UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported) July 21, 2010 (July 15, 2010)
Wyndham Worldwide Corporation
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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1-32876
(Commission File No.)
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20-0052541
(I.R.S. Employer
Identification No.) |
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| 22 Sylvan Way |
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| Parsippany, NJ
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07054 |
(Address of Principal
Executive Office)
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (973) 753-6000
(Former Name or Former Address if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.01 |
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Entry into a Material Definitive Agreement. |
The information set forth in the second paragraph of Item 8.01 below is incorporated herein by
reference.
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| Item 7.01. |
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Regulation FD Disclosure. |
Wyndham Worldwide Corporation (“Wyndham” or the “Company”) today issued a press release reporting
that it reached an agreement with the IRS to settle its federal contingent tax liability. A copy
of the Company’s press release is furnished as Exhibit 99.1 and is incorporated by reference.
On July 15, 2010, Cendant Corporation (now known as Avis Budget Group, Inc.) (“Cendant”), and the
Internal Revenue Service (“IRS”) agreed to settle the IRS examination of Cendant’s taxable years
2003 through 2006. During such period the Company and Cendant’s former real estate services unit
Realogy Corporation (“Realogy”) were included in Cendant’s tax returns. As previously disclosed in
the Company’s periodic reports, in connection with the Company’s separation from Cendant effective
July 31, 2006 (“Separation Date”), the Company entered into a tax sharing agreement with Cendant
and Realogy.
The agreements with the IRS close the IRS examination for tax periods prior to the Separation Date.
The agreements with the IRS also include a resolution with respect to the tax treatment of Wyndham
timeshare receivables, which resulted in the acceleration of unrecognized Wyndham deferred tax
liabilities as of the Separation Date. In connection with reaching agreement with the IRS to
resolve the contingent federal tax liabilities at issue, the Company entered into an agreement with
Realogy to clarify each party’s obligations under the tax sharing agreement. Under the agreement
with Realogy, among other things, the parties specified that the Company has sole responsibility
for taxes and interest associated with the acceleration of timeshare receivables income previously
deferred for tax purposes, while Realogy will not seek any reimbursement for the loss of a step up
in basis of certain assets. Such agreement is attached as Exhibit 10.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
During the third quarter 2010, the Company expects to make payment for all such tax liabilities,
including the final interest payable, to Cendant who is the taxpayer and receive payments from
Realogy. The Company expects its aggregate net payments to approximate $145 million. As of June
30, 2010, the Company’s accrual for outstanding Cendant contingent tax liabilities was $274
million, of which $185 million was in respect of items resolved in the agreement with the IRS and
the remaining $89 million relates to state and foreign tax legacy issues, which are expected to be
resolved in the next few years. The Company thus expects to recognize income of
approximately $40 million for the residual accrual that will no longer be required for such items
in its third quarter 2010 Consolidated Statement of Income.
The
agreement with the IRS and the net payment of $145 million
referenced above, will also result in the reversal of approximately $190 million in net deferred tax liabilities
allocated from Cendant on the Separation Date with a corresponding
increase to stockholders’ equity during the third quarter 2010.
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| Item 9.01. |
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Financial Statements and Exhibits. |
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| (d) Exhibits. |
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The following Exhibit 10.1 is filed, and the following Exhibit 99.1 is furnished with
this report: |
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| Exhibit No. |
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Description |
| Exhibit 10.1
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Agreement, dated as of July 15, 2010, between Wyndham Worldwide
Corporation and Realogy Corporation clarifying Tax Sharing
Agreement, dated as of July 28, 2006, among Realogy Corporation,
Cendant Corporation, Wyndham Worldwide Corporation and Travelport,
Inc. |
| Exhibit 99.1
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Press Release of Wyndham Worldwide Corporation, dated July 21, 2010. |