS                                                                                  $      5.53    $      5.14
Net income attributable to Wyndham shareholders                                              $      611     $      612
Adjustments:
Acquisition costs (a)                                     Operating                                 2              4
Restructuring costs (b)                                   Restructuring                             15             6
Executive departure costs (c)                             General and administrative                6              -
Bargain purchase gain (d)                                 Operating                                 (2)            -
Legacy costs (e)                                          General and administrative                (11)           -
Venezuela currency devaluation (f)                        Operating                                 24             -
Asset impairments (g)                                     Loss on sale and asset impairment         -              7
Contract termination (h)                                  Operating                                 7              14
Early extinguishment of debt (i)                          Interest expense                          11             -
Total adjustments before tax                                                                        53             31
Income tax (benefit)/expense (j) (k)                      Provision for income taxes                (28)           (35)
Total adjustments after tax                                                                         25             (4)
Total adjustments - EPS impact                                                               $      0.22    $      (0.03)
Adjusted net income attributable to Wyndham shareholders                                     $      636     $      608
Adjusted diluted EPS                                                                         $      5.75    $      5.11
Note: Amounts may not add due to rounding.
(a)                                                                                              The amount for 2016 represents costs related to (i) the Fen acquisition that closed in the fourth quarter at the Company’s hotel group business and (ii) acquisitions that closed in the third and fourth quarters at the Company’s destination network business. The amount for 2015 relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts at the Company’s hotel group business.
(b)                                                                                              Relates to costs incurred as a result of (i) enhancing organizational efficiency and rationalizing existing facilities during the twelve months ended December 31, 2016 and (ii) various organization realignment initiatives across the Company during the twelve months ended December 31, 2015.
(c)                                                                                              Represents costs associated with the departure of the chief executive officer at the Company’s vacation ownership business.
(d)                                                                                              Represents a gain from a bargain purchase on an acquisition at the Company’s destination network business.
(e)                                                                                              Relates to a benefit from an adjustment to certain contingent liabilities from the Company’s separation from Cendant.
(f)                                                                                              Represents the impact from the devaluation of the exchange rate of Venezuela at the Company’s destination network business during 2016.
(g)                                                                                              Relates to a non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from the decision to outsource its reservation system to a third-party provider at the Company’s hotel group business.
(h)                                                                                              Relates to costs incurred during the third quarter of both 2016 and 2015 associated with the termination of a management contract at the Company’s hotel group business.
(i)                                                                                              Represents costs incurred in connection with the Company’s early repurchase of its 6.0% senior unsecured notes.
(j)                                                                                              The amount from 2016 represents (i) the tax effect of the adjustments, (ii) an $8 million benefit primarily due to the release of a foreign tax credit valuation allowance, (iii) a $7 million benefit from foreign tax credits, and (iv) a $2 million state tax refund for legacy tax matters. There was no tax benefit associated with the $24 million Venezuela currency devaluation adjustment.
(k)                                                                                              The amount from 2015 represents (i) the tax effect of the adjustments, (ii) a $2 million tax valuation allowance established in connection with the acquisition of Dolce Hotels and Resorts, and (iii) a $26 million benefit primarily due to the release of a foreign tax credit valuation allowance.
The above tables reconcile certain non-GAAP financial measures.  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 and adjusted EPS financial measures 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 may be recurring or non-recurring and 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.  These supplemental disclosures are in addition to GAAP reported measures.  This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
                                                                                                                                                               Table 8
                                                                                                                                                               (1 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
(In millions)
                                                   Venezuela                                                                    Executive       Bargain
                                                   Currency         Acquisition  Legacy     Restructuring  Contract             Departure       Purchase  Adjusted
                                       EBITDA      Devaluation(b)   Costs(c)     Costs(d)   Costs(e)       Termination(f)       Costs (g)       Gain (h)  EBITDA
Three months ended March 31, 2016
Hotel Group                            $    84     $       -        $     -      $    -     $      -       $       -       $    -          $    -         $    84
Destination Network                         81             24             -           -            -               -            -               -              105
Vacation Ownership                          136            -              -           -            -               -            -               -              136
Total Reportable Segments                   301            24             -           -            -               -            -               -              325
Corporate and Other (a)                     (34)           -              -           -            -               -            -               -              (34)
Total Company                          $    267    $       24       $     -      $    -     $      -       $       -       $    -          $    -         $    291
Three months ended June 30, 2016
Hotel Group                            $    101    $       -        $     -      $    -     $      -       $       -       $    -          $    -         $    101
Destination Network                         85             -              1                        -               -            -               -              85
Vacation Ownership                          187            -              -           -            -               -            -               -              187
Total Reportable Segments                   373            -              1           -            -               -            -               -              373
Corporate and Other (a)                     (33)           -              -           -            -               -            -               -              (33)
Total Company                          $    340    $       -        $     1      $    -     $      -       $       -       $    -          $    -         $    340
Three months ended September 30, 2016
Hotel Group                            $    107    $       -        $     -      $    -     $      3       $       7       $    -          $    -         $    117
Destination Network                         138            -              -           -            4               -            -               -              142
Vacation Ownership                          189            -              -           -            6               -            -               -              195
Total Reportable Segments                   434            -              -           -            13              7            -               -              454
Corporate and Other (a)                     (32)           -                          (1)          1               -            -               -              (31)
Total Company                          $    402    $       -        $     -      $    (1)   $      14      $       7       $    -          $    -         $    423
Three months ended December 31, 2016
Hotel Group                            $    99     $       -        $     1      $    -     $      (1)     $       -       $    -          $    -         $    99
Destination Network                         53             -              1           -            -               -            -               (2)            52
Vacation Ownership                          182            -                          -            2               -            6               -              191
Total Reportable Segments                   334            -              2           -            1               -            6               (2)            342
Corporate and Other (a)                     (12)           -              -           (11)         -               -            -               -              (24)
Total Company                          $    322    $       -        $     2      $    (11)         1       $       -       $    6          $    (2)       $    318
Twelve months ended December 31, 2016
Hotel Group                            $    391    $       -        $     1      $    -     $      2       $       7       $    -          $    -         $    401
Destination Network                         356            24             1           -            5               -            -               (2)            385
Vacation Ownership                          694            -              -           -            8               -            6               -              708
Total Reportable Segments                   1,441          24             2           -            15              7            6               (2)            1,494
Corporate and Other (a)                     (110)          -              -           (11)         -               -            -               -              (121)
Total Company                          $    1,331  $       24       $     2      $    (11)  $      15      $       7       $    6          $    (2)       $    1,373
Note: Amounts may not add across due to rounding. The sum of the quarters may not add down due to rounding.
(a)   Includes the elimination of transactions between segments.
(b)   Represents the impact from the devaluation of the exchange rate of Venezuela.
(c)   Represents costs related to acquisitions.
(d)   Relates to a benefit from an adjustment to certain contingent liabilities from the Company’s separation from Cendant.
(e)   Relates to costs incurred due to enhancing organizational efficiency and rationalizing existing facilities across the Company.
(f)   Relates to additional costs associated with the termination of a management contract.
(g)   Represents costs associated with the departure of the chief executive officer at the Company’s vacation ownership business.
(h)   Represents a gain from a bargain purchase on an acquisition of a vacation rentals business.
                                                                                                                                                     Table 8
                                                                                                                                                     (2 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
(In millions)
                                                       Legacy             Acquisition Restructuring      Asset           Contract           Adjusted
                                    EBITDA             Adjustments(b)     Costs (c)   Costs (d)          Impairment (e)  Termination (f)    EBITDA
Three months ended March 31, 2015
Hotel Group                         $        76        $        -         $        3  $        -         $        -      $        -         $        79
Destination Network                          105                -                  -           (1)                -               -                  104
Vacation Ownership                           130                -                  -           -                  -               -                  130
Total Reportable Segments                    311                -                  3           (1)                -               -                  313
Corporate and Other (a)                      (34)               -                  -           -                  -               -                  (34)
Total Company                       $        277       $        -         $        3  $        (1)       $        -      $        -         $        279
Three months ended June 30, 2015
Hotel Group                         $        96        $        -         $        1  $        -         $        -      $        -         $        97
Destination Network                          84                 -                  -           -                  -               -                  84
Vacation Ownership                           182                -                  -           -                  -               -                  182
Total Reportable Segments                    362                -                  1           -                  -               -                  363
Corporate and Other (a)                      (30)               (1)                -           -                  -               -                  (31)
Total Company                       $        332       $        (1)       $        1  $        -         $        -      $        -         $        332
Three months ended September 30, 2015
Hotel Group                         $        83        $        -         $        -  $        4         $        7      $        14        $        108
Destination Network                          134                -                  -           3                  -               -                  137
Vacation Ownership                           200                -                  -           1                  -               -                  201
Total Reportable Segments                    417                -                  -           8                  7               14                 446
Corporate and Other (a)                      (35)               1                  -           -                  -               -                  (34)
Total Company                       $        382       $        1         $        -  $        8         $        7      $        14        $        412
Three months ended December 31, 2015
Hotel Group                         $        94        $        -         $        -  $        (1)       $        -      $        -         $        93
Destination Network                          44                 -                  -           (1)                -               -                  43
Vacation Ownership                           174                -                  -           -                  -               -                  174
Total Reportable Segments                    312                -                  -           (2)                -               -                  310
Corporate and Other (a)                      (37)               -                  -           -                  -               -                  (37)
Total Company                       $        275       $        -         $        -  $        (2)       $        -      $        -         $        273
Twelve months ended December 31, 2015
Hotel Group                         $        349       $        -         $        3  $        3         $        7      $        14        $        376
Destination Network                          367                -                  1           2                  -               -                  370
Vacation Ownership                           687                -                  -           1                  -               -                  688
Total Reportable Segments                    1,403              -                  4           6                  7               14                 1,434
Corporate and Other (a)                      (137)              -                  -           -                  -               -                  (137)
Total Company                       $        1,266     $        -         $        4  $        6         $        7      $        14        $        1,297
Note: The sum of the quarters may not agree to the twelve months ended December 31, 2015 due to rounding.
(a)   Includes the elimination of transactions between segments.
(b)   Relates to the net (benefit)/expense from the adjustments to certain contingent liabilities from the Company’s separation from Cendant.
(c)   Relates primarily to costs incurred in connection with the acquisition of Dolce Hotels and Resorts (January 2015).
(d)   Relates to costs incurred as a result of various organizational realignment initiatives and the reversal of a portion of restructuring reserves that were established in prior periods.
(e)   Relates to a non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from the Company’s decision to outsource its reservation system to a third-party provider.
(f)   Relates to costs associated with the anticipated termination of a management contract.
                                                                                                                                     Table 8
                                                                                                                                     (3 of 3)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA BY REPORTABLE SEGMENT
SHARED-BASED COMPENSATION EXPENSE
(In millions)
The following tables provide detail regarding share-based compensation expense which is included within adjusted EBITDA:
                                                            2016
                                                            Q1        Q2      Q3      Q4      Full Year
Adjusted EBITDA                                             $    291  $  340  $  423  $  318  $                                      1,373
Share-based compensation expense (*)                             13      20      14      13                                          61
Adjusted EBITDA excluding share-based compensation expense  $    304  $  360  $  437  $  331  $                                      1,434
                                                            2015
                                                            Q1        Q2      Q3      Q4      Full Year
Adjusted EBITDA                                             $    279  $  332  $  412  $  273  $                                      1,297
Share-based compensation expense (*)                             15      13      13      15                                          55
Adjusted EBITDA excluding share-based compensation expense  $    294  $  345  $  425  $  288  $                                      1,352
Note: Full year amounts may not add across due to rounding.
(*)   Excludes share-based compensation expenses for which there was no impact on adjusted EBITDA. Such costs amounted to $1 million during Q1, Q2, Q3 and $4 million for Q4 2016 and $7 million for the full year. During 2015, such costs amounted to $1 million during Q1, Q2 and Q3 and $3 million for the full year.  The Company believes providing adjusted EBITDA with the additional exclusion of share-based compensation expense assists our investors and management by providing an additional financial measure to evaluate ongoing operations by excluding the variations among companies in timing, amount and reporting of share-based compensation expense, which may differ significantly among companies.
                                                                                                                                                          Table 9
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION OF GROSS VOI SALES
(In millions)
GROSS VOI SALES
We believe gross vacation ownership 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.
The following table provides a reconciliation of Gross VOI sales (see Table 3) to vacation ownership interest sales (see Table 5):
Year
2016                                                Q1                   Q2                   Q3                   Q4                   Full Year
Gross VOI sales                                     $  428               $  518               $  564               $  502               $                 2,012
Less: Sales under WAAM Fee-for-Service                 (23)                 (20)                 (20)                 (1)                                 (64)
Gross VOI sales, net of WAAM Fee-for-Service sales     405                  498                  544                  501                                 1,948
Less: Loan loss provision                              (63)                 (90)                 (104)                (86)                                (342)
Vacation ownership interest sales                   $  342               $  409               $  441               $  415               $                 1,606
2015
Gross VOI sales                                     $  390               $  502               $  565               $  507               $                 1,965
Less: Sales under WAAM Fee-for-Service                 (21)                 (26)                 (37)                 (42)                                (126)
Gross VOI sales, net of WAAM Fee-for-Service sales     369                  477                  528                  464                                 1,838
Less: Loan loss provision                              (46)                 (60)                 (78)                 (64)                                (248)
Plus: Impact of percentage-of-completion accounting    13                   -                    (2)                  2                                   13
Vacation ownership interest sales                   $  336               $  417               $  448               $  403               $                 1,604
2014
Gross VOI sales                                     $  410               $  496               $  513               $  470               $                 1,889
Less: Sales under WAAM Fee-for-Service                 (44)                 (40)                 (27)                 (21)                                (132)
Gross VOI sales, net of WAAM Fee-for-Service sales     366                  456                  486                  449                                 1,757
Less: Loan loss provision                              (60)                 (70)                 (70)                 (60)                                (260)
Less: Impact of percentage-of-completion accounting    (3)                  (4)                  (1)                  (4)                                 (12)
Vacation ownership interest sales                   $  303               $  382               $  415               $  385               $                 1,485
2013
Gross VOI sales                                     $  384               $  481               $  536               $  488               $                 1,889
Less: Sales under WAAM Fee-for-Service                 (36)                 (44)                 (51)                 (29)                                (160)
Gross VOI sales, net of WAAM Fee-for-Service sales     347                  437                  486                  459                                 1,729
Less: Loan loss provision                              (84)                 (90)                 (102)                (73)                                (349)
Less: Impact of percentage-of-completion accounting    -                    -                    -                    (1)                                 (1)
Vacation ownership interest sales                   $  263               $  347               $  384               $  384               $                 1,379
_____________
Note: Amounts may not add due to rounding.
The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company’s VPG calculation (see Table 3):
                                                    Q1                   Q2                   Q3                   Q4                   Full Year
2016                                                $  25                $  22                $  31                $  30                $                 108
2015                                                $  24                $  17                $  32                $  27                $                 100
2014                                                $  25                $  21                $  27                $  24                $                 97
2013                                                $  24                $  18                $  22                $  25                $                 89
                                                                                                                                                                                                                                                                                                                            Table 10
Wyndham Worldwide Corporation
2017 OUTLOOK -  NON-GAAP
(In millions, except per share data)
                                                                                                                                                                                                                                                                                     Outlook (a) (b)        Outlook (a) (b)
                                                                                                                                                                                                                                                                                     As Adjusted            As Adjusted
                                                                                                                                                                                                                                                                                     (Non-GAAP)             (Non-GAAP)
                                                                                                                                                                                                                                                                                     Low                    High
Net revenues                                                                                                                                                                                                                                                                         $               5,800  $               5,950
Adjusted EBITDA                                                                                                                                                                                                                                                                      $               1,410  $               1,440
Depreciation and amortization                                                                                                                                                                                                                                                                        (268)                  (263)
Interest expense, net                                                                                                                                                                                                                                                                                (138)                  (134)
Adjusted income before taxes                                                                                                                                                                                                                                                                         1,005                  1,038
Income taxes                                                                                                                                                                                                                                                                                         (368)                  (380)
Adjusted net income                                                                                                                                                                                                                                                                  $               637    $               658
Adjusted diluted earnings per share                                                                                                                                                                                                                                                  $               5.90   $               6.10
Diluted shares                                                                                                                                                                                                                                                                                       107.9                  107.9
In determining adjusted EBIDTA, adjusted Net Income and adjusted EPS, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. A description of the adjustments which have been applicable in determining adjusted EBITDA, adjusted Net Income and adjusted EPS is included in Tables 7 and 8.  The Company is providing outlook for EBITDA, Net Income 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 for the forward-looking period, which can be dependent on future events that may not be reliably predicted, such as acquisition costs, legacy expenses, restructuring costs, asset impairments, contract termination costs, currency devaluations, and early extinguishment of debt costs. Based on past reported results, where one or more of these items have been applicable, such excluded special items could be material, individually or in the aggregate, to the reported results. See Tables 7 and 8 for historical adjustments.
(a)                                                                                                                                       Outlook represents Company’s approximate projection of performance for the outlook period.  Projections may not total because the Company does not expect the actual results of all items to be at the precise amount simultaneously.
(b)                                                                                                                                       We estimate for the 2017 full year outlook period pre-tax adjustments related to restructuring expenses totaling between $8 million and $12 million (after-tax between $5 million and $8 million).  These estimates do not include special items for the outlook period that cannot be predicted with reasonable certainty.  We cannot assure that the foregoing estimates for the outlook period will be accurate or may not significantly change or that other special items may not occur in the outlook period.
                                                                                                                                               Table 11
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION - CONSTANT CURRENCY AND CURRENCY NEUTRAL
(In millions, except per share data)
The Company reports certain current year period financial measures on a constant currency and currency-neutral basis and excluding the impact of acquisitions.  The Company believes providing certain financial measures on a constant currency and currency-neutral basis as well as excluding the impact of acquisitions assists management and investors in better understanding underlying results and trends by excluding the impact of period over period changes in foreign exchange rates and changes resulting from acquisitions.
Constant currency results assume foreign results are translated from foreign currencies to the U.S. dollar at exchange rates consistent with those in the comparable period.
Currency Neutral results (i) assume foreign results are translated from foreign currencies to the U.S. dollar at exchange rates consistent with those in the comparable period and (ii) eliminating foreign exchange related activities such as foreign exchange hedges, balance sheet remeasurements, currency devaluations and/or other adjustments.
Acquisition results are defined as the incremental period over period changes in the Company’s results directly attributable to acquisitions.
Revenues in Constant Currency and Excluding Acquisitions:                          Three Months Ended December 31,
                                                                                   2016                                            2015        % Change
Destination Network revenue as reported                                            $                                        317    $    310    2%
Adjustments:
Foreign currency - constant currency                                                                                        10          -      *
Incremental revenues from acquisitions                                                                                      (8)         -      *
Total Destination Network revenues in constant currency and excluding acquisitions $                                        319    $    310    3%
Exchange revenue as reported                                                       $                                        145    $    146    -1%
Adjustments:
Foreign currency - constant currency                                                                                        2           -      *
Total Exchange revenues in constant currency and excluding acquisitions            $                                        147    $    146    1%
Rental revenue as reported                                                         $                                        151    $    144    5%
Adjustments:
Foreign currency - constant currency                                                                                        8           -      *
Incremental revenues from acquisitions                                                                                      (8)         -      *
Total Rental revenues in constant currency and excluding acquisitions              $                                        151    $    144    5%
Currency-neutral Adjusted EBITDA:                                                  Three Months Ended December 31,
                                                                                   2016                                            2015        % Change
Hotel Group Adjusted EBITDA (a)                                                    $                                        99     $    93     6%
Adjustments:
Foreign currency - currency-neutral                                                                                         1           -      *
Hotel Group Currency-neutral Adjusted EBITDA excluding acquisitions                $                                        100    $    93     8%
Currency-neutral Adjusted EBITDA:                                                  Twelve Months Ended December 31,
                                                                                   2016                                            2015        % Change
Adjusted EBITDA (a)                                                                $                                        1,373  $    1,297  6%
Adjustments:
Foreign currency - currency-neutral                                                                                         17          -      *
Incremental EBITDA from acquisitions                                                                                        (7)         -      *
Currency-neutral Adjusted EBITDA excluding acquisitions                            $                                        1,383  $    1,297  7%
*       Not meaningful.
(a)   See Table 8 for a reconciliation of EBITDA to adjusted EBITDA and Table 2 for a reconciliation of EBITDA to Net Income
                                                                                                                                      Table 12
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
                                                               December 31,                           December 31,
                                                               2016                                   2015
Securitized vacation ownership debt (a)
Term notes                                                     $                               1,857  $                               1,867
Bank conduit facility (b)                                                                      284                                    239
Total securitized vacation ownership debt (c)                                                  2,141                                  2,106
Less: Current portion of securitized vacation ownership debt                                   195                                    209
Long-term securitized vacation ownership debt                  $                               1,946  $                               1,897
Debt:
Revolving credit facility (due July 2020) (d)                  $                               14     $                               7
Commercial paper (e)                                                                           427                                    109
Term loan (due March 2021)                                                                     323                                    -
$315 million 6.00% senior unsecured notes (due December 2016)                                  -                                      316
$300 million 2.95% senior unsecured notes (due March 2017) (f)                                 300                                    299
$14 million 5.75% senior unsecured notes (due February 2018)                                   14                                     14
$450 million 2.50% senior unsecured notes (due March 2018)                                     449                                    448
$40 million 7.375% senior unsecured notes (due March 2020)                                     40                                     40
$250 million 5.625% senior unsecured notes (due March 2021)                                    248                                    247
$650 million 4.25% senior unsecured notes (due March 2022)                                     648                                    648
$400 million 3.90% senior unsecured notes (due March 2023)                                     407                                    408
$350 million 5.10% senior unsecured notes (due October 2025)                                   338                                    337
Capital leases                                                                                 143                                    153
Other                                                                                          20                                     49
Total long-term debt                                                                           3,371                                  3,075
Less: Current portion of long-term debt                                                        34                                     44
Long-term debt                                                 $                               3,337  $                               3,031
(a)  The Company’s vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") that are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company’s creditors and legally are not the Company’s assets. Additionally, the non-recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors of these SPEs have no recourse to the Company for principal and interest.
(b)  Represents a non-recourse vacation ownership bank conduit facility with a term through August 2018 and borrowing capacity of $650 million. As of December 31, 2016, this facility had a remaining borrowing capacity of $366 million.
(c)  This debt is collateralized by $2,601 million and $2,576 million, of underlying vacation ownership contract receivables and related assets as of December 31, 2016, and December 31, 2015, respectively.
(d)  Represents a $1.5 billion revolving credit facility that expires in July 2020. As of December 31, 2016, the Company had $1 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $427 million, the remaining borrowing capacity was $1.1 billion as of December 31, 2016.
(e)  Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $823 million as of December 31, 2016.
(f)  Classified as long-term as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with its revolving credit facility.

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