EXHIBIT 99.1

 

LOGO

Wyndham Worldwide Reports Fourth Quarter and Full Year 2012 Earnings

Full Year Adjusted EPS Growth of 30%

Increases Dividend 26%

Increases EPS and EBITDA Guidance for 2013

PARSIPPANY, N.J. (February 6, 2013) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months and year ended December 31, 2012.

Highlights:

 

 

Fourth quarter adjusted diluted earnings per share (EPS) was $0.63, compared with $0.47 in the fourth quarter of 2011, an increase of 34%. Fourth quarter 2012 reported diluted EPS was $0.57, an increase of 54% from the same period in 2011.

 

 

Free cash flow increased to $796 million for the year ended December 31, 2012, compared with $764 million in 2011.

 

 

The Company’s Board of Directors authorized an increase in the quarterly cash dividend to $0.29 from $0.23 per share, beginning with the dividend that is expected to be declared in the first quarter of 2013.

 

 

During the quarter, the Company repurchased 2.9 million shares of its common stock for $151 million. For the full year, the Company spent $623 million to repurchase 12.9 million shares of its common stock.

“I’m pleased by our 30% adjusted EPS growth in 2012, especially coming off of 25% growth in 2011. These results reflect the momentum in our business, the strong execution by our teams and a capital allocation philosophy that works for shareholders,” said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide.

FOURTH QUARTER 2012 OPERATING RESULTS

Fourth quarter revenues increased 9% from the prior year period to $1.1 billion. The increase primarily reflects growth in the Company’s lodging and vacation ownership businesses.

For the fourth quarter of 2012, adjusted net income was $89 million, or $0.63 per diluted share, compared with $73 million, or $0.47 per diluted share, for the same period in 2011. The increase in adjusted net income primarily reflects stronger operating results at the Company’s lodging and vacation ownership businesses. EPS also benefited from the Company’s share repurchase program, which reduced fourth quarter weighted average share count by 8% compared with the same period in 2011.


Reported net income for the fourth quarter of 2012 was $81 million, or $0.57 per diluted share, compared with net income of $56 million, or $0.37 per diluted share, for the fourth quarter of 2011. Reported net income included several items not included in adjusted net income. The net effect of these items was a reduction to net income of $8 million in the fourth quarter of 2012 and $17 million in the fourth quarter of 2011. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2012 OPERATING RESULTS

Revenues for full year 2012 were $4.5 billion, an increase of 7% over the prior-year period. The revenue increase resulted from growth in the lodging and vacation ownership businesses, partially offset by adverse foreign exchange translation impacts in the vacation exchange and rentals business.

Adjusted net income for the full year 2012 was $469 million, or $3.23 per diluted share, compared with $414 million, or $2.49 per diluted share, for the prior year. The increase in adjusted net income primarily reflects stronger operating results at the Company’s lodging and vacation ownership businesses. EPS also benefited from the Company’s share repurchase program, which reduced weighted average diluted share count by 13% compared with 2011.

Reported net income for full year 2012 was $400 million, or $2.75 per diluted share, compared with net income of $417 million, or $2.51 per diluted share, for the prior-year period. Reported net income included several items not included in adjusted net income. The net effect of these items reduced full year 2012 net income by $69 million and increased full year 2011 net income by $3 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow increased to $796 million in the year ended December 31, 2012 compared with $764 million in 2011, which included a $67 million benefit from a refund of value added taxes and related interest income. The growth of free cash flow largely reflects debt refinancing transactions and lower capital expenditures. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the year ended December 31, 2012, cash provided by operating activities was $1.0 billion, flat compared with the prior year.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $223 million in the fourth quarter of 2012, an increase of 19%, compared with the fourth quarter of 2011. The increase primarily reflects RevPAR gains, incremental revenues associated with the Company’s owned hotels and higher intersegment licensing fees for use of the Wyndham brand trade name.


Adjusted EBITDA was $62 million, an increase of 51% compared with the fourth quarter of 2011. The increase largely reflects RevPAR gains, cost savings and higher intersegment licensing fees.

Domestic RevPAR increased 6% compared with the fourth quarter of 2011, while system-wide RevPAR increased 4%.

As of December 31, 2012, the Company’s hotel system consisted of over 7,340 properties and 627,400 rooms. The development pipeline included approximately 930 hotels and 110,700 rooms, of which 59% were new construction and 56% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $293 million in the fourth quarter of 2012, compared with $291 million in the fourth quarter of 2011. In constant currency and excluding the impact of acquisitions, revenues were flat.

Exchange revenues were $153 million, an increase of 2% compared with the fourth quarter of 2011. In constant currency, exchange revenues were up 1% as a 3% increase in exchange revenue per member was partially offset by the impact of a 2% decline in the average number of members. The decline in the average number of members was due to the non-renewal of an affiliation agreement at the beginning of 2012.

Vacation rental revenues were $125 million, flat compared with the fourth quarter of 2011, reflecting a 3% increase in transaction volume offset by a 2% decrease in the average net price per vacation rental.

Adjusted EBITDA for the fourth quarter of 2012 was $42 million, excluding $14 million of charges and impairments, up 11% compared with the prior-year period. Excluding the impact of acquisitions and the net effect of foreign currency, adjusted EBITDA increased by 3% compared with the prior year period, primarily due to operating efficiencies in the business.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $590 million in the fourth quarter of 2012, a 12% increase over the fourth quarter of 2011. Excluding the acquisition of Shell Vacations Club, revenues increased 6%, primarily reflecting increased VOI sales and higher resort management fees.

Gross VOI sales were $435 million in the fourth quarter of 2012, up 6% from the fourth quarter of 2011, primarily reflecting a 6% increase in tour flow, supported by the Shell acquisition.

Adjusted EBITDA for the fourth quarter of 2012 was $144 million, excluding $2 million of acquisition related restructuring costs, compared with EBITDA of $139 million in the fourth quarter of 2011, a 4% increase. Such increase was primarily due to the revenue


increases and the impact of the Shell acquisition, partially offset by higher general and administrative costs and incremental intersegment licensing fees.

Other Items

 

   

During 2013, the Company repurchased an additional 1.1 million shares for $60 million through February 5. The Company has $447 million remaining on its current share repurchase authorization.

 

   

Net interest expense in the fourth quarter of 2012 was $33 million, a decrease of $3 million from the fourth quarter of 2011, primarily due to lower interest rates offsetting higher average borrowings.

Balance Sheet Information as of December 31, 2012:

 

   

Cash and cash equivalents of $195 million, compared with $142 million at December 31, 2011

 

   

Vacation ownership contract receivables, net, of $2.9 billion, compared with $2.8 billion at December 31, 2011

 

   

Vacation ownership and other inventory of $1.1 billion, unchanged from December 31, 2011

 

   

Securitized vacation ownership debt of $2.0 billion, compared with $1.9 billion at December 31, 2011

 

   

Long-term debt of $2.6 billion, compared with $2.2 billion at December 31, 2011. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $631 million, compared with $771 million as of December 31, 2011

A schedule of debt is included in Table 5 of this press release.

Outlook

Note to Editors: The guidance excludes possible future share repurchases, while analysts’ estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.

For the full year 2013, the Company raises guidance as follows:

 

   

Revenues of $4.925 - $5.100 billion, up from $4.90 – $5.05 billion

 

   

EBITDA of $1.140 - $1.165 billion, up from $1.125 – $1.150 billion

 

   

EPS of $3.57 - $3.70, up from $3.50 - $3.60

 

   

Weighted average diluted shares of 140 million, down from 143 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 the Company’s guidance may change materially.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, February 6, 2013 at 8:30 a.m. EST. 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 EST on February 6, 2013. The conference call may also be accessed by dialing (888) 942-9868 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 noon EST on February 6, 2013, at (888) 473-0137.

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 EBITDA and EPS to the most directly comparable GAAP measure because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company’s reported results.

About Wyndham Worldwide Corporation

One of the world’s largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality products and services through its global portfolio of world-renowned brands. The world’s largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world’s best-known hotel brands, with over 7,340 franchised hotels and 627,400 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world’s largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 103,000 vacation properties in 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of 190 vacation ownership resorts serving approximately 915,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,500 associates globally. For more information, please visit 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, dividends 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 October 24, 2012. 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

Barry Goldschmidt

Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-7703

barry.goldschmidt@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), early extinguishment of debt, 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 attributable to Wyndham shareholders for the three months ended December 31, 2012 and 2011:

 

     Three Months Ended December 31,  
     2012     2011  
     Net Revenues     EBITDA     Net Revenues     EBITDA  

Lodging

   $ 223      $ 62      $ 188      $ (3 )(e) 

Vacation Exchange and Rentals

     293        28 (b)      291        38   

Vacation Ownership

     590        142 (c)      527        139   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     1,106        232        1,006        174   

Corporate and Other (a)

     (12     (28 )(d)      (6     (26
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 1,094      $ 204      $ 1,000      $ 148   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

        

EBITDA

     $ 204        $ 148   

Depreciation and amortization

       49          45   

Interest expense

       35          37   

Interest income

       (2       (1
    

 

 

     

 

 

 

Income before income taxes

       122          67   

Provision for income taxes

       41          11   
    

 

 

     

 

 

 

Net income attributable to Wyndham shareholders

     $ 81        $ 56   
    

 

 

     

 

 

 

 

(a) 

Includes the elimination of transactions between segments.

(b) 

Includes (i) a non-cash impairment charge of $8 million for the write-down of the ResortQuest and Steamboat Resorts tradenames, (ii) $5 million of restructuring costs incurred as a result of organizational realignment initiatives commenced during 2012 and (iii) $1 million of acquisition costs incurred in connection with the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012).

(c) 

Includes $2 million of restructuring costs associated with the Company’s acquisition of Shell Vacations Club (September 2012).

(d) 

Includes $2 million of a net benefit related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(e) 

Includes non-cash impairment charges of $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended December 31, 2012 and 2011 (for a description of adjustments by segment, see Table 7):

 

     Three Months Ended December 31,  
     2012     2011  
     Net Revenues     Adjusted
EBITDA
    Net Revenues     Adjusted
EBITDA
 

Lodging

   $ 223      $ 62      $ 188      $ 41   

Vacation Exchange and Rentals

     293        42        291        38   

Vacation Ownership

     590        144        527        139   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     1,106        248        1,006        218   

Corporate and Other

     (12     (30     (6     (26
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 1,094      $ 218      $ 1,000      $ 192   
  

 

 

   

 

 

   

 

 

   

 

 

 

 


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 attributable to Wyndham shareholders for the twelve months ended December 31, 2012 and 2011:

 

     Twelve Months Ended December 31,  
     2012     2011  
     Net Revenues     EBITDA     Net Revenues     EBITDA  

Lodging

   $ 890      $ 272 (b)    $ 749      $ 157 (g) 

Vacation Exchange and Rentals

     1,422        328 (c)      1,444        368 (h) 

Vacation Ownership

     2,269        549 (d)      2,077        515 (i) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     4,581        1,149        4,270        1,040   

Corporate and Other (a)

     (47     (104 )(e)      (16     (84 )(e) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 4,534      $ 1,045      $ 4,254      $ 956   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

        

EBITDA

     $ 1,045        $ 956   

Depreciation and amortization

       185          178   

Interest expense

       132          140 (j) 

Early extinguishment of debt

       108 (f)        12 (k) 

Interest income

       (8       (24 )(l) 
    

 

 

     

 

 

 

Income before income taxes

       628          650   

Provision for income taxes

       229          233   
    

 

 

     

 

 

 

Net income

       399          417   

Net loss attributable to noncontrolling interest

       1          —     
    

 

 

     

 

 

 

Net income attributable to Wyndham shareholders

     $ 400        $ 417   
    

 

 

     

 

 

 

 

(a) 

Includes the elimination of transactions between segments.

(b) 

Includes a $1 million benefit from the recovery of a previously recorded impairment charge.

(c) 

Includes (i) a non-cash impairment charge of $8 million for the write-down of the ResortQuest and Steamboat Resorts tradenames, (ii) $5 million of restructuring costs incurred as a result of organizational realignment initiatives commenced during 2012, (iii) a $2 million benefit related to the reversal of an allowance associated with a previously divested asset and (iv) $1 million of acquisition costs incurred in connection with the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012).

(d) 

Includes (i) $2 million of restructuring costs and (ii) $1 million of acquisition costs incurred in connection with the Company’s acquisition of Shell Vacations Club during September 2012.

(e) 

Includes $5 million and $16 million of a net benefit during 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(f) 

Represents costs incurred for the early repurchase of a portion of the Company’s 9.875% senior unsecured notes and 6.00% senior unsecured notes.

(g) 

Includes non-cash impairment charges of (i) $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes and (ii) $13 million related to a write-down of an international joint venture.

(h) 

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.

(i) 

Includes a $1 million benefit for the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

(j) 

Includes $3 million of interest related to value added tax accruals.

(k) 

Represents costs incurred for the early repurchase of a portion of the Company’s convertible notes.

(l) 

Includes $16 million of interest income related to a refund value added taxes.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the twelve months ended December 31, 2012 and 2011 (for a description of adjustments by segment, see Table 7):

 

     Twelve Months Ended December 31,  
     2012     2011  
           Adjusted           Adjusted  
     Net Revenues     EBITDA     Net Revenues     EBITDA  

Lodging

   $ 890      $ 271      $ 749      $ 214   

Vacation Exchange and Rentals

     1,422        340        1,444        348   

Vacation Ownership

     2,269        552        2,077        514   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     4,581        1,163        4,270        1,076   

Corporate and Other

     (47     (109     (16     (100
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 4,534      $ 1,054      $ 4,254      $ 976   
  

 

 

   

 

 

   

 

 

   

 

 

 


Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

 

        Three Months Ended    
December 31,
        Twelve Months Ended    
December 31,
 
        2012             2011             2012             2011      

Net revenues

       

Service and membership fees

  $ 446      $ 434      $ 2,005      $ 2,012   

Vacation ownership interest sales

    337        295        1,323        1,150   

Franchise fees

    134        127        583        522   

Consumer financing

    110        105        421        415   

Other

    67        39        202        155   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

    1,094        1,000        4,534        4,254   
 

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

       

Operating

    454 (b)      422        1,842 (b)      1,781 (h) 

Cost of vacation ownership interests

    46        37        161        152   

Consumer financing interest

    21        25        90        92   

Marketing and reservation

    169        156        723        628   

General and administrative (a)

    185        170        666        593 (i) 

Asset impairments

    8 (c)      44 (e)      8 (c)      57 (e) 

Restructuring

    7 (d)      —          7 (d)      6 (j) 

Depreciation and amortization

    49        45        185        178   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    939        899        3,682        3,487   
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    155        101        852        767   

Other income, net

    —          (2     (8 )(f)      (11 )(k) 

Interest expense

    35        37        132        140 (l) 

Early extinguishment of debt

    —          —          108 (g)      12 (m) 

Interest income

    (2     (1     (8     (24 )(n) 
 

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    122        67        628        650   

Provision for income taxes

    41        11        229        233 (o) 
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    81        56        399        417   

Net loss attributable to noncontrolling interest

    —          —          1        —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

  $ 81      $ 56      $ 400      $ 417   
 

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

       

Basic

  $ 0.58      $ 0.37      $ 2.80      $ 2.57   

Diluted

    0.57        0.37        2.75        2.51   

Weighted average shares outstanding

       

Basic

    139        151        143        162   

Diluted

    141        154        145        166   

 

(a)

Includes $2 million of a net benefit during the three months ended December 31, 2012 and $5 million and $12 million of a net benefit during the twelve months ended December 31, 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b)

Includes $1 million of costs incurred in connection with the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012). The twelve months ended December 31, 2012 also includes $1 million of costs incurred in connection with the acquisition of Shell Vacations Club (September 2012).

(c)

Relates to a non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames.

(d)

Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 and restructuring associated with the Shell acquisition.

(e)

Includes non-cash impairment charges of (i) $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes and (ii) $13 million related to a write-down of an international joint venture.

(f) 

Includes (i) a $2 million benefit related to the reversal of an allowance associated with a previously divested asset and (ii) a $1 million benefit from the recovery of a previously recorded impairment charge.

(g) 

Represents costs incurred for the early repurchase of a portion of the Company’s 9.875% senior unsecured notes and 6.00% senior unsecured notes.

(h) 

Includes a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

(i) 

Includes a $31 million net benefit resulting from a refund of value added taxes.

(j) 

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.

(k) 

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.

(l)

Includes $3 million of interest related to value added tax accruals.

(m) 

Represents costs incurred for the early repurchase of a portion of the Company’s convertible notes.

(n) 

Includes $16 million of interest income related to the refund of value added taxes.

(o)

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

     2012         609,300         608,300         618,100         627,400         N/A   
     2011         609,600         612,900         611,200         613,100         N/A   
     2010         593,300         606,800         605,700         612,700         N/A   
     2009         588,500         590,200         590,900         597,700         N/A   

RevPAR

     2012       $ 29.73       $ 37.23       $ 40.39       $ 31.86       $ 34.80   
     2011       $ 27.71       $ 35.38       $ 39.49       $ 30.65       $ 33.34   
     2010       $ 25.81       $ 32.25       $ 37.14       $ 29.18       $ 31.14   
     2009       $ 27.69       $ 32.38       $ 34.81       $ 26.47       $ 30.34   

Vacation Exchange and Rentals

                 

Average Number of Members (in 000s)

     2012         3,684         3,670         3,672         3,670         3,674   
     2011         3,766         3,755         3,744         3,734         3,750   
     2010         3,746         3,741         3,766         3,759         3,753   
     2009         3,789         3,795         3,781         3,765         3,782   

Exchange Revenue Per Member

     2012       $ 204.56       $ 177.07       $ 171.14       $ 165.86       $ 179.68   
     2011       $ 205.64       $ 178.46       $ 172.38       $ 161.68       $ 179.59   
     2010       $ 201.93       $ 172.20       $ 173.44       $ 162.59       $ 177.53   
     2009       $ 194.83       $ 174.22       $ 173.90       $ 163.89       $ 176.73   

Vacation Rental Transactions (in 000s) (b)

     2012         418         325         390         259         1,392   
     2011         398         328         370         250         1,347   
     2010         291         297         322         253         1,163   
     2009         273         231         264         196         964   

Average Net Price Per Vacation Rental (b)

     2012       $ 379.40       $ 524.40       $ 635.44       $ 484.69       $ 504.55   
     2011       $ 377.71       $ 549.09       $ 701.81       $ 497.04       $ 530.78   
     2010       $ 361.17       $ 387.01       $ 500.31       $ 449.12       $ 425.38   
     2009       $ 353.15       $ 471.74       $ 594.34       $ 499.66       $ 477.38   

Vacation Ownership (c)

                 

Gross Vacation Ownership Interest (VOI) Sales (in 000s) (d)

     2012       $ 384,000       $ 460,000       $ 502,000       $ 435,000       $ 1,781,000   
     2011       $ 319,000       $ 412,000       $ 455,000       $ 409,000       $ 1,595,000   
     2010       $ 308,000       $ 371,000       $ 412,000       $ 373,000       $ 1,464,000   
     2009       $ 280,000       $ 327,000       $ 366,000       $ 343,000       $ 1,315,000   

Tours (e)

     2012         148,000         186,000         207,000         183,000         724,000   
     2011         137,000         177,000         197,000         173,000         685,000   
     2010         123,000         163,000         187,000         160,000         634,000   
     2009         137,000         164,000         173,000         142,000         617,000   

Volume Per Guest (VPG) (e)

     2012       $ 2,414       $ 2,361       $ 2,315       $ 2,225       $ 2,324   
     2011       $ 2,192       $ 2,227       $ 2,197       $ 2,296       $ 2,229   
     2010       $ 2,334       $ 2,156       $ 2,081       $ 2,214       $ 2,183   
     2009       $ 1,866       $ 1,854       $ 1,944       $ 2,210       $ 1,964   

 

Note: Full year amounts may not add across due to rounding.

(a) 

Includes the impact of the acquisition of the Tryp hotel brand (June 2010) from the acquisition date 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), two tuck-in acquisitions (third quarter 2011) and Smoky Mountain Property Management Group (August 2012) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

(c) 

Includes the impact of the acquisition of Shell Vacations Club (September 2012) from the acquisition date forward. Therefore, the operating statistics are not presented on a comparable basis.

(d) 

Includes gross VOI sales under the Company’s Wyndham Asset Affiliate Model (WAAM) 1.0 beginning in the first quarter of 2010 and WAAM 2.0 beginning in the second quarter of 2012 (see Table 9 for a reconciliation of gross VOI sales to vacation ownership interest sales).

(e) 

Includes the impact of WAAM 1.0 related tours beginning in the first quarter of 2010 and WAAM 2.0 related tours beginning in the second quarter of 2012.


Table 3

(2 of 3)

Wyndham Worldwide Corporation

ADDITIONAL DATA

 

     Year      Q1      Q2      Q3      Q4      Full Year  

Lodging (a)

                 

Number of Properties

     2012         7,150         7,170         7,260         7,340         N/A   
     2011         7,190         7,220         7,190         7,210         N/A   
     2010         7,090         7,160         7,150         7,210         N/A   
     2009         6,990         7,020         7,040         7,110         N/A   

Vacation Ownership

                 

Provision for Loan Losses (in 000s) (b)

     2012       $ 96,000       $ 100,000       $ 124,000       $ 89,000       $ 409,000   
     2011       $ 79,000       $ 80,000       $ 96,000       $ 83,000       $ 339,000   
     2010       $ 86,000       $ 87,000       $ 85,000       $ 82,000       $ 340,000   
     2009       $ 107,000       $ 122,000       $ 117,000       $ 103,000       $ 449,000   

Sales under WAAM 1.0 (in 000s) (c)

     2012       $ 17,000       $ 18,000       $ 5,000       $ 10,000       $ 49,000   
     2011       $ 18,000       $ 19,000       $ 38,000       $ 31,000       $ 106,000   
     2010       $ 5,000       $ 13,000       $ 20,000       $ 14,000       $ 51,000   

WAAM 1.0 Commission Revenues (in 000s)

     2012       $ 12,000       $ 11,000       $ 4,000       $ 6,000       $ 33,000   
     2011       $ 10,000       $ 11,000       $ 23,000       $ 21,000       $ 65,000   
     2010       $ 3,000       $ 8,000       $ 12,000       $ 9,000       $ 31,000   

Sales under WAAM 2.0 (in 000s) (d)

     2012       $ —         $ 12,000       $ 57,000       $ 30,000       $ 99,000   

 

Note: Full year amounts may not add across due to rounding.

(a) 

Includes the impact of the acquisition of Tryp hotel brand (June 2010) from the acquisition date forward. Therefore, the operating statistics are not presented on a comparable basis.

(b) 

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.

(c) 

Represents gross VOI sales under the Company’s WAAM 1.0 for which the Company earns commission revenue (WAAM 1.0 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.

(d) 

Represents gross VOI sales under the Company’s WAAM 2.0 which enables the Company to acquire and own completed timeshare units close to the timing of the sales of such units. This significantly reduces the period between the deployment of capital to acquire inventory and the subsequent return on investment which occurs at the time of its sale to a timeshare purchaser. The Company implemented this sales model during the second quarter of 2012 and as such, there is no historical data prior to 2012.


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, or company owned, (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 paid annual membership dues as of the end of the period or within the allowed grace period. 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 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 2009-2012. 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)

 

    2012         2011  
    Q1     Q2     Q3     Q4     Year         Q1     Q2     Q3     Q4     Year  

Lodging

                     

Royalties and Franchise Fees

  $ 62      $ 80      $ 88      $ 71      $ 301        $ 58      $ 75      $ 85      $ 66      $ 284   

Marketing, Reservation and Wyndham Rewards Revenues (a)

    68        99        98        80        345          54        75        94        76        299   

Hotel Management Reimbursable Revenues (b)

    21        22        25        23        91          19        19        21        20        79   

Inter-segment Trademark Fees (c)

    8        9        9        8        34          1        2        3        4        10   

Owned Hotel Revenues

    8        8        7        18        41          —          —          —          5        5   

Ancillary Revenues (d)

    18        15        22        23        78          17        19        19        17        72   
 

 

 

     

 

 

 

Total Lodging

    185        233        249        223        890          149        190        222        188        749   
 

 

 

     

 

 

 

Vacation Exchange and Rentals

                     

Exchange Revenues

    188        162        157        153        660          194        168        161        150        673   

Rental Revenues

    159        170        248        125        702          150        180        260        125        715   

Ancillary Revenues (e)

    14        16        15        15        60          12        13        15        16        56   
 

 

 

     

 

 

 

Total Vacation Exchange and Rentals

    361        348        420        293        1,422          356        361        436        291        1,444   
 

 

 

     

 

 

 

Vacation Ownership

                     

Vacation Ownership Interest Sales

    271        342        373        337        1,323          222        313        320        295        1,150   

Consumer Financing

    103        102        106        110        421          102        103        105        105        415   

Property Management Fees

    110        108        117        125        460          110        108        105        101        424   

WAAM 1.0 Commissions

    12        11        4        6        33          10        11        23        21        65   

Ancillary Revenues (f)

    5        7        8        12        32          6        6        6        5        23   
 

 

 

     

 

 

 

Total Vacation Ownership

    501        570        608        590        2,269          450        541        559        527        2,077   
 

 

 

     

 

 

 

Total Reportable Segments

  $ 1,047      $ 1,151      $ 1,277      $ 1,106      $ 4,581        $ 955      $ 1,092      $ 1,217      $ 1,006      $ 4,270   
 

 

 

     

 

 

 
    2010         2009  
    Q1     Q2     Q3     Q4     Year         Q1     Q2     Q3     Q4     Year  

Lodging

                     

Royalties and Franchise Fees

  $ 52      $ 69      $ 82      $ 62      $ 265        $ 57      $ 68      $ 72      $ 57      $ 254   

Marketing, Reservation and Wyndham Rewards Revenues (a)

    50        65        76        60        251          54        66        73        53        246   

Hotel Management Reimbursable Revenues (b)

    21        20        18        18        77          22        23        21        19        85   

Ancillary Revenues (d)

    21        24        27        23        95          21        17        17        20        75   
 

 

 

     

 

 

 

Total Lodging

    144        178        203        163        688          154        174        183        149        660   
 

 

 

     

 

 

 

Vacation Exchange and Rentals

                     

Exchange Revenues

    189        161        163        153        666          185        165        164        154        668   

Rental Revenues

    105        115        161        114        495          96        109        157        98        460   

Ancillary Revenues (e)

    6        5        6        15        32          6        6        6        6        24   
 

 

 

     

 

 

 

Total Vacation Exchange and Rentals

    300        281        330        282        1,193          287        280        327        258        1,152   
 

 

 

     

 

 

 

Vacation Ownership

                     

Vacation Ownership Interest Sales

    217        271        308        276        1,072          239        242        285        287        1,053   

Consumer Financing

    105        106        107        107        425          109        109        108        109        435   

Property Management Fees

    100        100        104        101        405          91        94        96        95        376   

WAAM 1.0 Commissions (g)

    3        8        12        8        31          —          —          —          —          —     

Ancillary Revenues (f)

    19        20        2        5        46          23        22        19        17        81   
 

 

 

     

 

 

 

Total Vacation Ownership

    444        505        533        497        1,979          462        467        508        508        1,945   
 

 

 

     

 

 

 

Total Reportable Segments

  $ 888      $ 964      $ 1,066      $ 942      $ 3,860        $ 903      $ 921      $ 1,018      $ 915      $ 3,757   
 

 

 

     

 

 

 

 

(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) 

During 2011, $3 million, $1 million and $2 million of inter-segment trademark fees were recorded as a reduction of expenses in Q1, Q2 and Q3, respectively. As such, total inter-segment trademark fees for 2011 were $16 million.

(d) 

Primarily includes additional services provided to franchisees.

(e) 

Primarily includes fees generated from programs with affiliated resorts and homeowners.

(f) 

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.

(g) 

The Company implemented the WAAM 1.0 sales model during the first quarter of 2010 and, as such, there is no historical data for 2009.

 


Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

 

    December 31,
2012
    September 30,
2012
    June 30,
2012
    March 31,
2012
    December 31,
2011
 

Securitized vacation ownership debt (a)

         

Term notes

  $ 1,770      $ 1,702      $ 1,634      $ 1,896      $ 1,625   

Bank conduit facility (b)

    190        220        220        104        237   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Securitized vacation ownership debt (c)

    1,960        1,922        1,854        2,000        1,862   

Less: Current portion of securitized vacation ownership debt

    218        206        191        206        196   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Long-term securitized vacation ownership debt

  $ 1,742      $ 1,716      $ 1,663      $ 1,794      $ 1,666   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Debt:

         

Revolving credit facility (due July 2016) (d)

  $ 85      $ 270      $ 81      $ 47      $ 218   

Commercial paper (e)

    273        —          —          —          —     

3.50% convertible notes (due May 2012) (f)

    —          —          —          44        36   

9.875% senior unsecured notes (due May 2014)

    42        42        42        42        243   

6.00% senior unsecured notes (due December 2016)

    361        361        362        362        811   

2.95% senior unsecured notes (due March 2017)

    298        298        298        298        —     

5.75% senior unsecured notes (due February 2018)

    248        248        248        247        247   

7.375% senior unsecured notes (due March 2020)

    248        248        248        248        247   

5.625% senior unsecured notes (due March 2021)

    246        246        245        245        245   

4.25% senior unsecured notes (due March 2022)

    644        644        644        643        —     

Vacation rentals capital leases

    105        104        95        103        102   

Other

    52        68        3        1        4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total debt

    2,602        2,529        2,266        2,280        2,153   

Less: Current portion of debt

    326        64        11        54        46   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Long-term debt

  $ 2,276      $ 2,465      $ 2,255      $ 2,226      $ 2,107   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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 August 2014 and borrowing capacity of $650 million. As of December 31, 2012, this facility had remaining borrowing capacity of $460 million.

(c) 

This debt is collateralized by $2,543 million, $2,517 million, $2,490 million, $2,622 million and $2,638 million of underlying vacation ownership contract receivables and related assets as of December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, respectively.

(d) 

Represents a $1.0 billion revolving credit facility that expires on July 15, 2016. As of December 31, 2012, the Company had $11 million of outstanding letters of credit and a remaining borrowing capacity of $904 million. After considering outstanding commercial paper borrowings of $273 million, the remaining borrowing capacity was $631 million as of December 31, 2012.

(e) 

Represents a $500 million commercial paper program which the Company commenced in October 2012. As of December 31, 2012, the program had a remaining borrowing capacity of $227 million.

(f) 

Represents convertible notes issued by the Company during May 2009 and repaid by the Company during May 2012.


Table 6

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

 

     As of and For the Three Months Ended December 31, 2012
Brand    Number of
Properties
     Number
of Rooms
     Average
Occupancy Rate
  Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)

Lodging

             

Wyndham Hotels and Resorts

     112         27,651       55.2%   $110.77    $  61.16

TRYP by Wyndham

     91         13,112       56.8%   $  96.64    $  54.85

Wingate by Wyndham

     160         14,681       55.2%   $  82.73    $  45.65

Hawthorn Suites by Wyndham

     94         9,317       57.7%   $  68.86    $  39.75

Ramada

     850         115,811       50.3%   $  79.76    $  40.13

Baymont

     317         26,109       45.5%   $  61.27    $  27.87

Days Inn

     1,826         147,808       43.4%   $  61.29    $  26.59

Super 8

     2,314         147,512       51.5%   $  50.72    $  26.14

Howard Johnson

     455         46,203       44.6%   $  62.03    $  27.65

Travelodge

     445         33,213       43.2%   $  63.06    $  27.26

Microtel Inns & Suites by Wyndham

     308         21,938       51.3%   $  61.73    $  31.68

Knights Inn

     363         22,670       40.3%   $  41.72    $  16.80

Dream

     5         990       69.2%   $242.53    $167.79

Night

     2         422       45.9%   $119.65    $  54.93
  

 

 

    

 

 

         

Total Lodging

     7,342         627,437       48.2%   $  66.05    $  31.86

Vacation Ownership

             

Wyndham Vacation Ownership resorts

     190         23,441       N/A   N/A    N/A
  

 

 

    

 

 

         

Total Wyndham Worldwide

     7,532         650,878           
  

 

 

    

 

 

         
     As of and For the Three Months Ended December 31, 2011
Brand    Number of
Properties
     Number
of Rooms
     Average
Occupancy Rate
  Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)

Lodging

             

Wyndham Hotels and Resorts

     100         26,180       55.2%   $109.87    $  60.66

TRYP by Wyndham

     91         13,076       59.8%   $  97.58    $  58.33

Wingate by Wyndham

     162         14,836       55.3%   $  78.47    $  43.42

Hawthorn Suites by Wyndham

     74         7,036       56.3%   $  72.93    $  41.09

Ramada

     845         114,306       49.4%   $  77.79    $  38.41

Baymont

     259         21,605       42.9%   $  60.63    $  25.99

Days Inn

     1,864         150,436       42.8%   $  59.07    $  25.31

Super 8

     2,249         142,254       49.2%   $  51.24    $  25.19

Howard Johnson

     451         45,115       43.9%   $  59.39    $  26.08

Travelodge

     440         33,081       42.2%   $  61.45    $  25.95

Microtel Inns & Suites by Wyndham

     315         22,441       49.0%   $  58.62    $  28.75

Knights Inn

     349         21,698       37.8%   $  40.37    $  15.25

Dream

     5         990       75.8%   $242.68    $183.83

Night

     1         72       94.5%   $261.24    $247.00
  

 

 

    

 

 

         

Total Lodging

     7,205         613,126       47.0%   $  65.18    $  30.65

Vacation Ownership

             

Wyndham Vacation Ownership resorts

     162         20,803       N/A   N/A    N/A
  

 

 

    

 

 

         

Total Wyndham Worldwide

     7,367         633,929           
  

 

 

    

 

 

         

 

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 Year Ended December 31, 2012
Brand    Number of
Properties
     Number
of Rooms
     Average
Occupancy Rate
  Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)

Lodging

             

Wyndham Hotels and Resorts

     112         27,651       58.9%   $110.28    $  64.97

TRYP by Wyndham

     91         13,112       60.7%   $  97.49    $  59.17

Wingate by Wyndham

     160         14,681       61.0%   $  83.43    $  50.88

Hawthorn Suites by Wyndham

     94         9,317       61.9%   $  72.89    $  45.13

Ramada

     850         115,811       52.6%   $  78.86    $  41.50

Baymont

     317         26,109       50.5%   $  63.25    $  31.96

Days Inn

     1,826         147,808       48.1%   $  63.05    $  30.34

Super 8

     2,314         147,512       54.8%   $  53.00    $  29.06

Howard Johnson

     455         46,203       47.6%   $  62.47    $  29.76

Travelodge

     445         33,213       48.2%   $  66.40    $  32.02

Microtel Inns & Suites by Wyndham

     308         21,938       54.9%   $  62.20    $  34.14

Knights Inn

     363         22,670       41.3%   $  43.08    $  17.78

Dream

     5         990       72.1%   $216.87    $156.44

Night

     2         422       57.8%   $159.04    $  91.90
  

 

 

    

 

 

         

Total Lodging

     7,342         627,437       51.8%   $  67.13    $  34.80

Vacation Ownership

             

Wyndham Vacation Ownership resorts

     190         23,441       N/A   N/A    N/A
  

 

 

    

 

 

         

Total Wyndham Worldwide

     7,532         650,878           
  

 

 

    

 

 

         
     As of and For the Year Ended December 31, 2011
Brand    Number of
Properties
     Number
of Rooms
     Average
Occupancy Rate
  Average Daily
Rate (ADR)
   Average Revenue
Per Available
Room (RevPAR)

Lodging

             

Wyndham Hotels and Resorts

     100         26,180       58.4%   $108.27    $  63.22

TRYP by Wyndham

     91         13,076       60.5%   $103.27    $  62.48

Wingate by Wyndham

     162         14,836       59.7%   $  80.61    $  48.11

Hawthorn Suites by Wyndham

     74         7,036       61.1%   $  74.76    $  45.69

Ramada

     845         114,306       51.4%   $  76.40    $  39.29

Baymont

     259         21,605       47.5%   $  62.00    $  29.43

Days Inn

     1,864         150,436       47.0%   $  61.42    $  28.88

Super 8

     2,249         142,254       52.1%   $  54.32    $  28.29

Howard Johnson

     451         45,115       46.7%   $  60.72    $  28.33

Travelodge

     440         33,081       46.7%   $  65.12    $  30.41

Microtel Inns & Suites by Wyndham

     315         22,441       52.7%   $  59.07    $  31.11

Knights Inn

     349         21,698       38.7%   $  42.32    $  16.39

Dream

     5         990       75.6%   $198.31    $149.88

Night

     1         72       94.0%   $241.42    $227.05
  

 

 

    

 

 

         

Total Lodging

     7,205         613,126       50.2%   $  66.46    $  33.34

Vacation Ownership

             

Wyndham Vacation Ownership resorts

     162         20,803       N/A   N/A    N/A
  

 

 

    

 

 

         

Total Wyndham Worldwide

     7,367         633,929           
  

 

 

    

 

 

         

 

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 Corporation

NON-GAAP RECONCILIATION

(In millions)

 

    Net
Revenues
    Reported
EBITDA
    Legacy
Adjust-
ments (b)
    Im-
pairment
Recovery (c)
    Allowance
Reversal (d)
    Acquisition
Costs (e)
    Asset
Im-
pairment (f)
    Re-
structuring
Costs (g)
    Adjusted
EBITDA
 

Three months ended March 31, 2012

                 

Lodging

  $ 185      $ 49      $ —        $ —        $ —        $ —        $ —        $ —        $ 49   

Vacation Exchange and Rentals

    361        95        —          —          (2     —          —          —          93   

Vacation Ownership

    501        103        —          —          —          —          —          —          103   
 

 

 

   

 

 

 

Total Reportable Segments

    1,047        247        —          —          (2     —          —          —          245   

Corporate and Other (a)

    (11     (21     (4     —          —          —          —          —          (25
 

 

 

   

 

 

 

Total Company

  $ 1,036      $ 226      $ (4   $ —        $ (2   $ —        $ —        $ —        $ 220   
 

 

 

   

 

 

 

Three months ended June 30, 2012

                 

Lodging

  $ 233      $ 75      $ —        $ (1   $ —        $ —        $ —        $ —        $ 74   

Vacation Exchange and Rentals

    348        82        —          —          —          —          —          —          82   

Vacation Ownership

    570        150        —          —          —          —          —          —          150   
 

 

 

   

 

 

 

Total Reportable Segments

    1,151        307        —          (1     —          —          —          —          306   

Corporate and Other (a)

    (12     (25     —          —          —          —          —          —          (25
 

 

 

   

 

 

 

Total Company

  $ 1,139      $ 282      $ —        $ (1   $ —        $ —        $ —        $ —        $ 281   
 

 

 

   

 

 

 

Three months ended September 30, 2012

                 

Lodging

  $ 249      $ 86      $ —        $ —        $ —        $ —        $ —        $ —        $ 86   

Vacation Exchange and Rentals

    420        123        —          —          —          —          —          —          123   

Vacation Ownership

    608        154        —          —          —          1        —          —          155   
 

 

 

   

 

 

 

Total Reportable Segments

    1,277        363        —          —          —          1        —          —          364   

Corporate and Other (a)

    (12     (30     1        —          —          —          —          —          (29
 

 

 

   

 

 

 

Total Company

  $ 1,265      $ 333      $ 1      $ —        $ —        $ 1      $ —        $ —        $ 335   
 

 

 

   

 

 

 

Three months ended December 31, 2012

                 

Lodging

  $ 223      $ 62      $ —        $ —        $ —        $ —        $ —        $ —        $ 62   

Vacation Exchange and Rentals

    293        28        —          —          —          1        8        5        42   

Vacation Ownership

    590        142        —          —          —          —          —          2        144   
 

 

 

   

 

 

 

Total Reportable Segments

    1,106        232        —          —          —          1        8        7        248   

Corporate and Other (a)

    (12     (28     (2     —          —          —          —          —          (30
 

 

 

   

 

 

 

Total Company

  $ 1,094      $ 204      $ (2   $ —        $ —        $ 1      $ 8      $ 7      $ 218   
 

 

 

   

 

 

 

Twelve months ended December 31, 2012

                 

Lodging

  $ 890      $ 272      $ —        $ (1   $ —        $ —        $ —        $ —        $ 271   

Vacation Exchange and Rentals

    1,422        328        —          —          (2     1        8        5        340   

Vacation Ownership

    2,269        549        —          —          —          1        —          2        552   
 

 

 

   

 

 

 

Total Reportable Segments

    4,581        1,149        —          (1     (2     2        8        7        1,163   

Corporate and Other (a)

    (47     (104     (5     —          —          —          —          —          (109
 

 

 

   

 

 

 

Total Company

  $ 4,534      $ 1,045      $ (5   $ (1   $ (2   $ 2      $ 8      $ 7      $ 1,054   
 

 

 

   

 

 

 

 

(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 the recovery of a previously recorded impairment charge.

(d) 

Relates to a benefit from the reversal of an allowance associated with a previously divested asset.

(e) 

Relates to costs incurred in connection with the Company’s acquisition of Shell Vacations Club (September 2012) and the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012).

(f) 

Relates to a non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames.

(g) 

Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 and restructuring associated with the Shell acquisition.


Table 7

(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

 

    Net
Revenues
    Reported
EBITDA
    Legacy
Adjustments (b)
    Asset
Impairments
    Restructuring
Costs
    VAT
Adjustments (e)
    CTA
Writeoff (f)
    Adjusted
EBITDA
 

Three months ended March 31, 2011

               

Lodging

  $ 149      $ 27      $ —        $ 13 (c)    $ —        $ —        $ —        $ 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   
 

 

 

   

 

 

 

Three months ended December 31, 2011

               

Lodging

  $ 188      $ (3   $ —        $ 44 (h)    $ —        $ —        $ —        $ 41   

Vacation Exchange and Rentals

    291        38        —          —          —          —          —          38   

Vacation Ownership

    527        139        —          —         —         —          —          139   
 

 

 

   

 

 

 

Total Reportable Segments

    1,006        174        —          44        —          —          —          218   

Corporate and Other (a)

    (6     (26     —          —          —          —          —          (26
 

 

 

   

 

 

 

Total Company

  $ 1,000      $ 148      $ —        $ 44      $ —       $ —        $ —        $ 192   
 

 

 

   

 

 

 

Twelve months ended December 31, 2011

               

Lodging

  $ 749      $ 157      $ —        $ 57 (c) (h)    $ —        $ —        $ —        $ 214   

Vacation Exchange and Rentals

    1,444        368        —          —          7 (g)      (31     4        348   

Vacation Ownership

    2,077        515        —          —         (1 )(d)      —          —          514   
 

 

 

   

 

 

 

Total Reportable Segments

    4,270        1,040        —          57        6        (31     4        1,076   

Corporate and Other (a)

    (16     (84     (16     —          —          —          —          (100
 

 

 

   

 

 

 

Total Company

  $ 4,254      $ 956      $ (16   $ 57      $ 6      $ (31   $ 4      $ 976   
 

 

 

   

 

 

 

 

(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.

(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.

(h) 

Relates to non-cash impairment charges primarily related to the write-down of certain franchise and management agreements and development advance notes.


Table 8

(1 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

    Three Months Ended December 31, 2012  
    As
Reported
    Legacy
Adjustments
    Acquisition
Costs
    Asset
Impairment
    Restructuring
Costs
    As
Adjusted
 

Net revenues

           

Service fees and membership

  $ 446              $ 446   

Vacation ownership interest sales

    337                337   

Franchise fees

    134                134   

Consumer financing

    110                110   

Other

    67                67   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

    1,094        —          —          —          —          1,094   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

           

Operating

    454          (1 )(b)          453   

Cost of vacation ownership interests

    46                46   

Consumer financing interest

    21                21   

Marketing and reservation

    169                169   

General and administrative

    185        2 (a)            187   

Asset impairments

    8            (8 )(c)        —     

Restructuring

    7              (7 )(d)      —     

Depreciation and amortization

    49                49   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    939        2        (1     (8     (7     925   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    155        (2     1        8        7        169   

Interest expense

    35                35   

Interest income

    (2             (2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    122        (2     1        8        7        136   

Provision for income taxes

    41        (e)      (e)      3 (e)      3 (e)      47   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

  $ 81      $ (2   $ 1      $ 5      $ 4      $ 89   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

           

Basic

  $ 0.58      $ (0.01   $ 0.01      $ 0.04      $ 0.03      $ 0.64   

Diluted

    0.57        (0.01     0.01        0.04        0.03        0.63   

Weighted average shares outstanding

           

Basic

    139        139        139        139        139        139   

Diluted

    141        141        141        141        141        141   

 

Note: EPS amounts may not add due to rounding.

(a) 

Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b) 

Relates to costs incurred in connection with the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012).

(c) 

Relates to a non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames.

(d) 

Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 and restructuring associated with the Shell acquisition.

(e) 

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)

 

     Twelve Months Ended December 31, 2012  
     As
Reported
    Legacy
Adjust-

ments
    Reversal /
Recovery
    Acquisition
Costs
    Early
Extinguish-

ment of
Debt
    Asset
Im-
pairment
    Re-
structuring
Costs
    As
Adjusted
 

Net revenues

                

Service fees and membership

   $ 2,005                  $ 2,005   

Vacation ownership interest sales

     1,323                    1,323   

Franchise fees

     583                    583   

Consumer financing

     421                    421   

Other

     202                    202   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     4,534        —          —          —          —          —          —          4,534   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

                

Operating

     1,842            (2 )(c)            1,840   

Cost of vacation ownership interests

     161                    161   

Consumer financing interest

     90                    90   

Marketing and reservation

     723                    723   

General and administrative

     666        5 (a)                671   

Asset impairments

     8                (8 )(e)        —     

Restructuring

     7                  (7 )(f)      —     

Depreciation and amortization

     185                    185   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     3,682        5        —          (2     —          (8     (7     3,670   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     852        (5     —          2        —          8        7        864   

Other income, net

     (8       3 (b)              (5

Interest expense

     132                    132   

Early extinguishment of debt

     108              (108 )(d)          —     

Interest income

     (8                 (8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     628        (5     (3     2        108        8        7        745   

Provision for income taxes

     229        (2 )(g)      (1 )(g)      1 (g)      44 (g)      3 (g)      3 (g)      277   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     399        (3     (2     1        64        5        4        468   

Net loss attributable to noncontrolling interest

     1        —          —          —          —          —          —          1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

   $ 400      $ (3   $ (2   $ 1      $ 64      $ 5      $ 4      $ 469   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

                

Basic

   $ 2.80      $ (0.02   $ (0.02   $ 0.01      $ 0.45      $ 0.03      $ 0.03      $ 3.29   

Diluted

     2.75        (0.02     (0.02     0.01        0.44        0.03        0.03        3.23   

Weighted average shares outstanding

                

Basic

     143        143        143        143        143        143        143        143   

Diluted

     145        145        145        145        145        145        145        145   

 

Note: EPS amounts may not add due to rounding.

(a) 

Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b) 

Includes $2 million related to a benefit from the reversal of an allowance associated with a previously divested asset and $1 million related to the recovery of a previously recorded impairment charge.

(c) 

Relates to costs incurred in connection with the Company’s acquisition of Shell Vacations Club (September 2012) and the acquisition of Oceana Resorts and a tuck-in acquisition (December 2012).

(d) 

Represents costs incurred for the early repurchase of a portion of the Company’s 9.875% senior unsecured notes and 6.00% senior unsecured notes.

(e) 

Relates to a non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames.

(f) 

Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 and restructuring associated with the Shell acquisition.

(g) 

Relates to the tax effect of the adjustment.


Table 8

(3 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

     Three Months Ended December 31, 2011  
     As
Reported
    Legacy
Adjustments
    Asset
Impairments
    VAT
Adjustments
    As Adjusted  

Net revenues

          

Service fees and membership

   $ 434            $ 434   

Vacation ownership interest sales

     295              295   

Franchise fees

     127              127   

Consumer financing

     105              105   

Other

     39              39   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,000        —          —          —          1,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

          

Operating

     422              422   

Cost of vacation ownership interests

     37              37   

Consumer financing interest

     25              25   

Marketing and reservation

     156              156   

General and administrative

     170              170   

Asset impairments

     44          (44 )(a)        —     

Depreciation and amortization

     45              45   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     899        —          (44     —          855   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     101        —          44        —          145   

Other income, net

     (2           (2

Interest expense

     37              37   

Interest income

     (1       —            (1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     67        —          44          111   

Provision for income taxes

     11        3 (b)      17 (c)      7 (d)      38   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

   $ 56      $ (3   $ 27      $ (7   $ 73   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

          

Basic

   $ 0.37      $ (0.02   $ 0.18      $ (0.05   $ 0.49   

Diluted

     0.37        (0.02     0.18        (0.05   $ 0.47   

Weighted average shares outstanding

          

Basic

     151        151        151        151        151   

Diluted

     154        154        154        154        154   

 

Note: EPS amounts may not add across due to rounding.

(a) 

Relates to non-cash impairment charges primarily due to the write-down of certain franchise and management agreements and development advance notes.

(b) 

Relates to the reversal of certain legacy tax liabilities resulting from our separation from Cendant.

(c) 

Relates to the tax effect of the adjustment.

(d) 

Relates to additional tax adjustments from the utilization of foreign tax credits generated from the value added tax refund and related interest income recorded during the second and third quarters of 2011.


Table 8

(4 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

    Twelve Months Ended December 31, 2011  
    As
Reported
    Early
Extinguish-

ment of
Debt
    Tax
Valuation
Allowance
    Legacy
Adjust-

ments
    Asset
Im-
pairments
    Re-
structuring
Costs
    VAT
Adjust-

ments
    CTA
Write-

off
    As
Ad-

justed
 

Net revenues

                 

Service fees and membership

  $ 2,012                    $ 2,012   

Vacation ownership interest sales

    1,150                      1,150   

Franchise fees

    522                      522   

Consumer financing

    415                      415   

Other

    155                      155   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

    4,254        —          —          —          —          —          —          —          4,254   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

                 

Operating

    1,781                    (4 )(j)      1,777   

Cost of vacation ownership interests

    152                      152   

Consumer financing interest

    92                      92   

Marketing and reservation

    628                      628   

General and administrative

    593            12 (c)          31 (g)        636   

Asset impairment

    57              (57 )(e)            —     

Restructuring

    6                (6 )(f)          —     

Depreciation and amortization

    178                      178   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    3,487        —          —          12        (57     (6     31        (4     3,463   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    767        —          —          (12     57        6        (31     4        791   

Other income, net

    (11         4 (d)              (7

Interest expense

    152        (12 )(a)              (3 )(h)        137   

Interest income

    (24               16 (i)        (8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    650        12        —          (16     57        6        (44     4        669   

Provision for income taxes

    233        5 (k)      13 (b)      (2 )(l)      22 (k)      1 (k)      (17 )(k)      —   (k)      255   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

  $ 417      $ 7      $ (13   $ (14   $ 35      $ 5      $ (27   $ 4      $ 414   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

                 

Basic

  $ 2.57      $ 0.04      $ (0.08   $ (0.08   $ 0.21      $ 0.03      $ (0.17   $ 0.02      $ 2.55   

Diluted

    2.51        0.04        (0.08     (0.08     0.21        0.03        (0.17     0.02      $ 2.49   

Weighted average shares outstanding

                 

Basic

    162        162        162        162        162        162        162        162        162   

Diluted

    166        166        166        166        166        166        166        166        166   

 

(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 non-cash impairment charges due to a write-down of certain franchise and management agreements and development advance notes and the write-down of an international joint venture.

(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.

(l) 

Relates to the tax effect of the adjustments and the reversal of certain legacy tax liabilities resulting from our separation from Cendant.


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. 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, 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. During the fourth quarter of 2012, the Company modified its definition of free cash flow to exclude the impact of development advances.

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:

 

     Twelve Months Ended December 31,  
     2012     2011  

Net cash provided by operating activities

   $ 1,004      $ 1,003   

Less: Property and equipment additions

     (208     (239
  

 

 

   

 

 

 

Free cash flow

   $ 796      $ 764   
  

 

 

   

 

 

 

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

                              
2012    Q1     Q2     Q3     Q4     Full Year  

 

  

 

 

 

Gross VOI sales (a)

   $ 384      $ 460      $ 502      $ 435      $ 1,781   

Less: Sales under WAAM 1.0

     (17     (18     (5     (10     (49
  

 

 

 

Gross VOI sales, net of WAAM 1.0 sales

     367        442        497        426        1,732   

Less: Loan loss provision

     (96     (100     (124     (89     (409
  

 

 

 

Vacation ownership interest sales (a)

   $ 271      $ 342      $ 373      $ 337      $ 1,323   
  

 

 

 

2011

                              

Gross VOI sales

   $ 319      $ 412      $ 455      $ 409      $ 1,595   

Less: Sales under WAAM 1.0

     (18     (19     (38     (31     (106
  

 

 

 

Gross VOI sales, net of WAAM 1.0 sales

     302        393        417        378        1,489   

Less: Loan loss provision

     (79     (80     (96     (83     (339
  

 

 

 

Vacation ownership interest sales

   $ 222      $ 313      $ 320      $ 295      $ 1,150   
  

 

 

 

2010

                              

Gross VOI sales

   $ 308      $ 371      $ 412      $ 373      $ 1,464   

Less: Sales under WAAM 1.0

     (5     (13     (20     (14     (51
  

 

 

 

Gross VOI sales, net of WAAM 1.0 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 (b)

     67        37        36        47        187   

Less: Loan loss provision

     (107     (122     (117     (103     (449
  

 

 

 

Vacation ownership interest sales

   $ 239      $ 242      $ 285      $ 287      $ 1,053   
  

 

 

 

 

Note: Amounts may not add due to rounding.

(a) 

Includes VOI sales under WAAM 2.0 beginning in the second quarter of 2012.

(b) 

Represents the revenue that is deferred under the percentage of completion method of accounting.

The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company’s VPG calculation (see Table 3):

 

     Q1      Q2      Q3      Q4      Full Year  
  

 

 

 

2012

   $      27       $      20       $      22       $      28       $      97   

2011

   $ 18       $ 18       $ 21       $ 11       $ 68   

2010

   $ 20       $ 20       $ 23       $ 17       $ 80   

2009

   $ 24       $ 23       $ 29       $ 28       $ 104   

 

Note: Amounts may not add across due to rounding.