Exhibit 99.1
(WYNDHAM LOGO)
FOR IMMEDIATE RELEASE
Wyndham Worldwide Reports Solid Third Quarter 2008 Results
Adjusted EPS up 11% to $0.83
PARSIPPANY, N.J. (October 30, 2008) — Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2008.
HIGHLIGHTS:
    Third quarter reported EPS grew by 23%, or 11% on an adjusted basis. Third quarter 2008 net income was $142 million, or $0.80 diluted earnings per share. Adjusted net income, excluding $6 million after-tax in legacy items and restructuring costs, was $148 million, or $0.83 adjusted diluted earnings per share, exceeding Company-issued guidance of $0.80 - 0.82.
 
    Third quarter 2008 revenues were $1.2 billion, up 1% from the third quarter of 2007.
 
    Compared to the third quarter of 2007:
    System size increased by 42,500 rooms, or 8% (2% excluding the impact of the Microtel and Hawthorn brands acquisition in July 2008).
 
    Average net price per vacation rental increased 9%, or 5% in constant currency.
 
    Average number of vacation exchange members increased 4%, or 135,000 members.
 
    Gross Vacation Ownership Interest sales increased 3%.
    EBITDA increased in each of the Company’s businesses
“We produced solid operating results during the quarter in a difficult global economic environment,” said Stephen P. Holmes, Wyndham Worldwide Chairman and Chief Executive Officer. “We are taking the necessary steps to best weather this storm and, if necessary, we will make further adjustments. The diversity and flexibility of our

 


 

business model enables us to adjust to changes in the marketplace to optimize our performance.”
THIRD QUARTER 2008 OPERATING RESULTS
Revenues for the third quarter of 2008 were $1.2 billion, up 1% compared to the third quarter of 2007. The Company also reported year-over-year EBITDA growth in each of its three business units during the third quarter of 2008.
Reported net income for the third quarter of 2008 was $142 million, or $0.80 diluted earnings per share, compared to $117 million, or $0.65 diluted earnings per share, for the third quarter of 2007.
Excluding $2 million in after-tax net expense from the resolution of, and adjustment to, certain legacy items and $4 million in after-tax restructuring costs, adjusted net income for the third quarter of 2008 would have been $148 million, or $0.83 adjusted diluted earnings per share, an 11% increase compared to adjusted net income of $134 million, or adjusted diluted earnings per share of $0.75, in the third quarter of 2007. Adjusted net income in the third quarter of 2007 excludes $2 million in after-tax separation and related costs and $15 million in after-tax net expense from the resolution of, and adjustment to, certain legacy items.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $213 million in the third quarter of 2008, up $2 million, or 1%, when compared with the third quarter of 2007. Higher revenues resulting from the Microtel and Hawthorn brands acquisition and incremental properties were partially offset by a decline in worldwide RevPAR.
System-wide RevPAR decreased 2.7% in the third quarter of 2008, reflecting 4.2% and 1.7% declines in domestic and international RevPAR, respectively.
Third quarter 2008 EBITDA grew 3% to $72 million, compared to $70 million in the third quarter of 2007. This increase was driven by cost containment initiatives, the Microtel and Hawthorn brands acquisition, a one-time benefit resulting from the sale of a non-strategic asset and lower marketing expenses due to timing, which were partially offset by $4 million in restructuring costs. Excluding the $4 million restructuring costs, adjusted third quarter 2008 EBITDA would have been $76 million, a 9% increase over 2007.
As of September 30, 2008, the Company’s hotel system consisted of 6,970 properties and approximately 583,400 rooms, of which 20% were international, with a development pipeline of approximately 990 hotels and more than 111,000 rooms, of which 51% were new construction and 41% were international.

 


 

Vacation Exchange and Rentals (Group RCI)
Revenues were $354 million in the third quarter of 2008, a 5% increase compared with the third quarter of 2007, reflecting growth in vacation rentals and ancillary revenues, partially offset by lower annual dues and exchange revenues. In constant currency, revenues increased 3% compared to the third quarter of 2007.
Vacation rentals revenues were $199 million, up 9% compared to the third quarter of 2007, or a 5% increase in constant currency. The increase reflects a higher average net price per rental and the conversion of an existing Landal park from franchised to a managed property. Rental transaction volume was flat during the third quarter of 2008 compared to the prior year.
Annual dues and exchange revenues were $114 million, down 2% compared to the third quarter of 2007. A 4% increase in the average number of members was more than offset by a 5% decline in the average revenue per member.
Other ancillary revenues were $41 million, up 8% compared to the third quarter of 2007, reflecting increased club servicing revenues, fees from credit card loyalty programs and fees generated from programs with affiliated resorts.
Third quarter 2008 EBITDA was $105 million, compared to third quarter 2007 EBITDA of $103 million. Revenue gains and overhead cost reductions were partially offset by unfavorable foreign exchange impact on expenses, incremental marketing expenditures and higher operational expenses related to a Landal park conversion. In constant currency, EBITDA increased 4% compared to the third quarter of 2007. Excluding $2 million of restructuring costs, in constant currency adjusted third quarter 2008 EBITDA would have been $109 million, a 6% increase over the prior year.
Vacation Ownership (Wyndham Vacation Ownership)
Gross Vacation Ownership Interest sales were $566 million for the third quarter of 2008, up 3% compared to the third quarter of 2007. This increase was principally driven by modest increases in tour flow and volume per guest, as well as higher levels of upgrades.
Consumer finance revenues increased $18 million to $111 million in the third quarter of 2008, up 19% compared to the third quarter of 2007, reflecting continued growth in the portfolio due to higher gross VOI sales.
Reported revenues were $661 million in the third quarter of 2008, down 1% compared to the third quarter of 2007, including a higher provision for loan losses. Third quarter 2008 revenues were also reduced by $2 million as a result of deferred vacation ownership revenue recorded under the percentage-of-completion method of accounting, while the Company recognized $1 million of previously deferred revenue in the third quarter of 2007.

 


 

EBITDA for the third quarter of 2008 increased 10% to $128 million, compared to $116 million in the third quarter of 2007. The increase was primarily due to cost containment and higher net interest income of $13 million. Third quarter 2007 EBITDA includes a $7 million pre-tax gain on the sale of certain vacation ownership properties.
Other Items
Interest expense for the third quarter of 2008 was $21 million, up from $20 million in the third quarter of 2007. Interest income for the quarter was $2 million, down from $4 million from the comparable prior-year period. Depreciation and amortization increased $4 million to $47 million reflecting increased capital investments over the past two years.
Bank Conduit Facility
The Company also announced that it expects to close on or about November 10, 2008, a new timeshare receivables conduit facility led by J.P. Morgan. The facility is expected to have capacity of at least $800 million.
Balance Sheet Information as of September 30, 2008:
    Cash and cash equivalents of approximately $230 million compared to approximately $210 million at December 31, 2007
 
    Vacation ownership contract receivables, net, of $3.3 billion compared to $2.9 billion at December 31, 2007
 
    Vacation ownership and other inventory of approximately $1.3 billion compared to $1.2 billion at December 31, 2007
 
    Securitized vacation ownership debt of $2.1 billion, unchanged since December 31, 2007
 
    Other debt of $1.7 billion, compared to $1.5 billion at December 31, 2007
A schedule of debt is included in the financial tables section of this press release.
Outlook
Given the disruptions in the global economy and capital markets, and uncertainty about how these will impact employment, consumer spending and other macroeconomic drivers, guidance related to Wyndham Worldwide’s performance during the remainder of 2008 and 2009 is subject to higher than normal levels of uncertainty. The following guidance reflects assumptions used for internal planning purposes. If economic conditions improve or deteriorate materially from current levels, these assumptions and our guidance may change materially.
For the fourth quarter 2008, the Company expects adjusted EPS of $0.41 - $0.46 based on weighted average shares of approximately 178 million.
The Company’s updated full-year 2008 guidance is:
    Revenues of $4,360 - $4,410 million

 


 

    Adjusted* EBITDA of $830 - $880 million
 
    Depreciation and amortization expense of $175 - $185 million
 
    Interest expense, net of $70 - $80 million
 
    Adjusted* net income of $377 - $386 million
 
    Adjusted* EPS of $2.12 - $2.17 based on weighted average shares of approximately 178 million
Management provided preliminary guidance for the full-year 2009:
    Revenues of approximately $4.1 - $4.5 billion
 
    Adjusted* EBITDA of approximately $840 - $890 million
 
*   All guidance excludes legacy items, rebranding charges and restructuring costs, if any, which may have a positive or negative impact on reported results, as applicable.
On October 6, 2008, the Company announced strategic realignments that would result in estimated pre-tax restructuring costs of approximately $7 in the third quarter of 2008, $10 - $15 million in the fourth quarter of 2008, and approximately $5 - $10 million in the first quarter of 2009. Based upon more refined plans, the Company now believes it will incur restructuring costs of approximately $25 - $30 million in the fourth quarter of 2008 and approximately $5 - $10 million in the first quarter of 2009.
Conference Call Information
Wyndham Worldwide Corporation will provide a webcast of its conference call to discuss the Company’s third quarter 2008 financial results and outlook for the remainder of 2008 and full-year 2009 on Thursday, October 30, 2008 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company’s Web site at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the Web site for approximately 90 days beginning at noon EDT on October 30. The conference call also may be accessed by dialing (888) 395-6878 and providing the pass code “Wyndham.” Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available at (800) 280-4691 beginning at noon EDT on October 30 until 5 p.m. EST on December 15, 2008.
Presentation of Financial Information
Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of this press release.
About Wyndham Worldwide
As one of the world’s largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges

 


 

through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses 6,970 franchised hotels and approximately 583,400 hotel rooms worldwide. Group RCI offers its nearly 3.7 million members access to more than 67,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of approximately 145 vacation ownership resorts serving over 800,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs more than 32,000 employees globally.
For more information about Wyndham Worldwide, please visit the Company’s web site at www.wyndhamworldwide.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company’s revenues, earnings and related financial and operating measures, financing transactions, restructuring plans, and the number of hotel rooms the Company intends to add in future periods.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war and terrorist activity, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s 2007 Annual Report on Form 10-K, filed with the SEC on February 29, 2008. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
# # #

 


 

     
Investor contact:
  Press contact:
 
   
Margo C. Happer
  Betsy O’Rourke
Senior Vice President,
  Senior Vice President,
Investor Relations
  Marketing and Communications
Wyndham Worldwide Corporation
  Wyndham Worldwide Corporation
(973) 753-6472 
  (973) 753-7422 
Margo.Happer@wyndhamworldwide.com
  Betsy.O’Rourke@wyndhamworldwide.com

 


 

Table 1
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)
In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and “EBITDA,” which is defined as net income before depreciation and amortization, interest expense (excluding interest on securitized vacation ownership debt), interest income and income taxes, each of which is presented on the Company’s Consolidated Statements of Income. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.
The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income for the three and nine months ended September 30, 2008 and 2007:
                                   
    Three Months Ended September 30,
    2008   2007
     Net Revenues         EBITDA      (d)  Net Revenues        EBITDA      (f)
 
               
Lodging
  $ 213     $ 72     $ 211     $ 70    
Vacation Exchange and Rentals
    354       105       336       103    
Vacation Ownership
    661       128       671       116    
 
               
Total Reportable Segments
    1,228       305       1,218       289    
 
                               
Corporate and Other (a) (b)
    (2 )     (11 )     (2 )     (41 )  
 
               
Total Company
  $ 1,226     $ 294     $ 1,216     $ 248    
 
               
 
                               
Reconciliation of EBITDA to Net Income
                                 
 
                               
EBITDA
          $ 294             $ 248    
Depreciation and amortization
            47               43    
Interest expense
            21               20    
Interest income
            (2 )             (4 )  
 
                       
Income before income taxes
            228               189    
Provision for income taxes
            86               72    
 
                       
Net income
          $ 142             $ 117    
 
                       
                                   
    Nine Months Ended September 30,
    2008   2007
     Net Revenues         EBITDA      (d)  Net Revenues         EBITDA      (f)
 
               
Lodging
  $ 583     $ 179     $ 549     $ 174    
Vacation Exchange and Rentals
    1,009       252       937       237    
Vacation Ownership
    1,786       248   (e)   1,849       279    
 
               
Total Reportable Segments
    3,378       679       3,335       690    
 
                               
Corporate and Other (a) (c)
    (8 )     (34 )     (7 )     (40 )  
 
               
Total Company
  $ 3,370     $ 645     $ 3,328     $ 650    
 
               
 
                               
Reconciliation of EBITDA to Net Income
                                 
 
                               
EBITDA
          $ 645             $ 650    
Depreciation and amortization
            137               122    
Interest expense
            59               55    
Interest income
            (8 )             (9 )  
 
                       
Income before income taxes
            457               482    
Provision for income taxes
            175               184    
 
                       
Net income
          $ 282             $ 298    
 
                       
 
(a)   Includes the elimination of transactions between segments.
 
(b)   Includes $1 million and $25 million of a net expense during the three months ended September 30, 2008 and 2007, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets.
 
(c)   Includes $4 million and $5 million of a net benefit during the nine months ended September 30, 2008 and 2007, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets.
 
(d)   Includes restructuring costs of $4 million and $2 million for Lodging and Vacation Exchange and Rentals, respectively, during both the three and nine months ended September 30, 2008.
 
(e)   Includes an impairment charge of $28 million due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand.
 
(f)   Includes separation and related costs of $1 million and $2 million for Vacation Ownership and Corporate and Other, respectively, during the three months ended September 30, 2007 and $9 million and $7 million for Vacation Ownership and Corporate and Other, respectively, during the nine months ended September 30, 2007.

 


 

Table 2
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,   September 30,
    2008     2007     2008     2007  
 
               
Net revenues
                               
 
                               
Vacation ownership interest sales
  $ 446     $ 467     $ 1,153     $ 1,283  
Service fees and membership
    468       442       1,344       1,232  
Franchise fees
    153       155       402       406  
Consumer financing
    111       93       314       261  
Other
    48       59       157       146  
 
               
Net revenues
    1,226       1,216       3,370       3,328  
 
               
 
                               
Expenses
                               
Operating
    439       440       1,284       1,246  
Cost of vacation ownership interests
    86       101       226       296  
Consumer financing interest (a)
    34       29       93       77  
Marketing and reservation
    232       229       659       632  
 
                               
General and administrative (b)
    140       174       438       419  
 
                               
Separation and related costs (c)
    -           3       -           16  
 
                               
Trademark impairment (d)
    -           -           28       -      
 
                               
Restructuring costs (e)
    6       -           6       -      
Depreciation and amortization
    47       43       137       122  
 
               
 
                               
Total expenses
    984       1,019       2,871       2,808  
 
               
 
                               
Operating income
    242       197       499       520  
Other income, net
    (5 )     (8 )     (9 )     (8 )
Interest expense
    21       20       59       55  
Interest income
    (2 )     (4 )     (8 )     (9 )
 
               
 
                               
Income before income taxes
    228       189       457       482  
Provision for income taxes
    86       72       175       184  
 
               
 
                               
Net income
  $ 142     $ 117     $ 282     $ 298  
 
               
 
                               
Earnings per share
                               
 
                               
Basic
  $ 0.80     $ 0.65     $ 1.59     $ 1.63  
 
                               
Diluted
    0.80       0.65       1.58       1.62  
 
                               
Weighted average shares outstanding
                               
 
                               
Basic
    178       179       177       183  
 
                               
Diluted
    178       180       178       184  
 
(a)   Prior to periods ending September 30, 2008, such amounts were included as a component of Operating Expenses.
 
(b)   Includes $1 million and $25 million of a net expense during the three months ended September 30, 2008 and 2007, respectively, and $4 million and $5 million of a net benefit during the nine months ended September 30, 2008 and 2007, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets.
 
(c)   Represents costs that the Company incurred in connection with the execution of its separation from its former parent, Cendant (now Avis Budget Group, Inc.). Such amounts, net of tax, were $2 million and $10 million during the three and nine months ended September 30, 2007, respectively.
 
(d)   Represents an impairment charge due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand. Such amount, net of tax, was $17 million during the nine months ended September 30, 2008.
 
(e)   Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during the third quarter of 2008. Such amount, net of tax, was $4 million during both the three and nine months ended September 30, 2008.

 


 

Table 3
(1 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
                                                 
    Year     Q1     Q2     Q3     Q4     Full Year  
Lodging (a)
                                               
Number of Rooms (b)
    2008       551,100       551,500       583,400       N/A       N/A  
 
    2007       539,300       541,700       540,900       550,600       N/A  
 
    2006       525,500       535,900       533,700       543,200       N/A  
 
    2005       519,300       516,000       512,000       532,700       N/A  
 
                                               
RevPAR
    2008     $ 32.21     $ 38.87     $ 41.93       N/A       N/A  
 
    2007     $ 31.35     $ 38.35     $ 43.10     $ 33.09     $ 36.48  
 
    2006     $ 30.45     $ 36.97     $ 40.82     $ 31.41     $ 34.95  
 
    2005     $ 25.53     $ 31.91     $ 36.86     $ 29.72     $ 31.00  
 
                                               
Royalty, Marketing and Reservation Revenue (in 000s)
    2008     $ 104,162     $ 127,238     $ 145,502       N/A       N/A  
 
    2007     $ 105,426     $ 129,453     $ 146,290     $ 107,870     $ 489,041  
 
    2006     $ 102,741     $ 125,409     $ 138,383     $ 104,505     $ 471,039  
 
    2005     $ 84,704     $ 104,281     $ 119,829     $ 99,804     $ 408,620  
 
                                               
Vacation Exchange and Rentals
                                               
Average Number of Members (in 000s)
    2008       3,632       3,682       3,673       N/A       N/A  
 
    2007       3,474       3,506       3,538       3,588       3,526  
 
    2006       3,292       3,327       3,374       3,429       3,356  
 
    2005       3,148       3,185       3,233       3,271       3,209  
 
                                               
Annual Dues and Exchange Revenue Per Member
    2008     $ 150.84     $ 128.91     $ 124.51       N/A       N/A  
 
    2007     $ 155.60     $ 132.33     $ 131.38     $ 124.59     $ 135.85  
 
    2006     $ 152.10     $ 130.37     $ 132.31     $ 128.13     $ 135.62  
 
    2005     $ 159.12     $ 134.98     $ 125.64     $ 124.05     $ 135.76  
 
                                               
Vacation Rental Transactions (in 000s)
    2008       387       319       360       N/A       N/A  
 
    2007       398       326       360       293       1,376  
 
    2006       385       310       356       293       1,344  
 
    2005       367       311       344       278       1,300  
 
                                               
Average Net Price Per Vacation Rental
    2008     $ 412.74     $ 477.63     $ 553.69       N/A       N/A  
 
    2007     $ 349.73     $ 415.71     $ 506.78     $ 426.93     $ 422.83  
 
    2006     $ 312.51     $ 374.91     $ 442.75     $ 356.16     $ 370.93  
 
    2005     $ 331.37     $ 363.14     $ 412.66     $ 325.62     $ 359.27  
 
                                               
Vacation Ownership
                                               
Gross Vacation Ownership Interest Sales (in 000s)
    2008     $ 458,000     $ 532,000     $ 566,000       N/A       N/A  
 
    2007     $ 430,000     $ 523,000     $ 552,000     $ 488,000     $ 1,993,000  
 
    2006     $ 357,000     $ 434,000     $ 482,000     $ 469,000     $ 1,743,000  
 
    2005     $ 281,000     $ 354,000     $ 401,000     $ 360,000     $ 1,396,000  
 
                                               
Tours
    2008       255,000       314,000       334,000       N/A       N/A  
 
    2007       240,000       304,000       332,000       268,000       1,144,000  
 
    2006       208,000       273,000       312,000       254,000       1,046,000  
 
    2005       195,000       250,000       272,000       217,000       934,000  
 
                                               
Volume Per Guest (VPG)
    2008     $ 1,668     $ 1,583     $ 1,550       N/A       N/A  
 
    2007     $ 1,607     $ 1,596     $ 1,545     $ 1,690     $ 1,606  
 
    2006     $ 1,475     $ 1,426     $ 1,434     $ 1,623     $ 1,486  
 
    2005     $ 1,349     $ 1,284     $ 1,349     $ 1,507     $ 1,368  
 
Note: Full year amounts may not foot across due to rounding.
 
(a)   Quarterly drivers in the Lodging segment include the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008), Wyndham Hotels and Resorts (October 2005) and Baymont Inn & Suites (April 2006) from their acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
 
(b)   Numbers include affiliated rooms from the fourth quarter of 2006 forward.

 


 

Table 3
(2 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS
GLOSSARY OF TERMS
Lodging
Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, (ii) properties affiliated with Wyndham Hotels and Resorts brand for which we receive a fee for reservation and/or other services provided or (iii) properties managed under the CHI Limited joint venture.
Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.
Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.
RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR. Comparable RevPAR represents RevPAR of hotels which are included in both periods.
Royalty, Marketing and Reservation Revenues: Royalty, marketing and reservation revenues are typically based on a percentage of the gross room revenues of each hotel. Royalty revenue is generally a fee charged to each franchised or managed hotel for the use of one of our trade names, while marketing and reservation revenues are fees that we collect and are contractually obligated to spend to support marketing and reservation activities. Marketing and reservation fees are also included in Table 4 within Marketing, Reservation and Wyndham Rewards Revenues.
Vacation Exchange and Rentals
Average Number of Members: Represents members in our vacation exchange programs who pay annual membership dues. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with our vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related products and services.
Annual Dues and Exchange Revenue Per Member: Represents total revenues from annual membership dues and exchange fees generated for the period divided by the average number of vacation exchange members during the year.
Vacation Rental Transactions: Represents the gross number of transactions that are generated in connection with customers booking their vacation rental stays through us. In our European vacation rentals businesses, one rental transaction is recorded each time a standard one-week rental is booked; however, in the United States, one rental transaction is recorded each time a vacation rental stay is booked, regardless of whether it is less than or more than one week.
Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers divided by the number of rental transactions.
Vacation Ownership
Gross Vacation Ownership Interest Sales: Represents gross sales of vacation ownership interests (including tele-sales upgrades, which are a component of upgrade sales) before deferred sales and loan loss provisions.
Tours: Represents the number of tours taken by guests in our efforts to sell vacation ownership interests.
Volume per Guest (VPG): Represents revenue per guest and is calculated by dividing the gross vacation ownership interest sales, excluding tele-sales upgrades, which are a component of upgrade sales, by the number of tours.
General
Constant Currency: Represents comparison eliminating the effects of foreign exchange rate fluctuations between periods.

 


 

Table 4
Wyndham Worldwide Corporation
ADDITIONAL DATA
                                                 
    Year   Q1     Q2     Q3     Q4     Full Year  
Lodging (a)
                                               
Number of Properties (b)
    2008       6,550       6,560       6,970       N/A       N/A  
 
    2007       6,450       6,460       6,460       6,540       N/A  
 
    2006       6,300       6,440       6,420       6,470       N/A  
 
    2005       6,400       6,380       6,350       6,350       N/A  
 
                                               
Marketing, Reservation and Wyndham Rewards Revenues (in 000s) (c)
    2008     $ 62,200     $ 76,507     $ 85,491       N/A       N/A  
 
    2007     $ 61,369     $ 74,575     $ 84,820     $ 65,208     $ 285,973  
 
    2006     $ 58,572     $ 70,931     $ 78,856     $ 61,135     $ 269,495  
 
    2005     $ 45,066     $ 56,558     $ 65,812     $ 58,053     $ 225,491  
 
                                               
Property Management Reimbursable Revenue (in 000s) (d)
    2008     $ 27,128     $ 26,326     $ 24,973       N/A       N/A  
 
    2007     $ 15,624     $ 22,338     $ 25,612     $ 28,414     $ 91,987  
 
    2006     $ 15,732     $ 19,935     $ 17,210     $ 16,263     $ 69,142  
 
    2005     $     -     $     -     $     -     $ 17,291     $ 17,291  
 
                                               
Vacation Ownership
                                               
Deferred Revenues (in 000s) (e)
    2008     $ (81,716 )   $ (5,240 )   $ (2,023 )     N/A       N/A  
 
    2007     $ 3,906     $ (4,908 )   $ 506     $ (21,092 )   $ (21,588 )
 
    2006     $ 12,708     $ (221 )   $ (23,491 )   $ (10,675 )   $ (21,679 )
 
    2005     $ 492     $ (9,150 )   $ (5,856 )   $ (2,022 )   $ (16,536 )
 
                                               
Provision for Loan Losses (in 000s) (f)
    2008     $ 82,344     $ 112,669     $ 118,609       N/A       N/A  
 
    2007     $ 60,869     $ 75,032     $ 85,762     $ 83,644     $ 305,307  
 
    2006     $ 61,242     $ 55,872     $ 63,213     $ 78,680     $ 259,007  
 
    2005     $ 24,652     $ 27,754     $ 44,050     $ 31,644     $ 128,101  
 
Note: Full year amounts may not foot across due to rounding.
 
(a)   Information includes the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008), Wyndham Hotels and Resorts (October 2005) and Baymont Inn & Suites (April 2006) from their acquisition dates forward. Therefore, the data is not presented on a comparable basis.
 
(b)   Numbers include affiliated hotels from the fourth quarter of 2006 forward.
 
(c)   Marketing and reservation revenues represent fees we receive from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific reservation system. These fees are typically based on a percentage of the gross room revenues of each hotel. Marketing and reservation fees are also included in the above table within royalty, marketing and reservation revenues. Wyndham Rewards revenues represent fees we receive relating to our loyalty program.
 
(d)   Primarily represents payroll costs in our hotel management business that we incur and pay on behalf of property owners and for which we are reimbursed by the property owners.
 
(e)   Represents the revenue that is deferred under the percentage of completion method of accounting. Under the percentage of completion method of accounting, a portion of the total revenue from a vacation ownership contract sale is not recognized if the construction of the vacation resort has not yet been fully completed. This revenue will be recognized in future periods in proportion to the costs incurred as compared to the total expected costs for completion of construction of the vacation resort. Positive amounts represent the recognition of previously deferred revenues.
 
(f)   Represents provision for estimated losses on vacation ownership contract receivables originated during the period. Beginning January 1, 2006, the Company recorded such provision as a contra revenue to vacation ownership interest sales on the Consolidated and Combined Statements of Income, as required by Statement of Financial Accounting Standards No. 152, ‘‘Accounting for Real Estate Time-Sharing Transactions.’’ Prior to January 1, 2006, the Company recorded such provision, net of estimated inventory recoveries, as a separate expense line item on the Combined Statements of Income and thus 2005 amounts are not comparable to 2006, 2007 and 2008 amounts.

 


 

Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
                                         
    September 30,          June 30,               March 31,          December 31,     September 30,  
    2008     2008     2008     2007     2007  
Securitized vacation ownership debt
                                     
Term notes
  $ 1,437     $ 1,727     $ 1,278     $ 1,435     $ 1,148  
Bank conduit facility (a)
    647       354       841       646       777  
                           
Securitized vacation ownership debt (b)
    2,084       2,081       2,119       2,081       1,925  
Less: Current portion of securitized vacation ownership debt
    324       284       268       237       304  
                           
Long-term securitized vacation ownership debt
  $ 1,760     $ 1,797     $ 1,851     $ 1,844     $ 1,621  
                           
 
                                       
Debt:
                                       
6.00% Senior unsecured notes (due December 2016) (c)
  $ 797     $ 797     $ 797     $ 797     $ 797  
Term loan (due July 2011)
    300       300       300       300       300  
Revolving credit facility (due July 2011) (d)
    305       145       95       97       133  
Vacation ownership bank borrowings
    172       196       181       164       148  
Vacation rentals capital leases
    143       162       165       154       153  
Other
    12       13       14       14       14  
                           
 
                                       
Total debt
    1,729       1,613       1,552       1,526       1,545  
Less: Current portion of debt
    182       207       193       175       159  
                           
Long-term debt
  $ 1,547     $ 1,406     $ 1,359     $ 1,351     $ 1,386  
                             
 
(a)   This 364-day vacation ownership bank conduit facility has availability of $1,200 million and is no longer revolving as of October 29, 2008. See press release discussion regarding a new bank conduit facility.
 
(b)   This debt is collateralized by $2,721 million, $2,723 million, $2,667 million, $2,596 million and $2,428 million of underlying vacation ownership contract receivables and related assets at September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007, respectively.
 
(c)   The balance at September 30, 2008 represents $800 million aggregate principal less $3 million of unamortized discount.
 
(d)   The Company’s revolving credit facility has a borrowing capacity of $900 million. At September 30, 2008, the Company has $60 million of outstanding letters of credit and a remaining borrowing capacity of $535 million. The increase in balance from June 30, 2008 to September 30, 2008 primarily relates to amounts borrowed to fund the July 2008 acquisition of U.S. Franchise Systems, Inc. and its Microtel Inns & Suites and Hawthorn Suites hotel brands.

 


 

Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
                                         
            As of and For the Three Months Ended September 30, 2008        
                                    Average
                                    Revenue Per
                    Average   Average Daily   Available Room
Brand   Number of Properties   Number of Rooms   Occupancy Rate   Rate (ADR)   (RevPAR)
 
 
                                       
Wyndham Hotels and Resorts
    80       21,365       63.4 %   $ 123.13     $ 78.09  
 
                                       
Wingate Inn
    158       14,427       62.9 %   $ 93.44     $ 58.77  
 
                                       
Hawthorn Suites
    90       8,404       63.5 %   $ 91.00     $ 57.78  
 
                                       
Ramada
    877       110,844       57.0 %   $ 82.35     $ 46.92  
 
                                       
Baymont
    213       18,194       55.7 %   $ 67.82     $ 37.74  
 
                                       
AmeriHost Inn
    14       893       59.8 %   $ 79.06     $ 47.27  
 
                                       
Days Inn
    1,878       152,557       56.9 %   $ 68.95     $ 39.22  
 
                                       
Super 8
    2,098       130,056       62.1 %   $ 63.69     $ 39.57  
 
                                       
Howard Johnson
    471       45,084       52.4 %   $ 69.09     $ 36.20  
 
                                       
Travelodge
    482       36,203       56.1 %   $ 73.48     $ 41.19  
 
                                       
Microtel Inns & Suites
    301       21,431       57.9 %   $ 63.51     $ 36.78  
 
                                       
Knights Inn
    294       19,568       45.4 %   $ 46.18     $ 20.95  
 
                                       
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels(*)
    14       4,367       N/A       N/A       N/A  
 
                               
                             
Total
    6,970       583,393       57.7 %   $ 72.61     $ 41.93  
                             
                                         
            As of and For the Three Months Ended September 30, 2007        
                                    Average
                                    Revenue Per
                    Average   Average Daily   Available Room
Brand   Number of Properties   Number of Rooms   Occupancy Rate   Rate (ADR)   (RevPAR)
 
 
                                       
Wyndham Hotels and Resorts
    75       20,585       65.3 %   $ 110.47     $ 72.10  
 
                                       
Wingate Inn
    152       13,952       67.1 %   $ 89.71     $ 60.18  
 
                                       
Ramada
    854       103,230       61.6 %   $ 79.38     $ 48.91  
 
                                       
Baymont
    182       15,962       63.6 %   $ 72.61     $ 46.16  
 
                                       
AmeriHost Inn
    39       2,754       58.4 %   $ 70.99     $ 41.45  
 
                                       
Days Inn
    1,857       150,667       59.7 %   $ 67.91     $ 40.57  
 
                                       
Super 8
    2,061       127,038       65.4 %   $ 62.05     $ 40.60  
 
                                       
Howard Johnson
    465       44,422       53.9 %   $ 69.40     $ 37.41  
 
                                       
Travelodge
    492       36,639       59.1 %   $ 71.48     $ 42.27  
 
                                       
Knights Inn
    261       18,193       45.2 %   $ 46.49     $ 21.01  
 
                                       
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels(*)
    23       7,475       N/A       N/A       N/A  
 
                               
                             
Total
    6,461       540,917       60.9 %   $ 70.77     $ 43.10  
                             
 
NOTE: A glossary of terms is included in Table 3 (2 of 2).
 
(*)   Represents 1) affiliated properties for which we receive a fee for reservation services provided and 2) properties managed under the CHI Limited joint venture. These properties are not branded; as such, certain operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant.

 


 

Table 6
(2 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS
                                         
            As of and For the Nine Months Ended September 30, 2008        
                                    Average
                                    Revenue Per
                    Average   Average Daily   Available Room
Brand   Number of Properties   Number of Rooms   Occupancy Rate   Rate (ADR)   (RevPAR)
 
 
                                       
Wyndham Hotels and Resorts
    80       21,365       63.6 %   $ 123.30     $ 78.44  
 
                                       
Wingate Inn
    158       14,427       62.3 %   $ 92.72     $ 57.78  
 
                                       
Hawthorn Suites
    90       8,404       63.5 %   $ 91.00     $ 57.78  
 
                                       
Ramada
    877       110,844       54.2 %   $ 82.35     $ 44.63  
 
                                       
Baymont
    213       18,194       51.2 %   $ 66.38     $ 34.02  
 
                                       
AmeriHost Inn
    14       893       49.2 %   $ 71.45     $ 35.15  
 
                                       
Days Inn
    1,878       152,557       52.0 %   $ 65.80     $ 34.24  
 
                                       
Super 8
    2,098       130,056       56.0 %   $ 60.40     $ 33.84  
 
                                       
Howard Johnson
    471       45,084       48.5 %   $ 65.95     $ 32.01  
 
                                       
Travelodge
    482       36,203       50.7 %   $ 70.20     $ 35.60  
 
                                       
Microtel Inns & Suites
    301       21,431       57.9 %   $ 63.51     $ 36.78  
 
                                       
Knights Inn
    294       19,568       42.4 %   $ 43.71     $ 18.54  
 
                                       
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels(*)
    14       4,367       N/A       N/A       N/A  
 
                               
                             
Total
    6,970       583,393       53.4 %   $ 70.68     $ 37.76  
                             
                                         
            As of and For the Nine Months Ended September 30, 2007        
                                    Average
                                    Revenue Per
                    Average   Average Daily   Available Room
Brand   Number of Properties   Number of Rooms   Occupancy Rate   Rate (ADR)   (RevPAR)
 
 
                                       
Wyndham Hotels and Resorts
    75       20,585       65.2 %   $ 112.65     $ 73.42  
 
                                       
Wingate Inn
    152       13,952       66.7 %   $ 89.65     $ 59.82  
 
                                       
Ramada
    854       103,230       56.5 %   $ 77.55     $ 43.86  
 
                                       
Baymont
    182       15,962       56.5 %   $ 68.91     $ 38.90  
 
                                       
AmeriHost Inn
    39       2,754       49.0 %   $ 66.71     $ 32.66  
 
                                       
Days Inn
    1,857       150,667       54.4 %   $ 63.72     $ 34.67  
 
                                       
Super 8
    2,061       127,038       57.9 %   $ 58.53     $ 33.91  
 
                                       
Howard Johnson
    465       44,422       49.4 %   $ 65.59     $ 32.39  
 
                                       
Travelodge
    492       36,639       52.2 %   $ 66.42     $ 34.68  
 
                                       
Knights Inn
    261       18,193       42.3 %   $ 43.58     $ 18.43  
 
                                       
Unmanaged, Affiliated and Managed, Non-Proprietary Hotels (*)
    23       7,475       N/A       N/A       N/A  
 
                               
                             
Total
    6,461       540,917       55.4 %   $ 67.94     $ 37.63  
                             
 
NOTE: A glossary of terms is included in Table 3 (2 of 2).
 
(*)   Represents 1) affiliated properties for which we receive a fee for reservation services provided and 2) properties managed under the CHI Limited joint venture. These properties are not branded; as such, certain operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant.

 


 

Table 7
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
         March 31, 2008               June 30, 2008          September 30, 2008     September 30, 2008  
 
                               
Reported EBITDA
  $ 130     $ 221     $ 294     $ 645  
 
                               
Resolution of and adjustment to contingent liabilities and assets (a)
    3       (7 )     1       (4 )
 
                               
Trademark impairment (b)
    28                   28  
 
                               
Restructuring costs (c)
                6       6  
 
               
 
                               
Adjusted EBITDA
  $ 161     $ 214     $ 301     $ 675  
     
 
                               
Reported PreTax Income
  $ 70     $ 160     $ 228     $ 457  
 
                               
Resolution of and adjustment to contingent liabilities and assets (a)
    3       (7 )     1       (4 )
 
                               
Trademark impairment (b)
    28                   28  
 
                               
Restructuring costs (c)
                6       6  
 
               
 
                               
Adjusted PreTax Income
  $ 101     $ 153     $ 235     $ 487  
     
 
                               
Reported Tax Provision
  $ (28 )   $ (62 )   $ 86     $ 175  
 
                               
Resolution of and adjustment to contingent liabilities and assets (d)
          3       (1 )     (5 )
 
                               
Trademark impairment (d)
    (11 )                 11  
 
                               
Restructuring costs (d)
                2       2  
 
               
Adjusted Tax Provision
  $ (39 )   $ (59 )   $ 87     $ 183  
     
 
                               
Reported Net Income
  $ 42     $ 98     $ 142     $ 282  
Resolution of and adjustment to contingent liabilities and assets
    3       (4 )     2       1  
Trademark impairment
    17                   17  
Restructuring costs
                4       4  
 
               
 
                               
Adjusted Net Income
  $ 62     $ 94     $ 148     $ 304  
     
 
                               
Reported Diluted EPS
  $ 0.24     $ 0.55     $ 0.80     $ 1.58  
Resolution of and adjustment to contingent liabilities and assets
    0.01       (0.02 )     0.01       0.01  
Trademark impairment
    0.10                   0.10  
Restructuring costs
                0.02       0.02  
 
               
 
                               
Adjusted Diluted EPS
  $ 0.35     $ 0.53     $ 0.83     $ 1.71  
     
 
                               
Diluted Shares
    178       178       178       178  
 
Note: Amounts may not foot due to rounding.
 
(a)   Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets.
 
(b)   Represents an impairment charge due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand.
 
(c)   Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during the third quarter of 2008.
 
(d)   Relates to the tax effect of the adjustments.

 


 

Table 7
(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
         March 31, 2007               June 30, 2007          September 30, 2007     September 30, 2007  
 
                               
Reported EBITDA
  $ 192     $ 211     $ 248     $ 650  
 
                               
Separation and related costs (a)
    6       7       3       16  
 
                               
Resolution of and adjustment to contingent liabilities and assets (b)
    (13 )     (17 )     25       (5 )
 
               
 
                               
Adjusted EBITDA
  $ 185     $ 201     $ 276     $ 661  
       
 
                               
Reported PreTax Income
  $ 139     $ 154     $ 189     $ 482  
 
                               
Separation and related costs (a)
    6       7       3       16  
 
                               
Resolution of and adjustment to contingent liabilities and assets (b)
    (13 )     (17 )     25       (5 )
 
               
 
                               
Adjusted PreTax Income
  $ 132     $ 144     $ 217     $ 493  
       
 
                               
Reported Tax Provision
  $ (53 )   $ (58 )   $ (72 )   $ (184 )
 
                               
Separation and related costs (c)
    (2 )     (3 )     (1 )     (6 )
 
                               
Resolution of and adjustment to contingent liabilities and assets (c)
    4       6       (10 )     1  
 
               
 
                               
Adjusted Tax Provision
  $ (51 )   $ (55 )   $ (83 )   $ (189 )
       
 
                               
Reported Net Income
  $ 86     $ 96     $ 117     $ 298  
 
                               
Separation and related costs
    4       4       2       10  
 
                               
Resolution of and adjustment to contingent liabilities and assets
    (9 )     (11 )     15       (4 )
 
               
 
                               
Adjusted Net Income
  $ 81     $ 89     $ 134     $ 304  
       
 
                               
Reported Diluted EPS
  $ 0.45     $ 0.52     $ 0.65     $ 1.62  
 
                               
Separation and related costs
    0.02       0.02       0.01       0.05  
 
                               
Resolution of and adjustment to contingent liabilities and assets
    (0.05 )     (0.06 )     0.09       (0.02 )
 
               
 
                               
Adjusted Diluted EPS
  $ 0.43     $ 0.49     $ 0.75     $ 1.65  
       
 
                               
Diluted Shares
    190       183       180       184  
 
Note: Amounts may not foot due to rounding.
 
(a)   Represents the costs incurred in connection with the Company’s separation from Cendant (now Avis Budget Group).
 
(b)   Relates to the net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets.
 
(c)   Relates to the tax effect of the adjustments.

 


 

Table 8
(1 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                 
    Three Months Ended September 30, 2008  
 
                               
            Legacy     Restructuring        
    As Reported     Adjustments     Costs     As Adjusted  
Net revenues
                               
 
                               
Vacation ownership interest sales
  $ 446                     $ 446  
 
                               
Service fees and membership
    468                       468  
 
                               
Franchise fees
    153                       153  
 
                               
Consumer financing
    111                       111  
 
                               
Other
    48                       48  
 
                     
 
                               
Net revenues
    1,226       -          -          1,226  
 
                     
 
                               
Expenses
                               
 
                               
Operating
    439                       439  
 
                               
Cost of vacation ownership interests
    86                       86  
 
                               
Consumer financing interest
    34                       34  
 
                               
Marketing and reservation
    232                       232  
 
                               
General and administrative
    140       (1 (a)             139  
 
                               
Restructuring costs
    6               (6 (b)     -      
 
                               
Depreciation and amortization
    47                       47  
 
                     
 
                               
Total expenses
    984       (1 )     (6 )     977  
 
                     
 
                               
Operating income
    242       1       6       249  
 
                               
Other income, net
    (5 )                     (5 )
 
                               
Interest expense
    21                       21  
 
                               
Interest income
    (2 )                     (2 )
 
                     
 
                               
Income before income taxes
    228       1       6       235  
 
                               
Provision for income taxes
    86       (1 (c)     2  (c)     87  
 
                     
 
                               
Net income
  $ 142     $ 2     $ 4     $ 148  
 
                     
 
                               
Earnings per share
                               
 
                               
Basic
  $ 0.80     $ 0.01     $ 0.02     $ 0.83  
 
                               
Diluted
    0.80       0.01       0.02       0.83  
 
                               
Weighted average shares outstanding
                               
 
                               
Basic
    178       178       178       178  
 
                               
Diluted
    178       178       178       178  
 
(a)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets.
 
(b)   Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during the third quarter of 2008.
 
(c)   Relates to the tax effect of the adjustment.


 

Table 8
(2 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                         
    Nine Months Ended September 30, 2008  
 
                               
            Legacy     Trademark     Restructuring        
    As Reported     Adjustments     Impairment     Costs     As Adjusted  
Net revenues
                                       
 
                               
Vacation ownership interest sales
  $ 1,153                             $ 1,153  
 
                               
Service fees and membership
    1,344                               1,344  
 
                               
Franchise fees
    402                               402  
 
                               
Consumer financing
    314                               314  
 
                               
Other
    157                               157  
 
                           
 
                               
Net revenues
    3,370       -          -          -          3,370  
 
                           
 
                                       
Expenses
                                       
 
                               
Operating
    1,284                               1,284  
 
                               
Cost of vacation ownership interests
    226                               226  
 
                               
Consumer financing interest
    93                               93  
 
                               
Marketing and reservation
    659                               659  
 
                               
General and administrative
    438       4  (a)                     442  
 
                               
Trademark impairment
    28               (28 (b)             -        
 
                               
Restructuring costs
    6                       (6 (c)     -      
 
                               
Depreciation and amortization
    137                               137  
 
                           
 
                               
Total expenses
    2,871       4       (28 )     (6 )     2,841  
 
                           
 
                                       
Operating income
    499       (4 )     28       6       529  
 
                               
Other income, net
    (9 )                             (9 )
 
                               
Interest expense
    59                               59  
 
                               
Interest income
    (8 )                             (8 )
 
                           
 
                                       
Income before income taxes
    457       (4 )     28       6       487  
 
                               
Provision for income taxes
    175       (5 (d)     11  (d)     2  (d)     183  
 
                           
 
                                       
Net income
  $ 282     $ 1     $ 17     $ 4     $ 304  
 
                           
 
                                       
Earnings per share
                                       
 
                               
Basic
  $ 1.59     $ 0.01     $ 0.10     $ 0.02     $ 1.71  
 
                               
Diluted
    1.58       0.01       0.10       0.02       1.71  
 
                                       
Weighted average shares outstanding
                                       
 
                               
Basic
    177       177       177       177       177  
 
                               
Diluted
    178       178       178       178       178  
 
     
Note: EPS amounts may not foot across due to rounding.
 
(a)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets.
 
(b)   Represents an impairment charge due to the Company’s initiative to rebrand its vacation ownership trademarks to the Wyndham brand.
 
(c)   Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during the third quarter of 2008.
 
(d)   Relates to the tax effect of the adjustments.


 

Table 8
(3 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                 
    Three Months Ended September 30, 2007  
 
                               
            Separation and              
            Related     Legacy        
       As Reported        Adjustments       Adjustments          As Adjusted     
Net revenues
                               
 
                               
Vacation ownership interest sales
  $ 467                     $ 467  
 
                               
Service fees and membership
    442                       442  
 
                               
Franchise fees
    155                       155  
 
                               
Consumer financing
    93                       93  
 
                               
Other
    59                       59  
 
                   
Net revenues
    1,216       -         -         1,216  
 
                   
 
                               
Expenses
                               
 
                               
Operating
    440                       440  
 
                               
Consumer financing interest expense
    29                       29  
 
                               
Cost of vacation ownership interests
    101                       101  
 
                               
Marketing and reservation
    229                       229  
 
                               
General and administrative
    174               (25 (b)     149  
 
                               
Separation and related costs
    3       (3 (a)             -    
 
                               
Depreciation and amortization
    43                       43  
 
                   
Total expenses
    1,019       (3 )     (25 )     991  
 
                   
 
                               
Operating income
    197       3       25       225  
 
                               
Other income, net
    (8 )                     (8 )
 
                               
Interest expense
    20                       20  
 
                               
Interest income
    (4 )                     (4 )
 
                   
 
                               
Income before income taxes
    189       3       25       217  
 
                               
Provision for income taxes
    72       1  (c)     10  (c)     83  
 
                   
 
                               
Net income
  $ 117     $ 2     $ 15     $ 134  
 
                   
 
                               
Earnings per share
                               
 
                               
Basic
  $ 0.65     $ 0.01     $ 0.09     $ 0.75  
 
                               
Diluted
    0.65       0.01       0.09       0.75  
 
                               
Weighted average shares outstanding
                               
 
                               
Basic
    179       179       179       179  
 
                               
Diluted
    180       180       180       180  
 
Note: EPS amounts may not foot across due to rounding.
 
(a)   Represents the costs incurred in connection with the Company’s separation from Cendant (now Avis Budget Group).
 
(b)   Relates to the net benefit from the resolution of certain contingent liabilities.
 
(c)   Relates to the tax effect of the adjustments.


 

Table 8
(4 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                 
    Nine Months Ended September 30, 2007
            Separation and            
            Related     Legacy      
    As Reported     Adjustments     Adjustments     As Adjusted
Net revenues
                               
 
                               
Vacation ownership interest sales
  $ 1,283                     $ 1,283  
 
                               
Service fees and membership
    1,232                       1,232  
 
                               
Franchise fees
    406                       406  
 
                               
Consumer financing
    261                       261  
 
                               
Other
    146                       146  
 
                   
 
                               
Net revenues
    3,328       -         -         3,328  
 
                   
 
                               
Expenses
                               
 
                               
Operating
    1,246                       1,246  
 
                               
Consumer financing interest expense
    77                       77  
 
                               
Cost of vacation ownership interests
    296                       296  
 
                               
Marketing and reservation
    632                       632  
 
                               
General and administrative
    419               5  (b)     424  
 
                               
Separation and related costs
    16       (16 (a)             -      
 
                               
Depreciation and amortization
    122                       122  
 
                   
 
                               
Total expenses
    2,808       (16 )     5       2,797  
 
                   
 
                               
Operating income
    520       16       (5 )     531  
 
                               
Other income, net
    (8 )                     (8 )
 
                               
Interest expense
    55                       55  
 
                               
Interest income
    (9 )                     (9 )
 
                   
 
                               
Income before income taxes
    482       16       (5 )     493  
 
                               
Provision for income taxes
    184       6  (c)     (1 (c)     189  
 
                   
 
                               
Net income
  $ 298     $ 10     $ (4 )   $ 304  
 
                   
 
                               
Earnings per share
                               
 
                               
Basic
  $ 1.63     $ 0.05     $ (0.02 )   $ 1.66  
 
                               
Diluted
    1.62       0.05       (0.02 )     1.65  
 
                       
Weighted average shares outstanding
                               
 
                       
Basic
    183       183       183       183  
 
                       
Diluted
    184       184       184       184  
 
Note: EPS amounts may not foot across due to rounding.
 
(a)   Represents the costs incurred in connection with the Company’s separation from Cendant (now Avis Budget Group).
 
(c)   Relates to the net benefit from the resolution of certain contingent liabilities and assets.
 
(c)   Relates to the tax effect of the adjustments.