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This excerpt taken from the WYN 10-Q filed May 7, 2009. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Consolidated Financial
Statements should be read in conjunction with the audited
Consolidated and Combined Financial Statements included in the
Annual Report filed on
Form 10-K
with the SEC on February 27, 2009, which includes a
description of our critical accounting policies that involve
subjective and complex judgments that could potentially affect
reported results. While there have been no material changes to
our critical accounting policies as to the methodologies or
assumptions we apply under them, we continue to monitor such
methodologies and assumptions.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
March 31, 2009 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
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This excerpt taken from the WYN 10-Q filed Nov 10, 2008. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Consolidated Financial
Statements should be read in conjunction with the audited
Consolidated and Combined Financial Statements included in the
Annual Report filed on
Form 10-K
with the SEC on February 29, 2008, which includes a
description of our critical accounting policies that involve
subjective and complex judgments that could potentially affect
reported results. While there have been no material changes to
our critical accounting policies as to the methodologies or
assumptions we apply under them, we continue to monitor such
methodologies and assumptions.
Goodwill
and Other Intangible Assets
We have goodwill and other indefinite-lived intangible assets
recorded in connection with business combinations. We annually
(during the fourth quarter of each year subsequent to completing
our annual forecasting process) or, more frequently if
circumstances indicate impairment may have occurred, review
their carrying values as required by SFAS No. 142,
“Goodwill and Other Intangible Assets”. In performing
this review, we are required to make an assessment of fair value
for our goodwill and other indefinite-lived intangible assets.
When determining fair value, we utilize various assumptions,
including projections of future cash flows. A change in these
underlying assumptions could cause a change in the results of
the tests and, as such, could cause the fair value to be less
than the respective carrying amount. If the estimated fair value
is less than the carrying value, then we must write down the
carrying value to the estimated fair value. As of
September 30, 2008, we had a goodwill balance of
$2,750 million, which represents 73% of our total
stockholders’ equity. Our total goodwill balance of
$2,750 million was comprised of $307 million for our
lodging segment, $1,101 million for our vacation exchange
and rentals segment and $1,342 million for our vacation
ownership segment. As of September 30, 2008, the carrying
value of our net assets was $3.8 billion and the market
value of our outstanding shares was approximately
$2.8 billion. Accordingly, management performed an interim
goodwill impairment test in accordance with SFAS 142 and
concluded that no adjustment was required. Management has
calculated the estimated fair value of Wyndham Worldwide and
each of our three reporting units using various valuation
methods. Management performed a
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discounted cash flow analysis using updated forward-looking
projections of the estimated future operating results of each of
our reporting units and utilizing recent market multiples of
similar companies. In addition, management used the quoted
market price of our equity security over the most recent sixty
day period to September 30, 2008 and added a control
premium that is representative of recent and proposed
transactions in the hospitality sector, as well as, considering
certain qualitative and quantitative macroeconomics conditions
which may have impacted our quoted market price.
The goodwill impairment analysis and measurement is a process
that requires significant judgment. Factors that may be
considered a change in circumstances, indicating that the
carrying value of goodwill or amortizable intangible assets may
not be fully recoverable, include a prolonged decline in stock
price and market capitalization, reduced future cash flow
estimates or slower growth rates in our industry. We could be
required to record a charge to earnings in our financial
statements in a future period if any impairment of our goodwill
or amortizable intangible assets were deemed to have occurred,
negatively impacting our results of operations and
stockholders’ equity.
If the aggregate market value of our outstanding shares
continues to be significantly less than the carrying value, we
may be required to record a significant non-cash charge for
goodwill impairment during the fourth quarter of 2008.
Allowance
for Loan Losses
In our Vacation Ownership segment, we provide for estimated
vacation ownership contract receivable cancellations at the time
of VOI sales by recording a provision for loan losses on the
Consolidated Statements of Income. We assess the adequacy of the
allowance for loan losses based on the historical performance of
similar vacation ownership contract receivables. We use a
technique referred to as static pool analysis, which tracks
defaults for each year’s sales over the entire life of
those contract receivables. We consider current defaults, past
due aging, historical write-offs of contracts, consumer credit
scores (FICO scores) in the assessment of borrower’s credit
strength and expected loan performance. We also consider whether
the historical economic conditions are comparable to current
economic conditions. If current conditions differ from the
conditions in effect when the historical experience was
generated, we adjust the allowance for loan losses to reflect
the expected effects of the current environment on
uncollectibility. The strains of the overall economy appear to
be negatively impacting the portfolio borrowers, particularly
those with lower credit scores, thus causing us to record a
higher estimate of uncollectible receivables as a percentage of
VOI sales financed when compared to historical performance.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
September 30, 2008 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
This excerpt taken from the WYN 10-Q filed Aug 8, 2008. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Consolidated Financial
Statements should be read in conjunction with the audited
Consolidated and Combined Financial Statements included in the
Annual Report filed on
Form 10-K
with the SEC on February 29, 2008, which includes a
description of our critical
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accounting policies that involve subjective and complex
judgments that could potentially affect reported results. While
there have been no material changes to our critical accounting
policies as to the methodologies or assumptions we apply under
them, we continue to monitor such methodologies and assumptions.
Goodwill
and Other Intangible Assets
We have goodwill and other indefinite-lived intangible assets
recorded in connection with business combinations. We annually
(during the fourth quarter of each year subsequent to completing
our annual forecasting process) or, more frequently if
circumstances indicate impairment may have occurred, review
their carrying values as required by SFAS No. 142,
“Goodwill and Other Intangible Assets.” In performing
this review, we are required to make an assessment of fair value
for our goodwill and other indefinite-lived intangible assets.
When determining fair value, we utilize various assumptions,
including projections of future cash flows. A change in these
underlying assumptions could cause a change in the results of
the tests and, as such, could cause the fair value to be less
than the respective carrying amount. If the estimated fair value
is less than the carrying value, then we must write down the
carrying value to the estimated fair value. As of June 30,
2008, we had a goodwill balance of $2,732 million.
The goodwill impairment analysis and measurement is a process
that requires significant judgment. Factors that may be
considered a change in circumstances, indicating that the
carrying value of goodwill or amortizable intangible assets may
not be fully recoverable, include a prolonged decline in stock
price and market capitalization, reduced future cash flow
estimates or slower growth rates in our industry. We could be
required to record a charge to earnings in our financial
statements in a future period if any impairment of our goodwill
or amortizable intangible assets were deemed to have occurred,
negatively impacting our results of operations and
shareholders’ equity.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
June 30, 2008 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
This excerpt taken from the WYN 10-Q filed May 8, 2008. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Consolidated Financial
Statements should be read in conjunction with the audited
Consolidated and Combined Financial Statements included in the
Annual Report filed on
Form 10-K
with the SEC on February 29, 2008, which includes a
description of our critical accounting policies that involve
subjective and complex judgments that could potentially affect
reported results. Since such date there have been no material
changes to our critical accounting policies as to the
methodologies or assumptions we apply under them.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
March 31, 2008 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
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This excerpt taken from the WYN 10-Q filed Nov 8, 2007. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Condensed Consolidated and
Combined Financial Statements should be read in conjunction with
the audited Consolidated and Combined Financial Statements
included in the Annual Report filed on
Form 10-K
with the Securities and Exchange Commission on March 7,
2007, which includes a description of our critical accounting
policies that involve subjective and complex judgments that
could potentially affect reported results. Since such date there
have been no material changes to our critical accounting
policies as to the methodologies or assumptions we apply under
them.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
September 30, 2007 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
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Officer and Chief Financial Officer have concluded that, as of
the end of such period, our disclosure controls and procedures
are effective.
This excerpt taken from the WYN 10-Q filed Aug 9, 2007. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Condensed Consolidated and
Combined Financial Statements should be read in conjunction with
the audited Consolidated and Combined Financial Statements
included in the Annual Report filed on
Form 10-K
with the Securities and Exchange Commission on March 7,
2007, which includes a description of our critical accounting
policies that involve subjective and complex judgments that
could potentially affect reported results. Since such date there
have been no material changes to our critical accounting
policies as to the methodologies or assumptions we apply under
them.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
June 30, 2007 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
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This excerpt taken from the WYN 10-Q filed May 10, 2007. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Condensed Consolidated and
Combined Financial Statements should be read in conjunction with
the audited Consolidated and Combined Financial Statements
included in the Annual Report filed on
Form 10-K
with the Securities and Exchange Commission on March 7,
2007, which includes a description of our critical accounting
policies that involve subjective and complex judgments that
could potentially affect reported results. Since such date there
have been no material changes to our critical accounting
policies as to the methodologies or assumptions we apply under
them.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
March 31, 2007 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
(a) Disclosure Controls and Procedures. Our
management, with the participation of our Chief Executive
Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as such
term is defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) as of the end of the period covered
by this quarterly report. Based on such evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded
that, as of the end of such period, our disclosure controls and
procedures are effective.
(b) Internal Controls Over Financial Reporting.
There have been no changes in our internal control over
financial reporting (as such term is defined in
rules 13a-15(f)
and
15d-15(f)
under the Exchange Act) during the fiscal quarter to which this
report relates that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
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This excerpt taken from the WYN 10-Q filed Nov 14, 2006. CRITICAL
ACCOUNTING POLICIES
In presenting our financial statements in conformity with
generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported
therein. Several of the estimates and assumptions we are
required to make relate to matters that are inherently uncertain
as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact
to our consolidated results of operations, financial position
and liquidity. We believe that the estimates and assumptions we
used when preparing our financial statements were the most
appropriate at that time. These Condensed Consolidated and
Combined Financial Statements should be read in conjunction with
the audited Combined Financial Statements included in the
Form 10 filed on July 12, 2006, which includes a
description of our critical accounting policies that involve
subjective and complex judgments that could potentially affect
reported results. Since such date there have been no material
changes to our critical accounting policies as to the
methodologies or assumptions we apply under them.
We assess our market risk based on changes in interest and
foreign currency exchange rates utilizing a sensitivity analysis
that measures the potential impact in earnings, fair values, and
cash flows based on a hypothetical 10% change (increase and
decrease) in interest and foreign currency rates. We used
September 30, 2006 market rates to perform a sensitivity
analysis separately for each of our market risk exposures. The
estimates assume instantaneous, parallel shifts in interest rate
yield curves and exchange rates. We have determined, through
such analyses, that the impact of a 10% change in interest and
foreign currency exchange rates and prices on our earnings, fair
values and cash flows would not be material.
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