þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-0052541 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
22 Sylvan Way | 07054 | |
Parsippany, New Jersey | (Zip Code) | |
(Address of Principal Executive Offices) |
Large accelerated filer | þ | Accelerated filer | o | ||||
Non-accelerated filer | o | (Do not check if a smaller reporting company) | |||||
Smaller reporting company | o | ||||||
Emerging growth company | o |
Page | ||
PART I | FINANCIAL INFORMATION | |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | OTHER INFORMATION | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenues | |||||||||||||||
Service and membership fees | $ | 653 | $ | 632 | $ | 1,289 | $ | 1,266 | |||||||
Vacation ownership interest sales | 448 | 409 | 798 | 750 | |||||||||||
Franchise fees | 177 | 172 | 318 | 310 | |||||||||||
Consumer financing | 114 | 108 | 224 | 215 | |||||||||||
Other | 87 | 82 | 169 | 165 | |||||||||||
Net revenues | 1,479 | 1,403 | 2,798 | 2,706 | |||||||||||
Expenses | |||||||||||||||
Operating | 654 | 622 | 1,254 | 1,236 | |||||||||||
Cost of vacation ownership interests | 38 | 32 | 75 | 68 | |||||||||||
Consumer financing interest | 19 | 19 | 37 | 36 | |||||||||||
Marketing and reservation | 231 | 211 | 426 | 403 | |||||||||||
General and administrative | 191 | 185 | 383 | 372 | |||||||||||
Asset impairments | 135 | — | 140 | — | |||||||||||
Restructuring | — | — | 7 | — | |||||||||||
Depreciation and amortization | 66 | 63 | 128 | 125 | |||||||||||
Total expenses | 1,334 | 1,132 | 2,450 | 2,240 | |||||||||||
Operating income | 145 | 271 | 348 | 466 | |||||||||||
Other (income)/expense, net | (3 | ) | (6 | ) | (4 | ) | (16 | ) | |||||||
Interest expense | 39 | 34 | 73 | 68 | |||||||||||
Early extinguishment of debt | — | — | — | 11 | |||||||||||
Interest income | (2 | ) | (2 | ) | (4 | ) | (4 | ) | |||||||
Income before income taxes | 111 | 245 | 283 | 407 | |||||||||||
Provision for income taxes | 33 | 89 | 64 | 156 | |||||||||||
Net income | $ | 78 | $ | 156 | $ | 219 | $ | 251 | |||||||
Earnings per share | |||||||||||||||
Basic | $ | 0.75 | $ | 1.40 | $ | 2.10 | $ | 2.25 | |||||||
Diluted | 0.75 | 1.39 | 2.09 | 2.23 | |||||||||||
Cash dividends declared per share | $ | 0.58 | $ | 0.50 | $ | 1.16 | $ | 1.00 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 78 | $ | 156 | $ | 219 | $ | 251 | |||||||
Other comprehensive income/(loss), net of tax | |||||||||||||||
Foreign currency translation adjustments | 45 | (28 | ) | 75 | 8 | ||||||||||
Unrealized gains/(losses) on cash flow hedges | — | — | (1 | ) | 1 | ||||||||||
Defined benefit pension plans | — | — | — | (1 | ) | ||||||||||
Other comprehensive income/(loss), net of tax | 45 | (28 | ) | 74 | 8 | ||||||||||
Comprehensive income | $ | 123 | $ | 128 | $ | 293 | $ | 259 |
June 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 415 | $ | 185 | |||
Trade receivables, net | 598 | 610 | |||||
Vacation ownership contract receivables, net | 257 | 262 | |||||
Inventory | 315 | 315 | |||||
Prepaid expenses | 187 | 144 | |||||
Other current assets | 486 | 296 | |||||
Total current assets | 2,258 | 1,812 | |||||
Long-term vacation ownership contract receivables, net | 2,535 | 2,515 | |||||
Non-current inventory | 1,010 | 1,035 | |||||
Property and equipment, net | 1,368 | 1,340 | |||||
Goodwill | 1,637 | 1,603 | |||||
Trademarks, net | 742 | 734 | |||||
Franchise agreements and other intangibles, net | 382 | 393 | |||||
Other non-current assets | 416 | 387 | |||||
Total assets | $ | 10,348 | $ | 9,819 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Securitized vacation ownership debt | $ | 185 | $ | 195 | |||
Current portion of long-term debt | 41 | 34 | |||||
Accounts payable | 670 | 468 | |||||
Deferred income | 622 | 500 | |||||
Accrued expenses and other current liabilities | 866 | 835 | |||||
Total current liabilities | 2,384 | 2,032 | |||||
Long-term securitized vacation ownership debt | 1,867 | 1,946 | |||||
Long-term debt | 3,667 | 3,337 | |||||
Deferred income taxes | 1,255 | 1,214 | |||||
Deferred income | 196 | 197 | |||||
Other non-current liabilities | 387 | 375 | |||||
Total liabilities | 9,756 | 9,101 | |||||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.01 par value, authorized 6,000,000 shares, none issued and outstanding | — | — | |||||
Common stock, $.01 par value, authorized 600,000,000 shares, 218,748,902 issued as of 2017 and 218,198,050 shares in 2016 | 2 | 2 | |||||
Treasury stock, at cost – 116,036,879 shares in 2017 and 112,617,112 shares in 2016 | (5,418 | ) | (5,118 | ) | |||
Additional paid-in capital | 3,965 | 3,966 | |||||
Retained earnings | 2,077 | 1,977 | |||||
Accumulated other comprehensive loss | (39 | ) | (113 | ) | |||
Total stockholders’ equity | 587 | 714 | |||||
Noncontrolling interest | 5 | 4 | |||||
Total equity | 592 | 718 | |||||
Total liabilities and equity | $ | 10,348 | $ | 9,819 |
Six Months Ended | |||||||
June 30, | |||||||
2017 | 2016 | ||||||
Operating Activities | |||||||
Net income | $ | 219 | $ | 251 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 128 | 125 | |||||
Provision for loan losses | 195 | 153 | |||||
Deferred income taxes | 29 | 67 | |||||
Stock-based compensation | 32 | 36 | |||||
Excess tax benefits from stock-based compensation | — | (8 | ) | ||||
Asset impairments | 140 | — | |||||
Loss on early extinguishment of debt | — | 11 | |||||
Non-cash interest | 11 | 11 | |||||
Net change in assets and liabilities, excluding the impact of acquisitions: | |||||||
Trade receivables | 42 | 14 | |||||
Vacation ownership contract receivables | (197 | ) | (150 | ) | |||
Inventory | (53 | ) | (15 | ) | |||
Prepaid expenses | (41 | ) | (33 | ) | |||
Other current assets | (116 | ) | (20 | ) | |||
Accounts payable, accrued expenses and other current liabilities | 155 | 169 | |||||
Deferred income | 98 | 99 | |||||
Other, net | 21 | (4 | ) | ||||
Net cash provided by operating activities | 663 | 706 | |||||
Investing Activities | |||||||
Property and equipment additions | (82 | ) | (90 | ) | |||
Net assets acquired, net of cash acquired | (15 | ) | — | ||||
Payments of development advance notes | (5 | ) | (3 | ) | |||
Proceeds from development advance notes | 4 | — | |||||
Equity investments and loans | (2 | ) | (7 | ) | |||
Proceeds from asset sales | 11 | 1 | |||||
Increase in securitization restricted cash | (5 | ) | — | ||||
Increase in escrow deposit restricted cash | (50 | ) | (41 | ) | |||
Other, net | 11 | — | |||||
Net cash used in investing activities | (133 | ) | (140 | ) | |||
Financing Activities | |||||||
Proceeds from securitized borrowings | 820 | 878 | |||||
Principal payments on securitized borrowings | (912 | ) | (954 | ) | |||
Proceeds from long-term debt | 564 | 50 | |||||
Principal payments on long-term debt | (611 | ) | (67 | ) | |||
(Repayments of)/proceeds from commercial paper, net | (72 | ) | 299 | ||||
Proceeds from notes issued and term loan | 694 | 325 | |||||
Repayment/repurchase of notes | (300 | ) | (327 | ) | |||
Proceeds from vacation ownership inventory arrangements | — | 20 | |||||
Repayments of vacation ownership inventory arrangements | (22 | ) | (5 | ) | |||
Dividends to shareholders | (125 | ) | (115 | ) | |||
Repurchase of common stock | (299 | ) | (320 | ) | |||
Excess tax benefits from stock-based compensation | — | 8 | |||||
Debt issuance costs | (7 | ) | (8 | ) | |||
Net share settlement of incentive equity awards | (34 | ) | (34 | ) | |||
Other, net | (5 | ) | (1 | ) | |||
Net cash used in financing activities | (309 | ) | (251 | ) | |||
Effect of changes in exchange rates on cash and cash equivalents | 9 | (8 | ) | ||||
Net increase in cash and cash equivalents | 230 | 307 | |||||
Cash and cash equivalents, beginning of period | 185 | 171 | |||||
Cash and cash equivalents, end of period | $ | 415 | $ | 478 |
Common Shares Outstanding | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/ Income | Non-controlling Interest | Total Equity | |||||||||||||||||||||||
Balance as of December 31, 2016 | 106 | $ | 2 | $ | (5,118 | ) | $ | 3,966 | $ | 1,977 | $ | (113 | ) | $ | 4 | $ | 718 | |||||||||||||
Net income | — | — | — | — | 219 | — | — | 219 | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 74 | — | 74 | ||||||||||||||||||||||
Net share settlement of incentive equity awards | — | — | — | (34 | ) | — | — | — | (34 | ) | ||||||||||||||||||||
Change in deferred compensation | — | — | — | 31 | — | — | — | 31 | ||||||||||||||||||||||
Change in deferred compensation for Board of Directors | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||
Repurchase of common stock | (3 | ) | — | (300 | ) | — | — | — | — | (300 | ) | |||||||||||||||||||
Dividends | — | — | — | — | (119 | ) | — | — | (119 | ) | ||||||||||||||||||||
Other | — | — | — | 1 | — | — | 1 | 2 | ||||||||||||||||||||||
Balance as of June 30, 2017 | 103 | $ | 2 | $ | (5,418 | ) | $ | 3,965 | $ | 2,077 | $ | (39 | ) | $ | 5 | $ | 592 |
Common Shares Outstanding | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Non-controlling Interest | Total Equity | |||||||||||||||||||||||
Balance as of December 31, 2015 | 114 | $ | 2 | $ | (4,493 | ) | $ | 3,923 | $ | 1,592 | $ | (74 | ) | $ | 3 | $ | 953 | |||||||||||||
Net income | — | — | — | — | 251 | — | — | 251 | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 8 | — | 8 | ||||||||||||||||||||||
Issuance of shares for RSU vesting | 1 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net share settlement of incentive equity awards | — | — | — | (34 | ) | — | — | — | (34 | ) | ||||||||||||||||||||
Change in deferred compensation | — | — | — | 36 | — | — | — | 36 | ||||||||||||||||||||||
Change in deferred compensation for Board of Directors | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||
Repurchase of common stock | (5 | ) | — | (325 | ) | — | — | — | — | (325 | ) | |||||||||||||||||||
Change in excess tax benefit on equity awards | — | — | — | 8 | — | — | — | 8 | ||||||||||||||||||||||
Dividends | — | — | — | — | (117 | ) | — | — | (117 | ) | ||||||||||||||||||||
Balance as of June 30, 2016 | 110 | $ | 2 | $ | (4,818 | ) | $ | 3,934 | $ | 1,726 | $ | (66 | ) | $ | 3 | $ | 781 |
1. | Basis of Presentation |
• | Hotel Group—primarily franchises hotels in the upscale, upper midscale, midscale, economy and extended stay segments and provides hotel management services for full-service and select limited-service hotels. |
• | Destination Network—provides vacation exchange services and products to owners of intervals of vacation ownership interests (“VOIs”) and manages and markets vacation rental properties primarily on behalf of independent owners. |
• | Vacation Ownership—develops, markets and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs and provides property management services at resorts. |
Six Months Ended June 30, | |||||||
Increase/(decrease): | 2017 | 2016 | |||||
Operating Activities | $ | (1 | ) | $ | (3 | ) | |
Investing Activities | 56 | 44 | |||||
Cash and cash equivalents, beginning of period | 149 | 152 | |||||
Cash and cash equivalents, end of period | 214 | 192 |
2. | Earnings Per Share |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 78 | $ | 156 | $ | 219 | $ | 251 | |||||||
Basic weighted average shares outstanding | 103.8 | 111.0 | 104.5 | 111.9 | |||||||||||
Stock-settled appreciation rights (“SSARs”), RSUs (a) and PSUs (b) | 0.6 | 0.5 | 0.6 | 0.6 | |||||||||||
Diluted weighted average shares outstanding | 104.4 | 111.5 | 105.1 | 112.5 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.75 | $ | 1.40 | $ | 2.10 | $ | 2.25 | |||||||
Diluted | 0.75 | 1.39 | 2.09 | 2.23 | |||||||||||
Dividends: | |||||||||||||||
Aggregate dividends paid to shareholders | $ | 60 | $ | 55 | $ | 125 | $ | 115 |
(a) | Excludes 1.1 million of restricted stock units (“RSUs”) for the three and six months ended June 30, 2016, respectively, that would have been anti-dilutive to EPS. Includes unvested dilutive RSUs which are subject to future forfeiture. |
(b) | Excludes 0.7 million and 0.6 million of performance vested restricted stock units (“PSUs”) for the three and six months ended June 30, 2017, respectively, and 0.6 million for the three and six months ended June 30, 2016, as the Company has not met the required performance metrics. |
Shares | Cost | Average Price Per Share | ||||||||
As of December 31, 2016 | 88.1 | $ | 4,337 | $ | 49.22 | |||||
For the six months ended June 30, 2017 | 3.4 | 300 | 87.75 | |||||||
As of June 30, 2017 | 91.5 | $ | 4,637 | 50.66 |
3. | Acquisitions |
4. | Vacation Ownership Contract Receivables |
June 30, 2017 | December 31, 2016 | ||||||
Current vacation ownership contract receivables: | |||||||
Securitized | $ | 226 | $ | 235 | |||
Non-securitized | 89 | 84 | |||||
Current vacation ownership contract receivables, gross | 315 | 319 | |||||
Less: Allowance for loan losses | 58 | 57 | |||||
Current vacation ownership contract receivables, net | $ | 257 | $ | 262 | |||
Long-term vacation ownership contract receivables: | |||||||
Securitized | $ | 2,218 | $ | 2,254 | |||
Non-securitized | 902 | 825 | |||||
Long-term vacation ownership contract receivables, gross | 3,120 | 3,079 | |||||
Less: Allowance for loan losses | 585 | 564 | |||||
Long-term vacation ownership contract receivables, net | $ | 2,535 | $ | 2,515 |
Amount | |||
Allowance for loan losses as of December 31, 2016 | $ | 621 | |
Provision for loan losses | 195 | ||
Contract receivables write-offs, net | (173 | ) | |
Allowance for loan losses as of June 30, 2017 | $ | 643 |
Amount | |||
Allowance for loan losses as of December 31, 2015 | $ | 581 | |
Provision for loan losses | 153 | ||
Contract receivables write-offs, net | (148 | ) | |
Allowance for loan losses as of June 30, 2016 | $ | 586 |
As of June 30, 2017 | |||||||||||||||||||||||
700+ | 600-699 | <600 | No Score | Asia Pacific | Total | ||||||||||||||||||
Current | $ | 1,747 | $ | 1,017 | $ | 166 | $ | 124 | $ | 254 | $ | 3,308 | |||||||||||
31 - 60 days | 14 | 23 | 16 | 4 | 2 | 59 | |||||||||||||||||
61 - 90 days | 9 | 12 | 10 | 2 | 1 | 34 | |||||||||||||||||
91 - 120 days | 7 | 12 | 12 | 2 | 1 | 34 | |||||||||||||||||
Total | $ | 1,777 | $ | 1,064 | $ | 204 | $ | 132 | $ | 258 | $ | 3,435 | |||||||||||
As of December 31, 2016 | |||||||||||||||||||||||
700+ | 600-699 | <600 | No Score | Asia Pacific | Total | ||||||||||||||||||
Current | $ | 1,733 | $ | 1,010 | $ | 149 | $ | 120 | $ | 232 | $ | 3,244 | |||||||||||
31 - 60 days | 19 | 32 | 17 | 4 | 2 | 74 | |||||||||||||||||
61 - 90 days | 11 | 16 | 11 | 3 | 1 | 42 | |||||||||||||||||
91 - 120 days | 8 | 14 | 13 | 2 | 1 | 38 | |||||||||||||||||
Total | $ | 1,771 | $ | 1,072 | $ | 190 | $ | 129 | $ | 236 | $ | 3,398 |
5. | Inventory |
June 30, 2017 | December 31, 2016 | ||||||
Land held for VOI development | $ | 4 | $ | 146 | |||
VOI construction in process | 11 | 59 | |||||
Inventory sold subject to conditional repurchase | 92 | 163 | |||||
Completed VOI inventory | 893 | 667 | |||||
Estimated VOI recoveries | 265 | 256 | |||||
Destination network vacation credits and other | 60 | 59 | |||||
Total inventory | 1,325 | 1,350 | |||||
Less: Current portion (*) | 315 | 315 | |||||
Non-current inventory | $ | 1,010 | $ | 1,035 |
(*) | Represents inventory that the Company expects to sell within the next 12 months. |
6. | Long-Term Debt and Borrowing Arrangements |
June 30, 2017 | December 31, 2016 | ||||||
Securitized vacation ownership debt: (a) | |||||||
Term notes (b) | $ | 1,648 | $ | 1,857 | |||
Bank conduit facility (due August 2018) | 404 | 284 | |||||
Total securitized vacation ownership debt | 2,052 | 2,141 | |||||
Less: Current portion of securitized vacation ownership debt | 185 | 195 | |||||
Long-term securitized vacation ownership debt | $ | 1,867 | $ | 1,946 | |||
Long-term debt: (c) | |||||||
Revolving credit facility (due July 2020) | $ | 9 | $ | 14 | |||
Commercial paper | 355 | 427 | |||||
Term loan (due March 2021) | 324 | 323 | |||||
$300 million 2.95% senior unsecured notes (due March 2017) | — | 300 | |||||
$14 million 5.75% senior unsecured notes (due February 2018) | 14 | 14 | |||||
$450 million 2.50% senior unsecured notes (due March 2018) | 449 | 449 | |||||
$40 million 7.375% senior unsecured notes (due March 2020) | 40 | 40 | |||||
$250 million 5.625% senior unsecured notes (due March 2021) | 248 | 248 | |||||
$650 million 4.25% senior unsecured notes (due March 2022) (d) | 648 | 648 | |||||
$400 million 3.90% senior unsecured notes (due March 2023) (e) | 406 | 407 | |||||
$300 million 4.15% senior unsecured notes (due April 2024) | 297 | — | |||||
$350 million 5.10% senior unsecured notes (due October 2025) (f) | 339 | 338 | |||||
$400 million 4.50% senior unsecured notes (due April 2027) (g) | 400 | — | |||||
Capital leases | 144 | 143 | |||||
Other | 35 | 20 | |||||
Total long-term debt | 3,708 | 3,371 | |||||
Less: Current portion of long-term debt | 41 | 34 | |||||
Long-term debt | $ | 3,667 | $ | 3,337 |
(a) | Represents non-recourse debt that is securitized through bankruptcy-remote special purpose entities (“SPEs”), the creditors of which have no recourse to the Company for principal and interest. These outstanding borrowings (which legally are not liabilities of the Company) are collateralized by $2,558 million and $2,601 million of underlying gross vacation ownership contract receivables and related assets (which legally are not assets of the Company) as of June 30, 2017 and December 31, 2016, respectively. |
(b) | The carrying amounts of the term notes are net of debt issuance costs aggregating $22 million and $24 million as of June 30, 2017 and December 31, 2016, respectively. |
(c) | The carrying amounts of the senior unsecured notes and term loan are net of unamortized discounts of $15 million and $11 million as of June 30, 2017 and December 31, 2016, respectively. The carrying amounts of the senior unsecured notes and term loan are net of debt issuance costs of $5 million and $4 million as of June 30, 2017 and December 31, 2016, respectively. |
(d) | Includes $2 million of unamortized gains from the settlement of a derivative as of both June 30, 2017 and December 31, 2016, respectively. |
(e) | Includes $8 million and $9 million of unamortized gains from the settlement of a derivative as of June 30, 2017 and December 31, 2016, respectively. |
(f) | Includes $8 million and $9 million of unamortized losses from the settlement of a derivative as of June 30, 2017 and December 31, 2016, respectively. |
(g) | Includes a $4 million increase in the carrying value resulting from a fair value hedge derivative as of June 30, 2017. |
Securitized Vacation Ownership Debt | Long-Term Debt | Total | |||||||||
Within 1 year | $ | 185 | $ | 504 | (*) | $ | 689 | ||||
Between 1 and 2 years | 259 | 34 | 293 | ||||||||
Between 2 and 3 years | 440 | 79 | 519 | ||||||||
Between 3 and 4 years | 187 | 916 | 1,103 | ||||||||
Between 4 and 5 years | 201 | 659 | 860 | ||||||||
Thereafter | 780 | 1,516 | 2,296 | ||||||||
$ | 2,052 | $ | 3,708 | $ | 5,760 |
(*) | Includes $463 million of senior unsecured notes that are classified as long-term debt as the Company has the intent to refinance such debt on a long-term basis and the ability to do so with available capacity under its revolving credit facility. |
Securitized Bank Conduit Facility (a) | Revolving Credit Facility | |||||||
Total Capacity | $ | 650 | $ | 1,500 | ||||
Less: Outstanding Borrowings | 404 | 9 | ||||||
Letters of credit | — | 1 | ||||||
Commercial paper borrowings | — | 355 | (b) | |||||
Available Capacity | $ | 246 | $ | 1,135 |
(a) | The capacity of this facility is subject to the Company’s ability to provide additional assets to collateralize additional securitized borrowings. |
(b) | The Company considers outstanding borrowings under its commercial paper programs to be a reduction of the available capacity of its revolving credit facility. |
7. | Variable Interest Entities |
June 30, 2017 | December 31, 2016 | ||||||
Securitized contract receivables, gross (a) | $ | 2,444 | $ | 2,489 | |||
Securitized restricted cash (b) | 95 | 90 | |||||
Interest receivables on securitized contract receivables (c) | 19 | 21 | |||||
Other assets (d) | 2 | 4 | |||||
Total SPE assets | 2,560 | 2,604 | |||||
Securitized term notes (e) (f) | 1,648 | 1,857 | |||||
Securitized conduit facilities (e) | 404 | 284 | |||||
Other liabilities (g) | 1 | 2 | |||||
Total SPE liabilities | 2,053 | 2,143 | |||||
SPE assets in excess of SPE liabilities | $ | 507 | $ | 461 |
(a) | Included in current ($226 million and $235 million as of June 30, 2017 and December 31, 2016, respectively) and non-current ($2,218 million and $2,254 million as of June 30, 2017 and December 31, 2016, respectively) vacation ownership contract receivables on the Condensed Consolidated Balance Sheets. |
(b) | Included in other current assets ($78 million and $75 million as of June 30, 2017 and December 31, 2016, respectively) and other non-current assets ($17 million and $15 million as of June 30, 2017 and December 31, 2016, respectively) on the Condensed Consolidated Balance Sheets. |
(c) | Included in trade receivables, net on the Condensed Consolidated Balance Sheets. |
(d) | Primarily includes deferred financing costs for the bank conduit facility and a security investment asset, which are included in other non-current assets on the Condensed Consolidated Balance Sheets. |
(e) | Included in current ($185 million and $195 million as of June 30, 2017 and December 31, 2016, respectively) and long-term ($1,867 million and $1,946 million as of June 30, 2017 and December 31, 2016, respectively) securitized vacation ownership debt on the Condensed Consolidated Balance Sheets. |
(f) | Includes deferred financing costs of $22 million and $24 million as of June 30, 2017 and December 31, 2016, respectively, related to securitized debt. |
(g) | Primarily includes accrued interest on securitized debt, which is included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. |
June 30, 2017 | December 31, 2016 | ||||||
SPE assets in excess of SPE liabilities | $ | 507 | $ | 461 | |||
Non-securitized contract receivables | 991 | 909 | |||||
Less: Allowance for loan losses | 643 | 621 | |||||
Total, net | $ | 855 | $ | 749 |
June 30, 2017 | December 31, 2016 | ||||||
Receivable for leased property and equipment (a) | $ | — | $ | 16 | |||
Property and equipment, net | 35 | — | |||||
Total SPE assets | 35 | 16 | |||||
Long-term debt (b) | 35 | 17 | |||||
Total SPE liabilities | 35 | 17 | |||||
SPE deficit | $ | — | $ | (1 | ) |
(a) | Represents a receivable for assets leased to the Company which are reported within property and equipment, net on the Company’s Condensed Consolidated Balance Sheet. |
(b) | As of June 30, 2017, included $35 million relating to a two-year mortgage note, of which $25 million was included in current portion of long-term debt on the Condensed Consolidated Balance Sheet. As of December 31, 2016, included $15 million relating to a four-year mortgage note due in 2017 and $2 million of mandatorily redeemable equity, both of which were included in current portion of long-term debt on the Condensed Consolidated Balance Sheet. |
8. | Fair Value |
June 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Assets | |||||||||||||||
Vacation ownership contract receivables, net | $ | 2,792 | $ | 3,392 | $ | 2,777 | $ | 3,344 | |||||||
Debt | |||||||||||||||
Total debt | 5,760 | 5,905 | 5,512 | 5,579 |
9. | Derivative Instruments and Hedging Activities |
10. | Income Taxes |
11. | Commitments and Contingencies |
12. | Accumulated Other Comprehensive (Loss)/Income |
Foreign | Unrealized | Defined | |||||||||||||
Currency | Gains | Benefit | |||||||||||||
Translation | on Cash Flow | Pension | |||||||||||||
Pretax | Adjustments | Hedges | Plans | AOCI | |||||||||||
Balance, December 31, 2016 | $ | (225 | ) | $ | — | $ | (7 | ) | $ | (232 | ) | ||||
Period change | 83 | — | — | 83 | |||||||||||
Balance, June 30, 2017 | $ | (142 | ) | $ | — | $ | (7 | ) | $ | (149 | ) |
Tax | |||||||||||||||
Balance, December 31, 2016 | $ | 116 | $ | 1 | $ | 2 | $ | 119 | |||||||
Period change | (8 | ) | (1 | ) | — | (9 | ) | ||||||||
Balance, June 30, 2017 | $ | 108 | $ | — | $ | 2 | $ | 110 |
Net of Tax | |||||||||||||||
Balance, December 31, 2016 | $ | (109 | ) | $ | 1 | $ | (5 | ) | $ | (113 | ) | ||||
Period change | 75 | (1 | ) | — | 74 | ||||||||||
Balance, June 30, 2017 | $ | (34 | ) | $ | — | $ | (5 | ) | $ | (39 | ) |
Foreign | Unrealized | Defined | |||||||||||||
Currency | Gains | Benefit | |||||||||||||
Translation | on Cash Flow | Pension | |||||||||||||
Pretax | Adjustments | Hedges | Plans | AOCI | |||||||||||
Balance, December 31, 2015 | $ | (139 | ) | $ | — | $ | (9 | ) | $ | (148 | ) | ||||
Period change | (18 | ) | 1 | (1 | ) | (18 | ) | ||||||||
Balance, June 30, 2016 | $ | (157 | ) | $ | 1 | $ | (10 | ) | $ | (166 | ) |
Tax | |||||||||||||||
Balance, December 31, 2015 | $ | 70 | $ | 1 | $ | 3 | $ | 74 | |||||||
Period change | 26 | — | — | 26 | |||||||||||
Balance, June 30, 2016 | $ | 96 | $ | 1 | $ | 3 | $ | 100 |
Net of Tax | |||||||||||||||
Balance, December 31, 2015 | $ | (69 | ) | $ | 1 | $ | (6 | ) | $ | (74 | ) | ||||
Period change | 8 | 1 | (1 | ) | 8 | ||||||||||
Balance, June 30, 2016 | $ | (61 | ) | $ | 2 | $ | (7 | ) | $ | (66 | ) |
13. | Stock-Based Compensation |
RSUs | PSUs | SSARs | ||||||||||||||||||
Number of RSUs | Weighted Average Grant Price | Number of PSUs | Weighted Average Grant Price | Number of SSARs | Weighted Average Exercise Price | |||||||||||||||
Balance as of December 31, 2016 | 1.7 | $ | 75.81 | 0.6 | $ | 77.84 | 0.5 | $ | 68.78 | |||||||||||
Granted (a) | 0.7 | 84.18 | 0.3 | 83.86 | — | — | ||||||||||||||
Vested / exercised | (0.7 | ) | 73.75 | (0.2 | ) | 72.97 | (0.1 | ) | 44.57 | |||||||||||
Canceled | (0.1 | ) | 77.89 | — | — | — | — | |||||||||||||
Balance as of June 30, 2017 | 1.6 | (b) (c) | 80.20 | 0.7 | (d) | 81.77 | 0.4 | (e) (f) | 74.37 |
(a) | Primarily represents awards granted by the Company on February 28, 2017. |
(b) | Aggregate unrecognized compensation expense related to RSUs was $115 million as of June 30, 2017, which is expected to be recognized over a weighted average period of 2.9 years. |
(c) | Approximately 1.5 million RSUs outstanding as of June 30, 2017 are expected to vest over time. |
(d) | Maximum aggregate unrecognized compensation expense was $41 million as of June 30, 2017, which is expected to be recognized over a weighted average period of 2.1 years. |
(e) | Aggregate unrecognized compensation expense related to SSARs was $2 million as of June 30, 2017, which is expected to be recognized over a weighted average period of 2.1 years. |
(f) | Approximately 0.2 million SSARs were exercisable as of June 30, 2017. The Company assumes that all unvested SSARs are expected to vest over time. SSARs outstanding as of June 30, 2017 had an intrinsic value of $7 million and have a weighted average remaining contractual life of 2.8 years. |
14. | Segment Information |
Three Months Ended June 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Net Revenues | EBITDA | Net Revenues | EBITDA | ||||||||||||
Hotel Group | $ | 345 | (b) | $ | 106 | $ | 334 | (d) | $ | 101 | |||||
Destination Network | 405 | (c) | 89 | 384 | (c) | 85 | |||||||||
Vacation Ownership | 750 | 47 | 705 | 187 | |||||||||||
Total Reportable Segments | 1,500 | 242 | 1,423 | 373 | |||||||||||
Corporate and Other (a) | (21 | ) | (28 | ) | (20 | ) | (33 | ) | |||||||
Total Company | $ | 1,479 | $ | 214 | $ | 1,403 | $ | 340 | |||||||
Reconciliation of Net income to EBITDA | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Net income | $ | 78 | $ | 156 | |||||||||||
Provision for income taxes | 33 | 89 | |||||||||||||
Depreciation and amortization | 66 | 63 | |||||||||||||
Interest expense | 39 | 34 | |||||||||||||
Interest income | (2 | ) | (2 | ) | |||||||||||
EBITDA | $ | 214 | $ | 340 |
(a) | Includes the elimination of transactions between segments. |
(b) | Includes $18 million of intersegment revenues comprised of (i) $15 million of licensing fees for use of the Wyndham trade name and (ii) $3 million of other fees primarily associated with the Wyndham Rewards program. Such revenues are offset in expenses at the Company’s Vacation Ownership segment. |
(c) | Includes $3 million and $2 million of intersegment revenues during the three months ended June 30, 2017 and 2016, primarily comprised of call center operations and support services provided to the Company’s Hotel Group segment. |
(d) | Includes $17 million of intersegment revenues comprised of (i) $15 million of licensing fees for use of the Wyndham trade name, (ii) $1 million of other fees primarily associated with the Wyndham Rewards program and (iii) $1 million of room revenues at a Company owned hotel. Such revenues are offset in expenses at the Company’s Vacation Ownership segment. |
Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Net Revenues | EBITDA | Net Revenues | EBITDA | ||||||||||||
Hotel Group | $ | 643 | (b) | $ | 191 | $ | 629 | (d) | $ | 185 | |||||
Destination Network | 797 | (c) | 191 | 768 | (c) | 166 | |||||||||
Vacation Ownership | 1,399 | 166 | 1,345 | 323 | |||||||||||
Total Reportable Segments | 2,839 | 548 | 2,742 | 674 | |||||||||||
Corporate and Other (a) | (41 | ) | (68 | ) | (36 | ) | (67 | ) | |||||||
Total Company | $ | 2,798 | $ | 480 | $ | 2,706 | $ | 607 | |||||||
Reconciliation of Net income to EBITDA | |||||||||||||||
Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Net income | $ | 219 | $ | 251 | |||||||||||
Provision for income taxes | 64 | 156 | |||||||||||||
Depreciation and amortization | 128 | 125 | |||||||||||||
Interest expense | 73 | 68 | |||||||||||||
Early extinguishment of debt | — | 11 | |||||||||||||
Interest income | (4 | ) | (4 | ) | |||||||||||
EBITDA | $ | 480 | $ | 607 |
(a) | Includes the elimination of transactions between segments. |
(b) | Includes $35 million of intersegment revenues comprised of (i) $28 million of licensing fees for use of the Wyndham trade name and (ii) $7 million of other fees primarily associated with the Wyndham Rewards program. Such revenues are offset in expenses at the Company’s Vacation Ownership segment. |
(c) | Includes $6 million and $4 million of intersegment revenues during the six months ended June 30, 2017 and 2016, respectively, primarily comprised of call center operations and support services provided to the Company’s Hotel Group segment. |
(d) | Includes $34 million of intersegment revenues comprised of (i) $28 million of licensing fees for use of the Wyndham trade name, (ii) $4 million of other fees primarily associated with the Wyndham Rewards program and (iii) $2 million of room revenues at a Company owned hotel. Such revenues are offset in expenses at the Company’s Vacation Ownership segment. |
15. | Asset Impairments and Other Charges |
16. | Restructuring |
Liability as of | Costs | Cash | Liability as of | ||||||||||||||||
December 31, 2016 | Recognized | Payments | Other | June 30, 2017 | |||||||||||||||
Personnel-related | $ | 6 | $ | 7 | (a) | $ | (9 | ) | $ | (1 | ) | (b) | $ | 3 | |||||
Facility-related | 3 | — | — | — | 3 | ||||||||||||||
$ | 9 | $ | 7 | $ | (9 | ) | $ | (1 | ) | $ | 6 |
(a) | Represents severance costs resulting from a reduction of 80 employees. |
(b) | Represents the issuance of Wyndham stock. |
17. | Separation Adjustments and Transactions with Former Parent and Subsidiaries |
18. | Subsequent Event |
• | Hotel Group—primarily franchises hotels in the upscale, upper midscale, midscale, economy and extended stay segments and provides hotel management services for full-service and select limited-service hotels. |
• | Destination Network—provides vacation exchange services and products to owners of intervals of vacation ownership interests (“VOIs”) and manages and markets vacation rental properties primarily on behalf of independent owners. |
• | Vacation Ownership—develops, markets and sells VOIs to individual consumers, provides consumer financing in connection with the sale of VOIs and provides property management services at resorts. |
Three Months Ended June 30, | |||||||||
2017 | 2016 | % Change | |||||||
Hotel Group(a) | |||||||||
Number of rooms (b) | 705,700 | 683,300 | 3.3 | ||||||
RevPAR (c) | $ | 39.43 | $ | 39.10 | 0.8 | ||||
Destination Network | |||||||||
Average number of members (in 000s) (d) | 3,791 | 3,857 | (1.7) | ||||||
Exchange revenue per member (e) | $ | 168.27 | $ | 164.61 | 2.2 | ||||
Vacation rental transactions (in 000s) (a) (f) | 461 | 409 | 12.7 | ||||||
Average net price per vacation rental (a) (g) | $ | 476.72 | $ | 492.83 | (3.3) | ||||
Vacation Ownership | |||||||||
Gross VOI sales (in 000s) (h) (i) | $ | 563,000 | $ | 518,000 | 8.7 | ||||
Tours (in 000s) (j) | 235 | 213 | 10.3 | ||||||
Volume Per Guest (“VPG”) (k) | $ | 2,302 | $ | 2,328 | (1.1) |
(a) | Includes the impact from acquisitions from the acquisition dates forward. Therefore, such operating statistics for 2017 are not presented on a comparable basis to the 2016 operating statistics. |
(b) | Represents the number of rooms at hotel group properties at the end of the period which are under franchise and/or management agreements, or are company owned. |
(c) | Represents revenue per available room and is calculated by multiplying the percentage of available rooms occupied during the period by the average rate charged for renting a hotel room for one day. |
(d) | 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. |
(e) | 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. |
(f) | Represents the number of transactions that are generated during the period in connection with customers booking their vacation rental stays through us. One rental transaction is recorded for each standard one-week rental. |
(g) | Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees during the period divided by the number of vacation rental transactions during the period. |
(h) | Represents total sales of VOIs, including sales under the Wyndham Asset Affiliation Model (“WAAM”) Fee-for-Service before the effect of loan loss provisions. We believe that Gross VOI sales provide an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period. |
(i) | The following table provides a reconciliation of Gross VOI sales to vacation ownership interest sales for the three months ended June 30 (in millions): |
2017 | 2016 | ||||||
Gross VOI sales | $ | 563 | $ | 518 | |||
Less: WAAM Fee-for-Service sales (1) | (5 | ) | (20 | ) | |||
Gross VOI sales, net of WAAM Fee-for-Service sales | 558 | 498 | |||||
Less: Loan loss provision | (110 | ) | (90 | ) | |||
Vacation ownership interest sales (2) | $ | 448 | $ | 409 |
(1) | Represents total sales of VOIs through our WAAM Fee-for-Service sales model designed to offer turn-key solutions for developers or banks in possession of newly developed inventory, which we will sell for a commission fee through our extensive sales and marketing channels. WAAM Fee-for-Service commission revenues were $4 million and $16 million for the three months ended June 30, 2017 and 2016, respectively. |
(2) | Amounts may not foot due to rounding. |
(j) | Represents the number of tours taken by guests in our efforts to sell VOIs. |
(k) | VPG is calculated by dividing Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) by the number of tours. Tele-sales upgrades were $22 million during both the three months ended June 30, 2017 and 2016. We have excluded tele-sales upgrades in the calculation of VPG because tele-sales upgrades are generated by a different marketing channel. We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business’s tour selling efforts during a given reporting period. |
Three Months Ended June 30, | |||||||||||
2017 | 2016 | Favorable/(Unfavorable) | |||||||||
Net revenues | $ | 1,479 | $ | 1,403 | $ | 76 | |||||
Expenses | 1,334 | 1,132 | (202 | ) | |||||||
Operating income | 145 | 271 | (126 | ) | |||||||
Other (income)/expense, net | (3 | ) | (6 | ) | (3 | ) | |||||
Interest expense | 39 | 34 | (5 | ) | |||||||
Interest income | (2 | ) | (2 | ) | — | ||||||
Income before income taxes | 111 | 245 | (134 | ) | |||||||
Provision for income taxes | 33 | 89 | 56 | ||||||||
Net income | $ | 78 | $ | 156 | $ | (78 | ) |
• | $45 million of higher revenues at our vacation ownership business primarily resulting from an increase in net VOI sales, property management fees and consumer financing revenues, partially offset by a decrease in commission revenues resulting from lower WAAM Fee-for-Service VOI sales; |
• | $18 million of higher revenues (excluding intersegment revenues) at our destination network business primarily from an increase in rental transaction volume; |
• | $14 million of incremental revenues resulting from acquisitions primarily at our destination network business; and |
• | $9 million of higher revenues (excluding intersegment revenues) at our hotel group business primarily from an increase in ancillary services and royalty, marketing and reservation (inclusive of Wyndham Rewards) revenues. |
• | $135 million of a non-cash impairment charge primarily related to the write-down of undeveloped VOI land resulting from our decision to no longer pursue future development at certain locations; |
• | $58 million of higher expenses from operations primarily related to the revenue increases; |
• | $13 million of incremental expenses related to acquisitions primarily at our destination network business; and |
• | a $3 million increase in depreciation and amortization resulting from the impact of property and equipment additions that were placed in service over the last twelve months. |
Net Revenues | EBITDA | ||||||||||||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||
Hotel Group | $ | 345 | $ | 334 | 3.3 | $ | 106 | $ | 101 | 5.0 | |||||||||
Destination Network | 405 | 384 | 5.5 | 89 | 85 | 4.7 | |||||||||||||
Vacation Ownership | 750 | 705 | 6.4 | 47 | (b) | 187 | (74.9) | ||||||||||||
Total Reportable Segments | 1,500 | 1,423 | 5.4 | 242 | 373 | (35.1) | |||||||||||||
Corporate and Other (a) | (21 | ) | (20 | ) | (5.0) | (28 | ) | (c) | (33 | ) | (c) | 15.2 | |||||||
Total Company | $ | 1,479 | $ | 1,403 | 5.4 | $ | 214 | $ | 340 | (37.1) | |||||||||
Reconciliation of Net income to EBITDA | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
Net income | $ | 78 | $ | 156 | |||||||||||||||
Provision for income taxes | 33 | 89 | |||||||||||||||||
Depreciation and amortization | 66 | 63 | |||||||||||||||||
Interest expense | 39 | 34 | |||||||||||||||||
Interest income | (2 | ) | (2 | ) | |||||||||||||||
EBITDA | $ | 214 | $ | 340 |
(a) | Includes the elimination of transactions between segments. |
(b) | Includes $135 million of non-cash impairment charges primarily related to the write-down of undeveloped VOI land resulting from our decision to no longer pursue future development at certain locations. |
(c) | Includes $28 million and $33 million of corporate costs during the three months ended June 30, 2017 and 2016, respectively. |
• | $14 million of higher costs associated with rental transaction volume growth; |
• | $3 million of higher employee-related expenses; and |
• | $2 million of higher property recruitment costs to drive growth in our vacation rental portfolio. |
• | a $13 million increase in marketing costs due to our continued focus on new owner generation which yields a higher cost per tour; |
• | $10 million of higher sales and commission expenses primarily due to $60 million of higher gross VOI sales, net of WAAM Fee-for-Service; |
• | a $7 million increase in the cost of VOIs sold primarily due to higher sales volume partially offset by the favorable impact on estimated inventory recoveries from the increase in the provision for loan losses; |
• | $6 million of higher legal settlement expenses; |
• | $5 million of higher maintenance fees on unsold inventory; and |
• | the absence of a $4 million business interruption claim received during 2016 related to the 2010 Gulf of Mexico oil spill. |
Six Months Ended June 30, | |||||||||||
2017 | 2016 | Favorable/(Unfavorable) | |||||||||
Net revenues | $ | 2,798 | $ | 2,706 | $ | 92 | |||||
Expenses | 2,450 | 2,240 | (210 | ) | |||||||
Operating income | 348 | 466 | (118 | ) | |||||||
Other (income)/expense, net | (4 | ) | (16 | ) | (12 | ) | |||||
Interest expense | 73 | 68 | (5 | ) | |||||||
Early extinguishment of debt | — | 11 | 11 | ||||||||
Interest income | (4 | ) | (4 | ) | — | ||||||
Income before income taxes | 283 | 407 | (124 | ) | |||||||
Provision for income taxes | 64 | 156 | 92 | ||||||||
Net income | $ | 219 | $ | 251 | $ | (32 | ) |
• | $52 million of higher revenues at our vacation ownership business primarily resulting from an increase in net VOI sales, property management and consumer financing revenues, partially offset by a decrease in commission revenues resulting from lower WAAM Fee-for-Service VOI sales; |
• | $28 million of incremental revenues resulting from acquisitions primarily at our destination network business; |
• | $19 million of higher revenues (excluding intersegment revenues) at our destination network business primarily from an increase in rental transaction volume; and |
• | $11 million of higher revenues (excluding intersegment revenues) at our hotel group business primarily from an increase in ancillary services and royalty revenues. |
• | $140 million of non-cash impairment charges primarily related to the write-down of undeveloped VOI land resulting from our decision to no longer pursue future development at certain locations; |
• | $75 million of higher expenses from operations primarily related to the revenue increases; |
• | $25 million of incremental expenses related to acquisitions primarily at our destination network business; and |
• | $7 million of higher restructuring costs primarily at our corporate operations. |
Net Revenues | EBITDA | ||||||||||||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||
Hotel Group | $ | 643 | $ | 629 | 2.2 | $ | 191 | (b) | $ | 185 | 3.2 | ||||||||
Destination Network | 797 | 768 | 3.8 | 191 | 166 | (e) | 15.1 | ||||||||||||
Vacation Ownership | 1,399 | 1,345 | 4.0 | 166 | (c) | 323 | (48.6) | ||||||||||||
Total Reportable Segments | 2,839 | 2,742 | 3.5 | 548 | 674 | (18.7) | |||||||||||||
Corporate and Other (a) | (41 | ) | (36 | ) | (13.9) | (68 | ) | (d) | (67 | ) | (f) | (1.5) | |||||||
Total Company | $ | 2,798 | $ | 2,706 | 3.4 | $ | 480 | $ | 607 | (20.9) | |||||||||
Reconciliation of Net income to EBITDA | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
Net income | $ | 219 | $ | 251 | |||||||||||||||
Provision for income taxes | 64 | 156 | |||||||||||||||||
Depreciation and amortization | 128 | 125 | |||||||||||||||||
Interest expense | 73 | 68 | |||||||||||||||||
Early extinguishment of debt | — | 11 | |||||||||||||||||
Interest income | (4 | ) | (4 | ) | |||||||||||||||
EBITDA | $ | 480 | $ | 607 |
(a) | Includes the elimination of transactions between segments. |
(b) | Includes $1 million of restructuring costs primarily focused on realigning its brand operations. |
(c) | Includes $135 million of non-cash impairment charges primarily related to the write-down of undeveloped VOI land resulting from our decision to no longer pursue future development at certain locations and a $5 million non-cash impairment charge related to the write-down of assets resulting from the decision to abandon a new product initiative. |
(d) | Includes $6 million of restructuring costs focused on rationalizing its sourcing function and outsourcing certain information technology functions. Excluding restructuring costs, corporate costs were $62 million during the six months ended June 30, 2017. |
(e) | Includes a $24 million foreign currency loss related to the devaluation of the exchange rate of Venezuela. |
(f) | Includes $66 million of corporate costs and $1 million of a net expense related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation. |
• | $15 million of higher costs associated with rental transaction volume growth; |
• | $4 million of higher employee-related expenses; |
• | $3 million of higher property recruitment costs to drive growth in our vacation rental portfolio; and |
• | the absence of $3 million of proceeds received during the first quarter of 2016 for business disruption claims received related to the Gulf of Mexico oil spill during 2010. |
• | a $17 million increase in marketing costs due to our continued focus on new owner generation which yields a higher cost per tour; |
• | $15 million of higher sales and commission expenses primarily due to higher gross VOI sales, net of WAAM Fee-for-Service; |
• | $9 million of higher legal settlement expenses; |
• | $9 million of higher maintenance fees on unsold inventory; |
• | the absence of $9 million received during 2016 related to the settlement of several business interruption claims; |
• | a $6 million increase in the cost of VOIs sold primarily resulting from higher sales volume, partially offset by the favorable impact on estimated inventory recoveries from the increase in the provision for loan losses; and |
• | a $5 million increase in general and administrative expenses primarily due to higher employee-related costs. |
June 30, 2017 | December 31, 2016 | Change | |||||||||
Total assets | $ | 10,348 | $ | 9,819 | $ | 529 | |||||
Total liabilities | 9,756 | 9,101 | 655 | ||||||||
Total equity | 592 | 718 | (126 | ) |
• | a $230 million increase in cash and cash equivalents primarily due to seasonality in our vacation rentals businesses; and |
• | a $190 million increase in other current assets primarily due to (i) a higher income tax receivable resulting from a tax benefit on foreign currency losses recognized from an internal restructuring undertaken to realign the organizational and capital structure of certain foreign operations and (ii) increased escrow deposits and deferred costs primarily related to the seasonality of advanced vacation rental bookings at our destination network business. |
• | a $337 million increase in long term debt; |
• | a $201 million increase in accounts payable primarily due to higher homeowner liabilities resulting from the seasonality of vacation rental bookings at our destination network business; and |
• | a $121 million increase in deferred income primarily resulting from the seasonality of advanced vacation rental bookings at our destination network business. |
Six Months Ended June 30, | |||||||||||
2017 | 2016 | Change | |||||||||
Cash provided by/(used in) | |||||||||||
Operating activities | $ | 663 | $ | 706 | $ | (43 | ) | ||||
Investing activities | (133 | ) | (140 | ) | 7 | ||||||
Financing activities | (309 | ) | (251 | ) | (58 | ) | |||||
Effects of changes in exchange rates on cash and cash equivalents | 9 | (8 | ) | 17 | |||||||
Net change in cash and cash equivalents | $ | 230 | $ | 307 | $ | (77 | ) |
• | $37 million of higher net payments in connection with vacation ownership inventory arrangements; |
• | $16 million of lower net borrowings on securitized vacation ownership debt; |
• | $10 million of higher dividend payments to shareholders; and |
• | $5 million of lower proceeds on non-securitized debt. |
7/1/17- 6/30/18 | 7/1/18- 6/30/19 | 7/1/19- 6/30/20 | 7/1/20- 6/30/21 | 7/1/21- 6/30/22 | Thereafter | Total | |||||||||||||||||||||
Securitized debt (a) | $ | 185 | $ | 259 | $ | 440 | $ | 187 | $ | 201 | $ | 780 | $ | 2,052 | |||||||||||||
Long-term debt (b) | 504 | 34 | 79 | 916 | 659 | 1,516 | 3,708 | ||||||||||||||||||||
Interest on debt (c) | 198 | 185 | 175 | 143 | 111 | 199 | 1,011 | ||||||||||||||||||||
Operating leases | 93 | 64 | 54 | 41 | 34 | 174 | 460 | ||||||||||||||||||||
Purchase commitments (d) | 213 | 114 | 46 | 37 | 32 | 36 | 478 | ||||||||||||||||||||
Inventory sold subject to conditional repurchase (e) | 106 | 101 | 37 | 47 | 59 | — | 350 | ||||||||||||||||||||
Separation liabilities (f) | 10 | 13 | — | — | — | — | 23 | ||||||||||||||||||||
Total (g) (h) | $ | 1,309 | $ | 770 | $ | 831 | $ | 1,371 | $ | 1,096 | $ | 2,705 | $ | 8,082 |
(a) | Represents debt that is securitized through bankruptcy-remote special purpose entities the creditors to which have no recourse to us for principal and interest. |
(b) | Includes $463 million of senior unsecured notes due during the first quarter of 2018, which we intend to refinance on a long-term basis and have the ability to do so with available capacity under our revolving credit facility. |
(c) | Includes interest on both securitized and long-term debt; estimated using the stated interest rates on our long-term debt and the swapped interest rates on our securitized debt. |
(d) | Includes (i) $162 million for information technology activities, (ii) $120 million relating to the development of vacation ownership properties of which, $86 million was included within total liabilities on the Condensed Consolidated Balance Sheet and (iii) $96 million for marketing related activities. |
(e) | Represents obligations to repurchase completed vacation ownership properties from third-party developers (See Note 5 – Inventory for further detail) of which, $144 million was included within total liabilities on the Condensed Consolidated Balance Sheet. |
(f) | Represents liabilities which we assumed and are responsible for pursuant to our Separation (See Note 17 – Separation Adjustments and Transactions with Former Parent and Subsidiaries for further details). |
(g) | Excludes a $44 million liability for unrecognized tax benefits associated with the guidance for uncertainty in income taxes since it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities. |
(h) | Excludes other guarantees at our hotel group business as it is not reasonably estimable to determine the periods in which such commitments would be settled (See Note 11– Commitments and Contingencies for further details). |
(a) | Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, our principal executive and principal financial officers concluded that our disclosure controls and procedures were effective and operating to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. |
(b) | Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As of June 30, 2017, we utilized the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. |
(c) | Below is a summary of our Wyndham common stock repurchases by month for the quarter ended June 30, 2017: |
ISSUER PURCHASES OF EQUITY SECURITIES | ||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan | ||||||
April 1-30, 2017 | 478,800 | $ | 88.13 | 478,800 | $ | 548,344,241 | ||||
May 1-31, 2017 | 546,500 | $ | 96.73 | 546,500 | $ | 495,480,386 | ||||
June 1-30, 2017 | 540,711 | $ | 101.72 | 540,711 | $ | 440,481,675 | ||||
Total | 1,566,011 | $ | 95.82 | 1,566,011 | $ | 440,481,675 |
WYNDHAM WORLDWIDE CORPORATION | ||
Date: August 3, 2017 | By: | /s/ Thomas G. Conforti |
Thomas G. Conforti | ||
Chief Financial Officer | ||
Date: August 3, 2017 | By: | /s/ Nicola Rossi |
Nicola Rossi | ||
Chief Accounting Officer |
Exhibit No. | Description |
10.1* | Termination and Release Agreement with Thomas Anderson, executed April 28, 2017 |
12* | Computation of Ratio of Earnings to Fixed Charges |
15* | Letter re: Unaudited Interim Financial Information |
31.1* | Certification of Chairman and Chief Executive Officer Pursuant to Rule 13a-14(a) Under the Securities Exchange Act of 1934 |
31.2* | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) Under the Securities Exchange Act of 1934 |
32** | Certification of Chairman and Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 |
101.INS* | XBRL Instance Document |
101.SCH* | XBRL Taxonomy Extension Schema Document |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed with this report |
Section 1 | Cessation of Employment Relationship. |
Section 2 | Payment Obligations. |
(a) | the Company shall pay the Executive an aggregate cash severance amount equal to $2.28 million, payable in a lump sum within 60 days after the Termination Date, subject to Sections 2.4, 2.5 and 4.6 below; |
(b) | effective as of the Termination Date, and subject to Sections 2.4, 2.5 and 4.6 below, |
(i) | all of Executive’s outstanding time-based restricted stock units (“RSUs”) which would have otherwise vested within one year following the Termination Date (being 17,012 RSUs) will be accelerated and become vested as of the Termination Date and be settled in shares of Company common stock, to be provided to the Executive within 60 days after the Termination Date; |
(ii) | with respect to the Executive’s outstanding performance-based RSUs (“PVRSUs”) for the performance period from January 1, 2015 through December 31, 2017 (being 9,802 PVRSUs) and for the performance period from January 1, 2016 through December 31, 2018 (being 13,258 PVRSUs), to the extent that the performance goals applicable to such PVRSUs are achieved, in each case certified by the Compensation Committee of the Company’s Board of Directors following the completion of each such performance period, the Executive shall be entitled to vest in and be paid a pro-rata portion of such achieved PVRSUs, if any, in accordance with the terms of such PVRSUs, such pro-rata portion to be determined based upon the portion of the full performance period applicable to each particular PVRSU award during which the Executive was employed by the Company up to the Termination Date plus 12 months (or, if less, assuming employment for the entire performance period). Any such vested PVRSUs shall be paid to the Executive at the time that such PVRSU awards vest and are paid to employees generally, subject to Sections 2.4, 2.5 and 4.6 below. Except as set forth above in this subsection (b)(ii) the Executive’s outstanding PVRSUs shall not otherwise vest or accelerate and to the extent not so vested pursuant to this subsection (b)(ii), such PVRSUs shall terminate and be forfeited. |
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(iii) | The Executive has no other outstanding Company incentive awards, equity awards or similar equity compensation rights except as set forth above in subsection (b)(i) or (b)(ii) herein. |
(c) | The Executive shall continue to be eligible to participate in the Company’s Officer Deferred Compensation Plan and 401(k) Plan up to and including the Termination Date, in accordance with the terms thereof. |
(d) | The Executive shall continue to participate in the Company health plan in which he currently participates through the end of the month in which the Termination Date occurs. Following the Termination Date, the Executive may elect to continue health plan coverage in accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) at his own expense. |
(e) | The Executive shall be eligible to continue to use the vehicle provided to him through the Company’s executive car lease program in which he currently participates, upon the same terms as currently are in effect for him, through and until the Termination Date. At that time, the Executive shall have the option to purchase the vehicle in accordance with the terms of such program for use. If the Executive chooses not to purchase the vehicle, the Executive shall relinquish the vehicle to the Company’s Human Resources Department on or before the Termination Date. |
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(i) | with regard to any payment, the providing of any benefit or any distribution of equity under this Agreement or the Offer Letter that constitutes “deferred compensation” subject to Code Section 409A, payable upon separation from service, such payment, benefit or distribution shall not be made or provided prior to the earlier of (x) the expiration of the six-month period measured from the date of the Termination Date (or, if later, his “separation from service” as referred to in Code Section 409A) (“Separation Date”) or (y) the date of the Executive’s death; and |
(ii) | on the first day of the seventh month following the date of the Separation Date or, if earlier, on the date of death, (x) all payments delayed pursuant to Section 2.4(i) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal dates specified for them herein and (y) all distributions of equity delayed pursuant to Section 2.4(i) shall be made to the Executive; |
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Section 3 | Covenants. |
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Section 4 | Miscellaneous. |
(a) | Any controversy, dispute or claim arising out of or relating to this Agreement or the breach hereof which cannot be settled by mutual agreement of the parties hereto (other than with respect to the matters covered by Section 3 of this Agreement or the non-competition provisions of the Offer Letter, for which the Company may, but shall not be required to, seek injunctive and/or other equitable relief in a judicial proceeding; in conjunction with the foregoing, Executive acknowledges that the damages resulting from any breach of any such matter or provision would be irreparable and agrees that the Company has the right to apply to any court of competent jurisdiction for the issuance of a temporary restraining order to maintain the status quo pending the outcome of any proceeding) shall be finally settled by binding arbitration in accordance with the Federal Arbitration Act (or if not |
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(b) | The decision of the arbitrator on the points in dispute shall be final, unappealable and binding, and judgment on the award may be entered in any court having jurisdiction thereof. |
(c) | Except as otherwise provided in this Agreement, the arbitrator shall be authorized to apportion his or her fees and expenses and the reasonable attorneys’ fees and expenses of any such party as the arbitrator deems appropriate. In the absence of any such apportionment, the fees and expenses of the arbitrator shall be borne equally by each party, and each party shall bear the fees and expenses of its own attorney. |
(d) | The parties hereto agree that this Section 4.3 has been included to rapidly and inexpensively resolve any disputes between them with respect to this Agreement, and that this Section 4.3 shall be grounds for dismissal of any court action commenced by either party hereto with respect to this Agreement, other than court actions commenced by the Company with respect to any matter covered by Section 3 of this Agreement or the non-competition provisions of the Offer Letter and other than post-arbitration court actions seeking to enforce an arbitration award. In the event that any court determines that this arbitration procedure is not binding, or otherwise allows any litigation regarding a dispute, claim, or controversy covered by this Agreement to proceed, the parties hereto hereby waive any and all rights to a trial by jury in or with respect to such litigation. |
(e) | The parties shall keep confidential, and shall not disclose to any person, except for such disclosures that would be permitted under Section 3.2, the existence of the controversy hereunder, the referral of any such controversy to arbitration, or the status of resolution thereof. This Section 4.3(e) shall in all respects be subject to Paragraph 10 of the Executive Release. |
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WYNDHAM WORLDWIDE CORPORATION By: /s/ Mary Falvey Name: Mary Falvey Title: Chief Human Resources Officer | |
/s/ Thomas Anderson Executive: Thomas Anderson |
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i. | any and all matters arising out of my employment by the Company or any of the Released Parties and the cessation of said employment, and including, but not limited to, any alleged violation of the National Labor Relations Act (“NLRA”), any claims for discrimination of any kind under the Age Discrimination in Employment Act of 1967 (“ADEA”) as amended by the Older Workers Benefit Protection Act (“OWBPA”), Title VII of the Civil Rights Act of 1964 (“Title VII”), Sections 1981 through 1988 of Title 42 of the United States Code, the Executive Retirement Income Security Act of 1974 (“ERISA”)(except for vested benefits which are not affected by this agreement), the Americans With Disabilities Act of 1990, as amended (“ADA”), the Fair Labor Standards Act (“FLSA”), the Occupational Safety and Health Act (“OSHA”), the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Federal Family and Medical Leave Act (“FMLA”), the Federal Worker Adjustment Retraining Notification Act (“WARN”), the Uniformed Services Employment and Reemployment Rights Act (“USERRA”); and |
ii. | The Genetic Information Nondiscrimination Act of 2008; Family Rights Act; Fair Employment and Housing Act; Unruh Civil Rights Act; Statutory Provisions Regarding the Confidentiality of AIDS; Confidentiality of Medical Information Act; Parental Leave Law; Apprenticeship Program Bias Law; Equal Pay Law; Whistleblower Protection Law; Military Personnel Bias Law; Statutory Provisions Regarding Family and Medical Leave; Statutory Provisions Regarding Electronic |
iii. | The New Jersey Law Against Discrimination; The New Jersey Civil Rights Act; The New Jersey Family Leave Act; The New Jersey State Wage and Hour Law; The Millville Dallas Airmotive Plant Job Loss Notification Act; The New Jersey Conscientious Executive Protection Act; The New Jersey Equal Pay Law; The New Jersey Occupational Safety and Health Law; The New Jersey Smokers’ Rights Law; The New Jersey Genetic Privacy Act; The New Jersey Fair Credit Reporting Act; The New Jersey Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers’ Compensation Claim; New Jersey laws regarding Political Activities of Executives, Lie Detector Tests, Jury Duty, Employment Protection, and Discrimination; and |
iv. | any other federal, state or local civil or human rights law, or any other alleged violation of any local, state or federal law, regulation or ordinance, and/or public policy, implied or expressed contract, fraud, negligence, estoppel, defamation, infliction of emotional distress or other tort or common-law claim having any bearing whatsoever on the terms and conditions and/or cessation of my employment with the Company, including, but not limited to, all claims for any compensation including salary, back wages, front pay, bonuses or awards, incentive compensation, performance-based grants or awards, severance pay, vacation pay, stock grants, stock unit grants, stock options, or any other form of equity award, fringe benefits, disability benefits, severance benefits, reinstatement, retroactive seniority, pension benefits, contributions to 401(k) plans, or any other form of economic loss; all claims for personal injury, including physical injury, mental anguish, emotional distress, pain and suffering, embarrassment, humiliation, damage to name or reputation, interest, liquidated damages, and punitive damages; and all claims for costs, expenses, and attorneys’ fees. |
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-6- |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Earnings available to cover fixed charges: | |||||||
Income before income taxes | $ | 283 | $ | 407 | |||
Less: Income from equity investees | 1 | 1 | |||||
282 | 406 | ||||||
Plus: Fixed charges | 122 | 118 | |||||
Amortization of capitalized interest | 4 | 3 | |||||
Less: Capitalized interest | 1 | 3 | |||||
Earnings available to cover fixed charges | $ | 407 | $ | 524 | |||
Fixed charges (*): | |||||||
Interest | $ | 110 | $ | 104 | |||
Capitalized interest | 1 | 3 | |||||
Interest portion of rental expense | 11 | 11 | |||||
Total fixed charges | $ | 122 | $ | 118 | |||
Ratio of earnings to fixed charges | 3.34x | 4.44x |
(*) | Consists of interest expense on all indebtedness (including costs related to the amortization of deferred financing costs), capitalized interest and the portion of operating lease rental expense that is representative of the interest factor. |
1. | I have reviewed this quarterly report on Form 10-Q of Wyndham Worldwide Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 3, 2017 | |
/S/ STEPHEN P. HOLMES | |
CHAIRMAN AND CHIEF EXECUTIVE OFFICER |
1. | I have reviewed this quarterly report on Form 10-Q of Wyndham Worldwide Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 3, 2017 | |
/S/ THOMAS G. CONFORTI | |
CHIEF FINANCIAL OFFICER |
(1.) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2.) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ STEPHEN P. HOLMES |
STEPHEN P. HOLMES |
CHAIRMAN AND CHIEF EXECUTIVE OFFICER |
AUGUST 3, 2017 |
/S/ THOMAS G. CONFORTI |
THOMAS G. CONFORTI |
CHIEF FINANCIAL OFFICER |
AUGUST 3, 2017 |
Document And Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2017
shares
| |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q2 |
Entity Registrant Name | WYNDHAM WORLDWIDE CORP |
Entity Central Index Key | 0001361658 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 102,785,767 |
Condensed Consolidated Statements Of Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Net revenues | ||||
Service and membership fees | $ 653 | $ 632 | $ 1,289 | $ 1,266 |
Vacation ownership interest sales | 448 | 409 | 798 | 750 |
Franchise fees | 177 | 172 | 318 | 310 |
Consumer financing | 114 | 108 | 224 | 215 |
Other | 87 | 82 | 169 | 165 |
Net revenues | 1,479 | 1,403 | 2,798 | 2,706 |
Expenses | ||||
Operating | 654 | 622 | 1,254 | 1,236 |
Cost of vacation ownership interests | 38 | 32 | 75 | 68 |
Consumer financing interest | 19 | 19 | 37 | 36 |
Marketing and reservation | 231 | 211 | 426 | 403 |
General and administrative | 191 | 185 | 383 | 372 |
Asset impairments | 135 | 0 | 140 | 0 |
Restructuring | 0 | 0 | 7 | 0 |
Depreciation and amortization | 66 | 63 | 128 | 125 |
Total expenses | 1,334 | 1,132 | 2,450 | 2,240 |
Operating income | 145 | 271 | 348 | 466 |
Other (income)/expense, net | (3) | (6) | (4) | (16) |
Interest expense | 39 | 34 | 73 | 68 |
Early extinguishment of debt | 0 | 0 | 0 | 11 |
Interest income | (2) | (2) | (4) | (4) |
Income before income taxes | 111 | 245 | 283 | 407 |
Provision for income taxes | 33 | 89 | 64 | 156 |
Net income | $ 78 | $ 156 | $ 219 | $ 251 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.75 | $ 1.40 | $ 2.10 | $ 2.25 |
Diluted (in dollars per share) | 0.75 | 1.39 | 2.09 | 2.23 |
Cash dividends declared per share (in dollars per share) | $ 0.58 | $ 0.50 | $ 1.16 | $ 1.00 |
Condensed Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Net income | ||||
Net income | $ 78 | $ 156 | $ 219 | $ 251 |
Other comprehensive income/(loss), net of tax | ||||
Foreign currency translation adjustments | 45 | (28) | 75 | 8 |
Unrealized gains/(losses) on cash flow hedges | 0 | 0 | (1) | 1 |
Defined benefit pension plans | 0 | 0 | 0 | (1) |
Other comprehensive income/(loss), net of tax | 45 | (28) | 74 | 8 |
Comprehensive income | $ 123 | $ 128 | $ 293 | $ 259 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 6,000,000 | 6,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares, Issued | 218,748,902 | 218,198,050 |
Treasury Stock, Shares | 116,036,879 | 112,617,112 |
Basis of Presentation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Wyndham Worldwide Corporation (“Wyndham” or the “Company”) is a global provider of hospitality services and products. The accompanying Condensed Consolidated Financial Statements include the accounts and transactions of Wyndham, as well as the entities in which Wyndham directly or indirectly has a controlling financial interest. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2016 Consolidated Financial Statements included in its Annual Report filed on Form 10-K with the Securities and Exchange Commission on February 17, 2017. Business Description The Company operates in the following business segments:
Recently Issued Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the statement of financial position. The Company currently expects to adopt the new guidance utilizing the full retrospective transition method on its effective date of January 1, 2018. The Company’s analysis to identify the impact of the new guidance is substantially complete, with the exception of its Wyndham Rewards loyalty and co-branded credit card programs which the Company is still awaiting industry clarification. The Company estimates that its net revenues and net income for the year ended 2016 would be reduced by $5 million to $10 million, which would be recognized in future years. Additionally, the Company expects a change in the seasonality of its revenues and net income primarily reflecting a shift of revenues and net income from the first quarter to the third quarter. The Company believes the most significant impacts relating to its Hotel Group segment are the accounting for initial fees, upfront costs and marketing and reservation expenses. The Company expects royalty and marketing and reservation fees to remain substantially unchanged. Specifically, under the new guidance, the Company expects initial fees to be recognized ratably over the life of the noncancelable period of the franchise agreement and incremental upfront contract costs to be deferred and expensed over the life of the noncancelable period of the franchise agreement. Marketing and reservation revenues earned in excess of costs incurred will no longer be accrued as a liability for future marketing and reservation costs; marketing or reservation costs incurred in excess of revenues earned will continue to be expensed as incurred. The Company believes the most significant impacts relating to its Destination Network segment are the accounting for vacation rental revenues and other vacation exchange related product fees. Specifically, under the new guidance, the Company expects (i) approximately thirty percent of its vacation rental revenue will no longer be recognized in the period that the rental reservation is booked and, instead, will be recognized over the term of the guest stay and (ii) other vacation exchange related product fees to be deferred and recognized upon the occurrence of a future vacation exchange or other transaction. The Company expects vacation exchange transaction and membership fees to remain substantially unchanged. The Company expects the recognition of its Vacation Ownership segment revenues to remain substantially unchanged, with the exception of (i) revenue from certain travel packages utilized to market its VOI products which will be presented on a gross basis within other revenues and (ii) a reduction of property management revenues by the proportionate share of maintenance fees paid on its unsold inventory. Leases. In February 2016, the FASB issued guidance which requires companies generally to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Financial Instruments - Credit Losses. In June 2016, the FASB issued guidance which amends the guidance on measuring credit losses on financial assets held at amortized cost. The guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Statement of Cash Flows. In August 2016, the FASB issued guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance requires the retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company believes the impact of this new guidance will result in development advance notes being recorded within operating activities on its Condensed Consolidated Statement of Cash Flows. Restricted Cash. In November 2016, the FASB issued guidance which requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company will adopt this new guidance on January 1, 2018, using a retrospective transition method. The Company believes the impact of the new restricted cash guidance will result in escrow deposits and restricted cash being included with cash and cash equivalents on the statement of cash flows. The table below summarizes the effects of the new statement of cash flows and restricted cash guidance on the Company’s Condensed Consolidated Statements of Cash Flows
Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued guidance which requires companies to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance requires the modified retrospective approach and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Clarifying the Definition of a Business. In January 2017, the FASB issued guidance clarifying the definition of a business, which assists entities when evaluating whether transactions should be accounted for as acquisitions of businesses or assets. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued guidance which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Compensation - Stock Compensation. In May 2017, the FASB issued guidance which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This guidance does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Recently Adopted Accounting Pronouncements Simplifying the Measurement of Inventory. In July 2015, the FASB issued guidance related to simplifying the measurement of inventory. This guidance requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This guidance is effective prospectively for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2017, as required. There was no material impact on its financial statements and related disclosures. Compensation - Stock Compensation. In March 2016, the FASB issued guidance which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2017, as required. The Company elected to use the prospective transition method and as such, the excess tax benefits from stock-based compensation were presented as part of operating activities within its current period Condensed Consolidated Statement of Cash Flows. In addition, the excess tax benefit of $2 million and $6 million has been recognized within the provision for income taxes for the three and six months ended June 30, 2017, respectively, on the Condensed Consolidated Statement of Income. |
Earnings Per Share |
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Earnings Per Share Reconciliation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
The computation of basic and diluted earnings per share (“EPS”) is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. The following table sets forth the computation of basic and diluted EPS (in millions, except share data):
Stock Repurchase Program The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data):
The Company had $440 million of remaining availability under its program as of June 30, 2017. |
Acquisitions |
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Business Combinations [Abstract] | |||||
Acquisitions |
Assets acquired and liabilities assumed in business combinations were recorded on the Condensed Consolidated Balance Sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the Condensed Consolidated Statements of Income since their respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed was allocated to goodwill. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations may be subject to revision when the Company receives final information, including appraisals and other analyses. Any revisions to the fair values during the allocation period will be recorded by the Company as further adjustments to the purchase price allocations. Although, in certain circumstances, the Company has substantially integrated the operations of its acquired businesses, additional future costs relating to such integration may occur. These costs may result from integrating operating systems, relocating employees, closing facilities, reducing duplicative efforts and exiting and consolidating other activities. These costs will be recorded on the Condensed Consolidated Statements of Income as expenses. During the six months ended June 30, 2017, the Company completed three acquisitions at its Destination Network segment for $15 million in cash, net of cash acquired and $1 million of contingent consideration. The preliminary purchase price allocations resulted primarily in the recognition of (i) $20 million of other assets, (ii) $8 million of goodwill, of which is $4 million is expected to be deductible for tax purposes, (iii) $4 million of definite-lived intangible assets with a weighted average life of 7 years, (iv) $3 million of trademarks and (v) $19 million of liabilities. These acquisitions were not material to the Company’s results of operations, financial position or cash flows. |
Vacation Ownership Contract Receivables |
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Vacation Ownership Contract Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vacation Ownership Contract Receivables |
The Company generates vacation ownership contract receivables by extending financing to the purchasers of its VOIs. Current and long-term vacation ownership contract receivables, net consisted of:
The Company’s securitized vacation ownership contract receivables generated interest income of $83 million and $166 million during the three and six months ended June 30, 2017, respectively, and $81 million and $164 million during the three and six months ended June 30, 2016, respectively. Such interest income is included within consumer financing on the Condensed Consolidated Statements of Income. Principal payments that are contractually due on the Company’s vacation ownership contract receivables during the next twelve months are classified as current on the Condensed Consolidated Balance Sheets. During the six months ended June 30, 2017 and 2016, the Company originated vacation ownership contract receivables of $640 million and $556 million, respectively, and received principal collections of $443 million and $406 million, respectively. The weighted average interest rate on outstanding vacation ownership contract receivables was 13.9% as of both June 30, 2017 and December 31, 2016. The activity in the allowance for loan losses on vacation ownership contract receivables was as follows:
In accordance with the guidance for accounting for real estate time-sharing transactions, the Company recorded a provision for loan losses of $110 million and $195 million as a reduction of net revenues during the three and six months ended June 30, 2017, respectively, and $90 million and $153 million for the three and six months ended June 30, 2016 respectively. Credit Quality for Financed Receivables and the Allowance for Credit Losses The basis of the differentiation within the identified class of financed VOI contract receivables is the consumer’s FICO score. A FICO score is a branded version of a consumer credit score widely used within the U.S. by the largest banks and lending institutions. FICO scores range from 300 – 850 and are calculated based on information obtained from one or more of the three major U.S. credit reporting agencies that compile and report on a consumer’s credit history. The Company updates its records for all active VOI contract receivables with a balance due on a rolling monthly basis to ensure that all VOI contract receivables are scored at least every six months. The Company groups all VOI contract receivables into five different categories: FICO scores ranging from 700 to 850, 600 to 699, Below 600, No Score (primarily comprised of consumers for whom a score is not readily available, including consumers declining access to FICO scores and non U.S. residents) and Asia Pacific (comprised of receivables in the Company’s Wyndham Vacation Resort Asia Pacific business for which scores are not readily available). The following table details an aged analysis of financing receivables using the most recently updated FICO scores (based on the policy described above):
The Company ceases to accrue interest on VOI contract receivables once the contract has remained delinquent for greater than 90 days. At greater than 120 days, the VOI contract receivable is written off to the allowance for loan losses. In accordance with its policy, the Company assesses the allowance for loan losses using a static pool methodology and thus does not assess individual loans for impairment separate from the pool. |
Inventory |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory |
Inventory consisted of:
During the six months ended June 30, 2017 and 2016, the Company transferred $28 million and $26 million, respectively, from property and equipment to VOI inventory. In addition to the inventory obligations listed below, the Company had $5 million and $8 million of inventory accruals as of June 30, 2017 and December 31, 2016, respectively, included within accounts payable on the Condensed Consolidated Balance Sheets. During May 2017, the Company’s new leadership at its vacation ownership business performed an in-depth review of its operations, including its current development pipeline and long-term development plan. In connection with this review, the Company made a decision to no longer pursue future development at certain locations and thus performed a fair value assessment on these locations. As a result, the Company recorded a $135 million non-cash impairment charge primarily related to the write-down of land held for VOI development (see Note 15 - Asset Impairments and Other Charges for further details). Inventory Sale Transactions During 2015 and 2016, the Company sold real property located in St. Thomas, U.S. Virgin Islands (“St. Thomas”) to a third-party developer, consisting of vacation ownership inventory. During 2013, the Company sold real property located in Las Vegas, Nevada and Avon, Colorado to a third-party developer, consisting of vacation ownership inventory and property and equipment. The Company recognized no gain or loss on these sales transactions. In accordance with the agreements with the third-party developers, the Company has conditional rights and conditional obligations to repurchase the completed properties from the developers subject to the properties conforming to the Company's vacation ownership resort standards and provided that the third-party developers have not sold the properties to another party. Under the sale of real estate accounting guidance, the conditional rights and obligations of the Company constitute continuing involvement and thus the Company was unable to account for these transactions as a sale. During 2014, the Company acquired the property located in Avon, Colorado from the third-party developer. In connection with this acquisition, the Company had an outstanding obligation of $21 million as of June 30, 2017, of which $11 million was included within accrued expenses and other current liabilities and $10 million was included within other non-current liabilities on the Condensed Consolidated Balance Sheet. During the six months ended June 30, 2017, the Company paid $11 million to the third-party developer, of which $9 million was for vacation ownership inventory and $2 million was to satisfy a portion of its inventory obligation. As of December 31, 2016, the Company had an outstanding obligation of $32 million, of which $11 million was included within accrued expenses and other current liabilities and $21 million was included within other non-current liabilities on the Condensed Consolidated Balance Sheet. In connection with the Las Vegas, Nevada and St. Thomas properties, the Company had outstanding obligations of $144 million as of June 30, 2017, of which $71 million was included within accrued expenses and other current liabilities and $73 million was included within other non-current liabilities on the Condensed Consolidated Balance Sheet. During the six months ended June 30, 2017, the Company paid $54 million to the third-party developer, of which $32 million was for vacation ownership inventory located in Las Vegas, Nevada and St. Thomas, $20 million was for its obligation under the vacation ownership inventory arrangements and $2 million was for accrued interest. In connection with these transactions, the Company acquired $32 million of inventory developed by the third-party developer during the second quarter of 2017 which will be paid during the third quarter of 2017. As of December 31, 2016, the Company had an outstanding obligation related to the Las Vegas, Nevada and St. Thomas properties of $166 million, of which $74 million was included within accrued expenses and other current liabilities and $92 million was included within other non-current liabilities on the Condensed Consolidated Balance Sheet. The Company has guaranteed to repurchase the completed properties located in Las Vegas, Nevada and St. Thomas from the third-party developers subject to the properties meeting the Company’s vacation ownership resort standards and provided that the third-party developers have not sold the properties to another party. The maximum potential future payments that the Company could be required to make under these commitments was $206 million as of June 30, 2017. During the second quarter of 2017, the Company acquired property located in Austin, Texas from a third-party developer. In connection with this acquisition, the Company had an outstanding obligation of $61 million as of June 30, 2017, of which $30 million was included within accrued expenses and other current liabilities and $31 million was included within other non-current liabilities on the Condensed Consolidated Balance Sheet. |
Long-Term Debt And Borrowing Arrangements |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt And Borrowing Arrangements |
The Company’s indebtedness consisted of:
Long-Term Debt The Company’s $14 million 5.75% senior unsecured notes due February 2018 and $450 million 2.50% senior unsecured notes due March 2018 are 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 available capacity under its revolving credit facility. Debt Issuances Sierra Timeshare 2017-1 Receivables Funding, LLC. During March 2017, the Company closed a series of term notes payable, Sierra Timeshare 2017-1 Receivables Funding, LLC, with an initial principal amount of $350 million, which are secured by vacation ownership contract receivables and bear interest at a weighted average coupon rate of 2.97%. The advance rate for this transaction was 90%. As of June 30, 2017, the Company had outstanding borrowings under these term notes of $294 million, net of debt issuance costs. 4.15% Senior Unsecured Notes. During March 2017, the Company issued senior unsecured notes, with face value of $300 million and bearing interest at a rate of 4.15%, for net proceeds of $297 million. The interest on the senior unsecured notes will be subject to adjustments from time to time if there are downgrades to the credit ratings assigned to the notes. Interest began accruing on March 21, 2017 and is payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2017. The notes will mature on April 1, 2024 and are redeemable at the Company’s option at any time, in whole or in part, at the stated redemption prices plus accrued interest through the redemption date. These notes rank equally in right of payment with all of the Company’s other senior unsecured indebtedness. 4.50% Senior Unsecured Notes. During March 2017, the Company issued senior unsecured notes, with face value of $400 million and bearing interest at a rate of 4.50%, for net proceeds of $397 million. The interest on the senior unsecured notes will be subject to adjustments from time to time if there are downgrades to the credit ratings assigned to the notes. Interest began accruing on March 21, 2017 and is payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2017. The notes will mature on April 1, 2027 and are redeemable at the Company’s option at any time, in whole or in part, at the stated redemption prices plus accrued interest through the redemption date. These notes rank equally in right of payment with all of the Company’s other senior unsecured indebtedness. Other. During 2015, the Company entered into an agreement with a third-party partner whereby the partner would develop and construct VOI inventory through an SPE. The SPE financed the development and construction with a four-year bank mortgage note. During the first quarter of 2017, the third-party partner met certain conditions of the agreement, which resulted in the Company committing to purchase $51 million of VOI inventory located in Clearwater, Florida, from the SPE over a two-year period. Such proceeds from the purchase will be used by the SPE to repay the mortgage notes. The Company is considered to be the primary beneficiary for specified assets and liabilities of the SPE and, therefore, the Company consolidated such assets and liabilities within its financial statements. As of June 30, 2017, the Company’s obligation under the notes was $35 million, with principal and interest payable tri-annually (see Note 7 - Variable Interest Entities for further details). Commercial Paper The Company maintains U.S. and European commercial paper programs with a total capacity of $750 million and $500 million, respectively. As of June 30, 2017, the Company had outstanding borrowings of $355 million at a weighted average interest rate of 1.72%, all of which were under its U.S. commercial paper program. As of December 31, 2016, the Company had outstanding borrowings of $427 million at a weighted average interest rate of 1.36%, all of which were under its U.S. commercial paper program. The Company considers outstanding borrowings under its commercial paper programs to be a reduction of available capacity on its revolving credit facility. Fair Value Hedges During the first quarter of 2017, the Company entered into pay-variable/receive-fixed interest rate swap agreements (the “Swaps”) on its 4.50% senior unsecured notes with notional amounts of $400 million. The fixed interest rates on these notes were effectively modified to a variable LIBOR-based index. As of June 30, 2017, the variable interest rates on the notional portion of the 4.50% senior unsecured notes were 3.39%. The aggregate fair value of the Swaps resulted in $3 million of assets as of June 30, 2017, which were included within other non-current assets on the Condensed Consolidated Balance Sheet. During 2013, the Company entered into pay-variable/receive-fixed interest rate swap agreements on its 3.90% and 4.25% senior unsecured notes with notional amounts of $400 million and $100 million, respectively. The fixed interest rates on these notes were effectively modified to a variable LIBOR-based index. During May 2015, the Company terminated the Swaps resulting in a gain of $17 million, which is being amortized over the remaining life of the senior unsecured notes as a reduction to interest expense on the Condensed Consolidated Statements of Income. The Company had $10 million and $11 million of deferred gains as of June 30, 2017 and December 31, 2016, respectively, which are included within long-term debt on the Condensed Consolidated Balance Sheets. Maturities and Capacity The Company’s outstanding debt as of June 30, 2017 matures as follows:
Maturities of the securitized vacation ownership debt are based on the contractual payment terms of the underlying vacation ownership contract receivables. As such, actual maturities may differ as a result of prepayments by the vacation ownership contract receivable obligors. As of June 30, 2017, available capacity under the Company’s borrowing arrangements was as follows:
Early Extinguishment of Debt During the first quarter of 2016, the Company redeemed the remaining portion of its 6.00% senior unsecured notes for a total of $327 million. As a result, the Company incurred an $11 million loss during the six months ended June 30, 2016, which is included within early extinguishment of debt on the Condensed Consolidated Statement of Income. Interest Expense During the three and six months ended June 30, 2017, the Company incurred non-securitized interest expense of $39 million and $73 million, respectively, which primarily consisted of $39 million and $74 million of interest on long-term debt, partially offset by less than $1 million and $1 million of capitalized interest. Such amounts are included within interest expense on the Condensed Consolidated Statements of Income. Cash paid related to interest on the Company’s non-securitized debt was $69 million during the six months ended June 30, 2017. During the three and six months ended June 30, 2016, the Company incurred non-securitized interest expense of $34 million and $68 million, respectfully, which primarily consisted of $36 million and $71 million of interest on long-term debt, partially offset by $2 million and $3 million of capitalized interest. Such amounts are included within interest expense on the Condensed Consolidated Statements of Income. Cash paid related to interest on the Company’s non-securitized debt was $70 million during the six months ended June 30, 2016. Interest expense incurred in connection with the Company’s securitized vacation ownership debt during the three and six months ended June 30, 2017 was $19 million and $37 million, respectively, and $19 million and $36 million during the three and six months ended June 30, 2016, respectively, and is recorded within consumer financing interest on the Condensed Consolidated Statements of Income. Cash paid related to such interest was $25 million for the six months ended June 30, 2017 and 2016. |
Variable Interest Entities |
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Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities |
In accordance with the applicable accounting guidance for the consolidation of a variable interest entity (“VIE”), the Company analyzes its variable interests, including loans, guarantees, SPEs and equity investments to determine if an entity in which the Company has a variable interest is a VIE. If the entity is considered to be a VIE, the Company determines whether it would be considered the entity’s primary beneficiary. The Company consolidates into its financial statements those VIEs for which it has determined that it is the primary beneficiary. Vacation Ownership Contract Receivables Securitizations The Company pools qualifying vacation ownership contract receivables and sells them to bankruptcy-remote entities. Vacation ownership contract receivables qualify for securitization based primarily on the credit strength of the VOI purchaser to whom financing has been extended. Vacation ownership contract receivables are securitized through bankruptcy-remote SPEs that are consolidated within its financial statements. As a result, the Company does not recognize gains or losses resulting from these securitizations at the time of sale to the SPEs. Interest income is recognized when earned over the contractual life of the vacation ownership contract receivables. The Company services the securitized vacation ownership contract receivables pursuant to servicing agreements negotiated on an arms-length basis based on market conditions. The activities of these SPEs are limited to (i) purchasing vacation ownership contract receivables from the Company’s vacation ownership subsidiaries, (ii) issuing debt securities and/or borrowing under a conduit facility to fund such purchases and (iii) entering into derivatives to hedge interest rate exposure. The bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to creditors of the Company and legally are not assets of the Company. Additionally, the non-recourse debt that is securitized through the SPEs is legally not a liability of the Company and thus, the creditors have no recourse to the Company for principal and interest. The assets and liabilities of these vacation ownership SPEs are as follows:
In addition, the Company has vacation ownership contract receivables that have not been securitized through bankruptcy-remote SPEs. Such gross receivables were $991 million and $909 million as of June 30, 2017 and December 31, 2016, respectively. A summary of total vacation ownership contract receivables and other securitized assets, net of securitized liabilities and the allowance for loan losses, is as follows:
In addition to restricted cash related to securitizations, the Company had $120 million and $59 million of restricted cash related to escrow deposits as of June 30, 2017 and December 31, 2016, respectively, which are recorded within other current assets on the Condensed Consolidated Balance Sheets. Midtown 45, NYC Property During 2013, the Company entered into an agreement with a third-party partner whereby the partner acquired the Midtown 45 property in New York City through an SPE. The Company is managing and operating the property for rental purposes while the Company converts it into VOI inventory. The SPE financed the acquisition and planned renovations with a four-year mortgage note and mandatorily redeemable equity provided by related parties of such partner. At the time of the agreement, the Company committed to purchase such VOI inventory from the SPE over a four-year period. Such proceeds from the purchase were used by the SPE to repay the four-year mortgage note and the mandatorily redeemable equity. The Company is considered to be the primary beneficiary of the SPE and therefore, the Company consolidated the SPE within its financial statements. During the first quarter of 2017, the Company made its final purchase of VOI inventory from the SPE. Clearwater, FL Property During 2015, the Company entered into an agreement with a third-party partner whereby the partner would develop and construct VOI inventory through an SPE. During the first quarter of 2017, the third-party partner met certain conditions of the agreement, which resulted in the Company committing to purchase $51 million of VOI inventory from the SPE over a two-year period. Such proceeds from the purchase will be used by the SPE to repay the mortgage notes. The Company is considered to be the primary beneficiary for specified assets and liabilities of the SPE and, therefore, the Company consolidated (non-cash) $51 million of both property and equipment and long-term debt on its Condensed Consolidated Balance Sheet. The assets and liabilities of the Clearwater, FL Property and the Midtown 45, NYC Property SPEs are as follows:
During the six months ended June 30, 2017 and 2016, the SPE conveyed $30 million and $15 million, respectively, of property and equipment to the Company. |
Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value |
The Company measures its financial assets and liabilities at fair value on a recurring basis and utilizes the fair value hierarchy to determine such fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable. Level 3: Unobservable inputs used when little or no market data is available. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input (closest to Level 3) that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of June 30, 2017, the Company had interest rate swap contracts resulting in $3 million of assets which are included within other non-current assets and foreign exchange contracts resulting in $2 million of assets which are included within other current assets and $1 million of liabilities which are included within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet. As of December 31, 2016, the Company had foreign exchange contracts resulting in $1 million of assets which are included within other current assets and $1 million of liabilities which are included within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet. On a recurring basis, such assets and liabilities are remeasured at estimated fair value (all of which are Level 2) and thus are equal to the carrying value. The Company’s derivative instruments primarily consist of pay-fixed/receive-variable interest rate swaps, pay-variable/receive-fixed interest rate swaps, interest rate caps, foreign exchange forward contracts and foreign exchange average rate forward contracts. For assets and liabilities that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using other significant observable inputs are valued by reference to similar assets and liabilities. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets and liabilities in active markets. For assets and liabilities that are measured using significant unobservable inputs, fair value is primarily derived using a fair value model, such as a discounted cash flow model. The fair value of financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The carrying amounts of cash and cash equivalents, restricted cash, trade receivables, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The carrying amounts and estimated fair values of all other financial instruments are as follows:
The Company estimates the fair value of its vacation ownership contract receivables using a discounted cash flow model which it believes is comparable to the model that an independent third-party would use in the current market. The model uses Level 3 inputs consisting of default rates, prepayment rates, coupon rates and loan terms for the contract receivables portfolio as key drivers of risk and relative value that, when applied in combination with pricing parameters, determines the fair value of the underlying contract receivables. The Company estimates the fair value of its securitized vacation ownership debt by obtaining Level 2 inputs comprised of indicative bids from investment banks that actively issue and facilitate the secondary market for timeshare securities. The Company estimates the fair value of its other long-term debt, excluding capital leases, using Level 2 inputs based on indicative bids from investment banks and determines the fair value of its senior notes using quoted market prices (such senior notes are not actively traded). |
Derivative Instruments And Hedging Activities |
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Jun. 30, 2017 | |||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative Instruments And Hedging Activities |
Foreign Currency Risk The Company has foreign currency rate exposure to exchange rate fluctuations worldwide with particular exposure to the British pound, Euro and the Canadian and Australian dollars. The Company uses freestanding foreign currency forward contracts to manage a portion of its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables, payables, forecasted earnings of foreign subsidiaries and intercompany borrowings that are denominated in currencies other than the Company’s underlying functional currency. During the first quarter of 2017, the Company undertook an internal restructuring to realign the capital structure of certain subsidiaries to minimize the exposure to changes in foreign currency exchange on certain intercompany borrowings. Additionally, the Company uses foreign currency forward contracts designated as cash flow hedges to manage a portion of its exposure to changes in forecasted foreign currency denominated vendor payments. Gains and losses relating to freestanding foreign currency contracts are included in operating expenses on the Company’s Condensed Consolidated Statements of Income and are substantially offset by the earnings effect from the underlying items that were economically hedged. The freestanding foreign currency contracts resulted in $1 million of gains and $6 million of losses during the three months ended June 30, 2017 and 2016, respectively. The freestanding foreign currency contracts resulted in $2 million of gains and $10 million of losses during the six months ended June 30, 2017 and 2016, respectively. The amount of gains or losses relating to contracts designated as cash flow hedges that the Company expects to reclassify from accumulated other comprehensive income (“AOCI”) to earnings over the next 12 months is not material. Interest Rate Risk A portion of the debt used to finance the Company’s operations is exposed to interest rate fluctuations. The Company uses various hedging strategies and derivative financial instruments to create a desired mix of fixed and floating rate assets and liabilities. Derivative instruments currently used in these hedging strategies include swaps and interest rate caps. The derivatives used to manage the risk associated with the Company’s floating rate debt include freestanding derivatives and derivatives designated as cash flow hedges. The Company also uses swaps to convert specific fixed-rate debt into variable-rate debt (i.e., fair value hedges) to manage the overall interest cost. For relationships designated as fair value hedges, changes in the fair value of the derivatives are recorded in income with offsetting adjustments to the carrying amount of the hedged debt. The amount of gains or losses that the Company expects to reclassify from AOCI to earnings during the next 12 months is not material. Gains or losses recognized in AOCI for the three and six months ended June 30, 2017 and 2016 were not material. |
Income Taxes |
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Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||
Income Taxes |
The Company files income tax returns in the U.S. federal and state jurisdictions, as well as in foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2013. In addition, with few exceptions, the Company is no longer subject to state and local, or foreign income tax examinations for years prior to 2009. The Company’s effective tax rates were 29.7% and 36.3% during the three months ended June 30, 2017 and 2016, respectively. The decrease was principally due to (i) the impact of non-cash impairment charges primarily related to the write-down of undeveloped VOI land, (ii) a tax benefit recognized from an internal restructuring undertaken to realign the organizational and capital structure of certain foreign operations, and (iii) a tax benefit associated with the recently adopted stock-based compensation pronouncement during 2017. The Company’s effective tax rates were 22.6% and 38.3% during the six months ended June 30, 2017 and 2016, respectively. The decrease was principally due to (i) a tax benefit on foreign currency losses recognized from an internal restructuring undertaken to realign the organizational and capital structure of certain foreign operations, (ii) the impact of non-cash impairment charges primarily related to the write-down of undeveloped VOI land, and (iii) a tax benefit associated with the recently adopted stock-based compensation pronouncement during 2017. The Company made cash income tax payments, net of refunds, of $155 million and $65 million during the six months ended June 30, 2017 and 2016, respectively. |
Commitments And Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments And Contingencies |
The Company is involved in claims, legal and regulatory proceedings and governmental inquiries related to the Company’s business. Wyndham Worldwide Corporation Litigation The Company is involved in claims, legal and regulatory proceedings and governmental inquiries arising in the ordinary course of its business including but not limited to: for its hotel group business-breach of contract, fraud and bad faith claims between franchisors and franchisees in connection with franchise agreements and with owners in connection with management contracts, negligence, breach of contract, fraud, employment, consumer protection and other statutory claims asserted in connection with alleged acts or occurrences at owned, franchised or managed properties or in relation to guest reservations and bookings; for its destination network business-breach of contract, fraud and bad faith claims by affiliates and customers in connection with their respective agreements, negligence, breach of contract, fraud, consumer protection and other statutory claims asserted by members and guests for alleged injuries sustained at or acts or occurrences related to affiliated resorts and vacation rental properties and consumer protection and other statutory claims asserted by consumers; for its vacation ownership business-breach of contract, bad faith, conflict of interest, fraud, consumer protection and other statutory claims by property owners’ associations, owners and prospective owners in connection with the sale or use of VOIs or land, or the management of vacation ownership resorts, construction defect claims relating to vacation ownership units or resorts, and negligence, breach of contract, fraud, consumer protection and other statutory claims by guests for alleged injuries sustained at or acts or occurrences related to vacation ownership units or resorts; and for each of its businesses, bankruptcy proceedings involving efforts to collect receivables from a debtor in bankruptcy, employment matters which may include claims of wrongful termination, retaliation, discrimination, harassment and wage and hour claims, claims of infringement upon third parties’ intellectual property rights, claims relating to information security, privacy and consumer protection, fiduciary duty/trust claims, tax claims, environmental claims and landlord/tenant disputes. The Company records an accrual for legal contingencies when it determines, after consultation with outside counsel, that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations, the Company evaluates, among other things, the degree of probability of an unfavorable outcome and, when it is probable that a liability has been incurred, the Company’s ability to make a reasonable estimate of loss. The Company reviews these accruals each reporting period and makes revisions based on changes in facts and circumstances including changes to its strategy in dealing with these matters. The Company believes that it has adequately accrued for such matters with reserves of $45 million and $40 million as of June 30, 2017 and December 31, 2016, respectively. Such reserves are exclusive of matters relating to the Company’s separation from Cendant (“Separation”). For matters not requiring accrual, the Company believes that such matters will not have a material effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to the Company with respect to earnings and/or cash flows in any given reporting period. The Company had receivables of $16 million and $20 million as of June 30, 2017 and December 31, 2016, respectively, for certain matters which are covered by insurance and were included in other current assets on its Condensed Consolidated Balance Sheets. As of June 30, 2017, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to $63 million in excess of recorded accruals. However, the Company does not believe that the impact of such litigation should result in a material liability to the Company in relation to its consolidated financial position or liquidity. Other Guarantees/Indemnifications Hotel Group From time to time, the Company may enter into a hotel management agreement that provides the hotel owner with a guarantee of a certain level of profitability based upon various metrics. Under such an agreement, the Company would be required to compensate such hotel owner for any profitability shortfall over the term of the guarantee and/or the life of the management agreement up to a specified aggregate amount. For certain agreements, the Company may be able to recapture all or a portion of the shortfall payments in the event that future operating results exceed targets. The original terms of the Company’s existing guarantees range from 8 to 10 years. As of June 30, 2017, the Company had three guarantees for which the maximum potential amount of future payments that the Company may be required to fund was $114 million with a combined annual cap of $27 million. These guarantees have a remaining life of approximately 6 to 8 years with a weighted average life of approximately 6 years. One of the guarantees has a recapture provision and, as such, the Company had receivables of $5 million and $4 million as of June 30, 2017 and December 31, 2016, respectively, which were included within other non-current assets on its Condensed Consolidated Balance Sheets. Such receivables were the result of payments made to date that are subject to recapture and which the Company believes will be recoverable from future operating performance. As of June 30, 2017, the Company has an additional guarantee with a recapture provision under which the Company may be required to fund a maximum of $36 million. Such guarantee terminates in July 2020. The related hotel management agreement, which terminates in July 2038, also provides that the Company may have to fund future operating profitability shortfalls in excess of the maximum guarantee through the term of the management agreement. In the event the Company chooses not to fund any future operating profitability shortfalls, the hotel owner may terminate the hotel management agreement without penalty and the Company would be required to pay liquidated damages. The Company had a $38 million receivable related to this guarantee as of June 30, 2017, of which $5 million was included in other current assets and $33 million was included in other non-current assets on its Condensed Consolidated Balance Sheet. As of December 31, 2016, the Company had a $32 million receivable related to this guarantee which was included in other non-current assets on its Condensed Consolidated Balance Sheet. Such receivables were the result of payments made to date that are subject to recapture and which the Company believes will be recoverable from future operating performance. In connection with such performance guarantees, as of June 30, 2017, the Company maintained a liability of $20 million, of which $16 million was included in other non-current liabilities and $4 million was included in accrued expenses and other current liabilities on its Condensed Consolidated Balance Sheet. As of June 30, 2017, the Company also had a corresponding $30 million asset related to these guarantees, of which $26 million was included in other non-current assets and $4 million was included in other current assets on its Condensed Consolidated Balance Sheet. As of December 31, 2016, the Company maintained a liability of $24 million, of which $17 million was included in other non-current liabilities and $7 million was included in accrued expenses and other current liabilities on its Condensed Consolidated Balance Sheet. As of December 31, 2016, the Company also had a corresponding $32 million asset related to the guarantees, of which $28 million was included in other non-current assets and $4 million was included in other current assets on its Condensed Consolidated Balance Sheet. Such assets are being amortized on a straight-line basis over the life of the agreements. The amortization expense for the performance guarantees noted above was $1 million for the three months ended June 30, 2017 and 2016, respectively, and $2 million for the six months ended June 30, 2017 and 2016, respectively. Vacation Ownership The Company has guaranteed to repurchase completed properties located in Las Vegas, Nevada and St. Thomas from third-party developers subject to such properties meeting the Company’s vacation ownership resort standards and provided that the third-party developers have not sold such properties to another party (see Note 5 - Inventory). Cendant Litigation Under the Separation agreement, the Company agreed to be responsible for 37.5% of certain of Cendant’s contingent and other corporate liabilities and associated costs, including certain contingent litigation. Since the Separation, Cendant settled the majority of the lawsuits pending on the date of the Separation. See Note 17 - Separation Adjustments and Transactions with Former Parent and Subsidiaries regarding contingent litigation liabilities resulting from the Separation. |
Accumulated Other Comprehensive (Loss)/Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss)/Income |
The components of AOCI are as follows:
Currency translation adjustments exclude income taxes related to investments in foreign subsidiaries where the Company intends to reinvest the undistributed earnings indefinitely in those foreign operations. |
Stock-Based Compensation |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
The Company has a stock-based compensation plan available to grant RSUs, PSUs, SSARs and other stock-based awards to key employees, non-employee directors, advisors and consultants. Under the Wyndham Worldwide Corporation 2006 Equity and Incentive Plan, as amended, a maximum of 36.7 million shares of common stock may be awarded. As of June 30, 2017, 15.4 million shares remained available. Incentive Equity Awards Granted by the Company The activity related to incentive equity awards granted by the Company for the six months ended June 30, 2017 consisted of the following:
During the six months ended June 30, 2017, the Company granted incentive equity awards totaling $59 million to key employees and senior officers in the form of RSUs. These awards will vest ratably over a period of four years. In addition, during the six months ended June 30, 2017, the Company granted incentive equity awards totaling $22 million to key employees and senior officers in the form of PSUs. These awards cliff vest on the third anniversary of the grant date, contingent upon the Company achieving certain performance metrics. Stock-Based Compensation Expense The Company adopted the stock compensation guidance on January 1, 2017, as required. The Company elected to use the prospective transition method and as such, the excess tax benefits from stock-based compensation was presented as part of operating activities within its current period Condensed Consolidated Statement of Cash Flows. In addition during the three and six months ended June 30, 2017, the Company included a net benefit of $2 million and $6 million, respectively, within provision for income taxes on the Condensed Consolidated Statements of Income. The Company recorded stock-based compensation expense of $15 million and $30 million during the three and six months ended June 30, 2017, respectively, and $22 million and $36 million during the three and six months ended June 30, 2016, respectively, related to incentive equity awards granted to key employees and senior officers. The Company also recorded stock-based compensation expense for non-employee directors of less than $1 million during the three months ended June 30, 2017 and 2016 and $1 million during the six months ended June 30, 2017 and 2016. Additionally, $1 million of stock-based compensation expense was recorded within restructuring expense during the six months ended June 30, 2017. The Company paid $34 million of taxes for the net share settlement of incentive equity awards during the six months ended June 30, 2017 and 2016. Such amounts are included within financing activities on the Condensed Consolidated Statements of Cash Flows. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. 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 Condensed Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for its industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.
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Asset Impairments and Other Charges |
6 Months Ended |
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Jun. 30, 2017 | |
Impairment Effects on Earnings Per Share [Line Items] | |
Asset Impairment Charges [Text Block] | Asset Impairments and Other Charges Asset Impairments During May 2017, the Company’s new leadership at its vacation ownership business performed an in-depth review of its operations, including its current development pipeline and long-term development plan. In connection with such review, the Company updated its current and long-term development plan to focus on (i) selling existing finished inventory and (ii) procuring inventory from efficient sources such as just-in-time inventory in new markets and reclaiming inventory from owners’ associations or owners. As a result, the Company’s management performed a review of its land held for vacation ownership interests (“VOI”) development. Such review consisted of an assessment on 19 locations to determine its plan for future VOI development at those sites. As a result of this assessment, the Company concluded that no future development would occur at 17 locations, of which 16 were deemed to be impaired. The Company performed a fair value assessment on the land held for VOI development which resulted in a $121 million non-cash impairment charge during the second quarter of 2017. In addition, the Company also recorded a $14 million non-cash impairment charge relating to the write-off of construction in process costs at 6 of the 16 impaired locations. As a result, the Company reported a total non-cash impairment charge of $135 million, which is included within asset impairments and other charges on the Condensed Consolidated Statements of Income. In conjunction with this review and impairment, in May 2017, the Company sold 3 of the 17 locations, as well as non-core revenue generating assets to a former executive of the Company for $2 million of cash consideration which resulted in a $7 million loss. The Company also has an agreement with the former executive to sell an additional 2 of the 17 locations for $2 million resulting in a $13 million non-cash impairment charge. Such transaction is to be completed no later than December 31, 2017. The $7 million loss and $13 million non-cash impairment charge on the expected sale were included within the total non-cash impairment charge of $135 million. The Company had $19 million of land classified as assets held for sale as of June 30, 2017 which was included within other current assets on the Company’s Consolidated Condensed Balance Sheet. The fair value of the land held for sale was determined by reviewing prices of comparable assets which were recently sold and by actual purchase and sale agreements for the assets to be sold which represents level 3 fair value measurements. The land held for sale locations are currently being actively marketed at estimated fair value and are expected to be sold within a year. The Company has entered into a three year agreement with the former executive whereby such executive may assist the Company in selling the land held for sale. As part of such agreement, the former executive will be entitled to receive brokerage commissions upon the sale of land classified as assets held for sale. During the six months ended June 30, 2017, the Company incurred a $5 million non-cash impairment charge related to the write-down of assets resulting from the decision to abandon a new product initiative at the Company’s vacation ownership business. Such charge is recorded within asset impairments on the Condensed Consolidated Statement of Income. Other Charges During the six months ended June 30, 2016, the Company incurred a $24 million foreign exchange loss, primarily impacting cash, resulting from the Venezuelan government’s decision to devalue the exchange rate of its currency. Such loss is recorded within operating expenses on the Condensed Consolidated Statement of Income. |
Restructuring |
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Restructuring Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring |
2017 Restructuring Plans During the first quarter of 2017, the Company recorded $7 million of restructuring charges, all of which were personnel-related and consisted of (i) $6 million at its corporate operations which focused on rationalizing its sourcing function and outsourcing certain information technology functions and (ii) $1 million at its Hotel Group segment which primarily focused on realigning its brand operations. During the six months ended June 30, 2017, the Company reduced its liability by $5 million, of which $4 million was in cash payments and $1 million was through the issuance of Wyndham stock. The remaining liability of $2 million, as of June 30, 2017, is expected to be paid by the end of 2017. 2016 Restructuring Plans During 2016, the Company recorded $15 million of charges related to restructuring initiatives, primarily focused on enhancing organizational efficiency and rationalizing existing facilities which included the closure of four vacation ownership sales offices. In connection with these initiatives, the Company initially recorded $12 million of personnel-related costs, a $2 million non-cash charge and $2 million of facility-related expenses. In 2016, the Company subsequently reversed $1 million of previously recorded personnel-related costs and reduced its liability with $5 million of cash payments. During the six months ended June 30, 2017, the Company reduced its liability with $5 million of cash payments. The remaining liability of $3 million, as of June 30, 2017, is primarily related to leased facilities, and is expected to be paid by the end of 2019. The Company has additional restructuring plans which were implemented prior to 2016. The remaining liability of $1 million as of June 30, 2017, all of which is related to leased facilities, is expected to be paid by 2020. The activity associated with all of the Company’s restructuring plans is summarized by category as follows:
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Separation Adjustments and Transactions with Former Parent and Subsidiaries |
6 Months Ended | ||||
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Jun. 30, 2017 | |||||
Related Party Transaction, Due from (to) Related Party [Abstract] | |||||
Separation Adjustments and Transactions with Former Parent and Subsidiaries |
Transfer of Cendant Corporate Liabilities and Issuance of Guarantees to Cendant and Affiliates Pursuant to the Separation and Distribution Agreement, upon the distribution of the Company’s common stock to Cendant shareholders, the Company entered into certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify Cendant, Realogy and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with each of Cendant and Realogy. These guarantee arrangements primarily relate to certain contingent litigation liabilities, contingent tax liabilities, and Cendant contingent and other corporate liabilities, of which the Company assumed and is responsible for 37.5% while Realogy is responsible for the remaining 62.5%. The remaining amount of liabilities which were assumed by the Company in connection with the Separation was $23 million as of both June 30, 2017 and December 31, 2016. These amounts were comprised of certain Cendant corporate liabilities which were recorded on the books of Cendant as well as additional liabilities which were established for guarantees issued at the date of Separation, related to unresolved contingent matters and others that could arise during the guarantee period. Regarding the guarantees, if any of the companies responsible for all or a portion of such liabilities were to default in its payment of costs or expenses related to any such liability, the Company would be responsible for a portion of the defaulting party or parties’ obligation(s). The Company also provided a default guarantee related to certain deferred compensation arrangements related to certain current and former senior officers and directors of Cendant, Realogy and Travelport. These arrangements were valued upon the Separation in accordance with the guidance for guarantees and recorded as liabilities on the Condensed Consolidated Balance Sheets. To the extent such recorded liabilities are not adequate to cover the ultimate payment amounts, such excess will be reflected as an expense to the results of operations in future periods. As a result of the sale of Realogy on April 10, 2007, Realogy was required to post a letter of credit in an amount acceptable to the Company and Avis Budget Group (formerly known as Cendant) to satisfy its obligations for the Cendant legacy contingent liabilities. As of June 30, 2017, the letter of credit was $53 million. As of June 30, 2017, the Separation related liabilities of $23 million is comprised of $20 million for tax liabilities, $1 million for other contingent and corporate liabilities and $2 million of liabilities where the calculated guarantee amount exceeded the contingent liability assumed at the Separation Date. In connection with these liabilities, as of June 30, 2017, $10 million was recorded within accrued expenses and other current liabilities and $13 million was recorded within other non-current liabilities on the Condensed Consolidated Balance Sheet. As of December 31, 2016, the Company had $23 million of Separation related liabilities of which $10 million was recorded within accrued expenses and other current liabilities and $13 million was recorded within other non-current liabilities on the Condensed Consolidated Balance Sheet. The Company will indemnify Cendant for these contingent liabilities and therefore any payments made to the third-party would be through the former Parent. The actual timing of payments relating to these liabilities is dependent on a variety of factors beyond the Company’s control. In addition, the Company had $1 million of receivables due from former Parent and subsidiaries primarily relating to income taxes, as of both June 30, 2017 and December 31, 2016, which were included within other current assets on the Condensed Consolidated Balance Sheets. |
Subsequent Event |
6 Months Ended |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event AmericInn Acquisition On July 18, 2017, the Company announced its plan to acquire the AmericInn hotel brand and its management company, Three Rivers Hospitality, from Northcott Hospitality for $170 million. AmericInn’s portfolio consists of 200 primarily franchised hotels predominately in the Midwestern United States. The Company intends to explore options to divest the owned portfolio, which consists of 10 hotels. The transaction is subject to regulatory and government approval and the satisfaction of customary closing conditions. Spin-Off Transaction On August 2, 2017, the Company announced plans to spin-off its hotel business thus creating two separate, publicly traded companies. As a result of the proposed transaction, Wyndham Hotel Group, with headquarters in Parsippany, NJ, will be a new, publicly traded pure-play hotel franchise company with a portfolio of renowned brands. Wyndham Vacation Ownership, with headquarters in Orlando, Florida, will be the largest publicly traded timeshare company and will include Wyndham Destination Network, home to RCI, the world’s largest timeshare exchange company. The Company will also explore strategic alternatives for its European rental brands. The transaction, which is expected to be tax-free to Wyndham Worldwide and its shareholders, will be effected through a pro-rata distribution of the new hotel entity’s stock to existing Wyndham Worldwide shareholders. Wyndham Worldwide expects the transaction to be completed in the first half of 2018. |
Basis of Presentation (Policies) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Wyndham Worldwide Corporation (“Wyndham” or the “Company”) is a global provider of hospitality services and products. The accompanying Condensed Consolidated Financial Statements include the accounts and transactions of Wyndham, as well as the entities in which Wyndham directly or indirectly has a controlling financial interest. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2016 Consolidated Financial Statements included in its Annual Report filed on Form 10-K with the Securities and Exchange Commission on February 17, 2017. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the statement of financial position. The Company currently expects to adopt the new guidance utilizing the full retrospective transition method on its effective date of January 1, 2018. The Company’s analysis to identify the impact of the new guidance is substantially complete, with the exception of its Wyndham Rewards loyalty and co-branded credit card programs which the Company is still awaiting industry clarification. The Company estimates that its net revenues and net income for the year ended 2016 would be reduced by $5 million to $10 million, which would be recognized in future years. Additionally, the Company expects a change in the seasonality of its revenues and net income primarily reflecting a shift of revenues and net income from the first quarter to the third quarter. The Company believes the most significant impacts relating to its Hotel Group segment are the accounting for initial fees, upfront costs and marketing and reservation expenses. The Company expects royalty and marketing and reservation fees to remain substantially unchanged. Specifically, under the new guidance, the Company expects initial fees to be recognized ratably over the life of the noncancelable period of the franchise agreement and incremental upfront contract costs to be deferred and expensed over the life of the noncancelable period of the franchise agreement. Marketing and reservation revenues earned in excess of costs incurred will no longer be accrued as a liability for future marketing and reservation costs; marketing or reservation costs incurred in excess of revenues earned will continue to be expensed as incurred. The Company believes the most significant impacts relating to its Destination Network segment are the accounting for vacation rental revenues and other vacation exchange related product fees. Specifically, under the new guidance, the Company expects (i) approximately thirty percent of its vacation rental revenue will no longer be recognized in the period that the rental reservation is booked and, instead, will be recognized over the term of the guest stay and (ii) other vacation exchange related product fees to be deferred and recognized upon the occurrence of a future vacation exchange or other transaction. The Company expects vacation exchange transaction and membership fees to remain substantially unchanged. The Company expects the recognition of its Vacation Ownership segment revenues to remain substantially unchanged, with the exception of (i) revenue from certain travel packages utilized to market its VOI products which will be presented on a gross basis within other revenues and (ii) a reduction of property management revenues by the proportionate share of maintenance fees paid on its unsold inventory. Leases. In February 2016, the FASB issued guidance which requires companies generally to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Financial Instruments - Credit Losses. In June 2016, the FASB issued guidance which amends the guidance on measuring credit losses on financial assets held at amortized cost. The guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Statement of Cash Flows. In August 2016, the FASB issued guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance requires the retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company believes the impact of this new guidance will result in development advance notes being recorded within operating activities on its Condensed Consolidated Statement of Cash Flows. Restricted Cash. In November 2016, the FASB issued guidance which requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company will adopt this new guidance on January 1, 2018, using a retrospective transition method. The Company believes the impact of the new restricted cash guidance will result in escrow deposits and restricted cash being included with cash and cash equivalents on the statement of cash flows. The table below summarizes the effects of the new statement of cash flows and restricted cash guidance on the Company’s Condensed Consolidated Statements of Cash Flows
Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued guidance which requires companies to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance requires the modified retrospective approach and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Clarifying the Definition of a Business. In January 2017, the FASB issued guidance clarifying the definition of a business, which assists entities when evaluating whether transactions should be accounted for as acquisitions of businesses or assets. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued guidance which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Compensation - Stock Compensation. In May 2017, the FASB issued guidance which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This guidance does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Recently Adopted Accounting Pronouncements Simplifying the Measurement of Inventory. In July 2015, the FASB issued guidance related to simplifying the measurement of inventory. This guidance requires an entity to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This guidance is effective prospectively for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2017, as required. There was no material impact on its financial statements and related disclosures. Compensation - Stock Compensation. In March 2016, the FASB issued guidance which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance on January 1, 2017, as required. The Company elected to use the prospective transition method and as such, the excess tax benefits from stock-based compensation were presented as part of operating activities within its current period Condensed Consolidated Statement of Cash Flows. In addition, the excess tax benefit of $2 million and $6 million has been recognized within the provision for income taxes for the three and six months ended June 30, 2017, respectively, on the Condensed Consolidated Statement of Income. |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncement, Early Adoption | The table below summarizes the effects of the new statement of cash flows and restricted cash guidance on the Company’s Condensed Consolidated Statements of Cash Flows
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Earnings Per Share (Tables) |
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Earnings Per Share Reconciliation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation Of Basic And Diluted EPS | The following table sets forth the computation of basic and diluted EPS (in millions, except share data):
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Current Stock Repurchase Program | The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data):
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Vacation Ownership Contract Receivables (Tables) |
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Vacation Ownership Contract Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current And Long-Term Vacation Ownership Contract Receivables | Current and long-term vacation ownership contract receivables, net consisted of:
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Allowance For Loan Losses On Vacation Ownership Contract Receivables | The activity in the allowance for loan losses on vacation ownership contract receivables was as follows:
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Summary Of The Aged Analysis Of Financing Receivables Using The Most Recently Updated FICO Scores | The following table details an aged analysis of financing receivables using the most recently updated FICO scores (based on the policy described above):
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory consisted of:
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Long-Term Debt And Borrowing Arrangements (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The Company’s indebtedness consisted of:
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Summary Of Outstanding Debt Maturities | The Company’s outstanding debt as of June 30, 2017 matures as follows:
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Summary Of Available Capacity Under Borrowing Arrangements | As of June 30, 2017, available capacity under the Company’s borrowing arrangements was as follows:
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Variable Interest Entities (Tables) |
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Summary Of Total Vacation Ownership Receivables And Other Securitized Assets, Net Of Securitized Liabilities And Allowance For Loan Losses | A summary of total vacation ownership contract receivables and other securitized assets, net of securitized liabilities and the allowance for loan losses, is as follows:
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Vacation Ownership SPEs [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Assets and Liabilities of SPEs | The assets and liabilities of these vacation ownership SPEs are as follows:
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Assets and Liabilities of SPEs | The assets and liabilities of the Clearwater, FL Property and the Midtown 45, NYC Property SPEs are as follows:
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Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts and Estimated Fair Values of Financial Instruments | The carrying amounts and estimated fair values of all other financial instruments are as follows:
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Accumulated Other Comprehensive (Loss)/Income (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Accumulated Other Comprehensive (Loss)/Income | The components of AOCI are as follows:
|
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Equity Awards Granted By The Company | The activity related to incentive equity awards granted by the Company for the six months ended June 30, 2017 consisted of the following:
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Segment Information | The Company believes that EBITDA is a useful measure of performance for its industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.
|
Restructuring (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related To The Restructuring Costs | The activity associated with all of the Company’s restructuring plans is summarized by category as follows:
|
Basis of Presentation Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Tax benefit | $ 2 | $ 6 | |
Minimum [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Estimated impact on net revenues and net income from new guidance | $ (5) | ||
Maximum [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Estimated impact on net revenues and net income from new guidance | $ (10) |
Basis of Presentation Basis of Presentation (Schedule of Statement of Cash Flows) (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Operating Activities | $ 663 | $ 706 | ||
Investing Activities | (133) | (140) | ||
Accounting Standards Update 2016-09 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Operating Activities | (1) | (3) | ||
Investing Activities | 56 | 44 | ||
Accounting Standards Update 2015-16 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Total Restricted Cash | $ 214 | $ 192 | $ 149 | $ 152 |
Earnings Per Share (Narrative) (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Earnings Per Share Reconciliation [Abstract] | |
Remaining authorized amount under share repurchases | $ 440 |
Earnings Per Share (Current Stock Repurchase Program) (Details) $ / shares in Units, $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
$ / shares
shares
| |
Stock Repurchase Activity [Roll Forward] | |
Shares, As of December 31, 2016 | 112,617,112 |
Shares, As of March 31, 2017 | 116,036,879 |
Stock Repurchase Program [Member] | |
Stock Repurchase Activity [Roll Forward] | |
Shares, As of December 31, 2016 | 88,100,000 |
Cost, As of December 31, 2016 | $ | $ 4,337 |
Average Price, As of December 31, 2016 (in dollars per share) | $ / shares | $ 49.22 |
Shares, For the three months ended March 31, 2017 | 3,400,000 |
Cost, For the three months ended March 31, 2017 | $ | $ 300 |
Average Price, For the three months ended March 31, 2017 (in dollars per share) | $ / shares | $ 87.75 |
Shares, As of March 31, 2017 | 91,500,000 |
Cost, As of March 31, 2017 | $ | $ 4,637 |
Average Price, As of March 31, 2017 (in dollars per share) | $ / shares | $ 50.66 |
Acquisitions (Details) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2017
USD ($)
Acquisition
|
Jun. 30, 2016
USD ($)
|
|
Business Acquisition [Line Items] | ||
Amount to acquire hotel portfolio | $ 15 | $ 0 |
Other Acquisitions [Member] | Destination Network [Member] | ||
Business Acquisition [Line Items] | ||
Businesses acquired | Acquisition | 3 | |
Amount to acquire hotel portfolio | $ 15 | |
Contingent consideration | 1 | |
Other assets | 20 | |
Goodwill acquired | 8 | |
Intangibles | $ 4 | |
Weighted average useful life | 7 years | |
Liabilities | $ 19 | |
Trademarks [Member] | Other Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 3 |
Vacation Ownership Contract Receivables (Narrative) (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
fico_score
|
Jun. 30, 2016
USD ($)
|
|
Vacation Ownership Contract Receivables [Abstract] | ||||
Interest income on securitized receivables | $ 83 | $ 81 | $ 166 | $ 164 |
Originated vacation ownership contract receivables | 640 | 556 | ||
Vacation ownership contract principal collections | $ 443 | 406 | ||
Weighted average interest rate | 13.90% | 13.90% | ||
Provision for loan losses | $ 110 | $ 90 | $ 195 | $ 153 |
FICO score range minimum | fico_score | 300 | |||
FICO score range maximum | fico_score | 850 | |||
Minimum days which Company ceases to accrue interest on VOI contract receivables | 90 days | |||
VOI contract receivable written off as credit loss | 120 days |
Vacation Ownership Contract Receivables (Current And Long-Term Vacation Ownership Contract Receivables) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts, Notes, Loans and Financing Receivables [Line Items] | ||
Current vacation ownership contract receivables | $ 315 | $ 319 |
Less: Allowance for loan losses | 58 | 57 |
Current vacation ownership contract receivables, net | 257 | 262 |
Long-term vacation ownership contract receivables | 3,120 | 3,079 |
Less: Allowance for loan losses | 585 | 564 |
Long-term vacation ownership contract receivables, net | 2,535 | 2,515 |
Securitized [Member] | ||
Accounts, Notes, Loans and Financing Receivables [Line Items] | ||
Current vacation ownership contract receivables | 226 | 235 |
Long-term vacation ownership contract receivables | 2,218 | 2,254 |
Non-Securitized [Member] | ||
Accounts, Notes, Loans and Financing Receivables [Line Items] | ||
Current vacation ownership contract receivables | 89 | 84 |
Long-term vacation ownership contract receivables | $ 902 | $ 825 |
Vacation Ownership Contract Receivables (Allowance For Loan Losses On Vacation Ownership Contract Receivables) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Allowance for Loan Losses [Roll Forward] | ||||
Allowance for loan losses, beginning balance | $ 621 | $ 581 | ||
Provision for loan losses | $ 110 | $ 90 | 195 | 153 |
Contract receivables write-offs, net | (173) | (148) | ||
Allowance for loan losses, ending balance | $ 643 | $ 586 | $ 643 | $ 586 |
Inventory (Summary of Inventory) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Land held for VOI development | $ 4 | $ 146 |
VOI construction in process | 11 | 59 |
Inventory sold subject to conditional repurchase | 92 | 163 |
Completed VOI inventory | 893 | 667 |
Estimated VOI recoveries | 265 | 256 |
Destination network vacation credits and other | 60 | 59 |
Total inventory | 1,325 | 1,350 |
Less: Current portion | 315 | 315 |
Non-current inventory | $ 1,010 | $ 1,035 |
Long-Term Debt And Borrowing Arrangements (Interest Expense Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Debt Instrument [Line Items] | ||||
Interest on long-term debt | $ 39 | $ 36 | $ 74 | $ 71 |
Capitalized interest (less than $1 million for the three months ended June 30, 2017) | 1 | 2 | 1 | 3 |
Long-Term Debt Borrowings And Capitalized Interest [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense incurred | 39 | 34 | 73 | 68 |
Cash paid for interest | 69 | 70 | ||
Securitized Vacation Ownership Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense incurred | $ 19 | $ 19 | 37 | 36 |
Consumer Finance [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash paid for interest | $ 25 | $ 25 |
Long-Term Debt And Borrowing Arrangements (Summary Of Outstanding Debt Maturities) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Within 1 year | $ 689 | |
Between 1 and 2 years | 293 | |
Between 2 and 3 years | 519 | |
Between 3 and 4 years | 1,103 | |
Between 4 and 5 years | 860 | |
Thereafter | 2,296 | |
Long-term debt outstanding | 5,760 | |
Securitized Vacation Ownership Debt [Member] | ||
Debt Instrument [Line Items] | ||
Within 1 year | 185 | |
Between 1 and 2 years | 259 | |
Between 2 and 3 years | 440 | |
Between 3 and 4 years | 187 | |
Between 4 and 5 years | 201 | |
Thereafter | 780 | |
Secured Debt | 2,052 | $ 2,141 |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Within 1 year | 504 | |
Between 1 and 2 years | 34 | |
Between 2 and 3 years | 79 | |
Between 3 and 4 years | 916 | |
Between 4 and 5 years | 659 | |
Thereafter | 1,516 | |
Total long-term debt | 3,708 | $ 3,371 |
5.75% and 2.50% Senior Unsecured Notes [Member] | Other [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 463 |
Long-Term Debt And Borrowing Arrangements (Summary Of Available Capacity Under Borrowing Arrangements) (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Securitized Bank Conduit Facility [Member] | |
Debt Instrument [Line Items] | |
Total capacity | $ 650 |
Revolving credit facility | 404 |
Available Capacity | 246 |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Total capacity | 1,500 |
Revolving credit facility | 9 |
Letters of Credit Outstanding, Amount | 1 |
Commercial paper borrowings | 355 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,135 |
Variable Interest Entities (Summary Of Total Vacation Ownership Receivables And Other Securitized Assets, Net Of Securitized Liabilities And Allowance For Loan Losses) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Schedule Of Transfer And Financial Assets [Line Items] | ||||
SPE assets in excess of SPE liabilities | $ 507 | $ 461 | ||
Less: Allowance for loan losses | 643 | 621 | $ 586 | $ 581 |
Total, net | 855 | 749 | ||
Non Securitized Receivable [Member] | ||||
Schedule Of Transfer And Financial Assets [Line Items] | ||||
Non-securitized contract receivables | $ 991 | $ 909 |
Fair Value (Narrative) (Details) - Recurring Basis [Member] - Fair Value [Member] - Level 2 [Member] - Foreign Exchange Contracts [Member] - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis [Line Items] | ||
Derivative asset | $ 3 | |
Derivative asset | 2 | $ 1 |
Derivative liabilities | $ 1 | $ 1 |
Fair Value (Carrying Amounts And Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Vacation ownership contract receivables, net | $ 16 | $ 20 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Vacation ownership contract receivables, net | 2,792 | 2,777 |
Total debt | 5,760 | 5,512 |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Vacation ownership contract receivables, net | 3,392 | 3,344 |
Total debt | $ 5,905 | $ 5,579 |
Derivative Instruments And Hedging Activities (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Foreign Exchange Contracts [Member] | ||||
Derivative [Line Items] | ||||
Losses on freestanding foreign currency contracts | $ 1 | $ 6 | $ 2 | $ 10 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Effective income tax rate | 29.70% | 36.30% | 22.60% | 38.30% |
Income taxes payments, net of refunds | $ 155 | $ 65 |
Stock-Based Compensation (Narrative) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum shares of common stock to be awarded | 36.7 | 36.7 | ||
Remaining shares available | 15.4 | 15.4 | ||
Tax benefit | $ 2 | $ 6 | ||
Stock-based compensation | 15 | $ 22 | 30 | $ 36 |
Issuance of Stock and Warrants for Services or Claims | $ 1 | 1 | ||
Payment of taxes for net share settlement | 34 | $ 34 | ||
Restructuring Charges [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 1 | |||
RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Approved grants of incentive equity awards | $ 59 | |||
Vesting terms, in years | 4 years | |||
PSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Approved grants of incentive equity awards | $ 22 |
Subsequent Event Subsequent Event (Narrative) (Details) |
6 Months Ended | ||
---|---|---|---|
Jul. 18, 2017
USD ($)
hotel
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Subsequent Event [Line Items] | |||
Amount to acquire hotel portfolio | $ 15,000,000 | $ 0 | |
Subsequent Event [Member] | AmericInn Hotel [Member] | |||
Subsequent Event [Line Items] | |||
Amount to acquire hotel portfolio | $ 170,000,000 | ||
Subsequent Event [Member] | AmericInn Hotel [Member] | Franchised Units [Member] | |||
Subsequent Event [Line Items] | |||
Number of properties | hotel | 200 | ||
Subsequent Event [Member] | AmericInn Hotel [Member] | Entity Operated Units [Member] | |||
Subsequent Event [Line Items] | |||
Amount to acquire hotel portfolio | $ 10 |
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