EXHIBIT 99.1
(LOGO)
Wyndham Worldwide Reports Strong Third Quarter 2011 Earnings
Repurchased Over $300 Million of Common Stock in the Third Quarter
Increases Full-Year 2011 EPS Guidance
PARSIPPANY, N.J. (October 26, 2011) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2011.
Highlights:
  Third quarter 2011 adjusted diluted earnings per share (EPS) was $0.94, compared with $0.68 in the third quarter of 2010, an increase of 38%. Third quarter 2011 reported diluted EPS was $1.08, an increase of 29%, compared with the same period in 2010.
 
  Free cash flow increased 24% to $699 million for the first three quarters of 2011, compared with $564 million during the same period in 2010. The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances and excludes a 2010 cash payment related to contingent IRS tax liabilities.
 
  During the quarter, the Company repurchased approximately 10.2 million shares of its common stock at an average price of $29.75 for $304 million.
     “I am pleased once again with our strong results, which reflect outstanding operating performance and the resiliency of our businesses,” said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. “In addition, we continued to thoughtfully deploy our free cash flow to repurchase our common shares and invest in our company.”
THIRD QUARTER 2011 OPERATING RESULTS
Third quarter revenues increased 14% from the prior year period to $1.2 billion. The revenue growth reflects strong RevPAR growth of 6.3% in our hotel business, increased rental revenues including contributions from acquisitions of vacation rentals businesses and higher sales in the vacation ownership business.
For the third quarter of 2011, adjusted net income increased 22% to $153 million, compared with $125 million in the third quarter of 2010. On a per share basis, adjusted net income grew 38% to $0.94 per diluted share, compared with $0.68 per diluted share

 


 

in the same period in 2010. The increase reflects strong operational performance and the benefit from the Company’s share repurchase program, partially offset by a higher tax rate compared with the third quarter of 2010. Adjusted net income for the third quarter of 2011 excludes a tax benefit of $13 million related to the reversal of a tax valuation allowance, $7 million, after tax, of interest income related to a refund of value added taxes and a $6 million after-tax net benefit related to the adjustment and resolution of certain contingent liabilities and assets. These adjustments were partially offset by a $4 million after-tax loss related to the write-off of foreign exchange translation adjustments resulting from the liquidation of a foreign entity.
Including the above adjustments, third quarter 2011 net income grew 12% to $175 million, or $1.08 per diluted share, compared with net income of $156 million or $0.84 per diluted share, a 29% increase per share from the third quarter of 2010.
Free cash flow increased 24% to $699 million for the first nine months of 2011, compared with $564 million during the same period in 2010. The growth in free cash flow reflects higher cash earnings, more efficient working capital utilization and a refund of value added taxes and related interest income. For the first nine months, cash provided by operating activities was $860 million, compared with $528 million in the prior year period, which included a $145 million cash payment related to contingent IRS tax liabilities.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $222 million in the third quarter of 2011, an increase of 9%, compared with the third quarter of 2010, primarily reflecting improved RevPAR performance, an increase in system size and a $12 million reclassification of certain reservation fees, which had no impact on EBITDA. In the third quarter of 2011, system-wide RevPAR increased 6.3%, or 4.8% in constant currency.
Third quarter 2011 EBITDA of $67 million, was flat, compared with the same period in 2010, primarily reflecting the timing of $3 million in marketing and reservation expenses as well as $3 million of pre-opening costs for the Wyndham Grand Orlando Resort Bonnet Creek.
As of September 30, 2011, the Company’s hotel system consisted of approximately 7,190 properties and 611,200 rooms. The development pipeline included approximately 870 hotels and 115,000 rooms, of which 58% were new construction. International rooms accounted for 62% of the development pipeline.

 


 

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $436 million in the third quarter of 2011, an increase of 32% compared with the third quarter of 2010, reflecting incremental revenues from acquisitions and the favorable impact from foreign currency.
Exchange revenues were $161 million, flat compared with the third quarter of 2010. In constant currency, exchange revenues decreased 3%, reflecting a 2.2% decrease in exchange revenue per member. The average number of members was flat.
Vacation rental revenues were $260 million, which included $83 million of incremental revenues related to acquisitions, compared with $161 million in the third quarter of 2010. In constant currency, excluding the impact of the incremental revenues from acquisitions, net revenues generated from rental transactions and related services increased 2%, reflecting a 1.4% increase in the average net price per vacation rental, while rental transaction volume was flat.
Adjusted EBITDA for the third quarter of 2011 was $135 million, a 30% increase compared with $104 million in the prior year period. The increase reflects incremental contributions from acquisitions and the favorable impact from foreign currency. Third quarter 2011 adjusted EBITDA excludes a $4 million loss related to the write-off of foreign exchange translation adjustments resulting from the liquidation of a foreign entity.
Vacation Ownership (Wyndham Vacation Ownership)
Revenues for the third quarter of 2011 were $559 million, a 5% increase compared with $533 million in the third quarter of 2010, reflecting an increase in Vacation Ownership Interest (VOI) sales and commissions under the Wyndham Asset Affiliation Model (WAAM).
Gross VOI sales were $455 million in the third quarter of 2011, up 10% from the third quarter of 2010, reflecting a 5.6% increase in volume per guest and a 5.3% increase in tour flow.
EBITDA for the third quarter of 2011 increased 21% to $149 million, compared with EBITDA of $123 million in the third quarter of 2010, reflecting the increase in VOI sales and a decrease in cost of sales.
Other Items
    The Company repurchased approximately 10.2 million shares of its common stock during the third quarter of 2011 at an average price of $29.75 for $304 million and an additional 1.4 million shares at an average price of $29.19 for $40 million through October 25, 2011.
 
    Net interest expense in the third quarter of 2011 was $15 million, compared with $45 million in the same period in 2010. Third quarter 2011 net interest expense

 


 

      included $16 million of interest income related to a refund of value added taxes and third quarter 2010 net interest expense included $11 million of costs incurred for the early extinguishment of debt.
Balance Sheet Information as of September 30, 2011:
    Cash and cash equivalents of $175 million, compared with approximately $155 million at December 31, 2010.
 
    Vacation ownership contract receivables, net, of $2.9 billion, compared with $3.0 billion at December 31, 2010.
 
    Vacation ownership and other inventory of $1.1 billion, compared with $1.2 billion at December 31, 2010.
 
    Securitized vacation ownership debt of $1.7 billion, unchanged from December 31, 2010.
 
    Other debt of $2.1 billion, unchanged from December 31, 2010. The remaining borrowing capacity on the revolving credit facility was $820 million, compared with $788 million as of December 31, 2010.
A schedule of debt is included in the financial tables section of this press release.
Outlook
The Company is increasing full-year 2011 adjusted EPS guidance from $2.32 – $2.40 to $2.41 – $2.45, based on a diluted share count of 167 million.
For the fourth quarter of 2011, the Company expects adjusted EPS of $0.40 – $0.44 based on a diluted share count of 158 million.
The Company’s preliminary guidance for the full-year 2012 is as follows:
    Revenues of approximately $4.425 – $4.600 billion
 
    Adjusted EBITDA of approximately $1.030 – $1.055 billion
 
    Adjusted EPS of approximately $2.72 – $2.82 based on a diluted share count of 160 million.
The guidance reflects assumptions used for internal planning purposes. Guidance may exclude non-recurring or special items, which may have a positive or negative impact on reported results. If economic conditions change materially from current levels, these assumptions and our guidance may change materially.
Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, October 26, 2011 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company’s website at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EDT on October 26, 2011. The conference call may also be accessed by dialing (800) 369-2052 and providing the passcode “WYNDHAM.” Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days

 


 

beginning at 11:00am EDT on October 26, 2011 by dialing (866) 490-5935 and providing the pass code “8425.”
Presentation of Financial Information
Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP 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 the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to our financial results.
About Wyndham Worldwide Corporation
As one of the world’s largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality services and products across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Worldwide encompasses approximately 7,360 franchised hotels and vacation ownership resorts with approximately 632,000 rooms worldwide. Wyndham Exchange & Rentals offers leisure travelers, including its 3.7 million members, access to approximately 99,000 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 vacation ownership resorts serving nearly 815,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs approximately 26,000 employees globally.
For more information about Wyndham Worldwide, please visit the Company’s website 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.
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, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 1, 2011. 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 and Media contact:
Margo C. Happer
Senior Vice President, Investor Relations
Wyndham Worldwide Corporation
(973) 753-6472
margo.happer@wyn.com

 


 

Table 1
(1 of 2)
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 consumer financing interest), interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company’s Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for the Company’s industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.
The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income for the three months ended September 30, 2011 and 2010:
                                 
    Three Months Ended September 30,  
    2011     2010  
    Net Revenues     EBITDA     Net Revenues     EBITDA  
Lodging
  $ 222     $ 67     $ 203     $ 67  
Vacation Exchange and Rentals
    436       131 (b)     330       103 (e)
Vacation Ownership
    559       149       533       123  
 
                       
Total Reportable Segments
    1,217       347       1,066       293  
Corporate and Other(a)
    (5 )     (18) (c)     (1 )     30 (c)
 
                       
Total Company
  $ 1,212     $ 329     $ 1,065     $ 323  
 
                       
 
                               
Reconciliation of EBITDA to Net Income
                               
 
                               
EBITDA
          $ 329             $ 323  
Depreciation and amortization
            43               43  
Interest expense
            34               47 (f)
Interest income
            (19) (d)             (2 )
 
                           
Income before income taxes
            271               235  
Provision for income taxes
            96               79  
 
                           
Net income
          $ 175             $ 156  
 
                           
 
(a)   Includes the elimination of transactions between segments.
 
(b)   Includes a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(c)   Includes $8 million and $52 million of a net benefit during the three months ended September 30, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(d)   Includes $16 million of interest income related to a refund of value added taxes.
 
(e)   Includes $1 million related to costs incurred in connection with the Company’s acquisition of ResortQuest during September 2010.
 
(f)   Includes $11 million of costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during the third quarter of 2010.
The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended September 30, 2011 and 2010 (for a description of adjustments by segment, see Table 7):
                                 
    Three Months Ended September 30,  
    2011     2010  
            Adjusted             Adjusted  
    Net Revenues     EBITDA     Net Revenues     EBITDA  
Lodging
  $ 222     $ 67     $ 203     $ 67  
Vacation Exchange and Rentals
    436       135       330       104  
Vacation Ownership
    559       149       533       123  
 
                       
Total Reportable Segments
    1,217       351       1,066       294  
Corporate and Other
    (5 )     (26 )     (1 )     (22 )
 
                       
Total Company
  $ 1,212     $ 325     $ 1,065     $ 272  
 
                       

 


 

Table 1
(2 of 2)
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)
The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income for the nine months ended September 30, 2011 and 2010:
                                 
    Nine Months Ended September 30,  
    2011     2010  
    Net Revenues     EBITDA     Net Revenues     EBITDA  
Lodging
  $ 561     $ 160 (b)   $ 525     $ 148 (h)
Vacation Exchange and Rentals
    1,152       330 (c)     912       261 (i)
Vacation Ownership
    1,550       376 (d)     1,483       310  
 
                       
Total Reportable Segments
    3,263       866       2,920       719  
Corporate and Other(a)
    (10 )     (57) (e)     (6 )     (4) (e)
 
                       
Total Company
  $ 3,253     $ 809     $ 2,914     $ 715  
 
                       
Reconciliation of EBITDA to Net Income
                               
 
                               
EBITDA
          $ 809             $ 715  
Depreciation and amortization
            133               128  
Interest expense
            115 (f)             133 (j)
Interest income
            (22) (g)             (3 )
 
                           
Income before income taxes
            583               457  
Provision for income taxes
            222               157  
 
                           
Net income
          $ 361             $ 300  
 
                           
 
(a)   Includes the elimination of transactions between segments.
 
(b)   Includes a non-cash impairment charge of $13 million related to a write-down of an international joint venture in the Company’s lodging business.
 
(c)   Includes (i) a $31 million net benefit resulting from a refund of value added taxes, (ii) $7 million of restructuring costs incurred in connection with a strategic initiative commenced by the Company during 2010 and (iii) a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(d)   Includes a $1 million benefit for the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.
 
(e)   Includes $16 million and $51 million of a net benefit during the nine months ended September 30, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(f)   Includes (i) $12 million of costs incurred for the early repurchase of a portion of the Company’s convertible notes during the first nine months of 2011 and (ii) $3 million of interest related to value added tax accruals.
 
(g)   Includes $16 million of interest income related to a refund of value added taxes.
 
(h)   Includes $1 million related to costs incurred in connection with the Company’s acquisition of the TRYP hotel brand during June 2010.
 
(i)   Includes (i) $4 million related to costs incurred in connection with the Company’s acquisition of Hoseasons Holdings Ltd. during March 2010 and (ii) $1 million related to costs incurred in connection with the Company’s acquisition of ResortQuest during September 2010.
 
(j)   Includes (i) $16 million of costs incurred for the early extinguishment of the Company’s term loan facility and revolving foreign credit facility during March 2010 and (ii) $11 million of costs incurred for the repurchase of a portion of the Company’s 3.50% convertible notes during the third quarter of 2010.
The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the nine months ended September 30, 2011 and 2010 (for a description of adjustments by segment, see Table 7):
                                 
    Nine Months Ended September 30,  
    2011     2010  
            Adjusted             Adjusted  
    Net Revenues     EBITDA     Net Revenues     EBITDA  
Lodging
  $ 561     $ 173     $ 525     $ 149  
Vacation Exchange and Rentals
    1,152       310       912       266  
Vacation Ownership
    1,550       375       1,483       310  
 
                       
Total Reportable Segments
    3,263       858       2,920       725  
Corporate and Other
    (10 )     (73 )     (6 )     (55 )
 
                       
Total Company
  $ 3,253     $ 785     $ 2,914     $ 670  
 
                       

 


 

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,  
    2011     2010     2011     2010  
Net revenues
                               
Service and membership fees
  $ 584     $ 464     $ 1,579     $ 1,298  
Vacation ownership interest sales
    320       308       855       796  
Franchise fees
    160       142       395       353  
Consumer financing
    105       107       310       318  
Other
    43       44       114       149  
 
                       
Net revenues
    1,212       1,065       3,253       2,914  
 
                       
 
                               
Expenses
                               
Operating
    490   (a)     410   (b)     1,358   (a)     1,179   (b)
Cost of vacation ownership interests
    35       52       115       138  
Consumer financing interest
    21       27       67       80  
Marketing and reservation
    182       149       472       410  
General and administrative (c)
    157       101       422   (d)     394  
Asset impairment
          4   (e)     13   (f)     4   (e)
Restructuring
                6   (g)      
Depreciation and amortization
    43       43       133       128  
 
                       
Total expenses
    928       786       2,586       2,333  
 
                       
 
                               
Operating income
    284       279       667       581  
Other income, net
    (2 )     (1 )     (9 ) (h)     (6 )
Interest expense
    34       47   (i)     115   (j)     133   (i)
Interest income
    (19 )(k)     (2 )     (22 )(k)     (3 )
 
                       
 
                               
Income before income taxes
    271       235       583       457  
Provision for income taxes
    96   (l)     79       222   (l)     157  
 
                       
 
                               
Net income
  $ 175     $ 156     $ 361     $ 300  
 
                       
 
                               
Earnings per share
                               
Basic
  $ 1.10     $ 0.88     $ 2.17     $ 1.68  
Diluted
    1.08       0.84       2.12       1.62  
 
                               
Weighted average shares outstanding
                               
Basic
    159       177       166       179  
Diluted
    162       184       170       186  
 
(a)   Includes a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(b)   Includes $1 million during both the three and nine months ended September 30, 2010 related to costs incurred in connection with the Company’s September 2010 acquisition of ResortQuest. The nine months ended September 30, 2010 also includes (i) $4 million of costs incurred in connection with the Company’s March 2010 acquisition of Hoseasons Holdings Ltd. and (ii) $1 million related to costs incurred in connection with the Company’s June 2010 acquisition of the TRYP hotel brand.
 
(c)   Includes $8 million and $52 million of a net benefit during the three months ended September 30, 2011 and 2010, respectively, and $12 million and $51 million of a net benefit during the nine months ended September 30, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation.
 
(d)   Includes a $31 million net benefit resulting from a refund of value added taxes.
 
(e)   Represents a non-cash impairment charge to reduce the value of certain vacation ownership properties and related assets held for sale that are no longer consistent with the Company’s development plans.
 
(f)   Represents a non-cash impairment charge related to a write-down of an international joint venture in the Company’s lodging business.
 
(g)   Includes (i) $7 million of costs incurred as a result of a strategic initiative commenced by the Company during 2010 and (ii) a $1 million benefit for the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.
 
(h)   Includes $4 million of a gain related to the redemption of a preferred stock investment allocated to the Company in connection with our separation from Cendant.
 
(i)   Includes $11 million during both the three and nine months ended September 30, 2010 related to costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during the third quarter of 2010. The nine months ended September 30, 2010 also includes $16 million of costs incurred for the early extinguishment of the Company’s term loan facility and revolving foreign credit facility during March 2010.
 
(j)   Includes (i) $12 million of costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes and (ii) $3 million of interest related to value added tax accruals.
 
(k)   Includes $16 million of interest income related to the refund of value added taxes.
 
(l)   Includes a benefit of $13 million related to the reversal of a tax valuation allowance.

 


 

Table 3
(1 of 3)
Wyndham Worldwide Corporation
OPERATING STATISTICS
                                                 
    Year     Q1     Q2     Q3     Q4     Full Year  
     
Lodging (a)
                                               
Number of Rooms
    2011       609,600       612,900       611,200       N/A       N/A  
 
    2010       593,300       606,800       605,700       612,700       N/A  
 
    2009       588,500       590,200       590,900       597,700       N/A  
 
    2008       551,100       551,500       583,400       592,900       N/A  
 
                                               
RevPAR
    2011     $ 27.71     $ 35.38     $ 39.49       N/A       N/A  
 
    2010     $ 25.81     $ 32.25     $ 37.14     $ 29.18     $ 31.14  
 
    2009     $ 27.69     $ 32.38     $ 34.81     $ 26.47     $ 30.34  
 
    2008     $ 32.21     $ 38.87     $ 41.93     $ 30.03     $ 35.74  
 
                                               
Vacation Exchange and Rentals
                                               
Average Number of Members (in 000s)
    2011       3,766       3,755       3,744       N/A       N/A  
 
    2010       3,746       3,741       3,766       3,759       3,753  
 
    2009       3,789       3,795       3,781       3,765       3,782  
 
    2008       3,632       3,682       3,673       3,693       3,670  
 
                                               
Exchange Revenue Per Member
    2011     $ 205.64     $ 178.46     $ 172.38       N/A       N/A  
 
    2010     $ 201.93     $ 172.20     $ 173.44     $ 162.59     $ 177.53  
 
    2009     $ 194.83     $ 174.22     $ 173.90     $ 163.89     $ 176.73  
 
    2008     $ 234.05     $ 201.04     $ 193.39     $ 165.99     $ 198.48  
 
                                               
Vacation Rental Transactions (in 000s) (b)
    2011       398       328       370       N/A       N/A  
 
    2010       291       297       322       253       1,163  
 
    2009       273       231       264       196       964  
 
    2008       269       220       255       191       936  
 
                                               
Average Net Price Per Vacation Rental (b)
    2011     $ 377.71     $ 549.09     $ 701.81       N/A       N/A  
 
    2010     $ 361.17     $ 387.01     $ 500.31     $ 449.12     $ 425.38  
 
    2009     $ 353.15     $ 471.74     $ 594.34     $ 499.66     $ 477.38  
 
    2008     $ 442.50     $ 541.69     $ 659.93     $ 460.86     $ 528.95  
 
                                               
Vacation Ownership
                                               
Gross Vacation Ownership Interest (VOI) Sales (in 000s) (c)
    2011     $ 319,000     $ 412,000     $ 455,000       N/A       N/A  
 
    2010     $ 308,000     $ 371,000     $ 412,000     $ 373,000     $ 1,464,000  
 
    2009     $ 280,000     $ 327,000     $ 366,000     $ 343,000     $ 1,315,000  
 
    2008     $ 458,000     $ 532,000     $ 566,000     $ 432,000     $ 1,987,000  
 
                                               
Tours (d)
    2011       137,000       177,000       197,000       N/A       N/A  
 
    2010       123,000       163,000       187,000       160,000       634,000  
 
    2009       137,000       164,000       173,000       142,000       617,000  
 
    2008       255,000       314,000       334,000       240,000       1,143,000  
 
                                               
Volume Per Guest (VPG) (d)
    2011     $ 2,192     $ 2,227     $ 2,197       N/A       N/A  
 
    2010     $ 2,334     $ 2,156     $ 2,081     $ 2,214     $ 2,183  
 
    2009     $ 1,866     $ 1,854     $ 1,944     $ 2,210     $ 1,964  
 
    2008     $ 1,668     $ 1,583     $ 1,550     $ 1,630     $ 1,602  
 
Note: Full year amounts may not add across due to rounding.
 
(a)   Includes the impact of the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008) and the TRYP hotel brand (June 2010) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
 
(b)   Includes the impact of the acquisitions of Hoseasons (March 2010), ResortQuest (September 2010), James Villa Holidays (November 2010) and a tuck-in acquisition (August 2011) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
 
(c)   Includes gross VOI sales under the Company’s Wyndham Asset Affiliate Model (WAAM) beginning in the first quarter of 2010 (see Table 9 for a reconciliation of gross VOI sales to vacation ownership interest sales).
 
(d)   Includes the impact of WAAM related tours beginning in the first quarter of 2010.

 


 

Table 3
(2 of 3)
Wyndham Worldwide Corporation
ADDITIONAL DATA
                                                 
    Year     Q1     Q2     Q3     Q4     Full Year  
     
Lodging (a)
                                               
Number of Properties
    2011       7,190       7,220       7,190       N/A       N/A  
 
    2010       7,090       7,160       7,150       7,210       N/A  
 
    2009       6,990       7,020       7,040       7,110       N/A  
 
    2008       6,550       6,560       6,970       7,040       N/A  
 
                                               
Vacation Ownership
                                               
Deferred Revenues (in 000s) (b)
    2011     $     $     $       N/A       N/A  
 
    2010     $     $     $     $     $  
 
    2009     $ 67,000     $ 37,000     $ 36,000     $ 47,000     $ 187,000  
 
    2008     $ (82,000 )   $ (5,000 )   $ (2,000 )   $ 14,000     $ (75,000 )
 
                                               
Provision for Loan Losses (in 000s) (c)
    2011     $ 79,000     $ 80,000     $ 96,000       N/A       N/A  
 
    2010     $ 86,000     $ 87,000     $ 85,000     $ 82,000     $ 340,000  
 
    2009     $ 107,000     $ 122,000     $ 117,000     $ 103,000     $ 449,000  
 
    2008     $ 82,000     $ 113,000     $ 119,000     $ 136,000     $ 450,000  
 
                                               
Sales under WAAM (in 000s) (d)
    2011     $ 18,000     $ 19,000     $ 38,000       N/A       N/A  
 
    2010     $ 5,000     $ 13,000     $ 20,000     $ 14,000     $ 51,000  
 
                                               
WAAM Commission Revenues (in 000s)
    2011     $ 10,000     $ 11,000     $ 23,000       N/A       N/A  
 
    2010     $ 3,000     $ 8,000     $ 12,000     $ 9,000     $ 31,000  
 
Note: Full year amounts may not add across due to rounding.
 
(a)   Includes the impact of the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008) and the Tryp hotel brand (June 2010) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
 
(b)   Represents the revenue that is deferred under the percentage of completion method of accounting.
 
(c)   Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.
 
(d)   Represents gross VOI sales under the Company’s WAAM for which the Company earns commission revenue (WAAM Commission Revenues). The commission revenue earned on these sales is included in service fees and membership revenues on the Consolidated Statements of Income. The Company implemented this sales model during the first quarter of 2010 and, as such, there is no historical data prior to 2010.

 


 

Table 3
(3 of 3)
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 under affiliation agreements for which we receive a fee for reservation and/or other services provided or (iii) properties managed under a 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.
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 services and products.
Exchange Revenue Per Member: Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.
Vacation Rental Transactions: Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. One rental transaction is recorded for each standard one-week rental.
Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees divided by the number of vacation rental transactions.
Vacation Ownership
Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including Wyndham Asset Affiliation Model sales, before the net effect of percentage-of-completion accounting and loan loss provisions. See Table 9 for a reconciliation of Gross VOI sales to Vacation Ownership Interest Sales. We believe that Gross VOI sales provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period.
Tours: Represents the number of tours taken by guests in our efforts to sell vacation ownership interests.
Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel. See Table 9 for a detail of tele-sales upgrades for 2007-2010. We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business’ tour selling efforts during a given reporting period.
General
Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods.

 


 

Table 4
Wyndham Worldwide Corporation
REVENUE DETAIL BY REPORTABLE SEGMENT
(In millions)
                                                                                 
    2011     2010  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  
         
Lodging
                                                                               
Royalties and Franchise Fees
  $ 58     $ 75     $ 85       N/A       N/A     $ 52     $ 69     $ 82     $ 62     $ 265  
Marketing, Reservation and Wyndham Rewards Revenues (a)
    54       75       94       N/A       N/A       50       65       76       60       251  
Hotel Management Reimbursable Revenues (b)
    19       19       21       N/A       N/A       21       20       18       18       77  
Ancillary Revenues (c)
    18       21       22       N/A       N/A       21       24       27       23       95  
         
Total Lodging
    149       190       222       N/A       N/A       144       178       203       163       688  
         
 
                                                                               
Vacation Exchange and Rentals
                                                                               
Exchange Revenues
    194       168       161       N/A       N/A       189       161       163       153       666  
Rental Revenues
    150       180       260       N/A       N/A       105       115       161       114       495  
Ancillary Revenues (d)
    12       13       15       N/A       N/A       6       5       6       15       32  
         
Total Vacation Exchange and Rentals
    356       361       436       N/A       N/A       300       281       330       282       1,193  
         
 
                                                                               
Vacation Ownership
                                                                               
Vacation Ownership Interest Sales
    222       313       320       N/A       N/A       217       271       308       276       1,072  
Consumer Financing
    102       103       105       N/A       N/A       105       106       107       107       425  
Property Management Fees
    110       108       105       N/A       N/A       100       100       104       101       405  
WAAM Commissions
    10       11       23       N/A       N/A       3       8       12       8       31  
Ancillary Revenues (e)
    6       6       6       N/A       N/A       19       20       2       5       46  
         
Total Vacation Ownership
    450       541       559       N/A       N/A       444       505       533       497       1,979  
         
Total Reportable Segments
  $ 955     $ 1,092     $ 1,217       N/A       N/A     $ 888     $ 964     $ 1,066     $ 942     $ 3,860  
         
                 
    2009     2008  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  
         
Lodging
                                                                               
Royalties and Franchise Fees
  $ 57     $ 68     $ 72     $ 57     $ 254     $ 64     $ 78     $ 88     $ 66     $ 297  
Marketing, Reservation and Wyndham Rewards Revenues (a)
    54       66       73       53       246       60       75       84       61       280  
Hotel Management Reimbursable Revenues (b)
    22       23       21       19       85       27       26       25       21       100  
Ancillary Revenues (c)
    21       17       17       20       75       19       21       16       22       76  
         
Total Lodging
    154       174       183       149       660       170       200       213       170       753  
         
 
                                                                               
Vacation Exchange and Rentals
                                                                               
Exchange Revenues
    185       165       164       154       668       213       185       178       152       728  
Rental Revenues
    96       109       157       98       460       119       119       169       88       495  
Ancillary Revenues (d)
    6       6       6       6       24       9       10       7       10       36  
         
Total Vacation Exchange and Rentals
    287       280       327       258       1,152       341       314       354       250       1,259  
         
 
                                                                               
Vacation Ownership
                                                                               
Vacation Ownership Interest Sales
    239       242       285       287       1,053       294       414       446       309       1,463  
Consumer Financing
    109       109       108       109       435       99       104       111       112       426  
Property Management Fees
    91       94       96       95       376       85       84       89       89       346  
Ancillary Revenues (e)
    23       22       19       17       81       26       19       15       (18 )     43  
         
Total Vacation Ownership
    462       467       508       508       1,945       504       621       661       492       2,278  
         
Total Reportable Segments
  $ 903     $ 921     $ 1,018     $ 915     $ 3,757     $ 1,015     $ 1,135     $ 1,228     $ 912     $ 4,290  
         
 
Note: Full year amounts may not add across due to rounding.
 
(a)   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. Wyndham Rewards revenues represent fees we receive relating to our loyalty program.
 
(b)   Primarily represents payroll costs in our hotel management business that we pay on behalf of property owners and for which we are reimbursed by the property owners.
 
(c)   Primarily includes additional services provided to franchisees.
 
(d)   Primarily includes fees generated from programs with affiliated resorts and homeowners.
 
(e)   Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.

 


 

Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)
                                         
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2011     2011     2011     2010     2010  
Securitized vacation ownership debt (a)
                                       
Term notes
  $ 1,512     $ 1,446     $ 1,666     $ 1,498     $ 1,400  
Bank conduit facility (b)
    218       242       148       152       215  
 
                             
Securitized vacation ownership debt (c)
    1,730       1,688       1,814       1,650       1,615  
Less: Current portion of securitized vacation ownership debt
    179       190       216       223       187  
 
                             
Long-term securitized vacation ownership debt
  $ 1,551     $ 1,498     $ 1,598     $ 1,427     $ 1,428  
 
                             
 
                                       
Debt:
                                       
Revolving credit facility (due July 2016) (d)
  $ 169     $ 107     $ 5     $ 154     $ 26  
6.00% senior unsecured notes (due December 2016) (e)
    812       803       797       798       798  
9.875% senior unsecured notes (due May 2014) (f)
    243       242       241       241       240  
3.50% convertible notes (due May 2012) (g)
    27       32       41       266       289  
7.375% senior unsecured notes (due March 2020) (h)
    247       247       247       247       247  
5.75% senior unsecured notes (due February 2018) (i)
    247       247       247       247       247  
5.625% senior unsecured notes (due March 2021) (j)
    245       245       245              
Vacation rentals capital leases
    108       120       120       115       120  
Other
    1       1       28       26       34  
 
                             
Total debt
    2,099       2,044       1,971       2,094       2,001  
Less: Current portion of debt
    37       43       12       11       32  
 
                             
Long-term debt
  $ 2,062     $ 2,001     $ 1,959     $ 2,083     $ 1,969  
 
                             
 
(a)   The Company’s vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities (“SPE”) that are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company’s creditors and legally are not the Company’s assets. Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.
 
(b)   Represents a non-recourse vacation ownership bank conduit facility with a term through June 2013 and borrowing capacity of $600 million. As of September 30, 2011, this facility had remaining borrowing capacity of $382 million.
 
(c)   This debt is collateralized by $2,502 million, $2,672 million, $2,778 million, $2,865 million and $2,874 million of underlying vacation ownership contract receivables and related assets as of September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively.
 
(d)   Represents a $1.0 billion revolving credit facility that expires on July 15, 2016. As of September 30, 2011, the Company had $11 million of outstanding letters of credit and a remaining borrowing capacity of $820 million.
 
(e)   Represents senior unsecured notes issued by the Company during December 2006. The balance as of September 30, 2011 represents $800 million aggregate principal less $2 million of unamortized discount, plus $14 million of unamortized gains from the settlement of a derivative.
 
(f)   Represents senior unsecured notes issued by the Company during May 2009. The balance as of September 30, 2011 represents $250 million aggregate principal less $7 million of unamortized discount.
 
(g)   Represents convertible notes issued by the Company during May 2009, which includes debt principal, less unamortized discount, and a liability related to a bifurcated conversion feature. During the third and fourth quarters of 2010, the Company repurchased a portion of these notes. During the nine months ended September 30, 2011, the Company repurchased a portion of these notes, primarily through the completion of a cash tender offer. The following table details the components of the convertible notes
                                         
    September 30,
2011
    June 30,
2011
    March 31,
2011
    December 31,
2010
    September 30,
2010
 
Debt principal
  $ 12     $ 12     $ 17     $ 116     $ 138  
Unamortized discount
    (1 )     (1 )     (1 )     (12 )     (17 )
 
                             
Debt less discount
    11       11       16       104       121  
Fair value of conversion feature (*)
    16       21       25       162       168  
 
                             
Convertible notes
  $ 27     $ 32     $ 41     $ 266     $ 289  
 
                             
 
(*)   The Company also has an asset with a fair value equal to the conversion feature, which represents cash-settled call options that the Company purchased concurrent with the issuance of the convertible notes.
 
(h)   Represents senior unsecured notes issued by the Company during February 2010. The balance as of September 30, 2011 represents $250 million aggregate principal less $3 million of unamortized discount.
 
(i)   Represents senior unsecured notes issued by the Company during September 2010. The balance as of September 30, 2011 represents $250 million aggregate principal less $3 million of unamortized discount.
 
(j)   Represents senior unsecured notes issued by the Company during March 2011. The balance as of September 30, 2011 represents $250 million aggregate principal less $5 million of unamortized discount.

 


 

Table 6
(1 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
                                         
    As of and For the Three Months Ended September 30, 2011  
                                    Average Revenue  
    Number of     Number of     Average Occupancy     Average Daily     Per Available  
Brand   Properties     Rooms     Rate     Rate (ADR)     Room (RevPAR)  
Lodging
                                       
Wyndham Hotels and Resorts
    98       26,548       62.3 %   $ 106.49     $ 66.34  
 
TRYP by Wyndham
    93       13,456       67.0 %   $ 102.53     $ 68.73  
 
Wingate by Wyndham
    166       15,234       64.7 %   $ 83.02     $ 53.68  
 
Hawthorn Suites by Wyndham
    74       7,047       66.7 %   $ 75.65     $ 50.48  
 
Ramada
    848       114,377       56.9 %   $ 78.49     $ 44.64  
 
Baymont
    257       21,464       54.6 %   $ 64.72     $ 35.33  
 
Days Inn
    1,857       149,165       54.5 %   $ 65.47     $ 35.68  
 
Super 8
    2,241       141,272       60.4 %   $ 58.35     $ 35.24  
 
Howard Johnson
    453       45,016       52.4 %   $ 64.10     $ 33.57  
 
Travelodge
    436       32,563       54.7 %   $ 71.30     $ 39.00  
 
Microtel Inns & Suites
    317       22,601       59.4 %   $ 62.74     $ 37.23  
 
Knights Inn
    348       21,362       43.0 %   $ 44.84     $ 19.29  
 
Dream
    5       990       78.7 %   $ 175.65     $ 138.32  
 
Night
    1       72       94.8 %   $ 214.38     $ 203.31  
                             
Total Lodging
    7,194       611,167       57.0 %   $ 69.34     $ 39.49  
 
Vacation Ownership
                                       
Wyndham Vacation Ownership resorts
    162       20,803       N/A       N/A       N/A  
                             
 
Total Wyndham Worldwide
    7,356       631,970                          
                             
 
    As of and For the Three Months Ended September 30, 2010  
                                    Average Revenue  
    Number of     Number of     Average Occupancy     Average Daily     Per Available  
Brand   Properties     Rooms     Rate     Rate (ADR)     Room (RevPAR)  
Lodging
                                       
Wyndham Hotels and Resorts
    99       27,753       57.4 %   $ 107.11     $ 61.46  
 
TRYP by Wyndham
    92       13,236       63.2 %   $ 83.93     $ 53.03  
 
Wingate by Wyndham
    165       15,097       63.1 %   $ 81.19     $ 51.22  
 
Hawthorn Suites by Wyndham
    78       7,451       61.7 %   $ 75.83     $ 46.77  
 
Ramada
    894       117,842       55.0 %   $ 73.43     $ 40.38  
 
Baymont
    245       20,479       53.3 %   $ 63.36     $ 33.78  
 
Days Inn
    1,859       148,155       53.4 %   $ 64.03     $ 34.19  
 
Super 8
    2,156       134,827       58.3 %   $ 59.40     $ 34.61  
 
Howard Johnson
    474       45,735       52.6 %   $ 63.19     $ 33.26  
 
Travelodge
    438       32,377       54.1 %   $ 68.24     $ 36.89  
 
Microtel Inns & Suites
    319       22,760       57.1 %   $ 60.12     $ 34.34  
 
Knights Inn
    331       19,597       43.2 %   $ 46.42     $ 20.06  
 
Other
    2       404       N/A       N/A       N/A  
                             
Total Lodging
    7,152       605,713       55.3 %   $ 67.16     $ 37.14  
 
Vacation Ownership
                                       
Wyndham Vacation Ownership resorts
    160       20,569       N/A       N/A       N/A  
                             
 
Total Wyndham Worldwide
    7,312       626,282                          
                             
 
NOTE:   A glossary of terms is included in Table 3 (3 of 3); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.


 

Table 6
(2 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS
                                         
    As of and For the Nine Months Ended September 30, 2011  
                                    Average Revenue  
    Number of     Number of     Average Occupancy     Average Daily     Per Available  
Brand   Properties     Rooms     Rate     Rate (ADR)     Room (RevPAR)  
Lodging
                                       
Wyndham Hotels and Resorts
    98       26,548       59.5 %   $ 107.74     $ 64.14  
 
TRYP by Wyndham
    93       13,456       60.7 %   $ 105.13     $ 63.85  
 
Wingate by Wyndham
    166       15,234       61.1 %   $ 81.27     $ 49.68  
 
Hawthorn Suites by Wyndham
    74       7,047       62.7 %   $ 75.32     $ 47.26  
 
Ramada
    848       114,377       52.1 %   $ 75.97     $ 39.58  
 
Baymont
    257       21,464       49.0 %   $ 62.41     $ 30.59  
 
Days Inn
    1,857       149,165       48.4 %   $ 62.12     $ 30.09  
 
Super 8
    2,241       141,272       53.1 %   $ 55.31     $ 29.36  
 
Howard Johnson
    453       45,016       47.6 %   $ 61.12     $ 29.07  
 
Travelodge
    436       32,563       48.2 %   $ 66.22     $ 31.94  
 
Microtel Inns & Suites
    317       22,601       53.9 %   $ 59.21     $ 31.90  
 
Knights Inn
    348       21,362       39.1 %   $ 42.98     $ 16.79  
 
Dream
    5       990       75.5 %   $ 174.99     $ 132.10  
 
Night
    1       72       93.8 %   $ 232.89     $ 218.53  
                             
Total Lodging
    7,194       611,167       51.2 %   $ 66.85     $ 34.25  
 
Vacation Ownership
                                       
Wyndham Vacation Ownership resorts
    162       20,803       N/A       N/A       N/A  
                             
 
Total Wyndham Worldwide
    7,356       631,970                          
                             
 
    As of and For the Nine Months Ended September 30, 2010  
                                    Average Revenue  
    Number of     Number of     Average Occupancy     Average Daily     Per Available  
Brand   Properties     Rooms     Rate     Rate (ADR)     Room (RevPAR)  
Lodging
                                       
Wyndham Hotels and Resorts
    99       27,753       56.1 %   $ 109.35     $ 61.32  
 
TRYP by Wyndham
    92       13,236       63.2 %   $ 83.93     $ 53.03  
 
Wingate by Wyndham
    165       15,097       58.8 %   $ 79.67     $ 46.85  
 
Hawthorn Suites by Wyndham
    78       7,451       56.1 %   $ 76.95     $ 43.14  
 
Ramada
    894       117,842       49.9 %   $ 72.73     $ 36.26  
 
Baymont
    245       20,479       48.1 %   $ 61.03     $ 29.37  
 
Days Inn
    1,859       148,155       46.9 %   $ 61.16     $ 28.69  
 
Super 8
    2,156       134,827       50.4 %   $ 56.48     $ 28.50  
 
Howard Johnson
    474       45,735       46.1 %   $ 60.85     $ 28.04  
 
Travelodge
    438       32,377       45.9 %   $ 64.36     $ 29.57  
 
Microtel Inns & Suites
    319       22,760       51.1 %   $ 57.59     $ 29.41  
 
Knights Inn
    331       19,597       38.0 %   $ 42.67     $ 16.22  
 
Other
    2       404       N/A       N/A       N/A  
                             
Total Lodging
    7,152       605,713       49.0 %   $ 64.98     $ 31.81  
 
Vacation Ownership
                                       
Wyndham Vacation Ownership resorts
    160       20,569       N/A       N/A       N/A  
                             
 
Total Wyndham Worldwide
    7,312       626,282                          
                             
 
NOTE:   A glossary of terms is included in Table 3 (3 of 3); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.


 

Table 7
(1 of 2)
Wyndham Worldwide
NON-GAAP RECONCILIATION
(In millions)
                                                                   
            Reported     Legacy     Asset     Restructuring     VAT     CTA     Adjusted  
    Net Revenues     EBITDA     Adjustments(b)     Impairment(c)     Costs     Adjustments(e)     Writeoff(f)     EBITDA  
Three months ended March 31, 2011
                                                               
Lodging
  $ 149     $ 27     $     $ 13     $     $     $     $ 40  
Vacation Exchange and Rentals
    356       93                                     93  
Vacation Ownership
    450       97                   (1) (d)                 96  
                                                 
Total Reportable Segments
    955       217             13       (1 )                 229  
Corporate and Other (a)
    (3 )     (14 )     (11 )                             (25 )
                                                 
Total Company
  $ 952     $ 203     $ (11 )   $ 13     $ (1 )   $     $     $ 204  
                                                 
Three months ended June 30, 2011
                                                               
Lodging
  $ 190     $ 66     $     $     $     $     $     $ 66  
Vacation Exchange and Rentals
    361       106                   7 (g)     (31 )           82  
Vacation Ownership
    541       130                                     130  
                                                 
Total Reportable Segments
    1,092       302                   7       (31 )           278  
Corporate and Other (a)
    (2 )     (26 )     3                               (23 )
                                                 
Total Company
  $ 1,090     $ 276     $ 3     $     $ 7     $ (31 )   $     $ 255  
                                                 
Three months ended September 30, 2011
                                                               
Lodging
  $ 222     $ 67     $     $     $     $     $     $ 67  
Vacation Exchange and Rentals
    436       131                               4       135  
Vacation Ownership
    559       149                                     149  
                                                 
Total Reportable Segments
    1,217       347                               4       351  
Corporate and Other (a)
    (5 )     (18 )     (8 )                             (26 )
                                                 
Total Company
  $ 1,212     $ 329     $ (8 )   $     $     $     $ 4     $ 325  
                                                 
 
(a)   Includes the elimination of transactions between segments.
 
(b)   Relates to the net expense/(benefit) from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(c)   Relates to a non-cash impairment charge related to a write-down of an international joint venture in the Company’s lodging business.
 
(d)   Relates to the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.
 
(e)   Relates to a net benefit resulting from a refund of value added taxes.
 
(f)   Relates to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(g)   Relates to costs incurred as a result of a strategic initiative commenced by the Company during 2010.


 

Table 7
(2 of 2)
Wyndham Worldwide
NON-GAAP RECONCILIATIONS
(In millions)
                                                 
            Reported     Acquisition     Legacy     Restructuring     Adjusted  
    Net Revenues     EBITDA     Costs(b)     Adjustments(c)     Costs(d)     EBITDA  
Three months ended March 31, 2010
                                               
Lodging
  $ 144     $ 33     $     $     $     $ 33  
Vacation Exchange and Rentals
    300       80       4                   84  
Vacation Ownership
    444       82                         82  
 
           
Total Reportable Segments
    888       195       4                   199  
Corporate and Other (a)
    (2 )     (20 )           2             (18 )
 
           
Total Company
  $ 886     $ 175     $ 4     $ 2     $     $ 181  
 
           
 
                                               
Three months ended June 30, 2010
                                               
Lodging
  $ 178     $ 49     $ 1     $     $     $ 50  
Vacation Exchange and Rentals
    281       78                         78  
Vacation Ownership
    505       104                         104  
 
           
Total Reportable Segments
    964       231       1                   232  
Corporate and Other (a)
    (1 )     (14 )                       (14 )
 
           
Total Company
  $ 963     $ 217     $ 1     $     $     $ 218  
 
           
 
                                               
Three months ended September 30, 2010
                                               
Lodging
  $ 203     $ 67     $     $     $     $ 67  
Vacation Exchange and Rentals
    330       103       1                   104  
Vacation Ownership
    533       123                         123  
 
           
Total Reportable Segments
    1,066       293       1                   294  
Corporate and Other (a)
    (1 )     30             (52 )           (22 )
 
           
Total Company
  $ 1,065     $ 323     $ 1     $ (52 )   $     $ 272  
 
           
 
                                               
Three months ended December 31, 2010
                                               
Lodging
  $ 163     $ 40     $     $     $     $ 40  
Vacation Exchange and Rentals
    282       32       1             9       42  
Vacation Ownership
    497       131                         131  
 
           
Total Reportable Segments
    942       203       1             9       213  
Corporate and Other (a)
    (5 )     (20 )           (3 )           (23 )
 
           
Total Company
  $ 937     $ 183     $ 1     $ (3 )   $ 9     $ 190  
 
           
 
                                               
Twelve months ended December 31, 2010
                                               
Lodging
  $ 688     $ 189     $ 1     $     $     $ 190  
Vacation Exchange and Rentals
    1,193       293       6             9       308  
Vacation Ownership
    1,979       440                         440  
 
           
Total Reportable Segments
    3,860       922       7             9       938  
Corporate and Other (a)
    (9 )     (24 )           (54 )           (78 )
 
           
Total Company
  $ 3,851     $ 898     $ 7     $ (54 )   $ 9     $ 860  
 
           
 
Note: Amounts may not add across due to rounding.
 
(a)   Includes the elimination of transactions between segments.
 
(b)   Relates to costs incurred in connection with the Company’s acquisitions of Hoseasons during March 2010, the TRYP hotel brand during June 2010, ResortQuest during September 2010 and James Villa Holidays during November 2010.
 
(c)   Relates to the net expense/(benefit) from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(d)   Relates to costs incurred as a result of a strategic initiative commenced by the Company during 2010.

 


 

Table 8
(1 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                                 
    Three Months Ended September 30, 2011  
            Tax Valuation                          
    As Reported     Allowance     Legacy Adjustments     VAT Adjustments     CTA Writeoff     As Adjusted  
Net revenues
                                               
Service fees and membership
  $ 584                                     $ 584  
Vacation ownership interest sales
    320                                       320  
Franchise fees
    160                                       160  
Consumer financing
    105                                       105  
Other
    43                                       43  
 
                                   
Net revenues
    1,212                               1,212  
 
                                   
 
                                               
Expenses
                                               
Operating
    490                               (4) (d)     486  
Cost of vacation ownership interests
    35                                       35  
Consumer financing interest
    21                                       21  
Marketing and reservation
    182                                       182  
General and administrative
    157               8 (b)                     165  
Restructuring
                                           
Depreciation and amortization
    43                                       43  
 
                                   
Total expenses
    928             8             (4 )     932  
 
                                   
 
                                               
Operating income
    284             (8 )           4       280  
Other income, net
    (2 )                                     (2 )
Interest expense
    34                                       34  
Interest income
    (19 )                     16 (c)             (3 )
 
                                   
 
Income before income taxes
    271             (8 )     (16 )     4       251  
Provision for income taxes
    96       13 (a)     (2 )(e)     (9 )(e)     (e)     98  
 
                                   
 
                                               
Net income
  $ 175     $ (13 )   $ (6 )   $ (7 )   $ 4     $ 153  
 
                                   
 
                                               
Earnings per share
                                               
Basic
  $ 1.10     $ (0.08 )   $ (0.03 )   $ (0.05 )   $ 0.02     $ 0.96  
Diluted
    1.08       (0.08 )     (0.03 )     (0.04 )     0.02       0.94  
 
                                               
Weighted average shares outstanding
                                               
Basic
    159       159       159       159       159       159  
Diluted
    162       162       162       162       162       162  
 
Note: EPS amounts may not add across due to rounding.
 
(a)   Relates to the reversal of a tax valuation allowance.
 
(b)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(c)   Relates to interest income associated with a refund of value added taxes.
 
(d)   Relates to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(e)   Relates to the tax effect of the adjustments.

 


 

Table 8
(2 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)
                                                                         
    Nine Months Ended September 30, 2011  
            Early                                            
            Extinguishment of     Tax Valuation     Legacy     Asset     Restructuring                    
    As Reported     Debt     Allowance     Adjustments     Impairment     Costs     VAT Adjustments     CTA Writeoff     As Adjusted  
Net revenues
                                                                       
Service fees and membership
  $ 1,579                                                             $ 1,579  
Vacation ownership interest sales
    855                                                               855  
Franchise fees
    395                                                               395  
Consumer financing
    310                                                               310  
Other
    114                                                               114  
 
                                                     
Net revenues
    3,253                                                 3,253  
 
                                                     
 
                                                                       
Expenses
                                                                       
Operating
    1,358                                                       (4) (j)     1,354  
Cost of vacation ownership interests
    115                                                               115  
Consumer financing interest
    67                                                               67  
Marketing and reservation
    472                                                               472  
General and administrative
    422                       12 (c)                   31 (g)             465  
Asset impairment
    13                               (13) (e)                              
Restructuring
    6                                       (6) (f)                      
Depreciation and amortization
    133                                                               133  
 
                                                     
Total expenses
    2,586                   12       (13 )     (6 )     31       (4 )     2,606  
 
                                                     
 
                                                                       
Operating income
    667                   (12 )     13       6       (31 )     4       647  
Other income, net
    (9 )                     4 (d)                                   (5 )
Interest expense
    115       (12) (a)                                     (3) (h)             100  
Interest income
    (22 )                                             16 (i)             (6 )
 
                                                     
 
                                                                       
Income before income taxes
    583       12             (16 )     13       6       (44 )     4       558  
Provision for income taxes
    222       5 (k)     13 (b)     (5 )(k)     5 (k)     2 (k)     (24 )(k)     (k)     218  
 
                                                     
 
                                                                       
Net income
  $ 361     $ 7     $ (13 )   $ (11 )   $ 8     $ 4     $ (20 )   $ 4     $ 340  
 
                                                     
 
                                                                       
Earnings per share
                                                                       
Basic
  $ 2.17     $ 0.04     $ (0.08 )   $ (0.06 )   $ 0.05     $ 0.03     $ (0.12 )   $ 0.02     $ 2.05  
Diluted
    2.12       0.04       (0.08 )     (0.06 )     0.05       0.03       (0.12 )     0.02       2.00  
 
                                                                       
Weighted average shares outstanding
                                                                       
Basic
    166       166       166       166       166       166       166       166       166  
Diluted
    170       170       170       170       170       170       170       170       170  
 
(a)   Relates to costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during the first half of 2011.
 
(b)   Relates to the reversal of a tax valuation allowance.
 
(c)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.
 
(d)   Relates to a gain on the redemption of a preferred stock investment allocated to the Company in connection with our separation.
 
(e)   Relates to a non-cash impairment charge related to a write-down of an international joint venture in the Company’s lodging business.
 
(f)   Primarily relates to costs incurred as a result of a strategic initiative commenced by the Company during 2010.
 
(g)   Relates to a net benefit resulting from a refund of value added taxes.
 
(h)   Relates to interest on value added tax accruals.
 
(i)   Relates to interest income associated with a refund of value added taxes.
 
(j)   Relates to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.
 
(k)   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, 2010  
    As Reported     Early
Extinguishment of
Debt
    Acquisition Costs     Legacy
Adjustments
    As Adjusted  
Net revenues
                                       
Service fees and membership
  $ 464                             $ 464  
Vacation ownership interest sales
    308                               308  
Franchise fees
    142                               142  
Consumer financing
    107                               107  
Other
    44                               44  
 
                             
Net revenues
    1,065                         1,065  
 
                             
 
                                       
Expenses
                                       
Operating
    410               (1) (b)             409  
Cost of vacation ownership interests
    52                               52  
Consumer financing interest
    27                               27  
Marketing and reservation
    149                               149  
General and administrative
    101                       52 (c)     153  
Asset impairment
    4                               4  
Depreciation and amortization
    43                               43  
 
                             
Total expenses
    786             (1 )     52       837  
 
                             
 
                                       
Operating income
    279               1       (52 )     228  
Other income, net
    (1 )                             (1 )
Interest expense
    47       (11) (a)                     36  
Interest income
    (2 )                             (2 )
 
                             
 
                                       
Income before income taxes
    235       11       1       (52 )     195  
Provision for income taxes
    79       5 (d)     (d)     (14 )(d)     70  
 
                             
 
                                       
Net income
  $ 156     $ 6     $ 1     $ (38 )   $ 125  
 
                             
 
                                       
Earnings per share
                                       
Basic
  $ 0.88     $ 0.04     $ 0.01     $ (0.22 )   $ 0.71  
Diluted
    0.84       0.04       0.01       (0.21 )     0.68  
 
                                       
Weighted average shares outstanding
                                       
Basic
    177       177       177       177       177  
Diluted
    184       184       184       184       184  
 
Note: EPS amounts may not add across due to rounding.
 
(a)   Relates to costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during third quarter of 2010.
 
(b)   Relates to costs incurred in connection with the Company’s acquisition of ResortQuest during September 2010.
 
(c)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets primarily related to the accrual that was no longer needed for outstanding Cendant contingent tax liabilities since Cendant and the IRS agreed to settle the IRS examination of Cendant’s taxable years 2003 through 2006 on July 15, 2010.
 
(d)   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, 2010  
            Early                    
            Extinguishment of                    
    As Reported     Debt     Acquisition Costs     Legacy Adjustments     As Adjusted  
Net revenues
                                       
Service fees and membership
  $ 1,298                             $ 1,298  
Vacation ownership interest sales
    796                               796  
Franchise fees
    353                               353  
Consumer financing
    318                               318  
Other
    149                               149  
 
                             
Net revenues
    2,914                         2,914  
 
                             
 
                                       
Expenses
                                       
Operating
    1,179               (6) (b)             1,173  
Cost of vacation ownership interests
    138                               138  
Consumer financing interest
    80                               80  
Marketing and reservation
    410                               410  
General and administrative
    394                       51 (c)     445  
Asset impairment
    4                               4  
Depreciation and amortization
    128                               128  
 
                             
Total expenses
    2,333             (6 )     51       2,378  
 
                             
 
                                       
Operating income
    581             6       (51 )     536  
Other income, net
    (6 )                           (6 )
Interest expense
    133       (27 )(a)                     106  
Interest income
    (3 )                             (3 )
 
                             
 
                                       
Income before income taxes
    457       27       6       (51 )     439  
Provision for income taxes
    157       11 (d)     1 (d)     (15 )(d)     154  
 
                             
 
                                       
Net income
  $ 300     $ 16     $ 5     $ (36 )   $ 285  
 
                             
 
                                       
Earnings per share
                                       
Basic
  $ 1.68     $ 0.09     $ 0.03     $ (0.21 )   $ 1.59  
Diluted
    1.62       0.09       0.03       (0.20 )     1.53  
 
                                       
Weighted average shares outstanding
                                       
Basic
    179       179       179       179       179  
Diluted
    186       186       186       186       186  
 
Note: EPS amounts may not add across due to rounding.
     
(a)   Relates to costs incurred for the early extinguishment of the Company’s term loan facility and revolving foreign credit facility during March 2010 and the early repurchase of a portion of the Company’s 3.50% convertible notes during the third quarter of 2010.
 
(b)   Relates to costs incurred in connection with the Company’s acquisitions of Hoseasons Holdings Ltd. during March 2010, the Tryp hotel brand during June 2010 and ResortQuest during September 2010.
(c)   Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets primarily related to the accrual that was no longer needed for outstanding Cendant contingent tax liabilities since Cendant and the IRS agreed to settle the IRS examination of Cendant’s taxable years 2003 through 2006 on July 15, 2010.
 
(d)   Relates to the tax effect of the adjustments.

 


 

Table 9
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION
(In millions)
FREE CASH FLOW                        
The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances and excluding cash payments related to the Company’s contingent tax liabilities that it assumed and is responsible for pursuant to its separation from Cendant. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, equity investments and development advances, can be used for strategic opportunities, including making acquisitions, paying dividends, repurchasing the Company’s common stock and strengthening the balance sheet. Analysis of free cash flow also facilitates management’s comparisons of the Company’s operating results to its competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period.
The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these financial measures:
                 
    Nine Months Ended September 30,  
    2011     2010  
Net cash provided by operating activities
  $ 860     $ 528  
Less: Property and equipment additions
    (153 )     (100 )
Less: Equity investments and development advances
    (8 )     (9 )
Plus: Cash payments related to contingent IRS tax liabilities
          145  
 
           
Free cash flow
  $ 699     $ 564  
 
           
GROSS VOI SALES                        
The following table provides a reconciliation of Gross VOI sales (see Table 3) to Vacation ownership interest sales (see Table 4):
                                         
Year                              
2011   Q1     Q2     Q3     Q4     Full Year  
     
Gross VOI sales
  $ 319     $ 412     $ 455       N/A       N/A  
Less: Sales under the WAAM
    (18 )     (19 )     (38 )     N/A       N/A  
     
Gross VOI sales, net of WAAM sales
    302       393       417       N/A       N/A  
Less: Loan loss provision
    (79 )     (80 )     (96 )     N/A       N/A  
     
Vacation ownership interest sales
  $ 222     $ 313     $ 320       N/A       N/A  
     
                                         
2010                                        
Gross VOI sales
  $ 308     $ 371     $ 412     $ 373     $ 1,464  
Less: Sales under the WAAM
    (5 )     (13 )     (20 )     (14 )     (51 )
     
Gross VOI sales, net of WAAM sales
    303       358       392       359       1,413  
Less: Loan loss provision
    (86 )     (87 )     (85 )     (82 )     (340 )
     
Vacation ownership interest sales
  $ 217     $ 271     $ 308     $ 276     $ 1,072  
     
                                         
2009                                        
Gross VOI sales
  $ 280     $ 327     $ 366     $ 343     $ 1,315  
Plus: Net effect of percentage-of-completion accounting
    67       37       36       47       187  
Less: Loan loss provision
    (107 )     (122 )     (117 )     (103 )     (449 )
     
Vacation ownership interest sales
  $ 239     $ 242     $ 285     $ 287     $ 1,053  
     
                                         
2008                                        
Gross VOI sales
  $ 458     $ 532     $ 566     $ 432     $ 1,987  
Plus/(less): Net effect of percentage-of-completion accounting
    (82 )     (5 )     (2 )     14       (75 )
Less: Loan loss provision
    (82 )     (113 )     (119 )     (136 )     (450 )
     
Vacation ownership interest sales
  $ 294     $ 414     $ 446     $ 309     $ 1,463  
     
 
Note: Amounts may not add due to rounding.
The following represents tele-sales upgrades, which are excluded from Gross VOI sales in the Company’s VPG calculation (see Table 3):
                                         
    Q1     Q2     Q3     Q4     Full Year  
     
2011
  $ 18     $ 18     $ 21       N/A       N/A  
2010
  $ 20     $ 20     $ 23     $ 17     $ 80  
2009
  $ 24     $ 23     $ 29     $ 28     $ 104  
2008
  $ 33     $ 35     $ 49     $ 40     $ 156  
 
Note: Amounts may not add across due to rounding.