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These excerpts taken from the WYN 10-K filed Feb 27, 2009. Other
Items
We record lodging-related marketing and reservation revenues,
Wyndham Rewards revenues, as well as property management
services revenues for both our Lodging and Vacation Ownership
segments, in accordance with Emerging Issues Task Force Issue
99-19,
“Reporting Revenue Gross as a Principal versus Net as an
Agent,” which requires that these revenues be recorded on a
gross basis.
Table of Contents
Discussed below are our consolidated and combined results of
operations and the results of operations for each of our
reportable segments. The reportable segments presented below
represent our operating segments for which separate financial
information is available and which is utilized on a regular
basis by our chief operating decision maker to assess
performance and to allocate resources. In identifying our
reportable segments, we also consider the nature of services
provided by our operating segments. Management evaluates the
operating results of each of our reportable segments based upon
revenue and “EBITDA,” which is defined as net
income/(loss) before depreciation and amortization, interest
expense (excluding interest on securitized vacation ownership
debt), interest income, income taxes and cumulative effect of
accounting change, net of tax, each of which is presented on the
Consolidated and Combined Statements of Operations. We believe
that EBITDA is a useful measure of performance for our industry
segments which, when considered with GAAP measures, gives a more
complete understanding of our operating performance. Our
presentation of EBITDA may not be comparable to similarly-titled
measures used by other companies.
For the period January 1, 2006 to July 31, 2006,
Cendant allocated $20 million of general corporate overhead
costs to us based on a percentage of our forecasted revenues.
General corporate expense allocations included costs related to
Cendant’s executive management, tax, accounting, legal,
treasury and cash management, certain employee benefits and real
estate usage for common space. The allocations were not
necessarily indicative of the actual expenses that would have
been incurred had we been operating as a separate, stand-alone
public company for the periods presented.
Other
6.00% Senior Unsecured Notes. Our 6.00% notes,
with face value of $800 million, were issued in December
2006 for net proceeds of $796 million. The notes are
redeemable at our option at any time, in whole or in part, at
the appropriate redemption prices plus accrued interest through
the redemption date. These notes rank equally in right of
payment with all of our other senior unsecured indebtedness.
Term Loan. During July 2006, we entered into a five-year
$300 million term loan facility which bears interest at
LIBOR plus 75 basis points. Subsequent to the inception of
this term loan facility, we entered into an interest rate swap
agreement and, as such, the interest rate is fixed at 6.2%.
Revolving Credit Facility. We maintain a five-year
$900 million revolving credit facility which currently
bears interest at LIBOR plus 62.5 to 75 basis points. The
interest rate of this facility is dependent on our credit
ratings and the outstanding balance of borrowings on this
facility. During July 2008, we drew down on our revolving credit
facility to fund the acquisition of USFS. In addition, in
conjunction with closing the 2008 bank conduit facility, we drew
approximately $215 million on our revolving credit facility
to bring our previous bank conduit facility in line with the
lower advance rate and tighter eligibility requirements.
Vacation Ownership Bank Borrowings. We maintain a
364-day
secured, revolving foreign credit facility used to support our
vacation ownership operations in the South Pacific. Such
facility was renewed and upsized from AUD $225 million to
AUD $263 million in June 2008 and expires in June 2009. We
are currently exploring options to renew this facility. This
facility bears interest at Australian BBSY plus a spread and had
a weighted average interest rate of 8.1%, 7.2% and 6.5% during
2008, 2007 and 2006, respectively. These secured borrowings are
collateralized by $199 million of underlying gross vacation
ownership contract receivables as of December 31, 2008. The
capacity of this facility is subject to maintaining sufficient
assets to collateralize these secured obligations.
Vacation Rental Capital Leases. We lease vacation homes
located in European holiday parks as part of our vacation
exchange and rentals business. The majority of these leases are
recorded as capital lease obligations under generally accepted
accounting principles with corresponding assets classified
within property, plant and equipment
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on the Consolidated Balance Sheets. The vacation rentals capital
lease obligations had a weighted average interest rate of 4.5%
during 2008, 2007 and 2006.
Other. We also maintain other debt facilities which arise
through the ordinary course of operations. This debt principally
reflects $11 million of mortgage borrowings related to an
office building.
Interest expense incurred in connection with our other debt was
to $99 million, $96 million and $72 million
during 2008, 2007 and 2006, respectively. In addition, we
recorded $11 million of interest expense related to
interest on local taxes payable to certain foreign jurisdictions
during 2006. All such amounts are recorded within the interest
expense line item on the Consolidated and Combined Statements of
Operations. Cash paid related to such interest expense was
$100 million, $89 million and $60 million during
2008, 2007 and 2006, respectively.
Interest expense is partially offset on the Consolidated and
Combined Statements of Operations by capitalized interest of
$19 million, $23 million and $16 million during
2008, 2007 and 2006, respectively.
As debt maturities of the securitized vacation ownership debt
are based on the contractual payment terms of the underlying
vacation ownership contract receivables, actual maturities may
differ as a result of prepayments by the vacation ownership
contract receivable obligors.
The revolving credit facility, unsecured term loan and vacation
ownership bank borrowings include covenants, including the
maintenance of specific financial ratios. These financial
covenants consist of a minimum interest coverage ratio of at
least 3.0 times as of the measurement date and a maximum
leverage ratio not to exceed 3.5 times on the measurement date.
The interest coverage ratio is calculated by dividing EBITDA (as
defined in the credit agreement and Note 20—Segment
Information) by Interest Expense (as defined in the credit
agreement), excluding interest expense on any Securitization
Indebtedness and on Non-Recourse Indebtedness (as the two terms
are defined in the credit agreement), both as measured on a
trailing 12 month basis preceding the measurement date. As
of December 31, 2008, our interest coverage ratio was 20.6
times. The leverage ratio is calculated by dividing Consolidated
Total Indebtedness (as defined in the credit agreement)
excluding any Securitization Indebtedness and any Non-Recourse
Secured debt as of the measurement date by EBITDA as measured on
a trailing 12 month basis preceding the measurement date.
As of December 31, 2008, our leverage ratio was 2.2 times.
Covenants in these credit facilities also include limitations on
indebtedness of material subsidiaries; liens; mergers,
consolidations, liquidations, dissolutions and sales of all or
substantially all assets; and sale and leasebacks. Events of
default in these credit facilities include nonpayment of
principal when due; nonpayment of interest, fees or other
amounts; violation of covenants; cross payment default and cross
acceleration (in each case, to indebtedness (excluding
securitization indebtedness) in excess of $50 million); and
a change of control (the definition of which permitted our
Separation from Cendant).
The 6.00% senior unsecured notes contain various covenants
including limitations on liens, limitations on sale and
leasebacks, and change of control restrictions. In addition,
there are limitations on mergers, consolidations and sales of
all or substantially all assets. Events of default in the notes
include nonpayment of interest, nonpayment of principal, breach
of a covenant or warranty, cross acceleration of debt in excess
of $50 million, and bankruptcy related matters.
As of December 31, 2008, we were in compliance with all of
the covenants described above including the required financial
ratios.
Each of our non-recourse, securitized note borrowings contain
various triggers relating to the performance of the applicable
loan pools. For example, if the vacation ownership contract
receivables pool that collateralizes one of our securitization
notes fails to perform within the parameters established by the
contractual triggers (such as higher default or delinquency
rates), there are provisions pursuant to which the cash flows
for that pool will be maintained in the securitization as extra
collateral for the note holders or applied to amortize the
outstanding principal held by the noteholders. In the event such
provisions were triggered during 2009, we believe such cash
flows would be approximately $0 – $40 million. As
of December 31, 2008, all of our securitized pools were in
compliance with applicable triggers.
This excerpt taken from the WYN 10-K filed Feb 29, 2008. Other
6.00% Senior Unsecured Notes. The Company’s
6.00% notes, with face value of $800 million, were
issued in December 2006 for net proceeds of $796 million.
The notes are redeemable at the Company’s option at any
time, in whole or in part, at the appropriate 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. As of December 31,
2007, the notes had a carrying value of $797 million.
Term Loan. During July 2006, the Company entered into a
five-year $300 million term loan facility which bears
interest at LIBOR plus 55 basis points. Subsequent to the
inception of this term loan facility, the Company entered into
an interest rate swap agreement and, as such, the interest rate
is fixed at 6.00%. At December 31, 2007, the Company had
$300 million outstanding under this term loan facility.
Revolving Credit Facility. The Company maintains a
five-year $900 million revolving credit facility which
currently bears interest at LIBOR plus 45 to 55 basis
points. The interest rate of this facility is dependent on the
Company’s credit ratings and the outstanding balance of
borrowings on this facility. As of December 31, 2007, the
Company had $97 million of outstanding borrowings under
this facility.
Vacation Ownership Asset-linked Debt. Prior to the
Company’s Separation from Cendant, the Company previously
borrowed under a $600 million asset-linked facility through
Cendant to support the creation of certain vacation
ownership-related assets and the acquisition and development of
vacation ownership properties. In connection with the
Separation, Cendant eliminated the outstanding borrowings under
this facility of $600 million on July 27, 2006. The
weighted average interest rate on these borrowings was 5.5%
during the period January 1, 2006 through July 27,
2006 and 5.1% during the year ended December 31, 2005.
Vacation Ownership Bank Borrowings. The Company had
outstanding bank borrowings of $164 million as of
December 31, 2007 under a foreign credit facility used to
support the Company’s vacation ownership operations in the
South Pacific. This facility bears interest at Australian BBSY
plus 55 basis points and had a weighted average interest
rate of 7.2%, 6.5% and 6.3% during 2007, 2006 and 2005,
respectively. These secured borrowings are collateralized by
$208 million of underlying vacation ownership contract
receivables and related assets as of December 31, 2007. The
capacity of this facility is subject to maintaining sufficient
assets to collateralize these secured obligations.
Vacation Rental Bank Borrowings. As of December 31,
2006, the Company had bank debt outstanding of $73 million
related to the Company’s Landal GreenParks business. The
bank debt was collateralized by $130 million of land and
related vacation rental assets and had a weighted average
interest rate of 3.7% and 3.0% during 2006 and 2005,
respectively. The $73 million of outstanding borrowings
were repaid on January 31, 2007.
Vacation Rental Capital Leases. The Company leases
vacation homes located in European holiday parks as part of its
vacation exchange and rentals business. The majority of these
leases are recorded as capital lease obligations under generally
accepted accounting principles with corresponding assets
classified within property, plant and equipment on the
Consolidated Balance Sheets. The vacation rentals capital lease
obligations had a weighted average interest rate of 4.5% during
2007, 2006 and 2005.
Other. The Company also maintains other debt facilities
which arise through the ordinary course of operations. This debt
principally reflects $11 million of mortgage borrowings
related to an office building.
Interest expense incurred in connection with the Company’s
long-term debt (excluding securitized vacation ownership debt)
amounted to $96 million, $72 million and
$36 million during 2007, 2006 and 2005, respectively. In
addition, the Company recorded $11 million of interest
expense related to interest on local taxes payable to certain
foreign jurisdictions during 2006. All such amounts are recorded
within the interest expense line item on the Consolidated and
Combined Statements of Income. Cash paid related to such
interest expense was $89 million, $60 million and
$36 million during 2007, 2006, and 2005, respectively.
Interest expense is partially offset on the Consolidated and
Combined Statements of Income by capitalized interest of
$23 million, $16 million and $7 million during
2007, 2006 and 2005, respectively.
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This excerpt taken from the WYN 10-K filed Mar 7, 2007. Other
6.00% Senior Unsecured Notes. The Company’s
6.00% notes, with face value of $800 million, were
issued in December 2006 for net proceeds of $796 million.
The notes are redeemable at the Company’s option at any
time, in whole or in part, at the appropriate 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.
Term Loan. On July 7, 2006, the Company entered into
a five-year $300 million term loan facility which bears
interest at a fixed rate of 6.00%. At December 31, 2006,
the Company had $300 million outstanding under this term
loan facility.
Revolving Credit Facility. The Company entered into a
five-year $900 million revolving credit facility which
currently bears interest at LIBOR plus 45 to 55 basis
points. The pricing of this facility is dependent on the
Company’s credit ratings and the outstanding balance of
borrowings on this facility. As of December 31, 2006, the
Company had zero outstanding borrowings under this facility.
Vacation Ownership Asset-Linked Debt. The Company
previously borrowed under a $600 million asset-linked
facility through Cendant to support the creation of certain
vacation ownership-related assets and the acquisition and
development of vacation ownership properties. In connection with
the Separation, Cendant eliminated the outstanding borrowings
under this facility of $600 million on July 27, 2006.
The weighted average interest rate on these borrowings was 5.5%
during the period January 1, 2006 through July 27,
2006 and 5.1% and 2.6% during the years ended December 31,
2005 and 2004, respectively.
Vacation Ownership Bank Borrowings. The Company had
outstanding bank borrowings of $103 million as of
December 31, 2006 principally under a foreign credit
facility used to support the Company’s vacation ownership
operations in the South Pacific. This facility bears interest at
Australian Dollar LIBOR plus 55 basis points and had a
weighted average interest rate of 6.5%, 6.3% and 3.3% during
2006, 2005 and 2004, respectively. These secured borrowings are
collateralized by $158 million of underlying vacation
ownership contract receivables and related assets.
Vacation Rental Bank Borrowings. As of December 31,
2006, the Company had bank debt outstanding of $73 million
related to the Company’s Landal GreenParks business. The
bank debt is collateralized by $130 million of land and
related vacation rental assets and had a weighted average
interest rate of 3.7% during 2006 and 3.0% during both 2005 and
2004.
Vacation Rental Capital Leases. The Company leases
vacation homes located in European holiday parks as part of its
vacation exchange and rentals business. These leases are
recorded as capital lease obligations under generally accepted
accounting principles with corresponding assets classified
within property, plant and equipment on the Consolidated and
Combined Balance Sheets. The vacation rental capital lease
obligations had a weighted average interest rate of 7.5% during
2006, 2005 and 2004.
Other. The Company also maintains other debt facilities
which arise through the ordinary course of operations. This debt
principally reflects $11 million of mortgage borrowings
related to an office building.
Table of Contents
Interest expense incurred in connection with the Company’s
long-term debt (excluding securitized vacation ownership debt)
amounted to $72 million, $36 million and
$38 million during 2006, 2005 and 2004, respectively, and
is recorded within the interest expense line item on the
Consolidated and Combined Statements of Income.
This excerpt taken from the WYN 8-K filed Jul 19, 2006. Other Vacation Ownership Asset-Linked Debt. The Company borrows under a $600 million asset-linked facility through Cendant to support the creation of certain vacation ownership-related assets and the acquisition and development of vacation ownership properties. This facility expires in May 2007 and bears interest at a rate of LIBOR plus 62.5 basis points. These borrowings are collateralized by $1,305 million of vacation ownership-related assets, consisting primarily of unsecuritized vacation ownership contract receivables and vacation ownership inventory. The weighted average interest rate on these borrowings was 5.1% and 2.6% for 2005 and 2004, respectively.
F-44
Table of ContentsVacation Ownership Bank Borrowings. The Company’s bank borrowings principally represent $104 million outstanding under foreign credit facilities used to support the Company’s vacation ownership operations in the South Pacific. This facility bears interest at Australian Dollar LIBOR plus 60 basis points and had a weighted average interest rate of 6.3% and 3.3% for 2005 and 2004, respectively. These secured borrowings are collateralized by $133 million of underlying vacation ownership contract receivables and related assets. Vacation Rental Bank Borrowings. As of December 31, 2005 and 2004, the Company had bank debt outstanding of $68 million and $84 million, respectively, which was assumed in connection with the Company’s acquisition of Landal GreenParks during 2004 and was subsequently refinanced. The bank debt is collateralized by $117 million of land and related vacation rental assets and had a weighted average interest rate of 3.0% for both 2005 and 2004. Vacation Rental Capital Leases. The Company leases vacation homes located in European holiday parks as part of its vacation exchange and rental business. These leases are recorded as capital lease obligations under generally accepted accounting principles with corresponding assets classified within property, plant and equipment on the Combined Balance Sheets. The vacation rental capital lease obligations had a weighted average interest rate of 7.5% for both 2005 and 2004. Other. The Company also maintains other debt facilities which arise through the ordinary course of operations. This debt principally reflects $18 million of borrowings under a foreign unsecured credit facility and $11 million of mortgage borrowings related to an office building. Interest expense incurred in connection with the Company’s other debt amounted to $36 million, $38 million and $11 million during 2005, 2004 and 2003, respectively, and is recorded within the interest expense (income) line item on the Combined Statements of Income.
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